-----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, I8HulUZOfml2ZhgrXNx1GM5aLu/sBFuxkBlVU0bIN/FrWmKa1WTRpNiBXRSxrurM LXXQHUGBPw6z9obu5EiANw== 0000014170-96-000021.txt : 19961023 0000014170-96-000021.hdr.sgml : 19961023 ACCESSION NUMBER: 0000014170-96-000021 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961022 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRIDGES INVESTMENT FUND INC CENTRAL INDEX KEY: 0000014170 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 476027880 STATE OF INCORPORATION: NE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-01209 FILM NUMBER: 96646260 BUSINESS ADDRESS: STREET 1: 8401 W DODGE RD STREET 2: SUITE 256 CITY: OMAHA STATE: NE ZIP: 68114 BUSINESS PHONE: 4023974700 MAIL ADDRESS: STREET 1: 8401 WEST DODGE ROAD STREET 2: SUITE 256 CITY: OMAHA STATE: NE ZIP: 68114 N-30B-2 1 BRIDGES INVESTMENT FUND, INC. THIRD QUARTER SHAREHOLDER REPORT 1996 CONTENTS OF REPORT Pages 1 - 2 Shareholder Letter Exhibit 1 Portfolio Transactions from July 1, 1996, through September 30, 1996 Exhibit 2 Quarter-to-Quarter Changes in Financial Data Pages F1-F14 Unaudited Financial Statements for the Nine Months Ended September 30, 1996 This report has been prepared for the information of the shareholders of Bridges Investment Fund, Inc. and is under no circumstances to be construed as an offering of shares of the Fund. Such offering is made only by Prospectus, a copy of which may be obtained by inquiry to the Fund's office. Shareholder Letter 1 October 21, 1996 October 21, 1996 Dear Shareholder: Third Quarter and Nine Months, 1996 Review - ------------------------------------------- The net asset value per share of the Fund was $23.55 on September 30, 1996. This price was 0.6% higher than the $23.42 net asset value per share at June 30, 1996. The $23.55 price was up $2.01 or 9.3% from the $21.54 net asset value per share at December 31, 1995. The cash amounts distributed from 1996 net investment income were $.265 per share. Thus, the total value improvement from the First Nine Months of 1996 operations was $2.275 per share determined by adding $2.01 in price appreciation and $.265 in cash distributions. This $2.275 per share increase in value, when compared to the beginning net asset value of $21.54, resulted in a 10.6% total return for the Fund for the First Nine Months of 1996. After a moderate downward price correction in July, 1996, common stocks advanced in August and September, 1996 to new record high levels -- extending their long uptrend. Bond prices were generally trendless during the Summer Quarter, 1996, after declining on balance during the Winter and Spring Quarters of 1996 in response to rising interest rates. Fund Operations - --------------- The net assets of the Fund were $27,451,784 on September 30, 1996, representing the highest value for any calendar quarter reporting date. Net Shareholder Letter 2 October 21, 1996 assets advanced $343,574 from the June 30, 1996 total of $27,108,210, an increase of 1.3% for the Third Quarter of 1996. For the First Nine Months of 1996, net assets were up $3,399,038 or 14.1% from the $24,052,746 value at December 31, 1995. On a trailing twelve month basis (September 30, 1995 to September 30, 1996) net assets grew from $22,527,409 to $27,451,784 --- a 21.9% improvement. There were 1,165,788 shares of capital stock outstanding on September 30, 1996. This level of shares outstanding represented a record high for the Fund for any three months accounting statement period. The net gain in shares outstanding for the First Nine Months of 1996 was 49,168 units, which resulted in a 4.4% increase in comparison to the 1,116,620 shares outstanding at the end of 1995. Net investment income was $475,423 for the First Nine Months of 1996. compared to $467,197 for the same period in 1995. Net realized gains on investments for the First Nine Months of 1996 were $49,235 compared to $200,262 for the same time frame in 1995. The net increase in unrealized appreciation for portfolio securities was $2,091,162 for the Nine Months ending September 30, 1996. There was a $3,612,519 gain in