PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
ANNUAL REPORT
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Permanent Portfolio Family of Funds, Inc.
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Permanent Portfolio Family of Funds, Inc.
(comprising, respectively, the Permanent Portfolio, the Treasury Bill Portfolio,
the Versatile Bond Portfolio and the Aggressive Growth Portfolio), as of January
31, 1999, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years in the five-year
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. All periods indicated in the accompanying financial highlights ending
prior to February 1, 1994, were audited by other auditors whose report dated
March 18, 1994, expressed an unqualified opinion on this information.
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 financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
January 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting Permanent Portfolio Family of Funds,
Inc. as of January 31, 1999, the results of their operations, the changes in
their net assets and their financial highlights for the periods indicated
herein, except as noted above, in conformity with generally accepted accounting
principles.
As discussed in Note 8 to the financial statements, the Securities and Exchange
Commission is involved in public administrative and cease-and-desist proceedings
against the Fund's investment adviser and two of the Fund's directors and
officers, for which no decision has been rendered.
KPMG LLP
San Francisco, California
March 12, 1999
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
January 31, 1999
ASSETS AND LIABILITIES
ASSETS
Investments at market value (Notes 1, 2, 5 & 6):
Investments other than securities:
Gold assets ..............................................................
Silver assets ............................................................
Swiss franc deposits .....................................................
Swiss franc bonds ...........................................................
Stocks of United States and foreign real estate and natural resource companies
Aggressive growth stock investments .........................................
Corporate bonds .............................................................
United States Treasury securities ...........................................
Total investments (identified cost $62,238,944; $92,082,132; $24,625,931
and $9,240,049, respectively)
Cash ..........................................................................
Accounts receivable for shares of the portfolio sold ..........................
Accounts receivable for investments sold .......................................
Accrued interest, dividends and foreign taxes receivable ......................
Total assets
LIABILITIES
Bank overdraft ................................................................
Accounts payable for shares of the portfolio redeemed .........................
Accounts payable for investments purchased .....................................
Accrued investment advisory fee ...............................................
Accrued directors' and officers' fees and expenses ............................
Accrued excise tax ............................................................
Total liabilities
Net assets applicable to outstanding shares
NET ASSETS
Capital stock - par value $.001 per share:
Authorized - 100,000,000; 100,000,000; 10,000,000 and 25,000,000 shares,
respectively
Outstanding - 3,573,170; 1,369,730; 414,387 and 314,811 shares,
respectively ................................................................
Paid-in capital ...............................................................
Undistributed net investment income (loss) (Note 1) ...........................
Accumulated net realized gain (loss) on investments ...........................
Accumulated net realized loss on foreign currency transactions..................
Net unrealized appreciation of investments .....................................
Net unrealized depreciation on translation of assets and liabilities in foreign
currencies ..................................................................
Net assets applicable to outstanding shares
Net asset value per share
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Permanent Portfolio Treasury Bill Portfolio Versatile Bond Portfolio Aggressive Growth Portfolio
------------------- ----------------------- ------------------------ ---------------------------
<S> <C> <C> <C> <C>
$ 13,345,951 $ - $ - $ -
3,642,136 - - -
129,169 - - -
------------ ------------ ------------- ------------
17,117,256 - - -
6,554,228 - - -
9,830,720 - - -
10,842,572 - - 21,798,449
- - 21,421,240 -
21,836,350 92,087,050 3,239,136 -
------------ ------------ ------------- ------------
66,181,126 92,087,050 24,660,376 21,798,449
61,964 9,810 - -
17,991 326,350 454,471 14,052
288,615 - - -
490,866 1,491,915 426,432 7,712
------------ ------------ ------------- ------------
67,040,562 93,915,125 25,541,279 21,820,213
- - 95,567 5,770
10,000 584,324 5,864 15,102
- - 1,015,081 -
64,032 49,286 15,223 20,061
51,246 68,698 15,051 15,035
60,499 117,587 17,126 -
------------ ------------ ------------- ------------
185,777 819,895 1,163,912 55,968
------------ ------------ ------------- ------------
$ 66,854,785 $ 93,095,230 $ 24,377,367 $ 21,764,245
============ ============ ============= ============
$ 3,573 $ 1,370 $ 414 $ 315
53,242,874 93,377,607 23,110,470 9,433,051
------------ ------------ ------------- ------------
53,246,447 93,378,977 23,110,884 9,433,366
7,414,839 (120,246) 1,372,050 (202,864)
2,416,848 (168,419) (140,012) (24,657)
(162,612) - - -
3,942,182 4,918 34,445 12,558,400
(2,919) - - -
------------ ------------ ------------- ------------
$ 66,854,785 $ 93,095,230 $ 24,377,367 $ 21,764,245
============ ============ ============= ============
$18.71 $67.97 $58.83 $69.13
====== ====== ====== ======
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF OPERATIONS
Year ended January 31, 1999
Investment income (Note 1):
Interest ....................................................................
Dividends ...................................................................
Expenses (Notes 3, 4 & 8):
Investment advisory fee .....................................................
Directors' fees and expenses ................................................
Officers' salary expense ....................................................
Long term disability plan expense.............................................
Excise tax ..................................................................
Regulatory expense ..........................................................
Total expenses
Less waiver of investment advisory fee ......................................
Net expenses
Net investment income (loss) before foreign income taxes deducted at source
Less foreign income taxes deducted at source, net of refundable taxes...........
Net investment income (loss)
Realized and unrealized gain (loss)on investments and foreign currency
(Notes 1, 2, 5 & 6):
Net realized gain (loss) on:
Investments in unaffiliated issuers...........................................
Investments other than securities.............................................
Foreign currency transactions.................................................
Change in unrealized appreciation (depreciation) of:
Investments .................................................................
Translation of assets and liabilities in foreign currencies .................
Net realized and unrealized gain (loss) on investments
and foreign currency
Net increase in net assets resulting
from operations
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Permanent Portfolio Treasury Bill Portfolio Versatile Bond Portfolio Aggressive Growth Portfolio
------------------- ----------------------- ------------------------ ---------------------------
<S> <C> <C> <C> <C>
$ 2,165,609 $ 4,646,145 $ 1,256,975 $ 1,848
532,212 - - 147,689
------------ ------------ ------------- ------------
2,697,821 4,646,145 1,256,975 149,537
775,077 1,049,311 242,691 229,836
39,420 53,284 12,323 11,670
61,639 83,426 19,264 18,210
36,702 48,648 11,421 11,037
60,499 117,587 17,126 -
14,333 14,015 11,155 11,473
------------ ------------ ------------- ------------
987,670 1,366,271 313,980 282,226
- 466,838 80,753 -
------------ ------------ ------------- ------------
987,670 899,433 233,227 282,226
------------ ------------ ------------- ------------
1,710,151 3,746,712 1,023,748 (132,689)
320 - - -
------------ ------------ ------------- ------------
1,709,831 3,746,712 1,023,748 (132,689)
------------ ------------ ------------- ------------
2,738,528 (7,146) 3,227 68,336
(320,020) - - -
(162,612) - - -
------------ ------------ ------------- ------------
2,255,896 (7,146) 3,227 68,336
(2,399,261) (6,913) (63,398) 4,132,624
33,472 - - -
------------ ------------ ------------- ------------
(109,893) (14,059) (60,171) 4,200,960
------------ ------------ ------------- ------------
$ 1,599,938 $ 3,732,653 $ 963,577 $ 4,068,271
============ ============ ============= ============
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Permanent Portfolio
-----------------------------------
Year ended Year ended
January 31, 1999 January 31, 1998
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income (loss) .............................................. $ 1,709,831 $ 1,402,992
