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 811-4204
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PC&J Preservation Fund
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(Exact name of registrant as specified in charter)
120 West Third Street, Suite 300, Dayton, Ohio 45402-1819
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(Address of principal executive offices) (Zip code)
PC&J Service Corp., 120 West Third Street, Suite 300, Dayton, OH
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45402-1819
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(Name and address of agent for service)
Registrant's telephone number, including area code: 937-223-0600
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Date of fiscal year end: 12-31
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Date of reporting period: 12-31-2011
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
PC&J PRESERVATION
FUND
Financial Statements and Financial Highlights for
the Year Ended December 31, 2011
and Report of Independent Registered Public
Accounting Firm
PC&J PRESERVATION FUND
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ANNUAL REVIEW
Unaudited
MANAGEMENT REVIEW AND ANALYSIS
Avoiding risk was the overarching theme for investment returns in 2011. By
surveying the returns across various asset classes, one will see that straying
too far from the safest, largest, U.S. markets proved costly. We started 2011
innocently enough. Our economy appeared to be picking up steam. Consumer
spending was accelerating and unemployment was declining. Some economists were
raising their estimates, calling for growth in real GDP of 2.5% or more. That
was before Japan was hit with a tsunami. The resultant damage to several
nuclear reactors damaged major production facilities and disrupted supply lines
across the globe. Then, instead of confirming an acceleration in our U.S.
economy, data that came out in Q2 2011 pointed to a slowdown.
AVERAGE ANNUAL TOTAL RETURNS
1 Yr. 5 Yrs 10 Yrs
Preservation
Fund 3.29% 5.02% 4.27%
Barclays Inter
Gov/Credit 5.80% 5.88% 5.20%
Treasury Bills
(3 month) 0.16% 1.58% 1.96%
Meanwhile, all was not quiet on the European front. Growing concerns about the
soundness of the European banking system, combined with speculation by some
economists that the U.S. economy had already slipped back into a recession, sent
global financial markets into cardiac arrest. Traders went into "risk off"
mode, seeking safety in gold and U.S. and German government bonds.
The PC&J Preservation Fund (the "Fund"), with its relative absence of U.S.
Treasury investments, provided a 3.29% return for 2011, falling behind the more
government-oriented 5.80% return for the Barclay's Intermediate
Government/Credit Index. In addition to the lower weighting in U.S. government
securities, the returns of the Fund's holdings in the financial services sector
and lower-rated, industrially-oriented corporate bonds also detracted from its
performance on a relative basis. And, with most markets acting in concert,
i.e., declining during the summer selloff, the Fund's investments in diversified
strategies proved to be a drain on its return.
The markets had some relief in the fourth quarter, as improving economic news,
strong domestic earnings reports and plans for repairing the European banking
sector were revealed. Good quality corporate and taxable municipal bonds make
up over 60% of the Preservation Fund's portfolio. These holdings also attracted
the interest of investors seeking safety in the U.S. financial markets and
provided some solid gains for the year. Of course, about any positive return
would have beaten the 0.16% Fed-engineered return for 3-month Treasury Bills in
2011.
The holdings of good quality corporate and taxable municipal bonds should
continue to serve the Fund well in 2012, supported by the strengthening U.S.
economy. Once again we are managing the duration and structure of the portfolio
to preserve principal values should interest rates rise. Although the Federal
Reserve has vowed to keep treasury yields low for an extended period of time,
the current levels are below their targets, driven down by investors seeking
safety. Over the long-term, this bias has also served the Fund well with
returns that fall between no-risk, short-term Treasury Bills and the
longer-dated Barclays Index.
PRESERVATION FUND EXPENSE RATIO*
Per May 1, 2011 Prospectus 1.21%
Per December 31, 2011 Annual Report 1.10%
* The expense ratio stated in the May 1, 2011 Prospectus includes acquired fund
fees and expenses as required by Form N-1A. The expense ratio stated in the
December 31, 2011 Annual Report includes only operating expenses of the
Preservation Fund.
Growth of $10,000 Investment
PRESERVATION BARCLAYS INTER TREASURY BILL
GROWTH GOV/CR GROWTH GROWTH
2001 10,000 10,000 10,000
2002 10,598 10,984 10,161
2003 10,877 11,457 10,264
2004 11,173 11,806 10,404
2005 11,445 11,992 10,724
2006 11,887 12,482 11,222
2007 12,580 13,404 11,799
2008 11,951 14,085 12,087
2009 13,733 14,823 12,117
2010 14,705 15,696 12,117
2011 15,189 16,606 12,137
TOTAL RETURNS AND THE GROWTH OF A $10,000 INVESTMENT ARE BASED ON PAST
PERFORMANCE AND ARE NOT AN INDICATION OF FUTURE PERFORMANCE. THE VALUE OF YOUR
SHARES WILL FLUCTUATE AND MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST AT
THE TIME OF REDEMPTION. THE RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES
THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND
SHARES. PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH-END MAY BE
OBTAINED BY CALLING 888.223.0600.
PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS
DECEMBER 31, 2011
PERCENT
OF NET PRINCIPAL
SECURITY ASSETS AMOUNT VALUE
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U.S. AGENCY OBLIGATIONS:
Maturity of 1 - 5 years: 1.1%
Federal Home Loan Bank
5.625%, due 06-13-16 $ 125,000 $141,686
Maturity of 6 - 15 years: 4.5
Federal National Mtg Assn Step-Up 1
2.250%, due 09-30-25 260,000 260,967
Federal National Mtg Assn Step-Up 1
2.000%, due 09-28-26 350,000 351,232
612,199
TOTAL U.S. AGENCY OBLIGATIONS
(Cost $734,776) 5.6 753,885
U.S. CORPORATE OBLIGATIONS:
Maturity of 1 - 5 years: 22.9
Scholastic Corp.
5.000%, due 04-15-13 125,000 125,312
Arcelormittal Sa Luxembourg
5.375%, due 06-01-13 130,000 135,269
Arcelormittal Sa Luxembourg 2
5.375%, due 06-01-13 50,000 51,185
Leucadia National Corp.
7.000%, due 08-15-13 125,000 130,000
Montpelier Re Holdings Ltd.
6.125%, due 08-15-13 150,000 152,959
American Axle & Manufacturing Inc.
5.250%, due 02-11-14 210,000 207,900
Bunge Limited Finance Corp.
5.350%, due 04-15-14 150,000 158,147
Brinker International Inc.
5.750%, due 06-01-14 155,000 163,059
HSBC Finance Corp.
6.000%, due 08-15-14 275,000 293,436
Bear Stearns Cos. Inc.
5.700%, due 11-15-14 162,000 175,958
OGE Energy Corp.
5.000%, due 11-15-14 250,000 271,276
Hornbeck Offshore Services Inc.
6.125%, due 12-01-14 100,000 100,625
JPMorgan Floating Rate
3.500%, due 05-01-15 150,000 148,458
See notes to financial statements.
PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS (Continued)
DECEMBER 31, 2011
PERCENT
OF NET PRINCIPAL
SECURITY ASSETS AMOUNT VALUE
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U.S. CORPORATE OBLIGATIONS (Cont'd):
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Nabisco Inc.
7.550%, due 06-15-15 $ 100,000 $ 118,065
Teck Cominco Ltd.
5.375%, due 10-01-15 160,000 174,363
Alltel Corp.
7.000%, due 03-15-16 100,000 118,530
Alliant Techsystems Inc.
6.750%, due 04-01-16 110,000 112,750
Boston Scientific Corp.
6.400%, due 06-15-16 150,000 168,304
Frontier Oil Corp.
8.500%, due 09-15-16 125,000 132,969
Peabody Energy Corp.
7.375%, due 11-01-16 130,000 143,650
3,082,215
Maturity of 6 - 15 years: 10.7%
Goldman Sachs Group Inc.
5.625%, due 01-15-17 250,000 245,148
Freeport-McMoran Copper & Gold
8.375%, due 04-01-17 150,000 158,812
Terex Corp.
8.000%, due 11-15-17 250,000 245,000
Merrill Lynch Co. Inc.
6.500%, due 07-15-18 230,000 223,194
Conoco Philips
5.750%, due 02-01-19 100,000 120,889
General Electric Capital Corp. Step-Up 1
5.50%, due 10-28-21 200,000 201,964
Dow Chemical Co.
7.375%, due 03-01-23 200,000 245,471
1,440,478
TOTAL U.S. CORPORATE OBLIGATIONS
(Cost $4,312,439) 33.6 4,522,693
TAXABLE MUNICIPAL OBLIGATIONS:
Maturity of 1 - 5 years: 4.9
New York State Housing Finance Agency
4.810%, due 09-15-13 90,000 96,193
Dayton, OH Taxable Bonds
6.500%, due 11-01-13 100,000 100,000
Nebraska Public Power District Revenue3
5.140%, due 01-01-14 310,000 334,165
See notes to financial statements.
PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS (Continued)
DECEMBER 31, 2011
PERCENT
OF NET PRINCIPAL
SECURITY ASSETS AMOUNT VALUE
---------------------------------------- -------- ---------- --------
TAXABLE MUNICIPAL OBLIGATIONS (Cont'd):
----------------------------------------
Michigan Finance Authority Revenue
4.750%, due 11-01-15 $ 125,000 $132,726
663,084
Maturity of 6 - 10 years: 6.9%
Hazelwood MO Industrial Dev. Auth. Rev
5.640%, due 02-01-18 150,000 159,912
Maryland Heights MO Tax Incremnt Rev
7.000%, due 09-01-18 200,000 215,966
Portland OR Weekly Auction Notes 4, 5
0.045%, due 06-01-19 100,000 100,000
Cuyahoga County OH Economic Dev.
5.000%, due 12-01-19 150,000 160,977
Michigan State Refunding School Loan
6.950%, due 11-01-20 110,000 140,592
New York, NY General Obligation
6.491%, due 03-01-21 125,000 150,896
928,343
Maturity of 11 - 15 years: 5.8
Minneapolis & St. Paul Met. Gen. Oblig.
6.850%, due 01-01-22 295,000 303,850
San Bernadino Cnty CA Pension Oblig. 3
6.020%, due 08-01-23 245,000 257,640
Ohio State Dev. Assistance 3
5.670%, due 10-01-23 100,000 105,224
Pennsylvania Turnpike
7.470%, due 06-01-25 100,000 113,999
780,713
Maturity of 16 - 25 years: 7.1
Lake County IL School District
6.300%, due 01-01-27 110,000 122,672
New York Cntys Tobacco Settlement Tr.
6.000%, due 06-01-27 110,000 92,244
Erie County NY Tobacco Asset Secur.
