The Select
Family
Money Market Portfolio
Annual Report
August 31, 1999
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
ANNUAL INVESTMENT ADVISER'S REPORT
One year ago, economic and financial crises around the world threatened the
continuation of the eight-year expansion of the U.S. economy. With the
assistance, however, of lower interest rates, low inflation and a consumer
driven spending spree, the U.S. economy moved ahead at a brisk pace through
August of 1999. First quarter gross domestic product (GDP) grew by 4.5%, and
while the second quarter slipped to 1.6%, estimates for the third quarter range
as high as 5%. During the same period, price and wage pressures remained tame.
The GDP deflator reported a 1.4% increase through the first half of the year,
and consumer and wholesale prices for August showed moderate 2.3% increases on a
year-over-year basis. Energy costs, in particular, accounted for most of the
increases in CPI and PPI, as the price of oil reached $25 a barrel.
With the threat of global turmoil behind them, the Federal Reserve began to
rescind its three monetary policy easings effected last fall. Twice in the last
three months, the Fed raised short-term interest rates by a quarter point. The
current federal funds rate of 5.25% should, according to the Fed, "markedly
diminish the risk of rising inflation."
The Fed's tightenings had an immediate impact on the taxable money markets.
Overnight rates increased commensurate with the Fed's moves, while longer-dated
securities with maturities out to one year experienced larger gains. The result
was a steeper yield curve with yields on one-year obligations exceeding 6%. The
Y2K factor also came into play this year. Investments into January, 2000 often
carried incentives of 40-50 basis points versus December, 1999 maturities, as
investors sought extra liquidity for year-end uncertainties. The U.S. Treasury
and agency yield curves also steepened and the spreads widened between the two
sectors. The Money Market Portfolio maintained moderately extended maturities
for most of the year as the market tended to overvalue the magnitude of future
Fed tightenings. This allowed the portfolios to maintain a longer positioning,
even in an environment of rising rates. On August 31, the Money Market Portfolio
had assets of $2,739,120,331.
The Fund, like any business, could be affected if the computer systems on
which it relies do not properly process information beginning on January 1,
2000. While Year 2000 issues could have a negative effect on the Fund, the
Fund's investment adviser is currently working to avoid such problems. The
Fund's investment adviser is also working with other systems providers and
vendors servicing the Portfolios to determine their systems' ability to handle
Year 2000 problems. There is no guarantee, however, that systems will work
properly on or after January 1, 2000. Year 2000 problems may also hurt issuers
whose securities the Fund holds or securities markets generally.
BlackRock Institutional Management Corporation
(Please dial toll-free 800-430-9618 for
questions regarding your account or contact
your broker.)
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of The RBBFund,Inc.:
In our opinion, the accompanying statement of net assets, and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Money Market Portfolio, a separately managed portfolio of The RBB Fund, Inc.
(the "Fund"), at August 31, 1999, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at August
31, 1999 by correspondence with the custodian and brokers, provides a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopersLLP
2400 Eleven Penn Center
Philadelphia,Pennsylvania
October 15, 1999
2
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1999
PAR
(000) VALUE
-------- --------------
CERTIFICATES OF DEPOSIT--14.6%
DOMESTIC CERTIFICATES OF DEPOSIT--7.1%
First National Bank of Chicago
5.230% 10/20/99 ....................... $ 60,000 $ 60,001,246
6.060% 08/14/00 ....................... 15,000 14,992,908
4.980% 01/06/00 ....................... 50,000 49,996,642
Key Bank N.A.
5.705% 07/12/00 ....................... 10,000 9,998,760
Wilmington Trust Co.
5.060% 10/20/99 ....................... 25,000 25,000,000
5.530% 01/12/00 ....................... 20,000 20,000,000
5.070% 01/14/00 ....................... 14,400 14,400,000
--------------
194,389,556
--------------
YANKEE DOLLAR CERTIFICATES OF DEPOSIT--7.5%
Canadian Imperial Bank of Commerce
5.025% 01/27/00 ....................... 30,000 29,999,413
5.120% 02/23/00 ....................... 22,300 22,294,773
5.180% 03/15/00 ....................... 29,700 29,699,785
5.180% 03/16/00 ....................... 25,000 24,996,102
National Westminster Bank
4.980% 01/10/00 ....................... 15,000 14,998,961
5.280% 04/03/00 ....................... 25,000 24,996,849
Svenska Handelsbanken, Inc.
