BRIDGES INVESTMENT FUND, INC.
FIRST QUARTER
1996
CONTENTS OF REPORT
Pages 1 - 3 Shareholder Letter
Exhibit 1 Portfolio Transactions from January 1, 1996,
through March 31, 1996
Exhibit 2 Quarter-to-Quarter Changes in Financial Data
Exhibit 3 Reports to Stockholders of Management Companies
Pages F1-F14 Unaudited Financial Statements for the
Three Months Ended March 31, 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
April 29, 1996
Dear Shareholder:
First Quarter Review
- --------------------
The net asset value per share of the Fund was $22.66 on March 31, 1996.
This price was 5.2% higher than the $21.54 net asset value per share at year-end
1995, and the highest end of the quarter valuation achieved in the history of
the Fund.
The Dow Jones Industrials Average and the Standard & Poor's 500 Composite
Index both advanced to new all time high points during the First Quarter of 1996
in response to massive amounts of fresh cash flowing to equity oriented mutual
funds. Favorable corporate earnings reports also influenced the positive trends
in stock prices.
Operations
- ----------
The net assets of the Fund were $26,025,304 on March 31, 1996, representing
the highest value for any calendar quarter reporting date in the history of the
Fund. Net assets grew $1,972,558 from the 1995 year ending total of
$24,052,746, an increase of 8.2% for the First Quarter of 1996.
There were 1,148,429 shares of capital stock outstanding on March 31, 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
Quarter of 1996 was 31,809, which constituted a 2.8% advanced over the 1,116,620
shares outstanding at the end of 1995.
Net investment income was $153,898 for the First Quarter of 1996 compared
to $151,902 for the same period one year ago. Net realized losses were $22,002
on the securities portfolio of the Fund for the quarter ending March 31, 1996.
There were $42,885 in net realized gains in the Fund's portfolio for the
comparable period in 1995.
Shareholder Letter 2 April 29, 1996
The Fund's unaudited financial statements, appearing on pages F-1 through
F-14, provide the Schedule of Portfolio Investments, the Statement of Assets and
Liabilities, the Statement of Operations, the Statement of Changes in Net
Assets, and the Notes to Financial Statements as of March 31, 1996. Please
refer to Exhibits 1 and 2 for the Fund's current portfolio transactions and the
historical information on our operations with respect to net assets, shares
outstanding, net asset value per share, dividends, and capital gains
distributions.
Required Reports
- ----------------
Rule 30d-1(b) of the General Rules and Regulations under The Investment
Company Act of 1940 was amended last year to require certain reports to
stockholders with respect to any matter that was submitted to a shareholder vote
during the period covered by the shareholder report. Accordingly, the
information is disclosed in Exhibit 3, attached to this letter. A similar
presentation will be prepared each time there is an annual or special
shareholder meeting. The next planned disclosure will be with the Annual Report
for 1996 to be published in January, 1997, when this same Exhibit will be
repeated to be in compliance with this Rule.
Cash Distributions
- ------------------
On April 12, 1996, the Board of Directors declared a $.1325 per share
dividend on the shares of capital stock outstanding on the April 12, 1996,
record date for this income distribution amount to be payable on or about April
29, 1996. This dividend is payable from net investment income earned during the
January-March, 1996, Quarter.
Prospectus, Statement, and Other Information
- --------------------------------------------
This letter transmits the 1996 edition of the Fund's Prospectus that became
effective on April 29, 1996. The Prospectus is Part A of a three part filing
with the Securities and Exchange Commission in Washington, D.C. Part B is the
Statement of Additional Information, and Part C contains Other Information. The
Fund will mail Part A with this letter. Please notify Mrs. Mary Ann Mason,
Secretary of the Fund, if you wish to receive Part B and/or Part C, and she will
mail copies of the 1996 revisions in these documents to you. The Annual Report
for 1995 is also an integral part of the Prospectus offering for 1996. Each
shareholder has been mailed or personally received an Annual Report for 1995
since its issuance on January 22, 1996. Any person who desires another copy of
the Annual Report for 1995 should also request that document from Mrs. Mason.
Shareholder Letter 3 April 29, 1996
Outlook
- -------
Developments during the First Quarter, 1996, that impact the outlook for
securities prices for 1996 that were noteworthy are outlined below:
1.The U.S. consumer economy began to recover after a slowdown in mid to
late 1995. This progress was achieved in spite of nasty winter weather
in populous Eastern regions of the United States.