6.000%, due 06-01-28 150,000 139,916
Alameda Corridor Transit Authority CA 3
6.600%, due 10-01-29 200,000 202,460
Frisco TX COP 3
6.375%, due 02-15-33 360,000 393,149
950,441
See notes to financial statements.
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PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS (Continued)
DECEMBER 31, 2011
PERCENT
OF NET PRINCIPAL
SECURITY ASSETS AMOUNT VALUE
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TOTAL TAXABLE MUNICIPAL
OBLIGATIONS (Cost $3,137,042) 24.7% $3,322,581
TOTAL U.S. AGENCY, U.S. CORPORATE
AND TAXABLE MUNICIPAL
OBLIGATIONS
(Cost $8,184,257) 63.9 8,599,159
MORTGAGE BACKED STRUCTURED
OBLIGATIONS: 2.8
GNMA Remic Series 2010-76
4.500%, due 07-19-12 63,250 63,393
GNMA Remic Series 2010-17
4.500%, due 07-15-13 45,520 45,511
FNMA Remic Series 2011-49
4.000%, due 06-25-41 139,164 143,694
GNMA Remic Series 2011-153
3.000%, due 12-16-41 123,939 124,108
TOTAL MORTGAGE BACKED
STRUCTURED OBLIGATIONS
(Cost $373,457) 376,706
LEASE ASSIGNMENTS: 1.0
Ford Motor Co. ESA Lease 4, 6
12.524%, due 06-01-13 123,334 135,133
(Cost $123,334)
NON-CONVERTIBLE PREFERRED STOCK: 3.9 SHARES
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Annaly Cap. Mgt. Inc. Pfd. A, 7.875% 5,000 132,900
FPL Group Cap. Tr. I Pfd., 5.875% 6,300 162,540
Metlife Inc. Pfd. B, 6.500% 5,200 132,496
Powershares ETF Trust Finl. Pfd. 5,900 95,108
TOTAL NON-CONVERTIBLE PREFERRED
STOCK (Cost $514,722) 523,044
EXCHANGE TRADED DEBT: 7.0 SHARES
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AT&T Inc. Senior Notes
6.375%, due 02-15-56 5,000 133,750
CBS Corp. Senior Notes
6.75%, due 03-27-56 5,000 127,050
Comcast Corp. Notes
6.625%, due 05-15-56 5,400 140,886
See notes to financial statements.
PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS (Continued)
DECEMBER 31, 2011
PERCENT
OF NET PRINCIPAL
SECURITY ASSETS AMOUNT VALUE
------------------------------------- -------- --------- -----------
EXCHANGE TRADED DEBT (Cont'd):
-------------------------------------
General Elec. Cap. Corp. Pines
6.100%, due 11-15-32 6,000 $ 154,320
Georgia Power Co. Senior Notes
6.375%, due 07-15-47 5,000 133,150
Metlife Inc. Senior Notes
5.875%, due 11-21-33 5,175 135,792
Viacom Inc. Senior Notes
6.850%, due 12-15-55 5,000 125,500
TOTAL EXCHANGE TRADED DEBT
(Cost $906,570) 950,448
MUTUAL FUNDS: 15.7% SHARES
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Oppenheimer Sr. Floating Rate A 42,352 341,361
Payden Emerging Markets Bond 28,187 392,646
Templeton Income Global Bond A 45,370 561,227
First American Treasury Obligations 823,604 823,604
TOTAL MUTUAL FUNDS
(Cost $2,171,610) 2,118,838
DIVERSIFIED STRATEGIES: 4.7
Deutsche Bank Commodity Booster 7
Structured Note, due 02-17-12 125,000 111,825
Deutsche Bank Commodity Booster 7
Structured Note, due 07-31-12 125,000 102,025
SHARES
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Pimco All Asset All Authority D 35,390 351,779
X-Alpha Call Warrants 7
6-27-2013 22,500 63,225
TOTAL DIVERSIFIED STRATEGIES
(Cost $849,438) 628,854
TOTAL INVESTMENTS
(Cost $13,123,388) 8 99.0 13,332,182
ASSETS LESS OTHER LIABILITIES 1.0 129,208
NET ASSETS 100.0% $13,461,390
See notes to financial statements.
PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS (Concluded)
DECEMBER 31, 2011
1 Interest rates listed for step-up bonds are the rates as of December 31, 2011.
2 Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. At December 31, 2011, the aggregate amount of Rule 144A
securities was $51,185, which is 0.4% of the Fund's net assets.
3 Some municipal obligations have a credit enhancement feature, such as
insurance or letter of credit, which produces a credit quality comparable to
that of a same-rated corporate bond.
4 Security has been deemed illiquid. At December 31, 2011, the aggregate amount
of illiquid securities was $235,133, which is 1.7% of the Fund's net assets.
5 Variable interest rate. Interest rate listed is the rate as of December 31,
2011.
6 Security valued according to "good faith pricing" guidelines. (See Note A)
7 Non-income producing security
8 Represents cost for federal income tax and book purposes and differs from
value by net unrealized appreciation (depreciation). (See Note D)
The following table presents securities held by PC&J Preservation Fund by
industry sector as a percentage of net assets:
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Consumer Discretionary 7.6%
Consumer Staple 2.0%
Energy 3.7%
Financial 16.5%
Healthcare 1.2%
Industrials 2.7%
Materials 5.7%
Telecommunications 1.9%
Utilities 4.2%
Other* 54.5%
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Total 100.0%
* Other includes agency, municipal and structured
obligations, mutual funds and diversified strategies
See notes to financial statements.
