<PAGE> 1
- -------------------------------------------------------------------------------
[PROVIDENT INSTITUTIONAL FUNDS LETTERHEAD]
- -------------------------------------------------------------------------------
G. Willing Pepper
Chairman TEMPORARY INVESTMENT FUND, INC.
November 10, 1997
Dear Shareholder:
Enclosed is the Annual Report to Shareholders of Temporary Investment Fund,
Inc. for the year ended September 30, 1997.
The accompanying Investment Adviser's Report contains useful information on
the money markets and on our portfolios. Temporary Investment Fund, Inc.
continues to strive to provide liquidity, credit quality and service to meet the
expectations of our clients.
If you have any questions regarding TempFund or TempCash, please contact
your Provident Distributors, 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,
/s/ G. WILLING PEPPER
G. Willing Pepper
Chairman
<PAGE> 2
TEMPORARY INVESTMENT FUND, INC.
Annual Investment Adviser's Report
Positive news about the Federal Reserve's fight against inflation helped
offset the impact of otherwise strong gains in economic activity during the past
twelve months. This unusual harmony allowed the Fed to abstain from a possible
series of tighter monetary policy moves, in light of the strong gross domestic
product reports for the last quarter of 1996 and the first quarter of 1997.
These developments gave the Fed cause to raise the federal funds rate only once,
in March, by 25 basis points to 5.50%. The increase in short-term rates was the
first such move in over two years and was characterized as a "pre-emptive" move
to reduce the likelihood of more significant increases in interest rates later
in the year. As
the fourth quarter unfolds, the Fed's decision seems to have been an appropriate
one. Economic growth has slowed to a respectable 3% pace and consumer prices
decelerated to a 1.8% rate for the first nine months of 1997 versus 3.5% for the
same period a year ago.
The steadfastness of the Federal Reserve, however, did not translate into a
static rate environment for the year ended September 30. Early in the period,
market sentiment clearly anticipated several restrictive moves by the Fed and
the short-term yield curve, therefore, took on a more positive slope. After the
Fed's move in March, overnight rates rose to 5.50%, while one-year maturities
advanced as high as 6.30%. As the economic environment and inflation news became
more benign, in the second and third quarters, overnights remained at 5.50%, but
yields on one-year maturities fell to 5.85-5.95%, a 40 basis point flattening of
the yield curve. Another interesting facet in the money markets this year was
the supply and demand story in the U.S. Treasury bill market. With fewer bills
being sold by the Treasury and an abundance of cash in the financial markets,
Treasury bill yields were pushed down to the point where the yield on even the
one-year Treasury bill was sometimes below the yield available on overnight
investments.
Strategically, the Fund's two portfolios, TempFund and TempCash, maintained
moderately extended average weighted maturities for most of the year as periodic
weakness in the six to twelve month area of the yield curve presented buying
opportunities. Portfolio liquidity, as always, was a primary objective and both
portfolios usually maintained at least 10-25% of their respective assets in one
to seven-day investments. For most of the period, both portfolios attained
yields that were equal to overnight alternatives in the 5.50% range. This
performance attracted assets into the Fund during the year, producing combined
total assets of $10.8 billion on September 30, 1997, versus $8.24 billion a year
ago. TempFund also maintained its AAA rating from Standard & Poor's, and its
extended trading time of 5:30 p.m. Eastern time has proved to be a meaningful
feature to Fund shareholders with late day cash positions.
PNC INSTITUTIONAL MANAGEMENT CORPORATION
2
<PAGE> 3
TEMPFUND PORTFOLIO
Temporary Investment Fund, Inc.
Statement of Net Assets
September 30, 1997
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT--7.4%
BANK NOTES--6.8%
Bank of America Illinois
5.87%............. 03/04/98 $ 50,000 $ 49,993,945
5.97%............. 03/20/98 50,000 49,988,822
Bank of America National Trust & Savings
5.58%............. 10/21/97 190,000 190,002,944
Comerica Bank--Detroit
6.175%............ 05/27/98 25,000 25,018,490
First National Bank of Chicago
5.94%............. 07/01/98 100,000 99,957,143
LaSalle National Bank
5.96%............. 03/16/98 30,000 30,000,000
6.23%............. 04/03/98 25,000 25,000,000
6.10%............. 05/15/98 30,000 29,996,454
5.95%............. 09/14/98 25,000 24,988,612
Northern Trust Bank
5.96%............. 06/17/98 50,000 49,986,518
--------------
574,932,928
--------------
DOMESTIC CERTIFICATE OF DEPOSIT--0.6%
Morgan Guaranty Trust Co. of New York
5.92%............. 03/19/98 50,000 49,993,360
--------------
Total Certificates of Deposit
(Cost $624,926,288)................. 624,926,288
--------------
COMMERCIAL PAPER--49.6%
BANKS--1.2%
Bank of America FSB
5.51%............. 11/19/97 100,000 99,250,028
--------------
ELECTRIC SERVICES--0.6%
Southern California Edison Co.
5.58%............. 10/23/97 24,000 23,918,160
5.58%............. 10/24/97 24,000 23,914,440
--------------
47,832,600
--------------
FINANCE LESSORS--1.5%
General Electric Capital Corp.
