-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lbgx4xRy+GhgSKmJ70yFn8NKQG1I4ZcpfJozMWgUBTdndi7EEuhIJ2mFeeuMHqbC ocDEbaiUmPQD6dZFs0mZGg== /in/edgar/work/20001102/0000935069-00-000577/0000935069-00-000577.txt : 20001106 0000935069-00-000577.hdr.sgml : 20001106 ACCESSION NUMBER: 0000935069-00-000577 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000831 FILED AS OF DATE: 20001102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RBB FUND INC CENTRAL INDEX KEY: 0000831114 STANDARD INDUSTRIAL CLASSIFICATION: [ ] FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05518 FILM NUMBER: 751869 BUSINESS ADDRESS: STREET 1: 400 BELLEVUE PKWY STE 100 CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 3027911791 MAIL ADDRESS: STREET 1: 103 BELLEVUE PKWY STREET 2: SUITE 152 CITY: WILMINGTON STATE: DE ZIP: 19809 FORMER COMPANY: FORMER CONFORMED NAME: FUND INC /DE/ DATE OF NAME CHANGE: 19600201 N-30D 1 0001.txt PRINCIPAL CLASS MOR ANNUAL REPORT [GRAPHIC OMITTED] MORGAN KEEGAN MOR ACCOUNT ANNUAL REPORT FOR THE PRINCIPAL CLASS MONEY MARKET PORTFOLIO AUGUST 31, 2000 THE PRINCIPAL FAMILY THE RBB FUND, INC. ANNUAL INVESTMENT ADVISER'S REPORT A year ago, the financial markets were preoccupied with Y2K preparedness, even as the Federal Reserve was in the midst of a sharp tightening of monetary policy. In the end, Y2K proved to be a non-event, but the Fed's concern about the strength of the U.S. economy was justified, as the nation's gross domestic product grew, in successive quarters, at rates of 4-5%. The second quarter this year, in fact, registered a 5.3% gain, well above the Fed's non-inflationary threshold. Only the concurrent gain in productivity kept the Fed from raising interest rates still higher. At present, the main focus is on energy prices and the threat that $40 per barrel of oil poses to higher producer and consumer prices. Overall, inflation has remained well behaved in the past year, increasing by less than 3%, but it continues to be a key determinant of monetary policy. The Fed's actions over the last year appear to have produced an economic slowdown in the third quarter which may be sufficient to keep the federal funds level at 6.50% through the end of the year. Starting in June 1999, the Federal Reserve raised short-term interest rates a total of 175 basis points to 6.50%, in an effort to slow the economy to a more sustainable and non-inflationary pace. For much of the last twelve months, the yield curve was positively sloped, reflecting the market's continued expectations of rising interest rates. Y2K, of course, produced a brief anomaly last January, but spreads of 50-75 basis points were generally available between overnight and one-year investments. The Fed's most recent move was a fifty basis point increase in May 2000. The magnitude of that move, coupled with subsequent signs of an economic slowdown in July and August, caused the yield curve to flatten considerably. Currently, there is less than a twenty-five basis point spread between overnights and one year. Average weighted maturities in the RBB Money Market Portfolio were extended, when possible, in the May to August period, to a 45-55 day range to capture the higher yields that were available on longer dated investments. BlackRock Institutional Management Corporation (Please dial toll-free 800-430-9618 for questions regarding your account or contact your broker.) REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of The RBB Fund,Inc.: In our opinion, the accompanying statement of net assets, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Money Market Portfolio, a separately managed portfolio of The RBB Fund, Inc. (the "Fund") at August 31, 2000, 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 periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2000 by correspondence with the custodian, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Two Commerce Square Philadelphia, Pennsylvania October 20, 2000 2 THE PRINCIPAL FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS AUGUST 31, 2000 PAR (000) VALUE ------- ------------- CERTIFICATES OF DEPOSIT--7.1% DOMESTIC CERTIFICATES OF DEPOSIT--2.5% First Tennessee Bank 6.650% 11/03/00 ................................... $35,000 $ 35,000,910 ------------- YANKEE DOLLAR CERTIFICATES OF DEPOSIT--4.6% Bank of Montreal Yankee 6.540% 09/08/00 ................................... 