-----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, BBe1CxyRu7sZOsZxXM2BN7ZQu/0/I0fYFHvM62uNEjgyyE4MZppBNL4yiR2i8Jy3 Mm9l0gfS2FOX+ljAFgyPFQ== 0000014170-99-000008.txt : 19990427 0000014170-99-000008.hdr.sgml : 19990427 ACCESSION NUMBER: 0000014170-99-000008 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990426 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: SEC FILE NUMBER: 811-01209 FILM NUMBER: 99600648 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. FIRST QUARTER 1999 CONTENTS OF REPORT PAGES 1 - 6 SHAREHOLDER LETTER EXHIBIT 1 PORTFOLIO TRANSACTIONS FROM JANUARY 1, 1999, THROUGH MARCH 31, 1999 EXHIBIT 2 QUARTER-TO-QUARTER CHANGES IN FINANCIAL DATA EXHIBIT 3 REPORTS TO STOCKHOLDERS OF MANAGEMENT COMPANIES PAGES F1-F14 UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1999 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. BRIDGES INVESTMENT FUND, INC. 8401 West Dodge Road Omaha, Nebraska 68114 Telephone 402-397-4700 Facsimile 402-397-8617 Directors Frederick N. Backer Edson L. Bridges II Edson L. Bridges III N. P. Dodge, Jr. John W. Estabrook Jon D. Hoffmaster John J. Koraleski Roger A. Kupka Gary L. Petersen John T. Reed Roy A. Smith Janice D. Stoney L.B. Thomas John K. Wilson Officers Edson L. Bridges II - Chairman and Chief Executive Officer Edson L. Bridges III _ President Mary Ann Mason - Secretary Kathleen J. Stranik - Assistant Secretary Nancy K. Dodge - Treasurer Auditor KPMG Peat Marwick LLP Two Central Park Plaza Suite 1501 Omaha, Nebraska 68102-1617 Corporate Counsel Baird, Holm, McEachen, Pedersen, Hamann & Strasheim 1500 Woodmen Tower Omaha, Nebraska 68102 April 19, 1999 Dear Shareholder: Investment Results Bridges Investment Fund, Inc. had a total return of 6.95% during the First Quarter of 1999 based on a year-end 1998 net asset value of $34.26 per share and a March 31, 1999, net asset value of $36.64 per share. On a trailing 12-month basis for the period ending March 31, Bridges Investment Fund had a total return of 22.64%. By comparison, the S&P 500 had total returns of 4.98% for the First Quarter and 18.47% for the trailing 12 months ended March 31, 1999. In a continuation of many of the investment themes of 1998, the Fund benefited in the First Quarter from relative price strength in the large cap growth stock sector of the equity market. Investors continued to funnel capital toward those companies which offer the potential of above-average, long-term earnings growth. Strong investment performance during the quarter was found in a handful of stocks; the vast majority of equities underperformed the S&P 500 during the quarter, which itself continued to be dominated by a select few issues with very large market capitalizations. By April 15, 78.5% of publicly traded common stocks in the U.S. were underperforming the S&P 500 by more than 15% on a trailing 12-month basis, the highest level ever. Further, as of April 15, fully 80% of NASDAQ stocks were down more than 20% in price from their 52- week highs, while 64% of New York Stock Exchange stocks were down more than 20% from their 52-week highs. By comparison, only 43% of the stocks in the S&P 500 were down in excess of 20% from their 52-week highs. In this difficult operating environment for stock selection, the Fund's equities had a total return of 8.10% during the First Quarter versus a 4.98% total return for the S&P 500. That's the good news. The bad news is that the relatively strong price performance of the Fund's equities over the past three and 12-month periods has carried valuations to very high historical levels. As such, we will look for opportunities to pare positions in those equities which traded at valuation levels that we may believe to be unsustainable. While this approach has tended to diminish returns in the short run over the past 12 months, we believe it may prove to be a rewarding risk control measure over the remainder of 1999, which we expect to be volatile given the currently elevated valuation levels enjoyed by many stocks. Shareholder Letter 2 April 19, 1999 The following table summarizes the ten largest equity holdings of the Fund as of March 31, 1999, and includes some salient performance and valuation data:
EPS EPS % % 5Yr LT 3/31/99 % % Tot Tot Hist Ftr No. of Market of Tot Ret Ret Gr P/E P/E Gr Shares Company Value Equiy Asst QTD 12 Mo Rate 1999 2000 Rate 30,000 GAP 2,019,375 4.4 3.8 20.0 124.8 27 41.0 34.2 18 20,000 Microsoft 1,792,500 3.9 3.4 29.2 100.3 42 67.9 59.4 25 30,000 Freddie Mac 1,719,375 3.7 3.3 -10.8 21.9 16 20.8 18.1 15 11,000 Capital One 1,661,000 3.6 3.1 31.4 91.8 17 29.4 23.7 20 16,000 Merck 1,282,000 2.8 2.4 9.0 26.6 15 32.7 28.9 14 10,000 Intel 1,188,750 2.6 2.2 0.3 52.5 26 25.4 21.8 20 13,000 MCI WorldCom 1,151,313 2.5 2.2 23.4 105.7 24 45.0 31.4 30 18,000 Home Depot 1,120,500 2.4 2.1 1.8 84.5 24 47.2 38.2 23 7,000 Amer.Online 1,029,000 2.2 1.9 89.5 760.8 131 432.0 283.0 50 8,000 EMC 1,022,000 2.2 1.9 50.3 237.9 27 64.5 49.3 30
