<PAGE>
UAM Funds
Funds for the Informed Investor(SM)
ICM Small Company Portfolio
Annual Report October 31, 2000
[LOGO OF UAM]
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
OCTOBER 31, 2000
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TABLE OF CONTENTS
--------------------------------------------------------------------------------
Shareholders' Letter ...................................................... 1
Portfolio of Investments .................................................. 5
Statement of Assets and Liabilities ....................................... 11
Statement of Operations ................................................... 12
Statement of Changes in Net Assets ........................................ 13
Financial Highlights ...................................................... 14
Notes to Financial Statements ............................................. 15
Report of Independent Accountants.......................................... 19
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
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October 31, 2000
Dear Shareholder:
This year's annual letter marks the first time since fiscal year-end October 31,
1993 that we can state that small cap stocks as measured by the Russell 2000
Index outperformed large cap stocks represented by the S&P 500 over the last
twelve months. The ICM Small Company Portfolio returned a very respectable
19.71% and outperformed its primary benchmark, the Russell 2000 Value Index,
which returned 17.41%.
The stock market's journey over the last year has certainly been an interesting
one and the period will most assuredly go down as one of the most memorable in
the market's history. As the return table set forth below shows, the first six
months of the fiscal year saw small cap growth stocks (the Russell 2000 Growth
Index) continue their very strong performance which began in Fiscal 1999.
However, the second half of the year saw a complete reversal of form as growth
stocks corrected sharply and value stocks (the Russell 2000 Value Index)
continued to advance.
<TABLE>
<CAPTION>
Total Returns
--------------------------------------------------------
1st Fiscal Half 2nd Fiscal Half Fiscal Year
------------------ ------------------ -----------------
Nov. 1, 1999- May 1, 2000- Nov. 1, 1999-
April 30, 2000 Oct. 31, 2000 Oct. 31, 2000
------------------ ------------------ -----------------
<S> <C> <C> <C>
ICM Small Company Portfolio ............. 10.64% 8.20% 19.71%
Russell 2000 Value Index ................ 8.20% 8.40% 17.30%
Russell 2000 Index ...................... 18.72% -1.11% 17.41%
Russell 2000 Growth Index ............... 27.78% -9.09% 16.16%
S&P 500 Index ........................... 7.20% -1.03% 6.09%
</TABLE>
<TABLE>
<CAPTION>
Total Returns for Five Fiscal Years Ended October 31, 2000
-------------------------------------------------------------------
5 years
--------------------
Average
1996 1997 1998 1999 2000 Cumulative Annual
------ ------ ------- ------ ------ ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
ICM Small Company
Portfolio ........ 15.62% 43.28% -5.04% -0.13% 19.71% 88.07% 13.47%
Russell 2000 Value
Index ............ 19.58% 37.18% -7.69% 0.72% 17.30% 78.88% 12.33%
Russell 2000 Index.. 16.61% 29.33% -11.84% 14.87% 17.41% 79.30% 12.39%
Russell 2000
Growth Index ..... 13.33% 21.17% -15.86% 29.28% 16.16% 73.52% 11.65%
S&P 500 Index ...... 24.08% 32.10% 22.01% 25.67% 6.09% 166.65% 21.67%
</TABLE>
1
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
--------------------------------------------------------------------------------
Portfolio's Average Annual Total Returns
--------------------------------------------------------------------------------
1 year 5 year 10 Year Since Inception-4/18/89
End 10/31/00 End 10/31/00 End 10/31/00 Thru 10/31/00
------------ ------------ ------------ -----------------------
19.71% 13.47% 20.24% 15.09%
In recent months, the level of investor uncertainty has increased as the economy
has slowed its rate of growth and energy costs have soared. Consumer confidence
has begun to wane as the stock market has weakened and volatility has remained
quite high. The confusion over the just completed election and the potential
gridlock facing the next Administration will likely cause even further declines
in consumer confidence. Chances for a mild recession are increasing as economic
growth around the world has slowed. We believe that consensus corporate earnings
estimates for 2001 and beyond remain too high. As a result, extreme volatility
is likely to continue to plague the market in the months ahead.
