<PAGE> 1
- --------------------------------------------------------------------------------
PLAN INVESTMENT FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 1997
ADMINISTRATOR
---------------------------------------------------
Health Plans
===================================================
CAPITAL SERVICES
CORP [CSC LOGO]
225 N. Michigan * Chicago, IL 60601 * (312)297-6372
<PAGE> 2
PLAN INVESTMENT FUND, INC.
PRESIDENT'S LETTER
August 9, 1997
Fellow Investors:
On behalf of the Board of Trustees, I am pleased to submit the 1997 Semi-Annual
Report for Plan Investment Fund, Inc. Average assets declined modestly during
the first half of the year, in some cases reflecting reduced profitability and
cash flow at many Blue Cross Blue Shield Plans. As indicated in the
accompanying table of comparative returns, each of the Portfolios continued to
provide competitive returns while maintaining their high quality guidelines.
The bullish fundamentals of fixed income markets became more apparent in the
second quarter. The budget deficit appears to have shrunk dramatically, the
Federal Reserve has remained friendly and inflation statistics are the lowest
in a generation. With this backdrop, bond investors drove rates down across
the yield spectrum.
At its April meeting, the Board of Trustees adopted a modest investment
guideline change for the Short-Term Portfolio. The performance measurement
guidelines were changed to reflect a change in the neutral duration position of
the Portfolio. The neutral duration position was extended to nine months from
six months. During periods when the yield curve has a positive slope, this
change should provide additional yield over the Government/Repo Portfolio,
Money Market Fund Portfolio, and other similar alternatives. During periods of
declining interest rates, this change enables the Portfolio to maintain higher
yields. The Short Term Portfolio should be considered for potential additional
income opportunities from your short term assets.
The Plan Investment Fund Portfolios continue in the tradition of dependable,
high quality investment vehicles operated in a cost efficient manner. We look
forward to serving your investment needs.
Sincerely,
Philip A. Goss
President and Chief Executive Officer
<PAGE> 3
COMPARATIVE PERFORMANCE: ANNUALIZED TOTAL RETURN
<TABLE>
<CAPTION>
Periods Ended Three Six One From
June 30, 1997 Months Months Year Inception *
----------------------------------- ------ ------ ----- -----------
<S> <C> <C> <C> <C>
PIF GOVERNMENT/REPO PORTFOLIO 5.56% 5.48% 5.44% 5.58%
Donoghues Inst. Money Market Avg. 5.30% 5.22% 5.18% 5.30%
Repurchase Agreements 5.64% 5.53% 5.50% 5.65%
PIF MONEY MARKET PORTFOLIO 5.50% 5.43% 5.40% 6.00%
Donoghues Inst. Money Market Avg. 5.30% 5.22% 5.18% 5.80%
Repurchase Agreements 5.64% 5.53% 5.50% 6.00%
PIF SHORT-TERM PORTFOLIO 6.50% 5.55% 5.63% 6.12%
6 Month U.S. Treasury Bill Index 5.44% 5.41% 5.41% 5.88%
1 - 3 Year U.S. Treasury Note Index 9.16% 5.90% 6.57% 7.14%
* Inception dates
6/01/95: Government/REPO Portfolio 3/11/87: Money Market Portfolio,
Short-Term Portfolio
PORTFOLIO CHARACTERISTICS
<CAPTION>
Closing Closing
Average Closing Average Average
Portfolio/Month Yield Price Maturity Quality
- --------------- ------- ------- -------- -------
<S> <C> <C> <C> <C>
GOVERNMENT/REPO PORTFOLIO
April 5.40% $1.00 1 Day A1+
May 5.41% $1.00 3 Days A1+
June 5.46% $1.00 1 Day A1+
MONEY MARKET PORTFOLIO
April 5.31% $1.00 47 Days A1+
May 5.36% $1.00 43 Days A1+
June 5.44% $1.00 58 Days A1+
SHORT-TERM PORTFOLIO
April 5.41% $9.93 5.3 Months AA+
May 5.52% $9.94 9.6 Months AAA
June 5.60% $9.95 10.9 Months AA+
</TABLE>
<PAGE> 4
STATEMENT OF NET ASSETS
(Unaudited)
GOVERNMENT/REPO PORTFOLIO
June 30, 1997
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
GOVERNMENT AGENCY OBLIGATIONS 73.8%
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation
6.00% (7/01/97) $95,000 $ 95,000,000
------------
(Cost $95,000,000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 26.8%
- --------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette
5.90% (7/01/97)
(Collateralized by $20,157,000 U.S.
