-----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, HxsAssG8Ygp4zvxH8LS1RE3XoSYajmSD0dJHYiBVJ7JtF9dBNqE2RC8GkF/jZDJV 2uGtGMRUYPjnZJhxdrgcoQ== 0000935069-99-000281.txt : 19991217 0000935069-99-000281.hdr.sgml : 19991217 ACCESSION NUMBER: 0000935069-99-000281 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990831 FILED AS OF DATE: 19991216 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: 99775748 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 BEDFORD MUNICIPAL MONEY MARKET PORTFOLIO ================================================================================ THE BEDFORD MUNICIPAL MONEY MARKET PORTFOLIO MUNICIPAL MONEY MARKET PORTFOLIO - -------------------------------------------------------------------------------- ANNUAL REPORT AUGUST 31, 1999 ================================================================================ THE BEDFORD FAMILY THE RBB FUND, INC. ANNUAL INVESTMENT ADVISER'S REPORT One year ago, economic and financial crises around the world threatened the continuation of the eight-year expansion of the U.S. economy. With the assistance, however, of lower interest rates, low inflation and a consumer driven spending spree, the U.S. economy moved ahead at a brisk pace through August of 1999. First quarter gross domestic product (GDP) grew by 4.5%, and while the second quarter slipped to 1.6%, estimates for the third quarter range as high as 5%. During the same period, price and wage pressures remained tame. The GDP deflator reported a 1.4% increase through the first half of the year, and consumer and wholesale prices for August showed moderate 2.3% increases on a year-over-year basis. Energy costs, in particular, accounted for most of the increases in CPI and PPI, as the price of oil reached $25 a barrel. With the threat of global turmoil behind them, the Federal Reserve began to rescind its three monetary policy easings effected last fall. Twice in the last three months, the Fed raised short-term interest rates by a quarter point. The current federal funds rate of 5.25% should, according to the Fed, "markedly diminish the risk of rising inflation." The Fed's tightenings had an immediate impact on the taxable money markets. Overnight rates increased commensurate with the Fed's moves, while longer-dated securities with maturities out to one year experienced larger gains. The result was a steeper yield curve with yields on one-year obligations exceeding 6%. The Y2K factor also came into play this year. Investments into January, 2000 often carried incentives of 40-50 basis points versus December, 1999 maturities, as investors sought extra liquidity for year-end uncertainties. The U.S. Treasury and agency yield curves also steepened and the spreads widened between the two sectors. The municipal money markets also experienced the effects of the Fed's efforts to slow the economy to a more sustainable pace. One-year municipal notes rose to a 3.65% yield at the end of August versus yields under 3% early in 1999. Variable rate obligations, with one and seven-day puts used for liquidity, continued their pattern of trading in a range between 3-4% for most of the year. Strong investor demand easily absorbed all new issuance during the period. While total municipal money fund assets declined slightly to $193 billion on August 31, that was up from $175 billion a year ago. On August 31, assets in the Municipal Money Market Portfolio stood at $265,031,464 . The Fund, like any business, could be affected if the computer systems on which it relies do not properly process information beginning on January 1, 2000. While year 2000 issues could have a negative effect on the Fund, the Fund's investment adviser is currently working to avoid such problems. The Fund's investment adviser is also working with other systems providers and vendors servicing the Portfolios to determine their systems' ability to handle Year 2000 problems. There is no guarantee, however, that systems will work properly on or after January 1, 2000. Year 2000 problems may also hurt issuers whose securities the Fund holds or securities markets generally. BlackRock Institutional Management Corporation (Please dial toll-free 800-677-6310 for questions regarding your account or contact your broker.) REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of The RBBFund,Inc.: In our opinion, the accompanying statement of net assets, and the related statements of operations and changes in net assets, and the financial highlights present fairly, in all material respects, the financial position of Municipal Money Market Portfolio, a seperately managed portfolio of The RBBFund, Inc. (the "Fund") at August 31, 1999, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 1999 by correspondence with the custodian and brokers, provides a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP 2400 Eleven Penn Center Philadelphia, Pennsylvania October 15, 1999 2 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS AUGUST 31, 1999 PAR (000) VALUE -------- -------------- MUNICIPAL BONDS--102.2% ALABAMA--0.9% Montgomery Special Care Facilities Financing Authority RB 1985 Series A DN (AMBAC Insurance)(DAGGER) 3.350% 09/07/99 ........................... $ 2,270 $ 2,270,000 -------------- ALASKA--0.1% Valdez, Marine Terminal RB (Exxon Pipeline Co. Project) DN(DAGGER) 2.950% 09/01/99 ........................... 