LEBENTHAL FUNDS, INC.
SEMI-ANNUAL REPORT
MAY 31, 1996
(UNAUDITED)
LEBENTHAL
THEWORKHORSEOFINVESTMENTS.
LEBENTHAL FUNDS, INC.
120 BROADWAY, NEW YORK, NY 10271
212-425-6116
OUTSIDE NYC TOLL FREE 1-800-221-5822
_______________________________________________________________________________
Dear Shareholder:
The Lebenthal Bond Funds continue to do very well versus their peer funds. For
the 14 months ended May 31, 1996, on a rolling 12-month basis, the $113 million
Lebenthal New York Municipal Bond Fund was the best performing fund among its
peers for ten months and a close number two for four months out of 95 funds
followed by Lipper Analytical Services, Inc.
The total return statistics of the three Lebenthal Funds for the year ended May
31, 1996 were as follows: 4.97% for the New York Fund, 5.25% for the New Jersey
Fund, and 6.84% for the Taxable Municipal Bond Fund. These figures do not
reflect the maximum 4.5% sales charge. Taking that into account, an investor
who put $1,000 into each of the funds on June 1, 1995, reinvested the monthly
dividends, and sold on May 31, 1996, would have offset the full sales charge
and still have received $1,002.00 from the New York Fund, $1,004.90 from the
New Jersey Fund, and $1,020.70 from the Taxable Fund.
The performance records of the $4.4 million New Jersey and $13.1 million
Taxable Municipal Bond Funds relative to their peers have also been excellent.
Although the New Jersey Fund was not ranked by Lipper, New Jersey's 5.25% total
return for the year was higher than the comparable total return of any of the
New Jersey funds followed by Lipper. The Taxable Fund's 6.84% total return
cannot be directly compared to any Lipper fund category because it is the only
taxable municipal bond fund. However, the average return of the Lipper fund
grouping that most closely approximates it definitionally, "A-rated Corporate
Debt Funds", was 3.45% for the 12 months ended May 31, which obviously is much
lower than our 6.84% return.
We are also pleased with the 15.84% total return (without load and not
annualized) of the Lebenthal New York Fund for the three years ended May 31,
1996. This return placed it number six out of 55 New York funds followed by
Lipper and which had been in existence for the entire period.
The total return of each Lebenthal Municipal Bond Fund, assuming a full 4.5%
load, from inception through May 31, 1996, was (a) 36.5% (not annualized) for
the New York Fund (inception June 24, 1991); (b) (0.86%) for the Lebenthal New
Jersey Bond Fund (inception December 1, 1993); and (c) 8.49% for the Lebenthal
Taxable Fund (inception December 1, 1993).
The SEC yield of the three Funds at their May 31, 1996 offering prices were:
New York, 5.00%; New Jersey, 5.28%; and Taxable, 7.26%. The definition of SEC
yield is the annualized current return including sales charge for the 30-day
period prior to a named date divided by the average public offering price for
the same period.
We entered 1996 with the almost universal view that the economy was either
in-or about to enter-a recession. The actual performance of the economy
surprised most economists and investors. The confusion came about because of
the (1) bitter cold winter which slowed economic activity in the northeast
where the majority of the most widely quoted and visible economists reside, and
(2) the several Federal government shutdowns which caused the misreporting of
employment figures. The economists were misled by the near cessation of growth
in the Northeast, which they were personally experiencing, and, thus, did not
realize that economic growth was accelerating in the rest of the
country-particularly in California. It is unlikely that our economist friends
would have missed this dichotomy in other years because they would have had
timely and reasonably accurate Federal government reports on the whole economy.
But, this year, the only economic reports available up until March were late
and proved to be inaccurate and/or misleading. Even the Federal Reserve Board
was fooled-as shown by their continuing easing of monetary policy.
As investors, particularly those that were leveraged, realized that real GDP
growth was running above 3.0% and that the unemployment rate had dropped to
below the 5.5% range which has in the past caused excessive wage inflation,
they sold bonds with a vengeance-particularly since the prices of commodities
and gold were up strongly due to problems in the oil, copper, and grain
markets. Between 1995 year end and the May 31 date of this report, the
yield-to-maturity on the 30-year treasury rose from 6.01% to 7.18% which is
equivalent to a price decrease of 13.4%.
Under normal circumstances, an increase in short rates by the Federal Reserve
could have been expected. But because Mr. Greenspan and two other potential
Board members were under severe Congressional scrutiny during the nomination
approval process, it would have taken the "white of inflation's eyes" to
trigger an increase in short rates. With manufacturers and retailers unable to
pass along increases in costs, the clear and present evidence of inflation did
not exist. And the Federal Funds rate has held at 5 1/4% since the Fed's last
easing from 5 1/2% on January 31, 1996.
We think that the economy will likely continue to expand-although at a slower
rate of growth than the current estimated 4% inflation adjusted rate-for the
remainder of this year and well into 1997. For one thing, it appears that
exports should begin expanding due to what appears to be incipient economic
recoveries in Europe, Japan and Mexico. And, consumers are expanding their
spending, most particularly for automobiles and light trucks fueled partially
by the $1 trillion provided to them by the rise in the stock market over the
last couple of years. Moreover, the inventory adjustment, which had been one of
the major reasons for the slowdown in the economy around year end, appears to
have run its course.
Although there has been little effect thus far, the housing industry could
prove to be a drag on the economy because home buyers have proven to be very
sensitive to large increases in mortgage rates such as the rise from 7.00% to
8.30% which has occurred this year. A downturn in housing would have
substantial ripple effects through out the economy. Another potential problem
that could derail the consensus forecast of comfortable economic expansion is
the possibility of an extended strike in the automobile industry which would
meaningfully reduce economic prospects for the whole economy.