Portfolio changes in the Fund during the quarter generally fell into one of three themes. First, we sold or trimmed positions where fundamentals appeared to deteriorate and/or where valuations had expanded to the point where some profit taking seemed prudent. On the buy side, purchases were made in equities where strong fundamental stories continued to improve (Capital One, America Online, Vodafone, and QUALCOMM) and in stocks where we sought to broaden our exposure in sectors which have strong fundamentals through companies that complimented existing holdings in the portfolio (E*Trade, i2 Technologies, and At Home). The bulk of the purchases in equities during the quarter was concentrated in the technology, telecommunications, and financial services sectors, which we continue to believe have significant growth potential over the long run. As we discussed in the Shareholder Letter for year-end 1998, we anticipate that 1999 could be the most difficult year for equity investors since 1990 for a variety of reasons. Valuation levels are very high by historical levels. Investor speculation and complacency are widespread as evidenced by the gargantuan valuations placed on internet-related companies, many of which have business models which do not call for corporate profitability for years. Earnings growth continues to be difficult to come by. In view of these factors, we continue to expect that 1999 will be marked by significant equity price volatility. In an economic environment characterized by intense global competition, however, we remain very constructive on the outlook for common stocks and would tend to view sharp price declines in companies with strong business franchises as opportunities to invest capital on a favorable long-term basis. We will seek to approach 1999 opportunistically, looking to reduce equity exposure when equity valuation levels are high and increasing it when more favorable equity valuation levels exist. Longer term, we will continue to seek to invest in those companies which we believe offer the best combination of earnings and cash flow growth and reasonable valuation characteristics. We appreciate your confidence in our approach to investing and your patience during the inevitable difficult periods that may lie ahead. Shareholder Letter 3 April 19, 1999 Financial Statements The Fund's unaudited financial statements, appearing on pages F-1 through F-14, provide the Schedule of Portfolio Investments, the Statement of Assets and Liabilities, the Statement of Operations, the Statement of Changes in Net Assets, and the Notes to Financial Statements as of March 31, 1999. These presentations comprise our basic report to you. In addition, please refer to Exhibits 1 and 2 for information about the Fund's portfolio transactions for this First Quarter of 1999 and for the Fund's historical information with respect to net assets, shares outstanding, net asset value per share, dividends, and capital gains distributions. Required Reports Rule 30d-1(6) of the General Rules and Regulations under the Investment Company Act of 1940, as promulgated by the Securities and Exchange Commission, required certain reports to stockholders with respect to any matter that was submitted to a shareholder vote during the period covered by the shareholder report. The 1999 Annual Meeting of Shareholders of the Fund was held on February 16, 1999. The information that is required to be reported to you with respect to this meeting appears in Exhibit 3, attached hereto. A similar presentation will be made each time there is an annual or special meeting, and, in the instance of this report, the same information will be published again in January, 2000, within the Annual Shareholder Report for 1999 to fulfill certain requirements in connection with the solicitation of proxies for the next Annual Meeting of Shareholders. Cash Distribution On April 13, 1999, the Board of Directors declared a $.075 per share dividend on shares of capital stock that were outstanding on April 13, 1999 -- the record date for this income distribution. This dividend amount will be payable on or about April 19, 1999. This dividend is payable from net investment income earned during the January-March, 1999 Quarter. Prospectus This letter transmits the 1999 edition of the Fund's Prospectus that will become effective today, April 19, 1999. The Prospectus is Part A of a three segment filing with the Securities and Exchange Commission in Washington, D.C. Part B is the Statement of Additional Information, and Part C contains Other Information. The Fund will mail only Part A with this letter. Please notify Mrs. Mary Ann Mason, Secretary of the Fund, if you wish to receive Part B and/or Part C, and she will mail copies of the 1999 revisions in these documents to you. The Annual Report for 1998 could be considered an integral part of the Prospectus offering for 1999. Each shareholder has been mailed or personally received an Annual Report for 1998 with their proxy statement in January, 1999, or when he or she made an original purchase transaction in the Fund subsequent to the January 25, 1999, date of issuance for that report. Any person who desires another copy of the Annual Report for 1998 should request that document from Mrs. Mason. This document will be made available without cost to the requester. Shareholder Letter 4 April 19, 1999 Other Comments and Business Plans Registration -- Throughout the 36 year history of our Fund, the capital stock has been registered for sale only in the State of Nebraska. The shares offered to the public have been made upon inquiry based upon individual initiative or by referral of a staff member from our investment counsel practice. The Fund and its investment manager have prospered in relative obscurity on purpose. The manager's focus has been upon the excellence and quality of the Fund's investments. Marketing strategies have been nonexistent. The registration of shares in other states was deemed to be expensive and time consuming for our management. New Priority -- The low-profile, less complicated Fund operation has involved some missed fund shares sales opportunities from national publicity that is received from time to time as a result of our 21 consecutive year record of positive total annual returns in each of those periods. There are very few equity mutual funds in the United States that can meet or exceed that achievement for the December 31, 1977, to December 31, 1998, time frame. The need to capitalize upon achievements has risen to a higher priority now than in the past. Series Fund -- Our Fund has attracted a large sum as a percent of the total net assets and a considerable number of deferred income tax advantaged accounts over the years, mainly in the IRA genre, but the huge market for salary withholding and company match amounts directed towards 401(k) choices has been largely foregone, because the investment manager does not sponsor the usual four (or more) alternative choices for investment objectives that the typical employer desires to offer to his or her employees. Bridges Investment Counsel, Inc. is studying and will conduct market research for the possible formation of a series fund to fulfill some of the perceived opportunities for 401(k) plans and for other investors. Rates of Return -- An attractive investment record can be a compelling reason to bring new assets under management for our existing fund and possible new series portfolio choices. Accordingly, the achievement of outstanding and competitive short, intermediate, and long-term investment returns has become a fundamental cornerstone of our Fund's business policy and plan. For a number of years, the Fund has provided information to various publishers and rating services who seek standardized information for comparative purposes. In December, 1998, our daily net asset value was made available through NASDAQ. There are now at least three sources of quantitative information about our Fund: Morningstar Principia Pro for Mutual Funds, the Value Line Mutual Fund Survey, and The Street.com, a service of Arthur Lipper. Some recent information from these three sources appears below: Shareholder Letter 5 April 19, 1999 1. Morningstar's March 31, 1999, release rates Bridges Investment Fund, Inc. as a four star fund for growth and income -- five star is the highest rating. The investment record and ratings as reported by Morningstar are as follows:
Category YTD 12 Mos 3 Yr An 5 Yr Ann 10 Yr Ann 15 Yr Ann Tot. Return % 6.95 22.66 22.55 21.04 15.21 14.21 Number Rank in N.A. 6 (806) 56 (507) 58 (348) 65 (132) 74 (75) Funds
From the foregoing, you can see that steady improvement towards an industry leading position has been underway throughout the survey period. 2.The Value Line survey ranks funds by decile each year. Our Fund's position by decile since 1984 is shown below: 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 2 4 2 4 5 4 1 5 4 4 2 4 4 5 2 On January 5, 1999, Value Line published its latest article about Bridges Investment Fund, Inc. On that date, Value Line assigned an Overall Rank of 1 (Highest) and a Real Rank of 2 (Lower Risk). 3.On April 15, 1999, The Street.com at a net asset value price of $37.27 ranked Bridges Investment Fund, Inc. at 6.80% for 13 weeks, 9.00% for the year to date, and 23.10% for the one-year total return. This service ranked our company 22nd out of 599 mutual funds with an investment objective of growth and income. This information is provided to portray the business policy that a solid investment record has been created to broaden and deepen the constituency of mutual fund shareholders both within this Fund and others that might be sponsored from our investment manager's future professional activities. Our long-term policy has been to be well invested. Within that context, information about returns and rankings has been very limited in reports to you. To some degree, the reluctance to report comprehensive rate of return information has been related to a belief that new investors to the Fund derive their returns from future investment events, not the past. However, with the explosion of investment return information that has become available in the 1990's, electronically and otherwise, it seems appropriate to provide more rate of return information now than in the past. Quarterly Dividend -- The $.075 quarterly dividend just paid was the smallest distribution of this type since the Third Quarter of 1976. The decline in the dividend of $.135 paid in the First Quarter of 1998, 12 months ago, is related to the conscious choice to focus stock selections