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THE BEDFORD FAMILY
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
MUNICIPAL
MONEY MARKET PORTFOLIO
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GOVERNMENT OBLIGATIONS
MONEY MARKET PORTFOLIO
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ANNUAL REPORT
AUGUST 31, 1997
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<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
ANNUAL INVESTMENT ADVISER'S REPORT
For much of the past year, economic activity grew progressively stronger
and only the good behavior of inflation kept money market yields from an
appreciable rise. In last year's final two quarters and through 1997's first
quarter, the nation's gross domestic product rose from a rate of 2.1% to 4.9%,
led by healthy gains in employment and wages. This strong momentum put pressure
on the Federal Reserve to raise short-term interest rates, particularly early
this year. The Fed's only move, however, was in March when it increased the
federal funds rated from 5.25% to 5.50%. The Fed likened its move to buying
insurance against the possible need for larger moves at a later date. The
reaction to the tighter monetary policy was quite severe, with both the stock
and bond markets experiencing sharp declines in April.
In the months following the Fed's move, economic activity began to show
signs of slowing and the money market yield curve, which reached its steepest
slope in March, began to flatten. One-year yields, for example, which peaked at
6.30% fell below 6.00% over the next few months, while the one- to three-month
sector held steady in a 5.50-5.65% range. One interesting anomaly was the U.S.
Treasury market where yields on three-, six-, and twelve-month bills traded well
below other money market rates. With the huge amount of cash in the market, the
three-month Treasury bill yielded as low as 4.90% in the second quarter, while
overnight rates remained at 5.50%. By the end of August, the three-month
Treasury bill had recovered somewhat, but was still 30 basis points below the
federal funds rate. This dichotomy in market yields generally kept the duration
of the government portfolio shorter than the prime portfolio, as it carried more
overnight investments for both yield and liquidity. In contrast, the prime
portfolio was more attracted to the 3-month and 1-year sectors to pick up
incremental yield during those occasions when the curve steepened.
Early in the year, a lack of supply and a renewed belief in a Federal
Reserve tightening kept municipal yields at historically expensive levels.
Variable rate demand securities maintained strong interest from investors in
anticipation of higher short-term interest rates and in preparation for April's
income tax payments. Total tax-exempt money fund assets reached new all-time
highs in each of the first four months of the year. Tax-free variable rate
yields rose in volatile trading during the second quarter and returns offered
taxable equivalent yields that were 50 basis points above taxable securities.
Substantial cash inflows in mid-summer from coupon payments and crossover buyers
caused daily reset demand notes to drop approximately 170 basis points, while
weekly reset demand notes fell 70 basis points. By the end of August, total
tax-free money market fund assets, as measured by "IBC's MONEY FUND REPORT,"
climbed to an all-time high of over $154 billion. Interest rate volatility and a
flat yield curve allowed RBB Municipal and RBB New York Municipal Money Funds to
maintain shorter average weighted maturities than their "IBC MONEY FUND REPORT"
peer groups. For the year ended August, assets in RBB Municipal rose from $421
million to $488 million, while RBB New York increased from $88 million to $110
million.
PNC Institutional Management Corporation
(Please dial toll-free 800-533-7719 for questions regarding
your account or contact your broker.)
<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 Money Market,
Municipal Money Market and Government Obligations Money Market Portfolios of the
RBB Fund, Inc., as of August 31, 1997 and the related statement 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 owned by the
custodian as of August 31, 1997. 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
Money Market, Municipal Money Market and Government Obligations Money Market
Portfolios of the RBB Fund, Inc., as of August 31, 1997 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 17, 1997
2
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1997
PAR
(000) VALUE
-------- ------------
AGENCY OBLIGATIONS--10.0%
Student Loan Marketing
Association(DAGGER)
5.450% 09/02/97 ......................... $ 10,000 $ 10,000,000
5.460% 09/02/97 ......................... 10,000 10,000,000
Student Loan Marketing Assocation
Discount Notes
5.500% 09/02/97 ......................... 250,000 249,961,806
------------
TOTAL AGENCY OBLIGATIONS
(Cost $269,961,806) ................. 269,961,806
------------
CERTIFICATES OF DEPOSIT--32.8%
BANK NOTES--4.6%
First National Bank of Boston
5.625% 10/08/97 ......................... 50,000 50,000,000
5.600% 11/19/97 ......................... 75,000 75,000,000
------------
125,000,000
------------
DOMESTIC CERTIFICATES OF DEPOSIT--5.6%
Bankers Trust Co.
5.980% 06/19/98 ......................... 50,000 49,992,390
5.820% 07/31/98 ......................... 25,000 24,993,453
5.880% 08/11/98 ......................... 25,000 24,993,238
Mellon Bank N.A.
6.030% 09/23/97 ......................... 25,000 25,001,846
Wilmington Trust Co.
5.920% 11/06/97 ......................... 25,000 25,000,000
------------
149,980,927
------------
YANKEE DOLLAR CERTIFICATES OF DEPOSIT--22.6%
Banque Nationale de Paris
5.860% 08/10/98 ......................... 25,000 24,986,523
Caisse Nationale de Credit Agricole
5.640% 10/07/97 ......................... 50,000 50,001,479
Credit Suisse
6.240% 04/08/98 ......................... 40,000 40,040,657
Deutsche Bank
6.000% 03/25/98 ......................... 50,000 50,050,753
6.200% 04/08/98 ......................... 25,000 25,015,286
Industrial Bank of Japan
5.730% 10/10/97 ......................... 50,000 50,000,000
5.680% 10/24/97 ......................... 25,000 25,000,637
Rabobank Nederland
5.710% 02/17/98 ......................... 50,000 50,002,280
PAR
(000) VALUE
-------- ------------
YANKEE DOLLAR CERTIFICATES OF DEPOSIT--(CONTINUED)
Royal Bank of Canada
5.670% 09/02/97(DAGGER) ............. $ 25,000 $ 24,994,403
6.200% 04/06/98 ..................... 19,000 19,014,263
5.940% 06/25/98 ..................... 25,000 24,988,323
Sanwa Bank
5.780% 09/17/97 ..................... 50,000 50,000,637
Societe Generale
5.600% 09/19/97 ..................... 50,000 50,000,000
5.630% 12/31/97 ..................... 25,000 24,999,544
5.770% 01/09/98 ..................... 25,000 24,996,590
Sumitomo Bank
5.640% 10/20/97 ..................... 50,000 50,000,000
Swedbank
5.630% 11/20/97 ..................... 25,000 25,000,548
------------
609,091,923
------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $884,072,850) ............. 884,072,850
------------
COMMERCIAL PAPER--40.5%
ASSET BACKED SECURITIES--4.1%
Beta Finance Inc.
5.620% 09/26/97 ..................... 15,000 14,941,458
Countrywide Funding Corp.
5.590% 09/15/97 ..................... 60,000 59,869,567
5.570% 09/30/97 ..................... 35,000 34,842,957
------------
109,653,982
------------
BANKS--7.3%
AB Spintab Swedmortgage
5.520% 11/06/97 ..................... 50,000 49,494,000
AMRO N.A. Finance Inc.
5.560% 05/01/98 ..................... 50,000 48,131,222
Unifunding Inc.
5.540% 10/07/97 ..................... 50,000 49,723,000
5.520% 10/30/97 ..................... 50,000 49,547,667
------------
196,895,889
------------
FINANCE SERVICES--4.2%
SMM Trust 1997-L(DAGGER)
5.633% 09/29/97 ..................... 13,200 13,200,000
SMM Trust 1997-W(DAGGER)
5.645% 09/16/97 ..................... 100,000 100,000,000
------------
113,200,000
------------
See Accompanying Notes to Financial Statements.
3
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1997
PAR
(000) VALUE
-------- ------------
MOTOR VEHICLES & CAR BODIES--3.7%
BMW US Capital Corp.
5.550% 10/08/97 ........................... $ 50,000 $ 49,714,792
Daimler-Benz North America Corp.
5.600% 09/25/97 ........................... 50,000 49,813,333
--------------
99,528,125
--------------
PERSONAL CREDIT INSTITUTIONS--1.8%
General Motors Acceptance Corp.
5.750% 11/17/97 ........................... 50,000 49,385,069
--------------
PETROLEUM REFINING--0.9%
Repsol International Finance B.V.
5.510% 01/26/98 ........................... 25,000 24,437,521
--------------
SECURITY BROKERS & DEALERS--11.2%
Bear Stearns Companies, Inc.(DAGGER)
5.609% 09/08/97 ........................... 25,000 25,000,000
5.659% 09/22/97 ........................... 50,000 50,000,000
5.605% 09/26/97 ........................... 30,000 30,000,000
Lehman Brothers Holdings, Inc.(DAGGER)
5.913% 09/06/97 ........................... 50,000 50,000,000
Merrill Lynch & Co.
