LEBENTHAL
FUNDS, INC.
Semi-Annual Report
May 31, 1995
(Unaudited)
LEBENTHAL
THE WORKHORSE OF INVESTMENTS.
[COVER GRAPHIC OMMITED]
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LEBENTHAL 120 BROADWAY, NEW YORK, N.Y. 10271
FUNDS, INC. 212/425-6116
OUTSIDE NYC TOLL FREE 1-800/221-5822
===============================================================================
Dear Shareholder:
I am pleased to report that the Lebenthal New York Municipal Bond Fund was the
best performing New York tax-exempt fund out of 71 followed by Lipper Analytical
Services, Inc. for the 12 months ended April 30, May 31, and June 30, 1995. And,
as of this writing, our 14.7% total return year-to-date is the best of our
peers, as is our 11.8% total return over the last 12 months, according to the
Wall Street Journal. Additionally, the New York Times reports that our New York
Fund was the best performing municipal bond fund of the 732 they follow for the
quarter ended June 30, 1995.
The Lebenthal New Jersey Municipal Bond Fund and the Lebenthal Taxable Bond Fund
also did very well. The total return year-to-date fiqure for the New Jersey Fund
was 11.23% through July 10th which places it in the top twenty percent of the 49
New Jersey funds followed by Lipper. The comparable fiqure for the Taxable Fund
was 12.78% which is 58 basis points higher than the 12.20% total return of the
5,167 issues in the Lehman Brothers "Long Maturity Aggregate Taxable Bond
Index".
Yes, the interest rate increases of last year were painful. But, they were
actually beneficial to the individuals who steeled their nerves and reinvested
their dividends at lower fund prices than would otherwise have been possible,
and even made new purchases in the three Lebenthal Funds.
Each of the Funds is well positioned to deliver high current yield from
portfolios consisting of high-quality and mostly high-coupon investments. We are
trying to reduce price volatility, and towards that end, the use of high-coupon
bonds dampens the effect of market sell offs. We have been and continue to be
very careful to avoid credit risk - which has become increasingly important in
the aftermath of the Orange County, California, bankruptcy. We want to assure
you that we are not in the business of taking on credit risk on your behalf.
Let me discuss what happened to interest rates and the economy over the last six
months and what we think lies ahead.
1995 to date has been a wonderful time for the financial markets.
The enormous rally in the bond and equity markets have generated more than $1
trillion in additional wealth for holders of U.S. financial assets. One would
think that this huge financial windfall, which represents almost 15% of this
year's Gross Domestic Product, would cause Americans to increase their spending
big time on goods of all types -- but it hasn't. Why? Americans appear to be
increasingly concerned about the ability to remain employed in good quality jobs
causing them to (1) be cautious in their spending, (2) increase savings, and (3)
reduce consumption. The U.S. saving rate has increased to 5.0% from 3.5% last
year and trends suggest that the rate could increase to above 5.5% by year end
1995.
The public is increasingly taking the view that a comfortable retirement can
only come from one's own savings. Some economists say that the savings rate
could rise above 7.5% of earnings by the year 2000 and above 20% from US
citizens between ages 50 and 65. Considering the huge numbers of individuals now
moving into their 50s, the amounts that will be saved could be stupendous,
probably increasing the value of all financial assets -- but, most particularly,
bonds.
The bond rally started in late November 1994 because of a confluence of events,
namely, (1) a flight to U.S. Treasuries following the Mexican peso crisis, (2)
the massive Republican election victory with its focus on the deflationary
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"Contract With America", (3) the purchase of $50 billion U.S. Treasury notes by
world central banks attempting to slow the descent of the dollar, (4) the
severe, sudden, unforeseen dropoff in the sales of American automobiles starting
at the first of the year, showing that the economy was not nearly as strong as
economists had projected. The rally grew and expanded as the government reported
a major slowdown in employment growth and the Republican Congress demonstrated
its resolve to balance the budget.
In all this, municipals did very well -- but not nearly as well as Treasuries or
the stock market because of (1) investor concern over the potential passage of
legislation implementing a flat tax, (2) concern over the bankruptcy filing by
Orange County, and (3) the competition for investor dollars of a powerful bull
market in equities. As we go to press, municipals yield 90-105% of yields of
comparable maturity Treasuries versus the more normal 80-85% relationship. To
the extent we have a "Buy Now" bell in the Municipal Bond market, it is a
tax-free-to-taxable yield ratio at 90-105% -- simply because, the higher the
tax-free-to-taxable yield ratio, the more attractive tax free bonds are compared
to taxable alternatives.
We think that concern over passage of a flat tax will soon cease to be a reason
for avoiding tax exempts, because it is highly unlikely to be enacted inasmuch
as it doesn't make sense economically or politically. As for the Orange County
bankruptcy, we think it will soon become obvious that the irresponsible acts
that entity has taken to date will prove disastrous for the County and its
citizens, causing the State of California to take over the County's finances
leading eventually to full payment to bondholders, albeit with delays. We are
also positive about municipals versus equities. Individuals will soon take the
view that the downside risk in equities is much larger than the upside
potential, considering how far stocks have risen this year.
Although there will be backing and filling and occasional declines in bond
prices in the months ahead, we think that the much greater risk is that prices
do not decline and yields do not increase. Investors could end up investing at
significantly lower yields in the years to come. The economy is about to enter a
multiyear lackluster -- even deflationary -- environment with a slew of factors
auguring low interest rates. Add to the increasingly conservative political
climate, the national mood for deficit reduction, more cutbacks in military
spending, the improving saving rate, cheap and cheaper goods and labor in the
world economy, improved productivity, and you have the makings of a bull market
in bonds, again. After all, it was only 18 months ago that six-month
certificates of deposit yielded less than 3%.
After 28 years at this business of investing large sums on behalf of individuals
and institutions, even with a tax-free-to-taxable yield ratio beckoning "come
hither", I have learned that it is largely impossible to "time" investments.
Interest rates are pretty much a random walk. For long term investors, I am
convinced that the best method of investing is to invest on a regular basis --
both with new moneys as they become available and through reinvestment of
dividends. Over long periods, the original price paid for individual bond fund
purchases becomes meaningless. It is the continual accumulation of shares at
varying prices over the years that builds wealth. As we say in our sales
literature, "Count the shares. And give it time."
Sincerely,
/s/ James L. Gammon
James L. Gammon
President
Lebenthal Asset Management, Inc.
July 12, 1995
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LEBENTHAL NEW YORK TAX FREE MONEY FUND
STATEMENT OF INVESTMENTS
MAY 31, 1995
(UNAUDITED)
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<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- ------
Other Tax Exempt Investments (16.99%)
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<S> <C> <C> <C> <C> <C> <C>
$ 1,000,000 Brentwood NY UFSD TAN (b) 06/30/95 3.75% $ 1,000,535
1,760,000 Elmira NY GO BAN 08/11/95 3.95 1,761,644 MIG-1
2,000,000 Longwood CSD NY TAN (b) 06/23/95 3.65 2,000,639
1,000,000 Orange County, NY BAN 11/22/95 4.44 1,002,279 P1 A1+
1,000,000 Oswego City BOCES RAN (b) 06/27/95 3.81 1,000,274
2,000,000 Town of Islip NY BAN (b) 08/22/95 4.14 2,001,281
--------- ---------
8,760,000 Total Other Tax Exempt Investments 8,766,652
--------- ---------
<CAPTION>
Other Variable Rate Demand Instruments (c) (75.80%)
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<S> <C> <C> <C> <C> <C> <C>
$ 1,000,000 Franklin County, NY IDA IDRB (KES Chatauqua Project)
LOC Bank of Tokyo, Ltd. 07/01/21 3.65% $ 1,000,000 A1+
2,500,000 NY Local Govt Assistance Corp (LGAC) 1994 Series B
LOC Swiss Bank Corp. 04/01/23 3.20 2,500,000 VMIG-1 A1+
1,000,000 NYC NY GO Subseries B2
LOC Dai-Ichi Kangyo Bank, Ltd. 08/15/18 4.80 1,000,000 VMIG-1 A1+
500,000 NYS MedCare Pooled Equipment Authority Series 94A
LOC Chemical Bank 11/01/03 3.90 500,000 VMIG-1
1,000,000 Nassau Co. NY IDA Ser 1993
Cold Spring Harbor Lab Proj.
