<PAGE> 1
[PROVIDENT INSTITUTION FUNDS LOGO]
400 Bellevue Parkway, Wilmington, DE 19809
- Phone: 302-792-2555 - Fax: 302-792-5876
G. Willing Pepper
Chairman TEMPORARY INVESTMENT FUND, INC.
November 18, 1998
Dear Shareholder:
We are pleased to present the Annual Report to Shareholders of Temporary
Investment Fund, Inc. for the period ended September 30, 1998.
Commentary on the economy, financial markets, and recent developments in
our Fund are contained in the accompanying Investment Adviser's Report.
Thank you for choosing Provident Institutional Funds for your liquidity
needs. We look forward to your continued support of the Funds and encourage your
participation in the upcoming proxy solicitation and shareholder meeting. Should
you have any question regarding the proxy or other matters, please contact your
account representative or call our Client Service Center at (800) 821-7432. We
welcome the opportunity to service all your short term investment needs.
Sincerely,
/s/ G. Willing Pepper
Chairman
<PAGE> 2
TEMPORARY INVESTMENT FUND, INC.
Annual Investment Adviser's Report
A year ago, foreign exchange crises in Asia sent shockwaves through the
U.S. financial markets, offering a glimpse of what was in store for 1998. By the
middle of this year, the economic and financial turmoil in Asia had spread all
the way to Russia, Latin America and South America. Stock market valuations
around the world declined by 10-20% or more, as one crisis after another, such
as the devaluation of the Russian currency and a large hedge fund bailout, drove
investors to the safety of U.S. Treasury obligations. Early in the fourth
quarter, yields on Treasury bonds fell to a record low of 4.69%, while
short-term bills traded as low as 3.65%. Only a year ago, the bond's yield was
6.40% and three-month bills were 5.10%.
Concerns about global recessions also precipitated widespread belief that
the Federal Reserve would ease monetary policy at their September 29 meeting,
perhaps in coordination with other G-7 countries. With market rates already
discounting several moves by the Fed, the market was disappointed in the Fed's
25 basis point move. Surprisingly, however, the Fed moved again only sixteen
days later, cutting the federal funds and discount rates by 25 basis points.
Presently, the federal funds rate is 5%, down from 5.75% at the start of the
year, and there is considerable sentiment that it will head lower over the next
few quarters as the U.S. economy is impacted by business slowdowns around the
globe.
Early in the year, the Fund's two portfolios, TempFund and TempCash, sought
to take advantage of a positively sloped yield curve. Second quarter GDP was
reported at over 5%, and rates reflected a bias towards higher levels. TempFund
kept its average weighted maturity in the 50-55 day range, commensurate with its
AAA rating, while TempCash was a little longer, in the 60-day range. As the
economy began to slow and global troubles mounted, market sentiment shifted
towards expectations of lower rates. Treasury obligations saw yields drop
sharply, and the money market yield curve became very flat. With growing
expectations of Fed easing, the portfolios kept their maturities in a moderately
extended position. Credit quality became a key area of focus, as global troubles
impacted the financial services industry, both foreign and domestic. In an
effort to stay ahead of the deterioration in certain bank and broker credits, we
restricted quite a few issuers during the last two quarters. Finally, both
portfolios enjoyed strong asset growth in the year ended September 30, 1998.
TempFund's assets increased 19%, from $8.4 billion to $10 billion, while
TempCash's assets grew 25%, from $2.4 billion to $3 billion.
We appreciate your continued interest in the Temporary Investment Fund and
look forward to meeting your liquidity needs in the future.
BLACKROCK INSTITUTIONAL MANAGEMENT
CORPORATION
2
<PAGE> 3
TEMPFUND PORTFOLIO
Temporary Investment Fund, Inc.
Statement of Net Assets
September 30, 1998
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- ---------------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT--4.1%
BANK NOTES--2.6%
Bank of America National
Trust & Savings (A-1+, P-1)
5.51%............ 02/17/99 $ 87,500 $ 87,466,077
LaSalle National Bank
(A-1+, P-1)
5.59%............ 11/13/98 50,000 50,000,512
5.55%............ 02/16/99 20,000 19,988,348
Northern Trust Bank
(A-1+, P-1)
5.81%............ 04/30/99 100,000 99,977,868
---------------
257,432,805
---------------
DOMESTIC CERTIFICATES OF DEPOSIT--1.5%
Chase Manhattan Bank
(A-1+, P-1)
5.73%............ 05/17/99 50,000 49,981,377
First Tennessee Bank (A-1, P-1)
5.72%............ 04/23/99 100,000 99,973,232
---------------
149,954,609
---------------
Total Certificates of Deposit
(Cost $407,387,414)................. 407,387,414
---------------
COMMERCIAL PAPER--43.8%
ASSET BACKED SECURITIES--4.0%
Trident Capital Finance
(A-1+, P-1)
5.53%............ 10/28/98 44,470 44,285,561
5.52%............ 11/09/98 59,040 58,686,941
5.50%............ 11/30/98 48,500 48,055,417
5.49%............ 12/15/98 100,000 98,856,250
5.33%............ 02/05/99 150,000 147,179,541
---------------
397,063,710
---------------
BANKS--2.4%
NationsBank Corp. (A-1, P-1)
5.51%............ 12/04/98 73,000 72,284,924
5.48%............ 12/10/98 70,000 69,254,111
5.46%............ 02/11/99 100,000 97,982,833
---------------
239,521,868
---------------
FINANCE LESSORS--3.6%
General Electric Capital Corp.
