UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number
811-04447
Brandywine Fund, Inc.
---------------------
(Exact name of registrant as specified in charter)
3711 Kennett Pike
Greenville, DE 19807
--------------------
(Address of principal executive offices) (Zip code)
William F. D'Alonzo
Friess Associates, LLC
3711 Kennett Pike
Greenville, Delaware 19807
--------------------------
(Name and address of agent for service)
(302) 656-3017
--------------
Registrant's telephone number, including area code:
Date of fiscal year end: September 30
Date of reporting period: 03/31/2005
ITEM 1. REPORTS TO STOCKHOLDERS.
- --------------------------------
(THE BRANDYWINE FUNDS LOGO)
MANAGED BY FRIESS ASSOCIATES, LLC SEMI-ANNUAL REPORT MARCH 31, 2005
DEAR FELLOW SHAREHOLDERS:
Brandywine Fund grew 1.07 percent in a March-quarter environment marked by
declines in the Russell 3000, Russell 3000 Growth and S&P 500 Indexes of 2.20,
4.32 and 2.15 percent. The average fund in Morningstar's mid-cap growth category
declined 3.03 percent.
While Brandywine gained ground, 17 of the 20 fund categories tracked by
Morningstar backtracked during the quarter. The category exceptions were "bear
market" funds and specialty funds focused on either utilities or natural
resources.
Brandywine Blue Fund retraced 2.50 percent in this environment, positioning
it between declines in the Russell 1000 and Russell 1000 Growth Indexes of 1.91
and 4.09 percent. The average fund in Morningstar's large-cap growth category
fell 4.25 percent.
BRANDYWINE BRANDYWINE BLUE
CUMULATIVE TOTAL RETURN % CHANGE % CHANGE
- ----------------------- ---------- ---------------
QUARTER 1.07 -2.50
ONE YEAR 9.49 8.71
FIVE YEARS -15.27 -8.48
TEN YEARS 168.51 183.82
INCEPTION 1053.09*<F1> 536.19**<F2>
ANNUALIZED TOTAL RETURN
- -----------------------
FIVE YEARS -3.26 -1.76
TEN YEARS 10.38 11.00
INCEPTION 13.54*<F1> 13.90**<F2>
*<F1> 12/30/85 **<F2> 1/10/91
Performance data quoted represents past performance; past performance does
--------------------------------------------------------------------------
not guarantee future results. The investment return and principal value of an
-----------------------------
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. Current performance of the Funds
may be lower or higher than the performance quoted. Performance data current
to the most recent month end may be obtained by visiting
www.brandywinefunds.com.
After falling oil prices ignited a rally in the December-quarter of 2004,
fresh concerns emerged in the March quarter as oil flirted with a new all-time
high. When it wasn't oil, investors focused on potential for broad negatives to
befall stocks amid the Fed's stated intention to continue raising interest
rates.
Individual-company earnings prospects prompted the Brandywine Funds to hold
above-average concentrations of energy companies while limiting their exposure
to areas such as technology and financial services. Although the March-quarter
climate reflected a largely macro-driven mindset, the Brandywine Funds fared
relatively well because your team's bottom-up decisions isolated opportunities
that were in general agreement with the market's top-down mood.
Energy-related holdings were particularly strong as elevated oil prices
helped draw attention to the group's earnings strength. In Brandywine, oil and
gas producer Chesapeake Energy was the portfolio's top contributor, while
service providers National Oilwell Varco, Weatherford International and Nabors
Industries claimed spots among the top eight positive influences on total gains.
All four companies exceeded earnings estimates in their most recently reported
quarter. Brandywine Blue did not hold National Oilwell because of the Fund's
market-cap parameters.
Holdings from the raw materials sector also aided results. The global
economy's appetite for steel continued to reward companies uniquely positioned
to benefit from the current supply-and-demand imbalance. Iron-ore producer
Companhia Vale do Rio Doce (CVRD), whose steel-making customers recently agreed
to a 70-plus percent price increase, was the fifth-largest contributor to gains
in Brandywine and the third-largest in Brandywine Blue.
Brandywine received an additional steel-related boost from integrated steel
producer U.S. Steel. U.S. Steel drew particularly robust earnings strength from
higher steel prices because it mines its own iron ore, insulating it from the
kind of input cost increase borne by CVRD customers. Your team sold U.S. Steel
during the quarter after a substantial surge brought the stock to our price
target.
Arch Coal, which sells nearly all of its coal to domestic power plants, was
another raw materials sector standout for Brandywine. Arch Coal reported an
eightfold jump in December-quarter earnings, topping estimates by 17 percent.
The coal-demand tailwind assisting Arch Coal also left its mark on the
industrial sector, where both Funds benefited most from Burlington Northern
Santa Fe. Tight capacity gives the railroad operator pricing leverage, which
helped it grow December-quarter earnings 49 percent, also beating estimates by
17 percent.
Technology and financial services holdings detracted most from performance,
mirroring trends present in benchmark indexes. Based on individual-company
earnings outlooks, the Brandywine Funds were less exposed to these sectors than
benchmarks, mitigating their impact on relative results.
For more information on the holdings that influenced March-quarter
performance the most, please see "Roses & Thorns" on pages 4 and 6.
While some of the names and related details have changed, the March quarter
summary reads a lot like descriptions from previous quarters, with the
Brandywine Funds deriving strength from energy, raw materials and industrial
holdings. Holdings from these sectors have been particularly solid contributors
since the start of the fiscal year for the Brandywine Funds.
FISCAL YEAR-TO-DATE PERFORMANCE
BRANDYWINE FUND 13.56%
BRANDYWINE BLUE FUND 9.88%
RUSSELL 3000 INDEX 7.73%
RUSSELL 1000 INDEX 7.70%
S&P 500 INDEX 6.88%
RUSSELL 3000 GROWTH INDEX 4.92%
RUSSELL 1000 GROWTH INDEX 4.70%
Cumulative Total Returns, September 30, 2004 through March 31, 2005.
Our commitments to companies from the energy, raw materials and industrial
sectors speak to the number of opportunities in them and to the lasting nature
of the broader trends contributing to their prospects. In the raw materials
arena, for example, we're seeing the fallout from years of under-investment in
production and the networks necessary to deliver these basic goods. Some label
the situation "the revenge of the old economy."
Demand for materials needed to build infrastructure in rapidly growing
developing nations such as China and India promises to put added strain on the
system for years to come. Nevertheless, the strength and duration of the trends
underlying the individual-company earnings power we've isolated won't alone
dictate whether we continue to dedicate your assets to companies in these areas.
Recent success among energy holdings, for example, reflects a growing number
of investors agreeing with the reasons that led to our purchases, requiring re-
evaluation of the price-to-earnings ratios of the companies we hold. Likewise,
the more earnings jump this year, the harder year-over-year comparisons will be
next year, exposing existing holdings to possible displacement by new oppor-
tunities in earlier stages of their earnings-growth trajectories.
This isn't our way of dropping hints: The Brandy-wine Funds in six months or
a year could look the same . . . or be totally different. The only certainty is
that individual-company earnings trends and valuations will shape the
portfolios. By its nature, our company-by-company investment approach requires
us to be open to change because change is what enables us to migrate to the next
opportunities as the earnings landscape evolves.
Please join us in wishing our best to longtime Friess employees Susan Clark
and Carl Gates, who both decided to transition into retirement at the end of
2004. The departures don't disrupt our research ranks since neither serves in a
stock-picking role, but they will be sorely missed for their behind-the-scenes
contributions and the daily camaraderie we've enjoyed with them over the years.
We've highlighted their careers on pages 6 and 7 of Looking Forward.
Thanks for your continued confidence in our research-driven investment
approach and the team that implements it on your behalf. We're honored to serve
you.
/s/Bill D'Alonzo
Bill D'Alonzo
Brandywine Funds President April 8, 2005
BRANDYWINE FUND
PERCENT CHANGE IN TOP TEN HOLDINGS FROM BOOK COST
1. Companhia Vale do Rio Doce - ADR +37.4%
2. Starwood Hotels & Resorts Worldwide, Inc. +4.5%
3. Ingersoll-Rand Co. +12.6%
4. Phelps Dodge Corp. +26.5%
5. Weatherford International Ltd. +36.3%
6. Allstate Corp. +36.1%
7. Chesapeake Energy Corp. +66.2%
8. Kohl's Corp. -2.0%
9. National Oilwell Varco Inc. +37.8%
10. Corning Inc. -3.2%
EARNINGS GROWTH
YOUR COMPANIES 30%
S&P 500 10%
FORECASTED INCREASE IN EARNINGS PER SHARE
2005 VS 2004
ALL FIGURES ARE DOLLAR WEIGHTED AND BASED ON DATA FROM BASELINE. MARCH 31, 2005.
