RBB
FAMILY OF MUTUAL FUNDS
A TRADITION OF BUILDING WEALTH
[GRAPHIC OMITTED]
Government Securities Portfolio,
Money Market Portfolio,
Municipal Money Market Portfolio
Annual Report
August 31, 1996
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
ANNUAL INVESTMENT ADVISER'S REPORT
GOVERNMENT SECURITIES PORTFOLIO
During the period September 1, 1995 through January 31, 1996 the Federal
Reserve eased monetary on two occasions policy citing declining inflation
expectations and moderating economic expansion. However, beginning in February
through to August 31, 1996 interest rates have trended upward as the spectre of
inflation overshadowed the fixed income market. Fundamental economic data has
often been conflicting causing erratic changes in interest rates. Nevertheless,
Fed officials seem comfortable with core inflation and are unlikely to tighten
monetary policy over the near term.
The Government securities portfolio assumed a defensive posture beginning
in January of 1996. At times, cash levels were between 10-15% and longer
maturity bonds were substituted by shorter premium coupon issues. As interest
rates increased during 1996 the funds average weighted maturity and duration
have been reduced. By August 31, 1996 the average weighted maturity was 6.3
years and the duration of the portfolio was 4.2.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE GOVERNMENT
SECURITIES PORTFOLIO, AND THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT
INDEX FROM INCEPTION 8/1/91 AND AT EACH FISCAL YEAR END
AVERAGE ANNUAL TOTAL RETURN
One Year (2.17%)
From Inception 4.95%
PLOT POINTS
[GRAPHIC OMITTED]
Government Securities Lehman Brothers Intermediate
Portfolio Government Index
8/1/91 $ 9,525 $10,000
8/31/91 9,711 10,016
8/31/92 10,850 11,299
8/31/93 11,974 12,280
8/31/94 11,663 12,247
8/31/95 12,447 13,344
8/31/96 12,789 13,939
Note: Past performance is not predictive of future performance.
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
ANNUAL INVESTMENT ADVISER'S REPORT (CONCLUDED)
MONEY MARKET AND MUNICIPAL MONEY MARKET PORTFOLIOS
Although this summer's weather remained on the cool side, the debate over
Federal Reserve monetary policy became quite heated as the year progressed. By
early July, a majority of Fed watchers were convinced that a rise in short-term
interest rates was imminent, and pointed to July's strong employment report as
evidence. The only question seemed to be the size and timing of the Fed's move.
Would the Fed wait until its August meeting, or would they immediately raise the
funds rate 25 or 50 basis points? Certainly, they pointed out, the jump in
nonfarm payroll (+700,000 jobs) and the spike in hourly earnings (+9 cents) was
cause for immediate action by the Fed to curb the economy and prevent a
rekindling of inflation. However, as has often happened this year, economic
reports that seemed to suggest either a business expansion or a slowdown were
followed quite closely by reports that suggested otherwise. It seemed that after
the winter's government shut downs and snowstorms, the predictability of
economic numbers became a lost art in 1996.
This same type of reversal of expectations occurred again in July following
the strong jobs report. Within only a few weeks, signs of slower economic
activity had tempered the certainty of a rate hike, and by the time Alan
Greenspan spoke at his Humphrey-Hawkins testimony, he speculated that, "looking
forward, there are a number of reasons to expect demands to moderate and
economic activity to settle back toward a more sustainable pace in the months
ahead." The Federal Reserve's forecast for growth is 2.5%-2.75% this year,
falling to 1.75%-2.25% next year; while inflation should average about
3.0%-3.25% this year, and 2.75%-3.0% next year. Greenspan's remarks were very
well received by the markets, and stocks and bonds rose sharply into early
August. In addition, the expectation of higher short-term interest rates eased
considerably, and by the time the Fed met on August 20, there was almost no one
in the "tighter" camp.
Short-term taxable interest rates have held steady at 5.25% (federal funds
rate) for the last two quarters. The Federal Reserve's last move was on January
31, when they eased monetary policy to encourage economic growth, following news
of a very weak fourth quarter 1995. At that time, market sentiment was biased
towards additional easings of monetary policy and the short-term yield curve
offered no incentive to extend. By mid-April, however, strong jobs reports
worried the markets that the Fed would not only stop easing but might consider
tightening. In response, the yield curve turned positive and rewarded longer
average maturities with yield pick ups of 20-30 basis points. The Money Market
and Government portfolios took advantage of this opportunity by moving their
maturities to the 50-60 day range. For much of the last two quarters,
investments of 3-12 months have outyielded overnight rates by 25-50 basis
points.
In the short-term municipal market, the usually predictable pattern of
seasonal influences was interrupted this year by the federal budget impasse last
winter, the possibility of changes to the tax code and volatility in the stock
and bond markets. As in the taxable market, sentiment leaned towards higher
rates, but the short-term municipal yield curve remained stubbornly flat. Yields
on daily demand notes fluctuated widely during the year, between 2%-4%,
depending on the day, month and level of supply versus demand. In June, for
example, as supply fell, demand notes rose to yields over 4%, but as supply
reentered the market in July, yields fell to 2.35%. By the end of August, New
York City, California and Texas were all settling large new issues. The
Municipal Portfolio took advantage of these new offerings to extend its average
weighted maturity to the 50-day range.
As always, all the Fund's portfolios emphasized high quality securities and
highly liquid structures, in addition to providing competitive daily returns.
Our credit research department employs fifteen professionals to approve and
monitor the creditworthiness of every issue/issuer in which the portfolios
invest. Finally, as of the date of this report, there are a number of proposed
amendments to Rule 2a-7, the regulations which govern money market funds.The
anticipated effective date of October 3 has been postponed by the SEC. We are
following the situation closely and will be reporting to you in the future about
the substance and timing of those changes.
PNC Institutional Management Corporation
(Please dial toll-free 800-430-9618 for questions regarding
your account or contact your broker.)
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of The RBB Fund, Inc.:
We have audited the accompanying statements of net assets of the Government
Securities, Money Market, and Municipal Money Market Portfolios of The RBB Fund,
Inc., as of August 31, 1996, and the related statements of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
periods presented. 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.
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 held by the
custodian and brokers as of August 31, 1996. 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 the
Government Securities, Money Market, and Municipal Money Market Portfolios of
The RBB Fund, Inc. as of August 31, 1996 and the results of their operations for
the year then ended, the changes in their net assets for each of the two years
in the period then ended, and their financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
October 15, 1996
3
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1996
PAR
(000) VALUE
------ ----------
AGENCY OBLIGATIONS--26.1%
Federal National Mortgage Association
7.050% 12/10/98 ...................... $ 250 $ 252,823
6.750% 08/24/00 ...................... 250 247,260
8.250% 12/18/00 ...................... 1,000 1,053,020
7.700% 08/10/04 ...................... 250 252,645
6.500% 11/29/05 ...................... 250 238,462
Federal Home Loan Mortgage Corp.
7.188% 09/15/99 ...................... 250 250,892
----------
TOTAL AGENCY OBLIGATIONS
(Cost $2,279,780) ................ 2,295,102
----------
MORTGAGE BACKED OBLIGATIONS--4.3%
Government National Mortgage Association
9.000% 08/24/00 ...................... 357 373,515
----------
TOTAL MORTGAGE BACKED OBLIGATIONS
(Cost $354,727) .................. 373,515
----------
UNITED STATES TREASURY OBLIGATIONS--67.9%
U.S. TREASURY BONDS--15.8%
7.250% 05/15/16 ...................... 250 249,700
8.500% 02/15/20 ...................... 1,000 1,136,180
----------
1,385,880
----------
U.S. TREASURY NOTES--34.7%
6.125% 05/31/97 ...................... 750 751,665
7.250% 02/15/98 ...................... 250 253,540
7.125% 10/15/98 ...................... 250 253,902
7.000% 04/15/99 ...................... 250 253,178
6.875% 07/31/99 ...................... 250 252,232
7.500% 10/31/99 ...................... 250 256,578
7.125% 02/29/00 ...................... 250 253,950
7.500% 05/15/02 ...................... 250 258,832
7.250% 08/15/04 ...................... 250 255,270
7.500% 02/15/05 ...................... 250 259,145
----------
3,048,292
----------
PAR
(000) VALUE
------- -----------
U.S. TREASURY BILLS--17.4%
4.980% 09/05/96 ................. $ 250 $ 249,928
5.140% 11/29/96 ................. 350 345,444
5.250% 11/29/96 ................. 250 246,745
5.020% 12/05/96 ................. 250 246,530
5.100% 12/05/96 ................. 250 246,531
5.085% 12/12/96 ................. 200 197,064
----------
1,532,242
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5,810,431) ........... 5,966,414
----------
TOTAL INVESTMENTS--98.3%
(Cost $8,444,938*) .............. 8,635,031
OTHER ASSETS IN EXCESS
OF LIABILITIES--1.7% ............ 149,671
----------
NET ASSETS (Applicable to 971,541
RBB Shares)--100.0% ............. $8,784,702
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE
($8,784,702 (DIVIDE) 971,541) ... $9.04
=====
OFFERING PRICE PER SHARE
($9.04 (DIVIDE) .9525) .......... $9.49
=====
* Cost for Federal income tax purposes at August 31, 1996. The gross
appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation ......... $257,107
Gross Depreciation ......... (67,014)
--------
Net Appreciation ........... $190,093
========
See Accompanying Notes to Financial Statements.
4
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1996
PAR
(000) VALUE
------- -------------
CERTIFICATES OF DEPOSIT--12.8%
BANK NOTES--4.6%
First National Bank of Boston
5.500% 01/13/97 ........................ $50,000 $ 50,000,000
Mellon Bank
5.540% 02/07/97 ........................ 50,000 50,000,000
------------
100,000,000
------------
YANKEE DOLLAR CERTIFICATES OF DEPOSIT--8.2%
Bank of Tokyo-Mitsubishi
5.600% 11/04/96 ........................ 25,000 25,000,000
Banque Nationale de Paris
5.430% 09/30/96 ........................ 50,000 50,000,392
Swedbank
5.530% 09/12/96 ........................ 30,000 30,000,090
5.440% 11/06/96 ........................ 75,000 75,001,356
------------
180,001,838
------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $280,001,838) ................ 280,001,838
------------
COMMERCIAL PAPER--56.1%
ASSET BACKED SECURITIES--5.8%
Corporate Receivables Corp.
5.350% 11/21/96 ........................ 25,000 24,699,063
5.400% 01/15/97 ........................ 25,800 25,273,680
Cxc, Inc.
5.320% 11/20/96 ........................ 30,000 29,645,333
Sigma Finance, Inc.
5.420% 02/20/97 ........................ 50,000 48,705,222
------------
128,323,298
------------
BANKS--2.3%
Chase Manhattan Corp.
