Lord Abbett U.S. Government Securities
Money Market Fund
1999 ANNUAL REPORT
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A fund designed to help you with your
current income needs and preserve your
capital
[LOGO]
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[PHOTO]
ROBERT S. DOW
CHAIRMAN
AUGUST 6, 1999
"... we maintained an average
maturity of approximately 30 days,
while concentrating on specific
areas of the money market curve
that we expected to provide the
highest incremental yield."
Report to Share olders
For the Fiscal Year Ended June 30, 1999
Lord Abbett U.S. Government Securities Money Market Fund completed its fiscal
year on June 30, 1999 with net assets of $201 million and a seven-day current
yield of 4.03%.* The following chart provides an overview of class-specific data
during the fiscal year.
Fiscal Year Ended June 30, 1999
Class A Class B Class C
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Net asset value $1.00 $1.00 $1.00
Dividends $0.043 $0.036 $0.043
Average annual total return** +4.36% +3.76% +4.36%
Over the course of the Fund's fiscal year, we experienced a variety of economic
situations that affected U.S. interest rates. For example, in autumn of 1998, we
witnessed a world-wide "flight to quality" that pushed U.S. Treasury yields down
to near-historic lows. In the first quarter of 1999, we saw yields rise
significantly amid robust U.S. economic growth, spurred, in part, by a healthy
consumer-spending spree. Japan's efforts to pull its economy out of recession
helped to brighten the outlook on the global economy. Yields on U.S. Treasury
bonds continued to rise during the second quarter of 1999 as the U.S. economy
sustained its rate of growth and, in June, the Federal Reserve Board (the "Fed")
increased its key short-term interest rate by 0.25%.
During this time, we maintained an average maturity of approximately 30 days,
while concentrating on specific areas of the money market curve that we expected
to provide the highest incremental yield. The most significant of these segments
continues to be high-quality U.S. Government Agency discount notes.
We expect money market rates to track the overall level of interest rates,
rising in response to any further rate increases by the Fed. However, because
recent economic data suggests that inflation may not be a significant threat at
this time, a significant change in Fed interest rate policy is not anticipated
during the third quarter.
Thank you for including Lord Abbett U.S. Government Securities Money Market Fund
in your investment portfolio. We remain committed to helping you achieve your
long-term financial goals, and look forward to maintaining our relationship in
the coming years.
* The Fund's Class A current yield refers to the income generated by an
investment in the Fund over a seven-day period, which is then annualized.
The yield quotation more closely reflects the current earnings of the Fund
than the total return quotations. Past performance is not indicative of
future results.
** Average annual total return is the percent change in net asset value,
assuming the reinvestment of all distributions. Returns do not reflect the
deduction of the applicable contingent deferred sales charges that apply to
Class B shares when held for less than six years.
Note: An investment in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund. This Fund is managed to
maintain, and has maintained, its stable $1.00 per share price.
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Statement of Net Assets
June 30, 1999
<TABLE>
<CAPTION>
Principal
Amount
Investments Rating + (000) Value
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Investments in Securities 98.76%
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<S> <C> <C> <C>
U. S. Government Agency Federal Farm Credit Bank
Obligations 98.76% 4.77% due 7/1/1999 A1+ $ 5,000 $ 5,000,000
4.71% due 7/6/1999 A1+ 5,000 4,996,729
4.83% due 7/21/1999 A1+ 5,000 4,986,583
5.50% due 8/3/1999 A1+ 5,000 5,002,577
4.875% due 9/1/1999 A1+ 5,000 4,998,519
Total 24,984,408
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Federal Home Loan Bank
4.47% due 7/1/1999 A1+ 22,945 22,945,000
4.49% due 7/1/1999 A1+ 1,400 1,400,000
4.71% due 7/9/1999 A1+ 5,000 4,994,767
6.13% due 7/9/1999 A1+ 5,000 5,001,342
5.54% due 7/15/1999 A1+ 10,000 10,002,499
Total 44,343,608
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Federal Home Loan Mortgage Corporation
4.71% due 7/2/1999 A1+ 5,000 4,999,346
4.71% due 7/6/1999 A1+ 5,000 4,996,729
4.73% due 7/12/1999 A1+ 5,000 4,992,774
4.71% due 7/13/1999 A1+ 5,000 4,992,150
4.70% due 7/14/1999 A1+ 5,000 4,991,514
4.80% due 7/14/1999 A1+ 5,000 4,991,333
4.71% due 7/15/1999 A1+ 5,000 4,990,842
4.80% due 7/16/1999 A1+ 4,500 4,491,000
7.125% due 7/21/1999 A1+ 5,000 5,005,767
4.73% due 7/22/1999 A1+ 5,000 4,986,204
4.73% due 7/30/1999 A1+ 5,000 4,980,949
4.73% due 8/2/1999 A1+ 5,000 4,978,978
4.70% due 8/6/1999 A1+ 5,000 4,976,500
4.73% due 8/6/1999 A1+ 5,000 4,976,350
4.86% due 8/6/1999 A1+ 5,000 4,975,700
4.86% due 8/12/1999 A1+ 5,000 4,971,650
4.89% due 9/3/1999 A1+ 5,000 4,956,533
Total 84,254,319
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Federal National Mortgage Association
5.90% due 7/14/1999 A1+ 10,000 10,003,409
4.80% due 7/19/1999 A1+ 5,000 4,988,000
6.45% due 7/29/1999 A1+ 5,000 5,005,563
4.73% due 8/5/1999 A1+ 5,000 4,977,007
4.79% due 8/6/1999 A1+ 5,000 4,976,050
5.52% due 8/9/1999 A1+ 5,000 5,002,791
4.93% due 8/24/1999 A1+ 5,000 4,963,025
Total 39,915,845
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Student Loan Marketing Association
