-----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, Fczsdmjp1U/w/tljqzFYmjud2WCY2PvDFiOYMbbR1ytx0Sx79vbtx1H85XvL8+dJ /86t45bRwVNS+fwAiSABLQ== 0000935069-00-000237.txt : 20000510 0000935069-00-000237.hdr.sgml : 20000510 ACCESSION NUMBER: 0000935069-00-000237 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000229 FILED AS OF DATE: 20000509 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: 622544 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 THE PRINCIPAL CLASS SEMI-ANNUAL REPORT [GRAPHIC OMITTED] SEMI-ANNUAL REPORT FOR THE PRINCIPAL CLASS MONEY MARKET PORTFOLIO FEBRUARY 29, 2000 THE PRINCIPAL FAMILY THE RBB FUND, INC. SEMI-ANNUAL INVESTMENT ADVISER'S REPORT Money market activity was dominated by three key issues in the six-month period ended February 2000; the economy, Federal Reserve policy and Y2K issues. The U.S. economy, fueled by extraordinary consumer demand, broke a record for peacetime expansion, as gross domestic product (GDP) surged 5.8% in the fourth quarter and recorded an annual growth rate in excess of 4% for the third year in a row. In the eyes of the Federal Reserve, however, the exuberance of the economy was a clear sign of trouble ahead. With GDP running well above their non-inflationary threshold, higher wages and prices were the expected consequence. The Fed's response was to tighten monetary policy three times during the last six months, raising the federal funds rate by 75 basis points to 6.00% by mid-March. Further increases are expected at the Fed's May and June meetings. The final factor was the concern surrounding Y2K, the perceived date change threat to global computer networks. During the third and fourth quarters, the money market portfolios focused on maintaining additional liquidity through year-end to accommodate any unanticipated withdrawals as a result of Y2K. With the transition to year 2000 now passed, we can report that neither the portfolios nor any of our portfolio management systems experienced any problems. Y2K was, in short, a non-event. Short-term interest rates rose in the second half of 1999 and early 2000 as the Fed tightened monetary policy to thwart inflationary pressures. The current federal funds rate of 6.00% represents an increase of 1.25% since last June. The increase in rates also led to a steeper yield curve, as the anticipation of further Fed moves escalated. At the same time, an interesting anomaly occurred in January 2000 maturities during the third and fourth quarters. The concern over Y2K problems and the related build up in market wide liquidity in December precipitated a dramatic yield pick up in January 2000 maturities. Spreads widened to over 100 basis points as issuers tried to entice investors into the year 2000. This yield disparity provided a significant opportunity for the money market portfolios to add incremental yield, even as most assets were invested shorter than December 31. In January and February, most of the investments were targeted to the April-May period, as the three-month sector offered the best returns. Average weighted maturities ranged between 35-45 days. BlackRock Institutional Management Corporation (Please dial toll-free 800-430-9618 for questions regarding your account or contact your broker.) THE PRINCIPAL FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS FEBRUARY 29, 2000 (UNAUDITED) PAR (000) VALUE ---------- -------------- CERTIFICATES OF DEPOSIT--6.5% DOMESTIC CERTIFICATES OF DEPOSIT--2.4% First National Bank of Chicago 6.060% 08/14/00 ............................ $15,000 $ 14,996,617 Key Bank N.A. 5.705% 07/12/00 ............................ 10,000 9,999,476 Wilmington Trust Co. 6.050% 04/14/00 ............................ 25,000 25,000,000 6.000% 05/18/00 ............................ 12,100 12,100,000 -------------- 62,096,093 -------------- YANKEE DOLLAR CERTIFICATES OF DEPOSIT--4.1% Canadian Imperial Bank of Commerce 5.180% 03/15/00 ............................ 29,700 29,699,985 5.180% 03/16/00 ............................ 25,000 24,999,703 National Westminster Bank 5.280% 04/03/00 ............................ 25,000 24,999,516 Svenska Handelsbanken, Inc. 5.178% 03/16/00 ............................ 25,000 24,999,530 -------------- 104,698,734 -------------- TOTAL CERTIFICATES OF DEPOSIT (Cost $166,794,827) .................... 