N-30D 1 g02-0146.txt THE SANSOM STREET FAMILY 2002 SAR ============================= THE SANSOM STREET FAMILY MONEY MARKET PORTFOLIO Semi-Annual Report February 28, 2002 ============================= THE SANSOM STREET FAMILY THE RBB FUND, INC. SEMI-ANNUAL INVESTMENT ADVISER'S REPORT FEBRUARY 28, 2002 (UNAUDITED) U.S. gross domestic product declined 1.3% in the third quarter of 2001, as the September 11 tragedy exacerbated an already weak economy. Manufacturing was the most troubled sector last year, with an average monthly index reading of 43.9, a 19-year low. Rising unemployment was also a problem, as almost one million jobs were lost in the wake of September 11. As was the case earlier in 2001, the consumer's appetite to spend remained the one bright spot. To restore economic vitality, the Federal Reserve maintained a year-long policy of monetary ease. In 2001, the Fed reduced the federal funds rate eleven times, lowering the target rate from 6.50% to 1.75%, a forty year low. The Fed's actions were made easier by the continued good news on inflation. For the year, producer prices actually declined 1.8%, while consumer prices rose a mild 1.6%, helped by lower energy costs. Yields on money market securities moved lower in tandem with the Fed's rate cuts. Since the last easing in December 2001 overnight yields have traded near the federal funds rate of 1.75%, while one-year yields rose to 2.3% at year-end and to 2.45% by the end of February. The steepening of the money market yield curve in early 2002 reflected the growing sentiment in the market that an imminent economic recovery would cause rates to move higher in the second half of 2002. The decline in short-term taxable money market rates led the RBB Money Market Fund to maintain extended average weighted maturities of 50-60 days for most of the last two quarters. Expectations of redemptions in March, however, led the fund to shorten maturities to 37 days by the end of February. Credit quality also remained a key factor in managing the fund. Certain taxable commercial paper programs were avoided and with narrow yield spreads between commercial paper and government obligations, the fund increased holdings of the latter. On February 28, 2002, assets were $1.169 billion in RBB Money Market. BlackRock Institutional Management Corporation (Please dial toll-free 800-430-9618 for questions regarding your account or contact your broker.) THE SANSOM STREET FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS FEBRUARY 28, 2002 (UNAUDITED) PAR (000) VALUE ------- ------------- CERTIFICATES OF DEPOSIT--14.0% DOMESTIC CERTIFICATES OF DEPOSIT--9.0% HSBC Bank USA 1.810% 05/13/02 .............................. $40,000 $ 40,000,000 Washington Mutual Bank 1.900% 03/18/02 .............................. 65,000 65,000,000 -------------- 105,000,000 -------------- EURODOLLAR CERTIFICATES OF DEPOSIT--1.3% Credit Agricole Indosuez Yankee 3.625% 09/06/02 .............................. 15,000 14,999,240 -------------- YANKEE DOLLAR CERTIFICATES OF DEPOSIT--3.7% Canadian Imperial Bank of Commerce 4.270% 04/23/02 .............................. 10,000 9,999,993 4.295% 04/23/02 .............................. 10,000 9,999,859 Royal Bank of Canada 4.028% 07/15/02 .............................. 13,000 12,999,882 3.805% 07/26/02 .............................. 6,000 5,999,295 Toronto-Dominion Bank (The) 4.045% 07/30/02 .............................. 5,000 4,997,884 -------------- 43,996,913 -------------- TOTAL CERTIFICATES OF DEPOSIT (Cost $163,996,153) ...................... 163,996,153 -------------- COMMERCIAL PAPER--46.6% ASSET BACKED SECURITIES--22.7% Concord Minutemen Capital Co. 1.800% 04/19/02 .............................. 24,177 24,117,766 Crown Point Capital Co. 1.800% 04/18/02 .............................. 13,813 13,779,849 1.900% 04/19/02 .............................. 43,439 43,326,662 Edison Asset Securitization LLC 1.680% 03/22/02 .............................. 