KIEWIT MUTUAL FUND
MONEY MARKET PORTFOLIO
SHORT-TERM GOVERNMENT PORTFOLIO
INTERMEDIATE-TERM BOND PORTFOLIO
EQUITY PORTFOLIO
KIEWIT
KMF
MUTUAL FUND
[GRAPHIC OMITTED]
ANNUAL REPORT
JUNE 30, 1998
<PAGE>
KIEWIT
KMF
MUTUAL FUND
[GRAPHIC OMITTED]
DEAR SHAREHOLDER:
The management of Kiewit Mutual Fund is pleased to report to you on the
Fund's activity for the fiscal year ended June 30, 1998.
INVESTMENT STRATEGY
During third quarter 1997, Kiewit Investment Management Corp., the
Fund's adviser, made strategic changes to improve the quality, diversification,
and liquidity of the Kiewit Mutual Fund Portfolios. The Adviser also made
structural changes in each Portfolio to reduce return divergences from the
specific benchmark used. The NAVs of the fixed-income Portfolios were raised to
approximately $10/share late in third quarter 1997 through a 1-for-5 reverse
stock split. This change allows for better visibility of the Portfolios' price
fluctuations and reduces rounding error associated with shareholder
transactions. The Portfolios maintain minimal cash positions so that the
Portfolios fully participate in market movements and behave in a similar fashion
to their fully-invested performance benchmarks. The portfolio turnover rates
were abnormally high during the current fiscal year due to substantial portfolio
restructurings that were necessary. Going forward, portfolio turnover is likely
to be modest.
MONEY MARKET PORTFOLIO: During third quarter 1997, the adviser made a
policy decision to purchase only first-tier Money Market Securities. The Adviser
continues to find good value in commercial paper, maintains an average maturity
of typically 30-40 days, and performs extensive credit analysis in compliance
with SEC Rule 2a-7.
SHORT-TERM GOVERNMENT PORTFOLIO: During third quarter 1997, the
holdings of U.S. Treasuries were increased to approximately 90% of the
Portfolio's market value, thereby raising the Portfolio's average quality.
Holdings of federal agency securities were reduced accordingly. By consolidating
positions down to 10-15 securities, the overall liquidity of the Portfolio was
enhanced. Only noncallable securities are held in the Portfolio. The high
quality and excellent liquidity of the Portfolio has been maintained, with
approximately 85% of the Portfolio currently invested in U.S. Treasuries and
approximately 15% of the Portfolio currently invested in federal agency
securities. The cash position is minimal.
INTERMEDIATE-TERM BOND PORTFOLIO: At the end of third quarter 1997, the
benchmark for the Kiewit Intermediate-Term Bond Portfolio was changed from the
Lehman Brothers Intermediate-Term Corporate Bond Index to the Lehman Brothers
Intermediate-Term Government/Corporate Bond Index. This move raised the average
quality and overall liquidity of the benchmark. The Portfolio was adjusted
accordingly and now offers top quality, excellent liquidity, and a
well-diversified mix of securities. The Portfolio's holdings of U.S. Government
securities were increased substantially (to approximately 75% from approximately
15%), while its corporate securities exposure was reduced significantly (from
approximately 85% to approximately 25%). The high quality and excellent
liquidity of the Portfolio has been maintained since the aforementioned
restructuring. The cash position is minimal.
TAX-EXEMPT PORTFOLIO: Due to large shareholder liquidations, the
Tax-Exempt Portfolio ceased operations in April 1998.
EQUITY PORTFOLIO: During the third quarter of 1997, the Equity
Portfolio was substantially restructured to provide better diversification, more
exposure to large-capitalization stocks, and reduced performance differentials
vis-a-vis the Standard & Poor's 500 Stock Index. The Portfolio now holds
approximately 300 stocks as compared to approximately 65 stocks previously. The
Portfolio offers excellent diversification across a wide variety of industry
sectors. Since the restructuring, portfolio turnover has been minimal. The cash
position is typically less than 1% of the Portfolio's total market value.
INVESTMENT RESULTS*
The investment results reported in the charts contained in this letter
are measured from December 6, 1994 (the date the Fund's registration statement
under the Securities Act of 1933 became effective), except for the Kiewit Equity
Portfolio which commenced operations on January 5, 1995. However, the portions
of the annual report following this letter show the financial operation,
condition and results of each Portfolio from inception through the fiscal year
ended June 30, 1998.**
The Money Market Portfolio's total return for the fiscal year ended
June 30, 1998 was 5.61%. That return consisted of income distributions
(dividends) of $0.05 per share. The Portfolio's yield and return compare
favorably with competing funds. The Portfolio is currently ranked #2 in the
taxable money-market fund universe tracked by Kiplinger's Personal Finance
Magazine (July 1998 edition) based on recent 30-day yield.In total return
comparisons, the Portfolio is ranked #3 out of 215 First &Second Tier Money
Market Funds - Retail by IBC's Money Market Insight and is ranked #4 out of 299
Taxable Money-Market Instrument Funds - Retail by Lipper Analytical
Services,Inc. Both of the aforementioned total return rankings are based on
12-month total return through June 30, 1998.***
1
<PAGE>
The Short-Term Government Portfolio's total return for the fiscal year
was 6.33%. That return consisted of an increase in net asset value of $0.06 per
share, income distributions (dividends) of $0.55 per share and realized gain
distribution of $0.01 per share. The Portfolio's return compares to the 6.78%
total return reported for the Lehman Brothers 1-3 Year Government Bond Index
over the same period. The Lehman Brothers 1-3 Year Government Bond Index is a
total return performance benchmark consisting of U.S. Treasury and federal
agency with maturities from one to three years. Following is a chart that
presents the performance of the Portfolio and the Lehman Brothers 1-3 Year
Government Bond Index since the Portfolio's effective date on December 6, 1994
through June 30, 1998. The Portfolio currently has a 4-(STAR) rating from
Morningstar.1
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT 2
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW:
Kiewit Short- Lehman 1-3 Year
Term Government Government
Portfolio Index
12/94 10,000 10,000
6/95 10,618 10,703
6/96 11,114 11,288
6/97 11,836 12,031
6/98 12,585 12,846
-------------------------------------------------
AVG. ANNUAL TOTAL RETURN
EFFECTIVE
1 YEAR DATE
------ ---------
Portfolio 6.33% 6.65%
Lehman 1-3 Year
Gov. Bond Index 6.78% 7.27%
-------------------------------------------------
The Intermediate-Term Bond Portfolio's total return for the fiscal year
was 8.68%. That return consisted of an increase in net asset value of $0.25 per
share, income distributions (dividends) of $0.59 per share and realized gain
distribution of $0.03 per share. The Portfolio's return compares to 9.05% total
return of the Lehman Brothers Intermediate-Term Corporate Index (old benchmark)
and the 8.54% total return of the Lehman Brothers' Intermediate-Term
Government/Corporate Bond Index (new benchmark) over the same period. The change
of the Portfolio's benchmark reflects the higher percentage of Portfolio assets
now invested in government bonds. The Lehman Brothers Intermediate-Term
Corporate Bond Index is a total return performance benchmark consisting of
publicly-issued, investment-grade corporate bonds with remaining maturities from
1-10 years. The Lehman Brothers Intermediate-Term Government/Corporate Bond
Index is a total return performance benchmark consisting of publicly-issued U.S.
Treasuries, federal agencies, and investment-grade corporate bonds with
remaining maturities of 1-10 years. Below is a chart that presents the
performance of the Portfolio, the Lehman Brothers' Intermediate-Term Corporate
Bond Index, and the Lehman Brothers Intermediate-Term Government/Corporate Bond
Index since the Portfolio's effective date on December 6, 1994 through June 30,
1998. The Portfolio currently has a 3-(STAR) rating from Morningstar.1
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT 2
[GRAPH OMITTED]
PLOT POINTS FOLLOW:
Kiewit Intermediate- Lehman Inter- Lehman Inter-
Term Government Term Corp Term Gov/Corp
Portfolio Index Return Index Return
12/94 10,000 10,000 10,000
6/95 10,863 11,234 11,002
6/96 11,350 11,832 11,553
6/97 12,203 12,795 12,387
6/98 13,263 13,954 13,445
-------------------------------------------------
AVG. ANNUAL TOTAL RETURN
EFFECTIVE
1 YEAR DATE
------ ---------
Portfolio 8.68% 8.23%
Lehman Inter.
Corp. Index 9.05% 9.79%
Lehman Inter.
Gov./Corp. Index 8.54% 8.65%
-------------------------------------------------
2
<PAGE>
The Equity Portfolio's total return for the fiscal year was 29.09%.
That return consisted of a decrease in net asset value of $1.84 per share,
income distributions (dividends) of $0.16 per share and realized gain
distribution of $6.36 per share. The Portfolio's return compares to the 30.16%
total return reported for the Standard & Poor's 500 Index (the "S&P 500" ). The
S&P 500 is an unmanaged, capitalization-weighted index of five-hundred
publicly-traded stocks. Below is a chart that presents the performance of the
Portfolio and S&P 500 since the Portfolio's inception on January 5, 1995 through
June 30, 1998. The Portfolio currently has a 4-(STAR) rating from Morningstar.1
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT 2
[GRAPH OMITTED]
PLOT POINTS FOLLOW:
Kiewit Equity S&P 500
Portfolio Index
1/95 10,000 10,000
6/95 11,232 11,980
6/96 13,393 15,095
6/97 16,831 20,333
6/98 21,726 26,466
-------------------------------------------------
AVG. ANNUAL TOTAL RETURN
EFFECTIVE
1 YEAR DATE
------ ---------
Portfolio 29.09% 24.92%
S&P 500 Index 30.16% 32.19%
-------------------------------------------------
Since the Portfolio restructuring in third quarter 1997, the
Portfolio's performance has closely tracked the behavior of the respective
performance benchmark. For the 10/1/97-6/30/98 period, the figures are as
follows:
PERFORMANCE
PORTFOLIO BENCHMARK
--------- -----------
Short-Term Government Portfolio .......... 4.58% 4.72%
Intermediate-Term Bond Portfolio ......... 5.36% 5.68%
Equity Portfolio ......................... 21.63% 21.09%
Please note that the performance benchmarks (i.e., the Lehman Brothers'
indices and the S&P 500) are unmanaged statistical compilations, and, unlike the
Kiewit Portfolios, have no associated management expenses. For the fiscal year
ended June 30, 1998, Kiewit Investment Management Corp., the investment manager
of each Portfolio, agreed to waive all or a portion of its advisory fee and to
assume certain fund expenses (excluding taxes, extraordinary expenses, brokerage
commissions and interest) in order to limit annual operating expenses to not
more than the following percentages of the average daily net assets of the
Portfolios: Money Market Portfolio 0.20%; Short-Term Government Portfolio 0.30%;
Intermediate-Term Bond Portfolio 0.50%; and Equity Portfolio 0.80%. These
limitations aided the competitive returns of each Portfolio.
MARKET REVIEW AND OUTLOOK
The U.S. financial markets rallied strongly during the fiscal year
ended June 30, 1998. The U.S. stock market, as represented by the S&P 500 Stock
Index, posted a 30.16% total return for the one-year period. The U.S. bond
market, as represented by the Lehman Brothers Aggregate Bond Index, recorded a
10.54% total return over the same period. Cash investments provided a stable
income return of approximately 5.50% over the past fiscal year. All of these
figures are well above the historical norms for each respective market.
During the fiscal year ended June 30, 1998, interest rates fell 90-115
basis points in most maturities. Falling inflation, perceptions of deflation
from Asian market turmoil, collapsing commodity prices, a strong U.S. dollar,
fiscal restraint (and related cutbacks in Treasury issuance), and a stable Fed
supported the bond market rally. U.S. stocks advanced, albeit with an October
1997 setback, thanks to a strong U.S. economy, low inflation, earnings growth,
extraordinary capital flows (both domestic and foreign) into U.S. stocks,
mergers/acquisitions/stock buybacks, and falling interest rates.
The Federal budget deficit shrank to $22 billion in fiscal year 1997
from $111 billion in fiscal year 1996. A surplus of $40-$50 billion is expected
for fiscal year 1998. Consequently, new issuance of U.S. Treasury securities has
fallen sharply. A strong U.S. dollar combined with high "real" short-term U.S.
interest rates to attract foreign capital into our bond market. Foreign
inflation and foreign interest rates generally fell during the fiscal year.
3
<PAGE>
Fed policy was stable during the fiscal year ended June 30, 1998. The
federal funds rate has been held steady at 5.50%. The Fed removed its asymmetric
bias to raise interest rates at its December 1997 meeting, then reinstated the
bias at its March 1998 meeting. Broad money growth has been strong for over two
years now. This abundance of liquidity will continue to support economic growth
and financial market advances in the U.S. Excessive money growth eventually
pushes inflation upward. Indeed, we are already witnessing inflation in tangible
asset prices (e.g., real estate) and financial asset prices.
Looking ahead, the balance of 1998 is likely to bring modest economic
growth with low inflation. The environment for financial assets continues to be
good. The U.S. bond market is likely to post mediocre returns over the balance
of 1998 because a tight labor market and a highly valued U.S. stock market will
preclude the Fed from any policy eases. The returns on the U.S. stock market are
likely to moderate significantly from the blistering first-half pace. A healthy
U.S. economy, low inflation, low interest rates, merger/acquisition activity,
share repurchases, and excess global liquidity should continue to support the
U.S. stock market.
While our outlook is optimistic, we are cognizant of several dangers.
First, wage pressures may build as job growth continues and the unemployment
rate falls further. This may lead to higher inflation and higher interest rates.
