SEMIANNUAL
FINANCIAL REPORT
JUNE 30, 2003
NEW ALTERNATIVES FUND, INC.
FINANCIAL HIGHLIGHTS
STATEMENT OF PER SHARE INCOME AND CAPITAL CHANGES
For each share of capital stock outstanding*
(Unaudited)
Six Months Year Year Year Year Year Year Year Year
Ending End End End End End End End End
6/30 12/31 12/31 12/31 12/31 12/31 12/31 12/31 12/31
2003 2002 2001 2000 1999 1998 1997 1996 1995
NET ASSET VALUE AT BEGINNING
OF PERIOD $24.21 $34.71 $41.29 $28.85 $28.54 $32.07 $30.87 $30.51 $28.14
------ ------ ------ ------ ------ ------ ------ ------ ------
Investment income $ 0.28 $ 0.62 $ 0.75 $0.79 $ 0.66 $ 0.52 $ 0.64 $ 0.73 $ 0.75
Expenses 0.17 0.37 0.43 0.42 0.38 0.37 0.38 0.39 0.40
------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment income 0.11 0.25 0.32 0.37 0.28 0.15 0.26 0.34 0.35
Net realized & unrealized
gain (loss) on investment 1.65 (10.50) (5.13) 14.93 2.14 (3.22) 3.16 3.72 5.14
------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations 1.76 (10.25) (4.81) 15.30 2.42 (3.07) 3.42 4.06 5.49
Distributions from net
investment income (0.00) (0.25) (0.32) (0.37) (0.28) (0.15) (0.26) (0.34) (0.35)
Distributions from net
realized gain (0.00) (0.00) (1.13) (2.12) (1.83) (0.16) (1.96) (3.36) (2.77)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions (0.00) (0.25) (1.45) (2.49) (2.11) (0.31) (2.22) (3.70) (3.12)
Net change in net asset value 1.76 (10.50) (6.58) 12.44 0.31 (3.53) 1.20 0.36 2.37
Net asset value as of end
of the period 25.97 24.21 34.71 41.29 28.85 28.54 32.07 30.87 30.51
------ ------ ------ ------ ------ ------ ------ ------ ------
Total return
(Sales load not reflected) 7.27% -29.5% -12.4% 51.7% 8.5% -10.0% 11.1% 13.3% 19.5%
Net assets, end of period
(in thousands) $39,849 $36,723 $49,245 $52,773 $32,555 $33,021 $37,941 $35,549 $32,236
Ratio of operating expense
to net assets** 1.42% 1.32% 1.14% 1.11% 1.13% 1.18% 1.15% 1.21% 1.28%
Ratio of net investment income
to average net assets** 0.92% 0.89% 0.87% 1.01% 0.89% 0.49% 0.79% 1.04% 1.12%
Portfolio turnover** 23.9% 32.6% 29.3% 59.7% 87.3% 32.4% 53.9% 51.2% 48.72%
Number of shares
outstanding at end of period*** 1,534,246 1,516,709 1,368,171 1,211,783 1,058,230 1,156,952 1,111,377 1,038,561 965,769
Year Year Year First
End End End Seven
12/31 12/31 12/31 Months
1994 1993 1992 4/30/83
****
NET ASSET VALUE AT BEGINNING
OF PERIOD $30.00 $29.95 $29.19 $12.50
------ ------ ------ ------
Investment income $ 0.72 $ 0.62 $ 0.62 $ 0.38
Expenses 0.40 0.33 0.28 0.20
------ ------ ------ ------
Net investment income 0.32 0.29 0.34 0.18
Net realized & unrealized
gain (loss) on investment (1.43) 0.58 1.10 3.08
------ ------ ------ ------
Total from investment operations (1.11) 0.87 1.44 3.26
Distributions from net
investment income (0.32) (0.29) (0.34) (0.18)
Distributions from net
realized gain (0.43) (0.53) (0.34) (0.19)
------ ------ ------ ------
Total distributions (0.75) (0.82) (0.68) (0.37)
Net change in net asset value (1.86) 0.05 0.76 2.89
Net asset value as of end
of the period 28.14 30.00 29.95 15.39
====== ====== ====== ======
Total return
(Sales load not reflected) -3.7% 2.9% 4.9% 10.4%
Net assets, end of period
(in thousands) $28,368 $31,567 $28,896 $163
Ratio of operating expense
to net assets** 1.30% 1.11% 1.04% 1.08%
Ratio of net investment income
to average net assets** 1.04% 0.96% 1.25% 1.69%
Portfolio turnover** 33.0% 18.36% 13.1% 74.5%
Number of shares
outstanding at end of period*** 984,847 1,026,460 945,006 10,592
* All adjusted for two for one share split on July 26, 1985 and January 2,
1990
** Annualized (includes state taxes)
*** Shares immediately prior to dividend - Fund commenced operation on
September 3, 1982
**** At this time the Fund was on a fiscal year. Table for 1983-1990 is
available on request. Deleted to make space.