30,000 29,970,600 Emerald Corp. 1.850% 05/01/02 .............................. 28,511 28,421,626 Fairway Finance Corp. 1.820% 03/08/02 .............................. 20,851 20,843,621 Fcar Owner Trust II 1.790% 03/08/02 .............................. 25,000 24,991,299 PAR (000) VALUE ------- ------------- ASSET BACKED SECURITIES--(CONTINUED) Liberty Lighthouse Capital Co. 1.840% 03/07/02 .............................. $25,157 $ 25,149,285 Pennine Funding LLC 1.800% 03/25/02 .............................. 55,000 54,934,000 -------------- 265,534,708 -------------- BANKS--8.7% AB Spintab 1.820% 03/07/02 .............................. 50,000 49,984,833 Depfa-Finance N.V 1.810% 03/11/02 .............................. 16,500 16,491,704 1.830% 05/14/02 .............................. 35,000 34,868,342 -------------- 101,344,879 -------------- FINANCE SERVICES--3.3% Credit Suisse First Boston USA, Inc. 1.630% 04/15/02 .............................. 38,580 38,501,393 -------------- LIFE INSURANCE--2.1% ZCM Matched Funding Corp. 2.000% 03/04/02 .............................. 25,000 24,995,833 -------------- PERSONAL CREDIT INSTITUTIONS--4.8% Countrywide Home Loans, Inc. 1.870% 03/27/02 .............................. 30,000 29,959,483 1.870% 03/28/02 .............................. 15,000 14,978,962 1.900% 04/02/02 .............................. 11,130 11,111,203 -------------- 56,049,648 -------------- PHARMACEUTICAL PREPARATIONS--0.8% American Home Products Corp. 1.890% 04/05/02 .............................. 9,000 8,983,463 -------------- SHORT-TERM BUSINESS CREDIT INSTITUTIONS--4.2% General Electric Capital Corp. 2.000% 05/06/02 .............................. 50,000 49,816,667 -------------- TOTAL COMMERCIAL PAPER (Cost $545,226,591) ...................... 545,226,591 -------------- See Accompanying Notes to Financial Statements. 2 THE SANSOM STREET FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) FEBRUARY 28, 2002 (UNAUDITED) PAR (000) VALUE ------- ------------- MUNICIPAL BONDS--7.4% CALIFORNIA--3.7% California Housing Finance Agency Home Mortgage VRDN RB Series 1999 (Commerzbank LOC)+ 1.850% 03/06/02 .............................. $42,915 $ 42,915,000 -------------- FLORIDA--0.1% Coral Springs VRDN IDR (Alliance Corp.) (Suntrust Bank, Central FL LOC) Series 1995+ 1.950% 03/06/02 .............................. 1,700 1,700,000 -------------- GEORGIA--0.7% De Kalb County Development Authority VRDN (Emory University Project) Series 1995 B+ 1.900% 03/06/02 .............................. 8,370 8,370,000 -------------- INDIANA--0.1% Bremen IDR Bond VRDN (Universal Bearing, Inc. Project) Series 1996 B (Society National Bank, Cleveland LOC)+ 2.100% 03/07/02 .............................. 725 725,000 -------------- KENTUCKY--0.4% Boone County Taxable IDR Refunding Bonds VRDN (Square D Company Project) Series 1994-B (Societe Generale LOC)+ 2.000% 03/06/02 .............................. 4,200 4,200,000 -------------- MISSISSIPPI--0.8% Mississippi Business Finance Corp. IDR RB (Dana Lighting Project) Series 1995 (Suntrust Bank, N.A., LOC)+ 1.950% 03/06/02 .............................. 4,100 4,100,000 Mississippi Business Finance Corp. IDR RB VRDN (Dana Lighting Inc.) Series 1995 (Suntrust Bank, Central FL LOC)+ 1.950% 03/06/02 .............................. 5,100 5,100,000 -------------- 9,200,000 -------------- PAR (000) VALUE ------- ------------- NORTH CAROLINA--0.4% City of Asheville VRDN (Wachovia Bank LOC)+ 1.850% 03/06/02 .............................. $ 5,000 $ 5,000,000 -------------- TEXAS--1.3% South Central Texas IDR Corp. Taxable RB VRDN (Rhor Industries Project) Series 1990 (NBD Bank N.A. LOC)+ 2.000% 03/06/02 .............................. 14,800 14,800,000 -------------- TOTAL MUNICIPAL BONDS (Cost $86,910,000) ....................... 86,910,000 -------------- VARIABLE RATE OBLIGATIONS--8.2% BANKS--6.1% Citigroup Inc.