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 02995
Exact name of registrant as specified in charter: NRM INVESTMENT COMPANY
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Address of principal executive offices: NRM INVESTMENT COMPANY, ROSEMONT
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BUSINESS CAMPUS, SUITE 112, BUILDING 3 - 919 CONESTOGA ROAD,
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ROSEMONT, PENNSYLVANIA 19010
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Name and address of agent for service: JOHN H. MCCOY, PRESIDENT, NRM INVESTMENT
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- - COMPANY, ROSEMONT BUSINESS CAMPUS, SUITE 112, BUILDING 3 -
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919 CONESTOGA ROAD, ROSEMONT, PENNSYLVANIA 19010
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Registrant's Telephone Number: (610) 527-7009
Date of fiscal year end: AUGUST 31
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Date of Reporting Period: SEMI-ANNUAL PERIOD ENDING FEBRUARY 28, 2007.
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ITEM 1 - REPORTS TO STOCKHOLDERS
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A copy of the report transmitted to shareholders pursuant to Rule 30e-1 under
the Investment Company Act is attached hereto.
ITEMS 2 - 5
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The within N-CSR is a semi-annual report and accordingly the information
required by these items are not required at this time.
ITEM 6 - SCHEDULE OF INVESTMENTS
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The information is included as part of the report to shareholders filed under
Item 1 of this report and attached hereto.
ITEMS 7, 8 - PROXY VOTING POLICIES AND PURCHASES OF EQUITY SECURITIES:
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The information requested is not applicable to this open-end company.
ITEM 9 - SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
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CHANGE IN FUNDAMENTAL INVESTMENT POLICY
The Company, during the past year changed its investment policy and
strategy from investing primarily in municipal bonds that assure federal tax
free distributions to its shareholders to investing in such municipals for a
minimum percentage of just over one-half of the portfolio, and investing the
balance of the portfolio in other securities. This balance of the portfolio can
be defined as taxable or tax free bonds, equities or derivatives such that the
will produce high levels of income. Currently the major part of the
non-municipal portfolio is in preferred equities that qualify for dividends at
the maximum 15% Federal Income Tax Rate. The Board recommends to the
shareholders that the Company ratify this change. For the long term the Company
will no longer be limited in investment choice for any part of its portfolio
except as provided in the Investment Company Act, the Internal Revenue Code, or
other controlling
legislation, rule or decision. In making investment choices the Board and the
Adviser is reminded of the secondary objective of preserving capital.
Resolution carried.
ITEM - 10 CONTROLS AND PROCEDURES
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The Fund operates through its five-member board of directors sitting as an
executive committee of the whole; the board members receive only nominal
director's fees. The Fund has no employees other than its officers none of whom
receives compensation in such role. (The Assistant Secretary to the Fund is its
counsel who receives compensation only for legal work, not in his role as a Fund
officer.) The Fund engages independent contractors to provide investment,
financial and custodial services. The Fund's principal executive and financial
officer is its major shareholder and one of the five directors. In his view the
following controls and procedures are effective to comply with the Regulations
under the Investment Company Act.
PORTFOLIO PROCEDURES
1. The Investment Advisor has discretion in investing the Fund's portfolio but
only within the guidelines established by the Board of Directors, and those
authorized to execute investment transactions act only on direction by the Board
or Advisor.
2. Any significant inflows or outflows of cash will be brought to the
President's attention to confirm that a related purchase or sale of securities
or other disbursement was authorized by him.
INVESTMENT CUSTODY AND SHAREHOLDER SERVICES
1. All transactions with shareholders and the custody of the Fund's Securities
is performed by an independent corporate custodian. Any changes to these
functions must be authorized by the Board of Directors.
2
ACCOUNTING AND REPORTING
1. The recording, summarizing and reporting of all financial data will be
performed by a CPA who is independent of the buying and selling of securities as
well as the disbursement of the Fund's cash and transfer of the Fund's assets.
2. Upon discovery, the CPA will bring any unusual transaction directly to the
President and/or Board's attention.
3. The CPA will provide directly to the Board of Directors a Statement of Net
Assets and a Statement of Operations in accordance with generally accepted
accounting principles within ten business days of each month end.