PC&J PRESERVATION FUND
----------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2011
ASSETS:
Investments in securities, at value
(Cost basis - $13,123,388) (Notes A & D) $13,332,182
Receivables
Dividends and interest 140,126
Fund shares sold 1,644
Total receivables 141,770
Total assets 13,473,952
LIABILITIES:
Accrued expenses (Note B) 12,562
Total liabilities 12,562
NET ASSETS $13,461,390
SHARES OUTSTANDING (Unlimited authorized shares):
Beginning of year 1,206,535
Net increase (Note C) 77,320
End of year 1,283,855
NET ASSET VALUE, offering price and redemption price per share $ 10.49
NET ASSETS CONSIST OF:
Paid in capital $13,604,448
Net unrealized appreciation on investments 208,794
Undistributed net investment income 5,264
Accumulated net realized loss on investments (357,116)
Net Assets $13,461,390
See notes to financial statements.
PC&J PRESERVATION FUND
----------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2011
INVESTMENT INCOME (Note A):
Interest $ 533,334
Dividends 187,916
Total investment income 721,250
EXPENSES (Note B):
Investment advisory fee 66,535
Management fee 79,843
Total expenses 146,378
NET INVESTMENT INCOME 574,872
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note D):
Net realized loss on investments (101,341)
Change in net unrealized appreciation/depreciation of investments (49,727)
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS (151,068)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 423,804
See notes to financial statements.
PC&J PRESERVATION FUND
----------------------
STATEMENTS OF CHANGES IN NET ASSETS
For The Years Ended December 31,
2011 2010
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 574,872 $ 568,350
Net realized loss on investments (101,341) (50,327)
Change in net unrealized appreciation/depreciation
of investments (49,727) 409,626
Net increase in net assets resulting from operations 423,804 927,649
DECREASE IN NET ASSETS RESULTING FROM
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (563,705) (566,978)
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS (Note C) 814,411 (963,427)
Total increase/(decrease) in net assets 674,510 (602,756)
NET ASSETS:
Beginning of year 12,786,880 13,389,636
End of year $13,461,390 $12,786,880
UNDISTRIBUTED NET INVESTMENT INCOME $ 5,264 $ 5,687
See notes to financial statements.
PC&J PRESERVATION FUND
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NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2011
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PC&J Preservation Fund (the "Fund") commenced operations on April 30, 1985, as a
no-load, open-end, diversified investment company. It is organized as an Ohio
business trust and is registered under the Investment Company Act of 1940, as
amended. The investment objective of the Fund is the generation of income and
the preservation of capital.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates or assumptions that affect the reported amounts of assets and
liabilities, disclosures 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 those estimates.
(1) Security Valuations - Securities that are traded on any national
exchange, including exchange traded debt and non-convertible preferred stock,
are generally valued at the last quoted sales price or, if unavailable, the last
bid price. Securities that are traded on the NASDAQ over-the-counter market,
including non-convertible preferred stock, are generally valued at the NASDAQ
Official Closing Price. Mutual funds and closed end funds are valued at the net
asset value of their shares on each business day. Fixed income securities,
including U.S. agency obligations, U.S. corporate obligations, taxable municipal
obligations, Government National Mortgage Association mortgage backed securities
and warrants, are generally valued by using market quotations, or a matrix
methodology (including prices furnished by a pricing service) when Parker
Carlson & Johnson, Inc. (the "Adviser") believes such prices accurately reflect
the fair value of such securities. These prices may be based on inputs such as
dealer quotations, current trades and offerings, market movement and credit
information. The matrix pricing methodology utilizes yield spreads relating
to securities with similar characteristics to determine prices for normal
institutional-size trading units of debt securities without regard to sale or
bid prices. If the Adviser decides that the market quotation does not
accurately reflect current value or that prices cannot be readily estimated
using the matrix methodology, or when restricted or illiquid securities are
being valued, or when unique investment structures have no widely adopted
benchmarks, securities are valued at fair value as determined in good faith by
the Adviser, in conformity with guidelines adopted by and subject to review by
the Board of Trustees (the "Trustees") (generally lease assignments). It is
incumbent upon the Adviser to consider all appropriate factors relevant to the
value of securities for which market quotations are not readily available. No
single standard for determining fair value can be established, since fair value
depends upon the circumstances of each individual case. As a general principle,
the current fair value of an issue of securities being valued by the Adviser
would appear to be the amount which the owner might reasonably expect to receive
for the securities upon their current sale. Methods which are in accordance
with this principle may, for example, be based on inputs such as a multiple of
earnings, or a discount from market of a similar, freely traded security
(including a derivative security or a basket of securities traded on other
markets, exchanges or among dealers), or yield to maturity with respect to debt
issues. Other inputs may include a review of the issuer's financial statements,
cash flows or credit quality and other transactions or offers by the issuer. A
combination of these and other methods may be used.
GAAP establishes a framework for measuring fair value and expands disclosures
about fair value measurements in financial statements, effective for the Fund's
current fiscal period.
Various inputs may be used to determine the value of the Fund's investments.
These inputs are summarized in three broad levels:
Level 1 - quoted prices in active markets for identical securities.
PC&J PRESERVATION FUND
----------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 2011
Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, etc.).