5.50%............. 10/15/97 75,000 74,839,583
5.56%............. 02/09/98 50,000 48,988,389
--------------
123,827,972
--------------
FINANCE SERVICES--7.4%
Barton Capital Corp.
5.53%............. 12/19/97 23,810 23,521,059
Dakota Certificates Program
5.53%............. 10/24/97 21,931 21,853,517
5.53%............. 11/19/97 155,410 154,240,237
5.52%............. 11/21/97 88,836 88,141,302
5.53%............. 11/24/97 51,200 50,775,296
5.53%............. 11/25/97 75,000 74,366,354
5.52%............. 12/12/97 31,000 30,657,760
5.53%............. 12/12/97 39,300 38,865,342
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
FINANCE SERVICES (CONTINUED)
Triple-A One Funding Corp.
5.53%............. 11/07/97 $101,290 $ 100,714,307
5.53%............. 11/14/97 39,000 38,736,403
--------------
621,871,577
--------------
LIFE INSURANCE--1.2%
Prudential Funding Corp.
5.51%............. 11/17/97 50,000 49,640,319
5.52%............. 12/10/97 50,000 49,463,333
--------------
99,103,652
--------------
MOTOR VEHICLES & CAR BODIES--0.4%
Daimler-Benz North America Corp.
5.52%............. 10/30/97 30,000 29,866,600
--------------
PERSONAL CREDIT INSTITUTIONS--3.5%
Associates Corp. of North America
5.51%............. 10/31/97 150,000 149,311,250
5.52%............. 12/18/97 50,000 49,402,000
5.52%............. 12/19/97 100,000 98,788,667
--------------
297,501,917
--------------
RETAIL--LUMBER & OTHER BUILDING MATERIALS--2.2%
Home Depot Real Estate Funding, Inc.
5.53%............. 10/06/97 189,789 189,643,231
--------------
SECURITY BROKERS & DEALERS--3.0%
C.S. First Boston, Inc.
5.51%............. 11/14/97 25,000 24,831,639
5.53%............. 11/17/97 70,000 69,494,619
5.50%............. 11/18/97 50,000 49,633,333
5.50%............. 11/20/97 43,000 42,671,528
5.52%............. 12/05/97 30,000 29,701,000
Merrill Lynch & Co.
5.55%............. 11/03/97 40,000 39,796,500
--------------
256,128,619
--------------
SERVICES--AUTO RENTAL & LEASE--3.8%
PHH Corp.
5.53%............. 10/06/97 80,000 79,938,555
5.55%............. 10/07/97 45,000 44,958,375
5.54%............. 10/09/97 98,000 97,879,351
5.52%............. 10/24/97 48,685 48,513,304
5.52%............. 10/27/97 50,000 49,800,667
--------------
321,090,252
--------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--23.0%
Asset Securitization Coop. Corp.
5.52%............. 10/16/97 100,000 99,770,000
5.53%............. 11/07/97 158,000 157,101,989
5.53%............. 11/14/97 120,000 119,188,933
5.53%............. 12/01/97 35,000 34,672,040
Block Financial Corp.
5.52%............. 10/30/97 55,000 54,755,433
</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)
SHORT-TERM BUSINESS CREDIT INSTITUTIONS (CONTINUED)
Corporate Asset Funding, Inc.
5.52%............. 10/22/97 $100,000 $ 99,678,000
5.52%............. 11/12/97 27,565 27,387,481
5.52%............. 11/14/97 97,200 96,544,224
5.52%............. 11/18/97 75,000 74,448,000
5.52%............. 12/09/97 50,000 49,471,000
Corporate Receivables Corp.
5.52%............. 10/15/97 50,000 49,892,667
5.52%............. 10/24/97 48,500 48,328,957
5.52%............. 10/28/97 45,000 44,813,700
5.52%............. 10/29/97 50,000 49,785,333
5.52%............. 11/14/97 60,000 59,595,200
5.52%............. 11/25/97 102,493 101,628,643
CXC, Inc.
5.51%............. 10/10/97 40,000 39,944,900
5.53%............. 10/10/97 30,000 29,958,525
5.49%............. 10/24/97 50,000 49,824,625
5.53%............. 10/30/97 40,000 39,821,811
5.53%............. 11/21/97 39,000 38,694,468
5.53%............. 11/24/97 50,000 49,585,250
5.53%............. 12/16/97 35,000 34,591,394
5.51%............. 12/19/97 50,000 49,395,431
Delaware Funding Corp.
5.52%............. 10/06/97 27,940 27,918,579
5.53%............. 10/09/97 82,512 82,410,602
5.54%............. 10/14/97 27,648 27,592,689
5.52%............. 10/20/97 49,900 49,754,625
5.54%............. 10/28/97 60,939 60,685,798
5.53%............. 11/17/97 90,305 89,653,023
5.53%............. 11/25/97 51,540 51,104,559
General Electric Capital Services, Inc.
5.56%............. 02/09/98 50,000 48,988,389
--------------
1,936,986,268
--------------
TELEPHONE COMMUNICATIONS--1.8%
MCI Communications Corp.
5.54%............. 12/09/97 50,000 49,469,084
SBC Communications, Inc.