25,000 25,000,000 Industrial Bank of Japan 6.620% 10/10/00 ................................... 19,600 19,600,000 Sanwa Bank Yankee 6.620% 10/05/00 ................................... 20,000 20,000,187 ------------- 64,600,187 ------------- TOTAL CERTIFICATES OF DEPOSIT (Cost $99,601,097) ............................ 99,601,097 ------------- COMMERCIAL PAPER--51.8% ASSET BACKED SECURITIES--22.8% Beta Finance Inc. 6.650% 09/11/00 ................................... 9,000 8,983,375 Corporate Receivable Corp. 6.500% 12/20/00 ................................... 25,000 24,503,472 Edison Asset Securitzation LLC. 6.510% 11/06/00 ................................... 10,000 9,880,650 Emerald Certificates Program 6.540% 10/24/00 ................................... 21,705 21,496,017 Enterprise Funding Corp. 6.660% 12/18/00 ................................... 10,000 9,800,200 Fairway Finance Ltd. 6.630% 09/14/00 ................................... 53,412 53,284,123 K2 (USA) LLC. 6.530% 02/26/01 ................................... 9,025 8,733,608 Main Place Funding Corp. 6.888% 10/25/00 ................................... 32,000 32,003,247 Moriarty LLC. 6.690% 12/15/00 ................................... 55,000 53,926,813 Sheffield Receivables Corp. 6.620% 09/18/00 ................................... 48,300 48,149,009 Sigma Finance, Inc. 6.670% 12/15/00 ................................... 50,000 49,027,292 ------------- 319,787,806 ------------- PAR (000) VALUE ------- ------------- BANKS--8.5% Banque Et Caisse Luxembourg 6.500% 02/26/01 ................................... $24,600 $ 23,809,383 Cregem North America Inc. 6.510% 02/13/01 ................................... 40,000 38,806,500 Forrestal Funding Master Trust 6.565% 02/09/01 ................................... 13,000 12,618,318 HSBC USA Inc. 6.671% 03/09/01 ................................... 35,000 33,774,204 Santander Finance Inc. 6.540% 02/07/01 ................................... 10,000 9,711,150 ------------- 118,719,555 ------------- CHEMICALS & ALLIED PRODUCTS--1.7% BASF (AG) 6.510% 02/27/01 ................................... 25,000 24,190,771 ------------- GOVERNMENT--1.7% Quebec, Province of 6.620% 11/14/00 ................................... 24,000 23,673,413 ------------- MOTOR VEHICLES & CAR BODIES--1.4% Daimler Chrysler North America Holding Corp. 6.500% 02/26/01 ................................... 20,000 19,357,222 ------------- NATURAL GAS TRANS. & DISTR.--1.4% Consolidated Natural Gas Co. 6.600% 11/30/00 ................................... 20,000 19,670,000 ------------- RETAIL - DEPARTMENT STORES--0.7% St. Michael Finance Ltd. 6.520% 11/07/00 ................................... 10,180 10,056,471 ------------- SECURITY BROKERS & DEALERS--7.3% Lehman Brothers Holdings Inc. 6.750% 12/11/00 ................................... 40,000 39,242,500 6.720% 12/15/00 ................................... 9,000 8,823,600 Salomon Smith Barney Holdings Inc. 6.610% 09/14/00 ................................... 55,000 54,868,718 ------------- 102,934,818 ------------- See Accompanying Notes to Financial Statements. 3 THE PRINCIPAL FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 2000 PAR (000) VALUE ------- ------------- SHORT-TERM BUSINESS CREDIT INSTITUTIONS--6.0% Heller Financial, Inc. 6.730% 09/05/00 ................................... $40,000 $ 39,970,089 6.730% 09/06/00 ................................... 45,000 44,957,937 ------------- 84,928,026 ------------- TELEPHONE COMMUNICATIONS--0.3% AT&T Corp. 6.490% 02/08/01 ................................... 5,000 4,855,778 ------------- TOTAL COMMERCIAL PAPER (Cost $728,173,860) ........................... 728,173,860 ------------- MUNICIPAL BONDS--4.8% FLORIDA--0.1% Coral Springs, IDR (Alliance Corp.) Series 1995 (Suntrust Bank, Central FL LOC) Series 1995+ 6.650% 09/06/00 ................................... 2,000 2,000,000 ------------- GEORGIA--0.7% De Kalb County, Development Authority Series 1995 B (Emory University Project)+ 6.600% 09/07/00 ................................... 9,280 9,280,000 ------------- ILLINOIS--0.3% Illinois Health Facilities Authority (The Streeterville Corp. Project) Series 1993-B (Bank One N.A. LOC)+ 6.700% 09/06/00 ................................... 4,400 4,400,000 ------------- INDIANA--0.1% Bremen, IDR Bond Series 1996 B (Society National Bank, Cleveland LOC)+ 6.650% 09/07/00 ................................... 