2.Corporate profits continue to be strong for many companies despite the
extended age for the economic upturn that began in early 1991. Solid
profit levels finance positive future business activity.
3.Interest rates advanced after February in the intermediate and long-term
maturity sectors of the bond market in reflection of a restimulated
economic environment and a possible rekindling of an inflationary
environment through rising commodity prices, food prices, and energy
prices.
4.Labor relations in the auto industry appear to be worsening in advance
of contract negotiations later this year. The cost of the next
settlement may be above the recent trend line for annual wage increases.
In sum, the levels of production in the U.S. economy are likely to be somewhat
better in 1996 than expected a few months ago. Higher interest rates, advancing
price levels, and a resumption of wage inflation may cause downward revision in
price/earnings ratios later this year from present levels around 17-18 times
earnings. Thus, a downward correction for the general level of stock prices
should be more probable than was the case in 1995. Nevertheless, the long-term
outlook for the Fund's companies continues to be positive, and the management
increased the asset allocation to common stocks in the Fund's portfolio during
the First Quarter of 1996 to about 74% of net assets in response to this
optimistic expectation.
Thank you for your continued investment in our Fund.
Sincerely yours,
Edson L. Bridges II
President
<TABLE>
Exhibit 1
---------
BRIDGES INVESTMENT FUND, INC.
-----------------------------
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
JANUARY 1, 1996, THROUGH MARCH 31, 1996
<CAPTION>
Bought or Held After
Received Transaction
-------- -----------
Securities
----------
$1,000 Par $1,000 Par
Common Stocks Unless
Value (M) Value (M)
Described Otherwise
or Shares or Shares
<S> <C> <C>
Albertsons, Inc. 1,500 6,500
American International Group 600 600
Amgen, Inc. 500 500
Caterpillar, Inc. 1,000 3,000
(1)<F1> Cisco Systems, Inc. 2,000 2,000
Comcast Corp. Step-Up Cv. 50M 50M
Debs.
3.375% due 09/09/2005
First USA, Inc. 2,000 2,000
(2)<F2> General Motors Class E 4,223 4,223
HNC Software 1,000 1,000
Linear Technology 1,000 1,000
Norwest Corp. 514 6,000
Nucor Corp. 1,000 5,500
Sun Microsystems, Inc. 1,000 1,000
(3)<F3> 360 Communications Co. 2,666 2,666
U.S. Treasury Bonds 200M 200M
8.75% due 11/15/2008
U.S. Treasury Bonds 200M 200M
9.375% due 02/15/2006
U.S. West Communications 4,000 4,000
Group
Various issues of Commercial 26,578.295M 2,170M
Paper Notes Purchased
during
1st Qtr., 1996
EXHIBIT 1 - PORTFOLIO TRANSACTIONS--PAGE 2
<CAPTION>
Sold or Held After
Exchanged Transaction
--------- -----------
Securities
----------
$1,000 Par $1,000 Par
Common Stocks Unless
Value (M) Value (M)
Described Otherwise
or Shares or Shares
<S> <C> <C>
(4)<F4> Browning Ferris Ind. 150M --
Conv. Sub. Debs. 6.25% due
08/15/2012
(5)<F5> General Motors Cr. 3,000 --
Pfd. Series C
$3.25
Schweitzer-Mauduit Int'l. 300 --
Inc.
(6)<F6> Southern California 150M --
Edison Debs.
8.625% due 04-15-2019
Telefonos de Mexico ADR 1,500 --
(7)<F7> Time Warner Inc. Cr. 78.1M --
Sub. Debs.
8.75% due 04/01/2015
U.S. Treasury Notes 200M --
7.875% due 08/15/2001
Various issues of 26,253.295M --
Commercial Paper Notes
maturing during
1st Qtr., 1996
<F1>(1) - Purchased 1,000 shares on 01/16/96. Received 1,000 shares in a
2-for-1 stock split on 02/20/96.
<F2>(2) - Received from Conversion of General Motors Conv. Pfd. Series C
stock on 02/14/96.
<F3>(3) - Received in a 1-for-3 spin-off from Sprint Corporation on 03/07/96.
<F4>(4) - Entire Issue Called on 02/02/96 @ $101.25
<F5>(5) - Converted to General Motors Class E Common Stock on 02/14/96.
