<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
FUND, INC. (212) 830-5200
================================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of Delafield Fund, Inc. for the
period January 1, 1999 through June 30, 1999.
The Delafield Fund's net asset value per share on June 30, 1999 was $15.13 as
compared to $13.06 at December 31, 1998. The Fund had net assets of $102,893,547
and 862 active shareholders. The Fund registered an increase of 15.9% during the
first-half year. The Fund held 50 companies, with the top ten holdings
accounting for 33% of total net assets overall. Equity investments comprised 80%
of the $102.9 million portfolio on June 30, 1999.
We thank you for your support and look forward to serving your needs.
Sincerely,
\s\J. Dennis Delafield \s\Vincent Sellecchia
J. Dennis Delafield Vincent Sellecchia
Chairman President
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
STATEMENT OF NET ASSETS
JUNE 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ ------
Common Stocks (79.94%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automotive/Auto Parts (0.65%)
OEA, Inc.* 75,000 $ 665,625
---------------
Building (2.33%)
Champion Enterprises, Inc.* 70,000 1,303,750
Walter Industries* 85,000 1,099,688
---------------
2,403,438
---------------
Chemicals (4.50%)
Cabot Corporation 35,900 868,331
Crompton & Knowles Corporation 25,000 489,062
Engelhard Corporation 95,000 2,149,375
International Specialty Products* 110,000 1,120,625
---------------
4,627,393
---------------
Consumer Products & Services (7.79%)
Bush Industries Inc. 192,900 3,206,962
Huffy Corp. 74,500 1,043,000
O'Sullivan Industries Holdings* 150,000 2,550,000
Rexall Sundown Inc.* 100,000 1,215,625
---------------
8,015,587
---------------
Electronics (4.64%)
International Rectifier Corporation* 160,000 2,130,000
Sheldahl Inc.* 75,000 499,219
Varian Semiconductor Equipment* 125,000 2,140,625
---------------
4,769,844
---------------
Energy (1.89%)
Devon Energy Corporation 25,000 893,750
EEX Corporation* 25,000 173,438
Forest Oil Corporation* 70,000 879,375
---------------
1,946,563
---------------
Financial Products and Services (3.68%)
BancTec, Inc.* 128,000 2,296,000
Harland (John H.) Company 75,000 1,495,313
---------------
3,791,313
---------------
Industrial Products (18.61%)
AMETEK, Inc. 80,000 1,840,000
Atchison Casting Corporation* 85,000 884,531
Flowserve Corporation 50,000 946,875
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Value
Shares (Note 1)
Common Stocks (Continued) ------ ------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Products (Continued)
Furon Company 180,000 $ 3,420,000
Kennametal Inc. 100,000 3,100,000
Scott Technologies* 100,000 1,925,000
Telxon Corporation 40,000 318,750
UNOVA, Inc.* 230,000 3,651,250
Varian Inc.* 150,000 2,020,312
Westinghouse Air Brake Company 40,000 1,037,500
---------------
19,144,218
---------------
Insurance (Property/Casualty) (1.89%)
Berkeley W R Inc. 40,000 1,001,250
Highlands Insurance Group* 90,000 945,000
---------------
1,946,250
---------------
Insurance (Reinsurance) (4.04%)
Risk Capital Holding Inc.* 33,500 460,625
Trenwick Group, Inc. 150,000 3,698,438
---------------
4,159,063
---------------
Medical Equipment, Services & Supplies (5.75%)
Quest Diagnostics Inc.* 55,000 1,505,625
Steris Corporation* 100,000 1,937,500
Varian Medical Systems, Inc. 97,800 2,469,450
---------------
5,912,575
---------------
Metals/Mining (3.68%)
Allegheny Teledyne Inc. 75,000 1,696,875
Carpenter Technology 10,000 285,625
Commercial Metals Company 41,600 1,185,600
Special Metals Corporation* 106,100 616,706
---------------
3,784,806
---------------
Real Estate (3.54%)
Kimco Realty Corporation 75,000 2,934,375
Ramco-Gershenson Properties Trust 43,750 710,938
---------------
3,645,313
---------------
Telecommunications (0.92%)
Salient 3 Communications* 116,900 949,812
---------------
Textile/Apparel (10.88%)
Burlington Industries Inc.* 420,000 3,806,250
Delta Woodside Industries Inc. 922,000 5,532,000
Fruit of the Loom, Inc.* 190,000 1,852,500
---------------
11,190,750
---------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Value
Shares (Note 1)
Common Stocks (Continued) ------ ------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Miscellaneous (5.15%)
Calgon Carbon Corporation 175,000 $ 1,039,063
MSC Industrial Direct Company* 100,000 1,025,000
Moore Corporation, Ltd. 140,000 1,172,500
XTRA* 45,000 2,067,187
---------------
5,303,750
---------------
Total Common Stocks (Cost $76,515,159) 82,256,300
---------------
<CAPTION>
Convertible Preferred Stock (0.09%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Real Estate (0.09%)
Kimco Realty Corporation Class D
Depository Shares 3,600 88,200
---------------
Total Convertible Preferred Stock (Cost $82,722) 88,200
---------------
<CAPTION>
Face Value
Amount (Note 1)
------ ------