What does our favorable outlook for the economy mean for inflation and interest
rates and the performance of your funds? We think that inflation will stay at
or below the current 3% rate over the next year because of the ease of
obtaining goods overseas at favorable prices particularly since the dollar is
up strongly versus our trading partners. Also, many commodity prices and gold
have recently started falling. Furthermore, other than for the debate over
passage of the minimum wage, there is minimal evidence of any meaningful
wage-push inflation nor do we think such is likely.
Our quiescent inflation forecast leads me to conclude that the Federal Reserve
is unlikely to meaningfully increase short-term rates this year, particularly
since it is a Presidential election year. But, the yields on longer treasuries
could increase 25-50 basis points during the remainder of the year based upon
(1) the perception of a continually strengthening world economy; (2) a larger
supply of long treasuries; (3) lessened demand for US debt due to the
substantive increase in the value of the dollar versus other currencies.
In the economic environment just described, caution is advisable. Thus, we are
continuing to follow the same strategy that has thus far allowed us to
outperform most of our peer funds over the last year as described in the
opening paragraphs of this report. That strategy is to stay fully-invested in
high-quality, liquid instruments with current or premium coupons. Yes, it would
be more cautious to keep a substantive cash reserve but we believe that you
bought a bond fund with the idea that it would be mostly invested in bonds. In
any case, I have learned that successfully forecasting interest-rate inflection
points is almost impossible-so I believe in being fully invested at almost all
times.
The performance of tax-free bonds this year has been remarkable. In general,
the prices of long municipal bonds have outperformed the prices of long taxable
bonds by 3.5%. Really, all that happened was that the public returned to
tax-frees after (a) deciding that passage of a flat tax was unlikely and (b)
largely completing the desired increase in the allocation of assets to equities
that has fueled the equity markets over the last couple of years. On top of
heavy demand by the public has been a substantial increase in the purchase of
tax-free instruments by insurance companies due to increased profitability.
This increased demand has come at a time of decreased supply of new issuance by
municipalities complicated by a reduction in the outstanding amount of
municipal bonds due to calls and maturities. We expect this favorable
supply/demand outlook to continue and, thus, we don't think there will be
meaningful extended decreases in the prices of the Lebenthal New York and
Lebenthal New Jersey Municipal Bond Funds this year even if the price of the
long treasury should fall 2.0%-4.0% as I suggested earlier might occur.
Please be mindful that the information and statistics included in this
commentary are not guaranteed. However, they have been obtained from reliable
sources and are believed to be accurate.
We thank you for the opportunity to be of service.
Very truly yours,
James L. Gammon
President
Lebenthal Asset Management, Inc.
LEBENTHAL NEW YORK MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
MAY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
<TABLE>
<CAPTION>
RATINGS
FACE ------------------
AMOUNT VALUE STANDARD
- ----------- (NOTE 1) MOODY'S & POOR'S
MUNICIPAL BONDS (90.61%) -------------------------------
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
$ 1,285,000 Monroe County, New York IDA Civic Facility (DePaul Community Facility),
6.50%, due 02/01/24, (SONYMA Insured) $ 1,324,951 Aa
300,000 New York, New York - Series A, General Obligation, 7.75%, due 08/15/13 329,691 Baa1 BBB+
2,350,000 New York, New York - Series C, General Obligation, 7.25%, due 08/15/24 2,463,364 Baa1 BBB+
6,700,000 New York, New York - Series F, General Obligation, 6.625%, due 02/15/25 6,643,854 Baa1 BBB+
2,400,000 New York State Dormitory Authority, 7.40%, due 08/01/30, (FHA Insured) 2,653,536 Aa AAA
7,255,000 New York State Dormitory Authority (Highlands Center),
6.60%, due 02/01/34, (FHA Insured) 7,459,664 AA
2,330,000 New York State Dormitory Authority (Presbyterian Residential Community),
6.50%, due 08/01/34, (FHA Insured) 2,381,889 AA
750,000 New York State Dormitory Authority (State University Educational
Facilities), 7.00%, due 05/15/16 795,255 Baa1 BBB+
3,900,000 New York State Dormitory Authority (Nottingham Retirement Community),
6.125%, due 07/01/25, (SONYMA Insured) 3,850,197 Aa
3,500,000 New York State Dormitory Authority (Jewish Geriatric),
7.35%, due 08/01/29, (FHA Insured) 3,873,100 AAA
5,190,000 New York State Dormitory Authority (Niagara Frontier Home),
6.40%, due 02/01/35, (FHA Insured) 5,257,470 AA
4,755,000 New York State Dormitory Authority (Geneva Nursing Home II),
6.20%, due 08/01/35, (FHA Insured) 4,651,864 AA
4,710,000 New York State Dormitory Authority (Lakeside Memorial Hospital),
6.00%, due 02/01/21, (FHA Insured) 4,568,135 AAA
3,500,000 New York State Dormitory Authority (St. Johns Health),
6.25%, due 02/01/36, (FHA Insured) 3,499,615 AA
1,000,000 New York State Dormitory Authority (St. Lukes Home Residential Health),
6.375%, due 08/01/35, (FHA Insured) 1,009,830 AA
1,000,000 New York State Energy Research & Development Authority -
Industrial Development & Pollution Control (Brooklyn Union and Gas),
6.75%, due 02/01/24, (MBIA Insured) 1,055,100 Aaa AAA
6,000,000 New York State Energy Research & Development Authority - Electric
Facilities (Consolidated Edison Company of New York), 6.75%, due 01/15/27 6,195,540 A1 A+
1,000,000 New York State Energy Research & Development Authority - Electric
Facilities (Long Island Lighting), 7.15%, due 02/01/22 984,620 Ba1 BB+
500,000 New York State Energy Research & Development Authority-Pollution Control
(Niagara Mohawk Power Corporation), 6.625%, due 10/01/13, (FGIC Insured) 534,575 Aaa AAA
</TABLE>
See Notes to Financial Statements.