YOUR COMPANIES' MARKET CAPITALIZATION
LARGE CAP
$10 billion and over
28.7%
MID CAP
$2 billion to $10 billion
54.7%
SMALL CAP
below $2 billion
14.0%
CASH
2.6%
TOP TEN INDUSTRY GROUPS
Oil & Gas Equipment & Services (8.0%)
Steel (6.8%)
Industrial Machinery (6.4%)
Oil & Gas Exploration & Production (4.7%)
Railroads (4.5%)
Diversified Metals & Mining (4.3%)
Hotels, Resorts & Cruise Lines (4.2%)
Aerospace & Defense (4.0%)
Property & Casualty Insurance (3.6%)
Homebuilding (3.5%)
All Other Industry Groups (47.4%)
Cash (2.6%)
BRANDYWINE FUND
MARCH QUARTER "ROSES AND THORNS"
$ GAIN
BIGGEST $ WINNERS (IN MILLIONS) % GAIN REASON FOR MOVE
----------------- ------------- ------ ---------------
Chesapeake
Energy Corp. $34.1 32.8 December-quarter earnings grew 19 percent, beating estimates by 22 percent.
Quarterly revenues more than doubled to $942 million. In addition to owning
considerable reserves, the on-shore natural-gas producer drills the deepest wells
in the U.S., allowing it to exceed production expectations amid surging energy
demand.
National Oilwell
Varco Inc. $25.9 32.3 Closed during the quarter, the merger of National-Oilwell and Varco created a
combination that now offers customers a broader selection of drilling-related
services. December-quarter earnings grew 37 percent, beating estimates by 14
percent. Day rates increased as drillers looked to capitalize on higher prices,
putting the company's oil-field services at a premium.
Weatherford
International Ltd. $16.2 12.9 December-quarter earnings grew 53 percent, beating estimates as drillers worldwide
turned to Weatherford's yield-improving technologies to help increase production.
The company's drilling services segment benefits from increased revenues
associated with its underbalanced drilling technology, which is being adopted to
develop previously undevelopable sites.
United States
Steel Corp. $14.2 8.8 December-quarter earnings grew to $3.15 per share from a loss of $0.26 in the
year-ago period. Global economic growth is straining supply and putting upward
pressure on steel prices. The company is an integrated steel producer, meaning it
mines its own raw materials for production, which provides a competitive advantage
as competitors' material costs rise. The Fund sold U.S. Steel when it reached our
target price.
Companhia Vale
do Rio Doce $13.5 9.0 December-quarter earnings jumped 170 percent to $0.63 per share. The world's
largest supplier of iron-ore pellets used in steel production is selling all it
can produce as global steel demand outstrips existing iron-ore supply. Earnings
expectations for 2005 rose 55 percent, following a 70-plus percent year-over-year
price increase for the company's iron ore.
$ LOSS
BIGGEST $ LOSERS (IN MILLIONS) % LOSS REASON FOR MOVE
---------------- ------------- ------ ---------------
Avaya, Inc. $38.0 30.7 December-quarter earnings nearly tripled to $0.20 per share, beating estimates.
While enterprise customers continue to adopt Avaya's voice-over-Internet protocol
(VoIP) solutions, integration of a recent acquisition is proceeding slower than
expected. Additionally, the company's direct-sales channel was hampered due to a
reshuffling of territories. The Fund sold Avaya to fund an idea with greater near-
term earnings prospects.
E*Trade Financial
Corp. $18.5 16.1 December-quarter earnings grew 44 percent, beating estimates by 18 percent. Shares
traded lower on concerns of increased price competition among online brokers. Only
20 percent of E*Trade's business comes from online trading. The company stands to
benefit from the leverage in its diversified business model, which allows
customers to sweep cash between its brokerage and more profitable bank segments.
Lucent
Technologies Inc. $13.4 20.6 December-quarter earnings grew 33 percent, but the manufacturer of
telecommunications equipment lost ground as cellular operators pushed out spending
on third-generation networks until mid-2005. The Fund sold Lucent to fund an idea
with greater near-term earnings visibility.
MBNA Corp. $10.9 7.2 December-quarter earnings beat estimates. Steps by new management to divest
unproductive assets, cut expenses, streamline operations and increase
profitability were overshadowed as a competitive environment among lenders lasted
longer than expected. Despite higher interest rates, consumers were able to find
lenders offering zero-percentage rates for their credit balances, which MBNA did
not offer. The Fund sold MBNA to fund an idea with greater near-term upside
potential.
Garmin Ltd. $8.5 14.1 The maker of navigation devices that use Global Positioning System (GPS) to
pinpoint a user's exact location grew December-quarter earnings 34 percent,
beating estimates by 15 percent. Shares traded lower on concerns that a private
competitor would capture shelf space for its navigation products. We feel the
concerns are largely unwarranted, as Garmin holds significant cost advantages and
pricing flexibility over competitors.
All gains/losses are calculated on an average cost basis
BRANDYWINE BLUE FUND
PERCENT CHANGE IN TOP TEN HOLDINGS FROM BOOK COST
1. Starwood Hotels & Resorts Worldwide, Inc. +3.4%
2. Kohl's Corp. -2.1%
3. Companhia Vale do Rio Doce - ADR +47.7%
4. Weatherford International Ltd. +22.5%
5. Ingersoll-Rand Co. +10.7%
6. Phelps Dodge Corp. +23.9%
7. Corning Inc. -2.3%
8. Burlington Northern Santa Fe Corp. +42.1%
9. Union Pacific Corp. +10.8%
10. Nabors Industries, Ltd. +29.2%
EARNINGS GROWTH
YOUR COMPANIES 28%
S&P 500 10%
FORECASTED INCREASE IN EARNINGS PER SHARE
2005 VS 2004
ALL FIGURES ARE DOLLAR WEIGHTED AND BASED ON DATA FROM BASELINE. MARCH 31, 2005.
YOUR COMPANIES' MARKET CAPITALIZATION
LARGE CAP
$10 billion and over
56.4%
MID CAP
$2 billion to $10 billion
39.4%
CASH
4.2%
TOP TEN INDUSTRY GROUPS
Railroads (7.8%)
Industrial Machinery (7.0%)
Oil & Gas Equipment & Services (7.0%)
Steel (7.0%)
Oil & Gas Exploration & Production (6.1%)
Homebuilding (5.5%)
Department Stores (4.8%)
Hotels, Resorts & Cruise Lines (4.8%)
Communications Equipment (4.2%)
Diversified Metals & Mining (4.2%)
All Other Industry Groups (37.4%)
Cash (4.2%)
BRANDYWINE BLUE FUND
MARCH QUARTER "ROSES AND THORNS"
$ GAIN
BIGGEST $ WINNERS (IN MILLIONS) % GAIN REASON FOR MOVE
----------------- ------------ ------ ---------------
Nabors Industries, Ltd. $3.4 13.2 The company beat estimates with 55 percent December-quarter earnings growth as
oil and natural-gas producers increased drilling activity in both
international and North American markets to capitalize on higher energy
prices. Nabors is the world's largest land-drilling contractor.
Burlington Northern
Santa Fe Corp. $3.4 11.8 December-quarter earnings jumped 49 percent, beating estimates by 17 percent.
The nation's second largest railroad operator benefits from pricing leverage
associated with a tight transportation market and its ability to increase
volumes without disruption.
Companhia Vale
do Rio Doce $3.2 8.9 December-quarter earnings jumped 170 percent to $0.63 per share. The world's
largest supplier of iron-ore pellets used in steel production is selling all
it can produce as global steel demand outstrips existing iron-ore supply.
Earnings expectations for 2005 rose 55 percent, following a 70-plus percent
year-over-year price increase for the company's iron ore.
Weatherford
International, Ltd. $2.8 8.4 December-quarter earnings grew 53 percent, beating estimates as drillers
worldwide turned to Weatherford's yield-improving technologies to help
increase production. The company's drilling services segment benefits from
increased revenues associated with its underbalanced drilling technology,
which is being adopted to develop previously undevelopable sites.
Seagate Technology $1.6 8.5 The maker of hard drives used in consumer electronic devices beat December-
quarter earnings estimates by 21 percent. Earnings and revenue forecasts
climbed as consumers bought more digital products with substantial memory
requirements like Apple's iPod and Tivo's digital video recorders.
$ LOSS
BIGGEST $ LOSERS (IN MILLIONS) % LOSS REASON FOR MOVE
---------------- ------------ ------ ---------------
Avaya, Inc. $9.2 30.1 December-quarter earnings nearly tripled to $0.20 per share, beating
estimates. While enterprise customers continue to adopt Avaya's voice-over-
Internet protocol (VoIP) solutions, integration of a recent acquisition is
proceeding slower than expected. Additionally, the company's direct-sales
channel was hampered due to a reshuffling of territories. The Fund sold Avaya
to fund an idea with greater near-term earnings prospects.
Lucent
Technologies Inc. $5.5 22.7 December-quarter earnings grew 33 percent, but the manufacturer of
telecommunications equipment lost ground as cellular operators pushed out
spending on third-generation networks until mid-2005. The Fund sold Lucent to
fund an idea with greater near-term earnings visibility.