5.469% due 7/7/1999 ++ A1+ 5,000 5,000,000
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Total U.S. Government Agency Obligations* 198,498,180
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Other Assets, Less Liabilities 1.24% 2,482,839
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Net Assets 100.00% (Equivalent to $1.00 a share on 184,599,838
Class A shares, 11,188,528 Class B shares and 5,192,653
Class C shares of $. 001 par value capital stock
outstanding; authorized, 700,000,000 Class A shares,
100,000,000 Class B shares and
200,000,000 Class C shares) $200,981,019
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</TABLE>
+ Ratings have not been audited by Deloitte & Touche LLP.
++ Floating Rate Note.
* Cost for federal income tax purposes is $198,498,180.
Average maturity of investments: 22 days.
See Notes to Financial Statements.
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Statement of Operations
<TABLE>
<CAPTION>
Investment Income For the Year Ended June 30, 1999
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<S> <C> <C>
Income Interest $ 9,434,744
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Expenses Management fee $ 930,679
12b-1 distribution plan-D Class B 55,066
Shareholder servicing 350,245
Registration 60,000
Professional 40,080
Reports to shareholders 30,348
Others 6,774
Total expenses 1,473,192
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Net investment income $ 7,961,552
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See Notes to Financial Statements.
</TABLE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
Increase in Net Assets 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations Net investment income (declared as dividends to shareholders)
Class A $ 7,538,290 $ 6,834,313
Class B 258,502 40,717
Class C 164,760 49,867
Total 7,961,552 6,924,897
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Capital share transactions (dollar amounts and number of shares are the same) (a)
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Proceeds from shares sold:
Class A 510,782,049 328,880,426
Class B 25,887,755 7,463,527
Class C 42,179,622 5,938,698
Total 578,849,426 342,282,651
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Net asset value of shares issued to shareholders in reinvestment of dividends:
Class A 6,951,998 6,329,635
Class B 205,821 28,189
Class C 129,445 32,002
Total 7,287,264 6,389,826
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Cost of shares reacquired:
Class A (495,764,765) (315,776,844)
Class B (16,627,593) (5,975,021)
Class C (37,891,791) (6,024,269)
Total (550,284,149) (327,776,134)
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Increase in net assets 35,852,541 20,896,343
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Net Assets
Beginning of year 165,128,478 144,232,135
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End of year $ 200,981,019 $ 165,128,478
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(a) The Fund began offering Class B shares on August 1, 1996 and
Class C shares on July 15, 1996. See Notes to Financial
Statements.
</TABLE>
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Financial Highlights
<TABLE>
<CAPTION>
Class A Class B Class C
-------------------------------------------- --------------------------- ---------------------------
Year Year 8/1/96(a) Year 7/15/96(a)
Per Share Operating Ended Ended to Ended to
Performance: 1999 1998 1997 1996 6/30/95 1999 6/30/98 6/30/97 1999 6/30/98 6/30/97
- ---------------------------------------------------------------------------- --------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------- --------------------------- ---------------------------
Income from investment
operations
Net investment income 0.043 0.047 0.046 0.048 0.046 0.036 0.039 0.024 0.043 0.047 0.044
- ---------------------------------------------------------------------------- --------------------------- ---------------------------
Distributions
Dividends from
net investment income (0.043) (0.047) (0.046) (0.048) (0.046) (0.036) (0.039) (0.024) (0.043) (0.047) (0.044)
- ---------------------------------------------------------------------------- --------------------------- ---------------------------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------- --------------------------- ---------------------------
Total Return(c) 4.36% 4.79% 4.66% 4.85% 4.65% 3.76% 4.01% 2.39%(b) 4.36% 4.79% 4.47%(b)
- ---------------------------------------------------------------------------- --------------------------- ---------------------------
Ratios/Supplemental Data:
- ---------------------------------------------------------------------------- --------------------------- ---------------------------
Net assets, end of year(000) $184,600 $162,631 $143,197 $152,531 $140,642 $11,188 $1,760 $244 $5,193 $738 $791
- ---------------------------------------------------------------------------- --------------------------- ---------------------------
Ratios to Average Net Assets
- ---------------------------------------------------------------------------- --------------------------- ---------------------------
Expenses 0.76% 0.83% 0.84% 0.81% 0.86% 1.52% 1.59% 0.99%(b) 0.76% 0.84% 0.81%(b)
Net investment income 4.31% 4.68% 4.57% 4.75% 4.54% 3.52% 3.96% 2.38%(b) 4.27% 4.73% 4.39%(b)
- ---------------------------------------------------------------------------- --------------------------- ---------------------------
</TABLE>
(a) Commencement of offering Class B and Class C shares, respectively.
