<PAGE>
UAM Funds
Annual Report
------------------------
C & B Equity Portfolio
for Taxable Investors
- --------------------------------------------------------------------------------
October 31, 1998
UAM
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
OCTOBER 31, 1998
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter........................................................ 1
Performance Comparison...................................................... 2
Portfolio of Investments.................................................... 3
Statement of Assets and Liabilities......................................... 6
Statement of Operations..................................................... 7
Statement of Changes in Net Assets.......................................... 8
Financial Highlights........................................................ 9
Notes to Financial Statements............................................... 10
Report of Independent Accountants........................................... 15
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
Dear Shareholder:
The following report provides a detailed description of the securities held
and the statement of operations for the Cooke & Bieler Equity Portfolio for
Taxable Investors for the twelve month period ended October 31, 1998.
The S&P 500 was on a roller coaster ride over this past year. At the end of
this one year period, the S&P 500 advanced 22.01%. This very generous advance
seemed all but impossible just a few weeks earlier when the market was
essentially unchanged for the year. This type of volatility is disturbing to a
manager who approaches investing with a 5 to 10 year time frame. The Cooke &
Bieler Equity Portfolio for Taxable Investors appreciated 8.16% over this
comparable period.
In addition to the volatile markets, we continue to see a growing
bifurcation within the S&P 500. That is to say, the stock prices for the top
50 companies within this benchmark are doing very well but the valuations to
us look unattractive, and the stock prices for the bottom 450 companies, whose
performance has been quite poor relative to the top 50 offer some selected
opportunities. Needless to say, we are finding better long term values outside
of the jumbo, top 50 companies of the S&P 500.
Our relative results have been a mirror image of this divergent trend
because we have maintained very limited exposure to the largest stocks in the
S&P 500. Though the wisdom of this position was not apparent in this past
year, we believe that solid valuation support is an important differentiating
factor in an expended flat or down market. We firmly believe that this
Portfolio of attractively valued, high quality companies will perform well
during any market correction and yet participate fully in any further market
advance.
While the market remains volatile and full of crosscurrents, we are
encouraged by some recent shift in the tone of the market and continue to
believe that adherence to our disciplines that underpin our long-standing
"high quality, low risk" investment philosophy will prove to be rewarding.
Sincerely,
/s/ Peter A. Thompson
Peter A. Thompson
The investment results presented in the Advisor's letter represent past
performance and should not be construed as a guarantee of future results. If
Affiliates did not have temporary fee waivers and did not assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
1
<PAGE>
Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE C & B EQUITY
PORTFOLIO FOR TAXABLE INVESTORS AND THE STANDARD & POOR'S 500 INDEX (S&P 500).
- -----------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED OCTOBER 31, 1998
- -----------------------------------
1 YEAR SINCE 2/12/97*
- -----------------------------------
8.16% 13.85%
- -----------------------------------
[LINE GRAPH APPEARS HERE]
DATE C & B EQUTIY PORTFOLIO FOR TAXABLE INVESTORS+ S&P 500 INDEX+
---- --------------------------------------------- --------------
2/12/97* 10,000 10,000
10/31/97 11,554 11,794
10/31/98 12,497 14,390
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations.
** Total return reflects fees waived and expenses assumed by Affiliates.
Without such waiver of fees and expenses assumed, total return would be
lower.
+ The comparative index is not adjusted to reflect expenses or other fees
that the SEC requires to be reflected in the Portfolio's performance. The
fees, if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions.
The comparative index has been adjusted to reflect reinvestment of
dividends on securities in the index.
++ For comparative purposes, the value of the S&P 500 Index on 1/31/97 is used
as the beginning value on 2/12/97.