5.178% 03/16/00 ....................... 25,000 24,993,829
Toronto Dominion NY
5.000% 01/05/00 ....................... 15,000 14,999,500
5.100% 02/22/00 ....................... 20,000 19,996,325
--------------
206,975,537
--------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $401,364,726) ............... 401,365,093
--------------
COMMERCIAL PAPER--56.6%
AGRICULTURAL SERVICES--2.1%
Cargill Global Funding PLC 4-2
5.420% 01/19/00 ....................... 25,000 24,473,056
5.420% 01/28/00 ....................... 35,000 34,214,853
--------------
58,687,909
--------------
PAR
(000) VALUE
-------- --------------
AIRCRAFT ENGINES & PARTS--3.8%
Allied Signal, Inc. 4-2
4.920% 09/10/99 ....................... $ 25,000 $ 24,969,250
5.200% 10/08/99 ....................... 35,000 34,812,944
5.250% 02/15/00 ....................... 25,000 24,391,146
5.250% 02/28/00 ....................... 20,000 19,475,000
--------------
103,648,340
--------------
ASSET BACKED SECURITIES--19.8%
Barton Capital Corp. 4-2
5.140% 09/10/99 ....................... 66,110 66,025,049
Delaware Funding Corp. 4-2
5.120% 09/10/99 ....................... 61,700 61,621,024
Enterprise Funding Corp. 4-2
5.270% 09/20/99 ....................... 10,750 10,720,100
5.230% 10/13/99 ....................... 5,616 5,581,733
Moriarty L.L.C. 4-2
5.300% 09/07/99 ....................... 20,000 19,982,333
5.330% 10/25/99 ....................... 60,000 59,520,300
Moriarty Ltd. 4-2
5.140% 09/15/99 ....................... 40,000 39,920,044
5.180% 10/12/99 ....................... 20,000 19,882,011
Sigma Finance, Inc. 4-2
5.210% 10/28/99 ....................... 25,000 24,793,771
5.410% 11/04/99 ....................... 28,256 27,984,240
5.400% 11/08/99 ....................... 25,000 24,745,000
5.410% 11/15/99 ....................... 61,700 61,004,590
Trident Capital Finance, Inc. 4-2
5.170% 09/14/99 ....................... 75,000 74,859,979
Triple A-1 Funding 4-2
5.180% 09/20/99 ....................... 46,796 46,668,065
--------------
543,308,239
--------------
BANKS--9.0%
AB Spin Tab Swedmortgage 3-A-3
4.880% 09/07/99 ....................... 49,500 49,459,740
5.350% 11/10/99 ....................... 55,000 54,427,847
Abbey National North America 3-A-3
4.920% 01/31/00 ....................... 24,000 23,501,440
4.910% 02/01/00 ....................... 25,000 24,478,313
J.P. Morgan & Co. 3-A-3
4.830% 09/27/99 ....................... 25,000 24,912,792
See Accompanying Notes to Financial Statements.
