-----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, KffsieSKINT1Aw/mR+QH3BdGK45UPmxIyCoOFh5LInx1WT8aP/OKvPKeICQBabCY emRLHBYXJXSYds48ns4QFg== 0000935069-97-000186.txt : 19971106 0000935069-97-000186.hdr.sgml : 19971106 ACCESSION NUMBER: 0000935069-97-000186 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970831 FILED AS OF DATE: 19971105 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: SEC FILE NUMBER: 811-05518 FILM NUMBER: 97708131 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 ROBERTSON STEPHENS 1997 ANNUAL REPORT ================================================================================ ROBERTSON STEPHENS [LOGO OMITTED] MONEY MARKET PORTFOLIO Annual Report August 31, 1997 ================================================================================ THE SANSOM STREET FAMILY THE RBB FUND, INC. ANNUAL INVESTMENT ADVISER'S REPORT For much of the past year, economic activity grew progressively stronger and only the good behavior of inflation kept money market yields from an appreciable rise. In last year's final two quarters and through 1997's first quarter, the nation's gross domestic product rose from a rate of 2.1% to 4.9%, led by healthy gains in employment and wages. This strong momentum put pressure on the Federal Reserve to raise short-term interest rates, particularly early this year. The Fed's only move, however, was in March when it increased the federal funds rated from 5.25% to 5.50%. The Fed likened its move to buying insurance against the possible need for larger moves at a later date. The reaction to the tighter monetary policy was quite severe, with both the stock and bond markets experiencing sharp declines in April. In the months following the Fed's move, economic activity began to show signs of slowing and the money market yield curve, which reached its steepest slope in March, began to flatten. One-year yields, for example, which peaked at 6.30% fell below 6.00% over the next few months, while the one- to three-month sector held steady in a 5.50-5.65% range. One interesting anomaly was the U.S. Treasury market where yields on three-, six-, and twelve-month bills traded well below other money market rates. With the huge amount of cash in the market, the three-month Treasury bill yielded as low as 4.90% in the second quarter, while overnight rates remained at 5.50%. By the end of August, the three-month Treasury bill had recovered somewhat, but was still 30 basis points below the federal funds rate. This dichotomy in market yields generally kept the duration of the government portfolio shorter than the prime portfolio, as it carried more overnight investments for both yield and liquidity. In contrast, the prime portfolio was more attracted to the 3-month and 1-year sectors to pick up incremental yield during those occasions when the curve steepened. Early in the year, a lack of supply and a renewed belief in a Federal Reserve tightening kept municipal yields at historically expensive levels. Variable rate demand securities maintained strong interest from investors in anticipation of higher short-term interest rates and in preparation for April's income tax payments. Total tax-exempt money fund assets reached new all-time highs in each of the first four months of the year. Tax-free variable rate yields rose in volatile trading during the second quarter and returns offered taxable equivalent yields that were 50 basis points above taxable securities. Substantial cash inflows in mid-summer from coupon payments and crossover buyers caused daily reset demand notes to drop approximately 170 basis points, while weekly reset demand notes fell 70 basis points. By the end of August, total tax-free money market fund assets, as measured by "IBC's MONEY FUND REPORT," climbed to an all-time high of over $154 billion. Interest rate volatility and a flat yield curve allowed RBB Municipal and RBB New York Municipal Money Funds to maintain shorter average weighted maturities than their "IBC MONEY FUND REPORT" peer groups. For the year ended August, assets in RBB Municipal rose from $421 million to $488 million, while RBB New York increased from $88 million to $110 million. PNC Institutional Management Corporation (Please dial toll-free 800-430-9618 for questions regarding your account or contact your broker.) REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of The RBB Fund, Inc.: We have audited the accompanying statements of net assets of the Money Market Portfolio of the RBB Fund, Inc., as of August 31, 1997 and the related statement 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 owned by the custodian as of August 31, 1997. 