Source Capital, Inc.

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Objective: Maximum total return for Common shareholders from both capital appreciation and investment income to the extent consistent with protection of invested capital and provision of sufficient income to meet the dividend requirements of Preferred shareholders.

Investments: Common stock; preferred stock; fixed income; convertible securities.

Fund data as of 7/3/2008
Net Asset Value: $54.36

Common Stock Market Price: $50.00
Cusip: 8326144105
Ticker: SOR for Common Stock

Preferred Stock Market Price: $32.05
Cusip: 836144204
Ticker: SOR+ for Preferred Stock

Quarterly Portfolio Holdings

Investment Officers: Eric S. Ende and Steven R. Geist

Founded: 1968

Data below last updated May 31, 2008

Average Annual Total Return *

	12 Months	5 Years	10 Years
Per Common Share	-4.43%	+13.97%	+11.44%

The returns shown are calculated at net aseet value per common share. Please see additional disclosures below.*

Portfolio Structure

Total net assets: $593.4 million

Total Securities in Portfolio: 44

Data below last updated March 31, 2008

Top Sectors

Major Holdings

Noble Corp.

7.97%

Invitrogen

3.91%

ScanSource

5.68%

Helix Energy Solutions

3.88%

O'Reilly Automotive

5.10%

Carnival

3.85%

Charles River Laboratories

4.64%

Carmax

3.75%

IDEX Corporation

4.03%

Graco

3.16%

Top 10 Holdings represent 45.97% of Total Net Assets

Source Capital Audit Committee Charter LLC

* Performance has been calculated on a total return basis, which combines principal and dividend income changes for the periods shown. Principal changes are based on the difference between the beginning and closing net asset values for the period and assume reinvestment of all dividends and distributions paid. This data represents past performance and is not indicative of future performance. Source Capital is a closed-end investment company. Its shares are traded on the New York Stock Exchange, and the Company is not involved in these transactions. Thus, your performance will also vary based upon the market price of Source Capital's common stock.