STRATUS FUND, INC.
GROWTH
GOVERNMENT SECURITIES
CAPITAL APPRECIATION
INTERMEDIATE GOVERNMENT BOND
INTERNATIONAL
ANNUAL REPORT
JUNE 30, 1999
Stratus Fund, Inc.
Dear Fellow Shareholders:
The economy continues to perform at a very high level with above average growth
and low inflation. Gross Domestic Product has recorded above average growth with
considerable variability from quarter to quarter. 1999's first quarter GDP rose
at a 4.3% pace while second quarter growth slowed to 2.3%. Responsible for the
slowing has been the draw down of inventories built during the first quarter.
Consumer fundamentals remain very strong and the industrial side of the economy
is doing better. International economies are showing signs of bottoming out
particularly those that were hurt by the Asian contagion. Domestic economic
growth could be around the 3% level in the second half of 1999. Planning and
fears regarding Y2K could affect economic growth short term.
The positive economic climate has helped the stock market to perform favorably
through the first half of 1999. Big cap stocks performed better during the first
quarter, while leadership broadened during the second quarter with value stocks,
and small cap stocks doing significantly better. International stocks saw mixed
performance. In contrast to last year, Europe lagged while Asia bounced back
from the effects of the Asian contagion.
During the second quarter, the Dow Jones Industrial Index established a series
of new highs as money continued to pour into equity mutual funds. The high for
the first half of 1999 came on May 13th when the DJIA closed at 11,107. This
index stood at 10,970 on June 30, 1999.
The two bond funds, managed by Stratus, performed in line with other bond funds
with the same investment objective as higher interest rates reduced returns. The
Stratus Government Securities Portfolio achieved a total rate of return of 1.4%
this past fiscal year, while the Stratus Intermediate Government Bond Portfolio
appreciated 4.0%. For comparison purposes, the Merrill Lynch U. S. Treasury
Intermediate Term Index returned 2.4% during the recently completed fiscal year.
The strategy employed by the Intermediate Government Bond Portfolio is to buy
only U. S. Government Obligations or money market instruments that invest
exclusively in U. S. Treasury Obligations. As a normal operating practice, the
Intermediate Government Bond Portfolio invests in a 1-5 year ladder of
maturities.
The strategy for the Government Securities Portfolio is essentially the same
regarding the use of high quality government securities. It differs in that
bonds as long as ten years may be used and the average maturity will generally
be greater. Corporate bonds of trust quality may also be used. Emphasis will be
on a total return as opposed to income generation and the average maturity will
vary with existing and anticipated interest rates.
1
<PAGE>
The Stratus Growth fund completed a successful fiscal year which also ended June
30, 1999. With investors favoring large cap stocks most of the year, the Stratus
Growth Portfolio provided a total return of 16.3% for the fiscal year. The
strategy employed in this fund is to invest primarily in large capitalization
stocks with an emphasis on growth companies. The over weighting in technology
helped performance considerably as technology stocks were in favor most of the
year. Although the Growth fund did not match the performance of the S & P Index,
it did better than the majority of funds in its category. In the Wall Street
Journal's Mutual Funds Report for the second quarter of 1999, the Stratus Growth
fund earned an A ranking for one year performance versus comparable funds. Even
more importantly an A ranking for 3 years and 5 years was earned for the Stratus
Growth Portfolio.
The Capital Appreciation Portfolio, which invests primarily in smaller
capitalization stocks, returned (8.8%) for the year ended June 30, 1999. From
July 1998 to March 1999, smaller stocks continued their relative
underperformance as the market remained concentrated on the stocks of larger
companies for much of the fiscal year. In the second quarter of 1999, the market
did begin to broaden its focus to include many secondary issues which would
generally prove beneficial for smaller companies and the Portfolio. Fund
performance relative to the Russell 2000, up 1.4% for the year, was also
impacted by the Fund's substantial underweighting in speculative Internet
stocks, which fueled much of the Russell's rise in the first half of 1999. The
return on the S&P Small Cap Index was -2.3% for the same time period.
The Stratus International Portfolio, launched October, 1996, ran into head winds
caused by the problems in Asia. During the past year, it has posted gains of
1.4%. The stabilization of the world economy leaves us more optimistic regarding
better returns going forward. This fund is being sub-advised by Murray Johnstone
International head quartered in Glasgow, Scotland.
We value highly your continued relationship with the Stratus Family of Mutual
Funds and the confidence placed in us. We would welcome any questions or
comments you may have.
July 30, 1999
2
<PAGE>
GROWTH INSTITUTIONAL PORTFOLIO
[GRAPHIC OMITTED]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
GROWTH INSTITUTIONAL PORTFOLIO AND THE S&P 500 INDEX
AVG. ANNUAL RETURN 06/30/99 VALUE
- ----------------- ---------------------------
1 YEAR 16.34% GROWTH INSTITUTIONAL $27,840.61
5 YEAR 22.72% S&P 500 $33,712.99
INCEPTION 19.57%
- --------------------------------------------------------------------------------
GROWTH RETAIL PORTFOLIO
GRAPHIC OMITTED]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
GROWTH RETAIL PORTFOLIO AND THE S&P 500 INDEX
RETURN * 06/30/99 VALUE
- ----------------- ---------------------------
1 YEAR 16.09% GROWTH RETAIL $12,959.11
5 YEAR S&P 500 $14,467.74
INCEPTION 22.96%
- --------------------------------------------------------------------------------
Results for the Retail Shares reflect payment of a maximum sales charge of 4.5%
on the $10,000 investment with dividends and capital gains reinvested.
Average annual return does not include payment of a sales charge and assumes
reinvestment of dividends and capital gains.
Past performance is not predictive of future performance.
Growth Portfolio Institutional Shares for the period October 8, 1993 (inception)
through June 30, 1999
Growth Portfolio Retail Shares for the period January 7, 1998 (inception)
through June 30, 1999
3
<PAGE>
GOVERNMENT SECURITIES INSTITUTIONAL PORTFOLIO
[GRAPHIC OMITTED]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
GOVERNMENT SECURITIES INSTITUTIONAL PORTFOLIO AND THE
MERRILL LYNCH U.S. TREASURY INTER-TERM INDEX
AVG. ANNUAL RETURN 06/30/99 VALUE
- ------------------ -------------------------------------
1 YEAR 4.32% GOVERNMENT SECURITIES INSTITUTIONAL $12,954.76
5 YEAR 6.05% MERRILL LYNCH U.S. TREASURY
INCEPTION 4.62% INTER-TERM BOND $13,299.82
- --------------------------------------------------------------------------------
GOVERNMENT SECURITIES RETAIL PORTFOLIO
[GRAPHIC OMITTED]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
GOVERNMENT SECURITIES RETAIL PORTFOLIO AND THE
MERRILL LYNCH U.S. TREASURY INTER-TERM INDEX
RETURN * 06/30/99 VALUE
- ------------------ -------------------------------------
1 YEAR 3.96% GOVERNMENT SECURITIES RETAIL $10,243.81
5 YEAR MERRILL LYNCH U.S. TREASURY
INCEPTION 3.81% INTER-TERM BOND $10,592.28
Results for the Retail Shares reflect payment of a maximum sales charge of
3% on the $10,000 investment with dividends and capital gains reinvested.
Average annual return does not include payment of a sales charge and assumes
reinvestment of dividends and capital gains.
Past performance is not predictive of future performance.
Government Securities Portfolio Institutional Shares for the period
October 8, 1993 (inception) through June 30, 1999.
Government Securities Portfolio Retail Shares for the period
January 13, 1998 (inception) through June 30, 1999.
4
<PAGE>
CAPITAL APPRECIATION INSTITUTIONAL PORTFOLIO
[GRAPHIC OMITTED]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
CAPITAL APPRECIATION INSTITUTIONAL PORTFOLIO AND THE RUSSELL 2000
AVG. ANNUAL RETURN 06/30/99 VALUE
- ------------------ ------------------------------------
1 YEAR -8.79%
5 YEAR 12.16% CAPITAL APPRECIATION INSTITUTIONAL $15,889.71
INCEPTION 7.40% RUSSELL 2000 $22,811.68
- --------------------------------------------------------------------------------
CAPITAL APPRECIATION RETAIL PORTFOLIO
[GRAPHIC OMITTED]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
CAPITAL APPRECIATION RETAIL PORTFOLIO AND THE RUSSELL 2000
RETURN * 06/30/99 VALUE
- ------------------ ------------------------------------
1 YEAR -9.07%
5 YEAR CAPITAL APPRECIATION RETAIL $9,459.85
INCEPTION -.64% RUSSELL 2000 $10,679.77
Results for Retail Shares reflect payment of a maximum sales charge of 4.5%
on the $10,000 investment with dividends and capital gains reinvested.
Average annual return does not include payment of a sales charge and assumes
reinvestment of dividends and capital gains.
Past performance is not predictive of future performance.
Capital Appreciation Portfolio Institutional Shares for the period
January 4, 1993 (inception) through June 30, 1999.
Capital Appreciation Portfolio Retail Shares for the period
January 7, 1998 (inception) through June 30, 1999.
