<PAGE> 1
- -------------------------------------------------------------------------------
PROVIDENT
- -------------------------------------------------------------------------------
INSTITUTIONAL 400 Bellevue Parkway, Wilmington, DE 19809 Phone:
FUNDS 302-792-2555 Fax: 302-792-5876
G. Willing Pepper
Chairman TEMPORARY INVESTMENT FUND, INC.
November 13, 1995
Dear Shareholder:
Enclosed is the Annual Report to Shareholders of Temporary Investment Fund,
Inc. for the year ended September 30, 1995.
I urge you to read the Investment Adviser's Report which contains
information on the economy and comments on Fund performance. Credit quality is a
prime consideration in the management of each portfolio and service is paramount
in responding to your needs.
If you have any questions regarding TempFund or TempCash, please contact
your Provident Distributor, Inc. account representative or our Client Service
Center at (800) 821-7432. They will also be able to provide information about
other portfolios offered by Provident Institutional Funds.
Your continued confidence in Provident Institutional Funds is greatly
appreciated.
Sincerely,
[SIGNATURE]
G. Willing Pepper
Chairman
<PAGE> 2
TEMPORARY INVESTMENT FUND, INC.
Annual Investment Adviser's Report
Economic growth continued to slow during the second quarter as the impact
from the interest rate rise during 1994 worked its way through the system. The
most recent revision to second quarter real GDP growth was 1.3%, a dramatic
change from the 5.1% experienced in the fourth quarter of 1994 and the 2.7% in
the first quarter of 1995.
While the Federal Reserve is concerned about the deceleration in growth, it
cannot overlook the 100 basis point decline in interest rates at the front end
of the yield curve that has occurred in 1995 and the possibility that it has
re-stimulated the economy. A reacceleration in consumer spending could
significantly reduce inventories and lead to a resumption in manufacturing
activity. In fact, there are several indications that economic growth may be
rekindling. Factory orders, durable goods orders, retail sales and housing all
rebounded in mid-summer. Existing home sales rose 4.7% while new home sales
jumped 19.9%, the largest increase since January 1992. Lastly, consumer
confidence remains relatively high, buoyed by a soaring stock market.
The year-long rise in short-term interest rates ended in July, when the Fed
lowered the federal funds rate from 6% to 5.75%. This reversal in monetary
policy was widely anticipated and represented the Fed's belief that
"inflationary pressures have receded enough to accommodate a modest adjustment
in monetary conditions." The Fed's move also helped to flatten the short end of
the yield curve, correcting a sharply inverted position where one day
investments offered the highest yields at 6%, while six-month investments were
sometimes lower by 50 basis points or more. The Fed did not further ease policy
at its August or September meetings.
In the year's final quarter, the outlook for the economy is improving and
inflation remains subdued. A return to a non-inflationary growth rate of
2.5-3.0% may give the Fed sufficient comfort to ease policy again before the end
of the year.
On September 30, the TempFund portfolio had assets of $5.433 billion and a
7-day yield of 5.75% and the TempCash portfolio had assets of $1.770 billion and
a 7-day yield of 5.74%. These continued to be very competitive yields and
compared well to the Fed's current target of 5.75% for the federal funds rate.
Both portfolios maintained average weighted maturities near 50 days during the
most recent quarter, a slightly extended position in anticipation of declining
interest rates in the fourth quarter. The Company also maintained a very strict
position on credit quality, with both portfolios investing only in securities
with the highest short-term ratings. Overseas problems have not affected the
Company, but we have restricted even further our use of Japanese bank
obligations. The Company remains committed to providing shareholders with high
quality, highly liquid portfolios.
PNC INSTITUTIONAL MANAGEMENT
CORPORATION
NOVEMBER 2, 1995
2
<PAGE> 3
TEMPFUND PORTFOLIO
Temporary Investment Fund, Inc.
Statement of Net Assets
September 30, 1995
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT--0.5%
DOMESTIC CERTIFICATES OF DEPOSIT
National City Bank of Cleveland
6.375%............ 05/10/96 $ 25,000 $ 25,064,970
--------------
Total Certificates of Deposit
(Cost $25,064,970).................. 25,064,970
--------------
COMMERCIAL PAPER--43.5%
BANKS--4.6%
Citicorp
6.625%............ 10/02/95 100,000 99,981,597
Morgan (J. P.) & Co.
5.59%............. 12/20/95 25,000 24,689,444
National City Corp.
6.05%............. 10/31/95 25,000 24,873,958
Norwest Corp.
5.66%............. 11/13/95 60,000 59,594,367
5.66%............. 11/15/95 40,000 39,717,000
--------------
248,856,366
--------------
CHEMICALS & ALLIED PRODUCTS--1.3%
Monsanto Co.
5.60%............. 12/01/95 20,547 20,352,032
The Bayer Corp.
5.67%............. 11/09/95 50,000 49,692,875
--------------
70,044,907
--------------
CONVERTED PAPER & PAPERBOARD PRODUCTS--0.9%
Minnesota Mining & Manufacturing Co.
6.50%............. 10/02/95 48,565 48,556,231
--------------
FINANCE LESSORS--4.2%
General Electric Capital Corp.
5.70%............. 10/24/95 60,000 59,781,500
5.75%............. 11/28/95 75,000 74,305,208
5.68%............. 02/14/96 75,000 73,390,667
Pitney Bowes Credit Corp.
5.625%............ 12/01/95 22,037 21,826,960
--------------
229,304,335
--------------
INDUSTRIAL INORGANIC CHEMICALS--0.3%
Air Products & Chemicals, Inc.
