BRIDGES INVESTMENT FUND, INC.
SECOND QUARTER OR SEMI-ANNUAL
SHAREHOLDER REPORT
1996
CONTENTS OF REPORT
Pages 1 - 2 Shareholder Letter
Exhibit 1 Portfolio Transactions from April 1, 1996,
through June 30, 1996
Exhibit 2 Quarter-to-Quarter Changes in Financial Data
Pages F1-F14 Unaudited Financial Statements for the
Six Months Ended June 30, 1996
This report has been prepared for the information of the shareholders
of Bridges Investment Fund, Inc. and is under no circumstances to be
construed as an offering of shares of the Fund. Such offering is made
only by Prospectus, a copy of which may be obtained by inquiry to the
Fund's office.
Shareholder Letter 1 July 22, 1996
July 22, 1996
Dear Shareholder:
Second Quarter and First Half, 1996 Review
- - - ------------------------------------------
The net asset value per share of the Fund was $23.42 on June 30, 1996.
This price was 3.4% above the $22.66 net asset value per share at March 31,
1996, and up 8.7% from the year-end 1995 valuation of $21.54. The cash amounts
distributed from 1996 investment income were $.1325 per share. Thus, the total
value improvement from the First Half of 1996 operations was $2.0125 per share
derived by adding $1.88 in price appreciation and $.1325 in dividend income.
This $2.0125 per share increase in value, when compared to the beginning net
asset value of $21.54, resulted in a 9.3% total return for the Fund for the
First Six Months of 1996.
The generally rising trend of prices for common stocks continued during the
Second Quarter of 1996. The positive trend for stock prices was sustained by
favorable earnings reports. Bond prices were somewhat weaker in response to
higher interest rates during the First Half of 1996.
Fund Operations
- - - ---------------
The net assets of the Fund were $27,108,210 on June 30, 1996, representing
the highest value for any calendar quarter reporting date. Net assets advanced
$1,082,906 from the March 31, 1996, total of $26,025,304, an increase of 4.2%
Shareholder Letter 2 July 22, 1996
for the Second Quarter of 1996. For the First Six Months of 1996, net assets
are up $3,055,464 or 12.7% from the $24,052,746 at December 31, 1995. On a
trailing twelve month basis (June 30, 1995 to June 30, 1996) net assets grew
from $21,416,325 to $27,108,210 -- a 26.6% improvement.
There were 1,157,425 shares of capital stock outstanding on June 30, 1996.
This level of shares outstanding represented a record high for any three month
accounting statement period. The net gain in shares outstanding for the First
Six Months of 1996 was 40,805 units, which resulted in a 3.6% advance in
comparison to the 1,116,620 shares outstanding at the end of 1995.
Net investment income was $308,288 for the First Six Months of 1996,
compared to $308,520 for the same period in 1995. Net realized gains on
investments for the First Six Months of 1996 were $13,137 compared to $19,328
for the same time frame in 1995. The net increase in unrealized appreciation
was $1,986,619 for the First Six Months in 1996, compared to $2,818,482 achieved
during the first two calendar quarters of 1995.
Please refer to Exhibits 1 and 2 and pages F-1 through F-14 for specific
details covering the Fund's recent portfolio transactions; the historical data
with respect to capital gains distributions; and other financial statement
information as of June 30, 1996.
Dividend
- - - --------
On July 9, 1996, the Board of Directors declared a $.1325 per share
dividend on the shares of capital stock outstanding on the July 9, 1996 record
date with this income distribution amount to be payable on or about July 22,
Shareholder Letter 3 July 22, 1996
1996. This dividend is payable from net investment income earned during the
April - June, 1996 Quarter.
The Outlook
- - - -----------
The U.S. industrial economy has raised its growth pace during the First
Half of 1996 in comparison to the Last Half of 1995. Prospects for the balance
of 1996 appear to be solid. However, the upward progress of corporate earnings
is likely to be much less dynamic and somewhat more erratic than has been true
of the exceptional profits growth for the 1992 - 1995 period.
Equity valuations are above normal, but not speculatively high for those
companies where consistent earnings improvements are achieved. This statement
assumes that interest rates and inflationary prices will stay within the ranges
established in recent years.
With respect to consumer price inflation, particular attention should be
paid to prices for energy, food, and newly negotiated wage rates in union
contracts. The benign trends for the 1990's may be about to change adversely
towards higher price levels and annualized rates of change than currently in
effect. This possible scenario would be likely to depress price-earnings ratio
valuations, thereby causing stock price vulnerability.
Overall, the near term outlook continues to be positive without the
potential for major gains that was present one to three years ago. The longer
term trends remain on track with normal upbeat expectations.