Treasury Bill, 6.125%; due 9/30/00;
Market Value $20,419,041)
(Cost $20,000,000) 20,000 20,000,000
Morgan Stanley & Co.
6.20% (7/01/97)
(Collateralized by $11,121,000 U.S.
Treasury Bill, 12.375%; due 5/14/04;
Market Value $14,913,002)
(Cost $14,500,000) 14,500 14,500,000
------------
TOTAL REPURCHASE AGREEMENTS 34,500,000
------------
(Cost $34,500,000)
TOTAL INVESTMENTS IN SECURITIES..... 100.6% 129,500,000
(Cost $129,500,000*)
LIABILITIES IN EXCESS OF OTHER ASSETS (0.6%) (762,568)
----- ------------
</TABLE>
<PAGE> 5
STATEMENT OF NET ASSETS
GOVERNMENT/REPO PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF
NET ASSETS VALUE
---------- ------------
<S> <C> <C>
NET ASSETS (Applicable to 128,737,432
PCs outstanding) 100.0% $128,737,432
====== ============
NET ASSET VALUE, offering and
redemption price per PC
($128,737,432/128,737,432 PCs) $1.00
============
</TABLE>
* Aggregate cost for Federal tax purposes.
See accompanying notes to financial statements.
<PAGE> 6
STATEMENT OF NET ASSETS
(Unaudited)
MONEY MARKET PORTFOLIO
June 30, 1997
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
COMMERCIAL PAPER 82.4%
- --------------------------------------------------------------------------------
AGRICULTURAL SERVICES.................. 6.4%
Cargill Financial Services, Corp.
5.67% (12/29/97) $20,000 $19,429,850
Golden Peanut Co.
5.59%-5.63% (8/05/97-9/02/97) 9,670 9,591,217
-----------
29,021,067
-----------
BANKS.................................. 8.4%
National City Credit Corp.
5.62% (8/20/97-9/02/97) 19,000 18,827,340
Norwest Financial, Inc.
5.57% (12/09/97) 20,000 19,501,793
-----------
38,329,133
-----------
BOOKS: PUBLISHING & PRINTING.......... 1.4%
McGraw-Hill, Inc.
5.60% (9/02/97) 6,500 6,436,300
-----------
CHEMICALS & ALLIED PRODUCTS............ 2.2%
Bayer Corp.
5.54% (9/23/97) 10,000 9,870,733
----------
CUTLERY & HARDWARE.................... 4.4%
Gillette Co.
6.15% (7/01/97) 20,000 20,000,000
-----------
FINANCE LESSORS....................... 3.5%
General Electric Capital Corp.
5.70% (2/02/98) 15,000 14,487,000
Pitney Bowes Credit Corp.
5.37% (7/21/97) 1,650 1,645,078
-----------
16,132,078
-----------
</TABLE>
<PAGE> 7
STATEMENT OF NET ASSETS
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C> <C>
MOTOR VEHICLES & CAR BODIES........... 3.3%
Daimler-Benz North America Corp.
5.46%-5.61% (8/04/97-10/08/97) $15,065 $14,853,794
-----------
PERSONAL CREDIT INSTITUTIONS.......... 16.9%
American General Finance Corp.
5.63%-5.67% (7/07/97-10/06/97) 25,000 24,833,150
Associates Corp. of North America
5.68% (7/30/97) 16,000 15,926,791
Ford Motor Credit Corp.
5.60%-5.62% (7/21/97-12/08/97) 21,554 21,344,045
Household Finance Corp.
5.64% (7/17/97) 15,000 14,962,400
-----------
77,066,386
-----------
PETROLEUM REFINING................... 8.8%
Koch Industries, Inc.
6.15% (7/01/97) 20,000 20,000,000
Shell Oil Co.
6.15% (7/01/97) 20,000 20,000,000
-----------
40,000,000
-----------
PIPE LINES ........................... 0.9%
Colonial Pipeline Co.
5.30%-5.32% (8/14/97-8/18/97) 4,000 3,972,863
-----------
SECURITY BROKERS & DEALERS............ 14.1%
Credit Suisse First Boston Inc.
5.44% (9/10/97) 18,000 17,806,880
Goldman Sachs Group L.P.
5.65% (11/04/97) 23,000 22,545,175
Merrill Lynch & Co.
5.40%-5.70% (7/09/97-11/17/97) 24,000 23,783,925
-----------
64,135,980
-----------
SERVICES - AUTO RENT & LEASE.......... 4.3%
PHH Corp.
