BRIDGES INVESTMENT FUND, INC.
FIRST QUARTER
1999
CONTENTS OF REPORT
PAGES 1 - 6 SHAREHOLDER LETTER
EXHIBIT 1 PORTFOLIO TRANSACTIONS FROM JANUARY 1, 1999,
THROUGH MARCH 31, 1999
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, 1999
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.
<PAGE>
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
John T. Reed
Roy A. Smith
Janice D. Stoney
L.B. Thomas
John K. Wilson
Officers
Edson L. Bridges II - Chairman and
Chief Executive Officer
Edson L. Bridges III _ President
Mary Ann Mason - Secretary
Kathleen J. Stranik - Assistant Secretary
Nancy K. Dodge - Treasurer
Auditor
KPMG Peat Marwick LLP
Two Central Park Plaza
Suite 1501
Omaha, Nebraska 68102-1617
Corporate Counsel
Baird, Holm, McEachen,
Pedersen, Hamann & Strasheim
1500 Woodmen Tower
Omaha, Nebraska 68102
<PAGE>
April 19, 1999
Dear Shareholder:
Investment Results
Bridges Investment Fund, Inc. had a total return of 6.95% during the First
Quarter of 1999 based on a year-end 1998 net asset value of $34.26 per share and
a March 31, 1999, net asset value of $36.64 per share. On a trailing 12-month
basis for the period ending March 31, Bridges Investment Fund had a total return
of 22.64%. By comparison, the S&P 500 had total returns of 4.98% for the First
Quarter and 18.47% for the trailing 12 months ended March 31, 1999.
In a continuation of many of the investment themes of 1998, the Fund
benefited in the First Quarter from relative price strength in the large cap
growth stock sector of the equity market. Investors continued to funnel capital
toward those companies which offer the potential of above-average, long-term
earnings growth. Strong investment performance during the quarter was found in
a handful of stocks; the vast majority of equities underperformed the S&P 500
during the quarter, which itself continued to be dominated by a select few
issues with very large market capitalizations. By April 15, 78.5% of publicly
traded common stocks in the U.S. were underperforming the S&P 500 by more than
15% on a trailing 12-month basis, the highest level ever. Further, as of April
15, fully 80% of NASDAQ stocks were down more than 20% in price from their 52-
week highs, while 64% of New York Stock Exchange stocks were down more than 20%
from their 52-week highs. By comparison, only 43% of the stocks in the S&P 500
were down in excess of 20% from their 52-week highs.
In this difficult operating environment for stock selection, the Fund's
equities had a total return of 8.10% during the First Quarter versus a 4.98%
total return for the S&P 500. That's the good news. The bad news is that the
relatively strong price performance of the Fund's equities over the past three
and 12-month periods has carried valuations to very high historical levels. As
such, we will look for opportunities to pare positions in those equities which
traded at valuation levels that we may believe to be unsustainable. While this
approach has tended to diminish returns in the short run over the past 12
months, we believe it may prove to be a rewarding risk control measure over the
remainder of 1999, which we expect to be volatile given the currently elevated
valuation levels enjoyed by many stocks.
Shareholder Letter 2 April 19, 1999
The following table summarizes the ten largest equity holdings of the Fund
as of March 31, 1999, and includes some salient performance and valuation data:
<TABLE>
<CAPTION>
EPS EPS
% % 5Yr LT
3/31/99 % % Tot Tot Hist Ftr
No. of Market of Tot Ret Ret Gr P/E P/E Gr
Shares Company Value Equiy Asst QTD 12 Mo Rate 1999 2000 Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30,000 GAP 2,019,375 4.4 3.8 20.0 124.8 27 41.0 34.2 18
20,000 Microsoft 1,792,500 3.9 3.4 29.2 100.3 42 67.9 59.4 25
30,000 Freddie Mac 1,719,375 3.7 3.3 -10.8 21.9 16 20.8 18.1 15
11,000 Capital One 1,661,000 3.6 3.1 31.4 91.8 17 29.4 23.7 20
16,000 Merck 1,282,000 2.8 2.4 9.0 26.6 15 32.7 28.9 14
10,000 Intel 1,188,750 2.6 2.2 0.3 52.5 26 25.4 21.8 20
13,000 MCI WorldCom 1,151,313 2.5 2.2 23.4 105.7 24 45.0 31.4 30
18,000 Home Depot 1,120,500 2.4 2.1 1.8 84.5 24 47.2 38.2 23
7,000 Amer.Online 1,029,000 2.2 1.9 89.5 760.8 131 432.0 283.0 50
8,000 EMC 1,022,000 2.2 1.9 50.3 237.9 27 64.5 49.3 30
</TABLE>
Portfolio changes in the Fund during the quarter generally fell into one of
three themes. First, we sold or trimmed positions where fundamentals appeared
to deteriorate and/or where valuations had expanded to the point where some
profit taking seemed prudent. On the buy side, purchases were made in equities
where strong fundamental stories continued to improve (Capital One, America
Online, Vodafone, and QUALCOMM) and in stocks where we sought to broaden our
exposure in sectors which have strong fundamentals through companies that
complimented existing holdings in the portfolio (E*Trade, i2 Technologies, and
At Home). The bulk of the purchases in equities during the quarter was
concentrated in the technology, telecommunications, and financial services
sectors, which we continue to believe have significant growth potential over the
long run.
As we discussed in the Shareholder Letter for year-end 1998, we anticipate
that 1999 could be the most difficult year for equity investors since 1990 for a
variety of reasons. Valuation levels are very high by historical levels.
Investor speculation and complacency are widespread as evidenced by the
gargantuan valuations placed on internet-related companies, many of which have
business models which do not call for corporate profitability for years.
