<PAGE>
BATTERY PARK(SM) HIGH YIELD FUND
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the annual report for Battery Park High Yield Fund for
the fiscal year ending September 30, 1999. This report begins with a discussion
of the market environment and portfolio highlights by the Fund's portfolio
manager, followed by a schedule of the Fund's high yield corporate bond
holdings and the audited financial statements.
The Fund is managed by Nomura Corporate Research and Asset Management Inc.,
which seeks to provide you with a high total return--consisting of current
income and capital appreciation--by investing in a diversified portfolio of
high yield corporate bonds.
Although market conditions proved challenging throughout the year, we are
encouraged by both the positive fundamentals in the U.S. economy and improving
global economy and are confident that high yield bonds remain an attractive
investment opportunity over the long term.
Thank you for your continued trust and investment in the Battery Park High
Yield Fund. As we conclude our second full year of operations, we are committed
to increasing assets in the Fund and thus, lowering the expense ratio. We look
forward to helping you to achieve your financial goals in the future.
Sincerely,
/s/ Robert Levine, CFA
Robert Levine, CFA
Chairman and President
November 29, 1999
1
<PAGE>
BATTERY PARK(SM) HIGH YIELD FUND
FUND PERFORMANCE AND OUTLOOK
WE BELIEVE DIVERSIFICATION, INTENSIVE CREDIT RESEARCH AND PROACTIVE MANAGEMENT
ARE KEY TO ACHIEVING CONSISTENT LONG-TERM TOTAL RETURNS.
Battery Park High Yield Fund's objective is to provide shareholders with high
total return consisting of current income and capital appreciation. The Fund
seeks to achieve its objective by investing principally in fixed income
securities of U.S. companies which are rated in the lower rating categories of
the established rating services or are unrated securities of comparable
quality.
MARKET ENVIRONMENT
This reporting period began in the midst of 1998's global liquidity crisis. To
address liquidity concerns, the Federal Reserve quickly lowered interest rates
three times, for a total decrease of 75 basis points during the latter part of
1998. The equity and fixed income markets responded favorably to the Fed's
actions as the markets began to return to more normalized levels. The high
yield market gained momentum in early 1999 as evidence of a strong U.S. economy
began to soothe fears of a global recession. However, the economy's strong
performance soon shifted fears from global recession to inflation. During the
latter half of the Fund's fiscal year, the Fed reversed its earlier interest
rate policy by raising rates on two occasions, erasing 50 bps of the 75 bps
reduction (more recently, the Fed raised rates an additional 25 bps on
November 16, 1999). Technical factors contributing to recent market weakness
include an increase in investors' cash positions, possibly in anticipation of
Y2K concerns. While default rates, which are viewed as lagging market
indicators, have risen during the last twelve months, the Fund's investments
did not suffer any defaults. We remain confident in the Fund's portfolio
holdings. Below we discuss the sectors which hurt, and helped performance.
PORTFOLIO HIGHLIGHTS
Certain industries performed well for the Fund this year, particularly the
Cable Television and Telecommunications industries, in which the Fund is
currently overweighted. Other industries in which the Fund had investments,
such as Theaters (a subset of Leisure), Healthcare, Paging (a subset of
Telecommunications), and Financial Intermediaries, performed poorly. Here, we
discuss some reasons driving performance within these sectors.
Performance was negatively impacted by the Fund's investments in the Leisure
industry, particularly in the Theater sector. The sector was hurt by the
combination of the aggressive, mostly debt-financed, overexpansion of new
theaters nationwide, and the relatively weak box office performance in the
beginning of calendar year 1999. These factors combined to lead to reduced
earnings and operating margins throughout the industry. The Fund was also
negatively impacted by its investments in the Healthcare industry, as long-term
healthcare suffered dramatically from changes in
2
<PAGE>
Medicare reimbursement. The Paging sector also negatively impacted the Fund's
performance. The entire sector is experiencing a slowdown in growth as the
industry further matures, leading to intensified pricing competition.
Additionally, the Fund's overall performance was hurt by its investments in the
Financial Intermediaries industry. Many highly leveraged financial services
companies had cash withdrawn because their assets were falling in value during
the first quarter of our reporting period.
During this period, the Fund benefited from its increased exposure to the Cable
Television industry, which rose from 5% to 17% of assets (as of the end of the
Fund's fiscal year). Cable operators have historically provided stable cash
flows from their core video business. Currently, many cable companies are
upgrading their networks in order to provide consumers with local telephone
service, a high speed Internet service, and expanded digital video offerings.
AT&T, attracted by cable's ability to deliver local phone service, recently
bought TCI and MediaOne, gaining access to over 40% of households in the
country. Other large equity investments have been made in the cable sector by
significant players such as Microsoft and Vulcan Ventures. Such activity has
made the sector more attractive in the past year by boosting the credit
qualities of companies, including several of the Fund's holdings. Many of the
Fund's investments have benefited from this merger and acquisition activity,
and we expect continued M&A combined with strong growth to drive up performance
in the sector.
The Fund's investments in the Telecommunications industry performed
particularly well as the industry rebounded from its low in the Fall of 1998.
The strength in telecommunications equities in the early part of 1999 calmed
high yield investors' fears that telecommunications companies would not be able
to finance their capital needs. Furthermore, very strong operating results,
particularly in the Wireless sector (a subset of Telecommunications), combined
with merger and acquisition activity, several large IPOs and secondary equity
offerings, rekindled high yield investors' interest in the sector. We remain
bullish on the sector; however, we have shifted the Fund's focus to the
wireless service providers over the last six months, as these operators have
been showing the fastest growth, and are the most likely near term acquisition
candidates.