5.63% (8/22/97) 20,000 19,837,356
-----------
SERVICES - EQUIPMENT RENT & LEASE..... 3.3%
International Lease Finance Corp.
5.63% (8/06/97) 14,500 14,418,365
-----------
</TABLE>
<PAGE> 8
STATEMENT OF NET ASSETS
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C> <C>
SHORT-TERM BUSINESS CREDIT.............. 4.5%
Asset Securitization Cooperative Corp.
5.43% (7/08/97) $15,000 $ 14,984,163
Caterpiller Financial Service Corp.
5.56% (9/15/97) 5,415 5,351,440
------------
20,335,603
------------
TOTAL COMMERCIAL PAPER 374,409,658
(Cost $374,409,658) ------------
- --------------------------------------------------------------------------------
VARIABLE RATE OBLIGATIONS 13.8%
- --------------------------------------------------------------------------------
BANKS................................... 8.3%
Bank of America National Trust & Savings
5.55% (7/01/97) 20,000 19,984,505
CoreStates Bank, N.A.
5.6575% (7/29/97) 18,000 18,000,000
------------
37,984,505
------------
SECURITY BROKERS & DEALERS.............. 5.5%
Bear Stearns Companies Inc.
5.79% (8/07/97) 25,000 25,000,000
------------
TOTAL VARIABLE RATE OBLIGATIONS 62,984,505
(Cost $62,984,505) ------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 4.3%
- --------------------------------------------------------------------------------
Morgan Stanley & Co.
6.20% (7/01/97)
(Collateralized by $19,725,000 U.S.
Treasury Note, 6.50%; due 4/30/99;
Market Value $20,105,583)
(Cost $19,700,000) 19,700 19,700,000
------------
</TABLE>
<PAGE> 9
STATEMENT OF NET ASSETS
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF
NET ASSETS VALUE
---------- -------------
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES......... 100.5% $457,094,163
(Cost $457,094,163*)
LIABILITIES IN EXCESS OF OTHER ASSETS... (0.5%) (2,179,454)
------ ------------
NET ASSETS (Applicable to 454,912,527
PCs outstanding) 100.0% $454,914,709
====== ============
NET ASSET VALUE, offering and
redemption price per PC
($454,914,709 / 454,912,527 PCs) $1.00
=====
</TABLE>
* Aggregate cost for Federal tax purposes.
See accompanying notes to financial statements.
<PAGE> 10
STATEMENT OF NET ASSETS
(Unaudited)
SHORT-TERM PORTFOLIO
June 30, 1997
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 15.8%
- --------------------------------------------------------------------------------
U.S. Treasury Notes
6.00%-6.375 (9/30/98-5/31/99) $7,630 $7,654,659
----------
(Cost $7,637,033)
- --------------------------------------------------------------------------------
GOVERNMENT AGENCY OBLIGATIONS 16.3 %
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation
Mortgage Pass-Throughs
5.95%-6.50% (6/19/98-6/1/02) 7,900 7,894,656
----------
(Cost $7,889,105)
- --------------------------------------------------------------------------------
ASSET BACKED SECURITIES 7.8%
- --------------------------------------------------------------------------------
Capital Equipment Receivables Trust
5.60% (10/15/97) 340 339,942
Ford Credit Grantor Trust
4.30% (9/29/97) 511 508,392
Ford Credit Motor Trust 95-A
5.90% (3/30/98) 315 315,045
Premier Auto Trust 95-2A5
7.15% (9/30/97) 2,637 2,642,669
----------
TOTAL ASSET BACKED SECURITIES 3,806,048
(Cost $3,827,581) ----------
</TABLE>
<PAGE> 11
STATEMENT OF NET ASSETS
SHORT-TERM PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT 9.3%
- --------------------------------------------------------------------------------
Wachovia Bank N.C.
6.15% (5/06/98) $2,500 $2,500,825
Morgan (J.P.) & Co., Inc.
5.73% (8/12/97) 2,000 1,999,720
----------
TOTAL CERTIFICATES OF DEPOSIT 4,500,545
(Cost $4,499,526) ----------
- --------------------------------------------------------------------------------
COMMERCIAL PAPER 30.2%
- --------------------------------------------------------------------------------
BEVERAGES........................... 4.2%
Pepsico, Inc.
5.47% (7/02/97) 2,035 2,034,691
----------
CHEMICALS........................... 4.6%
Air Products & Chemicals, Inc.
5.58% (7/21/97) 2,260 2,252,877
----------
FINANCIAL SECURITIES BROKERS........ 4.9%
Bear Stearns Companies, Inc.
