<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
FUND, INC. (212) 830-5200
================================================================================
Dear Fellow Shareholders:
During the past quarter our Fund's asset value increased 4.8% versus an increase
of 18.4% in the Russell 2000 and 14.9% in the Standard & Poor's 500, each on a
total return basis. The Fund's net asset value as of December 31st was $14.07
per share, which was after taking into account an ordinary income dividend of
$.0852 per share paid on December 29th.
For the year as a whole, the Fund's asset value increased 8.4% versus increases
of 21.3% in the Russell 2000 and 21.0% in the Standard & Poor's 500. At the
beginning of the year our commitment to equities was roughly 99% and, while
there were significant fluctuations in our reserve position during the year, we
were fully invested as the year ended.
Once again we are disappointed with our results. The market's strong performance
has been driven by a handful of stocks and the valuation of smaller companies
has been declining relative to the valuation of larger companies since the
mid-1980's. Furthermore, the cumulative advanced-decline index recently recorded
a low not seen since 1988. Despite these trends, many of the companies in which
we invested had a fine year. These were, however, largely offset by declines in
value of our investments in the insurance, metals and textile industries. We
expect better performance from our holdings in these areas this year.
Our progress in 1999 traveled along a rocky road. We saw a continuing decline in
the valuation of our holdings in the first quarter, a spectacular recovery in
the second quarter, erosion in the third quarter and a mild recovery in the
fourth quarter. Throughout the year price volatility, in reaction to corporate
news, grew in intensity. We believe there is opportunity to be gained from
volatility and expect to increase our reserves in order to take advantage of
such fluctuations, if the occasion arises.
It seems worthwhile reiterating the strategy which we employ to protect your
capital and enhance its growth. This strategy has resulted in above average
returns over many years and we believe it is low risk, logical and likely to
result in attractive results in the years ahead.
1. We search for companies that are selling at prices which seem modest in
relationship to the company's intrinsic value.
2. We meet with managements, visit plants, talk to competition, consider the
makeup of the Board of Directors and make a judgment as to whether we wish
to be in business with the management. In other words, we try to understand
the business of the companies in which we invest and the individuals who
direct the company's future.
3. We search for companies wherein something may change which will alter that
company's future for the better. These can be simple matters ranging from a
change in the management or management's attitude toward how they run the
business, to a change in control, to a change in business opportunity, or
to a change in the dynamics of a company's cash flow and its use.
4. If we perform our analysis correctly, the value added we bring to you is an
earlier and better understanding of the companies in our portfolio than
other investors have. Then, if the companies begin to improve, their
earnings should increase and they should be valued at a higher price
earnings multiple.
5. We have never worried about the profits that we did not make. We worry much
more about what we might lose. We believe that stock selection is much more
relevant to successful investing than total commitment to equities. In the
volatile markets which we have developed over the last 15 to 20 years, we
have come to believe that the long term investors' best hedge against a
violent decline is to have cash with which to buy companies when prices
seem unduly depressed.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Your portfolio is composed of such companies. We have become fully invested
since we believe that many of our holdings are selling at depressed prices.
Usually a good part of our quarterly letter is committed to a description of
several of our holdings. We will forego that exercise in this letter since we
have discussed the majority of our large holdings in recent letters.
Our concerns as we begin this year center on the coming elections, the tight
labor market with its inflationary potential and rising interest rates as the
Federal Reserve Board tries to forestall a pickup in inflation. On the plus
side, the price of energy could decrease somewhat, reducing inflationary
expectations.
Also, large ongoing company share repurchase programs and purchases by the
managements of many of our holdings are eloquent testimony to the fact that
these managements believe their companies to be truly undervalued and expect to
profit from an increase in valuation.
Finally, the extreme bifurcation of the market with one sector, technology,
selling at extraordinarily high valuations and most of the rest selling at quite
modest levels leaves us concerned about the general direction of the stock
market.
We have often likened our style of investing to gardening. You plant seeds
expecting them to germinate and grow. But one never knows how long it will take
or which will ripen first. Often there is a steady harvest, but sometimes there
can be a lengthy period without fruit. This approach does not necessarily
correlate with broad market movements but over time the harvest should be
bountiful.
We feel it would be advantageous for the Fund to grow moderately, so we welcome
inquiries from potential investors, large or small. Anyone interested is
encouraged to call Cleo Piperis at (212) 830-5452 or either of us.
