-----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, QxxoA0C166NdBSP814QY+fwPk3JkCQJzBs4b/PXjRNYR47WwvcW9idKkdOwyicyw NNEdsm4l+wCiw9qNeAnX2A== 0000935069-97-000058.txt : 19970507 0000935069-97-000058.hdr.sgml : 19970507 ACCESSION NUMBER: 0000935069-97-000058 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970228 FILED AS OF DATE: 19970506 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: 97596312 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 BOSTON PARTNERS SEMI-ANNUAL REPORT [GRAPHIC OMITTED] BOSTON PARTNERS ASSET MANAGEMENT, L.P. -------------------------------------- BOSTON PARTNERS LARGE CAP VALUE FUND Semi-Annual Report February 28, 1997 BOSTON PARTNERS LARGE CAP VALUE FUND PORTFOLIO MANAGER'S LETTER March 17, 1997 Dear Shareholders: We are pleased to provide the inaugural report on the results of the Boston Partners Large Cap Value Fund for the period ended February 28, 1997. Our objective in each letter will be to update you on the results of the Fund, the market, and the economy over the past period and to present our insights as to what you can expect in the future. At February 28, 1997, the Fund's Net Asset Value (NAV) was $10.62 compared to $10.00 at inception on January 2, 1997. Therefore, the portfolio's total return was 6.20%, compared with 7.08% for the S&P 500 Index. PORTFOLIO REVIEW The first two months of 1997 saw the equities markets move significantly higher, although a pullback in the latter part of February tempered overall gains. The sharp advance in stock prices was dominated by large capitalization stocks, as the large capitalization indices such as the S&P 500 and the Dow Jones Industrial Average soundly outperformed most mid-cap and small-cap indices. Even among large capitalization stocks the advance had been very narrow, creating a difficult environment for active managers to outperform the S&P 500. Stocks characterized by high price to earnings and price to book ratios, like Coca-Cola, Unilever N.V. and Nationsbank led the surge for the S&P 500. These overpriced stocks did not meet our stock selection criteria, and therefore the Fund lagged the market's advance. The Financial Services sector has been a strong performing sector as investors have responded to strong earnings reports, attractive valuations, and further consolidation in the banking, insurance and brokerage industries. The Fund has been close to its 25% maximum position in the Financial Services sector, which has had a positive effect on performance. Among the better performing stocks in this sector were Student Loan Marketing Association, Republic New York Corporation, and H.F. Ahmanson. Also making a very positive contribution to the Fund's performance in January and February were the tobacco stocks, as investors focused less on the legal and regulatory risks facing these companies and more on their inexpensive valuations and very strong earnings and cash flow dynamics. The shares of Philip Morris (which is among the largest holdings in the Fund) increased by 19.69% during the period. CURRENT OUTLOOK We believe that by most valuation measures, the stock market looks expensive. According to recent history, though, over-valuation alone has rarely triggered a bear market. Declining markets are usually triggered by events such as rising interest rates, deteriorating profits, etc., in conjunction with overextended prices. The "bottom-up" consensus earnings estimate for the S&P 500 currently calls for a 14% increase in 1997 earnings versus 1996. We believe there is a strong probability that these estimates are too high. Therefore, we expect to see an increasing number of companies that report disappointing results in 1997. The recent pattern of such reports has seen the market inflict a serious penalty on the stocks of companies reporting earnings shortfalls. STRATEGY Our strategy for the coming months includes three tactics: (BULLET) Avoid overpriced stocks, regardless of how strong their fundamentals look; (BULLET) Avoid stocks with overly optimistic earnings estimates for 1997 (BULLET) Focus on stocks selling at low multiples of earnings, book value, sales, etc., whose earnings prospects are likely to be enhanced by: 1. Share Repurchases 2. Debt Paydown 3. Acquisitions and Divestitures 4. Restructuring Best Regards, Mr. Mark Donovan, CFA Ms. Wayne Steele Sharp, CFA Principal and Portfolio Manager Principal and Portfolio Manager Boston Partners Asset Management, L.P. Boston Partners Asset Management, L.P. 2 BOSTON PARTNERS LARGE CAP VALUE FUND OF THE RBB FUND, INC. PORTFOLIO OF INVESTMENTS FEBRUARY 28, 1997 (UNAUDITED) NUMBER OF SHARES VALUE --------- ---------- COMMON STOCK--87.9% AEROSPACE/DEFENSE--2.8% Litton Industries, Inc.