5.330% 01/10/97 ........................ 25,000 24,515,118
National City Corp.
5.270% 09/11/96 ........................ 25,000 24,963,403
------------
49,478,521
------------
PAR
(000) VALUE
------- -------------
CIGARETTES--3.0%
American Brands, Inc.
5.300% 12/12/96 ..................... $21,000 $ 20,684,650
5.290% 12/13/96 ..................... 25,000 24,621,618
5.480% 01/06/97 ..................... 20,000 19,613,356
------------
64,919,624
------------
FINANCE SERVICES--1.7%
Countrywide Funding Corp.
5.450% 10/18/96 ..................... 38,000 37,729,619
------------
GLASS, GLASSWARE, PRESSED OR BLOWN--2.3%
Newell Co.
5.320% 09/12/96 ..................... 50,000 49,918,722
------------
PERSONAL CREDIT INSTITUTIONS--10.7%
BMW US Capital Corp.
5.340% 09/09/96 ..................... 33,196 33,156,607
5.300% 09/16/96 ..................... 50,000 49,889,583
Ford Motor Credit Corp.
5.430% 10/22/96 ..................... 50,000 49,615,375
5.400% 12/12/96 ..................... 50,000 49,235,000
General Motors Acceptance Corp.
5.580% 12/26/96 ..................... 30,000 29,460,600
5.460% 02/12/97 ..................... 25,000 24,378,167
------------
235,735,332
------------
PETROLEUM REFINING--1.1%
Repsol Int'l Finance B.V.
5.370% 12/27/96 ..................... 25,000 24,563,688
------------
PHARMACEUTICAL PREPARATIONS--2.7%
American Home Products Corp.
5.250% 09/03/96 ..................... 60,000 59,982,500
------------
SEARCH, DETECTION, NAVIGATION,
GUIDANCE AERONAUTIC SYSTEMS--4.5%
Raytheon Co.
5.280% 09/17/96 ..................... 100,000 99,765,333
------------
See Accompanying Notes to Financial Statements.
5
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1996
PAR
(000) VALUE
-------- --------------
SECURITY BROKERS & DEALERS--12.9%
Lehman Brothers Holdings Inc.
5.500% 09/12/96 .......................... $ 55,000 $ 54,907,569
Merrill Lynch & Co. Canandian DCP
5.500% 11/18/96 .......................... 50,000 49,404,167
Morgan Stanley Group, Inc.
5.400% 09/23/96 .......................... 25,000 24,917,500
5.300% 10/21/96 .......................... 50,000 49,631,945
5.310% 12/13/96 .......................... 30,000 29,544,225
Nomura Holding America, Inc.
5.510% 10/24/96 .......................... 25,000 24,797,201
5.380% 11/14/96 .......................... 50,000 49,447,056
--------------
282,649,663
--------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--9.1%
American Express Credit Corp.
5.280% 09/05/96 .......................... 100,000 99,941,333
Sears Roebuck Acceptance Corp.
5.310% 09/04/96 .......................... 50,000 49,977,875
5.480% 10/31/96 .......................... 50,000 49,543,333
--------------
199,462,541
--------------
TOTAL COMMERCIAL PAPER
(Cost $1,232,528,841) ................ 1,232,528,841
--------------
MUNICIPAL BONDS--5.4%
CALIFORNIA--0.9%
San Bernardino County California
Certificate of Participation County
Center Refinancing Project,
Series 1995 (LOC Canadian
Imperial Bank of Commerce)(DOUBLE DAGGER)
5.650% 09/07/96 .......................... 7,800 7,800,000
Adventist Health Systems West
Series 1988 (LOC-First Interstate
Bank of California)(DAGGER)
3.750% 09/04/96 .......................... 12,925 12,925,000
--------------
20,725,000
--------------
FLORIDA--0.1%
Coral Springs, Florida Industrial
Development Revenue
(LOC Sun Bank, N.A.)(DOUBLE DAGGER)
5.650% 09/05/96 .......................... 2,900 2,900,000
--------------
PAR
(000) VALUE
------- -----------
GEORGIA--0.4%
De Kalb County Georgia Development
Authority (Emory U.)(DOUBLE DAGGER)
5.450% 09/04/96 ...................... $10,100 $10,100,000
-----------
ILLINOIS--0.8%
Barton Healthcare Taxable Revenue
Bonds Series 1995 DN (LOC-
American Nation Bank)(DAGGER)
5.550% 09/04/96 ...................... 12,455 12,455,000
Baylis Group Partnership Weekly
Demand Taxable Bond Series 1992
(LOC-Societe Generale)(DOUBLE DAGGER)
5.650% 09/04/96 ...................... 600 600,000
Illinois Health Facilities Authority
Convertible/ VRDN RB
(The Streeterville CORP Project)
Series 1993-B (LOC-First National
Bank of Chicago)(DOUBLE DAGGER)
5.550% 09/04/96 ...................... 4,400 4,400,000
-----------
17,455,000
-----------
KENTUCKY--0.2%
Boone County Taxable IDR Refunding
Bonds (Square D Company Project)
Series 1994-B (LOC-Societe Generale)
VRDN(DAGGER)
5.550% 09/04/96 ...................... 4,200 4,200,000
-----------
MINNESOTA--0.2%
Fairview Hospital And Healthcare Services
Taxable ADJ Convertible Extendable
Securities Series 1994
(MBIA Insurance) VRDN(DAGGER)
5.550% 09/05/96 ...................... 5,100 5,100,000
-----------
MISSISSIPPI--0.9%
Hinds County, Mississippi
(LOC-RaboBank Nederland)
IDRB VRDN(DAGGER)
5.450% 09/04/96 ...................... 1,400 1,400,000
5.450% 09/04/96 ...................... 2,155 2,155,000
See Accompanying Notes to Financial Statements.
6
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1996
PAR
(000) VALUE
------- -----------
MISSISSIPPI--(CONTINUED)
Mississippi Business Finance Corp.
Taxable IDRB (Bryan Foods, Inc.
Project) Series 1994 (Sara Lee
Corporation Guaranty)
(LOC-Sun Bank, N.A.) VRDN(DAGGER)
5.550% 09/04/96 ..................... $14,000 $ 14,000,000
Mississippi Business Finance Corp.
Taxable IDRB VRDN(DAGGER)
5.450% 09/07/96 ..................... 3,200 3,200,000
------------
20,755,000
------------
NEW YORK--0.6%
Health Insurance Plan of Greater NY
adj/Convertible Extendable Securities
Series 1990 (LOC-Morgan
Guaranty Trust Company) VRDN(DAGGER)
5.500% 09/04/96 ..................... 12,300 12,300,000
------------
NORTH CAROLINA--0.6%
Community Health Systems, Inc.
Taxable (LOC-First Union National
Bank of North Carolina)
Series 1991-A(DAGGER)
5.700% 09/04/96 ..................... 400 400,000
City of Ashville North Carolina
(LOC-Wachovia Bank of N.C.)
Tax Corp.(DAGGER)
5.400% 09/04/96 ..................... 12,700 12,700,000
------------
13,100,000
------------
TEXAS--0.7%
South Central Texas Industrial
Development Corp. Taxable IDR
Bonds (Rohr Industries Project
Series 1990 (LOC-Citibank N.A.)
VRDN(DAGGER)
5.550% 09/04/96 ..................... 14,800 14,800,000
------------
TOTAL MUNICIPAL BONDS
(Cost $121,435,000) ............. 121,435,000
------------
PAR
(000) VALUE
------- ------------
REVENUE ANTICIPATION NOTES--0.3%
MANDATORY PUT BONDS--0.3%
Bremen, Inc. Tax Adjustable Notes
(LOC-Society National Bank)
5.500% 09/05/96 ........................ $ 6,000 $ 6,000,000
------------
TOTAL REVENUE ANTICIPATION NOTES
(Cost $6,000,000) .................. 6,000,000
------------
CORPORATE OBLIGATIONS--10.2%
BANKS--2.3%
Norwest Corp.(DAGGER)
5.398% 09/28/96 ........................ 50,000 50,000,000
------------
PERSONAL CREDIT INSTITUTIONS--0.9%
General Motors Acceptance Corp.
5.410% 09/01/96(DAGGER) ................ 5,000 4,998,894
General Motors Acceptance Corp.
7.900% 03/12/97 ........................ 14,750 14,950,198
------------
19,949,092
------------
SECURITY BROKERS & DEALERS--7.0%
Bear Stearns & Co., Inc.
5.290% 03/11/97 ........................ 20,000 20,000,000
Goldman Sachs Group, LP
5.711% 11/06/96(DAGGER) ................ 53,000 53,000,000
Lehman Brothers Holdings Inc.
5.600% 09/05/96(DAGGER) ................ 50,000 50,000,000
Merrill Lynch & Co.
5.000% 12/15/96 ........................ 5,000 4,991,584
5.120% 02/27/97 ........................ 25,000 24,997,555
------------
152,989,139
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $222,938,231) ................ 222,938,231
------------
AGENCY OBLIGATIONS--2.5%
Student Loan Marketing Association(DAGGER)
5.390% 09/03/96 ........................ 25,000 24,994,375
5.410% 09/03/96 ........................ 10,000 10,000,000
5.420% 09/03/96 ........................ 20,000 20,000,000
------------
TOTAL AGENCY OBLIGATIONS
(Cost $54,994,375) ................. 54,994,375
------------
See Accompanying Notes to Financial Statements.
7
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONCLUDED)
AUGUST 31, 1996
PAR
(000) VALUE
------- --------------
TIME DEPOSITS--12.6%
Bank of Tokyo-Mitsubishi
5.375% 09/03/96 .......................... $76,800 $ 76,800,000
Dai-ichi Kangyo Bank
5.406% 09/05/96 .......................... 50,000 50,000,000
First National Bank of Boston
5.344% 09/05/96 .......................... 50,000 50,000,000
First Union National Bank of NC
5.250% 09/03/96 .......................... 100,000 100,000,000
--------------
TOTAL TIME DEPOSITS
(Cost $276,800,000) .................. 276,800,000
--------------
TOTAL INVESTMENTS AT VALUE--99.9%
(Cost $2,194,698,285*) ................... 2,194,698,285
OTHER ASSETS IN EXCESS
OF LIABILITIES--0.1% ..................... 1,125,153
--------------
NET ASSETS (Applicable to
1,109,351,734 Bedford shares,
202,360 Cash Preservation shares,
561,873,247 Janney Montgomery
Scott shares, 61,412 RBB shares,
524,367,399 Sansom Street shares
and 800 other shares)--100.0% ............ $2,195,823,438
==============
NET ASSET VALUE, offering and
redemption price per share
($2,195,823,438 (DIVIDE) 2,195,856,952) .. $1.00
=====
* Also cost for Federal income tax purposes
(DAGGER) Variable Rate Obigations -- The interest rate shown is the rate as of
August 31, 1996 and the maturity date shown is the longer of the
next interest rate readjustment date or the date the principal amount
shown can be recovered through demand.