unrealized appreciation achieved for the first three calendar quarters of 1995. Please refer to Exhibits 1 and 2 and pages F-1 through F-14 for specific details covering the Fund's recent portfolio transactions; the historical data with respect to net assets, shares outstanding, net asset value per share, dividends and capital gains distributions; and the various financial statements and accompanying footnotes as of September 30, 1996. Shareholder Letter 3 October 21, 1996 Dividend - -------- On October 15, 1996, the Board of Directors declared a $.14 per share dividend on shares of capital stock outstanding on the October 15, 1996 record date with this income distribution amount to be payable on or about October 21, 1996. This dividend is payable from the net investment income earned during the July - October, 1996 Quarter. The Outlook - ----------- The Dow Jones Industrial Average closed above $6,000 for the first time on October 14, 1996 for a record high of $6,010. The Wall Street Journal reported on that occasion that the price/earnings ratio for the Dow was 18.9 times earnings. The same article indicated that the price/earnings ratio for the "Dow" was 15.6 times earnings on February 23, 1995 when the popular index crossed $4,000 for the first time to $4,003.33. There has been a more than 20% increase in valuation multiples during the past twenty months that classifies common stock prices as less cheap and vulnerable to profit taking now in comparison to similar valuations in early 1995. Some versions of this same observation have been made in past letters to you from time to time without an apparent response from subsequent stock market trading. The reasons for the dominant upward trend in stock prices in the mid-1990's are: (1) strong and rising corporate earnings per share; (2) reasonable interest rates; and (3) below average bond yields in comparison to returns that were available in the 1980's and early 1990's. The potential annual long term returns favored common stocks. As we conclude 1996 and move towards 1997, the Fund's management expects that there will be growth in corporate profits after taxes for the U.S. economy in comparison to 1996 levels, but the rate of Shareholder Letter 4 October 21, 1996 improvement is likely to be quite modest in comparison to the growth in profits for the 1991 - 1996 time frame. The Fund's management assesses the annual consumer inflation rate for 1997 as likely to be higher (more than 3%) than the very favorable less than 3% annual rates for recent years. Costs for energy, food and labor are likely to tilt the indexes higher. As a result of upward price inflation and a reasonably strong economy, the Fund's management anticipates somewhat higher interest rates than present levels. This forecast should mean a drop for price/earnings ratios. The management views the environment ahead as less positive than in recent years, but still productive on balance, particularly for consistent earnings growth companies that are emphasized in the Fund's portfolio. Cordially, Edson L. Bridges II President ELBII:elc Exhibit 1 PORTFOLIO TRANSACTIONS DURING THE PERIOD FROM JULY 1, 1996, THROUGH SEPTEMBER 30, 1996
Bought or Held After Securities Received Transaction Common Stocks Unless $1,000 Par $1,000 Par Described Otherwise Value (M) Value (M) or Shares or Shares (1) Dayton Hudson Corporation 7,000 10,500 (2) Elan Corporation 2,000 4,000 First National of Nebraska 5 230 (3) Hewlett-Packard 6,000 12,000 Home Depot, Inc. 3,000 3,000 Various issues of Commercial 37,748M 2,885M Paper Notes Purchased during 3rd Qtr., 1996 Sold or Held After Exchanged Transaction Securities $1,000 Par $1,000 Par Common Stocks Unless Value (M) Value (M) Described Otherwise or Shares or Shares Delta Air Lines $3.50 Series C 3,000 -- Convertible Preferred Various issues of Commercial Paper 37,548M -- Notes maturing during 3rd Qtr., 1996 (1) - Received 7,000 shares in a 3-for-1 stock split on July 18, 1996. (2) - Received 2,000 shares in a 2-for-1 stock split on August 22, 1996. (3) - Received 6,000 shares in a 2-for-1 stock split on July 16, 1996.
EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION Exhibit 2 BRIDGES INVESTMENT FUND, INC. HISTORICAL FINANCIAL INFORMATION
Net Shares Net Asset Dividend/ Capital Valuation Assets Outstanding Value/Share Share Gains/Share Date 07-01-63 $ 109,000 10,900 $10.00 $ - $ - 09-30-63 109,764 10,900 10.07 - - 12-31-63 159,187 15,510 10.13 .07 - 03-31-64 202,354 19,105 10.59 .07 - 06-30-64 253,932 23,438 10.83 .07 - 09-30-64 310,307 28,286 10.97 .07 - 12-31-64 369,149 33,643 10.97 .07 - 03-31-65 434,523 38,531 11.28 .075 .028 06-30-65 491,068 44,667 10.99 .07 - 09-30-65 558,913 47,710 11.71 .07 - 12-31-65 621,241 51,607 12.04 .07 - 03-31-66 661,711 55,652 11.89 .085 - 06-30-66 643,920 57,716 11.16 .07 - 09-30-66 592,628 58,610 10.11 .07 - 12-31-66 651,282 59,365 10.97 .07 - 03-31-67 728,115 60,181 12.10 .085 - EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION 06-30-67 753,075 61,364 12.27 .07 - 09-30-67 823,967 62,810 13.12 .07 - 12-31-67 850,119 64,427 13.20 .07 - 03-31-68 812,416 65,607 12.38 .105 - 06-30-68 1,013,629 72,214 14.04 .07 - 09-30-68 1,046,852 72,633 14.41 .07 - 12-31-68 1,103,734 74,502 14.81 .07 - 03-31-69 1,083,278 77,393 14.00 .15 - 06-30-69 1,030,784 79,169 13.02 .07 - 09-30-69 1,063,290 83,291 12.77 .07 - 12-31-69 1,085,186 84,807 12.80 .07 - 03-31-70 1,061,534 87,349 12.15 .16 - 06-30-70 843,133 88,367 9.54 .07 - 09-30-70 959,114 89,417 10.73 .07 - 12-31-70 1,054,162 90,941 11.59 .07 - 03-31-71 1,168,919 91,819 12.73 .16 - 06-30-71 1,198,777 92,573 12.94 .07 - 09-30-71 1,200,753 92,723 12.95 .07 - 12-31-71 1,236,601 93,285 13.26 .07 - 03-31-72 1,285,684 93,661 13.73 .14 .08 06-30-72 1,228,951 93,834 13.10 .07 - 09-30-72 1,208,454 92,258 13.10 .07 - 12-31-72 1,272,570 93,673 13.59 .07 - 03-31-73 1,152,089 96,695 11.91 .13 .07 06-30-73 1,073,939 97,943 10.96 .07 - 09-30-73 1,131,789 99,353 11.39 .07 - 12-31-73 1,025,521 100,282 10.23 .07 - EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION Valuation Net Shares Net Asset Dividend/ Capital Date Assets Outstanding Value/Share Share Gains/Share 03-31-74 988,697 101,763 9.72 .14 - 06-30-74 863,820 101,578 8.50 .07 - 09-30-74 667,051 101,292 6.59 .07 - 12-31-74 757,545 106,909 7.09 .07 - 03-31-75 909,125 106,162 8.56 .14 - 06-30-75 1,028,687 106,517 9.66 .07 - 09-30-75 954,187 107,651 8.86 .07 - 12-31-75 1,056,439 111,619 9.46 .07 - 03-31-76 1,230,953 115,167 10.69 .16 - 06-30-76 1,265,767 117,506 10.77 .07 - 09-30-76 1,313,363 121,229 10.83 .07 - 12-31-76 1,402,661 124,264 11.29 .08 - 03-31-77 1,335,592 126,714 10.54 .188 .062 06-30-77 1,456,451 134,575 10.82 .08 - 09-30-77 1,450,573 139,402 10.41 .08 - 12-31-77 1,505,147 145,252 10.36 .08 - 03-31-78 1,418,417 146,380 9.69 .211 .049 06-30-78 1,523,758 145,470 10.47 .09 - 09-30-78 1,672,364 150,729 11.10 .09 - 12-31-78 1,574,097 153,728 10.24 .09 - 03-31-79 1,724,695 162,627 10.61 .204 .051 06-30-79 1,773,427 163,640 10.84 .09 - 09-30-79 1,913,242 167,426 11.43 .09 - 12-31-79 1,872,059 165,806 11.29 .09 - 03-31-80 1,769,935 170,882 10.36 .25 .0525 06-30-80 1,974,288 169,675 11.64 .10 - 09-30-80 2,204,689 173,549 12.70 .10 - EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION 12-31-80 2,416,997 177,025 13.65 .10 - 03-31-81 2,424,976 184,148 13.17 .29 .0868 06-30-81 2,356,007 186,307 12.65 .11 - 09-30-81 2,128,956 183,447 11.61 .11 - 12-31-81 2,315,441 185,009 12.52 .12 - 03-31-82 2,165,531 194,140 11.15 .39 .19123 06-30-82 2,074,816 190,067 10.92 .13 - 09-30-82 2,262,073 189,837 11.92 .13 - 12-31-82 2,593,411 195,469 13.27 .13 - 03-31-83 2,815,081 209,390 13.44 .40 .2500 06-30-83 3,030,744 212,068 14.29 .15 - 09-30-83 3,210,564 223,059 14.39 .15 - 