166,794,827 -------------- COMMERCIAL PAPER--58.5% AIRCRAFT PARTS & AUXILIARY EQUIPMENT, NEC--0.4% Textron Financial, 3-A-3 5.920% 05/02/00 ............................ 10,000 9,898,044 -------------- ASSET BACKED SECURITIES--10.4% Emerald Certificates Program (MBNA 99-K), 4-2 5.840% 03/16/00 ............................ 11,000 10,973,233 5.920% 04/07/00 ............................ 34,000 33,793,129 Enterprise Funding Corp., 4-2 5.900% 03/16/00 ............................ 5,547 5,533,364 Fairway Finance Ltd., 4-2 5.900% 04/17/00 ............................ 10,000 9,922,972 Grand Funding Corp., 4-2 5.780% 03/01/00 ............................ 9,500 9,500,000 5.780% 03/06/00 ............................ 25,000 24,979,931 5.870% 04/24/00 ............................ 28,700 28,447,296 Moriarty LLC, 4-2 5.870% 04/06/00 ............................ 50,000 49,706,500 5.870% 04/10/00 ............................ 40,000 39,739,111 5.900% 04/25/00 ............................ 35,000 34,684,514 PAR (000) VALUE ---------- -------------- ASSET BACKED SECURITIES--(CONTINUED) Special Purpose Accounts Receivable Cooperative Corp., 4-2 5.970% 05/15/00 ............................ $17,000 $ 16,788,562 -------------- 264,068,612 -------------- BANKS--5.6% AB Spintab, 3-A-3 5.870% 04/20/00 ............................ 17,500 17,357,326 ING Bank (Internationale Nederlanden Bank NV), 3-A-3 5.880% 03/06/00 ............................ 25,000 24,979,583 Swedbank, 3-A-3 5.850% 04/11/00 ............................ 100,000 99,333,750 -------------- 141,670,659 -------------- COMMUNICATION EQUIPMENT NEC--1.0% Alcatel Alsthom Inc., 3-A-3 5.430% 03/13/00 ............................ 25,000 24,954,750 -------------- HOSPITAL & MEDICAL SERVICE PLANS--0.5% United Healthcare Corp., 4-2 5.900% 04/03/00 ............................ 13,000 12,929,692 -------------- LIFE INSURANCE--5.5% Aetna Services Inc., 3-A-3 5.850% 03/24/00 ............................ 11,000 10,958,887 5.870% 03/27/00 ............................ 20,000 19,915,211 5.900% 04/03/00 ............................ 40,000 39,783,667 5.900% 04/11/00 ............................ 24,700 24,534,030 Aon Corp., 3-A-3 5.830% 03/06/00 ............................ 9,496 9,488,311 5.840% 03/14/00 ............................ 35,000 34,926,189 -------------- 139,606,295 -------------- MISC INDUSTRIAL & COMMERCIAL MACHINERY--1.2% Invensys, 4-2 5.920% 05/04/00 ............................ 30,000 29,684,267 -------------- MOTOR VEHICLE PARTS & ACCESSORIES--1.1% Eaton Corp., 4-2 5.950% 05/09/00 ............................ 29,000 28,669,279 -------------- See Accompanying Notes to Financial Statements. 2 THE PRINCIPAL FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) FEBRUARY 29, 2000 (UNAUDITED) PAR (000) VALUE ---------- -------------- NATURAL GAS TRANS. & DISTR.--1.4% Consolidated Natural Gas Co., 3-A-3 5.850% 03/20/00 ........................... $18,296 $ 18,239,511 Duke Capital Corp., 4-2 5.870% 04/13/00 ........................... 17,000 16,880,806 -------------- 35,120,317 -------------- PETROLEUM REFINING--4.4% Repsol International Finance BV, 3-A-3 5.870% 03/14/00 ........................... 13,000 12,972,444 5.920% 04/17/00 ........................... 17,500 17,364,744 5.940% 04/18/00 ........................... 13,500 13,393,080 6.000% 05/09/00 ........................... 9,000 8,896,500 6.000% 05/11/00 ........................... 25,000 24,704,167 6.000% 05/16/00 ........................... 10,000 9,873,333 6.000% 05/17/00 ........................... 25,000 24,679,167 -------------- 111,883,435 -------------- SECURITY BROKERS & DEALERS--3.1% Morgan Stanley Dean Witter, 3-A-3 5.850% 04/12/00 ........................... 80,000 79,454,000 -------------- SHORT-TERM BUSINESS CREDIT INSTITUTIONS--17.0% Associates First Capital BV, 3-A-3 5.900% 05/03/00 ........................... 39,500 39,092,162 5.910% 05/08/00 ........................... 15,000 14,832,550 5.930% 05/25/00 ........................... 25,000 24,649,965 5.940% 06/01/00 ........................... 25,000 24,620,500 Finova Capital Corp., 3-A-3 5.800% 03/01/00 ........................... 19,400 19,400,000 5.800% 03/03/00 ........................... 14,800 14,795,231 5.900% 04/03/00 ........................... 