5
<PAGE>
INTERMEDIATE GOVERNMENT BOND INSTITUTIONAL PORTFOLIO
[GRAPHIC OMITTED]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
INTERMEDIATE GOVERNMENT BOND INSTITUTIONAL PORTFOLIO AND THE
MERRILL LYNCH U.S. TREASURY INTER-TERM INDEX
AVG. ANNUAL RETURN 06/30/99 VALUE
- ------------------ ------------------------------------------
1 YEAR 3.96% INTERMEDIATE GOVERNMENT BOND INSTIT. $15,785.38
5 YEAR 5.55% MERRILL LYNCH U.S. TREASURY
INCEPTION 5.77% INTER-TERM BOND $17,075.10
- --------------------------------------------------------------------------------
INTERMEDIATE GOVERNMENT BOND RETAIL PORTFOLIO
[GRAPHIC OMITTED]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
INTERMEDIATE GOVERNMENT BOND RETAIL PORTFOLIO AND THE
MERRILL LYNCH U.S. TREASURY INTER-TERM INDEX
RETURN * 06/30/99 VALUE
- ------------------ ------------------------------------------
1 YEAR 3.73% INTERMEDIATE GOVERNMENT BOND RETAIL $10,232.07
5 YEAR MERRILL LYNCH U.S. TREASURY
INCEPTION 3.83% INTER-TERM BOND $10,592.28
Results for Retail Shares reflect payment of a maximum sales charge of 3% on
the $10,000 investment with dividends and capital gains reinvested.
Average annual return does not include payment of a sales charge and assumes
reinvestment of dividends and capital gains.
Past performance is not predictive of future performance.
Intermediate Government Bond Portfolio Institutional Shares for the period
May 15, 1991 (inception) through June 30, 1999.
Intermediate Government Bond Portfolio Retail Shares for the period
January 27, 1998 (inception) through June 30, 1999.
6
<PAGE>
INTERNATIONAL INSTITUTIONAL PORTFOLIO
[GRAPHIC OMITTED]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
INTERNATIONAL INSTITUTIONAL PORTFOLIO AND THE MORGAN STANLEY INTERNATIONAL
AVG. ANNUAL RETURN 06/30/99 VALUE
- ------------------ ------------------------------------------
1 YEAR 1.40% INTERNATIONAL INSTITUTIONAL PORTFOLIO $12,239.59
5 YEAR MORGAN STANLEY INTERNATIONAL $12,449.63
INCEPTION 7.64%
- --------------------------------------------------------------------------------
INTERNATIONAL RETAIL PORTFOLIO
[GRAPHIC OMITTED]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
INTERNATIONAL RETAIL PORTFOLIO AND THE MORGAN STANLEY INTERNATIONAL
RETURN* 06/30/99 VALUE
- ------------------ ------------------------------------------
1 YEAR 1.07% INTERNATIONAL RETAIL PORTFOLIO $10,992.70
5 YEAR MORGAN STANLEY INTERNATIONAL $12,273.53
INCEPTION 10.00%
Results for Retail Shares reflect payment of a maximum sales charge of 4.5%
on the $10,000 investment with dividends and capital gains reinvested.
Average annual return does not include payment of a sales charge and
assumes reinvestment of dividends and capital gains.
Past performance is not predictive of future performance.
International Portfolio Institutional Shares for the period October 1, 1996
(inception) through June 30, 1999.
International Portfolio Retail Shares for the period January 7, 1998 (inception)
through June 30, 1999.
7
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors of
Stratus Fund, Inc.
We have audited the accompanying statements of assets and liabilities, including
the schedule of investments, of Stratus Fund, Inc. (comprising, respectively, of
the Growth, Government Securities, Capital Appreciation, Intermediate Government
Bond, and International Portfolios) as of June 30, 1999, the related statements
of operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended, and the financial highlights
for each of the four years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for the year
ended June 30, 1995 for the Growth, Government Securities, Capital Appreciation,
and Intermediate Government Bond Portfolios were audited by other auditors whose
report, dated July 21, 1995, expressed an unqualified opinion on such financial
highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1999, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting Stratus Fund, Inc. as of June 30,
1999, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and their
financial highlights for each of the four years in the period then ended, in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Lincoln, Nebraska
July 23, 1999
8
<PAGE>
STRATUS FUND, INC.
Schedule of Investments
June 30, 1999
GROWTH PORTFOLIO
Percent
of Net Market
Shares Common Stock - 95.64% Assets Value
- ------ --------------------- ------ -----
Aerospace/Defense
------------------- 1.90%
20,000 Alliedsignal, Inc. $1,260,000
Building Materials/Construction 0.97%
-------------------------------
10,000 Home Depot, Inc. 644,375
Chemicals 2.95%
---------
20,000 Air Products & Chemicals Inc. 805,000
25,000 Great Lakes Chemical Corp. 1,151,562
---------
1,956,562
Computer Related 9.42%
----------------
7,000 America Online, Inc.* 773,500
14,000 Cisco Systems, Inc.* 903,000
20,000 International Business Machine Corp. 2,585,000
22,000 Microsoft Corp.* 1,984,125
---------
6,245,625
Electronics 5.83%
-----------
25,000 Intel Corp. 1,487,500
9,200 Phillips Electric 928,050
10,000 Texas Instruments, Inc. 1,450,000
---------
3,865,550
Entertainment/Leisure 2.56%
---------------------
35,000 Carnival Corp. Class A 1,697,500
Financial Services 8.21%
------------------
25,000 Bank of America Corp. 1,832,813
18,000 Finova Group, Inc. 947,250
14,000 Bank One Corp. 833,875
40,000 SLM Holding Corp. 1,832,500
---------
5,446,438
9
<PAGE>
STRATUS FUND, INC.
Schedule of Investments (Continued)
GROWTH PORTFOLIO
Percent
of Net Market
Shares Assets Value
- ------- --------- ---------
Food/Beverage/Tobacco 1.11%
---------------------
40,000 International Home Foods, Inc.* $737,500
Industrial Services 1.97%
-------------------
30,000 Ecolab, Inc. 1,308,750
Insurance 5.81%
---------
22,000 American General Corp. 1,658,250
25,000 Allstate Corp. 896,875
20,000 MBIA, Inc. 1,295,000
---------
3,850,125
Machine/Tools 1.06%
-------------
20,000 Dover Corp. 700,000
Manufacturing 4.02%
-------------
11,000 General Electric Co. 1,243,000
15,000 Tyco International Ltd. 1,421,250
---------
2,664,250
Medical Supplies/Service 4.74%
------------------------
21,000 Baxter International, Inc. 1,273,125
18,000 Cardinal Health, Inc. 1,154,250
9,000 Visx, Inc.* 712,687
-------
3,140,062
Metals/Mining 1.87%
-------------
20,000 Alcoa, Inc. 1,237,500
Oil Company- Integrated 4.10%
-----------------------
15,000 Mobil Corp. 1,485,000
16,000 Exxon Corp. 1,234,000
---------
2,719,000
10
<PAGE>
STRATUS FUND, INC.
Schedule of Investments (Continued)
GROWTH PORTFOLIO
Percent
of Net Market
Shares Assets Value
- ------- --------- ---------
Office/Business 3.18%
---------------
19,000 Pitney-Bowes, Inc. $1,220,750
15,000 Xerox Corp. 885,938
-------
2,106,688
Pharmaceutical/Medical 6.52%
----------------------
20,000 Bristol-Myers Squibb, Co. 1,408,750
20,000 Eli Lilly, Co. 1,432,500
20,000 Merck & Company, Inc. 1,480,000
---------
4,321,250
Publishing/Printing 2.48%
-------------------
23,000 Gannett Co., Inc. 1,641,625
Retail Store/Apparel 8.19%
--------------------
17,000 Ross Stores, Inc. 856,375
11,000 Circuit City Stores-Circuit City Group 1,023,000
16,000 Costco Companies, Inc.* 1,281,000
30,000 CVS Corp. 1,533,750
10,000 Tommy Hilfiger Corp.* 735,000
-------
5,429,125
Telecommunications 6.95%
------------------
14,000 Nortel Networks Corp. 1,215,375
20,000 Qwest Communications International, Inc.* 661,250
6,000 Vodaphone Airtouch PLC 1,182,000
18,000 MCI Worldcom, Inc.* 1,552,500
---------
4,611,125
Telecommunications Equipment 5.06%
----------------------------
21,000 Nokia Corp. 1,922,813
10,000 Qualcomm, Inc. 1,435,000
---------
3,357,813
11
<PAGE>
STRATUS FUND, INC.
Schedule of Investments (Continued)
GROWTH PORTFOLIO
Percent
of Net Market
Shares Assets Value
- ------- --------- ---------
Transportation 4.65%
--------------
15,000 Delta Air Lines Inc. $864,375
18,000 FDX Corp.* 976,500
40,000 Southwest Airlines Co. 1,245,000
---------
3,085,875
Utilities-Electric 2.09%
------------------
40,000 MidAmerican Energy Holdings Co.* 1,385,000
---------
Total investment in securities
(cost $48,138,385) 95.64% $63,411,738
Cash equivalents 6.08% 4,032,736
Other assets, less liabilities (1.72%) (1,140,543)
------- -----------
TOTAL NET ASSETS 100.00% $66,303,931
======= ===========
* Indicates non-income producing security.
12
<PAGE>
STRATUS FUND, INC.
