<PAGE>
LINCOLN LIFE MULTI FUND(R)
ANNUAL
REPORT
1994
<PAGE>
MULTI FUND(R) 1994 ANNUAL REPORT
INDEX
STATEMENT OF NET ASSETS:
Lincoln National Aggressive Growth Fund, Inc. 10
------------------------------------------------------------
Lincoln National Bond Fund, Inc. 11
------------------------------------------------------------
Lincoln National Capital Appreciation Fund, Inc. 13
------------------------------------------------------------
Lincoln National Equity Income Fund, Inc. 14
------------------------------------------------------------
Lincoln National Growth Fund, Inc. 17
------------------------------------------------------------
Lincoln National International Fund, Inc. 18
------------------------------------------------------------
Lincoln National Managed Fund, Inc. 20
------------------------------------------------------------
Lincoln National Money Market Fund, Inc. 23
------------------------------------------------------------
Lincoln National Putnam Master Fund, Inc. 24
------------------------------------------------------------
Lincoln National Social Awareness Fund, Inc. 30
------------------------------------------------------------
Lincoln National Special Opportunities Fund, Inc. 31
------------------------------------------------------------
STATEMENT OF OPERATIONS 34
------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS 36
------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS:
1. Significant Accounting Policies 38
------------------------------------------------------------
2. Other Assets Over(Under) Liabilities 39
------------------------------------------------------------
3. Management Fees and Other Transactions
With Affiliates 40
------------------------------------------------------------
4. Analysis of Net Assets 40
------------------------------------------------------------
5. Investments 41
------------------------------------------------------------
6. Supplemental Financial Instrument Information 41
------------------------------------------------------------
7. Concentration of Credit Risk 43
------------------------------------------------------------
8. Organization of New Funds 43
------------------------------------------------------------
9. Summary of Changes from
Capital Share Transactions 43
------------------------------------------------------------
10. Distribution to Shareholder 44
------------------------------------------------------------
11. Capital Loss Carryforward 44
------------------------------------------------------------
12. Subsequent Events 44
------------------------------------------------------------
FINANCIAL HIGHLIGHTS 45
------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS 47
------------------------------------------------------------
<PAGE>
[LOGO OF LINCOLN LIFE]
January 31, 1994
Dear Multi Fund(R) Contract Owner,
As we reflect on 1994 and look forward to 1995, we would like to take the
opportunity to thank you once again for placing your confidence in Lincoln Life.
This letter and accompanying material gives you a detailed picture of the
performance of the sub-accounts underlying your Lincoln annuity over the past
year. 1994 was a year of interest rate hikes and mixed investor sentiment, which
led both the stock and bond markets to perform below their historical averages.
The S&P 500 Index finished the year with a total return of 1.3% while the Lehman
Brothers Aggregate Bond Index was down 2.9%.
The following table shows the change in the unit values of the Multi Fund(R)
Variable Annuity sub-accounts for 1994.
1994 PERFORMANCE SUMMARY FOR MULTI FUND(R)/ACCOUNT C
12/31/93 to 12/31/94
Aggressive Growth Fund** (12.85)%
Bond Fund (5.18)%
Capital Appreciation Fund** (0.20)%
Equity-Income Fund** 1.86%
Growth Fund 0.32%
International Fund 2.28%
Managed Fund (2.85)%
Money Market Fund 2.78%
Putnam Master Fund (2.82)%
Social Awareness Fund (0.81)%
Special Opportunities Fund (2.01)%
Although 1994 was not unusually volatile by historical standards, some investors
were concerned about the market's month to month fluctuations. When investing
in variable accounts the importance of keeping a long-term perspective is
illustrated by looking at historical stock returns from 1926 to the present.
The S&P 500 Stock Index had a negative return in 27% of the one year periods
since 1926. However, only 4% of the ten year time periods between 1926 and 1993
had a negative return. Historically, the longer term investor has been rewarded
with much less volatility.
** Funds became effective 2/3/94. This performance is for the time period
2/3/94 - 12/31/94.
1
<PAGE>
In addition to having a long-term perspective, each variable investor should
understand his/her own risk tolerance. An investor's risk tolerance can be
gauged by the ability to withstand month to month market fluctuations. Some may
prefer to earn a small return every month with little or no variation. However,
they should understand the risk/reward trade-off. While short-term risk is
decreased, the risk of not earning sufficient returns to meet long-term goals is
increased.
Investors can also reduce their total portfolio risk through diversification,
although diversification does not eliminate all risk. Diversification refers to
investing in more than one asset class, (i.e. stocks, bonds, and money markets)
an/or in more than one country.
The following report contains comments from each of our portfolio managers for
the investment options in your Multi Fund(R) contract. Also, the underlying
investment option's past performance is shown with a comparison to a widely
recognized index. The commentary leads into more detailed financial information
about each of the underlying investment options.
I encourage you to review this information carefully. Your Lincoln Life
representative will help answer any questions that you may have.
Thank you for your patronage. We look forward to another year of serving you.
Sincerely,
/S/KELLY D. CLEVENGER
Kelly D. Clevenger
President, Board of Directors
In compliance with SEC guidelines, the following results show the percent of
change (on an annualized basis) for each of the required periods with dividends
reinvested and including deduction of all charges and fees including the annual
maintenance charge.
The following numbers are SEC required returns for the one year, five years and
ten years (or since inception if less than one of the previous stated periods).
These figures are for periodic contracts, based upon Surrender Charges of 8% for
years 1-5, and 4% for years 6-10, calculated as of 12/31/94. Bond Fund
(12.83)%, 5.75%, 8.71%; Growth Fund (7.80)%, 7.02%, 12.43%; Special
Opportunities Fund (9.91)%, 8.71%, 11.85%; Money Market Fund (5.51)%, 2.75%,
4.94%; Managed Fund (10.68)%, 5.44%, 9.71%; Putnam Master Fund (10.66)%, 5.96%,
N/A, 6.22%; Social Awareness Fund (8.82)%, 7.14%, N/A, 10.21%; International
Fund (5.97)%, N/A, N/A, 4.27%; Equity-Income Fund N/A, N/A, N/A, (3.79)%;
Aggressive Growth Fund N/A, N/A, N/A, (17.61)%; Capital Appreciation Fund N/A,
N/A, N/A (6.50)%.
Note: These figures reflect past results. Unit price and return will vary, so
you may have a gain or loss of principal when you sell your units. An
investment in the Money Market Fund is neither insured nor guaranteed by the
U.S. Government. The risks associated with investing on a worldwide basis
include differences in regulation of financial data and reporting, currency
exchange differences and economic and political systems which may be different
from those in the United States.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS FOR THE LINCOLN
NATIONAL LIFE VARIABLE ANNUITY ACCOUNT C. READ THE PROSPECTUS CAREFULLY BEFORE
YOU INVEST.
2
<PAGE>
Aggressive Growth Fund 12/31/94
Growth of $10,000 invested 1/3/94 through 12/31/94
Total
Shares NAV at Ending Return
at the end End of Account %
Date of year Year Value
1994 1,000.000 9.048 $9,048.00 -9.52%
The past year was a difficult one for investors in high-growth mid-cap stocks.
The catalyst for most of the market's problems was the significant change in
Federal Reserve policy. In response to the higher than expected growth in the
U.S. economy throughout the year and the fear of inflation, the Fed raised
interest rates 6 times, for a total change of 2.5% (Fed Funds rate) between
February 4th and December 31st. Higher interest rates negatively impact the
valuations of high growth companies because expected future earnings streams
become worth less to investors as alternative investments offer greater yields.
This more hostile environment was particularly damaging for small and mid cap
investors, but affected the broad market as well. For instance, although the
S&P 500 Index was up 1.3% for the year, the average decline of the stocks in the
Index from their individual 52 week highs was 17.6%. These price corrections
often occur even in companies whose fundamentals are clearly improving. The
Fund's performance for 1994 was (9.52)% in comparison to the S&P Mid Cap Index
performance of (3.58)%.
The performance in 1994 was negatively impacted by our exposure to the consumer
cyclical, basic materials, and to a lesser extent, the financial (banking)
sectors of the market. Specifically, housing related, auto and selected
retailing stocks hurt the portfolio's performance during the year. The
strongest performing sector was technology. Several computer hardware and
software companies as well as networking firms reported very strong earnings
gains during the year which led to strong share price gains.
As we enter 1995, we remain cautious on the market near term because of the
likelihood of continuing interest rate increases by the Federal Reserve. Our
near term concerns are balanced by two important observations. First, we have
witnessed during the past six months an outperformance by growth stocks relative
to value stocks as investors have become increasingly concerned over the
prospects of an economic slowdown in 1996. Second, the price/earnings ratios of
mid-cap stocks relative to their projected long term growth rates and relative
to large company stocks appears very attractive today. The relative
price/earnings ratios of the mid cap indices relative to the S&P 500 remains
well below the previous highs established back in 1983-84.
Ed Petner, Lynch & Mayer
Bond Fund 12/31/94
Growth of $10,000 invested 1/1/85 through 12/31/94
Total 1 Year 5 Year 10 Year
Shares NAV at Ending Return Return Return
at the end End of Account % % %
Date of year Year Value
1985 1,031.317 11.904 $12,276.79 22.77% 7.55%
1986 1,149.251 12.448 $14,305.88 16.53%
1987 1,278.043 11.141 $14,238.68 -0.47%
1988 1,412.746 11.010 $15,554.33 9.24%
1989 1,539.776 11.438 $17,611.96 13.23% 6.47%
1990 1,658.421 11.198 $18,571.00 5.45%
1991 1,797.336 12.188 $21,905.93 17.96%
1992 1,927.215 12.240 $23,589.11 7.68%
1993 2,107.357 12.693 $26,748.69 13.39%
1994 2,322.393 10.941 $25,409.30 -5.01%
1994 may be remembered as the worst year for fixed income returns since records
started being kept in the late 1920s. Six policy tightenings by the Federal
Reserve ended the bull market for bonds which began in 1990. In 1994 the one
year Treasury rate actually doubled from 3.58% to 7.17%, and the 30 year
Treasury rate rose almost 25% from 6.34% to 7.88%.
3
<PAGE>
These Federal Reserve actions were driven by an accelerating domestic economy
and fears of rising inflation. The Fed was accurate in its reading of economic
strength as Gross Domestic Product rose at 4%, but by year-end 1994 there were
few signs of inflation at the consumer level. The Consumer Price Index ended
the year with a change of 2.7%, only slightly above the 1993 change of 2.5%.
The rising tide of interest rates in 1994 impacted just about all fixed income
funds. The Bond Fund suffered through a painful year as well and Fund
performance was (5.01)% versus the Lehman Brothers Government/Corporate Bond
Index return of (3.5)%. The Fund ended 1994 conservatively positioned with a
duration shorter than that of the Index.
We look for 1995 to be a much better year for fixed income investors than 1994.
However, we expect the first half of the year to be potentially as tumultuous as
1994.
With no leverage, no emerging markets exposure and no principal risk from
derivatives, the Bond Fund should be able to rebound if interest rates stablize
as expected later in 1995.
Dave Berry, Lincoln National Investment Management Company
Capital Appreciation Fund 12/31/94
Growth of $10,000 invested 1/3/94 through 12/31/94
Total
Shares NAV at Ending Return
at the end End of Account %
Date of year Year Value
1994 1,000.000 10.152 $10,152.00 1.52%
The Capital Appreciation Fund finished 1994 with a gain of 1.52%, compared to
the Standard and Poor's 500 Index, which ended the year up 1.3%. Though these
gains are relatively modest, on the whole I am pleased with the Fund's
performance, especially given the choppy action in the stock market this year,
which was in large part the result of a genuine bear market in bonds. The gain
in the S&P 500 also masked the turbulent internal dynamics of the broader equity
market, where many stocks and stock groups are significantly off their highs of
1993 and early 1994. Earnings disappointments, perceived or actual, continue to
occasion radical markdowns.
As we head into 1995, the divergence between the stock and bond markets remains
unresolved. Bonds are still under pressure from rising interest rates, while
stocks have been supported by good earnings reports. I still believe that if
rates stabilize at or near current levels, stocks will be able to preserve their
gains and perhaps go higher. However, if rates continue to rise because
economic growth fails to moderate, then it will be difficult for stocks to make
much headway.
Given these conditions, my current portfolio strategy remains conservative. I
intend to hold cash unless I find exciting ideas, opportunities to add stocks to
the portfolio at exceptionally good valuations. Three such companies were added
during the fourth quarter: Astra is a Swedish pharmaceutical mnaufacturer that
is one of the fastest growing large drug companies in the world; General Re is a
reinsurer; and LIN Broadcasting is a large player in the cellular
telecommunications industry.
Companies that have performed well this year include our pharmaceutical stocks:
Amgen (biotech), Pfizer, and Merck. Aerospace manufacturer McDonnell Douglas
also gained about 25% since it was purchased, as did multinational publisher
Wolters Kluwer. I also expect good numbers from Elsevier, another
4
<PAGE>
Netherlands-based international publishing company. The portfolio received
additional help from the profitable sale of CSX Corporation (rails and
transportation), Caterpillar (heavy equipment), and generic drug manufacturer
Watson Pharmaceuticals.
The year was not without disappointments, however, among which Wal-Mart,
specialty retailer GAP, Inc., contact lens maker Bausch and Lomb, and General
Motors were perhaps the most prominent.
Going forward into 1995, the portfolio is positioned with the flexibility to
benefit from market strength, but to hold its own should stock prices weaken.
Whatever investing environment the new year brings, I will continue to position
the portfolio to preserve capital and produce good growth returns.
James P. Craig, Janus Capital Corporation
Equity-Income Fund 12/31/94
Growth of $10,000 invested 1/3/94 through 12/31/94
Total
Shares NAV at Ending
at the end End of Account Return
Date of year Year Value %
---------- ---------- ---------- ---------- ----------
1994 1,000.00 10.355 $10,335.00 3.35%
In 1994, the Fund's total return was positive 3.35%. This was more than 2%
above the performance of the benchmark S&P 500 Index which gained 1.3%. The
outperformance in the year reflected a combination of (1) issuer and industry
selection as well as (2) cash inflows to the Fund which began during the
period.
While inflation fears, rising interest rates and currency instability led to a
difficult investment environment, our strategy of seeking out-of-favor stocks
with improvement potential provided relatively strong returns from positions in
several areas. Expanding global economies, tightening supply/demands and signs
of pricing power led to rising earnings estimates and strong returns for
overweighted, commodity-oriented positions, including aluminum and paper stocks.
International oil positions helped returns because of ongoing cost cutting
efforts, strengthening petrochemical markets and expected higher earnings. A
variety of factors, including merger and acquisition activity, diminishing
concern about healthcare reform legislation, cost cutting and new products,
buoyed drug and hospital supply positions, such as Warner Lambert and American
Cyanamid. Certain restructuring computer and office equipment positions,
including IBM, also advanced because of global demand for productivity-enhancing
technology and the strong earning growth potential of these companies.
Stephen Petersen, Fidelity Management Trust Company
International Fund 12/31/94
Growth of $10,000 invested 5/1/91 through 12/31/94
Total Inception of
Shares NAV at Ending 1 Year the Fund
at the end End of Account Return Return
Date of year Year Value % %
---------- ---------- ---------- ---------- ---------- ----------
1991 1,000.000 9.958 $ 9,958.00 -0.42% 9.60%
1992 1,003.253 9.091 $ 9,120.57 -8.41%
1993 1,006.129 12.642 $12,719.48 39.46%
1994 1,006.521 13.027 $13,111.94 3.09%
International markets had mixed results for the year, and the MSCI World ex USA
Index finished 1994 with a (1.6)% return in local currency terms. Dollar
weaknesses against virtually all foreign currencies throughout the majority of
the year substantially lifted the
5
<PAGE>
Index's dollar return to 7.6% for the year. Underweighting in the United Kingdom
and substantial overweighting and outperformance in the Nordic Countries helped
the Fund's performance. An overweighting in Southeast Asia, underperformance in
Japan (the market preferred deep cyclicals, where the portfolio's exposure was
light) and the 35% weighting cap in Japan in the first half of the year,
however, combined to pull the Fund behind the Index for the year with a 3.09%
total return.
The investment strategy to be underweighted in the United Kingdom during 1994
was correct. The United Kingdom had a (1.4)% return for the year. And, we were
right to be overweighted in Scandinavia where its index had a 20.6% return for
the period and the portfolio did even better, returning 43.8%. We also
maintained the maximum 35% weighting in Japan in the first half of the year.
However, our overweighted position in Southeast Asia hurt us as many of these
dollar-based markets suffered, particularly in the first and fourth quarters,
with U.S. interest rate rises having a negative effect on local investor
sentiment.
Portfolio Management Team, Clay Finlay, Inc.
MANAGED FUND 12/31/94
Growth of $10,000 invested 1/1/85 through 12/31/94
Total
Shares NAV at Ending 1 Year 5 Year 10 Year
at the end End of Account Return Return Return
Date of year Year Value % % %
--------- --------- --------- ---------- --------- --------- ---------
1985 1,109.176 11.305 $12,539.23 25.39% 8.23%
1986 1,167.460 12.248 $14,299.05 14.03%
1987 1,249.748 12.283 $15,350.66 7.35%
1988 1,440.502 11.527 $16,604.66 8.17%
1989 1,515.139 12.713 $19,261.97 16.00% 6.78%
1990 1,668.084 11.941 $19,918.59 3.41%
1991 1,763.476 13.847 $24,418.85 22.59%
1992 1,854.558 13.653 $25,320.28 3.69%
1993 2,002.284 14.152 $28,336.32 11.91%
1994 2,163.013 12.783 $27,649.79 -2.42%
Anytime bank passbook returns outperform managed funds, it is a difficult time
in the market. We entered 1994 with the prospect of slower, but reasonable
economic growth. Employment and growth surprised both the Fed and the
investment community. To combat perceived and anticipated inflationary
pressure, the Fed embarked on a tightening program, pushing rates up six times
during the year. The impact of the Fed increases resulted in negative fixed
income performance and negative, to slightly positive, domestic equity returns.
During the year we had anticipated increasing equity holdings, but instead
maintained a modest mix of stocks and bonds. We employed strategies to raise
short term returns in the cash component by investing in one year Treasuries.
Adjusting for the changes produced an average cash position of over 7%.
The Fund's asset allocation as of 12/31/94 in the Managed Fund was: Stocks
47.78%, Bonds 52.11% and Money Markets 0.11%. The Managed Fund performance for
1994 was (2.42)% compared to the S&P 500 Index of 1.3% and the Lehman Brothers
Government/Corporate Bond Index of (3.5)% for the year.
While the difficulties encountered in both the stock and bond market in 1994 are
not quite behind us, we are cautiously optimistic for 1995. In the next few
months we expect the Fed will continue to raise short term interest rates. This
will result in a bearish tone for the fixed income market. Equities have made
efforts to disengage from the bond market, with greater attention being paid to
earnings. Thus, from an asset allocation perspective we will have a bias
towards equities.
Jay Yentis, Economist, Asset Allocation Committee, Lincoln National Investment
Management Company
6
<PAGE>
Putnam Master Fund 12/31/94
Growth of $10,000 invested 9/1/87 through 12/31/94
Total Inception of
Shares NAV at Ending 1 Year 5 Year the Fund
at the end End of Account Return Return Return
Date of year Year Value % % %
--------- --------- --------- ---------- --------- --------- ---------
1987 1,000.000 9.027 $ 9,027.00 -9.73% 9.14%
1988 1,009.715 9.616 $ 9,709.42 7.56%
1989 1,051.338 10.781 $11,334.48 16.74% 8.02%
1990 1,133.717 9.986 $11,321.29 -0.12%
1991 1,210.494 11.239 $13,604.75 20.17%
1992 1,291.916 11.204 $14,474.62 6.39%
1993 1,364.848 12.502 $17,063.33 17.88%
1994 1,494.069 11.143 $16,648.41 -2.43%
1994 was a difficult year for financial assets. The bond market suffered what
many investment professionals are calling its worst year ever. A volatile
stockmarket managed to end the year in positive territory, although just barely.
International Markets were as unpleasant as domestic markets, if not more so.
The Putnam Master Fund ended the year with a total return of (2.43)%. Equity
markets were positive for the year, due mostly to the strong January of 1994.
The S&P 500 Index returned 1.3% in 1994, while the EAFE Index returned 8.06% to
the U.S. dollar based investor. It is important to point out, however, that the
gains registered by the EAFE Index are entirely the product of the weakness of
the U.S. dollar throughout most of 1994. In local currency terms the EAFE Index
was (3.4)%. Bond markets were even more difficult. The Lehman Brothers
Government/Corporate Bond Index was (3.5)% on the year. The JP Morgan Non-U.S.
Government Bond Return Index gained 4.9% on the year, mostly due to a positive
currency adjustment.
Entering 1994, the Fund was overweighted in U.S. equities and underweighted in
U.S. fixed income securities. This positioning successfully increased the
Fund's participation in January's brisk equity market returns, as well as
protecting the portfolio somewhat from the drastic backup in yields seen
throughout the first half of 1994 in the bond market. In mid-summer, we moved
to an underweighted equity position, anticipating that increasing interest rates
threatended stock market valuation. We increased our fixed income exposure at
that time, noting that the higher yields made bonds an attractive alternative to
stocks as the year moved on.
All in all, 1994 was a year in which the Fund's basic diversification, as well
as its exposure to foreign currency denominated assets, helped it to avoid the
sharp losses suffered in many of the world's capital markets last year. The
portfolio weathered a difficult year while preserving most of the gains earned
in 1993.
