<PAGE>
STATEMENT OF PER SHARE INCOME AND CAPITAL CHANGES
For each share of capital stock outstanding*
<TABLE>
<CAPTION>
Six Year Year Year Year Year Year
Months End End End End End End
06/30 12/31 12/31 12/31 12/31 12/31 12/31
1998 1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING
OF PERIOD 32.07 $30.87 $30.51 $28.14 $30.0 $29.95 $29.19
----- ------ ------ ------ ----- ------ ------
Investment Income $.26 $.64 $.73 $.75 $.72 $.62 $.62
Expenses .19 .38 .39 .40 .40 .33 .28
--- --- --- --- --- --- ---
Net Investment Income .07 .26 .34 .35 .32 .29 .34
Net realized & Unrealized
gain (Loss) on investment .72 3.16 3.72 5.14 (1.43) .58 1.10
--- ---- ---- ---- ----- --- ----
Total from Investment operations .79 3.42 4.06 5.49 (1.11) .87 1.44
Dividends from net
investment income -- (.26) (.34) (.35) (.32) (.29) (.34)
Distributions from net
realized gain -- (1.96) (3.36) (2.77) (.43) (.53) (.34)
----- ----- ----- ---- ---- ----
Total Distributions -- (2.22) (3.70) (3.12) (.75) (.82) (.68)
Net change in net asset value .72 1.20 .36 2.37 (1.86) .05 .76
Net asset value as of end
of the period 32.79 32.07 30.87 30.51 28.14 30.00 29.95
----- ----- ----- ----- ----- ----- -----
Total return
(Sales load not reflected) 2.2% 11.1% 13.3% 19.5% (3.7)% 2.9% 4.9%
Net assets, end of period $38,621 $37,941 $35,549 $32,236 $28,368 $31,567 $28,896
Ratio of operating expense
to net assets** 1.15% 1.21% 1.28% 1.30% 1.11% 1.04%
Ratio of net investment income
to average net assets** .79% 1.04% 1.12% 1.04% .96% 1.25%
Portfolio turnover 53.9% 51.2% 48.72% 33.00% 18.36% 13.10%
Average commission rate paid .068 .074 .072
Number of shares oustanding 1,177,644 1,111,377 1,038,561 965,769 984,847 1,026,460 945,006
at end of period***
</TABLE>
(TABLE RESTUBED FROM ABOVE)
<TABLE>
<CAPTION>
Year Year Year Year Year Year First
End End End End End End Seven
12/31 12/31 12/31 12/31 12/31 4/30 Months
1991 1990 1989 1988 1987 1987 4/30/83
**** ****
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING
OF PERIOD $24.62 $27.57 $22.55 $18.85 $22.43 $19.68 $12.50
------ ------ ------ ------ ------ ------ ------
Investment Income $.72 $.70 $.73 $.67 $.40 $.38 $.38
Expenses .29 .27 .26 .25 .16 .16 .20
--- --- --- --- --- --- ---
Net Investment Income .43 .43 .47 .42 .24 .22 .18
Net realized & Unrealized
gain (Loss) on investment 5.86 (2.53) 5.41 4.09 (3.21) 3.45 3.08
---- ----- ---- ---- ----- ---- ----
Total from Investment operations 6.29 (2.10) 5.88 4.51 (2.97) 3.67 3.26
Dividends from net
investment income (.43) (.43) (.47) (.42) (.24) (.22) (.18)
Distributions from net
realized gain (1.29) (.42) (.39) (.39) (.38) (.70) (.19)
----- ---- ---- ---- ---- ---- ----
Total Distributions (1.72) (.85) (.86) (.81) (.62) (.92) (.37)
Net change in net asset value 4.57 (2.95) 5.03 3.71 (3.59) 2.75 2.89
Net asset value as of end
of the period 29.19 24.62 27.57 22.55 18.85 22.43 15.39
----- ----- ----- ----- ----- ----- -----
Total return
(Sales load not reflected) 25.6% (7.6)% 26.0% 23.9% (2.6)% 22.2% 10.4%
Net assets, end of period $23,931 $16,433 $11,893 $6,162 $4,133 $3,404 $163
Ratio of operating expense
to net assets** 1.18% 1.27% 1.25% 1.24% .80% 1.17% 1.08%
Ratio of net investment income
to average net assets** 1.74% 2.08% 2.20% 2.18% 1.23% 1.68% 1.69%
Portfolio turnover 21.50% 24.70% 14.60% 25.88% 8.57% 8.79% 74.50%
Average commission rate paid
Number of shares oustanding 776,974 646,664 419,212 264,414 212,704 151,848 10,592
at end of period***
</TABLE>
* All adjusted for two for one share split on July 26, 1985 and
January 2, 1990
** Annualized and includes state taxes
*** Shares immediately prior to dividend - Fund commenced operation on
September 3, 1982
**** At this time the fund was on a fiscal year. Table for 1983-1987 is
available on request. Deleted to make space.