Schedule of Investments
June 30, 1999
GOVERNMENT SECURITIES PORTFOLIO
Percent
of Net Market
Principal Assets Value
Amount U.S. Government Securities
- ------------ ---------------------------- ------- --------
89.30%
$2,000,000 Federal Home Loan Bond 6.06% due 10/15/02 $1,989,996
2,000,000 Federal Home Loan Bond 5.80% due 8/24/01 1,992,112
1,000,000 Federal National Mtg. Assn. 6.20% due 6/6/00 1,006,140
2,000,000 Federal National Mtg. Assn. 6.35% due 6/10/05 2,009,000
1,000,000 Federal National Mtg. Assn. 5.10% due 11/29/00 992,263
3,000,000 U.S. Treasury Note 6.50% due 5/31/01 3,051,094
2,000,000 U.S. Treasury Bond 6.625% due 3/31/02 2,049,062
1,200,000 U.S. Treasury Bond 6.375% due 7/15/99 1,200,937
3,000,000 U.S. Treasury Bond 6.375% due 1/15/00 3,019,219
3,000,000 U.S. Treasury Bond 5.75% due 8/15/03 3,000,469
1,000,000 U.S. Treasury Bond 7.75% due 11/30/99 1,011,250
3,000,000 U.S. Treasury Bond 5.75% due 10/31/00 3,011,719
2,000,000 U.S. Treasury Bond 5.50% due 12/31/00 2,000,625
---------
26,333,886
Corporate Bonds 8.46%
---------------
1,500,000 Wachovia 6.70% due 6/21/04 1,510,077
1,000,000 Xerox Europe 5.75% due 5/15/02 983,689
-------
2,493,766
Total investment in securities
(cost $28,632,520) 97.76% $28,827,652
Cash equivalents 0.72% 210,004
Other assets, less liabilities 1.52% 450,850
----- -------
TOTAL NET ASSETS 100.00% $29,488,506
======= ===========
13
<PAGE>
STRATUS FUND, INC.
Schedule of Investments
June 30, 1999
CAPITAL APPRECIATION PORTFOLIO
Percent
of Net Market
Shares COMMON STOCK - 95.82% Assets Value
- ------ --------------------- ------ -----
Aerospace/Defense 1.38%
-----------------
4,000 Primex Technologies, Inc. $86,250
Airlines 1.28%
--------
3,200 SkyWest, Inc. 79,800
Building Residential/Commercial 1.45%
-------------------------------
2,400 Lone Star Industries, Inc. 90,150
Commercial Services 2.86%
-------------------
11,000 Mail-Well, Inc.* 178,063
Computer Related 24.95%
----------------
2,000 Autobytel.com, Inc.* 44,000
3,500 Affiliated Computer, Inc.* 177,188
9,000 Ciber, Inc.* 172,125
10,000 Dianon Systems, Inc.* 108,750
5,000 Keane, Inc.* 113,125
2,600 Micros Systems, Inc.* 88,400
2,000 Mercury Interactive Corp.* 70,750
3,000 Pomeroy Computer Resources* 41,813
1,500 PSINet, Inc.* 65,625
3,500 Sterling Software* 93,406
10,300 Symantec Corp.* 262,650
5,000 Transaction Systems* 195,000
4,000 Veritas DGC, Inc.* 73,250
3,000 Wind River Systems, Inc.* 48,187
------
1,554,269
Cosmetics/Personal Care 1.36%
-----------------------
6,000 Orthodontic Centers of America, Inc.* 84,750
14
<PAGE>
STRATUS FUND, INC.
Schedule of Investments (Continued)
CAPITAL APPRECIATION PORTFOLIO
Percent
of Net Market
Shares Assets Value
- ------ ------- -------
Electrical Equipment 3.54%
--------------------
7,200 C & D Tech, Inc. $220,500
Electronics 2.90%
-----------
3,500 Technitrol, Inc. 112,875
4,000 Varian Semiconductor 68,000
------
180,875
Educational Services 2.62%
--------------------
6,000 Sylvan Learning Systems* 163,125
Entertainment/Leisure 2.02%
---------------------
8,000 Vistana, Inc.* 126,000
Financial Services 3.06%
------------------
2,000 Cullen/Frost Bankers, Inc.* 55,125
3,800 Oriental Financial Group 91,675
500 SEI Investments, Co. 44,125
------
190,925
Food/Berverage/Tobacco 3.08%
----------------------
4,500 U.S. Foodservice* 191,812
Food Processing 2.22%
---------------
4,600 Pilgrims Pride Corp. 138,000
Household Products/Wares 3.08%
------------------------
2,250 Ethan Allen Interiors, Inc. 84,937
6,500 Shaw Industries, Inc.* 107,250
-------
192,187
Human Resources 1.32%
---------------
4,000 Interim Services* 82,500
15
<PAGE>
STRATUS FUND, INC.
Schedule of Investments (Continued)
CAPITAL APPRECIATION PORTFOLIO
Percent
of Net Market
Shares Assets Value
- ------ ------- -------
Insurance 3.02%
---------
4,600 First American Finance Corp. $82,225
5,600 Fremont General Corp. 105,700
-------
187,925
Manufacturing 4.86%
-------------
4,000 Kaydon Corp. 134,500
3,000 USG Corp. 168,000
-------
302,500
Medical Supplies/Services 2.88%
-------------------------
3,500 Biomatrix, Inc.* 75,688
4,000 Renal Care Group, Inc.* 103,500
-------
179,188
Oil Refining & Marketing 1.28%
------------------------
5,000 Tesoro Petroleum Corp.* 79,687
Pharmaceutical/Medical 7.54%
----------------------
2,700 Advance Paradigm, Inc.* 164,700
2,000 IDEC Pharmaceuticals Corp.* 154,125
2,000 Jones Pharma, Inc. 78,750
2,000 Millennium Pharmaceuticals, Inc. * 72,000
------
469,575
Publishing/Printing 2.00%
-------------------
3,900 Big Flower Holdings, Inc.* 124,313
Real Estate 1.60%
-----------
4,000 CB Richard Ellis Services, Inc.* 99,500
Retail/Apparel 3.98%
--------------
6,200 Zale Corp.* 248,000
16
<PAGE>
STRATUS FUND, INC.
Schedule of Investments (Continued)
CAPITAL APPRECIATION PORTFOLIO
Percent
of Net Market
Shares Assets Value
- ------- -------- --------
Retail Store 3.86%
------------
8,000 BJ's Wholesale Club* $240,500
Retirement/Aged Care 2.46%
--------------------
4,400 Sunrise Assisted Living* 153,450
Utilities-Electric 5.22%
------------------
6,000 MidAmerican Energy Holdings Co.* 207,750
4,500 Empire District Electric Co. 117,281
-------
325,031
Total investment in securities
(cost $5,340,449) 95.82% $5,968,875
Cash equivalents 4.17% 259,830
Other assets, less liabilities 0.01% 893
----- ----------
TOTAL NET ASSETS 100.00% $6,229,598
======= ==========
*Indicates nonincome-producing security
17
<PAGE>
STRATUS FUND, INC.
SCHEDULE OF INVESTMENTS
June 30, 1999
INTERMEDIATE GOVERNMENT BOND PORTFOLIO
Percent
Principal of Net Market
Amount Government Agency Bonds Assets Value
- ------------- -------------------------- --------- --------
$500,000 U.S. Treasury Bond 6.25% due 1/31/02 92.38% $507,500
400,000 U.S. Treasury Bond 6.625% due 4/30/02 410,250
400,000 U.S. Treasury Bond 6.375% due 1/15/00 402,563
500,000 U.S. Treasury Bond 7.125% due 2/29/00 506,406
500,000 U.S. Treasury Bond 6.125% due 7/31/00 503,672
500,000 U.S. Treasury Bond 6.25% due 10/31/01 507,109
-------
2,837,500
Total investment in securities
(cost $2,803,025) 92.38% $2,837,500
Cash equivalents 5.81% 178,445
Other assets, less liabilities 1.81% 55,531
----- ------
TOTAL NET ASSETS 100.00% $3,071,476
======= ==========
18
<PAGE>
STRATUS FUND, INC.
Schedule of Investments
June 30, 1999
INTERNATIONAL PORTFOLIO
Percent
of Net Market
Shares Common Stock - 101.27% Assets Value
- ------ ---------------------- ------ -----
Auto/Truck/Parts 8.74%
----------------
950 Bridgestone Corp. ADR $287,269
4,300 Hino Motors Ltd. ADR* 202,502
5,700 PSA Peugeot Citroen ADR 224,842
21,500 Volkswagon Ag ADR 277,464
-------
992,077
Building Materials/Construction 0.84%
-------------------------------
3,000 Lafarge SA ADR 94,988
Chemicals 1.22%
---------
3,900 Quimica Minera Chili SA ADR 137,962
Comercial Services 2.38%
------------------
1,300 Secom Limited ADR 270,663
Computer Related 3.40%
----------------
1,000 Equant NV* 94,125
2,900 Fujitsu Limited ADR 291,710
-------
385,835
Diversified Operations 8.60%
----------------------
7,919 Barlow Ltd. ADR 45,669
15,600 Vivendi Sp ADR 252,739
20,800 Kawasaki Industries Ltd. ADR 225,466
8,800 Orkla ASA-ADR 136,937
3,000 Telecom Italia ADR 315,563
-------
976,374
Electronics 1.92%
-----------
1,100 Matsushita Electric Industry Co., Ltd. ADR 218,144
19
<PAGE>
STRATUS FUND, INC.