Second, excessive money growth is likely, at some point, to push reported
inflation higher. Third, earnings growth is slowing, which may inhibit stock
market gains. Finally, investor optimism is dangerously high and speculation in
specific market sectors (e.g., internet-related stocks) is rampant. A lot of
good news is already "priced into" the U.S. financial markets. Investors'
expectations regarding returns on financial assets are in desperate need of a
downward adjustment. Despite these dangers and the inherent volatility in
financial markets, we remain optimistic as long-term investors.
Sincerely,
(/S/ Livingston G. Douglas)
Livingston G. Douglas
President
August 19, 1998
- --------------------------
* Past performance is not necessarily predictive of future results. There can
be no assurance that the Money Market Portfolio will be able to maintain a
stable net asset value of $1.00. An investment in the Money Market
Portfolio is neither insured nor guaranteed by the U.S. Government. The
returns shown above are higher due to the Adviser's limitations on the
Portfolios' expenses.
** The Money Market Portfolio commenced operations on July 28, 1994; the
Short-Term Government Portfolio commenced on July 29, 1994; the
Intermediate-Term Bond Portfolio commenced operations on July 25, 1994; and
the Equity Portfolio commenced operations on January 5, 1995.
*** Both the rankings of IBC's Money Market Insight and Lipper Analytical
Services, Inc. are based on total return, including changes in principal
value, reinvested dividends, and capital gains distributions for the stated
period. The current rankings are based on the total return for the 12-month
period ending June 30, 1998.
1 Morningstar proprietary ratings reflect historical risk-adjusted
performance through June 30, 1998. Ten percent of the funds in an
investment category receive five stars, 22.5% receive four stars, 35%
receive three stars, 22.5% receive two stars and the bottom 10% receive one
star. The ratings are subject to change every month. Past performance is no
guarantee of future results.Morningstar is a privately-owned company,
founded in 1984 to provide investors with useful information for making
intelligent, informed investment decisions.
2 Past performance is not predictive of future results.
4
<PAGE>
KIEWIT MUTUAL FUND
- ------------------
FINANCIAL STATEMENTS
================================================================================
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1998
<TABLE>
<CAPTION>
SHORT-TERM
MONEY MARKET GOVERNMENT INTERMEDIATE-TERM EQUITY
PORTFOLIO PORTFOLIO BOND PORTFOLIO PORTFOLIO
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in Series, at value* (Note 2) ....................... $241,536,275 $19,161,946 $61,075,343 $110,069,568
Receivable for Portfolio shares sold ........................... -- -- 9,172 38,363
Unamortized organization costs (Note 2) ........................ 7,875 7,894 7,819 --
Other assets ................................................... 2,261 896 659 132
-----------------------------------------------------------------
Total assets ................................................... 241,546,411 19,170,736 61,092,993 110,108,063
-----------------------------------------------------------------
LIABILITIES:
Dividends payable .............................................. 1,162,112 80,956 268,393 --
Payable for investment purchased in Series ..................... -- -- 9,172 38,363
Accrued management fee (Note 4) ................................ 4,307 314 999 1,759
Other accrued expenses ......................................... 21,015 20,101 17,000 16,202
-----------------------------------------------------------------
Total liabilities .............................................. 1,187,434 101,371 295,564 56,324
-----------------------------------------------------------------
NET ASSETS ..................................................... $240,358,977 $19,069,365 $60,797,429 $110,051,739
=================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest .................................. $ 2,403,631 $ 18,854 $ 58,476 $ 58,774
Additional paid-in capital ..................................... 237,959,511 18,172,280 57,875,691 87,927,354
Undistributed net investment income ............................ -- -- -- 417,525
Accumulated net realized gain (loss) on investment ............. (4,165) 841,356 2,433,361 1,354,520
Net unrealized appreciation of investment ...................... -- 36,875 429,901 20,293,566
-----------------------------------------------------------------
NET ASSETS ..................................................... $240,358,977 $19,069,365 $60,797,429 $110,051,739
=================================================================
Shares of beneficial interest outstanding ...................... 240,363,142 1,885,429 5,847,627 5,877,424
-----------------------------------------------------------------
NET ASSETS VALUE, offering and redemption price per
share (Net assets/Outstanding shares of beneficial
interest, $0.01 par value) ................................. $ 1.00 $ 10.11 $ 10.40 $ 18.72
=================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
KIEWIT MUTUAL FUND
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FINANCIAL STATEMENTS -- CONTINUED
================================================================================
STATEMENTS OF OPERATIONS
For the Fiscal Year Ended June 30, 1998
<TABLE>
<CAPTION>
SHORT-TERM
MONEY MARKET GOVERNMENT INTERMEDIATE-TERM EQUITY
PORTFOLIO PORTFOLIO BOND PORTFOLIO PORTFOLIO
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
INCOME:
Investment income from Series .............................. $27,750,869 $8,425,426 $ 8,847,599 $ 1,599,508
Expenses from Series ....................................... (793,253) (347,606) (643,643) (736,546)
----------------------------------------------------------------
Net investment income from Series .......................... 26,957,616 8,077,820 8,203,956 862,962
----------------------------------------------------------------
EXPENSES:
Administration fee (Note 4) ................................ 98,109 29,054 28,909 19,844
Transfer Agent fee (Note 4) ................................ 25,640 21,558 21,459 20,022
Trustees' fees and expenses (Note 4) ....................... 5,476 5,476 5,476 5,476
Amortization of organizational expenses (Note 2) ........... 6,815 6,815 6,815 --
Registration fees .......................................... 9,153 3,993 -- --
Legal fees ................................................. 19,326 5,907 3,735 2,054
Audit fees ................................................. 8,820 9,336 9,405 9,541
Other ...................................................... 14,415 6,020 3,142 --
----------------------------------------------------------------
Total expenses ............................................. 187,754 88,159 78,941 56,937
----------------------------------------------------------------
Net investment income ...................................... 26,769,862 7,989,661 8,125,015 806,025
----------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investment transactions ........ (2,894) 1,416,678 3,219,708 13,803,874
Net realized loss on call options written .................. -- -- -- (184,913)
Net realized gain on futures contracts ..................... -- -- -- 325,474
Net change in unrealized appreciation (depreciation)
on investments .......................................... -- (198,451) 279,498 10,913,269
----------------------------------------------------------------
Net gain (loss) on investments ............................. (2,894) 1,218,227 3,499,206 24,857,704
----------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $26,766,968 $9,207,888 $11,624,221 $25,663,729
================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
KIEWIT MUTUAL FUND
- ------------------
FINANCIAL STATEMENTS -- CONTINUED
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
For the Fiscal Year Ended June 30, 1998
<TABLE>
<CAPTION>
SHORT-TERM
MONEY MARKET GOVERNMENT INTERMEDIATE-TERM EQUITY
PORTFOLIO PORTFOLIO BOND PORTFOLIO PORTFOLIO
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ................................... $ 26,769,862 $ 7,989,661 $ 8,125,015 $ 806,025
Net realized gain (loss) on investment transactions ..... (2,894) 1,416,678 3,219,708 13,803,874
Net realized loss on call options written ............... -- -- -- (184,913)
Net realized gain on future contracts ................... -- -- -- 325,474
Net change in unrealized appreciation
(depreciation) of investments ........................ -- (198,451) 279,498 10,913,269
--------------------------------------------------------------------
Net increase in net assets resulting from operations .... 26,766,968 9,207,888 11,624,221 25,663,729
--------------------------------------------------------------------
Distributions to shareholders:
Net investment income ................................... (26,769,862) (7,989,661) (8,125,015) (697,911)
In excess of net investment income ...................... -- (8,312) (10,992) --
Capital gain ............................................ -- (220,230) (600,992) (27,817,168)
--------------------------------------------------------------------
Total distributions .......................................... (26,769,862) (8,218,203) (8,736,999) (28,515,079)
--------------------------------------------------------------------
Portfolio share transactions (a):
Receipt from shares sold ................................ 2,802,359,254 128,661,824 144,376,638 14,765,563
Shares issued on reinvestment of
distributions ........................................ 27,192,469 7,959,221 8,492,881 28,253,479
Shares redeemed ......................................... (3,004,474,838) (248,035,589) (203,273,352) (18,878,694)
--------------------------------------------------------------------
Net increase (decrease)in net assets from Fund
share transactions ........................................ (174,923,115) (111,414,544) (50,403,833) 24,140,348
--------------------------------------------------------------------
Total increase (decrease) in net assets ...................... (174,926,009) (110,424,859) (47,516,611) 21,288,998
NET ASSETS:
Beginning of year ....................................... 415,284,986 129,494,224 108,314,040 88,762,741
--------------------------------------------------------------------
End of year ............................................. $ 240,358,977 $ 19,069,365 $ 60,797,429 $110,051,739
====================================================================
(A) TRANSACTIONS IN CAPITAL STOCK WERE:*
Shares sold ............................................. 2,802,359,254 12,763,591 13,964,556 799,581
Shares issued on reinvestment of distributions .......... 27,192,469 789,082 821,217 1,809,960
Shares redeemed ......................................... (3,004,474,838) (24,566,704) (19,605,986) (1,050,386)
--------------------------------------------------------------------
Net increase (decrease) in shares ....................... (174,923,115) (11,014,031) (4,820,213) 1,559,155
Shares outstanding - Beginning balance .................. 415,286,257 12,899,460 10,667,840 4,318,269
--------------------------------------------------------------------
Shares outstanding - Ending balance ..................... 240,363,142 1,885,429 5,847,627 5,877,424
====================================================================
<FN>
* Transactions in capital stock for the Short-Term Government Portfolio and
Intermediate-Term Bond Portfolio have been restated to reflect a 1 for 5
reverse stock split which occurred on September 25, 1997.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
KIEWIT MUTUAL FUND
- ------------------
FINANCIAL STATEMENTS -- CONTINUED
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
For the Fiscal Year Ended June 30, 1997
<TABLE>
<CAPTION>
SHORT-TERM
MONEY MARKET GOVERNMENT INTERMEDIATE-TERM EQUITY
PORTFOLIO PORTFOLIO BOND PORTFOLIO PORTFOLIO
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ................................... $ 24,089,839 $ 8,853,004 $ 7,260,811 $ 599,920
Net realized gain on investment transactions ............ 324 193,448 113,893 1,444,865
Net realized gain on call options written ............... -- -- -- 308,968
Net change in unrealized appreciation
of investments ....................................... -- 192,088 1,215,590 15,744,489
--------------------------------------------------------------------
Net increase in net assets resulting
from operations ...................................... 24,090,163 9,238,540 8,590,294 18,098,242
--------------------------------------------------------------------
Distributions to shareholders:
Net investment income ................................... (24,089,839) (8,853,004) (7,260,811) (642,027)
In excess of net investment income ...................... -- (58,182) (2,654) --
Capital gain ............................................ -- -- -- (369,271)
--------------------------------------------------------------------
Total distributions .......................................... (24,089,839) (8,911,186) (7,263,465) (1,011,298)
--------------------------------------------------------------------
Portfolio share transactions (a):
Receipt from shares sold ................................ 2,342,756,681 4,737,101 5,104,754 10,320,355
Shares issued on reinvestment of distributions .......... 23,288,239 9,029,717 7,161,800 1,003,552
Shares redeemed ......................................... (2,340,726,795) (67,915,970) (28,230,931) (5,784,946)
--------------------------------------------------------------------
Net increase (decrease) in net assets from
Fund share transactions ................................. 25,318,125 (54,149,152) (15,964,377) 5,538,961
--------------------------------------------------------------------
Total increase (decrease) in net assets ................. 25,318,449 (53,821,798) (14,637,548) 22,625,905
NET ASSETS:
Beginning of year ....................................... 389,966,537 183,316,022 122,951,588 66,136,836
--------------------------------------------------------------------
End of year ............................................. $ 415,284,986 $129,494,224 $108,314,040 $88,762,741
====================================================================
(A) TRANSACTIONS IN CAPITAL STOCK WERE:*
Shares sold ............................................. 2,342,756,681 471,388 504,187 589,643
Shares issued on reinvestment of distributions .......... 23,288,239 900,161 708,701 55,846
Shares redeemed ......................................... (2,340,726,795) (6,763,522) (2,780,361) (316,887)
--------------------------------------------------------------------
Net increase (decrease) in shares ....................... 25,318,125 (5,391,973) (1,567,473) 328,602
Shares outstanding - Beginning balance .................. 389,968,132 18,291,433 12,235,313 3,989,667
--------------------------------------------------------------------
Shares outstanding - Ending balance ..................... 415,286,257 12,899,460 10,667,840 4,318,269
====================================================================
<FN>
* Transactions in capital stock for the Short-Term Government Portfolio and
Intermediate-Term Bond Portfolio have been restated to reflect a 1 for 5
reverse stock split which occurred on September 25, 1997.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
KIEWIT MUTUAL FUND
- ------------------
FINANCIAL HIGHLIGHTS
================================================================================
The following tables includes selected data for a share outstanding
throughout each period and other performance information derived from the
financial statements.