(A-1+, P-1)
5.52%............ 10/19/98 150,000 149,586,000
5.51%............ 10/27/98 50,000 49,801,028
5.50%............ 10/30/98 100,000 99,556,944
5.46%............ 02/03/99 65,000 63,767,708
---------------
362,711,680
---------------
FINANCE SERVICES--10.7%
Barton Capital Corp. (A-1+, P-1)
5.54%............ 10/13/98 71,818 71,685,376
5.53%............ 10/30/98 132,203 131,614,072
5.54%............ 10/30/98 46,068 45,862,409
5.50%............ 01/15/99 58,057 57,116,799
</TABLE>
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- ---------------
<S> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
FINANCE SERVICES (CONTINUED)
Dakota Certificates Program
(A-1+, P-1)
5.52%............ 10/13/98 $ 50,000 $ 49,908,000
5.52%............ 10/14/98 50,000 49,900,333
5.52%............ 10/16/98 150,000 149,655,000
5.52%............ 11/19/98 50,000 49,624,333
5.43%............ 12/11/98 100,000 98,929,083
Windmill Funding (A-1+, P-1)
5.51%............ 11/06/98 211,866 210,698,618
5.52%............ 11/13/98 154,856 153,834,983
---------------
1,068,829,006
---------------
LIFE INSURANCE--1.0%
Prudential Funding Corp. (A-1, P-1)
5.47%............ 12/15/98 100,000 98,860,417
---------------
MISCELLANEOUS BUSINESS CREDIT INSTITUTIONS--0.4%
National Rural Utilities Coop.
Finance Corp. (A-1+, P-1)
5.50%............ 11/06/98 40,000 39,780,000
---------------
MOTOR VEHICLES & CAR BODIES--4.4%
Daimler-Benz North America Corp.
(A-1, P-1)
5.50%............ 10/20/98 150,000 149,564,583
5.50%............ 10/21/98 100,000 99,694,444
5.50%............ 10/22/98 75,000 74,759,375
5.51%............ 10/28/98 19,100 19,021,069
5.50%............ 11/20/98 100,000 99,236,111
---------------
442,275,582
---------------
PERSONAL CREDIT INSTITUTIONS--2.1%
Associates Corp. of North America
(A-1+, P-1)
5.48%............ 12/16/98 110,000 108,727,423
Ford Motor Credit Corp. (A-1, P-1)
5.51%............ 11/06/98 100,000 99,449,000
---------------
208,176,423
---------------
RADIO & TV BROADCAST & COMMERCIAL EQUIPMENT--2.0%
Motorola Credit Corp. (A-1+, P-1)
5.50%............ 10/13/98 31,500 31,442,250
5.50%............ 10/30/98 44,600 44,402,397
Motorola, Inc. (A-1+, P-1)
5.50%............ 10/13/98 35,427 35,362,051
5.50%............ 10/20/98 53,218 53,063,520
5.50%............ 11/19/98 35,000 34,737,986
---------------
199,008,204
---------------
SECURITY BROKERS & DEALERS--7.6%
C.S. First Boston, Inc. (A-1+, P-1)
5.51%............ 10/14/98 20,000 19,960,206
5.51%............ 10/22/98 20,000 19,935,717
5.51%............ 11/09/98 65,000 64,612,004
5.50%............ 12/03/98 43,000 42,586,125
</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)
SECURITY BROKERS & DEALERS (CONTINUED)
Merrill Lynch & Co. (A-1+, P-1)
5.52%............ 10/30/98 $ 85,000 $ 84,622,033
5.51%............ 11/06/98 50,000 49,724,500
5.50%............ 01/15/99 40,000 39,352,222
Morgan Stanley Group, Inc.
(A-1, P-1)
5.52%............ 10/09/98 100,000 99,877,333
5.51%............ 11/09/98 150,000 149,104,625
5.30%............ 02/26/99 100,000 97,821,111
5.26%............ 03/12/99 100,000 97,633,000
---------------
765,228,876
---------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--5.6%
Asset Securitization Coop. Corp.
(A-1+, P-1)
5.52%............ 11/06/98 81,000 80,552,880
C.I.T. Group Holdings, Inc.
(A-1, P-1)
5.37%............ 03/04/99 100,000 97,702,833
Corporate Receivables Corp.
(A-1+, P-1)
5.52%............ 10/20/98 125,000 124,635,833
5.52%............ 10/21/98 50,000 49,846,667
5.42%............ 12/10/98 45,000 44,525,750
CXC, Inc. (A-1+, P-1)
5.52%............ 10/19/98 50,000 49,862,000
5.52%............ 10/21/98 50,000 49,846,667
J.C. Penney Funding Corp.
