BRIDGES INVESTMENT FUND, INC.
FIRST QUARTER
1997
CONTENTS OF REPORT
Pages 1 - 3 Shareholder Letter
Exhibit 1 Portfolio Transactions from January 1, 1997,
through March 31, 1997
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, 1997
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.
BRIDGES INVESTMENT FUND, INC.
8401 West Dodge Road
Omaha, Nebraska 68114
Telephone 402-397-4700
Facsimile 402-397-8617
Directors
Frederick N. Backer
Edson L. Bridges II
Edson L. Bridges III
N. P. Dodge, Jr.
John W. Estabrook
Jon D. Hoffmaster
John J. Koraleski
Roger A. Kupka
Gary L. Petersen
Roy A. Smith
L.B. Thomas
Officers
Edson L. Bridges II - Chairman and
Chief Executive Officer
Edson L. Bridges III - President
Douglas P. Person - Vice President
Rosemary M. Teckmeyer - Vice President
Mary Ann Mason - Secretary
Kathleen J. Stranik - Assistant Secretary
Nancy K. Dodge - Treasurer
Auditor
Arthur Andersen LLP
1700 Farnam Street
Omaha, Nebraska 68102
Corporate Counsel
Baird, Holm, McEachen,
Pedersen, Hamann & Strasheim
1500 Woodmen Tower
Omaha, Nebraska 68102
April 25, 1997
Dear Shareholder:
First Quarter Review
- --------------------
The net asset value per share of the Fund was $24.99 on March 31, 1997.
This price was 1.7% higher than the $24.56 net asset value per share at year-
end, 1996. The $24.99 price was the highest end of the quarter valuation
achieved in the history of the Fund.
The Dow Jones Industrial Average and the Standard & Poor's 500 Composite
Index both advanced to new all time high points during the First Quarter of 1997
in response to a stronger than expected U.S. economy and the potential
improvements for corporate earnings related to that trend.
Operations
- ----------
The net assets of the Fund were $30,255,441 on March 31, 1997, representing
the highest value for any calendar quarter reporting date in the history of the
Fund. Net assets grew $1,005,953 from the 1996 year ending total of
$29,249,488, an increase of 3.4% for the First Quarter of 1997.
There were 1,210,627 shares of capital stock outstanding on March 31, 1997.
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 1997 was 19,796, which constituted a 1.7% advance over the 1,190,831
shares outstanding at the end of 1996.
Net investment income was $163,218 for the First Quarter of 1997 compared
to $153,898 for the same period one year ago, Net realized gains were $107,499
on the securities portfolio for the Fund for the quarter ending March 31, 1997.
There were $22,002 in net realized losses in the Fund's portfolio for the
comparable period in 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, and the Notes to Financial Statements
as of March 31, 1997. These documents constitute our basic report to you.
Please refer to Exhibits 1 and 2 for the Fund's portfolio transactions in the
current quarter 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 30 d-1 (6) of the General Rules and Regulations under the Investment
Company Act of 1940, as amended by the Securities and Exchange Commission,
requires certain reports to stockholders with respect to any matter that was
submitted to a shareholder vote during the period covered by the shareholder
report. The Annual Meeting of Shareholders of the Fund was held on February 18,
1997. The information required to be reported with respect to this meeting
appears in Exhibit 3. A similar presentation will be made each time there is an
annual or special meeting, and, in the instance of this report, the same
information will be republished in January, 1998 to fulfill requirements in
connection with proxy solicitation for the next annual meeting.
Cash Distribution
On April 11, 1997, the Board of Directors declared a $.1325 per share
dividend on the shares of capital stock outstanding on April 11, 1997 -- the
record date for this income distribution. The dividend amount will be payable
on or about April 25, 1997. This dividend is payable from net investment income
earned during the January - March, 1997, Quarter.
Prospectus
- -----------
This letter transmits the 1997 edition of the Fund's Prospectus that became
effective on April 25, 1997. The Prospectus is Part A of a three segment 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 1997 revisions in these documents to you. The Annual Report
for 1996 is an integral part of the Prospectus offering for 1997. Each
shareholder has been mailed or personally received an Annual Report for 1996
with their proxy statement in January, 1997 or when he or she made an original
purchase transaction in the Fund subsequent to the January 23, 1997 date of
issuance for this report. Any person who desires another copy of the Annual
Report for 1996 should request that document from Mrs. Mason.