One benefit of this economic slowdown is the increased probability that interest
rates will not follow energy prices higher. The highly competitive nature of the
U.S. economy will limit the ability of companies to pass on higher costs, and
inflation will likely remain in check. However, corporate profits will suffer.
We believe there is a reasonably good chance that these lower profits are, to
large extent, already factored into the share prices of many companies. But, the
volatility of the market will continue to be a problem for a while longer.
We believe the environment outlined above favors the value sector of the market.
But, the riskiness of the economy calls for particular attention to balance
sheet and free cash flow characteristics in picking stocks. In the past, stocks
have done well in periods of flat or declining profits; but, it has usually been
wise to own the stronger companies and avoid those with too much financial
leverage or too little market share in their respective industries. Our focus on
companies with strong balance sheets and leading market positions has helped the
Portfolio weather the last six months. We believe that this focus should work to
the Portfolio's benefit in the months ahead.
Respectfully,
/s/ Robert D. McDorman, Jr.
Robert D. McDorman, Jr.
Principal, Portfolio Manager
Investment Counselors of Maryland
2
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
--------------------------------------------------------------------------------
All performance presented in this report is historical and should not be
construed as a guarantee of future results. 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.
A portfolio's performance assumes the reinvestment of all dividends and
capital gains.
There are no assurances that a portfolio will meet its stated objectives.
A portfolio's holdings and allocations are subject to change
because it is actively managed and should not be considered
recommendations to buy individual securities.
Definition of the Comparative Indices
-------------------------------------
Russell 2000 Index is an unmanaged index comprised of 2,000 stocks of U.S.
companies with small market capitalization.
Russell 2000 Growth Index is a subset of the Russell 2000 Index (an unmanaged
index comprised of small capitalization, U.S. companies) that contains those
securities with higher price-to-book ratios and price-earnings ratios, lower
dividend yields and higher forecasted growth values than the value universe.
Russell 2000 Value Index is a subset of the Russell 2000 Index (an unmanaged
index comprised of small capitalization, U.S. companies) that contains those
securities with lower price-to-book and price-earnings ratios, higher dividend
yields and lower forecasted growth values than the growth universe.
S&P 500 Index is an unmanaged index comprised of stocks representing major U.S.
market industries, including 400 industrial stocks, 40 financial stocks, 40
utility stocks and 20 transportation stocks.
Index returns assume reinvestment of dividends and, unlike a portfolio's
returns, do not reflect any fees or expenses. If such fees and
expenses were included in the index returns, the performance
would have been lower.
Please note that one cannot invest directly in an unmanaged index.
3
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
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Growth of a $5,000,000 Investment
--------------------------------------
AVERAGE ANNUAL TOTAL RETURN*
FOR PERIOD ENDED OCTOBER 31, 2000
--------------------------------------
1 5 10
Year Years Years
--------------------------------------
19.71% 13.47% 20.24%
--------------------------------------
[GRAPH]
ICM SMALL COMPANY RUSSELL 2000 RUSSELL 2000
PORTFOLIO INDEX VALUE INDEX
12/31/88 $5,000 $5,000 $5,000
12/31/89 8,139 7,930 7,579
12/31/90 10,090 8,681 9,040
12/31/91 13,642 11,495 12,342
12/31/92 14,268 11,459 12,332
12/31/93 16,798 13,560 14,299
12/31/94 19,422 15,814 17,098
12/31/95 27,828 20,452 23,455
12/31/96 26,425 18,028 21,651
12/31/97 26,394 20,709 21,807
12/31/98 31,596 24,315 25,580
* If the adviser and/or portfolio service providers had not limited certain
expenses, the portfolio's total return would have been lower.
** Beginning with this report, the portfolio's performance will be compared to
the Russell 2000 Value Index rather than the Russell 2000 Index because
the Russell 2000 Value Index is a more appropriated benchmark for this type
of portfolio.
All performance presented in this report is historical and should not be
construed as a guarantee of future results. 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.
A portfolio's performance assumes the reinvestment of all
dividends and capital gains.
Index returns assume reinvestment of dividends and, unlike a portfolio's
returns, do not reflect any fees or expenses. If such fees and expenses
were included in the index returns, the performance would
have been lower.
Please note that one cannot invest directly in an unmanaged index.