Schedule of Investments (Continued)
INTERNATIONAL PORTFOLIO
Percent
of Net Market
Shares Assets Value
- ------ ----------- ----------
Financial Services 21.22%
------------------
6,000 Allied Irish Banks ADR $163,500
2,500 Barclays Plc ADR 298,750
10,485 Banco Frances Del Rio De La Plata S.A. ADR 199,215
4,000 Banque National Paris ADR 333,306
3,900 Dresdner Bank ADR 151,627
2,800 Deutsche Bank ADR 167,015
8,000 Istituto Bancario San Paolo-IMI ADR* 220,000
3,050 National Australia Bank Ltd. ADR 256,200
700 National Westminster Bank 90,956
7,000 Societe Generale ADR 246,741
1,500 Sumitomo Bank ADR 186,019
4,000 Uniao De Bancos S.A. 96,250
------
2,409,579
Food/Beverage/Tobacco 2.58%
---------------------
11,000 Cadbury Schweppes ADR 292,875
Holding Company 0.98%
---------------
12,805 South Africa Brewing ADR 111,195
Index Series 1.60%
------------
4,600 Webs-Italy Index Series 112,988
8,000 Webs-Singapore Index Series 69,000
------
181,988
Insurance 2.73%
---------
3,596 Allied Zurich Plc ADR 89,843
2,024 Aegon N.V. ADR 149,776
5,500 Liberty Life Association of Africa ADR 70,456
------
310,075
Machinery/Equipment 1.32%
-------------------
1,000 Mannesmann Ag Spon ADR 149,534
Manufacturing 1.85%
-------------
14,200 Olympus Opitcal ADR 209,886
20
<PAGE>
STRATUS FUND, INC.
Schedule of Investments (Continued)
INTERNATIONAL PORTFOLIO
Percent
of Net Market
Shares Assets Value
- ------ ----------- ----------
Medical Supplies/Services 3.90%
-------------------------
700 Banyu Pharmacuetical Ltd. ADR $231,336
1,000 Roche Holdings Ltd. ADR* 102,792
1,650 Smithkline Beecham ADR 109,003
-------
443,131
Oil-Field Services 1.00%
------------------
7,600 Petroleum Geo Services ADR* 113,050
Oil Exploration/Production 1.13%
--------------------------
2,000 Total SA Sponsor ADR 128,875
Oil/Gas Drilling 2.37%
----------------
1,000 Eni Spa ADR 60,000
4,500 Shell Transport & Trading Company ADR 208,687
-------
268,687
Oil Company-Integrated 1.61%
----------------------
11,900 Petrolio Brasileiro ADR 183,237
Pharmaceutical/Medical 2.96%
----------------------
4,600 Novartis AG ADR 335,844
Publishing/Printing 5.69%
-------------------
10,200 Elsevier NV Spon ADR 240,975
10,145 Vnu-Verenigde Nederlandse ADR 405,410
-------
646,385
Real Estate 3.16%
-----------
20,800 City Developments Ltd. ADR 133,172
25,400 Chueng Kong Holdings Ltd. ADR 225,890
-------
359,062
Recreation 1.78%
----------
25,500 Hilton Group Plc ADR 202,383
Retail Store
12,884 Cifra SA ADR 5.60% 247,106
3,300 Ito-Yokado Co., Ltd. ADR 223,988
5,000 Mauri Co. Ltd. ADR* 165,240
-------
636,334
21
<PAGE>
STRATUS FUND, INC.
Schedule of Investments (Continued)
INTERNATIONAL PORTFOLIO
Percent
of Net Market
Shares Assets Value
- ------ ----------- ----------
Telecommunications 9.48%
------------------
1,400 British Tele Plc ADR $239,750
5,900 Cia de Telecommunications de Chile Sa ADR 146,025
4,600 Nippon Telegraph & Telephone ADR 288,075
3,600 Telecom Corporation of New Zealand 125,775
2,000 Portugal Telecom sa ADR 82,375
3,000 Swisscom Spon ADR 115,125
400 Vodaphone Airtouch PLC 78,800
------
1,075,925
Utlities-Electric 1.82%
-----------------
5,900 Scottishpower Plc ADR 206,500
Utlities/Telecommunications 1.39%
---------------------------
1,073 Telefonica de Espana ADR 157,865
-------
Total investment in securities
(cost $10,639,134) 101.27% $11,498,453
Cash equivalents 2.23% 252,931
Other assets, less liabilities (3.50%) (396,622)
------- ---------
TOTAL NET ASSETS 100.00% $11,354,762
======= ===========
* Indicates non-income producing security.
22
<PAGE>
<TABLE>
<CAPTION>
STRATUS FUND, INC.
Statement of Assets and Liabilities
June 30, 1999
Government Capital
Growth Securities Appreciation
Assets: Portfolio Portfolio Portfolio
------------- ------------- ----------------
<S> <C> <C> <C>
Investments in securities, at market value
(cost $48,138,385, $28,632,520 and $5,340,449) $63,411,738 $28,827,652 $5,968,875
Cash equivalents 4,032,736 210,004 259,830
Accrued interest and dividends receivable 86,502 423,601 3,539
Receivable for securities sold 1,128,685 - 43,595
Receivable for fund shares sold 17,781 55,048 27,109
------- ------- ------
Total assets 68,677,442 29,516,305 6,302,948
=========== =========== =========
Liabilities:
Accrued expenses, including investment
management and distribution expense payable to
adviser, administrator and distributor (note 3) 63,836 25,192 11,355
Payable for securities purchased 235,875 - 59,061
Commissions payable for fund shares sold 104 - 6
Payable for fund shares redeemed 2,073,696 2,607 2,928
---------- ------ -----
Total liabilities 2,373,511 27,799 73,350
---------- ------- ------
Net assets applicable to outstanding capital stock $66,303,931 $29,488,506 $6,229,598
============ ============ ==========
Net assets are represented by:
Capital stock outstanding, at par (note 5) $3,398 $3,012 $476
Additional paid-in capital 43,461,463 29,724,995 6,496,572
Accumulated undistributed net investment income (loss) 185 269 (34,432)
Accumulated net realized gain/(loss) on investments 7,565,532 (434,902) (861,444)
Unrealized appreciation (note 4) 15,273,353 195,132 628,426
----------- -------- -------
Total net assets applicable to shares outstanding $66,303,931 $29,488,506 $6,229,598
============ ============ ==========
Shares outstanding and net asset value per share
Institutional Shares of Capital Stock Outstanding 3,331,458 2,995,214 457,708
Net Asset Value and offering price per
share - Institutional Shares $19.51 $9.79 $13.08
====== ===== ======
Retail Shares of Capital Stock Outstanding 66,265 17,110 18,708
Net Asset Value per share - Retail Shares $19.51 $9.79 $13.04
Maximum sales charge (note 3) 0.92 0.30 0.61
---- ---- ----
Maximum offering price to public $20.43 $10.09 $13.65
====== ====== ======
See accompanying notes to financial statements.
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
STRATUS FUND, INC.
Statement of Assets and Liabilities
June 30, 1999
Intermediate
Government
Bond International
Assets: Portfolio Portfolio
------------- --------------
<S> <C> <C>
Investments in securities, at market value
(cost $2,803,025 and $10,639,134 respectively) $2,837,500 $11,498,453
Cash equivalents 178,445 252,931
Accrued interest and dividends receivable 59,713 33,160
Receivable for fund shares sold - 1,373
----------- -----------
Total assets $3,075,658 $11,785,917
=========== ===========
Liabilities:
Accrued expenses, including investment
management and distribution expense payable to
adviser, administrator and distributor (note 3) 4,182 15,475
Payable for commissions on shares sold - 25
Payable for fund shares redeemed - 415,655
------ -------
Total liabilities 4,182 431,155
------ -------
Net assets applicable to outstanding capital stock $3,071,476 $11,354,762
=========== ===========
Net assets are represented by:
Capital stock outstanding, at par (note 5) $293 $977
Additional paid-in capital 3,152,357 10,011,481
Accumulated undistributed net investment income 23 152
Accumulated net realized gain/(loss) on investments (115,672) 482,833
Unrealized appreciation (note 4) 34,475 859,319
------- -------
Total net assets applicable to shares outstanding $3,071,476 $11,354,762
=========== ===========
Shares outstanding and net asset value per share
Institutional Shares of Capital Stock Outstanding 291,243 962,434
Net Asset Value per share - Institutional Shares $10.50 $11.62
====== ======
Retail Shares of Capital Stock Outstanding 1,277 14,841
Net Asset Value per share - Retail Shares $10.50 $11.62
Maximum sales charge (note 3) 0.33 0.55
---- ----
Maximum offering price to public $10.83 $12.17
====== ======
See accompanying notes to financial statements.
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
STRATUS FUND, INC.