1,665 1,665,000 ------------- KENTUCKY--0.3% Boone County, Taxable IDR Refunding Bonds (Square D Company Project) Series 1994-B (Societe Generale LOC)+ 6.700% 09/06/00 ................................... 4,200 4,200,000 ------------- PAR (000) VALUE ------- ------------- MISSISSIPPI--1.7% Mississippi Business Finance Corp. IDR Bond (Bryan Foods, Inc. Project) Series 1994 (Sara Lee Corp. LOC)+ 6.750% 09/06/00 ................................... $14,000 $ 14,000,000 Mississippi Business Finance Corp. IDR Bond (Dana Lighting Inc.) Series 1995 (Suntrust Bank, Central FL LOC)+ 6.650% 09/07/00 ................................... 4,900 4,900,000 Mississippi Business Finance Corp. IDR Bond (Choctaw Foods Inc. Project) Series 1995 (Rabobank Nederland LOC)+ 6.650% 09/07/00 ................................... 4,800 4,800,000 ------------- 23,700,000 ------------- NORTH CAROLINA--0.5% City of Asheville (Wachovia Bank LOC)+ 6.600% 09/06/00 ................................... 7,000 7,000,000 ------------- TEXAS--1.1% South Central Texas Industrial Development Corp. Taxable IDR Revenue Bond (Rohr Industries Project) Series 1990 (NBD Bank N.A. LOC)+ 6.700% 09/06/00 ................................... 14,800 14,800,000 ------------- TOTAL MUNICIPAL BONDS (Cost $67,045,000) ............................ 67,045,000 ------------- See Accompanying Notes to Financial Statements. 4 THE PRINCIPAL FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONCLUDED) AUGUST 31, 2000 PAR (000) VALUE ------- ------------- VARIABLE RATE OBLIGATIONS--22.8% AIRCRAFT PARTS & AUXILIARY EQUIPMENT, NEC--2.1% Textron Financial Corp.++ 6.742% 11/02/00 ................................... $30,000 $ 30,000,000 ------------- BANKS--18.9% AB Spintab Corp.++ 6.740% 10/23/00 ................................... 25,000 24,997,350 American Express Centurion Bank++ 6.670% 09/01/00 ................................... 21,000 21,000,000 Bank of America N.T.S.A.++ 6.670% 09/01/00 ................................... 50,000 50,000,000 Bayerische Landesbank Girozentrale++ 6.540% 09/28/00 ................................... 25,000 24,993,982 SMM Trust 1999-A++ 6.780% 09/13/00 ................................... 10,000 10,000,000 SMM Trust 2000-B++ 6.639% 09/13/00 ................................... 69,650 69,650,000 Westdeutsche Landesbank Girozentrale++ 6.540% 09/25/00 ................................... 15,000 14,996,420 Westpac Banking Corp.++ 6.655% 09/05/00 ................................... 50,000 49,997,514 ------------- 265,635,266 ------------- PERSONAL CREDIT INSTITUTIONS--1.8% American Honda Finance Corp.++ 6.720% 10/18/00 ................................... 24,800 24,799,078 ------------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $320,434,344) ........................... 320,434,344 ------------- MEDIUM TERM NOTES--4.3% SECURITY BROKERS & DEALERS--4.3% Goldman Sachs Group, Inc.++ 6.810% 09/12/00 ................................... 50,000 50,000,000 6.730% 12/20/00 ................................... 10,000 10,000,000 ------------- 60,000,000 ------------- TOTAL MEDIUM TERM NOTES (Cost $60,000,000) ............................ 60,000,000 ------------- PAR (000) VALUE ------- ------------- TIME DEPOSITS--9.0% Fifth Third Bank 6.656% 09/01/00 ................................... $67,000 $ 67,000,000 Firstar Bank N.A. (Mercantile Bank) 6.625% 09/01/00 ................................... 60,100 60,100,000 ------------- TOTAL TIME DEPOSITS (Cost $127,100,000) ........................... 127,100,000 ------------- TOTAL INVESTMENTS--99.8% (Cost $1,402,354,301*) ............................ 1,402,354,301 -------------- OTHER ASSETS IN EXCESS OF LIABILITIES--0.2% .............................. 2,371,576 ------------- NET ASSETS (Applicable to 454,943,875 Bedford shares, 412,407 Cash Preservation shares, 326,745,422 Sansom Street shares, 405,205,669 Select shares, 217,519,890 Principal shares, and 800 other shares)--100% ........................ 1,404,725,877 ============== NET ASSET VALUE, Offering and redemption price per share ($1,404,725,877 / 1,404,828,063) .................. $1.00 ===== * Also cost for Federal income tax purposes. + Variable Rate Demand Note -- The interest rate shown is the rate as of August 31, 2000 and the maturity date shown is the longer of the next interest rate readjustment date or the date the principal amount shown can be recovered through demand. ++ Variable Rate Obligations -- The interest rate shown is the rate as of August 31, 2000 and the maturity date shown is the next interest rate readjustment date or the maturity date. INVESTMENT ABBREVIATIONS IDR .........Industrial Development Revenue LOC .......................Letter of Credit VRDN .............Variable Rate Demand Note See Accompanying Notes to Financial Statements. 5 THE PRINCIPAL FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 2000