300 300,000 -------------- CALIFORNIA--1.9% California Higher Education Student Loan RB Series D-2 MB (Dresdner Bank LOC)(DOUBLE DAGGER) 3.500% 04/01/00 ........................... 5,000 5,000,000 -------------- COLORADO--0.4% Douglas County School District TAN 4.500% 06/30/00 ........................... 1,000 1,007,227 -------------- CONNECTICUT--1.0% Connecticut Special Assessment Unemployment Compensation Advance Fund (Connecticut Unemployment Project) Series 1993 C MB (FGIC Insurance)(DOUBLE DAGGER) 3.380% 01/01/00 ........................... 2,700 2,700,000 -------------- FLORIDA--1.9% Greater Orlando Aviation Authority Airport Facilities Subordinated Series A TECP (Morgan Guaranty Trust LOC)(DOUBLE DAGGER) 3.540% 12/15/99 ........................... 5,104 5,104,000 -------------- GEORGIA--8.9% Bulloch County, Development Authority of, Tax-Exempt Adjustable Mode IDA RB (Gold Kist Inc. Project) DN (Wachovia LOC)(DAGGER) 3.350% 09/07/99 ........................... 5,700 5,700,000 Burke County Development Authority PCR RB (Oglethorpe Power Corporation Vogtle) MB(DOUBLE DAGGER) 3.450% 11/28/99 ........................... 3,600 3,600,000 PAR (000) VALUE -------- -------------- GEORGIA--(CONTINUED) Burke County Development Authority RB (Oglethorpe Power Corp. Vogtle Project) Series 1996 MB(DOUBLE DAGGER) 3.350% 11/01/99 ........................... $ 4,000 $ 4,000,000 Gulf Coast IDA Solid Waste Disposal Facility Citgo Project Series 1994 DN (Wachovia LOC)(DAGGER) 3.100% 09/01/99 ........................... 2,100 2,100,000 McDuffie County, Development Authority of, Waste Disposal RB (Temple-Inland Forest Products Corporation) TECP 1998 4.050% 10/21/99 ........................... 2,500 2,500,000 Monroe County Development Authority PCR RB (Oglethorpe Power Corporation, Scherer Project) MB(DOUBLE DAGGER) 3.450% 11/28/99 ........................... 5,615 5,615,000 -------------- 23,515,000 -------------- ILLINOIS--9.8% Addison, Village Of, Dupage County, Industrial Revenue Refunding Bonds (General Binding Corp. Project) 1988 DN (ABN AMRO Bank N.V. LOC)(DAGGER) 3.650% 09/07/99 ........................... 1,600 1,600,000 Chicago Gas Supply RB (Peoples Gas Light & Coke Co. Project) 1993B MB(DOUBLE DAGGER) 3.200% 12/01/99 ........................... 5,575 5,575,000 Chicago, City Of, IDA RB (Goose Island Beer O. Project) DN (ABN Amro Bank LOC)(DAGGER) 3.750% 09/07/99 ........................... 2,100 2,100,000 East Dundee, Kane and Cook Counties, IDA RB (Otto Engine Project)/ (Lasalle National Bank LOC) DN(DAGGER) 3.370% 09/07/99 ........................... 950 950,000 Illinois Development Finance Authority PCR RB (Illinois Power Company Project) (ABN-AMRO Bank N.V. LOC) TECP(DOUBLE DAGGER) 3.650% 02/22/00 ........................... 2,000 2,000,000 See Accompanying Notes to Financial Statements. 3 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1999 PAR (000) VALUE -------- ------------ ILLINOIS--(CONTINUED) Illinois Health Facilites Authority TECP (Children's Memorial Hospital) Series A (First National Bank Chicago LOC)(DOUBLE DAGGER) 3.500% 11/30/99 ........................... $ 2,000 $ 2,000,000 Illinois Health Facilities Authority Revolving Fund Pooled Financing Program (The University of Chicago Project) MB(DOUBLE DAGGER) 3.200% 10/05/99 ........................... 4,000 4,000,000 Illinois Health Facility Authority RB MB (Evanston Hospital Corp.) Series A(DOUBLE DAGGER) 3.550% 07/31/00 ........................... 6,000 6,000,000 Lake County IDA RB (Northpoint Project) AMT DN (Banc One N.A. LOC)(DAGGER) 3.350% 09/07/99 ........................... 500 500,000 Plainfield, Village of, IDA RB Series 1997 (Plainfield Moldings, Inc. Project) DN (Algemene LOC)(DAGGER) 3.370% 09/07/99 ........................... 1,275 1,275,000 ------------ 26,000,000 ------------ INDIANA--11.3% Bremen IDA RB Series 1996 A (Universal Bearings, Inc. Project Private Placement) DN (Society National Bank of Cleveland LOC)(DAGGER) 3.450% 09/07/99 ........................... 5,000 5,000,000 Crawfordsville Industrial Economic Development RB (Pedcor Investments-Shady Knoll Apartments Project) DN (Federal Home Loan Bank LOC)(DAGGER) 3.350% 09/07/99 ........................... 3,365 3,365,000 Indiana Development Finance Authority IDA RB (Enterprise Center I Project) DN (LOC Society National Bank Cleveland)(DAGGER) 3.370% 09/07/99 ........................... 2,900 2,900,000 Indiana Development Finance Authority IDA RB (Enterprise Center II Project) DN (LOC Society National Bank Cleveland)(DAGGER) 3.370% 09/07/99 ........................... 2,000 2,000,000 PAR (000) VALUE -------- ------------ INDIANA--(CONTINUED) Indiana Development Finance Authority IDA RB (Enterprise Center IV Project) DN (LOC Society National Bank Cleveland)(DAGGER) 3.370% 09/07/99 ........................... $ 2,600 $ 2,600,000 Indiana Development Finance Authority IDA RB (Enterprise Center VI Project) DN (ABN Amro Bank LOC)(DAGGER) 3.370% 09/07/99 ........................... 4,900 4,900,000 Indiana Development Finance Authority Pollution Control Refunding RB (Southern Indiana Gas and Electric Co.) Series 1998A MB(DOUBLE DAGGER) 3.000% 03/01/00 ........................... 2,900 2,900,000 Indiana State Development Finance Authority Economic Development RB DN (Saroyan Hardwoods Inc. Project) (Banc One Funding Corp. LOC)(DAGGER) 3.420% 09/07/99 ........................... 