Earnings growth continues to be difficult to come by. In view of these factors,
we continue to expect that 1999 will be marked by significant equity price
volatility. In an economic environment characterized by intense global
competition, however, we remain very constructive on the outlook for common
stocks and would tend to view sharp price declines in companies with strong
business franchises as opportunities to invest capital on a favorable long-term
basis. We will seek to approach 1999 opportunistically, looking to reduce
equity exposure when equity valuation levels are high and increasing it when
more favorable equity valuation levels exist.
Longer term, we will continue to seek to invest in those companies which we
believe offer the best combination of earnings and cash flow growth and
reasonable valuation characteristics. We appreciate your confidence in our
approach to investing and your patience during the inevitable difficult periods
that may lie ahead.
Shareholder Letter 3 April 19, 1999
Financial Statements
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, 1999. These
presentations comprise our basic report to you. In addition, please refer to
Exhibits 1 and 2 for information about the Fund's portfolio transactions for
this First Quarter of 1999 and for the Fund's historical information with
respect to net assets, shares outstanding, net asset value per share, dividends,
and capital gains distributions.
Required Reports
Rule 30d-1(6) of the General Rules and Regulations under the Investment
Company Act of 1940, as promulgated by the Securities and Exchange Commission,
required 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 1999 Annual Meeting of Shareholders of the Fund was held on
February 16, 1999. The information that is required to be reported to you with
respect to this meeting appears in Exhibit 3, attached hereto. 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 published again in
January, 2000, within the Annual Shareholder Report for 1999 to fulfill certain
requirements in connection with the solicitation of proxies for the next Annual
Meeting of Shareholders.
Cash Distribution
On April 13, 1999, the Board of Directors declared a $.075 per share
dividend on shares of capital stock that were outstanding on April 13, 1999 --
the record date for this income distribution. This dividend amount will be
payable on or about April 19, 1999. This dividend is payable from net
investment income earned during the January-March, 1999 Quarter.
Prospectus
This letter transmits the 1999 edition of the Fund's Prospectus that will
become effective today, April 19, 1999. 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 only 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 1999 revisions in these documents to
you. The Annual Report for 1998 could be considered an integral part of the
Prospectus offering for 1999. Each shareholder has been mailed or personally
received an Annual Report for 1998 with their proxy statement in January, 1999,
or when he or she made an original purchase transaction in the Fund subsequent
to the January 25, 1999, date of issuance for that report. Any person who
desires another copy of the Annual Report for 1998 should request that document
from Mrs. Mason. This document will be made available without cost to the
requester.
Shareholder Letter 4 April 19, 1999
Other Comments and Business Plans
Registration -- Throughout the 36 year history of our Fund, the capital
stock has been registered for sale only in the State of Nebraska. The shares
offered to the public have been made upon inquiry based upon individual
initiative or by referral of a staff member from our investment counsel
practice. The Fund and its investment manager have prospered in relative
obscurity on purpose. The manager's focus has been upon the excellence and
quality of the Fund's investments. Marketing strategies have been nonexistent.
The registration of shares in other states was deemed to be expensive and time
consuming for our management.
New Priority -- The low-profile, less complicated Fund operation has
involved some missed fund shares sales opportunities from national publicity
that is received from time to time as a result of our 21 consecutive year record
of positive total annual returns in each of those periods. There are very few
equity mutual funds in the United States that can meet or exceed that
achievement for the December 31, 1977, to December 31, 1998, time frame. The
need to capitalize upon achievements has risen to a higher priority now than in
the past.
Series Fund -- Our Fund has attracted a large sum as a percent of the total
net assets and a considerable number of deferred income tax advantaged accounts
over the years, mainly in the IRA genre, but the huge market for salary
withholding and company match amounts directed towards 401(k) choices has been
largely foregone, because the investment manager does not sponsor the usual four
(or more) alternative choices for investment objectives that the typical
employer desires to offer to his or her employees. Bridges Investment Counsel,
Inc. is studying and will conduct market research for the possible formation of
a series fund to fulfill some of the perceived opportunities for 401(k) plans
and for other investors.
Rates of Return -- An attractive investment record can be a compelling
reason to bring new assets under management for our existing fund and possible
new series portfolio choices. Accordingly, the achievement of outstanding and
competitive short, intermediate, and long-term investment returns has become a
fundamental cornerstone of our Fund's business policy and plan. For a number of
years, the Fund has provided information to various publishers and rating
services who seek standardized information for comparative purposes. In
December, 1998, our daily net asset value was made available through NASDAQ.
There are now at least three sources of quantitative information about our Fund:
Morningstar Principia Pro for Mutual Funds, the Value Line Mutual Fund Survey,
and The Street.com, a service of Arthur Lipper. Some recent information from
these three sources appears below:
Shareholder Letter 5 April 19, 1999
1. Morningstar's March 31, 1999, release rates Bridges Investment Fund, Inc. as
a four star fund for growth and income -- five star is the highest rating.
The investment record and ratings as reported by Morningstar are as follows:
<TABLE>
<CAPTION>
Category YTD 12 Mos 3 Yr An 5 Yr Ann 10 Yr Ann 15 Yr Ann
<S> <C> <C> <C> <C> <C> <C>
Tot. Return % 6.95 22.66 22.55 21.04 15.21 14.21
Number Rank in N.A. 6 (806) 56 (507) 58 (348) 65 (132) 74 (75)
Funds
</TABLE>
From the foregoing, you can see that steady improvement towards an industry
leading position has been underway throughout the survey period.