4
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 92.8%
Shares Value
----------- ------------
AUTO & TRANSPORTATION -- 3.5%
Aramax International* ....................... 175,000 $ 1,577,734
Borg-Warner Automotive ...................... 150,000 5,662,500
Donnelly .................................... 161,750 1,924,825
Dura Automotive Systems* .................... 27,527 232,259
Heartland Express* .......................... 61,100 1,061,612
Intermet .................................... 175,000 1,312,500
Rollins Truck Leasing ....................... 410,000 2,152,500
Swift Transportation* ....................... 205,000 2,921,250
Wabash National ............................. 225,000 1,800,000
------------
18,645,180
------------
CONSUMER DISCRETIONARY -- 14.5%
Aaron Rents ................................. 330,000 5,527,500
Advanced Marketing Services ................. 177,400 3,193,200
Aptar Group ................................. 340,000 7,033,750
Baldor Electric ............................. 100,000 1,987,500
Bell & Howell* .............................. 200,000 3,800,000
Bon Ton Stores* ............................. 233,000 393,187
Bowne ....................................... 157,800 1,321,575
Burlington Coat Factory ..................... 200,000 3,150,000
Bush Industries ............................. 200,000 2,325,000
Finlay Enterprises* ......................... 300,000 4,143,750
FTI Consulting* ............................. 270,000 1,856,250
Furniture Brands International* ............. 157,800 2,662,875
F.Y.I.* ..................................... 60,000 2,407,500
Garden Fresh Restaurant* .................... 130,000 1,121,250
Jakks Pacific* .............................. 300,000 2,643,750
Mohawk Industries* .......................... 85,000 1,854,062
Papa John's International* .................. 150,000 3,768,750
Rex Stores* ................................. 150,000 2,756,250
R.H. Donnelley .............................. 250,000 5,656,250
Right Management Consultants* ............... 136,000 1,377,000
Saks* ....................................... 200,000 2,037,500
Shopko Stores ............................... 500,000 3,187,500
Stanley Furniture* .......................... 175,000 3,587,500
The accompanying notes are an integral part of the financial statements.
5
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS - continued
Shares Value
----------- ------------
CONSUMER DISCRETIONARY -- continued
Toro ........................................ 240,000 $ 8,400,000
Tropical Sportswear* ........................ 120,000 1,860,000
Unitel Video* (b) ........................... 120,000 1
------------
78,051,900
------------
CONSUMER STAPLES -- 2.8%
Conagra Foods ............................... 164,076 3,507,125
Earthgrains ................................. 175,000 3,543,750
Guest Supply* ............................... 210,000 3,438,750
Ruddick ..................................... 225,000 2,953,125
Sylvan* ..................................... 200,000 1,900,000
------------
15,342,750
------------
ENERGY -- 8.4%
Barrett Resources* .......................... 67,700 2,462,588
Basin Exploration* .......................... 125,000 2,476,562
Belco Oil & Gas* ............................ 250,000 2,281,250
Clayton Williams Energy* .................... 140,500 3,934,000
Equitable Resources ......................... 150,000 8,700,000
Meridian Resources* ......................... 400,000 2,775,000
Midcoast Energy Resources ................... 125,000 2,531,250
Newpark Resources* .......................... 500,000 4,500,000
Oceaneering International* .................. 300,000 4,218,750
Offshore Logistics* ......................... 100,000 1,718,750
Penn Virginia ............................... 250,000 6,625,000
Seitel* ..................................... 91,300 1,369,500
Varco International * ....................... 100,000 1,725,000
------------
45,317,650
------------
FINANCIAL SERVICES -- 13.9%
Affiliated Computer Services, Cl A* ......... 107,000 5,958,563
Allied Capital .............................. 191,000 3,939,375
Chittenden .................................. 190,000 5,046,875
Colonial BancGroup .......................... 502,000 4,423,875
CVB Financial ............................... 76,700 1,279,931
Landamerica Financial Group ................. 118,000 3,481,000
Medallion Financial ......................... 240,000 3,690,000
The accompanying notes are an integral part of the financial statements.