(A-1, P-1)
5.50%............ 11/20/98 60,000 59,541,667
---------------
556,514,297
---------------
Total Commercial Paper
(Cost $4,377,970,063)............... 4,377,970,063
---------------
UNITED STATES GOVERNMENT AGENCY
OBLIGATIONS--1.0%
Federal National Mortgage Association
4.62%............ 10/06/98 100,000 100,000,000
---------------
Total United States Government Agency
Obligations
(Cost $100,000,000)................. 100,000,000
---------------
VARIABLE RATE OBLIGATIONS+--31.0%
ASSET BACKED SECURITIES--4.5%
SMM Trust 1997-A (A-1+, P-1)
5.50%............ 12/23/98 175,000 175,000,000
SMM Trust 1997-X (A-1+, P-1)
5.625%........... 10/12/98 100,000 100,000,000
SMM Trust 1998-B (A-1+, P-1)
5.625%........... 10/05/98 175,000 175,000,000
---------------
450,000,000
---------------
</TABLE>
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- ---------------
<S> <C> <C> <C>
VARIABLE RATE OBLIGATIONS+ (CONTINUED)
BANKS--8.2%
First Bank of South Dakota
(A-1, P-1)
5.452%........... 10/21/98 $100,000 $ 99,996,290
First National Bank of Chicago
(A-1+, P-1)
5.4023%.......... 10/27/98 96,000 95,953,500
5.4023%.......... 10/28/98 50,000 49,975,700
Key Bank National Association
(A-1, P-1)
5.3367%.......... 10/29/98 125,000 124,937,843
National City Bank of Cleveland
(National City Corp.) (A-1, P-1)
5.505%........... 10/07/98 200,000 199,935,174
National City Indiana (A-1, P-1)
5.4698%.......... 10/20/98 143,000 142,957,430
5.4798%.......... 10/20/98 100,000 99,984,796
---------------
813,740,733
---------------
BEVERAGES--2.8%
Pepsico (A-1, P-1)
5.4975%.......... 11/19/98 281,000 280,720,274
---------------
FINANCE LESSORS--0.8%
General Electric Capital Corp.
(A-1+, P-1)
5.4687%.......... 12/09/98 80,000 79,973,010
---------------
MISCELLANEOUS BUSINESS CREDIT INSTITUTIONS--0.8%
John Deere Capital Corp.
(A-1, P-1)
5.5259%.......... 10/22/98 80,000 79,953,184
---------------
PERSONAL CREDIT INSTITUTIONS--0.6%
Norwest Corp. (A-1+, P-1)
5.45%............ 12/20/98 60,000 59,994,409
---------------
SECURITY BROKERS & DEALERS--11.3%
Bear Stearns Companies, Inc.
(A-1, P-1)
5.6375%.......... 11/06/98 150,000 150,000,000
5.6275%.......... 11/18/98 175,000 175,000,000
5.6375%.......... 11/24/98 150,000 150,000,000
Goldman Sachs Group L.P.
(A-1+, P-1)
5.6875%.......... 11/13/98 75,000 75,000,000
5.6875%.......... 12/26/98 80,000 80,000,000
Merrill Lynch & Co. (A-1+, P-1)
5.6075%.......... 12/10/98 150,000 149,986,205
5.43%............ 12/15/98 200,000 200,000,000
Morgan Stanley Group
(A-1, P-1)
5.585%........... 10/15/98 150,000 150,000,000
---------------
1,129,986,205
---------------
</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>
VARIABLE RATE OBLIGATIONS+ (CONTINUED)
SHORT-TERM BUSINESS CREDIT INSTITUTIONS--2.0%
Xerox Credit Corp. (A-1, P-1)
5.5048%.......... 10/12/98 $200,000 $ 199,932,857
---------------
Total Variable Rate Obligations
(Cost $3,094,300,672)............... 3,094,300,672
---------------
MEDIUM TERM NOTES--5.2%
BANKS--0.5%
J.P. Morgan & Co., Inc.
(A-1+, P-1)
5.75%............ 03/10/99 50,000 50,000,000
---------------
SECURITY BROKERS & DEALERS--4.7%
Goldman Sachs Group, L.P.
(A-1+, P-1)
5.78%............ 10/26/98 125,000 125,000,000
5.70%............ 11/24/98 200,000 200,000,000
5.70%............ 11/25/98 110,000 110,000,000
Merrill Lynch & Co.(A-1+, P-1)
5.6775%.......... 03/02/99 35,000 35,000,000
---------------
470,000,000
---------------
Total Medium Term Notes
(Cost $520,000,000)................. 520,000,000
---------------
REPURCHASE AGREEMENTS -- 15.1%
Goldman Sachs & Co.
5.25%............ 10/01/98 200,000 200,000,000
(Agreement dated 09/30/98
to be repurchased at
$200,029,167
collateralized by
$236,363,162 Federal Home
Loan Mortgage Corporation
Bonds and Federal
National Mortgage
Association Bonds 5.994%
to 7.4375% due from
10/25/08 to 08/18/28. The
market value is
$206,000,000.)
Lehman Government Securities, Inc.
5.38%............ 10/01/98 200,000 200,000,000
(Agreement dated 09/30/98
to be repurchased at
$200,029,889
collateralized by
$202,707,299 Government
National Mortgage
Association Bonds 5.50%
to 6.875% due from
05/20/26 to 01/20/28. The
market value is
$206,001,892.)
</TABLE>
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- ---------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Morgan Stanley & Co.