The Fund is also heavily weighted in the Broadcasting Radio and Television
industry. Historically, television broadcasters, which operate groups of
network- affiliated and independent stations, have demonstrated steady and
stable revenue growth, and have had low capital expenditures. The Fund is
overweighted in the industry due to the resultant deleveraging, combined with
the FCC's relaxation of ownership restrictions and increasing industry
consolidation. More recently, non-traditional networks, such as The WB and UPN,
have been gaining audience share from the Big Four (ABC, CBS, NBC and FOX).
Consequently, we are increasing the Fund's exposure to the faster growing, non-
traditional network affiliates, while scaling back our holdings in the
affiliates of the major networks. Despite positive fundamentals on the radio
side, especially low capital expenditure needs and high rates of growth, the
Fund was not overweighted in the radio sector due to the bonds' low yields. We
will continue to carefully evaluate investment opportunities within the sector
as they arise.
3
<PAGE>
During this period, the Fund has been a strictly high yield bond fund, with no
emerging markets or common equity exposure. We believe that our research-
driven, company-specific investment philosophy, which focuses on total return
and relative value, has allowed us to take advantage of this attractive market
while avoiding many of the problem credits. Finally, we are pleased to report
that, in a period of rising default rates, none of the Fund's holdings have
defaulted.
4
<PAGE>
BATTERY PARK FUND'S DIVERSE PORTFOLIO
Top ten industries [%] as of September 30, 1999
21.75% Telecommunications
16.86% Cable Television
15.14% Broadcasting Radio and Television
7.12% Hotels/Motels/Inns and Casinos
6.33% Leisure
4.38% Food Products
3.72% Food/Drug Retailers
3.14% Chemicals/Plastics
3.07% Electronics/Electric
3.01% Non-Ferrous Metals/Minerals
PORTFOLIO CHARACTERISTICS* AS OF SEPTEMBER 30, 1999
<TABLE>
<S> <C>
Modified Duration 5.81 years
Average Maturity 8.41 years
Average Rating B
30-Day SEC Yield**
Class A 9.50%
Class A Net of Load 9.07%
Class Y 9.75%
</TABLE>
* Portfolio characteristics exclude cash & cash equivalents which represent
approximately 6.15% of the Fund as of September 30, 1999.
** The Adviser voluntarily waived management fees and absorbed expenses (please
refer to note (4) of the Notes to the Financial Statements). Absent the
waiver and absorption of fees, the annualized SEC yield for Class A Shares
(NAV) would have been 9.45%, Class A Shares (net of maximum sales charge)
would have been 9.02% and Class Y shares would have been 9.69% and
performance returns would have been lower.
5
<PAGE>
FUND QUALITY BREAKDOWN OF SEPTEMBER 30, 1999
[GRAPH APPEARS HERE]
B- 37%
B 19%
B+ 19%
BB- 9%
Cash & Cash Equivalents & other 8%
Not Rated 6%
CCC 1%
OUTLOOK AND STRATEGY
In light of the positive fundamentals in the U.S. economy and improvements in
the global economy, we view current high yield spreads as an opportunity to
invest in quality companies at attractive prices. Moreover, we anticipate that
calendar year 2000 will provide an opportunity for a meaningful price recovery,
as Y2K fears dissipate, and investors continue to deploy their capital into the
high yield markets. We will continue to carefully evaluate and select
investments consistent with our research-intensive investment philosophy. While
past performance is no guarantee of future results, we remain confident in our
investment strategy that has produced competitive returns.
/s/ Robert Levine
Robert Levine, CFA
Chairman and President, Battery Park Funds, Inc.
/s/ Richard Buch
Richard Buch, CFA
Portfolio Manager
6
<PAGE>
ABOUT THE PORTFOLIO MANAGER
Richard A. Buch, CFA, is a Managing Director and Senior Portfolio Manager of
NCRAM. He is the portfolio manager of the Battery Park High Yield Fund since
the Fund's inception and other high yield accounts. He supervises NCRAM's team
of credit analysts/portfolio managers. Mr. Buch was previously Senior VP and
High Yield Portfolio Manager for Kidder, Peabody Asset Management, Assistant VP
at Reliance Insurance, and a Senior Securities Analyst at Teachers Insurance
and Annuity Association. Richard received his MBA from Cornell University in
1985 and is a member of the Association for Investment Management Research.
Risk Factors. High yield bonds, while offering greater total return potential,
also possess greater risks than lower yielding higher rated bonds. Please see
the Fund's Prospectus.
Class A Shares incur a maximum initial sales charge (front-end load) of 4.50%
and bear annual 12b-1 fees of 25 basis points. Class A shares are available
only through financial planners and securities dealers that have entered into
selected dealer agreements with the Distributor. Class A shares are available
to certain qualified investors and other entities without a sales charge.
Please see the Fund's prospectus for more details regarding the purchase of
Class A shares at NAV.
Class Y Shares are offered at net asset value without a sales charge to an
investor that invests at least $1 million in the Fund or purchases through a
fee-based financial planner whose clients have a current investment in the Fund
aggregating at least $1 million. Class Y Shares also are offered for purchases
of less than $1 million to Directors of the Fund and to retirement plans
administered by the Investment Adviser or its affiliates for the benefit of
employees of the Investment Adviser and/or its affiliates.