5.570% 12/12/97 ........................... 40,000 39,368,733
5.530% 02/24/98 ........................... 40,000 38,918,578
Nomura Holding America Inc.
5.740% 09/08/97 ........................... 25,000 24,972,097
5.640% 11/12/97 ........................... 20,000 19,774,400
5.630% 11/26/97 ........................... 25,000 24,663,764
--------------
302,697,572
--------------
SERVICES - AUTO RENT & LEASE--3.6% PHH Corp.
5.640% 09/02/97 ........................... 73,000 72,988,563
5.540% 10/09/97 ........................... 25,000 24,853,806
--------------
97,842,369
--------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--3.7%
Heller Financial Inc.
5.625% 09/05/97 ........................... 100,000 99,937,500
--------------
TOTAL COMMERCIAL PAPER
(Cost $1,093,578,027) ................. 1,093,578,027
--------------
PAR
(000) VALUE
-------- ------------
CORPORATE OBLIGATIONS--2.0%
FINANCE LESSORS--0.7%
IBM Credit Corp.
5.700% 10/27/97 ....................... $ 20,000 $19,999,145
-----------
PERSONAL CREDIT INSTITUTIONS--0.6%
General Motors Acceptance Corp.
5.625% 10/30/97 ....................... 15,000 14,998,566
-----------
SECURITY BROKERS & DEALERS--0.7%
Bear Stearns Companies, Inc.
5.860% 01/20/98 ....................... 20,000 20,000,000
-----------
TOTAL CORPORATE OBLIGATIONS
(Cost $54,997,711) ................ 54,997,711
-----------
MUNICIPAL BONDS--3.1%
FLORIDA--0.1%
Coral Springs, IDR(DOUBLE DAGGER)
5.600% 09/03/97 ....................... 2,700 2,700,000
-----------
GEORGIA--0.4%
De Kalb County Development Authority
Series 1995 B (Emory University
Project)(DOUBLE DAGGER)
5.600% 08/31/97 ....................... 9,840 9,840,000
-----------
ILLINOIS--0.2%
Illinois Health Facilities Authority
Convertible/ VRDN Revenue Bond
(The Streeterville Corp. Project)
Series 1993-B(DOUBLE DAGGER)
5.700% 09/03/97 ....................... 4,400 4,400,000
-----------
INDIANA--0.2%
Bremen, Inc. TARN Series 1996-B
5.610% 09/04/97 ....................... 5,200 5,200,000
-----------
KENTUCKY--0.2%
Boone County Taxable IDR Refunding
Bonds (Square D Company Project)
Series 1994-B VRDN(DAGGER)
5.700% 09/03/97 ....................... 4,200 4,200,000
-----------
See Accompanying Notes to Financial Statements.
4
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONCLUDED)
AUGUST 31, 1997
PAR
(000) VALUE
-------- -----------
MISSISSIPPI--1.1%
Hinds County, IDR Revenue Bond
VRDN Series 1987(DAGGER)
5.600% 09/03/97 ....................... $ 1,200 $ 1,200,000
Hinds County, IDR Revenue Bond
VRDN Series 1992(DAGGER)
5.600% 09/03/97 ....................... 1,860 1,860,000
Mississippi Business Finance Corp.
IDR Revenue Bond (Dana Lighting
Project) Series 1995(DAGGER)
5.600% 09/07/97 ....................... 6,400 6,400,000
Mississippi Business Finance Corp.
Taxable IDR Revenue Bond
(Bryan Foods, Inc. Project)
Series 1994(DAGGER)
5.700% 09/03/97 ....................... 14,000 14,000,000
Mississippi Business Finance Corp.
Taxable IDR Revenue Bond
Series 1995(DAGGER)
5.600% 09/07/97 ....................... 7,000 7,000,000
-----------
30,460,000
-----------
NORTH CAROLINA--0.4%
City of Asheville Tax Corp.(DAGGER)
5.650% 09/03/97 ....................... 11,700 11,700,000
-----------
TEXAS--0.5%
South Central Texas Industrial
Development Corp. Taxable IDR
Revenue Bond (Rohr Industries
Project Series 1990 VRDN(DAGGER)
5.700% 09/03/97 ....................... 14,800 14,800,000
-----------
TOTAL MUNICIPAL BONDS
(Cost $83,300,000) ................ 83,300,000
-----------
PAR
(000) VALUE
-------- --------------
TIME DEPOSITS--11.3%
First Union National Bank of North
Carolina
5.438% 09/02/97 ................... $ 45,100 $ 45,100,000
5.500% 09/02/97 ................... 50,000 50,000,000
General American Life
5.870% 09/30/97 ................... 50,000 50,000,000
Union Bank of Switzerland
5.625% 09/04/97 ................... 100,000 100,000,000
Wells Fargo Bank, N.A.
5.500% 09/02/97 ................... 60,000 60,000,000
--------------
TOTAL TIME DEPOSITS
(Cost $305,100,000) ........... 305,100,000
--------------
TOTAL INVESTMENTS AT VALUE--99.7%
(Cost $2,691,010,394*) ............ 2,691,010,394
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.3% ................. 9,015,235
--------------
NET ASSETS (Applicable to
1,392,910,207 Bedford shares,
242,215 Cash Preservation shares,
736,852,298 Janney Montgomery
Scott shares, 570,031,293
Sansom Street shares
and 800 other shares)--100.0% ..... $2,700,025,629
==============
NET ASSET VALUE, Offering and
Redemption Price Per Share
($2,700,025,629 (DIVIDE)
2,700,036,813) .................... $1.00
=====
* Also cost for Federal income tax purposes.
(DAGGER) Variable Rate Obligations -- The interest rate shown is the rate as of
August 31, 1997 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 put date.
INVESTMENT ABBREVIATIONS
VRDN ............................................... Variable Rate Demand Note
LOC ......................................................... Letter of Credit
IDR ........................................... Industrial Development Revenue
TARN ......................................... Taxable Adjustable Revenue Note
See Accompanying Notes to Financial Statements.
5
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1997
PAR
(000) VALUE
-------- ------------
MUNICIPAL BONDS--99.5%
ALABAMA--1.0%
Montgomery Special Care Facilities
Financing Authority RB DN 1985
Series A(DAGGER)
3.350% 09/07/97 ......................... $ 2,570 $ 2,570,000
Montgomery Special Care Facilities
Financing Authority RB DN 1985
Series G(DAGGER)
3.350% 09/07/97 ......................... 1,075 1,075,000
Montgomery Special Care Facilities
Hospital Authority RB DN 1985
Series D(DAGGER)
3.350% 09/07/97 ......................... 1,000 1,000,000
-----------
4,645,000
-----------
ALASKA--1.3%
Alaska Export and IDA RB
Series 1984-5 DN(DAGGER)
3.350% 09/07/97 ......................... 1,990 1,990,000
Valdez Marine Terminal TECP (ARCO
Transportation Alaska, Inc. Project)
3.750% 09/08/97 ......................... 4,300 4,300,000
-----------
6,290,000
-----------
ARIZONA--1.1%
Maricopa County PCR RB Arizona
Public Service Co. DN(DAGGER)
3.700% 09/01/97 ......................... 2,000 2,000,000
Pima County IDA (Tuscon Electric
Power Co. Project) Series 1983A
DN(DAGGER)
3.350% 09/07/97 ......................... 3,500 3,500,000
-----------
5,500,000
-----------
CALIFORNIA--8.6%
California Higher Education Student
Loan RB DN Series D-2(DAGGER)
4.000% 07/01/98 ......................... 4,000 4,000,000
Los Angeles County Series A TAN
4.500% 06/30/98 ......................... 28,000 28,144,960
PAR
(000) VALUE
-------- ------------
CALIFORNIA--(CONTINUED)
Oakland CTFS Partnership Capital
Equipment Project DN(DAGGER)
3.300% 09/07/97 ....................... $ 9,800 $ 9,800,000
-----------
41,944,960
-----------
COLORADO--1.5%
Moffat County PCR RB DN(DAGGER)
3.300% 09/07/97 ....................... 2,400 2,400,000
Colorado State General Fund TRAN
Series A
4.500% 06/26/98 ....................... 5,000 5,025,537
-----------
7,425,537
-----------
CONNECTICUT--0.6%
Connecticut Special Assessment
Unemployment Compensation
Advance Fund (Connecticut
Unemployment Project)
Series 1993 C MB
3.900% 07/01/98(DOUBLE DAGGER) ........ 3,000 3,000,000
-----------
DELAWARE--0.6%
The Delaware Economic Development
Authority Gas Facilities (Delmarva
Power & Light Project)
Series 1993 C RB DN(DAGGER)
3.350% 09/07/97 ....................... 3,000 3,000,000
-----------
FLORIDA--1.5%
Florida State Housing Finance Agency
RB for Carlton Project DN,
Series E(DAGGER)
3.300% 09/07/97 ....................... 1,500 1,500,000
Miami Health Facilities Authority DN
(Jewish Home For The Aged
Project)(DAGGER)
3.400% 09/07/97 ....................... 6,000 6,000,000
-----------
7,500,000
-----------
See Accompanying Notes to Financial Statements.