Investment Income Interest ................................................... $162,934,325 ------------ Expenses Distribution fees .......................................... 10,299,835 Investment advisory fees ................................... 9,804,320 Transfer agent fees ........................................ 2,817,578 Service organization fees .................................. 290,820 Printing fees .............................................. 711,689 Custodian fees ............................................. 393,225 Legal fees ................................................. 185,772 Registration fees .......................................... 45,000 Audit fees ................................................. 184,421 Directors' fees ............................................ 144,354 Insurance expense .......................................... 22,144 ------------ 24,899,158 Less fees waived ........................................... (1,995,632) Less expense reimbursement by advisor ...................... (2,269,338) ------------ Total expenses ........................................ 20,634,188 ------------ Net investment income ......................................... 142,300,137 ------------ Net realized loss on investments .............................. (46,157) ------------ Net increase in net assets resulting from operations .......... $142,253,980 ============
See Accompanying Notes to Financial Statements. 6 THE PRINCIPAL FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS
FOR THE FOR THE YEAR ENDED YEAR ENDED AUGUST 31, 2000 AUGUST 31, 1999 --------------- --------------- Increase (decrease) in net assets: Operations: Net investment income ...... $ 142,300,137 $ 115,658,458 Net gain (loss) on investments (46,157) 72,320 --------------- -------------- Net increase in net assets resulting from operations 142,253,980 115,730,778 --------------- -------------- Distributions to shareholders: Dividends to shareholders from Net Investment Income: Bedford shares ........... (21,820,881) (28,089,918) Cash Preservation shares . (14,538) (7,069) Janney Montgomery Scott shares ................. (55,534,937) (43,156,041) Principal shares ......... (11,383,856) (2,455,484) Sansom Street shares ..... (31,566,483) (36,008,586) Select shares ............ (21,979,442) (5,941,360) --------------- -------------- (142,300,137) (115,658,458) Dividends to shareholders from Net Realized Short-Term Gains in excess of Net Investment Income: Bedford shares ............ -- (2,671) Cash Preservation shares .. -- (1) Janney Montgomery Scott shares .................. -- (2,921) Principal shares .......... -- -- Sansom Street shares ...... -- (2,010) Select shares ............. -- (102) --------------- -------------- -- (7,705) Total Dividends to shareholders .......... (142,300,137) (115,666,163) --------------- -------------- Net capital share transactions (Note 3) ..................... (1,334,348,297) 423,497,416 --------------- -------------- Total increase/(decrease) in net assets .................. (1,334,394,454) 423,562,031 Net Assets: Beginning of year ........... 2,739,120,331 2,315,558,300 --------------- -------------- End of year ................. $ 1,404,725,877 $2,739,120,331 =============== ==============
See Accompanying Notes to Financial Statements. 7 THE PRINCIPAL FAMILY THE RBB FUND, INC. FINANCIAL HIGHLIGHTS (b) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