5.50%............. 10/14/97 55,000 54,890,765
5.49%............. 10/30/97 10,000 9,955,776
5.49%............. 11/24/97 10,000 9,917,650
5.49%............. 11/26/97 30,000 29,743,800
--------------
153,977,075
--------------
Total Commercial Paper
(Cost $4,177,079,791)............... 4,177,079,791
--------------
UNITED STATES GOVERNMENT AGENCY OBLIGATION--1.2%
Federal National Mortgage Association
5.29%............. 10/07/97 100,000 100,000,000
--------------
Total U.S. Government Agency
Obligation
(Cost $100,000,000)................. 100,000,000
--------------
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
VARIABLE RATE OBLIGATIONS+--16.3%
ASSET BACKED SECURITIES--2.0%
SMM Trust 1997-R
5.6562%........... 10/15/97 $169,000 $ 169,000,000
--------------
BANKS--4.8%
First Bank of South Dakota
5.5262%........... 10/15/97 100,000 99,928,583
5.5662%........... 10/15/97 150,000 149,974,685
Morgan Guaranty Trust Co. of New York
5.625%............ 11/14/97 150,000 149,986,818
--------------
399,890,086
--------------
PERSONAL CREDIT INSTITUTIONS--1.5%
Ford Motor Credit Corp.
5.8787%........... 12/02/97 125,000 125,040,387
--------------
SECURITY BROKERS & DEALERS--8.0%
Bear Stearns Companies, Inc.
5.6362%........... 10/20/97 150,000 150,000,000
5.6887%........... 11/07/97 150,000 150,000,000
5.6887%........... 11/22/97 150,000 150,000,000
Merrill Lynch & Co.
5.7362%........... 10/13/97 25,000 25,025,737
5.68%............. 10/14/97 100,000 99,999,294
Morgan Stanley Group
5.6921%........... 11/18/97 100,000 100,000,000
--------------
675,025,031
--------------
Total Variable Rate Obligations
(Cost $1,368,955,504)............... 1,368,955,504
--------------
MEDIUM TERM NOTES--7.3%
Security Brokers & Dealers Goldman Sachs Group, L.P.
5.847%............ 10/06/97 60,000 60,000,000
6.00%............. 10/06/97 100,000 100,000,000
5.74%............. 11/20/97 75,000 75,000,000
6.00%............. 12/29/97 100,000 100,000,000
Merrill Lynch & Co.
6.225%............ 04/07/98 50,000 50,000,000
5.82%............. 08/04/98 75,000 75,000,000
5.895%............ 08/11/98 50,000 50,000,000
5.98%............. 08/18/98 100,000 100,000,000
--------------
Total Medium Term Notes
(Cost $610,000,000)................. 610,000,000
--------------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
TEMPFUND PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS--18.3%
Goldman Sachs & Co.
6.30%............. 10/01/97 $200,000 $ 200,000,000
(Agreement dated 09/30/97 to
be repurchased at
$200,035,000
collateralized by
$79,196,164 Federal
National Mortgage
Association Notes 6.211%
to 8.00% due 12/25/16 to
03/25/27 and $136,293,388
Federal Home Loan Mortgage
Corp. Notes 6.0875% to
7.50% due 05/15/08 to
07/15/27. Market value of
collateral is
$206,000,000.)
Lehman Government Securities, Inc.
6.50%............. 10/01/97 80,200 80,200,000
(Agreement dated 09/30/97 to
be repurchased at
$80,214,481 collateralized
by $79,950,000 U.S.
Treasury Notes 6.00% due
05/31/98. Market value of
collateral is
$81,773,658.)
Morgan Stanley & Co.
6.45%............. 10/01/97 97,000 97,000,000
(Agreement dated 09/30/97 to
be repurchased at
$97,017,379 collateralized
by $256,326,000 U.S.
Treasury Strips due
08/15/2012. Market value
of collateral is
$99,033,601.)
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Morgan Stanley & Co.
6.50%............. 10/01/97 $650,000 $ 650,000,000
(Agreement dated 09/30/97 to
be repurchased at
$650,117,361
collateralized by
$21,100,000 Federal Farm
Credit Bank Discount Notes
6.38% to 9.55% due
05/09/05 to 09/04/07,
$110,245,000 Federal Home
Loan Bank Discount Notes
6.80% to 7.75% due
10/01/97 to 11/21/16,
$5,000,000 Financial
Assistance Corp. 8.80% due
06/10/05, $7,715,000
Federal Home Loan Mortgage
Corp. 6.54% to 8.64% due
03/24/03 to 10/14/09,
$118,510,000 Federal
National Mortgage
Association 5.45% to 8.90%
due 11/19/97 to 08/27/12,
$33,000,000 Student Loan
Marketing Association
0.00% to 9.15% due
06/30/98 to 10/03/22,
$2,230,000 Tennessee
Valley Authority 5.88% to
8.625% due 11/15/29 to
04/01/36, $55,794,000 U.S.
Treasury Bonds 8.00% to
10.375% due 11/15/12 to
11/15/21 and $289,146,000
U.S. Treasury Notes 5.00%
to 7.875% due 12/31/97 to
11/15/04. Market Value of
collateral is
$666,467,136.)