5.65%............ 10/01/98 $250,000 $ 250,000,000
(Agreement dated 09/30/98
to be repurchased at
$250,039,236
collateralized by
$341,292,715 Federal Farm
Credit Bank Medium Term
Notes, Federal Home Loan
Bank Bonds, Federal Home
Loan Mortgage Corporation
Bonds, Federal National
Mortgage Association
Bonds, Student Loan
Marketing Association
Bonds, Tennessee Valley
Authority Discount Notes
and U.S. Treasury Notes
and Strips from 0.00% to
9.15% due from 10/01/98
to 08/06/38. The market
value is $256,849,995.)
Morgan Stanley & Co.
5.825%........... 10/01/98 103,700 103,700,000
(Agreement dated 09/30/98
to be repurchased at
$103,716,779
collateralized by
$141,568,218 Federal Farm
Credit Bank Medium Term
Notes, Federal Home Loan
Bank Bonds, Federal Home
Loan Mortgage Corporation
Bonds, Federal National
Mortgage Association
Bonds, Student Loan
Marketing Association
Bonds, Tennessee Valley
Authority Discount Notes
and U.S. Treasury Notes
and Strips from 0.00% to
9.15% due from 10/01/98
to 08/06/38. The market
value is $106,541,378.)
</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)
Morgan Stanley & Co.
5.875%........... 10/01/98 $450,000 $ 450,000,000
Agreement dated 09/30/98 to
be repurchased at
$450,073,438
collateralized by
$614,326,888 Federal Farm
Credit Bank Medium Term
Notes, Federal Home Loan
Bank Bonds, Federal Home
Loan Mortgage Corporation
Bonds, Federal National
Mortgage Association
Bonds, Student Loan
Marketing Association
Bonds, Tennessee Valley
Authority Discount Notes
and U.S. Treasury Notes
and Strips from 0.00% to
9.15% due from 10/01/98
to 08/06/38. The market
value is $462,329,991.)
SBC Warburg Dillon Read, Inc.
5.40%............ 10/01/98 302,000 302,000,000
(Agreement dated 09/30/98
to be repurchased at
$302,045,300
collateralized at
$442,397,063 Federal
National Mortgage
Association Bonds,
Resolution Funding
Corporation Notes and
U.S. Treasury Bills and
Notes 0.00% to 7.50% due
from 04/29/99 to
01/15/30. The market
value is $311,215,856.)
---------------
Total Repurchase Agreements
(Cost $1,505,700,000)............... 1,505,700,000
---------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
---------------
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $10,005,358,149*)...... 100.2% $10,005,358,149
LIABILITIES IN EXCESS OF OTHER
ASSETS....................... (0.2) (16,390,818)
------ ---------------
NET ASSETS (Equivalent to $1.00
per share based on
9,686,688,686 TempFund Shares
and 302,482,347 TempFund
Dollar Shares, $.001 par
value stock outstanding)..... 100.0% $ 9,988,967,331
------ ---------------
------ ---------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
($9,988,967,331 / 9,989,171,033)........ $1.00
-----
-----
</TABLE>
- ---------------
* Cost for federal income tax purposes.
+ Variable Rate Obligations--The rate shown is the rate as of September 30, 1998
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.
<TABLE>
<CAPTION>
- ------------------------------------------------------
TEMPFUND PORTFOLIO
Maturity Information
September 30, 1998
(Unaudited)
MATURITY PAR PERCENTAGE
PERIOD (000) OF PORTFOLIO
------------- -------------- ----------
<S> <C> <C> <C> <C>
1- 7 days $1,980,700,000 20.0%
8- 14 days 658,745,000 6.5
15- 30 days 2,463,659,000 24.5
31- 60 days 2,347,762,000 23.3
61- 90 days 1,434,500,000 14.2
91-120 days 98,057,000 1.0
121-150 days 522,500,000 5.2
Over 150 days 535,000,000 5.3
Average Weighted Maturity--46 days
- ------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
TEMPCASH PORTFOLIO
Temporary Investment Fund, Inc.
Statement of Net Assets
September 30, 1998
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT--6.7%
BANK NOTES--3.3%
NationsBank (A-1+, P-1, D-1+)
5.50%............. 12/21/98 $100,000 $ 100,000,000
--------------
DOMESTIC CERTIFICATES OF DEPOSIT--0.9%
Wilmington Trust Co. (A-1, P-1)
5.71%............. 03/05/99 25,000 25,000,000
--------------
YANKEE DOLLAR CERTIFICATES OF DEPOSIT--2.5%
Bayerische Vereinsbank
(A-1+, P-1)
5.70%............. 01/07/99 20,000 19,997,282
National Westminster
(A-1+, VMIG-1)
5.7375%........... 05/07/99 25,000 25,004,320
Swedbank (P-1)
5.76%............. 05/24/99 25,000 24,990,757
Toronto Dominion (A-1+, VMIG-1)
5.71%............. 05/24/99 5,000 4,997,226
--------------
74,989,585
--------------
Total Certificates of Deposit
(Cost $199,989,585).................. 199,989,585
--------------
COMMERCIAL PAPER--45.6%
ASSET BACKED SECURITIES--15.1%
Barton Capital Corp. (A-1+, P-1)
5.38%............. 03/04/99 21,350 20,858,642
Beta Finance Inc. (P-1)
5.27%............. 02/18/99 50,000 48,975,278
CC USA Inc. (A-1+, P-1)
5.53%............. 10/30/98 75,000 74,665,896
5.51%............. 11/19/98 30,000 29,775,008
5.3699%........... 02/08/99 30,000 29,418,250
5.37%............. 02/08/99 20,000 19,612,167
Corporate Receivables Corp.