New Officers
- ------------
Mr. Edson L. Bridges II was elected Chairman and Chief Executive Officer,
and Mr. Edson L. Bridges III was elected President of the Fund at the April 11,
1997 meeting of the Board of Directors where all other officers were re-elected
to their regular positions. Mr. Bridges II turned the portfolio management
responsibilities for the Fund over to Mr. Bridges III at the close of business
on that date. Mr. Bridges III, known within our organization as Ted, has served
for many years as the back-up portfolio manager to Edson. A good number of the
common stocks within the present portfolio of the Fund have been Ted's research
selections. Edson will serve as the back-up portfolio manager to Ted for the
next twelve months. As Chairman, Edson will focus upon the non-portfolio
business matters for the Fund for which he has normally exercised
responsibility.
This change in assignments for the two top officers was made at the request
of Mr. Bridges II to provide the maximum benefit to the Fund's portfolio from
the knowledge and experience accumulated by Mr. Bridges III over a considerable
period of time. Both senior officers of the Fund believe their new positions
reflect a seamless change for the succession of management that will continue a
partnership that utilizes their best personal strengths for the foreseeable
future.
Outlook
- -------
The forward tilt to the U.S. economy is still intact after six years of
recovery that began in February, 1991. The word tilt was used to create a
contrast with a normal cyclical advance that usually materalizes into a boom or
burst of energy in the last phase before a recession. Our 1997 economy is not
in the typical post-World War II pattern. The Fund's management expects
sufficiently positive business conditions to keep the corporate profit
environment on a generally positive path.
The preference by investors for common stocks is likely to remain strong
because the relative potential for total returns is expected to be higher for
equities than for fixed income securities. The preference for common stocks in
U.S. markets has developed an environment for above average price to earnings
ratios for many securities. To some degree, stock price levels are, or will be,
vulnerable to profit taking or defensive moves by some equity owners. However,
trading volume in stocks remains high, and, at this point in time, the market
top for the mid-1990's upward phase may not have been reached.
Concluding Thoughts
The Fund's management will continue to emphasize stock selection based upon
consistent earnings growth over long periods of time. Our attention will be
upon outstanding opportunities for companies and industries with less concern
about the overall economic and market environment.
The Board of Directors and the management of the Fund have followed a set
of investment objectives and principles that have produced consistently positive
returns to the shareholders. We are grateful for your investment in our Fund,
and we expect to continue to merit your commitment to our shares as we
faithfully execute these successful investment strategies.
Sincerely yours,
Edson L. Bridges II, CFA
Chairman
Edson L. Bridges III, CFA
President
ELBII:elc
<TABLE>
EXHIBIT 1
BRIDGES INVESTMENT FUND, INC.
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
JANUARY 1, 1997, THROUGH MARCH 31, 1997
<CAPTION>
Bought or Held After
Received Transaction
$1,000 Par $1,000 Par
Securities
Value (M) Value (M)
Common Stocks Unless or Shares or Shares
Described Otherwise
<S> <C> <C>
(1)<F1> Bristol Myers Squibb 3,000 6,000
Capital One Financial 5,000 5,000
(2)<F2> Federal Home Loan Mortgage 18,000 24,000
(3)<F3> NCR 312 312
(4)<F4> Nations Bank Corporation 3,000 6,000
Transaction Systems Architects 2,500 6,500
West Teleservices 2,000 13,000
Various issues of Commercial 36,495M 3,270M
Paper Notes Purchased during
1st Qtr., 1997
<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>
First USA 4,000 --
Various issues of Commercial Paper 36,145M --
Notes maturing during
1st Qtr., 1997
<F1>(1) - Received 3,000 shares from a 2-for-1 stock split on March 1, 1997
<F2>(2) - Received 18,000 shares from a 4-for-1 stock split on January 13, 1997
<F3>(3) - Received in a 1-for-16 stock distribution from A T & T
<F4>(4) - Received 3,000 shares from a 2-for-1 stock split on February 28,
1997
</TABLE>
<TABLE>
Exhibit 2
BRIDGES INVESTMENT FUND, INC.