2.The Value Line survey ranks funds by decile each year. Our Fund's position
by decile since 1984 is shown below:
84 85 86 87 88 89 90 91 92 93 94 95 96 97 98
2 4 2 4 5 4 1 5 4 4 2 4 4 5 2
On January 5, 1999, Value Line published its latest article about Bridges
Investment Fund, Inc. On that date, Value Line assigned an Overall Rank of 1
(Highest) and a Real Rank of 2 (Lower Risk).
3.On April 15, 1999, The Street.com at a net asset value price of $37.27 ranked
Bridges Investment Fund, Inc. at 6.80% for 13 weeks, 9.00% for the year to
date, and 23.10% for the one-year total return. This service ranked our
company 22nd out of 599 mutual funds with an investment objective of growth
and income.
This information is provided to portray the business policy that a solid
investment record has been created to broaden and deepen the constituency of
mutual fund shareholders both within this Fund and others that might be
sponsored from our investment manager's future professional activities. Our
long-term policy has been to be well invested. Within that context, information
about returns and rankings has been very limited in reports to you. To some
degree, the reluctance to report comprehensive rate of return information has
been related to a belief that new investors to the Fund derive their returns
from future investment events, not the past. However, with the explosion of
investment return information that has become available in the 1990's,
electronically and otherwise, it seems appropriate to provide more rate of
return information now than in the past.
Quarterly Dividend -- The $.075 quarterly dividend just paid was the
smallest distribution of this type since the Third Quarter of 1976. The decline
in the dividend of $.135 paid in the First Quarter of 1998, 12 months ago, is
related to the conscious choice to focus stock selections on growth stocks --
many of these issues do not pay dividends. The management believes that the
higher prospective return from price appreciation in common stocks is worth the
sacrifice of current income.
Board Expansion -- The addition of three non-interested person members to
the Board of Directors in 1999 positions our Fund to be able to issue sales
literature and to register shares in other states. Management will be working
to accomplish these objectives as the year progresses.
Year 2000-- The Board of Directors received a briefing from management on
the status of preparations for the Year 2000 and the problems related to
Shareholder Letter 6 April 19, 1999
computer hardware and software that may not be compliant. The preparations
include the development of a plan, the definition of our assessment of the
status of mission critical systems, the remediation of problems that become
identified, the testing of corrections made and of system intercommunications,
and the development of written contingency plans in the event of unanticipated
failures at our site and/or at the location of vendors to our organization. The
Board was advised that Bridges Investment Counsel, Inc. and the Fund are ready
and prepared. However, the management is still posing "what if" questions to
research possible new areas of vulnerability.
Our management is also reviewing statements by public company managements
in their 1998 annual reports and elsewhere for concerns that are expressed by
the officers of those companies that are owned in the Fund's portfolio. This
review process is about one-third complete, as it requires time availability to
read the disclosures and the receipt of the report within the office. To date,
no significant problems for our portfolio companies have been ascertained.
Thank you for being an investor in our Fund.
Sincerely,
Edson L. Bridges II
Chairman
Edson L. Bridges III
President
ELBII:ELBIII:kjs
<PAGE>
<PAGE>
<TABLE>
EXHIBIT 1
BRIDGES INVESTMENT FUND, INC.
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
JANUARY 1, 1999, THROUGH MARCH 31, 1999
<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>
(1)<F1> AMERICA ONLINE, INC. 7,000 7,000
(2)<F2> AMGEN, INC. 3,000 6,000
AT HOME CORPORATION 2,000 2,000
(3)<F3> BP AMOCO PLC SPONS. ADR 6,616 6,616
(4)<F4> BRISTOL-MYERS SQUIBB CO. 4,000 8,000
(5)<F5> CSG SYSTEMS INTERNATIONAL, INC. 8,000 11,000
CAPITAL ONE FINANCIAL 1,000 11,000
CANADIAN OCCIDENTAL PETROLEUM LTD. 5,000 5,000
9.375% PFD. SERIES 1
CARDINAL HEALTH, INC. 2,000 2,000
(6)<F6> DELL COMPUTER 1,500 3,000
E*TRADE GROUP 2,000 2,000
GULFSTREAM AEROSPACE CORPORATION 1,000 6,000
HNC SOFTWARE, INC. 3,000 16,000
I2 TECHNOLOGIES, INC. 5,000 5,000
LEVEL 3 COMMUNICATIONS 5,000 12,000
(7)<F7> MERCK & CO., INC. 8,000 16,000
(8)<F8> MICROSOFT CORPORATION 10,000 20,000
MORGAN STANLEY, DEAN WITTER 1,000 3,000
DISCOVER & CO.
PROVIDIAN FINANCIAL 2,000 2,000
QUALCOMM, INC. 5,000 5,000
RCN CORPORATION 1,000 1,000
(9)<F9> SOLECTRON CORPORATION 6,000 12,000
SUN MICROSYSTEMS, INC. 2,000 2,000
TRANSACTION SYSTEMS ARCHITECTS 7,000 25,000
VODAFONE GROUP PLC SPONS. ADR 2,000 3,000
WEST TELESERVICES 5,800 50,000
VARIOUS ISSUES OF COMMERCIAL PAPER 16,080M 780M
NOTES PURCHASED DURING
1ST QUARTER, 1999
<F1>(1) - RECEIVED 2,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON FEBRUARY 23, 1999.
<F2>(2) - RECEIVED 3,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON MARCH 1, 1999.
<F3>(3) - RECEIVED 6,616 SHARES IN A .6616-FOR-1 ACQUISITION OF AMOCO CORP. ON
JANUARY 4, 1999.