Observable inputs may also include benchmark yields, reported trades, broker
quotes, benchmark securities and bid/offer quotations.
Level 3 - significant unobservable inputs (including the Fund's own assumptions
used to determine the fair value of investments).
In May 2011, the Financial Accounting Standards Board ("FASB") issued ASU
2011-04 "Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs", modifying Topic 820, Fair Value
Measurements and Disclosures. At the same time, the International Accounting
Standards Board ("IASB") issued International Financial Reporting Standard
("IFRS") 13, Fair Value Measurement. The objective of the FASB and IASB is
convergence of their guidance on fair value measurements and disclosures.
Specifically, ASU 2011-04 requires reporting entities to disclose (i) the
amounts of any transfers between Level 1 and Level 2, and the reasons for the
transfers, (ii) for Level 3 fair value measurements, quantitative information
about significant unobservable inputs used, (iii) a description of the valuation
processes used by the reporting entity, and (iv) a narrative description of the
sensitivity of the fair value measurement to changes in unobservable inputs if a
change in those inputs might result in a significantly higher or lower fair
value measurement. The effective date of ASU 2011-04 is for interim and annual
periods beginning after December 15, 2011, and it is therefore not effective for
the current fiscal year. Management is in the process of assessing the impact of
the updated standards on the Fund's financial statements, if any.
There were no significant transfers in and out of Levels 1 and 2 for the year
ended December 31, 2011.
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following table summarizes the inputs used to value the Fund's securities as
of December 31, 2011.
Level 1 Level 2 Level 3 Total
Security Type Investments in Securities ($000)
U.S. Agency Obligations $ - $ 754 $ - $ 754
U.S. Corporate Obligations - 4,523 - 4,523
Taxable Municipal Obligations - 3,322 - 3,322
Mortgage Backed Structured Obligations - 377 - 377
Lease Assignments - 135 - 135
Non-Convertible Preferred Stock 523 - - 523
Exchange Traded Debt 950 - - 950
Mutual Funds 2,119 - - 2,119
Diversified Strategies 352 277 - 629
Total $ 3,944 $ 9,388 $ - $13,332
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PC&J PRESERVATION FUND
----------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 2011
(2) Federal Income Taxes - The Fund has elected to be treated as a regulated
investment company and intends to continue to comply with the requirements under
Subchapter M of the Internal Revenue Code and to distribute all, or
substantially all, of its net investment income and net realized gains on
security transactions. Accordingly, no provision for federal income or excise
taxes has been made in the accompanying financial statements. As of December
31, 2011, the Fund has a capital loss carry forward of $357,116, of which
$35,450 can be carried forward through 2012, $29,688 through 2013, $120,473
through 2014, $17,581 through 2015, $13,846 through 2017, $50,327 through 2018,
and $89,751 can be carried forward indefinitely. These losses can be used to
offset future gains. The Regulated Investment Company Modernization Act of 2010
eliminates the eight-year limit on the use of capital loss carryforwards,
effective for losses generated in the first taxable year after the date of
enactment (December 22, 2010). See Note E for further disclosure regarding
uncertain tax positions. Additionally, the Fund had an unused capital loss
carry forward of $98,440 which expired as of December 31, 2011 and was
reclassified to paid in capital.
(3) Other - Security transactions are accounted for on the date the
securities are purchased or sold, (trade date). All premiums and discounts are
amortized or accreted for financial and tax reporting purposes using the
effective interest rate method. Realized gains and losses on sales are
determined using the specific lot method. Dividends to shareholders from net
investment income and net realized capital gains are declared and paid annually.
Interest income is accrued daily. Dividend income is recorded on the
ex-dividend date. Paydown gains and losses on mortgage and asset-backed
securities are presented as an adjustment to interest income. For tax purposes,
paydown gains and losses are reclassified to realized gains and losses on
investments. Net investment losses, if any, for tax purposes are reclassified
to paid in capital.
The Fund indemnifies the Trustees and officers of the Fund for certain
liabilities that might arise from the performance of their duties to the Fund.
The Fund's maximum exposure under these arrangements is not known; however, the
Fund has not had prior claims or losses pursuant to these arrangements and
expects the risk of loss to be remote.
B. INVESTMENT ADVISORY AGREEMENT AND MANAGEMENT AGREEMENT
The Fund has an investment advisory agreement (the "Agreement") with the
Adviser, whereby the Fund pays the Adviser a monthly advisory fee, accrued
daily, based on an annual rate of 0.5% of the daily net assets of the Fund.
Investment advisory fees were $66,535 for the year ended December 31, 2011.
The Fund has a management agreement with PC&J Service Corp. ("Service Corp."),
which is wholly owned by the shareholders of the Adviser. The Fund pays Service
Corp. for the overall management of the Fund's business affairs, exclusive of
the services provided by the Adviser, and functions as the Fund's transfer and
dividend disbursing agent. Service Corp. pays all expenses of the Fund (with
certain exclusions), including total Trustee fees of $4,000 for the year ended
December 31, 2011.
Service Corp. is entitled to a monthly fee, accrued daily, based on an annual
rate of 0.6% of the daily net assets of the Fund. Management fees were $79,843
for the year ended December 31, 2011.
Certain officers and Trustees of the Fund are officers and directors, or both,
of the Adviser and of Service Corp.