1,700 1,700,000 Portage Economic Development RB (Breckenridge Apartments Project) DN (Comerica Bank Detroit LOC)(DAGGER) 3.500% 09/07/99 ........................... 4,650 4,650,000 ------------ 30,015,000 ------------ IOWA--1.9% Iowa Finance Authority RB (Northcrest Inc. Project) DN (Norwest Bank LOC)(DAGGER) 3.400% 09/07/99 ........................... 5,145 5,145,000 ------------ KANSAS--1.2% Wyandotte County Kansas City Municipal G.O. Notes Series AAAA 3.300% 02/01/00 ........................... 2,096 2,096,147 Wyandotte County Kansas City Municipal G.O. Notes Series YYY 3.300% 02/01/00 ........................... 1,020 1,020,194 ------------ 3,116,341 ------------ See Accompanying Notes to Financial Statements. 4 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1999 PAR (000) VALUE -------- ------------ KENTUCKY--3.1% Henderson Industrial Building RB (Shamrock Technologies) 1997 DN (First Union National Bank LOC)(DAGGER) 3.400% 09/07/99 ........................... $ 3,151 $ 3,151,000 Kentucky State Housing Corp. RAN Series C(DOUBLE DAGGER) 3.200% 12/31/99 ........................... 2,000 2,000,000 Pulaski County Solid Waste Disposal Facilities PCR RB (East Kentucky Power) Series B MB(DOUBLE DAGGER) 3.550% 02/15/00 ........................... 3,000 3,000,000 ------------ 8,151,000 ------------ MARYLAND--1.2% Community Development Administration Multi-Family Development RB (Avalon Ridge Apartments) 97 DN (FNMA LOC)(DAGGER) 3.200% 09/07/99 ........................... 3,115 3,115,000 ------------ MASSACHUSETTS--1.5% Commonwealth of Massachusetts Federal Highway Grant Anticipation Notes 1998 Series A Trust Receipt DN (National Westminster LOC)(DAGGER) 3.300% 09/01/99 ........................... 900 900,000 Whiteman-Hanson Regional School District BAN 3.740% 07/07/00 ........................... 1,000 1,001,958 Whiteman-Hanson Regional School District BAN 3.500% 03/24/00 ........................... 2,000 2,003,244 ------------ 3,905,202 ------------ MICHIGAN--1.3% Benton Harbor Area School District BAN 4.000% 08/31/00 ........................... 1,000 1,002,890 Swartz Creek Michigan Community Schools State Aid Anticipation Notes G.O. Notes 3.600% 05/17/00 ........................... 2,500 2,503,406 ------------ 3,506,296 ------------ PAR (000) VALUE -------- ------------ MINNESOTA--0.1% Minneapolis G.O. Series 1995B DN (Bayerische Landesbank Girozentrale LOC)(DAGGER) 3.150% 09/07/99 ........................... $ 300 $ 300,000 ------------ MISSISSIPPI--0.4% Jackson County, Port Facilities Revenue Refunding Bonds (Chevron Corp. USA Income Project) DN(DAGGER) 2.950% 09/01/99 ........................... 1,100 1,100,000 ------------ MISSOURI--0.5% Kansas City IDA RB (Mid-America Health Services, Inc. Project) Series 1984 DN (Bank of New York LOC)(DAGGER) 3.470% 09/07/99 ........................... 400 400,000 Missouri Health & Educational Facility Authority Health Facility RB DN (Sisters of Mercy)(DAGGER) 3.250% 09/07/99 ........................... 1,000 1,000,000 ------------ 1,400,000 ------------ NEBRASKA--1.5% Lancaster (Sun-Husker Foods, Inc. Project) DN (Bank of Tokyo LOC)(DAGGER) 4.600% 09/07/99 ........................... 3,800 3,800,000 ------------ NEW HAMPSHIRE--1.1% New Hampshire State Business Finance Authority PCR RB (New England Power Co. Project) Series 1990A TECP 3.400% 10/26/99 ........................... 3,000 3,000,000 ------------ NEW JERSEY--3.6% Carlstadt County BAN 3.350% 03/29/00 ........................... 1,000 1,001,110 Cedar Grove Township G.O. Series 1999 BAN 3.500% 03/07/00 ........................... 2,292 2,296,557 Essex County Improvement Authority BAN 3.500% 03/31/00 ........................... 2,000 2,003,927 See Accompanying Notes to Financial Statements. 5 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1999 PAR (000) VALUE -------- ------------ NEW JERSEY--(CONTINUED) Hillside Township BAN 3.625% 03/08/00 ........................... $ 2,210 $ 2,215,250 New Jersey Economic Development Authority Economic Development RB (J. Jams Realty Co.) DN (First Union National Bank LOC)(DAGGER) 3.250% 09/07/99 ........................... 470 470,000 West Deptford G.O. Series 1999 BAN 4.250% 01/18/00 ........................... 1,500 1,503,633 ------------ 9,490,477 ------------ NEW YORK--5.9% Dormitory Authority - State of New York DN (Cornell University )(DAGGER) 2.950% 09/01/99 ........................... 4,150 4,150,000 Long Island Power Authority Electric System Subordinate RB DN (Credit Suisse LOC)(DAGGER) 2.800% 09/07/99 ........................... 700 700,000 Nassau County Industry Development Agency (Winthrop University Hospital Project) DN (Morgan Guaranty LOC)(DAGGER) 2.950% 09/07/99 ........................... 300 300,000 New York City G.O. DN 1992 Series D (FGIC Insurance)(DAGGER) 3.000% 09/07/99 ........................... 100 100,000 New York City G.O. Series 1993B DN (FGIC Insured)(DAGGER) 3.500% 09/01/99 ........................... 700 700,000 New York City G.O. DN (Mitsubishi Bank LOC) VRDN(DAGGER) 3.150% 09/07/99 ........................... 3,200 3,200,000 New York City Housing Development Corp. Multi-Family Mortgage RB DN (Jennings Street) (Fleet National Bank LOC)(DAGGER) 3.200% 09/07/99 ........................... 400 400,000 New York City, G.O. Bonds DN(DAGGER) 3.500% 09/07/99 ........................... 