20,000 19,891,833 6.000% 05/30/00 ........................... 30,000 29,550,000 General Electric Capital Corp., 3-A-3 5.890% 04/21/00 ........................... 20,000 19,833,117 Heller Financial, Inc., 3-A-3 5.800% 03/21/00 ........................... 20,000 19,935,556 5.900% 04/13/00 ........................... 35,000 34,753,347 5.920% 04/19/00 ........................... 35,000 34,717,978 5.920% 04/20/00 ........................... 30,000 29,753,333 Sears Roebuck Acceptance Corp., 3-A-3 5.900% 04/13/00 ........................... 15,000 14,894,292 5.900% 04/17/00 ........................... 45,000 44,653,375 6.000% 05/11/00 ........................... 50,000 49,408,333 -------------- 434,781,572 -------------- PAR (000) VALUE ---------- ------------- TELEPHONE COMMUNICATIONS--7.0% British Telecommunication, 3-A-3 5.890% 05/04/00 ........................... $50,000 $ 49,476,444 MCI Worldcom 4-2 5.920% 04/17/00 ........................... 25,000 24,806,778 5.920% 04/18/00 ........................... 50,000 49,605,333 5.920% 04/19/00 ........................... 43,000 42,653,516 5.920% 04/20/00 ........................... 12,000 11,901,333 -------------- 178,443,404 -------------- TOTAL COMMERCIAL PAPER (Cost $1,491,164,326) ................. 1,491,164,326 -------------- MUNICIPAL BONDS--2.8% FLORIDA--0.1% Coral Springs, VRDN IDR (Alliance Corp.) (Suntrust Bank, Central FL) Series 1995+ 5.900% 03/01/00 ........................... 2,300 2,300,000 -------------- GEORGIA--0.4% De Kalb County , Development Authority VRDN Series 1995 B (Emory University Project)+ 5.800% 03/07/00 ........................... 9,280 9,280,000 -------------- ILLINOIS--0.2% Illinois Health Facilities Authority VRDN (The Streeterville Corp. Project) Series 1993-B (First National Bank of Chicago)+ 5.950% 03/01/00 ........................... 4,400 4,400,000 -------------- INDIANA--0.1% Bremen, IDR Bond VRDN Series 1996 B (Society National Bank, Cleveland)+ 6.140% 03/02/00 ........................... 2,075 2,075,000 -------------- KENTUCKY--0.2% Boone County, Taxable IDR Refunding Bonds VRDN (Square D Company Project) Series 1994-B (Societe Generale)+ 5.950% 03/01/00 ........................... 4,200 4,200,000 -------------- See Accompanying Notes to Financial Statements. 3 THE PRINCIPAL FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) FEBRUARY 29, 2000 (UNAUDITED) PAR (000) VALUE ---------- ------------- MISSISSIPPI--1.0% Mississippi Business Finance Corp. IDR Bond VRDN Dana Lighting Inc. (Suntrust Bank, Central FL) Series 1995+ 5.900% 03/07/00 ............................ $ 5,600 $ 5,600,000 Mississippi Business Finance Corp. IDR Bond VRDN (Bryan Foods, Inc. Project) (Sara Lee Corp.) Series 1994+ 5.950% 03/01/00 ............................ 14,000 14,000,000 Mississippi Business Finance Corp. IDR Bond VRDN (Choctaw Foods Inc.Project) Series 1995 (Rabobank Nederland)+ 5.900% 03/07/00 ............................ 5,100 5,100,000 -------------- 24,700,000 -------------- NORTH CAROLINA--0.3% City of Asheville VRDN (Wachovia Bank)+ 5.850% 03/01/00 ............................ 8,900 8,900,000 -------------- TEXAS--0.6% South Central Texas Industrial Development Corp. Taxable IDR Revenue Bond VRDN (Rohr Industries Project) Series 1990 (NBD Bank)+ 5.950% 03/01/00 ............................ 14,800 14,800,000 -------------- TOTAL MUNICIPAL BONDS (Cost $70,655,000) ..................... 70,655,000 -------------- VARIABLE RATE OBLIGATIONS--25.4% AIRCRAFT PARTS & AUXILIARY EQUIPMENT, NEC--1.2% Textron Financial Corp.+ 6.098% 05/02/00 ............................ 30,000 30,000,000 -------------- BANKS--17.7% AB Spintab Corp.+ 6.040% 04/25/00 ............................ 25,000 24,987,975 Bayerische Hypo-Und Vereinsbank+ 5.799% 03/14/00 ............................ 74,500 74,494,626 5.795% 03/15/00 ............................ 50,000 49,991,848 PAR (000) VALUE ---------- -------------- BANKS--(CONTINUED) Bayerische Landesbank Girozentrale+ 5.798% 03/28/00 ............................ $25,000 $ 24,987,829 Key Bank N.A.+ 6.031% 03/14/00 ............................ 35,000 34,994,069 6.190% 05/25/00 ............................ 50,000 50,000,000 SMM Trust 1999-A+ 6.150% 04/13/00 ............................ 10,000 10,000,000 SMM Trust 1999-B+ 6.181% 03/15/00 ............................ 