<F6>(6) - Entire issue called on 02/21/96 @ $105.33
<F7>(7) - Entire issue called on 02/01.96 @ $103.50
</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 -
<CAPTION>
Valuation Net Shares Net Asset Dividend/ Capital
Date Assets Outstanding Value/Share Share Gains/Share
---- ------ ----------- ----------- ----- -----------
<S> <C> <C> <C> <C> <C>
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 -
<CAPTION>
Valuation Net Shares Net Asset Dividend/ Capital
Date Assets Outstanding Value/Share Share Gains/Share
---- ------ ----------- ----------- ----- -----------
<S> <C> <C> <C> <C> <C>
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 - -
Exhibit 3
---------
BRIDGES INVESTMENT FUND, INC.
-----------------------------
REPORTS TO STOCKHOLDERS OF MANAGEMENT COMPANIES
In Accordance With
Rule 30d-1(b) of the General Rules and Regulations Promulgated Under
The Investment Company Act of 1940 as Amended
`If any matter was submitted during the period covered by the shareholder
report to a vote of the shareholders, through the solicitation of proxies
or otherwise, furnish the following information:''
(1) Annual Meeting held on February 20, 1996, at 11:00 a.m.
(2) Election of Directors for one year terms (All Directors Stand for
Annual Election):
</TABLE>
<TABLE>
<CAPTION>
- - - - - -Votes Cast - - - - - -
----------------------------------
Withhold
Authority
To Vote
For All For
Names of Directors Nominees All
---
Elected at Meeting Except
- ------------------ ------
Nominees
--------
For
---
<S> <C> <C> <C>
Frederick N. Backer 1,008,182 None 1,549
Edson L. Bridges II 1,008,182 None 1,549
Edson L. Bridges III 1,005,209 2,973 1,549
N. P. Dodge, Jr. 1,007,540 642 1,549
John W. Estabrook 1,008,182 None 1,549
Jon D. Hoffmaster 1,006,973 1,209 1,549
John J. Koraleski 1,008,182 None 1,549
Roger D. Kupka 1,008,182 None 1,549
Gary L. Petersen 1,008,182 None 1,549
Roy A. Smith 1,008,182 None 1,549
L.B. Thomas 1,008,182 None 1,549
</TABLE>
(3) A brief description for each matter voted upon at the meeting:
<TABLE>
<CAPTION>
Matters Voted Upon For Against Abstain
------------------ --- ------- -------
<S> <C> <C> <C>
(a) For a proposed investment 1,007,291 None 2,440
advisory contract which continues
the employment of Bridges
Investment Counsel, Inc. as
investment adviser to the Fund
for the period from April 17,
1996 through April 17, 1997
(b) For the ratification of the 1,006,973 None 2,758
selection of Arthur Andersen
LLP as independent auditors
of the Fund for the Fiscal
Year ending December 31, 1996
</TABLE>
<TABLE>
-------
F-1
---
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
---------------------------------
MARCH 31, 1996
--------------
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Value
----------------- --------- -----
(Note 1)
<S> <C> <C>
COMMON STOCKS (73.9%)
Aircraft - Manufacturing (2.0%) -
- ---------------------------------
The Boeing Co. 6,000 $ 519,750
-----------
Amusements - Recreation - Sporting Goods (0.6%)
- -----------------------------------------------
NIKE, Inc. 2,000 $ 162,500
-----------
Banking and Finance (6.0%) -
- ----------------------------
First National of Nebraska, Inc. 220 $ 902,000
NationsBank Corporation 3,000 240,375
Norwest Corporation 6,000 220,500
State Street Boston Corp. 4,000 200,000
-----------
$ 1,562,875
-----------
Beverages - Soft Drinks (2.9%) -
- --------------------------------
PepsiCo, Inc. 12,000 $ 759,000
-----------
Building Materials - Forest Products (0.8%) -
- ---------------------------------------------
Georgia Pacific Corp. 3,000 $ 208,125
-----------
Chemicals (8.3%) -
- ------------------
The Dow Chemical Company 7,000 $ 609,000
Du Pont (E.I.) De Nemours & Company 4,000 332,000
Eastman Kodak Company 7,000 497,000
Monsanto Company 3,500 537,250
Morton International, Inc. 5,000 191,875
-----------
$ 2,167,125
-----------
Computers - Hardware and Software (5.9%) -
- ------------------------------------------
Cisco Systems, Inc.*<FN> 2,000 $ 92,750
General Motors Corporation Class E 4,223 240,711
HNC Software, Inc.*<FN> 1,000 68,000
Hewlett-Packard Co. 6,000 564,750