5.62%............. 12/14/95 17,000 16,803,612
--------------
INSURANCE AGENTS, BROKERS & SERVICES--0.5%
Marsh and McLennan Companies
5.75%............. 11/30/95 30,000 29,712,500
--------------
LIFE INSURANCE--0.5%
Prudential Funding Corp.
5.72%............. 11/15/95 25,000 24,821,250
--------------
MOTOR VEHICLES & CAR BODIES--0.3%
Daimler-Benz North America Corp.
6.04%............. 11/27/95 15,000 14,856,550
--------------
COMMERCIAL PAPER (CONTINUED)
PERSONAL CREDIT INSTITUTIONS--9.9%
Associates Corp. of North America
5.65%............. 10/02/95 50,000 49,992,153
5.68%............. 10/27/95 100,000 99,589,778
5.66%............. 12/05/95 50,000 49,489,028
5.66%............. 12/06/95 50,000 49,481,167
Ford Motor Credit Corp.
5.65%............. 10/06/95 150,000 149,882,292
5.87%............. 11/08/95 80,195 79,698,103
5.76%............. 02/20/96 60,000 58,636,800
--------------
536,769,321
--------------
PETROLEUM REFINING--1.3%
Koch Industries, Inc.
6.52%............. 10/02/95 75,000 74,986,417
--------------
PLASTIC SYNTHETIC RESIN/RUBBER--1.8%
Du Pont (E.I.) de Nemours & Co.
6.04%............. 10/03/95 50,000 49,983,222
5.55%............. 07/18/96 50,000 47,756,875
--------------
97,740,097
--------------
RAILROAD LINE-HAUL OPERATING--0.3%
Norfolk Southern Corp.
5.66%............. 11/08/95 15,000 14,910,383
--------------
SECURITY BROKERS & DEALERS--8.4%
C.S. First Boston
5.72%............. 12/13/95 40,000 39,536,044
Goldman Sachs Group L.P.
6.75%............. 10/02/95 85,000 84,984,063
Merrill Lynch & Co.
5.57%............. 01/16/96 50,000 49,172,236
5.57%............. 03/07/96 90,000 87,799,850
Morgan Stanley Group, Inc.
5.65%............. 01/22/96 100,000 98,226,528
Smith Barney Inc.
5.65%............. 12/18/95 100,000 98,775,833
--------------
458,494,554
--------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--5.4%
American Express Credit Corp.
5.67%............. 10/04/95 75,000 74,964,563
5.68%............. 10/30/95 70,000 69,679,711
5.64%............. 12/12/95 50,000 49,436,000
5.64%............. 12/19/95 100,000 98,762,333
--------------
292,842,607
--------------
SOAP, DETERGENT, CLEANING PREPS, PERFUMES
& COSMETICS--0.5%
Colgate-Palmolive Company
5.65%............. 10/10/95 25,000 24,964,688
--------------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
TEMPFUND PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
TELEPHONE COMMUNICATIONS--3.3%
American Telephone & Telegraph Co.
5.67%............. 11/10/95 $100,000 $ 99,370,000
5.72%............. 11/17/95 25,000 24,813,306
5.71%............. 11/22/95 45,000 44,628,850
Ameritech Corp.
5.40%............. 04/04/96 10,000 9,721,000
--------------
178,533,156
--------------
Total Commercial Paper
(Cost $2,362,196,974)............... 2,362,196,974
--------------
UNITED STATES GOVERNMENT AGENCY
OBLIGATIONS--6.6%
Federal Home Loan Bank
6.07%.+........... 10/02/95 70,000 69,997,154
5.695%............ 06/26/96 42,935 42,918,275
Federal National Mortgage Association
5.50%.+........... 10/03/95 100,000 100,000,000
5.8125%........... 09/27/96 75,000 75,000,000
5.86%............. 10/07/96 70,000 69,930,000
--------------
Total U.S.Government Agency
Obligations
(Cost $357,845,429)................. 357,845,429
--------------
VARIABLE RATE OBLIGATIONS+--19.2%
BANKS--9.2%
First Union National Bank of North Carolina
6.56%............. 10/02/95 100,000 100,000,000
Morgan Guaranty Trust
6.07%............. 10/02/95 275,000 274,859,006
Norwest Corp.
5.875%............ 10/04/95 100,000 100,000,000
5.8625%........... 12/20/95 25,000 25,027,115
--------------
499,886,121
--------------
FINANCE LESSORS--0.9%
General Electric Capital Corp.
5.8125%........... 12/14/95 50,000 50,000,000
--------------
PERSONAL CREDIT INSTITUTIONS--1.1%
Ford Motor Credit Corp.
6.125%............ 10/19/95 60,200 60,325,738
--------------
SECURITY BROKERS & DEALERS--8.0%
Bear Stearns Companies, Inc.
6.75%............. 10/02/95 100,000 100,000,000
5.47%............. 10/03/95 75,000 75,000,000
5.9875%........... 11/16/95 100,000 100,000,000
Goldman Sachs Group, L.P.
6.1875%........... 10/06/95 160,000 160,000,000
--------------
435,000,000
--------------
Total Variable Rate Obligations
(Cost $1,045,211,859)............... 1,045,211,859
--------------
MEDIUM TERM NOTES--6.1%
FINANCE LESSORS--2.4%
General Electric Capital Corp.
14.00%............ 07/01/96 20,000 21,135,673
14.00%............ 07/05/96 17,500 18,509,362
IBM Credit Corp.