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE FISCAL FOR THE FISCAL FOR THE FISCAL JULY 28, 1994(DAGGER)
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH
JUNE 30, 1998 JUNE 30, 1997 JUNE 30, 1996 JUNE 30, 1995
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MONEY MARKET PORTFOLIO
NET ASSET VALUE - BEGINNING OF PERIOD .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income ............................... 0.05 0.05 0.05 0.05
--------------------------------------------------------------------------
DISTRIBUTIONS:
From net investment income .......................... (0.05) (0.05) (0.05) (0.05)
--------------------------------------------------------------------------
NET ASSET VALUE - END OF PERIOD ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
==========================================================================
TOTAL RETURN ........................................... 5.61% 5.43% 5.61% 5.04%1
RATIOS (TO AVERAGE NET ASSETS)/SUPPLEMENTAL DATA:
Expenses 2 .......................................... 0.20% 0.20% 0.20% 0.30%3
Net investment income 2 ............................. 5.46% 5.31% 5.47% 5.51%3
Net assets at end of period (000) ................... $240,359 $415,285 $389,967 $380,708
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE FISCAL FOR THE FISCAL FOR THE FISCAL JULY 29, 1994(DAGGER)
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1998(DOUBLE DAGGER) 1997(DOUBLE DAGGER) 1996(DOUBLE DAGGER) 1995(DOUBLE DAGGER)
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHORT-TERM GOVERNMENT PORTFOLIO
NET ASSET VALUE - BEGINNING OF PERIOD ............ $ 10.05 $ 10.00 $ 10.15 $ 10.00
-------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income ......................... 0.55 0.60 0.60 0.55
Net realized and unrealized gain
(loss) on investments ....................... 0.07 0.05 (0.15) 0.15
-------------------------------------------------------------------------------
Total from investment operations ............ 0.62 0.65 0.45 0.70
-------------------------------------------------------------------------------
DISTRIBUTIONS:
From net investment income .................... (0.55) (0.60) (0.60) (0.55)
From net realized capital gain ................ (0.01) -- -- --
-------------------------------------------------------------------------------
Total distributions ......................... (0.56) (0.60) (0.60) (0.55)
-------------------------------------------------------------------------------
NET ASSET VALUE - END OF PERIOD .................. $ 10.11 $ 10.05 $ 10.00 $ 10.15
===============================================================================
TOTAL RETURN ..................................... 6.33% 6.51% 4.66% 7.00%1
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses 2 .................................... 0.30% 0.30% 0.30% 0.37%3
Net investment income 2 ....................... 5.51% 5.76% 6.06% 5.75%3
Portfolio turnover ............................ N/A N/A 57.52% 122.58%3
Net assets at end of period (000) ............. $19,069 $129,494 $183,316 $132,829
<FN>
(DAGGER) Commencement of Operations.
(DOUBLE DAGGER) The per share data has been restated to reflect a 1 for 5
reverse stock split which occurred on September 25, 1997.
1 The total return for the period has not been annualized.
2 The annualized expense ratio for the Money Market Portfolio, had there been
no fees waived by the Manager, would have been 0.31%, 0.27%, 0.27% and
0.34% for the fiscal years ended June 30, 1998, 1997, 1996, and for the
period ended June 30, 1995, respectively. The annualized net investment
income ratio for the Money Market Portfolio, had there been no fees waived
by the Manager, would have been 5.35%, 5.24%, 5.40% and 5.47% for the
fiscal years ended June 30, 1998, 1997, 1996 and for the period ended June
30, 1995, respectively. The annualized expense ratio for the Short-Term
Government Portfolio, had there been no fees waived by the Manager, would
have been 0.49%, 0.44%, 0.43% and 0.45% for the fiscal years ended June 30,
1998, 1997, 1996, and for the period ended June 30, 1995, respectively. The
annualized net investment income ratio for the Short-Term Government
Portfolio, had there been no fees waived by the Manager, would have been
5.32%, 5.62%, 5.93% and 5.67% for the fiscal years ended June 30, 1998,
1997, 1996 and for the period ended June 30, 1995, respectively. The
expense and net investment income ratios for the fiscal years ended June
30, 1998 and 1997 include expenses allocated from the Series.See notes to
the Financial Statements for amounts.
3 Annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
KIEWIT MUTUAL FUND
- ------------------
FINANCIAL HIGHLIGHTS -- CONTINUED
================================================================================
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE FISCAL FOR THE FISCAL FOR THE FISCAL JULY 25, 1994(DAGGER)
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1998(DOUBLE DAGGER) 1997(DOUBLE DAGGER) 1996(DOUBLE DAGGER) 1995(DOUBLE DAGGER)
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTERMEDIATE-TERM BOND PORTFOLIO
NET ASSET VALUE - BEGINNING OF PERIOD .......... $ 10.15 $ 10.05 $ 10.25 $ 10.00
-----------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income ....................... 0.59 0.65 0.65 0.60
Net realized and unrealized gain
(loss) on investments ..................... 0.28 0.10 (0.20) 0.25
-----------------------------------------------------------------------------------
Total from investment operations .......... 0.87 0.75 0.45 0.85
-----------------------------------------------------------------------------------
DISTRIBUTIONS:
From net investment income .................. (0.59) (0.65) (0.65) (0.60)
From net realized capital gain .............. (0.03) -- -- --
-----------------------------------------------------------------------------------
Total distributions ....................... (0.62) (0.65) (0.65) (0.60)
-----------------------------------------------------------------------------------
NET ASSET VALUE - END OF PERIOD ................ $ 10.40 $ 10.15 $ 10.05 $ 10.25
===================================================================================
TOTAL RETURN ................................... 8.68% 7.51% 4.48% 8.88%1
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses 3 .................................. 0.50% 0.50% 0.50% 0.41%2
Net investment income 3 ..................... 5.63% 6.27% 6.37% 6.41%2
Portfolio turnover .......................... N/A N/A 86.06% 128.95%2
Net assets at end of period (000) ........... $60,797 $108,314 $122,952 $105,020
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE FISCAL FOR THE FISCAL FOR THE FISCAL JANUARY 5, 1995(DAGGER)
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH
JUNE 30, 1998 JUNE 30, 1997 JUNE 30, 1996 JUNE 30, 1995
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQUITY PORTFOLIO
NET ASSET VALUE - BEGINNING OF PERIOD ............. $ 20.56 $ 16.58 $ 14.04 $ 12.50
-----------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income .......................... 0.16 0.13 0.13 0.11
Net realized and unrealized gain
(loss) on investments ........................ 4.52 4.09 2.56 1.43
-----------------------------------------------------------------------------
Total from investment operations ............. 4.68 4.22 2.69 1.54
-----------------------------------------------------------------------------
DISTRIBUTIONS:
From net investment income ..................... (0.16) (0.15) (0.15) --
From net realized capital gain ................. (6.36) (0.09) -- --
-----------------------------------------------------------------------------
Total distributions .......................... (6.52) (0.24) (0.15) --
-----------------------------------------------------------------------------
NET ASSET VALUE - END OF PERIOD ................... $ 18.72 $ 20.56 $ 16.58 $ 14.04
=============================================================================
TOTAL RETURN ...................................... 29.09% 25.67% 19.24% 12.32%1
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses 3 ..................................... 0.80% 0.80% 0.80% 0.80%2
Net investment income 3 ........................ 0.81% 0.80% 1.34% 3.06%2
Portfolio turnover ............................. N/A N/A 16.95% 0.00%2
Net assets at end of period (000) .............. $110,052 $88,763 $66,137 $20,865
<FN>
(DAGGER) Commencement of Operations.
(DOUBLE DAGGER) The per share data has been restated to reflect a 1 for 5
reverse stock split which occurred on September 25, 1997.
1 The total return for the period has not been annualized.
2 Annualized.
3 The annualized expense ratio for the Intermediate-Term Bond Portfolio, had
there been no fees waived by the Manager, would have been 0.58%, 0.58%,
0.57% and 0.53% for the fiscal years ended June 30, 1998, 1997, 1996, and
for the period ended June 30, 1995, respectively. The annualized net
investment income ratio for the Intermediate-Term Bond Portfolio, had there
been no fees waived by the Manager, would have been 5.55%, 6.19%, 6.30% and
6.29% for the fiscal years ended June 30, 1998, 1997, 1996 and for the
period ended June 30, 1995, respectively. The annualized expense ratio for
the Equity Portfolio, had there been no fees waived by the Manager, would
have been 0.93%, 0.94%, 1.05% and 2.56% for the fiscal years ended June 30,
1998, 1997, 1996, and for the period ended June 30, 1995, respectively. The
annualized net investment income ratio for the Equity Portfolio, had there
been no fees waived by the Manager, would have been 0.68%, 0.66%, 1.09% and
1.30% for the fiscal years ended June 30, 1998, 1997, 1996 and for the
period ended June 30, 1995, respectively. The expense and net investment
income ratios for the fiscal years ended June 30, 1998 and 1997 include
expenses allocated from the Series.See notes to the Financial Statements
for amounts.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
KIEWIT MUTUAL FUND
- ------------------
NOTES TO THE FINANCIAL STATEMENTS
================================================================================
1. DESCRIPTION OF THE FUND. The Kiewit Mutual Fund (the "Fund") is registered
under the Investment Company Act of 1940 (the "1940 Act") as an open-end
management investment company organized as a Delaware business trust on June
1, 1994. The Declaration of Trust permits the Trustees to establish
additional series, each of which is a separate class of shares. The Fund
comprises five series of shares: Kiewit Money Market Portfolio, Kiewit
Government Money Market Portfolio, Kiewit Short-Term Government Portfolio,
Kiewit Intermediate-Term Bond Portfolio, and Kiewit Equity Portfolio (each, a
"Portfolio" and collectively, the "Portfolios"). As of June 30, 1998, the
Kiewit Government Money Market Portfolio has not yet commenced operations.
Prior to December 6, 1994, the Fund was known as the Kiewit Institutional
Fund.
Effective March 1, 1997, the Portfolios adopted a Master/Feeder
configuration, hereafter referred to as the "Conversion," through the
contribution of the investment securities held as of February 28, 1997 at
market value to a corresponding series ("Series") of Kiewit Investment Trust
(the "Trust"). In return for the contributed securities, each Portfolio
received an ownership interest of equal value in its corresponding Series of
the Trust.
On September 25, 1997, the Kiewit Short-Term Government Portfolio and Kiewit
Intermediate-Term Bond Portfolio declared a 1 for 5 reverse stock split,
whereby the shareholders of the Kiewit Short-Term Government Portfolio and
the Kiewit Intermediate-Term Bond Portfolio received one share for each five
shares held.
The investment objectives of the five Portfolios are as follows: Money Market
Portfolio is to provide high current income while maintaining a stable share
price; Government Money Market Portfolio is to provide high current income
while maintaining a stable share price; Short-Term Government Portfolio is to
provide investors with as high a level of current income as is consistent
with the maintenance of principal and liquidity; Intermediate-Term Bond
Portfolio is to provide as high a level of current income consistent with
reasonable risk; Equity Portfolio is to achieve long-term capital
appreciation. Unlike other investment companies which directly acquire and
manage their own portfolio of securities, each Portfolio seeks to achieve its
investment objective by investing all of its investable assets in a
corresponding series of shares of the Trust, an open-end, management
investment company that issues series of shares (individually and
collectively, the "Series") having the same investment objective, policies
and limitations as each of the Portfolios. As of June 30, 1998, each
Portfolio owned virtually 100% of the ownership interest in its corresponding
Series. The performance of the Portfolios is directly affected by the
performance of the Series. The financial statements of the Trust, including
the Schedules of Investments, are included elsewhere in this report and
should be read in conjunction with the Fund's Financial Statements.
2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the
significant accounting policies of the Fund:
SECURITY VALUATION. Valuation of each Portfolio is based on the underlying
securities held in the corresponding Series. Each Portfolio is allocated its
portion of the Series' securities market value based upon its ownership
interest in the Series. Securities held by the Series which are listed on a
securities exchange and for which market quotations are available are valued
at the last quoted sale price of the day or, if there is no such reported
sale, securities are valued at the mean between the most recent quoted bid
and asked prices. Price information for listed securities is taken from the
exchange where the security is primarily traded. Unlisted securities for
which market quotations are readily available are valued at the most recent
bid prices. Securities with a remaining maturity of 60 days or less are
valued at amortized cost, which approximates market value, unless the Trust's
Board of Trustees determines that this does not represent fair value. The
Money Market Series values securities utilizing the amortized cost valuation
method which is permitted under Rule 2a-7 under the 1940 Act. This method
involves valuing a portfolio security initially at its cost and thereafter
adjusting for amortization of premium or accretion of discount to maturity.
FEDERAL INCOME TAXES. Each Portfolio is treated as a separate entity for
Federal income tax purposes and each intends to qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Internal Revenue Code"), and to distribute all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required. At June 30, 1998, the Money Market Portfolio had a net
tax basis capital loss carryforward available to offset future net capital
gains of approximately $4,000, which will expire as follows.
CAPITAL LOSS EXPIRATION
CARRYFORWARD DATE
--------------------------------
Money Market Portfolio .......... $ 1,000 06/30/2004
3,000 06/30/2006
11
<PAGE>
KIEWIT MUTUAL FUND
- ------------------
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
================================================================================
INVESTMENT INCOME AND DISTRIBUTIONS TO SHAREHOLDERS. The Portfolios record
their share of the respective Series' income, expenses and realized and
unrealized gains and losses daily. Additionally, each Portfolio records its
own expenses as incurred. Distributions to shareholders of each Portfolio,
except Kiewit Equity Portfolio, are declared daily from net investment income
and paid to shareholders monthly. The Fund's policy is to distribute
substantially all net income from the Kiewit Equity Portfolio annually.
Distributions of net capital gains realized by each Portfolio will be made
annually.