++ 1.810% 03/12/02 .............................. 41,000 41,000,000 First Union National Bank++ 2.120% 03/06/02 .............................. 18,000 18,026,231 Natexis Banque Populares++ 1.800% 03/28/02 .............................. 12,000 11,998,928 -------------- 71,025,159 -------------- SECURITY BROKERS & DEALERS--2.1% Salomon Smith Barney Holdings Inc.++ 2.161% 04/01/02 .............................. 25,000 25,036,426 -------------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $96,061,585) ....................... 96,061,585 -------------- AGENCY OBLIGATIONS--1.9% Federal Home Loan Mortgage Corporation--0.6% 1.880% 11/07/02 .............................. 7,000 6,908,246 -------------- Federal National Mortgage Association--1.3% 4.210% 03/08/02 .............................. 5,000 4,995,907 6.750% 08/15/02 .............................. 10,000 10,129,467 -------------- 15,125,374 -------------- TOTAL AGENCY OBLIGATIONS (Cost $22,033,620) ....................... 22,033,620 -------------- See Accompanying Notes to Financial Statements. 3 THE SANSOM STREET FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONCLUDED) FEBRUARY 28, 2002 (UNAUDITED) PAR (000) VALUE ------- ------------- MEDIUM TERM NOTES--6.8% General Electric Capital Corp. 3.815% 07/30/02 .............................. $10,000 $ 10,000,000 Goldman Sachs Group Inc. 3.740% 04/30/02 .............................. 24,000 24,000,000 3.610% 05/31/02 .............................. 19,000 19,000,000 1.830% 06/17/02 .............................. 19,000 19,000,000 Merrill Lynch & Co. Inc. 4.300% 04/24/02 .............................. 7,000 7,000,000 -------------- TOTAL MEDIUM TERM NOTES (Cost $79,000,000) ....................... 79,000,000 -------------- GUARANTEED INVESTMENT CONTRACT--3.4% LIFE INSURANCE--3.4% Transamerica Life Insurance & Annuity Co.+ 2.221% 03/05/03 .............................. 40,000 40,000,000 -------------- TOTAL GUARANTEED INVESTMENT CONTRACT (Cost $40,000,000) ....................... 40,000,000 -------------- REPURCHASE AGREEMENTS--11.4% J.P. Morgan Chase Bank (Agreement dated 02/28/02 to be repurchased at $87,004,519 collateralized by $89,610,077 Federal Gold Strip Principal due 10/01/27 to 06/01/31 Market Value of collateral is $87,000,075.) 1.870% 03/01/02 .............................. 87,000 87,000,000 Morgan Stanley & Co. Inc. (Agreement dated 02/28/02 to be repurchased at $45,902,423 collateralized by $12,841,415 Federal National Mortgage Association bonds 7.00% to 6.00% due 07/01/06 to 02/01/32 and Federal Mortgage Association Corporation collateralized by $33,218,347 at a rate of 2.32% due 02/15/30. Market Value of collateral is $47,441,554.) 1.900% 03/01/02 .............................. 45,900 45,900,000 -------------- TOTAL REPURCHASE AGREEMENTS (Cost $132,900,000) ...................... 132,900,000 -------------- VALUE ------------- TOTAL INVESTMENTS AT VALUE--99.7% (Cost $1,166,127,949*) ....................... $1,166,127,949 -------------- OTHER ASSETS IN EXCESS OF LIABILITIES--0.3% ......................... 3,389,560 -------------- NET ASSETS--100.0% .............................. $1,169,517,509 ============== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ($1,169,517,509 (DIVIDE) 1,169,450,429) ...... $1.00 ===== * Also cost for Federal income tax purposes. + Variable Rate Demand Note -- The interest rate shown is the rate as of February 28, 2002 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 February 28, 2002 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. 4 THE SANSOM STREET FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2002 (UNAUDITED) Investment Income Interest ............................................ $17,475,149 ----------- Expenses Distribution fees ................................... 2,895,545 Investment advisory fees ............................ 2,368,612 Registration fees ................................... 