15.00%............ 01/11/96 40,000 40,945,653
5.66%............. 07/17/96 50,000 50,000,000
--------------
130,590,688
--------------
SECURITY BROKERS & DEALERS--3.7%
Goldman Sachs Group, L. P.
5.875%............ 04/15/96 50,000 50,000,000
Merrill Lynch & Co.
7.214%............ 12/18/95 50,000 50,000,000
7.56%............. 01/18/96 49,500 49,496,784
5.742%............ 07/19/96 50,000 50,000,000
--------------
199,496,784
--------------
Total Medium Term Notes
(Cost $330,087,472)................. 330,087,472
--------------
REPURCHASE AGREEMENTS--27.4%
J. P. Morgan Securities
6.25%............. 10/02/95 $125,000 $ 125,000,000
(Agreement dated 09/29/95 to
be repurchased at
$125,021,701
collateralized by
$114,608,000 U.S. Treasury
Notes 7.50% due 11/15/16.
Market value of collateral
is $127,566,504.)
6.30%............. 10/02/95 98,000 98,000,000
(Agreement dated 09/29/95 to
be repurchased at
$98,017,150 collateralized
by $88,756,000 U.S.
Treasury Bonds 7.625% due
02/15/25. Market value of
collateral is
$100,017,333.)
Lehman Government Securities, Inc.
6.50%............. 10/02/95 85,000 85,000,000
(Agreement dated 09/29/95 to
be repurchased at
$85,015,347 collateralized
by $83,284,000 U.S.
Treasury Notes 6.75% due
5/31/99 to 6/30/99. Market
value of collateral is
$86,671,963.)
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
TEMPFUND PORTFOLIO
Statement of Net Assets (Concluded)
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Morgan Stanley & Co.
6.46%............. 10/02/95 $304,000 $ 304,000,000
(Agreement dated 09/29/95 to
be repurchased at
$304,054,551
collateralized by
$293,685,000 U.S. Treasury
Notes and Bonds 5.125% to
14.00% due 11/01/95 to
11/15/22. Market value of
collateral is
$312,168,195.)
6.54%............. 10/02/95 405,000 405,000,000
(Agreement dated 09/29/95 to
be repurchased at
$405,073,575
collateralized by
$430,310,035 Federal Home
Loan Bank Notes 3.94% to
9.25% due 10/02/95 to
11/01/24. Market value of
collateral is
$415,881,969.)
PaineWebber, Inc.
6.55%............. 10/02/95 275,000 275,000,000
(Agreement dated 09/29/95 to
be repurchased at
$275,050,035
collateralized by
$306,478,442 Federal
National Mortgage
Association Notes and
$59,320,000 Student Loan
Marketing Association
Notes 4.875% to 9.375% due
11/01/95 to 01/15/30.
Market value of collateral
is $283,250,688.)
6.625%............ 10/02/95 200,000 200,000,000
(Agreement dated
09/29/95 to be repurchased
at $200,036,806
collateralized by
$217,336,745
Federal National Mortgage
Association Adjustable
Rate Notes 5.00% to 11.50%
due 09/01/00 to 10/01/25.
Market value of collateral
is $206,001,738.)
--------------
Total Repurchase Agreements
(Cost $1,492,000,000)............... 1,492,000,000
--------------
<CAPTION>
VALUE
--------------
<S> <C> <C>
TOTAL INVESTMENT IN SECURITIES
(Cost $5,612,406,704*)........ 103.3% $5,612,406,704
LIABILITIES IN EXCESS OF OTHER
ASSETS........................ (3.3) (179,232,597)
------ --------------
NET ASSETS (Equivalent to $1.00
per share based on
5,351,412,693 TempFund shares
and 81,806,843 TempFund Dollar
shares, $.001 par value common
stock outstanding)............ 100.0% $5,433,174,107
====== ==============
NET ASSET VALUE, offering and
redemption price per share
($5,433,174,107 / 5,433,219,536)........ $1.00
=====
</TABLE>
- ---------------
* Cost for federal income tax purposes.
+ Variable Rate Obligations--The rate shown is the rate as of September 30,
1995, and the maturity date shown is the date the principal amount can be
recovered upon demand or put.
TEMPFUND/TEMPFUND DOLLAR
Maturity Information
September 30, 1995
<TABLE>
<CAPTION>
PERCENTAGE
MATURITY PAR OF
PERIOD (000) PORTFOLIO
------------- ---------- ----------
<S> <C> <C> <C>
1- 7 Days $3,105,565 55.2%
8- 14 Days 25,000 0.4
15- 30 Days 290,200 5.2
31- 60 Days 655,195 11.6
61- 90 Days 629,584 11.2
91-120 Days 239,500 4.2
121-150 Days 135,000 2.4
Over 150 Days 550,435 9.8
---------- -------
$5,630,479 100.0%
========== =======
Average Weighted Maturity--51 Days
- -------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
TEMPCASH PORTFOLIO
Temporary Investment Fund, Inc.
Statement of Net Assets
September 30, 1995
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT--7.9%
YANKEE CERTIFICATES OF DEPOSIT
ABN-AMRO Bank N.A. Finance, Inc.