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 Portfolio of the RBB Fund, Inc., as of August 31, 1997 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 17, 1997 2 THE SANSOM STREET FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS AUGUST 31, 1997 PAR (000) VALUE -------- ------------ AGENCY OBLIGATIONS--10.0% Student Loan Marketing Association(DAGGER) 5.450% 09/02/97 ......................... $ 10,000 $ 10,000,000 5.460% 09/02/97 ......................... 10,000 10,000,000 Student Loan Marketing Assocation Discount Notes 5.500% 09/02/97 ......................... 250,000 249,961,806 ------------ TOTAL AGENCY OBLIGATIONS (Cost $269,961,806) ................. 269,961,806 ------------ CERTIFICATES OF DEPOSIT--32.8% BANK NOTES--4.6% First National Bank of Boston 5.625% 10/08/97 ......................... 50,000 50,000,000 5.600% 11/19/97 ......................... 75,000 75,000,000 ------------ 125,000,000 ------------ DOMESTIC CERTIFICATES OF DEPOSIT--5.6% Bankers Trust Co. 5.980% 06/19/98 ......................... 50,000 49,992,390 5.820% 07/31/98 ......................... 25,000 24,993,453 5.880% 08/11/98 ......................... 25,000 24,993,238 Mellon Bank N.A. 6.030% 09/23/97 ......................... 25,000 25,001,846 Wilmington Trust Co. 5.920% 11/06/97 ......................... 25,000 25,000,000 ------------ 149,980,927 ------------ YANKEE DOLLAR CERTIFICATES OF DEPOSIT--22.6% Banque Nationale de Paris 5.860% 08/10/98 ......................... 25,000 24,986,523 Caisse Nationale de Credit Agricole 5.640% 10/07/97 ......................... 50,000 50,001,479 Credit Suisse 6.240% 04/08/98 ......................... 40,000 40,040,657 Deutsche Bank 6.000% 03/25/98 ......................... 50,000 50,050,753 6.200% 04/08/98 ......................... 25,000 25,015,286 Industrial Bank of Japan 5.730% 10/10/97 ......................... 50,000 50,000,000 5.680% 10/24/97 ......................... 25,000 25,000,637 Rabobank Nederland 5.710% 02/17/98 ......................... 50,000 50,002,280 PAR (000) VALUE -------- ------------ YANKEE DOLLAR CERTIFICATES OF DEPOSIT--(CONTINUED) Royal Bank of Canada 5.670% 09/02/97(DAGGER) ............. $ 25,000 $ 24,994,403 6.200% 04/06/98 ..................... 19,000 19,014,263 5.940% 06/25/98 ..................... 25,000 24,988,323 Sanwa Bank 5.780% 09/17/97 ..................... 50,000 50,000,637 Societe Generale 5.600% 09/19/97 ..................... 50,000 50,000,000 5.630% 12/31/97 ..................... 25,000 24,999,544 5.770% 01/09/98 ..................... 25,000 24,996,590 Sumitomo Bank 5.640% 10/20/97 ..................... 50,000 50,000,000 Swedbank 5.630% 11/20/97 ..................... 25,000 25,000,548 ------------ 609,091,923 ------------ TOTAL CERTIFICATES OF DEPOSIT (Cost $884,072,850) ............. 884,072,850 ------------ COMMERCIAL PAPER--40.5% ASSET BACKED SECURITIES--4.1% Beta Finance Inc. 5.620% 09/26/97 ..................... 15,000 14,941,458 Countrywide Funding Corp. 5.590% 09/15/97 ..................... 60,000 59,869,567 5.570% 09/30/97 ..................... 35,000 34,842,957 ------------ 109,653,982 ------------ BANKS--7.3% AB Spintab Swedmortgage 5.520% 11/06/97 ..................... 50,000 49,494,000 AMRO N.A. Finance Inc. 5.560% 05/01/98 ..................... 50,000 48,131,222 Unifunding Inc. 5.540% 10/07/97 ..................... 50,000 49,723,000 5.520% 10/30/97 ..................... 50,000 49,547,667 ------------ 196,895,889 ------------ FINANCE SERVICES--4.2% SMM Trust 1997-L(DAGGER) 5.633% 09/29/97 ..................... 13,200 13,200,000 SMM Trust 1997-W(DAGGER) 5.645% 09/16/97 ..................... 100,000 100,000,000 ------------ 113,200,000 ------------ See Accompanying Notes to Financial Statements. 3 THE SANSOM STREET FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1997 PAR (000) VALUE -------- ------------ MOTOR VEHICLES & CAR BODIES--3.7% BMW US Capital Corp. 5.550% 10/08/97 ........................... $ 50,000 $ 49,714,792 Daimler-Benz North America Corp. 5.600% 09/25/97 ........................... 50,000 49,813,333 -------------- 99,528,125 -------------- PERSONAL CREDIT INSTITUTIONS--1.8% General Motors Acceptance Corp. 5.750% 11/17/97 ........................... 