William J. Landes, Ph.D., Putnam Investments
GROWTH FUND 12/31/94
Growth of $10,000 invested 1/1/85 through 12/31/94
Total
Shares NAV at Ending 1 Year 5 Year 10 Year
at the end End of Account Return Return Return
Date of year Year Value % % %
--------- --------- --------- ---------- --------- --------- ---------
1985 823.722 16.138 $13,293.22 32.93% 10.30%
1986 860.911 18.031 $15,523.08 16.77%
1987 906.970 19.640 $17,812.89 14.75%
1988 1,107.986 17.372 $19,247.93 8.06%
1989 1,140.348 20.231 $23,070.39 19.86% 8.60%
1990 1,259.593 18.624 $23,458.66 1.68%
1991 1,291.366 23.766 $30,690.61 30.83%
1992 1,355.173 22.927 $31,070.06 1.24%
1993 1,425.768 24.693 $35,206.49 13.31%
1994 1,525.356 23.230 $35,434.03 0.65%
The Growth Fund's focus on stocks with both value and growth characteristic
helped stabilize returns. During the first half of 1994, value stocks
outperformed growth stocks by two percentage points while growth stocks
outperformed value stocks by six percentage points in the second half of the
year. By holding stocks with both growth and value characteristics, the Fund
participated in the favored style while mitigating the downside extreme of each.
Larger stocks outperformed smaller stocks with the top fifty stocks in the S&P
500 Index
7
<PAGE>
driving the positive market performance. The Fund is well-diversified, holding
stocks representing all industries in the S&P 500 Index. Thus, the gains
experienced by the top fifty stocks in the market boosted returns for the year.
In 1994, the Fund performed similarly to the S&P 500 Index, by providing a
return of .65% compared to the S&P 500 Index return of 1.3%.
Investors were pulled in two directions during 1994 as their fear of market
correction wrestled with their optimism due to a strong economy. Amidst this
battle, the Federal Reserve continued to raise interest rates as the strong
economic signals fueled fears of inflation. Each interest rate increase brought
mixed reactions as some pundits felt the increases were necessary, decisive
strikes against inflation while others feared they would throw the economy into
a recession.
As an example of the type of purchase we favor, the Fund purchased Capital
Cities/ABC based on its strong growth and value characteristics. Analysts had
upwardly reviewed their earnings estimates and stock was attractively priced.
Analysts were optimistic for ABC as the up front sales of commercial inventory
time has increased to 75-80% from historical levels of 70%. Furthermore, viewers
have appeared loyal to established networks, despite the recent proliferation of
cable channels. Also, ABC owns five of the six new television shows in the fall
1994 line up, making ABC less reliant on the studios for programming.
Scott Wittman, Vantage Global Advisors
SOCIAL AWARENESS FUND 12/31/94
Growth of $10,000 invested 5/3/88 through 12/31/94
Total Inception of
Shares NAV at Ending 1 Year 5 Year the Fund
at the end End of Account Return Return Return
Date of year Year Value % % %
--------- --------- --------- ---------- --------- --------- ---------
1988 1,000.000 10.454 $10,454.00 4.54% 11.66%
1989 1,006.359 13.350 $13,434.90 28.51% 9.81%
1990 1,039.600 12.207 $12,690.39 -5.54%
1991 1,056.819 16.449 $17,383.62 36.98%
1992 1,078.734 16.577 $17,882.18 2.87%
1993 1,135.648 17.915 $20,345.14 13.77%
1994 1,217.716 16.642 $20,265.23 -0.39%
1994 was a remarkable year for socially responsible investors as the economic
pressure on South Africa helped bring about the election of President Nelson
Mandela. Under the new administration, Nelson Mandela has called for investment
in South Africa to help build the nation. The Social Awareness Fund is in the
process of removing the restriction on companies doing business in South Africa.
The Fund eliminates companies from consideration that violate certain social
criteria. By eliminating such companies, the Fund has unique industry and size
characteristics that may help or hurt the portfolio relative to the broad, non-
screened market. Many large companies tend to be screened out of a socially
responsible investment fund. During 1994, large companies outperformed smaller
companies. Thus, the absence of some larger companies in the socially screened
portfolios made 1994 a difficult year for many socially responsible funds. In
addition, industries such as chemicals, soaps, and cosmetics, which are
underweighted in a socially aware portfolio, performed well, thus hurting
performance.
For 1994 the S&P 500 Index returned 1.3%. In comparison, the Social Awareness
Fund provided a (.39)% return.
Largely due to size and industry characteristics, the Fund lagged broad market
indices such as
8
<PAGE>
the S&P 500 Index. It should be noted, however, that these characteristics
helped performance during 1991-1993, and, historically, smaller companies have
outperformed larger companies in the long run.
Bank of New York is one example of an ideal buying opportunity for the Fund
during 1994 as the stock provided growth at a reasonable price. Bank of New
York, whose assets rank them as one of the nation's top twenty banks, exhibited
strength which was fueled by a growing securities processing operation.
Additionally, an aggressive marketing operation has helped sales of credit cards
to increase while interest on outstanding card balances provides steady revenue.
Scott Wittman, Vantage Global Advisors
SPECIAL OPPORTUNITIES 12/31/94
Growth of $10,000 invested 1/1/85 through 12/31/94
Total
Shares NAV at Ending 1 Year 5 Year 10 Year
at the end End of Account Return Return Return
Date of year Year Value % % %
---- ----------- -------- ---------- -------- ------- -------
1985 830.715 17.233 $14,315.71 43.16% 9.07%
1986 839.987 16.617 $13,958.07 -2.50%
1987 846.613 17.933 $15,182.31 8.77%
1988 1,009.425 15.601 $15,748.05 3.73%
1989 1,013.157 20.505 $20,774.78 31.92% 12.11%
1990 1,109.222 17.366 $19,262.75 -7.28%
1991 1,122.629 24.561 $27,572.90 43.14%
1992 1,185.369 24.712 $29,292.85 6.24%
1993 1,415.850 24.478 $34,657.19 18.31%
1994 1,539.377 22.164 $34,118.75 -1.55%
In a difficult year for mid-cap funds, the Special Opportunities Fund performed
well relative to mid-cap indices for 1994. While the Special Opportunities Fund
and mid-cap indices lagged the S&P 500 Index, 1994 was the first year in the
last four where mid-cap stocks underperformed the broad market. Mid-cap stocks
have historically provided higher returns than the S&P 500. Of course, with
higher returns comes higher volatility. The S&P Mid Cap Index returned (3.58)%,
while the Special Opportunities Fund ended the year at (1.55)%.
Investors were uncertain about the market's direction in 1994. Some investors
feared a large market correction while others were optimistic for stocks given
strong signs of economic growth. In such an environment, investors tend to move
to larger, more predictable stocks. The Federal Reserve appeared sensitive to
the signs of strong economic growth and raised interest rates throughout the
year in an attempt to fight off inflation. An autumn increase in interest rates
led to a market decline that erased most of the summer gains. However, the
market continued to bounce back as it rallied at year-end. During 1994, growth
stocks outperformed value stocks by almost five percentage points, signalling
the end to a two year value cycle. The Vantage investment style, which selects
stocks with both growth and value characteristics, buffered the effects of this
swing in style.
An example of an attractive stock for the Fund is Micron Technology which
continues to be a desirable holding based on both growth and value
characteristics. As software proliferates and consumers continue to demand
graphical memory-intensive applications, Micron's role in the technology
revolution, as a producer of computer memory chips, continues. This is taking
place despite the known computational problems and decreased sales of the
pentium-based PCs, which typically utilize twice as much system memory as other
machines.
Scott Wittman, Vantage Global Advisors
9
<PAGE>
Lincoln National Aggressive Growth
Fund, Inc.
Statement of Net Assets
December 31, 1994
Number Market
Investments of Shares Value
--------- ------
Common Stocks:
Agriculture Products:-1.1%
-----------------------------------------------------------------------
Terra Inds Inc. 63,600 $659,850
-----------------------------------------------------------------------
Banking and Insurance:-5.0%
-----------------------------------------------------------------------
Bay Banks Inc 13,100 687,750
-----------------------------------------------------------------------
California Federal Bank 51,100 555,712
-----------------------------------------------------------------------
Partner Re Holding 56,000 1,162,000
-----------------------------------------------------------------------
TCF Financial Corp. 14,900 614,625
-----------------------------------------------------------------------
3,020,087
Chemicals:-3.0%
-----------------------------------------------------------------------
FMC Corp.* 15,000 866,250
-----------------------------------------------------------------------
Georgia Gulf Corp.* 24,200 940,775
-----------------------------------------------------------------------
1,807,025
Coal and Natural Gas:-0.8%
-----------------------------------------------------------------------
Apache Corporation 20,100 502,500
-----------------------------------------------------------------------
Consumer Products and Services:-9.3%
-----------------------------------------------------------------------
Hospitality Franchise Systems Inc.* 35,100 930,150
-----------------------------------------------------------------------
Newell Company 37,400 785,400
-----------------------------------------------------------------------
Premark Intl Inc. 25,100 1,123,225
-----------------------------------------------------------------------
Sunbeam Oster Inc. 64,500 1,660,875
-----------------------------------------------------------------------
Tommy Hilfiger Corp.* 25,600 1,155,200
-----------------------------------------------------------------------
5,654,850
Drug and Hospital Supplies:-0.8%
-----------------------------------------------------------------------
Elan Corp. PLC* 13,700 488,062
-----------------------------------------------------------------------
Electrical and Electronics:-7.6%
-----------------------------------------------------------------------
Altera Corporation* 13,100 547,744
-----------------------------------------------------------------------
Lam Resh Corporation* 24,800 920,700
-----------------------------------------------------------------------
Read Rite Corp.* 66,000 1,221,000
-----------------------------------------------------------------------
Silicon Graphics Inc.* 39,100 1,207,213
-----------------------------------------------------------------------
Tektronix Inc. 20,700 708,975
-----------------------------------------------------------------------
4,605,632
Entertainment:-1.4%
-----------------------------------------------------------------------
Regal Cinemas Inc.* 33,900 851,737
-----------------------------------------------------------------------
Financial Services:-4.2%
-----------------------------------------------------------------------
First USA Inc. 33,000 1,084,875
-----------------------------------------------------------------------
Green Tree Financial Co 47,400 1,439,775
-----------------------------------------------------------------------
2,524,650
Food and Beverages:-2.8%
-----------------------------------------------------------------------
Coca Cola Enterprises Inc. 28,200 504,075
-----------------------------------------------------------------------
Hudson Foods Inc. 47,100 1,183,387
-----------------------------------------------------------------------
1,687,462
Hospitals and Health Care:-6.2%
-----------------------------------------------------------------------
HealthSouth Rehabilitation Corporation* 28,600 1,058,200
-----------------------------------------------------------------------
Horizon Healthcare Corp* 24,700 691,600
-----------------------------------------------------------------------
Mariner Health Group Inc.* 24,600 535,050
-----------------------------------------------------------------------
Medaphis Corp.* 22,800 1,054,500
-----------------------------------------------------------------------
Physician Reliance Network Inc.* 22,700 428,463
-----------------------------------------------------------------------
3,767,813
Hotels:-1.5%
-----------------------------------------------------------------------
Hilton Hotels Corp. 13,200 889,350
-----------------------------------------------------------------------
Machinery and Engineering:-2.8%
-----------------------------------------------------------------------
Cognex Corporation* 31,500 822,938
-----------------------------------------------------------------------
Harnnischfeger Industries Inc. 31,100 874,687
-----------------------------------------------------------------------
1,697,625
Metals and Mining:-1.4%
-----------------------------------------------------------------------
Reynolds Metals Company 17,300 $847,700
-----------------------------------------------------------------------
Miscellaneous:-2.8%
-----------------------------------------------------------------------
Omnicom Group 16,900 874,575
-----------------------------------------------------------------------
Scholastic Corp.* 16,500 843,563
-----------------------------------------------------------------------
1,718,138
Office and Business Equipment and Services:-9.6
-----------------------------------------------------------------------
Adobe Systems Inc. 20,200 603,475
-----------------------------------------------------------------------
Compuware Corporation* 27,400 982,975
-----------------------------------------------------------------------
Cadence Design Systems Inc.* 77,200 1,592,250
-----------------------------------------------------------------------
Dell Computer Corp.* 17,700 724,594
-----------------------------------------------------------------------
Filenet Corporation* 50,700 1,362,562
-----------------------------------------------------------------------
Policy Management System Corp.* 13,400 562,800
-----------------------------------------------------------------------
5,828,656
Paper:-2.0%
-----------------------------------------------------------------------
Westvaco Corp. 31,700 1,244,225
-----------------------------------------------------------------------
Petroleum and Petroleum Related:-6.9%
-----------------------------------------------------------------------
COFLEXIP 19,600 455,700
-----------------------------------------------------------------------
Halliburton Company 15,800 523,375
-----------------------------------------------------------------------
Lyondell Petrochemical Company 31,800 822,825
-----------------------------------------------------------------------
Petroleum Geo Services* 22,800 424,650
-----------------------------------------------------------------------
Smith International Inc.* 73,200 915,000
-----------------------------------------------------------------------
Triton Energy Corp.* 31,100 1,057,400
-----------------------------------------------------------------------
4,198,950
Retail:-6.1%
-----------------------------------------------------------------------
Ann Taylor Stores Corporation* 25,600 880,000
-----------------------------------------------------------------------
Revco DS Inc.* 70,400 1,663,200
-----------------------------------------------------------------------
Sunglass Hut International Inc.* 50,000 1,156,250
-----------------------------------------------------------------------
3,699,450
Steel:-0.9%
-----------------------------------------------------------------------
LTV Corp New* 35,100 570,375
-----------------------------------------------------------------------
Telecommunications:-4.1%
-----------------------------------------------------------------------
LCI Industires Inc.* 55,900 1,495,325
-----------------------------------------------------------------------
Qualcomm Inc.* 17,400 415,425
-----------------------------------------------------------------------
Scientific Atlanta 27,500 577,500
-----------------------------------------------------------------------
2,488,250
Total Common Stocks:-80.3%
(Cost-$46,283,078) 48,752,387
-----------------------------------------------------------------------
Maturity
Amount
--------
Repurchase Agreement:
State Street Bank and Trust Co. repurchase
agreement, dated 12/30/94, 5.15%, maturing
1/03/95 collateralized by U.S. Treasury
Bond 8.5%, 2/15/20 $11,643,659 11,637,000
-----------------------------------------------------------------------
Total Repurchase Agreement:-19.2%
(Cost-$11,637,000) 11,637,000
-----------------------------------------------------------------------
Total Investments:-99.5%
(Cost-$57,920,078) 60,389,387
-----------------------------------------------------------------------
Other Assets Over Liabilities-0.5% 307,874
-----------------------------------------------------------------------
Net Assets 100.0%
(equivalent to $9.048 per share
based on 6,708,497 shares
issued and outstanding) $60,697,261
-----------------------------------------------------------------------
-----------------------------------------------------------------------
<PAGE>
Lincoln National Bond Fund, Inc.
Statement of Net Assets
December 31, 1994
Par Market
Investments Amount Value
------ ------
Long-Term Debt Investments:
U.S. Government and Agency Obligations:-35.8%
--------------------------------------------------------------------------
Federal Home Loan Bank*
0.0%, 3/03/95 $1,500,000 $1,484,550
--------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.
4.88%, 6/23/98 3,000,000 2,775,210
--------------------------------------------------------------------------
Federal National Mortgage Association
8.0%, 4/1/17 500,634 479,513
--------------------------------------------------------------------------
FNMA
5.85% Med. Term Note, 2/02/98 3,000,000 2,823,120
5.24% Med. Term Note, 7/15/98 3,000,000 2,749,650
--------------------------------------------------------------------------
GNMA
9.0%, 5/15/17 332,573 335,482
9.0%, 9/15/19 1,105,202
6.5%, 11/15/23 983,709 851,823
--------------------------------------------------------------------------
U.S. Treasury Bonds
12.0%, 8/15/13 500,000 664,840
--------------------------------------------------------------------------
U.S. Treasury Notes
4.0%, 1/31/96 15,000,000 14,479,650
8.88%, 2/15/96 10,000,000 10,146,800
4.63%, 2/29/96 20,500,000 19,872,085
6.0%, 6/30/96 5,000,000 4,892,150
--------------------------------------------------------------------------
U.S. Treasury Strips*
0.0%, 2/15/18 18,000,000 2,871,360
0.0%, 5/15/20 10,000,000 1,360,700
0.0%, 2/15/21 22,400,000 2,901,920
--------------------------------------------------------------------------
69,794,055
Collateralized Mortgage Obligations:-3.1%
--------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Series 58
8%, 4/15/16 1,721,795 1,682,039
--------------------------------------------------------------------------
FNMA Remic
7.6%, 7/25/05 2,000,000 1,942,200
--------------------------------------------------------------------------
Mid State Trust III
9.625%,4/1/22 370,296 355,839
--------------------------------------------------------------------------
Prudential Home Mortgage
6.7%, 11/25/07 1,500,000 1,341,135
--------------------------------------------------------------------------
Resolution Trust Corp.
9.0%, 9/25/28 293,887 291,115
--------------------------------------------------------------------------
Spiegel Charge Account Trust 2
6.95%,12/17/01 500,000 486,145
--------------------------------------------------------------------------
6,098,473
Indexed Securities:-3.2%
--------------------------------------------------------------------------
Caterpillar Financial Services Corporation
4.25%, 1/08/96, coupon inversly
indexed to 2 year Italian swap
rate multiplied by 5.11 3,500,000 3,390,450
--------------------------------------------------------------------------
Goldman Sachs Group LP
4.24%, 12/29/95, coupon inversly
indexed to Euro swap basket
multiplied by 6.5 3,000,000 2,784,300
--------------------------------------------------------------------------
6,174,750
Air Transportation:-2.1%
--------------------------------------------------------------------------
American Airlines Equipment Trust
10.18%, 1/2/13 1,500,000 1,442,835
--------------------------------------------------------------------------
Delta Air Lines Inc.
8.25% Med. Term Note, 12/27/07 1,500,000 1,453,800
--------------------------------------------------------------------------
United Airline Inc. Equipment Trust
9.35%, 4/7/16 1,500,000 1,283,595
--------------------------------------------------------------------------
4,180,230
Aluminum:-0.4%
--------------------------------------------------------------------------
Alcan Aluminium LTD - Debentures
8.875%, 1/15/22 500,000 497,310
9.7%, 10/15/96 250,000 255,420
--------------------------------------------------------------------------
752,730
Par Market
Amount Value
------ ------
Banking and Insurance:-7.0%
--------------------------------------------------------------------------
Banc One Corp.
9.875%, 3/1/09 $500,000 $539,220
--------------------------------------------------------------------------
Barclays Bank Services
3.56%, 2/14/49 2,000,000 1,725,000
--------------------------------------------------------------------------
Chase Manhatten Corporation
6.75%, 8/15/08 3,000,000 2,495,160
--------------------------------------------------------------------------
First Union Corp.
8.0%, 8/15/09 2,000,000 1,823,240
--------------------------------------------------------------------------
First USA Bank
5.75%, 1/15/99 2,000,000 1,807,120
--------------------------------------------------------------------------
Fleet Financial Group
7.65%, 9/01/99 1,000,000 957,730
--------------------------------------------------------------------------
Fleet/Norstar Financial Group Inc.
7.65%, 3/1/97 500,000 492,870
--------------------------------------------------------------------------
Great Western Bank
10.25% Subordinated Notes, 6/15/00 500,000 527,280
--------------------------------------------------------------------------
Harris Bankcorp Inc.
9.375%, Subordinate Notes, 6/1/01 250,000 261,643
--------------------------------------------------------------------------
National Westminster Bancorp
3.69%, 7/30/49 3,000,000 2,572,500
--------------------------------------------------------------------------
National Westminster Bank p.l.c.
9.45% Debentures, 5/1/01 500,000 522,120
--------------------------------------------------------------------------
13,723,883
Chemicals:-1.6%
--------------------------------------------------------------------------
Dow Capital B V
9.0%, 5/15/10 3,000,000 3,054,450
--------------------------------------------------------------------------
Coal and Natural Gas:-0.6%
--------------------------------------------------------------------------
Coastal Corporation
9.75%, 8/1/03 1,000,000 1,045,740
--------------------------------------------------------------------------
Entertainment:-1.7%
--------------------------------------------------------------------------
Blockbuster Entertainment Corp.
6.63%, 2/15/98 550,000 516,670
--------------------------------------------------------------------------
Time Warner Entertainment Company
9.125%, 1/15/13 1,500,000 1,368,180
10.15%, 5/01/12 1,000,000 987,690
8.88%, 10/01/12 500,000 446,045
--------------------------------------------------------------------------
3,318,585
Finance:-8.6%
--------------------------------------------------------------------------
Aristar Finance
7.5% Senior Subordinated Note, 7/1/99 1,500,000 1,446,585
--------------------------------------------------------------------------
Avco Financial Services Inc.
7.25%, 7/15/99 1,000,000 956,270
--------------------------------------------------------------------------
Beneficial Corporation
9.0% Med. Term Notes, 1/19/96 1,250,000 1,264,688
--------------------------------------------------------------------------
Chrysler Financial Corporation
9.5%, 12/15/99 1,500,000 1,551,225
--------------------------------------------------------------------------
Discover Credit Corp.
8.73% Med. Term Note, 8/15/96 500,000 503,195
--------------------------------------------------------------------------
Ford Motor Credit Co.