(A-1, P-1, D-1)
5.40%............. 12/09/98 32,500 32,163,625
Dakota Certificates Program
(A-1+, P-1)
5.52%............. 11/05/98 50,000 49,731,667
5.38%............. 12/18/98 75,000 74,125,750
Trident Capital Finance
(A-1+, P-1)
5.52%............. 10/06/98 75,000 74,942,500
--------------
454,268,783
--------------
BANKS--8.1%
AB Spintab Swedmortgage (P-1)
5.53%............. 11/10/98 50,000 49,692,778
5.53%............. 11/24/98 45,000 44,626,725
Abbey National North America (P-1)
5.3199%........... 01/11/99 50,000 49,246,333
</TABLE>
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
BANKS (CONTINUED)
Banco Santander Puerto Rico
(A-1+, P-1)
5.52%............. 10/19/98 25,000 $ 24,931,000
Unifunding Inc. (A-1, P-1)
5.55%............. 10/21/98 $ 25,000 24,922,917
5.49%............. 12/14/98 50,000 49,435,750
--------------
242,855,503
--------------
BUSINESS CREDIT INSTITUTIONS--4.1%
General Electric Capital Corp.
(A-1+, P-1)
5.52%............. 10/15/98 50,000 49,892,667
5.46%............. 02/03/99 75,000 73,578,125
--------------
123,470,792
--------------
FOOD & KINDRED PRODUCTS--3.8%
Diageo Capital PLC
(A-1, P-1, D-1)
5.465%............ 12/11/98 35,000 34,622,763
5.45%............. 12/28/98 80,000 78,934,222
--------------
113,556,985
--------------
MOTOR VEHICLES & CAR BODIES--1.0%
BMW US Capital Corp.
(A-1, P-1, A1)
5.52%............. 11/09/98 30,000 29,820,600
--------------
PERSONAL CREDIT INSTITUTIONS--1.6%
Ford Motor Credit Corp.
(A-1, P-1, D-1+)
5.44%............. 02/17/99 50,000 48,949,778
--------------
PETROLEUM REFINING--3.5%
Repsol International Finance B.V
(A-1+, P-1, A1+)
5.46%............. 12/23/98 57,000 56,282,465
5.18%............. 03/15/99 50,000 48,812,917
--------------
105,095,382
--------------
SECURITY BROKERS & DEALERS--8.4%
Lehman Brothers Holdings, Inc.
(A-1, P-2, D-1)
5.50%............. 12/04/98 125,000 123,777,778
5.52%............. 02/24/99 30,000 29,328,400
Merrill Lynch & Co.
(A-1+, P-1, D-1+)
5.50%............. 12/03/98 50,000 49,518,750
5.48%............. 03/09/99 50,000 48,789,833
--------------
251,414,761
--------------
Total Commercial Paper
(Cost $1,369,432,584)................ 1,369,432,584
--------------
</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>
TIME DEPOSITS--14.0%
Bank of Montreal (P-1)
6.00%............. 10/01/98 $150,000 $ 150,000,000
National Australia Bank (P-1)
6.00%............. 10/01/98 140,000 140,000,000
Westdeutsche Landesbank (P-1)
6.00%............. 10/01/98 131,500 131,500,000
--------------
Total Time Deposits
(Cost $421,500,000).................. 421,500,000
--------------
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS--2.8%
Federal National Mortgage Association
4.62%............. 10/06/98 75,000 75,000,000
--------------
Student Loan Marketing Association
4.753%............ 10/06/98 10,000 10,000,515
--------------
Total United States Government Agency
Obligations
(Cost $85,000,515)................... 85,000,515
--------------
VARIABLE RATE OBLIGATIONS+--31.2%
ASSET BACKED SECURITIES--5.0%
SMM Trust 1997-X (A-1+, P-1)
5.625%............ 10/12/98 75,000 75,000,000
SMM Trust 1998-B (A-1+, P-1)
5.625%............ 10/05/98 75,000 75,000,000
--------------
150,000,000
--------------
BANKS--6.7%
Istituto Bancario San Paolo
di Torino (A-1, P-1, A1+)
5.525%............ 10/14/98 75,000 74,980,570
Royal Bank of Canada
(A-1+, P-1, A1+)
5.505%............ 10/14/98 50,000 49,966,630
Skandinaviska Enskilda Banken
Funding Inc. (P-1)
5.55%............. 10/12/98 $ 75,000 74,985,195
--------------
199,932,395
--------------
</TABLE>
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
VARIABLE RATE OBLIGATIONS+ (CONTINUED)
LIFE INSURANCE--10.0%
General American Life Insurance Co. (A-1+)
5.85%............. 10/01/98 125,000 $ 125,000,000
Peoples Security Life Insurance Co. (A-1+, P-1)
5.77%............. 10/01/98 75,000 75,000,000
5.81%............. 10/01/98 50,000 50,000,000
Transamerica Life and Annuity Co. (A-1+, P-1)
5.6445%........... 10/01/98 50,000 50,000,000
--------------
300,000,000
--------------
PERSONAL CREDIT INSTITUTIONS--4.5%
American Honda Finance Corp.