LEBENTHAL NEW YORK MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MAY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
<TABLE>
<CAPTION>
RATINGS
FACE -----------------
AMOUNT VALUE STANDARD
- --------- (NOTE 1) MOODY'S & POOR'S
MUNICIPAL BONDS (CONTINUED) ------------------------------
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
$ 550,000 New York State Environmental Facility Corp. Pollution Control -
(State Water Revolving Fund - Series C), 7.20%, due 03/15/11 $ 597,636 Aa A+
1,750,000 New York State Medical Hospital Nursing Facilities Finance Agency,
6.60%, due 02/15/31, (FHA Insured) 1,808,223 AAA
1,500,000 New York State Housing Finance Agency MHRB - Series C,
6.50%, due 08/15/24, (FHA Insured) 1,528,425 Aa AAA
3,400,000 New York State Housing Finance Agency (Phillips Village Project -
Series A), 7.75%, due 08/15/17, (FHA/SONYMA Insured) 3,741,530 A
6,750,000 New York State Medical Care Facilities Finance Agency - Series B,
6.60%, due 08/15/34, (FHA Insured) 6,935,692 Aa AA
175,000 New York State Medical Care Facilities Finance Agency,
7.30%, due 02/15/21 190,298 Baa1 BBB+
5,300,000 New York State Medical Care Facilities Finance Agency,
6.90%, due 08/15/34, (AMBAC/FHA Insured) 5,711,280 Aaa AAA
6,950,000 New York State Medical Care Facilities Finance Agency - Series C,
6.375%, due 08/15/29, (FHA Insured) 7,027,075 Aa AA
500,000 New York State Medical Care Facilities Finance Agency
(New York Downtown Hospital - Series A), 6.70%, due 02/15/12 504,110 Baa BBB
2,600,000 New York State Medical Care Facilities Finance Agency
(New York Downtown Hospital - Series A), 6.80%, due 02/15/20 2,625,220 Baa BBB
2,505,000 New York State Medical Care Facilities Finance Agency
(Mortgage Project - Series A), 6.50%, due 02/15/35, (FHA Insured) 2,562,865 Aa AA
2,000,000 New York State Medical Care Facilities Finance Agency
(Brookdale Hospital Medical Center - Series A), 6.80%, due 08/15/12 2,034,700 Baa BBB
2,550,000 New York State Medical Care Facilities Finance Agency
(Brookdale Hospital Medical Center - Series A), 6.85%, due 02/15/17 2,603,932 Baa BBB
5,000,000 New York State Medical Care Facilities Finance Agency
(Mortgage Project - Series D), 6.375%, due 02/15/35, (FHA Insured) 5,049,250 Aa AA
------------
TOTAL MUNICIPAL BONDS (COST $99,671,894) 102,452,486
</TABLE>
See Notes to Financial Statements.
LEBENTHAL NEW YORK MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MAY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- (NOTE 1)
CLOSED-END FUNDS (7.50%) --------
_________________________________________________________________________________________________________
<S> <C> <C>
$ 5,000 Blackrock New York Investment Quality Municipal Trust $ 59,375
212,855 Intercapital New York Quality Municipal Securities 2,368,012
57,463 Munivest New York Insured Fund 646,459
114,353 Muniyield New York Insured Fund 1,643,824
264,705 Muniyield New York Insured Fund II 3,408,077
11,300 Muniyield New York Insured Fund III 139,837
7,155 Nuveen New York Select Quality Municipal Fund 111,797
10,000 Taurus Muni New York Holdings 107,500
TOTAL CLOSED-END FUNDS (COST $8,356,905) 8,484,881
TOTAL INVESTMENTS (98.11%)(COST $108,028,799+) 110,937,367
CASH AND OTHER ASSETS, NET OF LIABILITIES (1.89%) 2,131,888
NET ASSETS (100.00%) $113,069,255
</TABLE>
+ Aggregate cost for federal income tax purposes is $108,049,059.
Aggregate unrealized appreciation and depreciation, based on cost for
federal income tax purposes, are $3,256,464 and $368,156, respectively,
resulting in net unrealized apprecation of $2,888,308.
KEY:
AMBAC = Ambac Indemnity Corporation
FGIC = Federal Guaranty Insurance Corporation
FHA = Federal Housing Administration
MBIA = Municipal Bond Insurance Association
MHRB = Multi-family Housing Revenue Bond
SONYMA = State of New York Mortgage Agency
See Notes to Financial Statements.