6
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1997
PAR
(000) VALUE
-------- -----------
GEORGIA--4.4%
Brunswick and Glynn IDA Sewage
Facility RB DN (Georgia-Pacific
Corp. Project) Series 1996(DAGGER)
3.500% 09/07/97 ........................... $ 5,000 $ 5,000,000
Burke County PCR RB MB
(Oglethorpe Power Company)(DOUBLE DAGGER)
3.600% 12/01/97 ........................... 2,000 2,000,000
Carrollton Payroll Development
Authority Certificates RAN(DAGGER)
3.500% 09/07/97 ........................... 6,125 6,125,000
Forsyth County IDA RB (American
Boa, Inc. Project) DN(DAGGER)
3.400% 09/07/97 ........................... 3,000 3,000,000
Fulton County IDA RB DN
(Charles J. Mackarich Project)(DAGGER)
3.500% 09/07/97 ........................... 3,500 3,500,000
Winder-Barrow Industrial Building
Authority DN (Georgia Barrow
Property Project)(DAGGER)
3.500% 09/07/97 ........................... 1,650 1,650,000
-----------
21,275,000
-----------
HAWAII--0.7%
Hawaii Department of Budget and
Finance MB(DOUBLE DAGGER)
3.800% 09/09/97 ........................... 2,210 2,210,000
Hawaii Department of Budget and
Finance TECP(DOUBLE DAGGER)
3.750% 10/09/97 ........................... 1,000 1,000,000
-----------
3,210,000
-----------
ILLINOIS--11.7%
Chicago O'Hare International Airport
Special Facility RB DN(DAGGER)
3.400% 09/07/97 ........................... 5,700 5,700,000
Illinois Development Finance
Authority (CHS Acquisition Corp.
Project) DN(DAGGER)
3.650% 09/07/97 ........................... 5,035 5,035,000
Illinois Development Finance Authority
Environmental Facilities RB DN
(Citizens Utility Company, Project)(DAGGER)
3.400% 09/07/97 ........................... 6,000 6,000,000
PAR
(000) VALUE
-------- -----------
ILLINOIS--(CONTINUED)
Illinois Development Finance Authority
PCR RB DN (Commonwealth
Edison Co. Project)(DAGGER)
3.350% 09/07/97 ........................... $12,200 $12,200,000
Illinois Development Financing
Authority PCR (Illinois Power Co.
Project) Series 1987 D DN(DAGGER)
3.500% 09/07/97 ........................... 900 900,000
Illinois Educational Facilities Authority
RB (Field Museum of Natural
History Project) Series 1985 DN(DAGGER)
3.350% 09/07/97 ........................... 2,000 2,000,000
Illinois Educational Facilities Authority
University Polled Financing DN(DAGGER)
3.350% 09/07/97 ........................... 2,000 2,000,000
Illinois Health Facility Authority RB DN
(Evanston Hospital Corp.)
Series A(DOUBLE DAGGER)
3.850% 10/15/97 ........................... 3,000 3,000,000
Illinois Housing Development Finance
Authority RB DN (Homeownership
Mortgage Bonds)(DOUBLE DAGGER)
3.700% 12/18/97 ........................... 4,000 4,000,000
Illinois Health Facility Authority
(Evanston Hospital Corp. Project)
Series 1996 MB(DOUBLE DAGGER)
3.900% 07/31/98 ........................... 5,000 5,000,000
Illinois, University Of, The Board of
Trustees Health Services Facilities
System RB DN
(A-1+, VMIG-1)(DAGGER)
3.300% 09/07/97 ........................... 7,600 7,600,000
Mundelein Industrial RB 1200 Town
Line Road DN(DAGGER)
3.350% 09/07/97 ........................... 1,000 1,000,000
Village of Oak Forest DN (Homewood
Pool)
3.350% 09/07/97 ........................... 2,600 2,600,000
-----------
57,035,000
-----------
See Accompanying Notes to Financial Statements.
7
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1997
PAR
(000) VALUE
-------- -----------
INDIANA--8.2%
Bremen IDA RB Series 1996 A
(Universal Bearings, Inc. Project
Private Placement) DN(DAGGER)
3.750% 09/07/97 ....................... $ 5,000 $ 5,000,000
Indiana Development Finance
Authority IDA RB DN (Enterprise
Center I Project)(DAGGER)
3.650% 09/07/97 ....................... 2,900 2,900,000
Indiana Development Finance
Authority IDA RB DN (Enterprise
Center II Project)(DAGGER)
3.650% 09/07/97 ....................... 5,000 5,000,000
Indiana Development Finance
Authority IDA RB DN (Enterprise
Center III Project)(DAGGER)
3.650% 09/07/97 ....................... 4,500 4,500,000
Indiana Development Finance
Authority IDA RB DN (Enterprise
Center IV Project)(DAGGER)
3.650% 09/07/97 ....................... 2,600 2,600,000
Indiana Development Finance
Authority IDA RB DN (Enterprise
Center VI Project)(DAGGER)
3.650% 09/07/97 ....................... 4,900 4,900,000
La Porte County Economic
Development RB DN (Pedcor
Investments - Woodland
Crossing)(DAGGER)
3.450% 09/07/97 ....................... 2,000 2,000,000
Orleans Economic Development
(Almana Limited Liability Co.
Project) Series 1995 DN(DAGGER)
3.500% 09/07/97 ....................... 5,200 5,200,000
Portage Economic Development
RB DN (Breckenridge Apartments
Project)(DAGGER)
3.550% 09/07/97 ....................... 4,650 4,650,000
Tippecanoe County DN(DAGGER)
3.600% 09/07/97 ....................... 3,000 3,000,000
-----------
39,750,000
-----------
PAR
(000) VALUE
-------- -----------
IOWA--1.4%
Iowa Finance Authority IDA RB DN
(Dixie Bedding Co. Project)
Series 1995(DAGGER)
3.500% 09/07/97 ........................... $ 3,000 $ 3,000,000
Iowa Finance Authority IDA RB DN
(Sauer-Sundstrand Co. Project)(DAGGER)
3.450% 09/07/97 ........................... 4,000 4,000,000
-----------
7,000,000
-----------
KANSAS--2.8%
Burlington PCR RB DN (Kansas City
Power & Light) Series 1985B(DAGGER)
3.900% 10/10/97 ........................... 5,900 5,900,000
Lawrence County Project IDA RB DN
Series A(DOUBLE DAGGER)
3.500% 09/04/97 ........................... 2,125 2,125,000
Shawnee IDA RB DN (Thrall
Enterprises, Inc. Project)(DAGGER)
3.650% 09/07/97 ........................... 5,400 5,400,000
-----------
13,425,000
-----------
KENTUCKY--3.2%
Hopkinsville IDA RB (Douglas
Autotech Corp. Project)
Series 1995 DN(DAGGER)
3.650% 09/07/97 ........................... 7,700 7,700,000
Maysville Solid Waste Disposal
Facilities RB (Inland Container Corp.
Project) Series 1992 MB(DOUBLE DAGGER)
3.900% 09/12/97 ........................... 2,800 2,800,000
4.000% 01/23/98 ........................... 5,000 5,000,000
-----------
15,500,000
-----------
LOUISIANA--1.3%
East Baton Rouge (Resource Recovery
Improvements Parish Pacific Corp.
Project) DN(DAGGER)
3.700% 09/07/97 ........................... 6,500 6,500,000
-----------
See Accompanying Notes to Financial Statements.
8
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1997
PAR
(000) VALUE
-------- -----------
MARYLAND--3.6%
Howard County Bluffs at Clary's Forest
Apartment Facility Series 1995 DN(DAGGER)
3.550% 09/07/97 ........................... $ 5,735 $ 5,735,000
Maryland State Health & Higher
Education Authority Doctors
Community Hospital Issue DN(DAGGER)
3.490% 09/07/97 ........................... 7,800 7,800,000
University of Maryland RB Equipment
Loan Program Series A DN(DAGGER)
3.300% 09/07/97 ........................... 3,900 3,900,000
-----------
17,435,000
-----------
MASSACHUSETTS--0.4%
Massachusetts Health and Education
Facility Authority Capital Asset
Program DN(DAGGER)
3.100% 09/07/97 ........................... 2,100 2,100,000
-----------
MICHIGAN--0.7%
Michigan Strategic Fund Limited
Obligation RB DN(DAGGER)
3.500% 09/07/97 ........................... 1,500 1,500,000
Wayne County Charter Airport RB DN
Series B
3.400% 09/07/97 ........................... 2,000 2,000,000
-----------
3,500,000
-----------
MISSOURI--3.6%
Berkeley IDA RB DN (St. Louis Air
Cargo Services, Inc. Project)(DAGGER)
3.600% 09/07/97 ........................... 5,225 5,225,000
Health and Education Facility Authority
DN (Washington University)(DAGGER)
3.350% 09/07/97 ........................... 4,000 4,000,000
Kansas City IDA Facility RB (K.C. Air
Cargo Services, Inc. Project) DN(DAGGER)
3.600% 09/07/97 ........................... 7,500 7,500,000
Kansas City IDA RB (Mid-America
Health Services, Inc. Project)
Series 1984 DN(DAGGER)
3.500% 09/07/97 ........................... 1,100 1,100,000
-----------
17,825,000
-----------
PAR
(000) VALUE
------- -----------
NEBRASKA--0.8%
Lancaster (Sun-Husker Foods, Inc.