50,000 49,385,069 -------------- PETROLEUM REFINING--0.9% Repsol International Finance B.V. 5.510% 01/26/98 ........................... 25,000 24,437,521 -------------- SECURITY BROKERS & DEALERS--11.2% Bear Stearns Companies, Inc.(DAGGER) 5.609% 09/08/97 ........................... 25,000 25,000,000 5.659% 09/22/97 ........................... 50,000 50,000,000 5.605% 09/26/97 ........................... 30,000 30,000,000 Lehman Brothers Holdings, Inc.(DAGGER) 5.913% 09/06/97 ........................... 50,000 50,000,000 Merrill Lynch & Co. 5.570% 12/12/97 ........................... 40,000 39,368,733 5.530% 02/24/98 ........................... 40,000 38,918,578 Nomura Holding America Inc. 5.740% 09/08/97 ........................... 25,000 24,972,097 5.640% 11/12/97 ........................... 20,000 19,774,400 5.630% 11/26/97 ........................... 25,000 24,663,764 -------------- 302,697,572 -------------- SERVICES - AUTO RENT & LEASE--3.6% PHH Corp. 5.640% 09/02/97 ........................... 73,000 72,988,563 5.540% 10/09/97 ........................... 25,000 24,853,806 -------------- 97,842,369 -------------- SHORT-TERM BUSINESS CREDIT INSTITUTIONS--3.7% Heller Financial Inc. 5.625% 09/05/97 ........................... 100,000 99,937,500 -------------- TOTAL COMMERCIAL PAPER (Cost $1,093,578,027) ................. 1,093,578,027 -------------- PAR (000) VALUE -------- ------------ CORPORATE OBLIGATIONS--2.0% FINANCE LESSORS--0.7% IBM Credit Corp. 5.700% 10/27/97 ....................... $ 20,000 $19,999,145 ----------- PERSONAL CREDIT INSTITUTIONS--0.6% General Motors Acceptance Corp. 5.625% 10/30/97 ....................... 15,000 14,998,566 ----------- SECURITY BROKERS & DEALERS--0.7% Bear Stearns Companies, Inc. 5.860% 01/20/98 ....................... 20,000 20,000,000 ----------- TOTAL CORPORATE OBLIGATIONS (Cost $54,997,711) ................ 54,997,711 ----------- MUNICIPAL BONDS--3.1% FLORIDA--0.1% Coral Springs, IDR(DOUBLE DAGGER) 5.600% 09/03/97 ....................... 2,700 2,700,000 ----------- GEORGIA--0.4% De Kalb County Development Authority Series 1995 B (Emory University Project)(DOUBLE DAGGER) 5.600% 08/31/97 ....................... 9,840 9,840,000 ----------- ILLINOIS--0.2% Illinois Health Facilities Authority Convertible/ VRDN Revenue Bond (The Streeterville Corp. Project) Series 1993-B(DOUBLE DAGGER) 5.700% 09/03/97 ....................... 4,400 4,400,000 ----------- INDIANA--0.2% Bremen, Inc. TARN Series 1996-B 5.610% 09/04/97 ....................... 5,200 5,200,000 ----------- KENTUCKY--0.2% Boone County Taxable IDR Refunding Bonds (Square D Company Project) Series 1994-B VRDN(DAGGER) 5.700% 09/03/97 ....................... 4,200 4,200,000 ----------- See Accompanying Notes to Financial Statements. 4 THE SANSOM STREET FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONCLUDED) AUGUST 31, 1997 PAR (000) VALUE -------- ----------- MISSISSIPPI--1.1% Hinds County, IDR Revenue Bond VRDN Series 1987(DAGGER) 5.600% 09/03/97 ....................... $ 1,200 $ 1,200,000 Hinds County, IDR Revenue Bond VRDN Series 1992(DAGGER) 5.600% 09/03/97 ....................... 1,860 1,860,000 Mississippi Business Finance Corp. IDR Revenue Bond (Dana Lighting Project) Series 1995(DAGGER) 5.600% 09/07/97 ....................... 6,400 6,400,000 Mississippi Business Finance Corp. Taxable IDR Revenue Bond (Bryan Foods, Inc. Project) Series 1994(DAGGER) 5.700% 09/03/97 ....................... 14,000 14,000,000 Mississippi Business Finance Corp. Taxable IDR Revenue Bond Series 1995(DAGGER) 5.600% 09/07/97 ....................... 7,000 7,000,000 ----------- 30,460,000 ----------- NORTH CAROLINA--0.4% City of Asheville Tax Corp.(DAGGER) 5.650% 09/03/97 ....................... 11,700 11,700,000 ----------- TEXAS--0.5% South Central Texas Industrial Development Corp. Taxable IDR Revenue Bond (Rohr Industries Project Series 1990 VRDN(DAGGER) 5.700% 09/03/97 ....................... 14,800 14,800,000 ----------- TOTAL MUNICIPAL BONDS (Cost $83,300,000) ................ 83,300,000 ----------- PAR (000) VALUE -------- -------------- TIME DEPOSITS--11.3% First Union National Bank of North Carolina 5.438% 09/02/97 ................... $ 45,100 $ 45,100,000 5.500% 09/02/97 ................... 50,000 50,000,000 General American Life 5.870% 09/30/97 ................... 50,000 50,000,000 Union Bank of Switzerland 5.625% 09/04/97 ................... 100,000 100,000,000 Wells Fargo Bank, N.A. 5.500% 09/02/97 ................... 