(b) Not annualized.
(c) Total return assumes reinvestment of all distributions.
See Notes to Financial Statements.
Notes to Financial Statements
1. Significant Accounting Policies
Lord Abbett U. S. Government Securities Money Market Fund (the "Company") is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The financial statements have been prepared in
conformity with generally accepted accounting principles, which require
management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Company:
(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 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. Therefore, no federal 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. Net investment income (other than distribution and service fees) is
allocated to each class of shares based upon the relative proportion of net
assets at the beginning of the day.
(e) Income distributions are determined in accordance with income tax
regulations, which may differ from methods used to determine the corresponding
income amounts in accordance with generally accepted accounting principles.
2. Management Fee and Other Transactions with Affiliates The Company has a
management agreement with Lord, Abbett & Co. (" Lord Abbett"), pursuant to which
Lord Abbett supplies the Company with investment management, research,
statistical and advisory services and pays officers' remuneration and certain
other expenses of the Company. The management fee 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 Rule 12b-1 plans and agreements (the "Class A, Class B and Class
C Plans") with Lord Abbett Distributor LLC, an affiliate of Lord Abbett, which
provides for payments of 0.15% of the average daily net asset value of Class A
shares, 0.75% of the average daily net asset value of Class B shares and 0.25%
of the average daily net asset value of Class C shares sold, and, at each
quarter-end after the first anniversary of the sale of such shares, 0.25% of the
average daily net asset value of such shares outstanding. The Company is
currently not making payments under the Class A and Class C Plans.
Certain of the Company' s officers and directors have an interest in Lord
Abbett.
3. Directors' Remuneration
The Directors of the Company associated with Lord Abbett and all officers of the
Company receive no compensation from the Company for acting as such. Outside
Directors' fees and retirement costs are allocated among all funds in the Lord
Abbett group based on the net assets of each fund. Directors' fees payable at
June 30, 1999, under a deferred compensation plan, were approximately $122,857.
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders,
Lord Abbett U. S. Government Securities Money Market Fund, Inc.:
We have audited the accompanying statement of net assets of Lord Abbett U. S.
Government Securities Money Market Fund, Inc. as of June 30, 1999, the related
statements of operations and of changes in net assets, and the financial
highlights for each of the periods presented. These financial statements and the
financial highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at June 30,
1999 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 statement 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, 1999, the results of
its operations, the changes in its net assets and the financial highlights for
each of the periods presented in conformity with generally accepted accounting
principles.
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Deloitte & Touche LLP
New York, New York
August 13, 1999
An investment in this Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund. The Fund is managed to maintain, and has
maintained, its stable $1.00 per share.
Mutual funds are not insured by the Federal Deposit Insurance Corporation, are
not deposits or other obligations of, or guaranteed by banks, and are subject to
investment risks including possible loss of principal amount invested.
Our Management
Investment Manager and
Underwriter
Lord, Abbett & Co. and
Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
212-848-1800
Custodian, Transfer Agent and Dividend
Disbursing Agent
United Missouri Bank of
Kansas City, N. A.
Tenth and Grand
Kansas City, MO 64141
Shareholder Servicing Agent
DST Systems, Inc.
P. O. Box 419100
Kansas City, MO 64141
800-821-5129
Auditors
Deloitte & Touche LLP
New York, NY
Counsel
Debevoise & Plimpton
New York, NY
Numbers to Keep Handy
For Shareholder Account or
Statement Inquiries:
800-821-5129
For Literature Only:
800-874-3733
For 24-Hour Automated Shareholder
Service Line:
800-865-7582
For More Information:
800-426-1130
Visit Our Web Site:
http://www. lordabbett. com
Copyright (C) 1999 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. There is no guarantee that the forecasts contained within this
publication will come to pass. All rights reserved. Printed in the U. S. A.
Lord Abbett Distributor LLC LAMM-2-699
The GM Building 767 Fifth Avenue New York, NY 10153-0203 (8/99)