Project) DN(DAGGER)
3.650% 09/07/97 ....................... $ 3,800 $ 3,800,000
-----------
NEVADA--1.1%
Clark County Airport System
Subordinate Lien RB DN
Series 1995 A-1(DAGGER)
3.250% 09/07/97 ....................... 4,425 4,425,000
Clark County Airport System
Subordinate Lien RB DN
Series 1995 A-2(DAGGER)
3.450% 09/07/97 ....................... 880 880,000
-----------
5,305,000
-----------
NEW HAMPSHIRE--2.9%
New Hampshire Housing Finance
Authority Multifamily RB
(Countryside Project) DN(DAGGER)
3.350% 09/07/97 ....................... 14,405 14,405,000
-----------
NEW YORK--0.5%
Triborough Bridge and Tunnel
Authority DN(DAGGER)
3.150% 09/07/97 ....................... 2,300 2,300,000
-----------
NORTH CAROLINA--5.9%
Charlotte Airport Refunding RB
Series 1997A DN(DAGGER)
3.350% 09/07/97 ....................... 4,000 4,000,000
Mecklenburg County G.O.
Series 1996C DN(DAGGER)
3.300% 09/07/97 ....................... 6,000 6,000,000
Mecklenburg County IDA and PCR
(Edgecomb Metals Co. Project)
Series 1984 DN(DAGGER)
3.350% 09/07/97 ....................... 3,800 3,800,000
North Carolina Health Care DN
Series 1985(DAGGER)
3.550% 09/07/97 ....................... 1,100 1,100,000
North Carolina Medical Care
Commission (Moses H. Cone
Memorial Hospital Project)
Series 1995 DN(DAGGER)
3.350% 09/07/97 ....................... 4,600 4,600,000
See Accompanying Notes to Financial Statements.
9
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1997
PAR
(000) VALUE
-------- -----------
NORTH CAROLINA--(CONTINUED)
North Carolina Medical Care
Community Hospital Lincoln Health
System DN(DAGGER)
3.400% 09/07/97 ......................... $ 4,500 $ 4,500,000
Wake County Industrial Facility
PCR DN (Carolina Power &
Light Co.) Series B(DAGGER)
3.450% 09/07/97 ......................... 3,900 3,900,000
Wake County Industrial Facility
PCR DN (Carolina Power &
Light Co.) Series C(DAGGER)
3.450% 09/07/97 ......................... 700 700,000
-----------
28,600,000
-----------
OHIO--2.9%
Franklin County Hospital Facilities
Refunding and Improvement
RB DN (U.S. Health Corp. of
Columbus(DAGGER)
3.350% 09/07/97 ......................... 1,900 1,900,000
Green County G.O. BAN
4.000% 03/26/98 ......................... 3,700 3,703,981
4.500% 05/07/98 ......................... 5,000 5,014,676
Mahoning County DN (Youngstown
Iron & Metal Inc. Project)(DAGGER)
3.550% 09/07/97 ......................... 2,140 2,140,000
Scioto County VHA Central Inc.
(Hospital Improvements Project)
Series D DN(DAGGER)
3.350% 09/07/97 ......................... 1,655 1,655,000
-----------
14,413,657
-----------
OKLAHOMA--0.4%
Oklahoma Development Finance
Authority (Shawnee Funding Limited)
DN(DAGGER)
3.500% 09/07/97 ......................... 2,000 2,000,000
-----------
PENNSYLVANIA--2.3%
Allegheny County PCR TECP Kansas
City Power and Light
3.900% 10/10/97 ......................... 2,100 2,100,000
PAR
(000) VALUE
-------- -----------
PENNSYLVANIA--(CONTINUED)
Bedford County IDA RB (Sepa, Inc.
Facility Project) Series 1985 DN(DAGGER)
3.600% 09/07/97 ........................... $ 2,000 $ 2,000,000
Sayre Health Care Facilities Authority
RB (VHA Capital Financing Project)
Series 1985F DN(DAGGER)
3.300% 09/07/97 ........................... 2,200 2,200,000
Sayre Health Care Facility Authority
(VHA Capital Financing Project)
Series 1985 I DN(DAGGER)
3.300% 09/07/97 ........................... 300 300,000
Washington County Authority
Lease Series 1985 DN(DAGGER)
3.300% 09/07/97 ........................... 4,600 4,600,000
-----------
11,200,000
-----------
SOUTH DAKOTA--0.1%
Lawrence County PCR RB (Homestate
Mining Company Project)
Series 1983 DN(DAGGER)
3.550% 09/07/97 ........................... 600 600,000
-----------
TENNESSEE--3.9%
Clarksville Public Building Authority
of Adjustable Rate Pooled Financing
RB MB (Tennessee Municipal Bond
Fund)(DOUBLE DAGGER)
3.400% 09/07/97 ........................... 4,800 4,800,000
Memphis General Improvement
Refunding RB DN(DAGGER)
3.350% 09/07/97 ........................... 1,800 1,800,000
Metropolitan Nashville Airport
Improvement DN(DAGGER)
3.350% 09/07/97 ........................... 2,770 2,770,000
Montgomery County Public Building
Authority Loan Pool G.O. DN(DAGGER)
3.400% 09/07/97 ........................... 2,400 2,400,000
Oak Ridge Solid Waste Disposal
Facility MB Series 1996 M4
(Environmental Project)(DOUBLE DAGGER)
3.500% 09/07/97 ........................... 5,100 5,100,000
See Accompanying Notes to Financial Statements.
10
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1997
PAR
(000) VALUE
-------- -----------
TENNESSEE--(CONTINUED)
Tennessee Housing Development
Authority (Single Family Program)
MB (Escrowed In U.S. Treasuries)(DOUBLE DAGGER)
3.750% 02/19/98 ............................... $ 2,000 $ 2,000,000
-----------
18,870,000
-----------
TEXAS--5.2%
Denton IDA DN Hartzell Manufacturing
Inc Project(DAGGER)
3.650% 09/07/97 ............................... 1,300 1,300,000
Mckinney City IDA RB DN (Delta
Dailyfood Texas Inc., Project)(DAGGER)
3.500% 09/07/97 ............................... 7,500 7,500,000
South Texas Higher Education
Authority Student Loan RB DN(DAGGER)
3.350% 09/07/97 ............................... 16,700 16,700,000
-----------
25,500,000
-----------
UTAH--5.8%
Intermountain Power Authority
Supply Series 1985 F MB(DOUBLE DAGGER)
3.500% 09/15/97 ............................... 3,500 3,500,000
Salt Lake Airport RB DN(DAGGER)
3.300% 09/07/97 ............................... 900 900,000
Salt Lake City Flexible Rate RB DN
(Pooled Hospital Financing Program)(DAGGER)
3.300% 09/07/97 ............................... 800 800,000
Utah County Environmental
Improvement RB DN (USX Corp.
Project)(DAGGER)
3.750% 01/15/98 ............................... 4,200 4,200,000
Utah State G.O. Highway TECP Notes
Series 97B
3.800% 10/07/97 ............................... 11,000 11,000,000
Utah University Auxiliary and Campus
Facilities Series 97 A RB DN(DAGGER)
3.450% 09/07/97 ............................... 8,000 8,000,000
-----------
28,400,000
-----------
VIRGINIA--5.4%
Capital Region Airport Commission
(Richmond International Airport
Project) Series 1995 C DN(DAGGER)
3.400% 09/07/97 ............................... 4,400 4,400,000
PAR
(000) VALUE
-------- -----------
VIRGINIA--(CONTINUED)
Culpepper IDA Residential Care
Facility RB DN(DAGGER)
3.400% 09/07/97 ............................... $ 1,470 $ 1,470,000
Louisa County IDA Pooled Financing
Series 1995 DN(DAGGER)
3.400% 09/07/97 ............................... 1,000 1,000,000
Lynchburg IDA Hospital Facilities
(Mid-Atlantic States Capital Asset
Finance Project) Series 1985 G DN
3.350% 09/07/97 ............................... 2,800 2,800,000
Lynchburg IDA Hospital Facilities RB
(VHA Mid-Atlantic States Capital
Asset Finance Program)
Series 1985B DN(DAGGER)
3.350% 09/07/97 ............................... 1,200 1,200,000
Metropolitan Washington D.C.