3
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1999
PAR
(000) VALUE
-------- --------------
BANKS--(CONTINUED)
San Paolo U.S. Financial Inc. 3-A-3
4.950% 11/17/99 ....................... $ 20,000 $ 19,788,250
Santander Finance, Inc. 3-A-3
5.180% 10/18/99 ....................... 50,000 49,661,861
--------------
246,230,243
--------------
COMMUNICATION EQUIPMENT NEC--0.9%
Alcatel Alsthom Inc. 3-A-3
5.430% 03/13/00 ....................... 25,000 24,268,458
--------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT--0.7%
General Electric Co. 3-A-3
5.110% 09/08/99 ....................... 18,000 17,982,115
--------------
MOTOR VEHICLES PARTS & ACCESSORIES--1.8%
Eaton Corp. 4-2
5.180% 10/04/99 ....................... 50,000 49,762,583
--------------
NEWSPAPER: PUBLISHING & PRINTING--2.2%
Knight-Ridder, Inc. 3-A-3
4.810% 09/10/99 ....................... 10,000 9,987,975
5.280% 09/24/99 ....................... 49,500 49,333,020
--------------
59,320,995
--------------
PERSONAL CREDIT INSTITUTIONS--1.8%
Associates First Capital Corp. 3-A-3
5.180% 10/19/99 ....................... 50,000 49,654,667
------------
RETAIL - DEPARTMENT STORES--2.2%
St. Michael Finance Ltd. 3-A-3
5.270% 10/12/99 ....................... 61,355 60,986,751
------------
SERVICES-EQUIPMENT RENTING & LEASING--0.9%
HD Real Estate Funding Corp. 4-2
5.720% 02/07/00 ....................... 25,000 24,368,417
------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--11.4%
Associates First Capital Corp. 3-A-3
5.150% 10/18/99 ....................... 43,600 43,306,850
Finova Capital Corp. 3-A-3
5.100% 09/10/99 ....................... 55,000 54,929,875
5.350% 10/08/99 ....................... 40,000 39,780,056
PAR
(000) VALUE
-------- --------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--(CONTINUED)
General Electric Capital International
3-A-3
5.240% 09/17/99 ....................... $ 75,000 $ 74,825,333
Heller Financial, Inc. 3-A-3
5.200% 09/02/99 ....................... 25,000 24,996,389
5.250% 09/13/99 ....................... 25,000 24,956,250
5.220% 09/16/99 ....................... 50,000 49,891,250
--------------
312,686,003
--------------
TOTAL COMMERCIAL PAPER
(Cost $1,550,904,720) ............. 1,550,904,720
--------------
MUNICIPAL BONDS--2.6%
FLORIDA--0.1%
Coral Springs, VRDN IDR (Suntrust)(DAGGER)
5.400% 09/01/99 ....................... 2,300 2,300,000
--------------
GEORGIA--0.3%
De Kalb County Development
Authority VRDN Series 1995 B
(Emory University Project)(DAGGER)
5.350% 09/07/99 ....................... 9,485 9,485,000
------------
ILLINOIS--0.2%
Illinois Health Facilities Authority
Convertible/ VRDN Revenue Bond
(The Streeterville Corp. Project)
Series 1993-B (First National Bank
of Chicago)(DAGGER)
5.350% 09/01/99 ....................... 4,400 4,400,000
------------
INDIANA--0.1%
Bremen, Inc. TARN VRDN
Series 1996 B (Society National
Bank, Cleveland)(DAGGER)
5.400% 09/02/99 ....................... 2,390 2,390,000
------------
KENTUCKY--0.2%
Boone County Taxable IDR Refunding
Bonds VRDN (Square D Company
Project) Series 1994-B (Credit
Lyonnais)(DAGGER)
5.350% 09/01/99 ....................... 4,200 4,200,000
------------
See Accompanying Notes to Financial Statements.
4
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1999
PAR
(000) VALUE
-------- --------------
MISSISSIPPI--0.9%
Mississippi Business Finance Corp.
IDR Revenue Bond VRDN (Dana
Lighting Project) Series 1995
Sun Bank, N.A., Orlando(DAGGER)
5.400% 09/07/99 ........................... $ 5,400 $ 5,400,000
Mississippi Business Finance Corp.
Taxable IDR Revenue Bond VRDN
(Sun Bank, N.A., Orlando)
Series 1995(DAGGER)
5.400% 09/07/99 ........................... 5,600 5,600,000
Mississippi Business Finance Corp.
