Form NPORT-P FAIRHOLME FUNDS INC For: Feb 26

April 28, 2021 11:32 AM EDT

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    NPORT-P
    false
    
      
      
        
          0001096344
          XXXXXXXX
        
      
      
      
      
        S000027309
        C000082377
      
      
    
  
  
    
      Fairholme Funds, Inc.
      811-09607
      0001096344
      549300HWYY7ECL9DW492
      2601 NE 2ND AVENUE
      Miami
      
      33137
      1-866-202-2263
      The Fairholme Focused Income Fund
      S000027309
      549300210MAIY8V53061
      2021-11-30
      2021-02-26
      N
    
    
      118425837.16
      1007032.48
      117418804.68
      0.00000000
      0.00000000
      0.00000000
      0.00000000
      0.00000000
      0.00000000
      0.00000000
      0.00000000
      0.00000000
      0.00000000
      0.00000000
      0.00000000
      0.00000000
      262451.34000000
      
        
          USD
          
          
        
      
      
      
      N
      
        
          
        
        
          
            
            
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
          
          
            
            
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
          
          
            
            
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
          
          
            
            
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
          
          
            
            
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
          
          
            
            
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
            
              
              
              
            
          
        
        
        
        
      
      
      
      
      
      
    
    
      
        TREASURY BILL
        254900HROIFWPRGM1V77
        United States Treasury Bill
        912796A33
        
          
          
        
        5000000.00000000
        PA
        USD
        4999516.65000000
        4.257850063816
        Long
        DBT
        UST
        US
        N
        
        2
        
          2021-05-27
          None
          0.00000000
          N
          N
          N
        
        
          N
          N
          N
        
      
      
        FREDDIE MAC
        S6XOOCT0IEG5ABCC6L87
        Federal Home Loan Mortgage Corp
        313400624
        
          
          
        
        88500.00000000
        NS
        USD
        466395.00000000
        0.397206394044
        Long
        EP
        USGSE
        US
        N
        
        1
        
          N
          N
          N
        
      
      
        Old Republic International Cor
        N/A
        Old Republic International Corp
        680223104
        
          
          
        
        241100.00000000
        NS
        USD
        4660463.00000000
        3.969094228732
        Long
        EC
        CORP
        US
        N
        
        1
        
          N
          N
          N
        
      
      
        Enbridge Inc
        98TPTUM4IVMFCZBCUR27
        Enbridge Inc
        29250N105
        
          
          
        
        137700.00000000
        NS
        USD
        4655637.00000000
        3.964984154529
        Long
        EC
        CORP
        CA
        N
        
        1
        
          N
          N
          N
        
      
      
        TREASURY BILL
        254900HROIFWPRGM1V77
        United States Treasury Bill
        912796C23
        
          
          
        
        8000000.00000000
        PA
        USD
        7999995.28000000
        6.813214716162
        Long
        DBT
        UST
        US
        N
        
        2
        
          2021-03-02
          None
          0.00000000
          N
          N
          N
        
        
          N
          N
          N
        
      
      
        TREASURY BILL
        254900HROIFWPRGM1V77
        United States Treasury Bill
        9127962Q1
        
          
          
        
        20000000.00000000
        PA
        USD
        19999061.20000000
        17.03224730868
        Long
        DBT
        UST
        US
        N
        
        2
        
          2021-04-22
          None
          0.00000000
          N
          N
          N
        
        
          N
          N
          N
        
      
      
        TREASURY BILL
        254900HROIFWPRGM1V77
        United States Treasury Bill
        9127962F5
        
          
          
        
        23000000.00000000
        PA
        USD
        22999520.91000000
        19.58759584776
        Long
        DBT
        UST
        US
        N
        
        2
        
          2021-03-25
          None
          0.00000000
          N
          N
          N
        
        
          N
          N
          N
        
      
      
        CVS Health Corp
        549300EJG376EN5NQE29
        CVS Health Corp
        126650100
        
          
          
        
        60000.00000000
        NS
        USD
        4087800.00000000
        3.481384443608
        Long
        EC
        CORP
        US
        N
        
        1
        
          N
          N
          N
        
      
      
        Western Midstream Partners LP
        N/A
        Western Midstream Partners LP
        958669103
        
          
          
        
        392400.00000000
        NS
        USD
        6525612.00000000
        5.557552742752
        Long
        EC
        CORP
        US
        N
        
        1
        
          N
          N
          N
        
      
      
        TREASURY BILL
        254900HROIFWPRGM1V77
        United States Treasury Bill
        9127964L0
        
