Financial Statements and Financial Highlights Central Investment Fund, Inc. August 31, 1999 with Report of Independent Auditors Report of Independent Auditors Board of Directors and Stockholder Central Investment Fund, Inc. We have audited the accompanying statement of assets and liabilities of Central Investment Fund, Inc. as of August 31, 1999, the related statement of operations for the eight month period ended August 31, 1999, and the statements of changes in net assets and the financial highlights for the eight month period ended August 31, 1999 and for the period from March 24, 1998 (commencement of operations) to December 31, 1998. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Central Investment Fund, Inc., at August 31, 1999, the results of its operations for the eight month period ended August 31, 1999, and the changes in its net assets and its financial highlights for the eight month period ended August 31, 1999 and for the period from March 24, 1998 (commencement of operations) to December 31, 1998, in conformity with generally accepted accounting principles. September 30, 1999 Central Investment Fund, Inc. Statement of Assets and Liabilities August 31, 1999 Assets Net asset value $0 See accompanying notes. Central Investment Fund, Inc. Statement of Operations For the eight month period ended August 31, 1999 Investment income: Dividend income $299,267 Interest income 14,227 Total investment income 313,494 Expenses: Administration fees (Note 2) 36,767 Investment management fee (Note 2) 5,309 Independent auditors 6,517 Interest expense 10,011 Directors fees and expenses 3,000 Legal fees 7,014 Other expenses 564 Total expenses 69,182 Net investment income 244,312 Net realized gain on investments 2,051,037 Net realized gain on in-kind transfer (Note 1) 55,953,937 Net decrease in unrealized appreciation (55,953,937) Net increase in net assets resulting from operations $2,295,349 See accompanying notes. Central Investment Fund, Inc. Statements of Changes in Net Assets For the period For the eight from month period ended March 24, 1998 to August 31, 1999 December 31, 1998 From operations: Net investment income $244,312 $5,505,575 Net realized gain (loss) on investme 2,051,037 (29,059) Net realized gain on in-kind transfe 55,953,937 0 Net change in unrealized appreciation on investments (55,953,937) 55,953,937 Increase in net assets resulting from operations 2,295,349 61,430,453 Dividends from net investment income: Auction market preferred stock 0 (5,475,820) Common stock (244,312) (29,755) (244,312) (5,505,575) Distribution from net realized gains: Common stock (2,021,978) 0 In-kind transfer (55,953,937) 0 (57,975,915) 0 Decrease in net assets resulting from distributions to stockholder (58,220,227) (5,505,575) Increase (decrease) from capital transactions: Issuance of auction market preferred 0 200,000,000 Redemption of auction market preferred stock 0 (200,000,000) Issuance of common stock 0 257,421 Redemption of common stock (257,421) 0 Additional paid-in-capital 0 459,193,783 Distribution of capital to common st (459,193,783) 0 (459,451,204) 459,451,204 Total increase (decrease) in net asse (515,376,082) 515,376,082 Net assets: Beginning of period 515,376,082 0 End of period $0 $515,376,082 See accompanying notes. Central Investment Fund, Inc. Notes to Financial Statements August 31, 1999 1. Organization and Significant Accounting Policies On January 7, 1999 the Board of Directors approved a Plan of Liquidation and Dissolution for the Central Investment Fund, Inc. ("the Fund"). As of August 31, 1999 the Fund was fully liquidated and all remaining capital had been distributed to the common stockholder through an in-kind distribution. For purposes of these financial statements, in accordance with generally accepted accounting principles, the in-kind distribution was treated as a realized gain. For tax purposes the distribution would not result in a realized gain until the securities were actually sold. The Fund was registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended. The Fund commenced operations on March 24, 1998. The Fund received notification from The Securities Exchange Commission ("SEC") that it was de-registered effective September 24, 1999. On the date of commencement, the Fund issued $200 million of Auction Market Preferred Stock ("AMPS") and received securities with an aggregate fair value of $457,421,449 from a collective trust fund for employee benefit plans in exchange for 25,742,144.95 shares of common stock and $200 million in cash. The following is a summary of