324,000 Printing fees ....................................... 199,182 Legal fees .......................................... 167,497 Custodian fees ...................................... 102,025 Transfer agent fees ................................. 94,132 Audit fees .......................................... 65,989 Directors' fees ..................................... 47,428 Insurance expense ................................... 13,123 Miscellaneous ....................................... 8,399 Service organization fees ........................... 7,288 ----------- Total expenses ................................. 6,293,220 Less fees waived .................................... (551,376) Less expense reimbursement by advisor ............... (517,162) ----------- Net expenses ................................... 5,224,682 ----------- Net investment income .................................. 12,250,467 ----------- Realized gain on investments ........................... 64,203 ----------- Net increase in net assets resulting from operations ... $12,314,670 =========== See Accompanying Notes to Financial Statements. 5 THE SANSOM STREET FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS
FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2002 AUGUST 31, 2001 ----------------- --------------- (UNAUDITED) Increase (decrease) in net assets: Operations: Net investment income ......................................... $ 12,250,467 $ 59,582,670 Net gain on investments ....................................... 64,203 105,064 -------------- -------------- Net increase in net assets resulting from operations .......... 12,314,670 59,687,734 -------------- -------------- Distributions to shareholders: Dividends to shareholders from Net Investment Income: Bedford shares .............................................. (6,139,116) (24,842,700) Cash Preservation shares .................................... (1,776) (13,247) Bear Stearns shares ......................................... (63) -- Principal shares ............................................ (3,166,897) (12,476,504) Sansom Street shares ........................................ (2,942,615) (12,942,542) Select shares ............................................... -- (9,307,677) -------------- -------------- Total Dividends to shareholders ........................... (12,250,467) (59,582,670) -------------- -------------- Net capital share transactions .................................. (6,452,037) (228,925,598) -------------- -------------- Total decrease in net assets .................................... (6,387,834) (228,820,534) Net Assets: Beginning of period ........................................... 1,175,905,343 1,404,725,877 -------------- -------------- End of period ................................................. $1,169,517,509 $1,175,905,343 ============== ==============
See Accompanying Notes to Financial Statements. 6 THE SANSOM STREET FAMILY THE RBB FUND, INC. FINANCIAL HIGHLIGHTS (a) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
MONEY MARKET PORTFOLIO -------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR YEAR ENDED ENDED ENDED ENDED FEBRUARY 28, 2002 AUGUST 31, 2001 AUGUST 31, 2000 AUGUST 31, 1999 ----------------- --------------- --------------- --------------- (UNAUDITED) Net asset value, beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- Income from investment operations: Net investment income .................... 0.0115 0.0511 0.0560 0.0473 -------- -------- -------- -------- Total net income from investment operations ........................... 0.0115 0.0511 0.0560 0.0473 -------- -------- -------- -------- Less distributions Dividends (from net investment income) ... (0.0115) (0.0511) (0.0560) (0.0473) -------- -------- -------- -------- Total distributions .................... (0.0115) (0.0511) (0.0560) (0.0473) -------- -------- -------- -------- Net asset value, end of period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== Total Return ................................ 1.15%(b) 5.23% 5.75% 4.83% Ratios /Supplemental Data Net assets, end of period (000) .......... $258,268 $201,632 $326,745 $841,887 Ratios of expenses to average net assets . .49%(c)(d) .49%(c) .49%(c) .49%(c) Ratios of net investment income to average net assets ..................... 2.30%(d) 5.23% 5.42% 4.73%