Airports Authority Passenger
Facility TECP
3.700% 09/26/97 ............................... 2,000 2,000,000
Peninsula Ports IDA RB (Allied Signal,
Inc. Project) Series 1993 (Allied
Signal Corp. Obligation) DN(DAGGER)
3.500% 09/07/97 ............................... 1,000 1,000,000
Roanoke City IDA Refunding Bonds
DN (Cooper Industries, Inc. Project)(DAGGER)
3.500% 09/07/97 ............................... 10,000 10,000,000
Roanoke IDA Hospital RB (Carillon
Health System Project)
Series 1995D DN(DAGGER)
3.250% 09/07/97 ............................... 2,500 2,500,000
-----------
26,370,000
-----------
WASHINGTON--0.4%
Washington G.O. Bonds DN(DAGGER)
3.250% 09/07/97 ............................... 2,100 2,100,000
-----------
WEST VIRGINIA--0.7%
Marshall County IDA (US/Canada
Project) DN(DAGGER)
3.500% 09/07/97 ............................... 3,500 3,500,000
-----------
See Accompanying Notes to Financial Statements.
11
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONCLUDED)
AUGUST 31, 1997
PAR
(000) VALUE
-------- -----------
WISCONSIN--2.6%
Wisconsin University Hospitals and
Clinics Authority RB
Series 1997 DN(DAGGER)
3.300% 09/07/97 ....................... $12,500 $ 12,500,000
------------
WYOMING--0.4%
Lincoln County PCR RB DN (Pacificorp
Project)(DAGGER)
3.700% 09/07/97 ....................... 1,900 1,900,000
------------
TOTAL INVESTMENTS AT VALUE--99.5%
(Cost $485,624,154*) .................. 485,624,154
OTHER ASSETS IN EXCESS
OF LIABILITIES--0.5% .................. 2,421,661
------------
NET ASSETS (Applicable to
213,100,752 Bedford shares,
166,093,827 Bradford shares
96,943 Cash Preservation shares
108,825,135 Janney Montgomery Scott
shares, and 800 other shares)--100.0% . $488,045,815
============
NET ASSET VALUE, Offering and
redemption price per share
($488,045,815 (DIVIDE) 488,117,457) ... $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, 1997 and the maturity 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
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.
12
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1997
PAR
(000) VALUE
-------- ------------
AGENCY OBLIGATIONS--59.0%
FEDERAL FARM CREDIT BANK--1.6%
5.510% 01/02/98 ............................... $10,000 $ 9,994,144
------------
FEDERAL HOME LOAN BANK--3.4%
6.080% 04/16/98 ............................... 21,000 21,006,876
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION--25.9%
5.500% 09/02/97 ............................... 45,000 44,993,125
5.400% 09/11/97 ............................... 8,030 8,017,955
5.410% 09/11/97 ............................... 26,970 26,929,470
5.430% 09/22/97 ............................... 50,000 49,841,625
5.520% 11/06/97 ............................... 9,000 8,998,537
5.713% 03/13/98 ............................... 20,000 19,987,681
------------
158,768,393
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--20.8%
5.350% 09/02/97 ............................... 10,000 10,000,000
6.020% 09/05/97 ............................... 3,000 3,000,143
5.463% 09/12/97 ............................... 10,000 9,999,876
5.465% 09/30/97 ............................... 10,000 9,998,262
5.440% 12/15/97 ............................... 30,000 29,524,000
5.600% 01/16/98 ............................... 10,000 9,995,684
5.710% 03/18/98 ............................... 25,000 24,996,101
5.890% 05/21/98 ............................... 10,000 10,007,684
5.840% 06/18/98 ............................... 20,000 19,994,844
------------
127,516,594
------------
STUDENT LOAN MARKETING ASSOCIATION(DAGGER) --6.3%
5.440% 09/02/97 ............................... 20,000 19,998,165
5.450% 09/02/97 ............................... 9,000 8,999,371
5.460% 09/02/97 ............................... 5,000 5,000,000
5.470% 09/02/97 ............................... 5,000 4,999,934
------------
38,997,470
------------
WORLD BANK DISCOUNT NOTES--1.0%
5.410% 09/23/97 ............................... 6,100 6,079,833
------------
TOTAL AGENCY OBLIGATIONS
(Cost $362,363,310) ....................... 362,363,310
------------
PAR
(000) VALUE
-------- -----------
REPURCHASE AGREEMENTS--40.7%
Donaldson, Lufkin & Jenrette
(Agreement dated 08/29/97 to be
repurchased at $100,362,688,
collateralized by $108,750,000
Federal Home Loan Mortgage
Association 6.50% to 7.00%
due 04/15/21 to 05/15/24.
Market value of collateral is
$103,313,588.)
5.625% 09/02/97 ............................... $ 100,300 $ 100,300,000
Greenwich Capital Markets Inc.
(Agreement dated 08/29/97 to be
repurchased at $100,062,444,
collateralized by $265,604,910
Federal National Mortgage
Association Strips Due 03/01/22 to
07/01/27. Market value of collateral
is $103,001,687.)
5.620% 09/02/97 ............................... 100,000 100,000,000
Merrill Lynch
(Agreement dated 08/29/97 to be
repurchased at $50,030,722,
collateralized by $172,262,022
Federal National Mortgage
Association Strips Due 02/01/23 to
07/01/27. Market value of collateral
is $51,500,518.)
5.530% 10/17/97 ............................... 50,000 50,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $250,300,000) ....................... 250,300,000
------------
See Accompanying Notes to Financial Statements.
13
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONCLUDED)
AUGUST 31, 1997
VALUE
-----------
TOTAL INVESTMENTS AT VALUE--99.7%
(Cost $612,663,310*) ............................... $612,663,310
OTHER ASSETS IN EXCESS
OF LIABILITIES--0.3% ............................... 1,568,901
------------
NET ASSETS (Applicable to
209,685,630 Bedford shares,
51,608,040 Bradford shares,
352,951,307 Janney Montgomery
Scott shares and 800
other shares)--100.0% .............................. $614,232,211
============
NET ASSET VALUE, Offering and
redemption price per share
($614,232,211 (DIVIDE) 614,245,777) ................ $1.00
=====
* Also cost for Federal income tax purposes.
(DAGGER) Variable Rate Obligations -- The interest rate is the rate as of August
31, 1997 and the maturity date shown is the longer of the next interest
readjustment date or the date the principal amount shown can be recovered
through demand.
See Accompanying Notes to Financial Statements.
14
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
GOVERNMENT
MUNICIPAL OBLIGATIONS
MONEY MARKET MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- -----------
<S> <C> <C> <C>
Investment Income
Interest ........................................... $137,348,046 $16,569,667 $31,972,074
------------ ----------- -----------
Expenses
Investment advisory fees ........................... 8,969,561 1,470,648 2,421,186
Administration fees ................................ -- 448,548 --
Distribution fees .................................. 10,841,715 2,606,546 3,435,186
Service organization fees .......................... 535,524 -- --
Directors' fees .................................... 49,983 9,175 11,967
Custodian fees ..................................... 396,951 94,626 107,578
Transfer agent fees ................................ 3,318,408 143,001 535,142
Legal fees ......................................... 104,755 19,208 25,058
Audit fees ......................................... 59,877 10,991 14,286
Registration fees .................................. 532,500 240,000 189,500
Insurance fees ..................................... 48,679 8,899 11,609
Printing fees ...................................... 489,378 71,800 83,824
Miscellaneous fees ................................. -- -- 475
------------ ----------- -----------
25,347,331 5,123,442 6,835,811
Less fees waived ................................... (3,616,431) (1,279,980) (647,063)
Less expense reimbursement by advisor .............. (469,986) (14,921) (404,193)
------------ ----------- -----------
Total expenses ................................ 21,260,914 3,828,541 5,784,555
------------ ----------- -----------
Net investment income .............................. 116,087,132 12,741,126 26,187,519
Realized gain (loss) on investments ................ 22,330 (3,917) (1,291)
------------ ----------- -----------
Net increase in net assets resulting from operations $116,109,462 $12,737,209 $26,186,228
============ =========== ===========
</TABLE>
See Accompanying Notes to Financial Statements.