<F4>(4) - RECEIVED 4,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON FEBRUARY 26, 1999.
<F5>(5) - RECEIVED 3,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON MARCH 8, 1999.
<F6>(6) - RECEIVED 1,500 SHARES IN A 2-FOR-1 STOCK SPLIT ON MARCH 8, 1999.
<F7>(7) _ RECEIVED 8,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON FEBRUARY 17, 1999.
<F8>(8) _ RECEIVED 10,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON MARCH 29, 1999.
<F9>(9) _ RECEIVED 6,000 SHARES IN A 2-FOR-1 STOCK SPLIT ON FEBRUARY 25, 1999.
<PAGE>
EXHIBIT 1
BRIDGES INVESTMENT FUND, INC.
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
JANUARY 1, 1999 THROUGH MARCH 31, 1999
(CONTINUED)
<CAPTION>
SOLD OR HELD AFTER
EXCHANGED TRANSACION
SECURITIES $1,000 PAR $1,000 PAR
COMMON STOCKS UNLESS VALUE (M) VALUE (M)
DESCRIBED OTHERWISE OR SHARES OR SHARES
<S> <C> <C>
(3)<F3> AMOCO CORPORATION 10,000 --
AT HOME CORPORATION 1,000 1,000
DAYTON HUDSON CORPORATION 2,000 15,000
HEWLETT PACKARD COMPANY 1,000 6,000
J.D. EDWARDS & CO. 1,000 --
MBIA, INC. 2,000 8,000
NIKE, INC. CLASS B 1,000 5,000
QUINTILES TRANSNATIONAL 4,000 --
R & B FALCON CORPORATION 15,000 --
SLM HOLDING CORPORATION 3,500 --
WELLS FARGO & CO. 2,000 10,000
VARIOUS ISSUES OF COMMERCIAL 17,745M --
PAPER NOTES MATURING DURING
1ST QTR., 1999
</TABLE>
<PAGE>
<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 -
<PAGE>
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
<CAPTION>
<PAGE>
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 -
<PAGE>
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
<CAPTION>
NET SHARES NET ASSET DIVIDEND/ CAPITAL
VALUATION ASSETS OUTSTANDING VALUE/SHARE SHARE GAINS/SHARE
DATE
<S> <C> <C> <C> <C> <C>
09-30-86 6,392,215 399,871 15.99 ,16 -
<PAGE>
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 -
<PAGE>
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 - -
06-30-97 34,567,391 1,229,643 28.11 .1325 -
09-30-97 36,500,979 1,242,731 29.37 .135 -
12-31-97 36,647,535 1,262,818 29.02 .24 0.30571
03-31-98 41,413,655 1,283,322 32.27 - -
06-30-98 43,600,764 1,298,420 33.58 .135 -
09-30-98 40,423,166 1,308,173 30.90 .09 -
12-31-98 48,433,113 1,413,731 34.26 .215 2.11648
03-31-99 52,835,162 1,442,077 36.64 - -
</TABLE>
<PAGE>
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 16, 1999, 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 For Except All Nominees
<S> <C> <C> <C>
Frederick N. Backer 1,107,066 None 782
Edson L. Bridges II 1,107,066 None 782
Edson L. Bridges III 1,107,066 None 782
N. P. Dodge, Jr. 1,102,733 4,333 782
John W. Estabrook 1,107,066 None 782
Jon D. Hoffmaster 1,107,066 None 782
John J. Koraleski 1,107,066 None 782
Roger D. Kupka 1,107,066 None 782
Gary L. Petersen 1,107,066 None 782
John T. Reed 1,107,066 None 782
Roy A. Smith 1,102,733 4,333 782
Janice D. Stoney 1,102,579 4,487 782
L.B. Thomas 1,107,066 None 782
John K. Wilson 1,107,066 None 782
(3) A brief description for each matter voted upon at the meeting:
<CAPTION>
For Against Abstain
Matters Voted Upon
<S> <C> <C> <C>
(a) A proposal to set the number of 1,098,550 4,580 4,718
directors at fourteen
(b) For a proposed investment 1,107,132 None 716
advisory contract which continues
the employment of Bridges
Investment Counsel, Inc. as
investment adviser to the Fund
for the period from April 17,
1999 through April 17, 2000
(c) For the ratification of the 1,105,135 None 2,713
selection of KPMG Peat Marwick
LLP as independent auditors
of the Fund for the Fiscal
Year ending December 31, 1999
</TABLE>
<PAGE>
<TABLE>
F-1
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1999
(Unaudited)
<CAPTION>
Number Market
of Shares COST Value
Title of Security
<S> <C> <C> <C>
COMMON STOCKS - (87.7%)
Advertising - 1.4%
Interpublic Group of Companies, Inc. (The) 2,000 $ 106,953 $ 155,750
Outdoor Systems, Inc.*<FN> 19,050 323,364 571,500
$ 430,317 $ 727,250
AEROSPACE/DEFENSE _ 0.5%
Gulfstream Aerospace Corp.*<FN> 6,000 $ 274,752 $ 260,250
Aircraft _ Manufacturing - 0.8%
The Boeing Company 12,000 $ 278,135 $ 408,000
Amusements _ Recreation _ Sporting Goods _ 0.5%
Nike, Inc. 5,000 $ 171,270 $ 288,440
Banking and Finance - 4.3%
Chase Manhattan Corporation (The) 2,000 $ 86,650 $ 162,750
First National of Nebraska, Inc. 230 346,835 690,000
MBNA Corporation 15,000 234,825 358,125
State Street Corporation 8,000 66,525 658,000
U.S. Bancorp (New) 2,000 70,160 68,126