6
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS - continued
Shares Value
----------- ------------
FINANCIAL SERVICES -- continued
Medical Assurance* .......................... 97,394 $ 1,351,342
Nova* ....................................... 279,000 4,376,813
Prosperity Bancshares ....................... 161,000 3,008,687
PXRE Group .................................. 160,000 2,390,000
Radian Group ................................ 100,100 7,094,587
Republic Security Financial ................. 538,700 3,653,059
Sovereign Bancorp ........................... 555,000 4,613,437
Sun Bancorp* ................................ 151,200 1,096,200
Superior Financial* ......................... 100,000 1,100,000
Trammell Crow* .............................. 400,000 5,350,000
Trenwick Group Limited ...................... 163,400 3,206,725
Triad Guaranty* ............................. 11,600 337,125
UCBH Holdings ............................... 135,000 4,860,000
West Coast Bancorp .......................... 306,900 2,934,731
WSFS Financial .............................. 160,000 1,720,000
------------
74,912,325
------------
HEALTH CARE -- 6.2%
Apria Healthcare Group* ..................... 150,000 3,000,000
Bio-Rad Labs, Cl A* ......................... 148,300 4,434,170
Cambrex ..................................... 125,000 4,992,187
Covance* .................................... 300,000 2,587,500
Dentsply International ...................... 250,000 8,671,875
Omnicare .................................... 425,000 7,437,500
Spacelabs Medical* .......................... 100,000 1,056,250
U.S. Oncology* .............................. 200,000 1,075,000
------------
33,254,482
------------
MATERIALS & PROCESSING -- 11.2%
Actuant ..................................... 250,000 906,250
Carpenter Technology ........................ 100,000 3,100,000
Centex Construction Products ................ 125,000 3,242,187
Clarcor ..................................... 100,000 1,912,500
FiberMark* .................................. 325,000 2,620,312
Georgia Gulf ................................ 100,000 1,337,500
Granite Construction ........................ 400,000 9,125,000
Griffon* .................................... 675,000 5,146,875
The accompanying notes are an integral part of the financial statements.
7
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS - continued
Shares Value
----------- ------------
MATERIALS & PROCESSING -- continued
Martin Marietta Materials ................... 125,000 $ 4,800,000
Minerals Technologies ....................... 200,000 6,262,500
Omnova Solutions ............................ 64,700 363,938
PolyOne* .................................... 350,000 2,756,250
Quaker Chemical ............................. 225,000 3,867,188
Quanex ...................................... 200,000 3,962,500
Schulman .................................... 100,000 1,093,750
Southdown ................................... 135,000 9,568,125
------------
60,064,875
------------
PRODUCER DURABLES -- 17.0%
AMETEK ...................................... 200,000 4,350,000
Armor Holdings* ............................. 200,000 3,112,500
Belden ...................................... 280,000 7,262,500
C&D Technologies ............................ 90,000 5,321,250
Centex ...................................... 125,000 4,625,000
Del Webb .................................... 192,600 5,176,125
Diebold ..................................... 190,000 4,940,000
GenCorp ..................................... 114,700 960,613
Heico ....................................... 199,000 2,189,000
Hughes Supply ............................... 250,000 4,687,500
MDC Holdings ................................ 500,000 13,687,500
Milacron .................................... 300,000 4,781,250
MKS Instruments* ............................ 215,000 3,950,625
Northwest Pipe* ............................. 175,000 1,826,563
Quixote ..................................... 268,000 4,388,500
Ryland Group ................................ 200,000 6,450,000
Spacehab* ................................... 320,000 1,300,000
Teleflex .................................... 125,000 4,320,313
Technitrol .................................. 29,000 3,215,375
Woodhead Industries ......................... 215,000 4,676,250
------------
91,220,864
------------
REAL ESTATE INVESTMENT TRUSTS -- 9.1%
AMLI Residential Properties ................. 134,800 3,117,250
Camden Property Trust ....................... 125,000 3,578,125
CBL & Associates Properties ................. 200,000 4,625,000
The accompanying notes are an integral part of the financial statements.
