ANNUAL
REPORT FOR
THE PRINCIPAL CLASS
MONEY MARKET PORTFOLIO
AUGUST 31, 2000
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
ANNUAL INVESTMENT ADVISER'S REPORT
A year ago, the financial markets were preoccupied with Y2K preparedness,
even as the Federal Reserve was in the midst of a sharp tightening of monetary
policy. In the end, Y2K proved to be a non-event, but the Fed's concern about
the strength of the U.S. economy was justified, as the nation's gross domestic
product grew, in successive quarters, at rates of 4-5%. The second quarter this
year, in fact, registered a 5.3% gain, well above the Fed's non-inflationary
threshold. Only the concurrent gain in productivity kept the Fed from raising
interest rates still higher. At present, the main focus is on energy prices and
the threat that $40 per barrel of oil poses to higher producer and consumer
prices. Overall, inflation has remained well behaved in the past year,
increasing by less than 3%, but it continues to be a key determinant of monetary
policy. The Fed's actions over the last year appear to have produced an economic
slowdown in the third quarter which may be sufficient to keep the federal funds
level at 6.50% through the end of the year.
Starting in June 1999, the Federal Reserve raised short-term interest rates
a total of 175 basis points to 6.50%, in an effort to slow the economy to a more
sustainable and non-inflationary pace. For much of the last twelve months, the
yield curve was positively sloped, reflecting the market's continued
expectations of rising interest rates. Y2K, of course, produced a brief anomaly
last January, but spreads of 50-75 basis points were generally available between
overnight and one-year investments. The Fed's most recent move was a fifty basis
point increase in May 2000. The magnitude of that move, coupled with subsequent
signs of an economic slowdown in July and August, caused the yield curve to
flatten considerably. Currently, there is less than a twenty-five basis point
spread between overnights and one year. Average weighted maturities in the RBB
Money Market Portfolio were extended, when possible, in the May to August
period, to a 45-55 day range to capture the higher yields that were available on
longer dated investments.
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 RBB Fund,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, 2000, 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 accounting principles generally accepted in the United States of
America. 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 audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 2000 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Two Commerce Square
Philadelphia, Pennsylvania
October 20, 2000
2
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 2000
PAR
(000) VALUE
------- -------------
CERTIFICATES OF DEPOSIT--7.1%
DOMESTIC CERTIFICATES OF DEPOSIT--2.5%
First Tennessee Bank
6.650% 11/03/00 ................................... $35,000 $ 35,000,910
-------------
YANKEE DOLLAR CERTIFICATES OF DEPOSIT--4.6%
Bank of Montreal Yankee
6.540% 09/08/00 ................................... 25,000 25,000,000
Industrial Bank of Japan
6.620% 10/10/00 ................................... 19,600 19,600,000
Sanwa Bank Yankee
6.620% 10/05/00 ................................... 20,000 20,000,187
-------------
64,600,187
-------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $99,601,097) ............................ 99,601,097
-------------
COMMERCIAL PAPER--51.8%
ASSET BACKED SECURITIES--22.8%
Beta Finance Inc.
6.650% 09/11/00 ................................... 9,000 8,983,375
Corporate Receivable Corp.
6.500% 12/20/00 ................................... 25,000 24,503,472
Edison Asset Securitzation LLC.
6.510% 11/06/00 ................................... 10,000 9,880,650
Emerald Certificates Program
6.540% 10/24/00 ................................... 21,705 21,496,017
Enterprise Funding Corp.
6.660% 12/18/00 ................................... 10,000 9,800,200
Fairway Finance Ltd.
6.630% 09/14/00 ................................... 53,412 53,284,123
K2 (USA) LLC.
6.530% 02/26/01 ................................... 9,025 8,733,608
Main Place Funding Corp.
6.888% 10/25/00 ................................... 32,000 32,003,247
Moriarty LLC.
6.690% 12/15/00 ................................... 55,000 53,926,813
Sheffield Receivables Corp.