Shareholder Letter 4 July 22, 1996
Appreciation
The Fund concluded 33 years of operations on June 30, 1996 on a very
positive note, as described on page one of this letter and in the financial
statements and Exhibits. On behalf of the Board of Directors and the Management
of the Fund, I want to thank you once again for your investment in and support
of our Fund through your investment in our shares and through the referral of
other investors to our Fund from time to time.
Cordially yours,
Edson L. Bridges II
President
ELBII:elc
<TABLE>
Exhibit 1
----------
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
APRIL 1, 1996, THROUGH JUNE 30, 1996
<CAPTION>
Bought or Held After
Securities Received Transaction
---------- --------- -----------
Common Stocks Unless $1,000 Par $1,000 Par
Described Otherwise Value (M) Value (M)
or Shares or Shares
<S> <C> <C>
American International Group 400 1,000
Amgen, Inc. 500 1,000
(1)<F1> Electronic Data Systems Corp. 4,223 4,223
First National of Nebraska 5 225
(2)<F2> GAP, Inc. 7,000 14,000
(3)<F3> HNC Software, Inc. 1,000 2,000
(4)<F4> Johnson & Johnson 5,000 10,000
(5)<F5> Monsanto Company 14,000 17,500
(6)<F6> PepsiCo, Inc. 12,000 24,000
Various issues of Commercial 33,675M 2,685M
Paper Notes Purchased during
2nd Qtr., 1996
<CAPTION>
Sold or Held After
Securities Exchanged Transaction
---------- --------- -----------
$1,000 Par $1,000 Par
Common Stocks Unless Value (M) Value (M)
Described Otherwise or Shares or Shares
<S> <C> <C>
Burlington Northern Santa Fe 3,191 --
(7)<F7> General Motors Class E 4,223 --
(8)<F8> U.S. Treasury Notes 200M --
9.375% due 04/15/96
Various issues of Commercial Paper 33,160M --
Notes maturing during
2nd Qtr., 1996
(1)<F1> - Received in exchange for 4,223 shares of General Motors Class E on
June 10, 1996.
(2)<F2> - Received 7,000 shares in a 2-for-1 stock split on April 11, 1996.
(3)<F3> - Received 1,000 shares in a 2-for-1 stock split on April 4, 1996.
(4)<F4> - Received 5,000 shares in a 2-for-1 stock split on June 12, 1996.
(5)<F5> - Received 14,000 shares in a 5-for-1 stock split on June 6, 1996.
(6)<F6> - Received 12,000 shares in a 2-for-1 stock split on May 29, 1996.
(7)<F7> - Exchanged for 4,223 shares of Electronic Data Systems Corp. on June
10, 1996.
(8)<F8> - Matured 200M at par on April 15, 1996.
</TABLE>
<TABLE>
Exhibit 2
--------
BRIDGES INVESTMENT FUND, INC.
----------------------------
HISTORICAL FINANCIAL INFORMATION
<CAPTION>
Valuation Net Shares Net Asset Dividend/ Capital
Date Assets Outstanding Value/Share Share Gains/Share
- - - ----------- ------ ----------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C>
07-01-63 $ 109,000 10,900 $10.00 $ - $ -
09-30-63 109,764 10,900 10.07 - -
12-31-63 159,187 15,510 10.13 .07 -
03-31-64 202,354 19,105 10.59 .07 -
06-30-64 253,932 23,438 10.83 .07 -
09-30-64 310,307 28,286 10.97 .07 -
12-31-64 369,149 33,643 10.97 .07 -
03-31-65 434,523 38,531 11.28 .075 .028
06-30-65 491,068 44,667 10.99 .07 -
09-30-65 558,913 47,710 11.71 .07 -
12-31-65 621,241 51,607 12.04 .07 -
03-31-66 661,711 55,652 11.89 .085 -
06-30-66 643,920 57,716 11.16 .07 -
09-30-66 592,628 58,610 10.11 .07 -
12-31-66 651,282 59,365 10.97 .07 -
03-31-67 728,115 60,181 12.10 .085 -
06-30-67 753,075 61,364 12.27 .07 -
09-30-67 823,967 62,810 13.12 .07 -
12-31-67 850,119 64,427 13.20 .07 -
03-31-68 812,416 65,607 12.38 .105 -
06-30-68 1,013,629 72,214 14.04 .07 -
09-30-68 1,046,852 72,633 14.41 .07 -
12-31-68 1,103,734 74,502 14.81 .07 -
03-31-69 1,083,278 77,393 14.00 .15 -