8
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS - continued
Shares Value
----------- ------------
REAL ESTATE INVESTMENT TRUSTS -- continued
Corporate Office Properties ................. 75,000 $ 731,250
Equity One .................................. 42,300 396,563
First Industrial Realty Trust ............... 100,000 3,087,500
Gables Residential Trust .................... 150,000 3,825,000
Healthcare Realty Trust ..................... 100,000 1,993,750
LaSalle Hotel Properties .................... 185,000 2,659,375
Liberty Property Trust ...................... 200,000 5,287,500
Mack-Cali Realty ............................ 80,000 2,170,000
Mills Corporation ........................... 200,000 3,412,500
Pan Pacific Retail Properties ............... 137,000 2,799,937
Parkway Properties .......................... 89,000 2,547,625
Reckson Associates .......................... 200,000 4,525,000
Shurgard Storage Centers .................... 175,000 3,970,313
------------
48,726,688
------------
TECHNOLOGY -- 5.5%
Ansys* ...................................... 137,600 1,599,600
APW Limited ................................. 250,000 11,546,875
Analogic .................................... 100,000 3,531,250
Complete Business Solutions* ................ 125,000 1,289,063
Coorstek Inc* ............................... 112,500 3,290,625
Pioneer-Standard Electronics ................ 350,000 4,856,250
Transaction Systems Architects* ............. 260,000 3,510,000
------------
29,623,663
------------
UTILITIES -- 0.7%
NUI ......................................... 125,000 3,898,438
------------
TOTAL COMMON STOCKS
(Cost $464,340,141) ...................... 499,058,815
------------
CONVERTIBLE PREFERRED STOCK -- 0.3%
PETROLEUM & FUEL PRODUCTS -- 0.3%
Belco Oil & Gas (Cost $2,518,992) ........... 100,000 1,556,250
------------
CONVERTIBLE BOND -- 0.4%
Spacehab
8.000%, 10/15/07 (Cost $2,828,140) ....... 2,700,000 1,866,375
------------
The accompanying notes are an integral part of the financial statements.
9
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENT - 6.6%
Face
Amount Value
----------- ------------
REPURCHASE AGREEMENT -- 6.6%
Chase Securities, Inc. 6.35%, dated 10/31/00,
due 11/01/00, to be repurchased at
$35,538,267, collateralized by $26,614,322
of various U.S. Treasury Obligations
valued at $35,532,695 (Cost $35,532,000).. $35,532,000 $ 35,532,000
------------
TOTAL INVESTMENTS -- 100.1%
(Cost $505,219,273) (a) .................. 538,013,440
------------
OTHER ASSETS AND LIABILITIES, NET -- (0.1%).. (378,844)
------------
TOTAL NET ASSETS -- 100.0% .................. $537,634,596
============
* Non-Income Producing Security
Cl Class
(a) The cost for federal income tax purposes was $504,948,988. At October 31,
2000, net unrealized appreciation for all securities based on tax cost was
$33,064,452. This consisted of aggregate gross unrealized appreciation for
all securities of $99,371,549 and an aggregate gross unrealized
depreciation for all securities of $66,307,097.
(b) Security is not readily marketable.
The accompanying notes are an integral part of the financial statements.
10
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Assets
Investments, at Cost ......................................... $505,219,273
============
Investments, at Value -- Note A .............................. $538,013,440
Cash ......................................................... 144,496
Receivable for Portfolio Shares Sold ......................... 1,027,252
Dividends and Interest Receivable ............................ 446,143
Other Assets ................................................. 43,669
------------
Total Assets .............................................. 539,675,000
------------
Liabilities
Payable for Investments Purchased ............................ 1,578,312
Payable for Investment Advisory Fees -- Note B ............... 305,661
Payable for Portfolio Shares Redeemed ........................ 46,079
Payable for Administrative Fees -- Note C .................... 42,097
Payable for Custodian Fees -- Note D ......................... 3,700
Payable for Directors' Fees -- Note F ........................ 850
Other Liabilities ............................................ 63,705
------------
Total Liabilities ......................................... 2,040,404
------------
Net Assets ................................................... $537,634,596
============
Net Assets Consist of:
Paid in Capital .............................................. 448,650,868
Undistributed Net Investment Income .......................... 537,254
Accumulated Net Realized Gain ................................ 55,652,307
Unrealized Appreciation ...................................... 32,794,167
------------
Net Assets ................................................... $537,634,596
============
Institutional Class Shares
Shares Issued and Outstanding ($0.001 par value)
(Authorized 50,000,000) .................................... 23,054,056
Net Asset Value, Offering and Redemption Price Per Share ..... $ 23.32
============
The accompanying notes are an integral part of the financial statements.