6.620% 09/18/00 ................................... 48,300 48,149,009
Sigma Finance, Inc.
6.670% 12/15/00 ................................... 50,000 49,027,292
-------------
319,787,806
-------------
PAR
(000) VALUE
------- -------------
BANKS--8.5%
Banque Et Caisse Luxembourg
6.500% 02/26/01 ................................... $24,600 $ 23,809,383
Cregem North America Inc.
6.510% 02/13/01 ................................... 40,000 38,806,500
Forrestal Funding Master Trust
6.565% 02/09/01 ................................... 13,000 12,618,318
HSBC USA Inc.
6.671% 03/09/01 ................................... 35,000 33,774,204
Santander Finance Inc.
6.540% 02/07/01 ................................... 10,000 9,711,150
-------------
118,719,555
-------------
CHEMICALS & ALLIED PRODUCTS--1.7%
BASF (AG)
6.510% 02/27/01 ................................... 25,000 24,190,771
-------------
GOVERNMENT--1.7%
Quebec, Province of
6.620% 11/14/00 ................................... 24,000 23,673,413
-------------
MOTOR VEHICLES & CAR BODIES--1.4%
Daimler Chrysler North America
Holding Corp.
6.500% 02/26/01 ................................... 20,000 19,357,222
-------------
NATURAL GAS TRANS. & DISTR.--1.4%
Consolidated Natural Gas Co.
6.600% 11/30/00 ................................... 20,000 19,670,000
-------------
RETAIL - DEPARTMENT STORES--0.7%
St. Michael Finance Ltd.
6.520% 11/07/00 ................................... 10,180 10,056,471
-------------
SECURITY BROKERS & DEALERS--7.3%
Lehman Brothers Holdings Inc.
6.750% 12/11/00 ................................... 40,000 39,242,500
6.720% 12/15/00 ................................... 9,000 8,823,600
Salomon Smith Barney Holdings Inc.
6.610% 09/14/00 ................................... 55,000 54,868,718
-------------
102,934,818
-------------
See Accompanying Notes to Financial Statements.
3
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 2000
PAR
(000) VALUE
------- -------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--6.0%
Heller Financial, Inc.
6.730% 09/05/00 ................................... $40,000 $ 39,970,089
6.730% 09/06/00 ................................... 45,000 44,957,937
-------------
84,928,026
-------------
TELEPHONE COMMUNICATIONS--0.3%
AT&T Corp.
6.490% 02/08/01 ................................... 5,000 4,855,778
-------------
TOTAL COMMERCIAL PAPER
(Cost $728,173,860) ........................... 728,173,860
-------------
MUNICIPAL BONDS--4.8%
FLORIDA--0.1%
Coral Springs, IDR (Alliance Corp.)
Series 1995 (Suntrust Bank,
Central FL LOC)
Series 1995+
6.650% 09/06/00 ................................... 2,000 2,000,000
-------------
GEORGIA--0.7%
De Kalb County, Development Authority
Series 1995 B (Emory University
Project)+
6.600% 09/07/00 ................................... 9,280 9,280,000
-------------
ILLINOIS--0.3%
Illinois Health Facilities Authority
(The Streeterville Corp. Project)
Series 1993-B (Bank One N.A. LOC)+
6.700% 09/06/00 ................................... 4,400 4,400,000
-------------
INDIANA--0.1%
Bremen, IDR Bond Series 1996 B
(Society National Bank, Cleveland
LOC)+
6.650% 09/07/00 ................................... 1,665 1,665,000
-------------
KENTUCKY--0.3%
Boone County, Taxable IDR Refunding
Bonds (Square D Company Project)
Series 1994-B (Societe Generale
LOC)+
6.700% 09/06/00 ................................... 4,200 4,200,000
-------------
PAR
(000) VALUE
------- -------------
MISSISSIPPI--1.7%
Mississippi Business Finance Corp.
IDR Bond (Bryan Foods, Inc.