Honda Motor Company, Ltd (A-1, P-1)
5.6575%........... 10/09/98 40,000 40,000,000
5.6575%........... 10/26/98 75,000 75,000,000
5.5425%........... 12/14/98 20,000 20,000,000
--------------
135,000,000
--------------
SECURITY BROKERS & DEALERS--5.0%
Bear Stearns Companies, Inc.
(A-1, P-1, A1)
5.5559%........... 10/22/98 100,000 100,000,000
5.6375%........... 11/06/98 50,000 50,000,000
--------------
150,000,000
--------------
Total Variable Rate Obligations
(Cost $934,932,395).................. 934,932,395
--------------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
TEMPCASH PORTFOLIO
Statement of Net Assets (Concluded)
<TABLE>
<CAPTION>
VALUE
--------------
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $3,010,855,079*)......... 100.3% $3,010,855,079
LIABILITIES IN EXCESS OF OTHER
ASSETS......................... (0.3) (7,932,346)
----- --------------
NET ASSETS (Equivalent to
$1.00 per share based on
2,499,091,645 TempCash Shares
and 503,843,346 TempCash Dollar
Shares outstanding)............ 100.0% $3,002,922,733
----- --------------
----- --------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($3,002,922,733 / 3,002,934,991)...... $1.00
-----
-----
</TABLE>
- ---------------
* Cost for federal income tax purposes.
+ Variable Rate Obligations--The rate shown is the rate as of September 30, 1998
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.
<TABLE>
<CAPTION>
- ----------------------------------------------------
TEMPCASH PORTFOLIO
Maturity Information
September 30, 1998
(Unaudited)
MATURITY PAR PERCENTAGE
PERIOD (000) OF PORTFOLIO
------------- ------------ ----------
<S> <C> <C> <C> <C>
1- 7 days $956,500,000 31.6%
8- 14 days 315,000,000 10.4
15- 30 days 350,000,000 11.6
31- 60 days 255,000,000 8.4
61- 90 days 624,500,000 20.6
91-120 days 70,000,000 2.3
121-150 days 255,000,000 8.4
Over 150 days 201,350,000 6.7
Average Weighted Maturity--49 days
- ----------------------------------------------------
</TABLE>
The Duff & Phelps, Fitch Investors Service, Moody's Investors Service, Standard
& Poor's Ratings Service and TBW, Inc. ratings of the investments in the various
Portfolios are believed to be the most recent ratings available at September 30,
1998. The ratings have not been audited by the Independent Auditors and,
therefore, are not covered by the Independent Auditors' Report.
See accompanying notes to financial statements.
9
<PAGE> 10
TEMPORARY INVESTMENT FUND, INC.
Statements of Operations
Year Ended September 30, 1998
<TABLE>
<CAPTION>
TEMPFUND TEMPCASH
PORTFOLIO PORTFOLIO
------------ ------------
<S> <C> <C>
Investment income:
Interest income......................................... $579,702,110 $171,972,729
------------ ------------
Expenses:
Investment advisory fee................................. 10,442,205 4,485,250
Administration fee...................................... 10,442,205 4,485,250
Directors' fees and officer's salary.................... 192,193 39,009
Transfer agent fee...................................... 638,408 128,345
Custodian fee........................................... 947,925 372,331
Shareholder computer access program..................... 30,873 17,829
Legal and audit......................................... 115,294 30,713
Registration expenses................................... 42,030 23,118
Other................................................... 145,090 42,605
------------ ------------
22,996,223 9,624,450
Less fees waived........................................ (4,630,556) (4,193,306)
------------ ------------
18,365,667 5,431,144
Service Organization fees -- Dollar Shares.............. 772,304 1,088,006
------------ ------------
Total expenses..................................... 19,137,971 6,519,150
------------ ------------
Net investment income................................... 560,564,139 165,453,579
Net realized gain (loss) on investments..................... (203,702) 491,505
------------ ------------
Net increase in net assets resulting from operations.... $560,360,437 $165,945,084
============ ============
</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,
1998 1997 1998 1997
----------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income............. $ 560,564,139 $ 451,218,574 $ 165,453,579 $ 175,320,887
Net realized gain (loss) on
investments..................... (203,702) 24,187 491,505 79,331
----------------- ----------------- ---------------- ----------------
Net increase in net assets
resulting from operations..... 560,360,437 451,242,761 165,945,084 175,400,218
----------------- ----------------- ---------------- ----------------
Distributions to shareholders:
Dividends to shareholders from net
investment income:
TempFund Shares................. (544,340,518) (433,387,702) -- --
TempFund Dollar Shares.......... (16,223,621) (17,830,872) -- --
TempCash Shares................. -- -- (142,514,398) (150,279,493)
TempCash Dollar Shares.......... -- -- (22,939,181) (25,041,394)
Distributions to shareholders from
net realized gain:
TempFund shares................. (23,462) (47,562) -- --
TempFund Dollar shares.......... (725) (1,567) -- --
----------------- ----------------- ---------------- ----------------
Total distributions to
shareholders................ (560,588,326) (451,267,703) (165,453,579) (175,320,887)
----------------- ----------------- ---------------- ----------------
Capital share transactions (at $1
per share):
Sale of shares.................... 163,267,203,408 159,612,735,266 55,035,173,158 66,663,923,098
Shares issued in reinvestment of
dividends....................... 194,706,744 136,470,296 77,504,373 69,364,628
Shares repurchased................ (161,888,500,360) (157,210,517,694) (54,502,812,282) (66,703,957,164)
----------------- ----------------- ---------------- ----------------
Increase in net assets derived
from capital share
transactions................ 1,573,409,792 2,538,687,868 609,865,249 29,330,562
----------------- ----------------- ---------------- ----------------
Total increase in net
assets...................... 1,573,181,903 2,538,662,926 610,356,754 29,409,893
Net assets:
Beginning of period................. 8,415,785,428 5,877,122,502 2,392,565,979 2,363,156,086
----------------- ----------------- ---------------- ----------------
End of period....................... $ 9,988,967,331 $ 8,415,785,428 $ 3,002,922,733 $ 2,392,565,979
================= ================= ================ ================
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 12
TEMPORARY INVESTMENT FUND, INC.