5.57%............ 06/05/96 $ 25,000 $ 24,958,678
Banque Nationale de Paris
6.63%............ 03/26/96 25,000 25,026,203
Banque Paribas
6.27%............ 11/01/95 25,000 25,000,122
Commerzbank
6.18%............ 05/09/96 15,000 15,028,708
6.03%............ 05/10/96 15,000 15,015,911
Westdeutsche Landesbank Girozentrale
6.71%............ 03/04/96 35,000 35,036,468
--------------
Total Certificates of Deposit
(Cost $140,066,090)................. 140,066,090
--------------
COMMERCIAL PAPER--21.6%
BANKS--5.9%
National City Corp.
6.05%............ 10/31/95 25,000 24,873,958
Nationwide Building Society
5.71%............ 11/02/95 50,000 49,746,222
5.68%............ 12/08/95 30,000 29,678,133
--------------
104,298,313
--------------
CONGLOMERATES--2.0%
BTR Dunlop Finance, Inc.
5.73%............ 11/16/95 36,000 35,736,420
--------------
HOUSEHOLD APPLIANCES--1.6%
Whirlpool Finance Corp.
6.05%............ 11/01/95 20,000 19,895,806
5.86%............ 01/26/96 8,500 8,338,118
--------------
28,233,924
--------------
INSURANCE AGENTS AND BROKERS SERVICES--1.4%
Marsh and McLennan Companies
5.70%............ 02/22/96 25,000 24,430,000
--------------
PERSONAL CREDIT INSTITUTIONS--4.8%
BMW U.S. Capital Corp.
5.72%............ 10/24/95 40,910 40,760,497
5.67%............ 12/15/95 14,155 13,987,794
General Motors Acceptance Corp.
5.68%............ 11/29/95 30,000 29,720,733
--------------
84,469,024
--------------
PHARMACEUTICAL PREPARATIONS--3.1%
American Home Products Corp.
5.74%............ 11/09/95 29,100 28,919,047
5.70%............ 12/06/95 26,825 26,544,679
--------------
55,463,726
--------------
COMMERCIAL PAPER (CONTINUED)
PLASTIC, SYNTHETIC RESIN/RUBBER--2.8%
Du Pont (E.I.) de Nemours & Co.
6.04%............ 10/03/95 50,000 49,983,222
--------------
Total Commercial Paper
(Cost $382,614,629)................. 382,614,629
--------------
TIME DEPOSITS--2.8%
Chemical Bank
6.50%............ 10/02/95 50,000 50,000,000
--------------
Total Time Deposits
(Cost $50,000,000).................. 50,000,000
--------------
UNITED STATES GOVERNMENT AGENCY
OBLIGATIONS--23.8%
Federal Farm Credit Bank
5.78%+........... 10/04/95 50,000 49,967,065
Federal National Mortgage Association
5.50%+........... 10/03/95 75,000 75,000,000
5.8125%.......... 09/27/96 45,000 44,986,648
5.86%............ 10/07/96 25,000 24,975,000
Student Loan Marketing Association
5.44%+........... 10/03/95 51,750 51,745,210
5.47%+........... 10/03/95 50,000 50,008,977
5.48%+........... 10/03/95 6,000 6,001,541
5.50%+........... 10/03/95 44,000 43,992,045
5.51%+........... 10/03/95 5,300 5,302,971
5.64%+........... 10/03/95 13,950 14,005,002
5.715%+.......... 10/03/95 56,000 56,174,002
--------------
Total U.S. Government Agency
Obligations
(Cost $422,158,461)................. 422,158,461
--------------
VARIABLE RATE OBLIGATIONS--40.7%
BANKS--5.7%
First Union National Bank of North Carolina
6.56%............ 10/02/95 100,000 100,000,000
--------------
FINANCE SERVICES--2.8%
AT&T Capital Corp.
6.30%............ 10/02/95 50,000 50,020,184
--------------
INSURANCE--2.8%
Peoples Security Life Funding Agreement
6.07%............ 10/02/95 50,000 50,000,000
--------------
PERSONAL CREDIT INSTITUTIONS--2.6%
Ford Motor Credit
6.075%........... 10/16/95 20,000 20,045,629
General Motors Acceptance Corp.
5.9625%.......... 10/23/95 25,000 25,024,047
--------------
45,069,676
--------------
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
TEMPCASH PORTFOLIO
Statement of Net Assets (Concluded)
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
VARIABLE RATE OBLIGATIONS (CONTINUED)
SECURITY BROKERS & DEALERS--26.8%
Bear Stearns Companies, Inc.
6.70%............ 10/02/95 $ 25,000 $ 25,000,000
6.75%............ 10/02/95 60,000 60,000,000
5.47%............ 10/03/95 40,000 40,000,000
Goldman Sachs Group L.P.
6.00%............ 11/10/95 100,000 100,000,000
Lehman Brothers Holdings, Inc.
5.975%........... 10/06/95 125,000 125,000,000
Merrill Lynch & Co.
6.20%............ 10/02/95 25,000 24,998,505
6.68%............ 10/02/95 50,000 49,999,932
5.47%............ 10/03/95 50,000 50,000,000
--------------
474,998,437
--------------
Total Variable Rate Obligations
(Cost $720,088,297)................. 720,088,297
--------------
MEDIUM TERM NOTES--2.8%
SECURITY BROKERS & DEALERS
Merrill Lynch & Co.
6.52%............ 05/13/96 50,000 50,000,000
--------------
Total Medium Term Notes
(Cost $50,000,000).................. 50,000,000
--------------
REPURCHASE AGREEMENTS--1.5%
PaineWebber, Inc.
6.55%............ 10/02/95 26,100 26,100,000
(Agreement dated 09/29/95
to be repurchased at
$26,104,749,
collateralized by
$19,279,190
Federal National
Mortgage Association
Notes and $15,129,000
Federal Home Loan
Mortgage Corp. Notes
6.00% to 8.50% due
08/25/07 to 02/25/25.