* .................. 1,780 $ 76,540 Lockheed Martin Corp. ..................... 770 68,145 Northrop Grumman Corp. .................... 925 67,178 ---------- 211,863 ---------- AIR TRANSPORT--1.3% AMR Corp.* .................................... 830 65,259 Gulfstream Aerospace Corp.* ................... 1,570 34,147 ---------- 99,406 ---------- BANKS & SAVINGS & LOANS--3.1% Bank of Boston Corp. .......................... 420 31,657 Dime Bancorp, Inc.* .......................... 2,200 38,500 First American Corp. .......................... 320 20,520 Republic New York Corp. ....................... 1,570 145,814 ---------- 236,491 ---------- BUSINESS SERVICES--0.5% Dun & Bradstreet Corp. ........................ 1,565 38,342 ---------- CHEMICALS--1.1% Agrium, Inc. .................................. 3,880 53,350 Wellman, Inc. ................................. 1,660 29,050 ---------- 82,400 ---------- COMPUTERS--4.3% Compaq Computer Corp.* ........................ 840 66,570 Komag, Inc.* .................................. 1,000 30,000 Quantum Corp.* ................................ 2,000 79,500 Tandem Computers, Inc.* ....................... 6,400 80,000 Wang Labs, Inc.* .............................. 3,230 70,858 ---------- 326,928 ---------- CONSUMER NON-DURABLES--0.8% Dial Corp. .................................... 3,760 56,400 ---------- CONSUMER PRODUCTS & SERVICES--2.3% Eastman Kodak Co. ............................. 1,200 107,550 Rite Aid Corp. ................................ 1,630 68,664 ---------- 176,214 ---------- NUMBER OF SHARES VALUE --------- ---------- DIVERSIFIED--2.0% American Brands, Inc. ......................... 630 $ 33,154 Canadian Pacific Ltd. ......................... 1,260 31,185 Cognizant Corp. ............................... 1,365 47,604 Kansas City Southern Industries, Inc. ............................ 730 38,325 ---------- 150,268 ---------- ELECTRONICS--2.2% Cirrus Logic Corp.* ........................... 2,200 29,837 National Semiconductor Corp.* ................. 1,680 43,890 VLSI Technology, Inc.* ........................ 4,900 91,569 ---------- 165,296 ---------- ENERGY--2.8% Calpine Corp.* ................................ 1,780 32,707 CMS Energy Corp. .............................. 1,675 54,856 ENSERCH Corp. ................................. 1,000 21,000 Entergy Corp. ................................. 2,520 66,465 Illinova Corp. ................................ 1,460 36,500 ---------- 211,528 ---------- FINANCIAL SERVICES--9.2% Ahmanson, (H.F.) & Co. ........................ 950 39,069 AMBAC, Inc. ................................... 528 35,244 Fannie Mae .................................... 1,565 62,600 H & R Block, Inc. ............................. 1,995 58,603 Lehman Brothers Holdings, Inc. ................ 4,510 151,649 St. Paul Companies, Inc. ...................... 500 33,750 Student Loan Marketing Association ................................. 2,950 312,331 ---------- 693,246 ---------- FOOD & BEVERAGE--0.6% Chiquita Brands International, Inc. ........... 3,460 46,710 ---------- HEALTH CARE--2.8% Lincare Holdings, Inc.* ....................... 1,675 72,234 Nationwide Health Properties, Inc. ........... 1,250 27,500 Trigon Healthcare, Inc.* ...................... 1,700 30,387 Wellpoint Health Networks, Inc.* .............. 1,885 80,819 ---------- 210,940 ---------- The accompanying notes are an integral part of the financial statements. 3 BOSTON PARTNERS LARGE CAP VALUE FUND OF THE RBB FUND, INC. PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1997 (UNAUDITED) NUMBER OF SHARES VALUE --------- ---------- INSURANCE--17.1% Ace, Ltd. ................................... 1,565 $ 101,725 Aetna, Inc. ................................. 940 77,903 Allmerica Financial Corp. ................... 1,980 74,002 CIGNA Corp. ................................. 500 76,438 Everest Re Holdings, Inc. ................... 2,000 63,000 GCR Holdings, Ltd. .......................... 1,560 37,245 General Re Corp. ............................ 400 67,850 Horace Mann Educators Corp. ................. 940 40,303 IPC Holdings Ltd. ........................... 520 12,740 ITT Hartford Group, Inc. .................... 