80,000 80,000,000 SMM Trust 1999-E+ 6.021% 04/05/00 ............................ 37,500 37,500,000 Westdeutsche Landesbank Girozentrale+ 5.799% 03/27/00 ............................ 15,000 14,992,719 Westpac Banking Corp.+ 5.959% 03/06/00 ............................ 50,000 49,983,651 -------------- 451,932,717 -------------- PERSONAL CREDIT INSTITUTIONS--6.5% American Honda Finance Corp.+ 6.020% 04/18/00 ............................ 24,800 24,797,858 6.080% 05/04/00 ............................ 10,000 9,997,835 6.068% 05/08/00 ............................ 30,000 29,992,223 6.060% 05/24/00 ............................ 44,600 44,598,013 General Motors Acceptance Corp.+ 5.995% 04/20/00 ............................ 24,500 24,494,380 Main Place Real Estate Investment+ 6.210% 04/25/00 ............................ 32,000 32,014,311 -------------- 165,894,620 -------------- TOTAL VARIABLE RATE OBLIGATIONS (Cost $647,827,337) .................... 647,827,337 -------------- See Accompanying Notes to Financial Statements. 4 THE PRINCIPAL FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONCLUDED) FEBRUARY 29, 2000 (UNAUDITED) PAR (000) VALUE ---------- ------------- MEDIUM TERM NOTES--2.9% PERSONAL CREDIT INSTITUTIONS--0.0% General Motors Acceptance Corp. 6.650% 05/24/00 ............................ $ 200 $ 200,195 -------------- SECURITY BROKERS & DEALERS--2.9% Goldman Sachs Group, Inc. 5.990% 04/17/00 ............................ 25,000 25,000,000 6.090% 05/08/00 ............................ 25,000 25,000,000 6.100% 05/10/00 ............................ 25,000 25,000,000 -------------- 75,000,000 -------------- TOTAL MEDIUM TERM NOTES (Cost $75,200,195) ..................... 75,200,195 -------------- TIME DEPOSITS--3.5% Norwest Bank Minnesota NA 5.875% 03/01/00 ............................ 89,600 89,600,000 -------------- TOTAL TIME DEPOSITS ...................... (Cost $89,600,000) 89,600,000 -------------- TOTAL INVESTMENTS AT VALUE--99.6% (Cost $2,541,241,685*) ..................... 2,541,241,685 -------------- OTHER ASSETS IN EXCESS OF LIABILITIES--0.4% ....................... 9,249,508 -------------- NET ASSETS (Applicable to 442,170,092 Bedford shares, 237,516 Cash Preservation shares, 1,231,157,266 Janney Montgomery Scott shares, 245,338,916 Sansom Street shares, 402,058,124 Select shares, 229,585,110 Principal shares, and 800 other shares)--100% ................ $2,550,491,193 ============== NET ASSET VALUE, Offering and redemption price per share ($2,550,491,193 / 2,550,547,824) ........... $1.00 ===== * Also cost for Federal income tax purposes. + Variable Rate Obigations -- The interest rate shown is the rate as of February 29, 2000 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. INVESTMENT ABBREVIATIONS BV ...................................................... Besloten Vennootschap IDR ............................................ Industrial Development Revenue NA ....................................................... National Association NEC .................................................. Not Elsewhere Classified TARN ............................................. Taxable Adjustable Rate Note VRDN ................................................ Variable Rate Demand Note NV ....................................................... Naambze Vennootschap See Accompanying Notes to Financial Statements. 5 THE PRINCIPAL FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 29, 2000 (UNAUDITED) MONEY MARKET PORTFOLIO ------------ Investment Income Interest .............................................. $83,785,587 ----------- Expenses Distribution fees ..................................... 5,228,683 Investment Advisory fees .............................. 5,310,677 Administration fees ................................... -- Transfer Agent fees ................................... 225,049 Service organization fees ............................. 284,235 Printing fees ......................................... 273,934 Custodian fees ........................................ 214,102 Legal fees ............................................ 73,444 Registration fees ..................................... 45,000 Audit fees ............................................ 80,076 Director's fees ....................................... 