LEBENTHAL NEW JERSEY MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
MAY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
<TABLE>
<CAPTION>
RATINGS
FACE -----------------
AMOUNT VALUE STANDARD
- ------------ (NOTE 1) MOODY'S & POOR'S
MUNICIPAL BONDS (84.84%) -----------------------------
___________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
$ 125,000 Cape May County, New Jersey Industrial Pollution Control Financing Authority
Atlantic City Electric Company Project A, 7.20%, due 11/01/29, (MBIA Insured) $ 138,948 Aaa AAA
100,000 Delaware River Junction Toll Bridge Commonwealth of Pennsylvania Bridge,
6.00%, due 07/01/18, (FGIC Insured) 99,751 Aaa AAA
70,000 Essex County, New Jersey Import Authority Orange School District - Series A,
6.95%, due 07/01/14, (MBIA Insured) 77,131 Aaa AAA
100,000 Irvington, New Jersey Housing & Mortgage Finance Authority,
6.50%, due 02/01/24, (FHA Insured) 101,174 AAA
100,000 New Jersey Economic Development Authority Economic Development Revenue -
American Airlines Inc. Project, 7.10%, due 11/01/31 104,645 Baa2 BB+
250,000 New Jersey Economic Development Authority,
Economic Development Revenue -Bancroft Incorporated Obligation Group,
6.05%, due 12/01/25, (Connie Lee Insured) 246,280 AAA
150,000 New Jersey Economic Development Authority, Economic Development Revenue
Refunding - Burlington Coat Factory, LOC First Fidelity Bank,
6.125%, due 09/01/10 153,039 Aa3
150,000 New Jersey Economic Development Authority, Economic Development Revenue -
W.Y. Urban Holding Company, LOC NatWest Bank, Jersey City,
6.50%, due 06/01/15 154,541 A
100,000 New Jersey Economic Development Authority Pollution Control Revenue
PSE&G Co. Project, 6.40%, due 05/01/32, (MBIA Insured) 102,276 Aaa AAA
100,000 New Jersey Economic Development Authority Water Facilities Revenue Project A,
6.875%, due 11/01/34, (FGIC Insured) 106,938 Aaa AAA
100,000 New Jersey Economic Development Authority - Economic Growth -
Series D, LOC NatWest Bank, Jersey City, 6.55%, due 08/01/14, Subject to AMT 101,920 A
100,000 New Jersey Economic Development Authority Revenue Sewer Facilities-
Anheuser-Busch Project, 5.85%, due 12/01/30 92,775 A1 AA-
85,000 New Jersey Health Care Facilities Financing Authority - Irvington General
Hospital Issue - Series 1994, 6.40%, due 08/01/25, (FHA Insured) 85,749 AAA
125,000 New Jersey Health Care Facilities Financing Authority - General
Hospital Center at Passaic, 6.75%, due 07/01/19, (FSA Insured) 133,765 Aaa AAA
100,000 New Jersey Health Care Facilities Financing Authority - Monmouth
Medical Center Issue - Series C, 6.25%, due 07/01/24, (FSA Insured) 102,396 Aaa AAA
100,000 New Jersey Health Care Facilities Financing Authority - Newark
Beth Israel Medical Center, 6.00%, due 07/01/24, (FSA Insured) 99,724 Aaa AAA
</TABLE>
See Notes to Financial Statements.
LEBENTHAL NEW JERSEY MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MAY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
<TABLE>
<CAPTION>
RATINGS
FACE -----------------
AMOUNT VALUE STANDARD
- ------------ (NOTE 1) MOODY'S & POOR'S
MUNICIPAL BONDS(CONTINUED) -----------------------------
___________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
$ 150,000 New Jersey State Education Facilities Authority - Trenton State
College - Series E, 6.00%, due 07/01/19, (AMBAC Insured) $ 150,276 Aaa AAA
100,000 New Jersey State Education Facilities Authority - New Jersey
Institute Tech. Issue - Series A, 6.00%, due 07/01/24, (MBIA Insured) 100,219 Aaa AAA
125,000 New Jersey State Housing & Mortgage Finance Agency MHRB
Refunding - Presidential Plaza, 7.00%, due 05/01/30, (FHA Insured) 129,737 AAA
300,000 New Jersey State Housing & Mortgage Finance Agency MHRB
Series A, 6.05%, due 11/01/20, (AMBAC Insured) 300,693 Aaa AAA
125,000 New Jersey State Housing & Mortgage Finance Agency Revenue Housing -
Series A, HUD Sec 8, 6.95%, due 11/01/13 131,665 A+
150,000 New Jersey State Housing & Mortgage Finance Agency - Home
Buyers - Series O, 6.35%, due 10/01/27, (MBIA Insured), Subject to AMT 150,705 Aaa AAA
250,000 New Jersey State Housing & Mortgage Finance Agency - Home
Buyers - Series Q, 5.875%, due 04/01/17, (MBIA Insured), Subject to AMT 243,392 Aaa AAA
140,000 Newark, New Jersey Housing Finance Corporation Mortgage Revenue,
Refunding-Section 8-Manor Apartments-A, 7.50%, due 02/15/24, (FHA Insured) 150,956 AAA
100,000 Puerto Rico Housing Bank & Finance Agency Single Family Mortgage
Affordable Housing Mortgage - Portfolio I, 6.25%,
due 04/01/29, (GNMA/FNMA/FHLMA Insured), Subject to AMT 100,427 Aaa AAA
275,000 Salem County, New Jersey Industrial Pollution Control Financing Authority
Refunding, 5.55%, due 11/01/33, (MBIA Insured) 257,004 Aaa AAA
125,000 Scotch Plains Township, New Jersey Senior Citizen Housing Corporation,
5.75%, due 09/01/23 120,982 Aa
----------
TOTAL MUNICIPAL BONDS (COST $3,682,595) 3,737,108
</TABLE>
See Notes to Financial Statements.
LEBENTHAL NEW JERSEY MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MAY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- (NOTE 1)]
CLOSED-END FUNDS (9.71%) ---------
_____________________________________________________________________________________________________
<S> <C> <C>
17,835 Munivest New Jersey Fund $ 216,249
15,100 Muniyield New Jersey Fund 211,400
TOTAL CLOSED-END FUNDS (COST $425,546) 427,649
TOTAL INVESTMENTS (94.55%)(COST $4,108,141+) 4,164,757
CASH AND OTHER ASSETS, NET OF LIABILITIES(5.45%) 239,990
NET ASSETS (100.00%) $4,404,747
</TABLE>
+ Aggregate cost for federal income tax purposes is identical.
Aggregate unrealized appreciation and depreciation, based on cost for
federal income tax purposes, are $94,467 and $37,851, respectively, resulting
in net unrealized appreciation of $56,616.
KEY:
AMBAC = Ambac Indemnity Corporation
AMT = Alternative Minimum Tax
FGIC = Federal Guaranty Insurance Corporation
FHA = Federal Housing Authority
FSA = Financial Security Assurance, Inc.
FHLMA = Federal Home Loan Mortgage Association
GNMA = Government National Mortgage Association
HUD = Housing and Urban Development
LOC = Letter of Credit
MHRB = Multi-family Housing Revenue Bond
MBIA = Municipal Bond Insurance Association
FNMA = Federal National Mortgage Association
See Notes to Financial Statements.