12-31-83 3,345,988 229,238 14.60 .15 - 03-31-84 3,279,542 247,700 13.24 .32 .5000 06-30-84 3,322,155 262,695 12.65 .16 - 09-30-84 3,554,876 263,783 13.48 .16 - 12-31-84 3,727,899 278,241 13.40 .16 - 03-31-85 4,058,327 300,068 13.52 .22 .6800 06-30-85 4,351,707 305,496 14.24 .16 - 09-30-85 4,260,686 310,379 13.73 .16 - 12-31-85 4,962,325 318,589 15.58 .16 - 03-31-86 5,663,449 347,479 16.30 .208 .86227 06-30-86 6,174,120 365,531 16.89 .16 - 09-30-86 6,392,215 399,871 15.99 .16 - Valuation Net Shares Net Asset Dividend/ Capital Date Assets Outstanding Value/Share Share Gains/Share EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION 12-31-86 6,701,786 407,265 16.46 .16 - 03-31-87 8,766,205 491,228 17.85 .196 .79447 06-30-87 9,214,305 509,569 18.08 .16 - 09-30-87 9,921,139 530,566 18.70 .16 - 12-31-87 7,876,275 525,238 15.00 .14 .24513 03-31-88 8,649,901 565,608 15.29 .16 - 06-30-88 9,027,829 574,563 15.71 .15 - 09-30-88 8,986,977 575,956 15.60 .16 - 12-31-88 8,592,807 610,504 14.07 .38 1.10967 03-31-89 9,103,009 618,331 14.72 - - 06-30-89 9,531,124 614,861 15.50 .16 - 09-30-89 10,815,006 652,207 16.58 .16 - 12-31-89 10,895,182 682,321 15.97 .35 0.53769 03-31-90 11,000,740 695,558 15.82 - - 06-30-90 11,521,748 696,414 16.54 .16 0.02646 09-30-90 10,534,037 706,268 14.92 .16 - 12-31-90 11,283,448 744,734 15.15 .35 0.40297 03-31-91 12,685,391 759,477 16.70 - - 06-30-91 12,485,281 766,387 16.29 .16 - 09-30-91 13,225,379 780,213 16.95 .16 - 12-31-91 14,374,679 831,027 17.30 .34 0.29292 03-31-92 14,428,305 851,349 16.95 - - 06-30-92 14,691,191 863,019 17.02 .15 - 09-30-92 15,940,013 910,936 17.50 .16 - 12-31-92 17,006,789 971,502 17.51 .325 0.15944 03-31-93 18,071,613 1,008,275 17.92 - - 06-30-93 17,621,101 992,755 17.75 .15 - 09-30-93 17,949,559 999,163 17.96 .15 - 12-31-93 17,990,556 1,010,692 17.80 .3125 0.17075 03-31-94 17,777,177 1,021,219 17.41 - - 06-30-94 17,953,364 1,033,984 17.36 .14 - 09-30-94 18,472,176 1,036,473 17.82 .15 - EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION 12-31-94 18,096,297 1,058,427 17.10 .30 0.17874 03-31-95 19,835,494 1,072,309 18.50 - - 06-30-95 21,416,325 1,076,463 19.90 .14 - 09-30-95 22,527,409 1,082,829 20.80 .14 - 12-31-95 24,052,746 1,116,620 21.54 .295 0.19289 03-31-96 26,025,304 1,148,429 22.66 - - 06-30-96 27,108,210 1,157,425 23.42 .1325 - 09-30-96 27,451,784 1,165,788 23.55 .1325 -
F -1 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS SEPTEMBER 30, 1996 (Unaudited)
Number Market of Shares Value (Note 1) Title of Security COMMON STOCKS (74.0%) Aircraft - Manufacturing (2.1%) - The Boeing Co. 6,000 $ 567,000 ------------ Amusements - Recreation - Sporting Goods (0.9%) NIKE, Inc. 2,000 $ 243,500 ------------ Banking and Finance (5.5%) - First National of Nebraska, Inc. 230 $ 782,000 NationsBank Corporation 3,000 260,625 Norwest Corporation 6,000 244,500 State Street Boston Corp. 4,000 229,500 ------------ $ 1,516,625 ------------ Beverages - Soft Drinks (2.5%) - PepsiCo, Inc. 24,000 $ 678,000 ------------ Building Materials - Forest Products (0.9%) - Georgia Pacific Corp. 3,000 $ 237,375 ------------ Chemicals (8.4%) - The Dow Chemical Company 7,000 $ 561,750 Du Pont (E.I.) De Nemours & Company 4,000 352,500 Eastman Kodak Company 7,000 549,500 Monsanto Company 17,500 638,750 Morton International, Inc. 5,000 198,750 ----------- $ 2,301,250 ------------ Computers - Hardware and Software (6.4%) - Cisco Systems, Inc.* $ 124,126 2,000 Electronic Data Systems Corp. 4,223 259,187 HNC Software, Inc.* 80,000 2,000 Hewlett-Packard Co. 12,000 585,000 International Business Machines Corporation 1,000 124,500 Microsoft Corporation* 527,500 4,000 Sun Microsystems, Inc.