7
<PAGE>
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
Label A B C D
========================================================================================================
Label Class A Class A with Load Class y ML High Yield Master II Index
========================================================================================================
<S> <C> <C> <C> <C>
1 Oct-96 10000 9550 10000 10000
===================-------------------------------------------------------------------------------------
2 10675 10196 10679 10346
===================-------------------------------------------------------------------------------------
3 Nov-96 10822 10336 10830 10424
===================-------------------------------------------------------------------------------------
4 11161 10660 11171 10584
===================-------------------------------------------------------------------------------------
5 Jan-97 10937 10446 10949 10439
===================-------------------------------------------------------------------------------------
6 11055 10558 11069 10572
===================-------------------------------------------------------------------------------------
7 Mar-97 11428 10915 11446 10795
===================-------------------------------------------------------------------------------------
8 11592 11071 11612 10962
===================-------------------------------------------------------------------------------------
9 May-97 11875 11342 11898 11253
===================-------------------------------------------------------------------------------------
10 11959 11422 11966 11239
===================-------------------------------------------------------------------------------------
11 July-97 12312 11759 12342 11441
===================-------------------------------------------------------------------------------------
12 12292 11740 12325 11500
===================-------------------------------------------------------------------------------------
13 Sep-97 12400 11844 12436 11607
===================-------------------------------------------------------------------------------------
14 12595 12030 12633 11719
===================-------------------------------------------------------------------------------------
15 Nov-97 12963 12381 13005 11905
===================-------------------------------------------------------------------------------------
16 13007 12423 13052 11954
===================-------------------------------------------------------------------------------------
17 Jan-98 13201 12608 13249 12067
===================-------------------------------------------------------------------------------------
18 13255 12660 13306 12119
===================-------------------------------------------------------------------------------------
19 Mar-98 13324 12725 13378 12192
===================-------------------------------------------------------------------------------------
20 13354 12755 13411 12255
===================-------------------------------------------------------------------------------------
21 May-98 13471 12866 13532 12333
===================-------------------------------------------------------------------------------------
22 12467 11907 12526 11711
===================-------------------------------------------------------------------------------------
23 Jul-98 12494 11933 12556 11741
===================-------------------------------------------------------------------------------------
24 11943 11407 12005 11490
===================-------------------------------------------------------------------------------------
25 Sep-98 12652 12084 12721 12086
===================-------------------------------------------------------------------------------------
26 12590 12024 12661 12065
===================-------------------------------------------------------------------------------------
27 Nov-98 12824 12248 12895 12228
===================-------------------------------------------------------------------------------------
28 12783 12209 12856 12144
===================-------------------------------------------------------------------------------------
29 Jan-99 13014 12430 13093 12286
===================-------------------------------------------------------------------------------------
30 13246 12651 13329 12510
===================-------------------------------------------------------------------------------------
31 Mar-99 12810 12235 12893 12396
===================-------------------------------------------------------------------------------------
32 12842 12265 12928 12365
===================-------------------------------------------------------------------------------------
33 May-99 12850 12273 12938 12381
===================-------------------------------------------------------------------------------------
34 12640 12073 12730 12251
===================-------------------------------------------------------------------------------------
35 Sep-99 12592 12027 12700 12201
===================-------------------------------------------------------------------------------------
</TABLE>
This graph compares a $10,000 investment in the Fund, made at its inception,
with a similar hypothetical investment in the Merrill Lynch High Yield Master
II Index. Results include the reinvestment of all dividends and capital gains
distributions. Past performance is not predicative of future performance.
Investment returns and principal value may vary, and you may have a gain or
loss when you sell shares. The Fund's portfolio may differ significantly from
the securities in the Index. The Index is unmanaged and therefore does not
reflect the cost of portfolio management or trading. It is not possible to
invest in an index.
FUND PERFORMANCE
<TABLE>
<CAPTION>
FOR PERIODS ENDED SEPTEMBER 30, 1999
- ---------------------------------------------------------------------------
Since Inception
AVERAGE ANNUAL RATE OF RETURN % One Year October 28, 1996
- ---------------------------------------------------------------------------
<S> <C> <C>
Battery Park Class Y Shares 1.13% 8.51%
Battery Park Class A Shares .77 8.20
Battery Park Class A Shares net of maximum sales
charge (4.50%) (3.80) 6.52
Merrill Lynch High Yield Master II Index* 3.92 6.86
- ---------------------------------------------------------------------------
</TABLE>
* Merrill Lynch & Co. The Merrill Lynch High Yield Master II Index is a
publicly reported unmanaged composite benchmark of the hypothetical return on
investment on approximately 1,083 high yield debt securities of at least $100
million ranging in rating from Ba1 to C by Moody's Investors Service Inc.,
and BB+ to C by Standard & Poor's. The Index has no cash component or
transaction costs and is trader priced. Approximately 10% of the Index is
comprised of deferred interest bonds and pay-in-kind bonds in addition to
cash pay bonds. Certain of the information contained in this presentation has
been provided by Merrill Lynch. Any information sourced to Merrill Lynch &
Co. has been reprinted by permission, all rights reserved. Copyright(C) 1999
Merrill Lynch, Pierce, Fenner & Smith
8
<PAGE>
Incorporated. The Index may not be copied, used or distributed without
Merrill Lynch's prior written approval. Merrill Lynch makes no
representation or warranty, express or implied, to any person including
without limitation, any recipient of this presentation or any member of the
public regarding the advisability of investing in securities generally or in
the ability of the Index (represented in the literature) to track market
performance. This presentation is not sponsored, endorsed, sold or promoted
by Merrill Lynch.
** Total return measures change in the value of an investment in the Fund,
assuming reinvestment of all dividends and capital gains. Since the
inception date of the Fund, the Adviser voluntarily waived management fees
of 0.65% and absorbed expenses of 0.87% (of annualized net assets) in order
to cap expenses at 1.25% for Class A Shares and 1.00% for Class Y Shares.
Pursuant to an Expense Waiver and Reimbursement Agreement dated as of
November 29, 1999, the investment adviser has agreed to the same waiver and
reimbursement arrangement for the fiscal year of the Fund beginning October
1, 1999 and ending September 30, 2000. At October 1, 2000, the investment
adviser may in its discretion agree to continue, modify or discontinue this
waiver and reimbursement arrangement.