200 200,000 New York Local Government Assistance Corp. RB DN(Canadian Imperial Bank LOC)(DAGGER) 3.100% 09/07/99 ........................... 1,600 1,600,000 PAR (000) VALUE -------- ------------ NEW YORK--(CONTINUED) Niagara County IDA Solid Waste Disposal RB Series B DN American Re-Fuel (Wachovia LOC)(DAGGER) 3.300% 09/07/99 ........................... $ 2,500 $ 2,500,000 Oswego, County Of, IDA RB (Crysteel Manufacturing, Inc. Project) DN (Key Corp. Bank N.A. LOC)(DAGGER) 3.450% 09/07/99 ........................... 1,700 1,700,000 ------------ 15,550,000 ------------ NORTH CAROLINA--7.5% Charlotte-Mecklenburg Hospital Authority Health Care RB DN(DAGGER) 3.200% 09/07/99 ........................... 7,000 7,000,000 Mecklenburg County G.O. Series 1996C DN(DAGGER) 3.200% 09/07/99 ........................... 4,000 4,000,000 North Carolina Health Care Series 1985 DN (MBIA Insurance)(DAGGER) 3.200% 09/07/99 ........................... 200 200,000 North Carolina Medical Care Commission (Baptist Hospital Project) Series 1992B DN(DAGGER) 3.300% 09/07/99 ........................... 700 700,000 Raleigh-Durham Airport Authority Special Facility Refunding RB (American Airlines, Inc. Project) Series 1995B DN (Royal Bank of Canada LOC)(DAGGER) 3.000% 09/01/99 ........................... 500 500,000 Wake County Industrial Facilities and Pollution Control Financing Authority RB (Carolina Power & Light Co. Project) Series 1987 DN (First Union Bank LOC)(DAGGER) 3.250% 09/07/99 ........................... 5,700 5,700,000 Wilkes County Industrial Facilities and Pollution Control Financing Authority RB (Schas Circular Industries, Inc. Project) Series 1997A DN (Marine Midland LOC)(DAGGER) 3.400% 09/07/99 ........................... 1,900 1,900,000 ------------ 20,000,000 ------------ See Accompanying Notes to Financial Statements. 6 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1999 PAR (000) VALUE -------- ------------ NORTH DAKOTA--0.4% North Dakota State Housing Finance Authority Home Mortgage RB Series C MB (FGIC Insurance LOC)(DOUBLE DAGGER) 3.200% 04/01/00 ........................... $ 1,000 $ 1,000,000 ------------ OHIO--3.3% Allen City BAN 3.350% 04/13/00 ........................... 2,000 2,001,783 Butler County BAN 3.550% 10/21/99 ........................... 1,000 1,000,530 Cuyahoga County RB (The Cleveland Clinic) Series D DN (Bank America N.A. LOC)(DAGGER) 3.000% 09/07/99 ........................... 300 300,000 Mahoning County (Youngstown Iron & Metal Inc. Project) DN (National City Bank of Cleveland LOC)(DAGGER) 3.500% 09/07/99 ........................... 1,840 1,840,000 Montgomery County Variable Rate Healthcare Facilities RB Series 1998 DN (National City Bank of Cleveland LOC)(DAGGER) 3.300% 09/07/99 ........................... 770 770,000 Newark G.O. Series 1999 BAN 3.300% 09/10/99 ........................... 1,000 1,000,060 Union Township G.O. Notes 3.770% 05/26/00 ........................... 1,850 1,856,150 ------------ 8,768,523 ------------ OKLAHOMA--1.8% Oklahoma County Finance Authority IDA RB (Southwest Electric Co. Project) Series 1998 DN (Bank One of Milwaukee LOC)(DAGGER) 3.420% 09/07/99 ........................... 2,865 2,865,000 Oklahoma Development Finance Authority (Shawnee Funding Limited) DN (Bank of Nova Scotia LOC)(DAGGER) 3.400% 09/07/99 ........................... 2,000 2,000,000 ------------ 4,865,000 ------------ PAR (000) VALUE -------- ------------ OREGON--0.6% Portland Multi-Family Housing RB Village of Lovejoy Fountain DN (Key Corp. Bank N.A. LOC)(DAGGER) 3.300% 09/07/99 ........................... $ 1,600 $ 1,600,000 ------------ PENNSYLVANIA--1.9% Pennsylvania Economic Development Financing Authority RB (International Business Systems Project) Series B-4 DN (First Union National Bank of North Carolina LOC)(DAGGER) 3.400% 09/07/99 ........................... 5,130 5,130,000 ------------ PUERTO RICO--0.7% Puerto Rico Government Development Bank Series 1985 DN (Credit Suisse LOC)(DAGGER) 2.850% 09/07/99 ........................... 1,200 1,200,000 Puerto Rico Industrial, Tourist, Educational, Medical & Environmental Control Facilities RB (Ana G Mendez University System Project) Series 1998 DN (Banco de Santander LOC)(DAGGER) 2.900% 09/07/99 ........................... 500 500,000 ------------ 1,700,000 ------------ RHODE ISLAND--0.6% Rhode Island Housing and Mortgage Finance Corp. Homeownership Opportunity Bonds Series 24-B MB(DOUBLE DAGGER) 3.150% 12/15/99 ........................... 1,700 1,700,000 ------------ SOUTH CAROLINA--4.9% Berkeley County IDA RB (Nucor Corp.) Series 1998 DN(DAGGER) 3.350% 09/07/99 ........................... 2,400 2,400,000 Chesterfield County IDA RB (Culp, Inc.) DN (Wachovia LOC)(DAGGER) 3.350% 09/07/99 ........................... 4,300 4,300,000 See Accompanying Notes to Financial Statements. 7 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONTINUED) AUGUST 31, 1999 PAR (000) VALUE -------- ------------ SOUTH CAROLINA--(CONTINUED) Marlboro County Solid Waste Disposal Facilities RB (Willamette Industries, Inc. Project) DN (Deutsche Bank LOC)(DAGGER) 3.300% 09/07/99 ........................... $ 1,100 $ 1,100,000 Marlboro County, IDA RB (Reliance Trading Corp. of America Project) 1997 DN (ABN AMRO Bank N.V. LOC)(DAGGER) 3.370% 09/07/99 ........................... 