Statement of Operations
Year Ended June 30, 1999
Intermediate
Government Capital Government
Growth Securities Appreciation Bond International
Portfolio Portfolio Portfolio Portfolio Portfolio
------------ ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Investment income:
Dividends $651,645 $ - $25,186 $ - $201,506
Interest 200,263 1,780,176 18,716 212,144 13,508
-------- ---------- ------- -------- -------
Total investment income 851,908 1,780,176 43,902 212,144 215,014
-------- ---------- ------- -------- --------
Expenses (note 3):
Investment advisory fees 467,752 150,186 39,016 23,320 122,831
Administration Fees 155,739 75,276 17,467 8,994 26,690
Distribution Expenses - Retail Class 3,079 507 734 80 464
Accounting 7,686 6,381 4,219 4,838 5,373
Custodial fees - - 11,886 3,807 -
Securities Pricing 5,079 - 4,361 - 7,037
Other operating expenses 20,622 8,365 898 645 978
------- ------ ---- ---- ------
Total expenses 659,957 240,715 78,581 41,684 163,372
-------- -------- ------- ------- -------
Net investment income (loss) 191,951 1,539,461 (34,679) 170,460 51,642
======== ========== ======== ======== ======
Realized and unrealized gain (loss) on
investments (note 4):
Net realized gain (loss) 7,852,458 4,501 (860,212) 205 689,531
Net unrealized appreciation
(depreciation)
Beginning of period 14,247,166 436,489 714,191 54,272 1,542,266
End of period 15,273,353 195,132 628,426 34,475 859,319
----------- -------- -------- ------- -------
Net unrealized appreciation
(depreciation) 1,026,187 (241,357) (85,765) (19,797) (682,947)
--------- --------- -------- -------- ---------
Net realized and unrealized
gain (loss)
on investments 8,878,645 (236,856) (945,977) (19,592) 6,584
---------- --------- --------- -------- -----
Net increase (decrease) in net assets
resulting from operations $9,070,596 $1,302,605 ($980,656) $150,868 $58,226
=========== ========== ========== ======== =======
See accompanying notes to financial statements.
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
STRATUS FUND, INC.
Statement of Changes in Net Assets
Years Ended June 30, 1999 and 1998
Government
Growth Securities
Portfolio Portfolio
--------------------------- --------------------------
Year Ended Year Ended Year Ended Year Ended
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------ -------------- --------------
Operations:
<S> <C> <C> <C> <C>
Net investment income $191,951 $355,054 $1,539,461 $1,459,915
Net realized gain on investments 7,852,458 8,100,736 4,501 3,634
Unrealized appreciation
(depreciatioN) 1,026,187 2,638,991 (241,357) 453,367
------------ ------------- ------------ ------------
Net increase in net assets
resting from operations 9,070,596 11,094,781 1,302,605 1,916,916
------------ ------------- ------------ ------------
Distributions to shareholders from:
Net investment income:
Institutional Class 192,811 354,256 1,533,764 1,455,518
Retail Class 201 797 8,326 1,947
------------ ------------- ------------ ------------
193,012 355,053 1,542,090 1,457,465
Net realized gains
Institutional Class 5,324,844 5,694,496 - -
Retail Class 85,354 - - -
------------ ------------- ------------ ------------
5,410,198 5,694,496 - -
------------ ------------- ------------ ------------
Total Distributions 5,603,210 6,049,549 1,542,090 1,457,465
------------ ------------- ------------ ------------
Capital share transactions (note 5):
Proceeds from sales 11,447,294 12,330,363 10,167,190 6,597,334
Payment for redemptions (17,142,994) (4,620,192) (12,344,732) (4,417,351)
Reinvestment of net investment
income and net realized gain
distributions
at net asset value 4,651,155 4,936,588 1,398,687 1,333,543
------------ ------------- ------------ ------------
Total increase (decrease)
from capital
share transactions (1,044,545) 12,646,759 (778,855) 3,513,526
------------ ------------- ------------ ------------
Total increase (decrease)
in netassets 2,422,841 17,691,991 (1,018,340) 3,972,977
Net Assets:
Beginning of period 63,881,090 46,189,099 30,506,846 26,533,869
------------ ------------- ------------ ------------
End of period $66,303,931 $63,881,090 $29,488,506 $30,506,846
============ ============= ============ ============
See accompanying notes to financial statements.
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
STRATUS FUND, INC.
Statement of Changes in Net Assets
Years Ended June 30, 1999 and 1998
Intermediate
Capital Government
Appreciation Bond
Portfolio Portfolio
--------------------------- --------------------------
Year Ended Year Ended Year Ended Year Ended
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------ -------------- --------------
Operations:
<S> <C> <C> <C> <C>
Net investment income (loss) ($34,679) $15,394 $170,460 $219,211
Net realized gain (loss)
on investments (860,212) 474,396 205 2,969
Unrealized appreciation
(depreciation) (85,765) (34,705) (19,797) 50,307
------------ ------------- ------------ -------------
Net increase (decrease)
in net assets
resting from operations (980,656) 455,085 150,868 272,487
------------ ------------- ------------ -------------
Distributions to shareholders from:
Net investment income:
Institutional Class - 15,226 169,995 217,970
Retail Class - - 1,170 511
------------- ---------- - ------------ -------------
- 15,226 171,165 218,481
Net realized gains
Institutional Class 23,255 461,511 - -
Retail Class 860 - - -
------------ ------------- ------------ -------------
24,115 461,511 - -
------------ ------------- ------------ -------------
Total Distributions 24,115 476,737 171,165 218,481
------------ ------------- ------------ -------------
Capital share transactions (note 5):
Proceeds from sales 2,166,995 3,781,440 34,934 240,311
Payment for redemptions (4,351,054) (1,569,897) (1,141,219) (1,059,642)
Reinvestment of net investment
income and net realized gain
distributions
at net asset value 23,641 472,356 160,118 197,547
------------ ------------- ------------ -------------
Total increase (decrease)
from capital
share transactions (2,160,418) 2,683,899 (946,167) (621,784)
------------ ------------- ------------ -------------
Total increase (decrease)
in net assets (3,165,189) 2,662,247 (966,464) (567,778)
Net Assets:
Beginning of period 9,394,787 6,732,540 4,037,940 4,605,718
------------ ------------- ------------ -------------
End of period $6,229,598 $9,394,787 $3,071,476 $4,037,940
============ ============= ============ =============
See accompanying notes to financial statements.
</TABLE>
27
<PAGE>
STRATUS FUND, INC.
Statement of Changes in Net Assets
Years Ended June 30, 1999 and 1998
International
Portfolio
----------------------------
Year Ended
June 30, 1999 June 30, 1998
----------------------------
Operations:
Net investment income $51,642 $23,436
Net realized gain on investments 689,531 476
Unrealized appreciation (depreciation) (682,947) 639,696
-------------- ------------
Net increase in net assets
resting from operations 58,226 663,608
-------------- ------------
Distributions to shareholders from:
Net investment income:
Institutional Class 51,751 22,988
Retail Class 237 149
-------------- ------------
51,988 23,137
Net realized gains
Institutional Class 204,146 131,684
Retail Class 3,025 -
-------------- ------------
207,171 131,684
-------------- ------------
Total Distributions 259,159 154,821
-------------- ------------
Capital share transactions (note 5):
Proceeds from sales 2,843,478 2,588,389
Payment for redemptions (3,136,480) (2,081,544)
Reinvestment of net investment
income and net realized gain distributions
at net asset value 249,768 152,190
-------------- ------------
Total increase (decrease) from capital
share transactions (43,234) 659,035
-------------- ------------
Total increase (decrease) in net assets (244,167) 1,167,822
Net Assets:
Beginning of period 11,598,929 10,431,107
-------------- ------------
End of period $11,354,762 $11,598,929
============== ============
See accompanying notes to financial statements.
28
<PAGE>
<TABLE>
<CAPTION>
STRATUS FUND, INC.
FINANCIAL HIGHLIGHTS
Years Ended June 30, 1999, 1998, 1997, 1996, and 1995
Growth Portfolio- Institutional Class
----------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Net asset value:
<S> <C> <C> <C> <C> <C>
Beginning of period $18.53 $17.07 $13.67 $11.47 $9.84
------ ------ ------ ------ -----
Income from investment operations:
Net investment income 0.06 0.11 0.22 0.23 0.22
Net realized and unrealized gain
on investments 2.53 3.45 3.99 2.36 1.72
----- ----- ----- ----- ----
Total income from investment
operations 2.59 3.56 4.21 2.59 1.94
----- ----- ----- ----- ----
Less distributions:
Dividends from net investment income (0.06) (0.11) (0.22) (0.22) (0.22)
Distribution from capital gains (1.55) (1.99) (0.59) (0.17) (0.09)
------ ------ ------ ------ ------
Total distributions (1.61) (2.10) (0.81) (0.39) (0.31)
------ ------ ------ ------ ------
End of period $19.51 $18.53 $17.07 (a) $13.67 $11.47
------ ------ ------ ------ ------
Total return: 16.34% 22.29% 32.6% (a) 22.6% 20.3%
------ ------ ----- ----- -----
Ratios/Supplemental data:
Net assets, end of period $65,011,189 63,096,914 46,189,099 24,627,983 12,813,352
Ratio of expenses to average
net assets 1.05% 0.76% 0.72% 0.71% 0.82%
Ratio of net income to average
net assets 0.31% 0.18% 1.46% 1.78% 2.14%
Portfolio turnover rate 194.23% 137.03% 88.53% 92.72% 19.89%
(a) Excludes maximum sales load of 4%
See accompanying notes to financial statements.
</TABLE>
29
<PAGE>
STRATUS FUND, INC.
FINANCIAL HIGHLIGHTS
Year Ended June 30, 1999 and the Period from January 7, 1998
(commencement of class shares) to June 30, 1998
Growth Portfolio- Retail Class
----------------------------------
1999 Period Ended
June 30, 1998
Net asset value: ---------- ---------------
Beginning of period $18.52 $15.86
------- ------
Income from investment operations:
Net investment income 0.00 0.04
Net realized and unrealized gain
on investments 2.47 2.66
----- ----
Total income from investment operations 2.47 2.70
----- ----
Less distributions:
Dividends from net investment income 0.00 (0.04)
Distribution from capital gains (1.48) 0.00
------ ----
Total distributions (1.48) (0.04)
------ ------
End of period $19.51 (a) $18.52 (a)
------ ------
Total return: 16.09% (a) 16.89% (a)(b)
------ ------
Ratios/Supplemental data:
Net assets, end of period $1,292,742 $784,176
Ratio of expenses to average net assets 1.35% 1.50% (c )
Ratio of net income to average net assets 0.01% 0.13% (c )
Portfolio turnover rate 194.23% 137.03%
(a) Excludes maximum sales load of 4%
(b) Total return is not annualized, as it may not be representative of the total
return for the year.