          
          
        
        4000000.00000000
        PA
        USD
        3998853.32000000
        3.405632795273
        Long
        DBT
        UST
        US
        N
        
        2
        
          2021-09-09
          None
          0.00000000
          N
          N
          N
        
        
          N
          N
          N
        
      
      
        Energy Transfer LP
        MTLVN9N7JE8MIBIJ1H73
        Energy Transfer LP
        29273V100
        
          
          
        
        590000.00000000
        NS
        USD
        4507600.00000000
        3.838908096777
        Long
        EC
        CORP
        US
        N
        
        1
        
          N
          N
          N
        
      
      
        Kinder Morgan Inc
        549300WR7IX8XE0TBO16
        Kinder Morgan Inc
        49456B101
        
          
          
        
        312000.00000000
        NS
        USD
        4586400.00000000
        3.906018301326
        Long
        EC
        CORP
        US
        N
        
        1
        
          N
          N
          N
        
      
      
        FANNIE MAE
        B1V7KEBTPIMZEU4LTD58
        Federal National Mortgage Association
        313586752
        
          
          
        
        340100.00000000
        NS
        USD
        1928367.00000000
        1.642298271776
        Long
        EP
        USGSE
        US
        N
        
        1
        
          N
          N
          N
        
      
      
        Williams Cos Inc/The
        D71FAKCBLFS2O0RBPG08
        Williams Cos Inc/The
        969457100
        
          
          
        
        140100.00000000
        NS
        USD
        3199884.00000000
        2.725188702712
        Long
        EC
        CORP
        US
        N
        
        1
        
          N
          N
          N
        
      
      
        Fidelity Treasury Portfolio
        N/A
        Fidelity Treasury Portfolio
        316175504
        
          
          
        
        5577469.12000000
        NS
        USD
        5577469.12000000
        4.750064638453
        Long
        STIV
        RF
        US
        N
        
        1
        
          N
          N
          N
        
      
      
        TREASURY BILL
        254900HROIFWPRGM1V77
        United States Treasury Bill
        9127962Y4
        
          
          
        
        9000000.00000000
        PA
        USD
        8999129.97000000
        7.664130114869
        Long
        DBT
        UST
        US
        N
        
        2
        
          2021-05-20
          None
          0.00000000
          N
          N
          N
        
        
          N
          N
          N
        
      
      
        FREDDIE MAC
        S6XOOCT0IEG5ABCC6L87
        Federal Home Loan Mortgage Corp
        313400855
        
          
          
        
        302300.00000000
        NS
        USD
        2554435.00000000
        2.175490550224
        Long
        EP
        USGSE
        US
        N
        
        1
        
          N
          N
          N
        
      
      
        AT&T Inc
        549300Z40J86GGSTL398
        AT&T Inc
        00206R102
        
          
          
        
        185600.00000000
        NS
        USD
        5176384.00000000
        4.408479556666
        Long
        EC
        CORP
        US
        N
        
        1
        
          N
          N
          N
        
      
      
        FREDDIE MAC
        S6XOOCT0IEG5ABCC6L87
        Federal Home Loan Mortgage Corp
        313400640
        
          
          
        
        260924.00000000
        NS
        USD
        1145456.36000000
        0.975530591647
        Long
        EP
        USGSE
        US
        N
        
        1
        
          N
          N
          N
        
      
    
    
      
    
    
      2021-04-27
      Fairholme Funds, Inc.
      Wayne Kellner
      Wayne Kellner
      Treasurer
    