HISTORICAL FINANCIAL INFORMATION
<CAPTION>
Net Shares Net Asset Dividend/ Capital
Valuation Assets Outstanding Value/Share Share Gains/Share
Date
<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 -
EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION
Valuation Net Shares Net Asset Dividend/ Capital
Date Assets Outstanding Value/Share Share Gains/Share
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 -
EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION
Valuation Net Shares Net Asset Dividend/ Capital
Date Assets Outstanding Value/Share Share Gains/Share
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 -
09-30-96 27,451,784 1,165,788 23.55 .1325 -
12-31-96 29,249,488 1,190,831 24.56 .285 0.25730
03-31-97 30,255,441 1,210,627 24.99 - -
</TABLE>
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 18, 1997, at 11:00 a.m.
(2) Election of Directors for one year terms (All Directors Stand for
Annual Election):
<TABLE>
<CAPTION>
- - - - - -Votes Cast - - - - - -
Withhold
For All Authority
Names of Directors Nominees To Vote For
Elected at Meeting Except All Nominees
For
<S> <C> <C> <C>
Frederick N. Backer 1,057,757 None None
Edson L. Bridges II 1,057,757 None None
Edson L. Bridges III 1,057,757 None None
N. P. Dodge, Jr. 1,057,757 None None
John W. Estabrook 1,057,757 None None
Jon D. Hoffmaster 1,057,757 None None
John J. Koraleski 1,057,757 None None
Roger D. Kupka 1,057,757 None None
Gary L. Petersen 1,057,757 None None
Roy A. Smith 1,057,757 None None
L.B. Thomas 1,057,757 None None
</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 1,057,392 None 365
advisory contract which continues
the employment of Bridges
Investment Counsel, Inc. as
investment adviser to the Fund
for the period from April 17,
1997 through April 17, 1998
(b) For the ratification of the 1,046,483 None 11,274
selection of Arthur Andersen
LLP as independent auditors
of the Fund for the Fiscal
Year ending December 31, 1997
</TABLE>
<TABLE>
F-1
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1997
(Unaudited)
<CAPTION>
Number Market
of Shares Value
Title of Security
<S> <C> <C>
COMMON STOCKS - (73.4%)
Aircraft - Manufacturing - 2.0%
The Boeing Co. 6,000 $ 591,750
Amusements - Recreation - Sporting Goods 0.8%
NIKE, Inc. 4,000 $ 247,500
Banking and Finance - 5.6%
First National of Nebraska, Inc. 230 $ 793,500
NationsBank Corporation 6,000 333,000
Norwest Corporation 6,000 277,500
State Street Boston Corp. 4,000 277,500
-----------
$ 1,681,500
-----------
Beverages - Soft Drinks - 2.6%
PepsiCo, Inc. 24,000 $ 777,000
Building Materials - Forest Products - 0.7%
Georgia Pacific Corp. 3,000 $ 217,500
Chemicals - 7.2%
The Dow Chemical Company 7,000 $ 559,125
Du Pont (E.I.) De Nemours & Company 4,000 424,000
Eastman Kodak Company 7,000 532,000
Monsanto Company 12,000 459,000
Morton International, Inc. 5,000 211,250
-----------
$ 2,185,375
-----------
Computers - Hardware and Software - 6.9%
Cisco Systems, Inc.*<FN> 2,000 $ 96,250
Electronic Data Systems Corp. 4,223 169,448
HNC Software, Inc.*<FN> 2,000 52,250
Hewlett-Packard Co. 12,000 640,500
International Business Machines Corporation 1,000 137,250
Microsoft Corporation*<FN> 8,000 733,504
NCR Corporation*<FN> 312 10,959
Sun Microsystems, Inc.*<FN> 2,000 57,750