06-30-69 1,030,784 79,169 13.02 .07 -
09-30-69 1,063,290 83,291 12.77 .07 -
12-31-69 1,085,186 84,807 12.80 .07 -
03-31-70 1,061,534 87,349 12.15 .16 -
06-30-70 843,133 88,367 9.54 .07 -
09-30-70 959,114 89,417 10.73 .07 -
12-31-70 1,054,162 90,941 11.59 .07 -
03-31-71 1,168,919 91,819 12.73 .16 -
06-30-71 1,198,777 92,573 12.94 .07 -
09-30-71 1,200,753 92,723 12.95 .07 -
12-31-71 1,236,601 93,285 13.26 .07 -
03-31-72 1,285,684 93,661 13.73 .14 .08
06-30-72 1,228,951 93,834 13.10 .07 -
09-30-72 1,208,454 92,258 13.10 .07 -
12-31-72 1,272,570 93,673 13.59 .07 -
03-31-73 1,152,089 96,695 11.91 .13 .07
06-30-73 1,073,939 97,943 10.96 .07 -
09-30-73 1,131,789 99,353 11.39 .07 -
12-31-73 1,025,521 100,282 10.23 .07 -
03-31-74 988,697 101,763 9.72 .14 -
06-30-74 863,820 101,578 8.50 .07 -
09-30-74 667,051 101,292 6.59 .07 -
12-31-74 757,545 106,909 7.09 .07 -
03-31-75 909,125 106,162 8.56 .14 -
06-30-75 1,028,687 106,517 9.66 .07 -
09-30-75 954,187 107,651 8.86 .07 -
12-31-75 1,056,439 111,619 9.46 .07 -
03-31-76 1,230,953 115,167 10.69 .16 -
06-30-76 1,265,767 117,506 10.77 .07 -
09-30-76 1,313,363 121,229 10.83 .07 -
12-31-76 1,402,661 124,264 11.29 .08 -
03-31-77 1,335,592 126,714 10.54 .188 .062
06-30-77 1,456,451 134,575 10.82 .08 -
09-30-77 1,450,573 139,402 10.41 .08 -
12-31-77 1,505,147 145,252 10.36 .08 -
03-31-78 1,418,417 146,380 9.69 .211 .049
06-30-78 1,523,758 145,470 10.47 .09 -
09-30-78 1,672,364 150,729 11.10 .09 -
12-31-78 1,574,097 153,728 10.24 .09 -
03-31-79 1,724,695 162,627 10.61 .204 .051
06-30-79 1,773,427 163,640 10.84 .09 -
09-30-79 1,913,242 167,426 11.43 .09 -
12-31-79 1,872,059 165,806 11.29 .09 -
03-31-80 1,769,935 170,882 10.36 .25 .0525
06-30-80 1,974,288 169,675 11.64 .10 -
09-30-80 2,204,689 173,549 12.70 .10 -
12-31-80 2,416,997 177,025 13.65 .10 -
03-31-81 2,424,976 184,148 13.17 .29 .0868
06-30-81 2,356,007 186,307 12.65 .11 -
09-30-81 2,128,956 183,447 11.61 .11 -
12-31-81 2,315,441 185,009 12.52 .12 -
03-31-82 2,165,531 194,140 11.15 .39 .19123
06-30-82 2,074,816 190,067 10.92 .13 -
09-30-82 2,262,073 189,837 11.92 .13 -
12-31-82 2,593,411 195,469 13.27 .13 -
03-31-83 2,815,081 209,390 13.44 .40 .2500
06-30-83 3,030,744 212,068 14.29 .15 -
09-30-83 3,210,564 223,059 14.39 .15 -
12-31-83 3,345,988 229,238 14.60 .15 -
03-31-84 3,279,542 247,700 13.24 .32 .5000
06-30-84 3,322,155 262,695 12.65 .16 -
09-30-84 3,554,876 263,783 13.48 .16 -
12-31-84 3,727,899 278,241 13.40 .16 -
03-31-85 4,058,327 300,068 13.52 .22 .6800
06-30-85 4,351,707 305,496 14.24 .16 -
09-30-85 4,260,686 310,379 13.73 .16 -
12-31-85 4,962,325 318,589 15.58 .16 -
03-31-86 5,663,449 347,479 16.30 .208 .86227
06-30-86 6,174,120 365,531 16.89 .16 -
09-30-86 6,392,215 399,871 15.99 .16 -
12-31-86 6,701,786 407,265 16.46 .16 -
03-31-87 8,766,205 491,228 17.85 .196 .79447
06-30-87 9,214,305 509,569 18.08 .16 -
09-30-87 9,921,139 530,566 18.70 .16 -
12-31-87 7,876,275 525,238 15.00 .14 .24513
03-31-88 8,649,901 565,608 15.29 .16 -
06-30-88 9,027,829 574,563 15.71 .15 -
09-30-88 8,986,977 575,956 15.60 .16 -
12-31-88 8,592,807 610,504 14.07 .38 1.10967
03-31-89 9,103,009 618,331 14.72 - -
06-30-89 9,531,124 614,861 15.50 .16 -
09-30-89 10,815,006 652,207 16.58 .16 -
12-31-89 10,895,182 682,321 15.97 .35 0.53769
03-31-90 11,000,740 695,558 15.82 - -
06-30-90 11,521,748 696,414 16.54 .16 0.02646
09-30-90 10,534,037 706,268 14.92 .16 -
12-31-90 11,283,448 744,734 15.15 .35 0.40297
03-31-91 12,685,391 759,477 16.70 - -
06-30-91 12,485,281 766,387 16.29 .16 -