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
TEMPFUND SHARES
-------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income From Investment Operations:
Net Investment Income................................... .0549 .0539 .0541 .0567 .0360
------ ------ ------ ------ ------
Less Distributions:
Dividends to Shareholders from net investment income.... (.0549) (.0539) (.0541) (.0567) (.0360)
------ ------ ------ ------ ------
Net Asset Value, End of Period............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return............................................ 5.63% 5.53% 5.55% 5.82% 3.66%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)...................... 9,686,491 8,060,501 5,715,004 5,351,346 4,480,851
Ratio of Expenses to Average Daily Net Assets(1)...... .18% .18% .18% .24% .25%
Ratio of Net Investment Income to Average Daily Net
Assets.............................................. 5.50% 5.39% 5.41% 5.67% 3.60%
</TABLE>
<TABLE>
<CAPTION>
TEMPFUND DOLLAR SHARES
-------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income From Investment Operations:
Net Investment Income................................... .0524 .0514 .0516 .0542 .0335
------ ------ ------ ------ ------
Less Distributions:
Dividends to Shareholders from net investment income.... (.0524) (.0514) (.0516) (.0542) (.0335)
------ ------ ------ ------ ------
Net Asset Value, End of Period............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return............................................ 5.38% 5.27% 5.30% 5.57% 3.41%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)...................... 302,476 355,284 162,119 81,828 102,105
Ratio of Expenses to Average Daily Net Assets(1)...... .43% .43% .43% .49% .50%
Ratio of Net Investment Income to Average Daily Net
Assets.............................................. 5.25% 5.14% 5.16% 5.42% 3.35%
</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
.23%, .24%, .26%, .27% and .27% for the years ended September 30, 1998,
1997, 1996, 1995 and 1994, respectively. For TempFund Dollar Shares, the
ratios of expenses to average daily net assets would have been .48%, .49%,
.51%, .52% and .52% for the years ended September 30, 1998, 1997, 1996, 1995
and 1994, respectively.
See accompanying notes to financial statements.
12
<PAGE> 13
TEMPORARY INVESTMENT FUND, INC.
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
TEMPCASH SHARES
-------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income.................................... .0552 .0541 .0542 .0575 .0370
------- ------- ------- ------- -------
Less Distributions:
Dividends to Shareholders from Net Investment Income..... (.0552) (.0541) (.0542) (.0575) (.0370)
------- ------- ------- ------- -------
Net Asset Value, End of Period............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Total Return............................................. 5.66% 5.55% 5.56% 5.90% 3.76%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)....................... 2,499,114 1,991,037 1,835,326 1,316,166 2,330,456
Ratio of Expenses to Average Daily Net Assets(1)....... .18% .18% .18% .16% .16%
Ratio of Net Investment Income to Average Daily Net
Assets............................................... 5.52% 5.41% 5.42% 5.75% 3.70%
</TABLE>
<TABLE>
<CAPTION>
TEMPCASH DOLLAR SHARES
-------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income.................................... .0527 .0516 .0517 .0550 .0345
------- ------- ------- ------- -------
Less Distributions:
Dividends to Shareholders from Net Investment Income..... (.0527) (.0516) (.0517) (.0550) (.0345)
------- ------- ------- ------- -------
Net Asset Value, End of Period............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Total Return............................................. 5.41% 5.29% 5.31% 5.65% 3.51%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)....................... 503,809 401,529 527,830 454,156 397,948
Ratio of Expenses to Average Daily Net Assets(1)....... .43% .43% .43% .41% .41%
Ratio of Net Investment Income to Average Daily Net
Assets............................................... 5.27% 5.16% 5.17% 5.50% 3.45%
</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
.32%, .30%, .33%, .30% and .33% for the years ended September 30, 1998,
1997, 1996, 1995 and 1994 respectively. For TempCash Dollar Shares, the
ratios of expenses to average daily net assets would have been .57%, .55%,
.58%, .55% and .58% for the years ended September 30, 1998, 1997, 1996, 1995
and 1994 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 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 securities, as collateral with a
custodian, 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 BlackRock Institutional Management Corporation
14
<PAGE> 15
Notes to Financial Statements (Continued)
(BIMC), an indirect wholly-owned subsidiary of PNC Bank, BIMC 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.