(DOUBLE DAGGER) Put Bonds -- Maturity date is the put date.
INVESTMENT ABBREVIATIONS
VRDN ............................Variable Rate Demand Note
LOC ......................................Letter of Credit
IDR.........................Industrial Development Revenue
See Accompanying Notes to Financial Statements.
8
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1996
PAR
(000) VALUE
------- ----------
MUNICIPAL BONDS--99.8%
ALABAMA--0.7%
Alabama Special Care Facilities
Authority St. Vincent's Daughters of
Charity MB(AA, Aa)(DOUBLE DAGGER)
4.000% 11/01/96 ....................... $ 1,735 $1,736,028
Livingston IDR Toin Corp USA Project
DN / (Ind. Bank of Japan LOC)
[A-1+, VMIG-1](DAGGER)
4.150% 09/07/96 ....................... 1,000 1,000,000
----------
2,736,028
----------
ALASKA--0.5%
Alaska Industrial Development & Export
Authority RB Series 1984-5
(LOC-Seattle First National Bank)
DN [A-1](DAGGER)
3.600% 09/07/96 ....................... 2,045 2,045,000
----------
ARIZONA--1.8%
Flagstaff IDA DN / (LOC-Wells Fargo)
[A, A-1](DAGGER)
3.550% 09/07/96 ....................... 7,755 7,755,000
----------
ARKANSAS--0.4%
Arkansas State Development Authority
Health Care Facility Sisters of
Mercy DN/ (ABM-AMRO Bank N.V. LOC)
[A-1+, VMIG-1](DAGGER)
3.450% 09/07/96 ....................... 1,700 1,700,000
----------
CALIFORNIA--14.8%
California Pollution Control DN / (Society
General LOC) [A-1+](DAGGER)
3.150% 09/30/96 ....................... 2,000 2,000,000
California Pollution Control Finance
Authority (Pacific Gas & Electric Co.
Project) Series 1996 C DN (Bank of
America LOC) [A-1+](DAGGER)
3.850% 09/07/96 ....................... 8,200 8,200,000
Los Angeles County Housing Authority
Malibu Meadows Project
Series A DN (LOC- Sumitomo Bank)
[A-1](DAGGER)
3.500% 09/07/96 ....................... 4,100 4,100,000
PAR
(000) VALUE
------- -----------
CALIFORNIA--(CONTINUED)
Los Angeles County
Series 1996 A TRAN
(Credit Suisse LOC) [SP-1+,
MIG-1](DOUBLE DAGGER)
4.500% 06/30/97 .............................. $10,315 $10,371,569
Oakland (LOC- Natwest PLC) DN(DAGGER)
3.750% 09/07/96 .............................. 11,600 11,600,000
San Bernardino County
TRAN / (Landesbank Hessen-
Thuringen LOC) [SP-1+, MIG-1]
4.500% 06/30/97 .............................. 5,000 5,024,890
Southeast Resource Recovery Facility
Authority Lease RB DN [A-1, VMIG-1](DAGGER)
3.550% 09/07/96 .............................. 7,500 7,500,000
State of California 1996-97 RAN
[SP-1+, MIG-1]
4.500% 06/30/97 .............................. 7,000 7,029,519
State of California RAN Series C-5 /
(Bank of America LOC) [A-1+, MIG]
3.850% 09/07/96 .............................. 1,000 1,000,000
Washington Township Hospital District
Alemeda County DN / (Ind. Bank of
Japan LOC)(DAGGER)
3.450% 09/07/96 .............................. 5,300 5,300,000
-----------
62,125,978
-----------
COLORADO--1.8%
Colorado State General Fund Revenue
Series 1996 A TRAN [SP-1+, MIG-1]
4.500% 06/27/97 .............................. 5,000 5,025,623
Moffat County DN [A-1+, P-1](DAGGER)
3.550% 09/07/96 .............................. 2,400 2,400,000
-----------
7,425,623
-----------
CONNECTICUT--0.7%
Connecticut State of Special Assessment
Unemployment Compensation
Advance Fund Revenue (Connecticut
Unemployment Project)
Series 1993 C MB (FGIC Insurance)
[A-1+, VMIG-1](DOUBLE DAGGER)
3.900% 07/01/97 .............................. 3,000 3,000,000
-----------
See Accompanying Notes to Financial Statements.
9
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1996
PAR
(000) VALUE
------- -----------
DELAWARE--0.7%
The Delaware Economic Development
Authority Gas Facilities Refunding
(Delmarva Power & Light Project)
Series 1993 C (Delmarva Power &
Light Corporate Obligation)
RB DN [VMIG-1](DAGGER)
3.650% 09/07/96 ......................... $ 3,000 $ 3,000,000
-----------
FLORIDA--1.4%
Florida Housing Finance Agency
DN / (Wells Fargo Bank LOC) [A-1](DAGGER)
3.850% 09/30/96 ......................... 3,000 3,000,000
Indian River County Hospital District
Sunhealth Network MB / (Kredietbank
LOC) [A-1+, VMIG-1](DOUBLE DAGGER)
3.700% 10/08/96 ......................... 3,000 3,000,000
-----------
6,000,000
-----------
GEORGIA--3.6%
Atlanta Urban Residential Finance
Authority RB DN (Residential
Construction -- Summerhill Project) /
(First Union National Bank of North
Carolina LOC) [A-1](DAGGER)
3.550% 09/07/96 ......................... 3,000 3,000,000
Brunswick and Glynn Development
Authority Sewage Facility RB DN for
Georgia-Pacific Corp. Project
(LOC-Commerce Bank)
Series 1996 [Aa2](DAGGER)
3.650% 09/07/96 ......................... 3,000 3,000,000
Carrollton Payroll Development
Authority Certificates RAN [Aa3]
3.650% 09/07/96 ......................... 6,000 6,000,000
Forsyth County IDA RB for American
Boa, Inc. Project (LOC- Dresdner
Bank A.G.) DN(DAGGER)
3.550% 09/07/96 ......................... 3,000 3,000,000
-----------
15,000,000
-----------
PAR
(000) VALUE
------- ------------
ILLINOIS--8.8%
Chicago O'Hare International Airport DN
(American Airlines) Series C / (LOC-
Royal Bank of Canada) [VMIG-1](DAGGER)
3.750% 09/01/96 ....................... $ 1,200 $ 1,200,000
Health Facility Authority DN (Central
Health Care and Northwest
Community Hospital) / (Sumitomo
Bank LOC) [VMIG-1](DAGGER)
3.450% 09/07/96 ....................... 1,545 1,545,000
Illinois Development Finance Authority
CHS Acquisition Corp. Project DN /
(ABM-AMRO Bank N.V. LOC) [A-1+](DAGGER)
3.850% 09/07/96 ....................... 5,035 5,035,000
Illinois Development Finance Authority
RB DN (Chicago Symphony
Orchestra Project) / (Northern Trust
LOC) [A-1, VMIG-1](DAGGER)
3.500% 09/07/96 ....................... 8,400 8,400,000
Illinois Health Facility Authority Carle
Foundation Project DN / (Northern
Trust LOC) [VMIG-1](DAGGER)
3.550% 09/07/96 ....................... 2,600 2,600,000
Illinois Housing Development Authority
Multifamily Housing Bonds DN /
(Landesbank Hessen-Thuringen LOC)
[A-1+](DAGGER)
3.500% 09/07/96 ....................... 1,000 1,000,000
Illinois Housing Development Authority
Series C-2 DN / (Society General LOC)
[VMIG-1](DAGGER)
3.450% 09/03/96 ....................... 2,200 2,200,000
Illinois Student Loan Authority
Community Student Loan RB DN /
(Bank of America LOC) [VMIG-1](DAGGER)
3.600% 09/07/96 ....................... 7,800 7,800,000
O'Hare International Airport Special
Facility RB DN / (Society General
LOC) [Aa2, VMIG-1](DAGGER)
3.600% 09/07/96 ....................... 5,800 5,800,000
Southwestern Development Authority
(Shell Oil Co. Wood River Project)
Series 1995 MB [Aa2,
VMIG-1](DOUBLE DAGGER)
3.950% 09/01/96 ....................... 1,375 1,375,000
-----------
36,955,000
-----------
See Accompanying Notes to Financial Statements.
10
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1996
PAR
(000) VALUE
------- ----------
INDIANA--9.5%
Bremen IDA RB Series 1996 A
Universal Bearings, Inc. Project
Private Placement DN / (Society
National Bank of Cleveland
LOC)(DAGGER)
3.800% 09/07/96 ........................ $ 5,000 $5,000,000
Indiana Development Finance Authority
IDA RB DN (Enterprise Center I
Project) / (LOC-Society National
Bank of Cleveland) [A-1+](DAGGER)
3.800% 09/07/96 ........................ 2,900 2,900,000
Indiana Development Finance Authority
IDA RB DN (Enterprise Center II,
Project) / (LOC-Society National
Bank of Cleveland) [A-1+](DAGGER)
3.800% 09/07/96 ........................ 5,000 5,000,000
Indiana Development Finance Authority
IDA RB DN (Enterprise Center III
Project) / (LOC-Society National Bank of
Cleveland) [A-1+, AA-](DAGGER)
3.800% 09/07/96 ........................ 4,500 4,500,000
Indiana Development Finance Authority
IDA RB DN (Enterprise Center IV
Project) / (LOC-Society National
Bank of Cleveland) [A-1+, AA-](DAGGER)
3.800% 09/07/96 ........................ 2,600 2,600,000
Indiana Health Facility Authority
Daughters of Charity for St. Mary's
Medical DN [AA, Aa](DAGGER)
4.000% 11/01/96 ........................ 840 840,497
La Porte County Economic Development
RB DN (Pedcor Investments --
Woodland Crossing) / (Federal Home
Loan Bank LOC) [VMIG-1, Aaa](DAGGER)
3.600% 09/07/96 ........................ 2,000 2,000,000
Orleans Economic Development RB for
Almana Limited Liability Co. Project
Series 1995 (LOC-National Bank of
Detroit) DN(DAGGER)
3.650% 09/07/96 ........................ 5,400 5,400,000
Portage, City of Economic Development
RB DN (Breckenridge Apartments
Project) / (Comerica Bank Detroit LOC)
[A-1](DAGGER)
3.650% 09/07/96 ........................ 4,650 4,650,000
PAR
(000) VALUE
------- -----------
INDIANA--(CONTINUED)
South Bend Redevelopment Authority
(College Football Hall of Fame
Project) Series DN (Fuji Bank LOC)
[VMIG-1](DAGGER)
4.000% 09/07/96 ...................... $ 4,100 $ 4,100,000
Tippencanoe DN / (Bank of
New York LOC) [Aa3, VMIG-1](DAGGER)
3.700% 09/07/96 ...................... 3,000 3,000,000
-----------
39,990,497
-----------
IOWA--1.9%
Iowa Finance Authority
IDA RB DN (Sauer-Sundstrand Co.