significant accounting policies consistently followed by the Fund in preparation of its financial statements. Security Transactions Security transactions were accounted for on a trade date plus one business day basis which does not differ materially from a trade date basis. The cost of securities sold was determined using the identified cost method. Dividend income was recorded on ex-dividend date and interest income was recorded on the accrual basis. Federal Income Taxes It was the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and distribute its taxable income to shareholders. Therefore, no provision for Federal income tax was required. Distribution of Income and Gains The Fund distributed substantially all of its taxable income in excess of the dividends paid to the preferred stockholders to the common stockholder. Dividends to the common stockholder were declared and paid at least annually. Net capital gains, if any, were generally distributed annually. The character of income and gains to be distributed was determined in accordance with income tax regulations which may differ from generally accepted accounting principles. Amounts distributed in excess of taxable income and net realized gains, if any, were considered a return of capital. Use of Estimates Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ from these amounts. 2. Related Party Transactions A collective trust fund for employee benefit plans was the sole common stockholder of the Fund. Certain officers and directors of the Fund were affiliated with the common stockholder. No fees or expenses were paid to the affiliated officers and directors. For the eight month period ended August 31, 1999 and the period from March 24, 1998 (commencement of operations) to December 31, 1998, dividend and capital gain distributions to the common stockholder were $2,266,290 and $29,755, respectively. For the year ended December 31, 1998, the common stockholder made capital contributions to the Fund in the amount of $459,193,783. Comerica Bank served as both custodian and administrator for the Fund and received a fee based on a percentage of net assets outstanding at the end of the fiscal year. An affiliate of Comerica Bank served as investment advisor to the Fund. The annual investment management fee was 0.01% of average equity investments. The administration and management fees were calculated and accrued on a monthly basis and generally were paid on a quarterly basis. 3. Investment Transactions The aggregate cost of securities purchased and the aggregate proceeds of securities sold, excluding short-term securities, for the eight month period ended August 31, 1999 were $6,161,950 and $6,882,437, respectively. Central Investment Fund, Inc. Financial Highlights 1999 (1) 1998 (2) For a share of common stock outstanding throughout the period: Net asset value, beginning of period $20.02 $0 Net investment income 0.01 0.21 Net realized and unrealized gains on investments 0.08 2.17 Total from investment operations 0.09 2.38 Capital contribution 0.00 17.85 Less dividends from net investment income: Common stock equivalent of dividends paid to AMPS holders 0.00 (0.21) Dividends paid to common stockholder (0.01) 0.00 Less distributions from net realized gains: Common stock equivalent of distributions 0.00 0.00 paid to AMPS holders Distributions paid to common stockholder (0.08) 0.00 Distributions from in-kind transfer paid to common stockholder (2.17) 0.00 Less distributions from paid-in capital: Return of capital to common stockholder (17.85) 0.00 Total distributions (20.11) (0.21) Net asset value, end of period $0.00 $20.02 Total investment return (3) 0.45% 23.80% Ratios/supplemental data: Net assets at end of period (000s) 0 $515,376 Average net assets (000s) $57,308 $464,048 Ratio of expenses to average net assets applicable to common stock (4) 0.12% 0.16% Ratio of net investment income to average net assets applicable to common stock (4) 0.43% 1.19% Portfolio turnover 10.75% 0.32% Asset coverage per AMPS share end of period 0 0 AMPS shares outstanding 0 0 Asset coverage for notes payable, end of period 0 107258% Notes payable, end of period 0 $480,500 (1) For the eight month period ended August 31, 1999. (2) For the period from March 24, 1998 (commencement of operations) to (3) Total investment return for the period, not annualized. (4) Ratios are calculated on the basis of income and expenses applicabl and preferred stock relative to the average net assets of the common Ratios do not reflect the effect of dividend payments to AMPS holders See accompanying notes.