9
<PAGE>
BATTERY PARK(SM) HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -------------------------------------------------------------------------------
Corporate Bonds--92.24%
- -------------------------------------------------------------------------------
Broadcasting Radio & Television--15.14%
- -------------------------------------------------------------------------------
$ 500,000 Allbritton Communication Co., 8.875%, 2/1/2008 $ 480,000
- -------------------------------------------------------------------------------
600,000 Cumulus Media, Inc., 10.375%, 7/1/2008 616,500
- -------------------------------------------------------------------------------
1,250,000 Lin Holdings Corp., 0/10.000%, 3/1/2008/(4)/ 825,000
- -------------------------------------------------------------------------------
550,000 STC Broadcasting, Inc., 11.000%, 3/15/2007 551,375
- -------------------------------------------------------------------------------
500,000 Sinclair Broadcasting, Inc., 9.000%, 7/15/2007 478,750
- -------------------------------------------------------------------------------
700,000 Susquehanna Media Co., 8.500%, 5/15/2009/(1)/ 693,000
- -------------------------------------------------------------------------------
Total 3,644,625
- -------------------------------------------------------------------------------
Cable Television--16.86%
- -------------------------------------------------------------------------------
500,000 Echostar Communications, 9.375%, 2/1/2009 497,500
- -------------------------------------------------------------------------------
1,200,000 Knology Holdings, 0/11.875%, 10/15/2007/(4)/ 660,000
- -------------------------------------------------------------------------------
750,000 Mediacom LLC, 8.500%, 4/15/2008 693,750
- -------------------------------------------------------------------------------
1,500,000 RCN Corp., 0/11.125%, 10/15/2007/(4)/ 975,000
- -------------------------------------------------------------------------------
900,000 TeleWest PLC, 0/11.000%, 10/1/2007/(4)/ 807,750
- -------------------------------------------------------------------------------
1,000,000 21st Century Telecom, 0/12.250%, 2/15/2008/(4)/ 425,000
- -------------------------------------------------------------------------------
Total 4,059,000
- -------------------------------------------------------------------------------
Chemical/Plastics--3.14%
- -------------------------------------------------------------------------------
750,000 Lyondell Chemical Co., 10.875%, 5/1/2009 757,500
- -------------------------------------------------------------------------------
Electronics/Electric--3.07%
- -------------------------------------------------------------------------------
750,000 Integrated Electrical Services, 9.375%, 2/1/2009 738,750
- -------------------------------------------------------------------------------
Food Products--4.38%
- -------------------------------------------------------------------------------
550,000 Agrilink Foods, Inc., 11.875%, 11/1/2008 486,750
- -------------------------------------------------------------------------------
560,000 Aurora Foods, Inc., 9.875%, 2/15/2007 567,000
- -------------------------------------------------------------------------------
Total 1,053,750
- -------------------------------------------------------------------------------
Food/Drug Retailers--3.72%
- -------------------------------------------------------------------------------
900,000 Duane Reade, Inc., 9.250%, 2/15/2008 895,500
- -------------------------------------------------------------------------------
Home Furnishing--1.83%
- -------------------------------------------------------------------------------
500,000 Home Interiors & Gifts, Inc., 10.125%, 6/1/2008 440,000
- -------------------------------------------------------------------------------
Hotels/Motels/Inns/& Casinos--7.12%
- -------------------------------------------------------------------------------
750,000 Aztar Corp., 8.875%, 5/15/2007 708,750
- -------------------------------------------------------------------------------
500,000 Hollywood Park, Inc., 9.500%, 8/1/2007 490,000
- -------------------------------------------------------------------------------
500,000 Station Casinos, Inc., 10.125%, 3/15/2006 515,000
- -------------------------------------------------------------------------------
Total 1,713,750
- -------------------------------------------------------------------------------
Leisure--6.33%
- -------------------------------------------------------------------------------
450,000 Bally Total Fitness Holding Corp., 9.875%, 10/15/2007 426,375
- -------------------------------------------------------------------------------
500,000 Regal Cinemas, Inc., 8.875%, 12/15/2010 332,500
- -------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
10
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- ---------------------------------------------------------------------------
Corporate Bonds--continued
- ---------------------------------------------------------------------------
Leisure--6.33% (Continued)
- ---------------------------------------------------------------------------
$ 750,000 The Sports Club Co., Inc., 11.375%, 3/15/2006 $ 765,000
- ---------------------------------------------------------------------------
Total 1,523,875
- ---------------------------------------------------------------------------
Non-Ferrous Metals/Minerals--3.01%
- ---------------------------------------------------------------------------
750,000 P & L Coal Holdings Corp., 9.625%, 5/15/2008 725,625
- ---------------------------------------------------------------------------
Oil & Gas--2.09%
- ---------------------------------------------------------------------------
500,000 Swift Energy Co., 10.250%, 8/1/2009 502,500
- ---------------------------------------------------------------------------
Retailers--1.55%
- ---------------------------------------------------------------------------
400,000 Advance Stores Co., Inc., 10.250%, 4/15/2008 374,000
- ---------------------------------------------------------------------------
Telecommunications--21.75%
- ---------------------------------------------------------------------------
650,000 Airgate PCS Inc., 0/13.500%, units, 357,500
10/1/2009/(4)//(5)/
- ---------------------------------------------------------------------------
600,000 Clearnet Communications, 0/10.125%, 5/1/2009/(4)/ 366,000
- ---------------------------------------------------------------------------
600,000 McLeod, Inc., 9.250%, 7/15/2007 603,000
- ---------------------------------------------------------------------------
650,000 MGC Communications, Inc., 13.000%, 10/1/2004 575,250
- ---------------------------------------------------------------------------
1,000,000 Nextlink Communications, 10.750%, 6/1/2009 1,007,500
- ---------------------------------------------------------------------------
800,000 PSINet Inc., 11.500%, 11/1/2008 810,000