LEBENTHAL TAXABLE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
MAY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
<TABLE>
<CAPTION>
RATINGS
FACE ------------------
AMOUNT VALUE STANDARD
- ----------- (NOTE 1) MOODY'S & POOR'S
MUNICIPAL BONDS (106.20%) -------------------------------
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
$ 150,000 All Saints Health System,
9.00%, due 08/15/24, (MBIA Insured) $159,331 Aaa AAA
585,000 Baltimore, Maryland - Series B, General Obligation,
7.90%, due 10/15/16, (FGIC Insured) 576,196 AAA AAA
1,100,000 Bastrop, Texas Economic Development Corporation,
8.00%, due 08/15/16 1,065,625 BBB+
100,000 Buffalo New York - Series F, 9.05%, due 02/01/15, (AMBAC Insured) 105,283 Aaa AAA
240,000 California Housing Finance Agency - Series C,
8.10%, due 02/01/37, (AMBAC Insured) 233,297 Aaa AAA
2,000,000 Compton California Community Redevelopment Agency - Series C,
Tax Allocation, 0.00%, due 08/01/22, (FSA Insured) 257,460 Aaa AAA
150,000 Connecticut State Health and Educational Facilities,
9.20%, due 11/01/24 165,163 A1 AA-
125,000 Connecticut State Health and Educational Facilities,
9.36%, due 11/01/24 136,300 A1 AA-
150,000 Connecticut State Health and Educational Facilities,
8.90%, due 11/01/24 160,266 A1 AA-
255,000 Connecticut State Housing Finance Authority - Series F,
9.25%, due 05/15/27 281,778 Aa AA
200,000 Connecticut State Housing Finance Authority - Series G,
7.625%, due 05/15/21 196,166 Aa AA
100,000 Connecticut State Development Authority - Subseries B1,
8.50%, due 08/15/14 100,420 A+
125,000 Conyers, Georgia Water & Sewer - Series B,
8.75%, due 07/01/15, (AMBAC Insured) 130,600 Aaa AAA
250,000 Cuyahoga County, Ohio Economic Development - Series A,
8.625%, due 06/01/22 265,557 A
1,230,000 Harrisburg, Pennsylvania - Series A, General Obligation,
0.00%, due 04/01/18, (AMBAC Insured) 222,347 Aaa AAA
1,165,000 Harrisburg, Pennsylvania - Series A, General Obligation,
0.00%, due 04/01/19, (AMBAC Insured) 194,730 Aaa AAA
610,000 Harrison County, Mississippi - Series A, General Obligation,
7.75%, due 04/01/16, (MBIA Insured) 604,663 Aaa
150,000 Idaho Housing Agency, HUD Section 8, 8.50%, due 07/01/09 153,030 A
</TABLE>
See Notes to Financial Statements.
LEBENTHAL TAXABLE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MAY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
<TABLE>
<CAPTION>
RATINGS
FACE -----------------
AMOUNT VALUE STANDARD
- --------- (NOTE 1) MOODY'S & POOR'S
MUNICIPAL BONDS (CONTINUED) ------------------------------
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
$ 150,000 Illinois Housing Development Authority,
8.64%, due 12/01/21, (AMBAC Insured) $153,945 Aaa AAA
500,000 Illinois Housing Development Authority - Series 8,
8.52%, due 09/01/31, (AMBAC Insured) 650,000 AAA AAA
2,180,000 Kern County, California Pension Obligation,
0.00%, due 08/15/18, (MBIA Insured) 390,176 Aaa AAA
325,000 Maryland State Community Development Administration,
9.10%, due 05/15/10, (MHF Insured) 348,511 Aa
150,000 Memorial Health System, (MBIA Insured) 8.375%, due 10/01/20 152,929 Aaa AAA
200,000 Michigan State Housing Development Authority - Series A,
8.30%, due 11/01/15, (AMBAC Insured) 205,186 Aaa AAA
190,000 Minnesota State Housing Finance Agency - Series A,
8.70%, due 08/01/22 196,154 AA
60,000 Minnesota State Housing Finance Agency - Series B,
8.00%, due 02/01/18 60,436 AA
50,000 Minnesota State Housing Finance Agency,
8.05%, due 01/01/12 50,065 Aa AA+
600,000 Mississippi Hospital Equipment and Facilities,
9.10%, due 04/01/06 592,236 Baa
90,000 New Hampshire State Housing and Finance Authority - Series C,
9.40%, due 07/01/14 98,155 Aa
240,000 New Jersey State Housing and Mortgage Finance Agency - Series E,
8.95%, due 11/01/12 250,320 A+
180,000 New York, New York - Series D, General Obligation, 9.625%, due 08/01/10 196,364 Baa1 BBB+
40,000 New York, New York - Series D, General Obligation, 9.90%, due 02/01/10 46,159 Baa1 BBB+
250,000 New York State Environment Facilities - Series A,
9.625%, due 03/15/21 270,932 Baa1 BBB
300,000 New York State Housing Finance Agency - Series B,
8.25%, due 05/15/35, (FHA Insured) 300,408 AAA
110,000 New York State Housing Finance Agency - Series B,
8.60%, due 03/15/04 114,137 Baa1 BBB
850,000 North Carolina Housing Finance Agency - Series I,
7.85%, due 07/01/16, (FHA Insured) 828,172 Aa AA
100,000 Pittsburgh, Pennsylvania Urban Redevelopment Authority,
9.07%, due 09/01/14, (FSA Insured) 109,642 Aaa AAA
</TABLE>
See Notes to Financial Statements.
