<PAGE>
--------------------------
LORD ABBETT U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND
--------------------------
1995 Annual Report
A money market ------------------------------------------------------------
fund with the
objective of
providing high
current income
and preservation
of capital through [PHOTO - MOTHER AND SON EXAMINING A STAMP THROUGH A
investments in MAGNIFYING GLASS]
high-quality,
short-term liquid
securities.
------------------------------------------------------------
<PAGE>
--------------------------------------------------------------
REPORT TO SHAREHOLDERS For the Fiscal Year Ended June 30, 1995
- --------------- Lord Abbett U.S. Government Securities, Money Market Fund
completed its fiscal year on June 30, 1995. The Fund closed
the year with net assets of $140.6 million and an average
annualized seven-day yield of 4.96%.
The last recession officially ended in 1991; over the past
[PHOTO] four years, the economy exhibited strong, yet inconsistent,
growth. The economy, as measured by Gross Domestic Product
(GDP), grew 5.1% in the fourth quarter of 1994 alone
(contributing to an overall 4.1% growth rate for all of last
year). But, recent data suggests that the higher interest-rate
environment of 1994 has begun to negatively impact consumer
- --------------- spending. As a result, the same sectors which were the
RONALD P. LYNCH, backbone of 1994's strong showing (houses, autos and retail
Chairman sales) are the leading cause of the slowdown in 1995.
Additionally, the rate of employment growth also has slowed
July 19, 1995 from 1994's pace.
Throughout most of 1994, the fixed-income markets reacted
negatively to the Federal Reserve's (the "Fed") less
accomodative monetary policy. However, as evidence of the
economic slowdown surfaced, the fixed-income markets responded
with a strong rally. Long-term Treasury bond yields moved from
7.61% at the beginning of the period to 6.61% at June 30,
1995. Additionally, foreign investors have increased their
investments in U.S. securities, adding to the rally in the
marketplace.
Thus far, the Fed seems to have been successful in
engineering a "soft landing'. Recently released economic
indicators have shown a trend toward a slower economy. Their
most recent action was to lower short-term interest rate by
.25%, a modest response to prevent the economy from slowing
too much. Going forward, we believe the Fed will adopt a "wait
and see" approach. Should the economy continue to slow, they
may take further action to ease short-term interest rates.
Prior to the latest Fed action, which reduced short-term
yields, the Fund increased its average maturity. The Fund
continues to emphasize conservative investments to achieve
high current income and preservation of capital.
--------------------------------------------------------------
"Thus far, the Fed seems to have been successful in
engineering a 'soft landing'."
--------------------------------------------------------------
Lord Abbett U.S. Government Securities Money Market Fund
seeks to provide investors with income and relative safety of
principal in all interest-rated environments. Shareholders of
the Fund also are offered checkwriting privilege and have the
flexibility to exchange Fund shares for other Lord Abbett-
managed funds, should investment goals change. We remain
committed to the goal of serving investors by providing a
relatively secure place for cash reserves.
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS June 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market Value
Security Rating+ Amount (Note 1a)
-------- ------- --------- ------------
INVESTMENTS IN SECURITIES 100.08%
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND FEDERAL FARM CREDIT BANKS
AGENCY OBLIGATIONS 5.82% due 7/7/1995 A1+ $ 3,000M $ 2,997,090
100.08% 5.81% due 8/1/1995 A1+ 3,500M 3,482,489
5.81% due 8/2/1995 A1+ 4,500M 4,476,760
5.81% due 8/3/1995 A1+ 3,000M 2,984,023
5.81% due 8/8/1995 A1+ 3,800M 3,776,696
5.82% due 8/11/1995 A1+ 3,900M 3,874,150
-----------
Total 21,591,208
===========
FEDERAL HOME LOAN BANKS
6.0% due 7/3/1995 A1+ 2,000M 1,999,333
5.86% due 7/21/1995 A1+ 3,000M 2,990,233
5.82% due 8/8/1995 A1+ 3,000M 2,981,570
5.81% due 8/14/1995 A1+ 2,500M 2,482,247
5.81% due 8/15/1995 A1+ 2,500M 2,481,844
5.80% due 8/25/1995 A1+ 3,000M 2,973,417
6.02% due 8/31/1995 A1+ 3,500M 3,464,298
-----------
Total 19,372,942
===========
FEDERAL HOME LOAN MORTGAGE CORPORATION
5.86% due 7/5/1995 A1+ 2,700M 2,698,242
5.88% due 7/10/1995 A1+ 2,000M 1,997,060
5.85% due 7/14/1995 A1+ 2,000M 1,995,775
5.85% due 7/17/1995 A1+ 3,500M 3,490,900
5.89% due 7/20/1995 A1+ 2,500M 2,492,229
5.85% due 7/24/1995 A1+ 1,700M 1,693,646