DEFERRED ORGANIZATION COSTS. Organization costs incurred by each Portfolio
have been deferred and are being amortized using the straight-line method
over a five-year period beginning on the date that each Portfolio commenced
operations. In the event that any of the initial shares of a Portfolio are
redeemed during the amortization period by any holder thereof, the redemption
proceeds will be reduced by any unamortized organization expenses in the same
proportion as the number of initial shares being redeemed bears to the number
of initial shares outstanding at the time of such redemption.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS. The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amount of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
3. INVESTMENT TRANSACTIONS. During the fiscal year ended June 30, 1998, cash
contributed to (additions) and cash withdrawn from (reductions) the
respective Series were as follows:
MONEY SHORT-TERM INTERMEDIATE-
MARKET GOVERNMENT TERM BOND EQUITY
---------------------------------------------------------------
Additions ... $ 2,802,359,254 $ 128,661,824 $ 144,376,638 $ 14,765,563
Reductions .. (3,004,989,325) (248,900,910) (203,882,068) (19,204,547)
4. MANAGEMENT AND ADMINISTRATION FEE AND OTHER TRANSACTIONS WITH AFFILIATES.
Kiewit Investment Management Corp. ("KIMC"), a wholly-owned subsidiary of
Kiewit Construction Company, serves as the investment manager to each Series
of the Trust. KIMC provides the Trust with records concerning KIMC's
activities which the Trust is required to maintain and renders regular
reports to the Trust's officers and the Board of Trustees. KIMC also selects
brokers and dealers to effect securities transactions. Under the investment
management agreement between KIMC and the Trust on behalf of each Series, the
monthly fees of the Series are at the following annual rates of their average
monthly net assets: Kiewit Money Market Series 0.20%; Kiewit Short-Term
Government Series 0.30%; Kiewit Intermediate-Term Bond Series 0.40%; and
Kiewit Equity Series 0.70%. Although the Portfolios do not directly pay KIMC
for its services under the investment management agreement, each Portfolio
shares in its pro rata portion allocated from its corresponding Series. KIMC
has agreed to waive all or a portion of its management fee and assume certain
Portfolio operating expenses (excluding taxes, extraordinary expenses,
brokerage commissions and interest) in an amount that will limit annual
operating expenses to not more than the following percentage of the average
daily net assets of each Portfolio: Money Market Portfolio - 0.20%,
Short-Term Government Portfolio - 0.30%; Intermediate-Term Bond Portfolio -
0.50%; and Equity Portfolio - 0.80%. These undertakings may be amended or
rescinded at any time in the future.
The Fund has entered into an Administrative Services Agreement with KIMC.
Pursuant to this agreement, KIMC performs various services, including:
supervision of the services provided by the Fund's custodian, transfer and
dividend disbursing agent and others who provide services to the Fund for the
benefit of the Portfolios; providing shareholders with information about the
Portfolios and their investment as they or the Fund may request; assisting
the Portfolios in conducting meetings of the shareholders; furnishing
information as the Board of Trustees may require regarding the corresponding
Series; and any other administrative services for the benefit of the
Portfolio as the Board of Trustees may reasonably request. For its services,
each Portfolio pays KIMC a monthly fee equal to one-twelfth of 0.02% of the
Portfolio's average net assets.
12
<PAGE>
KIEWIT MUTUAL FUND
- ------------------
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
================================================================================
The following table summarizes the KIMC administration fees for the fiscal
year ended June 30, 1998.
ADMINISTRATION
FEE
--------------
Money Market Portfolio ................... $98,109
Short-Term Government Portfolio .......... 29,054
Intermediate-Term Bond Portfolio ......... 28,909
Equity Portfolio ......................... 19,844
Effective January 5, 1998, PFPC Inc. ("PFPC"), an indirect wholly-owned
subsidiary of PNC Bank Corp., a multi-bank holding company, serves as
Administrator to the Trust and Fund pursuant to separate Administration
Agreements with the Fund and the Trust. As Administrator, PFPC is responsible
for services such as financial reporting, compliance monitoring and corporate
management. For the services provided, PFPC receives a monthly administration
fee from the Trust, on behalf of each Series. Each Series pays a
proportionate share of a complex-wide annual fee of 0.015% of the Trust's
aggregate total average daily net assets in excess of $125 million. This
asset based fee is determined on a total average daily net asset basis, and
is subject to prescribed minimums. Prior to January 5, 1998, Rodney Square
Management Corp. ("RSMC"), a wholly-owned subsidiary of Wilmington Trust
Company ("WTC"), served as Administrator to the Trust and Fund. RSMC was
compensated by the Fund at the same rate of compensation that PFPC receives.
Effective January 5, 1998, PNC Bank, N.A. ("PNC") serves as custodian to the
Fund and the Trust. Prior to January 5, 1998, WTC served as custodian of the
assets of the Fund.
Effective January 5, 1998, PFPC serves as transfer agent and dividend
disbursing agent of the Fund pursuant to a separate Transfer Agency Agreement
with the Fund on behalf of each Portfolio. For its services, the Fund pays
PFPC a monthly fee of $5,000, plus out-of-pocket expenses. Prior to January
5, 1998, RSMC served as transfer agent and dividend disbursing agent of the
Fund. RSMC was compensated by the Fund at the same rates of compensation that
PFPC receives.
Effective January 5, 1998, PFPC determines the net asset value per share of
each Portfolio and provides accounting services to the Trust and Fund
pursuant to separate Accounting Services Agreements with the Fund and the
Trust. For its services, PFPC receives from the Trust, on behalf of each
Series, the Series' proportionate share of a complex-wide annual fee of
0.015% of the Trust's aggregate total average daily net assets in excess of
$100 million. This asset-based fee is determined on a total average daily net
asset basis, and is subject to prescribed fixed minimums. Prior to January 5,
1998, RSMC provided accounting services to the Trust and Fund, and was
compensated by the Fund at the same rates of compensation that PFPC receives.
Independent Trustees are each paid an annual fee of $5,000 from the Fund,
plus $250 per Portfolio per meeting attended, plus travel expenses in
connection with meetings. Certain officers and trustees of the Fund are also
officers and/or directors of KIMC.
5. SPECIAL SHAREHOLDER MEETING. On March 31, 1998, KIMC became a wholly-owned
subsidiary of Kiewit Construction Company. This change of ownership of KIMC
required a Special Meeting of Shareholders, held on March 31, 1998, whereupon
each Portfolio's shareholders approved a new investment advisory agreement
with KIMC, on behalf of the respective Series. The terms of the new
investment advisory agreements are substantially identical to those of the
previous advisory agreements, and the change of ownership of KIMC is not
expected to have a material effect on the investment advisory services that
KIMC provides to the Series.
13
<PAGE>
KIEWIT MUTUAL FUND
- ------------------
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
To the Trustees and Shareholders of Kiewit Mutual Fund:
In our opinion, the accompanying statements of assets and liabilities 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 Kiewit Money Market Portfolio, Kiewit Short-Term Government
Portfolio, Kiewit Intermediate-Term Bond Portfolio and Kiewit Equity
Portfolio (four of the series constituting Kiewit Mutual Fund, hereafter
referred to as the "Fund") at June 30, 1998, the results of each of their
operations for the year then ended, the changes in each of their net assets
for each of the two years in the period then ended and the financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
July 31, 1998
14
<PAGE>
KIEWIT MUTUAL FUND
- ------------------
TAX INFORMATION (UNAUDITED)
================================================================================
For the fiscal year ended June 30, 1998, the Intermediate-Term Bond Portfolio
and Equity Portfolio paid distributions of $0.0252 and $5.6402 per share,
respectively, from net long-term capital gains. Pursuant to Section 852 of
the Internal Revenue Code of 1986, as amended, for the fiscal year ended June
30, 1998, the Intermediate-Term Bond Portfolio and Equity Portfolio designate
$600,992 and $24,663,888, respectively, as capital gain distributions. The
breakdown between the 28 Percent Rate Gain and the 20 Percent Rate Gain is as
follows:
INTERMEDIATE-TERM BOND EQUITY PORTFOLIO
------------------------ -----------------------
AMOUNT PER SHARE AMOUNT PER SHARE
------------------------ -----------------------
28 Percent Rate Gain ... $403,969 $0.0169 $ 1,603,241 $0.3666
20 Percent Rate Gain ... 197,023 0.0083 23,060,647 5.2736
-------- ------- ----------- -------
Total Capital Gain ..... $600,992 $0.0252 $24,663,888 $5.6402
======== ======= =========== =======
15
<PAGE>
KIEWIT INVESTMENT TRUST
- -----------------------
ANNUAL REPORT / JUNE 30, 1998
================================================================================
(The following pages should be read in conjunction with Kiewit Mutual
Fund Annual Financial Statements.)
16
<PAGE>
KIEWIT INVESTMENT TRUST / MONEY MARKET SERIES
- ---------------------------------------------
INVESTMENTS / JUNE 30, 1998
(Showing Percentage of Total Value of Net Assets)
================================================================================
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
----------- -----------
<S> <C> <C>
COMMERCIAL PAPER -- 90.3%
AUTOMOBILES -- 4.1%
Daimler-Benz North America Corp., 5.53%, 08/18/98 ...................... $ 5,000,000 $ 4,963,133
Daimler-Benz North America Corp., 5.50%, 09/09/98 ...................... 5,000,000 4,946,528
-----------
9,909,661
-----------
AUTO PARTS -- 4.1%
TRW, Inc., 5.53%, 07/16/98 ............................................. 5,000,000 4,988,479
TRW, Inc., 5.57%, 07/24/98 ............................................. 5,000,000 4,982,303
-----------
9,970,782
-----------
BANKS -- 8.2%
Bank of Nova Scotia , 5.50%, 08/03/98 .................................. 5,000,000 4,974,792
Commerzbank U.S. Finance, Inc., 5.54%, 07/24/98 ........................ 5,000,000 4,982,303
Corporacion Andina de Fomento, 5.53%, 07/10/98 ......................... 5,000,000 4,993,087
Dresdner U.S. Finance, Inc., 5.51%, 08/04/98 ........................... 5,000,000 4,973,981
-----------
19,924,163
-----------
BUSINESS SERVICES -- 2.1%
Electronic Data Systems Finance PLC , 5.53%, 08/13/98 .................. 5,000,000 4,966,974
-----------
CHEMICALS -- 12.4%
E.I. Dupont de Nemours and Co., 5.50%, 07/09/98 ........................ 5,000,000 4,993,889
E.I. Dupont de Nemours and Co., 5.50%, 07/28/98 ........................ 5,000,000 4,979,375
Great Lakes Chemical Corp., 5.50%, 07/14/98 ............................ 5,000,000 4,990,069
Great Lakes Chemical Corp., 5.51%, 08/24/98 ............................ 5,000,000 4,958,675
Monsanto Co., 5.55%, 07/07/98 .......................................... 5,000,000 4,995,500
Monsanto Co., 5.50%, 08/03/98 .......................................... 5,000,000 4,974,792
-----------
29,892,300
-----------
COMPUTERS -- 6.2%
Computer Sciences Corp., 5.55%, 07/07/98 ............................... 5,000,000 4,995,375
CSC Enterprises, 5.57%, 07/21/98 ....................................... 5,000,000 4,984,528
International Business Machines Corp., 5.48%, 08/17/98 ................. 5,000,000 4,964,228
-----------
14,944,131
-----------
ELECTRONICS -- 2.1%
General Electric Co., 5.48%, 07/20/98 .................................. 5,000,000 4,985,539
-----------
ENERGY -- 2.1%
Consolidated Natural Gas Co., 5.52%, 07/14/98 .......................... 5,000,000 4,990,033
-----------
FINANCIAL SERVICES -- 10.4%
Deutsche Bank Financial Inc., 5.50%, 07/08/98 .......................... 5,000,000 4,994,653
General Electric Capital Corp., 5.38%, 07/15/98 ........................ 5,000,000 4,989,539
General Electric Credit Capital Services of Puerto Rico, 5.53%, 07/10/98 5,000,000 4,993,087
John Deere Capital Corp., 5.50%, 07/22/98 .............................. 5,000,000 4,983,958
Novartis Finance Corp., 5.51%, 07/30/98 ................................ 5,000,000 4,977,807
-----------
24,939,044
-----------
FOOD & BEVERAGE -- 3.0%
Coca-Cola Enterprises Inc., 5.53%, 08/10/98 ............................ 2,350,000 2,335,561
McCormick & Company, Inc., 5.50%, 09/15/98 ............................. 5,000,000 4,941,944
-----------
7,277,505
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements .
17
<PAGE>
KIEWIT INVESTMENT TRUST / MONEY MARKET SERIES
- ---------------------------------------------
INVESTMENTS / JUNE 30, 1998 -- CONTINUED
================================================================================
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
----------- -----------
<S> <C> <C>
FREIGHT & SHIPPING -- 3.2%
Matson Navigation Company, Inc., 5.52%, 07/29/98 ....................... $ 5,000,000 $ 4,978,533
Matson Navigation Company, Inc., 5.54%, 07/29/98 ....................... 2,800,000 2,787,935
-----------
7,766,468
-----------
LEASING -- 4.1%
The Hertz Corp., 5.51%, 07/08/98 ....................................... 5,000,000 4,994,643
The Hertz Corp., 5.53%, 08/07/98 ....................................... 5,000,000 4,971,582
-----------
9,966,225
-----------
MACHINERY & HEAVY EQUIPMENT -- 4.1%
Deere & Co., 5.52%, 09/03/98 ........................................... 5,000,000 4,950,933
Dover Corp., 5.55%, 08/26/98 ........................................... 5,000,000 4,956,833
-----------
9,907,766
-----------
MANUFACTURING -- 1.2%
The Stanley Works, 5.48%, 07/16/98 ..................................... 3,000,000 2,993,150
-----------
OIL -- 2.1%
Atlantic Richfield Co., 5.53%, 08/12/98 ................................ 5,000,000 4,967,742
-----------
PHARMACEUTICALS PREPARATIONS -- 4.1%
American Home Products Corp., 5.51%, 08/21/98 .......................... 5,000,000 4,960,971
Novartis Group, 5.51%, 07/13/98 ........................................ 5,000,000 4,990,817
-----------
9,951,788
-----------
PRINTING & PUBLISHING -- 6.2%
Knight-Ridder, Inc., 5.80%, 07/02/98 ................................... 5,000,000 4,999,194
Knight-Ridder, Inc., 5.65%, 08/11/98 ................................... 5,000,000 4,967,826
R.R. Donnelley & Sons Co., 5.80%, 07/06/98 ............................. 5,000,000 4,995,972
-----------
14,962,992
-----------
RUBBER & PLASTICS -- 4.1%
Rubbermaid Inc., 5.52%, 08/27/98 ....................................... 5,000,000 4,956,300
Rubbermaid Inc., 5.51%, 09/08/98 ....................................... 5,000,000 4,947,196
-----------
9,903,496
-----------
SECURITIES DEALERS -- 2.0%
Merrill Lynch & Co., Inc., 5.55%, 08/05/98 ............................. 5,000,000 4,973,021
-----------
TELECOMMUNICATIONS -- 4.5%
GTE Corp., 5.60%, 07/01/98 ............................................. 3,000,000 3,000,000
GTE Corp., 5.54%, 07/20/98 ............................................. 5,000,000 4,985,381
GTE Corp., 5.54%, 07/28/98 ............................................. 3,000,000 2,987,535
-----------
10,972,916
-----------
TOTAL COMMERCIAL PAPER (COST $218,165,696) ....................................... 218,165,696
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
KIEWIT INVESTMENT TRUST / MONEY MARKET SERIES
- ---------------------------------------------
INVESTMENTS / JUNE 30, 1998 -- CONTINUED
================================================================================
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
----------- -----------
<S> <C> <C>
CORPORATE BOND -- 0.8%
Nordstrom, Inc., 9.60%, 07/01/98
(Cost$2,000,000) .................................................... $2,000,000 $ 2,000,000
------------
U.S. GOVERNMENT AGENCY OBLIGATION -- 2.5%
Student Loan Marketing Association Notes*, 5.32%, 09/28/98
(Cost$5,959,010) .................................................... 5,960,000 5,959,010
------------
REPURCHASE AGREEMENT -- 6.4%
With Paine Webber Group, Inc.: At 6.15% dated 06/30/98,
to be repurchased at $15,526,652 on 07/01/98,
collateralized by a Federal Home Loan Mortgage
Corporation security with an original par value of
$16,215,000, due 01/01/28 (market value $16,460,171)
(COST $15,524,000) ................................................................ 15,524,000
------------
TOTAL INVESTMENTS (COST $241,648,706)(DAGGER) -- 100.0% ................................... 241,648,706
OTHER ASSETS AND LIABILITIES, NET -- 0.0% ................................................. (9,018)
------------
NET ASSETS -- 100.0% ...................................................................... $241,639,688
============
<FN>
* Denotes a variable or floating note. Variable and floating rate notes are
instruments whose rates change periodically. The rate shown is as of June
30, 1998.
(DAGGER) Cost for Federal income tax purposes.
(DOUBLE DAGGER) Unaudited.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
KIEWIT INVESTMENT TRUST / SHORT-TERM GOVERNMENT SERIES
- ------------------------------------------------------
INVESTMENTS / JUNE 30, 1998
(Showing Percentage of Total Value of Net Assets)
================================================================================
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
----------- -----------
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 15.7%
Federal National Mortgage Association Notes, 6.20%, 06/26/00 ........... $ 2,000,000 $ 2,020,360
Federal National Mortgage Association Notes, 5.42%, 01/23/01 ........... 1,000,000 993,840
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $2,999,702) ....................... 3,014,200
-----------
U.S. TREASURY OBLIGATIONS -- 82.1%
U.S. Treasury Notes, 6.50%, 04/30/99 ................................... 1,800,000 1,814,526
U.S. Treasury Notes, 5.92%, 08/31/99 ................................... 2,400,000 2,409,552
U.S. Treasury Notes, 5.88%, 11/15/99 ................................... 3,000,000 3,013,649
U.S. Treasury Notes, 6.88%, 03/31/00 ................................... 2,800,000 2,861,656
U.S. Treasury Notes, 6.00%, 08/15/00 ................................... 2,000,000 2,018,420
U.S. Treasury Notes, 5.75%, 10/31/00 ................................... 1,750,000 1,758,155
U.S. Treasury Notes, 5.63%, 02/28/01 ................................... 1,000,000 1,001,990
U.S. Treasury Notes, 6.50%, 05/31/01 ................................... 900,000 922,671
-----------
TOTAL U.S TREASURY OBLIGATIONS (COST $15,778,185) ................................ 15,800,619
-----------
REPURCHASE AGREEMENT -- 1.0%
With Merrill Lynch & Co. Inc.: At 5.50% dated 06/30/98,
to be repurchased at $195,030 on 07/01/98, collateralized
by a Federal National Mortgage Association security with a
coupon rate of 6.15%, due 01/13/00
(market value $201,308) (COST $195,000) ........................................... 195,000
-----------
TOTAL INVESTMENTS (Cost $18,972,887)(DAGGER) -- 98.8% ..................................... 19,009,819
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.2% ............................................. 229,979
-----------
NET ASSETS -- 100.0% ...................................................................... $19,239,798
===========
<FN>
(DAGGER) Cost for Federal income tax purposes. At June 30, 1998, net unrealized
appreciation was $36,932. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an excess of market
value over tax cost of $45,144 and aggregate gross unrealized depreciation
for all securities in which there was an excess of tax cost over market
value of $8,212.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
KIEWIT INVESTMENT TRUST / INTERMEDIATE-TERM BOND SERIES
- -------------------------------------------------------
INVESTMENTS / JUNE 30, 1998
(Showing Percentage of Total Value of Net Assets)
================================================================================
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL VALUE
RATING(DOUBLE DAGGER) AMOUNT (NOTE 2)
--------------------- ---------- --------
<S> <C> <C> <C>
CORPORATE BONDS -- 27.1%
AUTOMOBILES -- 1.7%
General Motors Acceptance Corp., 6.75%, 02/07/02 ...... A3/A $ 1,000,000 $ 1,020,000
-----------
BANKS -- 1.7%
NationsBank Corp., 6.50%, 08/15/03 .................... A1/A 1,000,000 1,013,750
-----------
ENERGY -- 3.4%
Citizens Utilities Co., 7.60%, 06/01/06 ............... A2/AA- 1,000,000 1,081,250
Southern Calfornia Edison, 5.88%, 01/15/01 ............ A3/A 1,000,000 1,000,000
-----------
2,081,250
-----------
FINANCE -- 3.4%
Morgan Stanley Group Dean Witter, 6.88%, 03/01/07 ..... A1/A+ 1,000,000 1,037,500
Ford Motor Credit, 7.00%, 09/25/01 .................... A1/A 1,000,000 1,028,750
-----------
2,066,250
-----------
FINANCIAL SERVICES -- 1.7%
Household Finance Corp., 7.25%, 07/15/03 .............. A2/A 1,000,000 1,041,250
-----------
INDUSTRIAL -- 3.3%
Bausch & Lomb, Inc., 6.75%, 12/15/04 .................. Baa2/BBB 1,000,000 1,015,000
Praxair, Inc., 6.75%, 03/01/03 ........................ A3/BBB+ 1,000,000 1,022,500
-----------
2,037,500
-----------
MACHINERY & HEAVY EQUIPMENT -- 1.7%
Hanson PLC, 7.38%, 01/15/03 ........................... A3/A- 1,000,000 1,046,250
-----------
MANUFACTURING -- 5.3%
Dayton Hudson Corp., 6.40%, 02/15/03 .................. Baa1/BBB+ 1,200,000 1,210,500
EG&G, Inc., 6.80%, 10/15/05 ........................... Baa2/A 1,000,000 1,043,750
Hoechst-Celanese Corp., 6.13%, 02/01/04 ............... A2/A+ 1,000,000 1,006,250
-----------
3,260,500
-----------
RETAIL MERCHANDISING -- 1.6%
Penney ( J.C.) Co., 6.13%, 11/15/03 ................... A2/A 1,000,000 1,002,500
-----------
SECURITIES DEALERS -- 1.7%
Bear Stearns, Inc., 6.50%, 08/01/02 ................... A2/A 1,000,000 1,010,000
-----------
TELECOMMUNICATIONS -- 1.6%
Cable & Wireless Communications, 6.38%, 03/06/03 ...... Baa1/A- 1,000,000 1,000,000
-----------
TOTAL CORPORATE BONDS (COST $16,470,667) ............................................... 16,579,250
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 11.2%
Federal National Mtge. Assoc. Notes, 6.20%, 06/26/00 .. Aaa/NR 5,250,000 5,303,444
Federal National Mtge. Assoc. Notes, 5.42%, 01/23/01 .. Aaa/NR 1,000,000 993,840
Federal National Mtge. Assoc. Notes, 7.65%, 03/10/05 .. Aaa/NR 500,000 552,385
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $6,788,780) ............................. 6,849,669
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
KIEWIT INVESTMENT TRUST / INTERMEDIATE-TERM BOND SERIES
- -------------------------------------------------------
INVESTMENTS / JUNE 30, 1998 -- CONTINUED
================================================================================
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
----------- -----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 59.0%
U.S. Treasury Notes, 6.88%, 08/31/99 .................................... $5,250,000 $ 5,329,327
U.S. Treasury Notes, 5.88%, 11/15/99 .................................... 9,100,000 9,141,404
U.S. Treasury Notes, 5.75%, 10/31/00 .................................... 2,400.000 2,411,184
U.S. Treasury Notes, 6.25%, 04/30/01 .................................... 2,750,000 2,800,243
U.S. Treasury Notes, 5.88%, 11/30/01 .................................... 4,250,000 4,290,842
U.S. Treasury Notes, 6.25%, 06/30/02 .................................... 2,350,000 2,407,387
U.S. Treasury Notes, 6.50%, 10/15/06 .................................... 5,750,000 6,100,807
U.S. Treasury Bonds, 10.38%, 11/15/12 ................................... 2,700,000 3,614,058
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $35,834,566) ............................... 36,095,252
-----------
REPURCHASE AGREEMENT -- 1.5%
With Paine Webber Group, Inc.: At 6.15% dated 06/30/98, to be repurchased at
$893,153 on 07/01/98, collateralized by a Federal Home Loan Mortgage
Corporation security with an original par value of $935,000 due
01/01/28 (market value $949,137) (COST $893,000) .................................. 893,000
-----------
TOTAL INVESTMENTS (COST $59,987,013)(DAGGER) -- 98.8% ..................................... 60,417,171
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.2% ............................................. 736,317
-----------
NET ASSETS -- 100.0% ...................................................................... $61,153,488
===========
<FN>
(DAGGER) Cost for Federal income tax purposes. At June 30, 1998, net unrealized
appreciation was $430,158. This consisted of aggregate gross realized
appreciation for all securities in which there was an excess of market
value over tax cost of $479,471 and aggregate gross unrealized depreciation
for all securities in which there was an excess of tax cost over market
value of $49,313.
NR Not Rated. While not rated by Moody's or S&P, U.S. Government Agency
Obligations are considered to be of the highest quality, comparable to AAA.
(DOUBLE DAGGER) Unaudited.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
KIEWIT INVESTMENT TRUST / EQUITY SERIES
- ---------------------------------------
INVESTMENTS / JUNE 30, 1998
(Showing Percentage of Total Value of Net Assets)
================================================================================
VALUE
SHARES (NOTE 2)
------ -------
COMMON STOCK -- 96.2%
COMMUNICATIONS & BROADCASTING -- 8.6%
Airtouch Communications, Inc.* ...... 6,400 $ 374,000
Alltel Corp. ........................ 2,600 120,900
Ameritech Corp. ..................... 13,900 623,762
AT&T Corp. .......................... 20,600 1,176,775
Bell Atlantic Corp. ................. 19,800 903,375
BellSouth Corp. ..................... 12,600 845,775
CBS Corp. ........................... 8,700 276,225
Clear Channel Communications,
Inc.* ............................. 1,300 141,862
Comcast Corp. (Special A Shares) .... 4,700 190,791
GTE Corp. ........................... 12,100 673,062
MCI Communications Corp. ............ 8,800 511,500
Mediaone Group* ..................... 7,700 338,319
SBC Communications, Inc. ............ 23,200 928,000
Sprint Corp. ........................ 5,400 380,700
Tele-Communications, Inc. ...........