11
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
FOR THE YEAR ENDED OCTOBER 31, 2000
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Investment Income
Dividends ................................................... $ 9,049,287
Interest .................................................... 1,756,749
-----------
Total Income ............................................. 10,806,036
-----------
Expenses
Investment Advisory Fees -- Note B .......................... 3,658,557
Administration Fees -- Note C ............................... 482,949
Printing Fees ............................................... 36,543
Custodian Fees -- Note D .................................... 32,617
Legal Fees .................................................. 28,579
Registration and Filing Fees ................................ 27,204
Audit Fees .................................................. 22,491
Directors' Fees -- Note F ................................... 10,100
Other Expenses .............................................. 156,607
-----------
Net Expenses Before Expense Offset ....................... 4,455,647
Expense Offset .............................................. (18,133)
-----------
Net Expenses After Expense Offset ........................ 4,437,514
-----------
Net Investment Income ....................................... 6,368,522
-----------
Net Realized Gain on Investments ............................ 54,848,479
Net Change in Unrealized Appreciation (Depreciation)
on Investments ............................................ 31,967,784
-----------
Net Gain on Investments ..................................... 86,816,263
-----------
Net Increase in Net Assets Resulting from Operations ........ $93,184,785
===========
The accompanying notes are an integral part of the financial statements.
12
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, October 31,
2000 1999
------------- ------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income ............................... $ 6,368,522 $ 7,403,490
Net Realized Gain ................................... 54,848,479 67,100,104
Net Change in Unrealized Appreciation
(Depreciation) .................................... 31,967,784 (73,380,556)
------------- ------------
Net Increase in Net Assets Resulting from
Operations ........................................ 93,184,785 1,123,038
------------- ------------
Distributions:
Net Investment Income ............................... (6,555,421) (7,495,168)
Net Realized Gain ................................... (67,407,673) (36,638,319)
------------- ------------
Total Distributions .............................. (73,963,094) (44,133,487)
------------- ------------
Capital Share Transactions (1):
Issued .............................................. 88,855,273 135,646,019
In Lieu of Cash Distributions ....................... 69,248,756 39,930,140
Redeemed ............................................ (199,671,587) (191,175,458)
------------- ------------
Net Decrease from Capital Share Transactions ........ (41,567,558) (15,599,299)
------------- ------------
Total Decrease ................................... (22,345,867) (58,609,748)
Net Assets:
Beginning of Period ................................. 559,980,463 618,590,211
------------- ------------
End of Period (Including undistributed net investment
income of $537,254 and $909,756, respectively) .... $ 537,634,596 $559,980,463
============= ============
(1) Shares Issued and Redeemed:
Issued .............................................. 4,045,427 5,689,160
In Lieu of Cash Distributions ....................... 3,469,386 1,729,097
Redeemed ............................................ (9,200,413) (8,083,896)
------------- ------------
Net Decrease from Shares Issued ..................... (1,685,600) (665,639)
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Per Share Data & Ratios
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Years Ended October 31,
------------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period ........ $ 22.63 $ 24.35 $ 27.82 $ 20.71 $ 19.04
-------- -------- -------- -------- --------
Income from Investment
Operations:
Net Investment Income ......... 0.28 0.29 0.28 0.23 0.24
Net Realized and Unrealized
Gain (Loss) ................ 3.61 (0.30) (1.58) 8.27 2.59
-------- -------- -------- -------- --------
Total from Investment
Operations ................. 3.89 (0.01) (1.30) 8.50 2.83
-------- -------- -------- -------- --------
Distributions:
Net Investment Income ...... (0.28) (0.29) (0.24) (0.20) (0.24)
Net Realized Gain .......... (2.92) (1.42) (1.93) (1.19) (0.92)
-------- -------- -------- -------- --------
Total Distributions ........... (3.20) (1.71) (2.17) (1.39) (1.16)
-------- -------- -------- -------- --------
Net Asset Value,
End of Period .............. $ 23.32 $ 22.63 $ 24.35 $ 27.82 $ 20.71
======== ======== ======== ======== ========
Total Return .................. 19.71% (0.13)% (5.04)% 43.28% 15.62%
======== ======== ======== ======== ========
Ratios and Supplemental Data
Net Assets, End of Period
(Thousands) ................ $537,635 $559,980 $618,590 $518,377 $320,982
Ratio of Expenses to
Average Net Assets ......... 0.85% 0.85% 0.89% 0.89% 0.88%
Ratio of Net Investment
Income to Average
Net Assets ................. 1.22% 1.18% 1.12% 0.97% 1.20%
Portfolio Turnover Rate ....... 33% 32% 22% 23% 23%
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
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NOTES TO FINANCIAL STATEMENTS
UAM Funds, Inc., UAM Funds, Inc. II and UAM Funds Trust (collectively the
"UAM Funds") are registered under the Investment Company Act of 1940, as
amended. The ICM Small Company Portfolio (the "Portfolio"), a portfolio of UAM
Funds, Inc., is a diversified, open-end management investment company. At
October 31, 2000, the UAM Funds were comprised of 49 active portfolios. The
information presented in the financial statements pertains only to the
Portfolio. The objective of the Portfolio is to provide maximum, long-term total
return consistent with reasonable risk to principal, by investing primarily in
the common stocks of smaller companies in terms of revenues, assets, and market
capitalization.