We have become aware that many shareholders have not been receiving our
quarterly letters since they may not be distributed to those who are not direct
shareholders. Accordingly, anyone who wishes to be on our mailing list should
either call Cleo or write to us and we will be happy to add you to the list.
The Delafield Fund is now available through Charles Schwab's Mutual Fund
Marketplace, Fidelity Investments Fund Network, Jack White & Company and
National Investor Services Corp. (Waterhouse Securities) and First Trust Co.
(Datalynx).
With very best wishes.
Sincerely,
\s\J. Dennis Delafield \s\Vincent Sellecchia
J. Dennis Delafield Vincent Sellecchia
Chairman President
Tel. (212) 830-5454 Tel. (212) 830-5456
P.S. The net asset value per share of the Fund is determined as of 4:00 P.M.,
New York City time on each Fund Business Day (as fully described on page 7
of the Fund Prospectus). In addition to the Fund's published NASDAQ
listing, you may check its net asset value at any time by calling
1-800-221-3079 (or, 212-830-5220) to speak directly to a Fund
representative during the normal business hours of 8:30 A.M. - 5:30 P.M.,
NYC time. During off business hours, you may use the same 800 number (or,
212-380-5225) for a pre-recorded message. The 3-digit code number for The
Delafield Fund is 819.
Our Website address is: www.delafieldfund.com.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN WITH INCOME*
Russell
S & P 2000
Delafield Fund** 500 Total
-------------- ----- -------
<S> <C> <C> <C>
Quarter ended December 31, 1999 4.8% 14.9% 18.4%
One year ended December 31, 1999 8.4 21.0 21.3
Inception, November 19, 1993 to December 31, 1999 98.5 259.7 119.2
<CAPTION>
Annual Average Total Return with Income*
Russell
S & P 2000
Delafield Fund** 500 Total
-------------- ----- -------
<S> <C> <C> <C>
Three years ended December 31, 1999 4.7% 27.6% 13.1%
Five years ended December 31, 1999 13.1 28.6 16.7
Inception, November 19, 1993 to December 31, 1999 11.9 23.3 13.7
<CAPTION>
Asset Mix
12/31/98 3/31/99 6/30/99 9/30/99 12/31/99
-------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Equities 99.4% 95.6% 80.0% 74.4% 98.9%
Corporate Bonds 0.1 0.1 0.1 0.1 0.1
Cash Equivalents 0.5 4.3 19.9 25.5 1.0
-------- ------- ------- ------- --------
100% 100% 100% 100% 100%
<CAPTION>
TEN LARGEST HOLDINGS
% of Total
Company Portfolio
------- ---------
<S> <C>
Bush Industries, Inc. - Class A 4.8
MSC Industrial Direct Company Inc. - Class A 4.8
York International Corporation 4.0
Burlington Industries, Inc. 3.5
Ogden Corporation 3.5
Wabtec Corporation 3.1
Cabot Corporation 3.0
Kimco Realty Corporation 3.0
Kennametal Inc. 2.9
UNOVA, Inc. 2.9
-----
35.5%
-----
</TABLE>
* The performance data quoted above represents past performance. The
investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
the original cost.
** Delafield Fund Performance is stated after fees.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Comparison of change in value of $10,000 investment in the
Delafield Fund, Inc. and the S&P Index.
DELAFIELD FUND, INC.
Performance Comparision Chart
The Table below represents the omitted line graph which compares the change in
value of $10,000 investment in the Delafield Fund, Inc. and the S&P Index.
INCEPTION S&P 500 DELAFIELD
- --------- --------- ---------
<S> <C> <C>
11/19/93 10,000.00 10,000.00
12/31/93 10,112.00 10,170.00
06/30/94 9,769.20 10,361.20
12/31/94 10,244.96 10,739.38
06/30/95 12,315.47 12,350.29
12/31/95 14,095.06 13,680.41
06/30/96 15,518.66 15,566.94
12/31/96 17,331.24 17,285.53
06/30/97 20,903.20 19,631.18
12/31/97 23,114.76 20,683.41
06/30/98 27,208.39 21,351.48
12/31/98 29,719.72 18,311.03
06/30/99 33,399.02 21,213.33
12/31/99 35,974.09 19.847.19
<CAPTION>
Past performance is not predictive of future performance.
