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BMC FUND, INC.
Financial Statements and
Additional Information for the
Year Ended March 31, 1999
and Independent Auditors' Report
CONFIDENTIAL: For the use of shareholders and the
Securities and Exchange Commission only.
<PAGE>
BMC FUND, INC.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
DIRECTORS AND OFFICERS 1
LETTER TO SHAREHOLDERS 2
FEDERAL INCOME TAX INFORMATION 3
SUPPLEMENTAL PROXY INFORMATION 3-4
INDEPENDENT AUDITORS' REPORT 5
STATEMENT OF ASSETS AND LIABILITIES 6
STATEMENT OF OPERATIONS 7
STATEMENTS OF CHANGES IN NET ASSETS 8
NOTES TO FINANCIAL STATEMENTS 9-10
FINANCIAL HIGHLIGHTS 11
SCHEDULES OF INVESTMENTS:
I Investments in Securities of Unaffiliated Issuers 12-21
II Investments - Other than Securities 22
III Investments in Affiliates 23
<PAGE>
BMC FUND, INC.
DIRECTORS AND OFFICERS
- --------------------------------------------------------------------------------
DIRECTORS
E. D. Beach Lenoir, North Carolina
James T. Broyhill Winston-Salem, North Carolina
Paul H. Broyhill Lenoir, North Carolina
William E. Cooper Dallas, Texas
Lawrence Z. Crockett Vero Beach, Florida
Willard A. Gortner Naples, Florida
Allene B. Heilman Clearwater, Florida
Harry Heltzer Lenoir, North Carolina
Gene A. Hoots Charlotte, North Carolina
Michael G. Landry Ft. Lauderdale, Florida
Dolph W. von Arx Naples, Florida
OFFICERS
Paul H. Broyhill Chairman
E. D. Beach President, Secretary and
Treasurer
Carol Frye Assistant Secretary and
Assistant Treasurer
DIRECTORS EMERITUS
Clarence E. Beach Lenoir, North Carolina
Clarence A. Holden Lenoir, North Carolina
-1-
<PAGE>
TO OUR SHAREHOLDERS:
We are happy to present to you our semi-annual report, which we believe contains
complete and pertinent financial information.
BMC Fund, Inc. became a Regulated Investment Company (RIC) on April 1, 1981.
During the year ended March 31, 1999, the Fund paid the following dividends per
share:
First of each month $.11 $ 1.32
Special dividends:
June .28
December .71
March 31, 1999 .11
-------
Total $ 2.42
=======
We now have tax-exempt investments in 63 securities. We have invested in issues
of 19 states. Our highest investment in any state is North Carolina in which we
have a par value of $21,440,000 invested. Our holdings, based on maturity values
at March 31, 1999, are rated as follows (in thousands):
AAA $31,705
AA 7,355
A 34,500
-------
Total $73,560
========
At a board of directors meeting held in July 1998, the board approved a plan to
change the Fund's investment strategy so that no funds could be invested in
tax-exempt securities after April 1, 1999.
The tax exempt securities were redeemed as follows:
April 1999 $69,340,000
May 1999 4,220,000
-----------
Total $73,560,000
===========
In addition to the tax-exempt investments, we have a taxable portfolio with a
fair market value of $47,460,599 at March 31, 1999.
It is our intent to render reports to shareholders each six months.
Paul H. Broyhill, Chairman E. D. Beach, President
CONFIDENTIAL: For the use of shareholders and the Securities and Exchange
Commission Only.
-2-
<PAGE>
FEDERAL INCOME TAX INFORMATION
We are required by the Internal Revenue Code to advise you within 60 days of the
Fund's fiscal year end (March 31, 1999) as to the federal tax status of
dividends paid by the Fund during such fiscal year. Accordingly, we are advising
you that during the fiscal year the Fund paid distributions to its shareholders
totaling $2.42 per share, comprised of $.45 per share ordinary income and short
term capital gains which are taxable as ordinary income, $1.16 per share long
term capital gains which are taxable as such, and $.81 per share tax exempt
income. The shareholders are furnished a Form 1099 in January of each year which
details the federal tax status of dividends paid by the Fund during the calendar
year.
SUPPLEMENTAL PROXY INFORMATION
1998 ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of BMC Fund, Inc. was held on July 25, 1998
at The Greenbrier, White Sulphur Springs, West Virginia. The meeting was held
for the following purposes:
1. To elect the following eleven directors to serve as follows:
Director Term Expiring
E. D. Beach 1 year 1999
James T. Broyhill 1 year 1999
Paul H. Broyhill 1 year 1999
William E. Cooper 1 year 1999
Lawrence Z. Crockett 1 year 1999
Willard A. Gortner 1 year 1999
Allene B. Heilman 1 year 1999
Harry Heltzer 1 year 1999
Gene A. Hoots 1 year 1999
Michael G. Landry 1 year 1999
Dolph W. von Arx 1 year 1999
2. To ratify the selection of Deloitte & Touche LLP as the Company's auditor
for the fiscal year beginning April 1, 1998.