E*Trade Financial
Corp. $3.9 17.1 December-quarter earnings grew 44 percent, beating estimates by 18 percent.
Shares traded lower on concerns of increased price competition among online
brokers. Only 20 percent of E*Trade's business comes from online trading. The
company stands to benefit from the leverage in its diversified business model,
which allows customers to sweep cash between its brokerage and more profitable
bank segments.
R.R. Donnelley
& Sons Co. $2.3 9.7 The world's largest publishing company beat December-quarter earnings
estimates, but shares traded lower on concerns that its increased capital
spending would create overcapacity. R.R. Donnelley's acquisition strategy has
exposed excess costs and infrastructure, which it is eliminating as it wins
new business. The bulk of new spending is going toward replacing outdated
equipment.
MBNA Corp. $2.3 8.8 December-quarter earnings beat estimates. Steps by new management to divest
unproductive assets, cut expenses, streamline operations and increase
profitability were overshadowed as a competitive environment among lenders
lasted longer than expected. Despite higher interest rates, consumers were
able to find lenders offering zero-percentage rates for their credit balances,
which MBNA did not offer. The Fund sold MBNA to fund an idea with greater
near-term upside.
All gains/losses are calculated on an average cost basis
BRANDYWINE FUND, INC.
STATEMENT OF NET ASSETS
March 31, 2005
(Unaudited)
SHARES COST VALUE
------ ---- -----
LONG-TERM INVESTMENTS - 97.4% (A)<F4>
COMMON STOCKS - 96.9% (A)<F4>
CONSUMER DISCRETIONARY
APPAREL RETAIL - 2.6%
669,100 Aeropostale, Inc.*<F3> $ 20,925,582 $ 21,913,025
450,000 bebe stores, inc. 14,749,475 15,277,500
100,300 Children's Place
Retail Stores, Inc.*<F3> 3,210,408 4,789,325
350,000 The Finish Line, Inc. 6,440,495 8,102,500
610,000 The Men's Wearhouse, Inc.*<F3> 16,280,097 25,748,100
631,500 Talbots, Inc. 17,963,538 20,195,370
CATALOG RETAIL - 0.2%
367,800 Coldwater Creek Inc.*<F3> 7,033,608 6,796,944
CONSUMER ELECTRONICS - 1.4%
1,117,900 Garmin Ltd. 60,293,471 51,781,128
DEPARTMENT STORES - 3.2%
2,289,700 Kohl's Corp.*<F3> 120,594,230 118,217,211
DISTRIBUTORS - 0.1%
150,000 Prestige Brands Holdings Inc.*<F3> 2,477,217 2,647,500
FOOTWEAR - 1.7%
753,300 NIKE, Inc. Cl B 62,536,618 62,757,423
HOMEBUILDING - 3.5%
859,800 Centex Corp. 43,191,817 49,240,746
554,600 KB Home, Inc. 44,039,153 65,143,316
199,700 Standard Pacific Corp. 10,693,623 14,416,343
HOTELS, RESORTS & CRUISE LINES - 4.2%
2,584,500 Starwood Hotels & Resorts
Worldwide, Inc. 148,445,193 155,147,535
HOUSEWARES & SPECIALTIES - 0.2%
186,700 Jarden Corp.*<F3> 6,993,789 8,565,796
LEISURE PRODUCTS - 0.3%
400,000 Nautilus, Inc. 8,660,677 9,504,000
SPECIALTY STORES - 1.7%
193,100 Dick's Sporting Goods, Inc.*<F3> 6,199,868 7,092,563
1,512,900 Michaels Stores, Inc. 41,627,233 54,918,270
-------------- --------------
TOTAL CONSUMER DISCRETIONARY 642,356,092 702,254,595
THIS SECTOR IS 9.3% ABOVE YOUR FUND'S COST.
ENERGY
OIL & GAS DRILLING - 3.2%
1,155,000 Nabors Industries, Ltd.*<F3> 49,195,651 68,306,700
1,963,000 Patterson-UTI Energy, Inc. 48,465,202 49,114,260
OIL & GAS EQUIPMENT & SERVICES - 8.0%
125,000 Core Laboratories N.V.*<F3> 2,925,329 3,208,750
214,400 Grant Prideco, Inc.*<F3> 3,344,192 5,179,904
425,000 Halliburton Co. 17,002,069 18,381,250
2,270,000 National Oilwell Varco Inc.*<F3> 76,933,145 106,009,000
100,000 NS Group, Inc.*<F3> 2,058,726 3,141,000
450,000 Superior Energy Services, Inc.*<F3> 6,726,390 7,740,000
50,000 TETRA Technologies, Inc.*<F3> 1,499,750 1,422,000
276,200 Veritas DGC Inc.*<F3> 6,374,439 8,274,952
2,447,700 Weatherford International Ltd.*<F3> 104,081,673 141,819,738
OIL & GAS EXPLORATION & PRODUCTION - 4.7%
6,037,300 Chesapeake Energy Corp. 79,710,265 132,458,362
100,000 Global Industries, Ltd.*<F3> 935,250 940,000
150,000 KCS Energy, Inc.*<F3> 1,988,650 2,304,000
649,600 Southwestern Energy Co.*<F3> 37,286,907 36,871,296
40,000 Talisman Energy Inc. 1,345,760 1,366,000
-------------- --------------
TOTAL ENERGY 439,873,398 586,537,212
THIS SECTOR IS 33.3% ABOVE YOUR FUND'S COST.
FINANCIALS
ASSET MANAGEMENT & CUSTODY BANKS - 0.2%
145,300 Investors Financial Services Corp. 6,410,527 7,106,623
INVESTMENT BANKING & BROKERAGE - 2.0%
6,224,600 E*TRADE Financial Corp.*<F3> 87,519,378 74,695,200
PROPERTY & CASUALTY INSURANCE - 3.6%
2,461,600 Allstate Corp. 97,812,284 133,074,096
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.3%
300,000 CB Richard Ellis Group, Inc.*<F3> 8,872,632 10,497,000
-------------- --------------
TOTAL FINANCIALS 200,614,821 225,372,919
THIS SECTOR IS 12.3% ABOVE YOUR FUND'S COST.
HEALTH CARE
BIOTECHNOLOGY - 0.8%
659,900 Celgene Corp.*<F3> 21,692,079 22,469,595
343,200 Serologicals Corp.*<F3> 7,056,975 8,387,808
HEALTH CARE EQUIPMENT - 3.0%
1,550,000 Fisher Scientific
International Inc.*<F3> 69,002,993 88,226,000
1,077,900 PerkinElmer, Inc. 22,196,259 22,237,077
HEALTH CARE FACILITIES - 2.0%
2,102,200 Community Health Systems Inc.*<F3> 64,609,872 73,387,802
PHARMACEUTICALS - 0.9%
671,500 American Pharmaceutical
Partners, Inc.*<F3> 34,088,872 34,743,410
-------------- --------------
TOTAL HEALTH CARE 218,647,050 249,451,692
THIS SECTOR IS 14.1% ABOVE YOUR FUND'S COST.
INDUSTRIALS
AEROSPACE & DEFENSE - 4.0%
476,500 Alliant Techsystems Inc.*<F3> $ 32,979,372 $ 34,045,925
525,000 Armor Holdings, Inc.*<F3> 20,278,544 19,472,250
1,225,700 Goodrich Corp. 46,986,501 46,932,053
593,700 Precision Castparts Corp. 42,206,424 45,720,837
AIR FREIGHT & LOGISTICS - 1.4%
570,700 EGL, Inc.*<F3> 17,715,474 13,011,960
975,000 Ryder System, Inc. 34,043,459 40,657,500
COMMERCIAL PRINTING - 1.6%
1,885,400 R. R. Donnelley & Sons Co. 63,503,303 59,616,348
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS - 0.2%
150,000 Bucyrus International, Inc. 5,007,510 5,859,000
DIVERSIFIED COMMERCIAL SERVICES - 0.7%
570,800 Copart, Inc.*<F3> 14,130,548 13,448,048
126,500 Laureate Education Inc.*<F3> 4,639,362 5,412,935
309,100 Navigant Consulting, Inc.*<F3> 7,474,854 8,416,793
ELECTRICAL COMPONENTS & EQUIPMENT - 0.8%
445,100 AMETEK, Inc. 15,075,271 17,915,275
400,000 Thomas & Betts Corp.*<F3> 12,327,815 12,920,000
EMPLOYMENT SERVICES - 1.0%
1,257,000 Monster Worldwide Inc.*<F3> 37,238,375 35,258,850
ENVIRONMENTAL SERVICES - 0.2%
175,000 Waste Connections, Inc.*<F3> 6,122,844 6,081,250
INDUSTRIAL CONGLOMERATES - 1.3%
455,200 Carlisle Companies Inc. 31,681,199 31,759,304
394,300 Walter Industries, Inc. 16,823,550 16,777,465
INDUSTRIAL MACHINERY - 6.4%
219,200 IDEX Corp. 8,639,898 8,844,720
1,805,000 Ingersoll-Rand Co. 127,702,352 143,768,250
402,000 JLG Industries, Inc. 9,065,744 8,663,100
1,698,200 Pentair, Inc. 54,010,396 66,229,800
350,000 The Timken Co. 7,152,568 9,569,000
RAILROADS - 4.5%
1,199,000 Burlington Northern Santa Fe Corp. 41,622,007 64,662,070
455,200 Canadian Pacific Railway Ltd. 11,409,996 16,373,544
1,200,000 Union Pacific Corp. 75,532,091 83,640,000
TRADING COMPANIES & DISTIBUTORS - 1.3%
1,288,600 Hughes Supply, Inc. 38,231,268 38,335,850
475,000 United Rentals, Inc.*<F3> 9,410,691 9,599,750
TRUCKING - 2.2%
175,000 Arkansas Best Corp. 7,711,908 6,611,500
150,000 Old Dominion Freight Line, Inc.*<F3> 4,330,860 4,672,500
331,500 Swift Transportation Co., Inc.*<F3> 8,406,668 7,339,410
1,052,400 Yellow Roadway Corp.*<F3> 45,327,672 61,607,496
-------------- --------------
TOTAL INDUSTRIALS 856,788,524 943,222,783
THIS SECTOR IS 10.1% ABOVE YOUR FUND'S COST.