Net realized gain (loss) on investments ................................... 2,418,508 2,224,037
Net realized loss on foreign currency transactions ........................ (162,612) -
Change in unrealized appreciation (depreciation) of investments ............ (2,399,261) 1,508,317
Change in unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies ........................... 33,472 11,615
------------ ------------
Net increase in net assets resulting from operations 1,599,938 5,146,961
Equalization on shares issued and redeemed: ................................. (313,988) (497,147)
Distributions to shareholders from:
Net investment income ..................................................... (691,911) (1,233,055)
Net realized gain on investments .......................................... (2,212,316) (1,305,588)
Capital stock transactions exclusive of amounts allocated to undistributed
net investment income (Note 7): ........................................... (2,625,499) (4,004,133)
------------ ------------
Net increase (decrease) in net assets (4,243,776) (1,892,962)
Net assets at beginning of year 71,098,561 72,991,523
------------ ------------
Net assets at end of year (including undistributed net investment income
(loss) of $7,414,839 and $6,831,523; $(120,246) and $520,264; $1,372,050
and $1,725,080; $(202,864) and $(70,175), respectively) $ 66,854,785 $ 71,098,561
============ ============
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Treasury Bill Portfolio Versatile Bond Portfolio Aggressive Growth Portfolio
- ------------------------------------ ----------------------------------- -----------------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
January 31, 1999 January 31, 1998 January 31, 1999 January 31, 1998 January 31, 1999 January 31, 1998
- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S><C> <C> <C> <C> <C> <C>
$ 3,746,712 $ 3,956,396 $ 1,023,748 $ 1,127,755 $ (132,689) $ (107,261)
(7,146) (7,073) 3,227 (16,422) 68,336 (92,993)
- - - - - -
(6,913) 8,758 (63,398) 72,273 4,132,624 3,976,486
- - - - - -
------------ ------------- ------------ ------------ ------------ ------------
3,732,653 3,958,081 963,577 1,183,606 4,068,271 3,776,232
(329,728) (853,426) (224,680) 86,852 - 4,600
(2,854,801) (3,465,235) (616,185) (588,840) - (65,240)
- - - - - (992,338)
(1,652,736) (10,781,113) 899,737 1,328,359 (2,259,519) 1,814,900
------------ ------------- ------------ ------------ ------------ ------------
(1,104,612) (11,141,693) 1,022,449 2,009,977 1,808,752 4,538,154
94,199,842 105,341,535 23,354,918 21,344,941 19,955,493 15,417,339
------------ ------------- ------------ ------------ ------------ ------------
$ 93,095,230 $ 94,199,842 $ 24,377,367 $ 23,354,918 $ 21,764,245 $ 19,955,493
============ ============= ============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1999
<CAPTION>
Quantity Market Value
- ----------------- ------------
<C> <S> <C>
GOLD ASSETS - 19.96% of Total Net Assets
11,997 Troy Oz. Gold bullion (a) ......................................................... $ 3,434,818
33,383 Coins One-ounce gold coins (a) .................................................. 9,862,674
4,297 Units United States Gold Trust (a)(b) ........................................... 48,459
------------
Total Gold Assets (Cost $17,554,688) $ 13,345,951
------------
SILVER ASSETS - 5.45% of Total Net Assets
351,133 Troy Oz. Silver bullion (a) ........................................................ $ 1,833,618
379 Bags Silver coins (a) .......................................................... 1,808,518
------------
Total Silver Assets (Cost $3,126,799) $ 3,642,136
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Amount SWISS FRANC ASSETS - 10.00% of Total Net Assets
- ----------------
<C> <S> <C>
CHF 182,813 Swiss francs in interest-bearing bank accounts ............................ $ 129,169
------------
CHF 4,000,000 4.000% Swiss Confederation bonds, 03-10-99 ................................ 2,834,169
CHF 4,500,000 6.250% Swiss Confederation bonds, 01-07-03 ................................ 3,720,059
------------
Total Swiss Confederation bonds 6,554,228
------------
Total Swiss Franc Assets (Cost $6,460,732) $ 6,683,397
------------
</TABLE>
<TABLE>
<CAPTION>
Number STOCKS OF UNITED STATES AND FOREIGN REAL ESTATE AND NATURAL
Of Shares RESOURCE COMPANIES - 14.70% of Total Net Assets
---------
<C> <S> <C>
NATURAL RESOURCES - 4.57% of Total Net Assets
20,000 Broken Hill Proprietary, Ltd. (c) ......................................... $ 295,000
12,000 Burlington Resources, Inc. ................................................ 363,000
30,000 Cyprus Amax Minerals Company ............................................. 286,875
40,000 Forest Oil Corporation (a) ................................................ 257,500
35,000 Inco, Ltd. ................................................................ 369,688
25,000 Pogo Producing Company .................................................... 271,875
50,000 Santa Fe Energy Resources, Inc. (a) ...................................... 290,625
8,000 Texaco, Inc. .............................................................. 379,000
10,000 Weyerhaeuser Company ..................................................... 541,250
------------
$ 3,054,813
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1999
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
REAL ESTATE - 10.13% of Total Net Assets
27,500 Archstone Communities Trust ................................................ $ 537,969
22,000 BRE Properties, Inc. Class A ............................................... 528,000
31,000 Burnham Pacific Properties, Inc. ........................................... 368,125
23,500 Federal Realty Investment Trust ............................................ 540,500
47,000 IRT Property Company ....................................................... 464,125
25,000 MGI Properties ............................................................. 687,500
21,000 New Plan Excel Realty Trust, Inc............................................ 441,000
22,000 Pennsylvania Real Estate Investment Trust .................................. 440,000
15,000 Texas Pacific Land Trust ................................................... 873,750
40,000 United Dominion Realty Trust, Inc. ......................................... 395,000
29,000 Urstadt Biddle Properties, Inc.............................................. 239,250
29,000 Urstadt Biddle Properties, Inc. Class A..................................... 242,875
31,900 Washington Real Estate Investment Trust .................................... 570,213
37,300 Western Investment Real Estate Trust ....................................... 447,600
-----------
$ 6,775,907
-----------
Total Stocks of United States and Foreign Real Estate and Natural
Resource Companies (Cost $7,840,689) $ 9,830,720
-----------
AGGRESSIVE GROWTH STOCK INVESTMENTS - 16.22% of Total Net Assets
CHEMICALS - .54% of Total Net Assets
8,000 Air Products & Chemicals, Inc. ........................................... $ 269,000
10,000 Wellman, Inc. ............................................................. 94,375
-----------
$ 363,375
COMPUTER SOFTWARE - 1.43% of Total Net Assets
6,000 Autodesk, Inc. ............................................................ $ 265,125
1 Symantec Corporation warrant (a)(d) ....................................... 688,276
-----------
$ 953,401
CONSTRUCTION - .52% of Total Net Assets
5,000 Fluor Corporation ........................................................ $ 190,625
9,000 Johns Manville Corporation ................................................ 160,875
-----------
$ 351,500
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1999
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
DATA PROCESSING - .72% of Total Net Assets
3,000 Hewlett-Packard Company ................................................... $ 235,125
6,000 Seagate Technology, Inc. (a) .............................................. 244,125
-----------
$ 479,250
ELECTRICAL AND ELECTRONICS - .92% of Total Net Assets
3,000 Intel Corporation ........................................................ $ 422,813
15,000 National Semiconductor Corporation (a) .................................... 194,063
-----------
$ 616,876
ENTERTAINMENT AND LEISURE - 1.57% of Total Net Assets
6,000 Disney (Walt) Company .................................................... $ 198,000
3,000 Harcourt General, Inc. ................................................... 144,000
12,000 Harrah's Entertainment, Inc. (a) ......................................... 178,500
7,000 Promus Hotel Corporation (a) .............................................. 209,125
5,000 Tribune Company .......................................................... 319,688
-----------
$ 1,049,313
FINANCIAL SERVICES - 3.69% of Total Net Assets
18,000 Bank of New York, Inc. .................................................... $ 639,000
14,386 Bank of Petaluma ... ...................................................... 323,685
5,000 Bear Stearns Companies, Inc. ............................................. 235,625
4,000 Morgan Stanley Dean Witter & Company ..................................... 347,250
8,000 Schwab (Charles) Corporation ............................................. 562,500
5,000 State Street Corporation ................................................. 357,500