3. To vote upon such other business as may come before the meeting.
-3-
<PAGE>
The results of the proxy solicitation on the above matters were as
follows:
<TABLE>
<CAPTION>
Director Votes For Votes Against Votes Withheld Abstentions
<S> <C> <C> <C> <C>
1. E. D. Beach 4,781,691 - 151,590 -
James T. Broyhill 4,781,691 - 151,590 -
Paul H. Broyhill 4,781,691 - 151,590 -
William E. Cooper 4,781,691 - 151,590 -
Lawrence Z. Crockett 4,781,691 - 151,590 -
Willard A. Gortner 4,781,691 - 151,590 -
Allene B. Heilman 4,781,691 - 151,590 -
Harry Heltzer 4,781,691 - 151,590 -
Gene A. Hoots 4,781,691 - 151,590 -
Michael G. Landry 4,781,691 - 151,590 -
Dolph W. von Arx 4,781,691 - 151,590 -
2. Deloitte & Touche LLP 4,781,691 - 151,590 -
</TABLE>
3. There was no other business voted upon at the Annual Meeting of
Shareholders.
SUPPLEMENTAL INFORMATION
Paul H. Broyhill, Chairman of the Board, and E. D. Beach, President, are
primarily responsible for the day to day management of the Company's portfolio
and have had such responsibility since the inception of the Fund. In addition,
portions of the Company's portfolio are managed by IBJ Whitehall Bank & Trust
Company ("IBJ Whitehall"), which is responsible for approximately $19.3 million
of the Fund's portfolio, and W. H. Reaves & Co., Inc. ("Reaves & Co."), which is
responsible for approximately $7.6 million of the Fund's portfolio. Paul
Blaustein, a Senior Investment Officer of IBJ Whitehall, is the portfolio
manager responsible for the portion of the Company's portfolio managed by IBJ
Whitehall; William H. Reaves, who is the Chief Investment Officer of Reaves &
Co., is the portfolio manager responsible for the portion of the Company's
portfolio managed by Reaves & Co. Mr. Blaustein has held his current position
with IBJ Whitehall for more than a year. Mr. Reaves has held his current
position with Reaves & Co. for more than five years.
-4-
<PAGE>
[LETTERHEAD OF DELOITTE & TOUCHE]
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and
Shareholders of BMC Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of BMC
Fund, Inc. (the "Company"), including the schedules of investments, as of March
31, 1999, and the related statement of operations for the year then ended, and
the statements of changes in net assets for the years ended March 31, 1999 and
1998, and the selected financial highlights for each of the ten years in the
period ended March 31, 1999. These financial statements and financial highlights
are the responsibility of BMC Fund, Inc.'s management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
at March 31, 1999 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of BMC Fund, Inc. at
March 31, 1999, the results of its operations for the year then ended, the
changes in its net assets for the years ended March 31, 1999 and 1998, and the
financial highlights for each of the ten years in the period ended March 31,
1999, in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
May 11, 1999
-5-
<PAGE>
BMC FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS AT MARKET VALUE:
Investment securities (cost - $108,094,918) $121,228,494
Investments in affiliates - wholly owned subsidiaries (equity value - $15,137,583) 21,412,126
Investment real estate (cost - $147,267) 150,000
Cash and short-term investments 61,272
Receivables, principally accrued interest 1,034,907
Other assets 28,190
------------
Total assets 143,914,989
------------
LIABILITIES:
Accounts payable and accrued expenses 48,102
Payable to broker 774,740
------------
Total liabilities 822,842
------------
NET ASSETS AT MARCH 31, 1999 - EQUIVALENT TO $29.01 PER
SHARE ON 4,933,281 SHARES OF COMMON STOCK OUTSTANDING $143,092,147
============
SUMMARY OF SHAREHOLDERS' EQUITY:
Common stock, par value $5.00 per share - authorized, 70,000,000 shares;
outstanding, 4,933,281 shares $ 24,666,405
Retained earnings prior to becoming investment company 92,939,370
Undistributed net investment income 880,806
Undistributed nontaxable gain 5,194,714
Unrealized appreciation of investments 19,410,852
------------
NET ASSETS APPLICABLE TO COMMON STOCK OUTSTANDING $143,092,147
============
</TABLE>
See accompanying notes to financial statements.
-6-
<PAGE>
BMC FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Exempt interest $ 2,941,017
Other interest and dividends 1,374,454
Equity in earnings of wholly owned subsidiaries 1,261,274
-----------
Total income 5,576,745
-----------
Expenses:
Investment expenses 118,718
Officers' remuneration (Note 2) 66,000
Salaries 44,667
Taxes and license 29,557
Legal and professional fees 61,568
Travel and entertainment 69,310
Property and liability insurance 16,610
Directors' fees (Note 2) 26,000
Rent 14,100
Depreciation expense 2,585
Office supplies and expense 14,700
Miscellaneous 8,329
-----------
Total expenses 472,144
-----------
Net investment income 5,104,601
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain from investment securities sold 4,577,828
Change in unrealized appreciation of investments for the year (5,357,102)
-----------
Net loss on investments (779,274)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,325,327
===========
See accompanying notes to financial statements.
