<PAGE> 1
--------------------------
PLAN INVESTMENT FUND, INC.
ANNUAL REPORT
DECEMBER 31, 1998
ADMINISTRATOR:
---------------------------------------------------
Health Plans
================
CAPITAL SERVICES [CSC LOGO]
CORP
225 N. Michigan - Chicago, IL 60601 - (312)297-6372
<PAGE> 2
February 5, 1999
Fellow Investors:
On behalf of the Board of Trustees, I am pleased to submit the 1998 Annual
Report of Plan Investment Fund, Inc. As shown on the accompanying tables, the
Portfolios continue to provide competitive returns and the highest quality
ratings.
Plan Investment Fund provides tailored investment vehicles to the members of the
Blue Cross Blue Shield System. From its beginning, Plan Investment Fund has
focused on the fundamentals of high quality standards, competitive returns and
excellent customer service. For the past twelve years, we have focused on
nurturing and extending its most important asset - the trust and confidence of
its investors.
Our success has many champions. The Board of Trustees' oversight goes largely
unnoticed but is, in fact, the backbone of Plan Investment Fund. The Trustees'
in-depth knowledge of our investors' business complements their unwavering
commitment to the Fund's operations. BlackRock Investment Management Company
and Neuberger Berman have supported our vision with excellent investment
management during a period when many mutual funds with household names suffered
missteps as they stretched too far for yield. PFPC and Health Plans Capital
Services Corp. deliver on Plan Investment Fund's high service standards in their
respective roles as transfer agent and administrator.
I am proud of our record at Plan Investment Fund. I have always kept your
interests paramount. Thank you for your trust, confidence and friendship.
Looking ahead, Plan Investment Fund will be successful by stressing conservative
investment policies and vigorous cost containment, with the objective of
producing maximum return within prudent risk parameters.
Sincerely,
/s/ Philip A. Goss
-------------------------------------
Philip A. Goss
President and Chief Executive Officer
<PAGE> 3
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
COMPARATIVE PERFORMANCE: ANNUALIZED TOTAL RETURN
- -----------------------------------------------------------------------------------------------
Periods Ended Three One Five Ten From
December 31, 1998 Months Year Years Years Inception*
- -------------------- -------- ------ ------- ------- ------------
<S> <C> <C> <C> <C> <C>
GOVERNMENT/REPO PORTFOLIO 5.02% 5.48% - - 5.57%
Donoghues Inst. Money Market Avg. 4.88% 5.21% - - 5.29%
Repurchase Agreements 4.99% 5.46% - - 5.55%
MONEY MARKET PORTFOLIO 5.12% 5.42% 5.30% 5.70% 5.93%
Donoghues Inst. Money Market Avg. 4.88% 5.21% 5.06% 5.49% 5.73%
Repurchase Agreements 4.99% 5.46% 5.32% 5.66% 5.86%
SHORT-TERM PORTFOLIO 4.48% 5.86% 5.18% 6.11% 6.12%
6 Month Treasury Bill 5.01% 5.29% 5.29% 5.67% 5.82%
1 - 3 Year Treasury Note Index 3.05% 7.00% 5.99% 7.38% 7.14%
</TABLE>
* Inception dates:
- --------------------
6/01/95 - Government/REPO Portfolio; 3/11/87 - Money Market and Short-Term
Portfolios
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS
- --------------------------------------------------------------------------------
Closing Closing
Average Closing Average Average
Portfolio/Month Yield Price Maturity Quality
- -------------------- ------- ------- ---------- ---------
GOVERNMENT/REPO PORTFOLIO
October 5.02% $ 1.00 2 Days A1+
November 4.90% $ 1.00 1 Day A1+
December 4.79% $ 1.00 4 Days A1+
MONEY MARKET PORTFOLIO
October 5.16% $ 1.00 56 Days A1+
November 4.98% $ 1.00 63 Days A1+
December 4.88% $ 1.00 54 Days A1+
SHORT-TERM PORTFOLIO
October 5.31% $10.01 9.9 Months AA+
November 5.16% $10.00 9.8 Months AAA
December 5.09% $10.00 9.1 Months AAA
<PAGE> 4
- -------------------------------------------------------------------------------
REPORT FROM THE MONEY MARKET AND GOVERNMENT/REPO PORTFOLIO ADVISOR
- -------------------------------------------------------------------------------
U.S. government obligations were the clear beneficiary of the financial
turbulence that characterized global markets in 1998. Short-term treasury and
agency securities witnessed a precipitous drop in yields that pushed three-month
Treasury bills to as low as 3.65%, down from over 5.00% one year ago. The
thirty-year bond declined to a record low yield of 4.69%, from almost 6.40% last
year. The reasons for the strong rally in government securities were many. The
financial crisis in Asia last year spread around the world to South America,
Latin America and especially Russia, where a devaluation of their currency and a
default on debt made the situation appear particularly ominous this past summer.
As the threat of global economic slowdowns reaching the U.S. mounted, the
Federal Reserve began an aggressive campaign to maintain liquidity in the
financial system. Between September 29th and November 17th, the Fed reduced the
federal funds rate three times, in 25 basis point increments, to 4.75%.