DEFINITION OF THE COMPARATIVE INDEX
-----------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
2
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
OCTOBER 31, 1998
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 97.4%
<TABLE>
<CAPTION>
SHARES VALUE+
------ ----------
<S> <C> <C>
AEROSPACE & DEFENSE - 4.9%
Boeing Co. ................................................. 2,700 $ 101,250
Raytheon Co., Class B....................................... 1,200 69,675
----------
170,925
----------
AUTOMOTIVE - 4.9%
Dana Corp. ................................................. 2,400 100,350
Snap-On, Inc. .............................................. 2,000 70,875
----------
171,225
----------
BEVERAGES, FOOD & TOBACCO - 10.1%
Anheuser-Busch Cos., Inc. .................................. 2,000 118,875
UST, Inc. .................................................. 5,400 183,600
Whitman Corp. .............................................. 2,400 51,450
----------
353,925
----------
CAPITAL EQUIPMENT - 5.5%
Dover Corp. ................................................ 6,000 190,500
----------
CHEMICALS - 4.6%
Hercules, Inc. ............................................. 3,000 99,938
Nalco Chemical Co. ......................................... 2,000 61,875
----------
161,813
----------
CONSTRUCTION - 3.6%
Sherwin-Williams Co. ....................................... 5,000 125,937
----------
CONSUMER DURABLES - 4.5%
Corning, Inc. .............................................. 3,000 108,937
Rubbermaid, Inc. ........................................... 1,500 49,781
----------
158,718
----------
CONSUMER NON-DURABLES - 5.8%
Hasbro, Inc. ............................................... 2,000 70,125
NIKE, Inc., Class B......................................... 3,000 131,063
----------
201,188
----------
ELECTRONICS - 5.8%
Grainger (W.W.), Inc. ...................................... 3,500 161,219
Motorola, Inc. ............................................. 800 41,600
----------
202,819
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
OCTOBER 31, 1998
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------ ----------
<S> <C> <C>
ENERGY - 11.7%
Burlington Resources, Inc. .................................. 2,000 $ 82,375
Enron Corp. ................................................. 1,500 79,125
Exxon Corp. ................................................. 1,400 99,750
Royal Dutch Petroleum Co. (NY Shares)........................ 3,000 147,750
----------
409,000
----------
FINANCIAL SERVICES - 8.9%
EXEL Ltd. ................................................... 259 19,797
Marsh & McLennan Cos., Inc. ................................. 2,700 149,850
MBIA, Inc. .................................................. 1,200 73,350
State Street Corp. .......................................... 1,100 68,613
----------
311,610
----------
MULTI-INDUSTRY - 6.6%
National Service Industries, Inc. ........................... 3,000 107,625
Raychem Corp. ............................................... 4,000 122,250
----------
229,875
----------
OFFICE EQUIPMENT - 7.6%
International Business Machines Corp. ....................... 1,000 148,437
Pitney Bowes, Inc. .......................................... 900 49,556
Xerox Corp. ................................................. 700 67,813
----------
265,806
----------
PHARMACEUTICALS - 5.1%
Bristol-Myers Squibb Co. .................................... 600 66,338
Merck & Co., Inc. ........................................... 800 108,200
----------
174,538
----------
SERVICES - 7.8%
Service Corp. International.................................. 5,000 178,125
Sysco Corp. ................................................. 3,500 94,281
----------
272,406
----------
TOTAL COMMON STOCKS (Cost $3,202,195)............................... 3,400,285
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
OCTOBER 31, 1998
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT - 3.4%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
-------- ----------
<S> <C> <C>
REPURCHASE AGREEMENT - 3.4%
Chase Securities, Inc. 4.90%, dated 10/30/98, due
11/2/98, to be repurchased at $120,049, collateralized
by $115,479 of various U.S. Treasury Notes, 5.375%-
6.875% due from 5/31/99-2/15/04, valued at $120,002
(Cost $120,000)........................................ $120,000 $ 120,000
----------
TOTAL INVESTMENTS - 100.8% (Cost $3,322,195) (a)................. 3,520,285
----------
OTHER ASSETS AND LIABILITIES (NET) - (0.8%)...................... (27,960)
----------
NET ASSETS - 100%................................................ $3,492,325
==========
</TABLE>
+ See Note A to Financial Statements.