-7-
<PAGE>
BMC FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED MARCH 31, 1999 AND 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 5,104,601 $ 6,210,383
Net realized gain on investments 4,577,828 4,196,144
Change in unrealized appreciation (5,357,102) 5,413,824
------------- -------------
Net increase in net assets resulting from operations 4,325,327 15,820,351
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains on investment securities (4,577,828) (4,196,144)
Net investment income (7,360,712) (5,621,085)
------------- -------------
TOTAL (DECREASE) INCREASE IN NET ASSETS (7,613,213) 6,003,122
NET ASSETS AT BEGINNING OF YEAR 150,705,360 144,702,238
------------- -------------
NET ASSETS AT END OF YEAR (Including
undistributed net investment income: 1999 - $880,806;
1998 - $3,136,917) $ 143,092,147 $ 150,705,360
============= =============
</TABLE>
See accompanying notes to financial statements.
-8-
<PAGE>
BMC FUND, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED MARCH 31, 1999
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
BMC Fund, Inc. (the "Company") is a closed-end, diversified investment
company registered under the Investment Company Act of 1940, as amended.
Prior to becoming a regulated investment company on April 1, 1981, BMC
Fund, Inc. operated as a regular corporation. The following is a summary
of significant accounting policies followed by the Company in the
preparation of its financial statements. The policies are in conformity
with generally accepted accounting principles for investment companies.
A. Investment Valuations - The municipal bond investments and other
investment securities are stated at market as determined by a
pricing service and closing prices on national securities exchanges,
respectively. The cost of the bonds has been adjusted for
amortization of premium and accretion of discount over the term of
the security. Interest income is adjusted to reflect such
amortization and accretion. The carrying value of the investments in
wholly owned subsidiaries is based on an independent appraisal of
the fair market value of the subsidiaries.
B. Income Taxes - No federal tax provision is required as it is the
Company's policy to comply with the provisions of Subchapter M of
the Internal Revenue Code of 1954, as amended, including the
distribution to its shareholders of substantially all of its income
and any capital gains not offset by capital losses. Also, no state
income tax provision has been provided because the states in which
the Company has income recognize the tax exempt status of a
regulated investment company.
C. Investment Transactions - Investment transactions are accounted for
on the date the order to buy or sell is executed. Realized gains and
losses on investments are determined on the basis of specific
identification of issues sold or matured.
D. Dividend Policy - It is the Company's policy to pay dividends during
the year in sufficient amounts to meet the requirements to maintain
its status as a regulated investment company.
E. Temporary Cash and Short-term Investments - For purposes of
financial reporting, the Company considers all investments at
financial institutions with original maturities of three months or
less (repurchase agreements at March 31, 1999) to be equivalent to
cash. Short-term investments are money market investments managed by
third party investors and are included in investment securities.
F. 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.
-9-
<PAGE>
2. ADVISORY BOARD AND REMUNERATION OF DIRECTORS
The Company does not have an advisory board. During the current year, the
Chairman was paid $16,000 and the President was paid $50,000. The
independent directors are paid an annual fee of $1,000 plus $1,000 for
each meeting attended.
3. SUBSEQUENT EVENT
In April and May 1999, the Company redeemed $69,340,000 and $4,220,000 of
tax-exempt securities at par value. The Company reinvested the funds in
corporate bonds.
-10-
<PAGE>
BMC FUND, INC.
FINANCIAL HIGHLIGHTS
EACH OF THE TEN YEARS IN THE PERIOD ENDED MARCH 31, 1999
- --------------------------------------------------------------------------------
The following table presents financial information divided into three parts: per
share operating performance, total investment return and ratios and supplemental
data for each of the ten years in the period ended March 31, 1999. The first
part, per share operating performance, details the changes on a per share basis
of the Company's beginning net asset value to its ending net asset value. The
second part, total investment return, is based on the market price of the
Company's shares of stock. Part three, ratios and supplemental data, provides
additional financial information related to the Company's performance.
