BRIDGES INVESTMENT FUND, INC.
THIRD QUARTER
2000
CONTENTS OF REPORT
Pages 1 - 3 Shareholder Letter
Exhibit 1 Portfolio Transactions from July 1, 2000,
through September 30, 2000
Exhibit 2 Quarter-to-Quarter Changes in Financial Data
Pages F1-F13 Unaudited Financial Statements for the
Nine Months Ended September 30, 2000
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 and
Chief Investment Officer
Brian M. Kirkpatrick _ Vice President
Mary Ann Mason - Secretary
Kathleen J. Stranik - Assistant Secretary
Nancy K. Dodge - Treasurer
Linda J. Morris _ Assistant Treasurer
Auditor
KPMG LLP
Two Central Park Plaza
Suite 1501
Omaha, Nebraska 68102-1617
Corporate Counsel Counsel to Independent Directors
Baird, Holm Koley, Jessen, P.C.
Attorneys at Law Attorneys at Law
1500 Woodmen Tower One Pacific Place, Suite 800
Omaha, Nebraska 68102 1125 South 103 Street
Omaha, Nebraska 68124
<PAGE>
October 23, 2000
Dear Shareholder:
Review of Recent Results
The net asset value per share of the Fund was $42.82 on September 30, 2000.
This price was up $.19 per share or 0.7% from the June 30, 2000 net asset value
per share of $42.63, and it was down 7.2% from the year 1999 net asset value of
$46.24. On a trailing twelve month basis, the Fund price of $42.63 at September
30, 2000 had risen 16.0%, a reflection of very strong progress for the common
stocks held in the portfolio during the Fourth Quarter of 1999. After mid-March
of 2000, the trading in our Fund's common stocks has generally been shaving off
portions of the previous price advances.
The net assets of the Fund were $76,910,923 on September 30, 2000,
representing the second highest value ever reported at the end of a calendar
quarter for our company. Net assets at September 30, 2000 were up $1,487,331 or
2.0% from June 30, 2000. For the First Nine Months of 2000, net assets were up
$7,175,239 or 10.3% from the $69,735,684 level at December 31, 1999. During the
September 30, 1999 to September 30, 2000 time frame, the net assets of the Fund
gained $22,711,691 from $54,199,232 to $76,910,923 for an increase of 41.9%.
There were 1,796,215 shares outstanding for the Fund on September 30, 2000,
establishing a new record high level for the financial history of the Fund. The
shares outstanding were up 1.5% for the quarter ending September 30, 2000, and
they were 19.1% above the 1,508,154 shares outstanding level set at December 31,
1999.
Net investment income was $535,608 for the First Nine Months of 2000,
compared to $312,402 for the same period in 1999. Net realized gains on
investments for the First Nine Months of 2000 were $1,262,957. There were
$1,132,419 in net realized gains on securities sold for the same period in 1999.
The change for unrealized appreciation of investments for the First Nine Months
of 2000 was a net decrease of $5,842,417. By comparison, there was a $1,704,786
net increase in unrealized appreciation of investments during the First Nine
Months of 1999.
Please refer to Exhibits 1 and 2 and Pages F-1 through F-13 for specific
details covering the Fund's recent portfolio transactions, the historical data
with respect to dividends and capital gains distributions, and other financial
statement information as of September 30, 2000.
In conclusion, the total rate of return results for the Fund's price
performance for the past quarter, for the year to date, and for the past twelve
months are shown in the table below, along with the results for the Standard &
Poor's 500 Composite Stock Index:
S & P
Management Period BIF 500
Three Months to 09-30-00 +0.69% -0.97%
Nine Months to 09-30-00 -5.55% -1.39%
Twelve Months to 09-30-00 +21.08% +13.28%
Shareholder Letter 2 October 23, 2000
Dividend
On October 17, 2000, the Board of Directors declared an $.11 per share
dividend on the shares of capital stock outstanding on the October 17, 2000
record date. This income distribution amount is payable on or about October 23,
2000. This dividend is generated from the net investment income earned during
the July - September, 2000 quarter.
Organizational Matters
On October 17, 2000, the twelve independent directors of the Fund held
their first organizational meeting. The independent directors are: Frederick
N. Backer, N. P. Dodge, Jr., John W. Estabrook, Jon D. Hoffmaster, John J.
Koraeski, Roger D. Kupka, Gary L. Petersen, John T. Reed, Janice D. Stoney, L.B.