LOC Morgan Guaranty 07/01/23 4.45 1,000,000 A1+
100,000 New York City Trust Cultural Resource RB
(Jewish Museum)
LOC Sumitomo Bank, Ltd. 12/01/21 4.05 100,000 VMIG-1 A1
3,800,000 New York City, NY GO Bond - Subseries E6
FGIC Insured 08/01/19 4.15 3,800,000 VMIG-1 A1+
2,000,000 New York City, NY GO Bond - Series E-3
LOC Fuji Bank, Ltd. 05/15/96 4.20 2,000,000 VMIG-1 A1
800,000 New York City, NY GO Bonds - Subseries E-5
LOC Sumitomo Bank, Ltd. 08/01/16 4.10 800,000 VMIG-1 A1
2,600,000 New York City, NY GO Subseries B-10
LOC Union Bank of Switzerland 08/15/24 3.85 2,600,000 VMIG-1 A1+
1,000,000 New York City, NY HDC (East 17th St.) - Series A
LOC Chemical Bank 01/01/23 4.35 1,000,000 A1
3,700,000 New York City, NY IDA (Nippon Cargo Airlines Co.)
LOC Industrial Bank of Japan, Ltd. 11/01/15 5.15 3,700,000 A1+
1,226,000 New York City, NY IDA Civic Facility RB
(The Berkeley Carrol School Proj.) - Series 1993
LOC Chemical Bank 06/30/23 3.50 1,226,000 VMIG-1
</TABLE>
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See Notes to Financial Statements.
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LEBENTHAL NEW YORK TAX FREE MONEY FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MAY 31, 1995
(UNAUDITED)
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<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- ------
Other Variable Rate Demand Instruments (c) (Continued)
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<S> <C> <C> <C> <C> <C> <C>
$ 4,700,000 New York City, NY IDRB (Airport Project)
LOC Bayerische Landesbank Girozentrale 04/01/00 3.90% $ 4,700,000 P1 A1+
1,500,000 New York City, NY IDRB (Stroheim & Romann Inc.)
LOC Westdeutsche Landesbank Girozentrale 12/01/15 3.80 1,500,000 A1+
500,000 New York State ERDA PCRB
(Niagara Mohawk Power Corp.) - Series 1985C
LOC Canadian Imperial Bank of Commerce 12/01/25 4.30 500,000 P1
1,200,000 New York State ERDA PCRB
(Niagara Mohawk Power Corp.) - Series B
LOC Toronto-Dominion Bank 12/01/26 4.40 1,200,000 P1
2,000,000 New York State ERDA PCRB
(Rochester Gas & Electric) - Series 1984
LOC The Bank of New York 10/01/14 3.90 2,000,000 P1
1,300,000 Niagara Falls Bridge Commission Toll Bridge
Revenue Reference Bond 1993 A
FGIC Insured 10/01/19 3.90 1,300,000 VMIG-1 A1
500,000 Port Authority of New York & New Jersey - Series 1 08/01/28 4.30 500,000 VMIG-1 A1+
1,000,000 Port Authority of New York & New Jersey - Series 3
LOC Deutsche Bank A.G. 10/01/14 3.95 1,000,000 VMIG-1 A1+
300,000 Southeast, NY IDA (1989 Unilock, NY)
LOC National Bank of Detroit 11/01/95 4.25 300,000 P1 A1+
500,000 Southeast, NY IDA (1989 Unilock, NY)
LOC National Bank of Detroit 11/01/96 4.25 500,000 P1 A1+
200,000 Southeast, NY IDA (1989 Unilock, NY)
LOC National Bank of Detroit 11/01/01 4.25 200,000 P1 A1+
2,000,000 Suffolk County, NY Water Authority BAN 12/14/99 4.05 2,000,000 VMIG-1
1,200,000 Suffolk County, NY IDA (Nissequogue Cogen Partners)
LOC Toronto-Dominion Bank 12/15/23 4.20 1,200,000 VMIG-1 A1+
1,000,000 Yonkers, NY IDA Civic Facility Revenue Bond
Consumers Union Facility
AMBAC Insured 07/01/24 3.75 1,000,000 VMIG-1 A1+
---------- -----------
39,126,000 Total Other Variable Rate Demand Instruments 39,126,000
---------- -----------
<CAPTION>
Put Bonds (3.29%)
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<S> <C> <C> <C> <C> <C> <C>
$ 800,000 Albany County, NY IDA (West Eagle Co.)
LOC Key Bank, N.A. 08/15/95 4.65% $ 800,000 P1 A1
900,000 Puerto Rico Industrial Medical & Environmental Bond
LOC Morgan Guaranty 12/01/95 4.35 900,000 VMIG-1
--------- ---------
1,700,000 Total Put Bonds 1,700,000
--------- ---------
</TABLE>
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See Notes to Financial Statements.
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<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- ------
Variable Rate Demand Instruments - Participations (c) (3.84%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 297,235 Auburn, NY IDA IDRB (Bo-Mer Manufacturing Co., Inc.)
LOC Chemical Bank 10/01/00 5.85% $ 297,235 P1 A1
299,558 Nassau Co., NY IDA IDRB
(Steven Klein/Normandie Metal Fabricators)
LOC Chemical Bank 11/01/99 5.85 299,558 P1 A1
536,704 New York City, NY
(Seybert-Nicholas Printing Corp./Kenner Printing)
LOC Chemical Bank 06/01/00 5.85 536,704 P1 A1
249,999 New York City, NY IDA IDRB (Abigal Press, Inc. Project)
LOC Chemical Bank 02/01/99 5.85 249,999 P1 A1
293,308 New York City, NY IDA IDRB (Precision Plating Inc.)
LOC Chemical Bank 09/01/00 5.85 293,308 P1 A1
135,000 New York City, NY IDA IDRB (Zaro's Bake Shop, Inc.)
LOC Chemical Bank 11/01/96 5.85 135,000 P1 A1
172,351 Ulster County, NY IDA IDRB (Fin Pan Inc. Project)
LOC Chemical Bank 11/01/99 5.85 172,351 P1 A1
--------- ------------
1,984,155 Total Variable Rate Demand Instruments - Participations 1,984,155
--------- ------------
Total Investments (99.92%) (Cost $51,576,807+>) $ 51,576,807
Cash and Other Assets, Net of Liabilities (0.08%) 39,671
------------
Net Assets (100%) $ 51,616,478
============
+ Aggregate cost for federal income tax purpose is identical.
</TABLE>
FOOTNOTES
(a) Unless the variable rate demand instruments are assigned their own ratings,
the ratings noted for variable rate demand instruments are those of the
bank whose letter of credit secures such instruments or the guarantor of
the bond. P1 and A1+ are the highest ratings assigned for tax exempt
commercial paper.
(b) Securities that are not rated the Fund's Board of Directors has determined
to be of comparable quality to those rated securities in which the Fund
invests.