<TABLE>
<CAPTION>
PER SHARE OPERATING
PERFORMANCE 1999 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 30.55 $ 29.33 $ 29.40 $ 28.23 $ 28.02 $ 28.59
--------- --------- --------- --------- --------- ---------
Net investment income 1.04 1.26 1.29 1.22 1.28 1.30
Net gains (losses) on investments (.16) 1.95 .54 1.69 .46 (.46)
--------- --------- --------- --------- --------- ---------
Total from investment operations .88 3.21 1.83 2.91 1.74 .84
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income 1.49 1.14 1.16 1.05 1.20 1.21
Distributions from capital gains .93 .85 .74 .69 .33 .20
--------- --------- --------- --------- --------- ---------
Total distributions 2.42 1.99 1.90 1.74 1.53 1.41
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 29.01 $ 30.55 $ 29.33 $ 29.40 $ 28.23 $ 28.02
========= ========= ========= ========= ========= =========
Per share market value, end of period(1) $ 26.00 $ 26.00 N/A $ 26.00 $ 26.00 N/A
========= ========= ========= ========= ========= =========
TOTAL INVESTMENT RETURN(2) 3.38% 12.33% 7.05% 11.17% 6.68% 3.25%
========= ========= ========= ========= ========= =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 143,092 $ 150,705 $ 144,702 $ 145,036 $ 139,248 $ 138,230
Ratio of expenses to average net assets(3) .32% .27% .27% .29% .30% .30%
Ratio of net investment income to
average net assets(3) 3.50% 4.18% 4.39% 4.21% 4.55% 4.60%
Portfolio turnover rate 80.17% 26.98% 31.23% 21.75% 32.29% 22.48%
<CAPTION>
PER SHARE OPERATING
PERFORMANCE 1993 1992 1991 1990
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 27.77 $ 27.71 $ 27.69 $ 27.58
--------- --------- --------- ---------
Net investment income 1.42 1.62 1.76 1.84
Net gains (losses) on investments 1.14 .31 .30 .27
--------- --------- --------- ---------
Total from investment operations 2.56 1.93 2.06 2.11
--------- --------- --------- ---------
Less distributions:
Dividends from net investment income 1.45 1.72 1.83 1.92
Distributions from capital gains .29 .15 .21 .08
--------- --------- --------- ---------
Total distributions 1.74 1.87 2.04 2.00
--------- --------- --------- ---------
Net asset value, end of period $ 28.59 $ 27.77 $ 27.71 $ 27.69
========= ========= ========= =========
Per share market value, end of period(1) N/A $ 26.00 $ 26.00 $ 26.00
========= ========= ========= =========
TOTAL INVESTMENT RETURN(2) 9.83% 7.39% 7.93% 8.12%
========= ========= ========= =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 141,023 $ 136,994 $ 136,735 $ 136,633
Ratio of expenses to average net assets(3) .27% .29% .31% .28%
Ratio of net investment income to
average net assets(3) 5.02% 5.82% 6.36% 6.66%
Portfolio turnover rate 30.12% 32.74% 29.17% 18.87%
</TABLE>
(1) Unaudited - Based on stock trades during that year.
(2) Unaudited - Computed as follows: income from operations divided by market
value per share times number of shares outstanding.
(3) Average is computed on a quarterly basis.
-11-
<PAGE>
BMC FUND, INC. SCHEDULE I
INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Coupon Percent
Interest Maturity Maturity Market of Net
Debt Issuer Rate Date Value Value Assets
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS:
Aiken County, SC Schools 4.40% 04/01/99 $ 250,000 $ 250,000
Albany County, NY 5.00% 04/01/99 250,000 250,000
Dade County, FL 5.50% 04/01/99 125,000 125,000
Eau Claire, Wisconsin 4.90% 04/01/99 445,000 445,000
Fairfax County, VA 6.00% 04/01/99 250,000 253,125
Fairfax County, VA Pub Impt 5.60% 04/01/99 750,000 750,000
Kenosha, Wisconsin 6.80% 04/01/99 500,000 500,000
Kenosha, Wisconsin School 6.20% 04/01/99 1,225,000 1,225,000
Marquette, Michigan 7.50% 04/01/99 400,000 408,000
Massachusetts State 7.50% 04/01/99 1,000,000 1,020,000
New Jersey State 7.00% 04/01/99 300,000 300,000
New York State 4.10% 04/01/99 300,000 300,000
New York State Local Govt 5.10% 04/01/99 375,000 375,000
New York Thruway 6.00% 04/01/99 100,000 100,000
New York State Thruway 5.00% 04/01/99 250,000 250,000
North Hempstead, NY 7.25% 04/01/99 240,000 244,800
North Hempstead, NY Pub. Impt 7.25% 04/01/99 550,000 561,000
Ohio State Bldg. Authority 6.90% 04/01/99 900,000 900,000
Randolph County, NC BE 6.40% 04/01/99 145,000 145,000