INFORMATION TECHNOLOGY
APPLICATION SOFTWARE - 2.1%
3,135,900 Citrix Systems, Inc.*<F3> 73,801,939 74,697,138
218,200 Parametric Technology Corp.*<F3> 1,208,640 1,219,738
COMMUNICATIONS EQUIPMENT - 2.7%
8,724,400 Corning Inc.*<F3> 100,289,157 97,102,572
100,000 SpectraLink Corp. 1,693,752 1,412,000
COMPUTER HARDWARE - 0.6%
398,400 Avid Technology, Inc.*<F3> 23,782,151 21,561,408
COMPUTER STORAGE & PERIPHERALS - 2.0%
1,443,500 Emulex Corp.*<F3> 22,741,920 27,195,540
2,310,500 Seagate Technology 41,178,500 45,170,275
DATA PROCESSING & OUTSOURCED SERVICES - 0.3%
182,800 Global Payments Inc. 9,349,340 11,788,772
ELECTRONIC EQUIPMENT MANUFACTURERS - 1.1%
1,393,000 FLIR Systems, Inc.*<F3> 43,127,569 42,207,900
INTERNET SOFTWARE & SERVICES - 0.0%
100,000 ValueClick, Inc.*<F3> 953,420 1,061,000
IT CONSULTING & OTHER SERVICES - 0.2%
225,000 Anteon International Corp.*<F3> 7,279,571 8,759,250
SEMICONDUCTORS - 1.6%
255,400 Fairchild Semiconductor
International, Inc.*<F3> 3,551,804 3,915,282
1,452,000 Integrated Device
Technology, Inc.*<F3> 18,103,485 17,467,560
439,000 International Rectifier Corp.*<F3> 18,522,057 19,974,500
610,100 Xilinx, Inc. 17,812,611 17,833,223
SYSTEMS SOFTWARE - 0.2%
49,578 Computer Associates
International, Inc. 0 1,343,564
275,000 Sybase, Inc.*<F3> 4,703,508 5,076,500
TECHNOLOGY DISTRIBUTORS - 0.1%
99,700 ScanSource, Inc.*<F3> 7,142,285 5,167,451
-------------- --------------
TOTAL INFORMATION TECHNOLOGY 395,241,709 402,953,673
THIS SECTOR IS 2.0% ABOVE YOUR FUND'S COST.
MATERIALS
ALUMINUM - 0.3%
425,000 Century Aluminum Co.*<F3> 12,034,759 12,860,500
CONSTRUCTION MATERIALS - 1.1%
415,222 Headwaters Inc.*<F3> 10,915,711 13,627,586
500,300 Martin Marietta Materials, Inc. 24,563,545 27,976,776
DIVERSIFIED CHEMICALS - 0.1%
160,700 Olin Corp. 3,911,030 3,583,610
DIVERSIFIED METALS & MINING - 4.3%
388,500 Arch Coal, Inc. 12,242,659 16,709,385
1,400,000 Phelps Dodge Corp. 112,574,286 142,422,000
STEEL - 6.8%
219,900 Carpenter Technology Corp. 13,749,056 13,064,259
381,900 Cleveland-Cliffs Inc. 23,792,988 27,829,053
623,100 Commercial Metals Co. 19,999,701 21,116,859
5,200,000 Companhia Vale do Rio Doce-ADR 119,664,774 164,372,000
110,500 IPSCO, Inc. 2,688,515 5,635,500
357,500 Oregon Steel Mills, Inc.*<F3> 7,217,268 8,222,500
352,000 Steel Dynamics, Inc. 14,282,474 12,126,400
-------------- --------------
TOTAL MATERIALS 377,636,766 469,546,428
THIS SECTOR IS 24.3% ABOVE YOUR FUND'S COST.
-------------- --------------
Total common stocks 3,131,158,360 3,579,339,302
REITS - 0.5% (A)<F4>
FINANCIALS
REAL ESTATE INVESTMENT TRUSTS - 0.5%
1,025,500 Host Marriott Corp. 16,798,261 16,982,280
-------------- --------------
TOTAL FINANCIALS 16,798,261 16,982,280
THIS SECTOR IS 1.1% ABOVE YOUR FUND'S COST.
-------------- --------------
Total long-term investments 3,147,956,621 3,596,321,582
PRINCIPAL
AMOUNT
---------
SHORT-TERM INVESTMENTS - 1.5% (A)<F4>
COMMERCIAL PAPER - 1.5%
$54,000,000 Countrywide Home Loans,
due 04/01/05, discount of 2.88% 54,000,000 54,000,000
VARIABLE RATE DEMAND NOTE - 0.0%
1,718,637 U.S. Bank, N.A., 2.60% 1,718,637 1,718,637
-------------- --------------
Total short-term investments 55,718,637 55,718,637
-------------- --------------
Total investments $3,203,675,258 3,652,040,219
--------------
--------------
Cash and receivables, less
liabilities 1.1% (A)<F4> 39,860,733
--------------
NET ASSETS $3,691,900,952
--------------
--------------
Net Asset Value Per Share
($0.01 par value 500,000,000
shares authorized), offering
and redemption price
($3,691,900,952 / 134,424,432
shares outstanding) $27.46
------
------
*<F3> Non-dividend paying security.
(a)<F4> Percentages for the various classifications relate to net assets.
ADR -- American Depository Receipts.
N.V. -- Netherlands Antillies Limited Liability Corp.
The accompanying notes to financial statements are an integral part of this
statement.
BRANDYWINE FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 2005
(Unaudited)
INCOME:
Dividends $ 15,072,594
Interest 831,475
------------
Total income 15,904,069
------------
EXPENSES:
Management fees 18,316,065
Transfer agent fees 773,080
Administrative services 309,425
Printing and postage expense 186,766
Board of Directors fees 117,017
Custodian fees 104,146
Insurance expense 53,656
Professional fees 33,377
Registration fees 29,825
Other expenses 17,958
------------
Total expenses 19,941,315
------------
NET INVESTMENT LOSS (4,037,246)
------------
NET REALIZED GAIN ON INVESTMENTS 334,921,380
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 135,525,591
------------
NET GAIN ON INVESTMENTS 470,446,971
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $466,409,725
------------
------------
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended March 31, 2005 (Unaudited)
and For the Year Ended September 30, 2004
2005 2004
---- ----
OPERATIONS:
Net investment loss $ (4,037,246) $ (20,471,883)
Net realized gain on investments 334,921,380 279,692,234
Net increase in unrealized appreciation on investments 135,525,591 196,081,197
-------------- --------------
Net increase in net assets resulting from operations 466,409,725 455,301,548
-------------- --------------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (5,602,579 and 15,923,002 shares, respectively) 148,951,261 381,959,569
Cost of shares redeemed (19,434,973 and 26,634,617 shares, respectively) (510,252,731) (636,057,970)
-------------- --------------
Net decrease in net assets derived from Fund share activities (361,301,470) (254,098,401)
-------------- --------------
TOTAL INCREASE 105,108,255 201,203,147
NET ASSETS AT THE BEGINNING OF THE PERIOD 3,586,792,697 3,385,589,550
-------------- --------------
NET ASSETS AT THE END OF THE PERIOD $3,691,900,952 $3,586,792,697
-------------- --------------
-------------- --------------
The accompanying notes to financial statements are an integral part of these
statements.
BRANDYWINE FUND, INC.