8.875% Med. Term Note, 5/1/96 2,000,000 2,020,620
--------------------------------------------------------------------------
General Motors Acceptance Corporation
7.85%, 11/15/97 1,500,000 1,475,040
8.17%, 1/2/00 1,225,671 1,183,949
8.88%, 6/01/10 1,500,000 1,576,650
--------------------------------------------------------------------------
Household Affinity Credit Card
6.05%, 5/15/01 1,000,000 910,120
--------------------------------------------------------------------------
Household Finance Corp.
9.63% Senior Subordinated Note. 7/15/00 875,000 912,196
--------------------------------------------------------------------------
International Lease Finance Co
9.80%, 7/27/95 500,000 506,295
--------------------------------------------------------------------------
John Deere Capital Corp.
8.27% Med. Term Note, 8/8/95 500,000 503,020
--------------------------------------------------------------------------
Salomon Inc.
7.25%, 1/15/00 1,500,000 1,380,720
--------------------------------------------------------------------------
Transamerica Financial Corp.
9.2% Med. Term Note, 6/30/95 500,000 505,770
--------------------------------------------------------------------------
16,696,343
Food and Beverage:-1.2%
--------------------------------------------------------------------------
Coca-Cola Enterprises Inc.
8.0%, 1/04/05 2,310,000 2,352,804
--------------------------------------------------------------------------
11
<PAGE>
Par Market
Amount Value
------ ------
Forest Products:-0.5%
---------------------------------------------------------------------------
Boise Cascade Corporation
9.85%, 6/15/02 $1,000,000 $1,023,310
---------------------------------------------------------------------------
Foreign Government:-2.3%
---------------------------------------------------------------------------
Hydro-Quebec
7.2% Med. Term Note, 10/05/09 3,000,000 3,007,680
---------------------------------------------------------------------------
Manitoba (Province of)
7.75%, 7/7/26 1,500,000 1,497,675
---------------------------------------------------------------------------
4,505,355
Metals and Mining:-1.5%
---------------------------------------------------------------------------
Newmont Gold Company
8.91%, 1/05/09 750,000 731,220
---------------------------------------------------------------------------
Noranda Inc.
8.13%, 6/15/04 2,000,000 1,918,600
---------------------------------------------------------------------------
Reynolds Metals Company
9.0%, 8/15/03 250,000 254,853
---------------------------------------------------------------------------
2,904,673
Miscellaneous:-1.2%
---------------------------------------------------------------------------
Duquesne II Funding Corporation
8.7%, 6/1/16 2,479,000 2,313,155
---------------------------------------------------------------------------
Office and Business Equipment:-0.2%
---------------------------------------------------------------------------
Xerox Corporation - Euronote
8.375%, 9/25/96 500,000 501,760
---------------------------------------------------------------------------
Paper:-1.3%
---------------------------------------------------------------------------
Champion International Corp.
7.7%, 12/15/99 1,500,000 1,454,175
---------------------------------------------------------------------------
Georgia Pacific Corp.
10.1%, 6/15/02 1,500,000 1,065,690
---------------------------------------------------------------------------
2,519,865
Petroleum and Petroleum Related:-5.4%
---------------------------------------------------------------------------
Atlantic Richfield Co.
10.25% Eurobond, 7/2/00 1,000,000 1,044,890
---------------------------------------------------------------------------
Enron Corporation
9.5%, 6/15/01 1,000,000 1,047,630
---------------------------------------------------------------------------
Enserch Corporation
7.0%, 8/15/99 1,500,000 1,414,560
---------------------------------------------------------------------------
Noble Affiliates Inc.
7.25%, 10/15/23 600,000 491,244
---------------------------------------------------------------------------
Occidental Petroleum Corp.
11.75%, 3/15/11 2,000,000 2,158,480
---------------------------------------------------------------------------
Panhandle Eastern Pipe Line Co.
9.875%, 10/15/96 248,000 253,322
---------------------------------------------------------------------------
Petro Canada
8.6%, 10/15/01 1,500,000 1,506,495
---------------------------------------------------------------------------
Tenneco Inc.
10.0%, 8/1/98 2,500,000 2,597,450
---------------------------------------------------------------------------
10,514,071
Public Utilities:-15.1%
---------------------------------------------------------------------------
Arkla Inc.
8.875%, 7/15/99 500,000 490,500
---------------------------------------------------------------------------
Carolina Power & Light
9.0%, 4/01/22 500,000 498,615
---------------------------------------------------------------------------
Central Maine Power Company
6.5%, 7/22/97 1,500,000 1,415,145
---------------------------------------------------------------------------
Cleveland Electric Illuminating Company
8.26% Med. Term Note, 10/30/98 2,500,000 2,334,650
---------------------------------------------------------------------------
Commonwealth Edison Corporation
9.375%, 2/15/00 500,000 508,380
---------------------------------------------------------------------------
Consumers Power Company
8.75% 1st Mortgage Bonds, 2/15/98 1,000,000 1,001,710
8.875% 1st Mortgage Bonds, 11/15/99 1,000,000 1,005,140
---------------------------------------------------------------------------
Detroit Edison Company
6.56%, 5/1/01 2,000,000 1,808,040
---------------------------------------------------------------------------
Great Lakes Power Inc.
8.9%, 12/01/99 1,500,000 1,486,620
---------------------------------------------------------------------------
Illinois Power Co.
5.85% 1st Mortgage Bonds, 10/1/96 625,000 604,181
---------------------------------------------------------------------------
Long Island Lighting Co.
9.63%, 7/01/24 500,000 462,660
---------------------------------------------------------------------------
Par Market
Amount Value
------ ------
New Jersey Bell Telephone
7.85%, 11/15/29 $1,950,000 $1,977,807
---------------------------------------------------------------------------
New York Telephone Co.
6.5%, 3/01/05 1,000,000 869,100
---------------------------------------------------------------------------
Northeast Utilities Series A
8.58%, 12/1/06 1,000,000 950,040
---------------------------------------------------------------------------
Pacificorp
9.15% Med. Term Note, 8/9/11 2,000,000 2,088,680
---------------------------------------------------------------------------
Pennsylvania Power & Light
7.7%, 10/01/09 3,000,000 2,938,170
---------------------------------------------------------------------------
PSI Energy Inc.
8.56% Med. Term Note, 12/27/11 2,000,000 1,985,760
---------------------------------------------------------------------------
Public Service of Colorado
6.375%, 11/1/05 1,500,000 1,268,370
---------------------------------------------------------------------------
Texas Utilities Electric Company
9.85%, 2/5/03 1,500,000 1,604,835
---------------------------------------------------------------------------
Utilicorp United Inc.
10.5%, 12/1/20 2,000,000 2,212,020
---------------------------------------------------------------------------
Washington Water Power Co.
8.01%, 12/17/01 2,000,000 1,956,300
---------------------------------------------------------------------------
29,466,723
Railroads:-0.6%
---------------------------------------------------------------------------
Chicago & Northwestern Holdings Corporation
6.25%, 7/30/12 1,500,000 1,230,585
---------------------------------------------------------------------------
Retail:-1.1%
---------------------------------------------------------------------------
Dayton Hudson Corp.
10.03% Med. Term Note, 6/10/10 2,000,000 2,173,400
---------------------------------------------------------------------------
Securities Dealers:-1.8%
---------------------------------------------------------------------------
Paine Webber Group Inc.
9.625%, 5/1/95 500,000 502,180
---------------------------------------------------------------------------
Smith Barney Holdings
7.88%, 10/01/99 3,000,000 2,913,690
---------------------------------------------------------------------------
3,415,870
Telecommunications:-4.4%
---------------------------------------------------------------------------
NYNEX Cap Funding
7.63%, 10/15/09 3,000,000 2,919,300
---------------------------------------------------------------------------
NYNEX Corporation
9.55% Debentures, 5/1/10 1,722,640 1,823,087
---------------------------------------------------------------------------
Rochester Telephone Corp.
9.0% Med. Term Note, 7/19/00 2,000,000 2,053,960
---------------------------------------------------------------------------
Tele-Communications Inc.
6.58%, 2/15/05 2,000,000 1,833,620
---------------------------------------------------------------------------
8,629,967
Total Long-Term Debt Investments-100.7%
(Cost-$202,951,882) 196,390,777
---------------------------------------------------------------------------
Money Market Instruments:
Commercial Credit Inc.
5.81%, 1/09/95 2,160,000 2,160,000
---------------------------------------------------------------------------
Paccar Financial Corp
5.95%, 1/03/95 1,000,000 999,339
---------------------------------------------------------------------------
Temple-Inland Inc.
6.02%, 1/05/95 5,000,000 4,985,786
---------------------------------------------------------------------------
Total Money Market Instruments-4.2%
(Cost-$8,145,125) 8,145,125
---------------------------------------------------------------------------
Total Investments-104.9%
(Cost-$211,097,007) 204,535,902
---------------------------------------------------------------------------
Other Assets Under Liabilities-(4.9%) (9,526,136)
---------------------------------------------------------------------------
Net Assets-100.0%
(equivalent to $10.941 per share
based on 17,823,428 shares
issued and outstanding) $195,009,766
===========================================================================
12
<PAGE>
Lincoln National Capital Appreciation
Fund, Inc.
Statement of Net Assets
December 31, 1994
<TABLE>
<CAPTION>
Number Market
Investments of Shares Value
--------- -----
<S> <C> <C>
Common Stocks:
Aerospace:-1.4%
-----------------------------------------------------------------------
Alliant Techsystems Inc.* 18,100 $735,312
-----------------------------------------------------------------------
Air Transportation:-0.5%
-----------------------------------------------------------------------
McDonnell Douglas Corporation 1,900 269,800
-----------------------------------------------------------------------
Banking and Insurance:-7.6%
-----------------------------------------------------------------------
Alexander & Alexander Services 32,300 597,550
-----------------------------------------------------------------------
Bancorp Hawaii Inc. 8,000 203,000
-----------------------------------------------------------------------
Bank of New York, Inc. 15,500 449,500
-----------------------------------------------------------------------
CitiCorp 17,900 740,612
-----------------------------------------------------------------------
General Re Corporation 3,100 383,625
-----------------------------------------------------------------------
MGIC Invt Corporation 13,650 452,156
-----------------------------------------------------------------------
Suntrust Bks. Inc. 7,000 334,250
-----------------------------------------------------------------------
Unum Corporation 9,825 370,894
-----------------------------------------------------------------------
U.S. Healthcare Inc. 12,000 493,500
-----------------------------------------------------------------------
4,025,087
Broadcasting:-4.1%
-----------------------------------------------------------------------
British Sky Broadcast(UK)* 63,000 252,355
-----------------------------------------------------------------------
Grupo Carso(Mexico)* 6,071 44,541
-----------------------------------------------------------------------
Grupo Television SA DE CV 4,247 134,842
-----------------------------------------------------------------------
LIN Broadcasting Corp.* 7,000 939,750
-----------------------------------------------------------------------
LIN Television Corp.* 3,500 78,750
-----------------------------------------------------------------------
Reuters Holdings (UK) 32,000 234,330
-----------------------------------------------------------------------
Viacom Inc.* 10,910 443,219
-----------------------------------------------------------------------
Viacom Inc.* 1,440 59,940
-----------------------------------------------------------------------
2,187,727
Chemicals:-0.4%
-----------------------------------------------------------------------
Hercules Inc. 1,000 115,375
-----------------------------------------------------------------------
PPG Industries Inc. 3,225 119,728
-----------------------------------------------------------------------
235,103
Consumer Products and Services:-1.2%
-----------------------------------------------------------------------
Duracell International Inc. 3,000 130,125
-----------------------------------------------------------------------
Newell Company 23,675 497,175
-----------------------------------------------------------------------
627,300
Drugs and Hospital Supplies:-4.3%
-----------------------------------------------------------------------
Amgen Inc.* 4,075 240,170
-----------------------------------------------------------------------
Astra AB (Sweden) 28,412 734,140
-----------------------------------------------------------------------
Centocor Inc.* 10,000 163,125
-----------------------------------------------------------------------
Merck & Co. Inc. 11,300 430,813
-----------------------------------------------------------------------
Pfizer Inc. 8,875 685,594
-----------------------------------------------------------------------
2,253,842
Electrical and Electronics:-3.9%
-----------------------------------------------------------------------
Intel Corp. 14,000 892,500
-----------------------------------------------------------------------
LSI Logic Corp.* 5,000 201,875
-----------------------------------------------------------------------
Motorola Inc. 16,925 979,534
-----------------------------------------------------------------------
2,073,909
Entertainment:-1.3%
-----------------------------------------------------------------------
Carnival Corp. 15,050 319,813
-----------------------------------------------------------------------
Mattel Inc. 13,700 344,212
-----------------------------------------------------------------------
664,025
Finance:-1.0%
-----------------------------------------------------------------------
First Bank System Inc. 7,000 232,750
-----------------------------------------------------------------------
First Financial Management Corp. 5,000 308,125
-----------------------------------------------------------------------
540,875
Food and Beverage:-0.5%
-----------------------------------------------------------------------
Sysco Corp. 10,000 257,500
-----------------------------------------------------------------------
Hospital and Health Care:-1.0%
-----------------------------------------------------------------------
Columbia/HCA Healthcare Corporation 5,800 $211,700
-----------------------------------------------------------------------
United Healthcare Corp. 7,425 335,053
-----------------------------------------------------------------------
546,753
Industrial:-0.3%
-----------------------------------------------------------------------
Raytheon Company 2,700 172,463
-----------------------------------------------------------------------
Metals and Mining:-1.5%
-----------------------------------------------------------------------
Minerals Technologies Inc. 26,375 771,469
-----------------------------------------------------------------------
Miscellaneous:-3.0%
-----------------------------------------------------------------------
Canadian Pac LTD 7,000 105,000
-----------------------------------------------------------------------
Cifra SA DE CV(Mexico) 4,652 8,883
-----------------------------------------------------------------------
Elsevier NV(Mexico)* 70,000 729,881
-----------------------------------------------------------------------
Millipore Corporation 5,000 241,875
-----------------------------------------------------------------------
Ventritex Inc.* 17,500 471,406
-----------------------------------------------------------------------
Ver Ned Uitgevers (Netherlands) 500 51,904
-----------------------------------------------------------------------
1,608,949
Motor Vehicles and Equipment:-3.0%
-----------------------------------------------------------------------
Chrysler Corp. 2,000 98,000
-----------------------------------------------------------------------
General Motors Corp. 38,000 1,463,000
-----------------------------------------------------------------------
1,561,000
Office and Business Equipment and Services:-2.9%
-----------------------------------------------------------------------
Compaq Computer Corp.* 10,525 415,737
-----------------------------------------------------------------------
First Data Corporation 13,100 620,612
-----------------------------------------------------------------------
Oracle Systems* 10,000 442,500
-----------------------------------------------------------------------
Paychex Inc. 1,675 67,419
-----------------------------------------------------------------------
1,546,268
Paper:-0.5%
-----------------------------------------------------------------------
Alco Standard Corp. 4,500 282,375
-----------------------------------------------------------------------
Petroleum and Petroleum Related:- 0.3%
-----------------------------------------------------------------------
Methanex Corporation* 14,225 184,036
-----------------------------------------------------------------------
Printing and Publishing:-1.4%
-----------------------------------------------------------------------
Wolters Kluwer NV (Netherlands) 9,975 737,825
-----------------------------------------------------------------------
Railroads:-1.0%
-----------------------------------------------------------------------
Conrail Inc. 10,000 505,000
-----------------------------------------------------------------------
Restaurants:-0.8%
-----------------------------------------------------------------------
Wendy's International Inc. 28,000 402,500
-----------------------------------------------------------------------
Retail:-2.9%
-----------------------------------------------------------------------
Barnes & Noble Inc.* 2,900 90,625
-----------------------------------------------------------------------
Federated Department Stores Inc.* 10,000 192,500
-----------------------------------------------------------------------
Kohls Corp.* 5,700 226,575
-----------------------------------------------------------------------
Lowes Cos. Inc. 30,000 1,042,500
-----------------------------------------------------------------------
1,552,200
Securities Dealers:-0.2%
-----------------------------------------------------------------------
Schwab (Charles) Corp. 2,575 89,803
-----------------------------------------------------------------------
Soaps, Cleaners and Cosmetics:-0.9%
-----------------------------------------------------------------------
Dial Corp. 22,750 483,437
-----------------------------------------------------------------------
Telecommunications:-1.3%
-----------------------------------------------------------------------
Paging Network Inc.* 11,050 372,937
-----------------------------------------------------------------------
Telecomunicacoes Brasileras* 1,644 73,518
-----------------------------------------------------------------------
Telefonos De Mexico SA* 5,425 222,425
-----------------------------------------------------------------------
668,880
Transportation:-1.3%
-----------------------------------------------------------------------
CSX Corp. 6,750 469,969
-----------------------------------------------------------------------
Wisconsin Central Transportation Corp.* 6,000 246,000
-----------------------------------------------------------------------
715,969
Waste Management:-1.3%
-----------------------------------------------------------------------
Browning Ferris Industrustries Inc. 23,800 675,325
-----------------------------------------------------------------------
Total Common Stocks:-49.8%
(Cost-$25,796,317) 26,374,732
-----------------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Par Market
Amount Value
------ -----
<S> <C> <C>
Money Market Instruments:
Chevron Oil Finance Co.
5.78%, 1/06/95 $ 1,500,000 $ 1,498,796
------------------------------------------------------------------------
Federal National Mortgage Assn.
5.85%,1/10/95 1,600,000 1,597,660
------------------------------------------------------------------------
General Electric Capital Corp.
5.75%, 1/09/95 2,000,000 1,997,444
------------------------------------------------------------------------
Norwest Corp.
5.75%, 1/05/95 1,000,000 999,361
------------------------------------------------------------------------
United States Treasury Bills
5.09%, 1/12/95 800,000 798,756
5.06%, 1/19/95 1,100,000 1,097,217
5.11%, 1/26/95 500,000 498,226
5.16%, 1/26/95 1,000,000 996,417
5.175%, 1/26/95 10,300,000 10,262,984
5.22%, 2/02/95 400,000 398,144
5.265%, 2/02/95 400,000 398,128
4.89%, 2/09/95 2,000,000 1,989,405
4.92%, 2/09/95 3,400,000 3,381,878
------------------------------------------------------------------------
Total Money Market Instruments:-49.0%
(Cost-$25,914,416) 25,914,416
------------------------------------------------------------------------
Total Investments:-98.8%
(Cost-$51,710,733) 52,289,148
------------------------------------------------------------------------
Other Assets Over Liabilities-1.2% 614,740
------------------------------------------------------------------------
Net Assets-100.0%
(equivalent to $10.152 per share
based on 5,211,431 shares
issued and outstanding) $52,903,888
========================================================================
</TABLE>
<TABLE>
<CAPTION>
Lincoln National Equity Income
Fund, Inc.
Statement of Net Assets
December 31, 1994
Investments
Par Market
Long-Term Debt Investments: Amount Value
------ -----
<S> <C> <C>
Banking and Insurance:-0.2%
------------------------------------------------------------------------
Fremont General Corp. - Liquid Yield Option
0.01%, 10/12/13 $230,000 $74,462
------------------------------------------------------------------------
NAC Re Corporation
5.25%, 12/15/02 30,000 26,325
------------------------------------------------------------------------
USF&G Corporation
0.01%, 3/03/09 50,000 23,125
------------------------------------------------------------------------
123,912
Broadcasting:-0.1%
------------------------------------------------------------------------
Comcast Corporation
1.125%, 4/15/07 110,000 43,862
------------------------------------------------------------------------
Rogers Communications Inc.
0.01%, 5/20/13 130,000 42,250
------------------------------------------------------------------------
86,112
Building and Construction:-0.1%
------------------------------------------------------------------------
Cemex
4.25%, 11/01/97 100,000 80,000
------------------------------------------------------------------------
Coal and Natural Gas:-0.2%
------------------------------------------------------------------------
Apache Corp.
6.0%, 1/15/02 120,000 123,000
------------------------------------------------------------------------
Entertainment:-0.6%
------------------------------------------------------------------------
Time Warner Inc.
0.01%, 6/22/13 990,000 351,450
8.75%, 1/10/15 130,000 121,875
------------------------------------------------------------------------
473,325
</TABLE>
<TABLE>
<CAPTION>
Par Market
Amount Value
------ -----
<S> <C> <C>
Machinery and Engineering:-0.2%
------------------------------------------------------------------------
Outboard Marine Corporation
7.0%, 7/01/02 $170,000 $168,075
------------------------------------------------------------------------
Metals and Mining:-0.2%
------------------------------------------------------------------------
Freeport McMoran Inc.
6.55%, 1/15/01 200,000 180,500
------------------------------------------------------------------------
Miscellaneous:-0.1%
------------------------------------------------------------------------
Technology Res. Inds. Berhad
2.75%,11/28/04 110,000 105,050
------------------------------------------------------------------------
Paper:-0.3%
------------------------------------------------------------------------
Repap Enterprises
8.5%, 8/01/97 50,000 47,000
------------------------------------------------------------------------
Stone Container Corporation
8.875%, 7/15/00 90,000 153,000
------------------------------------------------------------------------
200,000
Petroleum and Petroleum Related:-0.1%
------------------------------------------------------------------------
Pennzoil Co.
6.5%, 1/15/03 100,000 111,500
------------------------------------------------------------------------
Real Estate:-0.0%
------------------------------------------------------------------------
Liberty Property LTD Partnership
1.0%, 7/01/01 10,000 9,638
------------------------------------------------------------------------
Retail:-0.1%
------------------------------------------------------------------------
Price Co.
5.5%,2/28/12 20,000 15,025
------------------------------------------------------------------------
Baker J. Inc.