Project) / (Bayerische LB Girozentrale
LOC) [P-1](DAGGER)
3.600% 09/07/96 ...................... 4,000 4,000,000
Iowa Finance Authority Tax-Exempt
Adjustable Mode IDA RB DN (Dixie
Bedding Co. Project) Series 1995 /
(Wachovia LOC) [Aa2](DAGGER)
3.600% 09/07/96 ...................... 3,000 3,000,000
Osceola IDA RB (Babson Brothers Co.
Projects) Series 1986 DN / (Bank of
New York LOC) [VMIG-1](DAGGER)
3.700% 09/07/96 ...................... 1,100 1,100,000
-----------
8,100,000
-----------
KANSAS--2.8%
Burlington PCR RB MB (Kansas City
Power & Light Company) /
(Deutsche Bank LOC)
[A-1+, P-1](DOUBLE DAGGER)
3.650% 10/10/96 ...................... 2,000 2,000,000
Butler County Solid Waste Disposal
Facilities RB DN [VMIG-1, A1](DAGGER)
4.000% 09/07/96 ...................... 2,000 2,000,000
Lawrence County Project IDA RB
Series A RAM Co. Project /
(Wachovia LOC) [A-1+, VMIG-1](DAGGER)
3.600% 09/05/96 ...................... 2,125 2,125,000
Shawnee IDA RB Thrall Enterprises, Inc.
Project DN (LOC-ABM-AMRO
Bank N.V.)[A-1+](DAGGER)
3.900% 09/07/96 ...................... 5,700 5,700,000
-----------
11,825,000
-----------
See Accompanying Notes to Financial Statements.
11
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1996
PAR
(000) VALUE
------- -----------
KENTUCKY--5.5%
Clark County PCR RB MB
(East Kentucky Power Cooperative,
Inc.) [A-1+, VMIG-1](DOUBLE DAGGER)
3.400% 10/15/96 .......................... $ 2,000 $ 2,000,000
Hopkinsville IDA RB Douglas Autotech
Corp. Project Series 1995 DN /
(Ind. Bank of Japan LOC) [A, A-1](DAGGER)
4.150% 09/07/96 .......................... 7,700 7,700,000
Hopkinsville RB (American Precision
Machinery) Series 1990 DN /
(Mitsubishi Bank LOC) [VMIG-1](DAGGER)
3.650% 09/07/96 .......................... 3,600 3,600,000
Maysville, City of Solid Waste Disposal
Facilities RB MB [A-1, P-1](DOUBLE DAGGER)
3.700% 09/12/96 .......................... 10,000 10,000,000
-----------
23,300,000
-----------
LOUISIANA--3.4%
Ascension Parish RB DN BASF
Corp. [P-1, Aa3](DAGGER)
3.550% 09/07/96 .......................... 2,800 2,800,000
East Baton Rouge Mortgage Finance
Authority MB Single Family
Mortgage Purchase Bonds /
(FNMA LOC) [VMIG-1](DOUBLE DAGGER)
3.400% 10/03/96 .......................... 2,910 2,910,000
East Baton Rouge Parish Pacific Corp.
Project DN / (Ind. Bank of
Japan LOC) [Aaa, VMIG-1](DAGGER)
3.850% 09/07/96 .......................... 6,500 6,500,000
Saint Charles PCR Series 1991 Shell
Oil Co. DN [A-1+, VMIG-1](DAGGER)
3.950% 09/01/96 .......................... 1,900 1,900,000
-----------
14,110,000
-----------
MARYLAND--3.2%
Howard County Bluffs at Clary's
Forest Apartment Facility
Series 1995 DN /
(FNB Maryland LOC) [A-1](DAGGER)
3.900% 09/07/96 .......................... 5,800 5,800,000
PAR
(000) VALUE
------- -----------
MARYLAND--(CONTINUED)
Maryland State Community
Development Adminstration
Department Single Family Housing
Bonds Project -- 2nd Series MB
[VMIG-1](DOUBLE DAGGER)
3.550% 10/01/96 ........................ $ 7,835 $ 7,835,000
-----------
13,635,000
-----------
MICHIGAN--0.6%
Michigan State Hospital Finance
Authority Daughters of Charity MB
[AA, Aa](DOUBLE DAGGER)
4.000% 11/01/96 ........................ 875 875,518
Michigan State Strategic Fund Limited
Obligation RB DN / (Comerica Bank
Detroit LOC) [A-1, P-1](DAGGER)
3.650% 09/07/96 ........................ 800 800,000
Northville IDA (Thrifty Northville Project)
Series 1984 DN / (LOC-FNB Chicago)
[P-1](DAGGER)
3.525% 09/07/96 ........................ 1,000 1,000,000
-----------
2,675,518
-----------
MISSOURI--3.3%
City of Berkeley IDA RB Exempt Facility
DN (St. Louis Air Cargo Services, Inc.
Project) / (LOC-Sumitomo Bank)
[A-1](DAGGER)
3.750% 09/07/96 ........................ 5,200 5,200,000
City of Kansas IDA RB (Mid-America
Health Services, Inc. Project)
Series 1984 DN / (Bank of New York
LOC) [A-1](DAGGER)
3.650% 09/07/96 ........................ 1,100 1,100,000
Kansas City IDA Demand Exempt Facility
RB (K.C. Air Cargo Services, Inc.
Project) DN / (LOC-Mellon Bank)
[A-1](DAGGER)
3.750% 09/07/96 ........................ 7,600 7,600,000
-----------
13,900,000
-----------
See Accompanying Notes to Financial Statements.
12
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1996
PAR
(000) VALUE
------- -----------
NEBRASKA--0.9%
Lancaster Sun-Husker Foods, Inc.
Project DN / (Bank of Tokyo LOC)
[A-1+](DAGGER)
4.150% 09/07/96 ......................... $ 3,800 $ 3,800,000
-----------
NEVADA--0.9%
Clark County Airport System Subordinate
Lien RB DN Series 1995 A-2 / (Toronto
Dominion LOC) [A-1+, VMIG-1](DAGGER)
3.600% 09/07/96 ......................... 1,680 1,680,000
Clark County IDA RB DN / (Swiss Bank
LOC) [A-1+, VMIG-1](DAGGER)
3.950% 09/01/96 ......................... 2,300 2,300,000
-----------
3,980,000
-----------
NEW HAMPSHIRE--4.8%
Health and Higher Education Facility
Authority Veteran Hospital Assoc.
DN Series 1985 E / (AMBAC
Insurance) [A-1+](DAGGER)
3.400% 09/07/96 ......................... 200 200,000
New Hampshire Higher Education &
Health Facility DN (AMBAC Insurance)
[A-1+, VMIG-1](DAGGER)
3.450% 09/07/96 ......................... 600 600,000
New Hampshire State Housing Finance
Authority Multifamily RB Countryside
Project DN / (General Electric Capital
Corp. LOC) [VMIG-1](DAGGER)
3.650% 09/07/96 ......................... 14,700 14,700,000
New Hampshire State Housing Finance
Authority Single Family Housing
Bond MB / (FGIC Insurance)
[VMIG-1](DOUBLE DAGGER)
3.650% 01/15/97 ......................... 4,500 4,500,000
-----------
20,000,000
-----------
NORTH CAROLINA--0.1%
Mecklenburg County Industrial Facility
and Pollution Control Financing
Authority (Edgcomb Metals Co.
Project) Series 1984 DN / (Banque
Nationale de Paris LOC)(DAGGER)
3.500% 09/07/96 ......................... 300 300,000
-----------
PAR
(000) VALUE
------- -----------
NORTH DAKOTA--0.8%
North Dakota Housing Finance Agency
Housing Finance Program Bonds
Home Mortgage Finance Program
DN / (FGIC Insurance) [VMIG-1](DAGGER)
3.850% 04/03/97 ........................ $ 3,500 $ 3,500,000
-----------
OKLAHOMA--0.5%
Oklahoma Development Finance
Authority Shawnee Funding Limited
DN / (Bank of Nova Scotia LOC)(DAGGER)
3.650% 09/07/96 ........................ 2,000 2,000,000
-----------
PUERTO RICO--0.1%
Puerto Rico Industrial Medical Health
Education and Environmental PCR
(Anna G. Mendez Project) DN /
(LOC-Bank of Tokyo) [A-1](DAGGER)
3.550% 09/07/96 ........................ 600 600,000
-----------
RHODE ISLAND--0.5%
Rhode Island Housing & Mortgage
Finance Corp. Convertible Home
Ownership Opportunity Bonds
Series 19 D MB / (Society General
LOC) [A-1+, VMIG-1](DOUBLE DAGGER)
3.550% 01/30/97 ........................ 2,000 2,000,000
-----------
SOUTH CAROLINA--3.7%
Anderson County IDA RB for Culp, Inc.
Project DN / (Wachovia LOC)(DAGGER)
3.600% 09/07/96 ........................ 6,580 6,580,000
Marlboro County Solid Waste Disposal
Facilities RB DN (Willamette Industries,
Inc. Project) Series 1995 (LOC-
Deutsche Bank A.G.) [A-1](DAGGER)
4.050% 09/07/96 ........................ 9,000 9,000,000
-----------
15,580,000
-----------
TENNESSEE--2.5%
Memphis General Improvement DN /
(LOC-West Deutsche Landesbank)
[A-1+, VMIG-1](DAGGER)
3.600% 09/07/96 ........................ 1,000 1,000,000
See Accompanying Notes to Financial Statements.
13
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1996
PAR
(000) VALUE
------- -----------
TENNESSEE--(CONTINUED)
Metropolitan Nashville Airport Authority,
Airport Improvement Series 1993 RB
DN / (FGIC Insurance)
[A-1+, VMIG-1](DAGGER)
3.500% 09/04/96 ...................... $ 1,100 $ 1,100,000
Montgomery County Public Building
Authority County Loan Pool G.O. DN /
(NCNB LOC) [A-1](DAGGER)
3.550% 09/07/96 ...................... 2,400 2,400,000
Oak Ridge Municipal Solid Waste
Disposal Facility Bonds
Series 1996 M4 Environmental
Project DN / (Sunbank LOC)(DAGGER)
3.650% 09/07/96 ...................... 6,000 6,000,000
-----------
10,500,000
-----------
TEXAS--6.9%
Angelina and Neches River Authority
Solid Waste Disposal RB MB
[A-1, P-1](DOUBLE DAGGER)
3.800% 10/11/96 ...................... 5,300 5,300,000
Brazos River Harbor Navigation
(Dow Chemical Co. Project)
Series 1988 DN [P-1](DAGGER)
3.700% 10/11/96 ...................... 2,000 2,000,000
Harris County Health Facilities
Development Corp. Hospital
RB DN [A-1+](DAGGER)
3.750% 09/01/96 ...................... 7,200 7,200,000
San Antonio Housing Finance Corp.