<PAGE>
June 30, 1998
NEW ALTERNATIVES FUND, INC.
STATEMENT OF INVESTMENTS
COMMON STOCKS :85.3%
SHARES MARKET VALUE
ALTERNATIVE ENERGY: 9.6%
*AstroPower 15000 $ 124,687.50
*Calpine 10000 201,875.00
*Energy Conversion Devices 1000 9,687.50
*Energy Research Corp 25000 500,000.00
Enron (Also Natural Gas) 20000 1,081,250.00
Idaho Power 5000 173,125.00
OM Group 20000 825,000.00
*Real Goods Trading 1000 5,375.00
*Spire 10000 36,250.00
*Thermo Power 15000 157,500.00
Trigen 45000 604,687.50
--------------
$ 3,719,437.50
CLEAN AIR: 5.8%
*BHA Group 22000 $ 363,000.00
*Dravo 15000 137,812.50
Praxair 15000 702,187.50
*Thermo Instruments 40000 1,050,000.00
--------------
$ 2,253,000.00
CLEAN WATER: 9.5%
Ameron 15000 $ 867,187.50
Aquarion 15000 512,812.50
Cuno Inc. 15000 324,375.00
*U.S. Filter 70000 1,964,375.00
--------------
$ 3,668,750.00
CONSERVATION: 6.8%
Owens Corning 20000 $ 816,250.00
T J International 25000 753,125.00
Minerals Technology 20000 1,017,500.00
*Zoltek 1000 20,125.00
--------------
$ 2,607,000.00
ENVIRONMENTAL (GENERAL): 6.7%
*Flow International 40000 465,000.00
*Metrika 10000 167,500.00
*Superior Industries 20000 601,250.00
*Tetra Tech 5000 121,250.00
*Thermo Electron 30000 1,025,625.00
*Thermo Sentron 15000 187,500.00
--------------
$ 2,568,125.00
EFFICIENT ELECTRIC DEVICES: 5.5%
Baldor 46666 $ 1,140,400.38
*SLI 37500 979,687.50
--------------
$ 2,120,087.88
NATURAL FOODS: 9.8%
*Gardenburger 20000 232,500.00
*United Natural Foods 25000 712,500.00
*Whole Foods Markets 20000 1,210,000.00
*Wild Oats 40000 1,215,000.00
Worthington Foods 20000 418,750.00
--------------
$ 3,788,750.00
<PAGE>
June 30, 1998
NEW ALTERNATIVES FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED)
SHARES MARKET VALUE
RECYCLING -PAPER: 3.8%
Caraustar Ind 15000 $ 433,125.00
Republic Group 20000 420,000.00
Sonoco Products 15000 453,750.00
*Thermo Fibertek 15000 154,687.50
--------------
$ 1,461,562.50
RECYCLING-METALS: 3.5%
Imco Recycling 20000 370,000.00
*Metal Management 15000 160,312.50
Nucor 15000 690,000.00
*Recycling Industries 25000 146,875.00
--------------
$ 1,367,187.50
NATURAL GAS PRODUCTION: 3.6%
Burlington Resources 30000 $ 1,291,875.00
Louis Dreyus Natural Gas 5000 94,687.50
--------------
$ 1,386,562.50
NATURAL GAS TRANSMISSION 14.5%
AND DISTRIBUTION:
Energen 20000 402,500.00
KN Energy 29000 1,571,437.50
MCN 20000 497,500.00
National Fuel Gas 20000 871,250.00
Questar 30000 588,750.00
Williams Co's 50000 1,687,500.00
--------------
$ 5,618,937.50
RAILROADS: 6.1%
Burlington Northern Rail 10000 $ 981,875.00
CSX Railway 5000 227,500.00
Norfolk Southern Railway 39000 1,162,687.50
--------------
$ 2,372,062.50
Total Common Stock (cost $26,131,788.80) $32,931,462.88
Money Market Deposits and Treasury Bills :14.1%
Socially Concerned Banks
Alternatives Federal Credit Union $ 100,000.00
Community Capital Bank 100,000.00
South Shore Bank 100,000.00
Vermont National Bank 100,000.00
U.S. Treasury Bills (cost $5,017,632.62) 5,034,180.20
--------------
$ 5,434,180.20
Total Common Stock ( 85.3%) $32,931,462.88
Bank money market and Treasury Bills( 14.1%) 5,434,180.20
Cash and **Receivables, less liabilities (0.6%) 255,139.35
NET ASSETS (100 %) $38,620,782.43
* Securities for which no cash dividends were paid during the fiscal year.