7.0%, 6/01/02 60,000 61,725
------------------------------------------------------------------------
76,750
Steel:-0.0%
------------------------------------------------------------------------
Allegheny Ludlum Corporation
5.875%, 3/15/02 20,000 20,275
------------------------------------------------------------------------
Textile Products:-0.1%
------------------------------------------------------------------------
Unifi Inc.
6.0%, 3/15/02 60,000 58,125
------------------------------------------------------------------------
Total Long-Term Debt Investments:-2.3%
(Cost-$1,921,549) 1,816,262
------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Number
Common Stocks: of Shares
---------
<S> <C> <C>
U.S. Government and Agency Obligations:-2.0%
------------------------------------------------------------------------
Federal National Mortgage Association 21,900 1,595,962
------------------------------------------------------------------------
Aerospace:-3.7%
------------------------------------------------------------------------
Allied Signal Inc. 21,300 724,200
------------------------------------------------------------------------
Boeing Co. 900 42,075
------------------------------------------------------------------------
Martin Marietta Corp. New 10,400 461,500
------------------------------------------------------------------------
Northrop Grumman Corp. 2,000 84,000
------------------------------------------------------------------------
Pall Corp. 5,700 106,875
------------------------------------------------------------------------
Textron Inc. 16,100 811,038
------------------------------------------------------------------------
United Technologies Corp. 10,900 685,338
------------------------------------------------------------------------
2,915,026
Aluminum:-1.6%
------------------------------------------------------------------------
Alumax Inc. 23,100 655,462
------------------------------------------------------------------------
Aluminum Co. of America 7,200 623,700
------------------------------------------------------------------------
1,279,162
Banking and Insurance:-8.8%
------------------------------------------------------------------------
AllState Corporation 38,100 900,112
------------------------------------------------------------------------
American Bankers Ins. Group Inc. 8,100 193,387
------------------------------------------------------------------------
American Premier Underwriters 3,600 93,150
------------------------------------------------------------------------
Banc One Corp. 7,300 185,237
------------------------------------------------------------------------
BankAmerica Corp. 500 19,750
------------------------------------------------------------------------
Bank of New York, Inc. 26,400 765,600
------------------------------------------------------------------------
Boatmens Bancshares Inc. 10,500 286,781
------------------------------------------------------------------------
Brascan LTD 12,300 176,812
------------------------------------------------------------------------
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ------
<S> <C> <C>
Chemical Banking Corp. 17,800 $638,575
------------------------------------------------------------------------
Chubb Corporation 3,000 232,125
------------------------------------------------------------------------
Cigna Corp. 2,600 164,450
------------------------------------------------------------------------
Comerica Inc. 5,800 141,375
------------------------------------------------------------------------
Conseco Inc. 2,800 114,100
------------------------------------------------------------------------
Continental Corp. 5,200 98,800
------------------------------------------------------------------------
Firstar Corporation 800 21,500
------------------------------------------------------------------------
Fleet Financial Group Inc. 10,300 334,750
------------------------------------------------------------------------
General Re Corporation 5,300 655,875
------------------------------------------------------------------------
Nationsbank Corporation 11,200 505,400
------------------------------------------------------------------------
NWNL Cos. Inc. 9,000 261,000
------------------------------------------------------------------------
Safeco Corporation 3,800 198,075
------------------------------------------------------------------------
Signet Banking Corporation 1,100 31,488
------------------------------------------------------------------------
Travelers Inc. 21,800 708,500
------------------------------------------------------------------------
US Life Corporation 500 17,438
------------------------------------------------------------------------
Washington Mutual Ins.* 13,300 222,775
------------------------------------------------------------------------
6,967,055
Broadcasting:-0.5%
------------------------------------------------------------------------
Gannett Inc. 6,800 362,100
------------------------------------------------------------------------
Building Materials:-0.2%
------------------------------------------------------------------------
Georgia PAC Corp. 2,600 185,900
------------------------------------------------------------------------
Building and Construction:-0.1%
------------------------------------------------------------------------
Armstrong World Industries Inc. 1,000 38,500
------------------------------------------------------------------------
Chemicals:-6.1%
------------------------------------------------------------------------
Akzo Nobel NV 5,000 290,625
------------------------------------------------------------------------
Dexter Corp. 1,300 28,275
------------------------------------------------------------------------
Dow Chemical Co. 2,700 181,575
------------------------------------------------------------------------
DuPont (E.I.) De Nemours & Company 16,900 950,625
------------------------------------------------------------------------
Eastman Chemical Company 8,000 404,000
------------------------------------------------------------------------
Grace WR & Co. 22,800 880,650
------------------------------------------------------------------------
Great Lakes Chemical Corp. 6,800 387,600
------------------------------------------------------------------------
Imperial Chemical Industries PLC 5,000 232,500
------------------------------------------------------------------------
Lubrizol Corp. 1,600 54,087
------------------------------------------------------------------------
Montedison Spa* 400 2,900
------------------------------------------------------------------------
Nalco Chemical Co. 9,000 301,500
------------------------------------------------------------------------
Olin Corp. 3,200 164,800
------------------------------------------------------------------------
Union Carbide Corp. 25,200 740,250
------------------------------------------------------------------------
Witco Corp. 8,200 201,925
------------------------------------------------------------------------
4,821,312
Consumer Products and Services:-6.2%
------------------------------------------------------------------------
American Home Products Corp. 7,900 495,725
------------------------------------------------------------------------
Avon Products Inc. 700 41,825
------------------------------------------------------------------------
Dial Corp. 22,200 471,750
------------------------------------------------------------------------
Dibrell Bros. Inc. 200 4,050
------------------------------------------------------------------------
Eastman Kodak Co. 4,200 200,550
------------------------------------------------------------------------
H&R Block Inc. 1,700 63,112
------------------------------------------------------------------------
Imasco LTD(Canada) 12,900 365,537
------------------------------------------------------------------------
Johnson & Johnson 19,700 1,078,575
------------------------------------------------------------------------
Philip Morris Co. Inc. 31,700 1,822,750
------------------------------------------------------------------------
Tambrands Inc. 9,100 351,488
------------------------------------------------------------------------
4,895,362
Drugs and Hospital Supplies:-6.3%
------------------------------------------------------------------------
Baxter International Inc. 28,000 791,000
------------------------------------------------------------------------
Becton Dickinson and Company 18,600 892,800
------------------------------------------------------------------------
Bergen Brunswig Corporation 19,800 413,325
------------------------------------------------------------------------
Bristol Myers Squibb Co. 13,700 792,887
------------------------------------------------------------------------
Pfizer Inc. 11,200 865,200
------------------------------------------------------------------------
Schering Plough Corporation 5,900 436,600
------------------------------------------------------------------------
Warner Lambert Co. 9,900 762,300
------------------------------------------------------------------------
4,954,112
Electrical and Electronincs:-5.4%
------------------------------------------------------------------------
AMP Inc. 3,400 247,350
------------------------------------------------------------------------
Cooper Industries Inc. 17,100 583,537
------------------------------------------------------------------------
General Electric Co. 46,500 2,371,500
------------------------------------------------------------------------
General Signal Corp. 1,000 31,875
------------------------------------------------------------------------
Thomas and Betts Corporation 1,600 107,400
------------------------------------------------------------------------
Tyco International LTD 9,500 451,250
------------------------------------------------------------------------
Westinghouse Electric Corporation 33,300 441,882
------------------------------------------------------------------------
4,234,794
Finance:-2.9%
------------------------------------------------------------------------
American Express Company 49,000 $1,445,500
------------------------------------------------------------------------
Beneficial Corp. 1,500 58,500
------------------------------------------------------------------------
GFC Financial Corporation 4,800 152,400
------------------------------------------------------------------------
Household International Inc. 8,500 315,563
------------------------------------------------------------------------
Keycorp 8,800 220,000
------------------------------------------------------------------------
Trilon Financial Corp.(Canada) 26,200 71,906
------------------------------------------------------------------------
2,263,869
Food and Beverage:-3.4%
------------------------------------------------------------------------
CPC International Inc. 3,100 165,075
------------------------------------------------------------------------
Fleming Cos. Inc. 6,200 144,150
------------------------------------------------------------------------
Great Atlantic and Pacific Tea Inc. 2,000 36,250
------------------------------------------------------------------------
Pepsico Inc. 16,500 598,125
------------------------------------------------------------------------
Ralston Purina Company 8,300 370,388
------------------------------------------------------------------------
RJR Nabisco Holdings Corporation* 208,900 1,148,950
------------------------------------------------------------------------
SuperValu Inc. 7,600 186,200
------------------------------------------------------------------------
2,649,138
Forest Products:-0.8%
------------------------------------------------------------------------
Weyerhaeuser Company 16,500 618,750
------------------------------------------------------------------------
Industrial:-0.6%
------------------------------------------------------------------------
Armco Inc.* 13,500 89,437
------------------------------------------------------------------------
Goulds Pumps Inc. 600 12,937
------------------------------------------------------------------------
ITT Corp. 500 44,313
------------------------------------------------------------------------
TRW Inc. 5,100 336,600
------------------------------------------------------------------------
483,287
Machinery and Engineering:-0.6%
------------------------------------------------------------------------
Crane Co. 12,800 344,000
------------------------------------------------------------------------
Keystone International Inc. 8,900 151,300
------------------------------------------------------------------------
495,300
Metals and Mining:-1.0%
------------------------------------------------------------------------
Lukens Inc. 3,300 96,113
------------------------------------------------------------------------
Noranda Inc. 1,000 18,891
------------------------------------------------------------------------
Reynolds Metals Company 14,200 695,800
------------------------------------------------------------------------
810,804
Miscellaneous:-1.0%
------------------------------------------------------------------------
Canadian Pac LTD 6,000 90,000
------------------------------------------------------------------------
European Vinyls Corp. Intl.(Netherlands)* 2,800 124,039
------------------------------------------------------------------------
Safety Kleen Corporation 15,700 231,575
------------------------------------------------------------------------
Snap On Inc. 9,100 302,575
------------------------------------------------------------------------
748,189
Motor Vehicles and Equipment:-1.8%
------------------------------------------------------------------------
General Motors Corp. 14,700 621,499
------------------------------------------------------------------------
Genuine Parts Company 16,000 576,000
------------------------------------------------------------------------
Goodrich BF Company 5,200 225,550
------------------------------------------------------------------------
1,423,049
Office and Business Equipment and Services:-4.8%
------------------------------------------------------------------------
Digital Equipment Corp.* 34,600 1,150,450
------------------------------------------------------------------------
Harris Corp. 3,800 161,406
------------------------------------------------------------------------
International Business Machines 20,800 1,528,800
------------------------------------------------------------------------
Kelly Services Inc. 1,200 32,850
------------------------------------------------------------------------
Moore Corporation LTD 27,000 509,625
------------------------------------------------------------------------
New England Business Services Inc. 1,300 24,213
------------------------------------------------------------------------
Standard Register 6,900 119,025
------------------------------------------------------------------------
Xerox Corp. 2,300 227,700
------------------------------------------------------------------------
3,754,069
Paper:-1.7%
------------------------------------------------------------------------
Bowater Inc. 4,200 103,425
------------------------------------------------------------------------
International Paper Co. 7,500 565,313
------------------------------------------------------------------------
Scott Paper Co. 8,700 601,388
------------------------------------------------------------------------
Westvaco Corp. 1,100 43,175
------------------------------------------------------------------------
1,313,301
Petroleum and Petroleum Related:-11.2%
------------------------------------------------------------------------
Amoco Corp. 13,500 798,187
------------------------------------------------------------------------
Atlantic Richfield Co. 9,100 237,737
------------------------------------------------------------------------
Baker Hughes Inc. 22,000 401,500
------------------------------------------------------------------------
British Petroleum PLC 13,777 1,100,438
------------------------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ------
<S> <C> <C>
Chevron Corp. 16,400 $731,850
------------------------------------------------------------------------
Diamond Shamrock Inc. 1,400 75,600
------------------------------------------------------------------------
Exxon Corp. 900 54,675
------------------------------------------------------------------------
GATX 3,000 132,000
------------------------------------------------------------------------
Halliburton Company 20,200 669,125
------------------------------------------------------------------------
Kerr McGee Corp. 1,000 46,000
------------------------------------------------------------------------
Lyondell Petrochemical Company 9,000 232,875
------------------------------------------------------------------------
Mobil Corp. 5,300 446,525
------------------------------------------------------------------------
Royal Dutch Petroleum Co. 5,000 537,500
------------------------------------------------------------------------
Schlumberger LTD 28,800 1,450,800
------------------------------------------------------------------------
Sonat Inc. 12,600 352,800
------------------------------------------------------------------------
Texaco Inc. 2,100 125,738
------------------------------------------------------------------------
Total S A 18,600 548,700
------------------------------------------------------------------------
Unocal Corporation 24,400 664,900
------------------------------------------------------------------------
Williams Cos Inc. 7,200 180,900
------------------------------------------------------------------------
8,787,850
Printing and Publishing:-0.9%
------------------------------------------------------------------------
Deluxe Corp. 6,300 166,950
------------------------------------------------------------------------
Donnnelley R R & Sons Co. 3,600 106,200
------------------------------------------------------------------------
Dow Jones & Co. Inc. 7,200 223,200
------------------------------------------------------------------------
McGraw Hill Inc. 1,600 107,000
------------------------------------------------------------------------
Times Mirror Co. 3,900 122,363
------------------------------------------------------------------------
725,713
Public Utilities:-1.7%
------------------------------------------------------------------------
DPL Inc. 5,300 108,650
------------------------------------------------------------------------
Entergy Corporation 2,800 61,250
------------------------------------------------------------------------
Huaneng Power International Inc.* 5,000 73,750
------------------------------------------------------------------------
Illinova Corporation 8,000 174,000
------------------------------------------------------------------------
Pacific Enterprises 16,900 359,125
------------------------------------------------------------------------
Panhandle Eastern Corporation 7,000 138,250
------------------------------------------------------------------------
Peco Energy Company 3,000 73,500
------------------------------------------------------------------------
Pinnacle West Capital Corp. 8,000 158,000
------------------------------------------------------------------------
Unicom Corp. 6,500 156,000
------------------------------------------------------------------------
1,302,525
Railroads:-0.7%
------------------------------------------------------------------------
Burlington Northern Inc. 12,100 582,312
------------------------------------------------------------------------
Real Estates:-0.4%
------------------------------------------------------------------------
Equity Residential PPTYS TR 5,500 165,000
------------------------------------------------------------------------
Lennar Corp. 2,000 31,000
------------------------------------------------------------------------
Macerich Company 400 8,550
------------------------------------------------------------------------
Merry Land and Investment Co. 5,000 109,375
------------------------------------------------------------------------
Pulte Corp. 900 20,700
------------------------------------------------------------------------
334,625
Retail:-3.7%
------------------------------------------------------------------------
Dayton Hudson Corp. 5,800 410,350
------------------------------------------------------------------------
Dillard Department Stores Inc. 5,300 141,775
------------------------------------------------------------------------
Edison Brothers Stores Inc. 7,800 144,300
------------------------------------------------------------------------
Jostens Inc. 11,500 214,188
------------------------------------------------------------------------
Limited Inc. 3,000 54,375
------------------------------------------------------------------------
Penny J C Inc. 1,100 49,088
------------------------------------------------------------------------
Sears Roebuck & Co. 33,300 1,531,800
------------------------------------------------------------------------
TJX Cos. Inc. 6,400 100,000
------------------------------------------------------------------------
Toys R Us Inc.* 8,300 253,150
------------------------------------------------------------------------
2,899,026
Savings and Loan:-0.6%
------------------------------------------------------------------------
Ahmanson H F and Co. 2,500 40,312
------------------------------------------------------------------------
First Chicago Corp. 7,500 358,125
------------------------------------------------------------------------
First Fidelity Bancorp New 2,000 89,750
------------------------------------------------------------------------
488,187
Securities Dealers:-0.5%
------------------------------------------------------------------------
Bear Stearns Cos. Inc. 7,300 112,237
------------------------------------------------------------------------
First Marathon Inc.(Canada) 25,000 231,679
------------------------------------------------------------------------
Lehman Brothers Holdings Inc. 5,380 79,355
------------------------------------------------------------------------
423,271
Telecommunications:-7.2%
------------------------------------------------------------------------
Ameritech Corp. 41,700 1,683,637
------------------------------------------------------------------------
Bell Atlantic Corp. 500 24,875
------------------------------------------------------------------------
Bellsouth Corp. 14,700 795,637
------------------------------------------------------------------------
Nynex Corp. 27,900 1,025,325
------------------------------------------------------------------------
Pacific Telesis Group 7,000 199,500
------------------------------------------------------------------------
Philippine Long Distance 2,300 124,488
------------------------------------------------------------------------
Rochester Tel Corporation 17,600 371,800
------------------------------------------------------------------------
Southwestern Bell Corp. 23,000 928,625
------------------------------------------------------------------------
Sprint Corp. 9,200 254,150
------------------------------------------------------------------------
U S West Inc. 7,500 267,188
------------------------------------------------------------------------
5,675,225
Textiles-Apparel Manufacturing:-0.4%
------------------------------------------------------------------------
Jones Apparel Group Inc.* 2,500 64,375
------------------------------------------------------------------------
Liz Claiborne 14,000 236,149
------------------------------------------------------------------------
Oshkosh B Gosh Inc. 1,000 13,875
------------------------------------------------------------------------
314,399
Textile Products:-0.1%
------------------------------------------------------------------------
Unifi Inc. 3,700 94,350
------------------------------------------------------------------------
Transportation:-0.9%
------------------------------------------------------------------------
CSX Corp. 10,700 744,987
------------------------------------------------------------------------
Waste Management:-0.7%
------------------------------------------------------------------------
Betz Laboratories Inc. 8,500 376,125
------------------------------------------------------------------------
Chemical Waste Management Inc.* 21,600 202,500
------------------------------------------------------------------------
578,625
Total Common Stocks:-88.5%
(Cost-$69,013,849) 69,760,136
------------------------------------------------------------------------
Preferred Stocks:
Alexander & Alexander Services Inc. 2,300 93,150
------------------------------------------------------------------------
Alumax Inc. 200 24,050
------------------------------------------------------------------------
Armco Inc. 1,500 75,000
------------------------------------------------------------------------
Chiquita Brands International Inc. 1,900 78,375
------------------------------------------------------------------------
Chrysler Corp. 5,300 722,125
------------------------------------------------------------------------
Evergreen Media Corporation 2,200 93,500
------------------------------------------------------------------------
Fieldcrest Cannon Inc. 2,800 140,000
------------------------------------------------------------------------
Ford Motor Co. 500 46,000
------------------------------------------------------------------------
Kaiser Alum Corp. 6,000 63,750
------------------------------------------------------------------------
National Semiconductor Corporation 1,800 130,500
------------------------------------------------------------------------
Norwest Corporation 5,200 336,700
------------------------------------------------------------------------
Occidental Peterluem Corporation 4,500 214,875
------------------------------------------------------------------------
Pittston Company 1,700 74,800
------------------------------------------------------------------------
Reynolds Metals Company 1,700 82,238
------------------------------------------------------------------------
Travelers Inc. 500 25,813
------------------------------------------------------------------------
US Surgical Inc. 6,600 151,800
------------------------------------------------------------------------
Total Preferred Stocks:-3.0%
(Cost-$3,404,635) 2,352,676
------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Maturity
Repurchase Agreement: Amount
----------
<S> <C> <C>
State Street Bank and Trust Co. repurchase
agreement dated 12/30/94, 5.15%, maturing
1/03/95 collateralized by U.S. Treasury
Note 9.125%, 5/15/18 $5,300,031 5,297,000
------------------------------------------------------------------------
Total Repurchase Agreement:-6.7%
(Cost-$5,297,000) 5,297,000
------------------------------------------------------------------------
Total Investments:-100.5%
(Cost-$79,637,033) 79,226,074
------------------------------------------------------------------------
Other Assets Under Liabilities-(0.5%) (364,887)
------------------------------------------------------------------------
Net Assets-100.0%
(equivalent to $10.335 per share
based on 7,630,416 shares
issued and outstanding) $78,861,187
========================================================================
</TABLE>
16
<PAGE>
Lincoln National Growth Fund, Inc.