-----------
$ 2,465,560
MANUFACTURING - 2.76% of Total Net Assets
3,000 Dana Corporation .......................................................... $ 123,375
4,000 Harley-Davidson, Inc. ..................................................... 208,000
5,000 Illinois Tool Works, Inc. ................................................ 301,563
8,000 Mattel, Inc. ............................................................. 181,500
2,000 NACCO Industries, Inc. Class A ........................................... 169,375
8,000 NACCO Industries, Inc. Class B ........................................... 677,500
6,000 Parker-Hannifin Corporation .............................................. 184,500
-----------
$ 1,845,813
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1999
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
OIL AND OILFIELD SERVICES - .48% of Total Net Assets
40,000 Frontier Oil Corporation (a) .............................................. $ 225,000
30,000 Parker Drilling Company (a) ............................................... 93,750
-----------
$ 318,750
PHARMACEUTICALS - 1.26% of Total Net Assets
7,000 Abbott Laboratories ....................................................... $ 325,063
3,000 Biogen, Inc. (a) .......................................................... 294,750
4,000 Genzyme Corporation (General Division) (a) ................................ 218,000
756 Genzyme Corporation Molecular Oncology (a) ................................. 2,033
1,245 Genzyme Corporation Tissue Repair (a) ..................................... 4,513
-----------
$ 844,359
RETAIL - .63% of Total Net Assets
4,000 Costco Companies, Inc. (a) ................................................ $ 331,500
6,000 Toys "R" Us, Inc. (a) ...................................................... 90,000
-----------
$ 421,500
TRANSPORTATION - 1.04% of Total Net Assets
8,000 ASA Holdings, Inc. ........................................................ $ 250,000
6,000 Kansas City Southern Industries, Inc. ..................................... 285,000
5,000 M. S. Carriers, Inc. (a) ................................................... 158,125
-----------
$ 693,125
MISCELLANEOUS - .66% of Total Net Assets
6,000 Lockheed Martin Corporation ............................................... $ 211,500
4,000 Temple-Inland, Inc. ....................................................... 228,250
-----------
$ 439,750
-----------
Total Aggressive Growth Stock Investments (Cost $3,749,143) $10,842,572
-----------
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1999
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
UNITED STATES TREASURY SECURITIES - 32.66% of Total Net Assets
$41,000,000 United States Treasury bond strips (Principal only) 5.556%, 05-15-18(e) ... $ 14,246,270
800,000 United States Treasury bonds 6.250%, 08-15-23 ............................ 898,920
1,000,000 United States Treasury notes 7.750%, 01-31-00 ............................ 1,030,020
2,000,000 United States Treasury notes 5.250%, 01-31-01 ............................ 2,024,460
1,100,000 United States Treasury bills 5.400%, 02-04-99 (e).......................... 1,099,340
2,600,000 United States Treasury bills 5.044%, 07-22-99 (e).......................... 2,537,340
------------
Total United States Treasury securities (Cost $23,506,893) $ 21,836,350
------------
Total Portfolio - 98.99% of total net assets (identified cost $62,238,944)(f) $ 66,181,126
Other assets, less liabilities (1.01% of total net assets) 673,659
------------
Net assets applicable to outstanding shares $ 66,854,785
============
<FN>
Note:(a) Non-income producing.
(b) Affiliated investment trust.
(c) Sponsored ADR.
(d) Market value determined by the Board of Directors.
(e) Interest rate represents yield to maturity.
(f) Aggregate cost for Federal income tax purposes was $54,194,820.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE TREASURY BILL PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1999
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
UNITED STATES TREASURY SECURITIES - 98.92% of Total Net Assets
$20,000,000 United States Treasury notes 5.500%, 02-28-99 ............................. $ 20,017,200
20,000,000 United States Treasury notes 6.250%, 03-31-99 ............................. 20,058,800
20,000,000 United States Treasury notes 6.375%, 04-30-99 ............................. 20,091,800
20,000,000 United States Treasury notes 6.250%, 05-31-99 ............................. 20,109,200
10,000,000 United States Treasury notes 6.000%, 06-30-99 ............................. 10,061,100
1,750,000 United States Treasury bills 5.400%, 02-04-99 (a) ......................... 1,748,950
------------
Total Portfolio - 98.92% of total net assets (identified cost $92,082,132)(b) $ 92,087,050
Other assets, less liabilities (1.08% of total net assets) 1,008,180
------------
Net assets applicable to outstanding shares $ 93,095,230
============
<FN>
Note:(a) Interest rate represents yield to maturity.
(b) Aggregate cost for Federal income tax purposes.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE VERSATILE BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1999
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
CORPORATE BONDS - 87.87% of Total Net Assets
AEROSPACE - 4.26% of Total Net Assets
$ 1,000,000 8.250% McDonnell Douglas Corporation, 07-01-00 ............................ $ 1,039,340
------------
$ 1,039,340
BEVERAGES - 4.22% of Total Net Assets
1,000,000 8.750% Anheuser-Busch Companies, Inc., 12-01-99 .......................... $ 1,028,570
------------
$ 1,028,570
BROADCASTING - 4.36% of Total Net Assets
1,000,000 8.875% Capital Cities / ABC, Inc., 12-15-00 ............................... $ 1,063,490
------------
$ 1,063,490
DATA PROCESSING - 4.16% of Total Net Assets
1,000,000 6.375% International Business Machines Corporation, 06-15-00 .............. $ 1,015,080
------------
$ 1,015,080
ELECTRIC UTILITIES - 8.49% of Total Net Assets
1,000,000 8.750% Pacific Gas & Electric Company, 01-01-01 ........................... $ 1,064,780
1,000,000 7.500% Southern California Edison Company, 04-15-99 ....................... 1,005,220
------------
$ 2,070,000
ELECTRICAL AND ELECTRONICS - 4.13% of Total Net Assets
1,000,000 6.750% Texas Instruments, Inc., 07-15-99 .................................. $ 1,007,320
------------
$ 1,007,320
FINANCIAL SERVICES - 8.30% of Total Net Assets
1,000,000 8.500% American General Finance Corporation, 06-15-99 ..................... $ 1,012,230
1,000,000 5.650% Ameritech Capital Funding Corporation, 01-15-01 .................... 1,009,970
------------
$ 2,022,200
INSURANCE - 4.14% of Total Net Assets
1,000,000 7.750% CitiGroup, Inc., 06-15-99 .......................................... $ 1,009,550
------------
$ 1,009,550
MANUFACTURING - 4.11% of Total Net Assets
1,000,000 6.375% Eaton Corporation, 04-01-99 ........................................ $ 1,001,990
------------
$ 1,001,990
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE VERSATILE BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1999
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
OIL AND OILFIELD SERVICES - 8.26% of Total Net Assets
$ 1,000,000 7.625% Baker Hughes, Inc., 02-15-99 ....................................... $ 1,001,270
1,000,000 6.250% Dresser Industries, Inc., 06-01-00 ................................ 1,013,160
------------
$ 2,014,430
PHARMACEUTICALS - 12.58% of Total Net Assets
1,000,000 7.700% American Home Products Corporation, 02-15-00 ....................... $ 1,024,950
1,000,000 9.250% Baxter International, Inc., 12-15-99 ............................... 1,032,010
1,000,000 5.875% Upjohn Company, 04-15-00............................................ 1,008,660
------------
$ 3,065,620
PUBLISHING - 4.14% of Total Net Assets
1,000,000 5.850% Gannett Company, Inc., 05-01-00 ................................... $ 1,008,090
------------
$ 1,008,090
RETAIL - 4.34% of Total Net Assets
1,000,000 9.875% May Department Stores, 06-15-00 ................................... $ 1,057,630
------------
$ 1,057,630
TELECOMMUNICATIONS - 12.38% of Total Net Assets
1,000,000 6.125% GTE Northwest, 02-15-99 ............................................ $ 1,000,880
1,000,000 6.150% New England Telephone & Telegraph Company, 09-01-99 ............... 1,006,620
1,000,000 6.125% Southwestern Bell Telephone Company, 03-01-00 ...................... 1,010,430
------------
$ 3,017,930
------------
Total Corporate bonds (Cost $21,389,082) $ 21,421,240
------------
UNITED STATES TREASURY SECURITIES - 13.29% of Total Net Assets
3,200,000 United States Treasury notes 5.250%, 01-31-01.............................. $ 3,239,136
------------
Total United States Treasury securities (Cost $3,236,849) $ 3,239,136
Total Portfolio - 101.16% of total net assets ------------
(identified cost $24,625,931)(a) $ 24,660,376
Liabilities, less other assets (1.16% of total net assets) (283,009)
------------
Net assets applicable to outstanding shares $ 24,377,367
============
<FN>
Note:(a) Aggregate cost for Federal income tax purposes.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1999
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
AGGRESSIVE GROWTH STOCK INVESTMENTS - 100.16% of Total Net Assets
CHEMICALS - 2.07% of Total Net Assets
12,000 Air Products & Chemicals, Inc. ............................................ $ 403,500
5,000 Wellman, Inc. ............................................................. 47,188