5.80% due 8/7/1995 A1+ 3,300M 3,280,328
5.80% due 8/11/1995 A1+ 3,000M 2.980,183
-----------
Total 20,628,363
===========
FEDERAL NATIONAL MORTGAGE ASSOCIATION
5.96% due 7/6/1995 A1+ 4,700M 4,696,109
5.80% due 7/18/1995 A1+ 1,700M 1,695,344
5.81% due 7/19/1995 A1+ 1,800M 1,794,771
5.85% due 7/27/1995 A1+ 2,800M 2,788,170
5.81% due 7/31/1995 A1+ 5,000M 4,975,792
5.80% due 8/16/1995 A1+ 3,500M 3,474,061
5.80% due 8/17/1995 A1+ 3,000M 2,971,100
5.90% due 8/17/1995 A1+ 3,700M 3,671,500
5.78% due 8/30/1995 A1+ 3,000M 2,977,283
5.78% due 9/5/1995 A1+ 3,700M 3,660,792
5.72% due 9/14/1995 A1+ 1,900M 1,877,358
5.725% due 9/21/1995 A1+ 4,100M 4,046,535
5.79% due 9/25/1995 A1+ 3,485M 3,436,797
5.61% due 2/16/1996++ A1+ 10,000M 10,000,000
-----------
Total 52,065,612
===========
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS June 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market Value
Security Rating+ Amount (Note 1a)
-------- ------- --------- ------------
<S> <C> <C> <C> <C>
STUDENT LOAN MARKETING ASSOCIATION
5.48% due 7/13/1995++ A1+ $ 9,600M $ 9,599,932
5.56% due 9/14/1995++ A1+ 7,500M 7,500,000
5.59% due 10/12/1995++ A1+ 5,000M 5,000,000
5.66% due 11/9/1995++ A1+ 5,000M 5,000,000
------------
Total 27,099,932
============
Total U.S. Government and Agency
Obligations* 140,758,057
============
OTHER ASSETS, LESS
LIABILITIES (.08)% (115,610)
============
NET ASSETS (equivalent to $1.00 a share on
100.00% 140,642,447 shares of $.001 par
value capital stock outstanding;
authorized; 1,000,000,000 shares) $140,642,447
============
+Ratings have not been audited by
Deloitte & Touche LLP.
++Floating Rate Note.
*Cost for federal income tax
purposes is $140,758,057.
Average Maturity of
Investments: 30 days.
See Notes to Financial Statements.
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended June 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment Income
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income Interest $ 8,376,375
------ -------- -----------
Expenses Management fee (Note 2) $775,871
--------
Shareholder servicing 415,000
--------
Audit and legal 46,500
--------
Registration 40,000
--------
Report to shareholders 39,500
--------
Other 20,575
--------
Total Expenses 1,337,446
-----------
Net investment income $ 7,038,929
===========
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended June 30,
INCREASE (DECREASE) IN NET ASSETS 1995 1994
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS Net investment income (declared as dividends to
shareholders)* $ 7,038,929 $ 3,386,976
------------ ------------
CAPITAL SHARE
TRANSACTIONS (DOLLAR
AMOUNTS AND NUMBER
OF SHARES ARE THE
SAME)
Proceeds from shares sold 183,892,809 214,677,358
------------ ------------
Net asset value of shares issued to shareholders
in reinvestment of net investment income 6,186,410 2,903,713
------------ ------------
Total 190,079,219 217,581,071
------------ ------------
Cost of shares reacquired (205,505,736) (184,294,476)
------------ ------------
Increase (decrease) in net assets (15,426,517) 33,286,595
------------ ------------
NET ASSETS
Beginning of year 156,068,964 122,782,369
------------ ------------
End of year $140,642,447 $156,068,964
============ ============
</TABLE>
*See Financial Highlights for per-share data.
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1995 1994 1993 1992 1991
------------------------------------------------ -------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
-------- --------- --------- --------- ---------
Net investment income: .046 .025+ .024+ .038+ .064
========= ========= ========= ========= =========
DISTRIBUTIONS
-------- --------- --------- --------- ---------
Dividends from net investment (.046) (.025) (.024) (.038) (.064)
-------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
TOTAL RETURN 4.65% 2.54% 2.43% 3.87% 6.55%
======== ======== ======== ======== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $140,642 $156,069 $122,782 $147,229 $195,134
-------- -------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS:
Expenses, including waiver 0.86% 0.85% 0.87% 1.01% 0.95%
-------- ------- -------- -------- --------
Expenses, excluding waiver 0.86% 0.90% 0.96% 1.02% 0.95%
-------- ------- -------- -------- --------
Net investment income 4.54% 2.56% 2.41% 3.86% 6.40%
======== ======= ======== ======== ========
</TABLE>
+Net of management fee waiver.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Company is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. The following is a summary
of significant accounting policies consistently followed by the Company. The
policies are in conformity with generally accepted accounting principles.