09-30-91 13,225,379 780,213 16.95 .16 -
12-31-91 14,374,679 831,027 17.30 .34 0.29292
03-31-92 14,428,305 851,349 16.95 - -
06-30-92 14,691,191 863,019 17.02 .15 -
09-30-92 15,940,013 910,936 17.50 .16 -
12-31-92 17,006,789 971,502 17.51 .325 0.15944
03-31-93 18,071,613 1,008,275 17.92 - -
06-30-93 17,621,101 992,755 17.75 .15 -
09-30-93 17,949,559 999,163 17.96 .15 -
12-31-93 17,990,556 1,010,692 17.80 .3125 0.17075
03-31-94 17,777,177 1,021,219 17.41 - -
06-30-94 17,953,364 1,033,984 17.36 .14 -
09-30-94 18,472,176 1,036,473 17.82 .15 -
12-31-94 18,096,297 1,058,427 17.10 .30 0.17874
03-31-95 19,835,494 1,072,309 18.50 - -
06-30-95 21,416,325 1,076,463 19.90 .14 -
09-30-95 22,527,409 1,082,829 20.80 .14 -
12-31-95 24,052,746 1,116,620 21.54 .295 0.19289
03-31-96 26,025,304 1,148,429 22.66 - -
06-30-96 27,108,210 1,157,425 23.42 .1325 -
</TABLE>
F-1
<TABLE>
BRIDGES INVESTMENT FUND, INC.
----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
----------------------------------
JUNE 30, 1996
-------------
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Value
----------------- --------- -----
(Note 1)
<S>
COMMON STOCKS (73.7%)
Aircraft - Manufacturing (1.9%) - <C> <C>
The Boeing Co. 6,000 $ 522,750
-----------
Amusements - Recreation - Sporting Goods (0.8%)
NIKE, Inc. 2,000 $ 205,500
------------
Banking and Finance (5.7%) -
First National of Nebraska, Inc. 225 $ 877,500
NationsBank Corporation 3,000 247,875
Norwest Corporation 6,000 209,250
State Street Boston Corp. 4,000 204,000
-----------
$ 1,538,625
-----------
Beverages - Soft Drinks (3.1%) -
PepsiCo, Inc. 24,000 $ 852,000
-----------
Building Materials - Forest Products (0.8%) -
Georgia Pacific Corp. 3,000 $ 213,000
-----------
Chemicals (7.9%) -
The Dow Chemical Company 7,000 $ 532,000
Du Pont (E.I.) De Nemours & Company 4,000 316,500
Eastman Kodak Company 7,000 544,250
Monsanto Company 17,500 568,750
Morton International, Inc. 5,000 186,250
-----------
$ 2,147,750
-----------
Computers - Hardware and Software (6.2%) -
Cisco Systems, Inc.*<FN> $ 113,250
2,000
Electronic Data Systems Corp. 4,223 226,986
HNC Software, Inc.*<FN> 92,500
2,000
Hewlett-Packard Co. 6,000 597,750
International Business Machines Corporation 1,000 99,000
Microsoft Corporation*<FN> 480,500
4,000
Sun Microsystems, Inc.*<FN> 58,875
1,000
-----------
$ 1,668,861
-----------
<FN>* Nonincome-producing security
</TABLE>
F-2
<TABLE>
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
----------------------------------
(Continued)
JUNE 30, 1996
-------------
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Value
----------------- --------- ------
(Note 1)
<S>
COMMON STOCKS (Continued)
Drugs - Medicines - Cosmetics (7.2%) - <C> <C>
Abbott Laboratories 8,000 $ 348,000
Amgen, Inc.*<FN> 54,000
1,000
Bristol-Myers Squibb Co. 3,000 270,000
Elan Corporation PLC ADR*<FN> 114,500
2,000
Johnson & Johnson 10,000 495,000
Merck & Co., Inc. 10,000 646,250
Perrigo Company*<FN> 33,750
3,000
-----------
$ 1,961,500
-----------
Electrical Equipment and Supplies (2.0%) -
General Electric Co. 6,000 $ 520,500
Linear Technology Corporation 1,000 30,000
-----------
$ 550,500
-----------
Electronics (2.9%) -
Intel Corporation 4,000 $ 293,752
Motorola, Inc. 8,000 502,000
-----------
$ 795,752
-----------
Finance - Real Estate (1.9%) -
Federal Home Loan Mortgage Corporation 6,000 $ 513,000
-----------
Finance - Services (0.4%) -
First USA, Inc. 2,000 $ 110,000
-----------
Food - Miscellaneous Products (3.8%) -
Philip Morris Companies, Inc. 10,000 $ 1,040,000