- ------------------------------------------- ------------------------------------
Average Annual Total Return
- ----------------------------- ------------- ----------------- ------------------
Since
One Year Five-Year 11/19/93
------------- ----------------- ------------------
Delafield Fund, Inc. 8.40% 13.07% 11.86%
S & P 500 Index 21.04% 28.56% 23.28%
- ----------------------------- ------------- ----------------- ------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
================================================================================
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ ------
Common Stocks (98.79%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace (4.71%)
Cordant Technologies Inc. 30,000 $ 990,000
GenCorp Inc. 65,000 641,875
Raytheon Co. - Class A 30,000 744,375
Teledyne Technologies Inc.* 175,001 1,651,572
---------------
4,027,822
---------------
Automotive/Auto Parts (1.09%)
OEA, Inc.* 190,700 929,663
---------------
Building (1.70%)
Champion Enterprises, Inc.* 50,000 428,125
Walter Industries, Inc. 95,000 1,027,187
---------------
1,455,312
---------------
Chemicals (9.77%)
C&K Witco Corp. 110,000 1,471,250
Cabot Corporation 125,000 2,546,875
Engelhard Corporation 125,000 2,359,375
International Specialty Products Inc.* 110,000 1,010,625
OMNOVA Solutions Inc. 125,000 968,750
---------------
8,356,875
---------------
Consumer Products & Services (9.48%)
Borders Group, Inc.* 50,000 803,125
Bush Industries, Inc. 240,100 4,126,719
Department 56 Inc.* 63,000 1,425,375
Huffy Corporation 263,000 1,380,750
Water Pik Technologies, Inc.* 38,750 370,547
---------------
8,106,516
---------------
Electronics (0.33%)
Sheldahl, Inc.* 65,000 286,406
---------------
Energy (1.54%)
Devon Energy Corporation 20,000 657,500
Forest Oil Corporation* 50,000 659,375
---------------
1,316,875
---------------
Financial Products & Services (5.84%)
Deluxe Corp. 90,000 2,469,375
Harland (John H.) Company 70,000 1,281,875
Moore Corporation, Ltd. 205,000 1,242,812
---------------
4,994,062
---------------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1999
================================================================================
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ ------
Common Stocks (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Products (18.85%)
AMETEK Inc. 105,000 $ 2,001,562
Atchison Casting Corporation* 30,000 273,750
CLARCOR Inc. 30,000 540,000
Flowserve Corporation 50,000 850,000
Kaydon Corporation 30,000 804,375
Kennametal Inc. 75,000 2,521,875
Thermo Electron Corporation* 40,000 600,000
UNOVA, Inc.* 190,000 2,470,000
Wabtec Corporation 148,500 2,635,875
York International Corporation 125,000 3,429,688
---------------
16,127,125
---------------
Insurance (Property/Casualty) (3.03%)
Berkeley (W.R.) Corp. 20,000 420,000
Highlands Insurance Group, Inc.* 40,000 380,000
Policy Management Systems Corp.* 70,000 1,789,375
---------------
2,589,375
---------------
Insurance (Reinsurance) (4.17%)
LaSalle Re Holdings Ltd. 45,000 742,500
Risk Capital Holdings, Inc.* 57,000 741,000
Trenwick Group Inc. 122,878 2,081,237
---------------
3,564,737
---------------
Medical Equipment, Services & Supplies (4.27%)
Quest Diagnostics Inc.* 65,000 1,986,563
Steris Corporation* 75,000 773,437
Varian Medical Systems, Inc. 30,000 894,375
---------------
3,654,375
---------------
Metals/Mining (5.49%)
A K Steel Holding Corporation 50,090 945,449
Allegheny Teledyne Inc. 73,500 1,649,156
Carpenter Technology Corporation 15,000 411,563
Commercial Metals Company 45,000 1,527,187
Special Metals Corporation* 50,000 159,375
---------------
4,692,730
---------------
Real Estate (4.87%)
Fairfield Communities Inc.* 100,000 1,075,000
Kimco Realty Corporation 75,000 2,540,625
Ramco-Gershenson Properties Trust 43,750 552,344
---------------
4,167,969
---------------
Telecommunications (0.99%)
Salient 3 Communications, Inc.* 121,400 849,800
---------------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ ------
Common Stocks (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Textile/Apparel (5.53%)
Burlington Industries, Inc.* 750,000 $ 3,000,000
Delta Woodside Industries, Inc. 922,000 1,728,750
---------------
4,728,750
---------------
Miscellaneous (17.13%)
Calgon Carbon Corporation 175,000 1,039,063
Carlisle Companies Inc. 20,000 720,000
International Multifoods Corporation 70,000 927,500
JLK Direct Distribution Inc.* 130,000 1,340,625
MSC Industrial Direct Company Inc.* 310,000 4,107,500
Ogden Corporation 250,000 2,984,375
Paxar Corp.* 75,000 632,813
Western Resources, Inc. 45,000 765,000
XTRA Corp.* 50,000 2,131,250
---------------
14,648,126
---------------
Total Common Stocks (Cost $87,802,312) $ 84,496,518
---------------
<CAPTION>
Convertible Preferred Stock (0.09%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Real Estate (0.09%)
Kimco Realty Corporation Class D Depository Shares 3,600 76,725
---------------
Total Convertible Preferred Stock (Cost $82,722) 76,725
---------------
<CAPTION>
Face Value
Amount (Note 1)