PC&J PRESERVATION FUND
----------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 2011
C. CAPITAL SHARE TRANSACTIONS
For the Year Ended For the Year Ended
December 31, 2011 December 31, 2010
------------------- -------------------
------------------------------
Shares Dollars Shares Dollars
------ ------- ------ -------
Subscriptions 97,491 $1,054,576 168,022 $ 1,804,164
Reinvestment of distributions 53,789 563,705 53,640 566,978
151,280 1,618,281 221,662 2,371,142
Redemptions (73,960) (803,870) (307,426) (3,334,569)
Net increase/(decrease) 77,320 $ 814,411 (85,764) $ (963,427)
D. INVESTMENT TRANSACTIONS
Securities purchased and sold (excluding short-term obligations and long-term
U.S. Government securities) for the year ended December 31, 2011, aggregated
$2,850,603 and $2,902,435, respectively. Purchases and sales of long-term U.S.
Government Securities for the year ended December 31, 2011, aggregated $350,000
and $0, respectively.
At December 31, 2011, gross unrealized appreciation on investments was $580,421
and gross unrealized depreciation on investments was $371,627, for a net
unrealized appreciation of $208,794 for financial reporting and federal
income tax purposes.
E. FEDERAL TAX DISCLOSURE
Distributions from income and realized capital gains are determined in
accordance with income tax regulations, which may differ from accounting
principles generally accepted in the United States of America. Certain capital
accounts in the financial statements are periodically adjusted for permanent
differences in order to reflect their tax character. These permanent differences
are primarily due to the varying treatment of income and gain/loss on portfolio
securities held by the Fund and have no impact on net assets or net asset value
per share. Temporary differences may arise from recognizing certain items of
income, expense, and gain/loss in different periods for financial statement and
tax purposes, and will reverse at some time in the future. Permanent differences
incurred during the tax year ended December 31, 2011, resulting in book and tax
accounting differences, have been reclassified at year end to reflect a decrease
in undistributed net investment income of $11,590, a decrease in accumulated net
realized loss on investments of $110,030 and a decrease to paid in capital of
$98,440. Net assets were not affected by this reclassification.
Tax Character of Distributions Paid
For the Year Ended December 31, 2011 For the Year Ended December 31, 2010
-------------------------- ------------------------------------
Ordinary Income Capital Gains Total Distribution Ordinary Income Capital Gains Total Distribution
---------------- -------------- ------------------- ---------------- -------------- ------------------
$ 563,705 $ - $ 563,705 $ 566,978 $ - $ 566,978
================ ============== =================== ================ ============== ==================
PC&J PRESERVATION FUND
----------------------
NOTES TO FINANCIAL STATEMENTS (Concluded)
FOR THE YEAR ENDED DECEMBER 31, 2011
Tax Basis of Distributable Earnings
As of December 31, 2011
------------------------------------
Undistributed Ordinary Income Undistributed Accumulated Realized Losses Unrealized Appreciation
------------------------------------ ------------------------------------------- ------------------------
$ 5,264 $ (357,116) $ 208,794
==================================== =========================================== ========================
The Fund recognizes tax benefits or expenses of uncertain tax positions only
when the position is "more likely than not" to be sustained assuming examination
by tax authorities. Management has reviewed the tax positions taken on Federal
income tax returns for all open tax years (tax years ended December 31,
2008-2011) and has concluded that no provision for uncertain tax benefits or
expenses is required in these financial statements.
F. SUBSEQUENT EVENTS
The Fund has evaluated subsequent events through the date of issuance of the
financial statements and determined that no events have occurred that require
disclosure.
G. OTHER FEDERAL TAX INFORMATION (UNAUDITED)
The percentage of ordinary income dividends that are eligible for the reduced
rate attributed to qualified dividend income under the Jobs and Growth Tax
Relief & Reconciliation Act of 2003 is 2.7%.
PC&J PRESERVATION FUND
----------------------
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital For the Years Ended December 31,
Stock Outstanding Throughout the Period 2011 2010 2009 2008 2007
---- ---- ---- ---- ----
NET ASSET VALUE-BEGINNING OF PERIOD $ 10.60 $ 10.36 $ 9.43 $ 10.48 $ 10.39
Income from investment operations:
Net investment income 0.46 0.49 0.48 0.52 0.52
Net realized and unrealized
gain (loss) on securities (0.11) 0.24 0.93 (1.05) 0.09
TOTAL FROM INVESTMENT OPERATIONS 0.35 0.73 1.41 (0.53) 0.61
Less distributions:
From net investment income (0.46) (0.49) (0.48) (0.52) (0.52)
TOTAL DISTRIBUTIONS (0.46) (0.49) (0.48) (0.52) (0.52)
NET ASSET VALUE-END OF PERIOD $ 10.49 $ 10.60 $ 10.36 $ 9.43 $ 10.48
TOTAL RETURN 3.29% 7.08% 14.91% (5.00%) 5.83%
RATIOS TO AVERAGE NET ASSETS
Expenses 1.10% 1.10% 1.10% 1.10% 1.10%
Net investment income 4.32% 4.18% 4.89% 4.96% 4.58%
Portfolio turnover rate 23.54% 20.52% 22.50% 65.51% 31.76%
Net assets at end of period (000's) $13,461 $12,787 $13,390 $10,953 $12,078
Total return is based on the combination of reinvested dividends, capital gain
and return of capital distributions, if any. Past performance is not indicative
of future results.