(c) Annualized for those periods less than twelve months in
duration.
See accompanying notes to financial statements.
30
<PAGE>
<TABLE>
<CAPTION>
STRATUS FUND, INC.
FINANCIAL HIGHLIGHTS
Years Ended June 30, 1999, 1998, 1997, 1996, and 1995
Government Securities Portfolio- Institutional Class
--------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Net asset value:
<S> <C> <C> <C> <C> <C>
Beginning of period $9.88 $9.72 $9.64 $9.77 $9.40
----- ----- ----- ----- -----
Income (loss) from investment operations:
Net investment income 0.51 0.51 0.51 0.49 0.45
Net realized and unrealized
gain (loss)
on investments (0.09) 0.16 0.08 (0.13) 0.37
------ ----- ----- ------ ----
Total income (loss) from investment
operations 0.42 0.67 0.59 0.36 0.82
----- ----- ----- ----- ----
Less distributions from
net investment income (0.51) (0.51) (0.51) (0.49) (0.45)
------ ------ ------ ------ ------
End of period $9.79 $9.88 $9.72 (a) $9.64 $9.77
----- ----- ----- ----- -----
Total return: 4.33% 7.04% 6.3% (a) 3.7% 9.0%
----- ----- ---- ---- ----
Ratios/Supplemental data:
Net assets, end of period $29,321,012 30,367,682 26,533,869 23,043,163 13,885,204
Ratio of expenses to average net assets 0.80% 0.82% 0.71% 0.69% 0.80%
Ratio of net income to average net assets 5.13% 5.17% 5.21% 5.04% 4.82%
Portfolio turnover rate 18.66% 2.07% 27.20% 40.61% 33.88%
(a) Excludes maximum sales load of 3%
See accompanying notes to financial statements.
</TABLE>
31
<PAGE>
STRATUS FUND, INC.
FINANCIAL HIGHLIGHTS
Year Ended June 30, 1999 and the Period from January 13,
1998 (commencement of class shares) to June 30, 1998
Government Securities- Retail Class
----------------------------------
1999 Period Ended
June 1998
--------- --------------
Net asset value:
Beginning of period $9.89 $9.97
------ -----
Income from investment operations:
Net investment income 0.48 0.25
Net realized and unrealized loss
on investments (0.09) (0.08)
------ ------
Total income from investment operations 0.39 0.17
----- ----
Less distributions:
Dividends from net investment income (0.49) (0.25)
Distribution from capital gains 0.00 0.00
----- -----
Total distributions (0.49) (0.25)
------ ------
End of period $9.79 $9.89
----- -----
Total return: 3.96% (a) 1.58%(a)(b)
----- -----
Ratios/Supplemental data:
Net assets, end of period $167,494 $139,164
Ratio of expenses to average net assets 1.10% 1.21% (c)
Ratio of net income to average net assets 4.83% 5.49% (c)
Portfolio turnover rate 18.66% 2.07%
(a) Excludes maximum sales load of 4%
(b) Total return is not annualized, as it may not be representative of the total
return for the year.
(c) Annualized for those periods less than twelve months in
duration.
See accompanying notes to financial statements.
32
<PAGE>
<TABLE>
<CAPTION>
STRATUS FUND, INC.
FINANCIAL HIGHLIGHTS
Years Ended June 30, 1999, 1998, 1997, 1996, and 1995
Capital Appreciation Portfolio-Institutional Class
--------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Net asset value:
<S> <C> <C> <C> <C> <C>
Beginning of period $14.39 $14.25 $13.19 $11.23 $8.95
------ ------ ------ ------ -----
Income (loss) from investment operations:
Net investment income (loss) (0.06) 0.03 0.18 (0.19) (0.15)
Net realized and unrealized gain (loss)
on investments (1.21) 0.86 1.48 2.88 2.62
------ ----- ----- ----- ----
Total income (loss) from investment
operations (1.27) 0.89 1.66 2.69 2.47
------ ----- ----- ----- ----
Less distributions from
net investment income 0.00 (0.03) (0.12) 0.00 0.00
Less distributions from capital gains (0.04) (0.72) (0.48) (0.73) (0.19)
------ ------ ------ ------ ------
Total Distributions (0.04) (0.75) (0.60) (0.73) (0.19)
------ ------ ------ ------ ------
End of period $13.08 $14.39 $14.25 (a) $13.19 $11.23
------ ------ ------ ------ ------
Total return: (8.79%) 7.47% 11.7% (a) 26.0% 28.6%
------- ----- ----- ----- -----
Ratios/Supplemental data:
Net assets, end of period $5,985,704 $9,174,664 6,732,540 2,474,470 748,588
Ratio of expenses to average net assets 1.11% 0.76% 0.91% 2.84% 2.69%
Ratio of net income (loss) to average net (0.49%) 0.18% 1.31% (1.54%) (1.59%)
Portfolio turnover rate 109.49% 277.31% 322.07% 179.06% 214.47%
(a) Excludes maximum sales load of 4% See accompanying notes to financial
statements.
</TABLE>
33
<PAGE>
STRATUS FUND, INC.
FINANCIAL HIGHLIGHTS
Year Ended June 30, 1999 and the Period from January 7,
1998 (commencement of class shares) to June 30, 1998
Capital Appreciation- Retail Class
------------------------------------
1999 Period Ended
June 30, 1998
------- ---------------
Net asset value:
Beginning of period $14.39 $13.21
------- ------
Income from investment operations:
Net investment loss (0.10) (0.03)
Net realized and unrealized loss
on investments (1.21) 1.21
Total income (loss) from investment
operations (1.31) 1.18
Less distributions:
Dividends from net investment income 0.00 0.00
----- ----
Distribution from capital gains (0.04) 0.00
------ ----
Total distributions (0.04) 0.00
------ ----
End of period $13.04 (a) $14.39 (a)
------ ------
Total return: (9.07%)(a) 8.93% (a)(b)
------- -----
Ratios/Supplemental data:
Net assets, end of period $243,894 $220,123
Ratio of expenses to average net assets 1.41% 1.25% (c )
Ratio of net income (loss) to average
net assets (0.79%) (0.18%)(c )
Portfolio turnover rate 109.49% 277.31%
(a) Excludes maximum sales load of 4%
(b) Total return is not annualized, as it may not be representative of the total
return for the year.
(c) Annualized for those periods less than twelve months in
duration.
See accompanying notes to financial statements.
34
<PAGE>
<TABLE>
<CAPTION>
STRATUS FUND, INC.
FINANCIAL HIGHLIGHTS
Years Ended June 30, 1999, 1998, 1997, 1996, and 1995
Intermediate Government Bond Portfolio-Institutional Class
----------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Net asset value:
<S> <C> <C> <C> <C> <C>
Beginning of period $10.60 $10.48 $10.47 $10.56 $10.29
------ ------ ------ ------ ------
Income (loss) from investment
operations:
Net investment income 0.51 0.52 0.54 0.52 0.50
Net realized and unrealized
gain (loss)
on investments (0.10) 0.12 0.02 (0.09) 0.27
------ ----- ----- ------ ----
Total income from investment
operations 0.41 0.64 0.56 0.43 0.77
----- ----- ----- ----- ----
Less distributions:
Dividends from net
investment income (0.51) (0.52) (0.55) (0.52) (0.50)
Distributions from capital gains 0.00 0.00 0.00 0.00 0.00
----- ----- ----- ----- -----
Total distributions (0.51) (0.52) (0.55) (0.52) (0.50)
End of period $10.50 $10.60 $10.48 (a) $10.47 $10.56
------ ------ ------ ------ ------
Total return: 3.96% 6.27% 5.6% (a) 4.1% 7.9%
----- ----- ---- ---- ----
Ratios/Supplemental data:
Net assets, end of period $3,058,068 4,008,700 4,605,718 7,224,506 5,518,431
Ratio of expenses to average
net assets 1.16% 1.17% 1.02% 1.03% 1.11%
Ratio of net income to average
net assets 4.75% 4.93% 5.14% 4.95% 4.84%
Portfolio turnover rate 0.00% 0.00% 26.88% 4.05% 27.67%
(a) Excludes maximum sales load of 3%
See accompanying notes to financial statements.
</TABLE>
35
<PAGE>
STRATUS FUND, INC.
FINANCIAL HIGHLIGHTS
Year Ended June 30, 1999 and the Period from January 27, 1998
(commencement of class shares) to June 30, 1998
Intermediate Government Bond Portfolio
Retail Class
--------------------------------------
1999 Period Ended
June 30, 1998
-------- ----------------
Net asset value:
Beginning of period $10.59 $10.63
------- ------
Income from investment operations:
Net investment income 0.47 0.29
Net realized and unrealized loss
on investments (0.09) (0.04)
------ ------
Total income from investment operations 0.38 0.25
----- ----
Less distributions:
Dividends from net investment income (0.47) 0.29
Distribution from capital gains 0.00 0.00
----- ----
Total distributions (0.47) 0.29
------ ----
End of period $10.50 (a) $10.59 (a)
------ ------
Total return: 3.73% (a) 1.69%(a)(b)
----- -----
Ratios/Supplemental data:
Net assets, end of period $13,408 $29,240
Ratio of expenses to average net assets 1.46% 1.63% (c )
Ratio of net income to average net assets 4.45% 5.18% (c )
Portfolio turnover rate 0.00% 0.00%
(a) Excludes maximum sales load of 4%
(b) Total return is not annualized, as it may not be representative of the total
return for the year.