on growth stocks -- many of these issues do not pay dividends. The management believes that the higher prospective return from price appreciation in common stocks is worth the sacrifice of current income. Board Expansion -- The addition of three non-interested person members to the Board of Directors in 1999 positions our Fund to be able to issue sales literature and to register shares in other states. Management will be working to accomplish these objectives as the year progresses. Year 2000-- The Board of Directors received a briefing from management on the status of preparations for the Year 2000 and the problems related to Shareholder Letter 6 April 19, 1999 computer hardware and software that may not be compliant. The preparations include the development of a plan, the definition of our assessment of the status of mission critical systems, the remediation of problems that become identified, the testing of corrections made and of system intercommunications, and the development of written contingency plans in the event of unanticipated failures at our site and/or at the location of vendors to our organization. The Board was advised that Bridges Investment Counsel, Inc. and the Fund are ready and prepared. However, the management is still posing "what if" questions to research possible new areas of vulnerability. Our management is also reviewing statements by public company managements in their 1998 annual reports and elsewhere for concerns that are expressed by the officers of those companies that are owned in the Fund's portfolio. This review process is about one-third complete, as it requires time availability to read the disclosures and the receipt of the report within the office. To date, no significant problems for our portfolio companies have been ascertained. Thank you for being an investor in our Fund. Sincerely, Edson L. Bridges II Chairman Edson L. Bridges III President ELBII:ELBIII:kjs EXHIBIT 1 BRIDGES INVESTMENT FUND, INC. PORTFOLIO TRANSACTIONS DURING THE PERIOD FROM JANUARY 1, 1999, THROUGH MARCH 31, 1999
BOUGHT OR HELD AFTER RECEIVED TRANSACTION SECURITIES $1,000 PAR $1,000 PAR COMMON STOCKS UNLESS VALUE (M) VALUE (M) DESCRIBED OTHERWISE OR SHARES OR SHARES (1) AMERICA ONLINE, INC. 7,000 7,000 (2) AMGEN, INC. 3,000 6,000 AT HOME CORPORATION 2,000 2,000 (3) BP AMOCO PLC SPONS. ADR 6,616 6,616 (4) BRISTOL-MYERS SQUIBB CO. 4,000 8,000 (5) CSG SYSTEMS INTERNATIONAL, INC. 8,000 11,000 CAPITAL ONE FINANCIAL 1,000 11,000 CANADIAN OCCIDENTAL PETROLEUM LTD. 5,000 5,000 9.375% PFD. SERIES 1 CARDINAL HEALTH, INC. 2,000 2,000 (6) DELL COMPUTER 1,500 3,000 E*TRADE GROUP 2,000 2,000 GULFSTREAM AEROSPACE CORPORATION 1,000 6,000 HNC SOFTWARE, INC. 3,000 16,000 I2 TECHNOLOGIES, INC. 5,000 5,000 LEVEL 3 COMMUNICATIONS 5,000 12,000 (7) MERCK & CO., INC. 8,000 16,000 (8) MICROSOFT CORPORATION 10,000 20,000 MORGAN STANLEY, DEAN WITTER 1,000 3,000 DISCOVER & CO. PROVIDIAN FINANCIAL 2,000 2,000 QUALCOMM, INC. 5,000 5,000 RCN CORPORATION 1,000 1,000 (9) SOLECTRON CORPORATION 6,000 12,000 SUN MICROSYSTEMS, INC. 2,000 2,000 TRANSACTION SYSTEMS ARCHITECTS 7,000 25,000 VODAFONE GROUP PLC SPONS. ADR 2,000 3,000 WEST TELESERVICES 5,800 50,000 VARIOUS ISSUES OF COMMERCIAL PAPER 16,080M 780M NOTES PURCHASED DURING 1ST QUARTER, 1999 (1) - RECEIVED 2,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON FEBRUARY 23, 1999. (2) - RECEIVED 3,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON MARCH 1, 1999. (3) - RECEIVED 6,616 SHARES IN A .6616-FOR-1 ACQUISITION OF AMOCO CORP. ON JANUARY 4, 1999. (4) - RECEIVED 4,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON FEBRUARY 26, 1999. (5) - RECEIVED 3,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON MARCH 8, 1999. (6) - RECEIVED 1,500 SHARES IN A 2-FOR-1 STOCK SPLIT ON MARCH 8, 1999. (7) _ RECEIVED 8,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON FEBRUARY 17, 1999. (8) _ RECEIVED 10,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON MARCH 29, 1999. (9) _ RECEIVED 6,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON FEBRUARY 25, 1999. EXHIBIT 1 BRIDGES INVESTMENT FUND, INC. PORTFOLIO TRANSACTIONS DURING THE PERIOD FROM JANUARY 1, 1999 THROUGH MARCH 31, 1999 (CONTINUED) SOLD OR HELD AFTER EXCHANGED TRANSACION SECURITIES $1,000 PAR $1,000 PAR COMMON STOCKS UNLESS VALUE (M) VALUE (M) DESCRIBED OTHERWISE OR SHARES OR SHARES (3) AMOCO CORPORATION 10,000 -- AT HOME CORPORATION 1,000 1,000 DAYTON HUDSON CORPORATION 2,000 15,000 HEWLETT PACKARD COMPANY 1,000 6,000 J.D. EDWARDS & CO. 1,000 -- MBIA, INC. 2,000 8,000 NIKE, INC. CLASS B 1,000 5,000 QUINTILES TRANSNATIONAL 4,000 -- R & B FALCON CORPORATION 15,000 -- SLM HOLDING CORPORATION 3,500 -- WELLS FARGO & CO. 2,000 10,000 VARIOUS ISSUES OF COMMERCIAL 17,745M -- PAPER NOTES MATURING DURING 1ST QTR., 1999