15
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MUNICIPAL MONEY
MONEY MARKET PORTFOLIO MARKET PORTFOLIO
--------------------------------- ---------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1997 AUGUST 31, 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ............... $ 116,087,132 $ 100,027,983 $ 12,741,126 $ 12,196,171
Net gain (loss) on
investments ....................... 22,330 (12,987) (3,917) (674)
-------------- -------------- ------------ ------------
Net increase in net assets
resulting from operations ....... 16,109,462 100,014,996 12,737,209 12,195,497
-------------- -------------- ------------ ------------
Distributions to shareholders:
Dividends to shareholders
from net investment income:
Bedford shares .................... (56,929,832) (49,874,649) (5,758,068) (5,960,711)
Bradford shares ................... -- -- (4,148,194) (3,611,114)
Cash Preservation shares .......... (10,852) (10,092) (2,492) (3,746)
Janney Montgomery Scott
shares .......................... (29,943,530) (24,434,566) (2,832,323) (2,620,457)
RBB shares ........................ (1,286) (2,630) (49) (143)
Sansom Street shares .............. (29,201,632) (25,706,046) -- --
Dividends to shareholders from
net realized short-term gains:
Bedford shares .................... -- -- -- --
Bradford shares ................... -- -- -- --
Janney Montgomery
Scott shares .................... -- -- -- --
-------------- -------------- ------------ ------------
Total dividends
to shareholders ............... (116,087,132) (100,027,983) (12,741,126) (12,196,171)
-------------- -------------- ------------ ------------
Net capital share
transactions ........................ 504,179,861 374,464,737 67,161,386 (1,864,843)
-------------- -------------- ------------ ------------
Total increase (decrease) in
net assets ......................... 504,202,191 374,451,750 67,157,469 (1,865,517)
Net Assets:
Beginning of year ................... 2,195,823,438 1,821,371,688 420,888,346 422,753,863
-------------- -------------- ------------ ------------
End of year ......................... $2,700,025,629 $2,195,823,438 $488,045,815 $420,888,346
============== ============== ============ ============
</TABLE>
GOVERNMENT OBLIGATIONS
MONEY MARKET PORTFOLIO
---------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 1997 AUGUST 31, 1996
--------------- ---------------
Increase (decrease) in net assets:
Operations:
Net investment income ............... $ 26,187,519 $ 25,224,326
Net gain (loss) on
investments ...................... (1,291) (10,995)
------------ ------------
Net increase in net assets
resulting from operations ......... 26,186,228 25,213,331
------------ ------------
Distributions to shareholders:
Dividends to shareholders
from net investment income:
Bedford shares .................... (9,057,728) (8,829,111)
Bradford shares ................... (2,084,419) (2,208,959)
Cash Preservation shares .......... -- --
Janney Montgomery Scott
shares .......................... (15,045,372) (14,186,256)
RBB shares ........................ -- --
Sansom Street shares .............. -- --
Dividends to shareholders from
net realized short-term gains:
Bedford shares .................... -- (12,697)
Bradford shares ................... -- (3,154)
Janney Montgomery
Scott shares .................... -- (18,204)
------------ ------------
Total dividends
to shareholders ............... (26,187,519) (25,258,381)
------------ ------------
Net capital share
transactions ........................ 57,686,497 44,099,699
------------ ------------
Total increase in net assets .......... 57,685,206 44,054,649
Net Assets:
Beginning of year ................... 556,547,005 512,492,356
------------ ------------
End of year ......................... $614,232,211 $556,547,005
============ ============
See Accompanying Notes to Financial Statements.
16
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS (b)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
-------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<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 ................ 0.0462 0.0469 0.0486 0.0278 0.0243
---------- ---------- -------- -------- --------
Total from investment
operations ..................... 0.0462 0.0469 0.0486 0.0278 0.0243
---------- ---------- -------- -------- --------
Less distributions
Dividends (from net investment
income) ............................ (0.0462) (0.0469) (0.0486) (0.0278) (0.0243)
---------- ---------- -------- -------- --------
Total distributions .............. (0.0462) (0.0469) (0.0486) (0.0278) (0.0243)
---------- ---------- -------- -------- --------
Net asset value, end of year ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ======== ======== ========
Total Return ........................... 4.72% 4.79% 4.97% 2.81% 2.46%
Ratios /Supplemental Data
Net assets, end of year (000) ........ $1,392,911 $1,109,334 $935,821 $710,737 $782,153
Ratios of expenses to average
net assets ......................... .97%(a) .97%(a) .96%(a) .95%(a) .95%(a)
Ratios of net investment income to
average net assets ................. 4.62% 4.69% 4.86% 2.78% 2.43%
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
-----------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1997 1996 1995 1994 1993
---------- ---------- ---------- ----------- ----------
<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 ................ 0.0285 0.0288 0.0297 0.0195 0.0195
-------- -------- -------- -------- --------
Total from investment
operations ..................... 0.0285 0.0288 0.0297 0.0195 0.0195
-------- -------- -------- -------- --------
Less distributions
Dividends (from net investment
income) ............................ (0.0285) (0.0288) (0.0297) (0.0195) (0.0195)
-------- -------- -------- -------- --------
Total distributions .............. (0.0285) (0.0288) (0.0297) (0.0195) (0.0195)
-------- -------- -------- -------- --------
Net asset value, end of year ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return ........................... 2.88% 2.92% 3.01% 1.97% 1.96%
Ratios /Supplemental Data
Net assets, end of year (000) ........ $213,034 $201,940 $198,425 $182,480 $215,577
Ratios of expenses to average
net assets ......................... .85%(a) .84%(a) .82%(a) .77%(a) .77%(a)
Ratios of net investment income to
average net assets ................. 2.85% 2.88% 2.97% 1.95% 1.95%
<FN>
(a) Without the waiver of advisory and administration 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 1.12%,
1.14%, 1.17%, 1.16% and 1.19% for the years ended August 31, 1997, 1996,
1995, 1994 and 1993, respectively. For the Municipal Money Market
Portfolio, the ratios of expenses to average net assets would have been
1.14%, 1.12%, 1.14%, 1.12% and 1.16% for the years ended August 31, 1997,
1996, 1995, 1994 and 1993, respectively.
(b) Financial Highlights relate solely to the Bedford Class of shares within
each portfolio.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
17
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS (b)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
-------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<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 ................ 0.0449 0.0458 0.0475 0.0270 0.0231
-------- -------- -------- -------- --------
Total from investment
operations ..................... 0.0449 0.0458 0.0475 0.0270 0.0231
-------- -------- -------- -------- --------
Less distributions
Dividends (from net investment
income) ............................ (0.0449) (0.0458) (0.0475) (0.0270) (0.0231)
-------- -------- -------- -------- --------
Total distributions .............. (0.0449) (0.0458) (0.0475) (0.0270) (0.0231)
-------- -------- -------- -------- --------
Net asset value, end of year ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return ........................... 4.59% 4.68% 4.86% 2.73% 2.33%
Ratios /Supplemental Data
Net assets, end of year (000) ........ $209,715 $192,599 $163,398 $166,418 $213,741
Ratios of expenses to average
net assets ......................... .975%(a) .975%(a) .975%(a) .975%(a) .975%(a)
Ratios of net investment income to
average net assets ................. 4.49% 4.58% 4.75% 2.70% 2.31%
<FN>
(a) Without the waiver of advisory, distribution and administration fees and
without the reimbursement of certain operating expenses, the ratios of
expenses to average net assets for the Government Obligations Money Market
Portfolio would have been 1.09%, 1.10%, 1.13%, 1.17% and 1.18% for the
years ended August 31, 1997, 1996, 1995, 1994 and 1993, respectively.
(b) Financial Highlights relate solely to the Bedford Class of shares within
each portfolio.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
18
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1997
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.
The Fund has authorized capital of thirty billion shares of common stock of
which 13.67 billion shares are currently classified into seventy-nine classes.
Each class represents an interest in one of twenty investment portfolios of the
Fund. The classes have been grouped into sixteen separate "families," nine of
which have begun investment operations: the RBB Family, the BEA Family, the
Sansom Street Family, the Bedford Family, the Cash Preservation Family, Janney
Montgomery Scott Money Family, the n/i Family, the Boston Partners Family, and
the Bradford Family. The Bedford Family represents interests in four portfolios,
three of which are covered in this report.
A) SECURITY VALUATION -- 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. The Fund seeks to maintain net asset value per
share at $1.00 for these portfolios.
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
agency 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) DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment
income are declared daily and paid monthly. Any net realized capital gains
will be distributed at least annually. Income distributions and capital
gain distributions are determined in accordance with tax regulations which
may differ from generally accepted accounting principles.
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.
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 and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
19
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1997
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Pursuant to Investment Advisory Agreements, PNC Institutional Management
Corporation ("PIMC"), a wholly 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 the three portfolios described
herein. PNC Bank serves as the sub-advisor for the Money Market, the Municipal
Money Market and the Government Obligations Money Market Portfolios.
For its advisory services, PIMC is entitled to receive the following fees,
computed daily and payable monthly based on each of the three portfolio's
average daily net assets:
<TABLE>
<CAPTION>
PORTFOLIO ANNUAL RATE
------------------------------------- ---------------------------------------------
<S> <C>
Money Market and Government .45% of first $250 million of net assets;
Obligations Money Market Portfolios .40% of next $250 million of net assets;
.35% of net assets in excess of $500 million.