* 62,125 1,000 ------------- $ 1,762,438 ----------- * Nonincome-producing security F-2 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) SEPTEMBER 30, 1996 (Unaudited) Number Market of Shares Value Title of Security (Note 1) COMMON STOCKS (Continued) Drugs - Medicines - Cosmetics (7.7%) - Abbott Laboratories 8,000 $ 394,000 Amgen, Inc.* 63,125 1,000 Bristol-Myers Squibb Co. 3,000 289,125 Elan Corporation PLC ADR* 119,500 4,000 Johnson & Johnson 10,000 512,500 Merck & Co., Inc. 10,000 703,750 Perrigo Company* 29,625 3,000 ----------- $ 2,111,625 ------------ Electrical Equipment and Supplies (2.1%) - General Electric Co. 6,000 $ 546,000 Linear Technology Corporation 1,000 36,875 ---------- $ 582,875 ----------- Electronics (2.9%) - Intel Corporation 4,000 $ 381,752 Motorola, Inc. 8,000 412,000 ---------- $ 793,752 ------------ Finance - Real Estate (2.1%) - Federal Home Loan Mortgage Corporation 6,000 $ 585,750 ------------ Finance - Services (0.4%) - First USA, Inc. 2,000 $ 110,750 ------------ Food - Miscellaneous Products (3.3%) - Philip Morris Companies, Inc. 10,000 $ 897,500 ------------ Forest Products & Paper (1.0%) Kimberly-Clark Corporation 3,000 $ 264,375 ------------ Insurance - Multiline (1.4%) - American International Group, Inc. 1,000 $ 100,750 General Re Corp. 2,000 283,500 ----------- $ 384,250 ------------ Insurance - Municipal Bond (0.9%) - MBIA, Inc. 3,000 $ 257,250 ------------ * Nonincome-producing security F-3 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) SEPTEMBER 30, 1996 (Unaudited) Number Market of Shares Value Title of Security (Note 1) COMMON STOCKS (Continued) Lumber and Wood Products (0.8%) - Weyerhaeuser Company 5,000 $ 230,625 ------------ Machinery - Construction & Mining (0.8%) - Caterpillar, Inc. 3,000 $ 226,125 ------------ Metal Products - Miscellaneous (1.0%) - Nucor Corporation 5,500 $ 279,125 ------------ Motion Pictures and Theatres (1.6%) - Walt Disney Co. 7,000 $ 442,750 ------------ Petroleum Producing (6.5%) - Amoco Corporation 5,000 $ 352,500 Atlantic Richfield Company 2,000 255,000 Chevron Corporation 10,000 626,250 Exxon Corporation 4,000 333,000 Mobil Corporation 2,000 231,500 ----------- $ 1,798,250 ------------ Printing and Engraving (0.7%) - Deluxe Corp. 5,000 $ 188,750 ----------- Publishing - Newspapers (1.0%) - Gannett Co., Inc. 4,000 $ 281,500 ------------ Publishing - Electronic (1.5%) - Reuters Holdings PLC 6,000 $ 415,500 ------------ Restaurants - Food Service (0.4%) - Apple South, Inc. 3,500 $ 46,813 Brinker International, Inc.* 51,000 ------------ 3,000 $ 97,813 ------------ Retail Stores - Apparel and Clothing (1.5%) - Gap, Inc. 14,000 $ 404,250 ------------ Retail Stores - Building Materials and Home Improvement (0.6%) Home Depot, Inc. 3,000 $ 170,625 ------------ * Nonincome-producing security F-4 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) SEPTEMBER 30, 1996 (Unaudited) Number Market of Shares Value Title of Security (Note 1) COMMON STOCKS (Continued) Retail Stores - Department (2.2%) - Dayton Hudson Corporation 10,500 $ 346,500 Wal-Mart Stores, Inc. 10,000 263,750 ------------ $ 610,250 ------------ Retail Stores - Variety (1.0%) - Albertson's Inc. 6,500 $ 273,812 ------------ Telecommunications (3.7%) - A T & T Corp. 5,000 $ 261,250 GTE Corporation 10,000 385,000 Sprint Corporation 8,000 311,000 360 Communications Company* 62,651 2,666 ----------- $ 1,019,901 ------------ Transportation - Railroads (1.1%) - Union Pacific Corporation 4,000 $ 293,000 ------------ Utilities - Telecommunications (0.4%) - U S West Communications Group 4,000 $ 119,500 ------------ Waste