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 - 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 - 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 - EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION NET SHARES NET ASSET DIVIDEND/ CAPITAL VALUATION ASSETS OUTSTANDING VALUE/SHARE SHARE GAINS/SHARE DATE 09-30-86 6,392,215 399,871 15.99 ,16 - 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 - 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 - 12-31-96 29,249,488 1,190,831 24.56 .285 0.25730 03-31-97 30,255,441 1,210,627 24.99 - - 06-30-97 34,567,391 1,229,643 28.11 .1325 - 09-30-97 36,500,979 1,242,731 29.37 .135 - 12-31-97 36,647,535 1,262,818 29.02 .24 0.30571 03-31-98 41,413,655 1,283,322 32.27 - - 06-30-98 43,600,764 1,298,420 33.58 .135 - 09-30-98 40,423,166 1,308,173 30.90 .09 - 12-31-98 48,433,113 1,413,731 34.26 .215 2.11648 03-31-99 52,835,162 1,442,077 36.64 - -
Exhibit 3 BRIDGES INVESTMENT FUND, INC. REPORTS TO STOCKHOLDERS OF MANAGEMENT COMPANIES In Accordance With Rule 30d-1(b) of the General Rules and Regulations Promulgated Under The Investment Company Act of 1940 as Amended "If any matter was submitted during the period covered by the shareholder report to a vote of the shareholders, through the solicitation of proxies or otherwise, furnish the following information:" (1) Annual Meeting held on February 16, 1999, at 11:00 a.m. (2) Election of Directors for one year terms (All Directors Stand for Annual Election):
- - - - - -Votes Cast - - - - - - Withhold For All Authority Names of Directors Nominees To Vote For Elected at Meeting For Except All Nominees Frederick N. Backer 1,107,066 None 782 Edson L. Bridges II 1,107,066 None 782 Edson L. Bridges III 1,107,066 None 782 N. P. Dodge, Jr. 1,102,733 4,333 782 John W. Estabrook 1,107,066 None 782 Jon D. Hoffmaster 1,107,066 None 782 John J. Koraleski 1,107,066 None 782 Roger D. Kupka 1,107,066 None 782 Gary L. Petersen 1,107,066 None 782 John T. Reed 1,107,066 None 782 Roy A. Smith 1,102,733 4,333 782 Janice D. Stoney 1,102,579 4,487 782 L.B. Thomas 1,107,066 None 782 John K. Wilson 1,107,066 None 782 (3) A brief description for each matter voted upon at the meeting: For Against Abstain Matters Voted Upon (a) A proposal to set the number of 1,098,550 4,580 4,718 directors at fourteen (b) For a proposed investment 1,107,132 None 716 advisory contract which continues the employment of Bridges Investment Counsel, Inc. as investment adviser to the Fund for the period from April 17, 1999 through April 17, 2000 (c) For the ratification of the 1,105,135 None 2,713 selection of KPMG Peat Marwick LLP as independent auditors of the Fund for the Fiscal Year ending December 31, 1999
F-1 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS MARCH 31, 1999 (Unaudited)
Number Market of Shares COST Value Title of Security COMMON STOCKS - (87.7%) Advertising - 1.4% Interpublic Group of Companies, Inc. (The) 2,000 $ 106,953 $ 155,750 Outdoor Systems, Inc.* 19,050 323,364 571,500 $ 430,317 $ 727,250 AEROSPACE/DEFENSE _ 0.5% Gulfstream Aerospace Corp.* 6,000 $ 274,752 $ 260,250 Aircraft _ Manufacturing - 0.8% The Boeing Company 12,000 $ 278,135 $ 408,000 Amusements _ Recreation _ Sporting Goods _ 0.5% Nike, Inc. 5,000 $ 171,270 $ 288,440 Banking and Finance - 4.3% Chase Manhattan Corporation (The) 2,000 $ 86,650 $ 162,750 First National of Nebraska, Inc. 230 346,835 690,000 MBNA Corporation 15,000 234,825 358,125 State Street Corporation 8,000 66,525 658,000 U.S. Bancorp (New) 2,000 70,160 68,126 Wells Fargo & Co. (New) 10,000 138,173 350,630 $ 943,168 $ 2,287,631 Beverages - Soft Drinks - 1.9% Coca-Cola Company (The) 1,000 $ 62,049 $ 61,375 PepsiCo, Inc. 24,000 307,470 940,512 $ 369,519 $ 1,001,887 Chemicals - 2.6% The Dow Chemical Company 5,000 $ 288,887 $ 465,940 Du Pont (E.I.) De Nemours & Company 8,000 273,935 464,504 Monsanto Company 10,000 116,189 459,380 $ 679,011 $ 1,389,824 Communications _ Radio and Television _ 1.3% Clear Channel Communications, Inc.* $ 366,954 $ 670,630 10,000 *Nonincome-producing security F-2 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) MARCH 31, 1999 (Unaudited) Number Market of Shares COST Value Title of Security COMMON STOCKS (Continued) Computers _ Hardware and Software - 14.2% America Online, Inc.* 7,000 $ 615,768 $ 1,027,250 Cisco Systems, Inc.* 9,000 290,726 986,067 Compaq Computer Corporation 10,000 359,228 316,880 Dell Computer Corporation * 3,000 109,594 122,625 EMC Corporation* 8,000 358,855 1,022,000 HNC Software, Inc.* 16,000 495,325 524,000 Hewlett-Packard Co. 6,000 83,784 406,878 I2 Technologies, Inc. 5,000 154,166 132,970 Microsoft Corporation* 20,000 93,361 1,792,500 Sun Microsystems, Inc.* 2,000 211,188 250,126 Transaction Systems Architects, Inc.* 25,000 900,966 900,000 $ 3,672,961 $ 7,481,296 Data Processing and Management _ 0.8% CSG SYSTEMS* 11,000 $ 334,847 $ 433,818 Diversified Operations _ 0.9% BERKSHIRE HATHAWAY INC., CLASS B * 210 $ 150,375 $ 493,710 Drugs - Medicines _ Cosmetics - 8.7% Abbott Laboratories 15,000 $ 169,395 $ 702,195 Amgen, Inc.