** Contingent gain: The fund may benefit or become entitled to shares or other
consideration because it is plaintiff in a class action lawsuit against
Bonneville Pacific Corporation, a former fund holding. At this time there
is no determinable value.
<PAGE>
4
NEW ALTERNATIVES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30 1997
ASSETS
Investment Securities at market value
(Cost:$26,131,788.80) (Notes 2A and 5).......... $32,931,462.88
Bank money market deposits...................... 400,000.00
U.S.Treasury Bills at market.................... 5,034,180.20
Cash............................................ 226,805.85
Receivables: Dividends......................... 38,816.60
Interest.......................... 609.41
Securities Sold................... 541,763.09
Subscriptions receivable.......... 59,686.21
--------------
Total Assets .................................. $39,233,324.24
LIABILITIES
Payables: Accrued Operating Expenses :
Accounting.................................... $ 330.00
Custodian................................ .... 2,000.14
Directors Fees ............................... 1,936.39
State Taxes .................................. 233.07
Advisory fee ................................. 23,900.50
Regulatory fees .............................. 3,239.33
Printing ..................................... 3,437.14
Bonds......................................... 5,860.41
Transfer Agent-Fund Plan Services............. 3,618.85
Fund Pricing-Fund Plan Services............... 2,587.50
Other......................................... 574.23
--------------
47,717.56
Securities Purchased.......................... 558,606.25
Redemptions Payable........................... 47,717.56
Dividend distribution payable................. 6,218.00
Total Liabilities ............................ $ 612,541.81
--------------
Net Assets at market, applicable to
1,177,644.750 outstanding shares. There are
eight million commmon shares authorized.
There is only one class of common stock.
(note 3)
==============
$38,620,782.43
<PAGE>
5
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDING JUNE 30, 1998
INVESTMENT INCOME AND EXPENSE
INCOME :
Dividends..................................... $ 213,280.63
Interest ..................................... 92,938.35
--------------
Total Income ................................. 306,218.98
EXPENSES :
Management Fee (note 4) ..................... $ 147,084.51
Custodian fees
United Missouri Bank......................... 21,720.00
State Taxes.................................. 213.58
Accounting .................................. 1,991.00
Directors ................................... 1,324.92
Filing Fees.................................. 5,538.60
Postage and Printing ........................ 7,240.00
Bond and Insurance .......................... 2,905.05
Transfer Agent-First Data ................... 21,720.00
Fund Pricing-First Data ..................... 14,856.00
Other........................................ 6,335.00
--------------
Total Expenses .............................. $ 219,460.50
NET INVESTMENT INCOME ....................... $ 86,758.48
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
REALIZED GAIN ON INVESTMENTS (note 2B&5)
Proceeds from sales.......................... $ 6,176,458.69
Cost of Securities Sold ..................... 5,647,538.51
--------------
Net Realized Gain ........................... $ 528,920.18
UNREALIZED APPRECIATION (DEPRECIATION) of
investments :
Beginning of period ......................... $ 6,572,267.08
End of period .............................. 6,799,674.08
--------------
Total unrealized appreciation (depreciation). $ 227,407.00
For the period.