-----------
Forest Products & Paper (0.8%)
Kimberly-Clark Corporation 3,000 $ 231,750
-----------
Insurance - Multiline (1.5%) -
American International Group, Inc. 1,000 $ 98,625
General Re Corp. 2,000 304,500
-----------
$ 403,125
-----------
Insurance - Municipal Bond (0.9%) -
MBIA, Inc. 3,000 $ 233,625
-----------
<FN>* Nonincome-producing security
</TABLE>
F-3
<TABLE>
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
----------------------------------
(Continued)
JUNE 30, 1996
-------------
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Value
----------------- --------- ------
(Note 1)
<S>
COMMON STOCKS (Continued)
Lumber and Wood Products (0.8%) - <C> <C>
Weyerhaeuser Company 5,000 $ 212,500
-----------
Machinery - Construction & Mining (0.7%) -
Caterpillar, Inc. 3,000 $ 203,250
-----------
Metal Products - Miscellaneous (1.0%) -
Nucor Corporation 5,500 $ 278,438
-----------
Motion Pictures and Theatres (1.6%) -
Walt Disney Co. 7,000 $ 440,125
-----------
Petroleum Producing (6.5%) -
Amoco Corporation 5,000 $ 360,625
Atlantic Richfield Company 2,000 236,500
Chevron Corporation 10,000 590,000
Exxon Corporation 4,000 347,500
Mobil Corporation 2,000 224,750
-----------
$ 1,759,375
-----------
Printing and Engraving (0.7%) -
Deluxe Corp. 5,000 $ 177,500
-----------
Publishing - Newspapers (1.0%) -
Gannett Co., Inc. 4,000 $ 283,000
-----------
Publishing - Electronic (1.6%) -
Reuters Holdings PLC 6,000 $ 435,000
-----------
Restaurants - Food Service (0.5%) -
Apple South, Inc. 3,500 $ 93,625
Brinker International, Inc.*<FN> 45,000
-----------
3,000
$ 138,625
-----------
Retail Stores - Apparel and Clothing (1.7%) -
Gap, Inc. 14,000 $ 449,750
-----------
<FN>* Nonincome-producing security
</TABLE>
F-4
<TABLE>
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
----------------------------------
(Continued)
JUNE 30, 1996
-------------
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Value
----------------- --------- ------
(Note 1)
<S>
COMMON STOCKS (Continued)
Retail Stores - Department (2.3%) - <C> <C>
Dayton Hudson Corporation 3,500 $ 360,938
Wal-Mart Stores, Inc. 10,000 253,750
-----------
$ 614,688
-----------
Retail Stores - Variety (1.0%) -
Albertson's Inc. 6,500 $ 268,937
-----------
Telecommunications (4.3%) -
A T & T Corp. 5,000 $ 310,000
GTE Corporation 10,000 447,500
Sprint Corporation 8,000 336,000
360 Communications Company*<FN> 63,984
2,666
-----------
$ 1,157,484
-----------
Transportation - Railroads (1.0%) -
Union Pacific Corporation 4,000 $ 279,500
-----------
Utilities - Telecommunications (0.5%) -
U S West Communications Group 4,000 $ 128,000
-----------
Waste Management (0.7%) -
WMX Technologies, Inc. 5,500 $ 180,125
-----------
TOTAL COMMON STOCKS (Cost - $11,255,270) $19,994,035
-----------
PREFERRED STOCKS (0.7%)
Transportation - Aircraft (0.7%) -
Delta Air Lines $3.50 Series C
Convertible Preferred 3,000 $ 189,000
-----------
TOTAL PREFERRED STOCKS (Cost - $150,645) $ 189,000
-----------
TOTAL STOCKS (Cost - $11,405,915) $20,183,035
-----------
<FN>* Nonincome-producing security
</TABLE>
F-5
<TABLE>
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
----------------------------------
(Continued)
JUNE 30, 1996
-------------
(Unaudited)
<CAPTION>
Principal Market
Title of Security Amount Value
----------------- --------- ------
(Note 1)
<S>
DEBT SECURITIES (24.9%)
Broadcast - Radio and Television (0.2%)- <C> <C>
Comcast Corporation 3.375% Step-Up
Convertible Subordinated Debentures
due September 9, 2005 $ 50,000 $ 46,937