3
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.
Registrant: NRM Investment Company
By: /S/ JOHN H. MCCOY
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John H. McCoy, President and Treasurer
Date: 4/30/07
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/ JOHN H. MCCOY
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John H. McCoy, President and Treasurer
Date: 4/30/07
By: /S/ EDWARD FACKENTHAL
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Edward Fackenthal, Counsel and Assistant Secretary
Date: 4/30/07
NRM INVESTMENT COMPANY
SEMI-ANNUAL FINANCIAL STATEMENTS
FEBRUARY 28, 2007
TABLE OF CONTENTS
PAGE NO.
FINANCIAL STATEMENTS:
Statement of Assets and Liabilities 1
Schedule of Investments 2-4
Statement of Operations 5
Statements of Changes in Net Assets 6
Financial Highlights 7
Notes to Financial Statements 8-11
NRM INVESTMENT COMPANY
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STATEMENT OF ASSETS AND LIABILITIES
UNAUDITED
FEBRUARY 28,
2007
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ASSETS
Investments at fair value (cost $13,762,564) $14,120,427
Cash 7,425
Receivable from sale of securities 532,275
Interest and dividends receivable 153,578
Prepaid expenses 4,089
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TOTAL ASSETS 14,817,794
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LIABILITIES
Dividends payable 165,967
Securities purchases payable 252,000
Accrued expenses and other liabilities 174,035
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TOTAL LIABILITIES 592,002
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NET ASSETS, APPLICABLE TO 3,608,403 OUTSTANDING SHARES
EQUIVALENT TO $3.94 A SHARE $14,225,792
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SEE NOTES TO FINANCIAL STATEMENTS.
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1
NRM INVESTMENT COMPANY
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FEBRUARY 28, 2007
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007 - UNAUDITED
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PRINCIPAL
AMOUNT FAIR
MUNICIPAL BONDS - 53.4% OR SHARES VALUE
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GENERAL OBLIGATION BONDS - 14.7%
Philadelphia, Pennsylvania School District, 5.00%, due 4/1/10 200,000 $ 208,128
Bucks County, Pennsylvania, 5.00, due 6/15/11, callable 6/15/09 at 100 100,000 103,030
Pittsburgh, Pennsylvania, 5.00%, due 9/1/12, callable 3/1/12 at 100
(AMBAC) 250,000 264,940
Pennsylvania State, First Series, 5%, due 7/1/13 300,000 322,140
Berks County Pennsylvania, 5.00%, due 11/15/14, callable 11/15/08 at
100 (AMBAC) 100,000 102,210
Philadelphia, Pennsylvania School District, 5.625%, due 8/1/15,
callable 8/1/12 at 100 (FGIC) 300,000 328,971
Wilson Pennsylvania School District, 5.375%, due 5/15/16, callable
5/15/12 (FSA) 425,000 460,428
Pittsburgh, Pennsylvania, 5.50%, due 9/1/17, at 100 (FSA) 250,000 286,950
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TOTAL GENERAL OBLIGATION BONDS 2,076,797
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HOUSING FINANCE AGENCY BONDS -1.0%
Odessa, Texas Housing Finance Corporation, Home Mortgage Revenue
Refunding, 8.45%, due 11/1/11, callable 11/1/05 at 103 20,094 20,363
California Housing Finance Agency, Home Mortgage, 10.25%, due 2/1/14,
callable 2/1/99 at 100 40,000 41,237
Minnesota State Housing Finance Agency, Single-Family Mortgage, 5.95%,
due 1/1/17, callable 1/1/07 at 101.50 70,000 71,444
Utah State Housing Finance Agency, Single-Family Mortgage, 6.30%, due
1/1/18 5,000 5,012
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TOTAL HOUSING FINANCE AGENCY BONDS 138,056
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SEE NOTES TO FINANCIAL STATEMENTS.