Statement of Net Assets
December 31, 1994
<TABLE>
<CAPTION>
Investments Number Market
of Shares Value
--------- ------
<S> <C> <C>
Common Stocks:
Aerospace:-0.7%
------------------------------------------------------------------------
McDonnell Douglas Corporation 56,700 $8,051,400
------------------------------------------------------------------------
Air Transportation:-0.8%
------------------------------------------------------------------------
Airborne Freight Corp. 91,500 1,875,750
------------------------------------------------------------------------
Lockheed Corp. 95,700 6,950,213
------------------------------------------------------------------------
8,825,963
Banking and Insurance:-10.2%
------------------------------------------------------------------------
Ahmanson HF & Co 98,500 1,588,313
------------------------------------------------------------------------
American General Corporation 584,000 16,498,000
------------------------------------------------------------------------
Chase Manhattan Corporation 452,500 15,554,687
------------------------------------------------------------------------
Cigna Corporation 125,000 7,953,125
------------------------------------------------------------------------
Conseco Inc. 91,100 3,928,687
------------------------------------------------------------------------
First Chicago Corporation 293,800 14,028,950
------------------------------------------------------------------------
First Interstate Bank 202,200 13,673,775
------------------------------------------------------------------------
MBNA Corp. 637,400 14,899,225
------------------------------------------------------------------------
Nationsbank Corporation 366,700 16,547,337
------------------------------------------------------------------------
NWNL COS 18,700 542,300
------------------------------------------------------------------------
St. Paul Companies 90,000 4,027,500
------------------------------------------------------------------------
SunAmerica Inc. 115,000 4,168,750
------------------------------------------------------------------------
Transamerica Corp. 104,300 5,188,925
------------------------------------------------------------------------
118,599,574
Broadcasting:-1.8%
------------------------------------------------------------------------
Belo (A.H.) Corporation 36,500 2,062,250
------------------------------------------------------------------------
Capital Cities ABC Inc. 218,100 18,593,025
------------------------------------------------------------------------
20,655,275
Building Materials:-0.8%
------------------------------------------------------------------------
Armstrong World Inc. 249,100 9,590,350
------------------------------------------------------------------------
Chemicals:-3.6%
------------------------------------------------------------------------
Dow Chemical Co. 122,800 8,258,300
------------------------------------------------------------------------
Du Pont E I De Nemours & Co. 354,600 19,946,250
------------------------------------------------------------------------
Georgia Gulf Corp.* 126,400 4,913,800
------------------------------------------------------------------------
Olin Corp. 171,400 8,827,100
------------------------------------------------------------------------
41,945,450
Consumer Products and Services:-6.4%
------------------------------------------------------------------------
American Brands, Inc. 483,100 18,116,250
------------------------------------------------------------------------
Kimberly-Clark Corporation 158,600 8,009,300
------------------------------------------------------------------------
Philip Morris Companies Inc. 504,500 29,008,750
------------------------------------------------------------------------
Premark International, Inc. 246,500 11,030,875
------------------------------------------------------------------------
Maytag Corporation 547,800 8,217,000
------------------------------------------------------------------------
74,382,175
Drug and Hospital Supplies:-7.6%
------------------------------------------------------------------------
Baxter International Inc. 565,900 15,986,675
------------------------------------------------------------------------
Bristol-Myers Squibb Company 353,200 20,441,450
------------------------------------------------------------------------
Lilly (Eli) & Company 225,800 14,818,125
------------------------------------------------------------------------
Schering-Plough Corporation 270,800 20,039,200
------------------------------------------------------------------------
Upjohn Co. 531,300 16,337,475
------------------------------------------------------------------------
87,622,925
Electronics and Electrical Equipment:-5.7%
------------------------------------------------------------------------
Advanced Micro Devices, Inc.* 556,800 13,850,400
------------------------------------------------------------------------
Cypress Semiconductor Corporation* 321,600 7,437,000
------------------------------------------------------------------------
General Electric Company 628,700 32,063,700
------------------------------------------------------------------------
General Instrument Corp.* 192,200 5,766,000
------------------------------------------------------------------------
Quantum Corp.* 455,400 6,859,235
------------------------------------------------------------------------
65,976,335
Entertainment:-1.1%
------------------------------------------------------------------------
Mattel, Inc. 367,625 9,236,578
------------------------------------------------------------------------
Mirage Resorts Inc.* 191,400 3,923,700
------------------------------------------------------------------------
13,160,278
Food and Beverage:-6.5%
------------------------------------------------------------------------
Campbell Soup Company 383,800 16,935,175
------------------------------------------------------------------------
Coca Cola Company 385,700 19,863,550
------------------------------------------------------------------------
ConAgra, Inc. 295,400 9,231,250
------------------------------------------------------------------------
Coors (Adolph) C.B. 263,900 4,453,313
------------------------------------------------------------------------
IBP, Inc. 212,800 6,437,200
------------------------------------------------------------------------
Ralston-Continental Baking Group* 8,520 31,950
------------------------------------------------------------------------
Safeway Inc.* 456,200 14,541,375
------------------------------------------------------------------------
Universal Foods Corporation 142,600 3,921,500
------------------------------------------------------------------------
75,415,313
Industrial:-0.9%
------------------------------------------------------------------------
Cummins Engine Company, Inc. 241,700 10,936,925
------------------------------------------------------------------------
Machinery & Engineering:-1.0%
------------------------------------------------------------------------
Clark Equipment Company* 47,000 2,549,750
------------------------------------------------------------------------
Deere & Company 135,700 8,990,125
------------------------------------------------------------------------
11,539,875
Metals and Mining:-1.5%
------------------------------------------------------------------------
Phelps Dodge Corporation 273,400 16,916,625
------------------------------------------------------------------------
Miscellaneous:-1.0%
------------------------------------------------------------------------
Clayton Homes 336,875 5,305,781
------------------------------------------------------------------------
Omnicom Group, Inc. 114,600 5,930,550
------------------------------------------------------------------------
Outboard Marine Corporation 30,000 588,750
------------------------------------------------------------------------
11,825,081
Motor Vehicles and Equipment:-3.8%
------------------------------------------------------------------------
Chrysler Corporation 311,300 15,253,700
------------------------------------------------------------------------
Ford Motor Company 736,100 20,610,800
------------------------------------------------------------------------
TRW Inc. 126,100 8,322,600
------------------------------------------------------------------------
44,187,100
Office and Business Equipment and Services:-7.4%
------------------------------------------------------------------------
Ceridian Corporation* 90,100 2,421,438
------------------------------------------------------------------------
Compaq Computer Corporation* 441,200 17,427,400
------------------------------------------------------------------------
Computer Associates International Inc. 383,500 18,599,750
------------------------------------------------------------------------
Federal Express Corporation* 210,400 12,676,600
------------------------------------------------------------------------
Micron Technology Inc. 370,350 16,341,694
------------------------------------------------------------------------
Reynolds & Reynolds Co. 209,200 5,230,000
------------------------------------------------------------------------
Stratus Computer Inc.* 160,100 6,083,800
------------------------------------------------------------------------
Tandem Computers Inc.* 394,000 6,747,250
------------------------------------------------------------------------
85,527,932
Petroleum and Petroleum Related:-11.2%
------------------------------------------------------------------------
Amoco Corp. 346,200 20,469,075
------------------------------------------------------------------------
Ashland Oil, Inc. 300,300 10,360,350
------------------------------------------------------------------------
Exxon Corporation 448,300 27,234,225
------------------------------------------------------------------------
Halliburton Co. 227,100 7,522,688
------------------------------------------------------------------------
Lyondell Petrochemical Company 588,300 15,222,263
------------------------------------------------------------------------
Mobil Corp. 67,000 5,644,750
------------------------------------------------------------------------
Royal Dutch Petroleum Company 114,600 12,319,500
------------------------------------------------------------------------
Tenneco, Inc. 372,600 15,835,500
------------------------------------------------------------------------
Ultramar Corporation 95,400 2,432,700
------------------------------------------------------------------------
Williams Companies, Inc. 537,500 13,504,687
------------------------------------------------------------------------
130,545,738
Public Utilities:-4.5%
------------------------------------------------------------------------
Baltimore Gas & Electric Company 601,700 13,312,612
------------------------------------------------------------------------
Consolidated Edison Company 556,600 14,332,450
------------------------------------------------------------------------
General Public Utilities Corp. 406,950 10,682,437
------------------------------------------------------------------------
Northeast Utilities 388,000 8,390,500
------------------------------------------------------------------------
Public Service Enterprise 224,000 5,936,000
------------------------------------------------------------------------
52,653,999
Real Estate:-0.2%
------------------------------------------------------------------------
Lennar Corporation 153,300 2,376,150
------------------------------------------------------------------------
Retail:-4.8%
------------------------------------------------------------------------
Federated Department Stores* 591,200 11,380,600
------------------------------------------------------------------------
Kroger Co.* 519,900 12,542,588
------------------------------------------------------------------------
Penney (J.C.) Company, Inc. 373,800 16,680,825
------------------------------------------------------------------------
Sears, Roebuck and Co. 184,700 8,496,200
------------------------------------------------------------------------
Wal-Mart Stores 331,200 7,038,000
------------------------------------------------------------------------
56,138,213
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ------
<S> <C> <C>
Securities Dealers:-0.8%
------------------------------------------------------------------------
Dean Witter Discover & Co. 261,800 $8,868,475
------------------------------------------------------------------------
Soaps, Cleaner and Cosmetics:-4.1%
------------------------------------------------------------------------
Clorox Company 185,800 10,938,975
------------------------------------------------------------------------
Colgate-Palmolive Company 264,900 16,788,038
------------------------------------------------------------------------
Dial Corp. 331,000 7,033,750
------------------------------------------------------------------------
Procter & Gamble Company 203,200 12,598,400
------------------------------------------------------------------------
47,359,163
Steel:-0.4%
------------------------------------------------------------------------
Allegheny Ludlum Corporation 244,400 4,582,500
------------------------------------------------------------------------
Telecommunications:-8.9%
------------------------------------------------------------------------
American Telephone & Telegraph Company 345,200 17,346,300
------------------------------------------------------------------------
Ameritech Corporation 541,600 21,867,100
------------------------------------------------------------------------
Bellsouth Corporation 290,600 15,728,725
------------------------------------------------------------------------
Comsat Corporation 281,600 5,244,800
------------------------------------------------------------------------
GTE Corporation 279,800 8,498,925
------------------------------------------------------------------------
Pacific Telesis Group 658,800 18,775,800
------------------------------------------------------------------------
Southwestern Bell Corp. 104,700 4,227,262
------------------------------------------------------------------------
Sprint Corporation 425,500 11,754,437
------------------------------------------------------------------------
103,443,349
Textiles-Apparel Manufacturing:-0.4%
------------------------------------------------------------------------
VF Corp. 90,900 4,420,012
------------------------------------------------------------------------
Transportation:-1.2%
------------------------------------------------------------------------
Illinois Central Corporation 149,300 4,590,975
------------------------------------------------------------------------
PHH Corporation 92,700 3,221,325
------------------------------------------------------------------------
Ryder System, Inc. 276,600 6,085,200
------------------------------------------------------------------------
13,897,500
Total Common Stocks:-97.3%
(Cost-$1,084,787,715) 1,129,443,675
------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Par
Amount
---------
<S> <C> <C>
Money Market Instruments:
American General Corp.
5.93%, 1/26/95 $2,047,000 2,036,884
------------------------------------------------------------------------
Associates Corp. of N. America
6.0%, 1/05/95 2,260,000 2,260,000
------------------------------------------------------------------------
Daimler-Benz N. America Corp.
5.9%, 1/12/95 4,500,000 4,489,675
------------------------------------------------------------------------
Metlife Funding Inc.
6.03%, 1/12/95 2,500,000 2,487,438
------------------------------------------------------------------------
Paccar Financial Corp.
5.95%, 1/03/95 2,655,000 2,653,245
------------------------------------------------------------------------
Pfizer Inc.
6.0%, 1/23/95 3,500,000 3,479,583
------------------------------------------------------------------------
Philip Morris
5.83%, 1/09/95 10,000,000 9,970,850
------------------------------------------------------------------------
Raytheon Company
5.80%, 1/05/95 8,700,000 8,678,975
------------------------------------------------------------------------
Smithkline Beecham Corp.
5.95%, 1/03/95 1,000,000 998,843
------------------------------------------------------------------------
Temple-Inland Inc.
6.03%, 1/04/95 3,500,000 3,495,310
6.02%, 1/10/95 1,800,000 1,793,679
------------------------------------------------------------------------
United States Treasury Bill +
0.0%, 5/04/95 4,500,000 4,305,488
------------------------------------------------------------------------
Vermont American Corp.
5.9%, 1/12/95 3,100,000 3,092,379
5.85%, 1/10/95 20,250,000 20,203,931
------------------------------------------------------------------------
Total Money Market Instruments:-6.0%
(Cost-$69,946,280) 69,946,280
------------------------------------------------------------------------
Total Investments:-103.3%
(Cost-$1,154,733,995) 1,199,389,955
------------------------------------------------------------------------
Other Assets Under Liabilities-(3.3%) (38,065,648)
------------------------------------------------------------------------
Net Assets-100.0%
(equivalent to $23.297 per share
based on 49,849,293 shares
issued and outstanding) $1,161,324,307
========================================================================
</TABLE>
Lincoln National International
Fund, Inc.
Statement of Net Assets
December 31, 1994
<TABLE>
<CAPTION>
Number Market
Investments of Shares Value
--------- ------
<S> <C> <C>
Common Stocks:
Air Transportation:-1.9%
------------------------------------------------------------------------
British Airport Authority (UK) 404,000 $2,990,017
------------------------------------------------------------------------
Singapore Airlines (Singapore) 330,000 3,033,962
------------------------------------------------------------------------
6,023,979
Banking and Insurance:-8.3%
------------------------------------------------------------------------
Assicurazioni Generali (Italy) 123,750 2,911,989
------------------------------------------------------------------------
Deutsche Bank AG (Germany) 8,100 3,763,309
------------------------------------------------------------------------
Guoco Group (Hong Kong) 593,000 2,536,775
------------------------------------------------------------------------
HSBC Holdings PLC (Hong Kong) 246,000 2,654,733
------------------------------------------------------------------------
Intl Nederlanden (Netherlands) 71,000 3,353,880
------------------------------------------------------------------------
Mitsubishi Bank (Japan) 50,000 1,229,920
------------------------------------------------------------------------
Overseas Chinese Banking Corp. (Singapore) 306,500 3,154,374
------------------------------------------------------------------------
Sanwa Bank (Japan) 170,000 3,379,518
------------------------------------------------------------------------
Standard Chartered Bank (UK) 721,528 3,172,420
------------------------------------------------------------------------
26,156,918
Broadcasting:-4.7%
------------------------------------------------------------------------
Nippon TV Network (Japan) 14,100 3,383,434
------------------------------------------------------------------------
Reed Elsevier International (UK) 250,000 3,119,621
------------------------------------------------------------------------
Reuters Holdings (UK) 405,800 2,971,591
------------------------------------------------------------------------
Television Broadcast (Hong Kong) 629,000 2,511,935
------------------------------------------------------------------------
Ver Ned Uitgevers (Netherlands) 26,700 2,771,669
------------------------------------------------------------------------
14,758,250
Building and Construction:-1.7%
------------------------------------------------------------------------
IHC Caland NV (Netherlands) 118,500 2,996,803
------------------------------------------------------------------------
Renonga BHD (Malaysia) 1,841,000 2,278,269
------------------------------------------------------------------------
5,275,072
------------------------------------------------------------------------
Chemicals:-1.1%
------------------------------------------------------------------------
Shin Etsu Chemical Company (Japan) 180,000 3,578,313
------------------------------------------------------------------------
Consumer Products and Services:-4.1%
------------------------------------------------------------------------
Astra AB (Sweden) 124,900 3,227,303
------------------------------------------------------------------------
BIC (France) 25,700 3,228,740
------------------------------------------------------------------------
Canon Inc. (Japan) 237,000 4,021,386
------------------------------------------------------------------------
Castorama DuBois (France) 18,650 2,329,068
------------------------------------------------------------------------
12,806,497
Electrical and Electronics:-14.8%
------------------------------------------------------------------------
AGIV AG (Germany) 9,060 2,835,452
------------------------------------------------------------------------
Allgon AB (Sweden) 165,000 3,108,766
------------------------------------------------------------------------
BBC Brown Boveri (Switzerland) 3,250 2,798,128
------------------------------------------------------------------------
Ericsson (LM) Tel (Sweden) 54,700 3,025,556
------------------------------------------------------------------------
Getronics NV (Netherlands) 97,250 3,546,244
------------------------------------------------------------------------
Hitachi LTD (Japan) 410,000 4,071,185
------------------------------------------------------------------------
Kyocera Corporation (Japan) 47,000 3,487,249
------------------------------------------------------------------------
Legrand (France) 2,520 3,057,405
------------------------------------------------------------------------
Murata Manufacturing Company (Japan) 92,000 3,556,225
------------------------------------------------------------------------
Riso Kagaku Corporation (Japan) 35,000 3,036,145
------------------------------------------------------------------------
Rohm Company (Japan) 84,000 3,559,036
------------------------------------------------------------------------
Sharp Corporation (Japan) 200,000 3,614,458
------------------------------------------------------------------------
Sony Corporation (Japan) 63,400 3,596,486
------------------------------------------------------------------------
Tokyo Electron (Japan) 109,000 3,392,570
------------------------------------------------------------------------
46,684,905
Entertainment:-1.0%
------------------------------------------------------------------------
Polygram NV (Netherlands) 70,700 3,286,762
------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ------
<S> <C> <C>
Finance:-6.7%
------------------------------------------------------------------------
Baer Holdings AG (Switzerland) 3,026 $3,097,662
------------------------------------------------------------------------
Brazilian Investment Co. (Brazil)* 34,900 1,394,953
------------------------------------------------------------------------
Chile Fund Inc. (Chile) 63,400 2,924,325
------------------------------------------------------------------------
Hong Leong Credit (Malasia) 439,000 2,131,819
------------------------------------------------------------------------
India Magnum Fund (India)* 46,850 2,787,575
------------------------------------------------------------------------
Japan Associated Finance Company (Japan) 24,000 3,734,940
------------------------------------------------------------------------
Korea Europe Fund (Korea) 238,000 1,963,500
------------------------------------------------------------------------
Korea Fund Inc. 16,500 375,375
------------------------------------------------------------------------
Nichiei Co. (Japan) 44,000 2,827,309
------------------------------------------------------------------------
21,237,458
Food and Beverage:-2.0%
------------------------------------------------------------------------
Heineken Holding (Netherlands) 24,000 3,244,887
------------------------------------------------------------------------
Nestle SA (Switzerland) 3,220 3,067,487
------------------------------------------------------------------------
6,312,374
Forest Products:-1.2%
------------------------------------------------------------------------
Fletcher Challenge (New Zealand) 1,617,000 3,798,982
------------------------------------------------------------------------
Health and Personal Care:-4.7%
------------------------------------------------------------------------
Arjo AB (Sweden)* 168,000 3,074,853
------------------------------------------------------------------------
Beiersdorf AG (Germany) 4,680 3,065,238
------------------------------------------------------------------------
Schering AG (Germany) 8,000 5,250,048
------------------------------------------------------------------------
Yamanouchi Pharm (Japan) 173,000 3,560,743
------------------------------------------------------------------------
14,950,882
Household Appliances:-1.0%
------------------------------------------------------------------------
Electrolux AB (Sweden) 61,100 3,099,978
Industrial:-4.6%
------------------------------------------------------------------------
Argentinian Investment* 64,100 1,378,150
------------------------------------------------------------------------
AXA (France)* 62,400 2,890,425
------------------------------------------------------------------------
Bridgestone Corporation (Japan) 220,000 3,445,783
------------------------------------------------------------------------
Carter Holt Harvey (New Zealand) 1,420,000 2,908,905
------------------------------------------------------------------------
China North Industries (China)* 2,750,000 2,750,000
------------------------------------------------------------------------
Corp Fin Reunida (Spain)* 350,177 1,072,125
------------------------------------------------------------------------
14,445,388
Machinery and Engineering:-3.1%
------------------------------------------------------------------------
Mannesmann AG (Germany) 11,800 3,213,267
------------------------------------------------------------------------
Mitsubishi Hvy Ind (Japan) 449,000 3,426,104
------------------------------------------------------------------------
Secom Company (Japan) 53,000 3,299,197
------------------------------------------------------------------------
9,938,568
Merchandising:-6.4%
------------------------------------------------------------------------
Autobacs Seven Company (Japan) 28,700 3,429,016
------------------------------------------------------------------------
Canon Sales Co. Inc. (Japan) 111,000 3,365,663
------------------------------------------------------------------------
Centros Com Pryca (Spain) 186,800 2,817,079
------------------------------------------------------------------------
ITO Yokado Company (Japan) 75,000 4,013,554
------------------------------------------------------------------------
Pinault Printemps Re 17,800 3,159,408
------------------------------------------------------------------------
Seven Eleven Japan (Japan) 45,000 3,618,976
------------------------------------------------------------------------
20,403,696
Metals and Mining:-2.4%
------------------------------------------------------------------------
Broken Hill Proprietary Co. LTD (Australia) 250,000 3,795,751
------------------------------------------------------------------------
Manila Mining Corp. (Philippines) 150,000,000 860,656
------------------------------------------------------------------------
Western Mining CP (Australia) 500,000 2,900,124
------------------------------------------------------------------------
7,556,531
Miscellaneous:-4.2%
------------------------------------------------------------------------
Hagemeyer (Netherlands) 37,695 3,072,667
------------------------------------------------------------------------
Hutchison Whampoa LTD (Hong Kong) 597,000 2,415,005
------------------------------------------------------------------------
Itochu Corp. (Japan) 467,000 3,329,016
------------------------------------------------------------------------
Multi Purpose Holding (Malaysia) 1,600,000 2,218,132
------------------------------------------------------------------------
Swire Pacific (Hong Kong) 352,000 2,192,750
------------------------------------------------------------------------
13,227,570
Motor Vehicles and Equipment:-3.1%
------------------------------------------------------------------------
Suzuki Motor Corp. (Japan) 300,000 $3,524,096
------------------------------------------------------------------------
Valeo (France) 67,600 3,365,445
------------------------------------------------------------------------
Volvo AB (Sweden)* 159,000 2,995,720
------------------------------------------------------------------------
9,885,261
Office and Business Equipment and Service-1.7%
------------------------------------------------------------------------
Carlton Communications (UK) 221,800 3,113,043
------------------------------------------------------------------------
Euro RSCG Worldwide (France) 23,000 2,368,470
------------------------------------------------------------------------
5,481,513
Paper:-1.5%
------------------------------------------------------------------------
Aokam Perdana BHD (Malaysia) 296,000 1,831,525
------------------------------------------------------------------------
KNP BT (KON) NV (Netherlands) 102,500 2,916,931
------------------------------------------------------------------------
4,748,456
Petroleum and Petroleum Related:-1.6%
------------------------------------------------------------------------
Ampolex LTD (Australia) 700,000 1,888,958
------------------------------------------------------------------------
British Petroleum (UK) 476,400 3,171,776
------------------------------------------------------------------------
5,060,734
Public Utilities:-1.0%
------------------------------------------------------------------------
Veba AG (Germany) 9,140 3,184,874
------------------------------------------------------------------------
Real Estate:-3.1%
------------------------------------------------------------------------
Henderson Land Development (Hong Kong) 469,000 2,236,653
------------------------------------------------------------------------
Hong Leong Properties BHD (Malaysia) 1,500,000 2,114,744
------------------------------------------------------------------------
Mitsubishi Warehouse (Japan) 222,000 3,700,000
------------------------------------------------------------------------
St. James Place CAP (UK) 1,000,000 1,689,876
------------------------------------------------------------------------
9,741,273
Securities Dealers:-1.2%
------------------------------------------------------------------------
Daiwa Securities (Japan) 256,000 3,701,205
------------------------------------------------------------------------
Telecommunications:-4.5%
------------------------------------------------------------------------
Cable & Wireless (UK) 471,800 2,783,111
------------------------------------------------------------------------
Nippon Telephone & Telegraph CP (Japan) 421 3,723,906
------------------------------------------------------------------------
Sip Ordinary (Italy) 1,050,000 2,733,079
------------------------------------------------------------------------
Telefonos De Mexico SA (Mexico) 42,800 1,754,800
------------------------------------------------------------------------
Vodafone Group (UK) 997,000 3,307,213
------------------------------------------------------------------------
14,302,109
Transportation:-1.0%
------------------------------------------------------------------------
Kamigumi Company (Japan) 312,000 3,320,482
------------------------------------------------------------------------
Total Common Stocks:-92.6%
(Cost - $284,656,937) 292,968,030
------------------------------------------------------------------------
Preferred Stocks:
Nokia (AB) OY (Finland) 45,500 6,703,039
------------------------------------------------------------------------
Total Preferred Stocks:-2.1%
(Cost - $1,740,575) 6,703,039
------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Maturity
Amount
---------
<S> <C> <C>
Repurchase Agreement:
State Street Bank and Trust Co. repurchase
agreement dated 12/30/94, 4.75%, maturing
on 1/3/95 collateralized by U.S. Treasury
Bond 9.125%, 5/15/18 $3,678,941 3,677,000
------------------------------------------------------------------------
Total Repurchase Agreement:-1.2%
(Cost - $3,677,000) 3,677,000
------------------------------------------------------------------------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Market
Value
------
<S> <C> <C>
Total Investments:-95.9%
(Cost - $290,074,512) $303,348,069
------------------------------------------------------------------------
Other Assets Over Liabilities-4.1% 13,001,836
------------------------------------------------------------------------
Net Assets: 100%
(Equivalent to 13.027 per share based
on 24,283,689 shares issued and
outstanding) $316,349,905
========================================================================
</TABLE>
Lincoln National Managed Fund, Inc.