------------
$ 450,688
COMPUTER SOFTWARE - 4.84% of Total Net Assets
13,000 Autodesk, Inc. ............................................................ $ 574,438
9,450 Computer Associates International, Inc. ................................... 478,406
------------
$ 1,052,844
CONSTRUCTION - 4.99% of Total Net Assets
5,000 Fluor Corporation ......................................................... $ 190,625
15,000 Johns Manville Corporation ............................................... 268,125
24,000 Ryland Group, Inc. ........................................................ 627,000
------------
$ 1,085,750
DATA PROCESSING - 2.88% of Total Net Assets
8,000 Hewlett-Packard Company ................................................... $ 627,000
------------
$ 627,000
ELECTRICAL AND ELECTRONICS - 4.21% of Total Net Assets
5,400 Intel Corporation ........................................................ $ 761,063
12,000 National Semiconductor Corporation (a) .................................... 155,250
------------
$ 916,313
ENTERTAINMENT AND LEISURE - 9.91% of Total Net Assets
15,900 Disney (Walt) Company ..................................................... $ 524,700
9,000 Harcourt General, Inc. .................................................... 432,000
2,000 Promus Hotel Corporation (a) .............................................. 59,750
8,000 Tribune Company .......................................................... 511,500
7,500 Viacom, Inc. Class A (a) .................................................. 629,063
------------
$ 2,157,013
FINANCIAL SERVICES - 23.27% of Total Net Assets
20,800 Bank of New York, Inc. .................................................... $ 738,400
15,000 Bear Stearns Companies, Inc. .............................................. 706,875
8,000 Morgan Stanley Dean Witter & Company ...................................... 694,500
30,000 Schwab (Charles) Corporation .............................................. 2,109,375
11,400 State Street Corporation .................................................. 815,100
------------
$ 5,064,250
MANUFACTURING - 9.37% of Total Net Assets
8,400 Dana Corporation ......................................................... $ 345,450
10,000 Harley-Davidson, Inc. ..................................................... 520,000
8,600 Illinois Tool Works, Inc. ................................................. 518,688
12,583 Mattel, Inc. .............................................................. 285,477
12,000 Parker-Hannifin Corporation ............................................... 369,000
------------
$ 2,038,615
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1999
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
OIL AND OILFIELD SERVICES - 3.01% of Total Net Assets
105,200 Frontier Oil Corporation (a) .............................................. $ 591,750
20,000 Parker Drilling Company (a) ............................................... 62,500
------------
$ 654,250
PHARMACEUTICALS - 14.19% of Total Net Assets
8,000 Amgen, Inc. (a) .......................................................... $ 1,022,500
11,000 Biogen, Inc. (a) .......................................................... 1,080,750
7,000 Chiron Corporation (a) .................................................... 159,250
15,000 Genzyme Corporation (General Division) (a) ................................ 817,500
1,621 Genzyme Corporation Molecular Oncology (a) ................................ 4,356
1,170 Genzyme Corporation Tissue Repair (a) .................................... 4,238
------------
$ 3,088,594
RETAIL - 5.43% of Total Net Assets
13,000 Costco Companies, Inc. (a) ................................................ $ 1,077,375
7,000 Toys "R" Us, Inc. (a) ..................................................... 105,000
------------
$ 1,182,375
TRANSPORTATION - 11.38% of Total Net Assets
16,000 ASA Holdings, Inc. ........................................................ $ 500,000
21,000 Kansas City Southern Industries, Inc. ..................................... 997,500
20,100 M.S. Carriers, Inc. (a) ................................................... 635,663
37,500 Mesa Air Group, Inc. (a) ................................................. 344,531
------------
$ 2,477,694
MISCELLANEOUS - 4.61% of Total Net Assets
12,000 Browning-Ferris Industries, Inc. .......................................... $ 330,000
11,000 Lockheed Martin Corporation .............................................. 387,750
5,000 Temple-Inland, Inc. ....................................................... 285,313
------------
$ 1,003,063
------------
Total Portfolio - 100.16% of total net assets (identified cost $9,240,049)(b) $ 21,798,449
Liabilities, less other assets (.16% of total net assets) (34,204)
------------
Net assets applicable to outstanding shares $ 21,764,245
============
<FN>
Note:(a) Non-income producing.
(b) Aggregate cost for Federal income tax purposes.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES
Permanent Portfolio Family of Funds, Inc. (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a no-load,
open-end, series, investment management company. The Fund commenced
operations as the Permanent Portfolio, the Treasury Bill Portfolio, the
Versatile Bond Portfolio and the Aggressive Growth Portfolio on January 8,
1982, May 26, 1987, September 27, 1991 and January 2, 1990, respectively.
Investment operations in the Permanent Portfolio, the Treasury Bill
Portfolio, the Versatile Bond Portfolio and the Aggressive Growth Portfolio
commenced on December 1, 1982, September 21, 1987, November 12, 1991 and
May 16, 1990, respectively.
The following significant accounting policies are consistently followed by
the Fund in the preparation of its financial statements, and such policies
are in conformity with generally accepted accounting principles for
registered investment companies. The preparation of such financial
statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses earned and incurred,
respectively, during the reporting period. Actual results could differ from
those estimates.
Valuation of investments
Investments are valued at market. Securities for which market quotations
are readily available are valued at the latest sale price. Unlisted
securities or securities for which the most active market is
over-the-counter are valued at the mean between the closing bid and asked
prices. Swiss francs are valued at the closing spot price on the
International Monetary Market. Swiss Confederation bonds are valued at the
closing price in Zurich, Switzerland, converted into U.S. dollars at 4 p.m.
(Eastern Time). Investments in gold and silver are valued based on the
closing spot prices on the New York Commodity Exchange. Short-term
securities are valued at market daily. Investments for which there is no
active market are valued at fair value as determined by the Board of
Directors. At January 31, 1999, one such investment in the Permanent
Portfolio (1.03% of total net assets) was so valued.
Investment transactions and investment income
Investment transactions are accounted for on the date of purchase, sale or
maturity. Interest income is accrued daily and includes amortization of any
premium and discount for financial and tax reporting purposes. Dividend
income is recorded on the ex-dividend date. Realized gains and losses from
securities transactions and unrealized appreciation or depreciation of
investments are recorded on an identified cost basis for financial and tax
reporting purposes.
For the year ended January 31, 1999, investment income was earned as
follows:
<TABLE>
<CAPTION>
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------ ------------- -------------- -----------------
<S> <C> <C> <C> <C>
Interest on:
Corporate bonds .................... $ 6,795 $ - $ 1,220,723 $ -
Swiss franc assets ................. 279,191 - - -
United States Treasury securities .. 1,861,910 4,613,866 5,802 -
Other investments .................. 17,713 32,279 30,450 1,848
Dividends ............................ 532,212 - - 147,689
------------ ------------ ------------ -----------
$ 2,697,821 $ 4,646,145 $ 1,256,975 $ 149,537
============ ============ ============ ===========
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1999
Translation of foreign currencies
Amounts denominated in or expected to settle in foreign currencies are
translated into U.S. dollars on the following basis: (i) market value of
investment securities and other assets and liabilities are translated at
the closing rate of exchange at January 31, 1999; and (ii) purchases and
sales of investment securities, income and expenses are translated at the
rate of exchange prevailing on the respective dates of such transactions.
The Fund separately reports the portions of the results of operations
attributable to the effect of changes in foreign exchange rates on the
value of investments. Reported net realized gains or losses on foreign
currency transactions arise from sales of foreign currencies; foreign
currency gains or losses realized between the trade and settlement dates on
securities transactions; and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Fund's
books verses the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign currency gains or losses arise from changes in
the exchange rate applicable to cash, receivables and liabilities
denominated in foreign currencies at January 31, 1999.