MONEY MARKET PORTFOLIO ---------------------- FOR THE YEAR ENDED AUGUST 31, 1998 --------------- Net asset value, beginning of period ........ $ 1.00 -------- Income from investment operations: Net investment income .................... 0.0520 -------- Total net income from investment operations ........................... 0.0520 -------- Less distributions Dividends (from net investment income) ... (0.0520) -------- Total distributions .................... (0.0520) -------- Net asset value, end of period .............. $ 1.00 ======== Total Return ................................ 5.34% Ratios /Supplemental Data Net assets, end of period (000) .......... $684,066 Ratios of expenses to average net assets . .49%(c) Ratios of net investment income to average net assets ..................... 5.20% (a) Financial highlights relate solely to the Sansom Street Class of shares within the portfolio. (b) Non-Annualized. (c) 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 .56% for the six months ended February 28, 2002, .61%, .61%, .62% and .62% for the years ended August 31, 2001, 2000, 1999 and 1998, respectively. (d) Annualized.
See Accompanying Notes to Financial Statements. 7 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2002 (UNAUDITED) 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 20.97 billion shares are currently classified into ninety-four classes. Each class represents an interest in one of thirteen investment portfolios of the Fund. The classes have been grouped into fourteen separate "families", nine of which have begun investment operations: the Bedford Family, the Sansom Street Family, the Cash Preservation Family, the Principal Family, the Bear Stearns Money Market Family, the n/i numeric investors Family, the Boston Partners Family, the Bogle Family and the Schneider Family. The Sansom Street 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, INVESTMENT INCOME, AND EXPENSES -- 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. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all of the RBB families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB funds. C) DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily, recorded on the ex-date 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 TAXES -- No provision is made for federal taxes. It is the Fund's intention to have each portfolio 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. 8 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2002 (UNAUDITED) 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, wherein 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 six months ended February 28, 2002, advisory fees and waivers for the investment portfolio were as follows: GROSS NET ADVISORY ADVISORY FEE WAIVER FEE ----------- --------- ---------- Money Market Portfolio $2,368,612 $(473,276) $1,895,336 9 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2002 (UNAUDITED) NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) The investment advisor/administrator may voluntarily waive and/or reimburse each portfolio for the amount, if any, by which the total operating and management expenses exceed the expense cap. For the six months ended February 28, 2002, the expense caps were as follows: PORTFOLIO CLASS OF SHARES EXPENSE CAP --------- ----------------- ----------- Money Market Portfolio Bedford 1.00% Cash Preservation .95 Bear Stearns 1.00 Sansom Street .49 Principal .77 Reimbursed expenses for the six months ended February 28, 2002 were $517,162 for the Money Market Portfolio. PFPC Trust Co. serves as custodian for the Fund's portfolio. As compensation for such custodial services, PFPC Trust Co. is entitled to receive the following fees, computed daily and payable monthly, and based on the portfolio's average gross assets: PORTFOLIO ANNUAL RATE ---------------------- ------------------------------------------------ Money Market Portfolio .25% of first $50 million of gross assets; .02% of next $50 million of gross assets; .015% of gross assets in excess of $100 million. 