60,000 60,000,000 -------------- TOTAL TIME DEPOSITS (Cost $305,100,000) ........... 305,100,000 -------------- TOTAL INVESTMENTS AT VALUE--99.7% (Cost $2,691,010,394*) ............ 2,691,010,394 OTHER ASSETS IN EXCESS OF LIABILITIES--0.3% ................. 9,015,235 -------------- NET ASSETS (Applicable to 1,392,910,207 Bedford shares, 242,215 Cash Preservation shares, 736,852,298 Janney Montgomery Scott shares, 570,031,293 Sansom Street shares and 800 other shares)--100.0% ..... $2,700,025,629 ============== NET ASSET VALUE, Offering and Redemption Price Per Share ($2,700,025,629 (DIVIDE) 2,700,036,813) .................... $1.00 ===== * Also cost for Federal income tax purposes. (DAGGER) Variable Rate Obligations -- The interest rate shown is the rate as of August 31, 1997 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 put date. INVESTMENT ABBREVIATIONS VRDN ............................................... Variable Rate Demand Note LOC ......................................................... Letter of Credit IDR ........................................... Industrial Development Revenue TARN ......................................... Taxable Adjustable Revenue Note See Accompanying Notes to Financial Statements. 5 THE SANSOM STREET FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 1997 Investment Income Interest .................................................... $137,348,046 ------------ Expenses Investment advisory fees .................................... 8,969,561 Distribution fees ........................................... 10,841,715 Service organization fees ................................... 535,524 Directors' fees ............................................. 49,983 Custodian fees .............................................. 396,951 Transfer agent fees ......................................... 3,318,408 Legal fees .................................................. 104,755 Audit fees .................................................. 59,877 Registration fees ........................................... 532,500 Insurance fees .............................................. 48,679 Printing Fees ............................................... 489,378 ------------ 25,347,331 Less fees waived ............................................ (3,616,431) Less expense reimbursement by advisor ....................... (469,986) ------------ Total expenses ......................................... 21,260,914 ------------ Net investment income ....................................... 116,087,132 Realized gain on investments ................................ 22,330 ------------ Net increase in net assets resulting from operations ........ $116,109,462 ============ See Accompanying Notes to Financial Statements. 6 THE SANSOM STREET FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS
FOR THE FOR THE YEAR ENDED YEAR ENDED AUGUST 31, 1997 AUGUST 31, 1996 --------------- --------------- Increase (decrease) in net assets: Operations: Net investment income ........................................ $ 116,087,132 $ 100,027,983 Net gain (loss) on investments ............................... 22,330 (12,987) -------------- -------------- Net increase in net assets resulting from operations ......... 116,109,462 100,014,996 -------------- -------------- Distributions to shareholders: Dividends to shareholders from net investment income: Bedford shares ............................................. (56,929,832) (49,874,649) Cash Preservation shares ................................... (10,852) (10,092) Janney Montgomery Scott shares ............................. (29,943,530) (24,434,566) RBB shares ................................................. (1,286) (2,630) Sansom Street shares ....................................... (29,201,632) (25,706,046) -------------- -------------- Total dividends to shareholders .......................... (116,087,132) (100,027,983) -------------- -------------- Net capital share transactions ................................. 504,179,861 374,464,737 -------------- -------------- Total increase in net assets ................................... 504,202,191 374,451,750 Net Assets: Beginning of year ............................................ 2,195,823,438 1,821,371,688 -------------- -------------- End of year .................................................. $2,700,025,629 $2,195,823,438 ============== ==============
