-----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, ADcONz5aLiKKByNcz6HsEqkJ0cSXSZC2EEe3nf8Bu1l1vGhoJxqyqF+FlsLDdddA YEUdrMQOR+1f/YkKagG1Zw== 0000935069-96-000136.txt : 19961106 0000935069-96-000136.hdr.sgml : 19961106 ACCESSION NUMBER: 0000935069-96-000136 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960831 FILED AS OF DATE: 19961105 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: RBB FUND INC CENTRAL INDEX KEY: 0000831114 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05518 FILM NUMBER: 96654154 BUSINESS ADDRESS: STREET 1: 400 BELLEVUE PKWY STE 100 CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 3027911791 MAIL ADDRESS: STREET 1: 103 BELLEVUE PKWY STREET 2: SUITE 152 CITY: WILMINGTON STATE: DE ZIP: 19809 FORMER COMPANY: FORMER CONFORMED NAME: FUND INC /DE/ DATE OF NAME CHANGE: 19600201 N-30D 1 MORGAN KEEGAN ACCESS ANNUAL REPORT MORGAN KEEGAN ACCESS ACCOUNT [GRAPHIC OMITTED] ANNUAL REPORT BEDFORD SHARES AUGUST 31, 1996 MONEY MARKET PORTFOLIO MUNICIPAL MONEY MARKET PORTFOLIO GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO THE BEDFORD FAMILY THE RBB FUND, INC. ANNUAL INVESTMENT ADVISER'S REPORT Although this summer's weather remained on the cool side, the debate over Federal Reserve monetary policy became quite heated as the year progressed. By early July, a majority of Fed watchers were convinced that a rise in short-term interest rates was imminent, and pointed to July's strong employment report as evidence. The only question seemed to be the size and timing of the Fed's move. Would the Fed wait until its August meeting, or would they immediately raise the funds rate 25 or 50 basis points? Certainly, they pointed out, the jump in nonfarm payroll (+700,000 jobs) and the spike in hourly earnings (+9 cents) was cause for immediate action by the Fed to curb the economy and prevent a rekindling of inflation. However, as has often happened this year, economic reports that seemed to suggest either a business expansion or a slowdown were followed quite closely by reports that suggested otherwise. It seemed that after the winter's government shut downs and snowstorms, the predictability of economic numbers became a lost art in 1996. This same type of reversal of expectations occurred again in July following the strong jobs report. Within only a few weeks, signs of slower economic activity had tempered the certainty of a rate hike, and by the time Alan Greenspan spoke at his Humphrey-Hawkins testimony, he speculated that, "looking forward, there are a number of reasons to expect demands to moderate and economic activity to settle back toward a more sustainable pace in the months ahead." The Federal Reserve's forecast for growth is 2.5%-2.75% this year, falling to 1.75%-2.25% next year; while inflation should average about 3.0%-3.25% this year, and 2.75%-3.0% next year. Greenspan's remarks were very well received by the markets, and stocks and bonds rose sharply into early August. In addition, the expectation of higher short-term interest rates eased considerably, and by the time the Fed met on August 20, there was almost no one in the "tighter" camp. Short-term taxable interest rates have held steady at 5.25% (federal funds rate) for the last two quarters. The Federal Reserve's last move was on January 31, when they eased monetary policy to encourage economic growth, following news of a very weak fourth quarter 1995. At that time, market sentiment was biased towards additional easings of monetary policy and the short-term yield curve offered no incentive to extend. By mid-April, however, strong jobs reports worried the markets that the Fed would not only stop easing but might consider tightening. In response, the yield curve turned positive and rewarded longer average maturities with yield pick ups of 20-30 basis points. The Money Market and Government portfolios took advantage of this opportunity by moving their maturities to the 50-60 day range. For much of the last two quarters, investments of 3-12 months have outyielded overnight rates by 25-50 basis points. In the short-term municipal market, the usually predictable pattern of seasonal influences was interrupted this year by the federal budget impasse last winter, the possibility of changes to the tax code and volatility in the stock and bond markets. As in the taxable market, sentiment leaned towards higher rates, but the short-term municipal yield curve remained stubbornly flat. Yields on daily demand notes fluctuated widely during the year, between 2%-4%, depending on the day, month and level of supply versus demand. In June, for example, as supply fell, demand notes rose to yields over 4%, but as supply reentered the market in July, yields fell to 2.35%. By the end of August, New York City, California and Texas were all settling large new issues. The Municipal Portfolio took advantage of these new offerings to extend its average weighted maturity to the 50-day range. As always, all the Fund's portfolios emphasized high quality securities and highly liquid structures, in addition to providing competitive daily returns. Our credit research department employs fifteen professionals to approve and monitor the creditworthiness of every issue/issuer in which the portfolios invest. Finally, as of the date of this report, there are a number of proposed amendments to Rule 2a-7, the regulations which govern money market funds.The anticipated effective date of October 3 has been postponed by the SEC. We are following the situation closely and will be reporting to you in the future about the substance and timing of those changes. PNC Institutional Management Corporation (Please dial toll-free 800-533-7719 for questions regarding your account or contact your broker.) REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of The RBB Fund, Inc.: We have audited the accompanying statements of net assets of the Money Market, Municipal Money Market and Government Obligations Money Market Portfolios of The RBB Fund, Inc., as of August 31, 1996 and the related statements of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments held by the custodian and brokers as of August 31, 1996. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Money Market, Municipal Money Market and Government Obligations Money Market Portfolios of The RBB Fund, Inc. as of August 31, 1996 and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for each of the periods presented, in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania October 15, 1996 2 THE BEDFORD FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS AUGUST 31, 1996 PAR (000) VALUE ------- ------------- CERTIFICATES OF DEPOSIT--12.8% BANK NOTES--4.6% First National Bank of Boston 5.500% 01/13/97 ........................ $50,000 $ 50,000,000 Mellon Bank 5.540% 02/07/97 ........................ 50,000 50,000,000 ------------ 100,000,000 ------------ YANKEE DOLLAR CERTIFICATES OF DEPOSIT--8.2% Bank of Tokyo-Mitsubishi 5.600% 11/04/96 ........................ 25,000 25,000,000 Banque Nationale de Paris 5.430% 09/30/96 ........................ 50,000 50,000,392 Swedbank 5.530% 09/12/96 ........................ 30,000 30,000,090 5.440% 11/06/96 ........................ 75,000 75,001,356 ------------ 180,001,838 ------------ TOTAL CERTIFICATES OF DEPOSIT (Cost $280,001,838) ................ 280,001,838 ------------ COMMERCIAL PAPER--56.1% ASSET BACKED SECURITIES--5.8% Corporate Receivables Corp. 5.350% 11/21/96 ........................ 25,000 24,699,063 5.400% 01/15/97 ........................ 25,800 25,273,680 Cxc, Inc. 5.320% 11/20/96 ........................ 30,000 29,645,333 Sigma Finance, Inc. 5.420% 02/20/97 ........................ 50,000 48,705,222 ------------ 128,323,298 ------------ BANKS--2.3% Chase Manhattan Corp. 5.330% 01/10/97 ........................ 25,000 24,515,118 National City Corp. 5.270% 09/11/96 ........................ 25,000 24,963,403 ------------ 49,478,521 ------------ PAR (000) VALUE ------- ------------- CIGARETTES--3.0% American Brands, Inc. 5.300% 12/12/96 ..................... $21,000 $ 20,684,650 5.290% 12/13/96 ..................... 25,000 24,621,618 5.480% 01/06/97 ..................... 20,000 19,613,356 ------------ 64,919,624 ------------ FINANCE SERVICES--1.7% Countrywide Funding Corp. 5.450% 10/18/96 ..................... 38,000 37,729,619 ------------ GLASS, GLASSWARE, PRESSED OR BLOWN--2.3% Newell Co. 5.320% 09/12/96 ..................... 50,000 49,918,722 ------------ PERSONAL CREDIT INSTITUTIONS--10.7% BMW US Capital Corp. 5.340% 09/09/96 ..................... 33,196 33,156,607 5.300% 09/16/96 ..................... 50,000 49,889,583 Ford Motor Credit Corp. 5.430% 10/22/96 ..................... 50,000 49,615,375 5.400% 12/12/96 ..................... 50,000 49,235,000 General Motors Acceptance Corp. 5.580% 12/26/96 ..................... 30,000 29,460,600 5.460% 02/12/97 ..................... 25,000 24,378,167 ------------ 235,735,332 ------------ PETROLEUM REFINING--1.1% Repsol Int'l Finance B.V. 5.370% 12/27/96 ..................... 25,000 24,563,688 ------------ PHARMACEUTICAL PREPARATIONS--2.7% American Home Products Corp. 5.250% 09/03/96 ..................... 60,000 59,982,500 ------------ SEARCH, DETECTION, NAVIGATION, GUIDANCE AERONAUTIC SYSTEMS--4.5% Raytheon Co. 5.280% 09/17/96 ..................... 100,000 99,765,333 ------------ See Accompanying Notes to Financial Statements. 3 THE BEDFORD FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1996 PAR (000) VALUE -------- -------------- SECURITY BROKERS & DEALERS--12.9% Lehman Brothers Holdings Inc. 5.500% 09/12/96 .......................... $ 55,000 $ 54,907,569 Merrill Lynch & Co. Canandian DCP 5.500% 11/18/96 .......................... 