LEBENTHAL TAXABLE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MAY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
<TABLE>
<CAPTION>
RATINGS
FACE -----------------
AMOUNT VALUE STANDARD
- --------- (NOTE 1) MOODY'S & POOR'S
MUNICIPAL BONDS (CONTINUED) ------------------------------
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
$ 300,000 Sacramento County, California, 0.00%, due 08/15/21, (MBIA Insured) $ 238,851 Aaa AAA
120,000 Southeastern Pennsylvania Transit Authority - Series B,
8.75%, due 03/01/20, (FGIC Insured) 128,167 Aaa AAA
300,000 Tampa Florida Sports Authority,
8.07%, due 10/01/26, (MBIA Insured) 303,180 Aaa AAA
375,000 Texas State Department of Housing & Community Affairs- Series C1,
7.76%, due 09/01/17, (MBIA Insured) 353,085 Aaa AAA
550,000 Texas State, General Obligation, 7.35%, due 12/01/21 519,882 A
1,050,000 United Nations Development Corporation,
8.80%, due 07/01/26 1,055,754 A
600,000 Virginia State Housing Development Authority - Series A,
8.00%, 07/01/29 587,658 Aa1 AA+
365,000 Virginia State Housing Development Authority - Series A,
8.125%, due 11/01/15 369,219 Aa AA+
350,000 Wisconsin Housing & Economic Development Authority - Series H,
7.875%, due 03/01/26 338,461 Aa AA
-----------
TOTAL MUNICIPAL BONDS (COST $14,004,820) 13,916,396
</TABLE>
<TABLE>
<CAPTION>
COMMERCIAL PAPER (1.26%)
________________________________________________________________________________________________________________________
<S> <C> <C>
164,600 Ford Motor Credit Company, 5.274%, due 06/05/96 164,600
(COST $164,600)
TOTAL INVESTMENTS (107.46%)(COST $14,169,420+) 14,080,996
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS (-7.46%) (976,902)
NET ASSETS (100.00%) $13,104,094
</TABLE>
+ Aggregate cost for federal income tax purposes is $14,175,279.
Aggregate unrealized appreciation and depreciation, based on cost for
federal income tax purposes, are $196,490 and $290,773, respectively, resulting
in net unrealized depreciation of $94,283.
KEY:
AMBAC = Ambac Indemnity Corporation
FGIC = Federal Guaranty Insurance Corporation
FHA = Federal Housing Authority
FSA = Financial Security Assurance, Inc.
HUD = Housing and Urban Development
MBIA = Municipal Bond Insurance Association
MHF = Maryland Housing Fund
See Notes to Financial Statements.
LEBENTHAL FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
<TABLE>
<CAPTION>
LEBENTHAL NEW YORK LEBENTHAL NEW JERSEY LEBENTHAL TAXABLE
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment in securities
at value (cost $108,028,799,
$4,108,141 and $14,169,420) $110,937,367 $4,164,757 $14,080,996
Cash - 32,696 60,027
Receivables:
Securities sold 810,065 - -
Capital shares sold 565,073 120,120 16,487
Interest 2,027,317 66,493 227,440
Due from Manager - 34,654 28,725
Deferred organization expenses 965 19,374 15,631
Total assets 114,340,787 4,438,094 14,429,306
LIABILITIES
Payables:
Securities purchased 594,140 - 1,246,512
Capital shares redeemed 277,347 - 30
Dividends declared 310,050 13,168 49,025
Due to custodian 26,294 - -
Distribution fee payable (Note 3) 23,940 - -
Management fee payable (Note 2) 22,328 - -
Administration fee payable (Note 4) 11,996 455 1,353
Accrued Directors' fees 2,400 83 227
Accrued expenses and other liabilities 3,037 19,641 28,065
Total liabilities 1,271,532 33,347 1,325,212
NET ASSETS 113,069,255 4,404,747 13,104,094
NET ASSETS CONSIST OF:
Paid in capital 112,901,712 4,631,158 13,585,444
Par value 14,601 677 1,930
Accumulated net realized loss
on investments (2,755,626) (283,704) (394,856)
Unrealized appreciation (depreciation)
on investments - net 2,908,568 56,616 (88,424)
Total net assets $113,069,255 $4,404,747 $13,104,094
Shares outstanding (Note 5) 14,601,440 676,533 1,929,522
Net asset value, and redemption
price per share $7.74 $6.51 $6.79
Maximum offering price per share* $8.10 $6.82 $7.11
</TABLE>
* The sales charge 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.
See Notes to Financial Statements.
LEBENTHAL FUNDS, INC.
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
<TABLE>
<CAPTION>
LEBENTHAL NEW YORK LEBENTHAL NEW JERSEY LEBENTHAL TAXABLE
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest $ 3,241,377 $ 107,047 $ 396,686
Dividends 250,142 11,283 44,291
Total income 3,491,519 118,330 440,977
Expenses:
Management fee (Note 2) 129,977 4,939 14,050
Distribution fee (Note 3) 139,034 4,939 14,050
Administration fee (Note 4) 72,662 2,575 7,317
Shareholder servicing and
related shareholder expenses 108,897 17,256 19,114
Custodian fee 1,811 403 1,498
Interest 67,142 279 1,238
Legal, compliance and filing fees 37,900 8,623 7,450
Audit and accounting fees 27,430 24,377 25,906
Directors' fees 8,060 288 841
Amortization of organization
expenses (Note 1) 7,681 3,883 3,133
Other 5,172 651 1,054
Total expenses 605,766 68,213 95,651
Less: Reimbursement of expenses
by Manager (Note 2) - ( 46,346) ( 33,742)
Fees waived by Manager and
Distributor (Note 3) - ( 9,878) ( 28,100)
Fees paid indirectly (Note 1) - ( 158) ( 208)
Net expenses 605,766 11,831 33,601
Net investment income 2,885,753 106,499 407,376
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments 565,545 ( 4,975) (158,627)
Change in unrealized appreciation
(depreciation) of investments (4,144,734) (119,874) (570,016)
Net realized and unrealized
loss on investments (3,579,189) (124,849) (728,643)
Decrease in net assets from operations $( 693,436) $( 18,350) $(321,267)
</TABLE>
See Notes to Financial Statements.