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
TEMPFUND PORTFOLIO
Statement of Net Assets (Concluded)
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Swiss Bank Corp.
6.10%............. 10/01/97 $164,000 $ 164,000,000
(Agreement dated 09/30/97 to
be repurchased at
$164,027,789
collateralized by
$47,270,720 U.S. Treasury
Notes 6.00% to 8.875% due
09/30/98 to 02/28/02 and
$95,895,360 U.S. Treasury
Bonds 7.25% to 12.375% due
05/15/04 to 08/15/22.
Market value of collateral
is $169,779,245.)
6.15%............. 10/01/97 150,000 150,000,000
(Agreement dated 09/30/97 to
be repurchased at
$150,025,625
collateralized by
$42,839,090 U.S. Treasury
Notes 6.00% to 8.75% due
09/30/98 to 02/28/02 and
$86,905,170 U.S. Treasury
Bonds 7.25% to 12.375% due
05/15/04 to 08/15/22.
Market value of collateral
is $153,862,440.)
6.20%............. 10/01/97 200,000 200,000,000
(Agreement dated 09/30/97 to
be repurchased at
$200,034,444
collateralized by
$57,611,190 U.S. Treasury
Notes 6.00% to 8.875% due
09/30/98 to 02/28/02 and
$116,872,470 U.S. Treasury
Bonds 7.25% to 12.375% due
05/15/04 to 08/15/22.
Market value of collateral
is $206,918,454.)
--------------
Total Repurchase Agreements
(Cost $1,541,200,000)............... 1,541,200,000
--------------
<CAPTION>
VALUE
--------------
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $8,422,161,583*)........ 100.1% $8,422,161,583
LIABILITIES IN EXCESS OF OTHER
ASSETS........................ (0.1%) (6,376,155)
-------- --------------
NET ASSETS (Equivalent to $1.00
per share based on
8,060,499,076 TempFund Shares
and 355,262,165 TempFund
Dollar Shares,
$.001 par value common stock
outstanding).................. 100.0% $8,415,785,428
====== ==============
NET ASSET VALUE, offering and redemption
price per share
($8,415,785,428 / 8,415,761,241)........ $1.00
=====
</TABLE>
- ---------------
* Cost for federal income tax purposes.
+ Variable Rate Obligations--The rate shown is the rate as of September 30, 1997
and the maturity date shown is the longer of the next interest readjustment
date or the date the principal amount can be recovered upon demand.
---------------------------------------------------------
TEMPFUND/TEMPFUND DOLLAR
Maturity Information
September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
PERCENTAGE
MATURITY PAR OF
PERIOD (000) PORTFOLIO
------------- -------------- ----------
<S> <C> <C> <C> <C>
1- 7 days $2,143,929,000 25.4%
8- 14 days 458,160,000 5.4%
15- 30 days 1,691,955,000 20.0%
31- 60 days 2,574,839,000 30.5%
61- 90 days 769,110,000 9.1%
91-120 days 0 0.0%
121-150 days 100,000,000 1.2%
Over 150 days 710,000,000 8.4%
-------------- -------
$8,447,993,000 100.0%
============== =======
Average Weighted Maturity--49 days
---------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
TEMPCASH PORTFOLIO
Temporary Investment Fund, Inc.
Statement of Net Assets
September 30, 1997
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT--36.2%
BANK NOTE--1.7%
LaSalle National Bank
5.75%............. 01/02/98 $ 40,000 $ 40,000,000
--------------
DOMESTIC CERTIFICATES OF DEPOSIT--5.2%
Bankers Trust Co.
5.91%............. 08/07/98 50,000 49,973,412
5.98%............. 08/12/98 25,000 24,991,753
Morgan Guaranty Trust Co. of New York
5.71%............. 01/06/98 50,000 49,994,908
--------------
124,960,073
--------------
YANKEE DOLLAR CERTIFICATES OF DEPOSIT--29.3%
Bank of Tokyo--Mitsubishi
5.70%............. 10/14/97 60,000 60,000,000
Industrial Bank of Japan
5.73%............. 10/09/97 27,000 27,000,505
5.68%............. 10/24/97 25,000 25,000,290
5.70%............. 11/13/97 50,000 50,000,000
5.68%............. 11/19/97 45,000 45,000,604
Royal Bank of Canada
5.71%............. 10/01/97 175,000 174,976,703
5.83%............. 01/14/98 25,000 25,003,316
Sanwa Bank Ltd. Japan
5.66%............. 10/02/97 50,000 50,000,014
5.71%............. 10/10/97 30,000 30,000,074
5.62%............. 10/20/97 50,000 50,000,261
Societe Generale
5.73%............. 10/15/97 25,000 24,999,740
5.93%............. 03/11/98 50,000 49,995,782
Sumitomo Bank
5.65%............. 10/10/97 65,000 64,999,900
5.71%............. 10/10/97 25,000 25,000,062
--------------
701,977,251
--------------
Total Certificates of Deposit
(Cost $866,937,324)................. 866,937,324
--------------
COMMERCIAL PAPER--32.5%
ASSET BACKED SECURITIES--1.5%
CC USA, Inc.