Taxable IDR Revenue Bond VRDN
(Bryan Foods, Inc. Project)
Series1994(DAGGER)
5.350% 09/01/99 ........................... 14,000 14,000,000
--------------
25,000,000
--------------
NORTH CAROLINA--0.3%
City of Asheville Tax Corp. VRDN(DAGGER)
5.350% 09/01/99 ........................... 8,900 8,900,000
--------------
TEXAS--0.5%
South Central Texas Industrial
Development Corp. Taxable IDR
Revenue Bond VRDN (Rohr
Industries Project) Series 1990
(Citibank N.A.)(DAGGER)
5.350% 09/01/99 ........................... 14,800 14,800,000
--------------
TOTAL MUNICIPAL BONDS
(Cost $71,475,000) .................... 71,475,000
--------------
VARIABLE RATE OBLIGATIONS--21.6%
ASSET BACKED SECURITIES--5.6%
Asset Securitization Corp.(DAGGER)
5.473% 09/27/99 ........................... 35,000 34,996,596
SMM Trust 1998-B(DAGGER)
5.204% 09/15/99 ........................... 80,000 80,000,000
SMM Trust 1999-E(DAGGER)
5.323% 10/05/99 ........................... 37,500 37,500,000
--------------
152,496,596
--------------
PAR
(000) VALUE
-------- --------------
BANKS--9.5%
Bayerische Hypo-Und Vereinsbank(DAGGER)
5.186% 09/14/99 ........................... $ 74,500 $ 74,472,398
5.186% 09/15/99 ........................... 50,000 49,972,065
Key Bank N.A.(DAGGER)
5.035% 09/14/99 ........................... 35,000 34,983,788
5.576% 11/26/99 ........................... 50,000 50,000,000
Royal Bank of Canada(DAGGER)
5.156% 09/14/99 ........................... 50,000 49,998,753
--------------
259,427,004
--------------
PERSONAL CREDIT INSTITUTIONS--5.6%
American Honda Finance Corp.(DAGGER)
5.293% 11/04/99 ........................... 10,000 9,995,308
5.340% 11/08/99 ........................... 30,000 29,983,321
5.535% 11/17/99 ........................... 30,000 30,001,938
5.430% 11/24/99 ........................... 44,600 44,593,706
5.486% 11/26/99 ........................... 15,000 14,998,545
General Motors Acceptance Corp.(DAGGER)
5.270% 10/20/99 ........................... 24,500 24,487,125
--------------
154,059,943
--------------
SECURITY BROKERS & DEALERS--0.9%
Morgan Stanley Dean Witter & Co.(DAGGER)
5.260% 10/14/99 ........................... 25,000 25,000,000
--------------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $590,983,543) ................... 590,983,543
--------------
MEDIUM TERM NOTES--0.3%
SECURITY BROKERS & DEALERS--0.3%
Goldman Sachs Group LP
5.280% 02/24/00 ........................... 7,500 7,499,928
--------------
TOTAL MEDIUM TERM NOTES
(Cost $7,499,928) ..................... 7,499,928
--------------
TIME DEPOSITS--3.7%
Bank Brussels Lambert
5.656% 09/01/99 ........................... 100,000 100,000,000
--------------
TOTAL TIME DEPOSITS
(Cost $100,000,000) ................... 100,000,000
--------------
See Accompanying Notes to Financial Statements.
5
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1999
PAR
(000) VALUE
-------- --------------
REPURCHASE AGREEMENTS--0.3%
J.P. Morgan Securities Inc.
(Agreement dated 08/31/99 to
be repurchased at $9,401,449
collateralized by $10,760,754
par Government National
Mortgage Association at rates
of 6.00% and 6.50% due 08/15/29
and 09/20/28. Market Value
of collateral is $9,682,001.)
5.550% 09/01/99 ........................... $ 9,400 $ 9,400,000
--------------
TOTAL REPURCHASE AGREEMENTS
(Cost $9,400,000) ..................... 9,400,000
--------------
TOTAL INVESTMENTS AT VALUE--99.7%
(Cost $2,731,628,284*) .................... 2,731,628,284
--------------
OTHER ASSETS IN EXCESS
OF LIABILITIES--0.3% ...................... 7,492,047
--------------
NET ASSETS (Applicable to
360,146,407 Bedford shares,
130,925 Cash Preservation
shares, 1,088,418,203
Janney Montgomery Scott
shares, 841,894,150 Sansom
Street shares, 230,052,052
Select Shares, 218,533,823
Principal Shares, and 800
other shares)--100% ....................... $2,739,120,331
==============
NET ASSET VALUE, Offering and
redemption price per share
($2,739,120,331 (DIVIDE) 2,739,176,360) $1.00
=====
* Also cost for Federal income tax purposes.
(DAGGER) Variable Rate Obligations -- The rate shown is the rate as of August
31, 1999 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.
INVESTMENT ABBREVIATIONS
VRDN ..................................................Variable Rate Demand Note
IDR ..............................................Industrial Development Revenue
TARN ...............................................Taxable Adjustable Rate Note
See Accompanying Notes to Financial Statements.