MONEY MARKET PORTFOLIO ---------------------------------------- FOR THE YEAR FOR THE PERIOD ENDED JUNE 1, 1999 TO AUGUST 31, 2000 AUGUST 31, 1999(c) --------------- ------------------ Net asset value, beginning of year or period .... $ 1.00 $ 1.00 ------ ------ Income from investment operations: Net investment income ........................ 0.0532 0.0110 ------ ------ Total from investment operations ........... 0.0532 0.0110 ------ ------ Less distributions Dividends (from net investment income) ....... (0.0532) (0.0110) ------ ------ Total distributions ........................ (0.0532) (0.0110) ------ ------ Net asset value, end of year or period .......... $ 1.00 $ 1.00 ====== ====== Total Return .................................... 5.46% 1.10%(e) Ratios /Supplemental Data Net assets, end of period (000) .............. $217,520 $218,530 Ratios of expenses to average net assets ..... .77%(a) .77%(a)(d) Ratios of net investment income to average net assets ......................... 5.32% 4.36%(d) (a) Without the waiver of advisory and transfer agent fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Money Market Portfolio would have been .85% and .85% for the periods ended August 31, 2000 and 1999, respectively. (b) Financial highlights relate solely to the Principal Family of shares within the portfolio. (c) On June 1, 1999 the Money Market Portfolio's Principal Class began operations. (d) Annualized. (e) Non-Annualized.
See Accompanying Notes to Financial Statements. 8 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2000 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc (the "Fund") is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund was incorporated in Maryland on February 29, 1988. The Fund has authorized capital of thirty billion shares of common stock of which 19.88 billion shares are currently classified into ninety-seven classes. Each class represents an interest in one of fourteen investment portfolios of the Fund. The classes have been grouped into fourteen separate "families", nine of which have begun investment operations: the Principal Family, the Bedford Family, the Sansom Street Family, the Cash Preservation Family, the Select Family, the n/i numeric investors Family, the Boston Partners Family, the Bogle Family and the Schneider Family. The Principal Family represents interests in one portfolio, which is covered in this report. A) SECURITY VALUATION -- Portfolio securities are valued under the amortized cost method, which approximates current market value. Under this method, securities are valued at cost when purchased and thereafter a constant proportionate amortization of any discount or premium is recorded until maturity of the security. Regular review and monitoring of the valuation is performed to ensure that cost continues to approximate market value and to avoid dilution or other unfair results to shareholders. The Portfolio seeks to maintain net asset value per share at $1.00. B) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is recorded on the accrual basis. Certain expenses, principally distribution, transfer agency and printing, are class specific expenses and vary by class. Expenses not directly attributable to a specific portfolio or class are allocated based on relative net assets of each portfolio and class, respectively. C) DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily and paid monthly. Any net realized capital gains are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. D) FEDERAL INCOME TAXES -- No provision is made for Federal taxes. It is the Fund's intention to have each portfolio to continue to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code and make the requisite distributions to its shareholders which will be sufficient to relieve it from Federal income and excise taxes. E) REPURCHASE AGREEMENTS -- Money market instruments may be purchased subject to the seller's agreement to repurchase them at an agreed upon date and price. The seller will be required on a daily basis to maintain the value of the securities subject to the agreement at not less than the repurchase price plus accrued interest. If the value of the underlying securities fall below 102% of the value of the purchase price plus accrued interest, the Fund will require the seller to deposit additional collateral by the next Fund business day. In the event that the seller under the agreement defaults on its repurchase obligation or fails to deposit sufficient collateral, the Fund has the contractual right, subject to the requirements of applicable bankruptcy and insolvency laws, to sell the underlying securities and may claim any resulting loss from the seller. The agreements are conditioned upon the collateral being deposited under the Federal Reserve book-entry system or with the Fund's custodian or a third party sub-custodian. 