  
  XXXX



SCHEDULE
OF
INVESTMENTS
February
28,
2021
(unaudited)
The
Fairholme
Fund
1
The
accompanying
notes
are
an
integral
part
of
the
schedule
of
investments.
Shares
Value
DOMESTIC
EQUITY
SECURITIES
73
.1
%
REAL
ESTATE
MANAGEMENT
&
DEVELOPMENT
73
.1
%
22,208,024‌
The
St.
Joe
Co.
(a)
$
1,117,729,848‌
TOTAL
DOMESTIC
EQUITY
SECURITIES
(COST $593,203,617)
1,117,729,848‌
FOREIGN
EQUITY
SECURITIES
1
.7
%
CANADA
1
.7
%
METALS
&
MINING
1
.7
%
6,835,467‌
Imperial
Metals
Corp.
(a)(b)
25,191,215‌
TOTAL
FOREIGN
EQUITY
SECURITIES
(COST $64,213,089)
25,191,215‌
DOMESTIC
PREFERRED
EQUITY
SECURITIES
6
.4
%
MORTGAGE
FINANCE
6
.4
%
8,955,013‌
Federal
Home
Loan
Mortgage
Corp.
7.875%,
Series
Z
(b)(c)
47,192,918‌
8,784,077‌
Federal
National
Mortgage
Association
7.750%,
Series
S
(b)(c)
49,805,717‌
96,998,635‌
TOTAL
DOMESTIC
PREFERRED
EQUITY
SECURITIES
(COST $75,287,318)
96,998,635‌
Principal
Value
DOMESTIC
CORPORATE
BONDS
0
.1
%
RETAIL
DEPARTMENT
STORES
0
.1
%
$
97,022,000‌
Sears
Holdings
Corp.
8.000%,
03/01/2021
(d)
$
1,319,499‌
TOTAL
DOMESTIC
CORPORATE
BONDS
(COST $97,385,904)
1,319,499‌
U.S.
GOVERNMENT
OBLIGATIONS
15
.2
%
U.S.
Treasury
Bills
20,000,000‌
0.051%,
03/02/2021
(e)
19,999,988‌
50,000,000‌
0.075%,
03/18/2021
(e)
49,999,312‌
50,000,000‌
0.020%,
03/23/2021
(e)
49,999,007‌
50,000,000‌
0.170%,
05/20/2021
(e)
49,995,166‌
50,000,000‌
0.016%,
05/27/2021
(e)
49,995,167‌
13,000,000‌
0.136%,
09/09/2021
(e)
12,996,273‌
TOTAL
U.S.
GOVERNMENT
OBLIGATIONS
(COST $232,967,399)
232,984,913‌
Shares
MONEY
MARKET
FUNDS
3
.6
%
55,328,905
Fidelity
Investments
Money
Market
Treasury
Portfolio
-
Class
I,
0.01%
(f)
55,328,905‌
TOTAL
MONEY
MARKET
FUNDS
(COST $55,328,905)
55,328,905‌
TOTAL
INVESTMENTS
100.1%
(COST $1,118,386,232)
1,529,553,015‌
LIABILITIES
IN
EXCESS
OF
OTHER
ASSETS
(0.1)%
(
1,279,244‌
)
NET
ASSETS
100.0%
$
1,528,273,771‌
(a)
    Affiliated
Company.
See
Note
8.
(b)
    Non-income
producing
security.
(c)
    Variable
rate
security.
Rates
shown
are
the
effective
rates
as
of
February
28,
2021.
(d)
    Security
in
default
and
no
interest
was
accrued
as
of
February
28,
2021.
(e)
    Rates
shown
are
the
effective
yields
based
on
the
purchase
price.
The
calculation
assumes
the
security
is
held
to
maturity.
(f)
    Annualized
based
on
the
1-day
yield
as
of
February
28,
2021.
SCHEDULE
OF
INVESTMENTS
February
28,
2021
(unaudited)
The
Fairholme
Focused
Income
Fund
2
The
accompanying
notes
are
an
integral
part
of
the
schedule
of
investments.
Shares
Value
DOMESTIC
EQUITY
SECURITIES
27
.9
%
DIVERSIFIED
TELECOMMUNICATIONS
4
.4
%
185,600‌
AT&T,
Inc.
$
5,176,384‌
HEALTH
CARE
3
.5
%
60,000‌
CVS
Health
Corp.
4,087,800‌
INSURANCE
-
PROPERTY
&
CASUALTY
4
.0
%
241,100‌
Old
Republic
International
Corp.
4,660,463‌
OIL
&
GAS
STORAGE
&
TRANSPORTATION
16
.0
%
312,000‌
Kinder
Morgan,
Inc.
4,586,400‌
590,000‌
Energy
Transfer
LP
4,507,600‌
140,100‌
Williams
Cos,
Inc.
(The)
3,199,884‌
392,400‌
Western
Midstream
Partners
LP
6,525,612‌
18,819,496‌
TOTAL
DOMESTIC
EQUITY
SECURITIES
(COST $29,347,669)
32,744,143‌
FOREIGN
EQUITY
SECURITIES
4
.0
%
CANADA
4
.0
%
OIL
&
GAS
STORAGE
&
TRANSPORTATION
4
.0
%
137,700‌
Enbridge,
Inc.
4,655,637‌
TOTAL
FOREIGN
EQUITY
SECURITIES
(COST $4,208,970)
4,655,637‌
DOMESTIC
PREFERRED
EQUITY
SECURITIES
5
.2
%
MORTGAGE
FINANCE
5
.2
%
Federal
Home
Loan
Mortgage
Corp.
302,300‌
5.100%
,
Series
H
(a)
2,554,435‌
260,924‌
6.550%
,
Series
Y
(a)
1,145,457‌
88,500‌