6
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1999 (A)
<TABLE>
<CAPTION>
MONEY MARKET
PORTFOLIO
------------
<S> <C>
Investment Income
Interest ........................... $136,764,907
------------
Expenses
Distribution fees ............... 10,596,485
Investment advisory fees ........ 9,552,406
Transfer agent fees ............. 2,501,558
Service organization fees ....... 572,331
Printing fees ................... 545,693
Custodian fees .................. 417,907
Legal fees ...................... 240,567
Registration fees ............... 225,000
Audit fees ...................... 142,476
Directors' fees ................. 71,775
Insurance expense ............... 33,113
SEC fees ........................ 2,611
Miscellaneous ................... 326
------------
24,902,248
Less fees waived and reimbursed . (3,795,799)
------------
Total expenses ............. 21,106,449
------------
Net investment income .............. 115,658,458
------------
Realized gain (loss) on investments 72,320
------------
Net increase in net assets resulting
from operations $115,730,778
============
</TABLE>
(a) On December 15, 1998, the Select Class of shares of the RBB Money Market
Fund began operations.
See Accompanying Notes to Financial Statements.
7
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS(A)
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 1999 AUGUST 31, 1998
--------------- ---------------
<S> <C> <C>
Increase (decrease)
in net assets:
Operations:
Net investment income ......... $ 115,658,458 $ 127,866,778
Net gain (loss) on
investments ................. 72,320 (95,478)
-------------- --------------
Net increase in net
assets resulting
from operations ............. 115,730,778 127,771,300
-------------- --------------
Distributions to
shareholders:
Dividends to
shareholders from
net investment income:
Bedford shares .............. (28,089,918) (56,898,248)
Cash Preservation shares .... (7,069) (10,274)
Janney Montgomery Scott
shares .................... (43,156,041) (38,111,646)
Principal shares ............ (2,455,484) --
Sansom Street shares ........ (36,008,586) (32,846,610)
Select shares ............... (5,941,360) --
-------------- --------------
(115,658,458) (127,866,778)
Distribution in excess
of net investment income:
Bedford shares .............. (2,671) (7,165)
Cash Preservation shares .... (1) (1)
Janney Montgomery Scott
shares .................... (2,921) (3,979)
Sansom Street shares ........ (2,010) (2,838)
Select shares ............... (102) --
-------------- --------------
(7,705) (13,983)
Total dividends to
shareholders ............ (115,666,163) (127,880,761)
-------------- --------------
Net capital share transactions .. 423,497,416 (384,357,868)
-------------- --------------
Total increase/(decrease) in
net assets .................... 423,562,031 (384,467,329)
Net Assets:
Beginning of year ............. 2,315,558,300 2,700,025,629
-------------- --------------
End of year ................... $2,739,120,331 $2,315,558,300
============== ==============
</TABLE>
(a) On December 15, 1998, the Select Class of shares of the RBB Money Market
Fund began operations.
See Accompanying Notes to Financial Statements.
8
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS (B)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
MONEY MARKET PORTFOLIO
----------------------
FOR THE PERIOD
DECEMBER 15, 1998
TO AUGUST 31, 1999 (C)
---------------------
Net asset value, beginning of period ................ $ 1.00
--------
Income from investment operations:
Net investment income ............................ 0.0345
--------
Total from investment operations ............... 0.0345
--------
Less distributions
Dividends (from net investment income) ........... (0.0345)
--------
Total distributions ............................ (0.0345)
--------
Net asset value, end of period ...................... $ 1.00
========
Total Return ........................................ 3.50%(e)
Ratios/Supplemental Data
Net assets, end of period ........................ $230,044
Ratios of expenses to average net assets ......... .27%(a)(d)
Ratios of net investment income to
average net assets ............................. 4.82%(d)
(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 .41%
for the period ended August 31, 1999.
(b) Financial highlights relate solely to the Select Class of shares within
the portfolio.
(c) On December 15, 1998 the Money Market Portfolio's Select Class began
operations.
(d) Annualized.
(e) Non-Annualized.
See Accompanying Notes to Financial Statements.
9
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
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 20.03 billion shares are currently classified into ninety-seven classes.