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2
NRM INVESTMENT COMPANY
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FEBRUARY 28, 2007
SCHEDULE OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2007 - UNAUDITED
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PRINCIPAL
AMOUNT FAIR
MUNICIPAL BONDS - 53.4% (CONTINUED) OR SHARES VALUE
- ---------------------------------------------------------------------------- ------------ ------------
OTHER REVENUE BONDS -37.7%
Parkland Pennsylvania School District, 5.00%, due 9/1/07 (FGIC) 170,000 $190,451
Grand Rapids, Michigan Downtown Development Authority, 6.60%, due
6/1/08, callable 6/1/06 at 100 365,000 365,339
Montgomery County Pennsylvania Industrial Development Authority,
5.00%, due 11/1/10 500,000 523,055
Allegheny County Pennsylvania Industrial Development Authority, 5.00%,
due 11/1/11 (MBIA) 100,000 105,515
Pennsylvania State Higher Educational Facilities Authority, 5.25%, due
1/1/12, callable 7/1/08 at 100 (MBIA) 175,000 178,596
Philadelphia Pennsylvania Gas Works, 18th Series, 5.00%, due 8/1/11
(CIFG) 300,000 314,964
Pennsylvania State Higher Educational Facilities Authority, 5.375%,
due 7/1/12, callable 7/1/09 at 100 (AMBAC) 100,000 103,915
Pennsylvania Infrastructure Investment Authority, 5.00%, due 9/1/12 500,000 533,300
Jackson Mississippi Redevelopment Authority, Jackson Street Area
Project, 5.70%, due 4/1/13, callable 10/1/05 at 100 (MBIA) 100,000 100,135
Harrisburg Pennsylvania Recovery Facilities, 5.00%, due 9/1/13,
callable 9/1/08 at 101 (FSA) 100,000 102,989
Philadelphia Pennsylvania Wastewater, 5.25%, due 11/1/14, callable
11/1/12 at 100 (FGIC) 250,000 270,395
Philadelphia Pennsylvania Wastewater, 5.00%, due 7/1/14 250,000 271,000
Pennsylvania State Turnpike Commission, 5.25%, due 12/1/14, callable
12/1/08 at 101 (AMBAC) 230,000 237,995
Pennsylvania State Turnpike Commission, 5.25%, due 12/1/15, callable
12/1/08 at 101 (AMBAC) 200,000 206,865
Allegheny County PA Higher Educational Building Authority, 5.50%, due
6/15/16, callable 6/15/12 at 100 (AMBAC) 150,000 169,874
Pennsylvania State Higher Educational Facilities Authority, 5.00%, due
6/15/16, callable 6/15/12 at 100 (AMBAC) 100,000 105,929
Philadelphia Pennsylvania Gas Works, Forth Series, 5.25%, due 8/1/16,
callable 8/1/13 250,000 270,430
Philadelphia Pennsylvania Industrial Development Lease Revenue, 5.40%,
due 2/15/17, callable 2/15/07 at 102 (MBIA)
100,000 102,129
Delaware River Port Authority PA & NJ, 5.75% due 1/1/18, callable
1/1/10 at 100 (FSA) 100,000 105,715
SEE NOTES TO FINANCIAL STATEMENTS.