(c) Securities payable on demand at par including accrued interest (usually
with seven days notice) and unconditionally secured as to principal and
interest by a bank letter of credit. The interest rates are adjustable and
are based on bank prime rates or other interest rate adjustment indices.
The rate shown is the rate in effect at the date of this statement.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
BAN = Bond Anticipation Note IDRB = Industrial Development Revenue Bond
CI = Certificate of Indebtedness PCRB = Pollution Control Revenue Bond
CLN = Construction Loan Note RAN = Revenue Anticipation Note
CRRB = Cultural Resource Revenue Bond RAW = Revenue Anticipation Warrant
ERDA = Energy Research and Development Authority RB = Revenue Bond
FAN = Fund Anticipation Note RN = Revenue Note
GAN = Grant Anticipation Note TAN = Tax Anticipation Note
HDC = Housing Development Corporation TLN = Tax Loan Note
HRB = Hospital Revenue Bond TRAN = Tax and Revenue Anticipation Note
IDA = Industrial Development Agency
</TABLE>
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See Notes to Financial Statements.
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LEBENTHAL NEW YORK MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
MAY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings
----------------
Face Value Standard
Amount (Note 1) Moody's & Poor's
------ ------ ------- ------
Municipal Bonds (103.72%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,285,000 Monroe County, NY IDA Civil Facility (DePaul Community Facility),
6.500%, due 2/01/24 $ 1,328,793 Aa
300,000 New York City Unlimited Tax General Obligation, 7.750%, due 8/15/13 331,101 Baa1 A-
2,925,000 New York, New York Series H, 7.20%, due 2/1/13 3,141,479 Baa1 A-
3,370,000 New York, New York Series H, 7.00%, due 2/1/20 3,541,364 Baa1 A-
2,350,000 New York, New York Series C, 7.25%, due 8/15/24 2,462,894 Baa1 A-
2,400,000 New York State Dormitory Authority Revenue, 7.40%, due 8/1/30 2,656,536 Aa AAA
7,255,000 New York State Dormitory Authority Revenue (Highlands Center),
6.600%, due 2/01/34 7,574,800 AA
2,330,000 New York State Dormitory Authority Revenue (Presbyterian Residential Community),
6.500%, due 8/01/34 2,413,973 AA
750,000 New York State Dormitory Authority Revenue
(State University Educational Facilities),
7.000%, due 5/15/16 797,055 Baa1 BBB+
3,500,000 New York State Dormitory Authority Revenue (Jewish Geriatric), FHA, 7.350%,
due 8/01/29 3,833,340 AAA
5,190,000 New York State Dormitory Authority Revenue
(MTG-FHA-Niagara Frontier Home), 6.40%, 2/01/35 5,339,887 AA
1,000,000 New York State Energy Research & Development Authority - Industrial Development
& Pollution Control (Brooklyn Union and Gas), MBIA, 6.750%, Due 2/01/24 1,068,170 Aaa AAA
8,350,000 New York State Energy Research & Development Authority - Electric Facilities Revenue-
(Consolidated Edison Company Project), 6.750%, due 1/15/27 8,619,622 A1 A+
1,000,000 New York State Energy Research & Development Authority - Electric Facilities Revenue-
(Long Island Lighting Company Project), 7.150%, due 2/1/22 1,003,240 BA1 BB+
500,000 New York State Energy Research & Development Authority - Pollution Control Revenue-
(Niagara Mohawk Power Corporation), FGIC, 6.625%, due 10/1/13 538,460 Aaa AAA
550,000 New York State Environmental Facilities Corp. Pollution Control Revenue -
(State Water Revolving Fund Series C), 7.200%, due 3/15/11 594,913 Aa A+
1,750,000 New York State Medical Hospital Nursing Facilities, 6.60%, due 2/15/31 1,809,937 AAA
1,500,000 New York State Housing Finance Agency Insured Multi-Family Mortgage Housing Revenue,
6.500%, due 8/15/24 1,540,545 Aa AAA
3,400,000 New York State Housing Finance Agency (Phillips Village Project) Series A, 7.750%,
due 8/15/17 3,680,228 A
</TABLE>
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See Notes to Financial Statements.
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7
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===============================================================================
<TABLE>
<CAPTION>
Ratings
----------------
Face Value Standard
Amount (Note 1) Moody's & Poor's
------ ------ ------- ------
Municipal Bonds (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 6,750,000 New York State Medical Care Facilities Finance Agency Revenue
(Hospital & Nursing Home FHA - Insured Mortgage Series B), 6.600%, due 8/15/34 $7,048,148 Aa AA
4,100,000 New York State Medical Care Facilities FHA (Hospital Special Surgery),
6.375%, due 8/15/24 4,257,563 Aa AA
175,000 New York State Medical Care Facilities Mental Health Service,
7.300%, due 2/15/21 189,616 Baa1 BBB+
5,300,000 New York State Medical Care Facilities Finance Agency Revenue,
6.90%, due 8/15/34 5,728,929 Aaa AAA
1,500,000 New York State Mortgage Agency Revenue
(Mortgage-Series 30-B-RMKT), 6.650%, due 10/01/25 1,547,535 Aa
3,750,000 New York State Mortgage Agency Revenue
(AMT-Homeowner Mortgage Series 46), 6.650%, due 10/01/25 3,886,350 Aa
3,675,000 New York State Medical Care Facilities Finance Agency Revenue,
(HOSP & NURS-FHA INSD Mortgage Series B), 6.250%, due 02/15/25 3,769,264 AAA
500,000 New York State Medical Care Facilities Finance Agency Revenue,
(FHA-INSD MTG Project-1995 Series C), 6.250%, due 8/15/15 514,160 Aaa AAA
4,675,000 New York State Medical Care Facilities Finance Agency Revenue,
(FHA-INSD MTG Project-1995 Series C), 6.375%, due 8/15/29 4,812,445 Aa AA
500,000 New York State Medical Care Facilities Finance Agency Revenue,
(New York Downtown Hospital - Series A), 6.70%, due 2/15/12 511,750 Baa BBB
2,600,000 New York State Medical Care Facilities Finance Agency Revenue,
(New York Downtown Hospital - Series A), 6.80%, due 2/15/20 2,682,264 Baa BBB
2,505,000 New York State Medical Care Facilities Finance Agency Revenue,
(FHA-MTG Project - Series A), 6.50%, due 2/15/35 2,598,261 Aa AA
2,000,000 New York State Medical Care Facilities Finance Agency Revenue,
(Brookdale Hospital Medical Center - Series A), 6.80%, due 8/15/12 2,046,740 Baa BBB
2,150,000 New York State Medical Care Facilities Finance Agency Revenue,
(Brookdale Hospital Medical Center - Series A), 6.85%, due 2/15/17 2,214,285 Baa BBB
900,000 New York State Thruway Authority Series 91, 7.25%, due 1/01/10 968,706 Baa1 BBB
---------- ---------
90,785,000 Total Municipal Bonds 95,052,353
---------- ----------
</TABLE>
<TABLE>
<CAPTION>
Shares
------ Market Value
Closed-End Mutual Funds (11.88%) ------------
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 187,900 Intercapital New York Quality $ 2,043,412
</TABLE>
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See Notes to Financial Statements.
<PAGE>
8
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LEBENTHAL NEW YORK MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MAY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Shares Market Value
------ ------------
Closed-End Mutual Funds (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 191,600 Munivest New York Insured Fund $ 2,347,100
220,220 Muniyield New York Insured Fund II 2,780,278
159,600 Muniyield New York Insured Fund 2,214,450
50,800 Nuveen New York Select Quality 768,350
10,300 Nuveen New York Quality Insured Mutual Fund 130,038
56,800 Taurus Muni New York Holdings 603,500
---------- ------------
877,220 Total Closed-End Mutual Funds 10,887,128
---------- ------------
Total Investments (115.60%)(Cost 100,527,069+) 105,939,481
Liabilities in Excess of Cash and Other Assets (15.60%) ( 14,296,961)
------------
Net Assets(100.00%) $ 91,642,520
============
+ Aggregate cost for federal income tax purposes is identical.