65,456 Insurance expense ..................................... 10,988 Miscellaneous ......................................... -- ----------- 11,811,644 Less fees waived ...................................... (707,606) Less expense reimbursement by advisor ................. (157,665) ----------- Total expenses ................................... 10,946,373 ----------- Net Investment Income .................................... 72,839,214 ----------- Net realized gain/(loss) on investments .................. (602) ----------- Net increase in net assets resulting from operations ..... $72,838,612 =========== See Accompanying Notes to Financial Statements. 6 THE PRINCIPAL FAMILY THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS FOR THE FOR THE PERIOD SIX MONTHS ENDED JUNE 1, 1999 to FEBRUARY 29, 2000 AUGUST 31, 1999(a) ----------------- ------------------ (UNAUDITED) Increase (decrease) in assets: Operations: Net investment income ......... $ 72,839,214 $ 115,658,458 Net realized gain (loss) on investments ................. (602) 72,320 ------------- -------------- Net increase in net assets resulting from operations ... 72,838,612 115,730,778 ------------- -------------- Distributions to shareholders: Dividends to shareholders from Net Investment Income: Bedford shares .............. (9,490,228) (28,089,918) Cash Preservation shares .... (3,610) (7,069) Janney Montgomery Scott shares .................... (26,738,928) (43,156,041) Principal shares ............ (5,268,052) (2,455,484) Sansom Street shares ........ (22,195,668) (36,008,586) Select shares ............... (9,142,728) (5,941,360) ------------- -------------- (72,839,214) (115,658,458) Dividends to shareholders from Net Realized Short-Term Gains in excess of Net Investment Income: Bedford shares .............. -- (2,671) Cash Preservation shares .... -- (1) Janney Montgomery Scott shares .................... -- (2,921) Sansom Street shares ........ -- (2,010) Select shares ............... -- (102) ------------- -------------- -- (7,705) Total Dividends to shareholders ............ (72,839,214) (115,666,163) ------------- -------------- Net capital share transactions (Note 3) ......... (188,628,536) 423,497,416 ------------- -------------- Total increase/(decrease) in net assets .................... (188,629,138) 423,562,031 Net Assets: Beginning of period ........... 2,739,120,331 2,315,558,300 ------------- -------------- End of period ................. $2,550,491,193 $2,739,120,331 ============== ============== (a)On June 1, 1999, the Principal Class of shares of the Money Market Fund began operations. See Accompanying Notes to Financial Statements. 7 THE PRINCIPAL FAMILY THE RBB FUND, INC. FINANCIAL HIGHLIGHTS (b) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
MONEY MARKET PORTFOLIO ------------------------------------------- FOR THE SIX MONTHS FOR THE ENDED PERIOD JUNE 1, 1999 FEBRUARY 29, 2000 TO AUGUST 31, 1999(c) ----------------- --------------------- (UNAUDITED) Net asset value, beginning of period ................. $ 1.00 $ 1.00 -------- -------- Income from investment operations: Net investment income ................................ 0.0246 0.0110 -------- -------- Total from investment operations ................ 0.0246 0.0110 -------- -------- Less distributions Dividends (from net investment income) ............ (0.0246) (0.0110) -------- -------- Total distributions ............................. (0.0246) (0.0110) -------- -------- Net asset value, end of period ....................... $ 1.00 $ 1.00 ======== ======== Total Return ......................................... 2.46%(e) 1.10%(e) Ratios /Supplemental Data Net assets, end of period (000) ................... $229,581 $218,530 Ratios of expenses to average net assets .......... .77%(a)(d) .77%(a)(d) Ratios of net investment income to average net assets .............................. 4.95%(d) 4.36%(d) (a)Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Money Market Portfolio would have been .81% for the six months ended February 29, 2000, and .85% for the year ended August 31, 1999. (b)Financial highlights relate solely to the Principal Family of shares within the portfolio. (c)On June 1, 1999 the Money Market Portfolio's Principal Class began operations. (d)Annualized. (e)Non-Annualized.