Early in the year, the Money Market Portfolio sought to take advantage of a
positively sloped yield curve. The Portfolio kept its average weighted maturity
in the 50-60 day range by buying in the six-month area at yields near
5.55-5.65%. With growing expectations of Fed easing, the Portfolio kept its
average maturity in a moderately extended position. Credit quality became a key
area of focus, as global troubles impacted the financial services industry, both
foreign and domestic. Therefore, we restricted quite a few issuers during the
last two quarters of the year. At year-end, assets in the Money Market
Portfolio were $488 million versus $414 million a year earlier. The Portfolios'
total return for the year was 5.42% versus 5.21% for the IBC Total
Institutions-Only category.
The Government/REPO Portfolio adhered to its policy of investing substantially
all its assets in overnight investments. The Portfolio's repurchase agreements
were collateralized by U.S. Treasury obligations and the repo counterparties
were analyzed for their credit quality. For 1998, the Portfolio produced a
total return of 5.48%, while finishing the year with assets of $124 million.
We enter 1999 with positive feelings about the markets. The economy should
remain healthy and inflation shows no signs of becoming a problem. As we said
last year, the global markets are the key. We expect the Federal Reserve to
remain vigilant and to ease money policy if global recessions spread toward the
U.S.
Thomas H. Nevin
Managing Director
BlackRock Institutional Management Corporation
<PAGE> 5
- -------------------------------------------------------------------------------
REPORT FROM THE SHORT-TERM PORTFOLIO ADVISOR
- -------------------------------------------------------------------------------
"All's Well That Ends Well." Shakespeare's quotation applies perfectly to 1998.
In fact, 1998's terrific returns, combined with 1997's, have rewarded fixed
income investors with the best back to back rally since 1991. After a brief
period in September, when the market's heart momentarily stopped, the Federal
Reserve took dramatic steps to provide liquidity. After a few tense moments and
plenty of headlines, the market righted itself and ended the year on a strong
note.
The corporate sector experienced a difficult 1998, reflecting the dramatically
reduced supply of Treasury debt and concerns about the possibility of
deteriorating global fundamentals which were compounded by technical factors
resulting from the unwinding of leveraged hedge funds. This led to corporate
securities under-performing comparable duration treasuries. However, a
supportive Federal Reserve came to the rescue with rate cuts in September,
October, and November. Stability and a modest reversal of widening swap and
corporate spreads returned liquidity to the capital markets, resulting in
corporates outperforming treasuries. Given historically wide spreads for a
non-recession environment, and an accommodative Fed, we continue to be
moderately constructive on the corporate sector, although some continued
volatility is expected. Our corporate sector investments were 11% of the
portfolio at year end. We will continue our rigorous credit monitoring process,
which is all the more important in these turbulent markets. The yield advantage
of our high quality commercial paper over Treasury debt was reflected in our 36%
weighting in this sector.
The mortgage sector also suffered during the difficult August-September period,
particularly in light of the sharp rally in Treasuries that sparked pre-payment
fears. The confluence of these factors widened the average pass through yield
spread over treasuries. However, by December, as the tone of the market
improved, mortgages recovered most of their ground. Overall, the sector
under-performed comparable treasuries. We maintained a small, 3%, commitment to
this sector. The asset-backed sector, once the darling of the fixed income
market, witnessed vanishing liquidity and virtually no new issuance in the
fourth quarter. Here our exposure was 4%.
Our conservative strategy and careful sector and security selection added to our
performance in 1998 as we dodged many bullets and did well with our high
Treasury and Agency commitments. As we enter 1999, inflation is at its lowest
level in three decades and economic conditions appear to be balanced. However,
rates are at historical lows, and with the dawning of the Euro, money flows from
different regions can make the fixed income markets choppy in 1999. Therefore,
in a very low interest rate environment with little margin for error, it will be
our challenge to select attractive sectors, find values and, most importantly,
deliver fixed income returns that are competitive, keeping in mind our mandate
of low risk to principal.
Josephine Mahaney
Senior Portfolio Manager
Neuberger Berman
<PAGE> 6
GROWTH OF $10,000 INVESTMENT
JANUARY 1, 1989 TO DECEMBER 31, 1998
[GRAPH]
Past Performance is Not
Predictive of Future Performance
Annualized Total Return
-----------------------
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years Inception
------ ------- -------- ---------
<S> <C> <C> <C> <C>
Short-Term Portfolio 5.86% 5.18% 6.11% 6.12%
</TABLE>
<PAGE> 7
STATEMENT OF NET ASSETS
-----------------------
GOVERNMENT/REPO PORTFOLIO
-------------------------
December 31, 1998
-----------------
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
------------ ---------- -------------
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY OBLIGATIONS 80.2%
- -----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation
Discount Notes
4.70% (1/04/99)
(Cost $99,960,833) $ 100,000 $ 99,960,833
-------------
- -----------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 20.4%
- -----------------------------------------------------------------------------------------------------
Morgan Stanley & Co.