1,100 1,100,000 South Carolina Jobs Economic Development Authority RB (Tate Metalworks, Inc. Project) 1998 DN (Wachovia LOC)(DAGGER) 3.350% 09/07/99 ........................... 1,000 1,000,000 South Carolina Jobs Economic Development Authority (Ellcon National Inc. Project) Series 1998B DN (First Union National Bank LOC)(DAGGER) 3.400% 09/07/99 ........................... 3,000 3,000,000 ------------ 12,900,000 ------------ TEXAS--6.5% Brazos River Harbor Navigation District of Brazoria County, PCR RB (The Dow Chemical Co. Project) 1988 TECP 3.400% 10/29/99 ........................... 9,980 9,980,000 Denton IDA (Hartzell Manufacturing Inc. Project) DN (National City Bank of Cleveland LOC)(DAGGER) 3.500% 09/07/99 ........................... 1,300 1,300,000 Texas State TRAN 4.500% 08/31/00 ........................... 6,000 6,046,260 ------------ 17,326,260 ------------ UTAH--0.4% Salt Lake City Flexible Rate RB DN (Pooled Hospital Financing Program)(DAGGER) 3.250% 09/07/99 ........................... 1,000 1,000,000 ------------ PAR (000) VALUE -------- ------------ VIRGINIA--9.0% Capital Region Airport Commission (Richmond International Airport Project) Series 1995 C DN (AMBAC Insurance LOC)(DAGGER) 3.250% 09/07/99 ........................... $ 5,965 $ 5,965,000 Metropolitan Washington DC Airport Authority (Bank of America LOC) TECP 3.400% 09/27/99 ........................... 14,000 14,000,000 Virginia Small Business Financing Authority (Ennestone Inc.) DN (Wachovia LOC)(DAGGER) 3.300% 09/07/99 ........................... 4,000 4,000,000 ------------ 23,965,000 ------------ WASHINGTON--0.9% Grant County, Industrial Development Corp. of Port District No.1 (Dodson Road Orchards, L.L.C. Project) 1998 DN (Key Corp. Bank N.A. LOC)(DAGGER) 3.300% 09/07/99 ........................... 2,405 2,405,000 ------------ WISCONSIN--4.2% Amery IDA RB (Plastech Corp.) Series 1997 DN (U.S. Bank, N.A. LOC)(DAGGER) 3.500% 09/07/99 ........................... 2,000 2,000,000 Franklin, City Of, IDA RB Series 1998 (All Glass Aquarium Co., Inc. Project) DN (Banc One Funding Corp. LOC)(DAGGER) 3.420% 09/07/99 ........................... 4,390 4,390,000 Mequon, City of, IDA RB (Johnson Level GRW Investment Project) DN(DAGGER) 3.420% 09/07/99 ........................... 2,345 2,345,000 Wisconsin Rapids City IDA RB (Theile Kaolin of Wisconsin, Inc. Project) DN (Sunbank LOC)(DAGGER) 3.400% 09/07/99 ........................... 2,250 2,250,000 ------------ 10,985,000 ------------ TOTAL MUNICIPAL BONDS (Cost $270,835,326) ................... 270,835,326 ------------ See Accompanying Notes to Financial Statements. 8 THE BEDFORD FAMILY THE RBB FUND, INC. MUNICIPAL MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONCLUDED) AUGUST 31, 1999 VALUE ------------ TOTAL INVESTMENTS AT VALUE--102.2% (Cost $270,835,326*) ...................... $270,835,326 ------------ OTHER LIABILITIES IN EXCESS OF ASSETS--(2.2%) ......................... (5,803,862) ------------ NET ASSETS (Applicable to 150,350,026 Bedford shares, 214,372 Cash Preservation shares, 114,540,864 Janney Montgomery Scott shares and 800 other shares)--100% .................. $265,031,464 ============ NET ASSET VALUE, Offering and redemption price per share ($265,031,464 (DIVIDE) 265,106,062) ....... $1.00 ===== * Also cost for Federal income tax purposes. (DAGGER) Variable Rate Demand Notes -- The rate shown is the rate as of August 31, 1999 and the maturity date shown is the longer of the next interest readjustment date or the date the principal amount shown can be recovered through demand. (DOUBLE DAGGER) Put Bonds -- Maturity date is the put date. INVESTMENT ABBREVIATIONS BAN ......................................................Bond Anticipation Note DN ..................................................................Demand Note GO ..........................................................General Obligations LOC ............................................................Letter of Credit IDA ............................................Industrial Development Authority MB ...............................................................Municipal Bond PCR ...................................................Pollution Control Revenue RAN ...................................................Revenue Anticipation Note RAW ...............................................Revenue Anticipation Warrants RB .................................................................Revenue Bond TAN .......................................................Tax Anticipation Note TECP ................................................Tax Exempt Commercial Paper TRAN ..........................................Tax and Revenue Anticipation Note See Accompanying Notes to Financial Statements. 9 THE BEDFORD FAMILY THE RBB FUND, INC. STATEMENTS OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 1999 MUNICIPAL MONEY MARKET PORTFOLIO ------------ Investment income Interest .................................................... $9,200,933 ---------- Expenses Distribution fees ........................................... 1,650,584 Investment advisory fees .................................... 955,350 Transfer agent fees ......................................... 106,450 Service organization fees ................................... -- Printing fees ............................................... 50,127 Custodian fees .............................................. 