LEBENTHAL FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
_______________________________________________________________________________
<TABLE>
<CAPTION>
LEBENTHAL NEW YORK MUNICIPAL LEBENTHAL NEW JERSEY MUNICIPAL
BOND FUND BOND FUND
------------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
MAY 31,1996 ENDED MAY 31,1996 ENDED
(UNAUDITED) NOV. 30,1995 (UNAUDITED) NOV. 30,1995
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income $ 2,895,893 $ 5,069,127 $ 106,499 $ 134,992
Net realized gain (loss) on
investments 555,405 1,283,011 (4,975) 36,790
Change in unrealized appreciation
(depreciation) (4,144,734) 11,953,235 (119,874) 221,012
Increase (decrease)
in net assets from operations (693,436) 18,305,373 (18,350) 392,794
Dividends from net investment income (2,885,753)* (5,069,127)* (106,499)* (134,992)*
Capital share transactions (Note 5) 11,069,357 17,016,993 1,171,713 954,934
Total increase 7,490,168 30,253,239 1,046,864 1,212,736
Net assets:
Beginning of period 105,579,087 75,325,848 3,357,883 2,145,147
End of period $113,069,255 $105,579,087 $ 4,404,747 $ 3,357,883
</TABLE>
* Designated as exempt interest dividends for federal income tax purposes.
See Notes to Financial Statements.
LEBENTHAL FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
_______________________________________________________________________________
LEBENTHAL TAXABLE MUNICIPAL
BOND FUND
----------------------------
SIX MONTHS
ENDED YEAR
MAY 31,1996 ENDED
(UNAUDITED) NOV. 30,1995
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income $ 407,376 $ 352,886
Net realized gain (loss) on
investments (158,627) 10,392
Change in unrealized appreciation
(depreciation) (570,016) 585,669
Increase (decrease)
in net assets from operations (321,267) 948,947
Dividends from net investment income (407,376) (352,886)
Capital share transactions (Note 5) 5,146,780 5,099,617
Total increase 4,418,137 5,695,678
Net assets:
Beginning of period 8,685,957 2,990,279
End of period $13,104,094 $8,685,957
See Notes to Financial Statements.
LEBENTHAL FUNDS, INC.
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
_______________________________________________________________________________
<TABLE>
<CAPTION>
LEBENTHAL NEW YORK
MUNICIPAL BOND FUND
--------------------------------------------------------------------------
SIX MONTHS JUNE 24,1991
ENDED YEAR ENDED NOVEMBER 30, (INCEPTION) TO
MAY 31,1996 ---------------------------------------------- NOVEMBER 30,
(UNAUDITED) 1995 1994+ 1993 1992 1991
------------ ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $7.99 $6.84 $8.03 $7.54 $7.19 $7.16
Income from investment operations:
Net investment income 0.21 0.43 0.41 0.44 0.47 0.14
Net realized and unrealized
gain (loss) on investments (0.25) 1.15 (1.15) 0.50 0.35 0.03
Total from investment operations (0.04) 1.58 (0.74) 0.94 0.82 0.17
Less distributions:
Dividends from net investment income (0.21) (0.43) (0.41) (0.44) (0.47) (0.14)
Distributions from net realized
gain on investments - - (0.04) (0.01) - -
Total distributions (0.21) (0.43) (0.45) (0.45) (0.47) (0.14)
Net asset value, end of period $7.74 $7.99 $6.84 $8.03 $7.54 $7.19
TOTAL RETURN
(without deduction of sales load) 4.97%++ 23.56% (9.62%) 12.63% 11.68% 2.36%++
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $113,069 $105,579 $75,326 $80,727 $39,350 $14,549
Ratios to average net assets:
Expenses 1.09%+++ 0.99% 0.64%* 0.20%* 0.17%* 0%+++*
Net investment income 5.19%+++ 5.63% 5.44% 5.42% 6.08% 6.08%+++
Portfolio turnover 30.04% 148.88% 192.91% 7.88% 8.14% 0%
</TABLE>
See Notes to Financial Statements.
LEBENTHAL FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
_______________________________________________________________________________
<TABLE>
<CAPTION>
LEBENTHAL NEW JERSEY LEBENTHAL TAXABLE
MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------------------------ -------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30, ENDED YEAR ENDED NOVEMBER 30,
MAY 31,1996 ---------------------- MAY 31,1996 ----------------------
(UNAUDITED) 1995 1994+** (UNAUDITED) 1995 1994+**
------------- --------- ---------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $6.70 $5.95 $7.16 $7.22 $6.34 $7.16
Income from investment operations:
Net investment income 0.18 0.36 0.32 0.26 0.53 0.44
Net realized and unrealized
gain (loss) on investments (0.19) 0.75 (1.21) (0.43) 0.88 (0.82)
Total from investment operations (0.01) 1.11 (0.89) (0.17) 1.41 (0.38)
Less distributions:
Dividends from net investment income (0.18) (0.36) (0.32) (0.26) (0.53) (0.44)
Net asset value, end of period $6.51 $6.70 $5.95 $6.79 $7.22 $6.34
TOTAL RETURN
(without deduction of sales load) 5.25%++ 19.10% (12.70%) 6.84%++ 23.11% (5.45%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $4,405 $3,358 $2,145 $13,104 $8,686 $2,990
Ratios to average net assets:
Expenses 0.60%+++* 0.60%* 0.60%* 0.60%+++* 0.60%* 0.60%*
Net investment income 5.39%+++ 5.64% 4.97% 7.25%+++ 7.57% 6.74%
Portfolio turnover 19.47% 61.69% 291.60% 18.88% 84.74% 93.73%
</TABLE>
+ Effective August 15, 1994, the investment advisor changed to Lebenthal
Asset Management, Inc.
++ Not Annualized
+++ Annualized
* If the Investment Manager had not waived fees and reimbursed expenses and
the Administrator and Distributor had not waived fees, the ratio of operating
expenses to average net assets would have been 1.10%, 1.12%, 1.44%, and 2.56%
for the periods ended November 30, 1994, 1993, 1992, and 1991, respectively,
for the New York Bond Fund; 3.44%, 4.13%, and 4.83% for the period ended May
31, 1996 and the periods ended November 30, 1995 and 1994, respectively, for
the New Jersey Bond Fund; and 1.70%, 2.59%, and 3.60% for the period ended May
31, 1996 and the periods ended November 30, 1995 and 1994, respectively, for
the Taxable Bond Fund.