* 6,000 248,687 449,250 Bristol-Myers Squibb Co. 8,000 141,675 513,000 Elan Corporation PLC ADR* 10,000 419,005 697,500 Johnson & Johnson 10,000 109,396 935,000 Merck & Co., Inc. 16,000 274,266 1,282,000 $ 1,362,424 $ 4,578,945 Electrical Equipment and Supplies - 1.7% General Electric Co. 8,000 $ 147,473 $ 885,000 ELECTRONIC COMPONENTS _ CONDUCTORS _ 0.2% Altera Corporation* 2,000 $ 96,625 $ 119,000 Electronics - 3.3% Intel Corporation 10,000 $ 334,735 $ 1,188,750 Solectron Corporation * 12,000 230,974 582,756 $ 565,709 $ 1,771,506 FINANCE _ CREDIT CARDS _ 0.9% American Express Company 2,000 $ 165,255 $ 235,500 Providian Financial Corporation 2,000 213,521 220,000 $ 378,776 $ 455,500 FINANCE _ DIVERSIFIED _ 0.6% Morgan Stanley, Dean Witter, Discover & Co. 3,000 $ 202,960 $ 299,814 FINANCE _ INVESTMENT BANKS _ 0.5% Merrill Lynch & Co, Inc. 3,000 $ 168,585 $ 265,500 *Nonincome-producing security F-3 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) MARCH 31, 1999 (Unaudited) Number Market of Shares COST Value Title of Security COMMON STOCKS (Continued) Finance - Real Estate - 3.3% Freddie Mac 30,000 $ 470,320 $ 1,719,390 Finance _ Services - 3.6% Capital One Financial Corporation 11,000 $ 592,546 $ 1,661,000 E*Trade Group, Inc.* 2,000 98,188 116,625 FINOVA 2,000 80,535 103,750 Paychex, Inc. 1,000 43,438 47,437 $ 814,707 $ 1,928,812 Food _ Miscellaneous Products - 1.3% Philip Morris Companies, Inc. 20,000 $ 338,693 $ 703,760 Insurance _ Mortgage _ 0.3% MGIC Investment Corporation 4,000 $ 177,450 $ 140,252 Insurance _ Multiline - 0.6% American International Group, Inc. 2,500 $ 118,455 $ 301,562 Insurance _ Municipal Bond _ 0.9% MBIA, Inc. 8,000 $ 360,053 $ 464,000 Internet _ Content _ 0.3% At Home Corporation * 1,000 $ 121,375 $ 157,500 Linen Supply and Related Products - 0.5% Cintas Corporation 4,000 $ 166,578 $ 261,500 Medical Sterilization Products _ 0.3% Steris Corporation * 6,000 $ 169,500 $ 159,750 Medical _ Wholesale Drug Dist. _ 0.2% Cardinal Health, Inc. 2,000 $ 148,330 $ 132,000 Metal Products _ Miscellaneous - 0.4% Nucor Corporation 4,500 $ 68,056 $ 198,284 Motion Pictures and Theatres - 1.3% The Walt Disney Company 22,000 $ 236,300 $ 684,750 Petroleum Producing - 5.2% Atlantic Richfield Company 4,000 $ 211,835 $ 292,500 BP Amoco PLC _ Spons. ADR 6,616 246,135 668,216 Chevron Corporation 10,000 340,535 887,500 Exxon Corporation 8,000 198,750 564,504 Mobil Corporation 4,000 127,075 352,000 $ 1,124,330 $ 2,764,720 *Nonincome-producing security F-4 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) MARCH 31, 1999 (Unaudited) Number Market of Shares COST Value Title of Security COMMON STOCKS (Continued) Publishing _ Newspapers - 0.9% Gannett Co., Inc. 8,000 $ 179,310 $ 504,000 Publishing _ Electronic - 0.9% Reuters Group PLC, ADR Sponsored 5,199 $ 166,303 $ 451,663 RADIO _ 0.2% Chancellor Media Corporation * 2,000 $ 62,688 $ 94,250 Retail Stores _ Apparel and Clothing - 3.8% Gap, Inc. 30,000 $ 258,323 $ 2,019,390 Retail Stores _ Building Materials and Home Improvement _ 2.1% The Home Depot, Inc. 18,000 $ 455,080 $ 1,120,500 Retail Stores _ Department - 1.9% Dayton Hudson Corporation 15,000 $ 146,129 $ 999,375 Retail Stores _ Variety - 0.5% Albertson's Inc. 5,000 $ 98,910 $ 272,190 SCHOOLS _ 0.4% SYLVAN LEARNING SYSTEM * 7,500 $ 200,089 $ 205,313 SOFTWARE _ NETWORK _ 0.3% NETWORK ASSOCIATES, INC. * 4,500 $ 188,077 $ 138,096 Telecommunications - 8.4% AirTouch Communications, Inc.* 8,000 $ 345,725 $ 773,000 Level 3 Communications * 12,000 483,300 873,756 MCI WorldCom, Inc. * 13,000 466,187 1,151,319 RCN Corporation * 1,000 22,978 33,563 Sprint Corporation 5,000 83,964 490,625 Sprint PCS Corporation * 2,500 10,082 110,783 Vodafone Group PLC 3,000 503,138 563,250 West Teleservices Corporation* 50,000 690,644 425,000 $ 2,606,018 $ 4,421,296 TELECOMMUNICATIONS _ EQUIPMENT _ 2.9% NOKIA CORPORATION 6,000 $ 492,858 $ 934,500 QUALCOMM INCORPORATED * 5,000 401,493 621,875 $ 894,351 $ 1,556,375 TELEVISION _ CABLE _ 0.4% COMCAST CORPORATION 3,000 $ 141,375 $ 188,814 *Nonincome-producing security F-5 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) MARCH 31, 1999 (Unaudited) Number Market of Shares COST Value Title of Security COMMON STOCKS (Continued) TRANSPORTATION _ AIRFREIGHT _ 1.3% EAGLE USA AIRFREIGHT, INC. * 22,000 $ 416,042 $ 715,000 Transportation _ Railroads - 0.4% Union Pacific Corporation 4,000 $ 148,580 $ 213,752 TOTAL COMMON STOCKS (Cost - $20,869,283) $20,869,283 $46,334,295 PREFERRED STOCKS (2.6%) Banking and Finance _ 1.2% CFC Capital Trust 9.375% Preferred, Series B 5,000 $ 125,000 $ 130,000 CFB Capital II 8.20% Cumulative Preferred 5,000 125,000 126,250 Harris Preferred Capital Corp., 10,000 250,000 252,500 7.375%, Series A Silicon Valley Bancshares Capital 5,000 125,000 115,000 8.25% Preferred Series I $ 625,000 $ 623,750 Petroleum Producing _ 0.2% Canadian Occidental Petroleum Ltd. 5,000 $ 125,000 $ 127,500 9.375% Preferred _ Series 1 Telecommunications - 0.7% AirTouch Communications, Inc. 4.25% Series C 3,000 $ 137,925 $ 403,500 Convertible Preferred UTILITIES _ ELECTRIC _ 0.5% Tennessee Valley Authority 6.75% 10,000 $ 250,000 $ 250,000 Variable Preferred Series D Total Preferred Stocks (Cost - $1,137,925) $ 1,137,925 $ 1,404,750 Total Stocks (Cost - $22,007,208) $22,007,208 $47,739,045 DEBT SECURITIES (9.4%) Energy _ Alternate Sources - 0.4% CalEnergy Co., Inc., 7.63% Notes due October 15, 2007 $200,000 $ 200,000 $ 211,580 Food _ Miscellaneous Products - 0.2% Super Valu Stores, Inc., 8.875% Promissory Notes, due June 15, 1999 $100,000 $ 100,689 $ 100,649 *Nonincome-producing security F-6 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS (Continued) MARCH 31, 1999 (Unaudited) Principal Market Amount