International Business Machines Corporation 1,000 111,250
Microsoft Corporation*<FN> 4,000 412,500
Sun Microsystems, Inc.*<FN> 1,000 43,750
-----------
$ 1,533,711
-----------
<FN>* Nonincome-producing security
F-2
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
---------------------------------
(Continued)
MARCH 31, 1996
--------------
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Value
----------------- --------- -----
(Note 1)
COMMON STOCKS (Continued)
<S> <C> <C>
- ---
Drugs - Medicines - Cosmetics (7.2%) -
- --------------------------------------
Abbott Laboratories 8,000 $ 326,000
Amgen, Inc.*<FN> 500 29,063
Bristol-Myers Squibb Co. 3,000 256,875
Elan Corporation PLC ADR*<FN> 2,000 128,500
Johnson & Johnson 5,000 461,250
Merck & Co., Inc. 10,000 622,500
Perrico Company*<FN> 3,000 40,500
-----------
$ 1,864,688
-----------
Electrical Equipment and Supplies (2.0%) -
- ------------------------------------------
General Electric Co. 6,000 $ 467,250
Linear Technology Corporation 1,000 41,750
-----------
$ 509,000
-----------
Electronics (2.5%) -
- --------------------
Intel Corporation 4,000 $ 227,500
Motorola, Inc. 8,000 424,000
-----------
$ 651,500
-----------
Finance - Real Estate (2.0%) -
- ------------------------------
Federal Home Loan Mortgage Corporation 6,000 $ 511,500
-----------
Finance - Services (0.4%) -
- ---------------------------
First USA, Inc. 2,000 $ 113,250
-----------
Food - Miscellaneous Products (3.4%) -
- --------------------------------------
Philip Morris Companies, Inc. 10,000 $ 877,500
-----------
Forest Products & Paper (0.9%)
- ------------------------------
Kimberly-Clark Corporation 3,000 $ 223,125
-----------
Insurance - Multiline (1.3%) -
- ------------------------------
American International Group, Inc. 600 $ 56,175
General Re Corp. 2,000 291,500
-----------
$ 347,675
-----------
Insurance - Municipal Bond (0.9%) -
- -----------------------------------
MBIA, Inc. 3,000 $ 225,000
-----------
<FN>* Nonincome-producing security
F-3
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
---------------------------------
(Continued)
MARCH 31, 1996
--------------
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Value
----------------- --------- -----
(Note 1)
COMMON STOCKS (Continued)
<S> <C> <C>
Lumber and Wood Products (0.9%) -
- ---------------------------------
Weyerhaeuser Company 5,000 $ 230,625
-----------
Machinery - Construction & Mining (0.8%) -
- ------------------------------------------
Caterpillar, Inc. 3,000 $ 204,000
-----------
Metal Products - Miscellaneous (1.2%) -
- ---------------------------------------
Nucor Corporation 5,500 $ 325,188
-----------
Motion Pictures and Theatres (1.7%) -
- -------------------------------------
Walt Disney Co. 7,000 $ 447,125
-----------
Petroleum Producing (6.6%) -
- ----------------------------
Amoco Corporation 5,000 $ 361,250
Atlantic Richfield Company 2,000 238,000
Chevron Corporation 10,000 561,250
Exxon Corporation 4,000 326,000
Mobil Corporation 2,000 231,750
-----------
$ 1,718,250
-----------
Printing and Engraving (0.6%) -
- -------------------------------
Deluxe Corp. 5,000 $ 156,875
-----------
Publishing - Newspapers (1.0%) -
- --------------------------------
Gannett Co., Inc. 4,000 $ 269,000
-----------
Publishing - Electronic (1.5%) -
- --------------------------------
Reuters Holdings PLC 6,000 $ 390,750
-----------
Restaurants - Food Service (0.5%) -
- -----------------------------------
Apple South, Inc. 3,500 $ 85,750
Brinker International, Inc.*<FN> 3,000 50,250
-----------
$ 136,000
-----------
Retail Stores - Apparel and Clothing (1.5%) -
- ---------------------------------------------
Gap, Inc. 7,000 $ 387,625
-----------
<FN>* Nonincome-producing security
F-4
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
---------------------------------
(Continued)
MARCH 31, 1996
--------------
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Value
----------------- --------- -----
(Note 1)
COMMON STOCKS (Continued)
<S> <C> <C>
Retail Stores - Department (2.0%) -
- -----------------------------------