Project) Series 1994 (Sara Lee
Corp. LOC)+
6.750% 09/06/00 ................................... $14,000 $ 14,000,000
Mississippi Business Finance Corp.
IDR Bond (Dana Lighting Inc.)
Series 1995 (Suntrust Bank,
Central FL LOC)+
6.650% 09/07/00 ................................... 4,900 4,900,000
Mississippi Business Finance Corp. IDR
Bond (Choctaw Foods Inc. Project)
Series 1995 (Rabobank Nederland
LOC)+
6.650% 09/07/00 ................................... 4,800 4,800,000
-------------
23,700,000
-------------
NORTH CAROLINA--0.5%
City of Asheville (Wachovia Bank LOC)+
6.600% 09/06/00 ................................... 7,000 7,000,000
-------------
TEXAS--1.1%
South Central Texas Industrial
Development Corp. Taxable IDR
Revenue Bond (Rohr Industries
Project) Series 1990 (NBD Bank
N.A. LOC)+
6.700% 09/06/00 ................................... 14,800 14,800,000
-------------
TOTAL MUNICIPAL BONDS
(Cost $67,045,000) ............................ 67,045,000
-------------
See Accompanying Notes to Financial Statements.
4
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONCLUDED)
AUGUST 31, 2000
PAR
(000) VALUE
------- -------------
VARIABLE RATE OBLIGATIONS--22.8%
AIRCRAFT PARTS & AUXILIARY EQUIPMENT, NEC--2.1%
Textron Financial Corp.++
6.742% 11/02/00 ................................... $30,000 $ 30,000,000
-------------
BANKS--18.9%
AB Spintab Corp.++
6.740% 10/23/00 ................................... 25,000 24,997,350
American Express Centurion Bank++
6.670% 09/01/00 ................................... 21,000 21,000,000
Bank of America N.T.S.A.++
6.670% 09/01/00 ................................... 50,000 50,000,000
Bayerische Landesbank Girozentrale++
6.540% 09/28/00 ................................... 25,000 24,993,982
SMM Trust 1999-A++
6.780% 09/13/00 ................................... 10,000 10,000,000
SMM Trust 2000-B++
6.639% 09/13/00 ................................... 69,650 69,650,000
Westdeutsche Landesbank
Girozentrale++
6.540% 09/25/00 ................................... 15,000 14,996,420
Westpac Banking Corp.++
6.655% 09/05/00 ................................... 50,000 49,997,514
-------------
265,635,266
-------------
PERSONAL CREDIT INSTITUTIONS--1.8%
American Honda Finance Corp.++
6.720% 10/18/00 ................................... 24,800 24,799,078
-------------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $320,434,344) ........................... 320,434,344
-------------
MEDIUM TERM NOTES--4.3%
SECURITY BROKERS & DEALERS--4.3%
Goldman Sachs Group, Inc.++
6.810% 09/12/00 ................................... 50,000 50,000,000
6.730% 12/20/00 ................................... 10,000 10,000,000
-------------
60,000,000
-------------
TOTAL MEDIUM TERM NOTES
(Cost $60,000,000) ............................ 60,000,000
-------------
PAR
(000) VALUE
------- -------------
TIME DEPOSITS--9.0%
Fifth Third Bank
6.656% 09/01/00 ................................... $67,000 $ 67,000,000
Firstar Bank N.A. (Mercantile Bank)
6.625% 09/01/00 ................................... 60,100 60,100,000
-------------
TOTAL TIME DEPOSITS
(Cost $127,100,000) ........................... 127,100,000
-------------
TOTAL INVESTMENTS--99.8%
(Cost $1,402,354,301*) ............................ 1,402,354,301
--------------
OTHER ASSETS IN EXCESS
OF LIABILITIES--0.2% .............................. 2,371,576
-------------
NET ASSETS (Applicable to
454,943,875 Bedford shares,
412,407 Cash Preservation shares,
326,745,422 Sansom Street shares,
405,205,669 Select shares,
217,519,890 Principal shares,
and 800 other shares)--100% ........................ 1,404,725,877
==============
NET ASSET VALUE, Offering and
redemption price per share
($1,404,725,877 / 1,404,828,063) .................. $1.00
=====
* Also cost for Federal income tax purposes.