59,688 Legal fees .................................................. 12,290 Registration fees ........................................... 108,000 Audit fees .................................................. 19,958 Directors' fees ............................................. 6,936 Insurance expense ........................................... 3,217 SEC fees .................................................... 1,869 Miscellaneous ............................................... 4,072 Administration fees ......................................... 276,787 ---------- 3,255,328 Less fees waived and reimbursed ............................. (826,004) ---------- Total expenses ......................................... 2,429,323 ---------- Net investment income .......................................... 6,771,609 ---------- Realized gain (loss) on investments ............................ -- ---------- Net increase in net assets resulting from operations ........... $6,771,609 ========== See Accompanying Notes to Financial Statements. 10 THE BEDFORD FAMILY THE RBB FUND, INC. STATEMENTS OF CHANGES IN NET ASSETS
MUNICIPAL MONEY MARKET PORTFOLIO ---------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED AUGUST 31, 1999 AUGUST 31, 1998 --------------- --------------- Increase (decrease) in net assets: Operations: Net investment income ................................................ $ 6,771,609 $ 9,017,840 Net gain (loss) on investments ....................................... -- (3,055) ------------ ------------ Net increase in net assets resulting from operations ................. 6,771,609 9,014,785 ------------ ------------ Distributions to shareholders: Dividends to shareholders from net investment income: Bedford shares ..................................................... (3,903,796) (5,548,854) Bradford shares .................................................... -- (405,975) Cash Preservation shares ........................................... (4,151) (2,738) Janney Montgomery Scott shares ..................................... (2,863,662) (3,060,273) Principal shares ................................................... -- -- Sansom Street shares ............................................... -- -- Select shares ...................................................... -- -- ------------ ------------ (6,771,609) (9,017,840) Distribution in excess of net investment income: Bedford shares ..................................................... -- -- Cash Preservation shares ........................................... -- -- Janney Montgomery Scott shares ..................................... -- -- Sansom Street shares ............................................... -- -- Select shares ...................................................... -- -- ------------ ------------ -- -- Total dividends to shareholders .................................. (6,771,609) (9,017,840) ------------ ------------ Net capital share transactions ......................................... 19,860,650 (242,871,947) ------------ ------------ Total increase in net assets ........................................... 19,860,650 (242,875,001) Net Assets: Beginning of year .................................................... 245,170,814 488,045,815 ------------ ------------ End of year .......................................................... $265,031,464 $245,170,814 ============ ============
See Accompanying Notes to Financial Statements. 11 THE BEDFORD FAMILY THE RBB FUND, INC. FINANCIAL HIGHLIGHTS (b) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
MUNICIPAL 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, 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- Net asset value, beginning of year ......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- Income from investment operations: Net investment income .................................... 0.0243 0.0286 0.0285 0.0288 0.0297 -------- -------- -------- -------- -------- Total from investment operations ........................ 0.0243 0.0286 0.0285 0.0288 0.0297 -------- -------- -------- -------- -------- Less distributions Dividends (from net investment income) ................... (0.0243 (0.0286 (0.0285 (0.0288) (0.0297) -------- -------- -------- -------- -------- Total distributions ..................................... (0.0243 (0.0286 (0.0285 (0.0288) (0.0297) -------- -------- -------- -------- -------- Net asset value, end of year ............................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total Return ............................................. 2.46% 2.97% 2.88% 2.92% 3.01% Ratios /Supplemental Data Net assets, end of year (000) ............................ $150,278 $147,633 $213,034 $201,940 $198,425 Ratios of expenses to average net assets ................. .89%(a) .89%(a) .85%(a) .84%(a) .82%(a) Ratios of net investment income to average net assets .... 2.43% 2.86% 2.85% 2.88% 2.97% (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 1.08%, 1.10%, 1.12%, 1.14%, and 1.17% for the years ended August 31, 1999, 1998, 1997, 1996 and 1995, respectively. For the Municipal Money Market Portfolio, the ratios of expenses to average net assets would have been 1.15%, 1.15%, 1.14%, 1.12% and 1.14% for the years ended August 31, 1999, 1998, 1997, 1996 and 1995, respectively. (b) Financial Highlights relate solely to the Bedford Class of shares within each portfolio.