50,000 49,404,167 Morgan Stanley Group, Inc. 5.400% 09/23/96 .......................... 25,000 24,917,500 5.300% 10/21/96 .......................... 50,000 49,631,945 5.310% 12/13/96 .......................... 30,000 29,544,225 Nomura Holding America, Inc. 5.510% 10/24/96 .......................... 25,000 24,797,201 5.380% 11/14/96 .......................... 50,000 49,447,056 -------------- 282,649,663 -------------- SHORT-TERM BUSINESS CREDIT INSTITUTIONS--9.1% American Express Credit Corp. 5.280% 09/05/96 .......................... 100,000 99,941,333 Sears Roebuck Acceptance Corp. 5.310% 09/04/96 .......................... 50,000 49,977,875 5.480% 10/31/96 .......................... 50,000 49,543,333 -------------- 199,462,541 -------------- TOTAL COMMERCIAL PAPER (Cost $1,232,528,841) ................ 1,232,528,841 -------------- MUNICIPAL BONDS--5.4% CALIFORNIA--0.9% San Bernardino County California Certificate of Participation County Center Refinancing Project, Series 1995 (LOC Canadian Imperial Bank of Commerce)(DOUBLE DAGGER) 5.650% 09/07/96 .......................... 7,800 7,800,000 Adventist Health Systems West Series 1988 (LOC-First Interstate Bank of California)(DAGGER) 3.750% 09/04/96 .......................... 12,925 12,925,000 -------------- 20,725,000 -------------- FLORIDA--0.1% Coral Springs, Florida Industrial Development Revenue (LOC Sun Bank, N.A.)(DOUBLE DAGGER) 5.650% 09/05/96 .......................... 2,900 2,900,000 -------------- PAR (000) VALUE ------- ----------- GEORGIA--0.4% De Kalb County Georgia Development Authority (Emory U.)(DOUBLE DAGGER) 5.450% 09/04/96 ...................... $10,100 $10,100,000 ----------- ILLINOIS--0.8% Barton Healthcare Taxable Revenue Bonds Series 1995 DN (LOC- American Nation Bank)(DAGGER) 5.550% 09/04/96 ...................... 12,455 12,455,000 Baylis Group Partnership Weekly Demand Taxable Bond Series 1992 (LOC-Societe Generale)(DOUBLE DAGGER) 5.650% 09/04/96 ...................... 600 600,000 Illinois Health Facilities Authority Convertible/ VRDN RB (The Streeterville CORP Project) Series 1993-B (LOC-First National Bank of Chicago)(DOUBLE DAGGER) 5.550% 09/04/96 ...................... 4,400 4,400,000 ----------- 17,455,000 ----------- KENTUCKY--0.2% Boone County Taxable IDR Refunding Bonds (Square D Company Project) Series 1994-B (LOC-Societe Generale) VRDN(DAGGER) 5.550% 09/04/96 ...................... 4,200 4,200,000 ----------- MINNESOTA--0.2% Fairview Hospital And Healthcare Services Taxable ADJ Convertible Extendable Securities Series 1994 (MBIA Insurance) VRDN(DAGGER) 5.550% 09/05/96 ...................... 5,100 5,100,000 ----------- MISSISSIPPI--0.9% Hinds County, Mississippi (LOC-RaboBank Nederland) IDRB VRDN(DAGGER) 5.450% 09/04/96 ...................... 1,400 1,400,000 5.450% 09/04/96 ...................... 2,155 2,155,000 See Accompanying Notes to Financial Statements. 4 THE BEDFORD FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1996 PAR (000) VALUE ------- ----------- MISSISSIPPI--(CONTINUED) Mississippi Business Finance Corp. Taxable IDRB (Bryan Foods, Inc. Project) Series 1994 (Sara Lee Corporation Guaranty) (LOC-Sun Bank, N.A.) VRDN(DAGGER) 5.550% 09/04/96 ..................... $14,000 $ 14,000,000 Mississippi Business Finance Corp. Taxable IDRB VRDN(DAGGER) 5.450% 09/07/96 ..................... 3,200 3,200,000 ------------ 20,755,000 ------------ NEW YORK--0.6% Health Insurance Plan of Greater NY adj/Convertible Extendable Securities Series 1990 (LOC-Morgan Guaranty Trust Company) VRDN(DAGGER) 5.500% 09/04/96 ..................... 12,300 12,300,000 ------------ NORTH CAROLINA--0.6% Community Health Systems, Inc. Taxable (LOC-First Union National Bank of North Carolina) Series 1991-A(DAGGER) 5.700% 09/04/96 ..................... 400 400,000 City of Ashville North Carolina (LOC-Wachovia Bank of N.C.) Tax Corp.(DAGGER) 5.400% 09/04/96 ..................... 12,700 12,700,000 ------------ 13,100,000 ------------ TEXAS--0.7% South Central Texas Industrial Development Corp. Taxable IDR Bonds (Rohr Industries Project Series 1990 (LOC-Citibank N.A.) VRDN(DAGGER) 5.550% 09/04/96 ..................... 14,800 14,800,000 ------------ TOTAL MUNICIPAL BONDS (Cost $121,435,000) ............. 121,435,000 ------------ PAR (000) VALUE ------- ------------ REVENUE ANTICIPATION NOTES--0.3% MANDATORY PUT BONDS--0.3% Bremen, Inc. Tax Adjustable Notes (LOC-Society National Bank) 5.500% 09/05/96 ........................ $ 6,000 $ 6,000,000 ------------ TOTAL REVENUE ANTICIPATION NOTES (Cost $6,000,000) .................. 6,000,000 ------------ CORPORATE OBLIGATIONS--10.2% BANKS--2.3% Norwest Corp.(DAGGER) 5.398% 09/28/96 ........................ 50,000 50,000,000 ------------ PERSONAL CREDIT INSTITUTIONS--0.9% General Motors Acceptance Corp. 5.410% 09/01/96(DAGGER) ................ 5,000 4,998,894 General Motors Acceptance Corp. 7.900% 03/12/97 ........................ 14,750 14,950,198 ------------ 19,949,092 ------------ SECURITY BROKERS & DEALERS--7.0% Bear Stearns & Co., Inc. 5.290% 03/11/97 ........................ 20,000 20,000,000 Goldman Sachs Group, LP 5.711% 11/06/96(DAGGER) ................ 53,000 53,000,000 Lehman Brothers Holdings Inc. 5.600% 09/05/96(DAGGER) ................ 50,000 50,000,000 Merrill Lynch & Co. 5.000% 12/15/96 ........................ 5,000 4,991,584 5.120% 02/27/97 ........................ 25,000 24,997,555 ------------ 152,989,139 ------------ TOTAL CORPORATE OBLIGATIONS (Cost $222,938,231) ................ 222,938,231 ------------ AGENCY OBLIGATIONS--2.5% Student Loan Marketing Association(DAGGER) 5.390% 09/03/96 ........................ 25,000 24,994,375 5.410% 09/03/96 ........................ 10,000 10,000,000 5.420% 09/03/96 ........................ 20,000 20,000,000 ------------ TOTAL AGENCY OBLIGATIONS (Cost $54,994,375) ................. 54,994,375 ------------ See Accompanying Notes to Financial Statements. 5 THE BEDFORD FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONCLUDED) AUGUST 31, 1996 PAR (000) VALUE ------- -------------- TIME DEPOSITS--12.6% Bank of Tokyo-Mitsubishi 5.375% 09/03/96 .......................... $76,800 $ 76,800,000 Dai-ichi Kangyo Bank 5.406% 09/05/96 .......................... 50,000 50,000,000 First National Bank of Boston 5.344% 09/05/96 .......................... 50,000 50,000,000 First Union National Bank of NC 5.250% 09/03/96 .......................... 100,000 100,000,000 -------------- TOTAL TIME DEPOSITS (Cost $276,800,000) .................. 276,800,000 -------------- TOTAL INVESTMENTS AT VALUE--99.9% (Cost $2,194,698,285*) ................... 2,194,698,285 OTHER ASSETS IN EXCESS OF LIABILITIES--0.1% ..................... 1,125,153 -------------- NET ASSETS (Applicable to 1,109,351,734 Bedford shares, 202,360 Cash Preservation shares, 561,873,247 Janney Montgomery Scott shares, 61,412 RBB shares, 524,367,399 Sansom Street shares and 800 other shares)--100.0% ............ $2,195,823,438 ============== NET ASSET VALUE, offering and redemption price per share ($2,195,823,438 (DIVIDE) 2,195,856,952) .. $1.00 ===== * Also cost for Federal income tax purposes (DAGGER) Variable Rate Obigations -- The interest rate shown is the rate as of August 31, 1996 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. (DOUBLE DAGGER) Put Bonds -- Maturity date is the put date. INVESTMENT ABBREVIATIONS VRDN ............................Variable Rate Demand Note LOC ......................................Letter of Credit IDR.........................Industrial Development Revenue See Accompanying Notes to Financial Statements. 6 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS AUGUST 31, 1996 PAR (000) VALUE ------- ---------- MUNICIPAL BONDS--99.8% ALABAMA--0.7% Alabama Special Care Facilities Authority St. Vincent's Daughters of Charity MB(AA, Aa)(DOUBLE DAGGER) 4.000% 11/01/96 ....................... $ 1,735 $1,736,028 Livingston IDR Toin Corp USA Project DN / (Ind. Bank of Japan LOC) [A-1+, VMIG-1](DAGGER) 4.150% 09/07/96 ....................... 1,000 1,000,000 ---------- 2,736,028 ---------- ALASKA--0.5% Alaska Industrial Development & Export Authority RB Series 1984-5 (LOC-Seattle First National Bank) DN [A-1](DAGGER) 3.600% 09/07/96 ....................... 2,045 2,045,000 ---------- ARIZONA--1.8% Flagstaff IDA DN / (LOC-Wells Fargo) [A, A-1](DAGGER) 3.550% 09/07/96 ....................... 7,755 7,755,000 ---------- ARKANSAS--0.4% Arkansas State Development Authority Health Care Facility Sisters of Mercy DN/ (ABM-AMRO Bank N.V. LOC) [A-1+, VMIG-1](DAGGER) 3.450% 09/07/96 ....................... 1,700 1,700,000 ---------- CALIFORNIA--14.8% California Pollution Control DN / (Society General LOC) [A-1+](DAGGER) 3.150% 09/30/96 ....................... 2,000 2,000,000 California Pollution Control Finance Authority (Pacific Gas & Electric Co. Project) Series 1996 C DN (Bank of America LOC) [A-1+](DAGGER) 3.850% 09/07/96 ....................... 8,200 8,200,000 Los Angeles County Housing Authority Malibu Meadows Project Series A DN (LOC- Sumitomo Bank) [A-1](DAGGER) 3.500% 09/07/96 ....................... 4,100 4,100,000 PAR (000) VALUE ------- ----------- CALIFORNIA--(CONTINUED) Los Angeles County Series 1996 A TRAN (Credit Suisse LOC) [SP-1+, MIG-1](DOUBLE DAGGER) 4.500% 06/30/97 .............................. $10,315 $10,371,569 Oakland (LOC- Natwest PLC) DN(DAGGER) 3.750% 09/07/96 .............................. 11,600 11,600,000 San Bernardino County TRAN / (Landesbank Hessen- Thuringen LOC) [SP-1+, MIG-1] 4.500% 06/30/97 .............................. 5,000 5,024,890 Southeast Resource Recovery Facility Authority Lease RB DN [A-1, VMIG-1](DAGGER) 3.550% 09/07/96 .............................. 7,500 7,500,000 State of California 1996-97 RAN [SP-1+, MIG-1] 4.500% 06/30/97 .............................. 