+ Variable Rate Demand Note -- The interest rate shown is the rate as of
August 31, 2000 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.
++ Variable Rate Obligations -- The interest rate shown is the rate as of
August 31, 2000 and the maturity date shown is the next interest rate
readjustment date or the maturity date.
INVESTMENT ABBREVIATIONS
IDR .........Industrial Development Revenue
LOC .......................Letter of Credit
VRDN .............Variable Rate Demand Note
See Accompanying Notes to Financial Statements.
5
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Interest ................................................... $162,934,325
------------
Expenses
Distribution fees .......................................... 10,299,835
Investment advisory fees ................................... 9,804,320
Transfer agent fees ........................................ 2,817,578
Service organization fees .................................. 290,820
Printing fees .............................................. 711,689
Custodian fees ............................................. 393,225
Legal fees ................................................. 185,772
Registration fees .......................................... 45,000
Audit fees ................................................. 184,421
Directors' fees ............................................ 144,354
Insurance expense .......................................... 22,144
------------
24,899,158
Less fees waived ........................................... (1,995,632)
Less expense reimbursement by advisor ...................... (2,269,338)
------------
Total expenses ........................................ 20,634,188
------------
Net investment income ......................................... 142,300,137
------------
Net realized loss on investments .............................. (46,157)
------------
Net increase in net assets resulting from operations .......... $142,253,980
============
</TABLE>
See Accompanying Notes to Financial Statements.
6
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2000 AUGUST 31, 1999
--------------- ---------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ...... $ 142,300,137 $ 115,658,458
Net gain (loss) on investments (46,157) 72,320
--------------- --------------
Net increase in net assets
resulting from operations 142,253,980 115,730,778
--------------- --------------
Distributions to shareholders:
Dividends to shareholders from
Net Investment Income:
Bedford shares ........... (21,820,881) (28,089,918)
Cash Preservation shares . (14,538) (7,069)
Janney Montgomery Scott
shares ................. (55,534,937) (43,156,041)
Principal shares ......... (11,383,856) (2,455,484)
Sansom Street shares ..... (31,566,483) (36,008,586)
Select shares ............ (21,979,442) (5,941,360)
--------------- --------------
(142,300,137) (115,658,458)
Dividends to shareholders from
Net Realized Short-Term Gains in
excess of Net Investment Income:
Bedford shares ............ -- (2,671)
Cash Preservation shares .. -- (1)
Janney Montgomery Scott
shares .................. -- (2,921)
Principal shares .......... -- --
Sansom Street shares ...... -- (2,010)
Select shares ............. -- (102)
--------------- --------------
-- (7,705)
Total Dividends to
shareholders .......... (142,300,137) (115,666,163)
--------------- --------------
Net capital share transactions
(Note 3) ..................... (1,334,348,297) 423,497,416
--------------- --------------
Total increase/(decrease) in
net assets .................. (1,334,394,454) 423,562,031
Net Assets:
Beginning of year ........... 2,739,120,331 2,315,558,300
--------------- --------------
End of year ................. $ 1,404,725,877 $2,739,120,331
=============== ==============
</TABLE>
See Accompanying Notes to Financial Statements.