5.47% (1/04/99)
To be repurchased at $25,515,498
(Collateralized by $25,585,000 U.S. Treasury
Note, 5.78%; due 2/28/99;
Market Value $26,140,527) 25,500 25,500,000
-------------
(Cost $25,500,000)
TOTAL INVESTMENTS IN SECURITIES 100.6% 125,460,833
(Cost $125,460,833*)
LIABILITIES IN EXCESS OF OTHER ASSETS (0.6%) (774,553)
---------- -------------
NET ASSETS (APPLICABLE TO 124,686,280
PCs outstanding) 100.0% $ 124,686,280
========== =============
NET ASSET VALUE, offering and
redemption price per PC
($124,686,280/124,686,280 PCs) $ 1.00
=============
</TABLE>
* Aggregate cost for Federal tax purposes.
See accompanying notes to financial statements.
<PAGE> 8
STATEMENT OF NET ASSETS
-----------------------
MONEY MARKET PORTFOLIO
----------------------
December 31, 1998
-----------------
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
------------ --------- -------------
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY OBLIGATIONS 22.4%
- ----------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank
Discount Notes
4.50% (1/04/99) $ 30,000 $ 29,988,749
------------
Federal Home Loan Mortgage Corporation
Discount Notes
4.70% (1/04/99) 79,340 79,308,925
------------
TOTAL GOVERNMENT AGENCY OBLIGATIONS 109,297,674
------------
(Cost $109,297,674)
- ----------------------------------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT 6.6%
- ----------------------------------------------------------------------------------------------------------------
Chase Manhattan Corp.
5.73% (5/17/99) 7,000 6,998,445
First Tennessee Bank
5.65% (3/02/99) 10,000 9,999,012
Fleet National Bank N.A.
5.07% (4/09/99) 15,000 15,000,000
------------
TOTAL CERTIFICATES OF DEPOSIT 31,997,457
------------
(Cost $31,997,457)
- ----------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER 51.2%
- ----------------------------------------------------------------------------------------------------------------
AGRICULTURAL SERVICES 3.1%
Archer Daniels Midland Co.
5.06% (2/02/99) 15,000 14,932,533
------------
ASSET BACKED SECURITIES 8.6%
Corporate Asset Funding Corp.
5.15% (1/11/99) 15,000 14,978,542
CXC Inc.
5.05% (3/15/99) 10,000 9,897,597
Enterprise Funding Corp.
5.22% (1/27/99) 2,149 2,140,898
Windmill Funding
5.50% (1/28/99) 15,000 14,938,125
------------
41,955,162
------------
</TABLE>
<PAGE> 9
STATEMENT OF NET ASSETS
-----------------------
MONEY MARKET PORTFOLIO
----------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
------------ ------------- -------------
<S> <C> <C> <C>
BUSINESS CREDIT INSTITUTIONS 3.0%
General Electric Corp.
4.94% (3/16/99) $ 15,000 $ 14,847,683
-------------
CHEMICALS & ALLIED PRODUCTS 1.6%
Great Lakes Chemical Corp.
5.10% (1/04/99) 7,700 7,696,728
-------------
COMPUTER & OFFICE EQUIPMENT 3.0%
Xerox Corp.
4.97% (4/06/99) 15,000 14,803,271
-------------
LIFE INSURANCE 3.1%
Prudential Funding Corp.
5.15% (3/12/99) 15,000 14,849,792
-------------
MOTOR VEHICLES & CAR BODIES 3.0%
Daimler-Benz North America Corp.
4.90% (5/03/99) 15,000 14,750,917
-------------
MOTORS & GENERATORS 3.1%
Emerson Electric Co.
5.32% (3/10/99) 15,000 14,849,267
-------------
PERSONAL CREDIT INSTITUTIONS 6.0%
Associates Corp. of North America
4.85% (6/04/99) 15,000 14,688,792
Ford Motor Credit Corp.
4.85% (6/22/99) 15,000 14,652,417
-------------
29,341,209
-------------
PHARMACEUTICAL PREPARATIONS 3.0%
Johnson & Johnson
4.75% (5/06/99) 15,000 14,752,604
-------------
PIPE LINES 2.6%
Colonial Pipeline Co.
4.95% (3/26/99) 13,000 12,849,850
-------------
SECURITY BROKERS & DEALERS 3.0%
Goldman Sachs Group
4.85% (6/11/99) 15,000 14,674,646
-------------
</TABLE>
<PAGE> 10
STATEMENT OF NET ASSETS
-----------------------
MONEY MARKET PORTFOLIO
----------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C> <C>
SHORT-TERM BUSINESS CREDIT 8.1%
American Express Credit Corp.
5.32% (2/25/99) $15,000 $ 14,878,083
Paccar Financial Corp.
4.73% (5/27/99) 10,000 9,808,172
Penney (J.C.) Funding Corp.
5.15% (1/14/99) 15,000 14,972,104
------------
39,658,359
------------
TOTAL COMMERCIAL PAPER 249,962,021
(Cost $249,962,021) ------------
- -----------------------------------------------------------------------------
VARIABLE RATE OBLIGATIONS 7.6%
- -----------------------------------------------------------------------------
BANKS 2.5%
Banc One Corp.