8.375%
,
Series
Z
(a)(b)
466,395‌
Shares
Value
DOMESTIC
PREFERRED
EQUITY
SECURITIES—
5.2%
(CONTINUED)
MORTGAGE
FINANCE
(continued)
340,100‌
Federal
National
Mortgage
Association
8.250%,
Series
S
(a)(b)
$
1,928,367‌
6,094,654‌
TOTAL
DOMESTIC
PREFERRED
EQUITY
SECURITIES
(COST $7,232,897)
6,094,654‌
Principal
U.S.
GOVERNMENT
OBLIGATIONS
58
.8
%
U.S.
Treasury
Bills
$
8,000,000‌
0.051%,
03/02/2021
(c)
7,999,995‌
23,000,000‌
0.117%,
03/25/2021
(c)
22,999,521‌
20,000,000‌
0.070%,
04/22/2021
(c)
19,999,061‌
9,000,000‌
0.170%,
05/20/2021
(c)
8,999,130‌
5,000,000‌
0.016%,
05/27/2021
(c)
4,999,517‌
4,000,000‌
0.136%,
09/09/2021
(c)
3,998,853‌
TOTAL
U.S.
GOVERNMENT
OBLIGATIONS
(COST $68,989,689)
68,996,077‌
Shares
MONEY
MARKET
FUNDS
5
.0
%
5,839,920
Fidelity
Investments
Money
Market
Treasury
Portfolio
-
Class
I,
0.01%
(d)
5,839,920‌
TOTAL
MONEY
MARKET
FUNDS
(COST $5,839,920)
5,839,920‌
TOTAL
INVESTMENTS
100.9%
(COST $115,619,145)
118,330,431‌
LIABILITIES
IN
EXCESS
OF
OTHER
ASSETS
(0.9)%
(
1,024,658‌
)
NET
ASSETS
100.0%
$
117,305,773‌
SCHEDULE
OF
INVESTMENTS
(continued)
February
28,
2021
(unaudited)
The
Fairholme
Focused
Income
Fund
3
The
accompanying
notes
are
an
integral
part
of
the
schedule
of
investments.
(a)
    Non-income
producing
security.
(b)
    Variable
rate
security.
Rates
shown
are
the
effective
rates
as
of
February
28,
2021.
(c)
    Rates
shown
are
the
effective
yields
based
on
the
purchase
price.
The
calculation
assumes
the
security
is
held
to
maturity.
(d)
    Annualized
based
on
the
1-day
yield
as
of
February
28,
2021.
SCHEDULE
OF
INVESTMENTS
February
28,
2021
(unaudited)
The
Fairholme
Allocation
Fund
4
The
accompanying
notes
are
an
integral
part
of
the
schedule
of
investments.
Shares
Value
DOMESTIC
EQUITY
SECURITIES
47
.9
%
DIVERSIFIED
TELECOMMUNICATIONS
3
.6
%
76,400‌
AT&T,
Inc.
$
2,130,796‌
HEALTH
CARE
3
.9
%
33,700‌
CVS
Health
Corp.
2,295,981‌
OIL
&
GAS
STORAGE
&
TRANSPORTATION
11
.3
%
121,600‌
Kinder
Morgan,
Inc.
1,787,520‌
284,300‌
Energy
Transfer
LP
2,172,052‌
164,200‌
Western
Midstream
Partners
LP
2,730,646‌
6,690,218‌
REAL
ESTATE
MANAGEMENT
&
DEVELOPMENT
29
.1
%
348,267‌
The
St.
Joe
Co.
(a)
17,176,529‌
TOTAL
DOMESTIC
EQUITY
SECURITIES
(COST $16,122,010)
28,293,524‌
FOREIGN
EQUITY
SECURITIES
17
.9
%
CANADA
17
.9
%
METALS
&
MINING
13
.7
%
2,192,841‌
Imperial
Metals
Corp.
(b)
8,081,427‌
OIL
&
GAS
STORAGE
&
TRANSPORTATION
4
.2
%
73,300‌
Enbridge,
Inc.
2,478,273‌
TOTAL
FOREIGN
EQUITY
SECURITIES
(COST $28,257,953)
10,559,700‌
Shares
Value
DOMESTIC
PREFERRED
EQUITY
SECURITIES
8
.4
%
MORTGAGE
FINANCE
8
.4
%
479,295‌
Federal
Home
Loan
Mortgage
Corp.
7.875%,
Series
Z
(c)
$
2,525,885‌
432,465‌
Federal
National
Mortgage
Association
7.750%,
Series
S
(c)
2,452,076‌
4,977,961‌
TOTAL
DOMESTIC
PREFERRED
EQUITY
SECURITIES
(COST $3,917,285)
4,977,961‌
Principal
U.S.
GOVERNMENT
OBLIGATIONS
25
.4
%
U.S.
Treasury
Bills
$
3,000,000‌
0.510%,
03/02/2021
(d)
2,999,998‌
8,000,000‌
0.070%,
04/22/2021
(d)
7,999,625‌
3,000,000‌
0.170%,
05/20/2021
(d)
2,999,710‌
1,000,000‌
0.136%,
09/09/2021
(d)
999,713‌
TOTAL
U.S.
GOVERNMENT
OBLIGATIONS
(COST $14,997,328)
14,999,046‌
Shares
MONEY
MARKET
FUNDS
0
.5
%
321,711
Fidelity
Investments
Money
Market
Treasury
Portfolio
-
Class
I,
0.01%
(e)
321,711‌
TOTAL
MONEY
MARKET
FUNDS
(COST $321,711)
321,711‌
TOTAL
INVESTMENTS
100.1%
(COST $63,616,287)
59,151,942‌
LIABILITIES
IN
EXCESS
OF
OTHER
ASSETS
(0.1)%
(
73,503‌