See Accompanying Notes to Financial Statements. 7 THE SANSOM STREET FAMILY THE RBB FUND, INC. FINANCIAL HIGHLIGHTS (b) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
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, 1997 AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 --------------- --------------- --------------- --------------- --------------- Net asset value, beginning of year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ---------- ---------- ---------- ---------- ---------- Income from investment operations: Net investment income ....................... 0.0510 0.0518 0.0543 0.0334 0.0304 ---------- ---------- ---------- ---------- ---------- Total from investment operations ......... 0.0510 0.0518 0.0543 0.0334 0.0304 ---------- ---------- ---------- ---------- ---------- Less distributions Dividends (from net investment income) ...... (0.0510) (0.0518) (0.0543) (0.0334) (0.0304) ---------- ---------- ---------- ---------- ---------- Total distributions ........................... (0.0510) (0.0518) (0.0543) (0.0334) (0.0304) ---------- ---------- ---------- ---------- ---------- Net asset value, end of year .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========== ========== ========== ========== ========== Total Return .................................. 5.22% 5.30% 5.57% 3.39% 3.08% Ratios /Supplemental Data Net assets, end of year (000) ............... $570,018 $524,359 $441,614 $373,745 $190,794 Ratios of expenses to average net assets .... .49%(a) .48%(a) .39%(a) .39%(a) .34%(a) Ratios of net investment income to average net assets ......................... 5.10% 5.18% 5.43% 3.34% 3.04% (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 .64%, .65%, .59%, .60% and .60% for the years ended August 31, 1997, 1996, 1995, 1994 and 1993, respectively. (b) Financial highlights relate soley to the Sansom Street Class of shares within the portfolio.
See Accompanying Notes to Financial Statements. 8 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997 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 13.67 billion shares are currently classified into seventy-nine classes. Each class represents an interest in one of twenty investment portfolios of the Fund. The classes have been grouped into sixteen separate "families," nine of which have begun investment operations: the RBB Family, the BEA Family, the Sansom Street Family, the Bedford Family, the Cash Preservation Family, the Janney Montgomery Money Family, the n/i Family, the Boston Partners Family, and the Bradford Family. The Sansom Street Family represents interests in the Money Market Portfolio, which is covered in this report. A) SECURITY VALUATION -- Portfolio securities are valued under the amortized cost method, which approximates current market value. Under this method, securities are valued at cost when purchased and thereafter a constant proportionate amortization of any discount or premium is recorded until maturity of the security. Regular review and monitoring of the valuation is performed in an attempt to avoid dilution or other unfair results to shareholders. The Portfolio seeks to maintain net asset value per share at $1.00. B) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is recorded on the accrual basis. Certain expenses, principally distribution, transfer agency and printing, are class specific expenses and vary by class. Expenses not directly attributable to a specific portfolio or class are allocated based on relative net assets of each portfolio and class, respectively. C) DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily and paid monthly. Any net realized capital gains are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principals. D) FEDERAL INCOME TAXES -- No provision is made for Federal taxes as it is the Fund's intention to have each portfolio to continue to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code and make the requisite distributions to its shareholders which will be sufficient to relieve it from Federal income and excise taxes. E) REPURCHASE AGREEMENTS -- Money market instruments may be purchased subject to the seller's agreement to repurchase them at an agreed upon date and price. The seller will be required on a daily basis to maintain the value of the securities subject to the agreement at not less than the repurchase price. 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 assumption 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. 