(a) The Company values securities utilizing the amortized cost method, which
approximates market value. Under this method, all investments purchased at a
discount are valued by amortizing the difference between the original purchase
price and maturity value of the issue over a period to maturity. Securities
purchased at face value are evenly valued at cost, which approximates market
value.
(b) It is the policy of the Company to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income in taxable distributions. Therefore, no income tax
provision is required.
(c) Security transactions are accounted for on the date that the securities
are purchased or sold (trade date). Interest income is recorded on the accrual
basis.
(d) Dividends from net investment income are declared each business day and paid
monthly.
(e) Income and capital gains distributions are determined in accordance with
income tax regulations which may differ from methods used to determine the
corresponding income and capital gains amounts in accordance with generally
accepted accounting principles. These differences are primarily caused by
differences in the timing of the recognition of certain components of income,
expense, or capital gain. Where such differences are permanent in nature, they
are reclassified in the Sources of Net Assets based upon their ultimate
characterization for federal income tax purposes. Any such reclassifications
will have no effect on net assets, results of operations, or net asset value of
the Fund.
2. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Lord, Abbett & Co. received a management fee of $775,871 for which it supplied
investment management, research, statistical and advisory services and paid
officers' remuneration and certain other expenses of the Company. The management
fee paid to Lord, Abbett & Co. is based on average daily net assets at the
following annual rates: 0.50% on the first $250 million, 0.45% on the next $250
million and 0.40% on the excess over $500 million.
The company has adopted a Rule 12b-1 Plan which provides for the payment to
dealers of .15% of the average daily net asset value of the Company's shares
sold by such dealers. Effective July 1, 1992, 12b-1 payments have been
suspended.
Certain of the Company's officers and directors have an interest in Lord, Abbett
& Co.
3. DIRECTORS' REMUNERATION
The Directors of the Company associated with Lord, Abbett & Co. and all officers
of the Company receive no compensation from the Company for acting as such.
Outside Directors' fees, including attendance fees for board and committee
meetings, and outside Directors' retirement costs, are allocated among all funds
in the Lord Abbett group based on net assets of each fund. The direct
remuneration accrued during the period for outside Directors of the Company as a
group was $3,645 (exclusive of expenses), which has been deemed invested in
shares of the Company under a deferred compensation plan contemplating future
payment of the value of those shares. As of June 30, 1995, the aggregate amount
in Directors' accounts maintained under the plan was $106,272. Retirement costs
accrued during the period amounted to $1,613.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ------------------
INDEPENDENT AUDITORS' REPORT OUR MANAGEMENT
- ------------------------------------------------------------ ------------------
<S> <C>
The Board of Directors and Shareholders, INVESTMENT MANAGER
Lord Abbett U.S. Government Securities Lord, Abbett & Co.
Money Market Fund, Inc.: The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
We have audited the accompanying statement of net assets of 212-848-1800
Lord Abbett U.S. Government Securities Money Market Fund,
Inc. as of June 30, 1995, the related statements of CUSTODIAN, TRANSFER AGENT AND
operations for the year then ended and of changes in net DIVIDEND DISBURSING AGENT
assets for each of the years in the two-year period then United Missouri Bank of
ended, and the financial highlights for each of the years in Kansas City, N.A.
the five-year period then ended. These financial statements Tenth and Grand
and the financial highlights are the responsibility of the Kansas City, MO
Company's management. Our responsibility is to express an 64141
opinion on these financial statements and the financial
highlights based on our audits. SHAREHOLDER SERVICING AGENT
DST Systems, Inc.
We conducted our audits in accordance with generally accepted P.O. Box 419576
auditing standards. Those standards require that we plan and Kansas City, MO 64141
perform the audit to obtain reasonable assurance about 800-821-5129
whether the financial statements and financial highlights
are free of material misstatement. An audit includes AUDITORS
examining, on a test basis, evidence supporting the amounts Deloitte & Touche LLP
and disclosures in the financial statements. Our procedures New York, NY
included confirmation of securities owned at June 30, 1995
by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant
estimates made by management,as well as evaluating the
overall financial statements presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial
highlights present fairly, in all material respects, the
financial position of Lord Abbett U.S. Government Securities
Money Market Fund, Inc. at June 30, 1995, the results of its
operations, the changes in its net assets and the financial
highlights for the above-stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
August 3, 1995
</TABLE>
An investment in this Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that this Fund will be able to maintain
a stable net asset value of $1.00 per share. This fund is managed to maintain,
and has maintained, its stable $1.00 per share price.
- --------------------------------------------------------------------------------
Copyright (C) 1995 by Lord Abbett U.S. Government Securities
Money Market Fund, Inc.
767 Fifth Avenue, New York, NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett U.S. Government Securities Money Market Fund, Inc., is to be
distributed only if preceded or accompanied by a current prospectus which
includes information concerning the Fund's investment objective and policies and
other matters.
All rights reserved. Printed in the U.S.A.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
[LOGO] LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
The GM Building . 767 Fifth Avenue . New York, NY 10153-0203