630 47,250 Loews Corp. ................................. 3,250 331,906 NAC Re Corp. ................................ 840 30,870 PartnerRe Ltd. .............................. 1,575 51,975 Travelers Group, Inc. ....................... 3,980 213,428 Western National Corp. ...................... 2,730 62,790 ---------- 1,289,425 ---------- METALS & MINING--2.3% Allegheny Teledyne, Inc. .................... 4,640 118,320 Inco, Ltd. .................................. 1,600 56,200 ---------- 174,520 ---------- OIL SERVICES--7.6% British Petroleum Co. PLC ................... 725 95,972 Elf Aquitaine SA ............................ 1,570 75,360 Exxon Corp. ................................. 735 73,408 Mobil Corp. ................................. 733 89,976 Oryx Energy Co.* ............................ 2,800 56,000 Repsol SA ................................... 2,410 91,580 Tosco Corp. ................................. 2,205 61,464 Ultramar Diamond Shamrock Corp. ............. 945 28,823 ---------- 572,583 ---------- PAPER & FOREST PRODUCTS--2.4% Boise Cascade Corp. ......................... 1,349 44,348 Caraustar Industries, Inc. .................. 1,147 34,123 Champion International Corp. ................ 1,459 64,378 Union Camp Corp. ............................ 730 35,223 ---------- 178,072 ---------- Number of Shares Value --------- ---------- PHARMACEUTICALS--2.9% Bristol-Meyers Squibb Co. ..................... 525 $ 68,513 Glaxo Wellcome PLC ............................ 2,200 74,525 Schering-Plough Corp. ......................... 965 73,943 ---------- 216,981 ---------- REAL ESTATE--3.3% American General Hospitality Corp. ............ 1,035 28,333 Associated Estates Realty Corp. ............... 530 12,455 Camden Property Trust ......................... 960 26,280 Highwoods Properties, Inc. .................... 210 7,245 Home Properties of New York, Inc. ............. 315 7,718 Liberty Property Trust ........................ 750 17,812 Mid-America Apartment Communities, Inc. ........................... 1,220 35,380 Oasis Residential, Inc. ....................... 430 9,944 Prentiss Property Trust ....................... 740 19,980 RFS Hotel Investors, Inc. ..................... 2,040 34,680 Summit Properties, Inc. ....................... 840 17,010 Wellsford Residential Property Trust ....................................... 1,140 33,345 ---------- 250,182 ---------- RETAIL TRADE--0.9% Wal-Mart Stores, Inc. ......................... 2,700 71,213 ---------- TELECOMMUNICATIONS--5.5% BHC Communications, Inc.* ..................... 310 31,620 Chris-Craft Industries, Inc.* ................. 1,680 69,090 COMSAT Corp. .................................. 2,090 54,863 Sprint Corp. .................................. 3,780 171,990 Telecomunicacoes Brasileiras SA ............... 520 50,440 Telefonos de Mexico SA Class L ................ 1,000 38,875 ---------- 416,878 ---------- TELECOMMUNICATIONS & EQUIPMENT--2.8% Alcatel Alsthom ADR ........................... 10,120 207,460 ---------- TEXTILES & APPAREL--3.0% Gap, Inc. ..................................... 1,250 41,250 Harcourt General, Inc. ........................ 1,700 80,093 Mercantile Stores Co., Inc. ................... 2,275 109,200 ---------- 230,543 ---------- The accompanying notes are an integral part of the financial statements. 4 BOSTON PARTNERS LARGE CAP VALUE FUND OF THE RBB FUND, INC. PORTFOLIO OF INVESTMENTS (CONCLUDED) February 28, 1997 (UNAUDITED) NUMBER OF SHARES VALUE --------- ---------- TOBACCO--3.8% Philip Morris Companies, Inc. ............. 2,100 $ 283,763 ---------- TOYS--0.5% Hasbro, Inc. .............................. 835 35,696 ---------- TOTAL COMMON STOCK (Cost $6,290,429) ....................... 6,633,348 ---------- PAR (000) ------- REPURCHASE AGREEMENT--2.6% PNC Capital Markets (Agreement dated 02/28/97 to be repurchased at $200,085, collateralized by $195,000 U.S. Treasury Note 7.375% due 11/15/97. Market value of collateral is $202,096) 5.100% 03/03/97 ......................... 200 200,000 ---------- TOTAL REPURCHASE AGREEMENT (Cost $200,000) ....................... 200,000 ---------- SHORT-TERM INVESTMENT--3.5% Smith Barney Cash Reserve 5.06% 03/03/97 .......................... 268 267,717 ---------- TOTAL SHORT-TERM INVESTMENT (Cost $267,717) ....................... 267,717 ---------- TOTAL INVESTMENTS -- 94.0% (Cost $6,758,146) ......................... $7,101,065 ---------- OTHER ASSETS IN EXCESS OF LIABILITIES -- 6.0% ....................... 