Management (0.7%) - WMX Technologies, Inc. 5,500 $ 180,812 ------------ TOTAL COMMON STOCKS (Cost - $11,433,885) $20,326,903 ------------ * Nonincome-producing security F-5 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) SEPTEMBER 30, 1996 (Unaudited) Principal Market Amount Value Title of Security (Note 1) DEBT SECURITIES (25.3%) Broadcast - Radio and Television (0.2%)- Comcast Corporation 3.375% Step-Up Convertible Subordinated Debentures due September 9, 2005 $ 50,000 $ 43,000 ------------ Food - Miscellaneous Products (0.4%) - Super Valu Stores, Inc. 8.875% Promissory Notes, due June 15, 1999 $100,000 $ 105,439 ----------- U.S. Government (11.0%) - U.S. Treasury, 8.875% Notes, due November 15, 1997 200,000 206,437 U.S. Treasury, 9.000% Notes, due May 15, 1998 200,000 209,063 U.S. Treasury, 9.125% Notes, due May 15, 1999 200,000 213,687 U.S. Treasury, 8.750% Notes, due August 15, 2000 200,000 215,813 U.S. Treasury, 8.000% Notes, due May 15, 2001 200,000 212,187 U.S. Treasury, 7.500% Notes, due May 15, 2002 200,000 209,375 U.S. Treasury, 10.750% Bonds due February 15, 2003 200,000 242,750 U.S. Treasury, 7.250% Notes, due May 15, 2004 200,000 207,125 U.S. Treasury, 7.50% Notes, due February 15, 2005 200,000 210,375 U.S. Treasury, 9.375% Bonds, due February 15, 2006 200,000 236,813 F-6 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) SEPTEMBER 30, 1996 (Unaudited) Principal Market Amount Value Title of Security (Note 1) DEBT SECURITIES (Continued) U.S. Government - (Continued) U.S. Treasury, 7.625% Bonds, due February 15, 2007 200,000 207,250 U.S. Treasury, 8.75% Bonds, due November 15, 2008 200,000 221,625 U.S. Treasury, 9.125% Bonds, due May 15, 2009 200,000 227,187 U.S. Treasury, 7.500% Bonds, due November 15, 2016 200,000 209,500 ------------ $ 3,029,187 ------------ Household Appliances and Utensils (0.4%) - Maytag Corp., 9.75% Notes, due May 15, 2002 $100,000 $ 112,478 ------------ Office Equipment and Supplies (0.4%) - Xerox Corporation, 9.750% Notes, due March 15, 2000 $100,000 $ 109,235 ------------ Retail Stores - Broad Line Chains (0.5%) - Costco Wholesale Corporation 5.750% Convertible Subordinated Debentures, due May 15, 2002 $150,000 $ 139,500 ------------ Retail Stores - Department (1.0%) - Dillard Department Stores, Inc. 7.850% Debentures, due October 1, 2012 $150,000 $ 153,651 Sears Roebuck & Co. 9.375% Debentures, due November 1, 2011 100,000 116,969 ----------- $ 270,620 ------------ Textiles - Miscellaneous (0.4%) - Guilford Mills, Inc. 6.000% Convertible Subordinated Debentures due September 15, 2012 $100,000 $ 96,000 ------------ F-7 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) SEPTEMBER 30, 1996 (Unaudited) Principal Market Amount Value Title of Security (Note 1) DEBT SECURITIES (Continued) Transportation - Railroads (0.5%) - Union Pacific Corporation 6.00% Notes, due September 1, 2003 $ 150,000 $ 140,051 ----------- Commercial Paper - Short Term (10.5%) - American Express Credit Corp. Commercial Paper Note 5.35% due October 1, 1996 $1,360,000 $ 1,360,000 Ford Motor Credit Corp. Commercial Paper Note 5.38% due October 1, 1996 $ 700,000 $ 700,000 General Electric Capital Corp. Commercial Paper Note 5.41% due October 1, 1996 $ 825,000 825,000 ------------- $ 2,885,000 ------------- TOTAL DEBT SECURITIES (Cost - $6,895,518) $ 6,930,510 ------------ TOTAL INVESTMENTS IN SECURITIES (Cost - $18,329,403) (99.3%) $27,257,413 CASH AND RECEIVABLES LESS TOTAL LIABILITIES (0.7%) 194,371 ------------ NET ASSETS, September 30, 1996 (100.0%) $27,451,784 ============ T he accompanying notes to financial statements are an integral part of this schedule.