5.166% (3/18/99) 12,000 11,999,910
------------
BEVERAGES 3.1%
Pepsico
5.209% (2/19/99) 15,000 14,989,334
------------
SERVICES - MISCELLANEOUS AMUSEMENT 2.0%
Walt Disney Co.
5.034% (1/26/99) 10,000 9,998,584
------------
TOTAL VARIABLE RATE OBLIGATIONS 36,987,828
(Cost $36,987,828) ------------
- -----------------------------------------------------------------------------
REPURCHASE AGREEMENTS 12.4%
- -----------------------------------------------------------------------------
Merrill Lynch
5.00% (1/04/99)
To be repurchased at $22,012,222
(Collateralized by $23,675,447
Federal Home Loan Mortgage
Corporation Adjustable Rate
Notes and Federal National
Mortgage Association Adjustable
Rate Notes, 3.84% to 6.26%;
due from 12/25/00 to 9/15/26;
Market Value $22,660,381) 22,000 22,000,000
</TABLE>
<PAGE> 11
STATEMENT OF NET ASSETS
-----------------------
MONEY MARKET PORTFOLIO
----------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
------------ --------- -------------
<S> <C> <C> <C>
Morgan Stanley & Co.
5.47% (1/04/99)
To be repurchased at $38,823,582
(Collateralized by $40,500,000 U.S.
Treasury Bill; due on 7/01/99;
Market Value $39,594,987) $ 38,800 $ 38,800,000
-------------
TOTAL REPURCHASE AGREEMENTS 60,800,000
-------------
(Cost $60,800,000)
TOTAL INVESTMENTS IN SECURITIES 100.2% 489,044,980
(Cost $489,044,980*)
LIABILITIES IN EXCESS OF OTHER ASSETS (0.2%) (920,685)
--------- -------------
NET ASSETS (Applicable to 488,124,295
PCs outstanding) 100.0% $ 488,124,295
========= =============
NET ASSET VALUE, offering and
redemption price per PC
($488,124,295/488,124,295 PCs) $ 1.00
=============
* Aggregate cost for Federal tax purposes.
</TABLE>
See accompanying notes to financial statements.
<PAGE> 12
STATEMENT OF NET ASSETS
-----------------------
SHORT-TERM PORTFOLIO
--------------------
December 31, 1998
-----------------
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
------------ --------- -----------
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 30.2%
- -------------------------------------------------------------------------------------------------------
U.S. Treasury Notes
6.375% (5/15/99) $ 3,600 $ 3,622,500
6.25% (5/31/99) 1,000 1,006,250
5.125% (8/31/00) 2,000 2,015,300
5.375% (2/15/01) 2,380 2,416,438
5.875% (11/30/01) 5,430 5,613,263
-----------
TOTAL U.S. TREASURY OBLIGATIONS 14,673,751
(Cost $14,598,020) -----------
- -------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY OBLIGATIONS 17.0%
- -------------------------------------------------------------------------------------------------------
Federal Home Loan Bank
5.58% (3/11/99) 2,000 2,002,820
-----------
Federal Home Loan Mortgage Corporation
Discount Notes
5.09% (1/04/99) 170 169,928
5.06% (1/19/99) 2,035 2,029,851
-----------
2,199,779
-----------
Federal Home Loan Mortgage Corporation
Gold Balloon
6.50% (10/31/99) 1,934 1,944,307
-----------
Federal National Mortgage Association
5.625% (3/15/01) 2,100 2,130,198
-----------
TOTAL GOVERNMENT AGENCY OBLIGATIONS 8,277,104
(Cost $8,230,048) -----------
- -------------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES 5.4%
- -------------------------------------------------------------------------------------------------------
Honda Auto Receivables Grantor Trust 1997-A
5.85% (8/31/99) 644 646,605
Union Acceptance Corp.
5.44% (10/01/99) 2,000 2,000,000
-----------
TOTAL ASSET BACKED SECURITIES 2,646,605
(Cost $2,641,608) -----------
</TABLE>
<PAGE> 13
STATEMENT OF NET ASSETS
-----------------------
SHORT-TERM PORTFOLIO
--------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
------------ ---------- -----------
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT 8.2%
- ----------------------------------------------------------------------------------------------------
Chase Manhattan Corp.
5.745% (5/10/99) $ 2,000 $ 2,004,260
Harris Trust & Savings Bank
5.64% (2/01/99) 2,000 1,999,828
-----------
TOTAL CERTIFICATES OF DEPOSIT 4,004,088
(Cost $3,999,624) -----------
- ----------------------------------------------------------------------------------------------------
COMMERCIAL PAPER 46.2%
- ----------------------------------------------------------------------------------------------------
BEVERAGES 5.7%
Coca Cola Co.
5.14% (1/15/99) 2,400 2,395,203
5.22% (1/20/99) 210 209,421
4.90% (1/22/99) 165 164,508
----------
2,769,132
----------
BROADCASTING AND PUBLISHING 4.0%
Walt Disney
4.90% (4/30/99) 2,000 1,966,516
----------
CREDIT 2.0%
American Express Credit Corp.