(Wellington Place Apartments)
(LOC-Banc One) Series 1995
A DN [A-1+, AA](DAGGER)
3.600% 09/07/96 ...................... 3,000 3,000,000
State of Texas TAN [SP-1+, MIG]
4.750% 08/29/97 ...................... 7,000 7,053,017
Texas State Veterans Housing
Authority MB(DOUBLE DAGGER)
3.900% 11/06/96 ...................... 4,000 4,000,000
Travis County Housing Finance
Authority MB(DOUBLE DAGGER)
4.000% 11/01/96 ...................... 430 430,255
-----------
28,983,272
-----------
PAR
(000) VALUE
------- -----------
UTAH--2.0%
Intermountain Power Agency Power
Supply Refunding Series 1985 E (Spa-
Bank of America) RB MB / (Morgan
Guaranty LOC) [A-1, VMIG-1](DOUBLE DAGGER)
3.930% 06/16/97 .......................... $ 2,000 $2,000,000
Salt Lake Airport RB DN (LOC-Credit
Suisse) [A-1+, VMIG-1](DAGGER)
3.450% 09/07/96 .......................... 2,300 2,300,000
Utah State Board of Regents Student
Loan Revenue Series C RB DN /
(Dresdner Bank LOC) [A-1+, VMIG-1](DAGGER)
3.550% 09/07/96 .......................... 3,400 3,400,000
Utah State Board of Regents Student
Loan Revenue Series L RB DN /
(Dresdner Bank LOC) [A-1+, VMIG-1](DAGGER)
3.550% 09/07/96 .......................... 900 900,000
----------
8,600,000
----------
VERMONT--0.2%
Vermont Educational & Health Buildings
Agency Hospital RB (AMBAC Insurance)
DN [A-1+, VMIG-1](DAGGER)
3.450% 09/07/96 .......................... 855 855,000
----------
VIRGINIA--5.7%
Alexandria IDA Adjustable Tender
Resource Recovery (Alexandria/
Arlington Waste-to-Energy Facility)
Series 1986 A DN / (Swiss Bank LOC)
[VMIG-1, A-1+](DAGGER)
3.900% 09/01/96 .......................... 200 200,000
Alexandria Redevelopment & Housing
Authority Multi-Family Housing
Series A DN [A-1](DAGGER)
3.550% 09/07/96 .......................... 3,100 3,100,000
Capital Region Airport Commission
(Richmond International Airport
Project) Series 1995 B DN / (AMBAC
Insurance ) [A-1+, VMIG-1](DAGGER)
3.300% 09/07/96 .......................... 1,700 1,700,000
Capital Region Airport Commission
(Richmond International Airport
Project) Series 1995 C DN / (AMBAC
Insurance) [VMIG-1, A-1+](DAGGER)
3.450% 09/07/96 .......................... 2,500 2,500,000
See Accompanying Notes to Financial Statements.
14
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1996
PAR
(000) VALUE
------- -----------
VIRGINIA--(CONTINUED)
Culpeper Town IDA Residential Care
Facility RB DN / (NCNB LOC) [A-1](DAGGER)
3.550% 09/07/96 ......................... $ 500 $ 500,000
Fairfax County IDA DN Series 1988 C /
(LOC-Credit Suisse) [A-1+](DAGGER)
3.650% 09/07/96 ......................... 200 200,000
King George County IDA (Birchwood
Power Partners, L.P. Project)
Series 1995 DN / (Credit Suisse LOC)
[A-1+](DAGGER)
4.000% 09/07/96 ......................... 1,300 1,300,000
Louisa County IDA Pooled Financing
Series 1995 DN (LOC-Nations Bank)
[A-1](DAGGER)
3.500% 09/07/96 ......................... 2,500 2,500,000
Lynchburg Hospital RB Federal Housing
Authority Mid-Atlantic
Series 1985 E DN / (AMBAC Insurance)
[A-1](DAGGER)
3.350% 09/07/96 ......................... 800 800,000
Lynchburg IDA Hospital Facilities
(Mid-Atlantic States Capital Asset
Finance Project) Series 1985 C DN /
(AMBAC Insurance)
[A-1+, VMIG-1](DAGGER)
3.350% 09/07/96 ......................... 500 500,000
Lynchburg IDA Hospital Facilities
(Mid-Atlantic States Capital Asset
Finance Project) Series 1985 G DN
(AMBAC Insurance) [VMIG-1](DAGGER)
3.350% 09/07/96 ......................... 7,900 7,900,000
Peninsula Port Authority Port Facility
(Shell Coal and Terminal Co.)
Series 1987 DN (AMBAC Insurance)
[Aaa, A-1+](DAGGER)
3.800% 09/01/96 ......................... 1,000 1,000,000
Peninsula Port Authority Dominion
Terminal Series 1987 D MB / (Barclays
Bank LOC) [A1+, P-1](DOUBLE DAGGER)
3.850% 09/01/96 ......................... 800 800,000
PAR
(000) VALUE
------- -----------
VIRGINIA--(CONTINUED)
Peninsula Port IDA RB (Allied Signal, Inc.
Project) Series 1993 (Allied Signal
Corp. Obligation) DN [A-1](DAGGER)
3.650% 09/07/96 ............................ $ 1,000 $ 1,000,000
-----------
24,000,000
-----------
WASHINGTON--1.2%
Port of Seattle IDA DN (Alaska Airlines
Project) / (Bank of NY LOC) [A-1](DAGGER)
3.600% 09/07/96 ......................... 4,580 4,580,000
Washington State Adjustable Rate G.O.
Bonds DN / (Landesbank Hessen LOC)
[A-1+, VMIG-1](DAGGER)
3.500% 09/07/96 ......................... 400 400,000
-----------
4,980,000
-----------
WEST VIRGINIA--2.5%
Grant County Municipal Solid Waste
MB [VMIG-1](DOUBLE DAGGER)
3.850% 09/10/96 ......................... 5,000 5,000,000
Marshall County IDA US/Canada Project
DN / (Harris Trust & Savings Bank
LOC) [A-1+, AA-](DAGGER)
3.650% 09/07/96 ......................... 3,500 3,500,000
West Virginia Hospital Finance Authority
Hospital RB DN (VHA Mid-Atlantic
States, Inc. Capital Asset)
(AMBAC Insurance) [A-1+, VMIG-1](DAGGER)
3.450% 09/07/96 ......................... 600 1,200,000
West Virginia Hospital Finance Authority
Hospital RB DN (Mid-Atlantic
Capital Finance Project) Series 1985
C DN (AMBAC Insurance)
[A-1+, VMIG-1](DAGGER)
3.450% 09/07/96 ......................... 700 700,000
-----------
10,400,000
-----------
WISCONSIN--1.1%
Carlton DN Wisconsin Power &
Light Project [P-1](DAGGER)
3.600% 09/07/96 ......................... 4,800 4,800,000
-----------
See Accompanying Notes to Financial Statements.
15
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONCLUDED)
AUGUST 31, 1996
VALUE
------------
TOTAL INVESTMENTS AT VALUE--99.8%
(Cost $420,156,916*) $420,156,916
OTHER ASSETS IN EXCESS
OF LIABILITIES--0.2% 731,430
------------
NET ASSETS (Applicable to
202,009,609 Bedford shares
129,398,582 Bradford shares
115,765 Cash Preservation shares
89,426,172 Janney Montgomery
Scott shares, 5,143 RBB shares
and 800 other shares)--100.0% $420,888,346
============
NET ASSET VALUE, offering and
redemption price per share
($420,888,346 (DIVIDE) 420,956,071) $1.00
=====
* Also cost for Federal income tax purposes.
(DAGGER) Variable Rate Demand Notes -- The interest rate shown is the rate as of
August 31, 1996 and the maturity shown is the longer of the next
interest readjustment date or the date the principal amount shown can
be recovered through demand.
(DOUBLE DAGGER) Put Bonds -- Maturity date is the put date.
The Moody's Investor Service, Inc. and Standard and Poor's Ratings Group's
ratings indicated are the most recent ratings available at August 31, 1996.
These ratings have not been audited by the Independent Accountants, and,
therefore, are not covered by the report of Independent Accountants.
INVESTMENT ABBREVIATIONS
BAN.................................Bond Anticipation Note
DN.............................................Demand Note
GO.....................................General Obligations
LOC.......................................Letter of Credit
IDA.......................Industrial Development Authority
MB..........................................Municipal Bond
PCR..............................Pollution Control Revenue
RAN..............................Revenue Anticipation Note
RAW..........................Revenue Anticipation Warrants
RB............................................Revenue Bond
TAN..................................Tax Anticipation Note
TECP...........................Tax Exempt Commercial Paper
TRAN.....................Tax and Revenue Anticipation Note
See Accompanying Notes to Financial Statements.
16
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1996
<TABLE>
<CAPTION>
GOVERNMENT MUNICIPAL
SECURITIES MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------
<S> <C> <C> <C>
Investment Income
Interest .............................. $ 660,462 $118,092,977 $15,900,230
----------- ------------ -----------
Expenses
Investment advisory fees .............. 39,247 7,702,090 1,409,660
Administration fees ................... 9,813 -- 428,209
Distribution fees ..................... 39,251 9,304,376 2,427,986
Service organization fees ............. -- 471,499 --
Directors' fees ....................... 173 38,473 7,715
Custodian fees ........................ 15,604 345,973 88,191
Transfer agent fees ................... 29,401 3,044,149 291,739
Legal fees ............................ 415 77,139 17,721
Audit fees ............................ 291 61,049 12,514
Registration fees ..................... 11,200 434,000 192,999
Insurance expense ..................... 210 43,932 9,056
Organization expense .................. 9,349 -- --
Printing fees ......................... 42,010 426,220 72,100
Miscellaneous ......................... 3,914 1,884 387
----------- ------------ -----------
200,878 21,950,784 4,958,277
Less fees waived ...................... (49,060) (3,543,632) (1,236,642)
Less expense reimbursement
by advisor ......................... (82,957) (342,158) (17,576)
----------- ------------ -----------
Total expenses ................... 68,861 18,064,994 3,704,059
----------- ------------ -----------
Net investment income ................. 591,601 100,027,983 12,196,171
----------- ------------ -----------
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments 749,135 (12,987) (674)
Increase in net unrealized
depreciation on investments ........ (1,036,871) -- --
----------- ------------ -----------
Net loss on investments ............... (287,736) (12,987) (674)
----------- ------------ -----------
Net increase in net assets resulting
from operations ....................... $ 303,865 $100,014,996 $12,195,497
=========== ============ ===========
</TABLE>
See Accompanying Notes to Financial Statements.