A. Significant Accounting Policies: The following significant accounting
policies are in conformity with accounting principles generally accepted in the
United States of America. Such policies are consistently followed by the
Portfolio in the preparation of its financial statements. Accounting principles
generally accepted in the United States of America 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 with 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
15
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
--------------------------------------------------------------------------------
is monitored on a daily basis to determine the 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
agreements. This joint repurchase agreement is covered by the same
collateral requirements as discussed above.
4. Distributions to Shareholders: The Portfolio will distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed at least 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 accounting principles generally accepted in the United
States of America. These differences are primarily due to differing book
and tax treatments in the timing of the recognition of gains or losses on
investments.
Permanent book and tax basis differences resulted in reclassifications
of an increase of $989,430 to accumulated net realized gain, a decrease of
$185,603 to undistributed net investment income, and a decrease of $803,827
to 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 is 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
16
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
--------------------------------------------------------------------------------
to a portfolio or share class 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. Investment Advisory Services: Under the terms of an investment advisory
agreement, Investment Counselors of Maryland, Inc. (the "Adviser"), a subsidiary
of United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio at a fee calculated at an annual rate of 0.70% of
average daily net assets for the month. Old Mutual, Plc. gained control of
United Asset Management on Sept. 26, 2000.
C. Administrative Services: UAM Fund 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 Portfolio under a Fund Administration Agreement (the
"Agreement"). The Administrator has entered into separate Service Agreements
with SEI Investments Mutual Funds Services ("SEI"), a wholly-owned subsidiary of
SEI Investments Company. DST Systems, Inc. ("DST"), and UAM Shareholder Service
Center ("UAMSSC"), an affiliate of UAM, to assist in providing certain services
to the Portfolio.
Pursuant to the Agreement, the Portfolio pays the Administrator 0.073% per
annum of the average daily net assets of the Portfolio, an annual base fee of
$72,500, and a fee based on the number of active shareholder accounts.
For the year ended October 31, 2000, the Administrator was paid $482,949,
of which $193,018 was paid to SEI for their services, $23,656 to DST for their
services, and $22,112 to UAMSSC for their services.
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 $3,000 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 $200 for each
active portfolio of the UAM Funds.
17
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
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G. Purchases and Sales: For the year ended October 31, 2000, the Portfolio
made purchases of $163,475,547 and sales of $253,034,749 of investment
securities other than long-term U.S. Government and short-term 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
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 0.09% 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, 2000, the Portfolio had no borrowings under the agreement.
I. Other: At October 31, 2000, 11% of total shares outstanding were held by
1 record shareholder.
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
UAM Funds, Inc. and Shareholders of
ICM Small Company Portfolio
In our opinion, the accompanying statement of assets and liabilities, including
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 ICM Small Company Portfolio (the
"Portfolio"), a portfolio of UAM Funds, Inc., at October 31, 2000, and the
results of its operations, the changes in its net assets and the financial
highlights for the periods indicated, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Portfolio's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at October 31, 2000 by correspondence with the custodian, provide
a reasonable basis for our opinion.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
December 20, 2000
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
--------------------------------------------------------------------------------
Federal Income Tax Information (Unaudited)
The ICM Small Company Portfolio hereby designates $67,441,972 as a long-term
capital gain for the purpose of the dividend paid deduction on the Portfolio's
income tax return.