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 2003
COMMON STOCKS: 79.31%
- ---------------------
SHARES MARKET VALUE
------ ------------
ALTERNATE ENERGY AS A GROUP: 24.31%
ALTERNATE ENERGY (GENERAL): 6.43%
Calpine Corp. 35000 231,000
**Fortis Inc. 5000 217,111
Idacorp Inc. 80,000 2,100,000
-----------
2,548,111
-----------
ALTERNATE ENERGY (FUEL CELL): 9.59%
*FuelCell Energy, Inc. 300,000 2,457,000
*Global Thermoelectric (Canada) 250,000 459,982
*Hydrogenics Corp. 1,000,000 446,000
*Medis Technologies Ltd. 25,000 178,250
*Plug Power Inc. 50,000 233,500
*Stuart Energy 10,000 24,655
-----------
3,799,387
-----------
ALTERNATE ENERGY (SOLAR CELL): 5.52%
*AstroPower Inc. 205,000 674,450
Kyocera Corp. (ADR) (Japan) 25,000 1,425,000
*Spire Corporation 30,000 86,670
-----------
2,186,120
-----------
ALTERNATE ENERGY (WIND): 2.78%
**NEG-Micon (Denmark) 20,000 204,015
**Pacific Hydro (Australia) 91,365 209,560
**Vestas Wind Systems (Denmark) 60,000 686,234
-----------
1,099,809
-----------
INDUSTRIAL CATALYSTS (FUEL CELLS
& CLEAN AIR): 2.00%
Engelhard Corp. 20,000 495,400
**Johnson Matthey (United Kingdom) 20,404 297,306
-----------
792,706
-----------
CLEAN WATER: 2.98%
Ameron International 15,000 521,550
Philadelphia Suburban 20,000 487,600
*Tetra Tech 10,000 171,300
-----------
1,180,450
-----------
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2003
SHARES MARKET VALUE
------ ------------
ENVIRONMENTAL (GENERAL): 1.85%
*Johnson Outdoors, Inc. 30,500 416,325
*Thermo Electron 15,000 315,300
-----------
731,625
-----------
ENERGY CONSERVATION: 5.67%
Baldor Electric 10,000 206,000
*Echelon Corp. 7,500 103,275
*Intermagnetics General Corp. 30,000 595,200
*International Rectifier 20,000 536,400
Linear Technology Corp. 25,000 805,250
-----------
2,246,125
-----------
NATURAL FOODS: 4.18%
*Stake Technology (Canada) 75,000 529,500
*United Natural Foods 40,000 1,125,600
-----------
1,655,100
-----------
RECYCLING: 0.10%
*Caraustar Industries 5,000 40,050
-----------
NATURAL GAS
TRANSMISSION & DISTRIBUTION: 34.44%
Atmos Energy Corp. 80,000 1,984,000
*Golar LNG Ltd. (Norway) 20,000 213,000
KeySpan Corp. 70,000 2,481,500
Laclede Group 20,000 536,000
New Jersey Resources 50,000 1,775,000
Nicor Inc. 50,000 1,855,500
Piedmont Natural Gas 25,000 970,250
South Jersey Industries 35,000 1,289,750
Questar Corp. 60,000 2,008,200
Washington Gas (District of Columbia) 20,000 534,000
-----------
13,647,200
-----------
OTHER (FUEL CELL COMPONENTS 1.52%
& VARIOUS AUTO COMPONENTS):
Delphi Corp. 70,000 604,100
-----------
OTHER (INDUSTRIAL GASES INCLUDING
HYDROGEN): 2.27%
Praxair Inc. 15,000 901,500
-----------
TOTAL COMMON STOCK (COST $31,535,075.22) $31,432,282
===========
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2003
CASH, SAVINGS ACCOUNTS,
30 DAY CERTIFICATES OF DEPOSITS AND
U.S. TREASURY BILLS: 20.69%
SOCIALLY CONCERNED BANKS
Alternatives Federal Credit Union
Savings 1.00% $ 100,000
Chittenden Bank
Money Market 0.95% 100,000
Community Capital Bank
Certificate of Deposit maturity 7/1/03 1.03% 100,000
Self-Help Credit Union
Certificate of Deposit maturity 8/13/03 1.09% 100,000
South Shore Bank
Certificate of Deposit maturity 7/18/03 1.00% 100,000
U.S. Treasury Bills (at various yields maturing at various
dates in July 2003 maturity value $7,700,000) 7,697,438
-----------
TOTAL MARKET DEPOSITS AND TREASURY BILLS $ 8,197,438
===========
Total Common Stock (79.31%) $31,432,282
Bank Money Market and U.S. Treasury Bills (20.69%) 8,197,438
-----------
TOTAL INVESTMENTS (100%) $39,629,720
===========
*Securities for which no cash dividends were paid during the fiscal year.
**Foreign Exchange Securities traded on a foreign exchange.
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2003
ASSETS
Investment securities at market value (Cost: $31,535,075)