Federal taxes
Each of the Fund's Portfolios will continue to be treated as a separate
regulated investment company and each Portfolio intends to qualify under
Subchapter M of the United States Internal Revenue Code of 1986, as amended
(the "Code"). Accordingly, no provision has been made for United States
income taxes, as each Portfolio intends to declare necessary dividend
distributions from investment company taxable income and net realized
capital gains, if any, to its shareholders prior to October 15, 1999,
pursuant to the requirements of the Code.
At January 31, 1999, capital loss carry forwards available to offset future
realized gains, if any, were as follows: $165,381 in the Treasury Bill
Portfolio, of which $1,752, $98,561, $41,743, $5,429, $3,632 and $14,264
expire on January 31, 2001, January 31, 2002, January 31, 2003, January 31,
2004, January 31, 2005 and January 31, 2007, respectively; $140,012 in the
Versatile Bond Portfolio, of which $86,614, $34,492 and $18,906 expire on
January 31, 2003, January 31, 2004 and January 31, 2006, respectively; and
$24,657 in the Aggressive Growth Portfolio, all of which expires on January
31, 2006. There were no capital loss carryforwards in the Permanent
Portfolio.
Pursuant to the Code, 14.49% of the distributions made from investment
company taxable income in 1998 by the Permanent Portfolio qualifies for the
corporate dividends received deduction.
During the year ended January 31, 1999, the Fund's Permanent Portfolio,
Treasury Bill Portfolio and Versatile Bond Portfolio incurred federal
excise taxes of $60,499, $117,587 and $17,126, respectively, which was
imposed on four percent of each Portfolio's undistributed income and
capital gains, if any. Such tax reduced the Portfolio's net asset value,
however, such undistributed income and capital gains were retained by the
Portfolio to earn further interest, dividends and profit.
Distributions
Distributions to shareholders from net investment income and realized gain
on investments, if any, are recorded on the ex-dividend date. The amount of
such distributions are determined in accordance with the Code which may
differ from generally accepted accounting principles. These differences
result primarily from different treatment of net investment income and
realized gains on certain investment securities held by the Fund's
Portfolios. During the year ended January 31, 1999, the Fund reclassified
from undistributed net investment income to paid-in capital, certain
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1999
book and tax basis differences relating to shareholder distributions,
totaling $122,848, $1,202,693 and $535,913 for the Permanent Portfolio, the
Treasury Bill Portfolio and the Versatile Bond Portfolio, respectively.
Additionally: in the Permanent Portfolio, $2,232 was reclassified from
accumulated net realized gain on investments to undistributed net
investment income; in the Treasury Bill Portfolio, $1,234 was reclassified
from accumulated net realized loss on investments to paid-in capital; and
in the Aggressive Growth Portfolio, $1,629 was reclassified from paid-in
capital to accumulated net realized loss on investments, due to these
differences.
Equalization
The Fund follows the accounting practice of equalization, by which a
portion of the proceeds from sales and a portion of the costs of
redemptions of shares of capital stock are allocated to undistributed net
investment income. The effect of this practice is to prevent the
calculation of net investment income per share from being affected by sales
or redemptions of shares in each Portfolio, and for periods of net
issuances of shares, allows undistributed net investment income to exceed
distributable investment company taxable income.
2. INVESTMENTS IN AFFILIATED ISSUERS
The Permanent Portfolio held 4,297 units of United States Gold Trust, an
affiliated investment trust, resulting in net unrealized depreciation of
$17,487 at January 31, 1999. The Permanent Portfolio received no income
from this investment during the year then ended.
3. INVESTMENT ADVISORY CONTRACT
In accordance with the terms of an Investment Advisory Contract (the
"Contract"), World Money Managers ("WMM"), the Fund's investment adviser,
receives a comprehensive advisory fee monthly (the "Advisory Fee"),
computed at the following annual rate: (i) for each Portfolio, 1/4 of 1% of
the first $200 million of the Portfolio's average daily net assets; plus
(ii) for the Fund as a whole: 7/8 of 1% of the first $200 million of the
Fund's average daily net assets; 13/16 of 1% of the next $200 million of
the Fund's average daily net assets; 3/4 of 1% of the next $200 million of
the Fund's average daily net assets; and 11/16 of 1% of the Fund's average
daily net assets in excess of $600 million, such fee for the Fund as a
whole to be allocated among the Portfolios in proportion to their net
assets.
All fees and expenses payable by the Fund pursuant to the Contract and
attributable only to one Portfolio are borne entirely by that Portfolio;
all other such fees and expenses are allocated among the Fund's Portfolios
in proportion to their net assets. Except for the Advisory Fee, the fees
and expenses of the Fund's directors, the salary expense of the Fund's
officers (including payments made by the Fund under its Long Term
Disability Plan described in Note 4), excise taxes and extraordinary
expenses as defined by the Contract, WMM pays or reimburses the Fund for
substantially all of the Fund's ordinary operating expenses out of its
Advisory Fee.
During the year ended January 31, 1999, WMM voluntarily agreed to waive
portions of the Advisory Fee allocable to the Treasury Bill Portfolio and
to the Versatile Bond Portfolio to the extent that either Portfolio's total
Advisory Fee otherwise would exceed an annual rate of 5/8 of 1%, in the
case of the Treasury Bill Portfolio, or 3/4 of 1%, in the case of the
Versatile Bond Portfolio, of the respective Portfolio's average daily net
assets. WMM may continue voluntarily to waive such fees, although it is not
required to do so, and reserves the right to revoke, reduce or change the
waiver prospectively upon five days written notice to the Fund.
WMM is a limited partnership of which one of the general partners is the
President and a director of the Fund and the other general partner is a
corporation wholly owned by the same individual.
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1999
4. LONG TERM DISABILITY PLAN
On March 9, 1998, the Fund's Board of Directors adopted the Permanent
Portfolio Family of Funds, Inc. Long Term Disability Plan (the "Plan"). The
Plan provides for payment by the Fund to any qualified officer of the Fund
who is totally disabled (a "Participant"), as defined by the Plan, a
disability benefit equal to 50% of the Participant's salary as of the time
the disability is determined, subject to cost-of-living adjustments, for a
period not to exceed five years. The Plan is renewable annually and may be
terminated by the Fund's Board of Directors at any time prior to each
annual renewal. On March 10, 1998, the Fund accrued an estimated liability
of $107,808 for one Participant under the Plan.