Aggregate unrealized appreciation and depreciation are $5,412,412 and $0.
</TABLE>
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See Notes to Financial Statements.
<PAGE>
9
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LEBENTHAL NEW JERSEY MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
MAY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings
----------------
Face Value Standard
Amount (Note 1) Moody's & Poor's
------ ------ ------- ------
Municipal Bonds (88.52%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 125,000 Cape May County, New Jersey Industrial Pollution Control Financing Authority
Rev - Atlantic City Electric Company Project A, MBIA, 7.20%, due 11/01/29 $ 143,850 Aaa AAA
70,000 Essex County, New Jersey Import Authority Revenue Refunding Bond - Orange
School District - Series A, MBIA, 6.95%, due 07/01/14 79,284 Aaa AAA
100,000 Hudson County, New Jersey Import Authority Facilities Lease Revenue - Hudson
County Lease Project, 6.00%, FGIC, due 12/01/25 101,809 Aaa AAA
100,000 Irvington, New Jersey Housing & Mortgage Finance Authority, 6.50% due 08/01/24 102,380 AAA
100,000 New Jersey Economics Development Authority - American Airline, 7.10%
due 11/01/31 103,246 Baa2 BB+
100,000 New Jersey Economics Developement Authority PSE&G, MBIA, 6.40% due 05/01/32 104,139 Aaa AAA
100,000 New Jersey Economics Development Authority Water Facilities Revenue, FGIC, 6.875%
due 11/01/34 109,106 Aaa AAA
85,000 New Jersey Health Care Facilities Financing Authority Refunding Revenue
Irvington General Hospital Issue Series 1994, FHA, 6.40%, due 08/1/25 86,688 AAA
125,000 New Jersey Health Care Facilities Financing Authority Revenue Bond - General
Hospital Center at Passaic, FSA, 6.75%, due 07/01/19 137,102 Aaa AAA
100,000 New Jersey Health Care Facilities Financing Authority Revenue Bond - Monmouth
Medical Center Issue - Series C, CGIC, 6.25%, due 07/01/24 104,050 Aaa AAA
100,000 New Jersey Health Care Facilities Financing Authority Revenue Bond - Newark
Beth Israel Medical Center, FSA, 6.00%, due 07/01/24 102,022 Aaa AAA
100,000 New Jersey Economics Development Authority AMT-Economic Growth Ser. D, LOC NatWest,
6.55%, due 08/01/14 104,335 AA-
100,000 New Jersey State Educational Facilities Authority Revenue Bond - New Jersey
Institute Tech. Issue - Series A, MBIA, 6.00%, due 07/01/24 102,434 Aaa AAA
100,000 New Jersey State Educational Facilities Authority Revenue Bond - Jersey
City State College, AMBAC, 5.90%, due 07/01/25 100,537 Aaa AAA
50,000 New Jersey State Educational Facilities Authority Revenue - Monmouth College -
Series C, 7.125%, due 07/01/24 54,365 Baa BBB
125,000 New Jersey State Housing & Mortgage Finance Agency Multi-Family HSG Rev
Ref-Presidential Plaza FHA-1, 7.00%, due 05/01/30 131,474 AAA
125,000 New Jersey State Housing & Mortgage Finance Agency Rev HSG - Series A,
6.95%, due 11/01/13 132,658 A+
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
10
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LEBENTHAL NEW JERSEY MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MAY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings
----------------
Face Value Standard
Amount (Note 1) Moody's & Poor's
------ ------ ------- ------
Municipal Bonds (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 140,000 Newark New Jersey Housing Finance Corporation Mortgage Rev,
Ref-SEC 8-FHA-Manor
Apts-A, 7.50%, due 02/15/24 $ 152,393 AAA
75,000 Port Authority New York & New Jersey Cons - 72nd Series - AMBAC - TCRS, 7.40%,
due 10/01/12 85,908 Aaa AAA
100,000 Puerto Rico Housing Bank & Finance Agency
Single Family Mortgage Revenue AMT - Afford
Housing Mortgage - Portfolio I, 6.25%, GNMA/FNMA/FHLMA College, due 04/01/29 101,240 Aaa AAA
--------- ---------
2,020,000 Total Municipal Bonds 2,139,020
--------- ---------
</TABLE>
<TABLE>
<CAPTION>
Shares Market Value
------ ------------
Closed-End Mutual Funds (9.96%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 11,670 Munivest New Jersey Fund $ 135,664
7,930 Muniyield New Jersey Fund 105,072
-------- --------
19,600 Total Closed-End Mutual Funds 240,736
-------- --------
Total Investments (98.48%)(Cost $ 2,256,325+) 2,379,756
Cash and Other Assets, Net of Liabilities (1.52%) 36,812
--------
Net Assets(100.00%) $ 2,416,568
=========
+ Aggregate cost for federal income tax purposes is identical.
Aggregate unrealized appreciation and depreciation are $123,431 and $0.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
11
- -------------------------------------------------------------------------------
LEBENTHAL TAXABLE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
MAY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings
----------------
Face Value Standard
Amount (Note 1) Moody's & Poor's
------ ------ ------- ------
Municipal Bonds (85.28%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 200,000 Alameda County, California Pension Obligation
Series A, 7.750%, due 12/01/04 $ 213,138 Aaa AAA
150,000 All Saints Health System Texas Bond 1994
Bonds, 9.00%, due 8/15/24 162,603 Aaa AAA
100,000 Buffalo, New York, GO, AMBAC Taxable Bonds
Series F, 9.05%, due 2/01/15 106,598 Aaa AAA
200,000 California State Department Water Revenue Bond
Series C, 9.875%, due 12/01/23 219,258 Aa AA
100,000 Connecticut State Development Authority Revenue Bond Tax Subseries B-1,
8.500%, due 08/15/14 100,750 A+
150,000 Connecticut Health and Educational Maefair Health, Taxable
Bonds, 9.20%, due 11/01/24 158,697 A1 AA-
125,000 Connecticut Health and Educational Facility Authority-
Laurelwood Rehab & Skilled Nursing Project, 9.36%, due 11/01/24 132,813 A1 AA-
150,000 Connecticut Health and Educational Facilities Authority Taxable
Bonds, Nursing Home Program Issue Series 1994, 8.90%, due 11/01/24 159,832 A1 AA-
270,000 Connecticut Housing Finance Authority Housing Mortgage Finance
Program 1993 Series G, 9.250%, due 5/15/27 287,231 Aa AA
125,000 Conyers GA Water & Sewer Revenue Bonds,
AMBAC, 8.75%, due 7/01/15 134,171 Aaa AAA
250,000 Cuyahoga County, Ohio Economic Development Revenue
Taxable Gateway Arena PJ-Series A, 8.625%, due 06/01/22 255,960 AA
150,000 Idaho Housing Agency MFB, 8.50%, due 7/01/09 153,562 A
150,000 Illinois Housing AMBAC, 8.64%, due 12/01/21 151,125 Aaa AAA
150,000 Memorial Health System Revenue Bond, MBIA, 8.375%, due 10/01/20 157,539 Aaa AAA
200,000 Michigan State Housing Development Authority Multi-Family
Taxable - Series A, 8.300%, due 11/01/15 200,000 Aaa AAA
190,000 Minnesota State Housing Finance Agency Taxable
Rental Housing Series A,
8.700%, due 08/01/22 192,850 A+
100,000 New Hampshire State Housing and Finance Authority SFM Revenue Bonds,
Series 1995-C, 9.40%, due 07/01/14 106,166 Aa
240,000 New Jersey State Housing and Mortgage Finance Agency Rental Housing
Revenues - Taxable Bonds, Series E, 8.95%, due 11/01/12 247,200 A+
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
12
- -------------------------------------------------------------------------------
LEBENTHAL TAXABLE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MAY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings
----------------
Face Value Standard
Amount (Note 1) Moody's & Poor's
------ ------ ------- ------
Municipal Bonds (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 180,000 New York, New York Series D, 9.625%, due 08/01/10 $ 192,152 Baa1 A-
250,000 New York State Environment Facilities Corp. State Service Contract Revenue
Series A, 9.625%, due 03/15/21 267,500 AA
110,000 New York State Housing Finance Agency Service Contract Obligation
Revenue - Series B, 8.60%, due 3/15/04 114,802 Baa1 BBB
100,000 Pittsburgh Pennsylvania Urban Redevelopment
Authority, CGIC, 9.07%, due 09/01/14 112,242 Aaa AAA
120,000 Southeastern Pennsylvania Trans Authority, FGIC, 8.750%, due 03/01/20 127,721 Aaa AAA
300,000 United Nations Development Corp., 8.800%, due 07/01/26 312,429 A
--------- ---------
4,060,000 Total Municipal Bonds 4,266,339
--------- ---------
</TABLE>
<TABLE>
<CAPTION>
Shares Market Value
------ ------------
Closed-End Mutual Funds (9.61%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 32,600 Blackrock Income Trust $ 236,350
27,150 Hyperion Total Return 244,350
-------- ---------
59,750 Total Closed-End Mutual Funds 480,700
-------- ---------
Total Investments (94.89%)(Cost $ 4,558,483+) $ 4,747,039
Cash and Other Assets, Net of Liabilities, (5.11%) 255,845
--------
Net Assets(100.00%) $ 5,002,884
==========
+ Aggregate cost for federal income tax purposes is identical.