F -8 BRIDGES INVESTMENT FUND, INC. STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996 (Unaudited)
ASSETS AMOUNT Investments, at market value (Note 1) Common stocks (cost $11,433,885) $20,326,903 Debt securities (cost $6,895,518) 6,930,510 ----------- Total Investments $27,257,413 Cash 112,426 Receivables Dividends and interest 136,021 Subscriptions to capital stock 297 -------- TOTAL ASSETS $27,506,157 ========== LIABILITIES Accrued operating expenses 54,373 ------ TOTAL LIABILITIES $ 54,373 ------ NET ASSETS Capital stock, $1 par value - Authorized 3,000,000 shares, less 674,940 shares redeemed; 1,840,728 shares issued; 1,165,788 shares outstanding (Note 6) $ 1,165,788 Paid-in surplus - Excess over par value of amounts received from sale of 1,840,728 shares, less amounts paid out in redeeming 674,940 shares (Note 6) 17,142,423 ----------- Net capital paid in on shares $18,308,211 Accumulated undistributed net investment income 168,791 Accumulated net realized gain on investment transactions 40,173 Net unrealized appreciation on investments (Note 1) 8,928,011 Accumulated undistributed equilization amount (Note 1) 6,598 --------- TOTAL NET ASSETS $27,451,784 ========== TOTAL LIABILITIES AND NET ASSETS $27,506,157 ========== NET ASSET VALUE PER SHARE (Note 5) $23.55 ===== OFFERING PRICE PER SHARE (Note 5) $23.55 ===== REDEMPTION PRICE PER SHARE (Note 5) $23.55 ===== The accompanying notes to financial statements are an integral part of this statement.
F-9 BRIDGES INVESTMENT FUND, INC. STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 (Unaudited)
AMOUNT AMOUNT INVESTMENT INCOME (Note 1) Interest $339,028 Dividends 309,364 -------- Total Investment Income $648,392 EXPENSES Management fees (Note 2) $ 99,206 Custodian fees 26,076 Professional services 8,175 Insurance 8,046 Bookkeeping services 8,243 Printing and supplies 10,184 Dividend disbursing and transfer agent fees (Note 3) 7,286 Computer programming 3,900 Taxes and licenses 799 Foreign Taxes Paid 1,054 ------- Total Expenses $ 172,969 ---------- NET INVESTMENT INCOME $ 475,423 ---------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS, NET (Note 1) Net realized gain on transactions in investment securities $ 49,235 Net increase in unrealized appreciation of investments 2,091,162 ----------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS $2,140,397 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,615,820 ========== The accompanying notes to financial statements are an integral part of this statement.
F-10 BRIDGES INVESTMENT FUND, INC. STATEMENTS OF CHANGES IN NET ASSETS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (Unaudited)
1996 1995 INCREASE IN NET ASSETS Operations - Net investment income $ 475,423 $ 467,197 Net realized gain on transactions in investment securities (Note 1) 49,235 200,262 Net increase in unrealized appreciation of investments (Note 1) 2,091,162 3,612,519 ---------- ----------- Net increase in net assets resulting from operations $ 2,615,820 $ 4,279,978 Net equalization credits (Note 1) 2,399 (2,031) Distributions to shareholders from - Net investment income (Note 7) (306,632) (297,921) Net realized gain from investment transactions - - Equalization (Note 1) - - Net capital share transactions (Note 6) 1,087,451 451,086 ---------- ---------- Total Increase in Net Assets $ 3,399,038 $ 4,431,112 NET ASSETS: Beginning of year 24,052,746 18,096,297 ---------- ----------- End of year (including accumulated undistributed net investment income of $175,389 and $169,276, respectively) $27,451,784 $22,527,409 =========== =========== The accompanying notes to financial statements are an integral part of these statements.
F-11 BRIDGES INVESTMENT FUND, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1996 (Unaudited) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Bridges Investment Fund, Inc. (Fund) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The primary investment objective of the Fund is long term capital appreciation. In pursuit of that objective, the Fund invests primarily in common stocks. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. A. Investments - Security transactions are recorded on the trade date at purchase cost or sales proceeds. Dividend income is recognized on the ex- dividend date, and interest income is recognized on an accrual basis. Securities owned are reflected in the accompanying statement of assets and liabilities and the schedule of portfolio investments at quoted market value. Quoted market value represents the last recorded sales price on the last business day of the calendar year for securities traded on a national securities exchange. If no sales were reported on that day, quoted market value represents the closing bid price. The cost of investments reflected in the statement of assets and liabilities and the schedule of portfolio investments is the same as the basis used for Federal income tax purposes. The difference between cost and quoted market value of securities is reflected separately as unrealized appreciation (depreciation) as applicable.