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 SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2002 (UAUDITED) 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 six months ended February 28, 2002, transfer agency fees and waivers for each class of shares within the investment portfolio were as follows:
GROSS NET TRANSFER AGENCY TRANSFER AGENCY FEE WAIVER FEE ---------------- -------- --------------- Money Market Portfolio Bedford Class $71,250 $(71,250) -- Cash Preservation Class 2,950 (2,950) -- Bear Stearns Class -- -- -- Principal Class 3,900 (3,900) -- Sansom Street Class 16,032 -- $16,032 ------- -------- ------- Total Money Market Portfolio $94,132 $(78,100) $16,032 ======= ======== =======
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 a Distribution Contract with PFPC Distributors Inc. ("PFPC Distributors"). PFPC Distributors is a wholly-owned subsidiary of PFPC Worldwide Inc., an indirect majority-owned subsidiary of The PNC Financial Services Group, Inc. The plans provide for each class to make monthly payments, based on average net assets, to PFPC Distributors of up to .65% on an annualized basis for the Bedford, Cash Preservation, Principal and Bear Stearns Classes and up to .20% on an annualized basis for the Sansom Street Class. For the six months ended February 28, 2002, distribution fees paid to PFPC Distributors for each class were as follows: DISTRIBUTION FEE ------------ Money Market Portfolio Bedford Class $2,202,999 Cash Preservation Class 379 Bear Stearns Class -- Principal Class 626,239 Sansom Street Class 65,928 ---------- Total Money Market Portfolio $2,895,545 ========== 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 six months ended February 28, 2002, service organization fees were $7,288 for the Money Market Portfolio. 11 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2002 (UNAUDITED) 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 SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2002 AUGUST 31, 2001 ----------------- --------------- (UNAUDITED) VALUE VALUE ----------------- --------------- Shares sold: Bedford Class $ 481,665,639 $ 977,375,528 Cash Preservation Class 79,595 239,568 Bear Stearns Class** 86,324 -- Principal Class 322,682,458 574,335,866 Sansom Street Class 871,323,599 1,562,347,829 Select Class* -- 947,199,090 --------------- --------------- Total Shares Sold 1,675,837,615 4,061,497,881 Shares issued on reinvestment of dividends: Bedford Class 6,562,494 25,009,271 Cash Preservation Class 1,897 13,843 Bear Stearns Class** 50 -- Principal Class 3,354,321 12,586,542 Sansom Street Class 179,751 725,168 --------------- --------------- Total Shares Reinvested 10,098,513 38,334,824 Shares repurchased: Bedford Class (551,903,774) (780,367,053) Cash Preservation Class (124,325) (471,279) Bear Stearns Class** (24,840) -- Principal Class (325,439,971) (507,329,527) Sansom Street Class (814,895,255) (1,688,185,685) Select Class* -- (1,352,404,759) --------------- --------------- Total Shares Repurchased (1,692,388,165) (4,328,758,303) --------------- --------------- Net increase (decrease) $ (6,452,037) $ (228,925,598) =============== =============== Sansom Street Shares authorized 1,500,000,000 1,500,000,000 =============== =============== * The Select Class of shares was liquidated on January 31, 2001. ** The Bear Stearns Class began operations on November 28, 2001.