Southern Illinois University 5.00% 04/01/99 500,000 500,000
Surry Cnty, NC 6.25% 04/01/99 1,000,000 1,000,000
Texas State 5.00% 04/01/99 400,000 400,000
Virginia College Bldg. Authority 7.55% 04/01/99 625,000 637,500
Wayne Cnty, NC Water 6.90% 04/01/99 110,000 110,000
Dorchester Cnty, SC* variable 04/15/99 3,000,000 3,000,210
Knox County, TN 8.60% 04/15/99 645,000 659,190
New Jersey* 7.25% 04/15/99 250,000 253,515
Rock Hill, Ohio 4.15% 04/15/99 1,000,000 1,000,320
Washington Township, NJ 7.50% 04/15/99 150,000 150,244
Wynford, Ohio 3.95% 04/15/99 1,000,000 1,000,270
Broward County, FL 4.00% 04/20/99 800,000 800,320
Alabama Mental Health 7.38% 05/01/99 2,000,000 2,046,840
Polk County, NC 6.50% 05/01/99 520,000 521,461
Richland County, SC School Dist. 2 5.30% 05/01/99 700,000 701,274
New Jersey Wastewater 6.80% 05/15/99 1,000,000 1,004,470
Mecklenburg County, NC A&B* 6.60% 04/01/00 365,000 366,825
Honolulu, Hawaii City & County 4.70% 10/01/00 300,000 305,856
Philadelphia, PA* 7.63% 04/01/01 600,000 612,000
Georgia State Bond* 7.25% 04/01/03 500,000 510,000
Mecklenburg County, NC Ser. A&B* 6.70% 04/01/05 270,000 275,400
</TABLE>
-12-
<PAGE>
BMC FUND, INC. SCHEDULE I
INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Coupon Percent
Interest Maturity Maturity Market of Net
Debt Issuer Rate Date Value Value Assets
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS (Continued):
Miami, FL* 7.40% 04/01/05 $ 100,000 $ 102,000
New Jersey State * 7.25% 04/15/05 500,000 508,275
Durham County, NC Pub. Impt.* variable 05/01/08 2,000,000 2,000,000
Georgia State Series B* 6.25% 04/01/09 500,000 510,000
Montgomery County, PA* variable 12/01/13 4,660,000 4,660,000
Virginia College Bldg. Authority* 7.75% 04/01/14 1,000,000 1,020,000
West Virginia* 7.25% 04/01/14 2,800,000 2,800,000
North Carolina Med. Care* variable 10/01/16 9,730,000 9,730,000
Mecklenburg County, NC* variable 02/01/17 2,600,000 2,600,000
Mecklenburg County, NC* variable 02/01/18 4,700,000 4,700,000
Jacksonville, FL Rev.* variable 03/01/18 1,100,000 1,100,000
Cobb County, GA* 3.50% 11/01/18 5,190,000 5,190,000
Palm Beach County, FL Education* variable 11/01/18 750,000 750,000
Palm Beach County, FL 3.50% 11/01/18 500,000 500,000
Fairfax County, VA* variable 09/01/21 4,340,000 4,340,000
Jacksonville, FL* variable 10/02/22 3,000,000 3,000,000
District of Columbia Rev.* variable 07/01/23 3,000,000 3,000,000
Emmaus, PA* variable 12/01/28 3,000,000 3,000,000
------------ -----------
TOTAL INVESTMENTS IN MUNICIPAL BONDS $ 73,560,000 73,767,895 51.55%
============ ----------- -----
</TABLE>
-13-
<PAGE>
BMC FUND, INC. SCHEDULE I
INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Market of Net
Company Name Shares Cost Value Assets
<S> <C> <C> <C> <C> <C>
MUTUAL FUNDS:
8,845.39 Baron Asset Fund 8,845 $ 300,655 $ 479,155
2,000.00 Central European Value Fund 2,000 25,823 18,375
30,884.33 Cornercap Growth Fund 30,884 339,055 295,254
3,000.00 Europe Fund Inc 3,000 54,093 50,438
8,500.00 European Warrant Fund 8,500 137,950 119,000
9,916.08 Ivy Fund Emerging Growth A 9,916 263,024 305,514
13,882.34 Ivy Fund Global Science &
Technology A 13,882 211,899 363,579
9,512.21 Ivy Global Fund Cl A 9,512 120,159 109,105
6,695.93 Ivy International Fund A 6,696 213,693 283,773
4,300.00 Midcap SPDR Trust I 4,300 247,294 296,431
1,000.00 SPDR Trust Unit I 1,000 77,942 128,375
---------- --------
TOTAL INVESTMENTS IN MUTUAL FUNDS $1,991,587 2,448,999 1.71%
========== --------- ----
</TABLE>
-14-
<PAGE>
BMC FUND, INC. SCHEDULE I
INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Shares Market of Net
Industries Held Company Name Cost Value Assets
<S> <C> <C> <C> <C> <C>
COMMON STOCKS:
Aerospace/Defense 4,000 Boeing Co $ 203,200 $ 136,000
8,000 Coltec Inds Inc 167,768 145,500
6,100 Raytheon Co 162,351 357,613
----------- -----------
533,319 639,113 .45%
----------- ----------- -----
Aluminum 5,800 Alcoa Inc 93,670 238,888 .17%
----------- ----------- -----
Apparel 7,400 Jones Apparel Group 55,234 206,737 .14%
----------- ----------- -----
Auto & Truck 3,000 General Motors Corp 145,430 261,000 .18%
----------- ----------- -----
Banking 5,124 Banco de Santander ADR 99,839 102,800
3,500 Bankamerica Corp New 61,206 247,188