Aggregate unrealized appreciation and depreciation are $195,572 and $7,016.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
13
- -------------------------------------------------------------------------------
LEBENTHAL FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
SIX MONTHS ENDED MAY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Lebenthal New York Lebenthal New York Lebenthal New Jersey Lebenthal Taxable
Tax Free Municipal Municipal Municipal
Money Fund Bond Fund Bond Fund Bond Fund
------------------ ------------------ -------------------- -----------------
ASSETS
<S> <C> <C> <C> <C>
Investment in securities
at value (cost $51,576,807, $100,527,069,
$2,256,325 and $4,558,483)... $ 51,576,807 $ 105,939,481 $ 2,379,756 $ 4,747,039
Cash........................... -- -- -- 155,468
Receivables:
Capital shares sold......... -- 844,479 25,003 274,146
Prepaid expense............. -- 211,449 -- --
Interest.................... 534,282 1,877,413 36,383 108,878
Dividends................... -- 45,215 1,281 3,758
Due from Manager............ -- -- 11,106 14,111
Deferred organization expenses. 6,174 16,326 27,140 21,897
---------- ----------- --------- ---------
Total assets............. 52,117,263 108,934,363 2,480,669 5,325,297
---------- ----------- --------- ---------
<CAPTION>
LIABILITIES
<S> <C> <C> <C> <C>
Payables:
Securities purchased........ -- -- -- 287,228
Capital shares redeemed..... -- 88,511 -- 3,363
Dividends declared.......... 69,746 309,728 7,671 18,368
Due to Administrator........ -- 9,516 -- --
Due to Distributor.......... 11,324 19,032 -- --
Due to Manager.............. 11,324 18,190 -- --
Due to Custodian............ -- 16,830,074 52,670 --
Accrued expenses and other liabilities 408,391 16,792 3,760 13,454
--------- ---------- --------- ---------
Total liabilities........ 500,785 17,291,843 64,101 322,413
--------- ---------- --------- ---------
<CAPTION>
NET ASSETS $ 51,616,478 $ 91,642,520 $ 2,416,568 $ 5,002,884
========== ========== ========= =========
<S> <C> <C> <C> <C>
Shares outstanding (Note 3).... 51,628,562 11,784,117 369,627 730,181
Net asset value, and redemption
price per share........... $ 1.00 $ 7.78 $ 6.54 $ 6.85
Maximum offering price per share* $ 1.00 $ 8.15 $ 6.85 $ 7.17
* The sales charge on the New York Bond Fund, the New Jersey Bond Fund and the
Taxable Bond Fund is 4.5% of the offering price on a single sale of less than
$50,000, reduced on sales of $50,000 or more and certain other sales. There is
no sales charge on the Money Fund.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
14
- -------------------------------------------------------------------------------
LEBENTHAL FUNDS, INC.
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Lebenthal New York Lebenthal New York Lebenthal New Jersey Lebenthal Taxable
Tax Free Municipal Municipal Municipal
Money Fund Bond Fund Bond Fund Bond Fund
------------------ ------------------ -------------------- -----------------
INVESTMENT INCOME
<S> <C> <C> <C> <C>
Income:
Interest...................... $ 1,042,859 $ 2,499,666 $ 52,482 $ 117,911
Dividends..................... -- 304,433 5,001 8,853
--- -------- ------ --------
Total income............... 1,042,859 2,804,099 57,483 126,764
--------- --------- ------- --------
Expenses: (Note 2)
Management fee................ 67,131 -- -- --
Advisory fee.................. -- 99,285 -- --
Distribution fee.............. -- 103,392 -- --
Administration fee............ -- 51,696 -- --
Shareholder servicing fee..... 67,131 -- -- --
Custodian, shareholder servicing and
related shareholder expenses 101,630 66,037 9,238 10,108
Legal, compliance and filing fees 12,661 24,452 7,306 9,148
Audit and accounting fees..... 23,012 17,602 22,279 25,008
Director's fees............... 2,323 3,579 86 124
Amortization of organization expenses 5,453 7,639 6,401 3,722
Other......................... 2,788 1,966 691 695
---------- ---------- --------- --------
Total expenses............... 282,129 375,648 46,001 48,805
Less: Reimbursement of expenses (Note 2) -- -- ( 40,456) ( 39,873)
---------- ---------- --------- --------
Net expenses................. 282,129 375,648 5,545 8,932
---------- ---------- --------- --------
Net investment income........... 760,730 2,428,451 51,938 117,832
---------- ---------- --------- --------
<CAPTION>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C> <C> <C> <C>
Net realized gain (loss) on investments ( 8,168) 109,903 ( 1,149) ( 45,748)
Change in unrealized appreciation
(depreciation) of investments -- 10,312,345 167,953 292,633
---------- ---------- ---------- ---------
Net realized and unrealized
gain (loss) on investments. ( 8,168) 10,422,248 166,804 246,885
---------- ---------- ---------- --------
Increase (decrease) in net
assets from operations..... $ 752,562 $ 12,850,699 $ 218,742 $ 364,717
========== ========== ========== ========
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
15
- -------------------------------------------------------------------------------
LEBENTHAL FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED MAY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Lebenthal New York Tax Free Lebenthal New York Municipal
Money Fund Bond Fund
----------------------------------- ----------------------------------
Six Months Six Months
Ended Year Ended Year
May 31, 1995 Ended May 31, 1995 Ended
(Unaudited) November 30, 1994 (Unaudited) November 30, 1994
--------- ----------------- --------- -----------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C> <C> <C>
Operations:
Net investment income............. $ 760,730 $ 918,497 $ 2,428,451 $ 4,417,708
Net realized gain (loss) on
investments................... ( 8,168) 910 109,903 ( 4,604,120)
Change in unrealized appreciation. -- -- 10,312,345 ( 8,260,378)
---------- ---------- ---------- -----------
Increase (decrease)
in net assets from operations. 752,562 919,407 12,850,699 ( 8,446,790)
Dividends from net investment income.. ( 760,730)* ( 918,497)* ( 2,428,451)* ( 4,417,708)*
Distributions from net realized gains
on investments................ -- -- -- ( 365,144)
Capital share transactions (Note 3)... 3,775,020 237,828 5,894,424 7,828,771
---------- -------- --------- ---------
Total increase (decrease)..... 3,766,852 238,738 16,316,672 ( 5,400,871)
Net assets:
Beginning of period............... 47,849,626 47,610,888 75,325,848 80,726,719
---------- ---------- ---------- ----------
End of period..................... $ 51,616,478 $ 47,849,626 $ 91,642,520 $ 75,325,848
========== ========== ========== ==========
* Designed as exempt interest dividends for federal income tax purposes.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
16
- -------------------------------------------------------------------------------
LEBENTHAL FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
SIX MONTHS ENDED MAY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Lebenthal New Jersey Municipal Lebenthal Taxable Municipal
Bond Fund Bond Fund
---------------------------------- --------------------------------
Six Months Six Months
Ended Year Ended Year
May 31, 1995 Ended May 31, 1995 Ended
(Unaudited) November 30, 1994 (Unaudited) November 30, 1994
--------- ----------------- --------- -----------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income............. $ 51,938 $ 87,979 $ 117,832 $ 170,931
Net realized gain (loss) on
investments................... ( 1,149) ( 315,519) ( 45,748) ( 246,621)