7,000 7,029,519 State of California RAN Series C-5 / (Bank of America LOC) [A-1+, MIG] 3.850% 09/07/96 .............................. 1,000 1,000,000 Washington Township Hospital District Alemeda County DN / (Ind. Bank of Japan LOC)(DAGGER) 3.450% 09/07/96 .............................. 5,300 5,300,000 ----------- 62,125,978 ----------- COLORADO--1.8% Colorado State General Fund Revenue Series 1996 A TRAN [SP-1+, MIG-1] 4.500% 06/27/97 .............................. 5,000 5,025,623 Moffat County DN [A-1+, P-1](DAGGER) 3.550% 09/07/96 .............................. 2,400 2,400,000 ----------- 7,425,623 ----------- CONNECTICUT--0.7% Connecticut State of Special Assessment Unemployment Compensation Advance Fund Revenue (Connecticut Unemployment Project) Series 1993 C MB (FGIC Insurance) [A-1+, VMIG-1](DOUBLE DAGGER) 3.900% 07/01/97 .............................. 3,000 3,000,000 ----------- See Accompanying Notes to Financial Statements. 7 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1996 PAR (000) VALUE ------- ----------- DELAWARE--0.7% The Delaware Economic Development Authority Gas Facilities Refunding (Delmarva Power & Light Project) Series 1993 C (Delmarva Power & Light Corporate Obligation) RB DN [VMIG-1](DAGGER) 3.650% 09/07/96 ......................... $ 3,000 $ 3,000,000 ----------- FLORIDA--1.4% Florida Housing Finance Agency DN / (Wells Fargo Bank LOC) [A-1](DAGGER) 3.850% 09/30/96 ......................... 3,000 3,000,000 Indian River County Hospital District Sunhealth Network MB / (Kredietbank LOC) [A-1+, VMIG-1](DOUBLE DAGGER) 3.700% 10/08/96 ......................... 3,000 3,000,000 ----------- 6,000,000 ----------- GEORGIA--3.6% Atlanta Urban Residential Finance Authority RB DN (Residential Construction -- Summerhill Project) / (First Union National Bank of North Carolina LOC) [A-1](DAGGER) 3.550% 09/07/96 ......................... 3,000 3,000,000 Brunswick and Glynn Development Authority Sewage Facility RB DN for Georgia-Pacific Corp. Project (LOC-Commerce Bank) Series 1996 [Aa2](DAGGER) 3.650% 09/07/96 ......................... 3,000 3,000,000 Carrollton Payroll Development Authority Certificates RAN [Aa3] 3.650% 09/07/96 ......................... 6,000 6,000,000 Forsyth County IDA RB for American Boa, Inc. Project (LOC- Dresdner Bank A.G.) DN(DAGGER) 3.550% 09/07/96 ......................... 3,000 3,000,000 ----------- 15,000,000 ----------- PAR (000) VALUE ------- ------------ ILLINOIS--8.8% Chicago O'Hare International Airport DN (American Airlines) Series C / (LOC- Royal Bank of Canada) [VMIG-1](DAGGER) 3.750% 09/01/96 ....................... $ 1,200 $ 1,200,000 Health Facility Authority DN (Central Health Care and Northwest Community Hospital) / (Sumitomo Bank LOC) [VMIG-1](DAGGER) 3.450% 09/07/96 ....................... 1,545 1,545,000 Illinois Development Finance Authority CHS Acquisition Corp. Project DN / (ABM-AMRO Bank N.V. LOC) [A-1+](DAGGER) 3.850% 09/07/96 ....................... 5,035 5,035,000 Illinois Development Finance Authority RB DN (Chicago Symphony Orchestra Project) / (Northern Trust LOC) [A-1, VMIG-1](DAGGER) 3.500% 09/07/96 ....................... 8,400 8,400,000 Illinois Health Facility Authority Carle Foundation Project DN / (Northern Trust LOC) [VMIG-1](DAGGER) 3.550% 09/07/96 ....................... 2,600 2,600,000 Illinois Housing Development Authority Multifamily Housing Bonds DN / (Landesbank Hessen-Thuringen LOC) [A-1+](DAGGER) 3.500% 09/07/96 ....................... 1,000 1,000,000 Illinois Housing Development Authority Series C-2 DN / (Society General LOC) [VMIG-1](DAGGER) 3.450% 09/03/96 ....................... 2,200 2,200,000 Illinois Student Loan Authority Community Student Loan RB DN / (Bank of America LOC) [VMIG-1](DAGGER) 3.600% 09/07/96 ....................... 7,800 7,800,000 O'Hare International Airport Special Facility RB DN / (Society General LOC) [Aa2, VMIG-1](DAGGER) 3.600% 09/07/96 ....................... 5,800 5,800,000 Southwestern Development Authority (Shell Oil Co. Wood River Project) Series 1995 MB [Aa2, VMIG-1](DOUBLE DAGGER) 3.950% 09/01/96 ....................... 1,375 1,375,000 ----------- 36,955,000 ----------- See Accompanying Notes to Financial Statements. 8 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1996 PAR (000) VALUE ------- ---------- INDIANA--9.5% Bremen IDA RB Series 1996 A Universal Bearings, Inc. Project Private Placement DN / (Society National Bank of Cleveland LOC)(DAGGER) 3.800% 09/07/96 ........................ $ 5,000 $5,000,000 Indiana Development Finance Authority IDA RB DN (Enterprise Center I Project) / (LOC-Society National Bank of Cleveland) [A-1+](DAGGER) 3.800% 09/07/96 ........................ 2,900 2,900,000 Indiana Development Finance Authority IDA RB DN (Enterprise Center II, Project) / (LOC-Society National Bank of Cleveland) [A-1+](DAGGER) 3.800% 09/07/96 ........................ 5,000 5,000,000 Indiana Development Finance Authority IDA RB DN (Enterprise Center III Project) / (LOC-Society National Bank of Cleveland) [A-1+, AA-](DAGGER) 3.800% 09/07/96 ........................ 4,500 4,500,000 Indiana Development Finance Authority IDA RB DN (Enterprise Center IV Project) / (LOC-Society National Bank of Cleveland) [A-1+, AA-](DAGGER) 3.800% 09/07/96 ........................ 2,600 2,600,000 Indiana Health Facility Authority Daughters of Charity for St. Mary's Medical DN [AA, Aa](DAGGER) 4.000% 11/01/96 ........................ 840 840,497 La Porte County Economic Development RB DN (Pedcor Investments -- Woodland Crossing) / (Federal Home Loan Bank LOC) [VMIG-1, Aaa](DAGGER) 3.600% 09/07/96 ........................ 2,000 2,000,000 Orleans Economic Development RB for Almana Limited Liability Co. Project Series 1995 (LOC-National Bank of Detroit) DN(DAGGER) 3.650% 09/07/96 ........................ 5,400 5,400,000 Portage, City of Economic Development RB DN (Breckenridge Apartments Project) / (Comerica Bank Detroit LOC) [A-1](DAGGER) 3.650% 09/07/96 ........................ 4,650 4,650,000 PAR (000) VALUE ------- ----------- INDIANA--(CONTINUED) South Bend Redevelopment Authority (College Football Hall of Fame Project) Series DN (Fuji Bank LOC) [VMIG-1](DAGGER) 4.000% 09/07/96 ...................... $ 4,100 $ 4,100,000 Tippencanoe DN / (Bank of New York LOC) [Aa3, VMIG-1](DAGGER) 3.700% 09/07/96 ...................... 3,000 3,000,000 ----------- 39,990,497 ----------- IOWA--1.9% Iowa Finance Authority IDA RB DN (Sauer-Sundstrand Co. Project) / (Bayerische LB Girozentrale LOC) [P-1](DAGGER) 3.600% 09/07/96 ...................... 4,000 4,000,000 Iowa Finance Authority Tax-Exempt Adjustable Mode IDA RB DN (Dixie Bedding Co. Project) Series 1995 / (Wachovia LOC) [Aa2](DAGGER) 3.600% 09/07/96 ...................... 3,000 3,000,000 Osceola IDA RB (Babson Brothers Co. Projects) Series 1986 DN / (Bank of New York LOC) [VMIG-1](DAGGER) 3.700% 09/07/96 ...................... 1,100 1,100,000 ----------- 8,100,000 ----------- KANSAS--2.8% Burlington PCR RB MB (Kansas City Power & Light Company) / (Deutsche Bank LOC) [A-1+, P-1](DOUBLE DAGGER) 3.650% 10/10/96 ...................... 2,000 2,000,000 Butler County Solid Waste Disposal Facilities RB DN [VMIG-1, A1](DAGGER) 4.000% 09/07/96 ...................... 2,000 2,000,000 Lawrence County Project IDA RB Series A RAM Co. Project / (Wachovia LOC) [A-1+, VMIG-1](DAGGER) 3.600% 09/05/96 ...................... 2,125 2,125,000 Shawnee IDA RB Thrall Enterprises, Inc. Project DN (LOC-ABM-AMRO Bank N.V.)[A-1+](DAGGER) 3.900% 09/07/96 ...................... 5,700 5,700,000 ----------- 11,825,000 ----------- See Accompanying Notes to Financial Statements. 9 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1996 PAR (000) VALUE ------- ----------- KENTUCKY--5.5% Clark County PCR RB MB (East Kentucky Power Cooperative, Inc.) [A-1+, VMIG-1](DOUBLE DAGGER) 3.400% 10/15/96 .......................... $ 2,000 $ 2,000,000 Hopkinsville IDA RB Douglas Autotech Corp. Project Series 1995 DN / (Ind. Bank of Japan LOC) [A, A-1](DAGGER) 4.150% 09/07/96 .......................... 7,700 7,700,000 Hopkinsville RB (American Precision Machinery) Series 1990 DN / (Mitsubishi Bank LOC) [VMIG-1](DAGGER) 3.650% 09/07/96 .......................... 3,600 3,600,000 Maysville, City of Solid Waste Disposal Facilities RB MB [A-1, P-1](DOUBLE DAGGER) 3.700% 09/12/96 .......................... 10,000 10,000,000 ----------- 23,300,000 ----------- LOUISIANA--3.4% Ascension Parish RB DN BASF Corp. [P-1, Aa3](DAGGER) 3.550% 09/07/96 .......................... 2,800 2,800,000 East Baton Rouge Mortgage Finance Authority MB Single Family Mortgage Purchase Bonds / (FNMA LOC) [VMIG-1](DOUBLE DAGGER) 3.400% 10/03/96 .......................... 2,910 2,910,000 East Baton Rouge Parish Pacific Corp. Project DN / (Ind. Bank of Japan LOC) [Aaa, VMIG-1](DAGGER) 3.850% 09/07/96 .......................... 6,500 6,500,000 Saint Charles PCR Series 1991 Shell Oil Co. DN [A-1+, VMIG-1](DAGGER) 3.950% 09/01/96 .......................... 1,900 1,900,000 ----------- 14,110,000 ----------- MARYLAND--3.2% Howard County Bluffs at Clary's Forest Apartment Facility Series 1995 DN / (FNB Maryland LOC) [A-1](DAGGER) 3.900% 09/07/96 .......................... 5,800 5,800,000 PAR (000) VALUE ------- ----------- MARYLAND--(CONTINUED) Maryland State Community Development Adminstration Department Single Family Housing Bonds Project -- 2nd Series MB [VMIG-1](DOUBLE DAGGER) 3.550% 10/01/96 ........................ $ 7,835 $ 7,835,000 ----------- 13,635,000 ----------- MICHIGAN--0.6% Michigan State Hospital Finance Authority Daughters of Charity MB [AA, Aa](DOUBLE DAGGER) 4.000% 11/01/96 ........................ 