For the year ended October 31, 2000, the percentage of dividends that qualify
for the 70% dividend received deduction for corporate shareholders was 96.4%.
20
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UAM FUNDS ICM SMALL COMPANY PORTFOLIO
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Officers and Directors
James F. Orr, III William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Gary L. French
Director Treasurer
Nancy J. Dunn Robert J. Della Croce
Director Assistant Treasurer
Philip D. English Linda T. Gibson, Esq.
Director Secretary
William A. Humenuk Martin J. Wolin, Esq.
Director Assistant Secretary
James P. Pappas Theresa DelVecchio
Vice President Assistant Secretary
--------------------------------------------------------------------------------
UAM Funds
P.O. Box 219081
Kansas City, MO 64121
(toll free)
1-877-UAM-LINK (826-5465)
www.uam.com
Investment Adviser
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, Maryland 21201
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.
--------------------------------------
<PAGE>
[LOGO OF UAM FUNDS]
Supplement dated October 27, 2000, to the Annual Report of the Financials for
the ICM Small Company Portfolio.
The Annual Report is hereby supplemented to reflect the following:
On November 16, 2000, there was a Special Meeting of Shareholders of the
Fund, at which the shareholders of the Portfolio voted on the listed
proposals. The following were the results of the vote:
<TABLE>
<CAPTION>
For: Against: Abstain:
---------- --------- ---------
<S> <C> <C> <C>
1.To elect the Trustees/Directors.
01) John T. Bennett, Jr. ...................... 19,010,168 -- 451,579
02) Nancy J. Dunn.............................. 19,032,354 -- 429,393
03) William A. Humenuk......................... 19,032,469 -- 429,278
04) Philip D. English.......................... 19,032,469 -- 429,278
05) James F. Orr, III.......................... 19,030,371 -- 431,371
2.To approve the proposed change of the investment objective of the Fund from
fundamental to non-fundamental.
7,679,735 2,679,735
3.To approve the proposed changes to the Fund's fundamental investment
restrictions.
a) Diversification of Investments:............. 9,590,683 346,576 1,247,951
b) Borrowing:.................................. 9,576,534 360,725 1,247,951
c) Issuing of Senior Securities:............... 9,576,534 360,725 1,247,951
d) Underwriting:............................... 9,576,534 360,725 1,247,951
e) Industry Concentration:..................... 9,590,683 346,576 1,247,951
f) Investment in Real Estate:.................. 9,597,747 339,512 1,247,951
g) Commodities:................................ 9,581,361 355,898 1,247,951
h) Lending:.................................... 9,576,534 360,725 1,247,951
i) Illiquid Securities:........................ 9,576,534 360,725 1,247,951
j) Control or Management:...................... 9,597,747 339,512 1,247,951
k) Unseasoned Issuers:......................... 9,595,511 341,748 1,247,951
l) Borrowing exceeding 5%:..................... 9,576,534 360,725 1,247,951
m) Pledging:................................... 9,576,534 360,725 1,247,951
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For: Against: Abstain:
--------- -------- ---------
<S> <C> <C> <C>
n) Margin Purchases and Short Sales:............ 9,576,534 360,725 1,247,951
o) Directors' Ownership of Shares:.............. 9,576,566 360,693 1,247,951
p) Interest in Oil, Gas or Other Mineral
Exploration or Development Programs:......... 9,597,747 339,512 1,247,951
q) Futures and Options:......................... 9,576,955 360,304 1,247,951
4.To ratify the selection of PricewaterhouseCoopers LLP as the independent
auditors.
9,677,070 478,579 1,071,139
5.To approve an Interim Investment Advisory Agreement between each Fund and
its investment adviser.
9,797,492 358,068 1,071,228
6.To approve an Investment Advisory Agreement between the Fund and its
investment adviser, subject to completion of the merger between United Asset
Management Corporation and Old Mutual Plc.
9,799,932 354,681 1,072,175
</TABLE>
[LOGO OF UAM FUNDS]