In March 1998, BIMC (formerly known as PNC Institutional Management
Corporation), assumed the responsibilities of PNC Bank, as sub-adviser, to
provide research, credit analysis and recommendations with respect to the Fund's
investments and supply certain computer facilities, personnel and other
services. The personnel and facilities related to these services have been
transferred to BIMC and BIMC's obligation to pay to PNC Bank a portion of the
advisory fee has been terminated.
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 an Administration Agreement with PFPC and PDI for
certain administrative services.
In return for their advisory and administrative services, the Company pays
BIMC 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:
0.175% of the first $1 billion, plus 0.15% of the next $1 billion, 0.125% of
the next $1 billion, 0.10% of the next $1 billion, 0.095% of the next $1
billion, 0.09% of the next $1 billion, 0.08% of the next $1 billion, 0.075% of
the next $1 billion and 0.07% of net assets in excess of $8 billion.
TempCash Portfolio:
0.175% of the first $1 billion, plus 0.15% of the next $1 billion, 0.125% of
the next $1 billion, 0.10% of the next $1 billion, 0.095% of the next $1
billion, 0.09% of the next $1 billion, 0.085% of the next $ billion and 0.08% 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 BIMC 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 BIMC 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 0.18% of each portfolio's average daily net assets.
For the year ended September 30, 1998, the Administrators and BIMC voluntarily
waived, on an equal basis, administration and advisory fees totaling $4,630,556
and $4,193,306 for the TempFund portfolio and the TempCash portfolio,
respectively.
Service Organization fees of $132,014 were paid to affiliates of BIMC for the
year ended September 30, 1998.
Expenses include legal fees paid to counsel to the Company, a partner of which
is secretary of the Company.
D. At September 30, 1998, the Company was authorized to issue 60 billion shares
of common stock, par value $0.001 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 as Class C--Special Series 1
shares.
15
<PAGE> 16
Notes to Financial Statements (Concluded)
Transactions in shares of the Company are summarized as follows:
<TABLE>
<CAPTION>
TEMPFUND PORTFOLIO
----------------------------------------
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997
------------------ ------------------
<S> <C> <C>
Sale of shares
TempFund Class B................................... 156,484,722,787 153,826,742,485
TempFund Dollar.................................... 6,782,480,621 5,785,992,781
Shares issued in reinvestment of dividends:
TempFund Class B................................... 186,102,310 129,081,124
TempFund Dollar.................................... 8,604,434 7,389,172
Shares repurchased:
TempFund Class B................................... (155,044,635,487) (151,610,301,526)
TempFund Dollar.................................... (6,843,864,873) (5,600,216,168)
----------------- -----------------
Net increase in shares.................................. 1,573,409,792 2,538,687,868
================= =================
</TABLE>
<TABLE>
<CAPTION>
TEMPCASH PORTFOLIO
----------------------------------------
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997
------------------ ------------------
<S> <C> <C>
Sale of shares
TempCash............................................. 52,797,975,692 63,725,228,824
TempCash Dollar...................................... 2,237,197,466 2,938,694,274
Shares issued in reinvestment of dividends:
TempCash............................................. 60,504,102 55,343,699
TempCash Dollar...................................... 17,000,271 14,020,929
Shares repurchased:
TempCash............................................. (52,350,827,640) (63,624,929,705)
TempCash Dollar...................................... (2,151,984,642) (3,079,027,459)
---------------- ----------------
Net increase in shares.................................... 609,865,249 29,330,562
================ ================
</TABLE>
On September 30, 1998 one shareholder held approximately 13% of the
outstanding shares of TempFund and two shareholders held approximately 20% of
the outstanding shares of TempCash.
E. At September 30, 1998, capital loss carryovers, expiring at various times
from 2004 to 2007 were available to offset possible future capital gains of the
respective portfolios, as follows: TempFund, $203,702 and TempCash, $12,258.
F. At September 30, 1998, net assets consisted of the following:
<TABLE>
<CAPTION>
TEMPFUND TEMPCASH
--------------- ---------------
<S> <C> <C>
Paid-in capital............................................. $9,989,171,033 $3,002,934,991
Accumulated net realized losses............................. (203,702) (12,258)
-------------- --------------
Total net assets............................................ $9,988,967,331 $3,002,922,733
============== ==============
</TABLE>
16
<PAGE> 17
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
Temporary Investment Fund, Inc.
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of TempFund Portfolio and TempCash
Portfolio (constituting Temporary Investment Fund, Inc., hereafter referred to
as the "Fund") at September 30, 1998, the results of each of their operations
for the year then ended, the changes in each of their net assets for each of the
two years in the period then ended and the financial highlights for each of the
five years in the period then ended, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 1998 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, PA 19103
October 30, 1998
17
<PAGE> 18
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE> 19
Board of Directors
G. Willing Pepper
Chairman
G. Nicholas Beckwith, III
Philip E. Coldwell
Robert R. Fortune
Jerrold B. Harris
Rodney D. Johnson
Officers
Thomas H. Nevin
President
Lisa M. Buono
Treasurer
W. Bruce McConnel, III
Secretary
Investment Adviser
BlackRock 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, 1998