(a) The cost for federal income tax purposes was $3,322,375. October 31, 1998,
net unrealized appreciation for all securities based on tax cost was
$197,910. This consisted of aggregate gross unrealized appreciation for all
securities of $314,918 and aggregate gross unrealized depreciation for all
securities of $117,008.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
OCTOBER 31, 1998
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<S> <C>
ASSETS
Investments, at Cost................................................ $3,322,195
==========
Investments, at Value............................................... $3,520,285
Cash................................................................ 274
Dividends Receivable................................................ 1,880
Interest Receivable................................................. 33
Other Assets........................................................ 79
----------
Total Assets....................................................... 3,522,551
----------
LIABILITIES
Payable for Investment Advisory Fees--Note B........................ 81
Payable for Administrative Fees--Note C............................. 8,766
Payable for Custodian Fees--Note D.................................. 387
Payable for Directors' Fees--Note F................................. 616
Other Liabilities................................................... 20,376
----------
Total Liabilities.................................................. 30,226
----------
NET ASSETS.......................................................... $3,492,325
==========
NET ASSETS CONSIST OF:
Paid in Capital..................................................... $3,431,035
Undistributed Net Investment Income................................. 1,139
Accumulated Net Realized Loss....................................... (137,939)
Unrealized Appreciation............................................. 198,090
----------
NET ASSETS.......................................................... $3,492,325
==========
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value)
(Authorized 25,000,000)............................................ 285,481
Net Asset Value, Offering and Redemption Price Per Share............ $12.23
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
FOR THE YEAR ENDED
OCTOBER 31, 1998
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends............................................................ $ 44,450
Interest............................................................. 14,892
---------
Total Income........................................................ 59,342
---------
EXPENSES
Administrative Fees - Note C......................................... 65,217
Investment Advisory Fees - Note B.................................... 16,532
Registration and Filing Fees......................................... 11,859
Printing Fees........................................................ 11,267
Audit Fees........................................................... 6,700
Directors' Fees - Note F............................................. 2,433
Custodian Fees - Note D.............................................. 2,067
Shareholder Servicing Fee............................................ 334
Other Expenses....................................................... 2,456
Investment Advisory Fees Waived - Note B............................. (16,532)
Expenses Assumed by the Investment Adviser - Note B.................. (75,610)
---------
Net Expenses Before Expense Offset.................................. 26,723
Expense Offset - Note A.............................................. (266)
---------
Net Expense After Expense Offset..................................... 26,457
---------
NET INVESTMENT INCOME................................................ 32,885
---------
NET REALIZED LOSS ON INVESTMENTS..................................... (131,119)
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON INVESTMENTS.... 120,747
---------
NET LOSS ON INVESTMENTS.............................................. (10,372)
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................. $ 22,513
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FEBRUARY 12,
YEAR ENDED 1997* TO
OCTOBER 31, OCTOBER 31,
1998 1997
----------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................... $ 32,885 $ 7,562
Net Realized Loss................................... (131,119) (6,820)
Net Change in Unrealized Appreciation/Depreciation.. 120,747 77,343
----------- --------
Net Increase in Net Assets Resulting from
Operations......................................... 22,513 78,085
----------- --------
DISTRIBUTIONS:
Net Investment Income............................... (32,989) (6,319)
----------- --------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.............................................. 3,793,725 934,577
In Lieu of Cash Distributions....................... 24,913 3,375
Redeemed............................................ (1,309,029) (16,526)
----------- --------
Net Increase from Capital Share Transactions........ 2,509,609 921,426
----------- --------
Total Increase...................................... 2,499,133 993,192
NET ASSETS:
Beginning of Period................................. 993,192 --
----------- --------
End of Period (including undistributed net
investment income of $1,139 and $1,243
respectively)...................................... $ 3,492,325 $993,192
=========== ========
(1) Shares Issued and Redeemed:
Issued.............................................. 307,354 88,006
In Lieu of Cash Distributions....................... 2,097 301
Redeemed............................................ (110,683) (1,594)
----------- --------
198,768 86,713
=========== ========
</TABLE>
*Commencement of Operations
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
YEAR FEBRUARY 12,
ENDED 1997*** TO,
OCTOBER 31, OCTOBER 31,
1998 1997
----------- ------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................ $11.45 $10.00
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.............................. 0.14 0.11
Net Realized and Unrealized Gain................... 0.79# 1.44
------ ------
Total From Investment Operations................... 0.93 1.55
------ ------
DISTRIBUTIONS:
Net Investment Income.............................. (0.15) (0.10)
------ ------
NET ASSET VALUE, END OF PERIOD...................... $12.23 $11.45
====== ======
TOTAL RETURN........................................ 8.16%+ 15.54%+**
====== ======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)............... $3,492 $ 993
Ratio of Expenses to Average Net Assets............. 1.01% 1.00%*
Ratio of Net Investment Income to Average Net
Assets............................................. 1.24% 1.57%*
Portfolio Turnover Rate............................. 49% 3%
Ratio of Voluntarily Waived Fees and Expenses
Assumed by Affiliates to Average Net Assets........ 3.48% 17.45%*
Ratio of Expenses to Average Net Assets Including
Expense Offsets.................................... 1.00% 1.00%*
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and
expenses assumed by Affiliates during the period indicated.