12 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2002 (UNAUDITED) NOTE 4. NET ASSETS At February 28, 2002, net assets consisted of the following: MONEY MARKET PORTFOLIO -------------- Paid-in capital $1,169,450,429 Accumulated net realized gain on investments 67,080 -------------- Total net assets $1,169,517,509 ============== 13 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2002 (UNAUDITED) NOTE 6. OTHER FINANCIAL HIGHLIGHTS The Fund currently offers four other classes of shares representing interest in the Money Market Portfolio: Cash Preservation, Sansom Street, Principal and Bear Stearns. Each class is marketed to different types of investors. Financial Highlights of the Cash Preservation class and the Bear Stearns classes are not represented in this report due to their 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 (a)
MONEY MARKET PORTFOLIO ---------------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED FEBRUARY 28, 2002 AUGUST 31, 2001 AUGUST 31, 2000 AUGUST 31, 1999 AUGUST 31, 1998 ----------------- --------------- --------------- --------------- --------------- (UNAUDITED) Net asset value,beginning of period ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- Income from investment operations: Net investment income .................. 0.0089 0.0460 0.0512 0.0425 0.0473 -------- -------- -------- -------- -------- Total net income from investment operations ......................... 0.0089 0.0460 0.0512 0.0425 0.0473 -------- -------- -------- -------- -------- Less distributions Dividends (from net investment income) . (0.0089) (0.0460) (0.0512) (0.0425) (0.0473) -------- -------- -------- -------- -------- Total distributions .................. (0.0089) (0.0460) (0.0512) (0.0425) (0.0473) -------- -------- -------- -------- -------- Net asset value, end of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total Return ......................... .89%(b) 4.70% 5.24% 4.34% 4.84% Ratios /Supplemental Data Net assets, end of period (000) ........ $613,286 $676,964 $423,977 $360,123 $762,739 Ratios of expenses to average net assets ................... 1.00%(c)(d) 1.00%(c) .97%(c) .97%(c) .97%(c) Ratios of net investment income to average net assets ................... 1.81%(d) 4.46% 5.15% 4.25% 4.73% (a) Financial Highlights relate solely to the Bedford Class of shares within the portfolio. (b) Non-Annualized. (c) 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 1.21% for the six months ended February 28, 2002, 1.19%, 1.05%, 1.08% and 1.10% for the years ended August 31, 2001, 2000, 1999 and 1998, respectively. For the Municipal Money Market Portfolio, the ratios of expenses to average net assets would have been 1.31% for the six months ended February 28, 2002, 1.29%, 1.21%, 1.15% and 1.15% for the years ended August 31, 2001, 2000, 1999 and 1998, respectively. (d) Annualized.
14 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 28, 2002 (UNAUDITED) NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED) THE PRINCIPAL FAMILY (a)
MONEY MARKET PORTFOLIO --------------------------------------------------------------------------- FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR FOR THE PERIOD ENDED ENDED ENDED JUNE 1, 1999 TO FEBRUARY 28, 2002 AUGUST 31, 2001 AUGUST 31, 2000 AUGUST 31, 1999(b) ----------------- --------------- --------------- ------------------ (UNAUDITED) Net asset value, beginning of year or period ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- Income from investment operations: Net investment income .......................... 0.0010 0.0483 0.0532 0.0110 -------- -------- -------- -------- Total net income from investment operations .. 0.0010 0.0483 0.0532 0.0110 -------- -------- -------- -------- Less distributions Dividends (from net investment income) ......... (0.0010) (0.0483) (0.0532) (0.0110) -------- -------- -------- -------- Total distributions .......................... (0.0010) (0.0483) (0.0532) (0.0110) -------- -------- -------- -------- Net asset value, end of year or period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== Total Return ...................................... .84%(e) 4.94% 5.46% 1.10%(e) Ratios /Supplemental Data Net assets, end of period (000) ................ $297,725 $297,115 $217,520 $218,530 Ratios of expenses to average net assets ....... .77%(c)(d) .77%(c) .77%(c) .77%(c)(d) Ratios of net investment income to average net assets ........................... 2.02%(d) 4.71% 5.32% 4.36%(d) (a) Financial highlights relate solely to the Principal Family of shares within the portfolio. (b) On June 1, 1999 the Money Market Portfolio's Principal Class began operations. (c) 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 .94% for the six months ended February 28, 2002, .88%, .85% and .85% for the periods ended August 31, 2001, 2000 and 1999, respectively. (d) Annualized. (e) Non-Annualized.
15 INVESTMENT ADVISER BlackRock Institutional Management Corporation 100 Bellevue Parkway Wilmington, DE 19809 ADMINISTRATOR/TRANSFER AGENT PFPC Inc. 400 Bellevue Parkway Wilmington, DE 19809 DISTRIBUTOR PFPC Distributors, Inc. 3200 Horizon Dr. King of Prussia, PA 19046 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP Two Commerce Square, Suite 1700 2001 Market Street Philadelphia, PA 19103-7042 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 The financial information included herein is taken from the records of each Fund without examination by independent accountants who do not express an opinion thereon.