Wells Fargo & Co. (New) 10,000 138,173 350,630
$ 943,168 $ 2,287,631
Beverages - Soft Drinks - 1.9%
Coca-Cola Company (The) 1,000 $ 62,049 $ 61,375
PepsiCo, Inc. 24,000 307,470 940,512
$ 369,519 $ 1,001,887
Chemicals - 2.6%
The Dow Chemical Company 5,000 $ 288,887 $ 465,940
Du Pont (E.I.) De Nemours & Company 8,000 273,935 464,504
Monsanto Company 10,000 116,189 459,380
$ 679,011 $ 1,389,824
Communications _ Radio and Television _ 1.3%
Clear Channel Communications, Inc.*<FN> $ 366,954 $ 670,630
10,000
<FN>*Nonincome-producing security
F-2
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 1999
(Unaudited)
<CAPTION>
Number Market
of Shares COST Value
Title of Security
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Computers _ Hardware and Software - 14.2%
America Online, Inc.*<FN> 7,000 $ 615,768 $ 1,027,250
Cisco Systems, Inc.*<FN> 9,000 290,726 986,067
Compaq Computer Corporation 10,000 359,228 316,880
Dell Computer Corporation *<FN> 3,000 109,594 122,625
EMC Corporation*<FN> 8,000 358,855 1,022,000
HNC Software, Inc.*<FN> 16,000 495,325 524,000
Hewlett-Packard Co. 6,000 83,784 406,878
I2 Technologies, Inc. 5,000 154,166 132,970
Microsoft Corporation*<FN> 20,000 93,361 1,792,500
Sun Microsystems, Inc.*<FN> 2,000 211,188 250,126
Transaction Systems Architects, Inc.*<FN> 25,000 900,966 900,000
$ 3,672,961 $ 7,481,296
Data Processing and Management _ 0.8%
CSG SYSTEMS*<FN> 11,000 $ 334,847 $ 433,818
Diversified Operations _ 0.9%
BERKSHIRE HATHAWAY INC., CLASS B *<FN> 210 $ 150,375 $ 493,710
Drugs - Medicines _ Cosmetics - 8.7%
Abbott Laboratories 15,000 $ 169,395 $ 702,195
Amgen, Inc.*<FN> 6,000 248,687 449,250
Bristol-Myers Squibb Co. 8,000 141,675 513,000
Elan Corporation PLC ADR*<FN> 10,000 419,005 697,500
Johnson & Johnson 10,000 109,396 935,000
Merck & Co., Inc. 16,000 274,266 1,282,000
$ 1,362,424 $ 4,578,945
Electrical Equipment and Supplies - 1.7%
General Electric Co. 8,000 $ 147,473 $ 885,000
ELECTRONIC COMPONENTS _ CONDUCTORS _ 0.2%
Altera Corporation*<FN> 2,000 $ 96,625 $ 119,000
Electronics - 3.3%
Intel Corporation 10,000 $ 334,735 $ 1,188,750
Solectron Corporation *<FN> 12,000 230,974 582,756
$ 565,709 $ 1,771,506
FINANCE _ CREDIT CARDS _ 0.9%
American Express Company 2,000 $ 165,255 $ 235,500
Providian Financial Corporation 2,000 213,521 220,000
$ 378,776 $ 455,500
FINANCE _ DIVERSIFIED _ 0.6%
Morgan Stanley, Dean Witter, Discover & Co. 3,000 $ 202,960 $ 299,814
FINANCE _ INVESTMENT BANKS _ 0.5%
Merrill Lynch & Co, Inc. 3,000 $ 168,585 $ 265,500
<FN>*Nonincome-producing security
F-3
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 1999
(Unaudited)
<CAPTION>
Number Market
of Shares COST Value
Title of Security
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Finance - Real Estate - 3.3%
Freddie Mac 30,000 $ 470,320 $ 1,719,390
Finance _ Services - 3.6%
Capital One Financial Corporation 11,000 $ 592,546 $ 1,661,000
E*Trade Group, Inc.*<FN> 2,000 98,188 116,625
FINOVA 2,000 80,535 103,750
Paychex, Inc. 1,000 43,438 47,437
$ 814,707 $ 1,928,812
Food _ Miscellaneous Products - 1.3%
Philip Morris Companies, Inc. 20,000 $ 338,693 $ 703,760
Insurance _ Mortgage _ 0.3%
MGIC Investment Corporation 4,000 $ 177,450 $ 140,252
Insurance _ Multiline - 0.6%
American International Group, Inc. 2,500 $ 118,455 $ 301,562
Insurance _ Municipal Bond _ 0.9%
MBIA, Inc. 8,000 $ 360,053 $ 464,000
Internet _ Content _ 0.3%
At Home Corporation *<FN> 1,000 $ 121,375 $ 157,500
Linen Supply and Related Products - 0.5%
Cintas Corporation 4,000 $ 166,578 $ 261,500
Medical Sterilization Products _ 0.3%
Steris Corporation *<FN> 6,000 $ 169,500 $ 159,750
Medical _ Wholesale Drug Dist. _ 0.2%
Cardinal Health, Inc. 2,000 $ 148,330 $ 132,000
Metal Products _ Miscellaneous - 0.4%
Nucor Corporation 4,500 $ 68,056 $ 198,284
Motion Pictures and Theatres - 1.3%
The Walt Disney Company 22,000 $ 236,300 $ 684,750
Petroleum Producing - 5.2%
Atlantic Richfield Company 4,000 $ 211,835 $ 292,500
BP Amoco PLC _ Spons. ADR 6,616 246,135 668,216
Chevron Corporation 10,000 340,535 887,500
Exxon Corporation 8,000 198,750 564,504
Mobil Corporation 4,000 127,075 352,000
$ 1,124,330 $ 2,764,720
<FN>*Nonincome-producing security
F-4
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 1999
(Unaudited)
<CAPTION>
Number Market
of Shares COST Value
Title of Security