17
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GOVERNMENT
SECURITIES PORTFOLIO MONEY MARKET PORTFOLIO
--------------------------------- ---------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1996 AUGUST 31, 1995
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Increase (decrease) in
net assets:
Operations:
Net investment income ................... $ 591,601 $ 2,852,634 $ 100,027,983 $ 64,913,329
Net gain (loss) on investments .......... (287,736) 382,436 (12,987) (18,463)
----------- ----------- -------------- --------------
Net increase in net assets resulting
from operations ....................... 303,865 3,235,070 100,014,996 64,894,866
----------- ----------- -------------- --------------
Distributions to shareholders:
Dividends to shareholders from
net investment income:
Bedford shares ........................ -- -- (49,874,649) (38,765,552)
Bradford Shares ....................... -- -- -- --
Cash Preservation shares .............. -- -- (10,092) (11,336)
Janney Montgomery Scott shares ........ -- -- (24,434,566) (4,784,092)
RBB shares ............................ (534,237) (2,609,620) (2,630) (2,530)
Sansom Street shares .................. -- -- (25,706,046) (21,349,819)
Distributions to shareholders from capital:
RBB shares ............................ (254,433) (834,878) -- --
----------- ----------- -------------- --------------
Total distributions to shareholders . (788,670) (3,444,498) (100,027,983) (64,913,329)
----------- ----------- -------------- --------------
Net capital share transactions ............ (1,244,286) (44,215,056) 374,464,737 736,630,198
----------- ----------- -------------- --------------
Total increase (decrease) in net assets ... (1,729,091) (44,424,484) 374,451,750 736,611,735
Net Assets:
Beginning of year ....................... 10,513,793 54,938,277 1,821,371,688 1,084,759,953
----------- ----------- -------------- --------------
End of year ............................. $ 8,784,702 $10,513,793 $2,195,823,438 $1,821,371,688
=========== =========== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY
MARKET PORTFOLIO
---------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 1996 AUGUST 31, 1995
--------------- ---------------
<S> <C> <C>
Increase (decrease) in
net assets:
Operations:
Net investment income ................... $ 12,196,171 $ 9,691,756
Net gain (loss) on investments .......... (674) 7,009
------------ ------------
Net increase in net assets resulting
from operations ....................... 12,195,497 9,698,765
------------ ------------
Distributions to shareholders:
Dividends to shareholders from
net investment income:
Bedford shares ........................ (5,960,711) (5,717,451)
Bradford Shares ....................... (3,611,114) (3,266,535)
Cash Preservation shares .............. (3,746) (5,648)
Janney Montgomery Scott shares ........ (2,620,457) (701,975)
RBB shares ............................ (143) (147)
Sansom Street shares .................. -- --
Distributions to shareholders from capital:
RBB shares ............................ -- --
------------ ------------
Total distributions to shareholders . (12,196,171) (9,691,756)
------------ ------------
Net capital share transactions ............ (1,864,843) 140,043,103
------------ ------------
Total increase (decrease) in net assets ... (1,865,517) 140,050,112
Net Assets:
Beginning of year ....................... 422,753,863 282,703,751
------------ ------------
End of year ............................. $420,888,346 $422,753,863
============ ============
</TABLE>
See Accompanying Notes to Financial Statements.
18
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
<TABLE>
<CAPTION>
GOVERNMENT SECURITIES PORTFOLIO
---------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1996 AUGUST 31, 1995* AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.54 $ 9.69 $ 10.73 $ 10.46 $ 10.12
------- ------- --------- -------- -------
Income from investment operations:
Net investment income 0.5220 0.5819 0.5931 0.7080 0.8002
Net losses on securities (both realized
and unrealized) (0.2540) 0.0361 (0.8651) 0.3300 0.3408
------- ------- --------- -------- -------
Total from investment operations 0.2680 0.6180 (0.2720) 1.0380 1.1410
------- ------- --------- -------- -------
Less distributions
Dividends (from net investment income) (0.5220) (0.5819) (0.5901) (0.7080) (0.8010)
Distributions (from excess net
investment income) -- -- (0.0235) -- --
Return of capital (0.2460) (0.1861) (0.1544) (0.0600) --
------- ------- ------- ------- -------
Total distributions (0.7680) (0.7680) (0.7680) (0.7680) (0.8010)
------- ------- --------- -------- -------
Net asset value, end of year $ 9.04 $ 9.54 $ 9.69 $ 10.73 $ 10.46
======= ======= ========= ======== =======
Total return 2.75%(b) 6.72%(b) (2.60%)(b) 10.36%(b) 11.73(b)
Ratios/Supplemental Data
Net assets, end of year (000) $8,785 $10,514 $54,938 $36,296 $25,604
Ratios of expenses to average net assets .70%(a) .72%(a) .64%(a) .66%(a) .83%(a)
Ratios of net investment income to average
net assets 6.05% 6.59% 5.86% 6.70% 7.81%
Portfolio turnover rate 77% 86% 65% 47% 21%
<FN>
(a) Without the waiver of advisory, administration and custody fees and without
the reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Government Securities Portfolio would have been
2.05%, 1.22%, 1.10%, 1.22% and 1.22% for the years ended August 31, 1996,
1995, 1994, 1993 and 1992, respectively.
(b) Sales load not reflected in total return.
* Certain numbers were revised to conform to current year presentation.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
19
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS (b)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
---------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ................. 0.0465 0.0482 0.0273 0.0238 0.0370
Net gains on securities (both
realized and unrealized) ............. -- -- -- -- 0.0007
-------- -------- -------- -------- --------
Total from investment
operations ........................ 0.0465 0.0482 0.0273 0.0238 0.0377
-------- -------- -------- -------- --------
Less distributions
Dividends (from net investment
income) .............................. (0.0465) (0.0482) (0.0273) (0.0238) (0.0370)
Distributions (from capital
gains) ............................... -- -- -- -- (0.0007)
-------- -------- -------- -------- --------
Total distributions ................ (0.0465) (0.0482) (0.0273) (0.0238) (0.0377)
-------- -------- -------- -------- --------
Net asset value, end of year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return ............................ 4.76% 4.93% 2.76% 2.41% 3.84%
Ratios /Supplemental Data
Net assets, end of year (000) ......... $61 $55 $45 $58 $74
Ratios of expenses to average
net assets ........................... 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a)
Ratios of net investment income
to average net assets ................ 4.65% 4.82% 2.73% 2.38% 3.70%
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
---------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ................. 0.0272 0.0279 0.0172 0.0172 0.0264
Net gains on securities (both
realized and unrealized) ............. -- -- -- -- --
-------- -------- -------- -------- --------
Total from investment
operations ........................ 0.0272 0.0279 0.0172 0.0172 0.0264
-------- -------- -------- -------- --------
Less distributions
Dividends (from net investment
income) .............................. (0.0272) (0.0279) (0.0172) (0.0172) (0.0264)
Distributions (from capital
gains) ............................... -- -- -- -- --
-------- -------- -------- -------- --------
Total distributions ................ (0.0272) (0.0279) (0.0172) (0.0172) (0.0264)
-------- -------- -------- -------- --------
Net asset value, end of year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return ............................ 2.76% 2.82% 1.73% 1.73% 2.67%
Ratios /Supplemental Data
Net assets, end of year (000) ......... $5 $5 $5 $5 $4
Ratios of expenses to average
net assets ........................... 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a)
Ratios of net investment income
to average net assets ................ 2.72% 2.79% 1.72% 1.72% 2.64%
<FN>
(a) Without the waiver of advisory and transfer agency fees and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Money Market Portfolio would have been 18.53%,
17.57%, 14.62%, 10.62% and 4.81% for the years ended August 31, 1996, 1995,
1994, 1993 and 1992, respectively. For the Municipal Money Market
Portfolio, the ratios of expenses to average net assets would have been
216.12%, 162.20%, 154.22%, 191.54% and 250.95% for the years ended August
31, 1996, 1995, 1994, 1993 and 1992, respectively.
(b) Financial Highlights relate solely to the RBB Class of shares within each
portfolio.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
20
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1996
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The RBB Fund, Inc. (the "Fund") is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The Fund
was incorporated in Maryland on February 29, 1988, and currently has seventeen
investment Portfolios, three of which are included in these financial
statements.
The Fund has authorized capital of thirty billion shares of common stock of
which 12.35 billion are currently classified into sixty-six classes. Each class
represents an interest in one of seventeen investment portfolios of the Fund.
The classes have been grouped into fifteen separate "families", eight of which
have begun investment operations: the RBB Family, the BEA Family, the Sansom
Street Family, the Bedford Family, the Cash Preservation Family, the Janney
Montgomery Scott Money Family, the n/i Family, and the Bradford Family. The RBB
Family represents interests in three portfolios, which are covered in this
report.
A) SECURITY VALUATION -- Government Securities Portfolio:
Portfolio securities for which market quotations are readily available are
valued at market value, which is currently determined using the last
reported sales price. If no sales are reported, as in the case of some
securities traded over-the-counter, portfolio securities are valued at the
mean between the last reported bid and asked prices. Corporate bonds,
tax-exempt bonds and notes, and government securities are valued on the
basis of quotations provided by an independent pricing service which uses
information with respect to transactions on bonds, quotations from bond
dealers, market transactions in comparable securities and various
relationships between securities in determining value. Short-term
obligations with maturities of 60 days or less are valued at amortized cost
which approximates market value.
Money Market Portfolio and Municipal Money Market Portfolio:
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 of the security.
Regular review and monitoring of the valuation is performed in an attempt
to avoid dilution or other unfair results to shareholders. These portfolios
seek to maintain net asset value per share at $1.00.
B) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security
transactions are accounted for on the trade date. The cost of investments
sold is determined by use of the specific identification method for both
financial reporting and income tax purposes. Interest income is recorded on
the accrual basis. Certain expenses, principally distribution, transfer
agent and printing, are class specific expenses and vary by class. Expenses
not directly attributable to a specific portfolio or class are allocated
based on relative net assets of each portfolio and class, respectively.
C) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Government
Securities Portfolio: Dividends from net investment income from each
portfolio are declared and paid at least monthly. Money Market Portfolio
and Municipal Money Market Portfolio: Dividends from net investment income
are declared daily and paid monthly. For all portfolios, any net realized
capital gains will be distributed at least annually. Income distributions
and capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of
mortgage-backed securities.
D) FEDERAL INCOME TAXES -- No provision is made for Federal taxes
as it is the Fund's intention to have each portfolio continue to qualify
for and elect the tax treatment applicable to regulated investment
companies under the Internal Revenue Code and make the requisite
distributions to its shareholders which will be sufficient to relieve it
from Federal income and excise taxes.