Each class represents an interest in one of sixteen investment portfolios of the
Fund. The classes have been grouped into sixteen separate "families", nine of
which have begun investment operations: the Principal Family, the Select Family,
the Sansom Street Family, the Bedford Family, the Cash Preservation Family, the
Janney Montgomery Scott Family, the n/i numeric investors Family, the Boston
Partners Family and the Schneider Family. The Select Family represents interests
in the Money Market Portfolio, which is 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 Portfolio seeks 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
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
are 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 principals.
D) FEDERAL INCOME TAXES -- No provision is made for Federal taxes
as it is the Fund's intention to have each portfolio to 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 plus accrued interest. If the value of the
underlying securities falls below 102% of the value of the purchase price
plus accrued interest, the Fund will require the seller to deposit
additional collateral by the next Fund business day. In the event that the
seller under the agreement defaults on its repurchase obligation or fails
to deposit sufficient collateral, the Fund has the contractual right,
subject to the requirements of applicable bankruptcy and insolvency laws,
to sell the underlying securities and may claim any resulting loss from the
seller. 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.
10
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Pursuant to Investment Advisory Agreement, BlackRock Institutional
Management Corporation ("BIMC"), an indirect majority-owned subsidiary of PNC
Bank, serves as investment adviser to the portfolio described herein, and also
serves as administrator to the Money Market Portfolio. For the Money Market
Portfolio, BIMC and PFPC have entered into a delegation agreement, whereas PFPC
has agreed to perform Administration and Accounting services for an annual fee
of .10% of the average net assets of the portfolio.
For its advisory services, BIMC is entitled to receive the following fee,
computed daily and payable monthly based on the portfolio's average daily net
assets:
PORTFOLIO ANNUAL RATE
------------------------------ --------------------------------------------
Money Market Portfolio .45% of first $250 million of net assets;
.40% of next $250 million of net assets;
.35% of net assets in excess of $500 million.
BIMC may, at its discretion, voluntarily waive all or any portion of its
advisory fee for this portfolio. 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, 1999, advisory fees and waivers were as
follows:
GROSS NET
ADVISORY ADVISORY
FEE WAIVER FEE
-------------- -------------- -------------
Money Market Portfolio $9,552,406 $(2,971,645) $6,580,761
The investment advisor has agreed to reimburse each portfolio for the
amount, if any, by which the total operating and management expenses exceed the
expense cap. For the year ended August 31, 1999 the reimbursed expenses were
$819,409 for the Money Market Portfolio.
11
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
In addition, PFPC Trust Co. serves as custodian for each of the Fund's
portfolios. PFPC Inc. ("PFPC") serves as each class's disbursing agent. Both
PFPC Trust Company and PFPC are wholly-owned subsidiaries of PFPC Worldwide
Inc., an indirect majority owned subsidiary of PNC Bank Corp.
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, 1999,
transfer agency fees and waivers for each class were as follows:
<TABLE>
<CAPTION>
GROSS NET
TRANSFER AGENCY TRANSFER AGENCY
FEE WAIVER FEE
------------------ ----------- -----------------
<S> <C> <C> <C>
Money Market Portfolio
Bedford Class $ 366,050 $ -- $ 366,050
Cash Preservation Class 5,156 (4,745) 411
Janney Montgomery Scott Class 1,679,402 -- 1,679,402
Principal Class 1,950 -- 1,950
Sansom Street Class 444,751 -- 444,751
Select 4,249 -- 4,249
---------- ------- ----------
Total Money Market Portfolio $2,501,558 $(4,745) $2,496,813
========== ======= ==========
</TABLE>
The Fund, on behalf of each class of shares within the investment
portfolio, has adopted Distribution Plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended. The Fund has entered into
Distribution Contracts with Provident Distributors Inc. ("PDI"), which provide
for each class to make monthly payments, based on average net assets, to PDI of
up to .65% on an annualized basis for the Bedford, Cash Preservation, Principal,
and Janney Montgomery Scott Classes and up to .20% on an annualized basis for
the Sansom Street Class.
For the year ended August 31, 1999, distribution fees for each class were
as follows:
DISTRIBUTION
FEE
--------------
Money Market Portfolio
Bedford Class $ 3,832,958
Cash Preservation Class 657
Janney Montgomery Scott Class 6,150,849
Principal Class 225,438
Sansom Street Class 386,583
-----------
Total Money Market Portfolio $10,596,485
===========
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, 1999 service
organization fees were $572,331 for the Money Market Portfolio.