5.54%............. 10/06/97 20,000 19,984,611
5.54%............. 11/05/97 17,000 16,908,436
--------------
36,893,047
--------------
CONGLOMERATES--2.1%
BTR Dunlop Finance, Inc.
5.54%............. 11/12/97 50,000 49,676,833
--------------
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
FINANCE SERVICES--2.4%
Dakota Certificates Program
5.53%............. 10/17/97 $ 43,500 $ 43,393,087
Old Line Funding Corp.
5.53%............. 10/08/97 14,000 13,984,946
--------------
57,378,033
--------------
MISCELLANEOUS BUSINESS CREDIT INSTITUTIONS--2.1%
Unifunding, Inc.
5.54%............. 10/07/97 50,000 49,953,833
--------------
MOTOR VEHICLES & CAR BODIES--2.1%
Ford Credit Europe PLC
5.50%............. 10/27/97 50,000 49,801,389
--------------
NATIONAL COMMERCIAL BANKS--1.0%
San Paolo U.S. Financial, Inc.
5.56%............. 10/03/97 25,000 24,992,278
--------------
PERSONAL CREDIT INSTITUTIONS--2.1%
General Motors Acceptance Corp.
5.82%............. 10/15/97 50,000 49,886,833
--------------
SECURITY BROKERS & DEALERS--9.5%
Merrill Lynch & Co.
5.70%............. 11/21/97 50,000 49,596,250
5.57%............. 12/12/97 54,000 53,398,440
Nomura Holding America, Inc.
5.75%............. 10/06/97 25,000 24,980,035
5.66%............. 11/14/97 25,000 24,827,056
5.66%............. 11/17/97 50,000 49,630,528
5.62%............. 12/15/97 25,000 24,707,292
--------------
227,139,601
--------------
SERVICES--AUTO RENT & LEASE--3.0%
PHH Corp.
5.52%............. 10/16/97 22,280 22,228,756
5.53%............. 10/27/97 50,000 49,800,306
--------------
72,029,062
--------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--6.7%
Block Financial Corp.
5.50%............. 10/27/97 20,000 19,920,556
Heller Financial, Inc.
5.65%............. 10/23/97 50,000 49,827,361
5.65%............. 10/24/97 40,000 39,855,611
5.65%............. 10/27/97 50,000 49,795,972
--------------
159,399,500
--------------
Total Commercial Paper
(Cost $777,150,409)................. 777,150,409
--------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
TEMPCASH PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS--4.4%
Federal National Mortgage Association+
5.29%............. 10/07/97 $ 75,000 $ 75,000,000
--------------
Student Loan Marketing Association+
5.25%............. 10/07/97 6,000 6,000,485
5.27%............. 10/07/97 10,000 10,002,325
5.41%............. 10/07/97 13,950 13,952,612
--------------
29,955,422
--------------
Total U.S. Government
Agency Obligations
(Cost $104,955,422)................. 104,955,422
--------------
VARIABLE RATE OBLIGATIONS+--18.8%
BANKS--1.7%
Wells Fargo & Co.
5.7987%........... 10/15/97 40,000 40,008,477
--------------
FINANCE SERVICES--2.5%
SMM Trust 1997
5.6562%........... 10/16/97 60,000 60,000,000
--------------
LIFE INSURANCE--6.3%
General American Life Insurance Co.
5.83%............. 10/01/97 100,000 100,000,000
Peoples Security Life Insurance Co.
5.84%............. 10/01/97 50,000 50,000,000
--------------
150,000,000
--------------
PERSONAL CREDIT INSTITUTIONS--0.6%
Dean Witter, Discover & Co.
5.6962%........... 10/15/97 15,000 15,008,890
--------------
SECURITY BROKERS & DEALERS--5.2%
Lehman Brothers Holdings, Inc.
5.7387%........... 12/05/97 125,000 125,000,000
--------------
SERVICES--AUTO RENT & LEASE--2.5%
PHH Corporation
5.5962%........... 10/25/97 50,000 49,995,160
5.63625%.......... 10/27/97 10,000 10,000,791
--------------
59,995,951
--------------
Total Variable Rate Obligations
(Cost $450,013,318)................. 450,013,318
--------------
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
MEDIUM TERM NOTES--5.2%
PERSONAL CREDIT INSTITUTIONS--1.0%
General Motors
Acceptance Corp.
5.75%............. 10/07/97 $ 25,000 $ 25,000,180
--------------
SECURITY BROKERS & DEALERS--4.2%
Goldman Sachs Group, L.P.
5.70%............. 11/04/97 50,000 50,000,000
5.6875%........... 11/06/97 50,000 50,000,000
--------------
100,000,000
--------------
Total Medium Term Notes
(Cost $125,000,180)................. 125,000,180
--------------
REPURCHASE AGREEMENTS--3.0%
PaineWebber, Inc.
6.15%............. 10/01/97 25,800 25,800,000
(Agreement dated 09/30/97 to
be repurchased at
$25,804,407 collateralized
by $26,362,000 Federal
National Mortgage
Association 6.46% to 7.81%
due 09/05/02 to 11/25/23
and $60,000 Federal Home
Loan Mortgage Corp. due
01/15/21 to 04/15/21.
Market value of collateral
is $26,574,953.)