7
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS (b)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
----------------------------------------
FOR THE
YEAR FOR THE PERIOD
ENDED JUNE 1, 1999 TO
AUGUST 31, 2000 AUGUST 31, 1999(c)
--------------- ------------------
<S> <C> <C>
Net asset value, beginning of year or period .... $ 1.00 $ 1.00
------ ------
Income from investment operations:
Net investment income ........................ 0.0532 0.0110
------ ------
Total from investment operations ........... 0.0532 0.0110
------ ------
Less distributions
Dividends (from net investment income) ....... (0.0532) (0.0110)
------ ------
Total distributions ........................ (0.0532) (0.0110)
------ ------
Net asset value, end of year or period .......... $ 1.00 $ 1.00
====== ======
Total Return .................................... 5.46% 1.10%(e)
Ratios /Supplemental Data
Net assets, end of period (000) .............. $217,520 $218,530
Ratios of expenses to average net assets ..... .77%(a) .77%(a)(d)
Ratios of net investment income to
average net assets ......................... 5.32% 4.36%(d)
<FN>
(a) Without the waiver of advisory and transfer agent fees and reimbursement of
certain operating expenses, the ratios of expenses to average net assets
for the Money Market Portfolio would have been .85% and .85% for the
periods ended August 31, 2000 and 1999, respectively.
(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.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
8
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2000
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 19.88 billion shares are currently classified into ninety-seven classes.
Each class represents an interest in one of fourteen investment portfolios of
the Fund. The classes have been grouped into fourteen separate "families", nine
of which have begun investment operations: the Principal Family, the Bedford
Family, the Sansom Street Family, the Cash Preservation Family, the Select
Family, the n/i numeric investors Family, the Boston Partners Family, the Bogle
Family and the Schneider Family. The Principal Family represents interests in
one 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 to ensure that cost continues to approximate market
value and 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 accounting principles generally accepted in the
United States of America.
D) FEDERAL INCOME TAXES -- No provision is made for Federal taxes. 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 fall 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.
9
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2000
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
F) USE OF ESTIMATES -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions.
These estimates and assumptions 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 Agreements, BlackRock Institutional
Management Corp. ("BIMC"), an indirect majority-owned subsidiary of The PNC
Financial Services Group, Inc., serves as investment adviser to the portfolio
described herein, and also serves as administrator for the Money Market
Portfolio. For the Money Market Portfolio, BIMC and PFPC, Inc. ("PFPC") have
entered into a delegation agreement, under which PFPC has agreed to perform
Administration and Accounting services for an annual fee of .10% of the average
net assets of the portfolio, paid out of the fee paid to BIMC.
For its advisory services, BIMC is entitled to receive the following fees,
computed daily and payable monthly, and based on the portfolio's average daily
net assets:
<TABLE>
<CAPTION>
PORTFOLIO ANNUAL RATE
------------------------------ ---------------------------------------------
<S> <C>
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.
</TABLE>
BIMC may, at its discretion, voluntarily waive all or any portion of its
advisory fee for this portfolio. For each class of shares within the portfolio,
the net advisory fee charged to each class is the same on a relative basis. For
the year ended August 31, 2000, advisory fees and waivers for the investment
portfolio were as follows:
<TABLE>
<CAPTION>
GROSS NET
ADVISORY ADVISORY
FEE WAIVER FEE
---------- ------------ ----------
<S> <C> <C> <C>
Money Market Portfolio $9,804,320 $(1,995,632) $7,808,688
</TABLE>
The investment advisor has agreed to reimburse the portfolio for the
amount, if any, by which the total operating and management expenses exceed the
cap. For the year ended August 31, 2000 the reimbursed expenses were $2,269,338
for the Money Market Portfolio.
In addition, PFPC Trust Co. serves as custodian for the Fund's portfolio.
PFPC serves as each class's transfer and dividend disbursing agent. Both PFPC
Trust Co. and PFPC are wholly-owned subsidiaries of PFPC Worldwide Inc., an
indirect majority owned subsidiary of The PNC Financial Services Group, Inc.
10
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2000
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, 2000,
no fees were waived. Transfer agency fees were as follows:
TRANSFER AGENCY
FEE
-------------
Money Market Portfolio
Bedford Class $ 34,311
Cash Preservation Class 443
Janney Montgomery Scott Class* 2,227,497
Principal Class 7,200
Sansom Street Class 537,432
Select Class 10,695
----------
Total $2,817,578
==========
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, and
Principal Classes and up to .20% on an annualized basis for the Sansom Street
Class.