See notes to financial statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of PC&J Preservation Fund:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of PC&J Preservation Fund (the "Fund") as of
December 31, 2011, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. 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 the standards of the Public Company
Accounting Oversight Board (United States). 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. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2011, by correspondence with the
custodian and the broker. 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 PC&J
Preservation Fund as of December 31, 2011, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
Cincinnati, Ohio
February 27, 2012
------
PC&J PRESERVATION FUND
----------------------
ADDITIONAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2011 (Unaudited)
FUND EXPENSES
As a shareholder of the Fund, you incur ongoing costs, including management fees
and investment advisory fees. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the Fund and to compare these
costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period (July 1, 2011) and held for the entire period through December 31, 2011.
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, such as
redemption fees. 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. In addition, if these transactional costs were
included, your costs would have been higher.
Beginning Account Ending Account
Value Value Expenses Paid
July 1, 2011 December 31, 2011 During Period*
Actual $ 1,000.00 $ 1,000.80 $ 5.55
Hypothetical (5% return $ 1,000.00 $ 1,019.66 $ 5.60
before expenses)
* Expenses are equal to the Fund's annualized expense ratio of 1.10%, multiplied
by the average account value over the period, multiplied by the number of days
in the most recent fiscal half-year, then divided by 365 (to reflect the
one-half year period).
PC&J PRESERVATION FUND
------------------------
ADDITIONAL INFORMATION (Concluded)
FOR THE YEAR ENDED DECEMBER 31, 2011 (Unaudited)
PORTFOLIO CHARACTERISTICS
TYPE OF SECURITY % OF NET ASSETS
----------------
-------------------------------
U.S. Agency Obligations 5.6%
U.S. Corporate Obligations 33.6
Taxable Municipal Obligations 24.7
Mortgage Backed Structured
Obligations 2.8
Lease Assignments 1.0
Non-Convertible Preferred Stock 3.9
Exchange Traded Debt 7.0
Mutual Funds 15.7
Diversified Strategies 4.7
Assets Less Other Liabilities 1.0
Total 100.0%
----------------
PC&J PRESERVATION FUND
----------------------
FUND TRUSTEES DISCLOSURE
(Unaudited)
The responsibility for management of the Fund is vested in its Board of
Trustees, which, among other things, is empowered by the Fund's Declaration of
Trust to elect officers of the Fund and contract with and provide for the
compensation of agents, consultants and other professionals to assist and advise
in such management.
The following table provides information regarding each Trustee who is not an
"interested person" of the Fund, as defined in the Investment Company Act of
1940, as amended.
NUMBER OF PORTFOLIOS
POSITION(S) IN LENGTH OF IN FUND COMPLEX**
NAME, AGE AND ADDRESS FUND COMPLEX** TIME SERVED OVERSEEN BY TRUSTEE
---------------------- -------------- ------------- --------------------
----------------------
John W. Lohbeck
c/o PC&J Service Corp.
300 Old Post Office
120 West Third Street
Dayton, Ohio 45402 Trustee since
Year of Birth: 1949 Trustee 2008 2
---------------------- -------------- ------------- --------------------
PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
OTHER DIRECTORSHIPS HELD BY TRUSTEE
-----------------------------------
-----------------------------------------------------------
From September 2005 to present, consultant with Battelle &
Battelle LLP (CPA firm); from December 1990 to August
2005, COO of Wagner Smith Co. (commercial electrical
contracting firm) None
----------------------------------------------------------- -----------------------------------
NUMBER OF PORTFOLIOS
POSITION(S) IN LENGTH OF IN FUND COMPLEX**
NAME, AGE AND ADDRESS FUND COMPLEX** TIME SERVED OVERSEEN BY TRUSTEE
---------------------- -------------- ------------- --------------------
----------------------
Laura B. Pannier
c/o PC&J Service Corp.
300 Old Post Office
120 West Third Street
Dayton, Ohio 45402 Trustee since
Year of Birth: 1954 Trustee 2003 2
---------------------- -------------- ------------- --------------------
PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS OTHER DIRECTORSHIPS HELD BY TRUSTEE
--------------------------------------------------- -----------------------------------
---------------------------------------------------
Not presently employed; from May 1988 to May 1997,
partner with Deloitte & Touche LLP (CPA firm) None
--------------------------------------------------- -----------------------------------
**The term "Fund Complex" refers to the PC&J Performance Fund and the PC&J
Preservation Fund.
PC&J PRESERVATION FUND
----------------------
FUND TRUSTEES DISCLOSURE (Concluded)
(Unaudited)
The following table provides information regarding each Trustee who is an
"interested person" of the Trust, as defined in the Investment Company Act of
1940, as amended, and each officer of the Trust.