7,350 Charter One Financial Inc 210,312 212,116
1,000 Citigroup Inc 44,305 63,875
4,500 First American Tennessee 67,188 165,937
9,580 Mellon Bank Corp 203,452 674,193
1,500 Old Kent Financial Corp 66,763 63,469
6,000 Wells Fargo & Co Del 165,101 210,375
----------- -----------
918,166 1,739,953 1.22%
----------- ----------- -----
Beverage - Alcoholic 2,200 Anheuser Busch Companies Inc 75,120 167,475 .12%
----------- ----------- -----
Beverage - Nonalcoholic 7,000 PepsiCo Inc 253,374 274,313 .19%
----------- ----------- -----
Building Materials 7,300 Eagle Hardware & Garden 141,353 278,769
10,000 Fletcher Challenge Bldg ADR 128,360 131,875
----------- -----------
269,713 410,644 .29%
----------- ----------- -----
Canadian Energy 2,500 Imperial Oil Ltd Com New 44,844 47,813 .03%
----------- ----------- -----
Chemical - Basic 4,500 Monsanto Co 45,659 206,719 .14%
----------- ----------- -----
Chemical - Diversified 4,600 Air Products & Chemicals Inc 118,101 157,550 .11%
----------- ----------- -----
Computer Software 9,000 Automatic Data Processing 121,984 372,375
& Services 3,000 Electronic Data Systems 158,115 146,063
4,200 Hewlett Packard Co 59,839 284,812
5,300 Sun Microsystems Inc 171,046 662,831
----------- -----------
510,984 1,466,081 1.02%
----------- ----------- -----
Consumer Products 6,500 Kimberly Clark Corp 334,587 311,594 .22%
----------- ----------- -----
</TABLE>
-15-
<PAGE>
BMC FUND, INC. SCHEDULE I
INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Shares Market of Net
Industries Held Company Name Cost Value Assets
<S> <C> <C> <C> <C> <C>
COMMON STOCKS:
(Continued):
Diversified Companies 6,000 AlliedSignal Inc $ 155,680 $ 295,125
2,200 United Technologies CP 119,037 297,963
----------- -----------
274,717 593,088 .41%
----------- ----------- -----
Drugs 3,500 Alza Corp Del 102,519 133,875
10,000 Amgen Inc 296,281 748,750
2,595 Cardinal Health Inc 109,321 171,270
23,000 Johnson & Johnson 528,594 2,150,500
1,000 Novartis AG Sponsored ADR 95,063 81,107
3,400 Pfizer Inc 51,129 471,750
----------- -----------
1,182,907 3,757,252 2.63%
----------- ----------- -----
Drugstores 6,488 CVS Corp 86,140 308,180 .22%
----------- ----------- -----
Electrical Equipment 5,100 General Electric Co 139,482 564,187 .39%
----------- ----------- -----
Electric Utilities 14,000 Ameren Corp 546,769 506,625
2,000 Cilcorp Inc 117,602 120,125
6,600 Cinergy Corp 204,868 181,500
8,600 CMS Energy Corp 352,534 346,150
500 Baltimore Gas & Electric 12,597 12,687
4,750 Dominion Resources Inc VA 164,588 175,453
12,200 Duke Energy Corp 598,743 668,713
5,000 Eastern Utilities Assoc 143,787 141,563
16,000 FirstEnergy Corp 422,061 448,000
4,000 New England Electric Systems 192,530 194,000
17,000 Nisource Inc 417,515 459,000
1,000 Northern States Power Minn 25,195 23,187
15,600 Southern Co 366,330 363,675
21,000 Teco Energy Inc 513,473 417,375
12,000 Wisconsin Energy Corp 358,870 312,750
----------- -----------
4,437,462 4,370,803 3.05%
----------- ----------- -----
Electronics 5,000 Altera Corp 276,337 297,500
8,000 Maxim Integrated Products 301,392 433,000
7,187 Molex Inc 145,014 211,118
5,000 SCI Systems Inc 169,953 148,125
----------- -----------
892,696 1,089,743 .76%
----------- ----------- -----
Entertainment 7,000 Bally Total Fitness Hldgs 114,187 167,125
4,000 Carnival Corp 120,863 194,250
6,000 Walt Disney Co 117,360 186,750
----------- -----------
352,410 548,125 .38%
----------- ----------- -----
</TABLE>
-16-
<PAGE>
BMC FUND, INC. SCHEDULE I
INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Shares Market of Net
Industries Held Company Name Cost Value Assets
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
(Continued):
Financial Services 2,000 Countrywide Credit Ind Del $ 90,573 $ 75,000
8,500 Espirito Santo Financial SA ADR 151,955 134,406
----------- -----------
242,528 209,406 .15%
----------- ----------- -----
Food Processing 5,500 Nabisco Hldgs Corp Cl A 159,315 228,594
6,150 Nestle SA Sponsored ADR 201,834 558,635
10,000 Sara Lee Corp 151,625 247,500
----------- -----------
512,774 1,034,729 .72%
----------- ----------- -----
Food Wholesalers 11,000 Sysco Corp 168,835 289,437 .20%
----------- ----------- -----