Change in unrealized appreciation. 167,953 ( 44,522) 292,633 ( 104,077)
-------- -------- -------- --------
Increase (decrease)
in net assets from operations. 218,742 ( 272,062) 364,717 ( 179,767)
Dividends from net investment income.. ( 51,938)* ( 87,979)* ( 117,832) ( 170,931)
Distributions from net realized gains
on investments................ -- -- -- --
Capital share transactions (Note 3)... 104,617 2,505,188 1,765,720 3,340,977
--------- ---------- ---------- ----------
Total increase (decrease)........ 271,421 2,145,147 2,012,605 2,990,279
Net assets:
Beginning of period.............. 2,145,147 -0- 2,990,279 -0-
--------- --------- ---------- ---------
End of period.................... $ 2,416,568 $ 2,145,147 $ 5,002,884 $ 2,990,279
========= ========= ========= =========
* Designed as exempt interest dividends for federal income tax purposes.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
17
- -------------------------------------------------------------------------------
LEBENTHAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
===============================================================================
1. Summary of Accounting Policies
Lebenthal Funds, Inc. (the "Company") is registered under the Investment Company
Act of 1940 as an open end management investment company consisting of Lebenthal
New York Tax Free Money Fund (the "Money Fund"), Lebenthal New York Municipal
Bond Fund (the "New York Bond Fund"), Lebenthal New Jersey Municipal Bond Fund
(the "New Jersey Bond Fund") and Lebenthal Taxable Municipal Bond Fund (the
"Taxable Bond Fund"). Its financial statements are prepared in accordance with
generally accepted accounting principles for investment companies as follows:
a) Valuation of Securities -
For the Money Fund, investments are valued at amortized cost. Under this
valuation method, a portfolio instrument is valued at cost and any discount
or premium is amortized on a constant basis to the maturity of the
instrument. The maturity of variable rate demand instruments is deemed to
be the longer of the period required before the Fund is entitled to receive
payment of the principal amount or the period remaining until the next
interest rate adjustment.
For the New York Bond Fund, the New Jersey Bond Fund and the Taxable Bond
Fund, municipal obligations are stated on the basis of valuations provided
by a pricing service approved by the Board of Directors, which uses
information with respect to transactions in bonds, quotations from bond
dealers, market transactions in comparable securities and various
relationships between securities in determining value. The valuations
provided by such pricing service will be based upon fair market value
determined most likely on the basis of the factors listed above. If a
pricing service is not used, municipal obligations will be valued at quoted
prices provided by municipal bond dealers. Non-tax exempt securities for
which transaction prices are readily available are stated at market value
(determined on the basis of the last reported sales price, or a similar
means). Short-term investments that will mature in 60 days or less are
stated at amortized cost, which approximates market value. All other
securities and assets are valued at their fair market value as determined
in good faith by the Board of Directors.
b) Federal Income Taxes -
It is the policy of each Fund to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its tax-exempt and taxable income to its shareholders.
Therefore, no provision for Federal income tax is required.
c) Dividends and Distributions -
Dividends from investment income (excluding capital gains and losses, if
any, and amortization of market discount) are declared daily and paid
monthly. Distributions of net capital gains, if any, realized on sales of
investments are made after the close of the Fund's fiscal year, as declared
by the Fund's Board of Directors.
d) Organizational Expenses -
The Money Fund, the New York Bond Fund, the New Jersey Bond Fund and the
Taxable Bond Fund are amortizing organization expenses by straight-line
charges against income over the periods ending December 23, 1995, June 23,
1996, November 30, 1998 and November 30, 1998, respectively. The proceeds
of any redemptions of the initial shares of the Money Fund will be reduced
by a pro rata portion of any then unamortized organizational expenses of
the Money Fund, based on the ratio of the shares redeemed to the total
initial shares outstanding immediately prior to the redemption.
- -------------------------------------------------------------------------------
<PAGE>
18
- -------------------------------------------------------------------------------
LEBENTHAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
Summary of Accounting Policies (Continued)
e) General -
Securities transactions are recorded on a trade date basis. Interest income
is accrued as earned and dividend income is recorded on the ex-dividend date.
Premiums and original issue discounts on securities purchased by the New York
Bond Fund, the New Jersey Bond Fund and the Taxable Bond Fund are amortized
over the life of the respective securities. Realized gains and losses from
securities transactions are recorded on the identified cost basis.
2. Investment Advisory Fees and Other Transactions with Affiliates
For the Money Fund:
Under the Management Contract, the Money Fund pays an investment management fee
to Reich & Tang Asset Management L.P. (its Manager), equal to .25% of the Fund's
average daily net assets up to $100 million and .20% of such assets in excess of
$100 million.
Pursuant to a Distribution Plan adopted under Securities and Exchange Commission
Rule 12b-1, the Fund and Lebenthal & Co., Inc. (its Distributor) have entered
into a Shareholder Servicing and Administration Agreement under which the
Distributor receives from the Fund a fee equal to .25% of the Fund's average
daily net assets up to $100 million and .20% of such assets in excess of $100
million. The Distributor has agreed to reimburse the Fund for its expenses
(exclusive of interest, taxes, brokerage, and extraordinary expenses) which in
any year exceed the limits on investment company expenses prescribed by any
state in which the Fund's shares are qualified for sale. No such reimbursement
was required for the period ended May 31, 1995.
For the New York Bond Fund, the New Jersey Bond Fund and the Taxable Bond Fund:
Under the Management Contract the Funds pay a management fee to Lebenthal Asset
Management, Inc. (its Manager), equal to .25% of the Fund's average daily net
assets up to $50 million; .225% of such assets between $50 million and $100
million; and .20% of such assets in excess of $100 million. The Manager
supervises all aspects of the Fund's operations. The Manager has agreed to
reimburse the Fund for its expenses (exclusive of interest, taxes, brokerage,
and extraordinary expenses) which in any year exceed the limits on investment
company expenses prescribed by any state in which the Fund's shares are
qualified for sale. For the period ended May 31, 1995, the Manager voluntarily
waived management fees of $2,305 and $3,742 for the New Jersey Bond Fund and the
Taxable Bond Fund, respectively. In addition, although not required to do so,
the Manager has agreed to reimburse expenses for the New Jersey Bond Fund and
the Taxable Bond Fund amounting to $40,456 and $39,873, respectively.