Dayton Hudson Corporation 3,500 $ 297,063
Wal-Mart Stores, Inc. 10,000 230,000
-----------
$ 527,063
-----------
Retail Stores - Variety (0.9%) -
- --------------------------------
Albertson's Inc. 6,500 $ 241,312
-----------
Telecommunications (4.3%) -
- ---------------------------
A T & T Corp. 5,000 $ 305,625
GTE Corporation 10,000 437,500
Sprint Corporation 8,000 304,000
360 Communications Company*<FN> 2,666 63,984
-----------
$ 1,111,109
-----------
Transportation - Railroads (2.1%) -
- -----------------------------------
Burlington Northern Santa Fe 3,191 $ 263,257
Union Pacific Corporation 4,000 274,500
-----------
$ 537,757
-----------
Utilities - Telecommunications (0.5%) -
- ---------------------------------------
U S West Communications Group 4,000 $ 129,500
-----------
Waste Management (0.7%) -
- -------------------------
WMX Technologies, Inc. 5,500 $ 174,625
-----------
TOTAL COMMON STOCKS (Cost - $11,370,412) $19,223,128
-----------
PREFERRED STOCKS (0.7%)
Transportation - Aircraft (0.7%) -
- ----------------------------------
Delta Air Lines $3.50 Series C
Convertible Preferred 3,000
$ 183,375
-----------
TOTAL PREFERRED STOCKS (Cost - $150,645) $ 183,375
-----------
TOTAL STOCKS (Cost - $11,521,057) $19,406,503
-----------
<FN>* Nonincome-producing security
F-5
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
---------------------------------
(Continued)
MARCH 31, 1996
--------------
(Unaudited)
<CAPTION>
Principal Market
Title of Security Amount Value
----------------- ------ -----
(Note 1)
<S> <C> <C>
DEBT SECURITIES (24.9%)
Broadcast - Radio and Television (0.2%)-
- ----------------------------------------
Comcast Corporation 3.375% Step-Up
Convertible Subordinated Debentures
due September 9, 2005 $ 50,000
$ 46,375
-----------
Food - Miscellaneous Products (0.4%) -
- --------------------------------------
Super Valu Stores, Inc. 8.875%
Promissory Notes, due June 15, 1999 $100,000
$ 107,094
-----------
U.S. Government (12.7%) -
- -------------------------
U.S. Treasury, 9.375% Notes,
due April 15, 1996 $200,000 $ 200,375
U.S. Treasury, 8.875% Notes,
due November 15, 1997 200,000 209,500
U.S. Treasury, 9.000% Notes,
due May 15, 1998 200,000 212,437
U.S. Treasury, 9.125% Notes,
due May 15, 1999 200,000 217,625
U.S. Treasury, 8.750% Notes,
due August 15, 2000 200,000 220,188
U.S. Treasury, 8.000% Notes,
due May 15, 2001 200,000 216,187
U.S. Treasury, 7.500% Notes,
due May 15, 2002 200,000 213,000
U.S. Treasury, 10.750% Bonds
due February 15, 2003 200,000 248,938
U.S. Treasury, 7.250% Notes,
due May 15, 2004 200,000 210,937
U.S. Treasury, 7.50% Notes,
due February 15, 2005 200,000 214,625
U.S. Treasury, 9.375% Bonds,
due February 15, 2006 200,000 243,250
F-6
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
---------------------------------
(Continued)
MARCH 31, 1996
--------------
(Unaudited)
<CAPTION>
Principal Market
Title of Security Amount Value
----------------- ------ -----
(Note 1)
<S> <C> <C>
DEBT SECURITIES (Continued)
U.S. Government - (Continued)
- -----------------------------
U.S. Treasury, 7.625% Bonds,
due February 15, 2007 200,000 211,813
U.S. Treasury, 8.75% Bonds,
due November 15, 2008 200,000 227,187
U.S. Treasury, 9.125% Bonds,
due May 15, 2009 200,000 232,500
U.S. Treasury, 7.500% Bonds,
due November 15, 2016 200,000
214,375
-----------
$ 3,292,937
-----------
Household Appliances and Utensils (0.4%) -
- ------------------------------------------
Maytag Corp., 9.75% Notes,
due May 15, 2002 $100,000
$ 114,094
-----------
Office Equipment and Supplies (0.4%) -
- --------------------------------------
Xerox Corporation, 9.750%
Notes, due March 15, 2000 $100,000
$ 111,312
-----------
Retail Stores - Broad Line Chains (0.5%) -
- ------------------------------------------
Costco Wholesale Corporation 5.750%
Convertible Subordinated Debentures,
due May 15, 2002 $150,000
$ 140,062
-----------
Retail Stores - Department (1.1%) -
- -----------------------------------
Dillard Department Stores, Inc. 7.850%
Debentures, due October 1, 2012 $150,000 $ 154,922
Sears Reobuck & Co.