- ---------------------------------------------------------------------------
900,000 Rogers Cantel Mobile, Inc., 8.800%, 10/1/2007 922,500
- ---------------------------------------------------------------------------
600,000 Williams Communications, 10.875%, 10/1/2009 595,494
- ---------------------------------------------------------------------------
Total 5,237,244
- ---------------------------------------------------------------------------
Textiles--2.25%
- ---------------------------------------------------------------------------
550,000 William Carter Co., 10.375%, 12/1/2006 541,750
- ---------------------------------------------------------------------------
Total Corporate Bonds (Cost $23,091,641) 22,207,869
- ---------------------------------------------------------------------------
Commercial Paper--5.70%
- ---------------------------------------------------------------------------
1,372,000 General Electric Capital Corp., 5.250%, 10/1/1999 1,372,000
- ---------------------------------------------------------------------------
Total Commercial Paper (Cost $1,372,000) 1,372,000
- ---------------------------------------------------------------------------
Demand Notes--0.43%
- ---------------------------------------------------------------------------
103,194 Warner Lambert, 5.023%/(3)/ 103,194
- ---------------------------------------------------------------------------
Total Demand Note (Cost $103,194) 103,194
- ---------------------------------------------------------------------------
<CAPTION>
Number
of Shares Value
- ---------------------------------------------------------------------------
<C> <S> <C>
Common Stocks--0.0%
- ---------------------------------------------------------------------------
Cable TV
- ---------------------------------------------------------------------------
500 Optel, Inc. /(1)//(2)/ 68
- ---------------------------------------------------------------------------
Total Common Stocks (Cost $2) 68
- ---------------------------------------------------------------------------
TOTAL INVESTMENTS--98.37% (Cost $24,566,837) 23,683,131
- ---------------------------------------------------------------------------
Other Assets in Excess of Liabilities--1.63% 393,982
- ---------------------------------------------------------------------------
TOTAL NET ASSETS--100.0% $24,077,113
- ---------------------------------------------------------------------------
</TABLE>
(1) Denotes a restricted security which is subject to restrictions on resale
under federal securities laws. These securities have been deemed liquid
based upon criteria approved by the Fund's Board of Directors. At September
30, 1999, these securities amounted to $693,068 which represents 2.88% of
net assets.
(2) Non-income producing security.
(3) Variable rate security. The rate listed is as of September 30, 1999.
(4) Denotes a step feature, with the rate representing the future coupon.
(5) Consisting of bonds and warrants.
See Notes to the Financial Statements.
11
<PAGE>
BATTERY PARK(SM) HIGH YIELD FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999
<TABLE>
<S> <C> <C>
Assets:
- -------------------------------------------------------------------------------
Investments, at value (cost $24,566,837) $23,683,131
- -------------------------------------------------------------------------------
Cash 6,195
- -------------------------------------------------------------------------------
Receivable for investments sold 580,844
- -------------------------------------------------------------------------------
Interest receivable 515,098
- -------------------------------------------------------------------------------
Deferred organizational costs 94,660
- -------------------------------------------------------------------------------
Other assets 10,966
- -------------------------------------------------------------------------------
Total assets 24,890,894
- -------------------------------------------------------------------------------
Liabilities:
- -------------------------------------------------------------------------------
Payable for investments purchased $703,682
- -------------------------------------------------------------------------------
Payable to investment adviser 5,808
- -------------------------------------------------------------------------------
Payable to distributor 4,267
- -------------------------------------------------------------------------------
Payable for shareholder redemptions 32,618
- -------------------------------------------------------------------------------
Distributions payable to shareholders 17,291
- -------------------------------------------------------------------------------
Accrued expenses 50,115
- -------------------------------------------------------------------------------
Total liabilities 813,781
- -------------------------------------------------------------------------------
Net Assets $24,077,113
- -------------------------------------------------------------------------------
Net Assets Consist of:
- -------------------------------------------------------------------------------
Capital stock (par value $.001, 200,000,000 shares
authorized) $27,426,183
- -------------------------------------------------------------------------------
Net unrealized depreciation of investments (883,706)
- -------------------------------------------------------------------------------
Accumulated net realized loss on investments (2,528,903)
- -------------------------------------------------------------------------------
Undistributed net investment income 63,539
- -------------------------------------------------------------------------------
Total Net Assets $24,077,113
- -------------------------------------------------------------------------------
Class A:
- -------------------------------------------------------------------------------
Net assets $ 4,210,884
- -------------------------------------------------------------------------------
Shares outstanding (par value $.001, 25,000,000 shares
authorized) 467,686
- -------------------------------------------------------------------------------
Net asset value and redemption price per share $9.00
- -------------------------------------------------------------------------------
Maximum offering price per share (100/95.50 of
$9.00) /(1)/ $9.42
- -------------------------------------------------------------------------------
Class Y:
- -------------------------------------------------------------------------------
Net assets $19,866,229
- -------------------------------------------------------------------------------
Shares outstanding (par value $.001, 25,000,000 shares
authorized) 2,205,666
- -------------------------------------------------------------------------------
Net asset value, offering and redemption price per share $9.01
- -------------------------------------------------------------------------------
</TABLE>
(1) See "Description of Classes--Class A Shares" in the Prospectus
See Notes to the Financial Statements.