4.95% (4/16/99) 1,000 985,013
----------
ELECTRIC SERVICES 2.1%
Motorola, Inc.
5.10% (1/26/99) 1,010 1,006,318
----------
FINANCE 2.0%
Motorola Credit
5.00% (1/22/99) 985 982,004
----------
FINANCIAL 2.3%
Ciesco
5.30% (1/20/99) 1,105 1,101,909
----------
FINANCIAL SERVICES 8.2%
General Electric Capital Corp.
5.00% (3/18/99) 2,000 1,977,778
IBM Credit Corp.
5.32% (1/29/99) 2,000 1,991,355
----------
3,969,133
----------
</TABLE>
<PAGE> 14
STATEMENT OF NET ASSETS
-----------------------
SHORT-TERM PORTFOLIO
--------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
------------ --------- -------------
<S> <C> <C> <C>
FOODS 4.1%
Hershey Foods
5.15% (1/15/99) $ 2,000 $ 1,995,994
-------------
INSURANCE 4.1%
MetLife Funding Inc.
5.22% (1/28/99) 2,000 1,992,170
-------------
TELECOMMUNICATIONS 10.6%
Ameritech Corp.
5.08% (1/11/99) 2,000 1,997,177
Bell South Telecommunications
5.05% (1/20/99) 1,885 1,879,976
Lucent Technologies
5.17% (1/25/99) 1,310 1,305,485
-------------
5,182,638
-------------
UTILITIES - GAS 1.1%
Northern Illinois Gas Co.
5.50% (1/08/99) 530 529,433
-------------
TOTAL COMMERCIAL PAPER 22,480,260
(Cost $22,483,629) -------------
- ------------------------------------------------------------------------------------------------------------
FIXED RATE OBLIGATIONS 14.4%
- ------------------------------------------------------------------------------------------------------------
CREDIT 4.2%
Associates Corp. North America
6.125% (11/12/99) 500 503,540
6.375% (6/15/00) 1,500 1,520,745
-------------
2,024,285
-------------
FINANCE 3.6%
International Lease Finance Corp.
6.63% (6/01/00) 740 750,427
Prudential Funding Corp.
5.96% (4/27/00) 1,000 1,005,120
-------------
1,755,547
-------------
FINANCIAL SERVICES 2.5%
Citicorp
6.70% (4/30/01) 1,170 1,204,340
-------------
</TABLE>
<PAGE> 15
STATEMENT OF NET ASSETS
-----------------------
SHORT-TERM PORTFOLIO
--------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF
NET ASSETS VALUE
------------ ------------
<S> <C> <C> <C>
SECURITY BROKERS AND DEALERS 4.1%
Merrill Lynch & Co.
6.64% (4/09/99) $2,000 $ 2,007,800
------------
TOTAL FIXED RATE OBLIGATIONS 6,991,972
------------
(Cost $6,947,412)
- ------------------------------------------------------------------------------------------------------------------------
VARIABLE RATE OBLIGATIONS 6.1%
- ------------------------------------------------------------------------------------------------------------------------
AUTOMOBILES 2.0%
General Motors Acceptance Corp.
5.239% (3/09/99) 1,000 999,160
------------
FINANCE 4.1%
Goldman Sachs Group
5.718% (1/25/99) 2,000 1,991,980
------------
TOTAL VARIABLE RATE OBLIGATIONS 2,991,140
------------
(Cost $2,999,344)
TOTAL INVESTMENTS IN SECURITIES 127.5% 62,064,920
(Cost $61,899,685*)
LIABILITIES IN EXCESS OF OTHER ASSETS (27.5%) (13,397,443)
----------- ------------
NET ASSETS (Applicable to 4,869,139
PCs outstanding) 100.0% $ 48,667,477
=========== ============
NET ASSET VALUE, offering and
redemption price per PC
($48,667,477/4,869,139 PCs) $ 10.00
============
</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
$176,976;excess of tax cost over value
$11,741.
See accompanying notes to financial statements.
<PAGE> 16
STATEMENTS OF ASSETS AND LIABILITIES
------------------------------------
DECEMBER 31, 1998
-----------------
<TABLE>
<CAPTION>
GOVERNMENT/REPO MONEY MARKET SHORT-TERM
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ------------- -------------
<S> <C> <C> <C>
ASSETS
Investments in securities at value $ 125,460,833 $ 489,044,980 $ 62,064,920
Accrued interest receivable 3,875 1,133,588 445,575
Cash 8,878 7,399 -
Other assets - - 9,901
--------------- ------------- -------------
Total Assets 125,473,586 490,185,967 62,520,396
LIABILITIES
Payable for fund shares redeemed - - 13,549,105
Dividends payable 777,263 1,897,172 268,955
Accrued expenses payable 10,043 164,500 34,859
--------------- ------------- -------------
Total Liabilities 787,306 2,061,672 13,852,919
--------------- ------------- -------------
NET ASSETS $ 124,686,280 $ 488,124,295 $ 48,667,477
=============== ============= =============
NET ASSET VALUE PER
PARTICIPATION CERTIFICATE $ 1.00 $ 1.00 $ 10.00
(Participation Certificates outstanding, =============== ============= =============
Government/REPO Portfolio 124,686,280,
Money Market Portfolio 488,124,295,
Short-Term Portfolio 4,869,139)
</TABLE>
See accompanying notes to financial statements.