875 875,518 Michigan State Strategic Fund Limited Obligation RB DN / (Comerica Bank Detroit LOC) [A-1, P-1](DAGGER) 3.650% 09/07/96 ........................ 800 800,000 Northville IDA (Thrifty Northville Project) Series 1984 DN / (LOC-FNB Chicago) [P-1](DAGGER) 3.525% 09/07/96 ........................ 1,000 1,000,000 ----------- 2,675,518 ----------- MISSOURI--3.3% City of Berkeley IDA RB Exempt Facility DN (St. Louis Air Cargo Services, Inc. Project) / (LOC-Sumitomo Bank) [A-1](DAGGER) 3.750% 09/07/96 ........................ 5,200 5,200,000 City of Kansas IDA RB (Mid-America Health Services, Inc. Project) Series 1984 DN / (Bank of New York LOC) [A-1](DAGGER) 3.650% 09/07/96 ........................ 1,100 1,100,000 Kansas City IDA Demand Exempt Facility RB (K.C. Air Cargo Services, Inc. Project) DN / (LOC-Mellon Bank) [A-1](DAGGER) 3.750% 09/07/96 ........................ 7,600 7,600,000 ----------- 13,900,000 ----------- See Accompanying Notes to Financial Statements. 10 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1996 PAR (000) VALUE ------- ----------- NEBRASKA--0.9% Lancaster Sun-Husker Foods, Inc. Project DN / (Bank of Tokyo LOC) [A-1+](DAGGER) 4.150% 09/07/96 ......................... $ 3,800 $ 3,800,000 ----------- NEVADA--0.9% Clark County Airport System Subordinate Lien RB DN Series 1995 A-2 / (Toronto Dominion LOC) [A-1+, VMIG-1](DAGGER) 3.600% 09/07/96 ......................... 1,680 1,680,000 Clark County IDA RB DN / (Swiss Bank LOC) [A-1+, VMIG-1](DAGGER) 3.950% 09/01/96 ......................... 2,300 2,300,000 ----------- 3,980,000 ----------- NEW HAMPSHIRE--4.8% Health and Higher Education Facility Authority Veteran Hospital Assoc. DN Series 1985 E / (AMBAC Insurance) [A-1+](DAGGER) 3.400% 09/07/96 ......................... 200 200,000 New Hampshire Higher Education & Health Facility DN (AMBAC Insurance) [A-1+, VMIG-1](DAGGER) 3.450% 09/07/96 ......................... 600 600,000 New Hampshire State Housing Finance Authority Multifamily RB Countryside Project DN / (General Electric Capital Corp. LOC) [VMIG-1](DAGGER) 3.650% 09/07/96 ......................... 14,700 14,700,000 New Hampshire State Housing Finance Authority Single Family Housing Bond MB / (FGIC Insurance) [VMIG-1](DOUBLE DAGGER) 3.650% 01/15/97 ......................... 4,500 4,500,000 ----------- 20,000,000 ----------- NORTH CAROLINA--0.1% Mecklenburg County Industrial Facility and Pollution Control Financing Authority (Edgcomb Metals Co. Project) Series 1984 DN / (Banque Nationale de Paris LOC)(DAGGER) 3.500% 09/07/96 ......................... 300 300,000 ----------- PAR (000) VALUE ------- ----------- NORTH DAKOTA--0.8% North Dakota Housing Finance Agency Housing Finance Program Bonds Home Mortgage Finance Program DN / (FGIC Insurance) [VMIG-1](DAGGER) 3.850% 04/03/97 ........................ $ 3,500 $ 3,500,000 ----------- OKLAHOMA--0.5% Oklahoma Development Finance Authority Shawnee Funding Limited DN / (Bank of Nova Scotia LOC)(DAGGER) 3.650% 09/07/96 ........................ 2,000 2,000,000 ----------- PUERTO RICO--0.1% Puerto Rico Industrial Medical Health Education and Environmental PCR (Anna G. Mendez Project) DN / (LOC-Bank of Tokyo) [A-1](DAGGER) 3.550% 09/07/96 ........................ 600 600,000 ----------- RHODE ISLAND--0.5% Rhode Island Housing & Mortgage Finance Corp. Convertible Home Ownership Opportunity Bonds Series 19 D MB / (Society General LOC) [A-1+, VMIG-1](DOUBLE DAGGER) 3.550% 01/30/97 ........................ 2,000 2,000,000 ----------- SOUTH CAROLINA--3.7% Anderson County IDA RB for Culp, Inc. Project DN / (Wachovia LOC)(DAGGER) 3.600% 09/07/96 ........................ 6,580 6,580,000 Marlboro County Solid Waste Disposal Facilities RB DN (Willamette Industries, Inc. Project) Series 1995 (LOC- Deutsche Bank A.G.) [A-1](DAGGER) 4.050% 09/07/96 ........................ 9,000 9,000,000 ----------- 15,580,000 ----------- TENNESSEE--2.5% Memphis General Improvement DN / (LOC-West Deutsche Landesbank) [A-1+, VMIG-1](DAGGER) 3.600% 09/07/96 ........................ 1,000 1,000,000 See Accompanying Notes to Financial Statements. 11 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1996 PAR (000) VALUE ------- ----------- TENNESSEE--(CONTINUED) Metropolitan Nashville Airport Authority, Airport Improvement Series 1993 RB DN / (FGIC Insurance) [A-1+, VMIG-1](DAGGER) 3.500% 09/04/96 ...................... $ 1,100 $ 1,100,000 Montgomery County Public Building Authority County Loan Pool G.O. DN / (NCNB LOC) [A-1](DAGGER) 3.550% 09/07/96 ...................... 2,400 2,400,000 Oak Ridge Municipal Solid Waste Disposal Facility Bonds Series 1996 M4 Environmental Project DN / (Sunbank LOC)(DAGGER) 3.650% 09/07/96 ...................... 6,000 6,000,000 ----------- 10,500,000 ----------- TEXAS--6.9% Angelina and Neches River Authority Solid Waste Disposal RB MB [A-1, P-1](DOUBLE DAGGER) 3.800% 10/11/96 ...................... 5,300 5,300,000 Brazos River Harbor Navigation (Dow Chemical Co. Project) Series 1988 DN [P-1](DAGGER) 3.700% 10/11/96 ...................... 2,000 2,000,000 Harris County Health Facilities Development Corp. Hospital RB DN [A-1+](DAGGER) 3.750% 09/01/96 ...................... 7,200 7,200,000 San Antonio Housing Finance Corp. (Wellington Place Apartments) (LOC-Banc One) Series 1995 A DN [A-1+, AA](DAGGER) 3.600% 09/07/96 ...................... 3,000 3,000,000 State of Texas TAN [SP-1+, MIG] 4.750% 08/29/97 ...................... 7,000 7,053,017 Texas State Veterans Housing Authority MB(DOUBLE DAGGER) 3.900% 11/06/96 ...................... 4,000 4,000,000 Travis County Housing Finance Authority MB(DOUBLE DAGGER) 4.000% 11/01/96 ...................... 430 430,255 ----------- 28,983,272 ----------- PAR (000) VALUE ------- ----------- UTAH--2.0% Intermountain Power Agency Power Supply Refunding Series 1985 E (Spa- Bank of America) RB MB / (Morgan Guaranty LOC) [A-1, VMIG-1](DOUBLE DAGGER) 3.930% 06/16/97 .......................... $ 2,000 $2,000,000 Salt Lake Airport RB DN (LOC-Credit Suisse) [A-1+, VMIG-1](DAGGER) 3.450% 09/07/96 .......................... 2,300 2,300,000 Utah State Board of Regents Student Loan Revenue Series C RB DN / (Dresdner Bank LOC) [A-1+, VMIG-1](DAGGER) 3.550% 09/07/96 .......................... 3,400 3,400,000 Utah State Board of Regents Student Loan Revenue Series L RB DN / (Dresdner Bank LOC) [A-1+, VMIG-1](DAGGER) 3.550% 09/07/96 .......................... 900 900,000 ---------- 8,600,000 ---------- VERMONT--0.2% Vermont Educational & Health Buildings Agency Hospital RB (AMBAC Insurance) DN [A-1+, VMIG-1](DAGGER) 3.450% 09/07/96 .......................... 855 855,000 ---------- VIRGINIA--5.7% Alexandria IDA Adjustable Tender Resource Recovery (Alexandria/ Arlington Waste-to-Energy Facility) Series 1986 A DN / (Swiss Bank LOC) [VMIG-1, A-1+](DAGGER) 3.900% 09/01/96 .......................... 200 200,000 Alexandria Redevelopment & Housing Authority Multi-Family Housing Series A DN [A-1](DAGGER) 3.550% 09/07/96 .......................... 3,100 3,100,000 Capital Region Airport Commission (Richmond International Airport Project) Series 1995 B DN / (AMBAC Insurance ) [A-1+, VMIG-1](DAGGER) 3.300% 09/07/96 .......................... 1,700 1,700,000 Capital Region Airport Commission (Richmond International Airport Project) Series 1995 C DN / (AMBAC Insurance) [VMIG-1, A-1+](DAGGER) 3.450% 09/07/96 .......................... 2,500 2,500,000 See Accompanying Notes to Financial Statements. 12 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1996 PAR (000) VALUE ------- ----------- VIRGINIA--(CONTINUED) Culpeper Town IDA Residential Care Facility RB DN / (NCNB LOC) [A-1](DAGGER) 3.550% 09/07/96 ......................... $ 500 $ 500,000 Fairfax County IDA DN Series 1988 C / (LOC-Credit Suisse) [A-1+](DAGGER) 3.650% 09/07/96 ......................... 200 200,000 King George County IDA (Birchwood Power Partners, L.P. Project) Series 1995 DN / (Credit Suisse LOC) [A-1+](DAGGER) 4.000% 09/07/96 ......................... 1,300 1,300,000 Louisa County IDA Pooled Financing Series 1995 DN (LOC-Nations Bank) [A-1](DAGGER) 3.500% 09/07/96 ......................... 2,500 2,500,000 Lynchburg Hospital RB Federal Housing Authority Mid-Atlantic Series 1985 E DN / (AMBAC Insurance) [A-1](DAGGER) 3.350% 09/07/96 ......................... 800 800,000 Lynchburg IDA Hospital Facilities (Mid-Atlantic States Capital Asset Finance Project) Series 1985 C DN / (AMBAC Insurance) [A-1+, VMIG-1](DAGGER) 3.350% 09/07/96 ......................... 500 500,000 Lynchburg IDA Hospital Facilities (Mid-Atlantic States Capital Asset Finance Project) Series 1985 G DN (AMBAC Insurance) [VMIG-1](DAGGER) 3.350% 09/07/96 ......................... 7,900 7,900,000 Peninsula Port Authority Port Facility (Shell Coal and Terminal Co.) Series 1987 DN (AMBAC Insurance) [Aaa, A-1+](DAGGER) 3.800% 09/01/96 ......................... 1,000 1,000,000 Peninsula Port Authority Dominion Terminal Series 1987 D MB / (Barclays Bank LOC) [A1+, P-1](DOUBLE DAGGER) 3.850% 09/01/96 ......................... 800 800,000 PAR (000) VALUE ------- ----------- VIRGINIA--(CONTINUED) Peninsula Port IDA RB (Allied Signal, Inc. Project) Series 1993 (Allied Signal Corp. Obligation) DN [A-1](DAGGER) 3.650% 09/07/96 ............................ $ 1,000 $ 1,000,000 ----------- 24,000,000 ----------- WASHINGTON--1.2% Port of Seattle IDA DN (Alaska Airlines Project) / (Bank of NY LOC) [A-1](DAGGER) 3.600% 09/07/96 ......................... 4,580 4,580,000 Washington State Adjustable Rate G.O. Bonds DN / (Landesbank Hessen LOC) [A-1+, VMIG-1](DAGGER) 3.500% 09/07/96 ......................... 400 400,000 ----------- 4,980,000 ----------- WEST VIRGINIA--2.5% Grant County Municipal Solid Waste MB [VMIG-1](DOUBLE DAGGER) 3.850% 09/10/96 ......................... 