For the year ended August 31, 2000, distribution fees for each class were
as follows:
DISTRIBUTION
FEE
------------
Money Market Portfolio
Bedford Class $ 2,553,192
Cash Preservation Class 1,086
Janney Montgomery Scott Class* 6,598,931
Principal Class 855,610
Sansom Street Class 291,016
-----------
Total Money Market Portfolio $10,299,835
===========
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, 2000 service
organization fees were $290,820 for the Money Market Portfolio.
*The Janney Montgomery Scott Class of shares was liquidated on July 31, 2000.
11
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2000
NOTE 3. CAPITAL SHARES
Transactions in capital shares (at $1 per capital share) for each year were
as follows:
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2000 AUGUST 31, 1999
---------------- ----------------
VALUE VALUE
---------------- ----------------
<S> <C> <C>
Shares sold:
Bedford Class $ 866,092,657 $ 1,676,808,408
Cash Preservation Class 462,203 114,454
Janney Montgomery Scott Class* 5,748,987,958 4,931,373,936
Principal Class 534,885,343 318,334,115
Sansom Street Class 3,118,553,510 2,907,994,377
Select Class 2,969,370,240 1,439,090,920
---------------- ----------------
Total Shares Sold 13,238,351,911 11,273,716,210
Shares issued on reinvestment of dividends:
Bedford Class 21,403,595 28,217,868
Cash Preservation Class 13,920 7,224
Janney Montgomery Scott Class* 54,694,717 43,272,113
Principal Class 11,245,950 2,206,341
Sansom Street Class 13,899,819 26,800,967
Select Class -- 347,980
---------------- ----------------
Total Shares Reinvested 101,258,001 100,852,493
Shares repurchased:
Bedford Class (792,698,785) (2,107,674,545)
Cash Preservation Class (194,641) (217,053)
Janney Montgomery Scott Class* (6,892,100,877) (4,790,786,046)
Principal Class (547,145,226) (102,006,633)
Sansom Street Class (3,647,602,057) (2,741,000,161)
Select Class (2,794,216,623) (1,209,386,849)
---------------- ----------------
Total Shares Repurchased (14,673,958,209) (10,951,071,287)
---------------- ----------------
Net increase (decrease) $ (1,334,348,297) $ 423,497,416
================ ================
Principal Shares authorized 1,500,000,000 1,500,000,000
================ ================
</TABLE>
*The Janney Montgomery Scott Class of shares was liquidated on July 31, 2000.
12
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2000
NOTE 4. NET ASSETS
At August 31, 2000, net assets consisted of the following:
MONEY MARKET
PORTFOLIO
--------------
Capital paid-in $1,404,828,063
Accumulated net realized gain/(loss) on investments (102,186)
--------------
$1,404,725,877
==============
NOTE 5. CAPITAL LOSS CARRYOVERS
At August 31, 2000 capital loss carryovers were available to offset future
realized gains as follows: $102,186 in the Money Market Portfolio of which
$56,029 expires in 2006 and $46,157 expires in 2008.
13
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2000
NOTE 6. OTHER FINANCIAL HIGHLIGHTS
The Fund currently offers four other classes of shares representing
interest in the Money Market Portfolio: Bedford, Cash Preservation, Sansom
Street, and Select. Each class is marketed to different types of investors.