# The amount shown for the year ended October 31, 1998 for a share outstand-
ing throughout the year does not agree with the amount of aggregate net
gains on investments for the year because of the timing of sales and re-
purchases of the Portfolio shares in relation to fluctuating market value
of the investments in the Portfolio.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The C & B
Equity Portfolio for Taxable Investors (the "Portfolio"), a portfolio of UAM
Funds, Inc., is a diversified, open-end management investment company. At
October 31, 1998, the UAM Funds were comprised of forty-six active portfolios.
The financial statements of the remaining portfolios are presented separately.
The objective of the Portfolio is to provide maximum long-term, after tax
total return consistent with minimizing risk to principal by investing in
common stocks which have a consistency and predictability in their earnings
growth.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Investments for which market quotations are
readily available are stated at market value, which is determined using
the last reported sale price from the exchange where the security is
primarily traded. If no sales are reported, as in the case of some
securities traded over-the-counter, the market value is determined using
the last reported bid price. Short-term investments that have remaining
maturities of sixty days or less at time of purchase are valued at
amortized cost, if it approximates market value. The value of other assets
and securities for which no quotations are readily available are stated at
fair value following procedures approved by the Board of Directors.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no
provision for Federal income taxes is required in the financial
statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities ("collateral"), the value of which exceeds the
principal amount of the repurchase transaction, including accrued
interest. To the extent that any repurchase transaction exceeds one
business day, the value of the collateral is monitored on a daily basis to
determine the
10
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
adequacy of the collateral. In the event of default on the obligation to
repurchase, the Portfolio has the right to liquidate the collateral and
apply the proceeds in satisfaction of the obligation. In the event of
default or bankruptcy by the counterparty to the agreement, realization
and/or retention of the collateral or proceeds may be subject to legal
proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreement. This joint repurchase agreement is covered by the
same collateral requirements as discussed above.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments and in-kind
transactions.
Permanent book and tax basis differences, if any, may result in
reclassifications to undistributed net investment income (loss)
accumulated net realized gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio.
Expenses which cannot be directly attributed are apportioned among the
portfolios of the UAM Funds based on their relative net assets. Custodian
fees for the Portfolio are shown gross of expense offsets, if any, for
custodian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Cooke & Bieler, Inc. (the"Adviser"), a wholly-owned subsidiary of United Asset
Management Corporation ("UAM"), provides investment advisory
11
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
services to the Portfolio at a fee calculated at an annual rate of 0.625% of
average daily net assets for the month. The Adviser has voluntarily agreed to
waive a portion of its advisory fees and to assume expenses, if necessary, in
order to keep the Portfolio's total annual operating expenses, after the
effect of expense offset arrangements, from exceeding 1.00% of average daily
net assets.
C. ADMINISTRATIVE SERVICES: UAM Funds Services, Inc. (the "Administrator"),
a wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing, shareholder servicing and transfer agent
services to the UAM Funds under a Fund Administration Agreement (the
"Agreement"). The Administrator has entered into a Mutual Funds Service
Agreement (the "Mutual Funds Service Agreement") with Chase Global Funds
Services Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank,
under which CGFSC provides certain services including, but not limited to,
administrative, fund accounting, dividend disbursing, shareholder servicing
and transfer agent services.
Pursuant to the Agreement, the Portfolio pays the Administrator a two part
monthly fee:
--a Portfolio-specific monthly fee of 0.04% per annum of the average daily
net assets of the Portfolio which is retained by the Administrator.
--a sub-administration fee (the "Sub-Administration Fee") which the
Administrator in turn pays to CGFSC on a monthly basis, calculated as
0.19% of the first $200 million of the combined aggregate net assets of
the UAM Funds; plus 0.11% of the next $800 million of the combined
aggregate net assets of the UAM Funds; plus 0.07% of the next $2 billion
of the combined aggregate net assets of the UAM Funds; plus 0.05% of the
combined aggregate net assets of the UAM Funds in excess of $3 billion.
The Sub-Administration Fee is allocated among the portfolios of the UAM
Funds on the basis of their relative net assets and is subject to a
graduated minimum fee schedule per portfolio which rises from $2,000 per
month, upon inception of a portfolio, to $70,000 annually after two
years. For portfolios with more than one class of shares, the minimum
annual fee increases to $90,000 over the same period.