Transaction System Architects*<FN> 6,500 178,750
-----------
$ 2,076,661
-----------
Commercial Services - 0.1%
MemberWorks, Inc.*<FN> 2,000 $ 32,500
<FN>* Nonincome-producing security
F-2
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 1997
(Unaudited)
<CAPTION>
Number Market
of Shares Value
Title of Security
<S> <C> <C>
COMMON STOCKS (Continued)
Drugs - Medicines - Cosmetics - 7.8%
Abbott Laboratories 8,000 $ 449,000
Amgen, Inc.*<FN> 1,000 55,875
Bristol-Myers Squibb Co. 6,000 354,000
Elan Corporation PLC ADR*<FN> 4,000 136,500
Johnson & Johnson 10,000 528,750
Merck & Co., Inc. 10,000 842,500
-----------
$ 2,366,625
-----------
Electrical Equipment and Supplies - 2.0%
General Electric Co. 6,000 $ 595,500
Electronics - 3.4%
Intel Corporation 4,000 $ 556,500
Motorola, Inc. 8,000 484,000
-----------
$ 1,040,500
-----------
Finance - Real Estate - 2.2%
Federal Home Loan Mortgage Corporation 24,000 $ 654,000
Finance - Services - 0.6%
Capital One Financial Corporation 5,000 $ 186,250
Food - Miscellaneous Products - 3.8%
Philip Morris Companies, Inc. 10,000 $ 1,141,250
Forest Products & Paper - 1.0%
Kimberly-Clark Corporation 3,000 $ 298,500
Insurance - Multiline - 1.4%
American International Group, Inc. 1,000 $ 117,375
General Re Corp. 2,000 316,000
-----------
$ 433,375
-----------
Insurance - Municipal Bond - 1.0%
MBIA, Inc. 3,000 $ 287,625
<FN>* Nonincome-producing security
F-3
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 1997
(Unaudited)
<CAPTION>
Number Market
of Shares Value
Title of Security
<S> <C> <C>
COMMON STOCKS (Continued)
Lumber and Wood Products - 0.7%
Weyerhaeuser Company 5,000 $ 223,125
Machinery - Construction & Mining - 0.8%
Caterpillar, Inc. 3,000 $ 240,750
Metal Products - Miscellaneous - 0.8%
Nucor Corporation 5,500 $ 251,625
Motion Pictures and Theatres - 1.7%
Walt Disney Co. 7,000 $ 510,125
Petroleum Producing - 7.2%
Amoco Corporation 5,000 $ 433,125
Atlantic Richfield Company 2,000 270,000
Chevron Corporation 10,000 696,250
Exxon Corporation 4,000 431,000
Mobil Corporation 2,000 261,250
Union Pacific Resources Group 3,387 90,602
-----------
$ 2,182,227
-----------
Printing and Engraving - 0.5%
Deluxe Corp. 5,000 $ 161,250
Publishing - Newspapers - 1.1%
Gannett Co., Inc. 4,000 $ 343,500
Publishing - Electronic - 1.2%
Reuters Holdings PLC 6,000 $ 349,128
Restaurants - Food Service - 0.2%
Apple South, Inc. 3,500 $ 45,937
Retail Stores - Apparel and Clothing - 1.5%
Gap, Inc. 14,000 $ 469,000
Retail Stores - Building Materials and Home
Improvement - 0.5%
Home Depot, Inc. 3,000 $ 160,500
<FN>* Nonincome-producing security
F-4
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 1997
(Unaudited)
<CAPTION>
Number Market
of Shares Value
Title of Security
<S> <C> <C>
COMMON STOCKS (Continued)
Retail Stores - Department - 1.4%
Dayton Hudson Corporation 10,500 $ 438,375
Retail Stores - Variety - 0.7%
Albertson's Inc. 6,500 $ 221,000
Telecommunications - 4.2%
A T & T Corp. 5,000 $ 176,250
GTE Corporation 10,000 466,250
Lucent Technologies, Inc. 1,620 85,050
Sprint Corporation 8,000 363,000
West Teleservices Corporation*<FN> 13,000 167,375
-----------
$ 1,257,925
-----------
Transportation - Railroads - 0.8%
Union Pacific Corporation 4,000 $ 227,000
Utilities - Telecommunications - 0.4%