See Accompanying Notes to Financial Statements. 8 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2000 (UNAUDITED) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund was incorporated in Maryland on February 29, 1988. The Fund has authorized capital of thirty billion shares of common stock of which 20.03 billion shares are currently classified into ninety-nine classes. Each class represents an interest in one of seventeen investment portfolios of the Fund. The classes have been grouped into fifteen separate "families", ten of which have begun investment operations: the Principal Family, the Select Family, the Janney Montgomery Scott Family, the Bedford Family, the Cash Preservation Family, the Sansom Street Family, the n/i Family, the Boston Partners Family, the Bogle Family and the Schneider Family. The Principal Family represents interests in one portfolio, which is covered in this report. A) SECURITY VALUATION -- Portfolio securities are valued under the amortized cost method, which approximates current market value. Under this method, securities are valued at cost when purchased and thereafter a constant proportionate amortization of any discount or premium is recorded until maturity of the security. Regular review and monitoring of the valuation is performed 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 principles. D) FEDERAL INCOME TAXES -- No provision is made for Federal taxes. It is the Fund's intention to have each portfolio continue to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code and make the requisite distributions to its shareholders which will be sufficient to relieve it from Federal income and excise taxes. E) REPURCHASE AGREEMENTS -- Money market instruments may be purchased subject to the seller's agreement to repurchase them at an agreed upon date and price. The seller will be required on a daily basis to maintain the value of the securities subject to the agreement at not less than the repurchase price plus accrued interest. If the value of the underlying securities falls below 102% of the value of the purchase price plus accrued interest, the Fund will require the seller to deposit additional collateral by the next Fund business day. In the event that the seller under the agreement defaults on its repurchase obligation or fails to deposit sufficient collateral, the Fund has the contractual right, subject to the requirements of applicable bankruptcy and insolvency laws, to sell the underlying securities and may claim any resulting loss from the seller. The agreements are conditioned upon the collateral being deposited under the Federal Reserve book-entry system or with the Fund's custodian or a third party sub-custodian. 9 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2000 (UNAUDITED) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to Investment Advisory Agreements, BlackRock Institutional Management Corp. ("BIMC"), an indirect majority-owned subsidiary of The PNC Financial Services Group, Inc., serves as investment advisor for the portfolio described herein, and also serves as administrator for the Money Market Portfolio. For the Money Market Portfolio, BIMC and PFPC, Inc. ("PFPC") have entered into a delegation agreement, whereas PFPC has agreed to perform Administration and Accounting services for an annual fee of .10% of the average net assets of the portfolio. For its advisory services, BIMC is entitled to receive the following fees, computed daily and payable monthly based on the portfolio's average daily net assets: PORTFOLIO ANNUAL RATE ------------------------ -------------------------------------------- Money Market Portfolio .45% of first $250 million of net assets; .40% of next $250 million of net assets; .35% of net assets in excess of $500 million. BIMC may, at its discretion, voluntarily waive all or any portion of its advisory fee for this portfolio. For each class of shares within the portfolio, the net advisory fee charged to each class is the same on a relative basis. For the six months ended February 29, 2000, advisory fees and waivers for the investment portfolio were as follows: GROSS NET ADVISORY ADVISORY FEE WAIVER FEE ---------- ---------- ---------- Money Market Portfolio $5,310,677 $(707,606) $4,603,071 The investment advisor has agreed to reimburse the portfolio for the amount, if any, by which the net operating expenses exceed the expense cap. For the six months ended February 29, 2000 the reimbursed expenses were $157,665 for the Money Market Portfolio. 10 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2000 (UNAUDITED) NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) In addition, PFPC Trust Co. serves as custodian for the portfolio. PFPC serves as each class's transfer and dividend disbursing agent. Both PFPC Trust Co. and PFPC are wholly-owned subsidiaries of PFPC Worldwide Inc., an indirect majority owned subsidiary of The PNC Financial Services Group, Inc. PFPC may, at its discretion, voluntarily waive all or any portion of its transfer agency fee for any class of shares. For the six months ended February 29, 2000, transfer agency fees and waivers for each class of shares within the investment portfolio were as follows: GROSS NET TRANSFER AGENCY TRANSFER FEE WAIVER AGENCY FEE --------------- ------------ ------------ Money Market Portfolio Bedford Class $ -- $ -- $ -- Cash Preservation Class -- -- -- Janney Montgomery Scott Class 213,047 -- 213,047 Principal Class 3,900 -- 3,900 Sansom Street Class 6,702 -- 6,702 Select 1,400 -- 1,400 -------- ------- -------- Total Money Market Portfolio $225,049 $ -- $225,049 ======== ======= ======== The Fund, on behalf of each class of shares within the investment