Effective October 23, 1998, the Mutual Funds Service Agreement with CGFSC
was revised to exclude dividend disbursing, shareholder servicing and transfer
agent services. Pursuant to the revised Mutual Funds Service Agreement, the
Sub-Administration Fee paid by the Portfolio to the Administrator and in turn
paid to CGFSC is calculated as a base fee per Portfolio of $52,500 annually
plus
12
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
$7,500 annually for each additional class of shares; plus 0.039% of the net
assets of the Portfolio. Certain portfolios which commenced operations after
October 1, 1997 have a base fee of $39,500 for a period of twelve months,
which increases to $52,500 annually once the twelve months have expired.
For the year ended October 31, 1998, UAM Funds Services, Inc. earned $65,217
from the Portfolio as Administrator of which $61,533 was paid to CGFSC for its
services as Sub-Administrator.
Also, effective October 23, 1998, dividend disbursing and transfer agent
services were sub-contracted to DST Systems, Inc. and shareholder servicing
has been sub-contracted to UAM Shareholder Service Center, Inc., an affiliate
of UAM. The portfolios pay dividend disbursing, transfer agent and shareholder
servicing fees to the Administrator who in turn pays them to DST Systems, Inc.
and UAM Shareholder Services Center, Inc., as appropriate. For the year ended
October 31, 1998, the Portfolio incurred $144 in shareholder servicing fees
with UAM Shareholder Service Center, Inc. This fee is based on the number of
classes of shares and shareholder accounts.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's
assets and the assets are held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
F. DIRECTORS' FEES: Each Director, who is not an officer or affiliated
person, receives $2,000 per meeting attended plus reimbursement of expenses
incurred in attending Board meetings, which is allocated proportionally among
the active portfolios of UAM Funds, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds.
G. PURCHASES AND SALES: For the year ended October 31, 1998, the Portfolio
made purchases of $3,583,838 and sales of $1,130,731 of investment securities.
There were no purchases or sales of long-term U.S. Government securities.
H. LINE OF CREDIT: The Portfolio, along with certain other portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital
13
<PAGE>
UAM FUNDS
C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
shares. Interest is charged to each participating portfolio based on its
borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In
addition, a commitment fee of 0.08% per annum, payable at the end of each
calendar quarter, is accrued by each participating portfolio based on its
average daily unused portion of the line of credit. During the year ended
October 31, 1998, the Portfolio had no borrowings under the agreement.
I. OTHER: At October 31, 1998, 36.0% of total shares outstanding were held
by 2 record shareholders each owning 10% or greater of the aggregate total
shares outstanding.
At October 31, 1998 the Portfolio had available capital loss carryover for
Federal income tax purposes of $6,641 and $131,119 which will expire on
October 31, 2005 and 2006, respectively.
The Portfolio retains a redemption fee of 1.00% on redemptions of capital
shares held for less than 1 year in the Portfolio. For the year ended October
31, 1998, there were no redemption fees.
14
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
UAM Funds, Inc. and Shareholders of
C & B Equity Portfolio for Taxable Investors
In our opinion, the accompanying statement of assets and liabilities, includ-
ing the portfolio of investments, 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 the C & B Equity Portfolio for
Taxable Investors (the "Portfolio"), a Portfolio of the UAM Funds Inc., at Oc-
tober 31, 1998, and the results of its operations, the changes in its net as-
sets and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audit of these financial statements in accordance with generally accepted au-
diting standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of mate-
rial misstatement. An audit includes examining, on a test basis, evidence sup-
porting 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 October 31, 1998 by cor-
respondence with the custodian, provide a reasonable basis for the opinion ex-
pressed above.
PricewaterhouseCoopers LLP
Boston Massachusetts
December 11, 1998
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FEDERAL INCOME TAX INFORMATION (UNAUDITED):
For the year ended October 31, 1998, the percentage of dividends paid that
qualify for the 70% dividend received deduction for corporate shareholders is
100.0%.
15
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
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OFFICERS AND DIRECTORS
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Gary L. French
Director Treasurer
Philip D. English Robert R. Flaherty
Director Assistant Treasurer
William A. Humenuk Michael J. Leary
Director Assistant Treasurer
Peter M. Whitman, Jr. Michelle Azrialy
Director Assistant Secretary
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UAM FUNDS
P.O. Box 419081
Kansas City, MO 64141-6081
(toll free)
1-877-UAM-LINK (826-5465)
INVESTMENT ADVISER
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
This report has been prepared for
shareholders and may be distributed
to others only if preceded or
accompanied by a current prospectus.