<PAGE> 17
STATEMENTS OF OPERATIONS
------------------------
YEAR ENDED DECEMBER 31, 1998
----------------------------
<TABLE>
<CAPTION>
GOVERNMENT/REPO MONEY MARKET SHORT-TERM
PORTFOLIO PORTFOLIO PORTFOLIO
---------------- ------------ -----------
<S> <C> <C> <C>
INTEREST INCOME $ 14,087,339 $ 24,617,169 $ 2,768,540
EXPENSES
Investment advisory fee 504,568 790,707 143,543
Administration fee 129,049 222,102 24,218
Custodian 36,366 51,133 10,162
Audit 11,248 23,360 3,090
Insurance 11,695 20,387 2,232
Legal 7,762 12,243 1,524
Transfer agent 9,348 8,347 1,123
Trustee expenses 3,009 5,914 670
Professional services 11,940 4,407 -
Printing 4,961 5,161 910
Service agent - - 100,000
Miscellaneous 745 679 114
Fees waived (472,592) (797) (142,277)
-------------- -------------- ------------
Total Expenses 258,099 1,143,643 145,309
NET INVESTMENT INCOME 13,829,240 23,473,526 2,623,231
NET REALIZED GAIN ON SECURITIES SOLD - 77 17,715
UNREALIZED APPRECIATION OF SECURITIES - - 101,501
-------------- -------------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 13,829,240 $ 23,473,603 $ 2,742,447
============== ============== ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 18
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
GOVERNMENT/REPO PORTFOLIO
-------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- -------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 13,829,240 $ 10,736,237
Net realized gain (loss) on securities sold - -
---------------- -------------------
Net increase in net assets
resulting from operations 13,829,240 10,736,237
---------------- -------------------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.054
and $.054 per PC (13,829,240) (10,736,237)
---------------- --------------------
CAPITAL TRANSACTIONS:
Proceeds from sale of 3,258,023,585
and 2,398,408,529 PCs 3,258,023,585 2,398,408,529
Value of 6,014,183 and 2,783,503 PCs
issued in reinvestment of dividends 6,014,183 2,783,503
Cost of 3,338,589,426 and 2,358,336,068
PCs repurchased (3,338,589,426) (2,358,336,068)
---------------- -------------------
Increase (decrease) in net assets derived
from capital transactions (74,551,658) 42,855,964
---------------- -------------------
Total increase (decrease) in net assets (74,551,658) 42,855,964
NET ASSETS:
Beginning of period 199,237,938 156,381,974
---------------- -------------------
End of period $ 124,686,280 $ 199,237,938
================ ===================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 19
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
MONEY MARKET PORTFOLIO
----------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 23,473,526 $ 27,767,147
Net realized gain (loss) on
securities sold 77 2,417
--------------- ---------------
Net increase in net assets
resulting from operations 23,473,603 27,769,564
--------------- ---------------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.053
and $.054 per PC (23,473,526) (27,767,147)
Net capital gains (77) (502)
--------------- ---------------
Total distributions (23,473,603) (27,767,649)
--------------- ---------------
CAPITAL TRANSACTIONS:
Proceeds from sale of 3,708,891,424
and 4,217,170,475 PCs 3,708,891,424 4,217,170,475
Value of 18,036,609 and 19,203,139
PCs issued in reinvestment of
dividends 18,036,609 19,203,139
Cost of 3,653,428,968 and
4,346,622,164 PCs repurchased (3,653,428,968) (4,346,622,164)
--------------- ---------------
Increase (decrease) in net assets
derived from capital transactions 73,499,065 (110,248,550)
--------------- ---------------
Total increase (decrease) in
net assets 73,499,065 (110,246,635)
NET ASSETS:
Beginning of period 414,625,230 524,871,865
--------------- ---------------
End of period $ 488,124,295 $ 414,625,230
=============== ===============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 20
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
SHORT-TERM PORTFOLIO
--------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 2,623,231 $ 2,855,386
Net realized gain (loss) on
securities sold 17,715 (40,211)
Unrealized appreciation
(depreciation) of securities 101,501 116,061
------------ ------------
Net increase in net assets
resulting from operations 2,742,447 2,931,236
------------ ------------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.540
and $.547 per PC (2,623,231) (2,855,386)
------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from sale of 3,125,109
and 924,097 PCs 31,194,097 9,215,049
Value of 185,408 and
233,412 PCs issued in
reinvestment of dividends 1,850,667 2,322,245
Cost of 3,096,706 and
3,533,885 PCs repurchased (30,901,428) (35,148,367)
------------ -----------
Increase (decrease) in net
assets derived from capital
transactions 2,143,336 (23,611,073)
------------ ------------
Total increase (decrease) in
net assets 2,262,552 (23,535,223)
NET ASSETS:
Beginning of period 46,404,925 69,940,148