Statement of Net Assets
December 31, 1994
<TABLE>
<CAPTION>
Par Market
Investments Amount Value
--------- ------
<S> <C> <C>
Long-Term Debt Investments:
U.S. Government and Agency Obligations:-26.0%
------------------------------------------------------------------------
Federal Home Loan Bank*
0.0%, 3/03/95 $1,500,000 $1,484,550
------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.
4.88%, 6/23/98 3,000,000 2,775,210
8.5%, 1/1/17 1,417,347 1,385,896
------------------------------------------------------------------------
Federal National Mortgage Association
0.0% Debenture, 7/5/14* 2,500,000 503,150
------------------------------------------------------------------------
FNMA
5.85% Med. Term Note, 2/02/98 3,000,000 2,823,120
5.24% Med. Term Note, 7/15/98 3,000,000 2,749,650
------------------------------------------------------------------------
GNMA
6.5%, 12/15/23 1,490,885 1,291,002
------------------------------------------------------------------------
United States Treasury Notes
4.0%, 1/31/96 33,000,000 31,855,230
4.63%, 2/29/96 16,500,000 15,994,605
8.88%, 2/15/96 17,000,000 17,249,560
6.0%, 6/30/96 15,000,000 14,676,450
7.375%, 5/15/96 2,000,000 1,996,860
5.375%, 5/31/98 10,000,000 9,271,800
------------------------------------------------------------------------
U.S. Treasury Strips*
0.0%, 2/15/18 18,000,000 2,871,360
0.0%, 2/15/21 36,500,000 4,728,575
0.0%, 5/15/20 25,000,000 3,401,750
------------------------------------------------------------------------
115,058,768
Collateralized Mortgage Obligations:-2.3%
------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Series 58
8.0%, 4/15/16 2,582,693 2,523,058
------------------------------------------------------------------------
Federal National Mortgage Association
7.5%, 5/25/20 4,000,000 3,643,280
------------------------------------------------------------------------
FNMA
7.6%, 7/25/05 2,000,000 1,942,200
------------------------------------------------------------------------
Mid State Trust III
9.625%,4/1/22 370,296 355,839
------------------------------------------------------------------------
Spiegel Charge Account Trust 2
6.95%,12/17/01 500,000 486,145
------------------------------------------------------------------------
Prudential Home Mortgage
6.7%, 11/25/07 1,500,000 1,341,135
------------------------------------------------------------------------
10,291,657
Indexed Securities:-1.4%
------------------------------------------------------------------------
Caterpillar Financial Services Corporation
4.25%, 1/08/96, coupon inversly
indexed to 2 year Italian swap
rate multiplied by 5.11 $3,500,000 $3,390,450
------------------------------------------------------------------------
Goldman Sachs Group LP
4.24%, 12/29/95, coupon inversly
indexed to Euro swap basket
multiplied by 6.5 3,000,000 2,784,300
------------------------------------------------------------------------
6,174,750
Air Transportation:-1.0%
------------------------------------------------------------------------
American Airlines Equipment Trust
10.18%, 1/2/13 1,500,000 1,442,835
------------------------------------------------------------------------
Delta Air Lines Inc.
8.25% Med. Term Note, 12/27/07 1,500,000 1,453,800
------------------------------------------------------------------------
United Airline Inc. Equipment Trust
9.35%, 4/7/16 1,500,000 1,283,595
------------------------------------------------------------------------
4,180,230
Banking and Insurance:-4.0%
------------------------------------------------------------------------
Banc One Corp.
9.875%, 3/1/09 500,000 539,220
------------------------------------------------------------------------
Barclays Bank Services
3.875%, 11/30/49 2,000,000 1,742,400
------------------------------------------------------------------------
Chase Manhatten Corporation
6.75%, 8/15/08 3,000,000 2,495,160
------------------------------------------------------------------------
First Chicago Corporation
6.38%, 1/30/09 3,000,000 2,381,430
------------------------------------------------------------------------
First Union Corp.
8.0%, 8/15/09 2,000,000 1,823,240
------------------------------------------------------------------------
First USA Bank
5.75%, 1/15/99 2,000,000 1,807,120
------------------------------------------------------------------------
Fleet Financial Group
7.65%, 9/01/99 1,000,000 957,730
------------------------------------------------------------------------
National Westminster Bancorp
3.69%, 7/30/49 3,000,000 2,572,500
------------------------------------------------------------------------
National Westminster Bank p.l.c.
9.45% Debentures, 5/01/01 500,000 522,120
------------------------------------------------------------------------
Travelers Inc.
8.63%, 2/01/07 3,000,000 2,972,730
------------------------------------------------------------------------
17,813,650
Coal & Natural Gas:-0.3%
------------------------------------------------------------------------
Coastal Corporation
9.75%, 8/1/03 1,000,000 1,045,740
------------------------------------------------------------------------
Entertainment:-0.4%
------------------------------------------------------------------------
Blockbuster Entertainment Corp.
6.63%, 2/15/98 550,000 516,670
------------------------------------------------------------------------
Time Warner Entertainment Company
8.88%, 10/01/12 500,000 446,045
10.15%, 5/01/12 1,000,000 987,690
------------------------------------------------------------------------
1,950,405
Finance:-4.7%
------------------------------------------------------------------------
Aristar Finance
7.5% Senior Subordinated Note, 7/1/99 1,500,000 1,446,585
------------------------------------------------------------------------
Avco Financial Services Inc.
7.25%, 7/15/99 1,000,000 956,270
------------------------------------------------------------------------
Chrysler Financial Corporation
9.5%, 12/15/99 1,500,000 1,551,225
------------------------------------------------------------------------
Discover Credit Corp.
8.73% Med. Term Note, 8/15/96 500,000 503,195
------------------------------------------------------------------------
Dow Capital B V
9.0%, 5/15/10 3,000,000 3,054,450
------------------------------------------------------------------------
Ford Motor Credit Co.
7.95% Med. Term Notes, 5/17/99 2,000,000 1,954,620
------------------------------------------------------------------------
General Electric Capital Corp.
8.3%, 9/20/09 3,000,000 3,040,110
------------------------------------------------------------------------
General Motors Acceptance Corporation
7.85%, 11/15/97 1,500,000 1,475,040
8.88%, 6/01/10 1,500,000 1,576,650
------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Par Market
Amount Value
---------- ----------
<S> <C> <C>
Household Finance Corp.
9.63% Senior Subordinated Note, 7/15/00 $ 875,000 $ 912,196
-------------------------------------------------------------------------------
John Deere Capital Corp.
8.27% Med. Term Note, 8/8/95 500,000 503,020
-------------------------------------------------------------------------------
National Rural Utilities Cooperative Finance Corp.
8.5%, 2/15/98 1,000,000 1,004,140
-------------------------------------------------------------------------------
Nationsbank Corp
8.125% Subordinated Debentures, 6/15/02 1,000,000 965,690
-------------------------------------------------------------------------------
Salomon Inc.
7.25%, 1/15/00 1,500,000 1,380,720
-------------------------------------------------------------------------------
20,323,911
Food and Beverage:-0.7%
-------------------------------------------------------------------------------
Coca-Cola Enterprises Inc.
8.0%, 1/04/05 3,000,000 3,055,590
-------------------------------------------------------------------------------
Forest Products:-0.2%
-------------------------------------------------------------------------------
Boise Cascade Corporation
9.85%, 6/15/02 1,000,000 1,023,310
-------------------------------------------------------------------------------
Foreign Government:-1.0%
-------------------------------------------------------------------------------
Hydro-Quebec
7.2% Med. Term Note, 10/05/09 3,000,000 3,007,680
-------------------------------------------------------------------------------
Manitoba (Province of)
7.75%, 7/7/26 1,500,000 1,497,675
-------------------------------------------------------------------------------
4,505,355
Metals and Mining:-0.6%
-------------------------------------------------------------------------------
Newmont Gold Company Psthr
8.91%, 1/05/09 750,000 731,220
-------------------------------------------------------------------------------
Noranda Inc.
8.13%, 6/15/04 2,000,000 1,918,600
-------------------------------------------------------------------------------
2,649,820
Miscellaneous:-0.5%
-------------------------------------------------------------------------------
Duquesne II Funding Corporation
8.7%, 6/1/16 2,480,000 2,314,088
-------------------------------------------------------------------------------
Office and Business Equipment and Services:-0.1%
-------------------------------------------------------------------------------
Xerox Corporation - Euronote
8.375%, 9/25/96 500,000 501,760
-------------------------------------------------------------------------------
Paper:-0.3%
-------------------------------------------------------------------------------
Champion International Corp.
7.7%, 12/15/99 1,500,000 1,454,175
-------------------------------------------------------------------------------
Petroleum and Petroleum Related:-2.5%
-------------------------------------------------------------------------------
Atlantic Richfield Co.
10.375% Debentures, 7/15/95 1,000,000 1,015,780
-------------------------------------------------------------------------------
Enron Corporation
9.5%, 6/15/01 1,000,000 1,047,630
-------------------------------------------------------------------------------
Enserch Corporation
7.0%, 8/15/99 1,500,000 1,414,560
-------------------------------------------------------------------------------
Noble Affiliates Inc.
7.25%, 10/15/23 600,000 491,244
-------------------------------------------------------------------------------
Occidental Petroleum Corp.
11.75%, 3/15/11 2,000,000 2,158,480
-------------------------------------------------------------------------------
Petro Canada
8.6%, 10/15/01 1,500,000 1,506,495
-------------------------------------------------------------------------------
Tenneco Inc.
10.0%, 8/1/98 2,500,000 2,597,450
-------------------------------------------------------------------------------
Transcontinental Gas Pipe Line Corp.
9.0%, 11/15/96 1,000,000 1,002,300
-------------------------------------------------------------------------------
11,233,939
Printing and Publishing:-0.3%
-------------------------------------------------------------------------------
Time Warner Inc.
9.125%, 1/15/13 1,500,000 1,368,180
-------------------------------------------------------------------------------
Public Utilities:-4.8%
-------------------------------------------------------------------------------
Baltimore Gas & Electric Co.
8.92% Med. Term Note, 7/16/98 1,000,000 1,015,580
-------------------------------------------------------------------------------
Carolina Power & Light
9.0%, 4/01/22 $ 500,000 $ 498,615
-------------------------------------------------------------------------------
Central Maine Power Company
6.5%, 7/22/97 1,500,000 1,415,145
-------------------------------------------------------------------------------
Cleveland Electric Illumination
9.375%, 3/1/17 1,750,000 1,487,412
-------------------------------------------------------------------------------
Commonwealth Edison Corporation
9.375%, 2/15/00 500,000 508,380
-------------------------------------------------------------------------------
Detroit Edison Company
6.56%, 5/1/01 2,000,000 1,808,040
-------------------------------------------------------------------------------
Great Lakes Power Inc.
8.9%, 12/01/99 1,500,000 1,486,620
-------------------------------------------------------------------------------
Gulf States Utilities Company
7.35%, 11/1/98 1,500,000 1,442,250
-------------------------------------------------------------------------------
Illinois Power Co.
5.85% 1st Mortgage Bonds, 10/1/96 625,000 604,181
-------------------------------------------------------------------------------
Long Island Lighting Co.
9.63%, 7/01/24 500,000 462,660
-------------------------------------------------------------------------------
Pacificorp
9.15% Med. Term Note, 8/9/11 1,500,000 1,566,510
-------------------------------------------------------------------------------
Pennsylvania Power & Light
7.7%, 10/01/09 3,000,000 2,938,170
-------------------------------------------------------------------------------
Public Service Company of Indiana, Inc.
8.57% 1st Mortgage Bonds, 12/27/11 500,000 496,880
-------------------------------------------------------------------------------
Public Service of Colorado
6.375%, 11/1/05 1,500,000 1,268,370
-------------------------------------------------------------------------------
Texas Utilities Electric Company
7.375%, 8/1/01 1,500,000 1,412,160
-------------------------------------------------------------------------------
Utilicorp United Inc.
10.5%, 12/1/20 1,000,000 1,106,010
-------------------------------------------------------------------------------
Utilicorp United Inc.
9.3% Senior Notes, 12/1/95 1,000,000 1,011,710
-------------------------------------------------------------------------------
Washington Water Power Company
8.01%, 12/17/01 1,000,000 978,150
-------------------------------------------------------------------------------
21,506,843
Railroads:-0.3%
-------------------------------------------------------------------------------
Chicago & Northwestern Holdings Corporation
6.25%, 7/30/12 1,500,000 1,230,585
-------------------------------------------------------------------------------
Retail:-0.6%
-------------------------------------------------------------------------------
Dayton Hudson Corporation
9.75%, 07/01/02 500,000 534,775
10.03% Med. Term Note, 6/10/10 2,000,000 2,173,400
-------------------------------------------------------------------------------
2,708,175
Securities Dealers:-0.7%
-------------------------------------------------------------------------------
Smith Barney Holdings
7.88%, 10/01/99 3,000,000 2,913,690
-------------------------------------------------------------------------------
Telecommunications:-1.1%
-------------------------------------------------------------------------------
NYNEX Cap Funding
7.63%, 10/15/09 3,000,000 2,919,300
-------------------------------------------------------------------------------
Tele-Communications Inc.