See Accompanying Notes to Financial Statements. 12 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1999 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-seven classes. Each class represents an interest in one of sixteen investment portfolios of the Fund. The classes have been grouped into sixteen separate "families", nine of which have begun investment operations: the Principal Family, the Select Family, the Sansom Street Family, the Bedford Family, the Cash Preservation Family, the Janney Montgomery Scott Family, the n/i numeric investors Family, the Boston Partners Family and the Schneider Family. The Bedford Family represents interests in three Portfolios, which are covered in this report. A) SECURITY VALUATION -- Portfolio securities are valued under the amortized cost method, which approximates current market value. Under this method, securities are valued at cost when purchased and thereafter a constant proportionate amortization of any discount or premium is recorded until maturity of the security. Regular review and monitoring of the valuation is performed in an attempt to avoid dilution or other unfair results to shareholders. The 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 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. See Accompanying Notes to Financial Statements. 13 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1999 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 Corporation ("BIMC"), an indirect majority-owned subsidiary of PNC Bank, serves as investment adviser to the portfolio described herein, and also serves as administrator to the Money Market and Government Obligations Money Market Portfolios. For the Money Market and Government Obligations Money Market Portfolios, BIMC and 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 portfolios. 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 - -------------------------------- --------------------------------------------- Municipal Money Market Portfolio .35% of first $250 million of net assets; .30% of next $250 million of net assets; .25% of net assets in excess of $500 million. BIMC may, at its discretion, voluntarily waive all or any portion of its advisory fee for these portfolios. For each class of shares within a respective portfolio, the net advisory fee charged to each class is the same on a relative basis. For the year ended August 31, 1999, advisory fees and waivers for the investment portfolios were as follows: GROSS NET ADVISORY ADVISORY FEE WAIVER FEE -------- ---------- -------- Municipal Money Market Portfolio $955,350 $(716,746) $238,604 The investment advisor has agreed to reimburse each portfolio for the amount, if any, by which the net operating and management expenses exceed the expense cap. For the year ended August 31, 1999 the reimbursed expenses were $102,998 for the Municipal Money Market Portfolio. In addition, PFPC Trust Co. serves as custodian for each of the Fund's portfolios. PFPC Inc. ("PFPC") serves as each class's disbursing agent. Both PFPC Trust Company and PFPC are wholly-owned subsidiaries of PFPC Worldwide Inc., an indirect majority owned subsidiary of PNC Bank Corp. 14 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1999 NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) PFPC may, at its discretion, voluntarily waive all or any portion of its transfer agency fee for any class of shares. For the year ended August 31, 1999, transfer agency fees and waivers for each class of shares within the three investment portfolios were as follows:
GROSS NET TRANSFER AGENCY TRANSFER AGENCY FEE WAIVER FEE --------------- -------- --------------- Municipal Money Market Portfolio Bedford Class $ 26,196 $ -- $ 26,196 Cash Preservation Class 6,831 (6,260) 571 Janney Montgomery Scott Class 73,423 -- 73,423 ---------- ------- ---------- Total Municipal Money Market Portfolio $ 106,450 $(6,260) $ 100,190 ========== ======= ==========
In addition, PFPC serves as administrator for the Municipal Money Market Portfolio. The administration fee is computed daily and payable monthly at an annual rate of .10% of the Portfolio's average daily net assets. PFPC may, at its discretion, voluntarily waive all or any portion of its administration fee for a Portfolio. For the year ended August 31, 1999, administration fee for the Portfolio was as follows: ADMINISTRATION FEE ----------------- Municipal Money Market Portfolio $276,787 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 and Janney Montgomery Scott Classes. For the year ended August 31, 1999, distribution fees for each class were as follows: DISTRIBUTION FEE ------------ Municipal Money Market Portfolio Bedford Class $ 951,897 Cash Preservation Class 716 Janney Montgomery Scott Class 697,971 ------------ Total Municipal Money Market Portfolio $ 1,650,584 ============ 15 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1999 NOTE 3. CAPITAL SHARES Transactions in capital shares (at $1 per capital share) for each year were as follows: MUNICIPAL MONEY MARKET PORTFOLIO ---------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED AUGUST 31, 1999 AUGUST 31, 1998 --------------- --------------- VALUE VALUE --------------- --------------- Shares sold: Bedford Class ...................... $ 471,166,299 $ 1,250,832,088 Bradford Class ..................... -- 59,917,620 Cash Preservation Class ............ 178,689 65,859 Janney Montgomery Scott Class ...... 445,130,179 404,988,148 Principal Class .................... -- -- Sansom Street Class ................ -- -- Select Class ....................... -- -- ------------- --------------- Total Shares Sold ............... 916,475,167 1,715,737,856 Shares issued in reinvestment of dividends: Bedford Class ...................... 3,895,215 5,440,322 Bradford Class ..................... -- 427,390 Cash Preservation Class ............ 3,980 2,591 Janney Montgomery Scott Class ...... 2,871,349 3,071,524 Principal Class .................... -- -- Sansom Street Class ................ -- -- Select Class ....................... -- -- ------------- --------------- Total Shares Reinvested ......... 6,770,544 8,941,827 Shares repurchased: Bedford Class ...................... (472,416,562) (1,321,667,987) Bradford Class ..................... -- (226,438,837) Cash Preservation Class ............ (60,295) (73,397) Janney Montgomery Scott Class ...... (430,908,204) (419,437,268) Principal Class .................... -- -- Sansom Street Class ................ -- -- Select Class ....................... -- -- ------------- --------------- Total Shares Repurchased ........ (903,385,061) (1,967,551,630) ------------- --------------- Net increase (decrease) ................ $ 19,860,650 $ (242,871,947) ============= =============== Bedford Shares authorized .............. 500,000,000 500,000,000 ============= =============== 16 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1999 NOTE 4. NET ASSETS At August 31, 1999, net assets consisted of the following: MUNICIPAL MONEY MARKET PORTFOLIO ------------ Capital paid-in $265,050,401 Accumulated net realized gain (loss) on investments (18,937) ------------ $265,031,464 ============ NOTE 5. CAPITAL LOSS CARRYOVER At August 31, 1999 capital loss carryovers were available to offset future realized gains as follows: $18,937 in the Municipal Money Market Portfolio of which, $444 expires in 2000, $1,058 expires in 2001, $9,789 expires in 2002, $674 expires in 2004, $3,917 expires in 2005, and $3,055 expires in 2006. The Municipal Money Market Portfolio had $55,760 of capital loss carryover that expired in 1999. 17 THE BEDFORD FAMILY THE RBB FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 1999 NOTE 6. OTHER FINANCIAL HIGHLIGHTS The Fund currently offers two other classes of shares representing interest in the Municipal Money Market Portfolio: Janney Montgomery Scott and Cash Preservation. Each class is marketed to different types of investors. Financial Highlights of the Cash Preservation class are not presented in this report due to their 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 JANNEY MONTGOMERY SCOTT FAMILY (c) (CONTINUED)
MUNICIPAL MONEY MARKET PORTFOLIO ------------------------------------------------------------------------------------ FOR THE PERIOD FOR THE FOR THE FOR THE FOR THE JUNE 12, 1995 YEAR YEAR YEAR YEAR (COMMENCEMENT OF ENDED ENDED ENDED ENDED OPERATIONS) TO AUGUST 31, 1999 AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995 --------------- --------------- --------------- --------------- --------------- 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 ........................ 0.0246 0.0290 0.0285 0.0278 0.0063 -------- -------- -------- -------- -------- Total from investment operations ........... 0.0246 0.0290 0.0285 0.0278 0.0063 -------- -------- -------- -------- -------- Less distributions Dividends (from net investment income) .................................... (0.0246) (0.0290) (0.0285) (0.0278) (0.0063) -------- -------- -------- -------- -------- Total distributions ........................ (0.0246) (0.0290) (0.0285) (0.0278) (0.0063) -------- -------- -------- -------- -------- Net asset value, end of year or period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total Return ................................... 2.49% 2.94% 2.89% 2.81% 2.87%(b) Ratios/Supplemental Data Net assets, end of year or period (000) .............................. $114,539 $ 97,445 $108,826 $ 89,428 $113,256 Ratios of expenses to average net assets ........................ 0.86%(a) 0.86%(a) 0.85%(a) 0.94%(a) 1.00%(a)(b) Ratios of net investment income to average net assets ........................ 2.46% 2.90% 2.85% 2.78% 2.83%(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 MUnicipal Money Market Portfolio, the ratio of expenses to average net assets would have been 1.20%, 1.16%, 1.13%, 1.23% and 1.30% for the years or period ended august 31, 1999, 1998, 1997, 1996 and 1995, respectively. (b) Annualized. (c) Financial Highlights relate solely to the Janney Montgomery Scott Class of shares within each portfolio.
18 TAX INFORMATION FOR SHAREHOLDERS (UNAUDITED) In the twelve months ended August 31, 1999 (the end of the Fund's fiscal year), 100% of the dividends paid by the Municipal Money Market Portfolio were exempt-interest dividends for purposes of federal income taxes and free from such taxes. However, approximately 55% of such dividends was attributable to interest on private activity bonds which must be included in federal alternative minimum taxable income for the purpose of determining liability for federal alternative minimum tax. In January 2000, you will be furnished with a schedule showing the yearly percentage breakdown by state or U.S. possession of the source of interest earned by the Municipal Money Market Portfolio in 1999. It is suggested that you consult your tax adviser concerning the applicability of state and local taxes to dividends paid by the Fund during the year. 19 -----END PRIVACY-ENHANCED MESSAGE-----