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each period)
For the Six Months Years Ended September 30,
ended March 31, 2005 -----------------------------------------------------------
(Unaudited) 2004 2003 2002 2001 2000
-------------------- ---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $24.19 $21.30 $19.08 $22.93 $46.23 $35.09
Income from investment operations:
Net investment loss(1)<F7> (0.03) (0.13) (0.10) (0.12) (0.09) (0.25)
Net realized and unrealized gains (losses)
on investments 3.30 3.02 2.32 (3.73) (7.10) 14.51
------ ------ ------ ------ ------ ------
Total from investment operations 3.27 2.89 2.22 (3.85) (7.19) 14.26
Less distributions:
Dividend from net investment income -- -- -- -- -- --
Distributions from net realized gains -- -- -- -- (16.11) (3.12)
------ ------ ------ ------ ------ ------
Total from distributions -- -- -- -- (16.11) (3.12)
------ ------ ------ ------ ------ ------
Net asset value, end of period $27.46 $24.19 $21.30 $19.08 $22.93 $46.23
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN 13.52%(a)<F5> 13.57% 11.64% (16.79%) (22.46%) 42.81%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 3,691,901 3,586,793 3,385,590 3,196,859 4,302,986 5,983,163
Ratio of expenses to average net assets 1.09%(b)<F6> 1.08% 1.09% 1.08% 1.06% 1.04%
Ratio of net investment loss
to average net assets (0.22%)(b)<F6> (0.55%) (0.53%) (0.52%) (0.32%) (0.61%)
Portfolio turnover rate 80.4% 247.0% 279.3% 272.9% 284.3% 244.0%
(a)<F5> Not Annualized.
(b)<F6> Annualized.
(1)<F7> In 2005, 2004, 2003, 2002 and 2001, net investment loss per share was
calculated using average shares outstanding. In 2000, net investment
loss per share was calculated using ending balances prior to
consideration of adjustments for book and tax differences.
The accompanying notes to financial statements are an integral part of this
statement.
BRANDYWINE BLUE FUND
STATEMENT OF NET ASSETS
March 31, 2005
(Unaudited)
SHARES COST VALUE
------ ---- -----
LONG-TERM INVESTMENTS - 95.8% (A)<F9>
COMMON STOCKS - 95.0% (A)<F9>
CONSUMER DISCRETIONARY
CONSUMER ELECTRONICS - 1.7%
293,100 Garmin Ltd. $ 15,656,710 $ 13,576,392
DEPARTMENT STORES - 4.8%
750,000 Kohl's Corp.*<F8> 39,548,026 38,722,500
FOOTWEAR - 3.1%
300,000 NIKE, Inc. Cl B 26,016,006 24,993,000
HOMEBUILDING - 5.5%
411,000 Centex Corp. 21,343,123 23,537,970
275,000 Pulte Homes, Inc. 19,499,287 20,248,250
HOTELS, RESORTS & CRUISE LINES - 4.8%
647,300 Starwood Hotels & Resorts
Worldwide, Inc. 37,583,656 38,857,419
PUBLISHING - 2.6%
237,300 McGraw-Hill Companies, Inc. 21,269,027 20,704,425
------------ ------------
TOTAL CONSUMER DISCRETIONARY 180,915,835 180,639,956
THIS SECTOR IS 0.2% BELOW YOUR FUND'S COST.
CONSUMER STAPLES
DRUG RETAIL - 2.5%
375,000 CVS Corp. 18,107,962 19,732,500
------------ ------------
TOTAL CONSUMER STAPLES 18,107,962 19,732,500
THIS SECTOR IS 9.0% ABOVE YOUR FUND'S COST.
ENERGY
OIL & GAS DRILLING - 3.7%
500,000 Nabors Industries, Ltd.*<F8> 22,890,806 29,570,000
OIL & GAS EQUIPMENT & SERVICES - 7.0%
472,300 Halliburton Co. 17,928,659 20,426,975
618,900 Weatherford International Ltd.*<F8> 29,282,002 35,859,066
OIL & GAS EXPLORATION & PRODUCTION - 6.1%
1,321,500 Chesapeake Energy Corp. 28,214,404 28,993,710
594,200 Talisman Energy Inc. 19,811,524 20,291,930
------------ ------------
TOTAL ENERGY 118,127,395 135,141,681
THIS SECTOR IS 14.4% ABOVE YOUR FUND'S COST.
FINANCIALS
INVESTMENT BANKING & BROKERAGE - 2.4%
1,582,200 E*TRADE Financial Corp.*<F8> 22,767,648 18,986,400
PROPERTY & CASUALTY INSURANCE - 3.3%
487,100 Allstate Corp. 21,057,064 26,332,626
------------ ------------
TOTAL FINANCIALS 43,824,712 45,319,026
THIS SECTOR IS 3.4% ABOVE YOUR FUND'S COST.
HEALTH CARE
BIOTECHNOLOGY - 2.7%
371,000 Amgen Inc.*<F8> 23,421,088 21,595,910
HEALTH CARE EQUIPMENT - 2.9%
402,600 Fisher Scientific
International Inc.*<F8> 24,166,712 22,915,992
------------ ------------
TOTAL HEALTH CARE 47,587,800 44,511,902
THIS SECTOR IS 6.5% BELOW YOUR FUND'S COST.
INDUSTRIALS
AIR FREIGHT & LOGISTICS - 2.7%
232,600 FedEx Corp. 21,796,838 21,852,770
COMMERCIAL PRINTING - 2.7%
680,000 R. R. Donnelley & Sons Co. 23,362,140 21,501,600
INDUSTRIAL CONGLOMERATES - 2.4%
540,000 General Electric Co. 17,254,568 19,472,400
INDUSTRIAL MACHINERY - 7.0%
440,000 Ingersoll-Rand Co. 31,647,491 35,046,000
232,000 ITT Industries, Inc. 19,617,604 20,935,680
RAILROADS - 7.8%
600,000 Burlington Northern
Santa Fe Corp. 22,771,407 32,358,000
434,600 Union Pacific Corp. 27,347,108 30,291,620
------------ ------------
TOTAL INDUSTRIALS 163,797,156 181,458,070
THIS SECTOR IS 10.8% ABOVE YOUR FUND'S COST.
INFORMATION TECHNOLOGY
COMMUNICATIONS EQUIPMENT - 4.2%
3,000,000 Corning Inc.*<F8> 34,176,858 33,390,000
COMPUTER STORAGE & PERIPHERALS - 2.6%
1,075,000 Seagate Technology 19,327,455 21,016,250
SEMICONDUCTORS - 1.3%
356,900 Xilinx, Inc. 10,356,749 10,432,187
SYSTEMS SOFTWARE - 0.0%
4,581 Computer Associates
International, Inc. 0 124,145
------------ ------------
TOTAL INFORMATION TECHNOLOGY 63,861,062 64,962,582
THIS SECTOR IS 1.7% ABOVE YOUR FUND'S COST.
MATERIALS
DIVERSIFIED METALS & MINING - 4.2%
330,400 Phelps Dodge Corp. 27,118,644 33,611,592
STEEL - 7.0%
1,217,500 Companhia Vale do Rio Doce-ADR 26,057,243 38,485,175
312,300 Nucor Corp. 19,698,198 17,975,988
------------ ------------
TOTAL MATERIALS 72,874,085 90,072,755
THIS SECTOR IS 23.6% ABOVE YOUR FUND'S COST.
------------ ------------
Total common stocks 709,096,007 761,838,472
REITS - 0.8% (A)<F9>
FINANCIALS
REAL ESTATE INVESTMENT TRUSTS - 0.8%
400,000 Host Marriott Corp. 6,620,760 6,624,000
------------ ------------
TOTAL FINANCIALS 6,620,760 6,624,000
THIS SECTOR IS 0.0% ABOVE YOUR FUND'S COST.
------------ ------------
Total long-term investments 715,716,767 768,462,472
PRINCIPAL
AMOUNT
---------
SHORT-TERM INVESTMENTS - 4.1% (A)<F9>
COMMERCIAL PAPER - 3.9%
$31,000,000 Countrywide Home Loans,
due 04/01/05, discount of 2.88% 31,000,000 31,000,000
VARIABLE RATE DEMAND NOTE - 0.2%
1,957,041 U.S. Bank, N.A., 2.60% 1,957,041 1,957,041
------------ ------------
Total short-term investments 32,957,041 32,957,041
------------ ------------
Total investments $748,673,808 801,419,513
------------
------------
Cash and receivables, less
liabilities 0.1% (A)<F9> 980,582
------------
NET ASSETS $802,400,095
------------
------------
Net Asset Value Per Share
($0.01 par value 100,000,000
shares authorized), offering
and redemption price
($802,400,095 / 28,965,778
shares outstanding) $27.70
------
------
*<F8> Non-dividend paying security.
(a)<F9> Percentages for the various classifications relate to net assets.