------ ------
Corporate Bonds (0.12%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Insurance (Life) (0.12%)
PennCorp Financial Group, Inc., 9.250%, due 12/15/2003 $125,000 106,875
---------------
Total Corporate Bonds (Cost $125,086) 106,875
---------------
<CAPTION>
Short-Term Investments (0.38%)
Repurchase Agreements (0.38%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Morgan (J.P.) Securities Inc., 2.50%, due 01/03/00 (Collateralized by $329,000,
Federal Home Loan Bank, 0.000%, due 01/26/00) $321,000 321,000
---------------
Total Short-Term Investments (Cost $321,000) 321,000
---------------
Total Investments (99.38%) (Cost $88,331,120+) 85,001,118
Cash and Other Assets, Net of Liabilities (0.62%) 527,237
---------------
Net Assets (100.00%), 6,076,843 shares outstanding (Note 3) $ 85,528,355
===============
Net asset value, offering and redemption price per share $ 14.07
===============
</TABLE>
* Non-income producing.
+ Aggregate cost for federal income tax purposes is $88,331,120. Aggregate
unrealized appreciation and depreciation, based on cost for Federal income
tax purposes, are $7,866,551 and $11,196,553, respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest....................................................................... $ 570,740
Dividends...................................................................... 1,097,444
----------------
Total income................................................................ 1,668,184
----------------
Expenses: (Note 2)
Investment management fee...................................................... 739,325
Administration fee............................................................. 194,073
Custodian expenses............................................................. 14,932
Shareholder servicing and related shareholder expenses......................... 73,450
Legal, compliance and filing fees.............................................. 66,330
Audit and accounting........................................................... 51,660
Directors' fees and expenses................................................... 8,734
Other.......................................................................... 5,714
----------------
Total expenses.............................................................. 1,154,218
Less:
Expenses paid indirectly.................................................... ( 1,222)
----------------
Net expenses................................................................ 1,152,996
----------------
Net investment income....................................................... 515,188
----------------
<CAPTION>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments........................................... ( 33,813)
Net change in unrealized appreciation (depreciation) of investments............... 5,651,088
----------------
Net gain (loss) on investments...................................... 5,617,275
----------------
Increase (decrease) in net assets from operations................................. $ 6,132,463
================
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
================================================================================
<TABLE>
<CAPTION>
1999 1998
--------------- ----------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income........................................... $ 515,188 $ 1,135,491
Net realized gain (loss) on investments......................... ( 33,813) ( 11,297)
Net change in unrealized appreciation (depreciation) ........... 5,651,088 ( 20,835,046)
-------------- ---------------
Increase (decrease) in net assets from operations............. 6,132,463 ( 19,710,852)
Distributions from:
Net investment income........................................... ( 515,840) ( 1,141,794)
Return of capital............................................... -- ( 1,296)
Capital share transactions (Note 3)............................... ( 23,818,361) ( 22,039,937)
-------------- ---------------
Total increase (decrease)...................................... ( 18,201,738) 42,893,879
Net Assets:
Beginning of year............................................... 103,730,093 146,623,972
-------------- ---------------
End of year..................................................... $ 85,528,355 $ 103,730,093
============== ===============
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
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 December 31, 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>
- --------------------------------------------------------------------------------
================================================================================
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
$208,761.
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 $46,199 paid to Reich & Tang
Services, Inc., an affiliate of the Manager as servicing agent for the Fund.
Included in the Statement of Operations under the captions "Shareholder
servicing and related shareholder expenses" are expense offsets of $1,222.