9 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 2000 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F) USE OF 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. These estimates and assumptions 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. NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to Investment Advisory Agreements, BlackRock Institutional Management Corp. ("BIMC"), an indirect majority-owned subsidiary of The PNC Financial Services Group, Inc., serves as investment adviser to the portfolio described herein, and also serves as administrator for the Money Market Portfolio. For the Money Market Portfolio, BIMC and PFPC, Inc. ("PFPC") have entered into a delegation agreement, under which PFPC has agreed to perform Administration and Accounting services for an annual fee of .10% of the average net assets of the portfolio, paid out of the fee paid to BIMC. For its advisory services, BIMC is entitled to receive the following fees, computed daily and payable monthly, and based on the portfolio's average daily net assets:
PORTFOLIO ANNUAL RATE - ------------------------------ --------------------------------------------- Money Market Portfolio .45% of first $250 million of net assets; .40% of next $250 million of net assets; .35% of net assets in excess of $500 million.
BIMC may, at its discretion, voluntarily waive all or any portion of its advisory fee for this portfolio. For each class of shares within the portfolio, the net advisory fee charged to each class is the same on a relative basis. For the year ended August 31, 2000, advisory fees and waivers for the investment portfolio were as follows:
GROSS NET ADVISORY ADVISORY FEE WAIVER FEE ---------- ------------ ---------- Money Market Portfolio $9,804,320 $(1,995,632) $7,808,688
The investment advisor has agreed to reimburse the portfolio for the amount, if any, by which the total operating and management expenses exceed the cap. For the year ended August 31, 2000 the reimbursed expenses were $2,269,338 for the Money Market Portfolio. In addition, PFPC Trust Co. serves as custodian for the Fund's portfolio. PFPC serves as each class's transfer and dividend disbursing agent. Both PFPC Trust Co. and PFPC are wholly-owned subsidiaries of PFPC Worldwide Inc., an indirect majority owned subsidiary of The PNC Financial Services Group, Inc. 10 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 2000 NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) PFPC may, at its discretion, voluntarily waive all or any portion of its transfer agency fee for any class of shares. For the year ended August 31, 2000, no fees were waived. Transfer agency fees were as follows: TRANSFER AGENCY FEE ------------- Money Market Portfolio Bedford Class $ 34,311 Cash Preservation Class 443 Janney Montgomery Scott Class* 2,227,497 Principal Class 7,200 Sansom Street Class 537,432 Select Class 10,695 ---------- Total $2,817,578 ========== The Fund, on behalf of each class of shares within the investment portfolio, has adopted Distribution Plans pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended. The Fund has entered into Distribution Contracts with Provident Distributors Inc. ("PDI"), which provide for each class to make monthly payments, based on average net assets, to PDI of up to .65% on an annualized basis for the Bedford, Cash Preservation, and Principal Classes and up to .20% on an annualized basis for the Sansom Street Class. For the year ended August 31, 2000, distribution fees for each class were as follows: DISTRIBUTION FEE ------------ Money Market Portfolio Bedford Class $ 2,553,192 Cash Preservation Class 1,086 Janney Montgomery Scott Class* 6,598,931 Principal Class 855,610 Sansom Street Class 291,016 ----------- Total Money Market Portfolio $10,299,835 =========== The Fund has entered into service agreements with banks affiliated with PNC Bank who render support services to customers who are the beneficial owners of the Sansom Street Class in consideration of the payment of .10% of the daily net asset value of such shares. For the year ended August 31, 2000 service organization fees were $290,820 for the Money Market Portfolio. *The Janney Montgomery Scott Class of shares was liquidated on July 31, 2000. 11 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 2000 NOTE 3. CAPITAL SHARES Transactions in capital shares (at $1 per capital share) for each year were as follows:
MONEY MARKET PORTFOLIO ---------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED AUGUST 31, 2000 AUGUST 31, 1999 ---------------- ---------------- VALUE VALUE ---------------- ---------------- Shares sold: Bedford Class $ 866,092,657 $ 1,676,808,408 Cash Preservation Class 462,203 114,454 Janney Montgomery Scott Class* 5,748,987,958 4,931,373,936 Principal Class 534,885,343 318,334,115 Sansom Street Class 3,118,553,510 2,907,994,377 Select Class 2,969,370,240 1,439,090,920 ---------------- ---------------- Total Shares Sold 13,238,351,911 11,273,716,210 Shares issued on reinvestment of dividends: Bedford Class 21,403,595 28,217,868 Cash Preservation Class 13,920 7,224 Janney Montgomery Scott Class* 54,694,717 43,272,113 Principal Class 11,245,950 2,206,341 Sansom Street Class 13,899,819 26,800,967 Select Class -- 347,980 ---------------- ---------------- Total Shares Reinvested 101,258,001 100,852,493 Shares repurchased: Bedford Class (792,698,785) (2,107,674,545) Cash Preservation Class (194,641) (217,053) Janney Montgomery Scott Class* (6,892,100,877) (4,790,786,046) Principal Class (547,145,226) (102,006,633) Sansom Street Class (3,647,602,057) (2,741,000,161) Select Class (2,794,216,623) (1,209,386,849) ---------------- ---------------- Total Shares Repurchased (14,673,958,209) (10,951,071,287) ---------------- ---------------- Net increase (decrease) $ (1,334,348,297) $ 423,497,416 ================ ================ Principal Shares authorized 1,500,000,000 1,500,000,000 ================ ================
*The Janney Montgomery Scott Class of shares was liquidated on July 31, 2000. 12 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 2000 NOTE 4. NET ASSETS At August 31, 2000, net assets consisted of the following: MONEY MARKET PORTFOLIO -------------- Capital paid-in $1,404,828,063 Accumulated net realized gain/(loss) on investments (102,186) -------------- $1,404,725,877 ============== NOTE 5. CAPITAL LOSS CARRYOVERS At August 31, 2000 capital loss carryovers were available to offset future realized gains as follows: $102,186 in the Money Market Portfolio of which $56,029 expires in 2006 and $46,157 expires in 2008. 13 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 2000 NOTE 6. OTHER FINANCIAL HIGHLIGHTS The Fund currently offers four other classes of shares representing interest in the Money Market Portfolio: Bedford, Cash Preservation, Sansom Street, and Select. Each class is marketed to different types of investors. Financial Highlights of the Cash Preservation class is not represented in this report due to its immateriality. Such information is available in the annual report of its respective family. The financial highlights of certain of the other classes are as follows: THE BEDFORD FAMILY (b)
MONEY MARKET PORTFOLIO ---------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, 2000 1999 1998 1997 1996 ---------- ---------- ---------- ---------- ---------- Net asset value, beginning of year ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ---------- ---------- ---------- ---------- ---------- Income from investment operations: Net investment income .. 0.0512 0.0425 0.0473 0.0462 0.0469 ---------- ---------- ---------- ---------- ---------- Total from investment operations .......... 0.0512 0.0425 0.0473 0.0462 0.0469 ---------- ---------- ---------- ---------- ---------- Less distributions Dividends (from net investment income) .... (0.0512) (0.0425) (0.0473) (0.0462) (0.0469) ---------- ---------- ---------- ---------- ---------- Total distributions ... (0.0512) (0.0425) (0.0473) (0.0462) (0.0469) ---------- ---------- ---------- ---------- ---------- Net asset value, end of year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========== ========== ========== ========== ========== Total Return ........... 5.24% 4.34% 4.84% 4.72% 4.79% Ratios /Supplemental Data Net assets, end of year (000) ..... $423,977 $360,123 $762,739 $1,392,911 $1,109,334 Ratios of expenses to average net assets .... .97%(a) .97%(a) .97%(a) .97%(a) .97%(a) Ratios of net investment income to average net assets ............ 5.15% 4.25% 4.73% 4.62% 4.69% (a) Without the waiver of advisory, administration and transfer agent fees and without the reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Money Market Portfolio would have been 1.05%, 1.08%, 1.10%, 1.12% and 1.14% for the years ended August 31, 2000, 1999, 1998, 1997, and 1996, respectively. (b) Financial Highlights relate solely to the Bedford Class of shares within the portfolio.