5. PURCHASES AND SALES OF SECURITIES
The following is a summary of purchases and sales of securities other than
short-term securities for the year ended January 31, 1999:
<TABLE>
<CAPTION>
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- -------------- -----------------
<S> <C> <C> <C> <C>
Purchases................................ $ 6,472,276 None $16,469,310 $ 554,062
Sales.................................... 9,048,885 None 14,433,040 2,937,283
</TABLE>
6. NET UNREALIZED APPRECIATION OF INVESTMENTS
<TABLE>
The following is a summary of net unrealized appreciation of investments at
January 31, 1999 for federal income tax purposes:
<CAPTION>
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- -------------- -----------------
<S> <C> <C> <C> <C>
Aggregate gross unrealized appreciation of
investments with excess of value over tax
cost:
Investments in securities of
unaffiliated issuers .................... $16,932,971 $ 7,157 $ 49,777 $12,768,630
Investments other than securities ....... 515,337 - - -
----------- -------- ----------- -----------
17,448,308 7,157 49,777 12,768,630
Aggregate gross unrealized depreciation
of investments with excess of tax cost
over value:
Investments in securities of unaffiliated
issuers ................................. (1,250,487) (2,239) (15,332) (210,230)
Investments other than securities........ (4,211,515) - - -
----------- -------- ----------- -----------
(5,462,002) (2,239) (15,332) (210,230)
----------- -------- ----------- -----------
Net unrealized appreciation
of investments $11,986,306 $ 4,918 $ 34,445 $12,558,400
=========== ======== =========== ===========
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1999
7. CAPITAL STOCK TRANSACTIONS
<TABLE>
Transactions in shares of each Portfolio's capital stock exclusive of
amounts allocated to undistributed net investment income were as follows
for the years ended January 31, 1999 and 1998:
<CAPTION>
Permanent Portfolio
---------------------------------------------------------------------------------
1999 1998
---------------------------------------- -------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Shares sold...................... 325,975 $ 5,316,770 267,705 $ 4,309,828
Distributions reinvested......... 142,118 2,651,913 124,147 2,324,036
------- ------------ ------- ------------
468,093 7,968,683 391,852 6,633,864
Shares redeemed.................. (620,388) (10,594,182) (632,375) (10,637,997)
------- ------------ ------- ------------
Net decrease (152,295) $ (2,625,499) (240,523) $ (4,004,133)
======= ============ ======= ============
</TABLE>
<TABLE>
<CAPTION>
Treasury Bill Portfolio
---------------------------------------------------------------------------------
1999 1998
---------------------------------------- -------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Shares sold...................... 719,836 $ 47,806,798 667,488 $ 43,964,269
Distributions reinvested......... 39,785 2,689,841 48,405 3,251,352
------- ------------ ------- ------------
759,621 50,496,639 715,893 47,215,621
Shares redeemed.................. (784,288) (52,149,375) (880,865) (57,996,734)
------- ------------ ------- ------------
Net decrease (24,667) $ (1,652,736) (164,972) $(10,781,113)
======= ============ ======= ============
</TABLE>
<TABLE>
<CAPTION>
Versatile Bond Portfolio
---------------------------------------------------------------------------------
1999 1998
---------------------------------------- --------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Shares sold...................... 409,669 $ 22,138,246 410,273 $ 21,564,778
Distributions reinvested......... 9,691 566,997 9,512 553,476
------- ------------ ------- ------------
419,360 22,705,243 419,785 22,118,254
Shares redeemed.................. (403,659) (21,805,506) (393,973) (20,789,895)
------- ------------ ------- ------------
Net increase 15,701 $ 899,737 25,812 $ 1,328,359
======= ============ ======= ============
</TABLE>
<TABLE>
<CAPTION>
Aggressive Growth Portfolio
---------------------------------------------------------------------------------
1999 1998
---------------------------------------- -------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Shares sold...................... 58,283 $ 3,529,499 195,149 $ 10,447,677
Distributions reinvested......... - - 18,011 1,021,204
------ ------------ ------- ------------
58,283 3,529,499 213,160 11,468,881
Shares redeemed.................. (98,311) (5,789,018) (181,840) (9,653,981)
------ ------------ ------- ------------
Net increase (decrease) (40,028) $ (2,259,519) 31,320 $ 1,814,900
====== ============ ======= ============
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1999
8. REGULATORY MATTERS
Following a routine examination of the Fund in 1991, the Securities and
Exchange Commission (the "Commission") instituted public administrative and
cease-and-desist proceedings on January 13, 1997, to determine the truth of
allegations by the Commission's Division of Enforcement (the "Division")
that WMM and two of the Fund's directors and officers (the "Respondents")
violated certain provisions of federal securities laws in fiscal years 1990
through 1992. The allegations include the following: that WMM, Terry Coxon
and Alan Sergy violated Section 206 of the Investment Advisers Act of 1940,
as amended, through conduct that included improper self-dealing at the
expense of the Fund; that WMM received excessive reimbursements under the
Fund's Marketing and Distribution Plan (the "Marketing Plan") during the
fiscal year ended January 31, 1991; that during fiscal years 1990 through
1992, the Fund's Board of Directors did not meet at the end of each quarter
to review the expenses incurred under the Marketing Plan and that the
reports thereon contained insufficient detail; and in April 1990, the
Permanent Portfolio acquired a "call option" prohibited by the Fund's
fundamental investment policies and managed the investment for the
advantage of a client of an officer of the Fund. No charges have been made
against the Fund. The Respondents have denied all of the allegations of the
Division and are contesting the proceedings. From May 5, 1997 through May
15, 1997, an administrative hearing on these charges was held before Chief
Administrative Law Judge Brenda P. Murray in San Francisco, California.
Thereafter, the Division and Respondents submitted post-hearing briefs and
the matter is currently under submission for decision. Pursuant to Maryland
law and the Fund's Bylaws, the Fund has agreed to continue to pay directly
on behalf of the Respondents, or to reimburse them, for certain expenses
incurred by them in connection with the proceedings, including expenses
paid by WMM to persons who are directors and officers of the Fund for
litigation support services. The Fund's management does not believe the
Fund will incur substantial additional expenses relating to this matter.
The Fund so paid or reimbursed the following expenses during the years
January 31, 1992 through 1999:
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- -------------- -----------------
1992 .... $ - $ - $ - $ -
1993 .... 52,331 63,961 - -
1994 .... - - - -
1995 .... 78,010 71,156 6,213 1,777
1996 .... 26,100 22,233 1,646 848
1997 .... 53,511 43,469 3,046 2,640
1998 .... 325,585 293,026 - 32,558
1999 .... 14,333 14,015 11,155 11,473
---------- ---------- ---------- ----------
$ 549,870 $ 507,860 $ 22,060 $ 49,296
========== ========== ========== ==========
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
<TABLE>
Financial highlights for the Permanent Portfolio
For each share of capital stock outstanding throughout each fiscal year:
<CAPTION>
Year ended Year ended Year ended Year ended
January 31, 1999 January 31, 1998 January 31, 1997 January 31, 1996
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 19.08 $ 18.40 $ 18.80 $ 16.51
--------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income ................ .47 .37 .52 .50
Net realized and unrealized gain (loss)
on investments and foreign
currencies ........................... - 1.01 (.41) 2.17
--------- --------- --------- ---------
Total income (loss) from
investment operations .47 1.38 .11 2.67
Less distributions from:
Net investment income ................ (.20) (.34) (.42) (.38)
Net realized gain on investments (1)... (.64) (.36) (.09) -
--------- --------- --------- ---------
Total distributions (.84) (.70) (.51) (.38)
--------- --------- --------- ---------
Net asset value, end of year $ 18.71 $ 19.08 $ 18.40 $ 18.80
========= ========= ========= =========
Total return (2) ......................... 2.48% 7.57% .57% 16.20%
Ratios / supplemental data:
Net assets, end of year (in thousands)... $ 66,855 $ 71,099 $ 72,992 $ 76,641
========= ========= ========= =========
Ratio of expenses to average net assets.. 1.43% 1.91% 1.49% 1.35%
Ratio of net investment income
to average net assets ................. 2.48% 1.96% 2.78% 2.85%
Portfolio turnover rate ................. 14.05% 7.66% 12.29% 9.96%
<FN>
(l) Capital gain distribution pursuant to Section 852(b)(3) of the Code.
(2) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended Year ended
January 31, 1995 January 31, 1994 January 31, 1993 January 31, 1992 January 31, 1991 January 31, 1990
- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S><C> <C> <C> <C> <C> <C>
$ 17.55 $ 15.36 $ 15.21 $ 15.10 $ 15.57 $ 15.00
--------- --------- --------- --------- --------- ---------
.64 .44 .49 .51 .64 .57
(1.46) 1.99 (.05) .51 (.63) -
--------- --------- --------- --------- --------- ---------
(.82) 2.43 .44 1.02 .01 .57
(.22) (.24) (.29) (.91) (.48) -
- - - - - -
--------- --------- --------- --------- --------- ---------
(.22) (.24) (.29) (.91) (.48) -
--------- --------- --------- --------- --------- ---------
$ 16.51 $ 17.55 $ 15.36 $ 15.21 $ 15.10 $ 15.57
========= ========= ========= ========= ========= =========
(4.65)% 15.86% 2.93% 7.01% .15% 3.80%
$ 71,610 $ 79,043 $ 65,937 $ 72,312 $ 80,542 $ 93,663
========= ========= ========= ========= ========= =========
1.32% 1.21% 1.25% 1.27% 1.36% 1.17%
2.63% 2.66% 3.20% 3.29% 4.22% 3.80%
31.24% 49.51% 70.77% 8.01% 31.58% 61.44%
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE TREASURY BILL PORTFOLIO
<TABLE>
Financial highlights for the Treasury Bill Portfolio
For each share of capital stock outstanding throughout each fiscal year:
<CAPTION>
Year ended Year ended Year ended Year ended
January 31, 1999 January 31, 1998 January 31, 1997 January 31, 1996
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 67.56 $ 67.55 $ 67.84 $ 66.40
---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (1) .................... 2.72 2.69 2.84 3.22
Net realized and unrealized gain (loss)
on investments (2) ........................... .03 .06 .01 .06
---------- ---------- ---------- ----------
Total income from investment operations 2.75 2.75 2.85 3.28
Less distributions from:
Net investment income ........................ (2.34) (2.74) (3.14) (1.84)
---------- ---------- ---------- ----------
Total distributions (2.34) (2.74) (3.14) (1.84)
---------- ---------- ---------- ----------
Net asset value, end of year $ 67.97 $ 67.56 $ 67.55 $ 67.84
========== ========== ========== ==========
Total return (3) ................................... 4.09% 4.09% 4.23% 4.95%
Ratios / supplemental data:
Net assets, end of year (in thousands) ......... $ 93,095 $ 94,200 $ 105,342 $ 114,667
========== ========== ========== ==========
Ratio of expenses to average net assets (1) ..... .96% 1.20% .90% .82%
Ratio of net investment income
to average net assets ......................... 4.01% 3.98% 4.19% 4.79%
<FN>
(l) Due to the waiver of advisory fees and, effective January 1, 1991 through
January 31, 1994, distribution expenses, the ratio of expenses to average
net assets was reduced by .50% for the year ended January 31, 1999 and
.50%, .50%, .50%, .50%, .49%, .47%, .48%, .47% and .62% for the years ended
January 31, 1998, 1997, 1996, 1995, 1994, 1993, 1992, 1991 and 1990,
respectively. Without this waiver, the net investment income per share
would have been $2.24 for the year ended January 31, 1999 and $2.19, $2.37,
$2.78, $2.12, $1.04, $1.28, $2.85, $3.85 and $3.96 for the years then
ended.