21
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1996
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E) REPURCHASE AGREEMENTS -- Money market instruments may be
purchased subject to the seller's agreement to repurchase them at an agreed
upon date and price. The seller will be required on a daily basis to
maintain the value of the securities subject to the agreement at not less
than the repurchase price. The agreements are conditioned upon the
collateral being deposited under the Federal Reserve book-entry system or
with the Fund's custodian or a third party sub-custodian.
F) USE OF ESTIMATES -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Pursuant to Investment Advisory Agreements, PNC Institutional Management
Corp. ("PIMC"), a wholly owned subsidiary of PNC Asset Management Group, Inc.,
which is in turn a wholly owned subsidiary of PNC Bank, National Association
("PNC Bank"), serves as investment advisor for each of the three portfolios
described herein.
For its advisory services, PIMC is entitled to receive the following fees,
computed daily and payable monthly based on a portfolio's average daily net
assets:
PORTFOLIO ANNUAL RATE
----------------------- -------------------------------------------------
Government Securities .40% of first $250 million of net assets;
Portfolio .35% of next $250 million of net assets;
and .30% of net assets in excess of $500 million.
Money Market .45% of first $250 million of net assets;
Portfolio .40% of next $250 million of net assets;
and .35% of net assets in excess of $500 million.
Municipal Money Market .35% of first $250 million of net assets;
Portfolio .30% of next $250 million of net assets;
and .25% of net assets in excess of $500 million.
PIMC may, at its discretion, voluntarily waive all or any portion of its
advisory fee for any of the portfolios. For each class of shares within a
respective portfolio, the net advisory fee charged to each class is the same on
a relative basis. For the year ended August 31, 1996, advisory fees and waivers
for each of the three investment portfolios were as follows:
<TABLE>
<CAPTION>
GROSS NET
ADVISORY ADVISORY
FEE WAIVER FEE
---------- ----------- ----------
<S> <C> <C> <C>
Government Securities Portfolio $ 39,247 $ (39,247) $ --
Money Market Portfolio 7,702,090 (3,527,715) 4,174,375
Municipal Money Market Portfolio 1,409,660 (1,218,973) 190,687
</TABLE>
PNC Bank serves as the sub-advisor for the Money Market and Municipal Money
Market Portfolios. The Government Securities Portfolio has no sub-advisor. PNC
Bank, as sub-advisor, receives a fee directly from PIMC, not the portfolios. In
addition, PNC Bank serves as custodian for each of the Fund's portfolios. PFPC
Inc.("PFPC"), an indirect wholly-owned subsidiary of PNC Bank, serves as each
class's transfer and disbursing agent.
22
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1996
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
PFPC may, at its discretion, voluntarily waive all or any portion of its
transfer agency fee for any class of shares. For the year ended August 31, 1996,
transfer agency fees and waivers for each class of shares within the three
investment portfolios were as follows:
<TABLE>
<CAPTION>
GROSS NET
TRANSFER AGENCY TRANSFER AGENCY
FEE WAIVER FEE
-------------- ------------- ---------------
<S> <C> <C> <C>
Government Securities Portfolio
RBB Class $ 29,401 $ -- $ 29,401
========== ========= ==========
Money Market Portfolio
Bedford Class $1,658,468 $ -- $1,658,468
Cash Preservation Class 8,613 (7,971) 642
Janney Montgomery
Scott Class 1,045,385 -- 1,045,385
RBB Class 8,149 (7,946) 203
Sansom Street Class 323,534 -- 323,534
---------- --------- ----------
Total Money Market Portfolio $3,044,149 $ (15,917) $3,028,232
========== ========= ==========
Municipal Money Market Portfolio
Bedford Class $ 104,373 $ -- $ 104,373
Bradford Class 59,772 -- 59,772
Cash Preservation Class 8,783 (8,303) 480
Janney Montgomery
Scott Class 109,422 -- 109,422
RBB Class 9,389 (9,366) 23
---------- --------- ----------
Total Municipal Money Market Portfolio $ 291,739 $ (17,669) $ 274,070
========== ========= ==========
</TABLE>
In addition, PFPC serves as administrator for the Government Securities and
Municipal Money Market Portfolios. The administration fee is computed daily and
payable monthly at the annual rate of .10% of each Portfolio's average daily net
assets. PFPC may, at its discretion, voluntarily waive all or any portion of its
administration fee for the Portfolios. For the year ended August 31, 1996,
administration fees and waivers for the two portfolios were as follows:
<TABLE>
<CAPTION>
GROSS NET
ADMINISTRATION ADMINISTRATION
FEE WAIVER FEE
-------------- -------------- --------------
<S> <C> <C> <C>
Government Securities Portfolio $ 9,813 $(9,813) $ --
Municipal Money Market Portfolio 428,209 -- 428,209
</TABLE>
The Fund, on behalf of each class of shares within the investment
portfolios, has adopted Distribution Plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, and has entered into Distribution
Contracts with Counsellors Securities Inc. ("Counsellors"), which provide for
each class to make monthly payments, based on average net assets, to Counsellors
of up to .65% on an annualized basis for the Bedford, Bradford, Cash
Preservation, Janney Montgomery Scott and RBB Classes, and up to .20% on an
annualized basis for the Sansom Street Class.
23
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1996
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
For the year ended August 31, 1996, distribution fees for each class of
shares within the three investment portfolios were as follows:
DISTRIBUTION
FEE
------------
Government Securities Portfolio
RBB Class $ 39,251
==========
Money Market Portfolio
Bedford Class $5,826,142
Cash Preservation Class 858
Janney Montgomery Scott Class 3,161,043
RBB Class 226
Sansom Street Class 316,107
---------
Total Money Market Portfolio $9,304,376
==========
Municipal Money Market Portfolio
Bedford Class $1,139,416
Bradford Class 723,264
Cash Preservation Class 531
Janney Montgomery Scott Class 564,754
RBB Class 21
----------
Total Municipal Money Market Portfolio $2,427,986
==========
The fund has entered into service agreements with banks affiliated with PNC
Bank who render support services to customers who are the beneficial owners of
the Sansom Street Class in consideration of the payment of .10% of the daily net
asset value of such shares. For the year ended August 31, 1996, service
organization fees were $471,499 for the Money Market Portfolio.
NOTE 3. PURCHASE AND SALES OF SECURITIES
For the year ended August 31, 1996, purchases and sales of investment
securities and United States Government Obligations(other than short-term
investments) were as follows:
<TABLE>
<CAPTION>
INVESTMENT SECURITIES U.S. GOVERNMENT OBLIGATIONS
------------------------------ -----------------------------
PURCHASES SALES PURCHASES SALES
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Government Securities Portfolio $ -- $ -- $ 6,752,009 $ 8,389,229
</TABLE>
24
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1996
NOTE 4. CAPITAL SHARES
Transactions in capital shares for each year were as follows:
<TABLE>
<CAPTION>
GOVERNMENT SECURITIES PORTFOLIO
-------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 1996 AUGUST 31, 1995
---------------------------- ----------------------------
SHARES VALUE SHARES VALUE
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Shares sold:
RBB Class 18,278 $ 167,759 9,203 $ 88,182
Shares issued in reinvestment of dividends:
RBB Class 50,559 478,224 78,459 744,477
Shares repurchased:
RBB Class (198,915) (1,890,269) (4,653,758) (45,047,715)
----------- ----------- ----------- ------------
Net decrease (130,078) $(1,244,286) (4,566,096) $(44,215,056)
=========== =========== =========== ============
RBB Shares authorized 100,000,000 100,000,000
=========== ===========
</TABLE>
25
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1996
NOTE 4. CAPITAL SHARES (CONTINUED)
Transactions in capital shares (at $1.00 per capital share) for each year
were as follows:
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO MUNICIPAL MONEY MARKET PORTFOLIO
------------------------------------- ------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1996 AUGUST 31, 1995
--------------- --------------- --------------- ---------------
VALUE VALUE VALUE VALUE
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Shares sold:
Bedford Class $ 3,797,592,288 $ 2,966,911,277 $ 1,022,457,772 $ 1,104,088,188
Bradford Class -- -- 479,401,891 474,166,249
Cash Preservation Class 122,344 84,527 171,907 175,548
Janney Montgomery
Scott Class 2,359,936,867 855,058,809 408,374,271 208,067,881
RBB Class 584,206 31,504 69,480 5,004
Sansom Street Class 2,191,596,362 1,864,628,110 -- --
Shares issued in reinvestment
of dividends:
Bedford Class 49,290,088 37,681,204 5,847,767 5,576,408
Bradford Class -- -- 3,506,714 3,126,860
Cash Preservation Class 10,084 11,226 3,515 5,478
Janney Montgomery
Scott Class 24,077,173 4,534,944 2,602,869 662,565
RBB Class 2,625 2,500 143 146
Sansom Street Class 18,389,361 16,689,941 -- --
Shares repurchased:
Bedford Class (3,673,362,904) (2,779,499,052) (1,024,790,222) (1,093,651,142)
Bradford Class -- -- (464,445,579) (466,448,018)
Cash Preservation Class (165,733) (91,268) (220,929) (220,601)
Janney Montgomery
Scott Class (2,265,789,890) (415,944,656) (434,775,023) (95,506,391)
RBB Class (580,821) (23,917) (69,419) (5,072)
Sansom Street Class (2,127,237,313) (1,813,444,951) -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) $ 374,464,737 $ 736,630,198 $ (1,864,843) $ 140,043,103
=============== =============== =============== ===============
RBB Shares authorized 500,000,000 500,000,000 500,000,000 500,000,000
=============== =============== =============== ===============
</TABLE>
26
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1996
NOTE 5. NET ASSETS
At August 31, 1996, net assets consisted of the following:
<TABLE>
<CAPTION>
GOVERNMENT MUNICIPAL
SECURITIES MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO
----------- -------------- ------------
<S> <C> <C> <C>
Capital Paid-In
Bedford Class -- $1,109,351,734 $202,009,609
Bradford Class -- -- 129,398,582
Cash Preservation Class -- 202,360 115,765
Janney Montgomery Scott Class -- 561,873,247 89,426,172
RBB Class $13,057,316 61,412 5,143
Sansom Street Class -- 524,367,399 --
Other Classes -- 800 800
Accumulated Net Realized Gain (Loss) on Investments
Bedford Class -- (17,400) (69,803)
Bradford Class -- -- 339
Cash Preservation Class -- (3) 5
Janney Montgomery Scott Class -- (7,821) 1,734
RBB Class (4,462,706) (1) --
Sansom Street Class -- (8,289) --
Unrealized Appreciation on Investments
Bedford Class -- -- --
Bradford Class -- -- --
Cash Preservation Class -- -- --
Janney Montgomery Scott Class -- -- --
RBB Class 190,092 -- --
Sansom Street Class -- -- --
----------- -------------- ------------
$ 8,784,702 $2,195,823,438 $420,888,346
=========== ============== ============
</TABLE>
NOTE 6. CAPITAL LOSS CARRYOVERS
At August 31, 1996, capital loss carryovers were available to offset future
realized gains as follows: $4,462,706 in the Government Securities Portfolio of
which $602,716 expires in 1999, $764,714 expires in 2000, $750,038 expires in
2002, $2,345,238 expires in 2003; $33,513 in Money Market Portfolio of which
$2,062 expires in 2002, $18,464 expires in 2003, $12,987 expires in 2004;
$67,725 in the Municipal Money Market Portfolio of which $55,760 expires in
1999, $444 expires in 2000, $1,058 expires in 2001, $9,789 expires in 2002 and
$674 expires in 2004.