Market value of
collateral is
$26,886,470.)
--------------
Total Repurchase Agreements
(Cost $26,100,000).................. 26,100,000
--------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
--------------
<S> <C> <C>
TOTAL INVESTMENT IN SECURITIES
(Cost $1,791,027,477*)....... 101.1% $1,791,027,477
LIABILITIES IN EXCESS OF OTHER
ASSETS....................... (1.1) (20,705,253)
----- --------------
NET ASSETS (Equivalent to $1.00
per share based on
1,316,583,230 TempCash shares
and 454,257,442 TempCash
Dollar shares, $.001 par
value common stock
outstanding)................. 100.0% $1,770,322,224
===== ==============
NET ASSET VALUE, offering and redemption
price per share ($1,770,322,224 /
1,770,840,672).......................... $1.00
=====
</TABLE>
- ---------------
* Cost for federal income tax purposes.
+ Variable Rate Obligations--The rate shown is the rate as of September 30,1995
and the maturity date shown is the date the principal amount can be recovered
upon demand or put.
- -------------------------------------------------------
TEMPCASH/TEMPCASH DOLLAR
Maturity Information
September 30, 1995
<TABLE>
<CAPTION>
PERCENTAGE
MATURITY PAR OF
PERIOD (000) PORTFOLIO
------------- ---------- ----------
<S> <C> <C> <C>
1- 7 Days $1,053,100 58.7%
8- 14 Days 0 0.0
15- 30 Days 85,910 4.8
31- 60 Days 315,100 17.6
61- 90 Days 70,980 4.0
91-120 Days 8,500 0.5
121-150 Days 25,000 1.4
Over 150 Days 235,000 13.0
---------- -------
$1,793,590 100.0%
========== =======
Average Weighted Maturity--48 Days
- -------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
TEMPORARY INVESTMENT FUND, INC.
Statements of Operations
Year Ended September 30, 1995
<TABLE>
<CAPTION>
TEMPFUND TEMPCASH
PORTFOLIO PORTFOLIO
------------ ------------
<S> <C> <C>
Interest income............................................................... $322,944,326 $226,905,534
------------ ------------
Expenses:
Investment advisory fee................................................... 6,840,438 5,277,478
Administration fee........................................................ 6,840,438 5,277,478
Directors' fees and officer's salary...................................... 48,334 42,296
Transfer agent fee........................................................ 306,262 157,782
Custodian fee............................................................. 564,897 432,806
Shareholder computer access program....................................... 87,867 37,420
Legal and audit........................................................... 78,270 74,668
Registration fees and expenses............................................ 23,205 14,400
Other..................................................................... 114,479 71,689
------------ ------------
14,904,190 11,386,017
Less fees waived.......................................................... (1,884,683) (5,190,756)
------------ ------------
13,019,507 6,195,261
Service Organization fees................................................. 197,029 1,102,689
------------ ------------
Total expenses....................................................... 13,216,536 7,297,950
------------ ------------
Net investment income..................................................... 309,727,790 219,607,584
Net realized gain (loss) on investments....................................... (45,427) 13,766
------------ ------------
Net increase in net assets resulting from operations...................... $309,682,363 $219,621,350
============ ============
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
TEMPORARY INVESTMENT FUND, INC.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TEMPFUND PORTFOLIO TEMPCASH PORTFOLIO
------------------------------------- ------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1995 1994 1995 1994
---------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income......... $ 309,727,790 $ 226,506,870 $ 219,607,584 $ 89,031,431
Net realized gain (loss)
on investments.............. (45,427) 38,515 13,766 (532,216)
---------------- ----------------- ---------------- ----------------
Net increase in net assets
resulting from
operations................ 309,682,363 226,545,385 219,621,350 88,499,215
---------------- ----------------- ---------------- ----------------
Distributions to shareholders:
Dividends to shareholders
from net investment income:
TempFund shares............. (305,489,546) (223,175,770) -- --
TempFund Dollar shares...... (4,238,244) (3,331,100) -- --
TempCash shares............. -- -- (195,367,688) (76,657,316)
TempCash Dollar shares...... -- -- (24,239,896) (12,374,115)
Distributions to shareholders
from net realized gain:
TempFund shares............. (37,842) (156,828) -- --
TempFund Dollar shares...... (673) (2,408) -- --
TempCash shares............. -- -- -- (40,922)
TempCash Dollar shares...... -- -- -- (6,452)
---------------- ----------------- ---------------- ----------------
Total distributions to
shareholders............ (309,766,305) (226,666,106) (219,607,584) (89,078,805)
---------------- ----------------- ---------------- ----------------
Capital share transactions
(at $1 per share):
Sale of shares................ 86,630,484,234 111,597,973,227 73,114,313,267 40,239,880,232
Shares issued in reinvestment
of dividends................ 47,211,646 35,304,942 69,643,235 21,324,036
Shares repurchased............ (85,827,394,675) (112,684,951,660) (74,142,052,727) (39,318,494,571)
---------------- ----------------- ---------------- ----------------
Increase (decrease) in
net assets derived from
capital share
transactions............ 850,301,205 (1,051,673,491) (958,096,225) 942,709,697
---------------- ----------------- ---------------- ----------------
Total increase (decrease)
in net assets........... 850,217,263 (1,051,794,212) (958,082,459) 942,130,107
Net assets:
Beginning of year................. 4,582,956,844 5,634,751,056 2,728,404,683 1,786,274,576
---------------- ----------------- ---------------- ----------------
End of year....................... $ 5,433,174,107 $ 4,582,956,844 $ 1,770,322,224 $ 2,728,404,683
================ ================= ================ ================
</TABLE>
See accompanying notes to financial statements.