(2) Per share net realized and unrealized gains or losses on investments may
not correspond with the change in aggregate unrealized gains and losses in
the Portfolio's securities because of the timing of sales and repurchases
of the Portfolio's shares in relation to fluctuating market values for the
Portfolio.
(3) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended Year ended
January 31, 1995 January 31, 1994 January 31, 1993 January 31, 1992 January 31, 1991 January 31, 1990
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S><C> <C> <C> <C> <C> <C>
$ 64.81 $ 64.45 $ 64.99 $ 63.11 $ 59.35 $ 54.91
---------- ---------- ---------- ---------- ---------- ----------
2.65 1.53 1.68 3.26 4.20 4.36
(.39) (.09) .19 (.08) (.01) .08
---------- ---------- ---------- ---------- ---------- ----------
2.26 1.44 1.87 3.18 4.19 4.44
(.67) (1.08) (2.41) (1.30) (.43) -
---------- ---------- ---------- ---------- ---------- ----------
(.67) (1.08) (2.41) (1.30) (.43) -
---------- ---------- ---------- ---------- ---------- ----------
$ 66.40 $ 64.81 $ 64.45 $ 64.99 $ 63.11 $ 59.35
========== ========== ========== ========== ========== ==========
3.49% 2.24% 2.89% 5.05% 7.06% 8.09%
$ 121,666 $ 133,970 $ 179,888 $ 320,382 $ 207,889 $ 61,056
========== ========== ========== ========== ========== ==========
.82% .72% .73% .73% .83% .54%
3.57% 2.46% 2.97% 4.87% 6.74% 7.87%
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE VERSATILE BOND PORTFOLIO
<TABLE>
Financial highlights for the Versatile Bond Portfolio
For each share of capital stock outstanding throughout each fiscal period:
<CAPTION>
Year ended Year ended Year ended
January 31, 1999 January 31, 1998 January 31, 1997
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 58.58 $ 57.24 $ 56.85
--------- --------- ---------
Income from investment operations:
Net investment income (2) ............... 2.77 2.87 2.94
Net realized and unrealized gain (loss)
on investments (3) .................... (.08) .17 (.34)
--------- --------- ---------
Total income from investment operations 2.69 3.04 2.60
Less distributions from:
Net investment income ................... (2.44) (1.70) (2.21)
Net realized gain on investments (4)...... - - -
--------- --------- ---------
Total distributions (2.44) (1.70) (2.21)
--------- --------- ---------
Net asset value, end of period $ 58.83 $ 58.58 $ 57.24
========= ========= =========
Total return (5) ............................ 4.61% 5.33% 4.58%
Ratios / supplemental data:
Net assets, end of period (in thousands).... $ 24,377 $ 23,355 $ 21,345
========= ========= =========
Ratio of expenses to average net assets (2). 1.08% 1.01% .97%
Ratio of net investment income
to average net assets ................... 4.72% 4.95% 5.16%
Portfolio turnover rate ................... 68.21% 55.53% 102.29%
<FN>
* Computed on an annualized basis.
(l) The Versatile Bond Portfolio commenced investment operations November 12,
1991.
(2) Due to the waiver of advisory fees and through January 31, 1994,
distribution expenses, the ratio of expenses to average net assets was
reduced by .37% for the year ended January 31, 1999 and .38%, .38%, .37%,
.36%, .39%, .41% and .43% for the years ended January 31, 1998, 1997, 1996,
1995, 1994, 1993 and the period ended January 31, 1992, respectively.
Without this waiver, the net investment income per share would have been
$2.48 for the year ended January 31, 1999 and $2.59, $2.66, $2.65, $1.84,
$1.57, $1.77 and $2.13 for the years and the period then ended.
(3) Per share net realized and unrealized gains or losses on investments may
not correspond with the change in aggregate unrealized gains and losses in
the Portfolio's securities because of the timing of sales and repurchases
of the Portfolio's shares in relation to fluctuating market values for the
Portfolio.
(4) Capital gain distribution pursuant to Section 852(b)(3) of the Code.
(5) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Period ended
January 31, 1996 January 31, 1995 January 31, 1994 January 31, 1993 January 31, 1992(1)
- ---------------- ---------------- ---------------- ---------------- ------------------
<S><C> <C> <C> <C> <C>
$ 54.90 $ 54.76 $ 53.63 $ 50.58 $ 50.00
--------- --------- --------- --------- ---------
2.91 2.12 1.87 2.06 2.51
1.05 (.63) (.04) 1.00 (1.93)
--------- --------- --------- --------- ---------
3.96 1.49 1.83 3.06 .58
(2.01) (1.33) (.70) (.01) -
- (.02) - - -
--------- --------- --------- --------- ---------
(2.01) (1.35) (.70) (.01) -
--------- --------- --------- --------- ---------
$ 56.85 $ 54.90 $ 54.76 $ 53.63 $ 50.58
========= ========= ========= ========= =========
7.24% 2.74% 3.42% 6.05% 3.33%*
$ 20,137 $ 22,229 $ 35,682 $ 23,217 $ 596
========= ========= ========= ========= =========
.89% .86% .89% .89% 1.07%*
5.21% 3.84% 3.46% 3.86% 4.00%*
51.64% 74.62% 75.05% 224.95% 600.99%*
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
<TABLE>
Financial highlights for the Aggressive Growth Portfolio
For each share of capital stock outstanding throughout each fiscal period:
<CAPTION>
Year ended Year ended Year ended
January 31, 1999 January 31, 1998 January 31, 1997
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 56.24 $ 47.66 $ 40.65
---------- ---------- ----------
Income (loss) from investment operations:
Net investment income (loss) ............................ (.41) (.31) .26
Net realized and unrealized gain (loss)
on investments ........................................ 13.30 11.97 7.05
---------- ---------- ----------
Total income (loss) from investment operations 12.89 11.66 7.31
Less distributions from:
Net investment income ................................... - (.19) (.25)
Net realized gain on investments (2)...................... - (2.89) (.05)
---------- ---------- ----------
Total distributions - (3.08) (.30)
---------- ---------- ----------
Net asset value, end of period $ 69.13 $ 56.24 $ 47.66
========== ========== ==========
Total return (3) ............................................. 22.92% 24.41% 18.00%
Ratios / supplemental data:
Net assets, end of period (in thousands) ................... $ 21,764 $ 19,955 $ 15,417
========== ========== ==========
Ratio of expenses to average net assets ..................... 1.39% 1.46% 1.33%
Ratio of net investment income (loss) to average net assets.. (.65)% (.60)% .59%
Portfolio turnover rate ..................................... 2.73% 2.15% 21.32%
<FN>
* Computed on an annualized basis.