5.53% (7/07/97) 2,375 2,372,811
----------
FINANCIAL SERVICES.................. 4.1%
Motorola Credit Corp.
5.50% (8/25/97) 2,000 1,982,914
----------
FIRE AND CASUALTY INSURANCE......... 2.1%
USAA Capital Corp.
5.62% (7/21/97) 1,025 1,021,746
----------
INSURANCE (LIFE)................... 2.0%
MetLife Funding Corp.
5.53% (8/12/97) 980 973,679
----------
PAPER AND FOREST PRODUCTS........... 3.6%
Pitney Bowes Inc.
5.57% (7/15/97) 1,770 1,766,102
----------
</TABLE>
<PAGE> 12
STATEMENT OF NET ASSETS
SHORT-TERM PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ------ ----------
<S> <C> <C> <C>
PUBLISHING............................................................ 4.7%
Gannett Co., Inc.
5.50% (8/19/97) $2,295 $ 2,277,532
-----------
TOTAL COMMERCIAL PAPER 14,682,352
(Cost $14,683,152) -----------
- ------------------------------------------------------------------------------------------------------------------
FIXED RATE OBLIGATIONS 25.2%
- ------------------------------------------------------------------------------------------------------------------
AUTOMOBILES.......................................................
General Motors Acceptance Corp.
6.20%-7.85% (11/17/97-12/07/98) 4.8% 2,300 2,308,776
-----------
BANKS............................................................. 4.1%
FCC National Bank
6.05% (11/04/98) 2,000 1,995,500
-----------
OFFICE EQUIPMENT.................................................. 3.5%
IBM Credit Corp.
5.93% (3/18/98) 1,700 1,698,844
-----------
SECURITY BROKERS & DEALERS........................................ 8.2%
Dean Witter Discover & Co.
6.00% (3/01/98) 2,000 2,000,620
Merrill Lynch & Co.
6.64% (4/09/99) 2,000 2,008,840
-----------
4,009,460
SERVICES - EQUIPMENT LEASING...................................... 4.6%
International Lease Finance Corp.
5.37% (2/02/98) 2,250 2,242,620
-----------
TOTAL FIXED RATE OBLIGATIONS 12,255,200
-----------
(Cost $12,260,958)
TOTAL INVESTMENTS IN SECURITIES............. 104.6% 50,793,460
(Cost $50,797,355*)
LIABILITIES IN EXCESS OF OTHER ASSETS... ( 4.6%) (2,231,042)
--------- -----------
</TABLE>
<PAGE> 13
STATEMENT OF NET ASSETS
SHORT-TERM PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF
NET ASSETS VALUE
---------- -----------
<S> <C> <C>
NET ASSETS (Applicable to 4,880,709
PCs outstanding) 100.0% $48,562,418
========== ===========
NET ASSET VALUE, offering and redemption
price per PC ($48,562,418/ 4,880,709 PCs) $9.95
===========
</TABLE>
* Aggregate cost for Federal tax purposes.
The aggregate gross unrealized appreciation
or depreciation for all securities is as
follows: excess of value over tax cost
$38,978 excess of tax cost over value
$42,873.
See accompanying notes to financial statements.
<PAGE> 14
STATEMENTS OF OPERATIONS
(Unaudited)
SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
GOVERNMENT/REPO MONEY MARKET SHORT-TERM
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ----------- ----------
<S> <C> <C> <C>
INTEREST INCOME $4,714,765 $14,126,724 $1,584,540
---------- ----------- ----------
EXPENSES
Investment advisory fee 173,414 439,551 80,405
Administration fee 43,354 127,272 13,936
Custodian 14,328 26,418 5,277
Transfer agent 1,644 16,438 919
Audit 4,222 12,406 1,363
Insurance 4,375 12,880 1,414
Legal 3,484 10,238 1,126
Trustee expenses 2,315 6,799 748
Professional services 3,674 3,792 282
Printing 721 2,120 233
Service Agent 0 0 50,000
Miscellaneous 197 786 56
SEC registration fee 0 0 0
Fees waived (164,997) (5,668) ( 72,144)
------------ ----------- ----------
Total expenses 86,731 653,032 83,615
------------ ----------- ----------
NET INVESTMENT INCOME 4,628,034 13,473,692 1,500,925
NET REALIZED GAIN (LOSS) ON SECURITIES SOLD 0 4,097 (51,085)
UNREALIZED APPRECIATION OF SECURITIES 0 0 48,432
------------ ----------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 4,628,034 $13,477,789 $1,498,272
============ =========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 15
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
GOVERNMENT/REPO PORTFOLIO
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
----------------- -----------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
OPERATIONS:
Net investment income $ 4,628,034 $ 5,579,782
Net realized gain (loss) on securities sold 0 0
----------------- -----------------
Net increase in net assets
resulting from operations 4,628,034 5,579,782
----------------- -----------------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.0264
and $.053 per PC (4,628,034) (5,579,782)
----------------- -----------------
CAPITAL TRANSACTIONS:
Proceeds from sale of 1,042,604,927 1,042,604,927 1,417,722,752
and 1,417,722,752 PCs
Value of 1,271,531 and 1,568,583 PCs 1,271,531 1,568,583
issued in reinvestment of dividends