12
<PAGE>
BATTERY PARK(SM) HIGH YIELD FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1999
<TABLE>
<S> <C> <C>
Investment Income:
- --------------------------------------------------------------------------------
Interest income $ 2,397,346
- --------------------------------------------------------------------------------
Total investment income 2,397,346
- --------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------
Investment advisory fee $ 163,178
- --------------------------------------------------------------------------------
Shareholder servicing and accounting fees and expenses 116,120
- --------------------------------------------------------------------------------
Administration fees 50,001
- --------------------------------------------------------------------------------
Amortization of organization costs 45,437
- --------------------------------------------------------------------------------
Professional fees 21,027
- --------------------------------------------------------------------------------
Federal and state registration fees 20,555
- --------------------------------------------------------------------------------
Directors' fees 19,389
- --------------------------------------------------------------------------------
Reports to shareholders 17,951
- --------------------------------------------------------------------------------
Distribution fee--Class A 12,696
- --------------------------------------------------------------------------------
Custody fees 1,276
- --------------------------------------------------------------------------------
Miscellaneous expenses 11,481
- --------------------------------------------------------------------------------
Total expenses before waiver and reimbursement 479,111
- --------------------------------------------------------------------------------
Less: Waiver of expenses and reimbursement from Adviser (215,368)
- --------------------------------------------------------------------------------
Net expenses 263,743
- --------------------------------------------------------------------------------
Net investment income 2,133,603
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments:
- --------------------------------------------------------------------------------
Net realized gain (loss) on investments (2,518,357)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments 668,967
- --------------------------------------------------------------------------------
Net gain (loss) on investments (1,849,390)
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 284,213
- --------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
13
<PAGE>
BATTERY PARK(SM) HIGH YIELD FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, September 30,
1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations:
- --------------------------------------------------------------------------------
Net investment income $ 2,133,603 $ 1,534,144
- --------------------------------------------------------------------------------
Net realized gain (loss) on investments (2,518,357) 932,771
- --------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments 668,967 (2,450,720)
- --------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 284,213 16,195
- --------------------------------------------------------------------------------
Capital Share Transactions:
- --------------------------------------------------------------------------------
Shares sold 14,523,060 5,596,793
- --------------------------------------------------------------------------------
Shares issued to holders in reinvestment of
dividends 2,844,210 2,213,982
- --------------------------------------------------------------------------------
Shares redeemed (10,569,979) (636,250)
- --------------------------------------------------------------------------------
Net increase in net assets resulting from capital
share transactions 6,797,291 7,174,525
- --------------------------------------------------------------------------------
Distributions to Class A Shareholders:
- --------------------------------------------------------------------------------
From net investment income (418,082) (247,673)
- --------------------------------------------------------------------------------
From net realized gains (188,112) (99,753)
- --------------------------------------------------------------------------------
Total distributions to Class A shareholders (606,194) (347,426)
- --------------------------------------------------------------------------------
Distributions to Class Y Shareholders:
- --------------------------------------------------------------------------------
From net investment income (1,795,488) (1,277,127)
- --------------------------------------------------------------------------------
From net realized gains (654,910) (703,403)
- --------------------------------------------------------------------------------
Total distributions to Class Y shareholders (2,450,398) (1,980,530)
- --------------------------------------------------------------------------------
Total increase in net assets 4,024,912 4,862,764
- --------------------------------------------------------------------------------
Net Assets:
- --------------------------------------------------------------------------------
Beginning of year 20,052,201 15,189,437
- --------------------------------------------------------------------------------
End of year (including undistributed net
investment income of $63,539 and $98,069,
respectively) $ 24,077,113 $20,052,201
- --------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
14
<PAGE>
BATTERY PARK(SM) HIGH YIELD FUND
FINANCIAL HIGHLIGHTS--CLASS A SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------
1999 1998 1997 /(1)/
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share Data:
- --------------------------------------------------------------------------
Net asset value, beginning of period $10.10 $11.40 $10.00
- --------------------------------------------------------------------------
Income from investment operations:
- --------------------------------------------------------------------------
Net investment income 0.80 0.89 0.84
- --------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments (0.72) (0.70) 1.40
- --------------------------------------------------------------------------
Total from investment operations 0.08 0.19 2.24
- --------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------
Dividends from net investment income (0.79) (0.91) (0.84)
- --------------------------------------------------------------------------
Distributions from net realized gains (0.39) (0.58) --
- --------------------------------------------------------------------------
Total distributions (1.18) (1.49) (0.84)
- --------------------------------------------------------------------------
Net asset value, end of period $ 9.00 $10.10 $11.40
- --------------------------------------------------------------------------
Total return /(2)/ 0.77% 1.50% 23.13%
- --------------------------------------------------------------------------
Supplemental Data and Ratios:
- --------------------------------------------------------------------------
Ratios of net expenses to average net assets:
- --------------------------------------------------------------------------
Before expense reimbursement 2.22% 2.92% 4.04%*
- --------------------------------------------------------------------------
After expense reimbursement 1.25% 1.25% 1.25%*
- --------------------------------------------------------------------------
Ratios of net investment income to average net
assets:
- --------------------------------------------------------------------------
Before expense reimbursement 7.33% 6.77% 5.87%*
- --------------------------------------------------------------------------
After expense reimbursement 8.30% 8.44% 8.66%*
- --------------------------------------------------------------------------
Net assets, in thousands, end of period $4,211 $3,894 $1,829
- --------------------------------------------------------------------------
Portfolio turnover rate /(3)/ 178% 190% 236%
- --------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(1) Reflects operations for the period from October 28, 1996 (date of initial
public offering) to September 30, 1997. For the period from September 16,
1996 (start of business) to October 27, 1996, the investment income was
distributed to the Fund's Adviser.