Pursuant to the Administrative Services Agreement, the Fund pays Reich & Tang
Asset Management L.P., (its Administrator) a fee equal to .125% of the Fund's
average daily net assets up to $100 million and .10% of such assets in excess of
$100 million. For the period ended May 31, 1995, the Administrator voluntarily
waived administration fees for the New Jersey Bond Fund and the Taxable Bond
Fund of $1,153 and $1,871, respectively.
For all Funds:
Pursuant to a Distribution Plan adopted under Rule 12b-1 of the Investment
Company Act of 1940, the Company and Lebenthal & Co., Inc. (the Distributor)
have entered into a Distribution Agreement. For its services under the
Distribution Agreement, the Distributor receives from each Fund a fee equal to
.25% of the Fund's average daily net assets. For the period ended May 31, 1995,
the Distributor voluntarily waived fees of $67,131, $2,305 and $3,742 from the
Money Fund, the New Jersey Bond Fund and the Taxable Bond Fund, respectively.
There were no additional expenses borne by the Company pursuant to the
Distribution Plan.
- -------------------------------------------------------------------------------
<PAGE>
19
- -------------------------------------------------------------------------------
===============================================================================
Investment Advisory Fees and Other Transactions with Affiliates (Continued)
Lebenthal & Co., Inc. retained commissions of $207,919 from the sales of shares
of the New York Bond, the New Jersey Bond Fund and the Taxable Bond Fund.
Included in the Statements of Operations under the caption "Custodian,
shareholder servicing and related shareholder expenses" are fees of $62,555,
$46,691, $8,424 and $8,537 for the Money Fund, the New York Bond Fund, the New
Jersey Bond Fund and the Taxable Bond Fund, respectively, paid to Fundtech
Services, L.P., an affiliate of Reich & Tang Asset Management L.P. as servicing
agent to the Funds.
Fees are paid to Directors of the Company who are unaffiliated with the
Managers, the Distributor or the Administrator on the basis of $2,000 per annum
plus $500 per meeting attended.
3. Capital Stock
At May 31, 1995, there were 20,000,000,000 shares of $.001 par value stock
authorized and capital paid in for the Money Fund, the New York Bond Fund, the
New Jersey Bond Fund and the Taxable Bond Fund amounted to $51,628,562, and
$90,724,387, $2,609,805 and $5,106,697, respectively. Transactions in capital
stock were as follows:
<TABLE>
<CAPTION>
Lebenthal New York Tax Free Money Fund Lebenthal New York Tax Free Money Fund
Six Months Ended Year Ended
May 31, 1995 November 30, 1994
-------------------------------------- --------------------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold.................................. 127,865,925 $ 127,865,925 181,240,729 $ 181,240,729
Issued on reinvestment of dividends... 718,806 718,806 870,979 870,979
Redeemed.............................. (124,809,711) (124,809,711) (181,873,880) (181,873,880)
----------- ----------- ----------- -----------
Net increase (decrease)............... 3,775,020 $ 3,775,020 237,828 $ 237,828
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Lebenthal New York Municipal Bond Fund Lebenthal New York Municipal Bond Fund
Six Months Ended Year Ended
May 31, 1995 November 30, 1994
-------------------------------------- --------------------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold.................................. 1,511,626 $ 11,308,747 3,069,379 $ 23,445,492
Issued on reinvestment of dividends... 283,991 2,092,403 528,597 3,988,593
Redeemed.............................. ( 1,028,810) ( 7,506,726) ( 2,631,314) ( 19,605,314)
---------- ----------- ---------- -----------
Net increase (decrease)............... 766,807 $ 5,894,424 966,662 $ 7,828,771
========== =========== ========== ===========
</TABLE>
- -------------------------------------------------------------------------------
<PAGE>
20
- -------------------------------------------------------------------------------
LEBENTHAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
3. Capital Stock (Continued)
<TABLE>
<CAPTION>
Lebenthal New Jersey Municipal Bond Fund Lebenthal New Jersey Municipal Bond Fund
Six Months Ended Year Ended
May 31, 1995 November 30, 1994
---------------------------------------- ----------------------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold.................................. 152,596 $ 966,014 378,649 $ 2,606,421
Issued on reinvestment of dividends... 7,068 44,523 9,222 59,421
Redeemed.............................. ( 150,847) ( 905,920) ( 27,061) ( 160,654)
-------- ---------- -------- ---------
Net increase (decrease)............... 8,817 $ 104,617 360,810 $ 2,505,188
======== ========== ======== =========
</TABLE>
<TABLE>
<CAPTION>
Lebenthal Taxable Municipal Bond Fund Lebenthal Taxable Municipal Bond Fund
Six Months Ended Year Ended
May 31, 1995 November 30, 1994
------------------------------------- -------------------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold.................................. 426,582 $ 2,837,769 502,012 $ 3,537,995
Issued on reinvestment of dividends... 13,056 85,821 12,689 85,390
Redeemed.............................. ( 180,811) ( 1,157,870) ( 43,347) ( 282,408)
-------- ---------- -------- --------
Net increase (decrease)............... 258,827 $ 1,765,720 471,354 $ 3,340,977
======== ========== ======== =========
</TABLE>
4. Investment Transactions
Purchases of investment securities for the New York Bond Fund, the New Jersey
Bond Fund, and the Taxable Bond Fund, other than short term obligations, were
$98,635,571, $1,098,409 and 3,018,609, respectively. Sales of investment
securities for the New York Bond Fund, the New Jersey Bond Fund and the Taxable
Bond Fund, other than short term obligations, were $76,402,915, $82,431 and
$1,449,403, respectively. Accumulated undistributed realized gains(losses) at
May 31, 1995 amounted to ($12,084), ($4,494,279), ($316,668) and ($292,369) for
the Money Fund, the New York Bond Fund, the New Jersey Bond Fund and the Taxable
Bond Fund, respectively. Tax basis capital losses which may be carried forward
to offset future capital gains through November 30, 2002 amounted to ($3,916),
($4,604,182), ($315,519) and ($246,621) for the Money Fund, the New York Bond
Fund, the New Jersey Bond Fund, and the Taxable Bond Fund, respectively.
5. Concentration of Credit Risk
The Money Fund and the New York Bond Fund invest primarily in obligations of
political subdivisions of the state of New York and the New Jersey Bond Fund
invests primarily in obligations of political subdivisions of the state of New
Jersey and accordingly these funds are subject to the risk associated with the
non-performance of such issuers. Approximately 66% of the investments of the
Money Fund are further secured, as to principal and interest, by letters of
credit issued by financial institutions. The Fund maintains a policy of
monitoring its exposure by reviewing the creditworthiness of the issuers, as
well as that of the financial institutions issuing the letters of credit, and by
limiting the amount of holdings with letters of credit from one financial
institution.