** Fund commenced operations on December 1, 1993.
See Notes to Financial Statements.
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 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 principals as
follows:
A) VALUATION OF SECURITIES -
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
services 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.
Other 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 sixty (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 net investment income 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 -
Costs incurred in connection with the organization of each Fund and their
initial registration are amortized on a straight-line basis over a five-year
period from each Fund's commencement of operations.
E) GENERAL -
Securities transactions are recorded on a trade date basis. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Interest income is recorded on the accrual basis and dividend income is
recorded on the ex-dividend date. Premiums and original issue discounts on
securities purchased are amortized over the life of the respective securities.
LEBENTHAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
_______________________________________________________________________________
F) FEES PAID INDIRECTLY -
Funds leaving excess cash in demand deposit accounts may receive credits which
are available to offset custody expenses. The Statements of Operations report
gross custody expense, and reflect the amount of such credits as a reduction in
total expenses.
G) BANK LOANS -
During the six month period ended May 31, 1996, the New York Bond Fund
periodically borrowed amounts from a bank. Interest paid on borrowings reduces
net income. During the six month period ended May 31, 1996, the New York Bond
Fund had average daily borrowings of $1,578,751 at an average interest rate of
8.37%.
H) ESTIMATES -
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Funds to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expense during the
reporting period. Actual results could differ from those estimates.
2. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Management Contract the Funds pay a management fee to Lebenthal Asset
Management, Inc. (its Manager), equal to 0.25% of each Fund's average daily net
assets up to $50 million; 0.225% of such assets between $50 million and $100
million; and 0.20% of such assets in excess of $100 million. The Manager
manages the portfolio of securities of each Fund and makes decisions with
respect to the purchase and sale of investments. 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 six months ended May 31, 1996, the Manager
voluntarily waived management fees of $4,939 and $14,050 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 $46,346 and $33,742,
respectively.
Lebenthal & Co., Inc. retained commissions of $369,941 from the sales of shares
of the New York Bond Fund, the New Jersey Bond Fund and the Taxable Bond Fund.
The Directors of the Company who are unaffiliated with the Manager or the
Distributor are paid $2,000 per annum plus $500 per meeting attended.
LEBENTHAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
_______________________________________________________________________________
3. DISTRIBUTION PLAN
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
0.25% of the Fund's average daily net assets. For the six months ended May 31,
1996, the Distributor voluntarily waived fees of $4,939 and $14,050 from 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.
4. ADMINISTRATION AGREEMENT
Effective December 1, 1995, the Company has engaged State Street Bank and Trust
Company to provide certain administrative services. Pursuant to the
Administration Agreement the Company pays State Street Bank at an annual rate
of 0.08% of average assets up to the first $125 million per Fund; 0.06% of such
assets between $125 million and $250 million per Fund; and 0.04% of such assets
in excess of $250 million per Fund, subject to a minimum complex fee of
$165,000.
5. CAPITAL STOCK
At May 31, 1996, there were 20,000,000,000 shares of $0.001 par value stock
authorized. Transactions in capital stock were as follows:
LEBENTHAL NEW YORK LEBENTHAL NEW YORK
MUNICIPAL BOND FUND MUNICIPAL BOND FUND
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1996 NOVEMBER. 30, 1995
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
Sold 2,093,201 $ 16,671,769 3,626,833 $ 27,728,133
Issued as reinvestment
of dividends 324,304 2,561,029 584,439 4,424,986
Redeemed (1,032,838) ( 8,163,441) (2,011,809) (15,136,126)
Net increase 1,384,667 $ 11,069,357 2,199,463 $ 17,016,993
LEBENTHAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
_______________________________________________________________________________
LEBENTHAL NEW JERSEY LEBENTHAL NEW JERSEY
MUNICIPAL BOND FUND MUNICIPAL BOND FUND
SIX MONTHS ENDED YEAR ENDED
MAY 31,1996 NOVEMBER 30,1995
------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- ------------
Sold 230,357 $1,533,944 320,760 $ 2,060,689
Issued as reinvestment
of dividends 14,670 97,352 18,321 118,158
Redeemed ( 69,410) (459,583) (198,975) (1,223,913)
Net increase 175,617 $1,171,713 140,106 $ 954,934
LEBENTHAL TAXABLE LELEBENTHAL TAXABLE
MUNICIPAL BOND FUND MUNICIPAL BOND FUND
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1995
------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------
Sold 734,341 $5,202,434 928,692 $ 6,373,549
Issued as reinvestment
of dividends 47,104 332,016 39,468 270,713
Redeemed ( 55,271) (387,670) (236,166) (1,544,645)
Net increase 726,174 $5,146,780 731,994 $ 5,099,617
6. 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
$37,977,492, $1,828,215, and $8,014,713, 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 $34,178,795,
$737,254, and $2,166,073, respectively.
7. FEDERAL INCOME TAXES
Tax basis capital losses which may be carried forward to offset future capital
gains through November 30, 2002 amounted to $3,290,709, $278,729 and $230,167
for the New York Bond Fund, the New Jersey Bond Fund, and the Taxable Bond
Fund, respectively.
8. CONCENTRATION OF CREDIT RISK
The New York Bond Fund invests 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. Each Fund maintains a policy of monitoring its
exposure by reviewing the creditworthiness of the issuers, as well as that of
financial institutions issuing letters of credit, and by limiting the amount of
holdings with letters of credit from one financial institution.
This report is submitted for the general information of the shareholders 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
LEBENTHAL
120 BROADWAY, NEW YORK, NY 10271
(212) 425-6116
OUTSIDE OF NYC 1-800-221-5822