U S West Communications Group 4,000 $ 135,500
Waste Management - 0.6%
WMX Technologies, Inc. 5,500 $ 168,438
TOTAL COMMON STOCKS (Cost - $11,607,493) $22,198,816
PREFERRED STOCKS (0.4%)
Telecommunications - (0.4%)
AirTouch Communications, Inc. 4.25% Series C 3,000 $ 131,250
Convertible Preferred
Total Preferred Stocks (Cost - $137,925) $ 131,250
Total Stocks (Cost - $11,745,418) $22,330,066
<FN>*Nonincome-producing security
F-5
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 1997
(Unaudited)
<CAPTION>
Principal Market
Amount Value
Title of Security
<S> <C> <C>
DEBT SECURITIES (25.4%)
Broadcast - Radio and Television (0.1%)-
Comcast Corporation 3.375% Step-Up
Convertible Subordinated Debentures
due September 9, 2005 $ 50,000 $ 46,688
Food - Miscellaneous Products (0.3%) -
Super Valu Stores, Inc. 8.875%
Promissory Notes, due June 15, 1999 $100,000 $ 103,563
U.S. Government (11.2%) -
U.S. Treasury, 8.875% Notes,
due November 15, 1997 200,000 203,500
U.S. Treasury, 9.000% Notes,
due May 15, 1998 200,000 206,000
U.S. Treasury, 9.125% Notes,
due May 15, 1999 200,000 210,312
U.S. Treasury, 8.750% Notes,
due August 15, 2000 200,000 212,438
U.S. Treasury, 8.000% Notes,
due May 15, 2001 200,000 209,000
U.S. Treasury, 7.500% Notes,
due May 15, 2002 200,000 206,187
U.S. Treasury, 10.750% Bonds
due February 15, 2003 200,000 237,188
U.S. Treasury, 7.250% Notes,
due May 15, 2004 300,000 305,906
U.S. Treasury, 7.50% Notes,
due February 15, 2005 300,000 310,219
U.S. Treasury, 9.375% Bonds,
due February 15, 2006 200,000 231,875
F-6
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 1997
(Unaudited)
<CAPTION>
Principal Market
Amount Value
Title of Security
<S> <C> <C>
DEBT SECURITIES (Continued)
U.S. Government - (Continued)
U.S. Treasury, 7.625% Bonds,
due February 15, 2007 300,000 307,781
U.S. Treasury, 8.75% Bonds,
due November 15, 2008 200,000 217,938
U.S. Treasury, 9.125% Bonds,
due May 15, 2009 200,000 223,000
U.S. Treasury, 7.500% Bonds,
due November 15, 2016 300,000 308,437
-----------
$ 3,389,781
-----------
Household Appliances and Utensils (0.4%) -
Maytag Corp., 9.75% Notes,
due May 15, 2002 $100,000 $ 110,569
Office Equipment and Supplies (0.4%) -
Xerox Corporation, 9.750%
Notes, due March 15, 2000 $100,000 $ 107,414
Retail Stores - Broad Line Chains (0.5%) -
Costco Wholesale Corporation 5.750%
Convertible Subordinated Debentures,
due May 15, 2002 $150,000 $ 145,312
Retail Stores - Department (0.9%) -
Dillard Department Stores, Inc. 7.850%
Debentures, due October 1, 2012 $150,000 $ 152,519
Sears Roebuck & Co.
9.375% Debentures, due
November 1, 2011 100,000 114,712
-----------
$ 267,231
-----------
Textiles - Miscellaneous (0.3%) -
Guilford Mills, Inc. 6.000%
Convertible Subordinated Debentures
due September 15, 2012 $100,000 $ 106,000
F-7
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 1997
(Unaudited)
<CAPTION>
Principal Market
Amount Value
Title of Security
<S> <C> <C>
DEBT SECURITIES (Continued)
Transportation - Railroads (0.5%) -
Union Pacific Corporation 6.00%
Notes, due September 1, 2003 $ 150,000 $ 138,724
Commercial Paper - Short Term (10.8%) -
American Express Credit Corp.
Commercial Paper Note 5.55%
due April 1, 1997 $1,540,000 $ 1,540,000
Ford Motor Credit Corp.