1996 1995 Net Change Net unrealized appreciation (depreciation): Aggregate gross unrealized appreciationon securities $9,166,947 $5,908,291 Aggregate gross unrealized depreciation on securities (238,936) (208,966) ----------- ------------ Net $8,928,011 $5,699,325 $3,228,686 =========== ========== ==========
The net realized gain (loss) from the sales of securities is determined for income tax and accounting purposes on the basis of the cost of specific securities. F-12 B. Federal Income Taxes - It is the Fund's policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, including the distribution of substantially all taxable income including net realized gains on sales of investments. Therefore, no provision is made for Federal income taxes. C. Distribution To Shareholders - The Fund accrues dividends to shareholders on the ex-dividend date. D. Equalization - The Fund uses the accounting practice of equalization by which a portion of the proceeds from sales and costs of redemption of capital shares, equivalent on a per share basis to the amount of undistributed net investment income on the date of the transactions, is credited or charged to undistributed income. As a result, undistributed net investment income per share is unaffected by sales or redemption of capital shares. (2) INVESTMENT ADVISORY CONTRACT Under an Investment Advisory Contract, Bridges Investment Counsel, Inc. (Investment Adviser) furnishes investment advisory services and performs certain administrative functions for the Fund. In return, the Fund has agreed to pay the Investment Adviser a fee computed on a quarterly basis at the rate of 1/8 of 1% of the average net asset value of the Fund during the quarter, equivalent to 1/2 of 1% per annum. Certain officers and directors of the Fund are also officers and directors of the Investment Adviser. These officers do not receive any compensation from the Fund other than that which is received indirectly through the Investment Adviser. The contract between the Fund and the Investment Adviser provides that total expenses of the Fund in any year, exclusive of stamp and other taxes, but including fees paid to the Investment Adviser, shall not exceed, in total, a maximum of 1 and 1/2% of the average month end net asset value of the Fund for the year. Amounts, if any, expended in excess of this limitation are reimbursed by the Investment Adviser is specifically identified in the Investment Advisory Contract. F-13 (3) DIVIDEND DISBURSING AND TRANSFER AGENT Effective October 1, 1987, dividend disbursing and transfer agent services are provided by Bridges Investor Services, Inc. (Transfer Agent). The fees paid to the Transfer Agent are intended to approximate the cost to the Transfer Agent for providing such services. Certain officers and directors of the Fund are also officers and directors of the Transfer Agent. (4) SECURITY TRANSACTIONS The cost of long term investment purchases during the first nine months ended September 30, was:
1996 1995 United States government obligations $ 493,695 $ 199,496 Other Securities 1,068,905 478,262 ----------- ----------- Total Cost $1,562,600 $ 677,758 ========== ==========
Net proceeds from sales of long term investments during the first nine months ended September 30, were:
1996 1995 United States government obligations $ 423,527 $ 200,000 Other Securities 882,326 806,019 ---------- ----------- Total Net Proceeds $1,305,853 $1,006,019 ========== ========== Total Cost Basis of Securities Sold $1,256,618 $ 805,757 ========== ==========
(5) NET ASSET VALUE The net asset value per share represents the effective price for all subscriptions and redemptions. F-14 (6) CAPITAL STOCK Shares of capital stock issued and redeemed are as follows:
1996 1995 Shares sold 68,242 51,815 Shares issued to shareholders in reinvestment of net investment income and realized gain from security transactions 18,250 21,932 -------- -------- 86,492 73,747 Shares redeemed 37,323 49,345 ------- ------- Net increase 49,169 24,402 ======= ========
Value of capital stock issued and redeemed is as follows:
1996 1995 Shares sold $1,504,226 $ 963,601 Shares issued to shareholders in reinvestment of net investment income and realized gain from security transactions 433,606 406,593 ------------ ----------- $1,937,832 $1,370,194 Shares redeemed 850,381 919,108 ---------- ----------- Net increase $1,087,451 $ 451,086 ========== ===========
(7) DISTRIBUTION TO SHAREHOLDERS On October 15, 1996 a distribution of $.14 per share aggregating $164,056.75 was declared to shareholders of record on October 15, 1996, to be payable on October 21, 1996. (8) DERIVATIVE FINANCIAL INSTRUMENTS In October, 1994, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 119, Disclosure about Derivative Financial Investments and Fair Value of Financial Instruments. The Fund has not entered into any such investment or investment contracts. A covered call option contract is a form of a financial derivative instrument. The Fund's investment and policy restrictions do permit the Fund to sell or write covered call option contracts under certain circumstances and limitations as set forth in the Fund's prospectus. However, the Fund has never entered into a covered call option under those circumstances. -----END PRIVACY-ENHANCED MESSAGE-----