Swiss Bank Corp.
6.10%............. 10/01/97 46,000 46,000,000
(Agreement dated 09/30/97 to
be repurchased at
$46,007,794 collateralized
by $44,793,000 U.S.
Treasury Bond 6.75% due
08/15/26. Market value of
collateral is
$47,060,668.)
--------------
Total Repurchase Agreements
(Cost $71,800,000).................. 71,800,000
--------------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
TEMPCASH PORTFOLIO
Statement of Net Assets (Concluded)
<TABLE>
<CAPTION>
VALUE
--------------
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $2,395,856,653*)........ 100.1% $2,395,856,653
LIABILITIES IN EXCESS OF OTHER
ASSETS........................ (0.1%) (3,290,674)
-------- --------------
NET ASSETS (Equivalent to $1.00
per share based on
1,991,439,490 TempCash Shares
and 401,630,251 TempCash
Dollar Shares, $.001 par value
common stock outstanding)..... 100.0% $2,392,565,979
====== ==============
NET ASSET VALUE, offering and redemption
price per share
($2,392,565,979 / 2,393,069,741)........ $1.00
=====
</TABLE>
- ---------------
* Cost for federal income tax purposes.
+ Variable Rate Obligations--The rate shown is the rate as of September 30, 1997
and the maturity date shown is the longer of the next interest readjustment
date or the date the principal amount can be recovered upon demand.
---------------------------------------------------------
TEMPCASH/TEMPCASH DOLLAR
Maturity Information
September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MATURITY PAR PERCENTAGE
PERIOD (000) OF PORTFOLIO
------------- -------------- ----------
<S> <C> <C> <C>
1- 7 days $ 696,750,000 29.0%
8- 14 days 221,000,000 9.2%
15- 30 days 650,780,000 27.1%
31- 60 days 387,000,000 16.2%
61- 90 days 204,000,000 8.5%
91-120 days 115,000,000 4.8%
121-150 days 0 0.0%
Over 150 days 125,000,000 5.2%
-------------- --------
$2,399,530,000 100.0%
============== ========
Average Weighted Maturity--38 days
---------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE> 10
TEMPORARY INVESTMENT FUND, INC.
Statements of Operations
Year ended September 30, 1997
<TABLE>
<CAPTION>
TEMPFUND TEMPCASH
PORTFOLIO PORTFOLIO
------------ ------------
<S> <C> <C>
Interest income............................................................... $467,142,993 $182,420,850
------------ ------------
Expenses:
Investment advisory fee................................................... 9,137,022 4,752,966
Administration fee........................................................ 9,137,022 4,752,966
Directors' fees and officer's salary...................................... 150,035 48,590
Transfer agent fee........................................................ 584,506 163,095
Custodian fee............................................................. 802,624 389,913
Shareholder computer access program....................................... 71,290 30,073
Legal and audit........................................................... 88,924 24,724
Registration fees and expenses............................................ 97,257 (247,902)
Other..................................................................... 145,479 53,903
------------ ------------
20,214,159 9,968,328
Less fees waived.......................................................... (5,153,041) (4,083,198)
------------ ------------
15,061,118 5,885,130
Service Organization fees................................................. 863,301 1,214,833
------------ ------------
Total expenses....................................................... 15,924,419 7,099,963
------------ ------------
Net investment income..................................................... 451,218,574 175,320,887
Net realized gain on investments.............................................. 24,187 79,331
------------ ------------
Net increase in net assets resulting from operations...................... $451,242,761 $175,400,218
============ ============
</TABLE>
See accompanying notes to financial statements.
10
<PAGE> 11
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,
1997 1996 1997 1996
----------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income......... $ 451,218,574 $ 370,210,835 $ 175,320,887 $ 151,863,345
Net realized gain (loss) on
investments................. 24,187 94,556 79,331 (64,645)
----------------- ----------------- ---------------- ----------------
Net increase in net assets
resulting from
operations................ 451,242,761 370,305,391 175,400,218 151,798,700
----------------- ----------------- ---------------- ----------------
Distributions to shareholders:
Dividends to shareholders from
net investment income:
TempFund shares............. (433,387,702) (363,902,699) -- --
TempFund Dollar shares...... (17,830,872) (6,308,136) -- --
TempCash shares............. -- -- (150,279,493) (126,493,796)
TempCash Dollar shares...... -- -- (25,041,394) (25,369,549)
Distributions to shareholders
from net realized gain:
TempFund shares............. (47,562) -- -- --
TempFund Dollar shares...... (1,567) -- -- --
----------------- ----------------- ---------------- ----------------
Total distributions to
shareholders............ (451,267,703) (370,210,835) (175,320,887) (151,863,345)
----------------- ----------------- ---------------- ----------------
Capital share transactions (at $1
per share):
Sale of shares................ 159,612,735,266 104,002,736,713 66,663,923,098 48,006,882,183
Shares issued in reinvestment
of dividends................ 136,470,296 90,326,001 69,364,628 59,462,722
Shares repurchased............ (157,210,517,694) (103,649,208,875) (66,703,957,164) (47,473,446,398)
----------------- ----------------- ---------------- ----------------
Increase in net assets
derived from capital
share transactions...... 2,538,687,868 443,853,839 29,330,562 592,898,507
----------------- ----------------- ---------------- ----------------
Total increase in net
assets.................. 2,538,662,926 443,948,395 29,409,893 592,833,862
Net assets:
Beginning of year................. 5,877,122,502 5,433,174,107 2,363,156,086 1,770,322,224
----------------- ----------------- ---------------- ----------------