Foreign Telecommunications 7,600 Cable & Wireless ADR 204,818 280,725
3,800 Ericsson LM Tel Co ADR 22,848 90,488
----------- -----------
227,666 371,213 .26%
----------- ----------- -----
Gold/Silver Mining 6,000 Euro Nevada Mining Ltd 81,622 80,145
6,900 Stillwater Mining Co 100,310 181,987
----------- -----------
181,932 262,132 .18%
----------- ----------- -----
Grocery 6,800 Kroger Co 83,572 407,150 .28%
----------- ----------- -----
Hotel/Gaming 9,000 International Game Tech 168,630 131,625 .09%
----------- ----------- -----
Household Products 3,500 Colgate Palmolive Co 89,886 322,000 .23%
----------- ----------- -----
Insurance 3,937 American Intl Group 100,062 474,901
1,000 Blanch, EW Holdings Inc 55,865 52,500
4,000 Conseco Inc 175,165 123,500
7,450 ING Groep NV Sponsored ADR 134,201 409,284
1,500 Mercury General Corp New 65,407 52,313
----------- -----------
530,700 1,112,498 .78%
----------- ----------- -----
Machinery 8,000 Dover Corp 87,145 263,000 .18%
----------- ----------- -----
Medical Services 12,200 Healthsouth Corp 140,810 126,575 .09%
----------- ----------- -----
Medical Supplies 4,000 Baxter Intl Inc 106,245 264,000 .18%
----------- ----------- -----
Natural Gas - Distributing 3,400 Indiana Energy Inc 77,273 64,384
3,100 Oneok Inc New 99,954 76,725
3,000 Providence Energy Corp 60,649 55,125
----------- -----------
237,876 196,234 .14%
----------- ----------- -----
</TABLE>
-17-
<PAGE>
BMC FUND, INC. SCHEDULE I
INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Shares Market of Net
Industries Held Company Name Cost Value Assets
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
(Continued):
Natural Gas - Diversified 800 Consolidated Natural Gas $ 40,793 $ 38,950
8,700 Enron Corp 441,846 558,975
3,000 Keyspan Energy 89,175 75,375
300 National Fuel Gas NJ 12,968 11,775
9,000 Questar Corp 171,587 152,437
----------- -----------
756,369 837,512 .59%
----------- ----------- -----
Oilfield Services & Equipment 3,500 Apache Corp 99,434 91,219
3,000 Core Laboratories NV 62,905 52,875
5,000 Newpark Resources Inc 88,201 36,250
1,500 Petroleum Geo-Svcs ADR 21,867 22,875
3,000 Schlumberger Ltd 152,313 180,563
2,500 Transocean Offshore 63,208 72,031
----------- -----------
487,928 455,813 .32%
----------- ----------- -----
Petroleum - Integrated 7,400 Atlantic Richfield Co 468,660 541,125
1,300 BP Amoco PLC ADR 111,453 131,300
400 Conoco Inc Cl A 9,453 9,825
3,000 Elf Aquitaine ADR 120,057 201,937
1,400 Equitable Resources Inc 39,024 36,487
7,300 Exxon Corp 342,745 515,106
7,300 Mobil Corp 303,438 642,400
3,500 Repsol SA ADR 119,233 179,375
8,200 Royal Dutch Petroleum 405,868 426,400
4,574 Texaco Inc Com 233,996 259,575
6,500 Unocol Corp com 265,320 239,688
4,400 USX Marathon Group 120,895 121,000
12,000 YPF Sociedad Anonima ADR 291,622 378,750
----------- -----------
2,831,764 3,682,968 2.57%
----------- ----------- -----
Petroleum - Producing 1,500 Burlington Resources Inc 70,670 59,906
1,600 Kerr McGee Corp 66,854 52,500
3,000 Noble Affiliates Inc 114,585 87,000
----------- -----------
252,109 199,406 .14%
----------- ----------- -----
Railroad 6,600 Norfolk Southern Corp 179,579 174,075 .12%
----------- ----------- -----
</TABLE>
-18-
<PAGE>
BMC FUND, INC. SCHEDULE I
INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Shares Market of Net
Industries Held Company Name Cost Value Assets
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
(Continued):
R.E.I.T.s 10,700 Choice Hotels Intl Inc $ 126,777 $ 150,469
5,500 Colonial Properties Trust 134,072 140,250
5,000 Kilroy Realty Corp 106,216 102,500
6,300 MGI Properties Inc 100,871 172,463
10,000 Mid-Atlantic Realty Trust 101,031 102,500
11,600 New Plan Excel Realty Trust 253,837 222,575
5,300 Post Properties Inc 202,202 192,125
2,000 Spieker Properties Inc 67,356 70,500
10,100 Tanger Factory Outlet 237,247 193,162
6,400 Trinet Corp Realty Trust 181,489 162,400
----------- -----------
1,511,098 1,508,944 1.06%
----------- ----------- -----
Restaurants 6,000 McDonalds Corp 191,460 271,875 .19%
----------- ----------- -----
Research-Medical/Scientific 3,000 Aviron 75,218 60,750 .04%
----------- ----------- -----
Retail Stores 3,000 Costco Companies Inc 54,625 274,688