9 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1997 NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to Investment Advisory Agreements, PNC Institutional Management Corporation ("PIMC"), a wholly owned 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 portfolio described herein. PNC Bank serves as the sub-advisor for the Money Market Portfolio. For its advisory services, PIMC is entitled to receive the following fees, computed daily and payable monthly based on the portfolio's average daily net assets: .45% of first $250 million of net assets; .40% of next $250 million of net assets; .35% of net assets in excess of $500 million. PIMC may, at its discretion, voluntarily waive all or any portion of its advisory fee for this portfolio. 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, 1997, advisory fees and waivers for the investment portfolio were as follows: GROSS NET ADVISORY ADVISORY FEE WAIVER FEE ---------- ------------ ---------- $8,969,561 $(3,603,130) $5,366,431 The investment advisor has agreed to reimburse the portfolio for the amount, if any, by which the total operating and management expenses exceed the cap. For the year ended August 31, 1997, the reimbursed expenses were $469,986. PNC Bank, as sub-advisor, receives a fee directly from PIMC, not the portfolio. In addition, PNC Bank serves as custodian for 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. 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, 1997, transfer agency fees and waivers for each class of shares within the investment portfolio were as follows:
GROSS NET TRANSFER AGENCY TRANSFER AGENCY FEE WAIVER FEE --------------- ----------- --------------- Bedford Class $1,790,000 $ -- $1,790,000 Cash Preservation Class 10,311 (9,650) 661 Janney Montgomery Scott Class 1,201,086 -- 1,201,086 RBB Class 3,750 (3,651) 99 Sansom Street Class 313,261 -- 313,261 ---------- ---------- ---------- Total $3,318,408 $ (13,301) $3,305,107 ========== ========== ==========
The Fund, on behalf of each class of shares within this investment portfolio, 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, Cash Preservation, Janney Montgomery Scott and RBB Classes and up to .20% on an annualized basis for the Sansom Street Class. 10 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1997 NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) For the year ended August 31, 1997, distribution fees for each class were as follows: DISTRIBUTION FEE ------------ Bedford Class $ 6,570,719 Cash Preservation Class 934 Janney Montgomery Scott Class 3,911,049 RBB Class 114 Sansom Street Class 358,899 ----------- Total $10,841,715 =========== 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, 1997 service organization fees were $535,524 for the Money Market Portfolio. Expenses include legal fees paid to counsel to the company, a partner of which is secretary of the company. Expenses include Administrative and 12B-1 fees paid to Counsellors, Inc. whose secretary is also a director of the company. NOTE 3. CAPITAL SHARES Transactions in capital shares (at $1.00 per capital share) for each year were as follows: MONEY MARKET PORTFOLIO --------------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED AUGUST 31, 1997 AUGUST 31, 1996 --------------- --------------- VALUE VALUE --------------- --------------- Shares sold: Bedford Class $ 4,513,203,668 $ 3,797,592,288 Cash Preservation Class 175,000 122,344 Janney Montgomery Scott Class 3,087,651,502 2,359,936,867 RBB Class 4,744 584,206 Sansom Street Class 1,965,226,666 2,191,596,362 Shares issued in reinvestment of dividends: Bedford Class 55,886,643 49,290,088 Cash Preservation Class 10,748 10,084 Janney Montgomery Scott Class 29,670,134 24,077,173 RBB Class 1,361 2,625 Sansom Street Class 20,645,930 18,389,361 Shares repurchased: Bedford Class (4,285,531,838) (3,673,362,904) Cash Preservation Class (145,893) (165,733) Janney Montgomery Scott Class (2,942,342,585) (2,265,789,890) RBB Class (67,517) (580,821) Sansom Street Class (1,940,208,702) (2,127,237,313) --------------- --------------- Net increase $ 504,179,861 $ 374,464,737 =============== =============== Sansom Street Shares Authorized 1,000,000,000 1,000,000,000 =============== =============== 11 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1997 NOTE 4. NET ASSETS At August 31, 1997, net assets consisted of the following: Capital paid-in Bedford Class $1,392,910,207 Cash Preservation Class 242,215 Janney Montgomery Scott Class 736,852,298 Sansom Street Class 570,031,293 Other Classes 800 Accumulated net realized loss on investments Bedford Class (5,881) CASH PRESERVATION CLASS (1) Janney Montgomery Scott Class (1,727) Sansom Street Class (3,575) -------------- $2,700,025,629 ============== NOTE 5. CAPITAL LOSS CARRYOVERS At August 31, 1997, capital loss carryovers were available to offset future realized gains as follows: $11,184 in the Money Market Portfolio of which $11,184 expires in 2004. 