(Notes 2A and 5) ............................................ $ 31,432,282
U.S. Treasury Bills at market value ........................... 7,697,438
Cash, Savings and Certificates of Deposit ..................... 500,000
Cash .......................................................... 321,133
Receivables: Dividends ....................................... 77,925
Interest ........................................ 510
Portfolio securities sold ....................... --
Subscriptions ................................... 7,882
Prepaid Insurance ............................................. 2,767
------------
TOTAL ASSETS .................................................. $ 40,039,937
============
LIABILITIES
Payables:
Capital stock reacquired ...................................... $ --
Advisory fee .................................................. 24,659
Other accounts payable and accruals ........................... 35,811
Portfolio securities purchased ................................ 130,547
Dividend distribution payable ................................. --
------------
TOTAL LIABILITIES ............................................. 191,018
------------
NET ASSETS .................................................... $ 39,848,919
============
ANALYSIS OF NET ASSETS
Net capital paid in shares of capital stock ................... 45,089,754
Distributable earnings ........................................ (5,240,835)
------------
NET ASSETS (equivalent to $25.97 per share based on
1,534,245.812 shares of capital stock outstanding) ........ $ 39,848,919
============
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDING JUNE 30, 2003
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $1430) ......... $ 384,156
Interest ...................................................... 49,002
Other net income .............................................. 1,153
-----------
Total Income .................................................. 434,311
-----------
EXPENSES:
Management fee (note 4) ....................................... 140,921
Custodian fees: PFPC Trust .................................... 12,065
Other ......................................................... 214
Auditor ....................................................... 11,252
Directors ..................................................... 3,224
Filing fees ................................................... 5,539
Postage and printing .......................................... 7,240
Bond and insurance ............................................ 3,502
Transfer Agent-PFPC, Inc. ..................................... 25,520
Fund pricing-PFPC, Inc. ....................................... 16,221
Shareholder service costs ..................................... 38,256
-----------
Total Expenses ................................................ 263,954
-----------
NET INVESTMENT INCOME ......................................... 170,357
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
REALIZED GAIN ON INVESTMENTS (NOTE 2B & 5)
Proceeds from sales ........................................... 3,235,385
Cost of securities sold ....................................... (4,087,717)
Foreign currency transactions (gains/loss) .................... (1,783)
-----------
Net Realized Gain/Loss ........................................ (854,115)
-----------
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
Beginning of period ........................................... (3,498,307)
End of period ................................................. (102,793)
Foreign currency translations ................................. 553
-----------
Total Unrealized Appreciation (Depreciation) For The Period ... 3,396,067
-----------
Net Realized and Unrealized Gain (Loss) On Investments ........ 2,541,952
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 2,712,309