(l) The Aggressive Growth Portfolio commenced investment operations May 16,
1990.
(2) Capital gain distribution pursuant to Section 852(b)(3) of the Code.
(3) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended Period ended
January 31, 1996 January 31, 1995 January 31, 1994 January 31, 1993 January 31, 1992 January 31, 1991(1)
---------------- ---------------- ---------------- ---------------- ---------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
$ 31.61 $ 32.56 $ 26.63 $ 22.77 $ 18.35 $ 20.00
--------- --------- --------- --------- --------- ---------
(.02) (.01) .01 .02 .06 .13
10.68 (.89) 6.41 4.44 4.38 (1.78)
--------- --------- --------- --------- --------- ---------
10.66 (.90) 6.42 4.46 4.44 (1.65)
(.11) (.03) (.02) (.13) (.02) -
(1.51) (.02) (.47) (.47) - -
--------- --------- --------- --------- --------- ---------
(1.62) (.05) (.49) (.60) (.02) -
--------- --------- --------- --------- --------- ---------
$ 40.65 $ 31.61 $ 32.56 $ 26.63 $ 22.77 $ 18.35
========= ========= ========= ========= ========= =========
33.78% (2.75)% 24.25% 19.77% 24.21% (8.25)%*
$ 11,067 $ 6,758 $ 7,201 $ 3,596 $ 2,577 $ 1,151
========= ========= ========= ========= ========= =========
1.19% 1.23% 1.20% 1.12% 1.18% 1.07%*
(.06)% (.04)% .02% .12% .23% .64%*
18.94% 26.29% 29.83% 25.62% 53.18% 36.88%*
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
Permanent Portfolio (PP)
(Graph omitted, see description on page 35)
Versatile Bond Portfolio (VBP)
(Graph omitted, see description on page 35)
Aggressive Growth Portfolio (AGP)
(Graph omitted, see description on page 35)
See following page for explanation of graphs.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
The graphs on the preceding page compare the initial account value and
subsequent account values at the end of each of the most recently completed
ten fiscal years of the Permanent Portfolio and each of the most recently
completed fiscal years since the commencement of investment operations for
the Aggressive Growth Portfolio and the Versatile Bond Portfolio, assuming
a $10,000 investment in the Portfolio at the beginning of the first fiscal
year and reinvestment of all dividends and distributions, to a $10,000
investment over the same periods in the following broad-based securities
market indexes: for the Permanent Portfolio, 3-month Treasury bills from
the weekly releases of Selected Interest Rates from the Federal Reserve;
for the Versatile Bond Portfolio, 180-day rates on certificates of deposit
from the Dow Jones News Retrieval Service; and for the Aggressive Growth
Portfolio, the Dow Jones Industrial Average, which is an average of the
stock prices of 30 large companies and represents an unmanaged portfolio. A
graph is not provided for the Treasury Bill Portfolio because it is a money
market portfolio. The tables below show each of the Fund's Portfolio's
average annual total returns for the periods indicated, assuming a
hypothetical investment in shares of $1,000, reinvestment of all dividends
and distributions, deduction of all fees and expenses except the $35
one-time account start-up fee and complete redemption of the investment at
the end of the period. Past performance is not predictive of future
performance.
<TABLE>
<CAPTION>
Permanent Portfolio(1) Treasury Bill Portfolio (2)(5)
- --------------------------------------- ------------------------------------
<S><C> <C> <C>
1 year ended January 31, 1999 2.42% 1 year ended January 31, 1999 4.04%
5 years ended January 31, 1999 4.13% 5 years ended January 31, 1999 4.10%
10 years ended January 31, 1999 4.92% 10 years ended January 31, 1999 4.52%
15 years ended January 31, 1999 4.95% 11 years 250 days ended
16 years 62 days ended January 31, 1999 4.67%
January 31, 1999 4.89%
Aggressive Growth Portfolio(3) Versatile Bond Portfolio (4)(6)
- --------------------------------------- ------------------------------------
<C> <C> <C> <C>
1 year ended January 31, 1999 22.86% 1 year ended January 31, 1999 4.56%
5 years ended January 31, 1999 18.54% 5 years ended January 31, 1999 4.83%
9 years 29 days end 7 years 127 days ended
January 31, 1999 16.35% January 31, 1999 4.71%
</TABLE>
- -----------------------
(1) The Permanent Portfolio commenced operations on December 1, 1982.
(2) The Treasury Bill Portfolio commenced operations on May 26, 1987.
(3) The Aggressive Growth Portfolio commenced operations on January 2, 1990.
(4) The Versatile Bond Portfolio commenced operations on September 27, 1991.
(5) Yield on the Treasury Bill Portfolio for the seven days ended February 1 ,
1999, assuming reinvestment of all dividends and distributions and
deduction of all fees and expenses except the $35 one-time account start-up
fee, was 4.61%, and effective yield was 4.71%.
(6) The 30-day SEC standardized yield for the Versatile Bond Portfolio at
January 31, 1999, calculated by dividing the net investment income per
share earned during the specified 30-day period by the net asset value per
share on the last day of the period and annualizing the resulting figure,
and assuming reinvestment of all dividends and distributions and deduction
of all fees and expenses except the $35 one-time account start-up fee, was
3.38.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
Management's Discussion and Analysis
Permanent Portfolio
The Permanent Portfolio's investment objective is to preserve and increase
the purchasing power of its shares over the long term. The Portfolio
invests fixed target percentages of its net assets in gold, silver, Swiss
franc assets, stocks of real estate and natural resource companies,
aggressive growth stocks and dollar assets such as United States Treasury
securities. The strong performance of U.S. stocks, particularly growth
stocks, as well as strength in the bond and silver markets throughout 1998
were substantially offset by weakness in shares of natural resource
companies, gold assets and the relative value of the Swiss franc.
Accordingly, the Portfolio achieved a total return of 2.48% for the year
ended January 31, 1999, as compared to an inflation rate of 1.67% during
the year then ended.
Treasury Bill Portfolio
The Treasury Bill Portfolio's investment objective is to achieve high
current income, consistent with safety and liquidity of principal. It
invests in short-term United States Treasury securities. The Portfolio
achieved a total return of 4.09% and maintained an average maturity of
between 60 and 90 days throughout the year ended January 31, 1999. This
return was consistent with other money market funds that invest primarily
in short-term United States Treasury securities.
Versatile Bond Portfolio
The Versatile Bond Portfolio's investment objective is to achieve high
current income while limiting risk to principal. It invests in a
diversified portfolio of short-term corporate bonds rated "A" or higher by
Standard & Poor's. The Portfolio achieved a total return of 4.61% while
maintaining an average maturity of between 270 and 450 days throughout the
year ended January 31, 1999. This return was consistent with other mutual
funds that invest primarily in corporate bonds of similar safety, liquidity
and maturity.
Aggressive Growth Portfolio
The Aggressive Growth Portfolio's investment objective is to achieve high
long-term appreciation. It is fully invested at all times in a diversified
portfolio of domestic stocks and stock warrants selected for high profit
potential. The Portfolio achieved a total return of 22.92% for the year
ended January 31, 1999, as compared to 20.32% for the Dow Jones Industrial
Average and 31.44% for the Standard and Poor's 500 Stock Index during the
year then ended.
<PAGE>
This page intentionally left blank.
<PAGE>
INVESTMENT ADVISER The
World Money Managers PERMANENT
Terry Coxon, General Partner PORTFOLIO
625 Second Street Family of Funds
Petaluma, California 94952
CONSULTANTS TO THE FUND
Harry Browne
Douglas Casey
TRANSFER AGENT
Chase Global Funds Services Company
P.O. Box 2798
Boston, Massachusetts 02208
(for overnight delivery services,
73 Tremont Street
Boston, Massachusetts 02108)
1-800-341-8900
In Mass. 1-617-557-8000
CUSTODIAN
State Street Bank and Trust Company
Boston, Massachusetts 02105
INDEPENDENT AUDITORS
KPMG LLP
Three Embarcadero Center
San Francisco, California 94111
INVESTOR'S INFORMATION OFFICE
P.O. Box 5847 ANNUAL REPORT
Austin, Texas 78763 January 31, 1999
1-800-531-5142 Nationwide
Local 1-512-453-7558