Municipal Money Market Portfolio .35% of first $250 million of net assets;
.30% of next $250 million of net assets;
.25% of net assets in excess of $500 million.
</TABLE>
PIMC may, at its discretion, voluntarily waive all or any portion of its
advisory fee for these 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, 1997, advisory fees and waivers for the
three investment portfolios were as follows:
<TABLE>
<CAPTION>
GROSS NET
ADVISORY ADVISORY
FEE WAIVER FEE
---------- ------------ ----------
<S> <C> <C> <C>
Money Market Portfolio $8,969,561 $(3,603,130) $5,366,431
Municipal Money Market Portfolio 1,470,648 (1,269,553) 201,095
Government Obligations Money Market Portfolio 2,421,186 (647,063) 1,774,123
</TABLE>
The investment advisor has agreed to reimburse each portfolio for the
amount, if any, by which the total operating and management expenses exceed the
cap. For the year ended August 31, 1997, the reimbursed expenses were $469,986,
$14,921 and $404,193 for the Money Market Portfolio, Municipal Money Market
Portfolio and Government Obligations Money Market Portfolio, respectively.
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
Corp., serves as each class's transfer and dividend disbursing agent.
20
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1997
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, 1997,
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>
Money Market Portfolio
Bedford Class $1,790,000 $ -- $1,790,000
Cash Preservation Class 10,311 (9,650) 661
Janney Montgomery Scott Class 1,201,086 -- 1,201,086
RBB Class 3,750 (3,651) 99
Sansom Street Class 313,261 -- 313,261
---------- -------- ----------
Total Money Market Portfolio $3,318,408 $(13,301) $3,305,107
========== ======== ==========
Municipal Money Market Portfolio
Bedford Class $ 110,433 $ -- $ 110,433
Bradford Class 7,350 -- 7,350
Cash Preservation Class 8,999 (8,682) 317
Janney Montgomery Scott Class 14,464 -- 14,464
RBB Class 1,755 (1,745) 10
---------- -------- ----------
Total Municipal Money Market Portfolio $ 143,001 $(10,427) $ 132,574
========== ======== ==========
Government Obligations Money Market Portfolio
Bedford Class $ 63,943 $ -- $ 63,943
Bradford Class 1,475 -- 1,475
Janney Montgomery Scott Class 469,724 -- 469,724
---------- -------- ----------
Total Government Obligations Money Market Portfolio $ 535,142 -- $ 535,142
========== ======== ==========
</TABLE>
In addition, PFPC serves as administrator for the Municipal Money Market
Portfolio. The administration fee is computed daily and payable monthly at an
annual rate of .10% of the Portfolio's average daily assets. For the year ended
August 31, 1997, the administration fee for the Municipal Money Market Portfolio
was as follows:
ADMINISTRATION
FEE
--------------
Municipal Money Market Portfolio $448,548
21
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1997
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
The Fund, on behalf of each class of shares within the three 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.
For the year ended August 31, 1997, distribution fees for each class were
as follows:
DISTRIBUTION
FEE
------------
Money Market Portfolio
Bedford Class $ 6,570,719
Cash Preservation Class 934
Janney Montgomery Scott Class 3,911,049
RBB Class 114
Sansom Street Class 358,899
-----------
Total Money Market Portfolio $10,841,715
===========
Municipal Money Market Portfolio
Bedford Class $ 1,131,857
Bradford Class 876,050
Cash Preservation Class 366
Janney Montgomery Scott Class 598,266
RBB Class 7
-----------
Total Municipal Money Market Portfolio $ 2,606,546
===========
Government Obligations Money Market Portfolio
Bedford Class $ 1,136,708
Bradford Class 278,374
Janney Montgomery Scott Class 2,020,104
-----------
Total Government Obligations Money Market Portfolio $ 3,435,186
===========
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, 1997, service
organization fees were $535,524 for the Money Market Portfolio.
Expenses include legal fees paid to counsel to the company, a partner of
which is secretary of the company.
Expenses include Administrative and 12B-1 fees paid to Counsellors, Inc.
whose secretary is also a director of the company.
22
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1997
NOTE 3. CAPITAL SHARES
Transactions in capital shares (at $1.00 per capital share) for each year
were as follows:
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET
MONEY MARKET PORTFOLIO PORTFOLIO
---------------------------------- ---------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1997 AUGUST 31, 1996
---------------- --------------- --------------- ---------------
VALUE VALUE VALUE VALUE
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Shares sold:
Bedford Class $ 4,513,203,668 $ 3,797,592,288 $ 1,075,834,153 $ 1,022,457,772
Bradford Class -- -- 586,482,906 479,401,891
Cash Preservation Class 175,000 122,344 82,717 171,907
Janney Montgomery
Scott Class 3,087,651,502 2,359,936,867 406,706,164 408,374,271
RBB Class 4,744 584,206 200 69,480
Sansom Street Class 1,965,226,666 2,191,596,362 -- --
Shares issued in
reinvestment of dividends:
Bedford Class 55,886,643 49,290,088 5,696,659 5,847,767
Bradford Class -- -- 4,016,410 3,506,714
Cash Preservation Class 10,748 10,084 2,358 3,515
Janney Montgomery
Scott Class 29,670,134 24,077,173 2,820,771 2,602,869
RBB Class 1,361 2,625 53 143
Sansom Street Class 20,645,930 18,389,361 -- --
Shares repurchased:
Bedford Class (4,285,531,838) (3,673,362,904) (1,070,439,669) (1,024,790,222)
Bradford Class -- -- (553,804,071) (464,445,579)
Cash Preservation Class (145,893) (165,733) (103,897) (220,929)
Janney Montgomery
Scott Class (2,942,342,585) (2,265,789,890) (390,127,972) (434,775,023)
RBB Class (67,517) (580,821) (5,396) (69,419)
Sansom Street Class (1,940,208,702) (2,127,237,313) -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) $ 504,179,861 $ 374,464,737 $ 67,161,386 $ (1,864,843)
=============== =============== =============== ===============
Bedford Shares authorized 1,500,000,000 1,500,000,000 500,000,000 500,000,000
=============== =============== =============== ===============
</TABLE>
23
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1997
NOTE 3. CAPITAL SHARES (CONTINUED)
GOVERNMENT OBLIGATIONS
MONEY MARKET PORTFOLIO
---------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 1997 AUGUST 31, 1996
--------------- ---------------
VALUE VALUE
--------------- ---------------
Shares sold:
Bedford Class $ 606,875,958 $ 663,889,198
Bradford Class 171,813,924 180,761,217
Janney Montgomery
Scott Class 1,232,450,606 1,160,250,876
Shares issued in
reinvestment of dividends:
Bedford Class 8,971,804 8,793,104
Bradford Class 2,002,758 2,158,629
Janney Montgomery
Scott Class 14,958,191 14,080,097
Shares repurchased:
Bedford Class (598,765,148) (643,470,937)
Bradford Class (179,400,377) (172,234,746)
Janney Montgomery
Scott Class (1,201,221,219) (1,170,127,739)
--------------- ---------------
Net increase $ 57,686,497 $ 44,099,699
=============== ===============
Bedford Shares authorized 500,000,000 500,000,000
=============== ===============
NOTE 4. NET ASSETS
At August 31, 1997, net assets consisted of the following:
<TABLE>
<CAPTION>
Government
Municipal Obligations
Money Market Money Market Money Market
Portfolio Portfolio Portfolio
-------------- ------------ ------------
<S> <C> <C> <C>
Capital paid-in
Bedford Class $1,392,910,207 $213,100,752 $209,685,630
Bradford Class -- 166,093,827 51,608,040
Cash Preservation Class 242,215 96,943 --
Janney Montgomery Scott Class 736,852,298 108,825,135 352,951,307
Sansom Street Class 570,031,293 -- --
Other Classes 800 800 800
Accumulated net realized gain (loss)
on investments
Bedford Class (5,881) (71,513) (4,689)
Bradford Class -- (994) (1,369)
Cash Preservation Class (1) 4 --
Janney Montgomery Scott Class (1,727) 861 (7,508)
Sansom Street Class (3,575) -- --
-------------- ------------ ------------
$2,700,025,629 $488,045,815 $614,232,211
============== ============ ============
</TABLE>
24
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1997
NOTE 5. CAPITAL LOSS CARRYOVERS
At August 31, 1997, capital loss carryovers were available to offset future
realized gains as follows: $11,184 in the Money Market Portfolio of which
$11,184 expires in 2004; $71,642 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, $674 expires in 2004, and $3,917 expires in 2005;
$13,566 in the Government Obligations Money Market Portfolio of which $12,275
expires in 2004, and $1,291 expires in 2005.