12 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1997 NOTE 6. OTHER FINANCIAL HIGHLIGHTS The Fund currently offers three other classes of shares representing interest in the Money Market Portfolio: Bedford, Cash Preservation and Janney Montgomery Scott. Each class is marketed to different types of investors. Financial Highlights of the Cash Preservation class is not presented in this report due to its immateriality. Such information is available in the annual report of its respective family. The financial highlights of certain of the other classes are as follows: THE BEDFORD FAMILY
MONEY MARKET PORTFOLIO ------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, 1997 1996 1995 1994 1993 ---------- ---------- ---------- ---------- ---------- Net asset value, beginning of year ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ---------- ---------- -------- -------- -------- Income from investment operations: Net investment income ................ 0.0462 0.0469 0.0486 0.0278 0.0243 ---------- ---------- -------- -------- -------- Total from investment operations ..................... 0.0462 0.0469 0.0486 0.0278 0.0243 ---------- ---------- -------- -------- -------- Less distributions Dividends (from net investment income) ............................ (0.0462) (0.0469) (0.0486) (0.0278) (0.0243) ---------- ---------- -------- -------- -------- Total distributions .............. (0.0462) (0.0469) (0.0486) (0.0278) (0.0243) ---------- ---------- -------- -------- -------- Net asset value, end of year ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========== ========== ======== ======== ======== Total Return ........................... 4.72% 4.79% 4.97% 2.81% 2.46% Ratios /Supplemental Data Net assets, end of year (000) ........ $1,392,911 $1,109,334 $935,821 $710,737 $782,153 Ratios of expenses to average net assets ......................... .97%(a) .97%(a) .96%(a) .95%(a) .95%(a) Ratios of net investment income to average net assets ................. 4.62% 4.69% 4.86% 2.78% 2.43% (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 1.12%, 1.14%, 1.17%, 1.16% and 1.19% for the years ended August 31, 1997, 1996, 1995, 1994 and 1993, respectively.
13 THE SANSOM STREET FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONCLUDED) AUGUST 31, 1997 NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED) THE JANNEY MONTGOMERY SCOTT MONEY FUNDS MONEY MARKET PORTFOLIO ---------------------------------------------------- FOR THE PERIOD FOR THE FOR THE JUNE 12, 1995 YEAR YEAR (COMMENCEMENT ENDED ENDED OF OPERATIONS) TO AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995 --------------- --------------- ----------------- Net asset value, beginning of year ...... $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- Income from investment operations: Net investment income .. 0.0459 0.0465 0.0112 -------- -------- -------- Total from investment operations .......... 0.0459 0.0465 0.0112 -------- -------- -------- Less distributions Dividends (from net investment income) ... (0.0459) (0.0465) (0.0112) -------- -------- -------- Total distributions ... (0.0459) (0.0465) (0.0112) -------- -------- -------- Net asset value, end of year ............ $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== Total Return ............. 4.69% 4.76% 5.30%(b) Ratios /Supplemental Data Net assets, end of year (000) ........... $736,855 $561,865 $443,645 Ratios of expenses to average net assets ... 1.00%(a) 1.00%(a) 1.00%(a)(b) Ratios of net investment income to average net assets ........... 4.59% 4.65% 5.04%(b) (a) Without the waiver of advisory, administration and transfer agent fees and without the reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Money Market Portfolio would have been 1.22%, 1.23% and 1.23% for the years ended August 31, 1997, 1996 and 1995, respectively. (b) Annualized. 14 -----END PRIVACY-ENHANCED MESSAGE-----