)
NET
ASSETS
100.0%
$
59,078,439‌
SCHEDULE
OF
INVESTMENTS
(continued)
February
28,
2021
(unaudited)
The
Fairholme
Allocation
Fund
5
The
accompanying
notes
are
an
integral
part
of
the
schedule
of
investments.
(a)
    Restricted/controlled
security.
The
value
of
this
security
totals
$17,176,529,
which
represents
29.07%
of
The
Allocation
Fund’s
net
assets.
Information
related
to
this
security
is
as
follows:
(b)
    Non-income
producing
security.
(c)
    Variable
rate
security.
Rates
shown
are
the
effective
rates
as
of
February
28,
2021.
(d)
    Rates
shown
are
the
effective
yields
based
on
the
purchase
price.
The
calculation
assumes
the
security
is
held
to
maturity.
(e)
    Annualized
based
on
the
1-day
yield
as
of
February
28,
2021.
Shares
Issuer
Acquisition
Date(s)
Acquisition
Cost
2/28/2021
Carrying
Value
Per
Unit
348,267
The
St.
Joe
Co.
08/09/2017-09/01/2017
$6,615,792
$49.32
NOTES
TO
SCHEDULE
OF
INVESTMENTS
February
28
,
2021
(unaudited)
Fairholme
Funds,
Inc.
6
Significant
Accounting
Policies
As
investment
companies,
the
Funds
follow
the
investment
company
accounting
and
reporting
guidance,
which
is
part
of
U.S.
generally
accepted
accounting
principles
(“U.S.
GAAP”).
The
Funds’
investments
are
reported
at
fair
value
as
defined
by
U.S.
GAAP.
The
Funds
calculate
their
net
asset
values
as
soon
as
practicable
following
the
close
of
regular
trading
on
the
New
York
Stock
Exchange
(currently
4:00
p.m.
Eastern
Time)
on
each
day
the
New
York
Stock
Exchange
is
open.
A
description
of
the
valuation
techniques
applied
to
the
Funds’
securities
measured
at
fair
value
on
a
recurring
basis
follows:
Security
Valuation:
Equity
securities
(common
and
preferred
stocks):
Securities
traded
on
a
national
securities
exchange
or
reported
on
the
NASDAQ
national
market
are
generally
valued
at
the
official
closing
price,
or
at
the
last
reported
sale
price
on
the
exchange
or
market
on
which
the
securities
are
traded,
as
of
the
close
of
business
on
the
day
the
securities
are
being
valued
or,
lacking
any
sales,
at
the
last
available
bid
price.
To
the
extent
these
securities
are
actively
traded
and
valuation
adjustments
are
not
applied,
they
are
classified
in
Level
1
of
the
fair
value
hierarchy.
If
these
securities
are
not
actively
traded,
they
are
classified
in
Level
2.
Subject
to
the
oversight
of
the
Board,
the
Manager
may
determine
the
fair
valuation
of
a
security
when
market
quotations
are
insufficient
or
not
readily
available,
when
securities
are
determined
to
be
illiquid
or
restricted,
or
when
in
the
judgment
of
the
Manager
the
prices
or
values
available
do
not
represent
the
fair
value
of
the
instrument.
In
these
situations,
if
the
inputs
are
observable,
the
valuation
will
be
classified
in
Level
2
of
the
fair
value
hierarchy,
otherwise
they
would
be
classified
in
Level
3.
Fixed-income
securities
(U.S.
government
obligations,
corporate
bonds,
convertible
bonds,
and
asset
backed
securities):
The
fair
value
of
fixed-income
securities
is
determined
using
market
quotations
when
readily
available,
but
may
also
be
estimated
by
various
methods
when
no
such
market
quotations
exist
and
when
the
Manager
believes
these
other
methods
reflect
the
fair
value
of
such
securities.
These
methods
may
consider
recently
executed
transactions
in
securities
of
the
issuer
or
comparable
issuers
and
market
price
valuations
from
independent
pricing
services
and/or
brokers
(where