Cost of 1,071,521,000 and 1,381,988,959
PCs repurchased (1,071,521,000) (1,381,988,959)
----------------- -----------------
Increase (decrease) in net assets derived
from capital transactions (27,644,542) 37,302,376
----------------- -----------------
Total increase (decrease) in net assets (27,644,542) 37,302,376
NET ASSETS:
Beginning of period 156,381,974 119,079,598
----------------- -----------------
End of period $128,737,432 $156,381,974
================= =================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 16
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
----------------- -------------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
OPERATIONS:
Net investment income $13,473,692 $34,545,603
Net realized gain (loss) on securities sold 4,097 (1,915)
----------------- -------------------
Net increase in net assets
resulting from operations 13,477,789 34,543,688
----------------- -------------------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.0263
and $.052 per PC (13,473,692) (34,545,603)
----------------- -------------------
CAPITAL TRANSACTIONS:
Proceeds from sale of 2,060,520,715
and 6,250,634,449 PCs 2,060,520,715 6,250,634,449
Value of 9,595,480 and 18,322,446 PCs
issued in reinvestment of dividends 9,595,480 18,322,446
Cost of 2,140,077,448 and 6,329,059,211
PCs repurchased (2,140,077,448) (6,329,059,211)
----------------- -------------------
Increase (decrease) in net assets derived
from capital transactions (69,961,253) (60,102,316)
----------------- -------------------
Total increase (decrease) in net assets (69,957,156) (60,104,231)
NET ASSETS:
Beginning of period 524,871,865 584,976,096
----------------- -------------------
End of period $454,914,709 $524,871,865
================= ===================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 17
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
SHORT-TERM PORTFOLIO
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
----------------- -----------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
OPERATIONS:
Net investment income $1,500,925 $3,849,874
Net realized gain (loss) on securities sold (51,085) (114,232)
Unrealized appreciation (depreciation)
of securities 48,432 (323,685)
----------------- -----------------
Net increase in net assets
resulting from operations 1,498,272 3,411,957
----------------- -----------------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.267
and $.542 per PC (1,500,925) (3,849,874)
----------------- -----------------
CAPITAL TRANSACTIONS:
Proceeds from sale of 60,302
and 3,710,897 PCs 600,000 37,000,000
Value of 125,972 and 259,814 PCs
issued in reinvestment of dividends 1,251,976 2,587,864
Cost of 2,337,269 and 3,330,380
PCs repurchased (23,227,053) (33,132,139)
----------------- -----------------
Increase (decrease) in net assets derived
from capital transactions (21,375,077) 6,455,725
----------------- -----------------
Total increase (decrease) in net assets (21,377,730) 6,017,808
NET ASSETS:
Beginning of period 69,940,148 63,922,340
----------------- -----------------
End of period $48,562,418 $69,940,148
================= =================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 18
FINANCIAL HIGHLIGHTS
(Unaudited)
GOVERNMENT/REPO PORTFOLIO
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
SIX MONTHS YEAR 6/1/95(1)
ENDED ENDED THROUGH
6/30/97 12/31/96 12/31/95
------------ -------- -----------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $ 1.00
------------ -------- -----------
Income From Investment Operations:
Net Investment Income .026 .053 .034
Net Realized Gain (Loss) on Investments 0 0 0
------------ -------- -----------
Total From Investment Operations .026 .053 .034
------------ -------- -----------
Less Distributions:
Dividends to PC holders from
Net Investment Income (.026) (.053) (.034)
Distributions to PC holders from
Net Capital Gains 0 0 0
------------ -------- -----------
Total Distributions (.026) (.053) (.034)
------------ -------- -----------
Net Asset Value, End of Period $1.00 $1.00 $1.00
============ ======== ===========
Total Return 5.48% (3) 5.42% 5.99% (3)
Ratios/Supplemental Data:
Net Assets, End of Period (000) $128,737 $156,382 $119,080
Ratio of Expenses to Average
Net Assets(2) .10% (3) .10% .10% (3)
Ratio of Net Investment Income
to Average Net Assets 5.34% (3) 5.29% 5.78% (3)
</TABLE>
- ---------------
(1) From June 1, 1995 commencement of operations
(2) Without the waiver of advisory and administration fees (see Note C), the
ratio of expenses to average daily net assets would have been .29% for the
six months ended June 30, 1997 and .29% and .30% for the fiscal periods
ended December 31, 1996 and 1995, respectively.