12
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
NOTE 3. CAPITAL SHARES
Transactions in capital shares (at $1 per capital share) for the year were
as follows:
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
---------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 1999 AUGUST 31, 1998
-------------- --------------
VALUE VALUE
-------------- --------------
<S> <C> <C>
Shares sold:
Bedford Class $ 1,676,808,408 $ 4,081,920,081
Cash Preservation Class 114,454 113,319
Janney Montgomery Scott Class 4,931,373,936 3,910,533,620
Principal Class 318,334,115 --
Sansom Street Class 2,907,994,377 2,296,071,622
Select Class 1,439,090,920 --
--------------- --------------
Total Shares Sold 11,273,716,210 10,288,638,642
Shares issued in reinvestment of dividends:
Bedford Class 28,217,868 56,201,453
Cash Preservation Class 7,224 10,291
Janney Montgomery Scott Class 43,272,113 37,882,680
Principal Class 2,206,341 --
Sansom Street Class 26,800,967 24,189,907
Select Class 347,980 --
--------------- --------------
Total Shares Reinvested 100,852,493 118,284,331
Shares repurchased:
Bedford Class (2,107,674,545) (4,768,237,063)
Cash Preservation Class (217,053) (139,525)
Janney Montgomery Scott Class (4,790,786,046) (3,780,710,398)
Principal Class (102,006,633) --
Sansom Street Class (2,741,000,161) (2,242,193,855)
Select Class (1,209,386,849) --
--------------- --------------
Total Shares Repurchased (10,951,071,287) (10,791,280,841)
--------------- --------------
Net increase (decrease) $ 423,497,416 $ (384,357,868)
=============== ===============
Select Shares authorized 700,000,000 700,000,000
=============== ===============
</TABLE>
13
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
NOTE 4. NET ASSETS
At August 31, 1999, net assets consisted of the following:
Capital paid-in $2,739,176,360
Accumulated net realized gain
(loss) on investments (56,029)
-------------
$2,739,120,331
-------------
14
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
NOTE 5. OTHER FINANCIAL HIGHLIGHTS
The Fund currently offers five other classes of shares representing
interest in the Money Market Portfolio: Bedford, Janney Montgomery Scott, Cash
Preservation, Sansom Street, and Principal. 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:
THE BEDFORD FAMILY (B)
<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, 1999 AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995
--------------- --------------- --------------- --------------- ---------------
<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 0.0425 0.0473 0.0462 0.0469 0.0486
-------- -------- ---------- ---------- --------
Total from investment
operations 0.0425 0.0473 0.0462 0.0469 0.0486
-------- -------- ---------- ---------- --------
Less distributions
Dividends (from net
investment income) (0.0425) (0.0473) (0.0462) (0.0469) (0.0486)
-------- -------- ---------- ---------- --------
Total distributions (0.0425) (0.0473) (0.0462) (0.0469) (0.0486)
-------- -------- ---------- ---------- --------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== -------- ---------- ---------- --------
Total Return 4.34% 4.84% 4.72% 4.79% 4.97%
Ratios/Supplemental Data
Net assets, end of
year (000) $360,123 $762,739 $1,392,911 $1,109,334 $935,821
Ratios of expenses to
average net assets .97%(a) .97%(a) .97%(a) .97%(a) .96%(a)
Ratios of net investment
income to average
net assets 4.25% 4.73% 4.62% 4.69% 4.86%
<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
1.08%, 1.10%, 1.12%, 1.14%, and 1.17%, for the years ended August 31,
1999, 1998, 1997, 1996, and 1995, respectively.
(b) Financial Highlights relate solely to the Bedford Class of shares
within the portfolio.