End of year....................... $ 8,415,785,428 $ 5,877,122,502 $ 2,392,565,979 $ 2,363,156,086
================= ================= ================ ================
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 12
TEMPORARY INVESTMENT FUND, INC
Financial Highlights
(For a Share of the Fund Outstanding Throughout Each Year)
<TABLE>
<CAPTION>
TEMPFUND SHARES
----------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<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............................. 0.0539 0.0541 0.0567 0.0360 0.0310
------- ------- ------- ------- -------
Total From Investment Operations.................. 0.0539 0.0541 0.0567 0.0360 0.0310
------- ------- ------- ------- -------
Less Distributions
Dividends (from net investment income)............ (0.0539) (0.0541) (0.0567) (0.0360) (0.0310)
------- ------- ------- ------- -------
Total Distributions............................... (0.0539) (0.0541) (0.0567) (0.0360) (0.0310)
------- ------- ------- ------- -------
Net Asset Value, End of Year........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return...................................... 5.53% 5.55% 5.82% 3.66% 3.14%
Ratios/Supplemental Data
Net Assets, End of Year (000's)................. $8,060,501 $5,715,004 $5,351,346 $4,480,851 $5,522,056
Ratio of Expenses to Average Daily Net Assets... 0.18%(1) 0.18%(1) 0.24%(1) 0.25%(1) 0.21%
Ratio of Net Investment Income to Average Daily
Net Assets.................................... 5.39% 5.41% 5.67% 3.60% 3.10%
</TABLE>
<TABLE>
<CAPTION>
TEMPFUND DOLLAR SHARES
----------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<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............................. 0.0514 0.0516 0.0542 0.0335 0.0285
------- ------- ------- ------- -------
Total From Investment Operations.................. 0.0514 0.0516 0.0542 0.0335 0.0285
------- ------- ------- ------- -------
Less Distributions
Dividends (from net investment income)............ (0.0514) (0.0516) (0.0542) (0.0335) (0.0285)
------- ------- ------- ------- -------
Total Distributions............................... (0.0514) (0.0516) (0.0542) (0.0335) (0.0285)
------- ------- ------- ------- -------
Net Asset Value, End of Year........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return...................................... 5.27% 5.30% 5.57% 3.41% 2.89%
Ratios/Supplemental Data
Net Assets, End of Year (000's)................. $ 355,284 $ 162,119 $ 81,828 $ 102,105 $ 112,695
Ratio of Expenses to Average Daily Net Assets... 0.43%(1) 0.43%(1) 0.49%(1) 0.50%(1) 0.46%
Ratio of Net Investment Income to Average Daily
Net Assets.................................... 5.14% 5.16% 5.42% 3.35% 2.85%
</TABLE>
- ---------------
(1) Without the waiver of advisory and administration fees, the ratios of
expenses to average daily net assets for TempFund Shares would have been
.24%, .26%, .27%, and .27% for the years ended September 30, 1997, 1996,
1995 and 1994, respectively. For TempFund Dollar Shares, the ratio of
expenses to average daily net assets would have been .49%, .51%, .52%, and
.52% for the years ended September 30, 1997, 1996, 1995 and 1994,
respectively.
See accompanying notes to financial statements.
12
<PAGE> 13
TEMPORARY INVESTMENT FUND, INC
Financial Highlights
(For a Share of the Fund Outstanding Throughout Each Year)
<TABLE>
<CAPTION>
TEMPCASH SHARES
----------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<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.............................. 0.0541 0.0542 0.0575 0.0370 0.0310
------- ------- ------- ------- -------
Total From Investment Operations................... 0.0541 0.0542 0.0575 0.0370 0.0310
------- ------- ------- ------- -------
Less Distributions
Dividends (from net investment income)............. (0.0541) (0.0542) (0.0575) (0.0370) (0.0310)
------- ------- ------- ------- -------
Total Distributions................................ (0.0541) (0.0542) (0.0575) (0.0370) (0.0310)
------- ------- ------- ------- -------
Net Asset Value, End of Year......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return....................................... 5.55% 5.56% 5.90% 3.76% 3.14%
Ratios/Supplemental Data
Net Assets, End of Year (000's).................. $1,991,037 $1,835,326 $1,316,166 $2,330,456 $1,479,035
Ratio of Expenses to Average Daily Net Assets.... 0.18%(1) 0.18%(1) 0.16%(1) 0.16%(1) 0.19%(1)
Ratio of Net Investment Income to Average Daily
Net Assets..................................... 5.41% 5.42% 5.75% 3.70% 3.10%
</TABLE>
<TABLE>
<CAPTION>
TEMPCASH DOLLAR SHARES
----------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<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.............................. 0.0516 0.0517 0.0550 0.0345 0.0285
------- ------- ------- ------- -------
Total From Investment Operations................... 0.0516 0.0517 0.0550 0.0345 0.0285
------- ------- ------- ------- -------
Less Distributions
Dividends (from net investment income)............. (0.0516) (0.0517) (0.0550) (0.0345) (0.0285)
------- ------- ------- ------- -------
Total Distributions................................ (0.0516) (0.0517) (0.0550) (0.0345) (0.0285)
------- ------- ------- ------- -------
Net Asset Value, End of Year......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return....................................... 5.29% 5.31% 5.65% 3.51% 2.89%
Ratios/Supplemental Data
Net Assets, End of Year (000's).................. $ 401,529 $ 527,830 $ 454,156 $ 397,948 $ 307,239
Ratio of Expenses to Average Daily Net Assets.... 0.43%(1) 0.43%(1) 0.41%(1) 0.41%(1) 0.44%(1)
Ratio of Net Investment Income to Average Daily
Net Assets..................................... 5.16% 5.17% 5.50% 3.45% 2.85%
</TABLE>
- ---------------
(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%, .30%, .33%, and .37% for the years ended September 30, 1997,
1996, 1995, 1994 and 1993, respectively. For TempCash Dollar Shares, the
ratio of expenses to average daily net assets would have been .55%, .58%,
.55%, .58% and .62% for the years ended September 30, 1997, 1996, 1995, 1994
and 1993, respectively.