Corporate Bonds (0.10%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Insurance (Life) (0.10%)
PennCorp Financial Group, 9.250%,
due 12/15/2003 $ 125,000 100,625
---------------
Total Corporate Bonds (Cost $125,095) 100,625
---------------
<CAPTION>
Short-Term Investments (17.85%)
Repurchase Agreements (17.85%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Morgan (J.P.) Securities Inc., 4.75%, due 07/01/99
(Collateralized by $19,570,000
FHLB Discounted Note, 5.823%, due 05/06/09) $ 18,366,000 18,366,000
---------------
Total Short-Term Investments (Cost $18,366,000) 18,366,000
---------------
Total Investments (97.98%) (Cost $95,088,976+) 100,811,125
Cash and Other Assets, In Excess of Liabilities (2.02%) 2,082,422
---------------
Net Assets (100.00%), 6,802,111 shares outstanding (Note 3) $ 102,893,547
===============
Net asset value, offering and redemption price per share $ 15.13
===============
* Non-income producing.
+ Aggregate cost for federal income tax purposes is $95,470,533. Aggregate unrealized appreciation and
depreciation, based on cost for Federal income tax purposes, are $11,578,191 and $6,237,599, respectively.
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest......................................................................... $ 166,471
Dividends........................................................................ 464,386
---------------
Total income............................................................... 630,857
---------------
Expenses: (Note 2)
Investment management fee........................................................ 374,937
Administration fee............................................................... 98,421
Custodian expenses............................................................... 5,724
Shareholder servicing and related shareholder expenses........................... 33,353
Legal, compliance and filing fees................................................ 39,268
Audit and accounting............................................................. 24,378
Directors' fees and expenses..................................................... 4,525
Other............................................................................ 2,604
---------------
Total expenses................................................................ 583,210
Less:
Expenses paid indirectly...................................................... ( 60)
---------------
Net expenses.................................................................. 583,150
---------------
Net investment income......................................................... 47,707
---------------
<CAPTION>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments............................................. ( 1,705,092)
Net change in unrealized appreciation (depreciation) of investments................. 14,703,239
---------------
Net gain (loss) on investments.............................................. 12,998,147
---------------
Increase (decrease) in net assets from operations................................... $ 13,045,854
===============
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Six Months
Ended Year
June 30, 1999 Ended
(Unaudited) December 31, 1998
------------- -----------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income..................................................... $ 47,707 $ 1,135,491
Net realized gain/(loss) on investments................................... ( 1,705,092) ( 11,297)
Net change in unrealized appreciation (depreciation) ..................... 14,703,239 ( 20,835,046)
-------------- --------------
Increase (decrease) in net assets from operations........................ 13,045,854 ( 19,710,852)
Distributions from:
Net investment income..................................................... -- ( 1,141,794)
Net realized gain on investments.......................................... -- --
Return of capital......................................................... -- ( 1,296)
Capital share transactions (Note 3)......................................... ( 13,882,400) ( 22,039,937)
-------------- --------------
Total increase (decrease)................................................ ( 836,546) ( 42,893,879)
Net Assets:
Beginning of period....................................................... 103,730,093 146,623,972
-------------- --------------
End of period (including undistributed net investment income
of $47,707 and $0, respectively)......................................... $ 102,893,547 $ 103,730,093
============== ==============
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
1. Summary of Accounting Policies
Delafield Fund, Inc. is a no-load, diversified, open-end management investment
company registered under the Investment Company Act of 1940. The investment
objectives of the Fund are to seek long-term preservation of capital and growth
of capital by investing primarily in equity securities of domestic companies.