NUMBER OF PORTFOLIOS
POSITION(S) HELD LENGTH OF IN FUND COMPLEX**
NAME, AGE AND ADDRESS WITH FUND TIME SERVED OVERSEEN BY TRUSTEE
---------------- ------------- --------------------
-------------------------
Kathleen A. Carlson, CFA* Treasurer and
c/o PC&J Service Corp. Trustee since
300 Old Post Office Treasurer, Chief 1985; Chief
120 West Third Street Compliance Compliance
Dayton, Ohio 45402 Officer and Officer since
Year of Birth: 1955 Trustee 2004 2
------------------------- ---------------- ------------- --------------------
PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS OTHER DIRECTORSHIPS HELD BY TRUSTEE
------------------------------------------------------- -----------------------------------
-------------------------------------------------------
President of the Adviser and PC&J Service Corp. since
1998; Treasurer and Director of the Adviser since 1982;
Chief Compliance Officer of the Adviser since 2004. None
------------------------------------------------------- -----------------------------------
NUMBER OF PORTFOLIOS
POSITION(S) HELD LENGTH OF IN FUND COMPLEX**
NAME, AGE AND ADDRESS WITH FUND TIME SERVED OVERSEEN BY TRUSTEE
---------------------- ---------------- --------------- --------------------
----------------------
Secretary and
James M. Johnson, CFA* Trustee since
c/o PC&J Service Corp. 1985;
300 Old Post Office President, President since
120 West Third Street Secretary, 2005;
Dayton, Ohio 45402 Chairman and Chairman since
Year of Birth: 1952 Trustee 2010 2
---------------------- ---------------- --------------- --------------------
PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS OTHER DIRECTORSHIPS HELD BY TRUSTEE
--------------------------------------------------------- -----------------------------------
---------------------------------------------------------
Secretary and Director of the Adviser and PC&J Service
Corp. since 1982; Chief Investment Officer of the Adviser
since 1982. None
--------------------------------------------------------- -----------------------------------
* Ms. Carlson and Mr. Johnson are "interested persons" of the Fund because they
are officers of the Fund and officers and shareholders of the Adviser, and own
in the aggregate a controlling interest in the Adviser and PC&J Service Corp.,
the Fund's transfer agent.
**The term "Fund Complex" refers to the PC&J Performance Fund and the PC&J
Preservation Fund.
The Statement of Additional Information includes additional information about
the Trustees and is available without charge upon request, by calling toll free
at (888) 223-0600.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities and information regarding how
the Fund voted those proxies during the most recent 12-month period ended June
30 are available without charge: (1) upon request by calling toll free at (888)
223-0600 or (2) from the Fund's documents filed with the Securities and Exchange
Commission ("SEC") on the SEC's website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available on the SEC's web site at www.sec.gov. The Fund's Forms N-Q may
also be reviewed and copied at the SEC's Public Reference Room in Washington,
DC. Information on the operation of the Public Reference Room may be obtained
by calling 1-800-SEC-0330.
ITEM 2. CODE OF ETHICS.
(a) As of the end of the period covered by this report, the registrant has
adopted a code of ethics that applies to the registrant's principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party.
(b) For purposes of this item, "code of ethics" means written standards that
are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in reports
and documents that a registrant files with, or submits to, the Commission and in
other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) Amendments: During the period covered by the report, there have not
been any amendments to the provisions of the code of ethics.
(d) Waivers: During the period covered by the report, the registrant has
not granted any express or implicit waivers from the provisions of the code of
ethics.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) The registrant's board of trustees has determined that Laura B. Pannier
is an audit committee financial expert. Ms. Pannier is independent for purposes
of this Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES
----------
FY 2010 $ 21,166
FY 2011 $ 21,000
(b) AUDIT-RELATED FEES
------------------
Registrant Parker Carlson & Johnson
---------- ------------------------
FY 2010 $ None $ None
FY 2011 $ None $ None
Nature of the fees: N/A
(c) TAX FEES
--------
Registrant Parker Carlson & Johnson
---------- ------------------------
FY 2010 $ 2,200 $ None
FY 2011 $ 2,300 $ None
Nature of the fees: Federal and Excise Tax Returns
(d) ALL OTHER FEES
--------------
Registrant Parker Carlson & Johnson
---------- ------------------------
FY 2010 $ None $ None
FY 2011 $ None $ None
(e) (1) AUDIT COMMITTEE'S PRE-APPROVAL POLICIES
---------------------------------------
The audit committee has not adopted pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) PERCENTAGES OF SERVICES APPROVED BY THE AUDIT COMMITTEE
-------------------------------------------------------
Registrant Parker Carlson & Johnson
---------- ------------------------
Audit-Related Fees: None None
Tax Fees: None None
All Other Fees: None None
None of the services described in paragraphs (b) through (d) of this Item were
approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X. All non-audit services were pre-approved by the audit
committee pursuant to paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X.
(f) During audit of registrant's financial statements for the most recent
fiscal year, less than 50 percent of the hours expended on the principal
accountant's engagement were attributed to work performed by persons other than
the principal accountant's full-time, permanent employees.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's investment
adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser),
and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant:
Registrant Parker Carlson & Johnson
---------- ------------------------
FY 2010 $ 2,200 $ None
FY 2011 $ 2,300 $ None
(h) Not applicable. The auditor performed no services for the registrant's
investment adviser or any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED COMPANIES. Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable - schedule filed with Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END FUNDS.
Not applicable.
ITEM 8. PORTFOLIO MANAGER OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not
applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END FUNDS. Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors, where those changes
were implemented after the registrant last provided disclosure in response to
the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or
this Item.
The registrant has not adopted procedures by which shareholders may recommend
nominees to the registrant's board of trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures as of December 31, 2011, the disclosure controls and procedures are
reasonably designed to ensure that the information required in filings on Forms
N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no significant changes in the registrant's internal control
over financial reporting that occurred during the registrant's second fiscal
half-year that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
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.
PC&J Preservation Fund
----------------------
By
/s/
---
Kathleen Carlson, Treasurer
Date February 22, 2012
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.
By
/s/
---
James M. Johnson, President
Date February 22, 2012
By
/s/
---
Kathleen Carlson, Treasurer
Date February 22, 2012