(3) Annualized
<PAGE> 19
FINANCIAL HIGHLIGHTS
(Unaudited)
MONEY MARKET PORTFOLIO
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
---------- --------- -------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------- ------- ------- ------- ------- -------
Income From Investment Operations:
- ---------------------------------------
Net Investment Income .026 .052 .058 .041 .030 .037
Net Realized Gain (Loss) on Investments 0 0 0 0 0 0
--------- ------- -------- ------ ------- --------
Total From Investment Operations .026 .052 .058 .041 .030 .037
--------- ------- -------- ------ ------- ---------
Less Distributions:
- ---------------------------------------
Dividends to PC holders from
Net Investment Income (.026) (.052) (.058) (.041) (.030) (.037)
Distributions to PC holders from
Net Capital Gains 0 0 0 0 0 0
-------- ------- -------- ------- ------- ------
Total Distributions (.026) (.052) (.058) (.041) (.030) (.037)
-------- ------- ------- ------- ------- -----
Net Asset Value, End of Period $1.00 $1.00 $1.00 $ 1.00 $1.00 $1.00
======== ======= ======== ======= ======= ======
Total Return 5.43%(2) 5.38% 5.97% 4.21% 3.07% 3.73%
Ratios/Supplemental Data:
- ---------------------------------------
Net Assets, End of Period (000) $454,915 $524,872 $584,976 $451,367 $474,838 $390,581
Ratio of Expenses to Average
Net Assets(1) .26%(2) .23% .24% .26% .24% .23%
Ratio of Net Investment Income
to Average Net Assets 5.29%(2) 5.24% 5.82% 4.15% 3.02% 3.68%
</TABLE>
- ------------------
(1) Without the waiver of advisory and administration fees (see Note C), the
ratios of expenses to average daily net assets would have been .24%, .25%
and .24% for the fiscal periods ended December 31, 1996, December 31, 1995
and December 31, 1992, respectively.
(2) Annualized
<PAGE> 20
FINANCIAL HIGHLIGHTS
(Unaudited)
SHORT-TERM PORTFOLIO
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
----------- ------------ ------------ -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.95 $10.00 $9.93 $10.03 $10.05 $10.09
----------- ------------ ------------ -------- --------- ---------
Income From Investment Operations:
Net Investment Income .267 .542 .599 .440 .377 .443
Net Realized and Unrealized
Gain (Loss) on Investments 0 (.050) .070 (.100) (.009) (.034)
----------- ------------ ------------ -------- ---------- -------
Total From Investment Operations .267 .492 .669 .340 .368 .409
----------- ------------ ------------ -------- --------- ------
Less Distributions:
Dividends to PC holders from
Net Investment Income (.267) (.542) (.599) (.440) (.377) (.443)
Distributions to PC holders from
Net Capital Gains 0 0 0 0 (.011) (.006)
----------- ------------ ------------ -------- --------- ---------
Total Distributions (.267) (.542) (.599) (.440) (.388) (.449)
----------- ------------ ------------ -------- --------- ---------
Net Asset Value, End of Period $9.95 $9.95 $10.00 $9.93 $10.03 $10.05
=========== ============ ============ ======== ========= =========
Total Return 5.55% (3) 5.08% 6.92% 3.46% 3.72% 4.13%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $48,562 $69,940 $63,922 $103,240 $186,808 $195,579
Ratio of Expenses to Average
Net Assets(1) .30%(3) .30% .30% .30% .30% .30%
Ratio of Net Investment Income
to Average Net Assets 5.39%(3) 5.43% 6.00% 4.29% 3.74% 4.29%
Portfolio Turnover Rate(2) 79.5%(3) 119.0% 64.8% 47.6% 34.1% 37.6%
</TABLE>
- ---------------
(1) Without the waiver of advisory, service agent and administration fees
(see note C), the ratios of expenses to average daily net assets would
have been .56% for the six months ended June 30, 1997 and .48%, .43%,
.37%, .32% and .37% respectively, for the fiscal periods ended December
31, 1996,1995, 1994, 1993 and 1992.