(2) Based on net asset value, which does not reflect the sales charge.
(3) Portfolio turnover rate is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See Notes to the Financial Statements.
15
<PAGE>
BATTERY PARK(SM) HIGH YIELD FUND
FINANCIAL HIGHLIGHTS--CLASS Y SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
1999 1998 1997 /(1)/
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share Data:
- ----------------------------------------------------------------------------
Net asset value, beginning of period $ 10.10 $ 11.40 $10.00
- ----------------------------------------------------------------------------
Income from investment operations:
- ----------------------------------------------------------------------------
Net investment income 0.76 0.93 0.86
- ----------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments (0.64) (0.71) 1.40
- ----------------------------------------------------------------------------
Total from investment operations 0.12 0.22 2.26
- ----------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------
Dividends from net investment income (0.82) (0.94) (0.86)
- ----------------------------------------------------------------------------
Distributions from net realized gains (0.39) (0.58) --
- ----------------------------------------------------------------------------
Total distributions (1.21) (1.52) (0.86)
- ----------------------------------------------------------------------------
Net asset value, end of period $ 9.01 $ 10.10 $ 11.40
- ----------------------------------------------------------------------------
Total return /(2)/ 1.13% 1.76% 23.41%
- ----------------------------------------------------------------------------
Supplemental Data and Ratios:
- ----------------------------------------------------------------------------
Ratios of net expenses to average net assets:
- ----------------------------------------------------------------------------
Before expense reimbursement 1.83% 2.67% 3.87%*
- ----------------------------------------------------------------------------
After expense reimbursement 1.00% 1.00% 1.00%*
- ----------------------------------------------------------------------------
Ratios of net investment income to average net
assets:
- ----------------------------------------------------------------------------
Before expense reimbursement 7.72% 6.96% 5.86%*
- ----------------------------------------------------------------------------
After expense reimbursement 8.55% 8.63% 8.73%*
- ----------------------------------------------------------------------------
Net assets, in thousands, end of period $19,866 $16,158 $13,361
- ----------------------------------------------------------------------------
Portfolio turnover rate /(3)/ 178% 190% 236%
- ----------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(1) Reflects operations for the period from October 28, 1996 (date of initial
public offering) to September 30, 1997. For the period from September 16,
1996 (start of business) to October 27, 1996, the investment income was
distributed to the Fund's Adviser.
(2) Based on net asset value, which does not reflect the sales charge.
(3) Portfolio turnover rate is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See Notes to the Financial Statements.
16
<PAGE>
BATTERY PARK(SM) HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
1. ORGANIZATION
Battery Park Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-ended management
investment company. The Company consists of one portfolio. The financial
statements included herein are only those of Battery Park High Yield Fund (the
"Fund"), a diversified portfolio. The Fund offers two classes of shares: Class
A Shares and Class Y Shares. The Fund's investment objective is to provide
shareholders with high total return, consisting of current income and capital
appreciation.
Organizational expenses of $213,984 and $13,290 were borne initially by Nomura
Corporate Research and Asset Management Inc., the Fund's investment adviser
(the "Adviser"), and Federated Services Company ("FServ"), respectively. The
Fund has reimbursed the Adviser and FServ for these expenses. These expenses
are being amortized over the period of benefit, but not to exceed sixty months.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. These policies are in
conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS. Securities which are traded on a national or recognized
stock exchange are valued at the last sale price on the securities exchange on
which such securities are primarily traded. Instruments with a remaining
maturity of 60 days or less are valued on an amortized cost basis. Securities
for which market quotations are not readily available and securities which are
restricted as to resale are valued at fair value under criteria established by
the Board of Directors.
INCOME AND EXPENSES. Interest income and expenses are accrued daily. Bond
premium and discount, if applicable, are amortized as required by the Internal
Revenue Code, as amended (the "Code"). The Fund is charged expenses directly
such as advisory, administration and certain shareholder service fees. Net
investment income other than class specific expenses, and realized and
unrealized gains and losses are allocated daily to each class of shares based
upon the relative net asset value of outstanding shares at the beginning of the
day (after adjusting for the current capital share activity of the respective
class).
DISTRIBUTIONS TO SHAREHOLDERS. Dividends from net investment income are
declared daily prior to the determination of net asset value on that day and
paid monthly. Distributions of net realized capital gains, if any, are declared
at least annually.
FEDERAL INCOME TAXES. Provision for federal income taxes or excise taxes has
not been made since the Fund has elected to be taxed as a "regulated investment
17
<PAGE>
company" and intends to distribute substantially all taxable income to its
shareholders and otherwise comply with the provisions of the Internal Revenue
Code applicable to regulated investment companies.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for the
deductibility of organizational costs. The following reclassifications have
been made to the financial statements.
<TABLE>
<CAPTION>
Increase (Decrease)
- -----------------------------
Paid- Undistributed Net
In Capital Investment Income
- -----------------------------
<S> <C>
($45,437) $45,437
- -----------------------------
</TABLE>
Net investment income, net realized gains/losses, and net assets were not
affected by this reclassification.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued
securities on the day following the trade date and maintains security positions
such that sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed delivery
basis are marked to market daily and begin earning interest on the settlement
date.
RESTRICTED SECURITIES. Restricted securities are securities that may only be
resold upon registration under federal securities laws or in transactions
exempt from such registration. In some cases, the issuer of restricted
securities has agreed to register such securities for resale, at the issuer's
expense either upon demand by the Fund or in connection with another registered
offering of the securities. Many restricted securities may be resold in the
secondary market in transactions exempt from registration. Such restricted
securities may be determined to be liquid under criteria established by the
Board of Directors. The Fund will not incur any registration costs upon such
resales. The Fund's restricted securities are valued at the price provided by
dealers in the secondary market or, if no market prices are available, at the
fair value under criteria established by the Board of Directors.