portfolio, has adopted Distribution Plans pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended. The Fund has entered into Distribution Contracts with Provident Distributors Inc. ("PDI"), which provide for each class to make monthly payments, based on average net assets, to PDI of up to .65% on an annualized basis for the Bedford, Cash Preservation, Principal, and Janney Montgomery Scott Classes and up to .20% on an annualized basis for the Sansom Street Class. For the six months ended February 29, 2000, distribution fees for each class were as follows: DISTRIBUTION FEE ------------ Money Market Portfolio Bedford Class $1,195,289 Cash Preservation Class 301 Janney Montgomery Scott Class 3,394,889 Principal Class 425,466 Sansom Street Class 212,738 ----------- Total Money Market Portfolio $5,228,683 =========== The Fund has entered into service agreements with banks affiliated with PNC Bank who render support services to customers who are the beneficial owners of the Sansom Street Class in consideration of the payment of .10% of the daily net asset value of such shares. For the six months ended February 29, 2000, service organization fees were $284,235 for the Money Market Portfolio. 11 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2000 (UNAUDITED) NOTE 3. CAPITAL SHARES Transactions in capital shares (at $1 per capital share) for the year were as follows: MONEY MARKET PORTFOLIO ---------------------------------- FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED FEBRUARY 29, 2000 AUGUST 31, 1999 ----------------- --------------- VALUE VALUE ----------------- ---------------- (UNAUDITED) Shares sold: Bedford Class $ 434,830,491 $ 1,676,808,408 Cash Preservation Class 168,234 114,454 Janney Montgomery Scott Class 2,959,249,169 4,931,373,936 Principal Class 300,341,761 318,334,115 Sansom Street Class 1,562,831,873 2,907,994,377 Select Class 1,740,715,743 1,439,090,920 --------------- ---------------- Total Shares Purchased 6,998,137,271 11,273,716,210 Shares issued in reinvestment of dividends: Bedford Class 9,382,916 28,217,868 Cash Preservation Class 3,501 7,224 Janney Montgomery Scott Class 26,565,909 43,272,113 Principal Class 5,254,007 2,206,341 Sansom Street Class 13,465,885 26,800,967 Select Class -- 347,980 --------------- ---------------- Total Shares Reinvested 54,672,218 100,852,493 Shares repurchased: Bedford Class (362,189,722) (2,107,674,545) Cash Preservation Class (65,144) (217,053) Janney Montgomery Scott Class (2,843,076,015) (4,790,786,046) Principal Class (294,544,481) (102,006,633) Sansom Street Class (2,172,852,992) (2,741,000,161) Select Class (1,568,709,671) (1,209,386,849) --------------- ---------------- Total Shares Repurchased (7,241,438,025) (10,951,071,287) --------------- ---------------- Net increase (decrease) $ (188,628,536) $ 423,497,416 =============== ================ Principal Shares authorized 700,000,000 700,000,000 =============== ================ 12 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2000 (UNAUDITED) NOTE 4. NET ASSETS At February 29, 2000, net assets consisted of the following: Capital paid-in $2,550,547,824 Accumulated net realized gain (loss) on investments (56,631) -------------- $2,550,491,193 ============== 13 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2000 (UNAUDITED) NOTE 5. OTHER FINANCIAL HIGHLIGHTS The Fund currently offers five other classes of shares representing interests in the Money Market Portfolio: Bedford, Cash Preservation, Janney Montgomery Scott, Sansom Street, and Select. Each class is marketed to different types of investors. Financial Highlights of Cash Preservation Class is not presented in this report due to its immateriality. Such information is available in the annual report of the Cash Preservation Family. The financial highlights of certain of the other classes are as follows: THE BEDFORD FAMILY (c)
MONEY MARKET PORTFOLIO --------------------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED FEBRUARY 29, 2000 AUGUST 31, 1999 AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996 ------------------ ----------------- --------------- --------------- --------------- (UNAUDITED) Net asset value, beginning of year or period . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- ---------- ---------- Income from investment operations: Net investment income ....... 0.0237 0.0425 0.0473 0.0462 0.0469 -------- -------- -------- ---------- ---------- Total from investment operations ............... 0.0237 0.0425 0.0473 0.0462 0.0469 -------- -------- -------- ---------- ---------- Less distributions Dividends (from net investment income) ......... (0.0237) (0.0425) (0.0473) (0.0462) (0.0469) -------- -------- -------- ---------- ---------- Total distributions ........ (0.0237) (0.0425) (0.0473) (0.0462) (0.0469) -------- -------- -------- ---------- ---------- Net asset value, end of year or period ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ========== ========== Total Return ................ 2.37%(d) 4.34% 4.84% 4.72% 4.79% Ratios/Supplemental Data Net assets, end of period (000) ............... $442,146 $360,123 $762,739 $1,392,911 $1,109,334 Ratios of expenses to average net assets ................. .97%(a)(b) .97%(a) .97%(a) .97%(a) .97%(a) Ratios of net investment income to average net assets ................. 4.76%(b) 4.25% 4.73% 4.62% 4.69% (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 1.02% for the six months ended February 29, 2000, 1.08%, 1.10%, 1.12% and 1.14% for the years ended August 31, 1999, 1998, 1997 and 1996, respectively. (b)Annualized. (c)Financial Highlights relate solely to the Bedford Class of shares within the portfolio. (d)Non-Annualized.