9
<PAGE> 10
TEMPORARY INVESTMENT FUND, INC.
Financial Highlights
(For a Share of the Fund Outstanding Throughout Each Year)
<TABLE>
<CAPTION>
TEMPFUND SHARES
------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
------------------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income From Investment Operations
Net Investment Income................................. .0567 .0360 .0310 .0424 .0667
Net Realized Gains on Investments..................... -- -- -- .0015 --
------ ------ ------ ------ ------
Total From Investment Operations...................... .0567 .0360 .0310 .0439 .0667
------ ------ ------ ------ ------
Less Distributions
Dividends (from net investment income)................ (.0567) (.0360) (.0310) (.0424) (.0667)
Distributions (from capital gains).................... -- -- -- (.0015) --
------ ------ ------ ------ ------
Total Distributions................................... (.0567) (.0360) (.0310) (.0439) (.0667)
------ ------ ------ ------ ------
Net Asset Value, End of Year............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total Return.......................................... 5.82% 3.66% 3.14% 4.48% 6.87%
Ratios/Supplemental Data
Net Assets, End of Year (000)....................... $5,351,346 $4,480,851 $5,522,056 $9,227,572 $8,888,832
Ratio of Expenses to Average Daily Net Assets....... .24%(1) .25%(1) .21% .21% .27%
Ratio of Net Investment Income to Average Daily
Net Assets........................................ 5.67% 3.60% 3.10% 4.13% 6.53%
</TABLE>
<TABLE>
<CAPTION>
TEMPFUND DOLLAR SHARES
------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
------------------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income From Investment Operations
Net Investment Income................................. .0542 .0335 .0285 .0399 .0642
Net Realized Gains on Investments..................... -- -- -- .0015 --
------ ------ ------ ------ ------
Total From Investment Operations...................... .0542 .0335 .0285 .0414 .0642
------ ------ ------ ------ ------
Less Distributions
Dividends (from net investment income)................ (.0542) (.0335) (.0285) (.0399) (.0642)
Distributions (from capital gains).................... -- -- -- (.0015) --
------ ------ ------ ------ ------
Total Distributions................................... (.0542) (.0335) (.0285) (.0414) (.0642)
------ ------ ------ ------ ------
Net Asset Value, End of Year............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total Return.......................................... 5.57% 3.41% 2.89% 4.23% 6.62%
Ratios/Supplemental Data
Net Assets, End of Year (000)....................... $ 81,828 $ 102,105 $ 112,695 $ 217,230 $ 44,667
Ratio of Expenses to Average Daily Net Assets....... .49%(1) .50%(1) .46% .46% .52%
Ratio of Net Investment Income to Average Daily
Net Assets........................................ 5.42% 3.35% 2.85% 3.88% 6.28%
- ---------------
(1) Without the waiver of advisory and administration fees, the ratio of expenses
to average daily net assets for TempFund Shares would have been .27% for the
years ended September 30, 1995 and 1994, respectively. For TempFund Dollar
Shares the ratio of expenses to average daily net assets would have been .52%
for the years ended September 30, 1995 and 1994, respectively.
See accompanying notes to financial statements.
</TABLE>
10
<PAGE> 11
TEMPORARY INVESTMENT FUND, INC.
Financial Highlights
(For a Share of the Fund Outstanding Throughout Each Year)
<TABLE>
<CAPTION>
TEMPCASH SHARES
----------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income From Investment Operations
Net Investment Income.............................. .0575 .0370 .0310 .0424 .0676
Net Realized Gains on Investments.................. -- -- -- .0008 --
------ ------ ------ ------ ------
Total From Investment Operations................... .0575 .0370 .0310 .0432 .0676
------ ------ ------ ------ ------
Less Distributions
Dividends (from net investment income)............. (.0575) (.0370) (.0310) (.0424) (.0676)
Distributions (from capital gains)................. -- -- -- (.0008) --
------ ------ ------ ------ ------
Total Distributions................................ .0575 (.0370) (.0310) (.0432) (.0676)
------ ------ ------ ------ ------
Net Asset Value, End of Year......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total Return....................................... 5.90% 3.76% 3.14% 4.41% 6.97%
Ratios/Supplemental Data
Net Assets, End of Year (000).................... $1,316,166 $2,330,456 $1,479,035 $1,492,959 $1,528,637
Ratio of Expenses to Average Daily Net Assets.... .16%(1) .16%(1) .19%(1) .20%(1) .20%(1)
Ratio of Net Investment Income to Average Daily
Net Assets..................................... 5.75% 3.70% 3.10% 4.14% 6.57%
</TABLE>
<TABLE>
<CAPTION>
TEMPCASH DOLLAR SHARES
----------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income From Investment Operations
Net Investment Income.............................. .0550 .0345 .0285 .0399 .0651
Net Realized Gains on Investments.................. -- -- -- .0008 --
------ ------ ------ ------ ------
Total From Investment Operations................... .0550 .0345 .0285 .0407 .0651
------ ------ ------ ------ ------
Less Distributions
Dividends (from net investment income)............. (.0550) (.0345) (.0285) (.0399) (.0651)
Distributions (from capital gains)................. -- -- -- (.0008) --
------ ------ ------ ------ ------
Total Distributions................................ (.0550) (.0345) (.0285) (.0407) (.0651)
------ ------ ------ ------ ------
Net Asset Value, End of Year......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total Return....................................... 5.65% 3.51% 2.89% 4.16% 6.72%
Ratios/Supplemental Data
Net Assets, End of Year (000).................... $ 454,156 $ 397,948 $ 307,239 $ 408,900 $ 438,721
Ratio of Expenses to Average Daily Net Assets.... .41%(1) .41%(1) .44%(1) .45%(1) .45%(1)
Ratio of Net Investment Income to Average Daily
Net Assets..................................... 5.50% 3.45% 2.85% 3.89% 6.32%
- ---------------
(1) Without the waiver of advisory and administration fees, the ratios of expenses
to average daily net assets for TempCash Shares would have been: 30%, .33%,
.37%, .33%, and .34% for the years ended September 30, 1995, 1994, 1993, 1992,
and 1991, respectively. For TempCash Dollar Shares, the ratio of expenses to
average daily net assets would have been: .55%, .58%, .62%, .58%, and .59% for
the years ended September 30, 1995, 1994, 1993, 1992, and 1991, respectively.