See accompanying notes to financial statements.
13
<PAGE> 14
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 on portfolio
securities and is reduced by premium amortized and expenses accrued. Net
realized capital gains, if any, will be distributed at least annually.
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.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that could affect the reported amounts 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.
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
14
<PAGE> 15
Notes to Financial Statements (Continued)
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 payable by the Company to PDI for its distribution services.
The Company has entered into a Co-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 daily 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 also 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% of each portfolio's average daily net assets.
For the year ended September 30, 1997, the administrators and PIMC waived, on
an equal basis, administration and advisory fees payable to them in the amounts
of $5,153,041 and $4,083,198 for the TempFund portfolio and the TempCash
portfolio, respectively.
Service Organization fees of $998,229 were paid to affiliates of PIMC for the
year ended September 30, 1997.
Expenses include legal fees paid to counsel to the Company, a partner of which
is secretary of the Company.
D. At September 30, 1997, 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.
15
<PAGE> 16
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 YEAR ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996 SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Sale of shares
TempFund Class B..... $ 153,826,742,485 $ 101,643,428,057 -- --
TempFund Dollar...... 5,785,992,781 2,359,308,656 -- --
TempCash............. -- -- $ 63,725,228,824 $ 45,784,802,510
TempCash Dollar...... -- -- 2,938,694,274 2,222,079,673
Shares issued in
reinvestment of
dividends
TempFund Class B..... 129,081,124 89,775,638 -- --
TempFund Dollar...... 7,389,172 550,363 -- --
TempCash............. -- -- 55,343,699 47,148,399
TempCash Dollar...... -- -- 14,020,929 12,314,323
Shares repurchased
TempFund Class B..... (151,610,301,526) (101,369,639,394) -- --
TempFund Dollar...... (5,600,216,168) (2,279,569,481) -- --
TempCash............. -- -- (63,624,929,705) (45,312,737,466)
TempCash Dollar...... -- -- (3,079,027,459) (2,160,708,932)
----------------- ----------------- ---------------- ----------------
Increase in net assets
derived from capital
share transactions..... $ 2,538,687,868 $ 443,853,839 $ 29,330,562 $ 592,898,507
================= ================= ================ ================
</TABLE>
On September 30, 1997, one shareholder held approximately 7% of the
outstanding shares of TempFund and three shareholders held approximately 28% of
the outstanding shares of TempCash.
E. At September 30, 1997, a capital loss carryover of $503,763 in the TempCash
portfolio was available to offset future possible realized gains. The
carryover expires as follows: $439,119 in 2002 and $64,644 in 2004.
F. At September 30, 1997, net assets consisted of the following:
<TABLE>
<CAPTION>
TEMPFUND TEMPCASH
--------------- ---------------
<S> <C> <C>
Paid-in capital.............................................. $ 8,415,761,241 $ 2,393,069,742
Accumulated net realized gains (losses )..................... 24,187 (503,763)
-------------- --------------
Total net assets............................................. $ 8,415,785,428 $ 2,392,565,979
============== ==============
</TABLE>
16
<PAGE> 17
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. (the "Company"), comprising, respectively, the TempFund
and TempCash portfolios, as of September 30, 1997, 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, 1997 by correspondence with custodians and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective portfolios comprising Temporary Investment Fund, Inc. as
of September 30, 1997, 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
November 7, 1997
17
<PAGE> 18
Board of Directors
G. Willing Pepper
Chairman
G. Nicholas Beckwith, III
Philip E. Coldwell
Robert R. Fortune
Jerrold B. Harris
Rodney D. Johnson
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.
Four Falls Corporate Center
6th Floor
West Conshohocken, PA 19428
Distributor
Provident Distributors, Inc.
Four Falls Corporate Center
6th Floor
West Conshohocken, PA 19428
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.
[PROVIDENT
INSTITUTIONAL FUNDS LOGO]
Annual Report
to Shareholders
September 30, 1997