Thomas, and John K. Wilson. Mr. Paul C. Jessen acted as interim legal counsel
to the independent directors.
The purpose for classifying members of the Board of Directors into
independent persons who are unrelated to or unaffiliated with Bridges Investment
Counsel, Inc. as manager for the Fund is to achieve the highest possible level
of objectivity with respect to administrative and contract matters, financial
audits and reports, and the nominations of new persons as members of the Board
of Directors for the Fund. The independent director concept is being
implemented across the investment company industry this year in response to
mandated requirements from the Securities and Exchange Commission that were
issued last year. These rules also require the retention of a legal counsel who
is independent of the investment adviser and of the attorneys in the Baird Holm
Firm who normally represent the Fund in corporate and securities matters.
At the organizational meeting, the independent directors elected Mr. Roy A.
Smith as the Lead Independent Director. Mr. Smith has been a director of the
Fund since 1976. The independent directors adopted a charter for an expanded
Audit Committee, and they replaced the Executive Committee with a charter for a
new Administrative and Nominating Committee. Mr. N. P. Dodge, Jr. was elected
as Chairman of the Administrative and Nominating Committee, and Mr. John T. Reed
was elected as Chairman of the Audit Committee. Mr. Backer, Mr. Kupka, Mr.
Petersen, and Mrs. Stoney were appointed to the Administrative and Nominating
Committee. Mr. Estabrook, Mr. Hoffmaster, Mr. Koraleski, Mr. Thomas, and Mr.
Wilson were selected as members of the Audit Committee. The permanent
appointment of Koley, Jessen, P.C. as legal counsel to the independent directors
was another action arranged for at the organizational meeting on October 17,
2000.
State Registrations
As of the date of this letter, the Fund's shares of capital stock have been
registered for sale in the following states: Arizona, California, Colorado,
Connecticut, Florida, Georgia, Iowa, Illinois, Kansas, Michigan, Minnesota,
Missouri, Montana, Nebraska, New Jersey, New York, Ohio, Pennsylvania, and
Washington. Management is progressively moving towards qualifying the Fund's
shares for sale in all fifty states.
Shareholder Letter 3 October 23, 2000
The Outlook
There are indications of a slowing in the pace of the advance for the
national economy as a result of somewhat higher interest rates and greater price
inflation in 2000 than the levels for those measures that prevailed in 1999.
The somewhat restricted available supplies and the elevated costs for energy,
particularly petroleum products, are somewhat problematic for the economy for
the foreseeable future. Nevertheless, our expectations are for modest growth in
gross domestic product for the balance of 2000 and into 2001. Corporate profits
may be less uniformly positive, yet most of the companies in our Fund's
portfolio are anticipated to reach their growth objectives. The price
volatility from downward moves over the most recent weeks and months has
provided some favorable purchase opportunities in the stock market.
Closing Comment
Ted Bridges is in Washington, D.C. attending a briefing by the management
of Capital One Financial, one of the strong growth companies in our portfolio.
Therefore, his remarks about the financial markets and specific holdings within
the portfolio are not included in this letter.
We both appreciate your investment in and support of our Fund.
Sincerely yours,
Edson L. Bridges II
Chairman
ELBII:elc
<PAGE>
<TABLE>
Exhibit 1
BRIDGES INVESTMENT FUND, INC.
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
JULY 1, 2000, THROUGH SEPTEMBER 30, 2000
<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>
<F1>(1) Altera 10,000 20,000
American Express Co. 5,000 20,000
<F2>(2) American International Group 5,000 10,000
Amgen, Inc. 2,000 15,000
Broadcom Corp. 1,000 3,000
CSG Systems International 3,000 25,000
Calpine Corporation 6,000 6,000
<F3>(3) Citigroup 4,999 9,999
Enron Corporation 4,000 4,000
Flextronics International Ltd. 2,000 7,000
Goldman Sachs Group 4,000 4,000
<F4>(4) Intel 20,000 40,000
Medtronic, Inc. 3,000 10,000
<F5>(5) Merrill Lynch 3,000 6,000
Nokia Corporation Sponsored ADR 2,000 50,000
PMC - Sierra 1,000 3,000
Providian Financial 3,000 3,000
Schwab, Charles Corporation 3,000 8,000
Sprint PCS Corp 5,000 20,000
Sun Microsystems, Inc. 2,000 15,000
<F6>(6) Target 15,000 30,000
Veritas Software Co. 1,000 3,000
West Teleservices 5,000 75,000
Various Issues of Commercial Paper 120,085M 7,400M
Notes Purchased during
3rd Quarter, 2000
<CAPTION>
Sold or Held After
Securities Exchanged Transacion
Common Stocks Unless $1,000 Par $1,000 Par
Described Otherwise Value (M) Value (M)
or Shares or Shares
<S> <C> <C>
AT&T Corporation Liberty Media Group 10,000 --
Class A
Carnival Corporation Class A 5,000 --
Chase Manhattan Corporation 3,000 --
Sprint Corporation (FON Group) 10,000 --
Texas Instruments, Inc. 8,000 --
<F7>(7) U.S. Treasury Notes 200M --
8.75% due 8-15-2000
Various Issues of Commercial 122,030M --
Paper Notes maturing during
3rd Qtr., 2000
<F1>(1) Received 10,000 shares in a 2-for-1 stock split on August 11, 2000.