COST Value Title of Security DEBT SECURITIES (Continued) Household Appliances and Utensils - 0.2% Maytag Corp., 9.75% Notes, due May 15, 2002 $100,000 $ 102,200 $ 110,810 Office Equipment and Supplies - 0.2% Xerox Corporation, 9.750% Notes due March 15, 2000 $100,000 $ 100,025 $ 103,630 Retail Stores _ Department - 0.5% Dillard Department Stores, Inc., 7.850% Debentures, due October 1, 2012 $150,000 $ 151,348 $ 160,470 Sears Roebuck & Co., 9.375% Debentures due November 1, 2011 100,000 $ 106,399 121,742 $ 257,747 $ 282,212 TELECOMMUNICATIONS _ 0.5% Level 3 Communications, Inc., 9.125% Senior $250,000 $ 241,937 $ 251,250 Notes due May 1, 2008 U.S. Government _ 5.9% U.S. Treasury, 9.125% Notes, due May 15, 1999 $200,000 $ 215,900 $ 201,031 U.S. Treasury, 8.750% Notes, due August 15, 2000 200,000 211,900 209,938 U.S. Treasury, 8.000% Notes, due May 15, 2001 200,000 199,052 211,875 U.S. Treasury, 7.500% Notes, due May 15, 2002 200,000 214,097 213,375 U.S. Treasury, 10.750% Bonds due February 15, 2003 200,000 219,525 238,063 U.S. Treasury, 7.250% Notes, due May 15, 2004 300,000 303,245 326,907 U.S. Treasury, 7.500% Notes, due February 15, 2005 300,000 305,871 332,812 U.S. Treasury, 9.375% Bonds, due February 15, 2006 200,000 256,223 245,313 U.S. Treasury, 7.625% Bonds, due February 15, 2007 300,000 307,910 317,760 F-7 BRIDGES INVESTMENT FUND, INC. SCHEDULE OF PORTFOLIO INVESTMENTS MARCH 31, 1999 (Unaudited) Principal Market Amount COST Value Title of Security DEBT SECURITIES (Continued) U.S. Treasury, 8.750% Bonds, due November 15, 2008 200,000 237,472 226,125 U.S. Treasury, 9.125% Bonds, due May 15, 2009 200,000 $ 234,910 $ 232,031 U.S. Treasury, 7.500% Bonds, due November 15, 2016 300,000 308,539 352,407 $ 3,014,644 $ 3,107,637 Commercial Paper _ Short Term _ 1.5% Ford Motor Credit Corporation Commercial Paper Note 4.89% due April 6, 1999 380,000 $ 380,000 380,000 Prudential Funding Corporation Commercial Paper Note 4.88% due April 2, 1999 400,000 400,000 400,000 $ 780,000 $ 780,000 TOTAL DEBT SECURITIES (Cost - $4,797,242) $ 4,797,242 $ 4,947,768 TOTAL INVESTMENTS IN SECURITIES (Cost - $26,804,450) (99.7%) $26,804,450 $52,686,813 CASH AND RECEIVABLES LESS TOTAL LIABILITIES (0.3%) 148,349 NET ASSETS, March 31, 1999 (100.0%) $52,835,162 The accompanying notes to financial statements are an integral part of this schedule.
F-8 BRIDGES INVESTMENT FUND, INC. STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1999 (UNAUDITED)
ASSETS AMOUNT INVESTMENTS, AT MARKET VALUE COMMON AND PREFERRED STOCKS (COST $22,007,208) $47,739,045 DEBT SECURITIES (COST $4,797,242) 4,947,768 TOTAL INVESTMENTS $52,686,813 CASH 101,957 RECEIVABLES DIVIDENDS AND INTEREST 139,387 SUBSCRIPTIONS TO CAPITAL STOCK 16,515 TOTAL ASSETS $52,944,672 LIABILITIES REDEMPTION OF CAPITAL STOCK $ 14,000 INVESTMENT ADVISOR, MANAGEMENT AND SERVICE FEES PAYABLE 63,841 ACCRUED OPERATING EXPENSES 31,669 TOTAL LIABILITIES $ 109,510 NET ASSETS CAPITAL STOCK, $1 PAR VALUE - AUTHORIZED 3,000,000 SHARES, 1,442,077 SHARES OUTSTANDING $ 1,442,077 PAID-IN SURPLUS - 25,205,498 NET CAPITAL PAID IN ON SHARES $26,647,575 ACCUMULATED NET REALIZED GAIN ON INVESTMENT TRANSACTIONS 187,172 NET UNREALIZED APPRECIATION ON INVESTMENTS 25,882,363 ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME 118,052 TOTAL NET ASSETS $52,835,162 NET ASSET VALUE PER SHARE $36.64 OFFERING PRICE PER SHARE $36.64 REDEMPTION PRICE PER SHARE $36.64 THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT.
F-9 BRIDGES INVESTMENT FUND, INC. STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 (UNAUDITED)
AMOUNT AMOUNT INVESTMENT INCOME INTEREST $ 95,609 DIVIDENDS 115,745 Total Investment Income $ 211,354 EXPENSES Management fees $ 63,841 CUSTODIAN FEES 8,609 INSURANCE AND OTHER ADMINISTRATIVE FEES 6,691 BOOKKEEPING SERVICES 5,976 PRINTING AND SUPPLIES 5,655 PROFESSIONAL SERVICES 2,625 DIVIDEND DISBURSING AND TRANSFER AGENT FEES 4,137 COMPUTER PROGRAMMING 1,250 TAXES AND LICENSES 266 TOTAL EXPENSES $ 99,050 NET INVESTMENT INCOME $ 112,304 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS NET REALIZED GAIN ON TRANSACTIONS IN INVESTMENT SECURITIES $ 187,172 NET INCREASE IN UNREALIZED APPRECIATION OF INVESTMENTS 3,112,351 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS $ 3,299,523 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,411,827 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 THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)
1999 1998 INCREASE IN NET ASSETS OPERATIONS - NET INVESTMENT INCOME $ 112,304 $ 179,338 NET REALIZED GAIN ON TRANSACTIONS IN INVESTMENT SECURITIES 187,172 568,549 NET INCREASE IN UNREALIZED APPRECIATION OF INVESTMENTS 3,112,351 3,405,722 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,411,827 $4,153,609 NET EQUALIZATION CREDITS 730 531 DISTRIBUTIONS TO SHAREHOLDERS FROM - NET INVESTMENT INCOME - - NET REALIZED GAIN FROM INVESTMENT TRANSACTIONS - - RETURN OF CAPITAL - - NET CAPITAL SHARE TRANSACTIONS 989,492 611,980 TOTAL INCREASE IN NET ASSETS $ 4,402,049 $4,766,120 NET ASSETS: BEGINNING OF YEAR $ 48,433,113 $36,647,535 END OF THREE MONTHS $ 52,835,162 $41,413,655 THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE STATEMENTS.