ADR -- American Depository Receipts
STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 2005
(Unaudited)
INCOME:
Dividends $ 3,454,390
Interest 433,606
-----------
Total income 3,887,996
-----------
EXPENSES:
Management fees 3,257,120
Transfer agent fees 80,547
Administrative services 73,075
Registration fees 36,346
Printing and postage expense 31,639
Board of Directors fees 25,716
Professional fees 20,062
Custodian fees 13,008
Insurance expense 7,524
Other expenses 13,532
-----------
Total expenses 3,558,569
-----------
NET INVESTMENT INCOME 329,427
-----------
NET REALIZED GAIN ON INVESTMENTS 36,671,130
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 16,437,390
-----------
NET GAIN ON INVESTMENTS 53,108,520
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $53,437,947
-----------
-----------
The accompanying notes to financial statements are an integral part of these
statements.
BRANDYWINE BLUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended March 31, 2005 (Unaudited)
and for the Year Ended September 30, 2004
2005 2004
---- ----
OPERATIONS:
Net investment income (loss) $ 329,427 $ (1,398,938)
Net realized gain on investments 36,671,130 33,958,803
Net increase in unrealized appreciation on investments 16,437,390 28,410,380
------------ ------------
Net increase in net assets resulting from operations 53,437,947 60,970,245
------------ ------------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (9,746,582 and 8,853,587 shares, respectively) 268,059,613 215,636,391
Cost of shares redeemed (1,864,188 and 2,384,780 shares, respectively) (50,613,123) (57,816,638)
------------ ------------
Net increase in net assets derived from Fund share activities 217,446,490 157,819,753
------------ ------------
TOTAL INCREASE 270,884,437 218,789,998
NET ASSETS AT THE BEGINNING OF THE PERIOD 531,515,658 312,725,660
------------ ------------
NET ASSETS AT THE END OF THE PERIOD $802,400,095 $531,515,658
------------ ------------
------------ ------------
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each period)
For the Six Months Years Ended September 30,
ended March 31, 2005 -----------------------------------------------------------
(Unaudited) 2004 2003 2002 2001 2000
-------------------- ---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $25.21 $21.40 $18.30 $21.31 $37.39 $29.46
Income from investment operations:
Net investment income (loss)(1)<F12> .01 (0.08) (0.08) (0.05) (0.05) (0.21)
Net realized and unrealized gains (losses)
on investments 2.48 3.89 3.18 (2.96) (5.32) 10.32
------ ------ ------ ------ ------ ------
Total from investment operations 2.49 3.81 3.10 (3.01) (5.37) 10.11
------ ------ ------ ------ ------ ------
Less distributions:
Dividend from net investment income -- -- -- -- -- --
Distributions from net realized gains -- -- -- -- (10.71) (2.18)
------ ------ ------ ------ ------ ------
Total from distributions -- -- -- -- (10.71) (2.18)
------ ------ ------ ------ ------ ------
Net asset value, end of period $27.70 $25.21 $21.40 $18.30 $21.31 $37.39
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN 9.88%(a)<F10> 17.80% 16.94% (14.12%) (19.92%) 35.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 802,400 531,516 312,726 217,738 271,947 407,839
Ratio of expenses to average net assets 1.09%(b)<F11> 1.13% 1.14% 1.13% 1.09% 1.07%
Ratio of net investment income (loss)
to average net assets 0.10%(b)<F11> (0.32%) (0.41%) (0.26%) (0.18%) (0.56%)
Portfolio turnover rate 88.44% 247.4% 300.0% 310.7% 274.5% 245.7%
(a)<F10> Not Annualized.
(b)<F11> Annualized.
(1)<F12> In 2005, 2004, 2003, 2002 and 2001, net investment income (loss) per
share was calculated using average shares outstanding. In 2000, net
investment loss per share was calculated using ending balances prior
to consideration of adjustments for book and tax differences.
The accompanying notes to financial statements are an integral part of these
statements.
THE BRANDYWINE FUNDS
NOTES TO FINANCIAL STATEMENTS
March 31, 2005 (Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies of Brandywine
Fund, Inc. (the "Brandywine Fund") and Brandywine Blue Fund (the "Blue
Fund," one of two Funds in a series of the Brandywine Blue Fund, Inc.)
(collectively the "Brandywine Funds" or the "Funds"). Each Fund is
registered as a diversified open-end management company under the
Investment Company Act of 1940, as amended. The assets and liabilities of
each Fund are segregated and a shareholder's interest is limited to the
Fund in which the shareholder owns shares. The Brandywine Fund was
incorporated under the laws of Maryland on October 9, 1985. The Blue Fund
was incorporated under the laws of Maryland on November 13, 1990. The
investment objective of each Fund is to produce long-term capital
appreciation principally through investing in common stocks.
(a) Each security, excluding short-term investments, is valued at the last
sale price reported by the principal security exchange on which the
issue is traded. Securities that are traded on the Nasdaq National
Market or the Nasdaq SmallCap Market are valued at the Nasdaq Official
Closing Price, or if no sale is reported, the latest bid price.
Securities which are traded over-the-counter are valued at the latest
bid price. Securities for which quotations are not readily available
are valued at fair value as determined by the investment adviser under
the supervision of the Board of Directors. Short-term investments with
maturities of 60 days or less are valued at amortized cost which
approximates value. For financial reporting purposes, investment
transactions are recorded on the trade date; however, for purposes of
executing shareholder transactions, the Funds record changes in
holdings of portfolio securities no later than the first business day
after the trade date in accordance with Rule 2a-4 of the Investment
Company Act. Accordingly, certain differences between net asset values
for financial reporting and for executing shareholder transactions may
arise.
(b) Net realized gains and losses on sales of securities are computed on
the identified cost basis.
(c) Dividend income is recorded on the ex-dividend date. Interest income
is recorded on the accrual basis.
(d) The Funds have investments in short-term variable rate demand notes,
which are unsecured instruments. The Funds may be susceptible to
credit risk with respect to these notes to the extent the issuer
defaults on its payment obligation. The Funds' policy is to monitor
the creditworthiness of the issuer and nonperformance by these
counterparties is not anticipated.
(e) Accounting principles generally accepted in the United States of
America ("GAAP") require that permanent differences between income for
financial reporting and tax purposes be reclassified in the capital
accounts.
(f) The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these
estimates.
(g) No provision has been made for Federal income taxes since the Funds
have elected to be taxed as "regulated investment companies" and
intend to distribute substantially all net investment company taxable
income and net capital gains to shareholders and otherwise comply with
the provisions of the Internal Revenue Code applicable to regulated
investment companies.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENTS AND TRANSACTIONS WITH RELATED
PARTIES
Each Fund has a management agreement with Friess Associates, LLC (the
"Adviser"), with whom certain Officers and Directors of the Funds are
affiliated, to serve as investment adviser and manager. Under the terms of
the agreements, each Fund will pay the Adviser a monthly management fee at
the annual rate of one percent (1%) on the daily net assets of such Fund.
Also, the Adviser is reimbursed for administrative services rendered to
each Fund by a consultant paid by the Adviser.
The Adviser entered into sub-advisory agreements with its affiliate, Friess
Associates of Delaware, LLC (the "Sub-Adviser"), to assist it in the day-
to-day management of each of the Funds. The Adviser and, if so delegated,
the Sub-Adviser supervise the investment portfolios of the Funds, directing
the purchase and sale of investment securities in the day-to-day management
of the Funds. The Adviser pays the Sub-Adviser a fee equal to 110% of the
monthly expenses the Sub-Adviser incurs in performing its services as Sub-
Adviser. This relationship does not increase the annual management fee the
Funds pay to the Adviser.
The Brandywine Fund and Brandywine Blue Fund pay each of the six
independent directors annual fees of $20,000 and $5,000, respectively. The
Lead Independent Director and Chairman of the Audit Committee are paid
additional fees of $5,000 and $2,500 annually, divided proportionately
among all the Funds. All of the independent directors have elected to defer
the receipt of all of the compensation they earn as directors through a
deferred compensation plan. Under the plan, the compensation credited to
the directors is in the form of phantom shares of the Funds. Therefore,
the amounts deferred under the plan increase or decrease in value as if
they had been invested in shares of the applicable Fund. Each Fund
maintains a payable for the directors' deferred compensation and recognizes
its change in value as an expense. The Funds also reimburse directors for
travel costs incurred in order to attend meetings of the Board of
Directors. For the six months ended March 31, 2005 the Funds expensed the
following directors fees and costs:
Brandywine Blue
Fund Fund
---------- ----
Directors Fees and Travel Costs Paid
during the Period $ 63,760 $ 16,714
Appreciation in Deferred Compensation
Plan Phantom Shares 54,291 10,035
-------- -------
Total Director Fees and Related Costs $118,051 $26,749
In the normal course of business the Funds enter into contracts with
service providers that contain general indemnification clauses. The Funds'
maximum exposure under these arrangements is unknown as this would involve
future claims that may be made against the Funds that have not yet
occurred. However, based on experience, the Funds expect the risk of loss
to be remote.