<F2>(2) Received 2,500 shares in a 3-for-2 stock split on July 31, 2000.
<F3>(3) Received 1,666 shares in a 4-for-3 stock split on August 28, 2000.
<F4>(4) Received 20,000 shares in a 2-for-1 stock split on July 31, 2000.
<F5>(5) Received 3,000 shares in a 2-for-1 stock split on September 1, 2000.
<F6>(6) Received 15,000 shares in a 2-for-1 stock split on July 20, 2000.
<F7>(7) Matured 200M notes on August 15, 2000.
</TABLE>
<PAGE>
<TABLE>
Exhibit 2
BRIDGES INVESTMENT FUND, INC.
SELECTED HISTORICAL FINANCIAL INFORMATION
- - - - - - - - - - - - -Year End Statistics - - - - - - - - - - - - -
<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 $ - $ -
12-31-63 159,187 15,510 10.13 .07 -
12-31-64 369,149 33,643 10.97 .28 -
12-31-65 621,241 51,607 12.04 .285 .028
12-31-66 651,282 59,365 10.97 .295 -
12-31-67 850,119 64,427 13.20 .295 -
12-31-68 1,103,734 74,502 14.81 .315 -
12-31-69 1,085,186 84,807 12.80 .36 -
12-31-70 1,054,162 90,941 11.59 .37 -
12-31-71 1,236,601 93,285 13.26 .37 -
12-31-72 1,272,570 93,673 13.59 .35 .08
12-31-73 1,025,521 100,282 10.23 .34 .07
12-31-74 757,545 106,909 7.09 .35 -
12-31-75 1,056,439 111,619 9.46 .35 -
12-31-76 1,402,661 124,264 11.29 .38 -
12-31-77 1,505,147 145,252 10.36 .428 .862
12-31-78 1,574,097 153,728 10.24 .481 .049
12-31-79 1,872,059 165,806 11.29 .474 .051
12-31-80 2,416,997 177,025 13.65 .55 .0525
12-31-81 2,315,441 185,009 12.52 .63 .0868
12-31-82 2,593,411 195,469 13.27 .78 .19123
12-31-83 3,345,988 229,238 14.60 .85 .25
12-31-84 3,727,899 278,241 13.40 .80 .50
12-31-85 4,962,325 318,589 15.58 .70 .68
12-31-86 6,701,786 407,265 16.46 .688 .86227
12-31-87 7,876,275 525,238 15.00 .656 1.03960
12-31-88 8,592,807 610,504 14.07 .85 1.10967
12-31-89 10,895,182 682,321 15.97 .67 .53769
12-31-90 11,283,448 744,734 15.15 .67 .40297
12-31-91 14,374,679 831,027 17.30 .66 .29292
12-31-92 17,006,789 971,502 17.51 .635 .15944
12-31-93 17,990,556 1,010,692 17.80 .6225 .17075
12-31-94 18,096,297 1,058,427 17.10 .59 .17874
12-31-95 24,052,746 1,116,620 21.54 .575 .19289
12-31-96 29,249,488 1,190,831 24.56 .55 .25730
12-31-97 36,647,535 1,262,818 29.02 .5075 .30571
12-31-98 48,433,113 1,413,731 34.26 .44 2.11648
12-31-99 69,735,684 1,508,154 46.24 .30 .91088
- - - - Current Quarter Compared to Same Quarter in Prior Year - - - -
<CAPTION>
Valuation Net Shares Net Asset Dividend/ Capital
Date Assets Outstanding Value/Share Share Gains/Share
<S> <C> <C> <C> <C> <C>
09-30-99 54,199,232 1,464,952 37.00 .066 -
09-30-00 76,910,823 1,796,215 42.82 .105 -
</TABLE>
<PAGE>
<TABLE>
F-1
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 2000
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
COMMON STOCKS - (83.5%)
Advertising _ 0.2%
Interpublic Group of Companies, Inc. (The) 5,000 $ 151,678 $ 170,312
Banking and Finance - 2.9%
First National of Nebraska, Inc. 230 $ 346,835 $ 517,500
State Street Corporation 8,000 66,525 1,040,800
U.S. Bancorp 10,000 282,657 227,500
Wells Fargo & Co. 10,000 138,173 459,375
$ 834,190 $ 2,245,175
Beverages _ Soft Drinks - 1.2%
PepsiCo, Inc. 20,000 $ 256,225 $ 920,000
Chemicals - 0.6%
The Dow Chemical Company 18,000 $ 396,947 $ 448,875
Communications _ Radio and Television _ 0.7%