(2) Excludes security purchases with a maturity of less than one year.
(3) Annualized
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
A. Plan Investment Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified open-end
regulated investment company. The Fund consists of three separate
portfolios, the Government/REPO Portfolio, the Money Market Portfolio and
the Short-Term Portfolio (the "Portfolio(s)"). The Fund is authorized to
issue five billion Participation Certificates ("PCs"), par value $.001 per
PC. The Fund presently offers three classes of PCs as follows: the
Government/REPO Portfolio - one billion PCs authorized, the Money Market
Portfolio - two billion PCs authorized and the Short-Term Portfolio - one
billion PCs authorized.
B. Significant accounting policies relating to the Fund are as follows:
Security Valuation - Government/REPO Portfolio and Money Market Portfolio:
Securities are valued under the amortized cost method, which approximates
current market value. Under this method, securities are valued at cost
when purchased and thereafter a constant proportionate amortization of any
discount or premium is recorded until maturity or sale of the security.
Security Valuation - Short-Term Portfolio: Securities for which market
quotations are readily available (other than debt securities with remaining
maturities of 60 days or less) are valued at the most recent quoted bid
price provided by investment dealers. Debt securities with remaining
maturities of 60 days or less are valued on an amortized cost basis (unless
the Board determines that such basis does not represent fair value at that
time).
Securities Transactions and Investment Income - Securities transactions are
recorded on the trade date. Realized gains and losses on investments sold
are recorded on the identified cost basis. Interest income is recorded on
the accrual basis.
Dividends to Participation Certificate Holders - Dividends of net
investment income of the Portfolios declared daily and paid monthly.
Dividends payable are recorded on the dividend record date. The Portfolios
intend, subject to the use of offsetting capital loss carry-forwards, to
distribute net realized short- and long-term capital gains, if any, once
each year.
Federal Income Taxes - No provision is made for federal taxes as it is each
Portfolio's intention to continue to qualify as a regulated investment
company and to make the requisite distributions to Participation
Certificate Holders which will be sufficient to relieve each Portfolio from
all, or substantially all, federal income and excise taxes. At June 30,
1997 the Short-Term Portfolio had capital loss carry-forwards amounting to
$871,994 and $114,232 that expire in 2002 and 2003, respectively. These
loss carry-forwards are available to offset possible future capital gains
of the Short-Term Portfolio.
Repurchase Agreements - Each Portfolio may agree to purchase money market
instruments from financial institutions such as banks and broker-dealers
subject to the seller's agreement to repurchase them at an agreed upon date
and price ("repurchase agreements"). Collateral for the repurchase
agreement is required on a daily basis to maintain the value of the
securities subject to the agreement at not less than the repurchase price.
The seller under a repurchase agreement is required on a daily basis to
maintain the value of the securities subject to the agreement at not less
than the repurchase price. The agreement is conditioned upon the
collateral being deposited under the Federal Reserve book entry system or
held in a separate account by the Fund's custodian or an authorized
securities depository.
Estimated Maturities - The maturity of collateralized mortgage obligations
and other asset backed securities may vary due to prepayments of principal.
The maturity dates for these securities are estimates based on historic
prepayment factors.
Variable Rate Obligations - For variable rate obligations, the interest
rate presented is as of June 30, 1997 and the maturity shown is the date of
the next interest readjustment.
Management Estimates - The preparation of financial statements requires the
use of management estimates.
<PAGE> 22
C. The Fund has entered into agreements for advisory, administrative,
service agent, custodian and transfer agent services as follows:
Government/REPO Portfolio and Money Market Portfolio - PNC Institutional
Management Corporation ("PIMC"), an indirectly wholly owned subsidiary of
PNC Bank, National Association ("PNC Bank"), serves as the Portfolios'
investment advisor and service agent. As compensation for its services the
Portfolios pay PIMC a fee, computed daily and paid monthly, at the
following rate: .20% of the first $250 million, .15% of the next $250
million, .12% of the next $250 million, .10% of the next $250 million, and
.08% of amounts in excess of $1 billion.
Short-Term Portfolio - Neuberger & Berman ("N&B"), a New York limited
partnership, serves as the Portfolio's investment advisor. As compensation
for its services, the Portfolio pays N&B a fee, computed daily and paid
monthly, at the following rate: .30% of the first $50 million, .20% of the
next $50 million, .15% of the next $150 million, and .10% of amounts in
excess of $250 million.