observable).
Where
the
Manager
deems
it
appropriate
to
do
so
(such
as
when
independent
prices
are
unavailable
or
not
deemed
to
be
representative
of
fair
value)
fixed
income
securities
will
be
fair
valued
in
good
faith
following
consideration
by,
and
conclusion
of,
the
Manager’s
Valuation
and
Liquidity
Risk
Management
Committee.
As
of
February
28,
2021
,
fixed-income
securities
are
valued
by
the
Manager
utilizing
observable
market
prices
on
the
day
of
valuation
or
the
average
bid
of
independent
broker/dealer
quotes
and/or
the
average
of
valuations
from
independent
pricing
services.
Although
fixed-income
securities
are
classified
in
Level
2
of
the
fair
value
hierarchy
at
February
28,
2021
,
in
instances
where
significant
unobservable
inputs
are
used,
they
would
be
classified
in
Level
3.
Open-end
mutual
funds:
Investments
in
open-end
mutual
funds
including
money
market
funds
are
valued
at
their
closing
net
asset
value
each
business
day
and
are
classified
in
Level
1
of
the
fair
value
hierarchy.
Short-term
securities:
Investments
in
securities
with
maturities
of
less
than
sixty
days
when
acquired,
or
which
subsequently
are
within
sixty
days
of
maturity,
shall
be
valued
at
prices
supplied
by
an
independent
pricing
source
or
by
one
of
the
Funds’
pricing
agents
based
on
broker
or
dealer
supplied
valuations
or
matrix
pricing.
To
the
extent
the
inputs
are
observable
and
timely,
the
values
would
be
classified
in
Level
2
of
the
fair
value
hierarchy.
Restricted
securities:
The
Manager
is
deemed
to
be
an
affiliate
of
The
St.
Joe
Co.
(“Joe”)
for
purposes
of
the
Securities
Act
of
1933
and
Rule
144.
This
determination
was
made
based
on
a
number
of
factors,
including
the
collective
ownership
of
Joe
by
certain
of
the
Funds
and
other
advisory
clients
advised
by
the
Manager.
Shares
of
Joe
owned
by
The
Allocation
Fund
are
considered
control
securities
under
Rule
144
and
are
treated
as
restricted
securities
for
purposes
of
The
Allocation
Fund’s
valuation
procedures.
Due
to
the
restrictions
on
resale,
the
securities
are
generally
valued
at
a
discount
to
similar
publicly
traded
securities.
Depending
on
the
relative
significance
of
valuation
inputs,
these
instruments
may
be
classified
in
either
Level
2
or
Level
3
of
the
fair
value
hierarchy.
Joe
was
classified
as
Level
2
at
February
28,
2021
.
Warrants:
The
Funds
may
invest
in
warrants,
which
may
be
acquired
either
through
a
direct
purchase,
included
as
part
of
a
private
placement,
or
pursuant
to
corporate
actions.
Warrants
entitle,
but
do
not
obligate,
the
holder
to
buy
equity
securities
at
a
specific
price
for
a
specific
period
of
time.
Warrants
may
be
considered
more
speculative
than
certain
other
types
of
investments
in
that
they
do
not
entitle
a
holder
to
dividends
or
voting
rights
with
respect
to
the
underlying
securities
that
may
be
purchased
NOTES
TO
SCHEDULE
OF
INVESTMENTS
(continued)
February
28
,
2021
(unaudited)
Fairholme
Funds,
Inc.
7
nor
do
they
represent
any
rights
in
the
assets
of
the
issuing
company.
Also,
the
value
of
a
warrant
does
not
necessarily
change
with
the
value
of
the
underlying
securities
and
a
warrant
ceases
to
have
value
if
it
is
not
exercised
prior
to
its
expiration
date.
Warrants
traded
on
a
security
exchange
are
valued
at
the
official
closing
price
on
the
valuation
date
and
are
classified
as
Level
1
of
the
fair
value
hierarchy.
Over
the
counter
(OTC)
warrants
are
valued
using