===========
The accompanying notes are an intergral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDING JUNE 30, 2003
2003 2002
---- ----
FROM INVESTMENT ACTIVITIES:
Net investment income $ 170,357 $ 373,183
Net realized gain (loss) from security transactions
and foreign currency transactions (854,115) (4,459,934)
Unrealized appreciation (depreciation) of investments 3,396,067 (10,980,355)
------------ ------------
Increase (decrease) in net assets derived from
investment activities 2,712,309 (15,067,106)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income dividends to shareholders (197) (369,254)
Distributions (capital gain) to shareholders 0 0
FROM CAPITAL SHARE TRANSACTIONS:
Net increase (decrease) from
Capital transactions (note 3) 414,244 2,913,950
------------ ------------
INCREASE (DECREASE) IN NET ASSETS: 3,126,356 (12,522,410)
NET ASSETS AT:
Beginning of the period 36,722,563 49,244,973
------------ ------------
END OF THE PERIOD $ 39,848,919 $ 36,722,563
============ ============
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE
PERIOD ENDING JUNE 30, 2003
1) ORGANIZATION - The Fund is registered as an open-end investment company under
the Investment Company Act of 1940, as amended. The Fund commenced operations
September 3, 1982. The investment objective of the Fund is to seek long-term
capital gains by investing in common stocks that provide a contribution to a
clean and sustainable environment.
2) ACCOUNTING POLICIES - The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of these financial
statements. The policies are in conformity with generally accepted accounting
principles:
A. SECURITY VALUATION - Listed investments are stated at the last reported sale
price at the closing of a national securities stock exchange and the NASD
National Market System on June 30, 2003 and at the mean between the bid and
asked price on the over the counter market if not traded on the day of
valuation.
B. FOREIGN CURRENCY - Investment securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollar amounts at the
date of valuation. Purchases and sales of investment securities and income and
expense items denominated in foreign currencies are translated into U.S. dollar
amounts on the respective dates of such transactions.
The company does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions
are accounted for on the trade date (date order to buy or sell is executed).
Realized gains and losses from security transactions are reported on a first in,
first out basis if not traded on the day of valuation. Short-term notes are
stated at amortized cost which approximates fair value.
D. INVESTMENT INCOME AND EXPENSE RECOGNITION - Dividend income is recorded as of
the ex- dividend date. Expenses are accrued on a daily basis.
E. FEDERAL INCOME TAXES - No provision for federal income tax is believed
necessary since the Fund distributes all of its taxable income to comply with
the provisions of the Internal Revenue Code applicable to investment companies.
The aggregate cost of the securities (common stocks) owned by the Fund on June
30, 2003 for federal tax purposes is $31,535,075.
The Fund had realized capital losses of $4,456,809 for 2002 which can be carried
forward to future years to offset future net realized capital gains through
2010. For the six months ending June 30, 2003 realized capital losses were
$854,115.
NEW ALTERNATIVES FUND, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE
PERIOD ENDING JUNE 30, 2003
F. USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect 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.
3) CAPITAL STOCK - There are 8,000,000 shares of $1.00 par value capital stock
authorized. On June 30, 2003, there were 1,534,245.812 shares outstanding.
Aggregate paid in capital including reinvestment of dividends was $45,089,754.