USE OF ESTIMATES. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent 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.
18
<PAGE>
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund were as follows:
<TABLE>
<CAPTION>
Year ended Year ended
September 30, 1999 September 30, 1998
- -------------------------------------------------------------------------
Class A Amount Shares Amount Shares
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold $ 4,099,371 423,413 $2,709,647 247,220
- -------------------------------------------------------------------------
Shares issued to holders in
reinvestment of dividends 391,608 40,900 225,919 20,933
- -------------------------------------------------------------------------
Shares redeemed (3,709,854) (382,197) (450,347) (42,955)
- -------------------------------------------------------------------------
Net increase $ 781,125 82,116 $2,485,219 225,198
- -------------------------------------------------------------------------
<CAPTION>
Year ended Year ended
September 30, 1999 September 30, 1998
- -------------------------------------------------------------------------
Class Y Amount Shares Amount Shares
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold $10,423,689 1,073,578 $2,887,146 262,525
- -------------------------------------------------------------------------
Shares issued to holders in
reinvestment of dividends 2,452,602 256,844 1,988,063 183,323
- -------------------------------------------------------------------------
Shares redeemed (6,860,125) (724,703) (185,903) (17,483)
- -------------------------------------------------------------------------
Net increase $ 6,016,166 605,719 $4,689,306 428,365
- -------------------------------------------------------------------------
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE. Nomura Corporate Research and Asset Management Inc.,
the Fund's investment adviser (the "Adviser"), is entitled to receive for its
services an annual investment advisory fee equal to 0.65% of the Fund's average
daily net assets. The Adviser has voluntarily chosen to waive its entire fee
and reimburse certain operating expenses of the Fund to ensure expenses do not
exceed 1.25% and 1.00% of average daily net assets for class A and class Y
shares, respectively. The Adviser can modify or terminate this voluntary waiver
and reimbursement at any time at its sole discretion. For the year ended
September 30, 1999, the Adviser has waived fees and reimbursed expenses in the
amount of $215,368.
DISTRIBUTION SERVICES FEE. The Fund has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the
Fund will compensate Nomura Securities International, Inc. (the "Distributor"),
from the net assets of the Fund's Class A shares to finance activities intended
to result in the sale of the Fund's Class A shares. The Plan provides that the
Fund may incur distribution expenses up to 0.25% of the average daily net
assets of Class A shares annually to compensate the Distributor. The
Distributor may voluntarily choose to waive any portion of its fee. The
Distributor can modify or terminate any such voluntary waiver at any time at
its sole discretion.
AGREEMENTS. For the period of October 1, 1998 through August 29, 1999,
Federated Services Company served as administrator and accounting services
agent, Federated Shareholder Services Company served as transfer agent, and the
Bank of New York served as custodian for the Fund. As of August 30, 1999,
Firstar
19
<PAGE>
Mutual Fund Services, LLC ("Firstar") serves as transfer agent, administrator,
and accounting services agent for the Fund, and Firstar Bank Milwaukee, N.A.
serves as custodian for the Fund. Certain officers of Firstar are also officers
of the Fund and are not compensated by the Fund.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, by the Fund for the year ended September 30, 1999, were as
follows:
<TABLE>
- ----------------------
<S> <C>
Purchases $46,176,003
- ----------------------
Sales $40,770,869
- ----------------------
</TABLE>
At September 30, 1999, gross unrealized appreciation and depreciation of
investments for federal income tax purposes was as follows:
<TABLE>
- --------------------------------------------------------
<S> <C>
Appreciation $ 178,174
- --------------------------------------------------------
(Depreciation) $(1,091,474)
- --------------------------------------------------------
Net unrealized depreciation on investments $ (913,300)
- --------------------------------------------------------
</TABLE>
At September 30, 1999, the cost of investments for federal income tax purposes
was $24,596,431.
6. YEAR 2000--Unaudited
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
20
<PAGE>
BATTERY PARK HIGH YIELD FUND
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of Battery Park Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of Battery
Park High Yield Fund (the "Fund"), a series of Battery Park Funds, Inc.,
including the schedule of investments, as of September 30, 1999, the related
statement of operations for the year then ended, the statement of changes in
net assets for each of the two years in the period then ended, and the
financial highlights for the periods presented. These financial statements and
financial highlights are the responsibility of the Fund'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 securities owned as of
September 30, 1999, by correspondence with the Fund's custodian 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Battery Park High
Yield Fund at September 30, 1999, the results of its operations, the changes in
its net assets and its financial highlights for the respective stated periods,
in conformity with generally accepted accounting principles.
Deloitte & Touche, LLP
Chicago, Illinois
November 10, 1999
21
<PAGE>
Directors Officers
- --------------------------------------------------------------------------------
Francis L. Fraenkel Robert Levine
Robert Levine Chairman and President
Frank K. Reilly Richard A. Buch
Jennie Wong Vice President
Jennie Wong
Treasurer
Freddie Jacobs, Jr.
Assistant Treasurer, Assistant Secretary
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus, which contains facts
concerning its investment objective and policies, management fees, expenses and
other information.
22
<PAGE>
Nomura Securities
International, Inc.
Distributor
2 World Financial Center
Building B
New York, NY 10281-1198
Cusip 07132Q108
Cusip 07132Q207
[LOGO OF BATTERY PARK]
BATTERY PARK(SM)
HIGH YIELD FUND
ANNUAL REPORT
SEPTEMBER 30, 1999
Nomura Corporate Research
and Asset Management Inc.
Investment Adviser
2 World Financial Center
Building B
New York, NY 10281-1198