6.58%, 2/15/05 2,000,000 1,833,620
-------------------------------------------------------------------------------
4,752,920
Total Long-Term Debt Investments-53.8%
(Cost-$245,985,158) 238,057,541
-------------------------------------------------------------------------------
Number
Common Stocks: of Shares
---------
Aerospace:-0.4%
-------------------------------------------------------------------------------
McDonnell Douglas Corporation 11,100 1,576,200
-------------------------------------------------------------------------------
Air Transportation:-0.4%
-------------------------------------------------------------------------------
Airborne Freight Corp. 14,600 299,300
-------------------------------------------------------------------------------
Lockheed Corp. 18,300 1,329,037
-------------------------------------------------------------------------------
1,628,337
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
---------- -----------
<S> <C> <C>
Banking and Insurance:-5.2%
-------------------------------------------------------------------------------
Ahmanson HF & Co. 58,700 $ 946,537
-------------------------------------------------------------------------------
American General Corporation 114,900 3,245,925
-------------------------------------------------------------------------------
Bank of New York 21,700 629,300
-------------------------------------------------------------------------------
Chase Manhattan Corporation 81,800 2,811,875
-------------------------------------------------------------------------------
Cigna Corporation 44,800 2,850,400
-------------------------------------------------------------------------------
Conseco Inc. 5,600 241,500
-------------------------------------------------------------------------------
First Chicago Corporation 40,600 1,938,650
-------------------------------------------------------------------------------
First Interstate Bank 38,600 2,610,325
-------------------------------------------------------------------------------
MBNA Corp. 106,700 2,494,113
-------------------------------------------------------------------------------
Nationsbank Corporation 73,700 3,325,713
-------------------------------------------------------------------------------
NWNL COS 3,300 95,700
-------------------------------------------------------------------------------
St. Paul Companies 14,100 630,975
-------------------------------------------------------------------------------
SunAmerica Inc. 5,700 206,625
-------------------------------------------------------------------------------
Transamerica Corp. 20,700 1,029,825
-------------------------------------------------------------------------------
23,057,463
Broadcasting:-0.6%
-------------------------------------------------------------------------------
Belo (A.H.) Corporation 7,300 412,450
-------------------------------------------------------------------------------
Capital Cities ABC Inc. 26,600 2,267,650
-------------------------------------------------------------------------------
2,680,100
Building Materials:-0.5%
-------------------------------------------------------------------------------
Armstrong World Inc. 55,100 2,121,350
-------------------------------------------------------------------------------
Chemicals:-2.4%
-------------------------------------------------------------------------------
Dow Chemical Co. 20,800 1,398,800
-------------------------------------------------------------------------------
Du Pont E I De Nemours & Co. 46,400 2,610,000
-------------------------------------------------------------------------------
Georgia Gulf Corp.* 24,800 964,100
-------------------------------------------------------------------------------
Lyondell Petrochemical 111,800 2,892,825
-------------------------------------------------------------------------------
Olin Corp. 53,000 2,729,500
-------------------------------------------------------------------------------
10,595,225
Coal & Natural Gas:-0.1%
-------------------------------------------------------------------------------
Coastal Corporation 13,800 355,350
-------------------------------------------------------------------------------
Consumer Products and Services:-2.8%
-------------------------------------------------------------------------------
American Brands, Inc. 90,600 3,397,500
-------------------------------------------------------------------------------
Handleman Company 36,900 419,737
-------------------------------------------------------------------------------
Kimberly-Clark Corporation 9,600 484,800
-------------------------------------------------------------------------------
Philip Morris Companies Inc. 95,700 5,502,750
-------------------------------------------------------------------------------
Premark International, Inc. 52,700 2,358,325
-------------------------------------------------------------------------------
12,163,112
Drug and Hospital Supplies:-3.9%
-------------------------------------------------------------------------------
Baxter International Inc. 118,800 3,356,100
-------------------------------------------------------------------------------
Bristol-Myers Squibb Company 81,500 4,716,812
-------------------------------------------------------------------------------
Lilly (Eli) & Company 48,500 3,182,812
-------------------------------------------------------------------------------
Schering-Plough Corporation 45,200 3,344,800
-------------------------------------------------------------------------------
Upjohn Co. 86,100 2,647,575
-------------------------------------------------------------------------------
17,248,099
Electrical and Electronics:-2.9%
-------------------------------------------------------------------------------
Advanced Micro Devices, Inc.* 79,400 1,975,075
-------------------------------------------------------------------------------
Cypress Semiconductor Corporation* 97,200 2,247,750
-------------------------------------------------------------------------------
General Electric Company 118,100 6,023,100
-------------------------------------------------------------------------------
General Instrument Corp.* 20,000 600,000
-------------------------------------------------------------------------------
Quantum Corp.* 131,000 1,973,122
-------------------------------------------------------------------------------
12,819,047
Entertainment:-0.5%
-------------------------------------------------------------------------------
Mattel, Inc. 63,050 1,584,131
-------------------------------------------------------------------------------
Mirage Resorts Inc.* 37,600 770,800
-------------------------------------------------------------------------------
2,354,931
Financial Services:-0.4%
-------------------------------------------------------------------------------
Dean Witter Discover & Co. 51,800 1,754,725
-------------------------------------------------------------------------------
Food and Beverage:-3.2%
-------------------------------------------------------------------------------
Campbell Soup Company 83,000 $ 3,662,375
-------------------------------------------------------------------------------
Coca Cola Company 48,600 2,502,900
-------------------------------------------------------------------------------
ConAgra, Inc. 104,400 3,262,500
-------------------------------------------------------------------------------
Coors (Adolph) C.B. 17,400 293,625
-------------------------------------------------------------------------------
IBP, Inc. 49,800 1,506,450
-------------------------------------------------------------------------------
Ralston-Continental Baking Group 1,040 3,900
-------------------------------------------------------------------------------
Safeway Inc.* 97,200 3,098,250
-------------------------------------------------------------------------------
14,330,000
Household Appliances:-0.4%
-------------------------------------------------------------------------------
Maytag Corporation 103,600 1,554,000
-------------------------------------------------------------------------------
Industrial:-0.4%
-------------------------------------------------------------------------------
Cummins Engine Company, Inc. 39,000 1,764,750
-------------------------------------------------------------------------------
Machinery & Engineering:-0.7%
-------------------------------------------------------------------------------
Briggs & Stratton Corporation 38,000 1,244,500
-------------------------------------------------------------------------------
Carpenter Technology Corporation 9,600 537,600
-------------------------------------------------------------------------------
Clark Equipment Company* 27,700 1,502,725
-------------------------------------------------------------------------------
3,284,825
Metals and Mining:-0.9%
-------------------------------------------------------------------------------
Phelps Dodge Corporation 48,900 3,025,688
-------------------------------------------------------------------------------
Pittston Services Group 37,900 1,004,350
-------------------------------------------------------------------------------
4,030,038
Miscellaneous:-0.5%
-------------------------------------------------------------------------------
Clayton Homes Inc. 67,125 1,057,219
-------------------------------------------------------------------------------
Omnicom Group, Inc. 11,000 569,250
-------------------------------------------------------------------------------
Outboard Marine Corporation 38,600 757,525
-------------------------------------------------------------------------------
2,383,994
Motor Vehicles and Equipment:-1.9%
-------------------------------------------------------------------------------
Chrysler Corporation 65,500 3,209,500
-------------------------------------------------------------------------------
Ford Motor Company 135,200 3,785,600
-------------------------------------------------------------------------------
TRW Inc. 24,600 1,623,600
-------------------------------------------------------------------------------
8,618,700
Office and Business Equipment and Services:-4.0%
-------------------------------------------------------------------------------
Avery Dennison Corp. 47,300 1,679,150
-------------------------------------------------------------------------------
Ceridian Corporation* 36,300 975,562
-------------------------------------------------------------------------------
Compaq Computer Corporation* 89,700 3,543,150
-------------------------------------------------------------------------------
Computer Associates International Inc. 74,300 3,603,550
-------------------------------------------------------------------------------
Federal Express Corporation* 32,400 1,952,100
-------------------------------------------------------------------------------
Micron Technology Inc. 67,900 2,996,088
-------------------------------------------------------------------------------
Reynolds & Reynolds Co. 27,800 695,000
-------------------------------------------------------------------------------
Stratus Computer Inc.* 22,200 843,600
-------------------------------------------------------------------------------
Tandem Computers Inc.* 82,900 1,419,663
-------------------------------------------------------------------------------
17,707,863
Petroleum and Petroleum Related:-4.7%
-------------------------------------------------------------------------------
Amoco Corp. 68,100 4,026,413
-------------------------------------------------------------------------------
Ashland Oil, Inc. 56,800 1,959,600
-------------------------------------------------------------------------------
Exxon Corporation 77,400 4,702,050
-------------------------------------------------------------------------------
Halliburton Co. 45,800 1,517,125
-------------------------------------------------------------------------------
Mobil Corp. 12,600 1,061,550
-------------------------------------------------------------------------------
Royal Dutch Petroleum Company 22,500 2,418,750
-------------------------------------------------------------------------------
Tenneco, Inc. 55,700 2,367,250
-------------------------------------------------------------------------------
Ultramar Corporation 81,600 2,080,800
-------------------------------------------------------------------------------
Williams Companies, Inc. 25,200 633,150
-------------------------------------------------------------------------------
20,766,688
Printing and Publishing:-0.3%
-------------------------------------------------------------------------------
Jostens Inc. 65,100 1,212,487
-------------------------------------------------------------------------------
Public Utilities:-2.4%
-------------------------------------------------------------------------------
Baltimore Gas & Electric Company 67,600 1,495,650
-------------------------------------------------------------------------------
Consolidated Edison Company 107,000 2,755,250
-------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
-------- ------------
<S> <C> <C>
General Public Utilities Corp. 71,400 $ 1,874,250
------------------------------------------------------------------------------
Northeast Utilities 110,100 2,380,913
------------------------------------------------------------------------------
Portland General 100,200 1,928,850
------------------------------------------------------------------------------
10,434,913
RETAIL:-2.6%
------------------------------------------------------------------------------
Federated Department Stores* 102,000 1,963,500
------------------------------------------------------------------------------
Kroger Co.* 77,200 1,862,450
------------------------------------------------------------------------------
Penney (J.C.) Company, Inc. 64,900 2,896,163
------------------------------------------------------------------------------
Sears, Roebuck and Co. 62,900 2,893,400
------------------------------------------------------------------------------
Wal-Mart Stores 83,600 1,776,500
------------------------------------------------------------------------------
11,392,013
SHOES:-0.3%
------------------------------------------------------------------------------
Reebok International Ltd. 32,000 1,264,000
------------------------------------------------------------------------------
SOAPS, CLEANERS AND COSMETICS:-2.1%
------------------------------------------------------------------------------
Colgate-Palmolive Company 51,200 3,244,800
------------------------------------------------------------------------------
Dial Corp. 56,000 1,190,000
------------------------------------------------------------------------------
Procter & Gamble Company 81,400 5,046,800
------------------------------------------------------------------------------
9,481,600
STEEL:-0.1%
------------------------------------------------------------------------------
Allegheny Ludlum Corporation 23,200 435,000
------------------------------------------------------------------------------
TELECOMMUNICATIONS:-4.2%
------------------------------------------------------------------------------
American Telephone & Telegraph Company 66,100 3,321,525
------------------------------------------------------------------------------
Ameritech Corporation 105,800 4,271,675
------------------------------------------------------------------------------
Bellsouth Corporation 52,800 2,857,800
------------------------------------------------------------------------------
Comsat Corporation 18,000 335,250
------------------------------------------------------------------------------
GTE Corporation 46,800 1,421,550
------------------------------------------------------------------------------
Pacific Telesis Group 122,600 3,494,100
------------------------------------------------------------------------------
Southwestern Bell Corp. 200 8,075
------------------------------------------------------------------------------
Sprint Corporation 95,700 2,643,713
------------------------------------------------------------------------------
18,353,688
TEXTILES-APPAREL MANUFACTURING:-0.1%
------------------------------------------------------------------------------
VF Corp. 11,900 578,638
------------------------------------------------------------------------------
TRANSPORTATION:-0.4%
------------------------------------------------------------------------------
Illinois Central Corporation 31,800 977,850
------------------------------------------------------------------------------
PHH Corporation 25,100 872,225
------------------------------------------------------------------------------
1,850,075
TRUCKING COMPANIES:-0.1%
------------------------------------------------------------------------------
Ryder System, Inc. 26,000 572,000
------------------------------------------------------------------------------
TOTAL COMMON STOCKS-49.4%
(Cost-$208,716,514) 218,369,211
------------------------------------------------------------------------------
Par
Amount
--------
MONEY MARKET INSTRUMENTS:
Paccar Financial Corp.
5.95%, 01/03/95 $400,000 399,736
------------------------------------------------------------------------------
TOTAL MONEY MARKET INSTRUMENTS:-0.1%
(Cost-$399,736) 399,736
------------------------------------------------------------------------------
TOTAL INVESTMENTS:-103.3%
(Cost-$455,101,408) 456,826,488
------------------------------------------------------------------------------
Other Assets Under Liabilities-(3.3%) (14,686,904)
------------------------------------------------------------------------------
NET ASSETS-100.0%
(equivalent to $12.783 per share
based on 34,587,852 shares
issued and outstanding) $442,139,584
==============================================================================
</TABLE>
LINCOLN NATIONAL MONEY MARKET
FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
<TABLE>
<CAPTION>
Par Market
INVESTMENTS Amount Value
---------- -----------
<S> <C> <C>
MONEY MARKET INSTRUMENTS:
American General Corporation
5.93%, 1/26/95 $3,700,000 $ 3,681,716
-------------------------------------------------------------------------------
Associates Corp. of North America
6.0%, 1/05/95 3,900,000 3,900,000
-------------------------------------------------------------------------------
Bankers Trust New York Corp.
6.05%, 1/17/95 4,000,000 3,977,144
-------------------------------------------------------------------------------
Chemical Banking Corp.
5.4%, 2/01/95 3,900,000 3,839,745
-------------------------------------------------------------------------------
Colgate-Palmolive Company
5.85%, 1/24/95 3,589,000 3,574,420
-------------------------------------------------------------------------------
Comerica Bank
6.11%, 11/22/95 3,900,000 3,896,829
-------------------------------------------------------------------------------
Corporate Asset Funding
5.97%, 1/19/95 1,500,000 1,491,543
-------------------------------------------------------------------------------
Donnelley (R.R) & Sons Co.
6.02%, 1/18/95 3,900,000 3,878,478
-------------------------------------------------------------------------------
Gannett Inc.
5.95%, 1/09/95 2,200,000 2,189,819
-------------------------------------------------------------------------------
International Lease Finance Corporation
5.99%, 1/24/95 3,900,000 3,872,096
-------------------------------------------------------------------------------
Kimberly-Clark Corporation
6.0%, 1/10/95 3,900,000 3,881,800
-------------------------------------------------------------------------------
Merrill Lynch & Company
5.8%, 1/20/95 3,800,000 3,763,267
-------------------------------------------------------------------------------
Monsanto Corporation
6.0%, 1/13/95 2,904,000 2,889,964
-------------------------------------------------------------------------------
J.P. Morgan & Co. Incorporated
5.9%, 1/23/95 2,200,000 2,188,823
-------------------------------------------------------------------------------
Nationsbank Corporation
6.1%, 2/17/95 3,800,000 3,761,366
-------------------------------------------------------------------------------
Paccar Financial Corp.
5.95%, 1/03/95 1,000,000 999,339
-------------------------------------------------------------------------------
Pfizer Inc.
6.0%, 1/23/95 1,500,000 1,491,250
-------------------------------------------------------------------------------
PHH Corporation
5.98%, 1/13/95 3,900,000 3,879,269
-------------------------------------------------------------------------------
PNC NA
4.86%, 9/07/95 4,000,000 3,999,348
-------------------------------------------------------------------------------
Prudential Home Mortgage
6.03%, 1/09/95 1,100,000 1,100,000
-------------------------------------------------------------------------------
Smithkline Beecham Corp.
6.0%, 1/17/95 4,000,000 3,978,000
-------------------------------------------------------------------------------
Temple-Inland Inc.
6.03%, 1/17/95 3,000,000 2,985,930
-------------------------------------------------------------------------------
Toyota Motor Credit
6.08%, 1/12/96 3,000,000 3,000,000
-------------------------------------------------------------------------------
U.S. West Communications
6.02%, 1/13/95 4,000,000 3,979,933
-------------------------------------------------------------------------------
Vermont American Corp.
5.90%, 1/19/95 3,500,000 3,487,381
-------------------------------------------------------------------------------
TOTAL MONEY MARKET INSTRUMENTS-103.3%
(Cost-$76,687,460) 79,687,460
-------------------------------------------------------------------------------
Other Assets Under Liabilities-(3.3%) (2,510,023)
-------------------------------------------------------------------------------
NET ASSETS-100.0%
(equivalent to $10.000 per share
based on 7,717,744 shares
issued and outstanding) $77,177,437
==============================================================================
</TABLE>
23
<PAGE>
LINCOLN NATIONAL PUTNAM MASTER
FUND, INC.
STATEMENT OF NET ASSETS
December 31, 1994
<TABLE>
<CAPTION>
Par Market
INVESTMENTS Amount** Value
---------- -----------
LONG-TERM DEBT INVESTMENTS:
U.S. GOVERNMENT AND AGENCY OBLIGATIONS:-14.7%
-------------------------------------------------------------------------------
<S> <C> <C>
Federal National Mortgage Association
9.0%, 3/25/00 $ 267,802 $ 267,427
6.5%, 9/01/00 129 121
7.5%, 7/01/07 512,231 483,597
7.5%, 2/01/14 1,026,524 958,196
7.5%, 5/01/17 44,888 42,074
.01%, 5/25/17 154,567 145,817
7.5%, 7/01/23 679,746 634,713
7.0%, 10/25/23 961,131 769,203
7.5%, 6/01/24 266,006 248,383
7.5%, 6/01/24 49,178 45,920
7.5%, 6/01/24 250,404 233,814
7.5%, 7/01/24 435,240 406,406
7.5%, 7/01/24 83,581 78,043
7.5%, 7/01/24 723,689 675,745
7.5%, 7/01/24 168,441 157,282
7.5% 8/01/24 571,955 534,063
-------------------------------------------------------------------------------
GNMA
11.0%, 12/15/15 9,556 10,389
11.0%, 12/15/15 88,848 96,594
11.0%, 12/15/15 107,934 117,345
7.0%, 2/15/22 81,848 73,459
7.0%, 2/15/22 594,054 533,164
7.0%, 2/15/22 754,410 677,083
8.0%, 7/15/22 26,002 24,873
7.0%, 12/15/22 186,358 167,373
7.0%, 12/15/22 166,305 149,259
7.5%, 12/15/22 635,161 589,707
8.0%, 6/15/23 162,519 155,459
7.5%, 9/15/23 25,159 23,359
8.0%, 10/15/23 446,302 426,916
7.0%, 11/15/23 223,905 200,955
7.5%, 12/15/23 231,326 214,627
7.5%, 1/15/24 139,141 129,097
7.5%, 1/15/24 496,469 460,629
7.5%, 1/15/24 198,375 184,054
8.0%, 3/15/24 108,791 104,066
8.0%, 3/15/24 27,390 26,200
8.0%, 8/15/24 26,658 25,500
8.0%, 10/15/24 312,048 298,493
8.0%, 11/15/24 719,304 688,059
8.0%, 11/15/24 312,525 298,950
8.0%, 11/15/24 25,806 24,685
8.0%, 12/15/24 974,145 931,831
-------------------------------------------------------------------------------
United States Treasury Notes
3.875%, 10/31/95 3,750,000 3,650,385
4.0%, 1/31/96 6,062,000 5,851,715
7.75%, 11/30/99 675,000 672,469
7.25%, 5/15/04 280,000 268,887
-------------------------------------------------------------------------------
United States Treasury Bonds
8.125%, 8/15/19 3,540,000 3,584,250
7.5%, 11/15/24 2,640,000 2,523,671
-------------------------------------------------------------------------------
28,864,307
</TABLE>
<TABLE>
<CAPTION>
Par Market
Amount Value
---------- -----------
BANKING AND INSURANCE:-1.3%
-------------------------------------------------------------------------------
<S> <C> <C>
Australia & New Zealand Bank
6.25%, 2/01/04 $ 300,000 $ 256,901
-------------------------------------------------------------------------------
Chase Manhattan Credit Card
8.75%, 8/15/99 890,000 897,788
-------------------------------------------------------------------------------
Int'l Bank for Reconstruction & Development*
0.0%, 10/16/99 410,000 278,544
-------------------------------------------------------------------------------
MBNA Amber Bank
7.12%, 4/12/99 500,000 478,750
-------------------------------------------------------------------------------
National Bank CDA Montreal QUE
8.125%, 8/15/04 500,000 481,603
-------------------------------------------------------------------------------
Suntrust Bank Inc.
6.125%, 2/15/04 315,000 269,567
-------------------------------------------------------------------------------
2,663,153
CONSUMER PRODUCTS AND SERVICES:-0.1%
-------------------------------------------------------------------------------
Whirlpool Corp. - Liquid Yield Option Note
0.01%, 5/14/11 560,000 208,600
-------------------------------------------------------------------------------
ELECTRICAL AND ELECTRONICS:-0.1%
-------------------------------------------------------------------------------
Unisys Corp.
8.25%, 8/01/00 140,000 141,050
-------------------------------------------------------------------------------
FINANCE:-3.7%
-------------------------------------------------------------------------------
Aegon NV
8.0%, 8/15/06 500,000 474,408
-------------------------------------------------------------------------------
Associates Corporation of North America
5.49%, 1/28/99 650,000 585,406
-------------------------------------------------------------------------------
Banponce Financial Corp
6.16%, 7/30/98 400,000 369,872
-------------------------------------------------------------------------------
Chrysler Financial Corporation
10.0%, 8/01/08 500,000 493,558
-------------------------------------------------------------------------------
Discover Card
8.625%, 7/16/98 905,000 908,959
-------------------------------------------------------------------------------
First Deposit Corp.
5.75% 6/15/01 215,000 199,791
-------------------------------------------------------------------------------
General Electric Capital Mortgage Services Inc.
6.0%, 2/25/24 600,000 557,063
-------------------------------------------------------------------------------
General Motors Acceptance Corporation
6.75%, 5/17/96 340,000 335,325
-------------------------------------------------------------------------------
GTE Corporation
8.75%, 11/01/21 940,000 925,660
-------------------------------------------------------------------------------
Household Finance LTD
7.125%, 4/30/99 380,000 360,411
-------------------------------------------------------------------------------
Merrill Lynch Mortgage Invest. Inc.
10.35%, 5/15/09 260,320 265,688
-------------------------------------------------------------------------------
Prudential Home Mortgage
5.15%, 12/25/07 5,296 5,286
-------------------------------------------------------------------------------
Standard Cr. Card Master Tri.
8.5%, 6/07/96 900,000 907,875
8.0%, 8/07/96 865,000 863,378
-------------------------------------------------------------------------------
7,252,680
FOREIGN GOVERNMENT:-8.8%
-------------------------------------------------------------------------------
Australia (Commonwealth)
10.0%, 10/15/02 2,195,000 1,697,942
9.0%, 9/15/04 445,000 323,146
6.75%, 11/15/06 929,000 558,581
-------------------------------------------------------------------------------
Canada(Government of)
9.0%, 12/01/04 785,000 556,658
8.0%, 6/01/23 1,100,000 697,739
9.0%, 6/01/25 1,920,000 1,347,307
-------------------------------------------------------------------------------
Denmark (Kingdom of)
9.0%, 1/15/00 1,400,000 230,112
8.0%, 5/15/03 6,400,000 988,297
-------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Par Market
Amount Value
--------- ------
<S> <C> <C>
Finland (Republic of)
10.75%, 3/15/02 $2,000,000 $440,726
-----------------------------------------------------------------------
France (Government of)
5.0%, 3/16/99 329,000 358,255
8.25%, 4/25/22 5,660,000 875,758
8.5%, 4/25/23 580,000 670,243
-----------------------------------------------------------------------
Italy (Republic of)
8.5%, 4/01/99 1,255,000,000 689,718
12.0%, 1/01/03 1,935,000,000 1,195,791
8.5%, 4/01/04 1,500,000,000 749,884
-----------------------------------------------------------------------
Netherlands (Government of)
5.75%, 1/15/04 100,000 50,395
7.5%, 1/15/23 300,000 162,538
-----------------------------------------------------------------------
New Zealand
8.0%, 11/15/95 985,000 622,734
9.0%, 11/15/96 425,000 270,152
-----------------------------------------------------------------------
Spain (Government Of)
10.55%, 11/30/96 49,800,000 377,776
10.25%, 11/30/98 57,200,000 415,664
-----------------------------------------------------------------------
Sweden (Kingdom of)
10.25%, 5/05/03 700,000 92,170
6.0%, 2/09/05 5,000,000 480,378
6.0%, 2/09/05 600,000 82,596
-----------------------------------------------------------------------
United Kingdom Treasury
7.25%, 3/30/98 65,000 97,955
9.0%, 3/03/00 145,000 229,718
9.75%, 8/27/02 385,000 630,836
9.5%, 4/18/05 900,000 1,475,561
7.75%, 9/08/06 405,000 590,929
8.0%, 9/27/13 230,000 341,662
-----------------------------------------------------------------------
17,301,221
Industrial:--0.1%
-----------------------------------------------------------------------
Gencorp Inc.
8.0%, 8/01/02 100,000 91,500
-----------------------------------------------------------------------
Machinery and Equipment:--0.2%
-----------------------------------------------------------------------
AMBAC Inc
9.375%, 8/01/11 400,000 423,754
-----------------------------------------------------------------------
Miscellaneous:--0.5%
-----------------------------------------------------------------------
Danieli & Co. (Italy)
7.25%, 1/01/00 33,000,000 16,284
-----------------------------------------------------------------------
Lasmo (USA) Inc.
7.125%, 6/01/03 345,000 308,460
-----------------------------------------------------------------------
RBSG Capital Corporation
10.125%, 3/01/24 450,000 490,666
-----------------------------------------------------------------------
Statens Bostansfin (Sweden)
11.0%, 1/21/99 600,000 81,175
-----------------------------------------------------------------------
896,585
Office and Business Equipment and Services:--0.4%
-----------------------------------------------------------------------
Comdisco Inc.
7.75%, 9/01/99 800,000 770,446
-----------------------------------------------------------------------
Public Utilities:--1.9%
-----------------------------------------------------------------------
Commonwealth Edison Co.
6.0%, 3/15/98 600,000 554,482
6.50%, 4/15/00 500,000 452,306
-----------------------------------------------------------------------
Hydro Quebec (Canada)
8.5%, 12/01/29 600,000 564,431
-----------------------------------------------------------------------
Iberdrolaintl B V
7.5%, 10/01/02 725,000 688,750
-----------------------------------------------------------------------
Long Island Lighting Co.