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Publishing _ Newspapers - 0.9%
Gannett Co., Inc. 8,000 $ 179,310 $ 504,000
Publishing _ Electronic - 0.9%
Reuters Group PLC, ADR Sponsored 5,199 $ 166,303 $ 451,663
RADIO _ 0.2%
Chancellor Media Corporation *<FN> 2,000 $ 62,688 $ 94,250
Retail Stores _ Apparel and Clothing - 3.8%
Gap, Inc. 30,000 $ 258,323 $ 2,019,390
Retail Stores _ Building Materials and Home
Improvement _ 2.1%
The Home Depot, Inc. 18,000 $ 455,080 $ 1,120,500
Retail Stores _ Department - 1.9%
Dayton Hudson Corporation 15,000 $ 146,129 $ 999,375
Retail Stores _ Variety - 0.5%
Albertson's Inc. 5,000 $ 98,910 $ 272,190
SCHOOLS _ 0.4%
SYLVAN LEARNING SYSTEM *<FN> 7,500 $ 200,089 $ 205,313
SOFTWARE _ NETWORK _ 0.3%
NETWORK ASSOCIATES, INC. *<FN> 4,500 $ 188,077 $ 138,096
Telecommunications - 8.4%
AirTouch Communications, Inc.*<FN> 8,000 $ 345,725 $ 773,000
Level 3 Communications *<FN> 12,000 483,300 873,756
MCI WorldCom, Inc. *<FN> 13,000 466,187 1,151,319
RCN Corporation *<FN> 1,000 22,978 33,563
Sprint Corporation 5,000 83,964 490,625
Sprint PCS Corporation *<FN> 2,500 10,082 110,783
Vodafone Group PLC 3,000 503,138 563,250
West Teleservices Corporation*<FN> 50,000 690,644 425,000
$ 2,606,018 $ 4,421,296
TELECOMMUNICATIONS _ EQUIPMENT _ 2.9%
NOKIA CORPORATION 6,000 $ 492,858 $ 934,500
QUALCOMM INCORPORATED *<FN> 5,000 401,493 621,875
$ 894,351 $ 1,556,375
TELEVISION _ CABLE _ 0.4%
COMCAST CORPORATION 3,000 $ 141,375 $ 188,814
<FN>*Nonincome-producing security
F-5
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 1999
(Unaudited)
<CAPTION>
Number Market
of Shares COST Value
Title of Security
<S> <C> <C> <C>
COMMON STOCKS (Continued)
TRANSPORTATION _ AIRFREIGHT _ 1.3%
EAGLE USA AIRFREIGHT, INC. *<FN> 22,000 $ 416,042 $ 715,000
Transportation _ Railroads - 0.4%
Union Pacific Corporation 4,000 $ 148,580 $ 213,752
TOTAL COMMON STOCKS (Cost - $20,869,283) $20,869,283 $46,334,295
PREFERRED STOCKS (2.6%)
Banking and Finance _ 1.2%
CFC Capital Trust 9.375% Preferred, Series B 5,000 $ 125,000 $ 130,000
CFB Capital II 8.20% Cumulative Preferred 5,000 125,000 126,250
Harris Preferred Capital Corp., 10,000 250,000 252,500
7.375%, Series A
Silicon Valley Bancshares Capital 5,000 125,000 115,000
8.25% Preferred Series I
$ 625,000 $ 623,750
Petroleum Producing _ 0.2%
Canadian Occidental Petroleum Ltd. 5,000 $ 125,000 $ 127,500
9.375% Preferred _ Series 1
Telecommunications - 0.7%
AirTouch Communications, Inc. 4.25% Series C 3,000 $ 137,925 $ 403,500
Convertible Preferred
UTILITIES _ ELECTRIC _ 0.5%
Tennessee Valley Authority 6.75% 10,000 $ 250,000 $ 250,000
Variable Preferred Series D
Total Preferred Stocks (Cost - $1,137,925) $ 1,137,925 $ 1,404,750
Total Stocks (Cost - $22,007,208) $22,007,208 $47,739,045
DEBT SECURITIES (9.4%)
Energy _ Alternate Sources - 0.4%
CalEnergy Co., Inc., 7.63% Notes
due October 15, 2007 $200,000 $ 200,000 $ 211,580
Food _ Miscellaneous Products - 0.2%
Super Valu Stores, Inc., 8.875%
Promissory Notes, due June 15, 1999 $100,000 $ 100,689 $ 100,649
<FN>*Nonincome-producing security
F-6
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 1999
(Unaudited)
<CAPTION>
Principal Market
Amount COST Value
Title of Security
<S> <C> <C> <C>
DEBT SECURITIES (Continued)
Household Appliances and Utensils - 0.2%
Maytag Corp., 9.75% Notes,
due May 15, 2002 $100,000 $ 102,200 $ 110,810
Office Equipment and Supplies - 0.2%
Xerox Corporation, 9.750% Notes
due March 15, 2000 $100,000 $ 100,025 $ 103,630
Retail Stores _ Department - 0.5%
Dillard Department Stores, Inc., 7.850%
Debentures, due October 1, 2012 $150,000 $ 151,348 $ 160,470
Sears Roebuck & Co., 9.375% Debentures
due November 1, 2011 100,000 $ 106,399 121,742
$ 257,747 $ 282,212
TELECOMMUNICATIONS _ 0.5%
Level 3 Communications, Inc., 9.125% Senior $250,000 $ 241,937 $ 251,250
Notes due May 1, 2008
U.S. Government _ 5.9%
U.S. Treasury, 9.125% Notes,
due May 15, 1999 $200,000 $ 215,900 $ 201,031
U.S. Treasury, 8.750% Notes,
due August 15, 2000 200,000 211,900 209,938
U.S. Treasury, 8.000% Notes,
due May 15, 2001 200,000 199,052 211,875
U.S. Treasury, 7.500% Notes,
due May 15, 2002 200,000 214,097 213,375
U.S. Treasury, 10.750% Bonds
due February 15, 2003 200,000 219,525 238,063
U.S. Treasury, 7.250% Notes,
due May 15, 2004 300,000 303,245 326,907
U.S. Treasury, 7.500% Notes,
due February 15, 2005 300,000 305,871 332,812