------------ ------------
End of period $ 48,667,477 $ 46,404,925
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 21
FINANCIAL HIGHLIGHTS
GOVERNMENT/REPO PORTFOLIO
-------------------------
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
YEAR YEAR YEAR 6/1/95(1)
ENDED ENDED ENDED THROUGH
12/31/98 12/31/97 12/31/96 12/31/95
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
Income From Investment Operations:
- ----------------------------------
Net Investment Income 0.054 0.054 0.053 0.034
Net Realized Gain (Loss)
on Investments 0 0 0 0
-------- -------- -------- --------
Total From Investment Operations 0.054 0.054 0.053 0.034
-------- -------- -------- --------
Less Distributions:
- -------------------
Dividends to PC holders from
Net Investment Income (0.054) (0.054) (0.053) (0.034)
Distributions to PC holders from
Net Capital Gains 0 0 0 0
-------- -------- -------- --------
Total Distributions (0.054) (0.054) (0.053) (0.034)
-------- -------- -------- --------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total Return 5.48% 5.57% 5.42% 5.99%(3)
Ratios/Supplemental Data:
- -------------------------
Net Assets, End of Period (000) $124,686 $199,238 $156,382 $119,080
Ratio of Expenses to Average
Net Assets(2) 0.10% 0.10% 0.10% 0.10%(3)
Ratio of Net Investment Income
to Average Net Assets 5.36% 5.44% 5.29% 5.78%(3)
</TABLE>
(1) Commencement of operations
(2) Without the waiver of a portion of advisory and administration fees (see
Note C), the ratio of expenses to average daily net assets would have been
.28%, .29%, .29% and .30% for the fiscal periods ended December 31, 1998,
1997, 1996 and 1995, respectively.
(3) Annualized
See accompanying notes to financial statements.
<PAGE> 22
FINANCIAL HIGHLIGHTS
MONEY MARKET PORTFOLIO
----------------------
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income From Investment Operations:
- ----------------------------------
Net Investment Income 0.053 0.054 0.052 0.058 0.041
Net Realized Gain (Loss)
on Investments 0 0 0 0 0
-------- -------- -------- -------- --------
Total From Investment Operations 0.053 0.054 0.052 0.058 0.041
-------- -------- -------- -------- --------
Less Distributions:
- -------------------
Dividends to PC holders from
Net Investment Income (0.053) (0.054) (0.052) (0.058) (0.041)
Distributions to PC holders from
Net Capital Gains 0 0 0 0 0
-------- -------- -------- -------- --------
Total Distributions (0.053) (0.054) (0.052) (0.058) (0.041)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return 5.42% 5.51% 5.38% 5.97% 4.21%
Ratios/Supplemental Data:
- -------------------------
Net Assets, End of Period (000) $488,124 $414,625 $524,872 $584,976 $451,367
Ratio of Expenses to Average
Net Assets(1) 0.26% 0.25% 0.23% 0.24% 0.26%
Ratio of Net Investment Income
to Average Net Assets 5.28% 5.38% 5.24% 5.82% 4.15%
- ------------------------------------
</TABLE>
(1) Without the waiver of a portion of advisory and administration fees (see
Note C), the ratios of expenses to average daily net assets would have
been .24% and .25% for the fiscal periods ended December 31, 1996 and
1995, respectively.
See accompanying notes to financial statements.
<PAGE> 23
FINANCIAL HIGHLIGHTS
SHORT-TERM PORTFOLIO
--------------------
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.97 $ 9.95 $ 10.00 $ 9.93 $ 10.03
Income From Investment Operations:
- ----------------------------------
Net Investment Income 0.540 0.547 0.542 0.599 0.440
Net Realized and Unrealized
Gain (Loss) on Investments 0.030 0.020 (0.050) 0.070 (0.100)
-------- -------- -------- -------- --------
Total From Investment Operations 0.570 0.567 0.492 0.669 0.340
-------- -------- -------- -------- --------
Less Distributions:
- -------------------
Dividends to PC holders from
Net Investment Income (0.540) (0.547) (0.542) (0.599) (0.440)
Distributions to PC holders from
Net Capital Gains - - - - -
-------- -------- -------- -------- --------
Total Distributions (0.540) (0.547) (0.542) (0.599) (0.440)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 10.00 $ 9.97 $ 9.95 $ 10.00 $ 9.93
======== ======== ======== ======== ========
Total Return 5.86% 5.85% 5.08% 6.92% 3.46%
Ratios/Supplemental Data:
- -------------------------
Net Assets, End of Period (000) $ 48,667 $ 46,405 $ 69,940 $ 63,922 $103,240
Ratio of Expenses to Average
Net Assets(1) 0.30% 0.30% 0.30% 0.30% 0.30%
Ratio of Net Investment Income
to Average Net Assets 5.42% 5.47% 5.43% 6.00% 4.29%
Portfolio Turnover Rate(2) 10.2% 79.2% 119.0% 64.8% 47.6%
- ---------------------------------
</TABLE>
(1) Without the waiver of a portion of advisory, service agent and
administration fees (see Note C), the ratios of expenses to average daily
net assets would have been .59%, .57%, .48%, .43%, and .37% for the fiscal
periods ended December 31, 1998, 1997, 1996, 1995 and 1994.