(c) Annualized for those periods less than twelve months in
duration.
See accompanying notes to financial statements.
36
<PAGE>
STRATUS FUND, INC.
FINANCIAL HIGHLIGHTS
Years ended June 30, 1999 and 1998 and the Period from
October 1, 1996 (commencement of class shares) to June 30, 1997
International Portfolio- Institutional Class
--------------------------------------------
1999 1998 Period Ended
June 30, 1997
---- ---- ---------------
Net asset value:
Beginning of period $11.75 $11.22 $10.00
------ ------ ------
Income from investment operations:
Net investment income 0.05 0.02 0.15
Net realized and unrealized gain
on investments 0.09 0.64 1.22
----- ----- ----
Total income from investment
operations 0.14 0.66 1.37
----- ----- ----
Less distributions:
Dividends from net investment
income (0.05) (0.02) (0.15)
Distributions from capital gains (0.22) (0.11) 0.00
------ ------ ----
Total Distributions (0.27) (0.13) (0.15)
------ ------ ------
End of period $11.62 $11.75 $11.22 (a)
------ ------ ------
Total return: 1.4% 6.27% 18.20%(a)(b)
---- ----- ------
Ratios/Supplemental data:
Net assets, end of period $11,182,332 $11,473,772 10,431,107
Ratio of expenses to average net
assets 1.53% 1.65% 1.48%(b)
Ratio of net income to average net
assets 0.49% 0.21% 1.89%(b)
Portfolio turnover rate 40.00% 52.92% 33.77%
(a) Excludes maximum sales load of 4%
(b) Annualized for those periods less than twelve months in duration.
See accompanying notes to financial statements.
37
<PAGE>
STRATUS FUND, INC.
FINANCIAL HIGHLIGHTS
Year ended June 30, 1999 and the Period from January 7, 1998
(commencement of class shares) to June 30, 1998
International Portfolio - Retail Class
---------------------------------------
1999 Period Ended
June 30, 1998
------ ---------------
Net asset value:
Beginning of period $11.75 $10.33
------- ------
Income from investment operations:
Net investment income 0.02 0.03
Net realized and unrealized gain (loss)
on investments 0.09 1.42
----- ----
Total income from investment operations 0.11 1.45
----- ----
Less distributions:
Dividends from net investment income (0.02) (0.03)
Distribution from capital gains (0.22) 0.00
------ ----
Total distributions (0.24) (0.03)
------ ------
End of period $11.62 (a) $11.75 (a)
------ ------
Total return: 1.07% (a) 13.88%(a)(b)
----- ------
Ratios/Supplemental data:
Net assets, end of period $172,430 $125,157
Ratio of expenses to average net assets 1.83% 1.94% (c )
Ratio of net income to average net assets 0.19% 0.27% (c )
Portfolio turnover rate 40.00% 52.92%
(a) Excludes maximum sales load of 4%
(b) Total return is not annualized, as it may not be representative of the total
return for the year.
(c) Annualized for those periods less than twelve months in
duration.
See accompanying notes to financial statements.
38
<PAGE>
STRATUS FUND, INC.
Notes to Financial Statements
June 30, 1999
1. Organization
Stratus Fund, Inc. (the Fund) is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Fund issues its shares in series, each series representing a
distinct portfolio with its own investment objectives and policies. At June
30, 1999, the following series are presently authorized and have shares
outstanding.
Growth Portfolio Capital Appreciation Portfolio
Government Intermediate Government
Securities Portfolio Bond Portfolio
International Portfolio
Each portfolio has two classes of shares authorized and outstanding:
retail and institutional
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies employed by
the Fund in preparing its financial statements.
Use of Estimates: In preparing the financial statements in accordance with
generally accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the
date of the financial statements and changes in net assets for the period.
Actual results could differ from those estimates.
Valuation of Investments
Investment securities are carried at market determined using the following
valuation methods:
o Securities traded on a national or regional stock exchange or included
in the NASDAQ National Market System are valued at the last quoted
sales price.
o Securities not listed on an exchange or securities for which the latest
quoted sales price is not readily available and securities traded
over-the-counter but not included in the NASDAQ National Market System
are valued at the mean of the closing bid and asked prices.
o Securities including bonds, restricted securities, or other assets for
which reliable recent market quotations are not readily available are
valued at fair market value as determined in good faith or under the
direction of the Board of Directors. Determination of fair value
involves, among other things, reference to market indices, matrices and
data from independent brokers and pricing services.
39
<PAGE>
STRATUS FUND, INC.
Notes to Financial Statements
2. Summary of Significant Accounting Policies (Continued)
All securities are valued in accordance with the above noted policies at
the close of each business day.
The Growth, Capital Appreciation, and International Portfolios are
authorized to purchase exchange-traded put and call options.
At June 30, 1999, the Growth, Capital Appreciation and International
Portfolios had no such exchange traded options nor were any purchased
during the year then ended.
The Portfolios may sell a security it does not own in anticipation of a
decline in the market value of that security (short-sale). When a Portfolio
makes a short-sale, it must borrow the security sold short and deliver it
to the buyer. The proceeds from the short-sale will be retained by the
broker-dealer through which it made the short-sale as collateral for its
obligation to deliver the security upon conclusion of the sale. The
Portfolio may have to pay a fee to borrow the security and may be obligated
to remit any interest received on such borrowed securities. A gain or loss
is recognized upon the termination of the short sale, if the market price
at termination is less than or greater than the proceeds originally
received.
At June 30, 1999, the cost of investment securities is identical for
financial reporting and income tax purposes.
Security Transactions
Security transactions are accounted for on the date securities are
purchased or sold (trade date). Dividend income is recognized on the
ex-dividend date and interest income is accrued daily. Amortization of
premium and discount is accrued daily using both the constant yield and the
straight-line methods. Realized investment gains and losses are determined
by specifically identifying the issue sold.
Federal Income Taxes
It is the policy of each Portfolio to comply with the requirements of the
Internal Revenue Code (the Code) applicable to regulated investment
companies and to distribute virtually all of the taxable income generated
by the Portfolios to their shareholders within the time period allowed by
the Federal law. Consequently, no liability for Federal income taxes is
required. Internal Revenue Code requirements regarding distributions may
differ from amounts determined under generally accepted accounting
principles. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, they are
40
<PAGE>
STRATUS FUND, INC.
Notes to Financial Statements
2. Summary of Significant Accounting Policies (Continued)
charged or credited to paid-in-capital or accumulated net realized gain, as
appropriate in the period that the differences arise. Each Portfolio is
treated as a separate entity for tax purposes, and on a calendar basis,
will distribute substantially all of its net investment income and realized
gains, if any, to avoid payment of any Federal excise tax. There will be no
net realized gain distributions until the net realized loss carry forwards
have been offset or expired. The losses will expire in 8 years. Each
Portfolio prepares its tax return on an accrual basis. The Government
Securities, Intermediate Government Bond, and Capital Appreciation
Portfolios have unused capital loss carry forwards of approximately
$378,000, $124,000, and $455,000 respectively, available for federal income
tax purposes at June 30, 1999. The losses begin expiring in 2003 and 2005
for the Government Securities and Intermediate Government Bond portfolios,
respectively.
Distribution to Shareholders
Dividends to shareholders are recorded on the ex-dividend date. In
accordance with resolutions enacted by the Board of Directors, the
Government Securities and Intermediate Government Bond Portfolios declare
dividends monthly and the Growth, Capital Appreciation, and International
Portfolios declare dividends semi-annually. The dividends declared become
payable immediately.
Cash Equivalents
Cash equivalents consist of money market funds which declare dividends
daily. As of June 30, 1999, the average yield on such funds was
approximately 4.50%.
3. Fees, Expenses and Related Party Transactions
The Fund and each of its Portfolios have retained Union Bank & Trust
Company (UBATCO) as their exclusive investment adviser and custodian of the
Fund's assets (hereinafter, the Adviser). The agreement provides that the
Capital Appreciation Portfolio will compensate the Adviser on a performance
based scale, whereby the Portfolio will pay a fee of 1.40% per annum of
daily average net assets. The fee may be increased or decreased by up to
1.00% of the average daily net assets during the latest 12 months (a
rolling average method), depending upon the performance of this Portfolio
relative to the Russell 2000 Index. For the twelve months ended June 30,
1999, the annualized fee was 0.56%.
41
<PAGE>
STRATUS FUND, INC.
Notes to Financial Statements
3. Fees, Expenses and Related Party Transactions (Continued)
The remaining Portfolios pay the following advisory fee rates per annum of
their average daily net asset values:
Portfolio Annual Fee Rate
----------- ----------------
Growth .75%
Government Securities .50%
Intermediate Government Bond .65%
International 1.15%
The Fund and each of its Portfolios have retained UBATCO as the custodian
of the Fund's investments. The agreement provides that the portfolios
(except the Growth, Government Securities, and International Portfolios,
which pay no fee), will pay the custodian an annual fee which is calculated
and billed monthly. The fee calculation does not include cash equivalents.