Financial Highlights of the Cash Preservation class is not represented 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, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- ----------
<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 .. 0.0512 0.0425 0.0473 0.0462 0.0469
---------- ---------- ---------- ---------- ----------
Total from investment
operations .......... 0.0512 0.0425 0.0473 0.0462 0.0469
---------- ---------- ---------- ---------- ----------
Less distributions
Dividends (from net
investment income) .... (0.0512) (0.0425) (0.0473) (0.0462) (0.0469)
---------- ---------- ---------- ---------- ----------
Total distributions ... (0.0512) (0.0425) (0.0473) (0.0462) (0.0469)
---------- ---------- ---------- ---------- ----------
Net asset value,
end of year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return ........... 5.24% 4.34% 4.84% 4.72% 4.79%
Ratios /Supplemental Data
Net assets,
end of year (000) ..... $423,977 $360,123 $762,739 $1,392,911 $1,109,334
Ratios of expenses to
average net assets .... .97%(a) .97%(a) .97%(a) .97%(a) .97%(a)
Ratios of net investment
income to average
net assets ............ 5.15% 4.25% 4.73% 4.62% 4.69%
<FN>
(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 1.05%, 1.08%, 1.10%, 1.12% and 1.14% for the years ended August 31,
2000, 1999, 1998, 1997, and 1996, respectively.
(b) Financial Highlights relate solely to the Bedford Class of shares within
the portfolio.
</FN>
</TABLE>
14
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2000
NOTE 6. 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, 2000 AUGUST 31, 1999 AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996
--------------- --------------- --------------- --------------- ---------------
<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 .................. 0.0560 0.0473 0.0520 0.0510 0.0518
-------- -------- -------- -------- --------
Total from investment operations ..... 0.0560 0.0473 0.0520 0.0510 0.0518
-------- -------- -------- -------- --------
Less distributions
Dividends (from net investment income) . (0.0560) (0.0473) (0.0520) (0.0510) (0.0518)
-------- -------- -------- -------- --------
Total distributions .................. (0.0560) (0.0473) (0.0520) (0.0510) (0.0518)
-------- -------- -------- -------- --------
Net asset value, end of year .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return .............................. 5.75% 4.83% 5.34% 5.22% 5.30%
Ratios/Supplemental Data
Net assets, end of year (000) .......... $326,745 $841,887 $684,066 $570,018 $524,359
Ratios of expenses to average net assets .49%(a) .49%(a) .49%(a) .49%(a) .48%(a)
Ratios of net investment income to
average net assets ................... 5.42% 4.73% 5.20% 5.10% 5.18%
<FN>
(a) Without the waiver of advisory fees and reimbursement of certain operating
expenses, the ratios of expenses to average net assets for the Money Market
Portfolio would have been .61%, .62%, .62%, .64% and .65% for the years
ended August 31, 2000, 1999, 1998, 1997 and 1996, respectively.
(b) Financial highlights relate solely to the Sansom Street Class of shares
within the portfolio.
</FN>
</TABLE>
15
<PAGE>
THE PRINCIPAL FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
AUGUST 31, 2000
NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED)
THE SELECT FAMILY (b)
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
-----------------------------------------
FOR THE
YEAR FOR THE PERIOD
ENDED DECEMBER 15, 1998
AUGUST 31, 2000 TO AUGUST 31, 1999(c)
--------------- ---------------------
<S> <C> <C>
Net asset value, beginning of year or period .......... $ 1.00 $ 1.00
-------- -------
Income from investment operations:
Net investment income .............................. 0.0582 0.0345
-------- -------
Total from investment operations ................. 0.0582 0.0345
-------- -------
Less distributions
Dividends (from net investment income) ............. (0.0582) (0.0345)
-------- -------
Total distributions .............................. (0.0582) (0.0345)
-------- -------
Net asset value, end of year or period ................ $ 1.00 $ 1.00
======== =======
Total Return .......................................... 5.98% 3.50%(e)
Ratios /Supplemental Data
Net assets, end of period (000) .................... $405,206 $230,044
Ratios of expenses to average net assets ........... .27%(a) .27%(a)(d)
Ratios of net investment income to
average net assets ............................... 5.87% 4.82%(d)
<FN>
(a) Without the waiver of advisory fees and reimbursement of certain operating
expenses, the ratios of expenses to average net assets for the Money Market
Portfolio would have been .41% and .41% for the periods ended August 31,
2000 and 1999, respectively.
(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.
</FN>
</TABLE>
16
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