See accompanying notes to financial statements.
</TABLE>
11
<PAGE> 12
Notes to Financial Statements
A. Temporary Investment Fund, Inc. (the Company) is registered under the
Investment Company Act of 1940, as amended, as a diversified open-end management
company. The Company maintains two separate portfolios, TempFund and TempCash.
Interests in the TempFund portfolio are represented by Class B (TempFund shares)
and Class B--Special Series 1 (TempFund Dollar shares) common stock. Interests
in the TempCash portfolio are represented by Class C (TempCash Dollar shares)
and Class C--Special Series 1 (TempCash shares) common stock.
Dollar shares are substantially identical in all respects to other classes of
shares, except that Dollar shares are sold to institutions which provide support
services to their customers, who beneficially own such shares, in consideration
of the Company's payment of 0.25% (on an annualized basis) of the average daily
net asset value of the shares held by the institutions for the benefit of their
customers. The Service Organization fee is applicable only to the earnings of
the respective Dollar series of shares.
B. Significant accounting policies are as follows:
Security Valuation--Portfolio securities are valued under the amortized cost
method which approximates current market value. Under this method, securities
are valued at cost when purchased and thereafter a constant proportionate
amortization of any discount or premium is recorded until maturity of the
security. Regular review and monitoring of the market-based valuation is
performed in an attempt to avoid dilution or other unfair results to
shareholders. The Company seeks to maintain the net asset value per share of
each portfolio at $1.00.
Repurchase Agreements--The Company may purchase, for each portfolio, money
market instruments from financial institutions, such as banks and non-bank
dealers, subject to the seller's agreement to repurchase them at an agreed upon
date and price. Although the securities subject to repurchase agreements may
bear maturities exceeding thirteen months, the repurchase agreements themselves
will have a maximum maturity of one year or less. The seller will be required on
a daily basis to maintain the value of the securities subject to the agreement
at not less than the repurchase price.
Dividends to Shareholders--Dividends are declared daily and paid monthly.
Dividends payable are recorded on the dividend record date. Net income for
dividend purposes includes interest accrued and discount earned and realized
gains and losses on portfolio securities and is reduced by premium amortized and
expenses accrued.
Federal Taxes--No provision is made for federal taxes as it is the Company's
intention to have each portfolio continue to qualify as a regulated investment
company and to make the requisite distributions to its shareholders which will
be sufficient to relieve it from all or substantially all federal income and
excise taxes.
Other--Investment transactions are accounted for on the trade date and the
cost of investments sold is determined by use of the specific identification
method for both financial reporting and income tax purposes. Expenses not
directly attributable to a specific portfolio are allocated between the two
portfolios based on their relative net assets.
C. Under agreements among the Company, PNC Bank, National Association (PNC Bank)
and PNC Institutional Management Corporation (PIMC), an indirect wholly owned
subsidiary of PNC Bank, PIMC manages the Company's portfolios and maintains
their financial accounts. PNC Bank is the Company's sub-adviser and custodian
and PFPC Inc. (PFPC) is the Company's transfer agent.
Provident Distributors, Inc. (PDI) is the Company's Distributor. No
compensation is
12
<PAGE> 13
Notes to Financial Statements (Continued)
payable by the Company to PDI for its distribution services.
The Company has entered into an Administration Agreement with PFPC and PDI for
certain administrative services.
In return for their advisory and administrative services, the Company pays
PIMC and the administrators each a fee, computed daily and payable monthly,
based upon an annualized percentage of the average net assets of each portfolio
as follows:
TempFund Portfolio:
.175% of the first $1 billion, plus .15% of the next $1 billion, .125% of the
next $1 billion, .10% of the next $1 billion, .095% of the next $1 billion, .09%
of the next $1 billion, .08% of the next $1 billion, .075% of the next $1
billion and .07% of net assets in excess of $8 billion.
TempCash Portfolio:
.175% of the first $1 billion, plus .15% of the next $1 billion, .125% of the
next $1 billion, .10% of the next $1 billion, .095% of the next $1 billion, .09%
of the next $1 billion, .085% of the next $1 billion and .08% of net assets in
excess of $7 billion.
If expenses borne by either portfolio in any fiscal year exceed the applicable
expense limitation imposed by state securities regulations, the administrators
and PIMC will each reimburse the portfolio for one-half of any excess expense up
to the amount of fees payable to it (except where such regulations require
reimbursement regardless of the fees payable to it).