449,350 ---------- NET ASSETS -- 100.0% ......................... $7,550,415 ========== - ------------- *Non-income producing The accompanying notes are an integral part of the financial statements. 5 BOSTON PARTNERS LARGE CAP VALUE FUND OF THE RBB FUND, INC. STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1997 (UNAUDITED) ASSETS Investments, at value (cost - $6,758,146) ................... $7,101,065 Receivable for Fund shares sold ............................. 500,000 Receivable for investments sold ............................. 85,753 Receivable from investment adviser .......................... 12,922 Dividends and interest receivable ........................... 11,615 Prepaid expenses and other assets ........................... 2,765 ---------- Total assets .............................................. 7,714,120 ---------- LIABILITIES Payable for investments purchased ............................ 147,097 Accrued expenses and other liabilities ....................... 16,608 ---------- Total liabilities .......................................... 163,705 ---------- NET ASSETS Capital stock, $0.001 par value ............................ 711 Paid-in capital ............................................ 7,149,641 Undistributed net investment income ........................ 14,023 Accumulated net realized gain from investments ............. 43,120 Net realized appreciation on investments ................... 342,920 ---------- Net assets ............................................... $7,550,415 ========== INSTITUTIONAL CLASS Net assets ................................................... $7,444,130 Shares outstanding ........................................... 700,715 ---------- Net asset value, offering and redemption price per share ..... $ 10.62 ========== INVESTOR CLASS Net assets ....................................................... $ 106,285 Shares outstanding ............................................... 10,006 ---------- Net asset value, offering and redemption price per share ......... $ 10.62 ========== The accompanying notes are an integral part of the financial statements. 6 BOSTON PARTNERS LARGE CAP VALUE FUND OF THE RBB FUND, INC. STATEMENT OF OPERATIONS FOR THE PERIOD JANUARY 2, 1997* THROUGH FEBRUARY 28, 1997 (UNAUDITED) INVESTMENT INCOME Dividends .................................................... $ 18,171 Interest ..................................................... 5,024 -------- 23,195 -------- EXPENSES Advisory fees ................................................. 6,866 Administration fees ........................................... 13,873 Federal and state registration fees ........................... 4,576 Transfer agent fees and expenses .............................. 6,497 Custodian fees and expenses ................................... 3,548 Printing ...................................................... 2,148 Audit and legal fees .......................................... 461 Distribution fees ............................................. 17 Other ......................................................... 1,231 -------- Total expenses before waivers and reimbursements ............ 39,217 Less: waivers and reimbursements ............................ (30,045) -------- Total expenses after waivers and reimbursements ............. 9,172 -------- Net investment income ......................................... 14,023 -------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from investments ........................... 43,120 Net change in unrealized appreciation on investments ......... 342,920 -------- Net realized and unrealized gain from investments ............ 386,040 -------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $400,063 ======== - -------------- *Commencement of operations. The accompanying notes are an integral part of the financial statements. 7 BOSTON PARTNERS LARGE CAP VALUE FUND OF THE RBB FUND, INC. STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED) FOR THE PERIOD JANUARY 2, 1997* THROUGH FEBRUARY 28, 1997 ------------------------ INCREASE IN NET ASSETS FROM OPERATIONS Net investment income ................................ $ 14,023 Net realized gain from investments ................... 43,120 Net change in unrealized appreciation on investments ........................................ 342,920 ---------- Net increase in net assets resulting from operations ....................................... 