5,000 5,000,000 Marshall County IDA US/Canada Project DN / (Harris Trust & Savings Bank LOC) [A-1+, AA-](DAGGER) 3.650% 09/07/96 ......................... 3,500 3,500,000 West Virginia Hospital Finance Authority Hospital RB DN (VHA Mid-Atlantic States, Inc. Capital Asset) (AMBAC Insurance) [A-1+, VMIG-1](DAGGER) 3.450% 09/07/96 ......................... 600 1,200,000 West Virginia Hospital Finance Authority Hospital RB DN (Mid-Atlantic Capital Finance Project) Series 1985 C DN (AMBAC Insurance) [A-1+, VMIG-1](DAGGER) 3.450% 09/07/96 ......................... 700 700,000 ----------- 10,400,000 ----------- WISCONSIN--1.1% Carlton DN Wisconsin Power & Light Project [P-1](DAGGER) 3.600% 09/07/96 ......................... 4,800 4,800,000 ----------- See Accompanying Notes to Financial Statements. 13 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONCLUDED) AUGUST 31, 1996 VALUE ------------ TOTAL INVESTMENTS AT VALUE--99.8% (Cost $420,156,916*) $420,156,916 OTHER ASSETS IN EXCESS OF LIABILITIES--0.2% 731,430 ------------ NET ASSETS (Applicable to 202,009,609 Bedford shares 129,398,582 Bradford shares 115,765 Cash Preservation shares 89,426,172 Janney Montgomery Scott shares, 5,143 RBB shares and 800 other shares)--100.0% $420,888,346 ============ NET ASSET VALUE, offering and redemption price per share ($420,888,346 (DIVIDE) 420,956,071) $1.00 ===== * Also cost for Federal income tax purposes. (DAGGER) Variable Rate Demand Notes -- The interest rate shown is the rate as of August 31, 1996 and the maturity shown is the longer of the next interest readjustment date or the date the principal amount shown can be recovered through demand. (DOUBLE DAGGER) Put Bonds -- Maturity date is the put date. The Moody's Investor Service, Inc. and Standard and Poor's Ratings Group's ratings indicated are the most recent ratings available at August 31, 1996. These ratings have not been audited by the Independent Accountants, and, therefore, are not covered by the report of Independent Accountants. INVESTMENT ABBREVIATIONS BAN.................................Bond Anticipation Note DN.............................................Demand Note GO.....................................General Obligations LOC.......................................Letter of Credit IDA.......................Industrial Development Authority MB..........................................Municipal Bond PCR..............................Pollution Control Revenue RAN..............................Revenue Anticipation Note RAW..........................Revenue Anticipation Warrants RB............................................Revenue Bond TAN..................................Tax Anticipation Note TECP...........................Tax Exempt Commercial Paper TRAN.....................Tax and Revenue Anticipation Note See Accompanying Notes to Financial Statements. 14 THE BEDFORD FAMILY THE RBB FUND, INC. GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS AUGUST 31, 1996 PAR (000) VALUE -------- ------------ AGENCY OBLIGATIONS--53.8% FEDERAL FARM CREDIT BANK--8.1% 5.120% 09/04/96(DAGGER) ..................... $ 15,000 $ 14,998,280 5.400% 04/01/97 ............................. 30,000 29,977,099 ------------ 44,975,379 ------------ FEDERAL HOME LOAN BANK--8.1% 5.277% 09/02/96(DAGGER) ..................... 20,000 19,998,784 5.238% 09/20/96(DAGGER) ..................... 15,000 14,999,434 5.560% 10/25/96 ............................. 10,000 9,997,291 ------------ 44,995,509 ------------ FEDERAL NATIONAL MORTGAGE ASSOCIATION--28.6% 5.370% 09/03/96(DAGGER) ..................... 10,000 10,000,000 5.410% 09/03/96(DAGGER) ..................... 10,000 9,994,465 5.465% 09/03/96(DAGGER) ..................... 10,000 9,999,787 5.348% 09/06/96(DAGGER) ..................... 20,000 19,992,305 5.337% 09/17/96(DAGGER) ..................... 20,000 19,990,167 5.310% 10/18/96 ............................. 15,000 14,996,237 5.320% 11/21/96(DAGGER) ..................... 25,000 24,992,910 5.270% 11/26/96 ............................. 20,000 19,748,211 5.530% 01/10/97 ............................. 15,000 14,698,154 5.240% 01/15/97 ............................. 15,000 14,703,067 ------------ 159,115,303 ------------ STUDENT LOAN MARKETING ASSOCIATION(DAGGER)--9.0% 5.400% 09/03/96 ............................. 9,000 8,998,786 5.410% 09/03/96 ............................. 5,000 5,000,000 5.420% 09/03/96 ............................. 5,000 4,999,414 5.460% 09/03/96 ............................. 15,000 14,996,128 5.585% 09/03/96 ............................. 3,850 3,851,055 5.610% 09/03/96 ............................. 12,100 12,105,327 ------------ 49,950,710 ------------ TOTAL AGENCY OBLIGATIONS (Cost $299,036,901) ..................... 299,036,901 ------------ PAR (000) VALUE ------- ------------ U. S. TREASURY OBLIGATIONS--7.2% U.S. TREASURY NOTES--7.2% 6.875% 02/28/97 ...................... $20,000 $ 20,159,607 6.875% 03/31/97 ...................... 10,000 10,075,608 6.500% 04/30/97 ...................... 10,000 10,050,993 ------------ TOTAL U. S. TREASURY OBLIGATIONS (Cost $40,286,208) ............... 40,286,208 ------------ REPURCHASE AGREEMENTS--38.5% Aubrey G. Lanston & Co. Inc. 5.200% 09/03/96 ...................... 92,000 92,000,000 (Agreement dated 08/30/96 to be repurchased at $92,053,156, collateralized by $44,562,500 U.S. Treasury Bond 6.25% due 08/15/23 and collateralized by $47,439,700 U.S. Treasury Notes 7.75% to 8.50% due 12/31/99 to 11/15/00. Market value of collateral is $92,002,200.) Donaldson, Lufkin & Jenrette 5.310% 09/03/96 ...................... 102,200 102,200,000 (Agreement dated 08/30/96 to be repurchased at $102,260,298, collateralized by $110,810,000 Federal Home Loan Mortgage Corp. due 08/15/26 Market value of collateral is $105,270,608.) Morgan Stanley & Co. 5.270% 09/20/96 ...................... 20,000 20,000,000 (Agreement dated 08/22/96 to be repurchased at 20,084,906, collateralized by $25,860,948 Federal Home Loan Mortgage Corp. 0% to 8.00% due 12/01/09 to 06/15/35. Market value of collateral is $20,405,022.) ------------ TOTAL REPURCHASE AGREEMENTS (Cost $214,200,000) .............. 214,200,000 ------------ See Accompanying Notes to Financial Statements. 15 THE BEDFORD FAMILY THE RBB FUND, INC. GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONCLUDED) AUGUST 31, 1996 VALUE ------------ TOTAL INVESTMENTS AT VALUE--99.5% (COST $553,523,109*).................. $553,523,109 OTHER ASSETS IN EXCESS OF LIABILITIES--0.5%.................. 3,023,896 ------------ NET ASSETS (Applicable to 192,603,016 Bedford shares, 57,191,735 Bradford shares, 306,763,729 Janney Montgomery Scott shares and 800 other shares)--100%......................... $556,547,005 ============ NET ASSET VALUE, offering and redemption price per share ($556,547,005 (DIVIDE) 556,559,280)... $1.00 ===== * Also cost for Federal income tax purposes. (DAGGER) Variable Rate Obligations -- The interest rate is the rate as of August 31, 1996 and the maturity date shown is the longer of the next interest readjustment date or the date the principal amount shown can be recovered through demand. See Accompanying Notes to Financial Statements. 16 THE BEDFORD FAMILY THE RBB FUND, INC. STATEMENTS OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 1996
GOVERNMENT MUNICIPAL OBLIGATIONS MONEY MARKET MONEY MARKET MONEY MARKET PORTFOLIO PORTFOLIO PORTFOLI0 ------------ ------------ ------------ Investment Income Interest .......................................................... $118,092,977 $15,900,230 $30,707,263 ------------ ----------- ----------- Expenses Investment advisory fees .......................................... 7,702,090 1,409,660 2,310,433 Administration fees ............................................... -- 428,209 -- Distribution fees ................................................. 9,304,376 2,427,986 3,236,194 Service organization fees ......................................... 471,499 -- -- Directors' fees ................................................... 38,473 7,715 10,037 Custodian fees .................................................... 345,973 88,191 102,930 Transfer agent fees ............................................... 3,044,149 291,739 610,887 Legal fees ........................................................ 77,139 17,721 20,228 Audit fees ........................................................ 61,049 12,514 16,044 Registration fees ................................................. 434,000 192,999 134,940 Insurance expense ................................................. 43,932 9,056 11,658 Printing fees ..................................................... 426,220 72,100 107,852 Miscellaneous ..................................................... 1,884 387 499 ------------ ----------- ----------- 21,950,784 4,958,277 6,561,702 Less fees waived .................................................. (3,543,632) (1,236,642) (671,811) Less expense reimbursement by advisor ............................. (342,158) (17,576) (406,954) ------------ ----------- ----------- Total expenses ............................................... 18,064,994 3,704,059 5,482,937 ------------ ----------- ----------- Net investment income ............................................. 100,027,983 12,196,171 25,224,326 ------------ ----------- ----------- Realized loss on investments ...................................... (12,987) (674) (10,995) ------------ ----------- ----------- Net increase in net assets resulting from operations .............. $100,014,996 $12,195,497 $25,213,331 ============ =========== ===========
See Accompanying Notes to Financial Statements. 17 THE BEDFORD FAMILY THE RBB FUND, INC. STATEMENTS OF CHANGES IN NET ASSETS