F-11 BRIDGES INVESTMENT FUND, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 1999 (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.
1999 1998 NET CHANGE NET UNREALIZED APPRECIATION (DEPRECIATION): AGGREGATE GROSS UNREALIZED APPRECIATION ON SECURITIES $26,395,715 $19,425,849 AGGREGATE GROSS UNREALIZED DEPRECIATION ON SECURITIES (513,352) (223,563) NET $25,882,363 $19,202,286 $6,680,077
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. THE GAIN COMPUTED ON THE BASIS OF AVERAGE COST WOULD HAVE BEEN SUBSTANTIALLY THE SAME AS THAT REFLECTED IN THE ACCOMPANYING STATEMENT OF OPERATIONS. F-12 B. FEDERAL TAXES - THE FUND INTENDS TO COMPLY WITH THE REQUIREMENTS OF THE INTERNAL REVENUE CODE APPLICABLE TO REGULATED INVESTMENT COMPANIES AND NOT BE SUBJECT TO FEDERAL INCOME TAX. THEREFORE, NO INCOME TAX PROVISION IS REQUIRED. THE FUND ALSO INTENDS TO DISTRIBUTE ITS TAXABLE NET INVESTMENT INCOME AND REALIZED GAINS, IF ANY, TO AVOID THE PAYMENT OF ANY FEDERAL EXCISE TAXES. THE CHARACTER OF DISTRIBUTIONS MADE DURING THE YEAR FROM NET INVESTMENT INCOME OR NET REALIZED GAINS MAY DIFFER FROM ITS ULTIMATE CHARACTERIZATION FOR FEDERAL INCOME TAX PURPOSES. IN ADDITION, DUE TO THE TIMING OF DIVIDEND DISTRIBUTIONS, THE FISCAL YEAR IN WHICH AMOUNTS ARE DISTRIBUTED MAY DIFFER FROM THE YEAR THAT THE INCOME OR REALIZED GAINS OR LOSSES WERE RECORDED BY THE FUND. C. DISTRIBUTION TO SHAREHOLDERS - THE FUND ACCRUES INCOME DIVIDENDS TO SHAREHOLDERS ON A QUARTERLY BASIS AS OF THE EX-DIVIDEND DATE. DISTRIBUTIONS OF NET REALIZED GAINS ARE MADE ON AN ANNUAL BASIS TO SHAREHOLDERS AS OF 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. E. USE OF ESTIMATES THE PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES REQUIRES MANAGEMENT TO MAKE ESTIMATES AND ASSUMPTIONS THAT 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. (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. F-13 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 AS SPECIFICALLY IDENTIFIED IN THE INVESTMENT ADVISORY CONTRACT. THERE WERE NO AMOUNTS REIMBURSED IN THE THREE MONTHS ENDED MARCH 31, 1999. (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 THREE MONTHS ENDED MARCH 31, WAS:
1999 1998 UNITED STATES GOVERNMENT OBLIGATIONS $ -- $ -- OTHER SECURITIES 3,723,354 2,144,818 TOTAL COST $3,723,354 $2,144,818
NET PROCEEDS FROM SALES OF LONG-TERM INVESTMENTS DURING THE THREE MONTHS ENDED MARCH 31, WERE:
1999 1998 UNITED STATES GOVERNMENT OBLIGATIONS $ -- $ -- OTHER SECURITIES 977,905 1,341,699 TOTAL NET PROCEEDS $ 977,905 $1,341,699 TOTAL COST BASIS OF SECURITIES SOLD $ 790,733 $ 773,150
(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:
1999 1998 SHARES SOLD 35,551 25,050 SHARES ISSUED TO SHAREHOLDERS IN REINVESTMENT OF NET INVESTMENT INCOME AND REALIZED GAIN FROM SECURITY TRANSACTIONS 3,512 4,237 39,063 29,287 SHARES REDEEMED 10,718 8,783 NET INCREASE 28,345 20,504
VALUE OF CAPITAL STOCK ISSUED AND REDEEMED IS AS FOLLOWS:
1999 1998 SHARES SOLD $1,247,512 $ 754,163 SHARES ISSUED TO SHAREHOLDERS IN REINVESTMENT OF NET INVESTMENT INCOME AND REALIZED GAIN FROM SECURITY TRANSACTIONS 122,203 123,123 $1,369,715 $ 877,286 SHARES REDEEMED 380,223 265,306 NET INCREASE $ 989,492 $ 611,980
(7) DISTRIBUTION TO SHAREHOLDERS ON APRIL 13, 1999 A CASH DISTRIBUTION WAS DECLARED FROM NET INVESTMENT INCOME ACCRUED THROUGH MARCH 31, 1999. THIS DISTRIBUTION WAS CALCULATED AT $.075 PER SHARE AGGREGATING $108,250.02. THE DIVIDEND WILL BE PAID ON APRIL 19, 1999, TO SHAREHOLDERS OF RECORD ON APRIL 13, 1999. -----END PRIVACY-ENHANCED MESSAGE-----