- -------------------------------------------------------------------------------
<PAGE>
21
- -------------------------------------------------------------------------------
6. Selected Financial Information:
<TABLE>
<CAPTION>
Lebenthal New York
Tax Free Money Fund
-----------------------------------------------------------------------------------
Six Months
Ended Year Year Year December 24, 1990
May 31, 1995 Ended Ended Ended (Inception) to
(Unaudited) November 30, 1994 November 30, 1993 November 30, 1992 November 30, 1991
----------- ----------------- ----------------- ----------------- -----------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<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.............. .014 0.018 0.016 0.025 0.029
Net realized and unrealized
gain on investments............ -- -- -- -- --
------- ------- ------ ------ -------
Total from investment operations... .014 0.018 0.016 0.025 0.029
------- ------- ------ ------ -------
Less distributions:
Dividends from net investment income ( .014) ( 0.018) ( 0.016) ( 0.025) ( 0.029)
Distributions from net realized
gain on investments............ -- -- -- -- --
------- ------- ------- ------- ------
Total distributions................ ( .014) ( 0.018) ( 0.016) ( 0.025) ( 0.029)
------- ------- ------- ------- -------
Net asset value, end of period..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return
(without deduction of sales load) 2.88%* 1.82% 1.66% 2.54% 3.54%*
Ratios/Supplemental Data
Net assets, end of period (000).... $ 51,616 $ 47,850 $ 47,611 $ 50,941 $ 45,618
Ratios to average net assets:
Expenses.......................... 1.05%*++ 0.99%++ 0.89%++ 0.89%++ 0.58%*++
Net investment income............ 2.83%*++ 1.80%++ 1.65%++ 2.48%++ 3.74%*++
Portfolio turnover............... -- -- -- -- --
</TABLE>
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<PAGE>
22
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LEBENTHAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Lebenthal New York
Municipal Bond Fund
--------------------------------------------------------------------------------------
Six Months
Ended Year Year Year June 24, 1991
May 31, 1995 Ended Ended Ended (Inception) to
(Unaudited) November 30, 1994+++ November 30, 1993 November 30, 1992 November 30, 1991
----------- -------------------- ----------------- ----------------- -----------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 6.84 $ 8.03 $ 7.54 $ 7.19 $ 7.16
------- ------- ------- -------- -------
Income from investment operations:
Net investment income.............. 0.22 0.41 0.44 0.47 0.14
Net realized and unrealized
gain/(loss) on investments .... .94 ( 1.15) 0.50 0.35 0.03
------- ------- ------- --------- -------
Total from investment operations... 1.16 ( .74) 0.94 0.82 .17
------- ------- ------- --------- -------
Less distributions:
Dividends from net investment income ( .22) ( 0.41) ( 0.44) ( 0.47) ( 0.14 )
Distributions from net realized
gain on investments............ -- ( 0.04) ( 0.01) -- --
------- ------- ------- --------- -------
Total distributions................ ( .22) ( 0.45) ( 0.45) ( 0.47) ( 0.14)
------- ------- ------- --------- -------
Net asset value, end of period..... $ 7.78 $ 6.84 $ 8.03 $ 7.54 $ 7.19
======= ======= ======= ========= =======
Total Return
(without deduction of sales load) 17.08%+ ( 9.62%) 12.63% 11.68% 2.36%+
Ratios/Supplemental Data
Net assets, end of period (000).... $91,643 $75,326 $80,727 $39,350 $14,549
Ratios to average net assets:
Expenses.......................... .91%* 0.64%++ 0.20%++ 0.17%++ 0%*++
Net investment income............ 5.87%* 5.44%++ 5.42%++ 6.08%++ 6.08%*++
Portfolio turnover............... 87.52% 192.91% 7.88% 8.14% 0%
* Annualized. + Not Annualized
++ Management, shareholder servicing, and distribution fees for the Money Fund
of .25%, .25%, .34%, .34% and .66% of average net assets, respectively,
were waived during each period. For the New York Bond Fund advisory,
management, administration, and distribution fees of .00%, .38%, .58%, .62%
and .775% of average net assets, respectively, were waived during each
period; and expenses were reimbursed equivalent to .00%, .08%, .34%, .65%
and 1.78% of average net assets. For the New Jersey Bond Fund advisory,
management, administration and distribution fees of .63% and .68% of
average net assets, respectively, were waived during the period and
expenses were reimbursed equivalent to 4.39% and 3.55% of average net
assets, respectively. For the Taxable Bond Fund advisory, management,
administration and distribution fees of .63% and .68% of average net
assets, respectively, were waived during the period; and expenses were
reimbursed equivalent to 2.66% and 2.32% of average net assets,
respectively.
+++ Effective August 15, 1994, Lebenthal Asset Management, Inc. replaced J. &
W. Seligman & Co. Incorporated as advisor to the Funds.
</TABLE>
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<PAGE>
23
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===============================================================================
6. Selected Financial Information:
<TABLE>
<CAPTION>
Lebenthal New Jersey Lebenthal Taxable
Municipal Bond Fund Municipal Bond Fund
----------------------------------- -----------------------------------------
Six Months Six Months
Ended Year Ended Year
May 31, 1995 Ended May 31, 1995 Ended
(Unaudited) November 30, 1994+++ (Unaudited) November 30, 1994+++
---------- -------------------- ---------- --------------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 5.95 $ 7.16 $ 6.34 $ 7.16
------ ------ ------- ------
Income from investment operations:
Net investment income.............. 0.18 0.32 0.27 0.44
Net realized and unrealized
gain on investments ........... 0.59 ( 1.21) 0.51 ( 0.82)
------ ----- ------ ------
Total from investment operations... 0 .77 ( 0.89) 0.78 ( 0.38)
------ ----- ------- ------
Less distributions:
Dividends from net investment income ( 0 .18) ( 0.32) ( 0.27) ( 0.44)
Distributions from net realized
gain on investments............ -- -- -- --
------ ------ ------- ------
Total distributions................ ( 0 .18) ( 0.32) ( .27) ( 0.44)
------ ------ ------- -----
Net asset value, end of period..... $ 6.54 $ 5.95 $ 6.85 $ 6.34
====== ======= ======= =======
Total Return
(without deduction of sales load) 13.03%+ ( 12.70%) 12.50%+ ( 5.45%)
Ratios/Supplemental Data
Net assets, end of period (000).... $2,417 $2,145 $5,003 $2,990
Ratios to average net assets:
Expenses.......................... 0.60%*++ 0.60%++ .60%*++ 0.60%++
Net investment income............ 5.63%*++ 4.97%++ 7.87%*++ 6.74%++
Portfolio turnover............... 4.67% 291.60% 46.70% 93.73%
* Annualized + Not Annualized
++ Management, shareholder servicing, and distribution fees for the Money Fund
of .25%, .25%, .34%, .34% and .66% of average net assets, respectively,
were waived during each period. For the New York Bond Fund advisory,
management, administration, and distribution fees of .00%, .38%, .58%, .62%
and .775% of average net assets, respectively, were waived during each
period; and expenses were reimbursed equivalent to .00%, .08%, .34%, .65%
and 1.78% of average net assets. For the New Jersey Bond Fund advisory,
management, administration and distribution fees of .63% and .68% of
average net assets, respectively, were waived during the period and
expenses were reimbursed equivalent to 4.39% and 3.55% of average net
assets, respectively. For the Taxable Bond Fund advisory, management,
administration and distribution fees of .63% and .68% of average net
assets, respectively, were waived during the period; and expenses were
reimbursed equivalent to 2.66% and 2.32% of average net assets,
respectively.
+++ Effective August 15, 1994, Lebenthal Asset Management, Inc. replaced J. &
W. Seligman & Co. Incorporated as advisor to the Funds.
</TABLE>
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<PAGE>
24
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===============================================================================
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This report is submitted for the general information of the shaerholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information.
- -------------------------------------------------------------------------------
Lebenthal Funds, Inc.
120 Broadway
New York, New York 10271
(212) 425-6116
Distributor and
Shareholder Servicing Agent
Lebenthal & Co., Inc.
120 Broadway
New York, New York 10271
[Cover Graphic Omitted}