</FN>
</TABLE>
15
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
NOTE 5. OTHER FINANCIAL HIGHLIGHTS (CONTINUED)
THE JANNEY MONTGOMERY SCOTT MONEY FUNDS (C)
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
-----------------------------------------------------------------
FOR THE PERIOD
FOR THE FOR THE FOR THE FOR THE JUNE 12, 1995
YEAR YEAR YEAR YEAR (COMMENCEMENT
ENDED ENDED ENDED ENDED OF OPERATIONS)TO
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1999 1998 1997 1996 1995
---------- -------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of year or period ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- -------- -------- -------- ----------
Income from investment
operations:
Net investment income ......... 0.0422 0.0469 0.0459 0.0465 0.0112
---------- -------- -------- -------- ----------
Total from investment
operations .............. 0.0422 0.0469 0.0459 0.0465 0.0112
---------- -------- -------- -------- ----------
Less distributions
Dividends (from net
investment income) .......... (0.0422) (0.0469) (0.0459) (0.0465) (0.0112)
---------- -------- -------- -------- ----------
Total distributions ....... (0.0422) (0.0469) (0.0459) (0.0465) (0.0112)
---------- -------- -------- -------- ----------
Net asset value, end of
year or period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ======== ======== ======== ==========
Total Return .................... 4.30% 4.81% 4.69% 4.76% 5.30%(b)
Ratios /Supplemental Data
Net assets, end of year or
period (000) ................ $1,088,405 $904,526 $736,855 $561,865 $443,645
Ratios of expenses to
average net assets .......... 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a)(b)
Ratios of net investment
income to average
net assets .................. 4.22% 4.69% 4.59% 4.65% 5.04%(b)
</TABLE>
(a) Without the waiver of advisory, administration 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 1.19%, 1.21%, 1.22%, 1.23% and 1.23% for the years or period
ended August 31, 1999, 1998, 1997, 1996 and 1995, respectively.
(b) Annualized.
(c) Financial Highlights relate solely to the Janney Montgomery Scott Class
of shares within each portfolio.
16
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
NOTE 5. OTHER FINANCIAL HIGHLIGHTS (CONTINUED)
THE SANSOM STREET FAMILY (B)
<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, 1999 AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995
--------------- --------------- --------------- --------------- ---------------
<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 ................. 0.0473 0.0520 0.0510 0.0518 0.0543
-------- -------- -------- -------- --------
Total from investment operations .... 0.0473 0.0520 0.0510 0.0518 0.0543
-------- -------- -------- -------- --------
Less distributions
Dividends (from net investment income) (0.0473) (0.0520) (0.0510) (0.0518) (0.0543)
-------- -------- -------- -------- --------
Total distributions ................. (0.0473) (0.0520) (0.0510) (0.0518) (0.0543)
-------- -------- -------- -------- --------
Net asset value, end of year ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return ............................. 4.83% 5.34% 5.22% 5.30% 5.57%
Ratios/Supplemental Data
Net assets, end of year ............... $841,887 $684,066 $570,018 $524,359 $441,614
Ratios of expenses to average net assets .49%(a) .49%(a) .49%(a) .48%(a) .39%(a)
Ratios of net investment income to
average net assets .................. 4.73% 5.20% 5.10% 5.18% 5.43%
</TABLE>
(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 .62%,
.62%, .64%, .65%, and .59% for the years ended August 31, 1999, 1998,
1997, 1996 and 1995 respectively.
(b) Financial highlights relate solely to the Sansom Street Class of shares
within the portfolio.
17
<PAGE>
THE SELECT FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
NOTE 5. OTHER FINANCIAL HIGHLIGHTS (CONTINUED)
THE PRINCIPAL FAMILY (B)
MONEY MARKET PORTFOLIO
----------------------
FOR THE PERIOD
JUNE 1, 1999 TO
AUGUST 31, 1999 (C)
-------------------
Net asset value, beginning of period ................. $ 1.00
- - ----------
Income from investment operations:
Net investment income ............................. 0.0110
--------
Total from investment operations ................ 0.0110
--------
Less distributions
Dividends (from net investment income) ............ (0.0110)
--------
Total distributions ............................. (0.0110)
--------
Net asset value, end of period ....................... $ 1.00
========
Total Return ......................................... 1.10%(e)
Ratios/Supplemental Data
Net assets, end of period ......................... $218,530
Ratios of expenses to average net assets .......... .77%(a)(d)
Ratios of net investment income to
average net assets .............................. 4.36%(d)
(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 .85%
for the period ended August 31, 1999.
(b) Financial highlights relate solely to the Principal Family of shares
within the portfolio.
(c) On June 1, 1999 the Money Market Portfolio's Principal Class began
operations.
(d) Annualized.
(e) Non-Annualized.
18