Net realized and unrealized gain (loss)
on investments .... ........................ $ 756,327.18
--------------
Net increase (decrease) in net assets
resulting from operations.................... $ 843,085.66
--------------
<PAGE>
6
NEW ALTERNATIVES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Six
Months Year End
06/30/98 12/31/97
FROM INVESTMENT ACTIVITIES:
Net Investment income ...... $ 86,758.48 $ 288,448.08
Net Realized gain from
security transactions ...... 528,920.18 2,179,207.35
Unrealized appreciation
(deprec.) of investments.... 227,407.00 1,408,056.31
------------- --------------
Increase (decrease) in net
assets derived from invest-
ment activities............. $ 843,085.66 $ 3,875,711.74
------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS :
From net investment income
dividends to shareholders .. $ (57.67) (288,422.67)
Distributions to
shareholders ............... ----- (2,179,188.28)
FROM CAPITAL SHARE TRANSACTIONS :
Net increase (decrease)
from capital transactions
(note 3).................... $ (163,469.01) 984,268.75
INCREASE(DECREASE) IN
NET ASSETS:................. $ 679,558.98 2,392,369.54
NET ASSETS :
At the beginning of the
period...................... $37,941,223.45 $35,548,869.45
-------------- --------------
At the end of the
period...................... $38,620,782.43 $37,941,238.99
============== ==============
<PAGE>
NOTES TO FINANCIAL STATEMENT FOR THE
SIX MONTHS END JUNE 30, 1998
1) ORGANIZATION - The fund is registered as an open-end investment company
under the Investment Company Act of 1940, as amended. The fund commenced
operations September 3, 1982.
2) ACCOUNTING POLICIES - The following is a summary of significant accounting
policies consistently followed by the fund in the preparation of these
financial statements. The policies are in conformity with generally accepted
accounting principles:
A. SECURITY VALUATION - listed investments are stated at the last sale price at
the closing of the New York Stock Exchange and the American Stock Exchange and
the NASD National Market System on June 30, 1998 and at the mean between the
bid and asked price on the over the counter market.
B. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions
are accounted for on the trade date(date order to buy or sell is
executed).Realized gains and losses from security transactions are reported on
a first in, first out basis.
C. INVESTMENT INCOME AND EXPENSE RECOGNITION - Dividend income is recorded as
of the ex-dividend date. Expenses are accrued on a daily basis.
D. FEDERAL INCOME TAXES - No provision for federal income tax is believed
necessary since the fund intends to distribute all its taxable income to comply
with the provisions of the Internal Revenue Code applicable to investment
companies. The aggregate cost of the securities owned by the fund on June 30,
1998 for federal tax purposes is $26,131,778.80.
3. CAPITAL STOCK - There are eight million shares of capital stock authorized.
On June 30, 1998 there were 1,177,644.750 shares after the dividend. Aggregate
paid in capital including reinvestment of dividends was $31,205,448.89.
Transactions in capital stock were as follows:
Six Months End 06/30/98 Year End 12/31/97
----------------------- -----------------
Capital stock Shares $ Amount Shares $ Amount
sold......... 47,365.328 1,585,119.84 68,392.297 2,195,444.11
Capital stock
issued reinvest 105.110 3,370.82 68,554.443 2,198,834.61
ment of divd..
Redemptions. (52,729.264) (1,751,959.67) (105,757.199) (3,410,009.97)
---------- ------------ ----------- ------------
Net Increase/ (5,258.826) $(163,469.01) 31,189.541 $984,268.75
(decrease)
4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES - Pursuant to
agreements, Accrued Equities, Inc. serves as investment advisor to the Fund.
The Fund pays to Accrued Equities, Inc. an annual management fee of 1.00% of
the first $10 million of average net assets;0.75% of the next $20 million; and
0.50% of net assets over $30 million and 0.45% of assets over $100 million. If
the net annual expenses of the Fund (other than interest, taxes, brokerage
commissions, extraordinary expenses) exceed the most restrictive limitation
imposed by any state in which the Fund has registered its securities for sale
(presently 2.5%, in California) Accrued Equities reduces its management fee by
the amount of such excess expense. The annualized expense ratio for the six
months ended June 30, 1998 was 1.12%. The fund pays no remuneration to its
officers, each of whom is also an officer of Accrued Equities, Inc.
5)PURCHASES AND SALES OF SECURITIES - During the six months ended June 30,
1998, the aggregate cost of securities purchased totalled $ 4,601,884.88. Net
realized gains were computed on a first in, first out basis. The amount
realized on sales of securities for the six months ended June 30, 1998 was
$6,176,458.69.