Transactions in capital stock were as follows:
Six months Ending 6/30/03 Year End 12/31/02
------------------------- -----------------
Shares Amount Shares Amount
Capital stock sold 95,157.253 $ 2,291,854 177,206.401 $ 5,145,016
Capital stock issued
Reinvestment of dividends 7.183 174 13,397.950 324,605
Redemptions (77,628.357) (1,877,784) (92,704.716) (2,555,670)
------------ ----------- ----------- -----------
Net Increase (Decrease) 17,536.079 $ 414,244 97,899.635 $ 2,913,951
============ =========== =========== ===========
4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES - Pursuant to
agreements, Accrued Equities, Inc. serves as investment advisor to the Fund. The
Fund pays to Accrued Equities, Inc. an annual management fee of 1.00% of the
first $10 million of average net assets; 0.75% of the next $20 million; and
0.50% of net assets over $30 million and 0.45% of assets over $100 million. If
the net annual expenses of the Fund (other than interest, taxes, brokerage
commissions, extraordinary expenses) exceed the most restrictive limitation
imposed by any state in which the Fund has registered its securities for sale,
Accrued Equities, Inc. reduces its management fee by the amount of such excess
expenses. The annualized expense ratio for the period ended June 30, 2003 was
1.42%. The Fund pays no remuneration to its officers, David Schoenwald and
Maurice Schoenwald, who are also Directors. They are also officers of Accrued
Equities, Inc. Accrued Equities, Inc. is the principal underwriter for the Fund.
There is a commission of 4.75% on most new sales. The commission will be shared
with other brokers who actually sell new shares. Their share of the commission
may vary. The Fund paid Accrued Equities, Inc. a total of $10,617 in
underwriting fees for the period ended June 30, 2003. The Fund also paid Accrued
Equities, Inc. $16,732 in commissions for the period ended June 30, 2003.
5) PURCHASES AND SALES OF SECURITIES - For the six months period ended June 30,
2003, the aggregate cost of securities purchased totaled $5,432,410. Net
realized gains (loss) were computed on a first in, first out basis. The amount
realized on sales of securities for the six months ended June 30, 2003 was
$3,235,385.
6) DIRECTORS FEES - The amount charged for the six months ended June 30, 2003
for Directors compensation was $3,224. Only non-interested Directors are
compensated. A non-interested Director is not part of the management of the
Fund. Each non-interested Director receives $500 of compensation and one
Director may receive payment for travel costs to Directors meetings. There was
no additional compensation paid to any Director for board service. See note 4
for compensation regarding interested Directors.
7) PROXY VOTING - The Fund has proxy voting policies which are available,
without charge, upon request by calling the Fund at 800-423-8383. Proxy votes of
the Fund are available by calling the Fund.
EXHIBIT EX-99.CERT
CERTIFICATION (SECTION 302 OF THE SARBANES-OXLEY ACT)
I, David J. Schoenwald, certify that:
1. I have reviewed this report on Form N-CSR of New Alternatives Fund, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statement
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations, changes in net assets, and cash
flows if the financial statements are required to include a statement of cash
flows) of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Rule 30a-2 (c) under the Investment Company Act of
1940) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant and which is made known to us by others,
particularly during the period in which this report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this report
(the "Evaluation Date"); and
c) presented in this report are my conclusion about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
5. The registrant's certifying officer has disclosed, based on our most recent
evaluation, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent functions)
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize, and report financial date and have identified for the registrant's
auditors any material weaknesses, if any, in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
The registrant's certifying officer has indicated in this report whether or not
there were significant changes in internal controls or in other factors that
could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
The registrant has adopted a code of ethics that applies to the principal
executive officer and any other involved member. The code of ethics is contained
in the Statement of Additional Information, which is available by calling the
Fund.
The registrant has adopted a proxy voting policy, which is contained in the
Statement of Additional Information, which is available by calling the Fund.
The registrant has an independent audit committee with one member. The
registrant's Directors have voted to determine the audit committee member is a
financial expert under the securities law statutes.
July 23, 2003
Date: ______________________________
/s/
---------------------------------
David J. Schoenwald
President
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
New Alternatives Fund, Inc.
(Registrant)___________________________________________
By (Signature and Title)
/s/
*____________________________________________________
David J. Schoenwald, President
July 23, 2003
Date_________________________________________________
EXHIBIT EX-99.906.CERT
CERTIFICATIONS PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
I, David J. Schoenwald, President of New Alternatives Fund, Inc. certify that:
1. This report on Form N-CSR fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in this report on Form N-CSR fairly presents, in
all material respects, the financial condition and results of operations of New
Alternatives Fund, Inc.
Date: July 23, 2003 /s/ David J. Schoenwald
-------------------------------
President
New Alternatives Fund, Inc.