Effective August 18, 1998, the Fund authorized three classes of stock:
Administrative Class, Institutional Class, and Retail Class. Original shares of
the Fund were automatically converted to Institutional Class shares of the Fund.
The Administrative Class shares of the Fund are available to qualified
retirement plan clients of financial intermediaries and are subject to a service
fee pursuant to the Fund's 12b-1 Plan. The Institutional Class shares of the
Fund are available to corporate, institutional and individual investors and are
not subject to a service fee. The Retail Class shares of the Fund are subject to
a service fee pursuant to the Fund's Rule 12b-1 Distribution and Service Plan
and are sold through financial intermediaries who provide servicing to Retail
Class shareholders. As of June 30, 1999 only the Institutional Class of the Fund
was active. Its financial statements are prepared in accordance with generally
accepted accounting principles for investment companies as follows:
a) Valuation of Securities -
Securities traded on a national securities exchange or admitted to trading
on the National Association of Securities Dealers Inc. Automated Quotations
National List are valued at the last reported sales price on the last
business day of the fiscal period. Common stocks for which no sale was
reported on that date and over-the-counter securities, are valued at the
mean between the last reported bid and asked prices. United States
Government obligations and other debt instruments having sixty days or less
remaining until maturity are stated at amortized cost. Debt instruments
having a remaining maturity of more than sixty days are valued at the
highest bid price obtained from a dealer maintaining an active market in
that security or on the basis of prices obtained from a pricing service
approved as reliable by the Board of Directors. All other investment
assets, including restricted and not readily marketable securities, are
valued in such manner as the Board of Directors in good faith deems
appropriate to reflect their fair market value.
b) Federal Income Taxes -
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income to its shareholders. Therefore, no provision for
federal income tax is required.
c) Use of Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results
could differ from those estimates.
d) General -
Securities transactions are recorded on the trade date basis. Interest
income is accrued as earned and dividend income is recorded on the
ex-dividend date. Realized gains and losses from securities transactions
are recorded on the identified cost basis. Dividends and capital gain
distributions to shareholders, which are determined in accordance with
income tax regulations, are recorded on the ex-dividend date. It is the
Fund's policy to take possession of securities as collateral under
repurchase agreements and to determine on a daily basis that the value of
such securities plus accrued interest are sufficient to cover the value of
the repurchase agreements.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates
Under the Investment Management Contract, the Fund pays an investment management
fee to Reich & Tang Asset Management, L.P. (the "Manager") equal to .80% of the
Fund's average daily net assets.
Pursuant to an Administrative Services Agreement, the Fund pays to the Manager
an annual fee of .21% of the Fund's average daily net assets.
Pursuant to a Distribution and Service Plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and Reich & Tang, Inc. (the
Distributor) have entered into a Distribution Agreement and a Shareholder
Servicing Agreement, only with respect to the Administrative Class and Retail
Class shares of the Fund. For its services under the Shareholder Servicing
Agreement, the Distributor receives from the Fund with respect only to the
Administrative Class and Retail Class shares, a fee equal to .25% of the Fund's
average daily net assets. There is no shareholder servicing fee for
Institutional Class shares of the Fund. There were no additional expenses borne
by the Fund pursuant to the Distribution Agreement.
Brokerage commissions paid during the period to the Distributor amounted to
$92,035.
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$1,500 per annum plus $250 per meeting attended.