MUNICIPAL MONEY MONEY MARKET PORTFOLIO MARKET PORTFOLIO ---------------------------------- --------------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1996 AUGUST 31, 1995 --------------- --------------- --------------- --------------- Increase (decrease) in net assets: Operations: Net investment income ...................... $ 100,027,983 $ 64,913,329 $ 12,196,171 $ 9,691,756 Net gain (loss) on investments ............. (12,987) (18,463) (674) 7,009 -------------- -------------- ------------ ------------ Net increase in net assets resulting from operations ............................... 100,014,996 64,894,866 12,195,497 9,698,765 -------------- -------------- ------------ ------------ Distributions to shareholders: Dividends to shareholders from net investment income: Bedford shares ........................... (49,874,649) (38,765,552) (5,960,711) (5,717,451) Bradford Shares .......................... -- -- (3,611,114) (3,266,535) Cash Preservation shares ................. (10,092) (11,336) (3,746) (5,648) Janney Montgomery Scott shares ........... (24,434,566) (4,784,092) (2,620,457) (701,975) RBB shares ............................... (2,630) (2,530) (143) (147) Sansom Street shares ..................... (25,706,046) (21,349,819) -- -- Dividends to shareholders from net realized short-term gains: Bedford shares ........................... -- -- -- -- Bradford shares .......................... -- -- -- -- Janney Montgomery Scott shares ........... -- -- -- -- -------------- -------------- ------------ ------------ Total distributions to shareholders .... (100,027,983) (64,913,329) (12,196,171) (9,691,756) -------------- -------------- ------------ ------------ Net capital share transactions ............... 374,464,737 736,630,198 (1,864,843) 140,043,103 -------------- -------------- ------------ ------------ Total increase (decrease) in net assets ...... 374,451,750 736,611,735 (1,865,517) 140,050,112 Net Assets: Beginning of year .......................... 1,821,371,688 1,084,759,953 422,753,863 282,703,751 -------------- -------------- ------------ ------------ End of year ................................ $2,195,823,438 $1,821,371,688 $420,888,346 $422,753,863 ============== ============== ============ ============
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO --------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED AUGUST 31, 1996 AUGUST 31, 1995 --------------- --------------- Increase (decrease) in net assets: Operations: Net investment income ...................... $ 25,224,326 $ 12,855,095 Net gain (loss) on investments ............. (10,995) 41,241 ------------ ------------ Net increase in net assets resulting from operations ............................... 25,213,331 12,896,336 ------------ ------------ Distributions to shareholders: Dividends to shareholders from net investment income: Bedford shares ........................... (8,829,111) (7,551,189) Bradford Shares .......................... (2,208,959) (2,071,772) Cash Preservation shares ................. -- -- Janney Montgomery Scott shares ........... (14,186,256) (3,232,134) RBB shares ............................... -- -- Sansom Street shares ..................... -- -- Dividends to shareholders from net realized short-term gains: Bedford shares ........................... (12,697) -- Bradford shares .......................... (3,154) -- Janney Montgomery Scott shares ........... (18,204) -- ------------ ------------ Total distributions to shareholders .... (25,258,381) (12,855,095) ------------ ------------ Net capital share transactions ............... 44,099,699 306,300,108 ------------ ------------ Total increase (decrease) in net assets ...... 44,054,649 306,341,349 Net Assets: Beginning of year .......................... 512,492,356 206,151,007 ------------ ------------ End of year ................................ $556,547,005 $512,492,356 ============ ============
See Accompanying Notes to Financial Statements. 18 THE BEDFORD FAMILY THE RBB FUND, INC. FINANCIAL HIGHLIGHTS (b) (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
MONEY MARKET PORTFOLIO --------------------------------------------------------------------------------------- - FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992 --------------- --------------- --------------- --------------- --------------- - Net asset value, beginning of year..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ---------- -------- -------- -------- -------- Income from investment operations: Net investment income................. 0.0469 0.0486 0.0278 0.0243 0.0375 Net gains on securities (both realized and unrealized) ........... -- -- -- -- 0.0007 ---------- -------- -------- -------- -------- Total from investment operations........................ 0.0469 0.0486 0.0278 0.0243 0.0382 ---------- -------- -------- -------- -------- Less distributions Dividends (from net investment income)............................. (0.0469) (0.0486) (0.0278) (0.0243) (0.0375) Distributions (from capital gains) ... -- -- -- -- (0.0007) ---------- -------- -------- -------- -------- Total distributions ............... (0.0469) (0.0486) (0.0278) (0.0243) (0.0382) ---------- -------- -------- -------- -------- Net asset value, end of year ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========== ======== ======== ======== ======== Total Return............................ 4.79% 4.97% 2.81% 2.46% 3.89% Ratios /Supplemental Data Net assets, end of year (000) ........ $1,109,334 $935,821 $710,737 $782,153 $736,842 Ratios of expenses to average net assets.......................... .97%(a) .96%(a) .95%(a) .95%(a) .95%(a) Ratios of net investment income to average net assets .............. 4.69% 4.86% 2.78% 2.43% 3.75%
MUNICIPAL MONEY MARKET PORTFOLIO --------------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992 --------------- --------------- --------------- --------------- --------------- Net asset value, beginning of year..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- Income from investment operations: Net investment income................. 0.0288 0.0297 0.0195 0.0195 0.0287 Net gains on securities (both realized and unrealized) ........... -- -- -- -- -- -------- -------- -------- -------- -------- Total from investment operations........................ 0.0288 0.0297 0.0195 0.0195 0.0287 -------- -------- -------- -------- -------- Less distributions Dividends (from net investment income)............................. (0.0288) (0.0297) (0.0195) (0.0195) (0.0287) Distributions (from capital gains) ... -- -- -- -- -- -------- -------- -------- -------- -------- Total distributions ............... (0.0288) (0.0297) (0.0195) (0.0195) (0.0287) -------- -------- -------- -------- -------- Net asset value, end of year ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total Return............................ 2.92% 3.01% 1.97% 1.96% 2.90% Ratios /Supplemental Data Net assets, end of year (000) ........ $201,940 $198,425 $182,480 $215,577 $176,950 Ratios of expenses to average net assets.......................... .84%(a) .82%(a) .77%(a) .77%(a) .77%(a) Ratios of net investment income to average net assets .............. 2.88% 2.97% 1.95% 1.95% 2.87% (a) Without the waiver of advisory 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 1.14%, 1.17%, 1.16%, 1.19% and 1.20% for the years ended August 31, 1996, 1995, 1994, 1993 and 1992, respectively. For the Municipal Money Market Portfolio, the ratios of expenses to average net assets would have been 1.12%, 1.14%, 1.12%, 1.16% and 1.15% for the years ended August 31, 1996, 1995, 1994, 1993 and 1992, respectively. (b) Financial Highlights relate solely to the Bedford Class of shares within each portfolio.
See Accompanying Notes to Financial Statements. 19 THE BEDFORD FAMILY THE RBB FUND, INC. FINANCIAL HIGHLIGHTS (b) (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO --------------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992 --------------- --------------- --------------- --------------- --------------- Net asset value, beginning of year............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- Income from investment operations: Net investment income....................... 0.0458 0.0475 0.0270 0.0231 0.0375 Net gains on securities (both realized and unrealized)............ -- -- -- -- 0.0009 -------- -------- -------- -------- -------- Total from investment operations......... 0.0458 0.0475 0.0270 0.0231 0.0384 -------- -------- -------- -------- -------- Less distributions Dividends (from net investment income)...... (0.0458) (0.0475) (0.0270) (0.0231) (0.0375) Distributions (from capital gains).......... -- -- -- -- (0.0009) -------- -------- -------- -------- -------- Total distributions...................... (0.0458) (0.0475) (0.0270) (0.0231) (0.0384) -------- -------- -------- -------- -------- Net asset value, end of year.................. $ 1.00 $ 1.00 $ 1 .00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total Return.................................. 4.68% 4.86% 2.73% 2.33% 3.91% Ratios /Supplemental Data Net assets, end of year (000)............... $192,599 $163,398 $166,418 $213,741 $225,101 Ratios of expenses to average net assets. .975%(a) .975%(a) .975%(a) .975%(a) .975%(a) Ratios of net investment income to average net assets................................ 4.58% 4.75% 2.70% 2.31% 3.75% (a) Without the waiver of advisory fees and without the reimbursement of certain operating expenses, the ratios of expenses average net assets for the Government Obligations Money Market Portfolio would have been 1.10%, 1.13%, 1.17%, 1.18% and 1.12% for the years ended August 31, 1996, 1995, 1994, 1993 and 1992, respectively. (b) Financial Highlights relate solely to the Bedford Class of shares within each portfolio.