Clear Channel Communications, Inc.*<FN> 10,000 $ 366,954 $ 565,000
Computers _ Hardware and Software - 8.7%
Cisco Systems, Inc.*<FN> 36,000 290,726 1,989,000
HNC Software, Inc.*<FN> 18,000 598,741 1,472,625
I2 Technologies, Inc.*<FN> 3,000 480,406 561,187
Microsoft Corporation*<FN> 20,000 93,361 1,206,250
Tibco Software, Inc.*<FN> 6,000 153,194 506,625
Transaction Systems Architects, Inc.*<FN> 32,000 1,102,118 520,000
VERITAS Software Corporation*<FN> 3,000 375,063 426,000
$ 3,093,609 $ 6,681,687
Computers _ Memory Devices _ 4.1%
EMC Corporation/MASS*<FN> 32,000 $ 358,855 $ 3,184,000
Computers _ Micro _ 2.3%
Sun Microsystems, Inc.*<FN> 15,000 $ 777,750 $ 1,751,250
Data Processing and ManagemenT _ 1.7%
CSG Systems*<FN> 25,000 $ 873,688 $ 725,000
First Data Corporation 15,000 728,228 585,938
$ 1,601,916 $ 1,310,938
Diversified Operations _ 1.3%
Berkshire Hathaway Inc., Class B *<FN> 500 $ 600,020 $ 1,035,000
<FN>*Nonincome-producing security
<PAGE>
F-2
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
SEPTEMBER 30, 2000
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Drugs - Medicines _ Cosmetics - 7.1%
Abbott Laboratories 15,000 $ 169,395 $ 713,437
Amgen, Inc.*<FN> 15,000 463,500 1,047,422
Bristol-Myers Squibb Co. 8,000 141,675 457,000
Elan Corporation PLC ADR*<FN> 20,000 419,005 1,095,000
Johnson & Johnson 10,000 109,396 939,375
Merck & Co., Inc. 16,000 274,266 1,191,000
$ 1,577,237 $ 5,443,234
Electrical Equipment and Supplies - 1.8%
General Electric Co. 24,000 $ 147,473 $ 1,387,500
Electric _ Generation _ 3.1%
AES Corporation*<FN> 20,000 $ 635,202 $ 1,370,000
Calpine Corporation*<FN> 6,000 572,287 624,750
Enron Corp. 4,000 346,467 350,500
$ 1,553,956 $ 2,345,250
Electronic Components _ Conductors _ 5.2%
Altera Corporation*<FN> 20,000 $ 563,375 $ 955,000
Broadcom Corporation Class A*<FN> 3,000 538,240 731,250
Intel Corporation 40,000 334,735 1,662,500
PMC - Sierra, Inc.*<FN> 3,000 608,812 645,750
$ 2,045,162 $ 3,994,500
Electronics - 2.5%
Flextronics International Ltd.*<FN> 7,000 $ 482,610 $ 574,875
Solectron Corporation *<FN> 30,000 439,416 1,383,750
$ 922,026 $ 1,958,625
Finance _ Credit Cards _ 1.6%
American Express Company 20,000 $ 837,772 $ 1,215,000
Finance _ Diversified _ 2.2%
Citigroup, Inc. 9,999 $ 514,720 $ 540,571
Morgan Stanley, Dean Witter, Discover & Co. 13,000 659,100 1,188,688
$ 1,173,820 $ 1,729,259
Finance _ Investment Banks _ 1.1%
Merrill Lynch & Co., Inc. 6,000 $ 108,586 $ 396,000
Golman Sachs Group, Inc. (The) 4,000 479,050 455,750
$ 647,636 $ 851,750
<FN>*Nonincome-producing security
F-3
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
SEPTEMBER 30, 2000
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Finance - Real Estate - 2.1%
Freddie Mac 30,000 $ 470,320 $ 1,621,875
Finance _ Services - 4.7%
Capital One Financial Corporation 40,000 $ 866,856 $ 2,802,500
Paychex, Inc. 7,500 154,125 393,750
Providian Financial Corportion 3,000 339,938 381,000
$ 1,360,919 $ 3,577,250
Insurance _ Multiline - 1.2%
American International Group, Inc. 10,000 $ 566,397 $ 956,875
Internet Brokers _ 0.4%
Charles Schwab Corporation (The) 8,000 $ 254,706 $ 288,000
Linen Supply and Related Products - 0.3%
Cintas Corporation*<FN> 6,000 $ 166,578 $ 261,375