-----------
Food - Miscellaneous Products (0.4%) -
Super Valu Stores, Inc. 8.875%
Promissory Notes, due June 15, 1999 $100,000 $ 105,708
-----------
U.S. Government (11.2%) -
U.S. Treasury, 8.875% Notes,
due November 15, 1997 200,000 207,437
U.S. Treasury, 9.000% Notes,
due May 15, 1998 200,000 210,063
U.S. Treasury, 9.125% Notes,
due May 15, 1999 200,000 214,500
U.S. Treasury, 8.750% Notes,
due August 15, 2000 200,000 216,562
U.S. Treasury, 8.000% Notes,
due May 15, 2001 200,000 212,625
U.S. Treasury, 7.500% Notes,
due May 15, 2002 200,000 209,438
U.S. Treasury, 10.750% Bonds
due February 15, 2003 200,000 244,000
U.S. Treasury, 7.250% Notes,
due May 15, 2004 200,000 207,125
U.S. Treasury, 7.50% Notes,
due February 15, 2005 200,000 210,187
U.S. Treasury, 9.375% Bonds,
due February 15, 2006 200,000 237,438
</TABLE>
F-6
<TABLE>
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
----------------------------------
(Continued)
JUNE 30, 1996
-------------
(Unaudited)
<CAPTION>
Principal Market
Title of Security Amount Value
----------------- ---------- ------
(Note 1)
<S>
DEBT SECURITIES (Continued)
U.S. Government - (Continued) <C> <C>
- - - -------------------------------
U.S. Treasury, 7.625% Bonds,
due February 15, 2007 200,000 207,375
U.S. Treasury, 8.75% Bonds,
due November 15, 2008 200,000 221,875
U.S. Treasury, 9.125% Bonds,
due May 15, 2009 200,000 227,437
U.S. Treasury, 7.500% Bonds,
due November 15, 2016 200,000 209,813
-----------
$ 3,035,875
-----------
Household Appliances and Utensils (0.4%) -
Maytag Corp., 9.75% Notes,
due May 15, 2002 $100,000 $ 112,666
-----------
Office Equipment and Supplies (0.4%) -
Xerox Corporation, 9.750%
Notes, due March 15, 2000 $100,000 $ 109,250
-----------
Retail Stores - Broad Line Chains (0.5%) -
Costco Wholesale Corporation 5.750%
Convertible Subordinated Debentures,
due May 15, 2002 $150,000 $ 139,125
-----------
Retail Stores - Department (1.0%) -
Dillard Department Stores, Inc. 7.850%
Debentures, due October 1, 2012 $150,000 $ 153,804
Sears Reobuck & Co.
9.375% Debentures, due
November 1, 2011 100,000 116,531
-----------
$ 270,335
-----------
Textiles - Miscellaneous (0.4%) -
Guilford Mills, Inc. 6.000%
Convertible Subordinated Debentures
due September 15, 2012 $100,000 $ 97,750
-----------
</TABLE>
F-7
<TABLE>
BRIDGES INVESTMENT FUND, INC.
----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
----------------------------------
(Continued)
JUNE 30, 1996
-------------
(Unaudited)
<CAPTION>
Principal Market
Title of Security Amount Value
----------------- --------- -------
(Note 1)
<S>
DEBT SECURITIES (Continued)
Transportation - Railroads (0.5%) - <C> <C>
Union Pacific Corporation 6.00%
Notes, due September 1, 2003 $ 150,000 $ 139,219
------------
Commercial Paper - Short Term (9.9%) -
Ford Motor Credit Corp.
Commercial Paper Note 5.35%
due July 2, 1996 $1,300,000 $ 1,300,000
General Electric Credit Corp.
Commercial Paper Note 5.35%
due July 2, 1996 $ 385,000 385,000
Prudential Funding Corp.
Commercial Paper Note 5.35%
due July 2, 1996 $1,000,000 $ 1,000,000
------------
$ 2,685,000
------------
TOTAL DEBT SECURITIES (Cost - $6,695,518) $ 6,741,865
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost - $18,101,433) (99.3%) $26,924,900
CASH AND RECEIVABLES
LESS TOTAL LIABILITIES (0.7%) 183,310
-----------
NET ASSETS, June 30, 1996 (100.0%) $27,108.210
============
<FN>The accompanying notes to financial statements
are an integral part of this schedule.
</TABLE>
F-8
<TABLE>
BRIDGES INVESTMENT FUND, INC.