U.S. Treasury, 9.375% Bonds,
due February 15, 2006 200,000 256,223 245,313
U.S. Treasury, 7.625% Bonds,
due February 15, 2007 300,000 307,910 317,760
F-7
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1999
(Unaudited)
<CAPTION>
Principal Market
Amount COST Value
Title of Security
<S> <C> <C> <C>
DEBT SECURITIES (Continued)
U.S. Treasury, 8.750% Bonds,
due November 15, 2008 200,000 237,472 226,125
U.S. Treasury, 9.125% Bonds,
due May 15, 2009 200,000 $ 234,910 $ 232,031
U.S. Treasury, 7.500% Bonds,
due November 15, 2016 300,000 308,539 352,407
$ 3,014,644 $ 3,107,637
Commercial Paper _ Short Term _ 1.5%
Ford Motor Credit Corporation
Commercial Paper Note 4.89%
due April 6, 1999 380,000 $ 380,000 380,000
Prudential Funding Corporation
Commercial Paper Note 4.88%
due April 2, 1999 400,000 400,000 400,000
$ 780,000 $ 780,000
TOTAL DEBT SECURITIES (Cost - $4,797,242) $ 4,797,242 $ 4,947,768
TOTAL INVESTMENTS IN SECURITIES
(Cost - $26,804,450) (99.7%) $26,804,450 $52,686,813
CASH AND RECEIVABLES
LESS TOTAL LIABILITIES (0.3%) 148,349
NET ASSETS, March 31, 1999 (100.0%) $52,835,162
<FN>The accompanying notes to financial statements
are an integral part of this schedule.
</TABLE>
<PAGE>
<TABLE>
F-8
BRIDGES INVESTMENT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1999
(UNAUDITED)
<CAPTION>
ASSETS AMOUNT
<S> <C>
INVESTMENTS, AT MARKET VALUE
COMMON AND PREFERRED STOCKS (COST $22,007,208) $47,739,045
DEBT SECURITIES (COST $4,797,242) 4,947,768
TOTAL INVESTMENTS $52,686,813
CASH 101,957
RECEIVABLES
DIVIDENDS AND INTEREST 139,387
SUBSCRIPTIONS TO CAPITAL STOCK 16,515
TOTAL ASSETS $52,944,672
LIABILITIES
REDEMPTION OF CAPITAL STOCK $ 14,000
INVESTMENT ADVISOR, MANAGEMENT AND
<PAGE>
SERVICE FEES PAYABLE 63,841
ACCRUED OPERATING EXPENSES 31,669
TOTAL LIABILITIES $ 109,510
NET ASSETS
CAPITAL STOCK, $1 PAR VALUE - AUTHORIZED
3,000,000 SHARES,
1,442,077 SHARES OUTSTANDING $ 1,442,077
PAID-IN SURPLUS - 25,205,498
NET CAPITAL PAID IN ON SHARES $26,647,575
ACCUMULATED NET REALIZED GAIN ON INVESTMENT
TRANSACTIONS 187,172
NET UNREALIZED APPRECIATION ON INVESTMENTS 25,882,363
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME 118,052
TOTAL NET ASSETS $52,835,162
NET ASSET VALUE PER SHARE $36.64
OFFERING PRICE PER SHARE $36.64
REDEMPTION PRICE PER SHARE $36.64
<FN>THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
ARE AN INTEGRAL PART OF THIS STATEMENT.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
F-9
BRIDGES INVESTMENT FUND, INC.
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED)
<CAPTION>
AMOUNT AMOUNT
<S> <C> <C>
INVESTMENT INCOME
INTEREST $ 95,609
DIVIDENDS 115,745
Total Investment Income $ 211,354
EXPENSES
Management fees $ 63,841
CUSTODIAN FEES 8,609
INSURANCE AND OTHER ADMINISTRATIVE FEES 6,691
BOOKKEEPING SERVICES 5,976
PRINTING AND SUPPLIES 5,655
PROFESSIONAL SERVICES 2,625
DIVIDEND DISBURSING AND TRANSFER
AGENT FEES 4,137
COMPUTER PROGRAMMING 1,250
TAXES AND LICENSES 266
TOTAL EXPENSES $ 99,050
NET INVESTMENT INCOME $ 112,304
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
NET REALIZED GAIN ON TRANSACTIONS IN
INVESTMENT SECURITIES $ 187,172
NET INCREASE IN UNREALIZED
APPRECIATION OF INVESTMENTS 3,112,351
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS $ 3,299,523
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,411,827
<FN>THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
ARE AN INTEGRAL PART OF THIS STATEMENT.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
F-10
BRIDGES INVESTMENT FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
<CAPTION>
1999 1998
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS -
NET INVESTMENT INCOME $ 112,304 $ 179,338
NET REALIZED GAIN ON TRANSACTIONS IN
INVESTMENT SECURITIES 187,172 568,549
NET INCREASE IN UNREALIZED
APPRECIATION OF INVESTMENTS 3,112,351 3,405,722
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 3,411,827 $4,153,609
NET EQUALIZATION CREDITS 730 531
DISTRIBUTIONS TO SHAREHOLDERS FROM -
NET INVESTMENT INCOME - -
NET REALIZED GAIN FROM INVESTMENT
TRANSACTIONS - -
RETURN OF CAPITAL - -
NET CAPITAL SHARE TRANSACTIONS 989,492 611,980
TOTAL INCREASE IN NET ASSETS $ 4,402,049 $4,766,120
NET ASSETS:
BEGINNING OF YEAR $ 48,433,113 $36,647,535
END OF THREE MONTHS $ 52,835,162 $41,413,655
<FN>THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
ARE AN INTEGRAL PART OF THESE STATEMENTS.