Medical Instruments - 0.7%
Medtronic, Inc. 10,000 $ 504,734 $ 518,125
Motion Pictures and Theatres - 1.1%
The Walt Disney Company 22,000 $ 236,300 $ 841,500
Petroleum Producing - 3.9%
BP Amoco PLC-Sponsored ADR 19,000 $ 443,238 $ 1,007,000
Chevron Corporation 10,000 340,535 852,500
Exxon Mobil Corporation 13,000 318,735 1,158,625
$ 1,102,508 $ 3,018,125
Publishing _ Electronic - 0.8%
Reuters Group PLC, ADR Sponsored 5,199 $ 166,303 $ 584,238
Retail Stores _ Apparel and Clothing - 1.3%
Gap, Inc. 50,000 $ 521,360 $ 1,006,250
Retail Stores _ Building Materials and Home
Improvement _ 2.1%
The Home Depot, Inc. 30,000 $ 587,115 $ 1,588,125
Retail Stores _ Department - 1.0%
Target Corporation 30,000 $ 146,129 $ 768,750
<FN>*Nonincome-producing security
F-4
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
SEPTEMBER 30, 2000
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Telecommunications - 7.6%
Level 3 Communications *<FN> 15,000 $ 876,675 $ 1,156,875
Sprint PCS Corporation *<FN> 20,000 581,333 702,500
Vodafone Airtouch PLC Sponsored ADR 40,000 915,541 1,480,000
VoiceStream Wireless Cororation*<FN> 2,000 238,125 232,125
West Teleservices Corporation*<FN> 75,000 1,150,972 1,650,000
WorldCom, Inc. *<FN> 20,000 490,156 607,500
$ 4,252,802 $ 5,829,000
Telecommunications _ Equipment _ 5.0%
Nokia Corporation Sponsored ADR 50,000 $ 585,643 $ 1,990,625
Qualcomm Incorporated *<FN> 26,000 605,060 1,852,500
$ 1,190,703 $ 3,843,125
Telecommunications - Satellite - 1.1%
EchoStar Communications Corporation*<FN> 16,000 $ 906,306 $ 844,000
Television _ Cable _ 0.5%
Comcast Corporation*<FN> 10,000 $ 309,375 $ 409,375
Transportation _ Airfreight _ 1.4%
EGL, Inc. *<FN> 35,000 $ 466,542 $ 1,058,750
TOTAL COMMON STOCKS (Cost - $30,552,323) $30,552,323 $64,252,093
PREFERRED STOCKS (1.2%)
Banking and Finance _ 0.7%
CFB Capital II 8.20% Cumulative Preferred 5,000 $ 125,000 $ 110,000
CFC Capital Trust 9.375% Preferred, Series B 5,000 125,000 113,750
Harris Preferred Capital Corp., 10,000 250,000 220,000
7.375%, Series A
Silicon Valley Bancshares 5,000 125,000 108,125
8.25% Preferred Series I
$ 625,000 $ 551,875
Oil Comp. _ Exploration and Production _ 0.2%
Canadian Occidental Petroleum Ltd. 5,000 $ 125,000 $ 122,188
9.375% Preferred _ Series 1
<FN>*Nonincome-producing security
F-5
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
SEPTEMBER 30, 2000
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
Utilities _ Electric _ 0.3%
Tennessee Valley Authority 6.75% 10,000 $ 250,000 $ 222,500
Variable Preferred Series D
Total Preferred Stocks (Cost - $1,000,000) $ 1,000,000 $ 896,563
Total Stocks (Cost - $31,552,323) $31,552,323 $65,148,656
DEBT SECURITIES (14.6%)
Auto-Cars/Light Trucks _ 0.3%
General Motors Corporation 7.700% Debentures
due April 15, 2016 $250,000 $ 252,320 $ 247,313
Energy _ Alternate Sources - 0.3%
CalEnergy Co., Inc., 7.630% Notes
due October 15, 2007 $200,000 $ 200,000 $ 199,397
Hotels and Motels _ 0.3%
Marriot International 7.875% Notes Series C
due September 15, 2009 $250,000 $ 250,068 $ 249,429
Household Appliances and Utensils - 0.1%
Maytag Corp., 9.750% Notes,
due May 15, 2002 $100,000 $ 102,200 $ 104,168