(3) CREDIT AGREEMENT
U.S. Bank, N.A. has made available to each Fund a credit facility pursuant
to Credit Agreements effective July 22, 2004, for the purpose of having
cash available to cover incoming redemptions. The Brandywine Fund has a
$50,000,000 credit facility and the Blue Fund has a $10,000,000 credit
facility. Principal and interest of such loan under the Credit Agreements
are due not more than 31 days after the date of the loan. Amounts under the
credit facilities bear interest at a rate per annum equal to the current
prime rate minus one on the amount borrowed. Advances will be
collateralized by securities owned by the respective Fund. During the six
months ended March 31, 2005, neither Fund borrowed against their Agreement.
The Credit Agreements expire on December 18, 2005.
(4) DISTRIBUTIONS TO SHAREHOLDERS
Net investment income and net realized gains, if any, are distributed to
shareholders at least annually.
(5) INVESTMENT TRANSACTIONS AND RELATED COSTS
For the six months ended March 31, 2005, purchases and proceeds of sales of
investment securities (excluding short-term investments) for the Funds were
as follows:
SALE TRANSACTION RATIO OF COST TO
PURCHASES PROCEEDS COST AVERAGE NET ASSETS
--------- -------- ----------- ------------------
Brandywine Fund $2,894,001,183 $3,307,805,945 $10,095,520 0.27%
Blue Fund 760,074,457 554,225,220 2,036,547 0.31%
Transaction cost represents the total commissions paid by each Fund on its
respective purchases and sales of investment securities. These costs are
added to the cost basis of the securities purchased and are deducted from
the proceeds of securities sold, thereby reducing the realized gains or
increasing the realized losses upon the sale of the securities.
(6) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
As of March 31, 2005, liabilities of each Fund included the following:
Brandywine Blue
Fund Fund
---------- ----
Payable to brokers for investments purchased $ 32,300,159 $ 13,866,401
Due to custodian 3,399,800 --
Payable to Adviser for management fees 3,191,542 662,624
Deferred compensation plan for Directors 538,620 137,723
Payable to shareholders for redemptions 147,204 12,924
Other liabilities 720,236 24,921
(7) SOURCES OF NET ASSETS
As of March 31, 2005, the sources of net assets were as follows:
Fund shares issued and outstanding $3,916,301,938 $732,822,547
Net unrealized appreciation on investments 448,364,961 52,745,705
Accumulated net realized (losses) gains (672,227,327) 16,640,139
Undistributed net investment income -- 329,427
Accumulated net investment loss (538,620) (137,723)
-------------- ------------
$3,691,900,952 $802,400,095
-------------- ------------
-------------- ------------
(8) INCOME TAX INFORMATION
The following information for the Funds is presented on an income tax basis
as of March 31, 2005:
GROSS GROSS NET UNREALIZED
COST OF UNREALIZED UNREALIZED APPRECIATION
INVESTMENTS APPRECIATION DEPRECIATION ON INVESTMENTS
----------- ------------ ------------ --------------
Brandywine Fund $3,203,940,905 $507,194,743 $59,095,429 $448,099,314
Blue Fund 748,674,474 69,777,995 17,032,956 52,745,039
The following information for the Funds is presented on an income tax basis
as of September 30, 2004:
GROSS GROSS NET UNREALIZED DISTRIBUTABLE DISTRIBUTABLE
COST OF UNREALIZED UNREALIZED APPRECIATION ORDINARY LONG-TERM
INVESTMENTS APPRECIATION DEPRECIATION ON INVESTMENTS INCOME CAPITAL GAINS
----------- ------------ ------------ -------------- ------------- -------------
Brandywine Fund $3,313,100,506 $388,573,669 $74,320,440 $314,253,229 $ -- $ --
Blue Fund 496,605,023 45,697,068 8,695,584 37,001,484 $ -- $ --
The difference, if any, between the cost amounts for financial statement
and federal income tax purposes is due primarily to timing differences in
recognizing certain gains and losses in security transactions.
(8) INCOME TAX INFORMATION (continued)
The tax components of dividends paid during the years ended September 30,
2004 and 2003, capital loss carryovers, which may be used to offset future
capital gains, subject to Internal Revenue Code limitations, (expiring in
varying amounts through 2011), as of September 30, 2004, and tax basis
post-October losses as of September 30, 2004, which are not recognized for
tax purposes until the first day of the following fiscal year are:
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003
--------------------------------------------------------------------- -------------------------------
ORDINARY LONG-TERM NET CAPITAL ORDINARY LONG-TERM
INCOME CAPITAL GAINS LOSS POST-OCTOBER INCOME CAPITAL GAINS
DISTRIBUTIONS DISTRIBUTIONS CARRYOVERS LOSSES DISTRIBUTIONS DISTRIBUTIONS
------------- ------------- ---------- ------------ ------------- -------------
Brandywine Fund $ -- $ -- $1,008,483,332 $ -- $ -- $ --
Blue Fund $ -- $ -- $ 20,690,340 $ -- $ -- $ --
The Brandywine Fund and the Blue Fund have utilized $279,658,978 and
$32,658,100, respectively, of their capital loss carryovers during the year
ended September 30, 2004.
Since there were no ordinary distributions paid for either Fund for the
year ended September 30, 2004, there were no distributions designated as
qualifying for the dividends received deduction for corporate shareholders
nor as qualified dividend income under the Jobs and Growth Tax Relief Act
of 2003.
COST DISCUSSION
Mutual fund shareholders incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchase payments, reinvested dividends, or
other distributions; redemption fees; and exchange fees; and (2) ongoing costs,
including management fees; distribution [and/or service] (12b-1) fees; and other
fund expenses. Brandywine and Brandywine Blue do not have 12b-1 distribution
fees. This example is intended to help you understand your ongoing costs (in
dollars) of investing in the Brandywine Funds and to compare these costs with
the ongoing costs of investing in other mutual funds.
In addition to the costs highlighted and described below, the only Fund
transaction costs you might currently incur would be wire fees ($15 per wire),
if you choose to have proceeds from a redemption wired to your bank account
instead of receiving a check. Additionally, U.S. Bank charges an annual
processing fee ($15) if you maintain an IRA account with the Funds. To determine
your total costs of investing in the Funds, you would need to add any applicable
wire or IRA processing fees you've incurred during the period to the costs
provided in the example below.
The example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period from September 30, 2004 through March
31, 2005.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs. While the
Brandywine Funds currently do not assess sales charges, redemption or exchange
fees, other funds do, and those costs will not be reflected in their expense
example tables. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT ACCOUNT DURING PERIOD*<F13>
VALUE VALUE 09/30/04-
09/30/04 03/31/05 03/31/05
-------- -------- --------
Brandywine Actual $1,000 $1,000.00 $1,135.20 $5.80
Hypothetical (5% return before expenses) $1,000.00 $1,025.00 $5.50
Brandywine Blue Actual $1,000 $1,000.00 $1,098.80 $5.70
Hypothetical (5% return before expenses) $1,000 $1,000.00 $1,025.00 $5.50
*<F13> Expenses are equal to the Funds' annualized expense ratios of 1.09% and
1.09%, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period between
September 30, 2004 and March 31, 2005).
BRANDYWINE FUNDS ADVISORY AGREEMENTS
On December 6, 2004, the Board of Directors of the Funds approved the
continuation of the advisory agreements with Friess Associates, LLC ("Friess").
Prior to approving the continuation of the advisory agreements, the Board
considered:
o the nature, extent and quality of the services provided by Friess
o the investment performance of the Funds
o the costs of the services to be provided and profits to be realized by
Friess from its relationship with the Funds
o the extent to which economies of scale would be realized as the Funds
grow and whether fee levels reflect these economies of scale
o the expense ratios of the Funds
o the manner in which portfolio transactions for the Funds are conducted,
including the use of soft dollars
In considering the nature, extent and quality of the services provided by
Friess, the Board of Directors reviewed a report describing the portfolio
management, shareholder communication and support and regulatory compliance
services provided by Friess to the Funds. The Board concluded that Friess was
providing essential services to the Funds. In particular, the Board concluded
that Friess was preparing reports to shareholders in addition to those required
by law.
The Directors compared the performance of the Funds to benchmark indices
over various periods of time and concluded that the performance of the Funds
warranted the continuation of the advisory agreements.
In concluding that the advisory fees payable by the Funds were reasonable,
the Directors reviewed a report of the costs of services provided by and the
profits realized by Friess from its relationship with the Funds and concluded
that such profits were reasonable and not excessive. The Directors also reviewed
reports comparing the expense ratios and advisory fees paid by the Funds to
those paid by other comparable mutual funds and concluded that the advisory fees
paid by the Funds were higher than the average advisory fees paid by comparable
mutual funds, but the expense ratios of the Funds were lower than the average
expense ratios of comparable mutual funds. The Directors also noted that all
clients of Friess pay the same 1% advisory fee, which eliminates potential
conflicts of interest for Friess between the Funds and the other portfolios it
manages. They noted that this fee would not be adjusted if economies of scale
were realized during the current contract period as the Funds grew, but did not
consider that factor to be significant in light of the other factors considered.
Finally, the Board reviewed reports discussing the manner in which portfolio
transactions for the Funds were conducted, including the use of soft dollars.