The fee consists of an investment transaction charge of $12 for each
transaction, a fee of $100 per account, plus an additional fee calculated
in accordance with the following table.
Net assets of:
$0 - $10 million 11 basis points
$10 - $20 million 6 basis points
Over $20 million 2.5 basis points
The Fund and each of its Portfolios have retained Lancaster Administrative
Services, Inc. (the Administrator) to act as their transfer agent and
administrator to provide all necessary record keeping and share transfer
services for the Fund. As of July 1, 1999 the Administrator is a related
party to the Fund. The agreement provides that each Portfolio will pay an
administrative fee to the Administrator equal to .25% per annum of average
daily net assets.
The Fund has also retained SMITH HAYES Financial Services Corporation (the
Distributor) to act as the underwriter and distributor of the fund's
shares. Retail shares for the Growth, Capital Appreciation, and
International portfolios include a maximum sales charge of 4.5%. Retail
shares for the Government Securities and Intermediate Government Bond
portfolios include a maximum sales charge of 3.0%. For sales of all
Portfolios of $50,000 or more, the sales charge is reduced. Pursuant to the
shareholder approved distribution plan under Rule 12b-1, Retail shares of
each fund will reimburse the distributor for shareholder-related expenses
incurred in connection with the distribution of the fund's shares, however,
under no circumstances shall such reimbursement exceed .30% per annum of
the fund's average daily net assets. The Distributor received $14,590 and
paid out $11,992 of this amount as commissions and dealer reallowances.
Institutional shares for all portfolios are not charged sales charges or
12b-1 fees.
42
<PAGE>
STRATUS FUND, INC.
Notes to Financial Statements
3. Fees, Expenses and Related Party Transactions (Continued)
Under the terms of the advisory, custodian, administrative and distribution
agreements outlined above, the Portfolios collectively incurred $803,105;
$15,693; $284,165 and $4,864 for such services. Of the amount paid to the
Distributor, 100% was paid out to Union Bank & Trust Company under a Dealer
Service Agreement.
At June 30, 1999, the following accrued investment advisory and
administrative fees were payable to the Adviser and Administrator.
Payable to Payable to Payable to
Adviser Administrator Distributor Total
--------- ------------ ----------- -----
Growth Portfolio $41,003 $5,472 $310 $46,785
Government Securities Portfolio 12,162 2,418 41 14,621
Capital Appreciation Portfolio 6,856 490 57 7,403
Intermediate Government
Bond Portfolio 1,644 266 3 1,913
International Portfolio 11,007 952 41 12,000
Under the terms of the advisory agreement, the Adviser may be obligated to
reimburse a Portfolio up to the amount of the Adviser's fee paid to the
Adviser if during any year the expenses of the Portfolio, including the
Adviser's fee, exceed certain limitations. At June 30, 1999, no expense
reimbursement was required.
In addition to the amounts paid by the Portfolios under advisory,
custodian, and administration agreements, the Portfolios used SMITH HAYES
Financial Services Corporation (SMITH HAYES), a company related through
common management, to affect security trades on their behalf. As is
customary in the industry, the investment adviser evaluates the pricing and
ability to execute the transactions in selecting brokers to affect trades.
SMITH HAYES was paid commissions in the amount of $26,842 for their
brokerage services during the twelve months ended June 30, 1999.
At June 30, 1999, directors, officers and employees of the Fund, the
Adviser and Administrator and their immediate families held the following
in each Portfolio:
Shares Value
--------- --------
Growth Portfolio Institutional Class 307,874 $6,006,622
Government Securities Portfolio
Institutional Class 335,092 3,280,552
Capital Appreciation Portfolio
Institutional Class 63,476 830,271
Intermediate Gov't Bond Portfolio
Institutional Class - -
International Portfolio Institutional Class 83,018 964,666
43
<PAGE>
STRATUS FUND, INC.
Notes to Financial Statements
3. Fees, Expenses and Related Party Transactions (Continued)
At June 30, 1999, UBATCO held, in nominee name, the following in each
Portfolio:
Shares Value
-------- -------
Growth Portfolio Institutional Class 3,223,122 $64,834,110
Growth Portfolio Retail Class 59,973 1,170,081
Government Securities Portfolio
Institutional Class 2,995,214 29,321,012
Government Securities Portfolio Retail Class 17,110 167,494
Capital Appreciation Portfolio
Institutional Class 456,959 5,977,024
Capital Appreciation Portfolio Retail Class 18,188 237,179
Intermediate Gov't Bond Portfolio
Institutional Class 286,728 3,010,644
Intermediate Gov't Bond Portfolio Retail Class 1,277 13,408
International Portfolio Institutional Class 962,259 11,181,450
International Portfolio Retail Class 14,808 172,069
4. Securities Transactions
Purchases of securities and proceeds from sales were as follows for each
Portfolio:
Purchases of Proceeds
Securities from Sales
------------- ------------
Growth Portfolio $112,467,589 $118,698,905
Government Securities Portfolio 5,504,240 4,304,773
Capital Appreciation Portfolio 7,278,521 9,198,136
Intermediate Government Bond Portfolio - 1,050,328
International Portfolio 4,525,897 4,191,336
At June 30, 1999, the aggregate gross unrealized appreciation and the
aggregate gross unrealized depreciation of securities in each Portfolio
were as follows:
Aggregate Gross
Unrealized
Appreciation Depreciation
-------------- -------------
Growth Portfolio $16,005,419 $732,065
Government Securities Portfolio 237,086 41,954
Capital Appreciation Portfolio 1,007,041 378,615
Intermediate Government Bond Portfolio 34,475 -
International Portfolio 1,962,208 1,102,889
44
<PAGE>
STRATUS FUND, INC.
Notes to Financial Statements
5. Capital Share Transactions
The Fund is authorized to issue a total of 1 billion shares of common stock
in series with a par value of $.001 per share. The Board of Directors has
authorized twenty million shares to be issued in the Growth Portfolio and
ten million each in the Government Securities Portfolio, Capital
Appreciation Portfolio, Intermediate Government Bond Portfolio, and the
International Portfolio.
Transactions in the capital stock of each Portfolio for the twelve
months ended June 30, 1999 were as follows:
Growth Growth
Portfolio Portfolio
Institutional Shares Retail Shares
Transactions in shares: --------------------- -------------
Shares sold 604,780.391 28,498.234
Shares redeemed (964,596.917) (10,137.807)
Reinvested dividends 285,304.330 5,379.448
----------- -----------
Net increase/(decrease) (74,512.196) 23,739.875
============== ==========
Transactions in dollars:
Dollars sold $10,936,522 $510,772
Dollars redeemed (16,962,447) (180,547)
Reinvested dividends 4,565,600 85,555
Net increase/(decrease) (1,460,325) 415,780
============ =======
Government Government
Securities Portfolio Securities Port.
Institutional Shares Retail Shares
Transactions in shares:
Shares sold 1,017,926.590 4,508.363
Shares redeemed (1,235,858.445) (2,286.824)
Reinvested dividends 140,060.686 811.520
-------------- -------------
Net increase/(decrease) (77,871.169 3,033.059
============== =============
Transactions in dollars:
Dollars sold $10,122,315 $44,875
Dollars redeemed (12,322,021) (22,711)
Reinvested dividends 1,390,629 8,058
Net increase/(decrease) (809,076) 30,222
============ =======
45
<PAGE>
STRATUS FUND, INC.
Notes to Financial Statements
5. Capital Share Transactions (Continued)
Capital Appreciation Capital Appreciation
Portfolio Portfolio
Institutional Shares Retail Shares
------------------ -------------
Transactions in shares:
Shares sold 163,963.107 10,919.333
Shares redeemed (335,674.249) (7,581.852)
Reinvested dividends 1881.201 71.132
--------------- ------------
Net increase/(decrease) (169,829.941) 3,408.613
============= =============
Transactions in dollars:
Dollars sold $2,032,580 $134,415
Dollars redeemed (4,258,566) (92,488)
Reinvested dividends 22,781 860
----------- ---------
Net increase/(decrease) (2,203,205) 42,787
========== =========
Intermediate Gov't Intermediate Gov't
Bond Portfolio Bond Portfolio
Institutional Shares Retail Shares
------------------ -------------
Transactions in shares:
Shares sold 3,290.152 .000
Shares redeemed (105,297.562) (1,593.098)
Reinvested dividends 14,942.669 109.942
------------- ----------
Net increase/(decrease) (87,064.741) (1,483.156)
=============== ===========
Transactions in dollars:
Dollars sold $34,934 $0
Dollars redeemed (1,124,406) (16,813)
Reinvested dividends 158,948 1,170
------------ -----
Net increase/(decrease) (930,524) (15,643)
International International
Portfolio Portfolio
Institutional Shares Retail Shares
------------------ -------------
Transactions in shares:
Shares sold 243,612.224 7,918.977
Shares redeemed (279,958.877) (4,032.711)
Reinvested dividends 22,696.235 302.734
------------- ------------
Net increase/(decrease) (13,650.418) 4,189.000
============== ===========
Transactions in dollars:
Dollars sold $2,758,103 $85,375
Dollars redeemed (3,092,484) (43,996)
Reinvested dividends 246,505 3,263
------------ --------
Net increase/(decrease) (87,876) (44,642)
============ ========
46