(Class A)* ........................ 6,900 265,219
Time Warner, Inc. ................... 7,100 606,606
US West Inc. ........................ 6,310 296,570
Viacom, Inc. (Class B)* ............. 4,500 262,125
Worldcom, Inc.* ..................... 12,800 620,000
----------
TOTAL COMMUNICATIONS & BROADCASTING ................ 9,535,566
----------
ELECTRIC, GAS & WATER UTILITIES -- 2.4%
American Electric Power Co., Inc. ... 2,600 117,975
Carolina Power & Light Co. .......... 2,000 86,750
Central & South West Corp. .......... 3,000 80,625
Consolidated Edison, Inc. ........... 3,200 147,400
Dominion Resources, Inc. ............ 2,600 105,950
Duke Power Co. ...................... 4,600 272,550
Edison International ................ 5,300 156,681
Enron Corp. ......................... 4,100 221,656
Entergy Corp. ....................... 3,300 94,875
First Energy Corp. .................. 3,100 95,325
FPL Group, Inc. ..................... 2,500 157,500
Houston Industries, Inc. ............ 3,900 120,412
Pacificorp .......................... 4,000 90,500
PG & E Corp. ........................ 5,900 186,219
Public Service Enterprise Group ..... 3,200 110,200
Southern Co. ........................ 8,700 240,881
Texas Utilities Co. ................. 3,300 137,362
Unicom Corp. ........................ 3,000 105,187
Williams Cos., Inc. ................. 4,200 141,750
----------
TOTAL ELECTRIC, GAS & WATER UTILITIES .............. 2,669,798
----------
FINANCE & INSURANCE -- 18.3%
HOSPITAL & MEDICAL SERVICE PLANS -- 0.7%
Aetna, Inc. ......................... 2,000 152,250
Aon Corp. ........................... 2,300 161,575
Columbia Healthcare Corp. ........... 8,200 238,825
United Healthcare Corp. ............. 2,600 165,100
----------
717,750
----------
VALUE
SHARES (NOTE 2)
------ -------
INSURANCE CARRIERS -- 4.8%
Allstate Corp. ...................... 5,400 $ 494,437
American General Corp. .............. 3,400 242,037
American International Group, Inc. .. 8,800 1,284,800
Chubb Corp. ......................... 2,400 192,900
CIGNA Corp. ......................... 3,000 207,000
Cincinnati Financial Corp. .......... 2,100 80,587
Conseco, Inc. ....................... 2,600 121,550
General Reinsurance Corp. ........... 1,100 278,850
Hartford Financial Services
Group, Inc. ....................... 1,600 183,000
Jefferson-Pilot Corp. ............... 1,500 86,906
Lincoln National Corp. .............. 1,300 118,787
Loews Corp. ......................... 1,500 130,687
Marsh & McLennan Cos., Inc. ......... 3,450 208,509
MGIC Investment Corp. ............... 1,500 85,594
Progressive Corporation of Ohio ..... 1,000 141,000
Safeco Corp. ........................ 1,700 77,244
St. Paul Cos., Inc. ................. 2,200 92,537
SunAmerica, Inc. .................... 2,700 155,081
Torchmark Corp. ..................... 1,800 82,350
Transamerica Corp. .................. 800 92,100
Travelers Group, Inc. ............... 14,500 879,062
UNUM Corp. .......................... 1,800 99,900
----------
5,334,918
----------
SAVINGS, CREDIT & OTHER FINANCIAL INSTITUTIONS -- 3.0%
American Express Co. ................ 5,900 672,600
Associates First Capital Corp. ......
Class A ........................... 4,483 344,631
Beneficial Corp. .................... 700 107,231
Federal Home Loan Mortgage
Corp. ............................. 8,800 414,150
Federal National Mortgage
Association ....................... 13,400 814,050
H.F. Ahmanson & Co. ................. 1,300 92,300
Household International, Inc. ....... 4,200 208,950
Washington Mutual, Inc. ............. 5,100 221,531
Wells Fargo & Co. ................... 1,200 442,800
----------
3,318,243
----------
SECURITY & COMMODITY BROKERS, DEALERS & SERVICES -- 1.2%
Charles Schwab Corp. ................ 3,600 117,000
Lehman Brothers Holdings, Inc. ...... 1,200 93,075
Merrill Lynch & Co., Inc. ........... 4,200 387,450
Morgan Stanley Dean Witter
Discover & Co. .................... 7,500 685,312
----------
1,282,837
----------
STATE & NATIONAL BANKS -- 8.6%
Banc One Corp. ...................... 8,200 457,662
Bank of New York Co., Inc. .......... 4,700 285,231
BankAmerica Corp. ................... 8,700 752,006
BankBoston Corp. .................... 3,800 211,375
Bankers Trust New York Corp. ........ 1,300 150,881
BB&T Corp. .......................... 1,800 121,725
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
KIEWIT INVESTMENT TRUST / EQUITY SERIES
- ---------------------------------------
INVESTMENTS / JUNE 30, 1998 -- CONTINUED
================================================================================
VALUE
SHARES (NOTE 2)
------ -------
Chase Manhattan Corp. ............... 10,600 $ 800,300
Citicorp ............................ 5,800 865,650
Comerica, Inc. ...................... 2,100 139,125
Fifth Third Bancorp. ................ 3,000 189,000
First Chicago NBD Corp. ............. 3,700 327,912
First Union Corp. ................... 11,950 696,087
Fleet Financial Group, Inc. ......... 3,400 283,900
Huntington Bancshares Inc. .......... 2,600 87,100
J.P. Morgan & Co., Inc. ............. 2,200 257,675
Keycorp. ............................ 6,000 213,750
MBNA Corp. .......................... 6,300 207,900
Mellon Bank Corp. ................... 3,400 236,725
Merchantile Bancorp, Inc. ........... 1,800 90,675
National City Corp. ................. 2,900 205,900
Nationsbank Corp. ................... 11,900 910,350
Northern Trust Corp. ................ 1,500 114,375
Norwest Corp. ....................... 9,600 358,800
PNC Bank Corp. ...................... 3,900 209,869
Republic New York Corp. ............. 1,400 88,112
State Street Corp. .................. 2,100 145,950
Summit Bancorp ...................... 2,400 114,000
Suntrust Banks, Inc. ................ 2,900 235,806
Synovus Financial Corp. ............. 3,450 81,937
U.S. Bancorp ........................ 9,900 425,700
Wachovia Corp. ...................... 2,600 219,700
----------
9,485,178
----------
TOTAL FINANCE & INSURANCE .......................... 20,138,926
----------
MANUFACTURING -- 47.8%
AIRCRAFT & AEROSPACE -- 1.6%
Allied-Signal, Inc. ................. 7,200 319,500
Boeing Co. .......................... 12,600 561,487
Lockheed Martin Corp. ............... 2,400 254,100
Northrop Grumman Corp. .............. 900 92,812
Raytheon Co. (Class B) .............. 4,300 254,237
United Technologies Corp. ........... 3,200 296,000
----------
1,778,136
----------
CHEMICAL & ALLIED PRODUCTS -- 2.4%
Air Products & Chemicals, Inc. ...... 2,800 112,000
Amgen, Inc.* ........................ 3,600 235,350
Dow Chemical Co. .................... 3,100 299,731
Dupont (E.I.) de Nemours & Co. ...... 14,300 1,067,137
Monsanto Co. ........................ 7,500 419,062
Occidental Petroleum Corp. .......... 4,500 121,500
PPG Industries, Inc. ................ 2,500 173,906
Praxair, Inc. ....................... 2,100 98,306
Rohm & Haas Co. ..................... 800 83,150
WR Grace & Company* ................. 1,000 17,062
----------
2,627,204
----------
COMPUTERS & OFFICE EQUIPMENT -- 9.1%
3Com Corp.* ......................... 4,700 144,231
Bay Networks, Inc.* ................. 2,700 87,075
Cisco Systems, Inc.* ................ 12,700 1,169,194
Compaq Computer Corp. ............... 21,090 598,429
VALUE
SHARES (NOTE 2)
------ -------
EMC Corp.* .......................... 6,200 $ 277,837
Hewlett-Packard Co. ................. 13,200 790,350
Intel Corp. ......................... 20,700 1,534,387
International Business Machines
Corp. ............................. 12,300 1,412,194
Micron Technology, Inc.* ............ 2,900 71,956
Microsoft Corp.* .................... 30,500 3,305,437
Pitney Bowes, Inc. .................. 3,800 182,875
Seagate Technology, Inc.* ........... 3,300 78,581
Xerox Corp. ......................... 4,100 416,662
----------
10,069,208
----------
CONSUMER PRODUCTS -- 3.4%
Avon Products, Inc. ................. 1,700 131,750
Clorox Co. .......................... 1,400 133,525
Colgate-Palmolive Co. ............... 3,700 325,600
Gillette Co. ........................ 14,200 804,962
Kimberly-Clark Corp. ................ 7,100 325,712
Newell Co. .......................... 2,100 104,606
Procter & Gamble Co. ................ 17,000 1,548,063
Ralston Purina Group ................ 1,400 163,538
Wm. Wrigley, Jr. Co. ................ 1,500 147,000
----------
3,684,756
----------
FOOD AND BEVERAGE -- 6.2%
Agribrands International, Inc.* ..... 140 4,235
Anheuser-Busch Cos., Inc. ........... 6,200 292,563
Archer Daniels Midland Co. .......... 7,600 147,250
Bestfoods, Inc. ..................... 3,800 220,638
Campbell Soup Co. ................... 5,800 308,125
Coca-Cola Co. ....................... 31,300 2,676,150
Conagra, Inc. ....................... 6,400 202,800
General Mills, Inc. ................. 2,100 143,588
Heinz (H.J.) Co. .................... 4,700 263,788
Hershey Foods Corp. ................. 1,900 131,100
Kellogg Co. ......................... 5,200 195,325
PepsiCo, Inc. ....................... 19,200 790,800
Quaker Oats Co. ..................... 1,800 98,888
Sara Lee Corp. ...................... 6,000 335,625
Sysco Corp. ......................... 4,800 123,000
The Seagram Co. Ltd. ................ 5,000 204,688
Unilever NV ......................... 8,100 639,394
Vlasic Foods International* ......... 580 11,673
----------
6,789,630
----------
GAMES & TOYS -- 0.1%
Mattel, Inc. ........................ 3,900 165,019
----------
MISC. ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES -- 4.3%
AMP, Inc. ........................... 3,000 103,125
Applied Materials, Inc.* ............ 5,000 147,500
Emerson Electric Co. ................ 5,600 338,100
General Electric Co. ................ 41,400 3,767,400
Honeywell, Inc. ..................... 1,700 142,056
Texas Instruments, Inc. ............. 4,900 285,731
----------
4,783,912
----------
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
KIEWIT INVESTMENT TRUST / EQUITY SERIES
- ---------------------------------------
INVESTMENTS / JUNE 30, 1998 -- CONTINUED
================================================================================
VALUE
SHARES (NOTE 2)
------ -------
MISC. INDUSTRIAL MACHINERY & EQUIPMENT-- 1.2%
Baker Hughes, Inc. .................. 2,300 $ 79,494
Caterpillar, Inc. ................... 4,700 248,513
Cooper Industries, Inc. ............. 1,600 87,900
Deere & Co. ......................... 3,400 179,775
Dover Corp. ......................... 3,000 102,750
Dresser Industries, Inc. ............ 2,400 105,750
Eaton Corp. ......................... 1,000 77,750
Illinois Tool Works, Inc. ........... 3,400 226,738
Ingersoll Rand Co. .................. 2,300 101,344
Thermo Electron Corp.* .............. 2,000 68,375
----------
1,278,389
----------
MISCELLANEOUS MANUFACTURING INDUSTRIES -- 1.2%
Corning, Inc. ....................... 3,100 107,725
Crown Cork & Seal Co., Inc. ......... 1,700 80,750
Minnesota Mining & Manufacturing
Co. ............................... 5,200 427,375
Pioneer Hi Bred International ....... 3,300 136,538
Sealed Air Corp.* ................... 536 19,698
Tyco International Ltd. ............. 6,800 428,400
UST, Inc. ........................... 2,500 67,500
----------
1,267,986
----------
OIL FIELD MACHINERY & EQUIPMENT -- 0.4%
Schlumberger Ltd. ................... 6,200 423,538
----------
PAPER & PAPER PRODUCTS -- 0.4%
Fort James Corp. .................... 2,600 115,700
International Paper Co. ............. 4,100 176,300
Weyerhaeuser Co. .................... 2,700 124,706
----------
416,706
----------
PHARMACEUTICAL PREPARATIONS -- 9.9%
Abbott Laboratories ................. 19,400 792,975
American Home Products Corp. ........ 16,400 848,700
Bristol-Myers Squibb Co. ............ 12,600 1,448,213
Johnson & Johnson Co. ............... 17,000 1,253,750
Eli Lilly & Co. ..................... 14,000 924,875
Merck & Co., Inc. ................... 15,200 2,033,000
Pfizer, Inc. ........................ 16,400 1,782,475
Pharmacia & Upjohn, Inc. ............ 6,400 295,200
Schering-Plough Corp. ............... 9,300 852,113
Warner-Lambert Co. .................. 10,200 707,625
----------
10,938,926
----------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.3%
Eastman Kodak Co. ................... 4,100 299,556
----------
PRECISION INSTRUMENTS & MEDICAL SUPPLIES -- 0.9%
Baxter International, Inc. .......... 3,500 188,344
Becton, Dickinson & Co. ............. 1,600 124,200
Boston Scientific Corp.* ............ 2,700 193,388
Guidant Corp. ....................... 2,000 142,625
Medtronic, Inc. ..................... 6,000 382,500
----------
1,031,057
----------
VALUE
SHARES (NOTE 2)
------ -------
PRINTING & PUBLISHING -- 0.6%
Gannett Co., Inc. ..................... 3,800 $ 270,038
McGraw-Hill Cos., Inc. ................ 1,300 106,031
New York Times Co. .................... 1,300 103,025
R.R. Donnelley & Sons Co. ............. 2,000 91,500
Tribune Co. ........................... 1,600 110,100
----------
680,694
----------
RUBBER & PLASTICS -- 0.1%
Goodyear Tire & Rubber Co. ............ 2,100 135,319
----------
TELECOMMUNICATIONS EQUIPMENT -- 2.1%
Lucent Technologies, Inc. ............. 16,200 1,347,638
Motorola, Inc. ........................ 7,500 394,219
Northern Telecom Ltd. ................. 6,600 374,550
Tellabs, Inc.* ........................ 2,500 179,063
----------
2,295,470
----------
TEXTILES & APPAREL -- 0.2%
Nike, Inc. ............................ 3,900 189,881
VF Corp. .............................. 1,600 82,400
----------
272,281
----------
TOBACCO -- 1.1%
Philip Morris Cos., Inc. .............. 30,700 1,208,813
----------
TRANSPORTATION EQUIPMENT -- 2.3%
Chrysler Corp. ........................ 8,400 473,550
Dana Corp. ............................ 1,300 69,550
Ford Motor Co. ........................ 15,200 896,800
General Motors Corp. .................. 8,900 594,631
Rockwell International Corp. .......... 2,900 139,381
Tenneco, Inc. ......................... 2,300 87,544
Textron, Inc. ......................... 2,300 164,881
TRW, Inc. ............................. 1,600 87,400
----------
2,513,737
----------
TOTAL MANUFACTURING .................................. 52,660,337
----------
MINING -- 6.9%
ALUMINUM -- 0.2%
Alcan Aluminum Ltd. ................... 3,100 85,638
Aluminum Co. of America ............... 2,400 158,250
----------
243,888
----------
CRUDE PETROLEUM & NATURE GAS -- 1.9%
Burlington Resources, Inc. ............ 2,400 103,350
Halliburton Co. ....................... 3,400 151,513
Phillips Petroleum Co. ................ 3,600 173,475
Royal Dutch Petroleum Co. ............. 27,200 1,490,900
Unocal Corp. .......................... 3,400 121,550
----------
2,040,788
----------
MISCELLANEOUS METAL ORES -- 0.1%
Barrick Gold Corp. .................... 5,000 95,938
----------
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
KIEWIT INVESTMENT TRUST / EQUITY SERIES
- ---------------------------------------
INVESTMENTS / JUNE 30, 1998 -- CONTINUED
================================================================================
VALUE
SHARES (NOTE 2)
------ -------
PETROLEUM REFINING -- 4.7%
Amoco Corp. ......................... 12,200 $ 507,825
Atlantic Richfield Co. .............. 4,300 335,938
Chevron Corp. ....................... 8,300 689,419
Coastal Corp. ....................... 1,400 97,738
Exxon Corp. ......................... 31,300 2,232,081
Mobil Corp. ......................... 10,000 766,250
Texaco, Inc. ........................ 7,200 429,750
USX - Marathon Group ................ 3,900 133,819
----------
5,192,820
----------
TOTAL MINING ....................................... 7,573,434
----------
SERVICES -- 4.7%
AMUSEMENT & RECREATIONAL SERVICES -- 0.8%
Walt Disney Co. ..................... 8,600 903,538
----------
BUSINESS SERVICES -- 0.9%
Automatic Data Processing, Inc. ..... 3,700 269,638
Cendant Corp.* ...................... 10,000 208,750
First Data Corp. .................... 6,000 199,875
The Interpublic Group of Cos., Inc. . 1,600 97,100
MBIA, Inc. .......................... 1,200 89,850
Omnicom Group, Inc. ................. 2,100 104,738
----------
969,951
----------
COMPUTER SERVICES -- 2.1%
Cognizant Corp. ..................... 2,300 144,900
Computer Associates International,
Inc. .............................. 6,900 383,381
Computer Sciences Corp. ............. 2,000 128,000
Dell Computer Corp.* ................ 8,200 761,063
Gateway 2000, Inc.* ................. 1,900 96,188
HBO & Co. ........................... 5,800 204,450
Oracle Corp.* ....................... 12,400 304,575
Parametric Technology Corp.* ........ 3,400 92,225
Sun Microsystems, Inc.* ............. 4,700 204,156
----------
2,318,938
----------
HOTELS, OTHER LODGING PLACES -- 0.2%
Hilton Hotels Corp. ................. 3,400 96,900
Marriott International, Inc. ........