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3
NRM INVESTMENT COMPANY
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FEBRUARY 28, 2007
SCHEDULE OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2007
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PRINCIPAL
AMOUNT FAIR
MUNICIPAL BONDS - 53.4% (CONTINUED) OR SHARES VALUE
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OTHER REVENUE BONDS - 37.7%
Chester County Pennsylvania Health and Educational Authority
(Devereux), 5.00, due 11/1/18 405,000 $ 431,961
Michigan Municipal Bond Authority, LOC Government Loans, 6.125%, due
12/1/18, callable 12/1/04 at 102, callable 12/1/06 at 100 (FGIC) 100,000 100,116
Kennett Pennsylvania Consolidated School District, 5.25%, due 2/15/19,
callable 2/15/13 (FGIC) 500,000 538,795
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TOTAL OTHER REVENUE BONDS 5,329,463
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TOTAL MUNICIPAL BONDS (COST $7,495,858) 7,544,316
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PREFERRED STOCKS -45.0%
ABN Amro Capital Trust VI, 6.25% 20,000 508,400
Aegon NV , 6.50% 15,000 381,750
Aegon NV, 6.75% 10,000 260,100
Barclays Bank, PLC ADR 20,000 522,400
CIT Group, Inc., 6.35% 15,000 393,900
Federal Home Loan Mortgage Corporation, 6.42% 5,000 273,250
Goldman Sachs Group, Inc. 1/1000 B 15,000 391,500
HSBC USA, Inc., 1/40 Series H 20,000 541,000
ING Groep NV, 7.05% 10,000 251,400
ING Groep NV, Perpetual Debt Security 16,000 401,280
Lehman Brothers Holdings, Inc. C Dep. 1/10 10,000 508,500
Metlife, Inc., 6.50% 17,500 464,275
Prudential PLC, 6.50% 12,500 322,375
Royal Bank of Scotland Group PLC ADR Series Q 20,000 527,200
Royal Bank of Scotland Group PLC ADR Series R, 6.125% 10,000 252,000
Santander Financial SA, 6.41% 14,000 351,120
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TOTAL PREFERRED STOCKS (COST $6,041,045) 6,350,450
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SHORT-TERM INVESTMENTS - AT COST APPROXIMATING FAIR VALUE - 1.6%, FEDERATED
PENNSYLVANIA MUNICIPAL CASH TRUST #8 -(COST $225,661) 225,661 225,661
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TOTAL INVESTMENTS - 100% (COST $13,762,564) $14,120,427
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SEE NOTES TO FINANCIAL STATEMENTS.
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4
NRM INVESTMENT COMPANY
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February 28, 2007
STATEMENT OF OPERATIONS
UNAUDITED
SIX-MONTH
PERIOD ENDED
FEBRUARY 28,
2007
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INVESTMENT INCOME $356,471
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EXPENSES
Investment advisory fees 21,785
Custodian fees 9,750
Transfer and dividend disbursing agent fees 1,150
Legal and professional fees 42,006
Directors' fees 3,733
Insurance 325
Capital stock tax 2,300
Provision for environmental claims 10,231
Miscellaneous 2,100
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TOTAL EXPENSES 93,380
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NET INVESTMENT INCOME 263,091
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain from investment transactions 5,971
Net unrealized appreciation of investments 101,517
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NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 107,448
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $370,579
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SEE NOTES TO FINANCIAL STATEMENTS.
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5
NRM INVESTMENT COMPANY
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February 28, 2007
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD/ YEAR ENDED
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UNAUDITED
FEBRUARY 28, AUGUST 31,
2007 2006
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INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 263,091 $ 399,194
Net realized gain (loss) from investment transactions 5,971 141,159
Net unrealized appreciation of investments 101,517 72,712
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 370,579 613,065
DISTRIBUTIONS TO SHAREHOLDERS (353,603) (477,046)
CAPITAL SHARE TRANSACTIONS 44 (1,324,319)
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TOTAL INCREASE (DECREASE) IN NET ASSETS 17,020 (1,188,300)
NET ASSETS - BEGINNING OF YEAR 14,208,772 15,397,072
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NET ASSETS - END OF PERIOD/YEAR $ 14,225,792 $ 14,208,772
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SEE NOTES TO FINANCIAL STATEMENTS.
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6
NRM INVESTMENT COMPANY
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February 28, 2007
FINANCIAL HIGHLIGHTS
UNAUDITED YEARS ENDED AUGUST 31,
FEBRUARY 28, --------------------------------------------------------
2007 2006 2005 2004 2003 2002
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PER SHARE DATA (FOR A SHARE
OUTSTANDING THROUGHOUT
THE INDICATED PERIOD/YEAR)
Net asset value, beginning of year $3.938 $3.900 $3.931 $3.834 $3.842 $ 3.837
Net investment income .073 .110 .070 .119 .146 .163
Net realized and unrealized gain (loss) on
investments .029 .059 .097 .096 .006 .006
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TOTAL FROM INVESTMENT OPERATIONS .102 .169 .167 .215 .152 .169
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Less distributions:
Dividends from capital gains
(.018) (.021) (.130) (.009) -- --
Dividends from net tax-exempt income (.041) (.086) (.061) (.103) (.146) (.163)
Dividends from net taxable income (.039) (.024) (.007) (.006) -- --
Distribution in excess of net investment
income -- -- -- -- (.014) (.001)
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TOTAL DISTRIBUTIONS (.098) (.131) (.198) (.118) (.160) (.164)
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NET ASSET VALUE, END OF PERIOD/YEAR $3.942 $3.938 $3.900 $3.931 $3.834 $3.842
====================================================================================================================================
TOTAL RETURN 2.99% 4.40% 3.76% 5.59% 3.96% 4.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) $14,226 $ 14,209 $15,397 $15,579 $15,198 $15,285
Ratio of expenses to average net assets .65% 1.05% 1.23% .67% 1.07% 1.43%
Ratio of net investment income to average
net assets 1.84% 2.77% 1.75% 3.04% 3.78% 4.24%
Portfolio turnover rate 1.78% 88.85% 56.38% 47.45% 37.90% 16.82%
SEE NOTES TO FINANCIAL STATEMENTS.