14 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 2000 NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED) THE SANSOM STREET FAMILY (b)
MONEY MARKET PORTFOLIO --------------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED AUGUST 31, 2000 AUGUST 31, 1999 AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996 --------------- --------------- --------------- --------------- --------------- Net asset value, beginning of year ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- Income from investment operations: Net investment income .................. 0.0560 0.0473 0.0520 0.0510 0.0518 -------- -------- -------- -------- -------- Total from investment operations ..... 0.0560 0.0473 0.0520 0.0510 0.0518 -------- -------- -------- -------- -------- Less distributions Dividends (from net investment income) . (0.0560) (0.0473) (0.0520) (0.0510) (0.0518) -------- -------- -------- -------- -------- Total distributions .................. (0.0560) (0.0473) (0.0520) (0.0510) (0.0518) -------- -------- -------- -------- -------- Net asset value, end of year .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total Return .............................. 5.75% 4.83% 5.34% 5.22% 5.30% Ratios/Supplemental Data Net assets, end of year (000) .......... $326,745 $841,887 $684,066 $570,018 $524,359 Ratios of expenses to average net assets .49%(a) .49%(a) .49%(a) .49%(a) .48%(a) Ratios of net investment income to average net assets ................... 5.42% 4.73% 5.20% 5.10% 5.18% (a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Money Market Portfolio would have been .61%, .62%, .62%, .64% and .65% for the years ended August 31, 2000, 1999, 1998, 1997 and 1996, respectively. (b) Financial highlights relate solely to the Sansom Street Class of shares within the portfolio.
15 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONCLUDED) AUGUST 31, 2000 NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED) THE SELECT FAMILY (b)
MONEY MARKET PORTFOLIO ----------------------------------------- FOR THE YEAR FOR THE PERIOD ENDED DECEMBER 15, 1998 AUGUST 31, 2000 TO AUGUST 31, 1999(c) --------------- --------------------- Net asset value, beginning of year or period .......... $ 1.00 $ 1.00 -------- ------- Income from investment operations: Net investment income .............................. 0.0582 0.0345 -------- ------- Total from investment operations ................. 0.0582 0.0345 -------- ------- Less distributions Dividends (from net investment income) ............. (0.0582) (0.0345) -------- ------- Total distributions .............................. (0.0582) (0.0345) -------- ------- Net asset value, end of year or period ................ $ 1.00 $ 1.00 ======== ======= Total Return .......................................... 5.98% 3.50%(e) Ratios /Supplemental Data Net assets, end of period (000) .................... $405,206 $230,044 Ratios of expenses to average net assets ........... .27%(a) .27%(a)(d) Ratios of net investment income to average net assets ............................... 5.87% 4.82%(d) (a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Money Market Portfolio would have been .41% and .41% for the periods ended August 31, 2000 and 1999, respectively. (b) Financial Highlights relate solely to the Select Class of shares within the portfolio. (c) On December 15, 1998 the Money Market Portfolio's Select Class began operations. (d) Annualized. (e) Non-Annualized.
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