Class A ........................... 3,400 110,075
Sodexho Marriott Services, Inc. ..... 425 12,325
----------
219,300
----------
MEDICAL & HEALTH SERVICES -- 0.3%
Healthsouth Corp.* .................. 5,400 144,113
Tenet Healthcare Corp.* ............. 4,100 128,125
----------
272,238
----------
PERSONAL SERVICES -- 0.1%
Service Corp. International ......... 3,400 145,775
----------
VALUE
SHARES (NOTE 2)
------ -------
SANITARY SERVICES -- 0.3%
Browning-Ferris Industries, Inc. .... 2,900 $ 100,775
Waste Management, Inc. .............. 6,100 213,500
----------
314,275
----------
TOTAL SERVICES ........................ 5,144,015
----------
TRANSPORTATION -- 1.2%
AMR Corp.* .......................... 2,400 199,800
Burlington Northern Santa Fe ........ 2,100 206,194
CSX Corp. ........................... 3,000 136,500
Delta Air Lines, Inc. ............... 1,000 129,250
FDX Corp.* .......................... 2,000 125,500
Norfolk Southern Corp. .............. 5,100 152,044
Southwest Airlines .................. 3,100 91,838
Union Pacific Corp. ................. 3,400 150,025
USAir Group, Inc.* .................. 1,300 103,025
----------
TOTAL TRANSPORTATION .................. 1,294,176
----------
WHOLESALE & RETAIL TRADE -- 6.3%
MISCELLANEOUS RETAIL STORES -- 1.0%
Costco Companies, Inc.* ............. 2,900 182,881
Dayton Hudson Corp. ................. 6,000 291,000
CVS Corp. ........................... 4,800 186,900
Rite Aid Corp. ...................... 3,200 120,200
Toys "R" Us, Inc.* .................. 3,900 91,894
Walgreen Co. ........................ 6,200 256,138
----------
1,129,013
----------
RETAIL APPAREL & ACCESSORY STORES -- 0.5%
Abercrombie & Fitch Co.* ............ 50 2,200
The Gap, Inc. ....................... 5,100 314,288
The Limited, Inc. ................... 3,700 122,563
TJX Companies, Inc. ................. 4,000 96,500
----------
535,551
----------
RETAIL BUILDING MATERIAL -- 0.9%
Home Depot, Inc. .................... 9,300 772,481
Lowe's Cos., Inc. ................... 4,800 194,700
----------
967,181
----------
RETAIL EATING & DRINKING PLACES -- 0.5%
McDonald's Corp. .................... 8,700 600,300
----------
RETAIL FOOD STORES -- 0.5%
Albertson's, Inc. ................... 3,300 170,981
American Stores Co. ................. 3,700 89,494
Kroger Co.* ......................... 3,500 150,063
Winn Dixie Stores, Inc. ............. 2,100 107,494
----------
518,032
----------
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
KIEWIT INVESTMENT TRUST / EQUITY SERIES
- ---------------------------------------
INVESTMENTS / JUNE 30, 1998 -- CONTINUED
================================================================================
VALUE
SHARES (NOTE 2)
------ -------
RETAIL - FAMILY CLOTHING STORES -- 2.5%
Federated Department Stores, Inc.* .. 2,900 $ 156,056
J.C. Penney Co., Inc. ............... 3,400 245,863
K Mart Corp.* ....................... 6,600 127,050
May Department Stores Co. ........... 3,200 209,600
Sears Roebuck & Co. ................. 4,900 299,206
Wal-Mart Stores, Inc. ............... 28,600 1,737,450
----------
2,775,225
----------
WHOLESALE - CHEMICALS & DRUGS -- 0.1%
Cardinal Health, Inc. ............... 1,400 131,250
----------
WHOLESALE MISCELLANEOUS -- 0.3%
Fortune Brands, Inc. ................ 2,400 92,250
Genuine Parts Co. ................... 2,500 86,406
Masco Corp. ......................... 2,300 139,150
----------
317,806
----------
TOTAL WHOLESALE & RETAIL TRADE ..................... 6,974,358
----------
TOTAL COMMON STOCK
(COST $85,725,536) .................. 105,990,610
----------
CONVERTIBLE PREFERRED STOCK -- 0.0%
Sealed Air Corp. $2.00 Cumulative
(COST $26,348) ..................... 475 19,950
----------
PRINCIPAL VALUE
AMOUNT (NOTE 2)
------ -------
U.S. TREASURY OBLIGATION -- 0.5%
U.S. Treasury Bills
5.03%, 09/17/98(a)
(COST $494,556) .................... $ 500,000 $ 494,486
----------
REPURCHASE AGREEMENT -- 3.3%
With Paine Webber Group, Inc.: At 6.15%
dated 06/30/98, to be repurchased
at $3,611,617 on 07/01/98,
collateralized by a Federal Home Loan
Morgage Corporation security with an
original par value of $3,775,000, due
01/01/28 (market value $3,832,078)
(COST $3,611,000) ............................... 3,611,000
------------
TOTAL INVESTMENTS
(COST $89,857,440)(DAGGER) -- 100.0% ................. 110,116,046
OTHER ASSETS AND LIABILITIES, NET -- 0.0% ............... 43,437
------------
NET ASSETS -- 100.0% .................................... $110,159,483
============
* Non-income producing security.
(a) This security has been pledged as collateral for initial margin for futures
contracts.
(DAGGER) Cost for Federal income tax purposes was $88,358,046. At June 30, 1998,
net unrealized appreciation was $21,758,000. This consisted of aggregate
gross unrealized appreciation for all securities in which there was an
excess of market value over tax cost of $24,679,222 and aggregate gross
unrealized depreciation for all securities in which there was an excess of
tax cost over market value of $2,921,222.
SCHEDULE OF FUTURES CONTRACTS (Note 2)
- --------------------------------------
TOTAL UNREALIZED
NUMBER OF CONTRACTS CONTRACT DESCRIPTION CONTRACT VALUE GAIN
- --------------------------------------------------------------------------------
S&P 500
14 September 1998 (Long) $4,000,500 $48,713
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
KIEWIT INVESTMENT TRUST
- -----------------------
FINANCIAL STATEMENTS
================================================================================
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1998
<TABLE>
<CAPTION>
SHORT-TERM
MONEY MARKET GOVERNMENT INTERMEDIATE-TERM EQUITY
SERIES SERIES BOND SERIES SERIES
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in securities, at value* (Note 2) ................... $241,648,706 $19,009,819 $60,417,171 $110,116,046
Cash ........................................................... 295 95 771 257
Receivable for beneficial interests sold ....................... -- -- 9,172 38,363
Receivable from adviser ........................................ -- 11,781 -- --
Dividends and interest receivable .............................. 77,789 249,878 760,009 108,485
-----------------------------------------------------------------
Total assets ................................................... 241,726,790 19,271,573 61,187,123 110,263,151
-----------------------------------------------------------------
LIABILITIES:
Payable for futures variation margin (Note 2) .................. -- -- -- 29,726
Accrued management fee (Note 4) ................................ 39,263 -- 3,238 46,364
Other accrued expenses (Note 4) ................................ 47,839 31,775 30,397 27,578
-----------------------------------------------------------------
Total liabilities .............................................. 87,102 31,775 33,635 103,668
-----------------------------------------------------------------
NET ASSETS ..................................................... $241,639,688 $19,239,798 $61,153,488 $110,159,483
=================================================================
<FN>
* Investments at cost ......................................... $241,648,706 $18,972,887 $59,987,013 $ 89,857,440
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
KIEWIT INVESTMENT TRUST
- -----------------------
FINANCIAL STATEMENTS -- CONTINUED
================================================================================
STATEMENTS OF OPERATIONS
For the Fiscal Year Ended June 30, 1998
<TABLE>
<CAPTION>
SHORT-TERM
MONEY MARKET GOVERNMENT INTERMEDIATE-TERM EQUITY
SERIES SERIES BOND SERIES SERIES
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCOME:
Dividends ................................................. $ -- $ -- $ -- $ 1,405,379
Interest .................................................. 27,754,348 8,428,059 8,850,321 194,845
-----------------------------------------------------------------
Total Income .............................................. 27,754,348 8,428,059 8,850,321 1,600,224
-----------------------------------------------------------------
EXPENSES:
Management fee (Note 4) ................................... 983,634 437,024 579,830 695,586
Administration fee (Note 4) ............................... 114,115 69,391 69,066 62,622
Accounting fee (Note 4) ................................... 106,047 59,883 59,601 53,079
Custodian fee (Note 4) .................................... 61,354 21,397 20,303 23,601
Trustees' fees and expenses (Note 4) ...................... 5,476 5,476 5,476 5,476
Legal fees ................................................ 6,861 2,586 1,816 1,381
Audit fees ................................................ 17,981 17,981 17,981 17,981
Other ..................................................... 17,753 6,291 5,465 4,056
-----------------------------------------------------------------
Total expenses before fee waivers ...................... 1,313,221 620,029 759,538 863,782
Management fee waived (Note 4) ......................... (519,887) (272,381) (115,748) (126,953)
-----------------------------------------------------------------
Total expenses, net .................................... 793,334 347,648 643,790 736,829
-----------------------------------------------------------------
Net investment income ..................................... 26,961,014 8,080,411 8,206,531 863,395
-----------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investment transactions ....... (2,895) 1,416,863 3,220,001 13,804,461
Net realized loss on call options written ................. -- -- -- (184,915)
Net realized gain on futures contracts .................... -- -- -- 325,669
Net change in unrealized appreciation
(depreciation) on investments .......................... -- (198,397) 279,752 10,926,841
-----------------------------------------------------------------
Net gain (loss) on investments ............................ (2,895) 1,218,466 3,499,753 24,872,056
-----------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........... $26,958,119 $9,298,877 $11,706,284 $25,735,451
=================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
KIEWIT INVESTMENT TRUST
- -----------------------
FINANCIAL STATEMENTS -- CONTINUED
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
For the Fiscal Year Ended June 30, 1998
<TABLE>
<CAPTION>
SHORT-TERM
MONEY MARKET GOVERNMENT INTERMEDIATE-TERM EQUITY
SERIES SERIES BOND SERIES SERIES
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income .................................. $ 26,961,014 $ 8,080,411 $ 8,206,531 $ 863,395
Net realized gain (loss) on investment transactions .... (2,895) 1,416,863 3,220,001 13,804,461
Net realized loss on call options written .............. -- -- -- (184,915)
Net realized gain on futures contracts ................. -- -- -- 325,669
Net change in unrealized appreciation
(depreciation) on investments ....................... -- (198,397) 279,752 10,926,841
--------------------------------------------------------------------
Net increase in net assets resulting
from operations .......................................... 26,958,119 9,298,877 11,706,284 25,735,451
--------------------------------------------------------------------
Transactions in beneficial interests:
Contributions .......................................... 2,802,458,254 128,735,824 144,450,638 14,839,563
Withdrawals ............................................ (3,004,989,325) (248,900,910) (203,882,068) (19,204,547)
--------------------------------------------------------------------
Net increase (decrease) in net assets from transactions
in interests ............................................. (202,531,071) (120,165,086) (59,431,430) (4,364,984)
--------------------------------------------------------------------
Total increase (decrease) in net assets ..................... (175,572,952) (110,866,209) (47,725,146) 21,370,467
NET ASSETS:
Beginning of year ...................................... 417,212,640 130,106,007 108,878,634 88,789,016
--------------------------------------------------------------------
End of year ............................................ $ 241,639,688 $ 19,239,798 $ 61,153,488 $110,159,483
====================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
KIEWIT INVESTMENT TRUST
- -----------------------
FINANCIAL STATEMENTS -- CONTINUED
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
For the Period March 1, 1997 (Commencement of Operations) through June 30, 1997
<TABLE>
<CAPTION>
SHORT-TERM
MONEY MARKET GOVERNMENT INTERMEDIATE-TERM EQUITY
SERIES SERIES BOND SERIES SERIES
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income .................................... $ 7,635,035 $ 2,439,031 $ 2,279,895 $ 219,132
Net realized gain (loss) on investment transactions ...... -- (106,763) (58,777) 263,311
Net realized gain on call options written ................ -- -- -- 308,968
Net change in unrealized appreciation
of investments ......................................... -- 235,328 150,405 9,380,417
-----------------------------------------------------------------
Net increase in net assets resulting
from operations .......................................... 7,635,035 2,567,596 2,371,523 10,171,828
-----------------------------------------------------------------
Transactions in beneficial interests:
Contributions .......................................... 684,043,333 133,963,166 107,263,591 81,691,510
Withdrawals ............................................ (274,465,728) (6,424,755) (756,480) (3,074,322)
-----------------------------------------------------------------
Net increase in net assets from
transactions in interests ................................ 409,577,605 127,538,411 106,507,111 78,617,188
-----------------------------------------------------------------
Total increase in net assets ................................ 417,212,640 130,106,007 108,878,634 88,789,016
NET ASSETS:
Beginning of period .................................... -- -- -- --
-----------------------------------------------------------------
End of period .......................................... $417,212,640 $130,106,007 $108,878,634 $88,789,016
=================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
KIEWIT INVESTMENT TRUST
- -----------------------
NOTES TO THE FINANCIAL STATEMENTS
================================================================================
1. DESCRIPTION OF THE TRUST. The Kiewit Investment Trust (the "Trust") is
registered under the Investment Company Act of 1940 (the "1940 Act") as an
open-end management investment company organized as a Delaware business trust
on January 23, 1997. The Declaration of Trust permits the Trustees to
establish additional series, each of which is a separate class of shares. The
Trust comprises five series of shares: Kiewit Money Market Series, Kiewit
Government Money Market Series, Kiewit Short-Term Government Series, Kiewit
Intermediate-Term Bond Series, and Kiewit Equity Series (individually and
collectively referred to as "Series"). As of June 30, 1998, the Kiewit
Government Money Market Series has not yet commenced operations. The
investment objectives of the five Series are as follows: Money Market Series
is to provide high current income while maintaining a stable share price.