3,500 Meyer, Fred Inc Del New 73,185 206,062
----------- -----------
127,810 480,750 .34%
----------- ----------- -----
Semiconductors 2,000 Intel Corp 158,125 237,750
3,500 Motorola Inc 202,367 256,375
3,600 Novellus Systems Inc 200,567 198,450
8,000 Xilinx Inc 152,875 324,500
----------- -----------
713,934 1,017,075 .72%
----------- ----------- -----
Services 27,000 Cendant Corp 317,734 430,312 .30%
----------- ----------- -----
Telecommunications Equipment 10,500 Ciena Corp 190,184 236,250
3,714 Lucent Technologies 97,673 401,112
10,000 Scientific Atlanta Inc 164,736 272,500
----------- -----------
452,593 909,862 .64%
----------- ----------- -----
Telecommunications Services 11,334 Alltel Corp 437,239 706,958
5,500 Ameritech Corp New 241,047 316,938
5,300 AT&T Corp 322,281 423,006
7,500 Bell Atlantic Corp 342,308 387,656
5,000 Century Tel Enterprise 261,071 351,250
5,900 GTE Corp 230,188 356,950
18,400 SBC Communications Inc 520,362 868,250
4,000 Sprint Corp 100,504 392,500
2,000 Sprint Corp PCS 12,068 88,625
500 US West Inc New 26,566 27,531
----------- -----------
2,493,634 3,919,664 2.74%
----------- ----------- -----
</TABLE>
-19-
<PAGE>
BMC FUND, INC. SCHEDULE I
INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Shares Market of Net
Industries Held Company Name Cost Value Assets
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
(Continued):
Water Utility 6,300 American Water Works Inc $ 154,243 $ 183,487 .13%
----------- ----------- -----
Limited Partnerships (Units) 500,000 Bay Harbour 90-1, LP 500,000 482,645
400,000 Golfsouth 1994 LP 380,000 200,000
500,000 Mariner Partners, LP 500,000 517,832
100,000 Piedmont Venture Partners 100,000 100,000
750,000 Rose Glen Capital Partners I, LP 750,000 1,110,940
500,000 Safe Harbor Fund, LP 500,000 603,907
1,000,000 Stark Investments, LP 1,000,000 972,617
79,255 ULQ Hedge Fund LP 1,025,002 1,101,676
87,500 WP Strategic LP 87,500 47,803
----------- -----------
4,842,502 5,137,420 3.59%
----------- ----------- -----
TOTAL INVESTMENTS IN COMMON STOCKS $28,930,589 41,619,170 29.09%
=========== ----------- -----
</TABLE>
-20-
<PAGE>
BMC FUND, INC. SCHEDULE I
INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Market of Net
Industries Company Name Cost Value Assets
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS Evergreen Money
Market Fund $ 3,392,430 $ 3,392,430 2.37%
============ ------------ -----
TOTAL INVESTMENTS -
MARKET VALUE $121,228,494 84.72%
============ =====
*Putable prior to maturity date.
Aggregate gross unrealized appreciation
of security values $ 14,396,324
Aggregate gross unrealized depreciation
of security values (1,262,748)
------------
Net appreciation of security values 13,133,576
Tax cost of securities 108,094,918
------------
TOTAL MARKET VALUE OF SECURITIES $121,228,494
============
</TABLE>
-21-
<PAGE>
BMC FUND, INC. SCHEDULE II
INVESTMENTS - OTHER THAN SECURITIES
MARCH 31, 1999
- --------------------------------------------------------------------------------
Market
Value at
End of
Description Period
INVESTMENT LAND:
Residential acreage including subdivided lots in
Caldwell, Rutherford and Wilkes Counties, N.C $150,000 (a)
--------
TOTAL $150,000
========
Aggregate appreciation of investment land $ 2,733
Tax cost of investment land 147,267
--------
Market value of investment land $150,000
========
(a) Non-income producing property.
-22-
<PAGE>
BMC FUND, INC. SCHEDULE III
INVESTMENT IN AFFILIATES
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Amount of Equity
Shares Held At In Net Profit Amount of Value at
March 31, And Loss for the Dividends March 31,
Issuer 1999 Period (1) 1999
<S> <C> <C> <C> <C>
Broyhill Industries Inc. - wholly owned
subsidiary 1,000 $ (304) $ -- $ 526,923
P. B. Realty, Inc. - wholly owned
subsidiary 1,000 1,261,578 -- 20,885,203
----------- ------ ------------
TOTAL $ 1,261,274 $ -- $ 21,412,126
=========== ====== ============
</TABLE>
(1) All of the dividends received by BMC Fund, Inc. from their wholly owned
subsidiaries have been credited to the investment account, since BMC Fund,
Inc. is accounting for their investment in the subsidiary companies on the
equity method.
-23-
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