400,063 ---------- Increase in net assets derived from capital share transactions ......................................... 7,150,352 ---------- Total increase in net assets ........................ 7,550,415 NET ASSETS Beginning of period .................................. -- ---------- End of period ........................................ $7,550,415 ========== - -------------- *Commencement of operations. The accompanying notes are an integral part of the financial statements. 8 BOSTON PARTNERS LARGE CAP VALUE FUND OF THE RBB FUND, INC. FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the period. This information has been derived from information provided in the financial statements. - -------------------------------------------------------------------------------- FOR THE PERIOD FOR THE PERIOD JANUARY 2, 1997* JANUARY 16, 1997* through through FEBRUARY 28, 1997 FEBRUARY 28, 1997 ----------------- ----------------- (UNAUDITED) (UNAUDITED) INSTITUTIONAL INVESTOR CLASS CLASS ----------------- ----------------- PER SHARE OPERATING PERFORMANCE** Net asset value, beginning of period ..... $ 10.00 $ 10.20 ------- ------- Net investment income(1) ................. 0.02 0.01 Net realized and unrealized gain on investments(2) ................. 0.60 0.41 ------- ------- Net increase in net assets resulting from operations .............. 0.62 0.42 ------- ------- Net asset value, end of period ........... $ 10.62 $ 10.62 ======= ======= Total investment return(3) ............... 6.20% 4.12% ======= ======= RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ........................ $ 7,444 $ 106 Ratio of expenses to average net assets***(1)(4) .................... 1.00% 1.25% Ratio of net investment income to average net assets***(1) ............... 1.53% 1.59% Portfolio turnover rate**** .............. 17.00% 17.00% Average commission rate per share(5) ..... $0.0363 $0.0363 - ------------- * Commencement of operations. ** Calculated based on shares outstanding on the first and last day of the respective periods, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. *** Annualized. **** Not annualized. (1) Reflects waivers and reimbursements. (2) The amount shown for a share outstanding throughout the period is not in accord with the change in the aggregate gains and losses in investments during the period because the timing of sales and repurchases of Fund shares in relation to fluctuating net asset value during the period. (3) Total return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of the period reported and will include reinvestments of dividends and distributions, if any. Total return is not annualized. (4) Without the waiver of advisory, administration and transfer agent fees and without the reimbursement of certain operating expenses, the ratio of expenses to average net assets annualized for the period ended February 28, 1997 would have been 3.59% and 3.51% for the Institutional Class and the Investor Class, respectively. (5) Computed by dividing the total amount of commissions paid by the total number of shares purchased and sold during the period subject to such commissions. The accompanying notes are an integral part of the financial statements. 9 BOSTON PARTNERS LARGE CAP VALUE FUND OF THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended, (the "Investment Company Act") as an open-end management investment company. RBB is a "series fund", which is a mutual fund divided into separate portfolios. The portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently RBB has nineteen investment portfolios, including the Boston Partners Family, which consists of Boston Partners Large Cap Value Fund (the "Fund"). As of the date hereof, the Fund offers three classes of shares, two of which have commenced operations, the Institutional Class and the Investor Class. RBB has authorized capital of thirty billion shares of common stock of which 13.48 billion are currently classified into seventy-seven classes. Each class represents an interest in one of nineteen investment portfolios of RBB. The classes have been grouped into sixteen separate "families", nine of which have begun investment operations, including the Boston Partners Family, which commenced investment operations on January 2, 1997. PORTFOLIO VALUATION -- The net asset value of the Fund is determined as of 4:00 p.m. eastern time on each business day. The Fund's securities are valued at