Commercial Paper Note 5.5%
due April 1, 1997 $1,540,000 $ 1,540,000
Prudential Funding Corp. Commercial
Paper Note 5.4% due April 1, 1997 $ 190,000 $ 190,000
-----------
$ 3,270,000
-----------
TOTAL DEBT SECURITIES (Cost - $7,702,768) $ 7,685,282
TOTAL INVESTMENTS IN SECURITIES
(Cost - $19,448,186) (99.2%) $30,015,348
CASH AND RECEIVABLES
LESS TOTAL LIABILITIES (0.8%) 240,093
-----------
NET ASSETS, March 31, 1997 (100.0%) $30,255,441
===========
<FN>The accompanying notes to financial statements
are an integral part of this schedule.
</TABLE>
<TABLE>
F-9
BRIDGES INVESTMENT FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
(Unaudited)
<CAPTION>
AMOUNT AMOUNT
<S> <C> <C>
INVESTMENT INCOME
Interest $120,095
Dividends 108,948
--------
Total Investment Income $229,043
EXPENSES
Management fees $ 38,327
Custodian fees 10,007
Professional services 2,725
Insurance 2,349
Bookkeeping services 3,609
Printing and supplies 4,413
Dividend disbursing and transfer
agent fees 3,004
Computer programming 1,125
Taxes and licenses 266
-------
Total Expenses $ 65,825
---------
NET INVESTMENT INCOME $ 163,218
---------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS, NET
Net realized gain on transactions in
investment securities $ 107,499
Net increase in unrealized
appreciation of investments 227,369
--------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS $ 334,868
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 498,086
==========
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
<TABLE>
F-10
BRIDGES INVESTMENT FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1997 AND 1996
(Unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
INCREASE IN NET ASSETS
Operations -
Net investment income $ 163,218 $ 153,898
Net realized gain/(loss) on transactions
in investment securities 107,499 (22,002)
Net increase in unrealized
appreciation of investments 227,369 1,143,789
----------- ----------
Net increase in net assets
resulting from operations $ 498,086 $1,275,685
Net equalization credits 1,252 1,192
Distributions to shareholders from -
Net investment income - -
Net realized gain from investment
transactions - -
Equalization - -
Net capital share transactions 506,615 695,681
----------- ----------
Total Increase in Net Assets $ 1,005,953 $1,972,558
NET ASSETS:
Beginning of year 29,249,488 24,052,746
---------- ----------
End of year (including accumulated
undistributed net investment income
of $169,202 and $159,289 respectively) $30,255,441 $26,025,304
=========== ===========
<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
MARCH 31, 1997
(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>
1997 1996 Net Change
<S> <C> <C> <C>
Net unrealized appreciation (depreciation):
Aggregate gross unrealized
appreciation on securities $10,868,820 $8,172,188
Aggregate gross unrealized
depreciation on securities (301,658) (191,551)
Net $10,567,162 $7,980,637 $2,586,525
</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. The gain computed on the basis of average
cost would have been substantially the same as that reflected in the
accompanying statement of operations.
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.
E. 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.
(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 years ended
March 31, was:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
United States government obligations $ - $ 493,695
Other Securities 310,716 806,978
Total Cost $ 310,716 $1,300,673
</TABLE>
Net proceeds from sales of long-term investments during the years
ended March 31, were:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
United States government obligations $ - $ 223,527
Other Securities 211,481 446,090
Total Net Proceeds $ 211,481 $ 669,617
Total Cost Basis of
Securities Sold $ 103,982 $ 691,619
</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>
1997 1996
<S> <C> <C>
Shares sold 36,077 35,667
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 5,782 6,680
41,859 42,347
Shares redeemed 22,063 10,538
Net increase 19,796 31,809
</TABLE>
Value of capital stock issued and redeemed is as follows:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Shares sold $ 918,980 $ 786,721
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 147,024 144,137
$1,066,004 $ 930,858
Shares redeemed 559,389 235,177
Net increase $ 506,615 $ 695,681
</TABLE>
(7) DISTRIBUTION TO SHAREHOLDERS
----------------------------
On April 11, 1997 a distribution of $.1325 per share aggregating
$160,379.48 was declared to shareholders of record on April 11, 1997, to
be payable on April 25, 1997.
(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.