14 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2000 (UNAUDITED) NOTE 5. OTHER FINANCIAL HIGHLIGHTS (CONTINUED) THE JANNEY MONTGOMERY SCOTT MONEY FUNDS (c)
MONEY MARKET PORTFOLIO --------------------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED FEBRUARY 29, 2000 AUGUST 31, 1999 AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996 ----------------- --------------- --------------- --------------- --------------- (UNAUDITED) Net asset value, beginning of year or period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ---------- ---------- -------- -------- -------- Income from investment operations: Net investment income ...... 0.0235 0.0422 0.0469 0.0459 0.0465 ---------- ---------- -------- -------- -------- Total from investment operations .............. 0.0235 0.0422 0.0469 0.0459 0.0465 ---------- ---------- -------- -------- -------- Less distributions Dividends (from net investment income) ....... (0.0235) (0.0422) (0.0469) (0.0459) (0.0465) ---------- ---------- -------- -------- -------- Total distributions ....... (0.0235) (0.0422) (0.0469) (0.0459) (0.0465) ---------- ---------- -------- -------- -------- Net asset value, end of year or period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========== ========== ======== ======== ======== Total Return ............... 2.35%(d) 4.30% 4.81% 4.69% 4.76% Ratios /Supplemental Data Net assets, end of year or period (000) ............. $1,231,144 $1,088,405 $904,526 $736,855 $561,865 Ratios of expenses to average net assets ............... 1.00%(a)(b) 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a) Ratios of net investment income to average net assets ............... 4.73(b) 4.22% 4.69% 4.59% 4.65% (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 1.05% for the six months ended February 29, 2000, 1.19%, 1.21%, 1.22% and 1.23% for the years ended August 31, 1999, 1998, 1997 and 1996, respectively. (b)Annualized. (c)Financial Highlights relate solely to the Janney Montgomery Scott Class of shares within the portfolio. (d)Non-Annualized.
15 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2000 (UNAUDITED) NOTE 5. OTHER FINANCIAL HIGHLIGHTS (CONTINUED) THE SANSOM STREET FAMILY (c)
MONEY MARKET PORTFOLIO ---------------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED FEBRUARY 29, 2000 AUGUST 31, 1999 AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996 ----------------- --------------- --------------- --------------- --------------- (UNAUDITED) Net asset value, beginning of year or period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- Income from investment operations: Net investment income ................... 0.0259 0.0473 0.0520 0.0510 0.0518 -------- -------- -------- -------- -------- Total from investment operations ...... 0.0259 0.0473 0.0520 0.0510 0.0518 -------- -------- -------- -------- -------- Less distributions Dividends (from net investment income) .. (0.0259) (0.0473) (0.0520) (0.0510) (0.0518) -------- -------- -------- -------- -------- Total distributions ................... (0.0259) (0.0473) (0.0520) (0.0510) (0.0518) -------- -------- -------- -------- -------- Net asset value, end of year or period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total Return ............................... 2.59%(d) 4.83% 5.34% 5.22% 5.30% Ratios/Supplemental Data Net assets, end of period ............. $245,332 $841,887 $684,066 $570,018 $524,359 Ratios of expenses to average net assets .49%(a)(b) .49%(a) .49%(a) .49%(a) .48%(a) Ratios of net investment income to average net assets .................... 5.22%(b) 4.73% 5.20% 5.10% 5.18% (a) Without the waiver of advisory, adminition 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 .55% for the six months ended February 29, 2000, .62%, .62%, .64% and .65% for the years ended August 31, 1999, 1998, 1997 and 1996, respectively. (b) Annualized. (c) Financial highlights relate solely to the Sansom Street Class of shares within the portfolio. (d) Non-Annualized.
16 THE PRINCIPAL FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2000 (UNAUDITED) NOTE 5. OTHER FINANCIAL HIGHLIGHTS (CONTINUED) THE SELECT FAMILY (b)
MONEY MARKET PORTFOLIO ---------------------------------------- FOR THE FOR THE PERIOD SIX MONTHS ENDED DECEMBER 15, 1998 FEBRUARY 29, 2000 TO AUGUST 31, 1999(c) ----------------- --------------------- (Unaudited) Net asset value, beginning of period (12/15/98)....................... $ 1.00 $ 1.00 ------- ------- Income from investment operations: Net investment income .................. 0.0272 0.0345 ------- ------- Total from investment operations ..... 0.0272 0.0345 ------- ------- Less distributions Dividends (from net investment income).. (0.0272) (0.0345) ------- ------- Total distributions .................. (0.0272) (0.0345) ------- ------- Net asset value, end of period ............ $ 1.00 $ 1.00 ======= ======= Total Return .............................. 2.72%(e) 3.50%(e) Ratios/Supplemental Data Net assets, end of period .............. $402,050 $230,044 Ratios of expenses to average net assets .................. .27%(a)(d) .27%(a)(d) Ratios of net investment income to average net assets ................... 5.47%(d) 4.82%(d) (a) Without the waiver of advisory and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Money Market Portfolio would have been .40% for the six months ended February 29, 2000, and .41% for the period ended August 31, 1999. (b) Financial Highlights relate solely to the Select Class of shares. (c) On December 15, 1998 the Money Market Portfolio's Select Class began operations. (d) Annualized. (e) Non-Annualized.
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