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7
NRM INVESTMENT COMPANY
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NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
NRM Investment Company (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a
non-diversified, open-end management investment company. The
following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its
financial statements.
VALUATION OF INVESTMENTS
Investments in securities (other than debt securities maturing
in 60 days or less) traded in the over-the-counter market, and
listed securities for which no sale was reported on the last
business day of the period, are valued based on prices
furnished by a pricing service. This service determines the
valuations using a matrix pricing system based on common bond
features such as coupon rate, quality and expected maturity
dates. Securities for which market quotations are not readily
available are valued by the Investment Advisor under the
supervision and responsibility of the Fund's Board of
Directors. Investments in securities that are traded on a
national securities exchange are valued at the closing prices.
Short-term investments are valued at amortized cost, which
approximates fair value.
INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME
Investment transactions are accounted for on the date the
securities are purchased or sold (trade date). Realized gains
and losses from investment transactions are reported on the
basis of identified cost for both financial and federal income
tax purposes. Interest income is recorded on the accrual basis
for both financial and income tax reporting. In computing
investment income, the Fund amortizes premiums over the life
of the security, unless said premium is in excess of any call
price, in which case the excess is amortized to the earliest
call date. Discounts are accreted over the life of the
security.
TRANSACTIONS WITH SHAREHOLDERS
Fund shares are sold and redeemed at the net asset value.
Transactions of these shares are recorded on the trade date.
Dividends and distributions are recorded by the Fund on the
ex-dividend date.
FEDERAL INCOME TAXES
It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment
companies and distribute substantially all of its net
investment income and realized net gain from investment
transactions to its shareholders and, accordingly, no
provision has been made for federal income taxes.
ESTIMATES
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
of America 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 those estimates.
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8
NRM INVESTMENT COMPANY
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NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007
NOTE 2 - INVESTMENT ADVISOR AND MANAGEMENT FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
The Fund has an investment advisory agreement which provides that
the Fund will pay to the investment advisor, as compensation for
services provided and expenses assumed, a fee. The annual flat rate was
$10,000 through December 31, 2005 and subsequently thereto was
increased to an annual rate of. .30% of the fund's net asset value .
The chief executive officer of the investment advisor is on the Board
of Directors of the Fund. Furthermore, the Fund's preisent and chairman
of the Board owns 78.1% of the Fund's outstanding sghres as of February
28, 2007
NOTE 3 - COST, PURCHASES AND SALES OF INVESTMENT SECURITIES
Cost of purchases and proceeds from sales and maturities of
investment securities, other than short-term investments, aggregated
$252,000 and $550,564 respectively, during the period ended February
28, 2007.
At February 28, 2007, the cost of investment securities owned is
the same for financial reporting and federal income tax purposes. Net
unrealized appreciation of investment securities is $357,863 (aggregate
gross unrealized appreciation of $381,052,less aggregate unrealized
depreciation of $23,189).
NOTE 4 - DIVIDENDS PAYABLE
On December 20, 2006 the Board of Directors declared a quarterly
dividend of $.046 per share to shareholders of record as of February
23, 2007, payable March 1, 2007
NOTE 5 - ENVIRONMENTAL LIABILITY AND SUBSEQUENT EVENTS.