Based on these reports, the Board concluded that the research obtained by Friess
was beneficial to the Funds and that Friess was executing the Funds portfolio
transactions in a manner designed to obtain best execution for the Funds.
ADDITIONAL DIRECTOR INFORMATION, PROXY VOTING POLICY
AND QUARTERLY PORTFOLIO SCHEDULES
For additional information about the Directors and Officers or for a
description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities, please call (800) 656-3017 and
request a Statement of Additional Information. One will be mailed to you free of
charge. The Statement of Additional Information is also available on the website
of the Securities and Exchange Commission (the "Commission") at
http://www.sec.gov. Information on how the Funds voted proxies relating to
portfolio securities during the twelve month period ending June 30, 2004 is
available on the Funds' website at http://www.brandywinefunds.com or the website
of the Commission. The Funds file their complete schedule of portfolio holdings
with the Commission for the first and third quarters of each fiscal year on Form
N-Q; (ii) the Funds' Forms N-Q are available on the Commission's website; and
(iii) the Funds' Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC, and that information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330.
"IT REMAINS CLEAR THAT THE [FRIESS] TEAM IS OBSESSIVE AND THOROUGH WHEN IT
COMES TO CONDUCTING INDUSTRY TRADE CHECKS. They talk to companies up and
down the food chain, and across sectors and industries to help them uncover
good ideas and get an information edge over the competition. We view the
team's emphasis on this practice as the most important aspect of the team's
success."
No-Load Fund Analyst, "Fund Updates," March 2005
"ONE OF THE SECRETS OF THE FRIESS TEAM'S SUCCESS IS THAT ITS GROWTH-
ORIENTED STYLE IS TEMPERED BY A CON-SCIOUSNESS OF VALUE. Compared to other
growth funds, it's not uncommon for Brandywine and Brandywine Blue to lag
their peers in go-go markets, lead them in more difficult times and provide
a smoother, more-profitable ride over the long run."
Louis Rukeyser's Mutual Funds, "The New Leader of a Top Team," March 2005
"WHAT MAKES A GREAT FUND? A GREAT MANAGER. MEET THOSE ON THE HONOR ROLL."
Brandywine Fund named to Kiplinger's list of "16 Funds We Love."
Kiplinger's Personal Finance Mutual Funds, "16 Funds We Love," Spring 2005
"BRANDYWINE HAS WHAT IT TAKES TO GET THE MID-CAP GROWTH JOB DONE -- AND
THEN SOME. The price tag here is reasonable, and the manager is rock-
solid."
Motley Fool Champion Funds, "Fund of the Month," January 2005
DEFINITIONS AND DISCLOSURES
Performance data quoted represents past performance; past performance does not
guarantee future results. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. Current performance of the funds
may be lower or higher than the performance quoted. Performance data current to
the most recent month end may be obtained by visiting www.brandywinefunds.com.
The funds' investment objectives, risks, charges and expenses must be considered
carefully before investing. The prospectus contains this and other important
information about the investment companies, and it may be obtained by calling 1-
800-656-3017, or visiting www.brandywinefunds.com. Read it carefully before
investing.
Fund holdings and sector weightings are subject to change at any time and are
not recommendations to buy or sell any securities. Securities discussed were not
held by the Funds as of 3/31/05, unless listed in the accompanying statements of
net assets. References to the earnings growth rates of the Funds refer solely to
the estimated earnings growth rates of the average investment holding of the
Funds based on consensus estimates from Baseline and not to the actual
performance of the Funds themselves. Baseline Financial Services, Inc.
(Baseline) provides analytical information and services to the investment
community.
The Russell 3000 Index measures the performance of the 3,000 largest U.S.
companies based on total market capitalization, which represents approximately
98% of the investable U.S. equity market. The Russell 3000 Growth Index measures
the performance of those Russell 3000 Index companies with higher price-to-book
ratios and higher forecasted growth values. The S&P 500 Index is a market-value
weighted index consisting of 500 U.S. stocks chosen for market size, liquidity
and industry group representation. The Russell 1000 Index measures the
performance of the 1,000 largest companies in the Russell 3000 Index, which
represents approximately 92% of the total market capitalization of the Russell
3000 Index. The Russell 1000 Growth Index measures the performance of those
Russell 1000 companies with higher price-to-book ratios and higher forecasted
growth values. You cannot invest directly in an index.
As of March 31, 2005, the Russell 3000 Index's average annual total returns for
1, 5 and 10 years were 7.09, -2.48 and 10.80 percent; the Russell 3000 Growth
Index's were 1.15, -10.94 and 7.87 percent; the Russell 1000 Index's were 7.24,
- -2.97 and 10.93 percent; the Russell 1000 Growth Index's were 1.16, -11.28 and
8.15 percent; and the S&P 500 Index's were 6.69, -3.16 and 10.79 percent. As of
March 31, 2005, the average fund in Morningstar's Mid-cap Growth category had
average annual total returns for 1, 5 and 10 years of 5.14, -6.84 and 9.28
percent, and the average fund in Morningstar's Large Growth category had returns
of 1.45, -9.73 and 7.85 percent.
CAPITAL GAINS UPDATE . . .
An October capital gains distribution seems unlikely for Brandywine Fund,
which during the March quarter reduced its net realized loss position to
about $5.00 per share. Brandywine Blue Fund finished the quarter with a
net realized gain of approximately $0.57 a share, raising the possibility
of a distribution. These are only estimates provided for planning
purposes. The amount of gains and losses realized over the next six
months will be the deciding factor on whether distributions are in order,
so please look for updates in future quarterly reports.
BOARD OF DIRECTORS
Robert F. Birch
President and Director
New America High Income Fund
Dover, Massachusetts
William F. D'Alonzo
CEO and CIO
Friess Associates of Delaware, LLC
Greenville, Delaware
Foster S. Friess
Chairman
Friess Associates, LLC
Jackson, Wyoming
Quentin Jackson
President and CEO
Nuclear Electric Insurance Limited
Wilmington, Delaware
Stuart A. McFarland
Managing Partner
Federal City Capital Advisors, LLC
Washington, DC
W. Richard Scarlett, III
Chairman and CEO
United Bancorporation of Wyoming, Inc.
Jackson, Wyoming
Marvin N. Schoenhals
Chairman and President
WSFS Financial Corp.
Wilmington, Delaware
James W. Zug
Former Senior Partner
PricewaterhouseCoopers LLP
Radnor, Pennsylvania
P.O. Box 4166, Greenville, DE 19807
(800) 656-3017 www.brandywinefunds.com bfunds@friess.com
Investment Adviser: FRIESS ASSOCIATES, LLC
Investment Sub-Adviser: FRIESS ASSOCIATES OF DELAWARE, LLC
Custodian: U.S. BANK, N.A.
Transfer Agent: U.S. BANCORP FUND SERVICES, LLC
Independent Registered Public Accounting Firm: PRICEWATERHOUSECOOPERS LLP
Legal Counsel: FOLEY & LARDNER LLP
OFFICERS: Foster Friess, Founder; William D'Alonzo, Chairman and President;
Lynda Campbell, Vice President and Secretary; Christopher Long, Vice President
and Treasurer; David Marky, Chief Compliance Officer, Vice President and
Assistant Secretary; and Paul Robinson, Vice President
Report Editor: Chris Aregood
Report Staff: Rebecca Buswell, David Marky, Adam Rieger
ITEM 2. CODE OF ETHICS.
- -----------------------
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
- -----------------------------------------
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
- -----------------------------------------------
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
- ----------------------------------------------
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
- --------------------------------
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
- -------------------------------------------------------------------------
MANAGEMENT INVESTMENT COMPANIES.
- --------------------------------
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
- -------------------------------------------------------------------------
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
- --------------------------------------------------------------------------
COMPANY AND AFFILIATED PURCHASERS.
- ----------------------------------
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- -------------------------------------------------------------
None.
ITEM 11. CONTROLS AND PROCEDURES.
- ---------------------------------
(a) The disclosure controls and procedures of the Brandywine Fund, Inc. are
periodically evaluated. As of April 20, 2005, the date of the last
evaluation, we concluded that our disclosure controls and procedures are
adequate.
(b) The internal controls of the Brandywine Fund, Inc. are periodically
evaluated. Since, April 20, 2005, the date of the last evaluation, there
have been no significant changes in the Brandywine Fund's internal controls
or in other factors that could have had a significant effect on such
controls. There have also been no significant deficiencies or material
weaknesses identified since the last evaluation that required any
corrective action.
ITEM 12. EXHIBITS.
- ------------------
(a) Any code of ethics or amendment thereto. Not applicable.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
(c) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Brandywine Fund, Inc.
---------------------
Registrant
By /s/William F. D'Alonzo
----------------------
William F. D'Alonzo Principal Executive Officer
Date 04/20/2005
----------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Brandywine Fund, Inc.
---------------------
Registrant
By /s/Christopher G. Long
----------------------
Christopher G. Long, Principal Financial Officer
Date 04/20/2005
----------