Retail Stores _ Department - 0.3%
Dillard Department Stores, Inc., 7.850%
Debentures, due October 1, 2012 $150,000 $ 151,347 $ 107,644
Sears Roebuck & Co., 9.375% Debentures
due November 1, 2011 100,000 $ 106,399 108,022
$ 257,746 $ 215,666
Telecommunications _ 0.3%
Level 3 Communications, Inc., 9.125% Senior $250,000 $ 241,938 $ 216,619
Notes due May 1, 2008
U.S. Government _ 3.4%
U.S. Treasury, 8.000% Notes,
due May 15, 2001 $200,000 $ 199,052 $ 202,031
U.S. Treasury, 7.500% Notes,
due May 15, 2002 200,000 214,098 204,344
F-6
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
SEPTEMBER 30, 2000
(Unaudited)
<CAPTION>
Principal Market
Title of Security Amount Cost Value
<S> <C> <C> <C>
DEBT SECURITIES (Continued)
U.S. Treasury, 10.750% Bonds
due February 15, 2003 200,000 219,525 220,500
U.S. Treasury, 7.250% Notes,
due May 15, 2004 300,000 303,245 312,891
U.S. Treasury, 7.500% Notes,
due February 15, 2005 300,000 305,871 318,328
U.S. Treasury, 9.375% Bonds,
due February 15, 2006 200,000 256,222 231,469
U.S. Treasury, 7.625% Bonds,
due February 15, 2007 300,000 307,910 305,203
U.S. Treasury, 8.750% Bonds,
due November 15, 2008 200,000 237,472 214,687
U.S. Treasury, 9.125% Bonds,
due May 15, 2009 200,000 234,910 219,250
U.S. Treasury, 7.500% Bonds,
due November 15, 2016 300,000 308,539 342,047
$ 2,586,844 $ 2,570,750
Commercial Paper _ Short Term _ 9.6%
Ford Motor Credit Corporation
Commercial Paper Note 6.428%
due October 6, 2000 3,750,000 3,750,000 3,750,000
Prudential Funding Corporation
Commercial Paper Note 6.388%
due October 3, 2000 3,650,000 3,650,000 3,650,000
$ 7,400,000 $ 7,400,000
TOTAL DEBT SECURITIES (Cost - $11,291,116) $11,291,116 $11,203,342
TOTAL INVESTMENTS IN SECURITIES - (99.3%)
(Cost - $42,843,439) $42,843,439 $76,351,998
CASH AND RECEIVABLES
LESS TOTAL LIABILITIES _ (0.7%) 558,825
NET ASSETS, Seotember 30, 2000 _ (100.0%) $76,910,823
<FN>The accompanying notes to financial statements
are an integral part of this schedule.
</TABLE>
<PAGE>
<TABLE>
F-7
BRIDGES INVESTMENT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
(Unaudited)
<CAPTION>
ASSETS Amount
<S> <C>
Investments, at market value
Common and preferred stocks
(cost $31,552,323) $65,148,656
Debt securities (cost $11,291,116) 11,203,342
Total investments $76,351,998
Cash 246,667
Receivables
Dividends and interest 125,028
Subscriptions to capital stock 55,006
Securities Sold 987,547
TOTAL ASSETS $77,766,246
LIABILITIES
Purchase of Securities $ 705,816
Redemption of capital stock 18,814
Investment advisor, management and
service fees payable 96,807
Accrued operating expenses 33,986
TOTAL LIABILITIES $ 855,423
NET ASSETS
Capital stock, $1 par value - Authorized
3,000,000 shares,1,796,215 shares
outstanding $ 1,796,215
Paid-in surplus - 40,124,898
Net capital paid in on shares $41,921,113
Accumulated net realized gain on
investment transactions 1,262,958
Net unrealized appreciation on investments 33,508,559
Accumulated undistributed net investment income 218,193
TOTAL NET ASSETS $76,910,823
NET ASSET VALUE PER SHARE $42.82
OFFERING PRICE PER SHARE $42.82
REDEMPTION PRICE PER SHARE $42.82
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
F-8
BRIDGES INVESTMENT FUND, INC.