The Fund has been identified as a potentially responsible party
("PRP") by the United States Environmental Protection Agency ("EPA") in
remedial activities related to an environmental matter.
The claim arising from the EPA activities and directions is
divided into two parts: the first relates to groundwater contamination
(OU-1), and the second relates to drummed waste and soil cleanup
(OU-2). In addition, there are past costs incurred by the EPA which are
included in OU-2.
The Fund has joined a group (OU-1 Group) of defendants to share
the costs of the OU-1 matter and has declined to join a group (OU-2
Group) to share the costs of the OU-2 matter as the Fund believed its
linkage to the drummed waste and soil cleanup portion of OU-2 to be
weak.
EPA notified selected PRP's to undertake the cleanup pursuant to
an EPA decision specifying remedies for OU-1 and OU-2. Five such PRP
participants commenced suit against other PRP's, including the Fund,
seeking contribution from defendants for what plaintiffs contend to be
costs incurred in excess of their fair share of a common liability.
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9
NRM INVESTMENT COMPANY
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NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007
NOTE 5 - ENVIRONMENTAL LIABILITY AND SUBSEQUENT EVENTS (CONTINUED)
The Fund has accrued $150,000 at February 28, 2007 as its estimate
of the remaining commitment to the OU-1 Group. The Fund's share of the
costs is subject to reallocation after all available evidence is
analyzed.
In April, 2007 Counsel for the Fund advises that, with minor
exceptions, lengthy discovery proceedings have been concluded, the
developed facts have been analyzed, and that the Fund has begun
settlement negotiations. After considering the facts and plaintiffs'
contentions, Counsel believes that a payment by the Fund either by
settlement or by recovery following further litigation is probable and
that, in addition to the OU-1 costs the Fund has already incurred,
there will be additional claims estimated to be between $750,000 and
$1,500,000 and that $1,000,000 is the present best estimate of the
Fund's liability. This amount will be charged to the Fund in April,
2007.
NOTE 6 - TRANSACTIONS IN CAPITAL STOCK AND COMPONENTS OF NET ASSETS
Transactions in fund shares were as follows:
PERIOD/YEAR ENDED
----------------------------------------------------------------------
FEBRUARY 28, 2007 AUGUST 31, 2006
----------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- -----------
Shares issued in reinvestment of
dividends 11 $ 44 11 $ 45
Shares redeemed -0- -0- (340,065) (1,324,364)
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) 11 $ 44 (340,054) $(1,324,319)
=========== =========== =========== ===========
The components of net assets at February 28, 2007 and August 31,
2006 are as follows:
FEBRUARY 28, AUGUST 31,
2007 2006
------------ ------------
Capital shares, par value $.01 per share, 3,608,403 shares
and 3,608,392 shares issued and outstanding at February
28, 2007 and August 31, 2006 (10,000,000 full and
fractional shares
authorized); and capital paid-in $ 13,999,552 $ 13,999,508
Accumulated net realized gains on investment
transactions 5,971 --
Unrealized appreciation of investments 357,863 256,345
Undistributed net investment income 15,571 106,084
Overdistributed net investment income* (153,165) (153,165)
------------ ------------
NET ASSETS $ 14,225,792 $ 14,208,772
============ ============
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10
NRM INVESTMENT COMPANY
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NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007
NOTE 6 - TRANSACTIONS IN CAPITAL STOCK AND COMPONENTS OF NET ASSETS (CONTINUED)
* For federal income tax purposes, there is no undistributed net
investment income. The book/tax difference arises from amounts
reserved for environmental litigation desributed in Note 5 and
not deducted fior federal income tax purposes.
NOTE 7 - DISTRIBUTION TO SHAREHOLDERS
The tax character of distributions paid during the period ended
February 28, 2007 and the year ended August 31, 2006 was as follows:
2/28/07 8/31/06
-------- --------
Distributions paid from:
Tax-exempt interest dividends $145,813 $316,754
Taxable qualified dividends 141,444 67,700
Taxable ordinary dividends 0 17,779
Long-term capital gains 66,346 74,813
-------- --------
$353,306 $477,046
======== ========
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11