----------------------------
STATEMENT OF ASSETS AND LIABILITIES
----------------------------------
JUNE 30, 1996
-------------
(Unaudited)
<CAPTION>
ASSETS Amount
<S> <C>
Investments, at market value (Note 1)
Common and preferred stocks (cost $11,405,915) $20,183,035
Debt securities (cost $6,695,518) 6,741,865
----------
Total Investments $26,924,900
Cash 111,270
Receivables
Dividends and interest 117,807
Subscriptions to capital stock 8,204
-------
TOTAL ASSETS $27,162,181
===========
LIABILITIES
Accrued operating expenses 53,971
-----------
TOTAL LIABILITIES $ 53,971
-----------
NET ASSETS
Capital stock, $1 par value - Authorized 3,000,000 shares,
less 663,062 shares redeemed; 1,820,487 shares issued;
1,157,425 shares outstanding (Note 6) $ 1,157,425
Paid-in surplus -
Excess over par value of amounts received from sale
of 1,820,487 shares, less amounts paid out in redeeming
663,062 shares (Note 6) 16,961,732
----------
Net capital paid in on shares $18,119,157
Accumulated undistributed net investment income 155,532
Accumulated net realized gain on investment
transactions 4,074
Net unrealized appreciation on investments
(Note 1) 8,823,468
Accumulated undistributed equilization amount (Note 1) 5,979
-----------
TOTAL NET ASSETS $27,108,210
===========
TOTAL LIABILITIES AND NET ASSETS $27,162,181
===========
NET ASSET VALUE PER SHARE (Note 5) $23.42
======
OFFERING PRICE PER SHARE (Note 5) $23.42
======
REDEMPTION PRICE PER SHARE (Note 5) $23.42
======
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
F-9
<TABLE>
BRIDGES INVESTMENT FUND, INC.
----------------------------
STATEMENT OF OPERATIONS
------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 1996
--------------------------------------
(Unaudited)
<CAPTION>
INVESTMENT INCOME (Note 1) Amount
<S> <C>
Interest $221,089
Dividends 202,499
-------
Total Investment Income $423,588
EXPENSES
Management fees (Note 2) $ 65,756
Custodian fees 17,289
Professional services 5,450
Insurance 4,698
Bookkeeping services 5,261
Printing and supplies 7,912
Dividend disbursing and transfer
agent fees (Note 3) 5,387
Computer programming 2,250
Taxes and licenses 532
Foreign Taxes Paid 765
--------
Total Expenses $ 115,300
---------
NET INVESTMENT INCOME $ 308,288
---------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS, NET (Note 1)
Net realized gain on transactions in
investment securities $ 13,137
Net increase in unrealized
appreciation of investments 1,986,619
---------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS $1,999,756
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,308,044
==========
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
F-10
<TABLE>
BRIDGES INVESTMENT FUND, INC.
----------------------------
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
----------------------------------------------
(Unaudited)
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
INCREASE IN NET ASSETS
Operations -
Net investment income $ 308,288 $ 308,520
Net realized gain/(loss) on transactions in
investment securities (Note 1) 13,137 19,328
Net increase (decrease) in unrealized
appreciation of investments (Note 1) 1,986,619 2,818,482
----------- -----------
Net increase in net assets
resulting from operations $ 2,308,044 $ 3,146,330
Net equalization credits (Note 1) 1,779 (2,093)
Distributions to shareholders from -
Net investment income (Note 7) (152,756) (147,222)
Net realized gain from investment
transactions - -
Equalization (Note 1) - -
Net capital share transactions
(Note 6) 898,397 323,013
----------- -----------
Total Increase in Net Assets $ 3,055,464 $ 3,320,028
NET ASSETS:
Beginning of year 24,052,746 18,096,297
---------- -----------
End of year (including accumulated
undistributed net investment income
of $161,511 and $162,441, respectively) $27,108,210 $21,416,325
========== ===========
<FN>The accompanying notes to financial statements
are an integral part of these statements.
</TABLE>
F-11
BRIDGES INVESTMENT FUND, INC.
----------------------------
NOTES TO FINANCIAL STATEMENTS
------------------------------
JUNE 30, 1996
-------------
(Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Bridges Investment Fund, Inc. (Fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company. The primary investment objective of the Fund is long
term capital appreciation. In pursuit of that objective, the Fund invests
primarily in common stocks. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of
its financial statements. The policies are in conformity with generally
accepted accounting principles.
A. Investments -
-----------
Security transactions are recorded on the trade date at purchase
cost or sales proceeds. Dividend income is recognized on the ex-
dividend date, and interest income is recognized on an accrual basis.
Securities owned are reflected in the accompanying statement of
assets and liabilities and the schedule of portfolio investments at
quoted market value. Quoted market value represents the last recorded
sales price on the last business day of the calendar year for
securities traded on a national securities exchange. If no sales were
reported on that day, quoted market value represents the closing bid
price. The cost of investments reflected in the statement of assets
and liabilities and the schedule of portfolio investments is the same
as the basis used for Federal income tax purposes. The difference
between cost and quoted market value of securities is reflected
separately as unrealized appreciation (depreciation) as applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1996 1995 Net Change
---- ---- ----------
Net unrealized appreciation (depreciation):
Aggregate gross unrealized appreciation
on securities $9,032,573 $5,110,945
Aggregate gross unrealized depreciation
on securities (209,105) (205,656)
Net $8,823,468 $4,905,289 $3,918,179
========== ========== ==========
</TABLE>
The net realized gain (loss) from the sales of securities is
determined for income tax and accounting purposes on the basis of the cost
of specific securities.