9.375% Debentures, due
November 1, 2011 100,000
118,875
-----------
$ 273,797
-----------
Textiles - Miscellaneous (0.4%) -
- ---------------------------------
Guilford Mills, Inc. 6.000%
Convertible Subordinated Debentures
due September 15, 2012 $100,000
$ 95,500
-----------
F-7
BRIDGES INVESTMENT FUND, INC.
-----------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
---------------------------------
(Continued)
MARCH 31, 1996
--------------
(Unaudited)
<CAPTION>
Principal Market
Title of Security Amount Value
----------------- ------ -----
(Note 1)
<S> <C> <C>
DEBT SECURITIES (Continued)
Transportation - Railroads (0.5%) -
- -----------------------------------
Union Pacific Corporation 6.00%
Notes, due September 1, 2003 $150,000
$ 140,438
-----------
Commerical Paper - Short Term (7.7%) -
- --------------------------------------
Ford Motor Credit Corp.
Commercial Paper Note 5.39%
due April 2, 1996 $1,200,000 $ 1,200,000
Prudential Funding Corp.
Commercial Paper Note 5.15%
due April 2, 1996 $ 970,000
$ 970,000
-----------
$ 2,170,000
-----------
TOTAL DEBT SECURITIES (Cost - $6,396,418) $ 6,491,609
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost - $17,917,475) (99.5%) $25,898,112
CASH AND RECEIVABLES
LESS TOTAL LIABILITIES (0.5%)
127,192
-----------
NET ASSETS, March 31, 1996 (100.0%) $26,025,304
===========
</TABLE>
The accompanying notes to financial statements
are an integral part of this schedule.
<TABLE>
F-8
BRIDGES INVESTMENT FUND, INC.
-----------------------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
MARCH 31, 1996
--------------
(Unaudited)
<CAPTION>
ASSETS Amount
<S> <C>
Investments, at market value (Note 1)
Common and preferred stocks (cost $11,521,057) $19,406,503
Debt securities (cost $6,396,418) 6,491,609
----------
Total Investments $25,898,112
Cash 58,442
Receivables
Dividends and interest 153,259
Subscriptions to capital stock 13,766
-------
TOTAL ASSETS $26,123,579
===========
LIABILITIES
Accounts payable - Redemptions of Capital Stock $ 44,525
Accrued operating expenses 53,750
-----------
TOTAL LIABILITIES $ 98,275
-----------
NET ASSETS
Capital stock, $1 par value - Authorized 3,000,000 shares,
less 648,155 shares redeemed; 1,796,584 shares issued;
1,148,429 shares outstanding (Note 6) $ 1,148,429
Paid-in surplus -
Excess over par value of amounts received from sale
of 1,796,584 shares, less amounts paid out in redeeming
648,155 shares (Note 6) 16,768,013
----------
Net capital paid in on shares $17,916,442
Accumulated undistributed net investment income 153,898
Accumulated net realized loss on investment
transactions (31,064)
Net unrealized appreciation on investments
(Note 1) 7,980,637
Accumulated undistributed equilization
amount (Note 1) 5,391
-----------
TOTAL NET ASSETS $26,025,304
===========
TOTAL LIABILITIES AND NET ASSETS $26,123,579
===========
NET ASSET VALUE PER SHARE (Note 5) $22.66
======
OFFERING PRICE PER SHARE (Note 5) $22.66
======
REDEMPTION PRICE PER SHARE (Note 5) $22.66
======
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
<TABLE>
F-9
BRIDGES INVESTMENT FUND, INC.