See Accompanying Notes to Financial Statements. 20 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1996 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 12.35 billion shares are currently classified into sixty-six classes. Each class represents an interest in one of seventeen investment portfolios of the Fund. The classes have been grouped into fifteen separate "families", eight of which have begun investment operations: the RBB Family, the BEA Family, the Sansom Street Family, the Bedford Family, the Cash Preservation Family, Janney Montgomery Scott Money Family, the n/i Family and the Bradford Family. The Bedford Family represents interests in four portfolios, three of which are 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 in an attempt to avoid dilution or other unfair results to shareholders. The Fund seeks to maintain net asset value per share at $1.00 for these portfolios. B) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is recorded on the accrual basis. Certain expenses, principally distribution, transfer agency and printing, are class specific expenses and vary by class. Expenses not directly attributable to a specific portfolio or class are allocated based on relative net assets of each portfolio and class, respectively. C) DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily and paid monthly. Any net realized capital gains will be distributed at least annually. Income distributions and capital gain distributions are determined in accordance with tax regulations which may differ from generally accepted accounting principles. D) FEDERAL INCOME TAXES -- No provision is made for Federal taxes as 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. 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. F) 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 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. 21 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1996 NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to Investment Advisory Agreements, PNC Institutional Management Corporation ("PIMC"), a wholly subsidiary of PNC Asset Management Group, Inc., which is in turn a wholly owned subsidiary of PNC Bank, National Association ("PNC Bank"), serves as investment advisor for the three portfolios described herein. PNC Bank serves as the sub-advisor for the Money Market, the Municipal Money Market and the Government Obligations Money Market Portfolios. For its advisory services, PIMC is entitled to receive the following fees, computed daily and payable monthly based on each of the three portfolio's average daily net assets: PORTFOLIO ANNUAL RATE --------------------------- --------------------------------------------- Money Market and Government .45% of first $250 million of net assets; Obligations Money Market .40% of next $250 million of net assets Portfolios .35% of net assets in excess of $500 million. Municipal Money Market .35% of first $250 million of net assets; Portfolio .30% of next $250 million of net assets; .25% of net assets in excess of $500 million. PIMC may, at its discretion, voluntarily waive all or any portion of its advisory fee for these portfolios. For each class of shares within a respective portfolio, the net advisory fee charged to each class is the same on a relative basis. For the year ended August 31, 1996, advisory fees and waivers for the three investment portfolios were as follows:
GROSS NET ADVISORY ADVISORY FEE WAIVER FEE ---------- ----------- ---------- Money Market Portfolio $7,702,090 $(3,527,715) $4,174,375 Municipal Money Market Portfolio 1,409,660 (1,218,973) 190,687 Government Obligations Money Market Portfolio 2,310,433 (671,811) 1,638,622
PNC Bank, as sub-advisor, receives a fee directly from PIMC, not the portfolios. In addition, PNC Bank serves as custodian for each of the Fund's portfolios. PFPC Inc. ("PFPC"), an indirect wholly owned subsidiary of PNC Bank Corp., serves as each class's transfer and dividend disbursing agent. 22 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1996 NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) PFPC may, at its discretion, voluntarily waive all or any portion of its transfer agency fee for any class of shares. For the year ended August 31, 1996, transfer agency fees and waivers for each class of shares within the three investment portfolios were as follows:
GROSS NET TRANSFER AGENCY TRANSFER AGENCY FEE WAIVER FEE --------------- ---------- --------------- Money Market Portfolio Bedford Class $1,658,468 $ -- $1,658,468 Cash Preservation Class 8,613 (7,971) 642 Janney Montgomery Scott Class 1,045,385 -- 1,045,385 RBB Class 8,149 (7,946) 203 Sansom Street Class 323,534 -- 323,534 ---------- -------- ---------- Total Money Market Portfolio $3,044,149 $(15,917) $3,028,232 ========== ======== ========== Municipal Money Market Portfolio Bedford Class $ 104,373 $ -- $ 104,373 Bradford Class 59,772 -- 59,772 Cash Preservation Class 8,783 (8,303) 480 Janney Montgomery Scott Class 109,422 -- 109,422 RBB Class 9,389 (9,366) 23 ---------- -------- ---------- Total Municipal Money Market Portfolio $ 291,739 $(17,669) $ 274,070 ========== ======== ========== Government Obligations Money Market Portfolio Bedford Class $ 81,107 $ -- $ 81,107 Bradford Class 11,935 -- 11,935 Janney Montgomery Scott Class 517,845 -- 517,845 ---------- -------- ---------- Total Government Obligations Money Market Portfolio $ 610,887 $ -- $ 610,887 ========== ======== ==========
In addition, PFPC serves as administrator for the Municipal Money Market Portfolio. The administration fee is computed daily and payable monthly at an annual rate of .10% of the Portfolio's average daily assets. For the year ended August 31, 1996, the administration fee for the Municipal Money Market Portfolio was as follows: ADMINISTRATION FEE -------------- Municipal Money Market Portfolio $428,209 The Fund, on behalf of each class of shares within the three investment portfolios, has adopted Distribution Plans pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, and has entered into Distribution Contracts with Counsellors Securities Inc. ("Counsellors"), which provide for each class to make monthly payments, based on average net assets, to Counsellors of up to .65% on an annualized basis for the Bedford, Bradford, Cash Preservation, Janney Montgomery Scott and RBB Classes and up to .20% on an annualized basis for the Sansom Street Class. 23 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1996 NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) For the year ended August 31,1996, distribution fees for each class within the three investment Portfolios were as follows: DISTRIBUTION FEE ------------ Money Market Portfolio Bedford Class $5,826,142 Cash Preservation Class 858 Janney Montgomery Scott Class 3,161,043 RBB Class 226 Sansom Street Class 316,107 ---------- Total Money Market Portfolio $9,304,376 ========== Municipal Money Market Portfolio Bedford Class $1,139,416 Bradford Class 723,264 Cash Preservation Class 531 Janney Montgomery Scott Class 564,754 RBB Class 21 ---------- Total Municipal Money Market Portfolio $2,427,986 ========== Government Obligations Money Market Portfolio Bedford Class $1,091,847 Bradford Class 275,120 Janney Montgomery Scott Class 1,869,227 ---------- Total Government Obligations Money Market Portfolio $3,236,194 ========== The Fund has entered into service agreements with banks affiliated with PNC Bank who render support services to customers who are the beneficial owners of the Sansom Street Class in consideration of the payment of .10% of the daily net asset value of such shares. For the year ended August 31, 1996, service organization fees were $471,499 for the Money Market Portfolio. 24 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1996 NOTE 3. CAPITAL SHARES Transactions in capital shares (at $1.00 per capital share) for each year were as follows:
MONEY MARKET PORTFOLIO MUNICIPAL MONEY MARKET PORTFOLIO ----------------------------------- ---------------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1996 AUGUST 31, 1995 --------------- --------------- --------------- --------------- VALUE VALUE VALUE VALUE --------------- --------------- --------------- --------------- Shares sold: Bedford Class $ 3,797,592,288 $ 2,966,911,277 $ 1,022,457,772 $ 1,104,088,188 Bradford Class -- -- 479,401,891 474,166,249 Cash Preservation Class 122,344 84,527 171,907 175,548 Janney Montgomery Scott Class 2,359,936,867 855,058,809 408,374,271 208,067,881 RBB Class 584,206 31,504 69,480 5,004 Sansom Street Class 2,191,596,362 1,864,628,110 -- -- Shares issued in reinvestment of dividends: Bedford Class 49,290,088 37,681,204 5,847,767 5,576,408 Bradford Class -- -- 3,506,714 3,126,860 Cash Preservation Class 10,084 11,226 3,515 5,478 Janney Montgomery Scott Class 24,077,173 4,534,944 2,602,869 662,565 RBB Class 2,625 2,500 143 146 Sansom Street Class 18,389,361 16,689,941 -- -- Shares repurchased: Bedford Class (3,673,362,904) (2,779,499,052) (1,024,790,222) (1,093,651,142) Bradford Class -- -- (464,445,579) (466,448,018) Cash Preservation Class (165,733) (91,268) (220,929) (220,601) Janney Montgomery Scott Class (2,265,789,890) (415,944,656) (434,775,023) (95,506,391) RBB Class (580,821) (23,917) (69,419) (5,072) Sansom Street Class (2,127,237,313) (1,813,444,951) -- -- ------------- ------------- ------------- --------------- Net increase (decrease) $ 374,464,737 $ 736,630,198 $ (1,864,843) $ 140,043,103 =============== =============== ============= =============== Bedford Shares authorized 1,500,000,000 1,500,000,000 500,000,000 500,000,000 =============== =============== ============= ===============
25 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1996 NOTE 3. CAPITAL SHARES (CONTINUED) GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO --------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED AUGUST 31, 1996 AUGUST 31, 1995 --------------- --------------- VALUE VALUE --------------- --------------- Shares sold: Bedford Class $ 663,889,198 $ 461,728,190 Bradford Class 180,761,217 192,414,935 Janney Montgomery Scott Class 1,160,250,876 533,143,649 Shares issued in reinvestment of dividends: Bedford Class 8,793,104 7,147,384 Bradford Class 2,158,629 2,029,050 Janney Montgomery Scott Class 14,080,097 3,065,158 Shares repurchased: Bedford Class (643,470,937) (471,908,601) Bradford Class (172,234,746) (187,671,346) Janney Montgomery Scott Class (1,170,127,739) (233,648,311) --------------- ------------- Net increase $ 44,099,699 $ 306,300,108 =============== ============= Bedford Shares authorized 500,000,000 500,000,000 =============== ============= NOTE 4. NET ASSETS At August 31, 1996, net assets consisted of the following:
GOVERNMENT MUNICIPAL OBLIGATIONS MONEY MARKET MONEY MARKET MONEY MARKET PORTFOLIO PORTFOLIO PORTFOLIO -------------- ------------ ------------ Capital paid-in: Bedford Class $1,109,351,734 $202,009,609 $192,603,016 Bradford Class -- 129,398,582 57,191,735 Cash Preservation Class 202,360 115,765 -- Janney Montgomery Scott Class 561,873,247 89,426,172 306,763,729 RBB Class 61,412 5,143 -- Sansom Street Class 524,367,399 -- -- Other Classes 800 800 800 Accumulated net realized gain (loss) on investments: Bedford Class (17,400) (69,803) (4,248) Bradford Class -- 339 (1,261) Cash Preservation Class (3) 5 -- Janney Montgomery Scott Class (7,821) 1,734 (6,766) RBB Class (1) -- -- Sansom Street Class (8,289) -- -- -------------- ------------ ------------ $2,195,823,438 $420,888,346 $556,547,005 ============== ============ ============