F-12
B. Federal Income Taxes -
--------------------
It is the Fund's policy to comply with the requirements of the
Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies, including the distribution of substantially all
taxable income including net realized gains on sales of investments.
Therefore, no provision is made for Federal income taxes.
C. Distribution To Shareholders -
----------------------------
The Fund accrues dividends to shareholders on the ex-dividend date.
D. Equalization -
------------
The Fund uses the accounting practice of equalization by which a
portion of the proceeds from sales and costs of redemption of capital
shares, equivalent on a per share basis to the amount of undistributed net
investment income on the date of the transactions, is credited or charged
to undistributed income. As a result, undistributed net investment income
per share is unaffected by sales or redemption of capital shares.
(2) INVESTMENT ADVISORY CONTRACT
----------------------------
Under an Investment Advisory Contract, Bridges Investment Counsel,
Inc. (Investment Adviser) furnishes investment advisory services and
performs certain administrative functions for the Fund. In return, the
Fund has agreed to pay the Investment Adviser a fee computed on a quarterly
basis at the rate of 1/8 of 1% of the average net asset value of the Fund
during the quarter, equivalent to 1/2 of 1% per annum. Certain officers
and directors of the Fund are also officers and directors of the Investment
Adviser. These officers do not receive any compensation from the Fund
other than that which is received indirectly through the Investment
Adviser.
The contract between the Fund and the Investment Adviser provides that
total expenses of the Fund in any year, exclusive of stamp and other taxes,
but including fees paid to the Investment Adviser, shall not exceed, in
total, a maximum of 1 and 1/2% of the average month end net asset value of
the Fund for the year. Amounts, if any, expended in excess of this
limitation are reimbursed by the Investment Adviser as specifically
identified in the Investment Advisory Contract.
F-13
(3) DIVIDEND DISBURSING AND TRANSFER AGENT
--------------------------------------
Effective October 1, 1987, dividend disbursing and transfer agent
services are provided by Bridges Investor Services, Inc. (Transfer Agent).
The fees paid to the Transfer Agent are intended to approximate the cost to
the Transfer Agent for providing such services. Certain officers and
directors of the Fund are also officers and directors of the Transfer
Agent.
(4) SECURITY TRANSACTIONS
---------------------
The cost of long term investment purchases during the first six months
ended June 30, was:
1996 1995
---- ----
United States government obligations $ 493,695 $ 199,496
Other Securities 890,290 24,472
--------- ---------
Total Cost $1,383,985 $ 223,968
========== ==========
Net proceeds from sales of long term investments during the first
six months ended June 30, were:
1996 1995
---- ----
United States government obligations $ 423,527 $ 200,000
Other Securities 695,583 368,238
--------- ---------
Total Net Proceeds $1,119,110 $ 568,238
========== ==========
Total Cost Basis of
Securities Sold $1,105,973 $ 548,910
========== ==========
(5) NET ASSET VALUE
---------------
The net asset value per share represents the effective price for all
subscriptions and redemptions.
F-14
(6) CAPITAL STOCK
-------------
Shares of capital stock issued and redeemed are as follows:
1996 1995
---- ----
Shares sold 53,861 44,416
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 12,389 15,434
------ ------
66,250 59,850
Shares redeemed 25,445 41,813
------- ------
Net increase 40,805 18,037
======= ======
Value of capital stock issued and redeemed is as follows:
1996 1995
---- ----
Shares sold $1,172,684 $ 813,446
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 302,602 276,255
---------- ----------
$1,475,286 $1,089,701
Shares redeemed 576,889 766,688
--------- ----------
Net increase $ 898,397 $ 323,013
========== ==========
(7) DISTRIBUTION TO SHAREHOLDERS
----------------------------
On July 9, 1996 a distribution of $.1325 per share aggregating
$153,876.35 was declared to shareholders of record on July 9, 1996, to be
payable on July 22, 1996.
(8) DERIVATIVE FINANCIAL INSTRUMENTS
--------------------------------
In October, 1994, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 119, Disclosure about
Derivative Financial Investments and Fair Value of Financial Instruments.
The Fund has not entered into any such investment or investment contracts.
A covered call option contract is a form of a financial derivative
instrument. The Fund's investment and policy restrictions do permit the
Fund to sell or write covered call option contracts under certain
circumstances and limitations as set forth in the Fund's prospectus.
However, the Fund has never entered into a covered call option under those
circumstances.