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(Unaudited)
<CAPTION>
INVESTMENT INCOME Amount Amount
<S> <C> <C>
Interest $637,731
Dividends (Net of foreign withholding taxes
of $4,316) 294,677
Total Investment Income $ 932,408
EXPENSES
Management fees $ 278,645
Custodian fees 35,365
Insurance and Other Administrative Fees 19,046
Bookkeeping services 16,806
Printing and supplies 13,076
Professional services 9,095
Dividend disbursing and transfer
agent fees 20,218
Computer programming 3,750
Taxes and licenses 799
Total Expenses $ 396,800
NET INVESTMENT INCOME $ 535,608
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on transactions in
investment securities $1,262,957
Net decrease in unrealized
appreciation of investments (5,842,417)
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS $(4,579,460)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(4,043,852)
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
F-9
BRIDGES INVESTMENT FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<CAPTION>
2000 1999
<S> <C> <C>
INCREASE IN NET ASSETS
Operations -
Net investment income $ 535,608 $ 312,402
Net realized gain on transactions in
investment securities 1,262,957 1,132,418
Net decrease in unrealized
appreciation of investments (5,842,417) 2,704,786
Net decrease in net assets
resulting from operations $ (4,043,852) $ 4,149,606
Net equalization credits 11,374 852
Distributions to shareholders from -
Net investment income (330,181) (204,282)
Net realized gain from investment
transactions (1,058,779) -
Return of capital - -
Net capital share transactions 12,596,577 1,819,943
Total increase in Net Assets $ 7,175,139 $ 5,766,119
NET ASSETS:
Beginning of year $ 69,735,684 $48,433,113
End of nine months $ 76,910,823 $54,199,232
</TABLE>
[FN] The accompanying notes to financial statements
are an integral part of these statements.
<PAGE>
F-10
BRIDGES INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(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>
Net unrealized appreciation
(depreciation): 2000 1999 Net Change
<S> <C> <C> <C>
Aggregate gross unrealized
appreciation
on securities $34,782,786 $26,292,916
Aggregate gross unrealized
depreciation
on securities (1,274,227) (818,119)
Net $33,508,559 $25,474,797 $8,033,762
</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-11
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-12
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 nine months ended September 30, 2000.
(3) DIVIDEND DISBURSING AND TRANSFER AGENT
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 nine months
ended September 30, was:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
United States government obligations $ -- $ --
Other Securities 17,293,080 7,636,919
Total Cost $17,293,080 $7,636,919
</TABLE>
Net proceeds from sales of long-term investments during the nine
months ended September 30, were:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
United States government obligations $ 200,000 $ 200,500
Other Securities 8,696,914 5,023,750
Total Net Proceeds $8,896,914 $5,224,250
Total Cost Basis of
Securities Sold $7,633,957 $4,091,831
</TABLE>
(5) NET ASSET VALUE
The net asset value per share represents the effective price for all
subscriptions and redemptions.
F-13
(6) CAPITAL STOCK
Shares of capital stock issued and redeemed are as follows:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
Shares sold 302,577 79,128
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 28,767 8,000
331,344 87,128
Shares redeemed 43,283 35,908
Net increase 288,061 51,220
</TABLE>
Value of capital stock issued and redeemed is as follows:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
Shares sold $13,264,216 $2,876,124
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 1,218,275 286,633
$14,482,491 $3,162,757
Shares redeemed 1,885,914 1,342,814
Net increase $12,596,577 $1,819,943
</TABLE>
(7) DISTRIBUTIONS TO SHAREHOLDERS
On October 17, 2000 a cash distribution of $.11 per share aggregating
$198,057.23 was declared to shareholders of record on October 17, 2000, to
be payable on October 23, 2000.
<PAGE>