The administrators and PIMC have currently agreed to reduce their fees, on an
equal basis, to the extent necessary to ensure that the ordinary operating
expenses (excluding Service Organization fees) of the TempFund portfolio and the
TempCash portfolio do not exceed .18% and .18%, respectively, of the portfolio's
average net assets. Prior to June 15, 1995, the ordinary operating expenses of
the TempFund portfolio and the TempCash portfolio did not exceed .27% and .18%,
respectively, of the portfolio's average net assets.
For the year ended September 30, 1995, the administrators and PIMC waived, on
an equal basis, administration and advisory fees payable to them in the amounts
of $1,884,683 and $5,190,756 for the TempFund portfolio and the TempCash
portfolio, respectively.
Service organization fees of $469,705 were paid to affiliates of PIMC for the
year ended September 30, 1995.
D. At September 30, 1995, the Company was authorized to issue 60 billion shares
of common stock, par value $.001 per share, of which 40 billion were classified
as Class B shares, 5 billion shares as Class B--Special Series 1 shares, 5
billion shares as Class C shares and 10 billion shares as Class C--Special
Series 1 shares.
13
<PAGE> 14
Notes to Financial Statements (Concluded)
Transactions in shares of each portfolio are summarized as follows:
<TABLE>
<CAPTION>
TEMPFUND PORTFOLIO TEMPCASH PORTFOLIO
--------------------------------------- --------------------------------------
YEAR ENDED YEAR ENDED
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
SEPTEMBER 30, 1995 1994 SEPTEMBER 30, 1995 1994
------------------ ----------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Sale of shares
TempFund Class B....... $ 81,711,616,890 $ 103,582,951,088 -- --
TempFund Dollar........ 4,918,867,344 8,015,022,139 -- --
TempCash............... -- -- $ 71,241,203,865 $ 38,330,757,568
TempCash Dollar........ -- -- 1,873,109,402 1,909,122,664
Shares issued in
reinvestment of
dividends
TempFund Class B....... 47,014,339 35,008,506 -- --
TempFund Dollar........ 197,307 296,436 -- --
TempCash............... -- -- 59,750,637 16,989,927
TempCash Dollar........ -- -- 9,892,598 4,334,109
Shares repurchased
TempFund Class B....... (80,888,032,287) (104,663,140,416) -- --
TempFund Dollar........ (4,939,362,388) (8,021,811,244) -- --
TempCash............... -- -- (72,315,282,564) (37,495,414,117)
TempCash Dollar........ -- -- (1,826,770,163) (1,823,080,454)
------------------ ----------------- ------------------ ----------------
Increase (decrease)
in net assets derived
from capital share
transactions............. $ 850,301,205 $ (1,051,673,491) $ (958,096,225) $ 942,709,697
================= ================= ================= ================
</TABLE>
E. At September 30, 1995, a capital loss carryover of $45,427, which expires in
2003, in the TempFund portfolio and capital loss carryovers of $518,450 which
expire in 2002, in the TempCash portfolio, were available to offset future
realized gains.
F. At September 30, 1995, net assets consisted of the following:
<TABLE>
<CAPTION>
TEMPFUND TEMPCASH
--------------- ---------------
<S> <C> <C>
Paid-in capital.............................................. $ 5,433,219,534 $ 1,770,840,674
Undistributed net realized gains (losses).................... (45,427) (518,450)
--------------- ---------------
Total net assets............................................. $ 5,433,174,107 $ 1,770,322,224
=============== ===============
</TABLE>
14
<PAGE> 15
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Directors of
Temporary Investment Fund, Inc.:
We have audited the accompanying statements of net assets of Temporary
Investment Fund, Inc.--TempFund and TempCash as of September 30, 1995, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the years presented. These financial
statements and financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
September 30, 1995 by correspondence with custodians, bankers and issuers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Temporary Investment Fund, Inc.--TempFund and TempCash as of September 30, 1995,
the results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended, and the financial
highlights for each of the years presented, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
October 27, 1995
15
<PAGE> 16
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<PAGE> 17
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE> 18
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
G. Willing Pepper
Chairman
David R. Wilmerding, Jr.
Vice-Chairman
Philip E. Coldwell
Robert R. Fortune
Rodney D. Johnson
Anthony M. Santomero
OFFICERS
G. Willing Pepper
President
Edward J. Roach
Vice President and
TREASURER
W. Bruce McConnel, III
Secretary
INVESTMENT ADVISER
PNC Institutional Management
Corporation
400 Bellevue Parkway
Wilmington, DE 19809
CO-ADMINISTRATORS
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Provident Distributors, Inc.
259 Radnor-Chester Road
Suite 120
Radnor, PA 19087
DISTRIBUTOR
Provident Distributors, Inc.
259 Radnor-Chester Road
Suite 120
Radnor, PA 19087
TRANSFER AGENT
PFPC Inc.
P.O. Box 8950
Wilmington, DE 19885-9628
This report is submitted for
the general information of the
shareholders of the Company.
It is not authorized for
distribution to prospective
investors unless accompanied
or preceded by effective
prospectuses for each
portfolio of the Company,
which contain information
concerning the investment
policies of the portfolios as
well as other pertinent
information.
PIF-A-001
TEMPFUND
TEMPCASH
Investment Portfolios
Offered by
Temporary Investment Fund, Inc.
[LOGO]
Annual Report to Shareholders
September 30, 1995
- --------------------------------------------------------------------------------