26 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1996 NOTE 5. CAPITAL LOSS CARRYOVERS At August 31, 1996, capital loss carryovers were available to offset future realized gains as follows: $33,513 in the Money Market Portfolio of which of which $2,062 expires in 2002, $18,464 expires in 2003, $12,987 expires in 2004; $67,725 in the Municipal Money Market Portfolio of which $55,760 expires in 1999, $444 expires in 2000, $1,058 expires in 2001, $9,789 expires in 2002, $674 expires in 2004; and $12,275 in the Government Obligations Money Market Portfolio which expires in 2004. NOTE 6. OTHER FINANCIAL HIGHLIGHTS The Fund currently offers four other classes of shares representing interests in the Money Market Portfolio: Cash Preservation, Janney Montgomery Scott, RBB and Sansom Street. The Fund currently offers four other classes of shares representing interests in the Municipal Money Market Portfolio: Bradford, Cash Preservation, Janney Montgomery Scott and RBB. The Fund currently offers two other class of shares representing an interest in the Government Obligations Money Market Portfolio: Bradford and Janney Montgomery Scott. Each class is marketed to different types of investors. Financial Highlights of the RBB and Cash Preservation Classes are not presented in this report due to their immateriality. Such information is available in the annual reports of each respective family. The financial highlights of certain of the other classes are as follows: BRADFORD GOVERNMENT OBLIGATIONS MONEY MARKET SHARES
FOR THE PERIOD FOR THE FOR THE FOR THE FOR THE JANUARY 10, 1992 YEAR YEAR YEAR YEAR (COMMENCEMENT OF ENDED ENDED ENDED ENDED OPERATIONS) TO AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992 --------------- --------------- --------------- --------------- --------------- Net asset value, beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- Income from investment operations: Net investment income .................... 0.0458 0.0475 0.0270 0.0231 0.0208 Net gains on securities (both realized and unrealized) ........................ -- -- -- -- 0.0009 -------- -------- -------- -------- -------- Total from investment operations ..... 0.0458 0.0475 0.0270 0.0231 0.0217 -------- -------- -------- -------- -------- Less distributions Dividends (from net investment income) ... (0.0458) (0.0475) (0.0270) (0.0231) (0.0208) Distributions (from capital gains) -- -- -- -- (0.0009) -------- -------- -------- -------- -------- Total distributions .................. (0.0458) (0.0475) (0.0270) (0.0231) (0.0217) -------- -------- -------- -------- -------- Net asset value, end of period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total Return ................................ 4.68% 4.86% 2.73% 2.33% 3.42%(b) Ratios /Supplemental Data Net assets, end of period (000) .......... $ 57,190 $ 46,509 $ 39,732 $ 50,523 $ 42,477 Ratios of expenses to average net assets . .975%(a) .975%(a) .975%(a) .975%(a) .975%(a)(b) Ratios of net investment income to average net assets ..................... 4.58% 4.75% 2.70% 2.31% 3.23%(b) (a) Without the waiver of advisory fees and without the reimbursement of certain operating expenses, the ratios of expenses to average net assets would have been 1.10%, 1.13%, 1.18% and 1.18% for the years ended August 31, 1996, 1995, 1994, and 1993, respectively and 1.15% annualized for the period end August 31, 1992. (b) Annualized.
27 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1996 NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED) BRADFORD MUNICIPAL MONEY MARKET SHARES
FOR THE PERIOD FOR THE FOR THE FOR THE FOR THE JANUARY 10, 1992 YEAR YEAR YEAR YEAR (COMMENCEMENT OF ENDED ENDED ENDED ENDED OPERATIONS) TO AUGUST 31, 1996 AUGUST 31,1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992 --------------- -------------- --------------- --------------- --------------- Net asset value, beginning of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- ------- ------- Income from investment operations: Net investment income ..................... 0.0288 0.0297 0.0195 0.0195 0.0154 -------- -------- -------- ------- ------- Total from investment operations ...... 0.0288 0.0297 0.0195 0.0195 0.0154 -------- -------- -------- ------- ------- Less distributions Dividends (from net investment income) .... (0.0288) (0.0297) (0.0195) (0.0195) (0.0154) -------- -------- -------- ------- ------- Total distributions ................... (0.0288) (0.0297) (0.0195) (0.0195) (0.0154) -------- -------- -------- ------- ------- Net asset value, end of period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======= ======= Total Return ................................. 2.92% 3.01% 1.97% 1.96% 2.42%(b) Ratios /Supplemental Data Net assets, end of period (000) ........... $129,399 $110,936 $100,089 $76,975 $69,586 Ratios of expenses to average net assets .. .84%(a) .82%(a) .77%(a) .77%(a) .77%(a)(b) Ratios of net investment income to average net assets ....................... 2.88% 2.97% 1.95% 1.95% 2.40%(b) (a) Without the waiver of advisory fees and without the reimbursement of certain operating expenses, the ratios of expenses to average net assets would have been 1.12%, 1.14%, 1.11% and 1.16% for the years ended August 31, 1996, 1995, 1994 and 1993, respectively, and 1.16% annualized for the period ended August 31, 1992. (b) Annualized.
28 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1996 NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED) THE JANNEY MONTGOMERY SCOTT FAMILY
MUNICIPAL MONEY GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO MARKET PORTFOLIO MONEY MARKET PORTFOLIO -------------------------------- -------------------------------- --------------------------------- FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE JUNE 12, 1995 FOR THE JUNE 12, 1995 FOR THE JUNE 12, 1995 YEAR (COMMENCEMENT OF YEAR (COMMENCEMENT OF YEAR (COMMENCEMENT OF ENDED OPERATIONS) TO ENDED OPERATIONS) TO ENDED OPERATIONS) TO AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1996 AUGUST 31, 1995 --------------- --------------- --------------- --------------- --------------- ---------------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- ----------- -------- ---------- -------- ---------- Income from investment operations: Net investment income 0.0465 0.0112 0.0278 0.0063 0.0456 0.0109 --------- ----------- -------- ---------- -------- ---------- Total from investment operations 0.0465 0.0112 0.0278 0.0063 0.0456 0.0109 --------- ----------- -------- ---------- -------- ---------- Less distributions Dividends (from net investment income) (0.0465) (0.0112) (0.0278) (0.0063) (0.0456) (0.0109) --------- ----------- -------- ---------- -------- ---------- Total distributions (0.0465) (0.0112) (0.0278) (0.0063) (0.0456) (0.0109) --------- ----------- -------- ---------- -------- ---------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== =========== ======== ========== ======== =========== Total Return 4.76% 5.30%(b) 2.81% 2.87%(b) 4.66% 5.03%(b) Ratios /Supplemental Data Net assets, end of period (000) $561,865 $ 443,645 $ 89,428 $ 113,226 $306,757 $ 302,585 Ratios of expenses to average net assets 1.00%(a) 1.00%(a)(b) 0.94%(a) 1.00%(a)(b) 1.00%(a) 1.00%(a)(b) Ratios of net investment income to average net assets 4.65% 5.04%(b) 2.78% 2.83%(b) 4.56% 4.91%(b) (a) Without the waiver of advisory and administration 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 1.23% for the year ended August 31, 1996 and 1.23% annualized for the period ended August 31, 1995. For the Municipal Money Market Portfolio, the ratio of expenses to average net assets would have been 1.23% for the year ended August 31, 1996 and 1.30% annualized for the period ended August 31, 1995. For the Government Obligations Money Market Portfolio, the ratio of expenses to average net assets would have been 1.25% for the year ended August 31, 1996 and 1.28% annualized for the period ended August 31, 1995. (b) Annualized.
29 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONCLUDED) AUGUST 31, 1996 NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED) THE SANSOM STREET FAMILY
MONEY MARKET PORTFOLIO ----------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992 --------------- --------------- --------------- --------------- --------------- Net asset value, beginning of year .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- Income from investment operations: Net investment income ......................... 0.0518 0.0543 0.0334 0.0304 0.0435 Net gains on securities (both realized and unrealized) .............................. -- -- -- -- 0.0007 -------- -------- -------- -------- -------- Total from investment operations ........... 0.0518 0.0543 0.0334 0.0304 0.0442 -------- -------- -------- -------- -------- Less distributions Dividends (from net investment income) ........ (0.0518) (0.0543) (0.0334) (0.0304) (0.0435) Distributions (from capital gains) ............ -- -- -- -- (0.0007) -------- -------- -------- -------- -------- Total distributions ........................ (0.0518) (0.0543) (0.0334) (0.0304) (0.0442) -------- -------- -------- -------- -------- Net asset value, end of year .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total Return .................................... 5.30% 5.57% 3.39% 3.08% 4.51% Ratios /Supplemental Data Net assets, end of year ....................... $524,359 $441,614 $373,745 $190,794 $228,079 Ratios of expenses to average net assets ...... .48%(a) .39%(a) .39%(a) .34%(a) .35%(a) Ratios of net investment income to average net assets ................................... 5.18% 5.43% 3.34% 3.04% 4.35% (a) Without the waiver of advisory 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 .65%, .59%, .60%, .60% and .61% for the years ended August 31, 1996, 1995, 1994, 1993 and 1992, respectively.
30 TAX INFORMATION FOR SHAREHOLDERS (UNAUDITED) In the twelve months ended August 31, 1996 (the end of the Fund's fiscal year), 100% of the dividends paid by the Municipal Money Market Portfolio were exempt-interest dividends for purposes of federal income taxes and free from such taxes. However, approximately 47% of such dividends for the Municipal Money Market Portfolio was attributable to interest on private activity bonds which must be included in federal alternative minimum taxable income for the purpose of determining liability for federal alternative minimum tax. In January 1997, you will be furnished with a schedule showing the yearly percentage breakdown by state or U.S. possession of the source of interest earned by the Municipal Money Market Portfolio in 1996. It is suggested that you consult your tax adviser concerning the applicability of state and local taxes to dividends paid by the Fund during the year. 31 MORGAN KEEGAN & COMPANY, INC./MORGAN KEEGAN TOWER/FIFTY FRONT STREET/MEMPHIS, TENNESSEE 38103 -----END PRIVACY-ENHANCED MESSAGE-----