Short-Term Government Series is to provide investors with as high a level of
current income as is consistent with the maintenance of principal and
liquidity; Intermediate-Term Bond Series is to provide as high a level of
current income as is consistent with reasonable risk; and the Equity Series
is to achieve long-term capital appreciation.
The Trust commenced operations on March 1, 1997. Each Series of the Trust
received a contribution of investment securities from a corresponding
Portfolio of Kiewit Mutual Fund (the "Fund") in exchange for an ownership
interest in the Series of equal value.
2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the
significant accounting policies of the Trust. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
SECURITY VALUATION. Securities held by the Series which are listed on a
securities exchange and for which market quotations are available are valued
at the last quoted sale price of the day or, if there is no such reported
sale, securities are valued at the mean between the most recent quoted bid
and asked prices. Price information for listed securities is taken from the
exchange where the security is primarily traded. Unlisted securities for
which market quotations are readily available are valued at the most recent
bid prices. Securities with a remaining maturity of 60 days or less are
valued at amortized cost, which approximates market value, unless the Trust's
Board of Trustees determines that this does not represent fair value. The
Money Market Series values securities utilizing the amortized cost valuation
method which is permitted under Rule 2a-7 under the 1940 Act. This method
involves valuing a portfolio security initially at its cost and thereafter
adjusting for amortization of premium or accretion of discount to maturity.
FEDERAL INCOME TAXES. Each Series is treated as a partnership entity for
Federal income tax purposes. Any interest, dividends and gains or losses of a
Series will be deemed to have been "passed through" to each partner.
Accordingly, no tax provision is recorded for the Trust Series.
INVESTMENT INCOME. All of the net investment income (loss) and realized and
unrealized gains and losses from the security transactions are allocated pro
rata among the investors in the Series on a daily basis.
REPURCHASE AGREEMENTS. Each Series, through the Trust's custodian, receives
delivery of the underlying securities used to collateralize the repurchase
agreements, the market value of which is required to be in an amount at least
equal to 102% of the resale price. Kiewit Investment Management Corp.
("KIMC"), the Trust Manager, is responsible for determining that the market
value of these underlying securities is maintained at a level at least equal
to 102% of the resale price. In the event of default of the obligation to
repurchase, the Trust has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Provisions of each agreement
require that the market value of the collateral is sufficient in the event of
default; however, in the event of default or bankruptcy by the other party to
the agreement, realization and/or retention of the collateral may be subject
to legal proceedings.
CALL AND PUT OPTIONS. The Short-Term Government Series, Intermediate-Term
Bond Series and the Equity Series each may write and/ or purchase
exchange-traded call options and purchase exchange-traded put options on
securities in the Series. When a Series writes a call option, an amount equal
to the premium received is reflected as a liability. The amount of the
liability is subsequently "marked to market" to reflect the current market
value of the option written. If an option which a Series has written expires
on its stipulated expiration date, or if a Series enters into a closing
purchase transaction, the Series realizes a gain (or loss if the cost of the
closing transaction exceeds the premium received when the option is sold),
and the liability related to such option is extinguished. If a call option
which a Series has written is exercised, the Series realizes a gain or loss
from the sale of the underlying security, and the proceeds from which are
increased by the premium originally received.
32
<PAGE>
KIEWIT INVESTMENT TRUST
- -----------------------
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
================================================================================
FUTURES TRANSACTIONS. Certain Portfolios may enter into futures contracts
subject to certain limitations.Upon entering into a futures contract, the
Portfolio is required to deposit cash or pledge U.S.Government securities as
margin. Subsequent payments, which are dependent on the daily fluctuations in
the value of the underlying security or securities, are made or received by
the Portfolio each day (daily variation margin) and are recorded as
unrealized gains or losses until the contracts are closed. When the contracts
are closed, the Portfolio records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and
the Portfolio's basis in the contracts. Risks of entering into futures
contracts include the possibility that there will not be a perfect price
correlation between the futures contracts and the underlying securities, and
that a lack of liquidity for futures contracts could exist in the secondary
market, resulting in an inability to close a futures position prior to its
maturity date. The purchase of a futures contract involves the risk that a
Portfolio could lose more than the original margin deposit required to
initiate a futures transaction up to the amount of the contract.
OTHER. Investment security transactions are accounted for on a trade date
basis. Each Series uses the specific identification method for determining
realized gain and loss on investments for both financial and Federal income
tax reporting purposes.
3. INVESTMENT SECURITIES. During the fiscal year ended June 30, 1998, purchases
and sales of investment securities (excluding short-term investments)
aggregated as follows:
SHORT-TERM INTERMEDIATE-
GOVERNMENT TERM BOND EQUITY
-------------------------------------------
Purchases ..................... $310,056,257 $304,449,533 $89,592,266
Sales ......................... 414,940,883 344,379,974 89,312,231
Portfolio Turnover Rate:
1998 ........................ 235.47% 236.36% 93.08%
1997 ........................ 44.24% 51.57% 26.33%
Written options transactions for the Equity Series during the fiscal year
ended June 30, 1998 are summarized as follows:
CALL OPTIONS WRITTEN
PREMIUMS RECEIVED
--------------------
Options outstanding, beginning of period ...... $(19,624)
Options written ............................... (93,109)
Options closed ................................ 82,397
Options exercised ............................. 30,336
Options expired ............................... 0
--------
Options outstanding at June 30, 1998 .......... $ 0
========
During the fiscal year ended June 30, 1998, the Short-Term Government Series
and the Intermediate-Term Bond Series had not entered into any option
contracts.
4. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES. The Trust, on behalf
of each Series, employs KIMC, a wholly-owned subsidiary of Kiewit
Construction Company, to furnish investment advisory and other services to
the Trust. Pursuant to an investment management agreement with the Trust with
respect to each Series, KIMC manages the investment and reinvestment of their
assets, provides the Trust with records concerning KIMC's activities which
the Trust is required to maintain, and renders regular reports to the Trust
officers and the Board of Trustees.
For its services under the investment management agreement for each Series,
KIMC receives fees from the Series at the following annual rates of their
average monthly net assets. Money Market Series - 0.20%; Short-Term
Government Series - 0.30%; Intermediate-Term Bond Series - 0.40%; and Equity
Series - 0.70%.
33
<PAGE>
KIEWIT INVESTMENT TRUST
- -----------------------
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
================================================================================
KIMC has agreed to waive all or a portion of its management fee and assume
certain fund expenses in an amount that will limit annual operating expenses
(excluding taxes, extraordinary expenses, brokerage commissions and interest)
to not more than the following percentage of the average daily net assets of
each Kiewit Mutual Fund Portfolio: Money Market Portfolio - 0.20%, Short-Term
Government Portfolio - 0.30%; Intermediate-Term Bond Portfolio - 0.50%; and
Equity Portfolio - 0.80%. These undertakings may be amended or rescinded at
any time in the future.
The following table summarizes the management fees for the fiscal year ended
June 30, 1998:
GROSS MANAGEMENT MANAGEMENT
FEE FEES WAIVED
------------------------------
Money Market Series ................. $983,634 $519,887
Short-Term Government Series ........ 437,024 272,381
Intermediate-Term Bond Series ....... 579,830 115,748
Equity Series ....................... 695,586 126,953
Effective January 5, 1998, PFPC Inc. ("PFPC"), an indirect wholly-owned
subsidiary of PNC Bank Corp., a multi-bank holding company, serves as
Administrator to the Trust and Fund pursuant to separate Administration
Agreements with the Fund and the Trust. As Administrator, PFPC is responsible
for service such as financial reporting, compliance monitoring and corporate
management. For the services provided, PFPC receives a monthly administration
fee from the Trust, on behalf of each Series. Each Series pays a
proportionate share of a complex-wide annual fee of 0.015% of the Trust's
aggregate total average daily net assets in excess of $125 million. This
asset based fee is determined on a total average daily net asset basis, and
is subject to prescribed minimums. Prior to January 5, 1998, Rodney Square
Management Corp. ("RSMC"), a wholly-owned subsidiary of Wilmington Trust
Company ("WTC"), served as Administrator to the Trust and Fund. RSMC was
compensated by the Fund at the same rate of compensation that PFPC receives.
Effective January 5, 1998, PNC Bank, N.A. serves as custodian to the Fund and
the Trust. Prior to January 5, 1998, WTC served as custodian of the assets of
the Trust.
Effective January 5, 1998, PFPC determines the net asset value of each Series
and provides accounting services to the Trust pursuant an Accounting Services
Agreement with the Trust on behalf of each Series. For its services, PFPC
receives from the Trust, on behalf of each Series, the Series' proportionate
share of a complex-wide annual fee of 0.015% of the Trust's aggregate total
average daily net assets in excess of $100 million. This asset-based fee is
determined on a total average daily net asset basis, and is subject to
prescribed fixed minimums. Prior to January 5, 1998, RSMC provided accounting
services to the Trust, and was compensated by the Fund at the same rates of
compensation that PFPC receives.
Independent Trustees are each paid an annual fee of $5,000 from the Trust,
plus $250 per Series per meeting attended, plus travel expenses in connection
with meetings. Certain officers and trustees of the Trust are also officers
and/or directors of KIMC.
34
<PAGE>
KIEWIT INVESTMENT TRUST
- -----------------------
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
To the Trustees and Beneficial Interest Holders of Kiewit Investment Trust:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets present fairly, in all material
respects, the financial position of Kiewit Money Market Series, Kiewit
Short-Term Government Series, Kiewit Intermediate-Term Bond Series and Kiewit
Equity Series (four of the series constituting Kiewit Investment Trust,
hereafter referred to as the "Trust") at June 30, 1998, the results of each
of their operations for the year then ended and the changes in each of their
net assets for the year then ended and for the period ended March 1, 1997
(commencement of operations) through June 30, 1997, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Trust'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 generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at June 30, 1998 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
July 31, 1998
35