27
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1996
NOTE 7. OTHER FINANCIAL HIGHLIGHTS
The Fund currently offers four other classes of shares representing
interest in the Money Market Portfolio: Bedford, Cash Preservation, Janney
Montgomery Scott and Sansom Street. The Fund currently offers four other classes
of shares representing interest in the Municipal Money Market Portfolio:
Bedford, Bradford, Cash Preservation and Janney Montgomery Scott. Each class is
marketed to different types of investors. Financial Highlights of the Cash
Preservation class is not presented in this report due to its immateriality.
Such information is available in the annual reports of the Cash Preservation
family. The financial highlights of certain of the other classes are as follows:
THE BEDFORD FAMILY
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
---------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ........... 0.0469 0.0486 0.0278 0.0243 0.0375
Net gains on securities (both
realized and unrealized) ....... -- -- -- -- 0.0007
---------- -------- -------- -------- --------
Total from investment
operations .................. 0.0469 0.0486 0.0278 0.0243 0.0382
---------- -------- -------- -------- --------
Less distributions
Dividends (from net investment
income) ........................ (0.0469) (0.0486) (0.0278) (0.0243) (0.0375)
Distributions (from capital
gains) ......................... -- -- -- -- (0.0007)
---------- -------- -------- -------- --------
Total distributions .......... (0.0469) (0.0486) (0.0278) (0.0243) (0.0382)
---------- -------- -------- -------- --------
Net asset value, end of year ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ======== ======== ======== ========
Total Return ...................... 4.79% 4.97% 2.81% 2.46% 3.89%
Ratios /Supplemental Data
Net assets, end of year (000) ... $1,109,334 $935,821 $710,737 $782,153 $736,842
Ratios of expenses to average
net assets ..................... .97%(a) .96%(a) .95%(a) .95%(a) .95%(a)
Ratios of net investment income
to average net assets .......... 4.69% 4.86% 2.78% 2.43% 3.75%
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
---------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ........... 0.0288 0.0297 0.0195 0.0195 0.0287
Net gains on securities (both
realized and unrealized) ....... -- -- -- -- --
-------- -------- -------- -------- --------
Total from investment
operations .................. 0.0288 0.0297 0.0195 0.0195 0.0287
-------- -------- -------- -------- --------
Less distributions
Dividends (from net investment
income) ........................ (0.0288) (0.0297) (0.0195) (0.0195) (0.0287)
Distributions (from capital
gains) ......................... -- -- -- -- --
-------- -------- -------- -------- --------
Total distributions .......... (0.0288) (0.0297) (0.0195) (0.0195) (0.0287)
-------- -------- -------- -------- --------
Net asset value, end of year ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return ...................... 2.92% 3.01% 1.97% 1.96% 2.90%
Ratios /Supplemental Data
Net assets, end of year (000) ... $201,940 $198,425 $182,480 $215,577 $176,950
Ratios of expenses to average
net assets ..................... .84%(a) .82%(a) .77%(a) .77%(a) .77%(a)
Ratios of net investment income
to average net assets .......... 2.88% 2.97% 1.95% 1.95% 2.87%
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of
certain operating expenses, the ratios of expenses to average net assets
for the Money Market Portfolio would have been 1.14%, 1.17%, 1.16%, 1.19%,
and 1.20% for the years ended August 31, 1996, 1995, 1994, 1993, and 1992,
respectively. For the Municipal Money Market Portfolio, the ratios of
expenses to average net assets would have been 1.12%, 1.14%, 1.12%, 1.16%,
and 1.15% for the years ended August 31, 1996, 1995, 1994, 1993 and 1992,
respectively.
</FN>
</TABLE>
28
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1996
NOTE 7. OTHER FINANCIAL HIGHLIGHTS (CONTINUED)
BRADFORD MUNICIPAL MONEY MARKET SHARES
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE FOR THE FOR THE FOR THE JANUARY 10, 1992
YEAR YEAR YEAR YEAR (COMMENCEMENT OF
ENDED ENDED ENDED ENDED OPERATIONS) TO
AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992
--------------- --------------- --------------- --------------- ----------------
<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 ................. 0.0288 0.0297 0.0195 0.0195 0.0154
-------- -------- -------- -------- ---------
Total from investment operations .... 0.0288 0.0297 0.0195 0.0195 0.0154
-------- -------- -------- -------- ---------
Less distributions
Dividends (from net investment income) (0.0288) (0.0297) (0.0195) (0.0195) (0.0154)
-------- -------- -------- -------- ---------
Total distributions ................. (0.0288) (0.0297) (0.0195) (0.0195) (0.0154)
-------- -------- -------- -------- ---------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== =========
Total Return ............................. 2.92% 3.01% 1.97% 1.96% 2.42%(b)
Ratios /Supplemental Data
Net assets, end of period (000) ....... $129,399 $110,936 $100,089 $76,975 $69,586
Ratios of expenses to average net assets .84%(a) .82%(a) .77%(a) .77%(a) .77%(a)(b)
Ratios of net investment income to
average net assets .................. 2.88% 2.97% 1.95% 1.95% 2.40%(b)
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of
certain operating expenses, the ratios of expenses to average net assets
would have been 1.12%, 1.14%, 1.11% and 1.16% for the years ended August
31, 1996, 1995, 1994 and 1993, respectively, and 1.16% annualized for the
period ended August 31, 1992.
(b) Annualized.
</FN>
</TABLE>
29
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1996
NOTE 7. OTHER FINANCIAL HIGHLIGHTS (CONTINUED)
THE JANNEY MONTGOMERY SCOTT MONEY FUNDS
<TABLE>
<CAPTION>
MUNICIPAL MONEY
MONEY MARKET PORTFOLIO MARKET PORTFOLIO
---------------------------------- ---------------------------------
FOR THE PERIOD FOR THE PERIOD
FOR THE JUNE 12, 1995 FOR THE JUNE 12, 1995
YEAR (COMMENCEMENT OF YEAR (COMMENCEMENT OF
ENDED OPERATIONS) TO ENDED OPERATIONS) TO
AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1996 AUGUST 31, 1995
--------------- ---------------- --------------- ----------------
<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 .............................. 0.0465 0.0112 0.0278 0.0063
-------- -------- -------- --------
Total from investment operations ................ 0.0465 0.0112 0.0278 0.0063
-------- -------- -------- --------
Less distributions
Dividends (from net investment income) ............. (0.0465) (0.0112) (0.0278) (0.0063)
-------- -------- -------- --------
Total distributions ............................. (0.0465) (0.0112) (0.0278) (0.0063)
-------- -------- -------- --------
Net asset value, end of period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total Return .......................................... 4.76% 5.30%(b) 2.81% 2.87%(b)
Ratios /Supplemental Data
Net assets, end of period (000) .................... $561,865 $443,645 $ 89,428 $113,226
Ratios of expenses to average net assets ........... 1.00%(a) 1.00%(a)(b) 0.94%(a) 1.00%(a)(b)
Ratios of net investment income to
average net assets ................................ 4.65% 5.04%(b) 2.78% 2.83%(b)
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of
certain operating expenses, the ratios of expenses to average net assets
for the Money Market Portfolio would have been 1.23% for the year ended
August 31, 1996 and 1.23% annualized for the period ended August 31, 1996.
For the Municipal Money Market Portfolio, the ratio of expenses to average
net assets would have been 1.23% for the year ended August 31, 1996 and
1.30% annualized for the period ended August 31, 1995.
(b) Annualized.
</FN>
</TABLE>
30
<PAGE>
THE RBB FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
AUGUST 31, 1996
NOTE 7. OTHER FINANCIAL HIGHLIGHTS (CONTINUED)
THE SANSOM STREET FAMILY
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
--------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993 AUGUST 31, 1992
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ------- -------- --------
Income from investment operations:
Net investment income .................... 0.0518 0.0543 0.0334 0.0304 0.0435
Net gains on securities (both realized
and unrealized) ........................ -- -- -- -- 0.0007
-------- -------- ------- -------- --------
Total from investment operations ...... 0.0518 0.0543 0.0334 0.0304 0.0442
-------- -------- ------- -------- --------
Less distributions
Dividends (from net investment income) ... (0.0518) (0.0543) (0.0334) (0.0304) (0.0435)
Distributions (from capital gains) ....... -- -- -- -- (0.0007)
-------- -------- ------- -------- --------
Total distributions ................... (0.0518) (0.0543) (0.0334) (0.0304) (0.0442)
-------- -------- ------- -------- --------
Net asset value, end of year ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return ............................... 5.30% 5.57% 3.39% 3.08% 4.51%
Ratios /Supplemental Data
Net assets, end of year .................. $524,359 $441,614 $373,745 $190,794 $228,079
Ratios of expenses to average net assets . .48%(a) .39%(a) .39%(a) .34%(a) .35%(a)
Ratios of net investment income to
average net assets ...................... 5.18% 5.43% 3.34% 3.04% 4.35%
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of
certain operating expenses, the ratios of expenses to average net assets
for the Money Market Portfolio would have been .65%, .59%, .60%, .60% and
.61% for the years ended August 31, 1996, 1995, 1994, 1993 and 1992,
respectively.
</FN>
</TABLE>
31
<PAGE>
TAX INFORMATION FOR SHAREHOLDERS
(UNAUDITED)
In the twelve months ended August 31, 1996 (the end of the Fund's fiscal year),
100% of the dividends paid by the Municipal Money Market Portfolio were
exempt-interest dividends for purposes of federal income taxes and free from
such taxes. However, approximately 47% of such dividends was attributable to
interest on private activity bonds which must be included in federal alternative
minimum taxable income for the purpose of determining liability for federal
alternative minimum tax.
In January 1997, you will be furnished with a schedule showing the yearly
percentage breakdown by state or U.S. possession of the source of interest
earned by the Municipal Money Market Portfolio in 1996. It is suggested that you
consult your tax adviser concerning the applicability of state and local taxes
to dividends paid by the Fund during the year.
32
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