3. Capital Stock
At December 31, 1999, 20,000,000,000 shares of $.001 par value stock were
authorized and capital paid in amounted to $88,903,467. Transactions in capital
stock were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1999 December 31, 1998
--------------------------- ---------------------------
Shares Amount Shares Amount
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Sold........................................ 1,258,219 $ 17,488,983 2,711,119 $ 39,948,178
Issued on reinvestment of dividends......... 36,428 504,888 78,658 1,116,708
Redeemed.................................... ( 3,161,363) (41,812,232) ( 4,699,355) ( 63,104,823)
---------- ---------- ---------- -----------
Net increase (decrease)..................... ( 1,866,716) $(23,818,361) ( 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 $86,156,384 and
$110,244,502, respectively. Accumulated undistributed realized losses at
December 31, 1999 amounted to $45,110. This amount represents tax basis capital
losses which may be carried forward to offset future capital gains. Such losses
expire December 31, 2006 and 2007.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DELAFIELD FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
<TABLE>
<CAPTION>
5. Financial Highlights
Year
Ended Period from Year
December 31, October 1, 1995 to Ended
----------------------------------------------- December 31, September 30,
1999 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................... 0.09 0.12 0.21 0.16 0.05 0.13
Net realized and unrealized
gains (losses) on investments........... 1.01 ( 1.82 ) 2.42 3.07 0.50 1.99
-------- -------- -------- -------- -------- --------
Total from investment operations............ 1.10 ( 1.70 ) 2.63 3.23 0.55 2.12
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income.... ( 0.09) ( 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.............. $ 14.07 $ 13.06 $ 14.88 $ 13.49 $ 12.26 $ 11.95
======== ======== ======== ======== ======== ========
Total Return................................ 8.40% ( 11.47%) 19.66% 26.35% 4.62%(a) 20.05%
Ratios/Supplemental Data
Net assets, end of period (000)............. $ 85,528 $ 103,730 $ 146,624 $ 61,279 $ 45,730 $ 42,316
Ratios to average net assets:
Expenses, net of fees waived............ 1.25%+ 1.24%+ 1.29%+ 1.29%+ 1.67%*+ 1.65%
Net investment income................... 0.56% 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..................... 105.37% 81.56% 55.43% 75.54% 20.49% 70.36%
</TABLE>
* Annualized
+ Before expenses paid indirectly
(a) Not annualized
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<PAGE>
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DELAFIELD FUND, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
The Board of Directors and Shareholders of
Delafield Fund, Inc.
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Delafield Fund, Inc. (the "Fund") at December 31, 1999, and the results of its
operations, the changes in its net assets and the financial highlights for the
year then ended, in conformity with accounting principles generally accepted in
the United States. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
financial statements in accordance with auditing standards generally accepted in
the United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1999 by
correspondence with the custodian and brokers, provides a reasonable basis for
the opinion expressed above. The financial statements for the year ended
December 31, 1998, including the financial highlights for each of the periods
prior to December 31, 1999 were audited by other independent accountants whose
report dated January 29, 1999 expressed an unqualified opinion on those
financial statements.
PricewaterhouseCoopers LLP
New York, New York
January 28, 2000
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<PAGE>
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DELAFIELD FUND, INC.
CHANGE IN INDEPENDENT ACCOUNTANTS
================================================================================
On August 13, 1999, McGladrey & Pullen, LLP (McGladrey) resigned as independent
auditors of the Fund pursuant to an agreement by PricewaterhouseCoopers LLP
(PwC) to acquire McGladrey's investment company practice. The McGladrey partners
and professionals serving the Fund at the time of the acquisition have joined
PwC.
The reports of McGladrey on the financial statements of the Fund during the past
two fiscal years contained no adverse opinion or a disclaimer of opinion, and
were not qualified or modified as to uncertainty, audit scope or accounting
principles.
In connection with its audits for the most recent two fiscal years and through
August 13, 1999, there were no disagreements with McGladrey on any matter of
accounting principle or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
McGladrey would have caused it to make reference to the subject matter of
disagreement in connection with its report.
Effective August 13, 1999, the Fund, with the approval of its Board of Directors
and its Audit Committee, engaged PwC as its independent auditors.
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<PAGE>
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DELAFIELD
FUND, INC.
Annual Report
December 31, 1999
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<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
State Street Kansas City
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
DEL1299A
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<PAGE>