</TABLE>
<PAGE>
F-11
BRIDGES INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(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>
1999 1998 NET CHANGE
<S> <C> <C> <C>
NET UNREALIZED APPRECIATION
(DEPRECIATION):
AGGREGATE GROSS UNREALIZED
APPRECIATION
ON SECURITIES $26,395,715 $19,425,849
AGGREGATE GROSS UNREALIZED
DEPRECIATION
ON SECURITIES (513,352) (223,563)
NET $25,882,363 $19,202,286 $6,680,077
</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 TAXES -
THE FUND INTENDS TO COMPLY WITH THE REQUIREMENTS OF THE INTERNAL
REVENUE CODE APPLICABLE TO REGULATED INVESTMENT COMPANIES AND NOT BE
SUBJECT TO FEDERAL INCOME TAX. THEREFORE, NO INCOME TAX PROVISION IS
REQUIRED. THE FUND ALSO INTENDS TO DISTRIBUTE ITS TAXABLE NET
INVESTMENT INCOME AND REALIZED GAINS, IF ANY, TO AVOID THE PAYMENT OF
ANY FEDERAL EXCISE TAXES.
THE CHARACTER OF DISTRIBUTIONS MADE DURING THE YEAR FROM NET
INVESTMENT INCOME OR NET REALIZED GAINS MAY DIFFER FROM ITS ULTIMATE
CHARACTERIZATION FOR FEDERAL INCOME TAX PURPOSES. IN ADDITION, DUE TO
THE TIMING OF DIVIDEND DISTRIBUTIONS, THE FISCAL YEAR IN WHICH AMOUNTS
ARE DISTRIBUTED MAY DIFFER FROM THE YEAR THAT THE INCOME OR REALIZED
GAINS OR LOSSES WERE RECORDED BY THE FUND.
C. DISTRIBUTION TO SHAREHOLDERS -
THE FUND ACCRUES INCOME DIVIDENDS TO SHAREHOLDERS ON A QUARTERLY
BASIS AS OF THE EX-DIVIDEND DATE. DISTRIBUTIONS OF NET REALIZED GAINS
ARE MADE ON AN ANNUAL BASIS TO SHAREHOLDERS AS OF 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.
F-13
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.
THERE WERE NO AMOUNTS REIMBURSED IN THE THREE MONTHS ENDED MARCH 31,
1999.
(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 THREE
MONTHS ENDED MARCH 31, WAS:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
UNITED STATES GOVERNMENT OBLIGATIONS $ -- $ --
OTHER SECURITIES 3,723,354 2,144,818
TOTAL COST $3,723,354 $2,144,818
</TABLE>
NET PROCEEDS FROM SALES OF LONG-TERM INVESTMENTS DURING THE THREE MONTHS
ENDED MARCH 31, WERE:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
UNITED STATES GOVERNMENT OBLIGATIONS $ -- $ --
OTHER SECURITIES 977,905 1,341,699
TOTAL NET PROCEEDS $ 977,905 $1,341,699
TOTAL COST BASIS OF
SECURITIES SOLD $ 790,733 $ 773,150
<PAGE>
</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>
1999 1998
<S> <C> <C>
SHARES SOLD 35,551 25,050
SHARES ISSUED TO SHAREHOLDERS IN
REINVESTMENT OF NET INVESTMENT
INCOME AND REALIZED GAIN FROM
SECURITY TRANSACTIONS 3,512 4,237
39,063 29,287
SHARES REDEEMED 10,718 8,783
NET INCREASE 28,345 20,504
</TABLE>
VALUE OF CAPITAL STOCK ISSUED AND REDEEMED IS AS FOLLOWS:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
SHARES SOLD $1,247,512 $ 754,163
SHARES ISSUED TO SHAREHOLDERS IN
REINVESTMENT OF NET INVESTMENT
INCOME AND REALIZED GAIN FROM
SECURITY TRANSACTIONS 122,203 123,123
$1,369,715 $ 877,286
SHARES REDEEMED 380,223 265,306
NET INCREASE $ 989,492 $ 611,980
</TABLE>
(7) DISTRIBUTION TO SHAREHOLDERS
ON APRIL 13, 1999 A CASH DISTRIBUTION WAS DECLARED FROM NET
INVESTMENT INCOME ACCRUED THROUGH MARCH 31, 1999. THIS DISTRIBUTION WAS
CALCULATED AT $.075 PER SHARE AGGREGATING $108,250.02. THE DIVIDEND WILL
BE PAID ON APRIL 19, 1999, TO SHAREHOLDERS OF RECORD ON APRIL 13, 1999.
<PAGE>