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are fees of $23,615 paid to Reich & Tang
Services L.P., an affiliate of the Manager as servicing agent for the Fund.
Included in the Statement of Operations under the caption "Custodian expenses"
are expense offsets of $60.
3. Capital Stock
At June 30, 1999, 20,000,000,000 shares of $.001 par value stock were authorized
and capital paid in amounted to $98,840,080. Transactions in capital stock were
as follows:
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
June 30, 1999 December 31, 1998
---------------------------- ---------------------------
Shares Amount Shares Amount
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Sold................................ 923,217 $ 12,797,982 2,711,119 $ 39,948,178
Issued on reinvestment of dividends. -0- -0- 78,658 1,116,708
Redeemed............................ ( 2,064,665) (26,680,382) ( 4,699,355) (63,104,823)
----------- ---------- ---------- ----------
Net increase (decrease)............. ( 1,141,448) $(13,882,400) ( 1,909,578) $(22,039,937)
=========== ========== ========== ==========
</TABLE>
4. Investment Transactions
Purchases and sales of investment securities, other than U.S. Government direct
and agency obligations and short-term investments, totaled $29,492,294 and
$63,197,235, respectively. Accumulated undistributed realized losses at June 30,
1999 amounted to $1,716,389.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
5. Financial Highlights
Year
Six Months Ended Ended Period from Year
June 30, December 31, October 1, 1995 to Ended
1999 --------------------------------- December 31, September 30,
(Unaudited) 1998 1997 1996 1995 1995
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period...... $ 13.06 $ 14.88 $ 13.49 $ 12.26 $ 11.95 $ 10.82
--------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income................... 0.01 0.12 0.21 0.16 0.05 0.13
Net realized and unrealized
gains (losses) on investments........... 2.06 ( 1.82) 2.42 3.07 0.50 1.99
--------- -------- -------- -------- -------- --------
Total from investment operations.......... 2.07 ( 1.70) 2.63 3.23 0.55 2.12
--------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income.... -- ( 0.12) ( 0.21) ( 0.16 ) ( 0.05) ( 0.13)
Distributions from net realized gains
on investments........................ -- -- ( 1.03) ( 1.84 ) ( 0.18) ( 0.86)
In excess of net realized gain.......... -- -- -- -- ( 0.01) --
--------- -------- -------- -------- -------- --------
Total distributions....................... -- ( 0.12) ( 1.24) ( 2.00) ( 0.24) ( 0.99)
--------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 15.13 $ 13.06 $ 14.88 $ 13.49 $ 12.26 $ 11.95
========= ======== ======== ======== ======== ========
Total Return.............................. 15.85%(a) ( 11.47%) 19.66% 26.35% 4.62%(a) 20.05%
Ratios/Supplemental Data
Net assets, end of period (000)........... $ 102,894 $ 103,730 $ 146,624 $ 61,279 $ 45,730 $ 42,316
Ratios to average net assets:
Expenses, net of fees waived............ 1.24%*+ 1.24%+ 1.29%+ 1.29%+ 1.67%*+ 1.65%
Net investment income................... 0.10%* 0.83% 1.64% 1.18% 1.57%* 1.35%
Management, administration and
shareholder servicing fees waived..... 0.00% 0.16% 0.20% 0.20% 0.20%* 0.71%
Expenses paid indirectly................ 0.00% 0.00% 0.00% 0.01% 0.07%* 0.00%
Portfolio turnover rate................... 33.65% 81.56% 55.43% 75.54% 20.49% 70.36%
* Annualized
+ Includes expenses paid indirectly
(a) Not Annualized
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- -----------------------------------------------------
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.
- -----------------------------------------------------
Delafield Fund, Inc.
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management, L.P.
600 Fifth Avenue
New York, New York 10020
Custodian
Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent
Reich & Tang Services L.P.
600 Fifth Avenue
New York, New York 10020
DEL699S
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD
FUND, INC.
Semi-Annual Report
June 30, 1999
(Unaudited)
- --------------------------------------------------------------------------------
<PAGE>