Health Plans Capital Services Corp. ("CSC") serves as the Fund's
administrator and acts generally in a supervisory capacity with respect to
the Fund's overall operations and relations with holders of PCs. As
compensation for its services each Portfolio pays CSC a fee, computed daily
and payable monthly at an annual rate not to exceed .05% of the average
daily net assets of each of the Fund's Portfolios.
PNC Bank acts as custodian of the Fund's assets and PFPC Inc. ("PFPC"), an
affiliate of PNC Bank, acts as the Fund's transfer agent and dividend
disbursing agent. In addition, PIMC serves as the Short-Term Portfolio
service agent. PNC Bank, PIMC and PFPC receive fees from the Fund for
serving in these capacities.
PIMC and N&B have agreed contractually to reduce their advisory fees
otherwise payable to them in 1997 by the Money Market Portfolio and the
Short-Term Portfolio, respectively, to the extent necessary to reduce the
ordinary operating expenses of both Portfolios individually so that they do
not exceed 0.30 of one percent (0.30%) of each Portfolio's average net
assets for the year. Under these contractual agreements, N&B waived
$44,307 of such fees for the period ended June 30, 1997. PIMC voluntarily
waived $24,731 of service agent fees and CSC voluntarily waived $3,106 of
administrator fees payable by the Short-Term Portfolio during this period.
In addition, PIMC voluntarily waived $4,251 and $136,657 of advisory fees
and CSC voluntarily waived $1,417 and $28,340 of administrator fees payable
by the Money Market Portfolio and Government/REPO Portfolio, respectively,
during this period.
D. At June 30, 1997, net assets consisted of:
<TABLE>
<CAPTION>
Government/REPO Money Market Short-Term
Portfolio Portfolio Portfolio
--------------- ------------ -------------
<S> <C> <C> <C>
Capital paid in.................... $128,737,432 $454,912,527 $49,603,624
Accumulated realized gain (loss) on
security transactions............ - 2,182 (1,037,311)
Net unrealized depreciation of
investments...................... - - ( 3,895)
--------------- ------------ -------------
$128,737,432 $454,914,709 $48,562,418
=============== ============ =============
</TABLE>
E. Short-Term Portfolio purchases and sales of investment securities, other
than short-term investments, were $18,770,064 and $9,641,554 respectively,
and purchases and sales of U.S. Government securities were $15,769,584 and
$9,529,682 respectively, for the period ended June 30, 1997.
<PAGE> 23
ANNUAL MEETING OF PARTICIPATION CERTIFICATE HOLDERS
(Unaudited)
The 1997 Plan Investment Fund, Inc. Annual Meeting of Participation Certificate
holders was held on April 22, 1997. At this meeting the Participation
Certificate holders elected the slate of Trustee nominees recommended by the
Board of Trustees and ratified the selection of Coopers & Lybrand L.L.P. as the
independent certified public accountants for the fiscal year ending December
31, 1997. A total of 524,917,945.118 Participation Certificates, representing
84.7% of the Participation Certificates eligible to be voted at the meeting,
were voted as follows:
<TABLE>
<CAPTION>
For Against Abstain
--------------- ------- -------
<S> <C> <C> <C>
Election of Trustee nominees 524,917,945.118 0 0
Ratification of independent
certified public accountants 524,917,945.118 0 0
</TABLE>
<PAGE> 24
PLAN INVESTMENT FUND, INC.
225 N. Michigan
Chicago, Illinois 60601
(312) 297-6372
TRUSTEES
ALBERT F. ANTONINI CHARLES R. LONG
President and Senior Vice President,
Chief Executive Officer Chief Financial Officer
Blue Cross and Blue Shield and Treasurer
of Central New York, Inc. Highmark, Inc.
PHILLIP A. GOSS DAVID M. MURDOCH
President and Executive Vice President
Chief Executive Officer Blue Cross and Blue Shield
Plan Investment Fund, Inc. Association
Health Plans Capital
Services Corp. THOMAS J. WARD
President and
GENE HOLCOMB Chief Executive Officer
President Blue Cross of Northeastern
Blue Cross and Blue Shield Pennsylvania
of Tennessee-Memphis
SHERMAN M. WOLFF
STEVEN L. HOOKER Senior Vice President, Finance
Chief Financial Officer and and Sales
Treasurer Health Care Service Corporation
The Regence Group
RONALD F. KING
President and
Chief Executive Officer
Blue Cross and Blue Shield
of Oklahoma
INVESTMENT ADVISORS
GOVERNMENT/REPO PORTFOLIO SHORT-TERM PORTFOLIO
AND MONEY MARKET PORTFOLIO Neuberger & Berman
PNC Institutional Management Corporation New York, New York
Wilmington, Delaware