-----------------------------
STATEMENT OF OPERATIONS
-----------------------
FOR THE THREE MONTHS ENDED MARCH 31, 1996
-----------------------------------------
(Unaudited)
<CAPTION>
INVESTMENT INCOME (Note 1) Amount Amount
<S> <C> <C>
Interest $109,862
Dividends 101,326
-------
Total Investment Income $211,188
EXPENSES
Management fees (Note 2) $ 32,107
Custodian fees 8,452
Professional services 2,725
Insurance 2,349
Bookkeeping services 1,621
Printing and supplies 5,399
Dividend disbursing and transfer
agent fees (Note 3) 3,246
Computer programming 1,125
Taxes and licenses 266
--------
Total Expenses $ 57,290
---------
NET INVESTMENT INCOME $ 153,898
---------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS, NET (Note 1)
Net realized loss on transactions in
investment securities $ (22,002)
Net increase in unrealized
appreciation of investments 1,143,789
---------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS $1,121,787
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,275,685
==========
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
F-10
<TABLE>
BRIDGES INVESTMENT FUND, INC.
-----------------------------
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
--------------------------------------------------
(Unaudited)
<CAPTION>
1996 1995
---- ----
INCREASE IN NET ASSETS
<S> <C> <C>
Operations -
Net investment income $ 153,898 $ 151,902
Net realized gain/(loss) on transactions in
investment securities (Note 1) (22,002) 42,885
Net increase (decrease) in unrealized
appreciation of investments (Note 1) 1,143,789 1,302,517
----------- -----------
Net increase in net assets
resulting from operations $ 1,275,685 $ 1,497,304
Net equalization credits (Note 1) 1,192 440
Distributions to shareholders from -
Net investment income (Note 7) - -
Net realized gain from investment
transactions - -
Equalization (Note 1) - -
Net capital share transactions
(Note 6) 695,681 241,453
------------ -----------
Total Increase in Net Assets $ 1,972,558 $ 1,739,197
NET ASSETS:
Beginning of year 24,052,746 18,096,297
---------- -----------
End of year (including accumulated
undistributed net investment income
of $159,289 and $155,579, respectively) $26,025,304 $19,835,494
========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
F-11
----
BRIDGES INVESTMENT FUND, INC.
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
MARCH 31, 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>
1995 1994 Net Change
---- ---- ----------
<S> <C> <C> <C>
Net unrealized appreciation (depreciation):
Aggregate gross unrealized
appreciation on securities
$8,172,188 $3,800,932
Aggregate gross unrealized
depreciation on securities
(191,551) (411,608)
---------- ----------
Net $7,980,637 $3,389,324 $4,591,313
========== ========== ==========
</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 three
months ended March 31, was:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
United States government obligations $ 493,695 $ 199,496
Other Securities 806,978 24,472
--------- ---------
Total Cost $1,300,673 $ 223,968
========== ==========
</TABLE>
Net proceeds from sales of long term investments during the first
three months ended March 31, were:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
United States government obligations $ 223,527 $ -
Other Securities 446,090 368,238
--------- ---------
Total Net Proceeds $ 669,617 $ 368,238
========== ==========
Total Cost Basis of
Securities Sold $ 691,619 $ 325,353
========== ==========
</TABLE>
(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:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <S>
Shares sold 35,667 19,952
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 6,680 8,429
------ ------
42,347 28,381
Shares redeemed 10,538 14,499
------ ------
Net increase 31,809 13,882
====== ======
</TABLE>
Value of capital stock issued and redeemed is as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Shares sold $ 786,721 $ 356,996
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 144,137 145,725
---------- ----------
$ 930,858 $ 502,721
Shares redeemed 235,177 261,268
--------- ----------
Net increase $ 695,681 $ 241,453
========== ==========
</TABLE>
- --------
(7) DISTRIBUTION TO SHAREHOLDERS
----------------------------
On April 12, 1996 a distribution of $.1325 per share aggregating
$152,756.18 was declared to shareholders of record on April 12, 1996, to be
payable on April 29, 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 circum-
stances and limitations as set forth in the Fund's prospectus.