NOTE 6. OTHER FINANCIAL HIGHLIGHTS
The Fund currently offers three other classes of shares representing
interests in the Money Market Portfolio: Cash Preservation, Janney Montgomery
Scott and Sansom Street. The Fund currently offers three other classes of shares
representing interests in the Municipal Money Market Portfolio: Bradford, Cash
Preservation and Janney Montgomery Scott. The Fund currently offers two other
class of shares representing an interest in the Government Obligations Money
Market Portfolio: Bradford 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 report of its respective family. The financial
highlights of certain of the other classes are as follows:
BRADFORD GOVERNMENT OBLIGATIONS MONEY MARKET SHARES
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993
--------------- --------------- --------------- --------------- ---------------
<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 .................. 0.0449 0.0458 0.0475 0.0270 0.0231
--------------- --------------- --------------- --------------- ---------------
Total from investment operations ... 0.0449 0.0458 0.0475 0.0270 0.0231
--------------- --------------- --------------- --------------- ---------------
Less distributions
Dividends (from net investment income).. (0.0449) (0.0458) (0.0475) (0.0270) (0.0231)
--------------- --------------- --------------- --------------- ---------------
Total distributions ................ (0.0449) (0.0458) (0.0475) (0.0270) (0.0231)
--------------- --------------- --------------- --------------- ---------------
Net asset value, end of year ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============== =============== =============== =============== ===============
Total Return ............................. 4.59% 4.68% 4.86% 2.73% 2.33%
Ratios /Supplemental Data
Net assets, end of year (000) .......... $51,608 $57,190 $46,509 $39,732 $50,523
Ratios of expenses to average net assets .975%(a) .975%(a) .975%(a) .975%(a) .975%(a)
Ratios of net investment income to
average net assets ................... 4.49% 4.58% 4.75% 2.70% 2.31%
<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 1.09%, 1.10%, 1.13%, 1.18% and 1.18% for the years ended
August 31, 1997, 1996, 1995, 1994 and 1993, respectively.
</FN>
</TABLE>
25
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1997
NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED)
BRADFORD MUNICIPAL MONEY MARKET SHARES
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993
--------------- --------------- --------------- --------------- ---------------
<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 ................... 0.0285 0.0288 0.0297 0.0195 0.0195
--------------- --------------- --------------- --------------- ---------------
Total from investment operations ...... 0.0285 0.0288 0.0297 0.0195 0.0195
--------------- --------------- --------------- --------------- ---------------
Less distributions
Dividends (from net investment income) .. (0.0285) (0.0288) (0.0297) (0.0195) (0.0195)
--------------- --------------- --------------- --------------- ---------------
Total distributions ................... (0.0285) (0.0288) (0.0297) (0.0195) (0.0195)
--------------- --------------- --------------- --------------- ---------------
Net asset value, end of year .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============== =============== =============== =============== ===============
Total Return .............................. 2.88% 2.92% 3.01% 1.97% 1.96%
Ratios /Supplemental Data
Net assets, end of year (000) ........... $166,089 $129,399 $110,936 $100,089 $76,975
Ratios of expenses to average net assets .85%(a) .84%(a) .82%(a) .77%(a) .77%(a)
Ratios of net investment income to
average net assets .................... 2.85% 2.88% 2.97% 1.95% 1.95%
<FN>
(a) Without the waiver of advisory, transfer agency and administration fees and
without the reimbursement of certain operating expenses, the ratio of
expenses to average net assets would have been 1.14%, 1.12%, 1.14%, 1.11%
and 1.16% for the years ended August 31, 1997, 1996, 1995, 1994 and 1993,
respectively.
</FN>
</TABLE>
26
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1997
NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED)
THE JANNEY MONTGOMERY SCOTT FAMILY
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO MUNICIPAL MONEY MARKET PORTFOLIO
---------------------------------------------------- ----------------------------------------------------
FOR THE PERIOD FOR THE PERIOD
FOR THE FOR THE JUNE 12, 1995 FOR THE FOR THE JUNE 12, 1995
YEAR YEAR (COMMENCEMENT YEAR YEAR (COMMENCEMENT
ENDED ENDED OF OPERATIONS) TO ENDED ENDED OF OPERATIONS) TO
AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995
--------------- --------------- ----------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------
Income from investment
operations:
Net investment income .. 0.0459 0.0465 0.0112 0.0285 0.0278 0.0063
-------- -------- -------- -------- -------- -------
Total from investment
operations .......... 0.0459 0.0465 0.0112 0.0285 0.0278 0.0063
-------- -------- -------- -------- -------- -------
Less distributions
Dividends (from net
investment income) ... (0.0459) (0.0465) (0.0112) (0.0285) (0.0278) (0.0063)
-------- -------- -------- -------- -------- -------
Total distributions ... (0.0459) (0.0465) (0.0112) (0.0285) (0.0278) (0.0063)
-------- -------- -------- -------- -------- -------
Net asset value,
end of year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return ............. 4.69% 4.76% 5.30%(b) 2.89% 2.81% 2.87%(b)
Ratios /Supplemental Data
Net assets, end of
year (000) ........... $736,855 $561,865 $443,645 $108,826 $89,428 $113,256
Ratios of expenses to
average net assets ... 1.00%(a) 1.00%(a) 1.00%(a)(b) 0.85%(a) 0.94%(a) 1.00%(a)(b)
Ratios of net investment
income to average
net assets ........... 4.59% 4.65% 5.04%(b) 2.85% 2.78% 2.83%(b)
<FN>
(a) Without the waiver of advisory, administration 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 1.22%, 1.23% and 1.23% for the years ended August 31, 1997, 1996 and
1995, respectively. For the Municipal Money Market Portfolio, the ratio of
expenses to average net assets would have been 1.13%, 1.23% and 1.30% for
the years ended August 31, 1997, 1996 and 1995, respectively.
(b) Annualized.
</FN>
</TABLE>
27
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1997
NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED)
THE JANNEY MONTGOMERY SCOTT FAMILY (CONTINUED)
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
---------------------------------------------------
FOR THE PERIOD
FOR THE FOR THE JUNE 12, 1995
YEAR YEAR (COMMENCEMENT
ENDED ENDED OF OPERATIONS) TO
AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995
---------------- --------------- -----------------
Net asset value,
beginning of year ........ $ 1.00 $ 1.00 $ 1.00
-------- -------- --------
Income from investment
operations:
Net investment income .... 0.0447 0.0456 0.0109
-------- -------- --------
Total from investment
operations ........... 0.0447 0.0456 0.0109
-------- -------- --------
Less distributions
Dividends (from net
investment income) ..... (0.0447) (0.0456) (0.0109)
Total distributions ..... (0.0447) (0.0456) (0.0109)
-------- -------- --------
Net asset value,
end of year .............. $ 1.00 $ 1.00 $ 1.00
======== ======== ========
Total Return ............... 4.56% 4.66% 5.03%(b)
Ratios /Supplemental Data
Net assets, end of
year (000) ............. $352,950 $306,757 $302,585
Ratios of expenses to
average net assets ..... 1.00%(a) 1.00%(a) 1.00%(a)(b)
Ratios of net investment
income to average
net assets ............. 4.47% 4.56% 4.91%(b)
(a) For the Government Obligations Money Market Portfolio, the ratio of
expenses to average net assets would have been 1.23%, 1.25% and 1.28% for
years ended August 31, 1997, 1996 and 1995, respectively.
(b) Annualized.
28
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
AUGUST 31, 1997
NOTE 6. 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, 1997 AUGUST 31, 1996 AUGUST 31, 1995 AUGUST 31, 1994 AUGUST 31, 1993
--------------- --------------- --------------- --------------- ---------------
<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 ........................ 0.0510 0.0518 0.0543 0.0334 0.0304
---------- ---------- ---------- ---------- ----------
Total from investment operations .......... 0.0510 0.0518 0.0543 0.0334 0.0304
---------- ---------- ---------- ---------- ----------
Less distributions
Dividends (from net investment income) ....... (0.0510) (0.0518) (0.0543) (0.0334) (0.0304)
---------- ---------- ---------- ---------- ----------
Total distributions ....................... (0.0510) (0.0518) (0.0543) (0.0334) (0.0304)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return ................................... 5.22% 5.30% 5.57% 3.39% 3.08%
Ratios /Supplemental Data
Net assets, end of year (000) ................ $570,018 $524,359 $441,614 $373,745 $190,794
Ratios of expenses to average net assets ..... .49%(a) .48%(a) .39%(a) .39%(a) .34%(a)
Ratios of net investment income to
average net assets .......................... 5.10% 5.18% 5.43% 3.34% 3.04%
<FN>
(a) Without the waiver of advisory and transfer agent 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 .64%,
.65%, .59%, .60% and .60% for the years ended August 31, 1997, 1996, 1995,
1994 and 1993, respectively.
</FN>
</TABLE>
29
<PAGE>
TAX INFORMATION FOR SHAREHOLDERS
(UNAUDITED)
In the twelve months ended August 31, 1997 (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 49% of such dividends were 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 1998, 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 1997. 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.
30
<PAGE>