simulation
models
utilizing
market
value
of
the
underlying
security,
expiration
date
of
the
warrants,
volatility
of
the
underlying
security,
strike
price
of
the
warrants,
risk-
free
interest
rate
at
the
valuation
date,
and
are
classified
as
Level
2
or
Level
3
of
the
fair
value
hierarchy
depending
on
the
observability
of
the
inputs
used.
The
Funds
use
several
recognized
industry
third-party
pricing
services
(TPPS)
-approved
by
the
Board
and
unaffiliated
with
the
Manager
-to
provide
prices
for
some
of
the
Funds’
securities.
The
Funds
also
use
other
independent
market
trade
data
sources
(such
as
TRACE,
the
FINRA
developed
mandatory
reporting
of
over-the-counter
secondary
market
transactions),
as
well
as
broker
quotes
provided
by
market
makers.
The
data
within
these
feeds
is
ultimately
sourced
from
major
stock
exchanges
and
trading
systems
where
these
securities
trade.
If
a
price
obtained
from
the
pricing
source
is
deemed
unreliable,
it
may
be
discarded
and/or
challenged.
In
these
cases
the
pricing
decision
is
made
by
reference
to
the
reliable
market
data
from
the
other
market
data
sources.
Subject
to
the
oversight
of
the
Board,
the
Manager
may
determine
the
fair
valuation
of
a
security
when
market
quotations
are
insufficient
or
not
readily
available,
when
securities
are
determined
to
be
illiquid
or
restricted,
or
when
in
the
judgment
of
the
Manager
the
prices
or
values
available
do
not
represent
the
fair
value
of
the
instrument.
Factors
which
may
cause
the
Manager
to
make
such
a
judgment
include
the
following:
(a)
only
a
bid
price
or
an
asked
price
is
available;
(b)
the
spread
between
bid
and
asked
prices
is
substantial;
(c)
the
liquidity
of
the
securities;
(d)
the
frequency
of
sales;
(e)
the
thinness
of
the
market;
(f)
the
size
of
reported
trades;
(g)
actions
of
the
securities
markets,
such
as
the
suspension
or
limitation
of
trading;
and
(h)
local
market
closures.
Among
the
factors
to
be
considered
to
fair
value
a
security
are
recent
prices
of
comparable
securities
that
are
publicly
traded,
reliable
prices
of
securities
not
publicly
traded,
the
use
of
valuation
models,
current
analyst
reports,
valuing
the
income
or
cash
flow
of
the
issuer,
or
cost
if
the
preceding
factors
do
not
apply.
The
circumstances
of
fair
valued
securities
are
frequently
monitored
to
determine
if
fair
valuation
measures
continue
to
apply.
The
Manager
reports
quarterly
to
the
Board
the
results
of
the
application
of
fair
valuation
policies
and
procedures.
The
inputs
and
valuation
techniques
used
to
measure
fair
value
of
the
Funds’
investments
are
summarized
into
three
levels
as
described
in
the
hierarchy
below:
Level
1
quoted
prices
in
active
markets
for
identical
securities;
Level
2
other
significant
observable
inputs
(including
quoted
prices
for
similar
securities,
quoted
prices
in
inactive
markets
for
identical
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.);
and
Level
3
significant
unobservable
inputs
(including
the
Manager’s
determination
as
to
the
fair
value
of
investments).
NOTES
TO
SCHEDULE
OF
INVESTMENTS
(continued)
February
28
,
2021
(unaudited)
Fairholme
Funds,
Inc.
8
The
inputs
or
methodology
used
for
valuing
investments
are
not
necessarily
an
indication
of
the
level
of
risk
associated
with
investing
in
those
investments.
The
summary
of
the
Funds’
investments
by
inputs
used
to
value
the
Funds’
investments
as
of
February
28,
2021
is
as
follows:
Valuation
Inputs
Level
1
-
Quoted
Prices
Level
2
-
Other
Significant
Observable
Inputs
Level
3
-
Significant
Observable
Inputs
Total
Fair
Value
at
02/28/21
THE
FAIRHOLME
FUND
ASSETS:
INVESTMENTS
(Fair
Value):
Domestic
Equity
Securities
*
$
1,117,729,848
$
$
$
1,117,729,848
Foreign
Equity
Securities
*
25,191,215
25,191,215
Domestic
Preferred
Equity
Securities
*
96,998,635
96,998,635
Domestic
Corporate
Bonds
*
1,319,499
1,319,499
U.S.
Government
Obligations
232,984,913
232,984,913
Money
Market
Funds
55,328,905
55,328,905
TOTAL
INVESTMENTS
$
1,295,248,603
$
234,304,412
$
$
1,529,553,015
*
Industry
classification
for
these
categories
are
detailed
in
the
Schedule
of
Investments.
Valuation
Inputs
Level
1
-
Quoted
Prices
Level
2
-
Other
Significant
Observable
Inputs
Level
3
-
Significant
Observable
Inputs
Total
Fair
Value
at
02/28/21
THE
INCOME
FUND
ASSETS:
INVESTMENTS
(Fair
Value):
Domestic
Equity
Securities
*
$
32,744,143
$
$
$
32,744,143
Foreign
Equity
Securities
*
4,655,637
4,655,637
Domestic
Preferred
Equity
Securities
*
6,094,654
6,094,654
U.S.
Government
Obligations
68,996,077
68,996,077
Money
Market
Funds
5,839,920
5,839,920
TOTAL
INVESTMENTS
$
49,334,354
$
68,996,077
$
$
118,330,431
*
Industry
classification
for
these
categories
are
detailed
in
the
Schedule
of
Investments.
NOTES
TO
SCHEDULE
OF
INVESTMENTS
(continued)
February
28
,
2021
(unaudited)
Fairholme
Funds,
Inc.
9
There
were
no
Level
3
investments
for
any
of
the
Funds
at
February
28,
2021
.
Transactions
in
Shares
of
Affiliates
Portfolio
companies
in
which
The
Fairholme
Fund
owns
5%
or
more
of
the
outstanding
voting
securities
of
the
issuer
are
considered
affiliates
of
The
Fairholme
Fund.
The
aggregate
fair
value
of
all
securities
of
affiliates
held
by
The
Fairholme
Fund
as
of
February
28,
2021
amounted
to
$
1,142,921,063
,
representing
approximately
74
.79
%
of
The
Fairholme
Fund’s
net
assets.
Transactions
in
The
Fairholme
Fund
during
the
period
ended
28
February,
2021
,
in
which
the
issuer
of
the
security
was
an
affiliate
are
as
follows:
For
additional
information
regarding
the
accounting
policies
of
the
Funds
and
the
most
recent
federal
income
tax
information,
refer
to
the
most
recent
financial
statements
in
the
N-CSR
filing
at
www.sec.gov.
Valuation
Inputs
Level
1
-
Quoted
Prices
Level
2
-
Other
Significant
Observable
Inputs
Level
3
-
Significant
Observable
Inputs
Total
Fair
Value
at
02/28/21
THE
ALLOCATION
FUND
ASSETS:
INVESTMENTS
(Fair
Value):
Domestic
Equity
Securities
Real
Estate
Management
&
Development
$
$
17,176,529
$
$
17,176,529
Other
Industries
*
11,116,995
11,116,995
Foreign
Equity
Securities
*
10,559,700
10,559,700
Domestic
Preferred
Equity
Securities
*
4,977,961
4,977,961
U.S.
Government
Obligations
14,999,046
14,999,046
Money
Market
Funds
321,711
321,711
TOTAL
INVESTMENTS
$
26,976,367
$
32,175,575
$
$
59,151,942
*
Industry
classification
for
these
categories
are
detailed
in
the
Schedule
of
Investments.
November
30,
2020
Gross
Addition
Gross
Deduction
February
28,
2021
Shares/
Par
Value
Shares/
Par
Value
Shares/
Par
Value
Shares/
Par
Value
Fair
Value
Realized
Loss
Change
In
Unrealized
Appreciation
Imperial
Metals
Corp.
6,865,767
(
30,300
)
6,835,467
$
25,191,215
$
(
305,934
)
$
7,475,424
The
St.
Joe
Co.
22,208,024
22,208,024
1,117,729,848
384,642,976
Total
$
1,142,921,063
$
(
305,934
)
$
392,118,400


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