(2) Excludes security purchases with a maturity of less than one year.
See accompanying notes to financial statements.
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS
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 are 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 December
31, 1998, the Short-Term Portfolio had capital loss carry-forwards
amounting to $854,279, $114,232 and $40,211 that expire in 2002, 2004 and
2005 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 repurchase agreements
may have longer maturities than the maximum permissible remaining maturity
of portfolio investments. 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. All repurchase agreements were
entered into on December 31, 1998.
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 December 31, 1998 and the maturity shown is the
date of the next interest readjustment.
<PAGE> 25
Management Estimates - The preparation of financial statements in
accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could
differ from those estimates.
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 - BlackRock
Institutional Management Corporation ("BIMC"), an indirect majority owned
subsidiary of PNC Bank, serves as the Portfolios' investment advisor and
service agent. As compensation for its services the Portfolios pay BIMC a
fee, computed daily and paid monthly based upon an annualized percentage of
the average daily net assets, 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 Delaware Limited
Liability Corporation, serves as the Portfolio's investment advisor. As
compensation for its services, the Portfolio pays N&B a fee, computed daily
and paid monthly based upon an annualized percentage of the average daily
net assets, 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, BIMC serves as the Short-Term Portfolio
service agent. PNC Bank, BIMC and PFPC receive fees from the Fund for
serving in these capacities.
BIMC and N&B have agreed contractually to reduce their advisory fees
otherwise payable to them in 1998 to the extent necessary to reduce the
ordinary operating expenses of the 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
$80,801 of such fees payable by the Short-Term Portfolio for the period
ended December 31, 1998. BIMC voluntarily waived $56,081 of service agent
fees and CSC voluntarily waived $5,395 of administrator fees payable by the
Short-Term Portfolio during this period. In addition, BIMC voluntarily
waived $598 and $390,240 of advisory fees and CSC voluntarily waived $199
and $82,352 of administrator fees payable by the Money Market Portfolio and
Government/REPO Portfolio, respectively, during this period.
D. At December 31,1998, net assets consisted of:
<TABLE>
<CAPTION>
Government/REPO Money Market Short-Term
Portfolio Portfolio Portfolio
--------------- -------------- -------------
<S> <C> <C> <C>
Capital paid in.................... $ 124,686,280 $ 488,124,295 $ 49,510,964
Accumulated realized gain (loss) on
security transactions............ - - (1,008,722)
Net unrealized appreciation of
investments...................... - - 165,235
--------------- -------------- -------------
$ 124,686,280 $ 488,124,295 $ 48,667,477
=============== ============== =============
</TABLE>
E. Short-Term Portfolio purchases and sales of investment securities, other
than short-term investments, were $21,184,389 and $2,739,568, respectively,
and purchases and sales of U.S. Government securities were $10,628,855 and
$1,739,078 respectively, for the period ended December 31, 1998.
<PAGE> 26
REPORT OF INDEPENDENT ACCOUNTS
To the Participation Certificate Holders and
Trustees of Plan Investment Fund, Inc.:
In our opinion, the accompanying statements of assets and liabilities,
including the schedule of investments, and the related statements of
operations, changes in net assets, and the financial highlights present fairly,
in all material respects, the financial position of the Government/REPO
Portfolio, Money Market Portfolio and Short-Term Portfolio of Plan Investment
Fund, Inc. (the "Fund") at December 31, 1998, and the results of its
operations, changes in its net assets, and its financial highlights for each of
the periods presented, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1998 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Philadelphia, PA
February 3, 1999
<PAGE> 27
--------------------------
PLAN INVESTMENT FUND, INC.
225 N. Michigan
Chicago, Illinois 60601
(312) 297-6372
TRUSTEES
--------
HOWARD F. BEACHAM III DAVID M. MURDOCH
President and President
Chief Operating Officer David M. Murdoch & Associates
Blue Cross and Blue Shield
of Central New York, Inc. JOSEPH REICHARD
Vice President, Treasury Services &
PHILIP A. GOSS Assistant Treasurer
President and Highmark, Inc.
Chief Executive Officer
Plan Investment Fund, Inc. M. EDWARD SELLERS
Health Plans Capital President and
Services Corp. Chief Executive Officer
Blue Cross and Blue Shield
STEVEN L. HOOKER of South Carolina
Chief Financial Officer and
Treasurer THOMAS J. WARD
The Regence Group President and
Chief Executive Officer
RONALD F. KING Blue Cross of Northeastern
President and Pennsylvania
Chief Executive Officer
Blue Cross and Blue Shield SHERMAN M. WOLFF
of Oklahoma Senior Vice President, Corporate
Resources and
Chief Financial Officer
Health Care Service Corporation
INVESTMENT ADVISORS
-------------------
GOVERNMENT/REPO PORTFOLIO SHORT-TERM PORTFOLIO
AND MONEY MARKET PORTFOLIO --------------------
- -------------------------- Neuberger Berman
BlackRock Institutional Management Corporation New York, New York
Wilmington, Delaware