the last reported sales price on the national securities exchange or national securities market on which such shares are primarily traded. If no sales are reported, as in the case of some securities traded over-the-counter, portfolio securities are valued at the mean between the last reported bid and asked prices. Securities for which market quotations are not readily available are valued at fair market value as determined in good faith by or under the direction of RBB's Board of Directors. With the approval of the RBB's Board of Directors, the Fund may use a pricing service, bank or broker-dealer experienced in such matters to value its securities. The preparation of financial statements requires the use of estimates by management. Short-term obligations with maturities of 60 days or less are valued at amortized cost which approximates market value. Expenses and fees, including investment advisory and administration fees are accrued daily and taken into account for the purpose of determining the net asset value of the Fund. REPURCHASE AGREEMENTS -- The Fund has agreed to purchase securities from financial institutions subject to the seller's agreement to repurchase them at an agreed-upon time and price ("repurchase agreements"). The financial institutions with whom the Fund enters into repurchase agreements are banks and broker/dealers which Boston Partners Asset Management, L.P. (the Fund's investment adviser or "Boston Partners") considers creditworthy pursuant to criteria approved by RBB's Board of Directors. The seller under a repurchase agreement will be required to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. Boston Partners marks to market daily the value of the collateral, and, if necessary, requires the seller to maintain additional securities, to ensure that the value is not less than the repurchase price. Default by or bankruptcy of the seller would, however, expose the Fund to possible loss because of adverse market action or delays in connection with the disposition of the underlying securities. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME -- 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 in determining realized gains and losses on investments. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. The Fund's net investment income (other than distribution fees) and unrealized and realized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day (after adjusting for current capital share activity of the respective classes). 10 BOSTON PARTNERS LARGE CAP VALUE FUND OF THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) DIVIDENDS AND DISTRIBUTIONS -- Dividends from net investment income, if any, will be declared and paid at least annually to shareholders. Distributions from net realized capital gains, if any, will be distributed at least annually. Income and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from generally accepted accounting principles. U.S. FEDERAL TAX STATUS -- No provision is made for U.S. federal income taxes as it is the Fund's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. federal income and excise taxes. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Boston Partners Asset Management, L.P. serves as the Fund's investment adviser. For its advisory services, Boston Partners is entitled to receive 0.75% of the Fund's average daily net assets, computed daily and payable monthly. The adviser has voluntarily agreed to limit the Fund's total operating expenses for the current and the following fiscal year to the extent that such expenses exceeded 1.00% of the Fund's average daily net assets. As necessary, this limitation is effected in waivers of advisory fees and reimbursements of expenses exceeding the advisory fee. For the period ended February 28, 1997, investment advisory fees, waivers and reimbursements of expenses were as follows: GROSS NET ADVISORY ADVISORY EXPENSE FUND FEES WAIVER FEES REIMBURSEMENT - ---- -------- -------- -------- ------------- Boston Partners Large Cap Value Fund $6,866 $(6,866) $ -- $12,922 The Fund will not pay Boston Partners at a later time for any amounts it may waive or any amounts which Boston Partners has assumed. PFPC Inc. ("PFPC"), an indirect wholly-owned subsidiary of PNC Bank, National Association, serves as administrator for the Fund. For providing administrative services PFPC is entitled to receive a monthly fee equal to an annual rate of 0.125% of the Fund's average daily net assets, subject to a minimum monthly fee of $6,250 per Fund. For the period ended February 28, 1997, PFPC, at it's discretion, voluntarily agreed to waive a portion of it's administration fees for the Fund. For the period ended February 28, 1997, PFPC's administration fees and related waivers were as follows:
GROSS PFPC NET PFPC FUND ADMINISTRATION FEES WAIVERS ADMINISTRATION FEES - ---- ------------------- ---------- ------------------- Boston Partners Large Cap Value Fund $12,500 $(6,250) $6,250
In addition, PFPC serves as the Fund's transfer and disbursing agent. PFPC, at it's discretion, voluntarily agreed to waive a portion of the transfer agency fees for the Fund. For the period ended February 28, 1997, transfer agency fees and waivers were as follows:
GROSS TRANSFER NET TRANSFER FUND AGENCY FEES WAIVERS AGENCY FEES - ---- -------------- ---------- ------------------ Boston Partners Large Cap Value Fund $6,497 $(3,000) $3,497
11 BOSTON PARTNERS LARGE CAP VALUE FUND OF THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (Concluded) (UNAUDITED) Counsellors Funds Services, Inc. ("Counsellors"), a wholly-owned subsidiary of Warburg, Pincus Counsellors, Inc., provides certain distribution services to the Fund. As compensation for such distribution services, Counsellors is entitled to receive a monthly fee equal to an annual rate of 0.15% of the Fund's average daily net assets. For the period ended February 28, 1997 Counsellors has, at its discretion, voluntarily agreed to waive a portion of the distribution fees for the Fund. For the period ended February 28, 1997, distribution fees and related waivers were as follows: GROSS DISTRIBUTION NET DISTRIBUTION FUND FEES WAIVERS FEES - ---- ------------ ---------- ----------------- Boston Partners Large Cap Value Fund $1,373 $(1,007) $366 These fees are computed daily and paid monthly. 3. INVESTMENT IN SECURITIES For U.S. federal income tax purposes, the costs of securities owned at February 28, 1997 was $6,758,146. Accordingly, the net unrealized appreciation/(depreciation) of investments are as follows:
Net Appreciation/ FUND Appreciation Depreciation (Depreciation) - ---- ------------ ------------ ------------------ Boston Partners Large Cap Value Fund $434,886 $(91,966) $342,920
For the period ended February 28, 1997, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: Fund Purchases Sales - ---- ------------ ------------ Boston Partners Large Cap Value Fund $7,370,137 $1,122,828 4. Capital Share Transactions As of February 28, 1997 the Fund has 100,000,000 Institutional and 100,000,000 Investor shares of $0.001 par value common stock authorized. Transactions in capital shares for the period January 2, 1997 (commencement of operations) through February 28, 1997 were as follows: Institutional Class Investor Class ------------------------- ------------------------ Shares Amount Shares Amount -------- ---------- -------- ---------- Sales .................... 700,715 $7,045,432 10,006 $104,920 Repurchases .............. -- -- -- -- -------- ---------- ------ -------- Net increase ............. 700,715 $7,045,432 10,006 $104,920 ======== ========== ====== ======== 12 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] INVESTMENT ADVISOR Boston Partners Asset Management, L.P. One Financial Center, 43rd Floor Boston, MA 02111 ADMINISTRATOR PFPC Inc. 400 Bellevue Parkway Wilmington, DE 19809 DISTRIBUTOR Counsellors Funds Services, Inc 466 Lexington Avenue New York, NY 10017 CUSTODIAN PNC Bank, N.A. 200 Stevens Drive Lester, PA 19113 TRANSFER AGENT PFPC Inc. 400 Bellevue Parkway Wilmington, DE 19809 INDEPENDENT ACCOUNTANTS Coopers & Lybrand, L.L.P. 2400 Eleven Penn Center Philadelphia, PA 19103 COUNSEL Drinker Biddle & Reath 1345 Chestnut Street Philadelphia, PA 19107 The financial information included herein is taken from the records of the Fund without examination by independent auditors who do not express an opinion thereon. This report is submitted for the general information of the shareholders of the Fund. It is not authorized for the distribution to prospective investors in the Fund unless it is preceded or accompanied by a current prospectus which includes details regarding the Fund's objectives, policies and other information. Total investment return is based on historical results and is not intended to indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than original cost. -----END PRIVACY-ENHANCED MESSAGE-----