5.25%, 3/01/96 350,000 338,723
-----------------------------------------------------------------------
Public Service Co.
8.875% 5/15/96 400,000 401,296
-----------------------------------------------------------------------
Par Market
Amount Value
--------- ------
Puget Sound Power & Light Company
7.875%, 10/01/97 $400,000 $395,928
8.25%, 8/15/95 250,000 251,363
-----------------------------------------------------------------------
3,647,279
Retail:--0.8%
-----------------------------------------------------------------------
May Department Stores Co.
9.6%, 6/15/95 350,000 353,863
-----------------------------------------------------------------------
Sears Roebuck
9.42%, 4/03/96 350,000 355,031
8.45%, 11/01/98 500,000 499,611
-----------------------------------------------------------------------
Wal Mart Stores Inc.
1.0%, 9/15/06 300,000 295,699
-----------------------------------------------------------------------
1,504,204
Transportation:--0.3%
-----------------------------------------------------------------------
The Penn Central Corp.
10.625%, 4/15/00 600,000 626,891
-----------------------------------------------------------------------
Waste Management:--0.2%
-----------------------------------------------------------------------
Waste Management Inc.
8.75%, 5/01/18 350,000 348,218
-----------------------------------------------------------------------
Total Long-Term Debt Investments:--33.1%
(Cost - $66,361,948) 64,739,888
-----------------------------------------------------------------------
Number Market
Common Stocks: of Shares Value
--------- ------
U.S. Government and Agency Obligations:--0.2%
-----------------------------------------------------------------------
Federal National Mortgage Association 5,100 371,663
-----------------------------------------------------------------------
Aerospace:--0.7%
-----------------------------------------------------------------------
Allied Signal Inc. 13,200 448,800
-----------------------------------------------------------------------
Rockwell International Corp. 10,050 359,288
-----------------------------------------------------------------------
Textron Inc. 4,750 239,281
-----------------------------------------------------------------------
United Technologies Corp. 3,950 248,356
-----------------------------------------------------------------------
1,295,725
Air Transportation:--0.4%
-----------------------------------------------------------------------
McDonnell Douglas Corporation 4,600 653,200
-----------------------------------------------------------------------
Singapore Airlines (Singapore) 14,000 128,714
-----------------------------------------------------------------------
781,914
Banking and Insurance:--5.7%
-----------------------------------------------------------------------
ABN Amro Holdings NV (Netherlanrd) 4,280 148,674
-----------------------------------------------------------------------
Aetna Life & Casualty Co. 6,950 327,519
-----------------------------------------------------------------------
Allied Irish Banks (Ireland) 82,690 344,968
-----------------------------------------------------------------------
BankAmerica Corp. 15,100 596,450
-----------------------------------------------------------------------
Bankers Trust New York Corp. 7,100 393,163
-----------------------------------------------------------------------
Barclays PLC (UK) 24,346 232,756
-----------------------------------------------------------------------
Christiania Bank of (Norway) 156,000 318,344
-----------------------------------------------------------------------
Cigna Corp. 11,550 730,538
-----------------------------------------------------------------------
CitiCorp 15,600 645,450
-----------------------------------------------------------------------
Comerica Inc. 9,900 241,313
-----------------------------------------------------------------------
Corestates Finacial Corp. 9,450 245,700
-----------------------------------------------------------------------
Coventry Corp.* 600 14,588
-----------------------------------------------------------------------
Credit Local De France (France) 3,200 228,871
-----------------------------------------------------------------------
CS Holding (Switzerland) 529 226,310
-----------------------------------------------------------------------
Development Bank Singapore (Singapore) 19,000 195,540
-----------------------------------------------------------------------
HCC Insurance Holdings Inc.* 4,450 90,669
-----------------------------------------------------------------------
Health Wise Amer. Inc.* 2,825 92,519
-----------------------------------------------------------------------
HSBC Holdings PLC (Hong Kong) 13,162 142,039
-----------------------------------------------------------------------
Life Partners Group Inc. 4,435 97,016
-----------------------------------------------------------------------
MBNA Corp. 29,450 688,394
-----------------------------------------------------------------------
Mitsui Marine & Fire Insurance Co. (Japan) 40,000 302,410
-----------------------------------------------------------------------
National City Corp. 16,400 424,350
-----------------------------------------------------------------------
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- --------
<S> <C> <C>
Nationsbank Corporation 18,800 $848,350
-----------------------------------------------------------------------
PNC Banking Corp. 9,550 201,744
-----------------------------------------------------------------------
Reinsurance Group America Inc. 3,400 83,725
-----------------------------------------------------------------------
Reliance Group Holdings Inc. 19,200 98,400
-----------------------------------------------------------------------
Royal Insurance (UK) 43,300 189,704
-----------------------------------------------------------------------
Sierra Health Svcs. Inc.* 4,300 135,988
-----------------------------------------------------------------------
Societe Generale (France) 1,555 163,332
-----------------------------------------------------------------------
St. Paul Companies Inc. 2,400 107,400
-----------------------------------------------------------------------
Travelers Inc. 16,533 537,323
-----------------------------------------------------------------------
Trenwick Group Inc. 2,200 93,225
-----------------------------------------------------------------------
United American Healthcare Corp.* 2,150 53,481
-----------------------------------------------------------------------
United Overseas Bank (Singapore) 33,562 354,617
-----------------------------------------------------------------------
USF & G Corp. 9,046 123,252
-----------------------------------------------------------------------
U.S. Healthcare Inc. 12,300 505,838
-----------------------------------------------------------------------
Wellcare Mgmt. Inc.* 3,750 92,813
-----------------------------------------------------------------------
Wells Fargo & Company 4,400 638,000
-----------------------------------------------------------------------
Yamanashichuo Bank (Japan) 25,000 278,614
-----------------------------------------------------------------------
11,233,387
Broadcasting:--0.8%
-----------------------------------------------------------------------
Broadcasting Partners Inc. 3,300 51,150
-----------------------------------------------------------------------
CBS Inc. 12,870 712,676
-----------------------------------------------------------------------
Clear Channel Communications* 2,575 130,681
-----------------------------------------------------------------------
Infinity Broadcasting Corp.* 3,200 101,200
-----------------------------------------------------------------------
Pearson (UK) 32,000 278,892
-----------------------------------------------------------------------
Renaissance Communication Corporation* 1,500 41,625
-----------------------------------------------------------------------
SFX Broadcasting Inc.* 3,350 61,138
-----------------------------------------------------------------------
Starsight Telecast Inc.* 1,400 11,375
-----------------------------------------------------------------------
Valuevision International Inc.* 4,000 19,000
-----------------------------------------------------------------------
Westcott Communications Inc.* 6,250 78,906
-----------------------------------------------------------------------
1,486,643
Building and Construction:--0.4%
-----------------------------------------------------------------------
Armstrong World Industries Inc. 6,131 236,044
-----------------------------------------------------------------------
Cemex SA 17,550 195,244
-----------------------------------------------------------------------
CRH (Ireland) 60,000 329,110
-----------------------------------------------------------------------
Schuler Homes Inc.* 3,500 49,438
-----------------------------------------------------------------------
809,836
Chemicals:--1.9%
-----------------------------------------------------------------------
Akzo NV (Netherlands) 2,800 323,244
-----------------------------------------------------------------------
Dow Chemical Co. 9,500 638,875
-----------------------------------------------------------------------
DSM NV (Netherlands) 3,700 293,928
-----------------------------------------------------------------------
DuPont (E.I.) De Nemours & Company 13,350 750,938
-----------------------------------------------------------------------
Eastman Chemical Company 4,937 249,319
-----------------------------------------------------------------------
Grace WR & Co. 13,398 517,498
-----------------------------------------------------------------------
Lubrizol Corp. 4,083 138,312
-----------------------------------------------------------------------
Olin Corp. 2,700 139,050
-----------------------------------------------------------------------
Union Carbide Corp. 14,300 420,063
-----------------------------------------------------------------------
Witco Corp. 13,450 331,206
-----------------------------------------------------------------------
3,802,433
Construction:--0.3%
-----------------------------------------------------------------------
Fluor Corporation 12,100 521,735
-----------------------------------------------------------------------
Consumer Products and Services:--5.2%
-----------------------------------------------------------------------
American Brands Inc. 15,550 583,125
-----------------------------------------------------------------------
American Home Products Corp. 8,200 514,550
-----------------------------------------------------------------------
Avon Products Inc. 15,400 919,720
-----------------------------------------------------------------------
Black & Decker Corporation 21,000 500,150
-----------------------------------------------------------------------
B.A.T. Industries (UK) 28,489 192,126
-----------------------------------------------------------------------
Colgate Palmolive Co. 1,600 101,400
-----------------------------------------------------------------------
Eastman Kodak Co. 32,450 1,549,488
-----------------------------------------------------------------------
Genting Berhad (Singapore) 40,500 350,120
-----------------------------------------------------------------------
Number Market
of Shares Value
--------- --------
Home Depot Inc. 1 $46
-----------------------------------------------------------------------
H&R Block Inc. 2,700 100,238
-----------------------------------------------------------------------
Johnson & Johnson 15,300 837,675
-----------------------------------------------------------------------
Loewen Group Inc. 5,750 151,656
-----------------------------------------------------------------------
Magna International Inc. 13,100 502,713
-----------------------------------------------------------------------
Philip Morris Co. Inc. 27,500 1,581,250
-----------------------------------------------------------------------
Premark Intl Inc. 11,100 496,725
-----------------------------------------------------------------------
Procter & Gamble Co. 10,600 657,200
-----------------------------------------------------------------------
Reebok International LTD 9,400 371,300
-----------------------------------------------------------------------
Seagram Company LTD 7,950 234,525
-----------------------------------------------------------------------
Siebe (UK) 34,065 296,356
-----------------------------------------------------------------------
Stewart Enterprises Inc. 4,500 109,125
-----------------------------------------------------------------------
Tommy Hilfiger Corp* 3,300 148,913
-----------------------------------------------------------------------
10,198,401
Container:--0.1%
-----------------------------------------------------------------------
Amcor LTD (Australia) 20,220 146,131
-----------------------------------------------------------------------
Drugs and Hospital Supplies:--2.3%
-----------------------------------------------------------------------
Amgen Inc.* 6,800 400,775
-----------------------------------------------------------------------
Baxter International Inc. 9,950 281,088
-----------------------------------------------------------------------
Bristol Myers Squibb Co. 7,450 431,169
-----------------------------------------------------------------------
Cor Therapeutics Inc.* 2,100 22,173
-----------------------------------------------------------------------
Horizon Healthcare Corp.* 7,200 201,600
-----------------------------------------------------------------------
I Stat Corp.* 3,300 62,494
-----------------------------------------------------------------------
Idexx Labs Inc.* 2,150 76,863
-----------------------------------------------------------------------
Immulogic Pharmaceutical Co.* 1,600 11,200
-----------------------------------------------------------------------
Lilly Eli & Co. 6,400 420,000
-----------------------------------------------------------------------
Lincare Holdings Inc.* 6,000 174,750
-----------------------------------------------------------------------
Pfizer Inc. 8,500 656,625
-----------------------------------------------------------------------
Santen Pharmaceutical Co. 6,000 166,867
-----------------------------------------------------------------------
Schering Plough Corporation 1,200 88,800
-----------------------------------------------------------------------
Steris Corp. 4,250 158,844
-----------------------------------------------------------------------
Upjohn Co. 6,200 190,612
-----------------------------------------------------------------------
Veeco Instrs. Inc.* 1,400 13,738
-----------------------------------------------------------------------
Warner Lambert Co. 11,600 893,200
-----------------------------------------------------------------------
Yamanouchi Pharmacy (Japan) 13,000 267,570
-----------------------------------------------------------------------
4,518,368
Electrical and Electronics:--3.9%
-----------------------------------------------------------------------
Applied Materials Inc.* 9,600 403,200
-----------------------------------------------------------------------
Baldor Electric Co. 5,540 149,580
-----------------------------------------------------------------------
Cambridge Technology Partners* 3,550 78,100
-----------------------------------------------------------------------
Cherry Corp.* 6,350 92,075
-----------------------------------------------------------------------
Concord EFS Inc.* 3,375 84,375
-----------------------------------------------------------------------
Cooper Industries Inc. 2,950 100,669
-----------------------------------------------------------------------
Emerson Electric Co. 9,400 587,500
-----------------------------------------------------------------------
General Electric Co. 10,550 538,050
-----------------------------------------------------------------------
General Instrument Corp.* 9,500 285,069
-----------------------------------------------------------------------
General Signal Corp. 5,800 184,875
-----------------------------------------------------------------------
Getronics NV (Netherlands) 11,306 412,276
-----------------------------------------------------------------------
Hidroel Cantabrico (Spain) 5,600 153,162
-----------------------------------------------------------------------
Hirose Electric (Japan) 2,000 122,691
-----------------------------------------------------------------------
Johnson Electric Holdings (Hong Kong) 21,500 49,321
-----------------------------------------------------------------------
Keane Inc.* 4,475 106,281
-----------------------------------------------------------------------
LSI Logic Corp.* 6,900 278,588
-----------------------------------------------------------------------
Maxim Integrated Products Inc.* 5,600 197,400
-----------------------------------------------------------------------
Microcom Inc.* 900 10,350
-----------------------------------------------------------------------
Motorola Inc. 11,200 648,200
-----------------------------------------------------------------------
Murata Manufacturing Company (Japan) 7,000 270,582
-----------------------------------------------------------------------
Oak Industries Inc.* 4,050 92,644
-----------------------------------------------------------------------
Sanmina Corp.* 4,125 113,438
-----------------------------------------------------------------------
Senior Engineering (UK) 90,100 117,013
-----------------------------------------------------------------------
SGS Thomson Microelectronics* 10,500 238,875
-----------------------------------------------------------------------
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ------
<S> <C> <C>
Silicon Graphics Inc.* 13,000 $401,375
------------------------------------------------------------------------
Sony Corporation (Japan) 5,000 283,635
------------------------------------------------------------------------
Tandy Company 8,100 406,013
------------------------------------------------------------------------
Teradyne Inc.* 2,740 92,818
------------------------------------------------------------------------
Texas Instruments Inc. 8,100 606,488
------------------------------------------------------------------------
Westinghouse Electric Corporation 29,500 390,875
------------------------------------------------------------------------
Zilog Inc.* 2,750 80,781
------------------------------------------------------------------------
7,576,299
Entertainment:-0.1%
------------------------------------------------------------------------
Burgo(Cartiere) Spa (Italy) 25,820 171,204
------------------------------------------------------------------------
Burgo (Cartiere) (Italy) 6,520 1,038
------------------------------------------------------------------------
172,242
Finance:-2.4%
------------------------------------------------------------------------
American Express Company 39,200 1,156,400
------------------------------------------------------------------------
American General Corp. 10,550 298,038
------------------------------------------------------------------------
American International Group Inc. 4,700 460,600
------------------------------------------------------------------------
Beneficial Corp. 10,250 399,750
------------------------------------------------------------------------
Dean Witter Discover & Co. 10,501 355,721
------------------------------------------------------------------------
Dun & Bradstreet Corporation 16,800 924,000
------------------------------------------------------------------------
Household International Inc. 9,500 352,688
------------------------------------------------------------------------
Morgan J P & Co. Inc. 7,650 428,400
------------------------------------------------------------------------
SCHW Bankverein (Switzerland) 900 248,892
------------------------------------------------------------------------
4,624,489
Food and Beverage:-1.5%
------------------------------------------------------------------------
Anheuser Busch Inc. 4,000 203,500
------------------------------------------------------------------------
Coca Cola Co. 14,100 726,150
------------------------------------------------------------------------
ConAgra Inc. 16,200 506,250
------------------------------------------------------------------------
Heinz HJ Company 8,150 299,548
------------------------------------------------------------------------
Nestle SA (Switzerland) 155 147,659
------------------------------------------------------------------------
Pepsico Inc. 11,000 398,750
------------------------------------------------------------------------
Sara Lee Corp. 16,100 406,525
------------------------------------------------------------------------
Tate & Lyle (UK) 49,500 328,399
------------------------------------------------------------------------
3,016,781
Forest Products:-0.4%
------------------------------------------------------------------------
Rayonier Timerlands L.P 3,225 98,363
------------------------------------------------------------------------
Repola (Finland) 17,000 306,775
------------------------------------------------------------------------
Weyerhaeuser Company 8,500 318,750
------------------------------------------------------------------------
723,888
Health and Personal Care:-0.5%
------------------------------------------------------------------------
Authentic Fitness Corp.* 8,875 123,141
------------------------------------------------------------------------
Columbia/HCA Healthcare Corporation 12,300 448,950
------------------------------------------------------------------------
Mid Atlantic Medical Services Inc.* 3,875 88,641
------------------------------------------------------------------------
Schering AG (Germany) 495 324,847
------------------------------------------------------------------------
985,579
Hospital and Health Care:-1.2%
------------------------------------------------------------------------
Advantage Health Corporation 6,130 196,160
------------------------------------------------------------------------
Grancare Inc.* 2,900 50,750
------------------------------------------------------------------------
Health Management Assoc.* 6,662 166,550
------------------------------------------------------------------------
Health Management* 5,000 88,438
------------------------------------------------------------------------
Healthcare Services Group Inc.* 6,000 79,500
------------------------------------------------------------------------
Healthsource Inc.* 4,625 189,047
------------------------------------------------------------------------
HealthSouth Rehabilitation Corporation* 2,775 102,675
------------------------------------------------------------------------
Humana Inc.* 20,300 459,288
------------------------------------------------------------------------
Interim Services Inc.* 2,700 66,848
------------------------------------------------------------------------
Mariner Health Group Inc.* 1,300 28,275
------------------------------------------------------------------------
Olsten Corp 1,900 60,325
------------------------------------------------------------------------
Quantum Health Res. Inc.* 1,750 50,094
------------------------------------------------------------------------
Ren Corp USA* 4,830 63,394
------------------------------------------------------------------------
Renal Treatment Centers Inc.* 3,900 83,363
------------------------------------------------------------------------
United Healthcare Corp.* 11,600 523,450
------------------------------------------------------------------------
Vencor Inc. 3,750 104,531
------------------------------------------------------------------------
2,312,688
Household Appliances:-0.1%
------------------------------------------------------------------------
Maytag Corp. 13,650 204,750
------------------------------------------------------------------------
Industrial:-1.7%
------------------------------------------------------------------------
Asahi Diamond Industrial Co. LTD (Japan) 9,000 151,807
------------------------------------------------------------------------
Blyth Industries Inc.* 2,200 62,975
------------------------------------------------------------------------
Bridgestone Corporation 14,000 219,277
------------------------------------------------------------------------
Caterpillar Inc. 13,400 738,675
------------------------------------------------------------------------
Gencorp Inc. 6,900 81,938
------------------------------------------------------------------------
ITT Corp. 8,550 757,744
------------------------------------------------------------------------
Johnson Controls Inc. 2,950 144,550
------------------------------------------------------------------------
Ogden Corp. 4,150 77,813
------------------------------------------------------------------------
Sundstrand Corp. 2,700 122,850
------------------------------------------------------------------------
TRW Inc. 12,160 802,403
------------------------------------------------------------------------
Zebra Technologies Corp.* 2,388 93,729
------------------------------------------------------------------------
3,253,761
Hotels:-0.3%
------------------------------------------------------------------------
Marriott International Inc. 17,800 500,625
------------------------------------------------------------------------
Machinery and Engineering:-0.9%
------------------------------------------------------------------------
Case Equipment Corporation 6,000 129,000
------------------------------------------------------------------------
Cognex Corporation* 6,375 166,547
------------------------------------------------------------------------
Dana Corp. 9,700 226,738
------------------------------------------------------------------------
Deere & Company 8,400 556,500
------------------------------------------------------------------------
Komatsu 40,000 361,446
------------------------------------------------------------------------
Medar Inc.* 1,900 25,650
------------------------------------------------------------------------
Molins (UK) 15,000 115,005
------------------------------------------------------------------------
Novellus System Inc.* 1,505 75,062
------------------------------------------------------------------------
United Engineering (Malaysia) 30,000 148,032
------------------------------------------------------------------------
1,803,980
Metals and Mining:-0.6%
------------------------------------------------------------------------
Coltec Industries Inc.* 10,300 176,388
------------------------------------------------------------------------
CRA LTD (Australia) 2,400 33,127
------------------------------------------------------------------------
Freeport McMoran Copper & Gold 5,000 106,250
------------------------------------------------------------------------
MIM Holdings LTD (Australia) 67,365 112,310
------------------------------------------------------------------------
Pechiney International NV (France) 2,700 80,884
------------------------------------------------------------------------
Phelps Dodge Corp. 7,700 476,438
------------------------------------------------------------------------
Western Mining CP (Australia) 16,711 96,928
------------------------------------------------------------------------
1,082,325
Miscellaneous:-6.4%
------------------------------------------------------------------------
Anglian Water (UK) 10,000 80,113
------------------------------------------------------------------------
Argentaria (Spain) 6,300 223,282
------------------------------------------------------------------------
Associated British Ports (UK) 26,900 114,907
------------------------------------------------------------------------
BASF AG (Germany) 2,010 414,400
------------------------------------------------------------------------
BBC Brown Boveri (Switzerland) 325 279,813
------------------------------------------------------------------------
BCO Tottae Acores-Registered (Portugal) 5,720 128,030
------------------------------------------------------------------------
Best Denki Company (Japan) 8,000 131,727
------------------------------------------------------------------------
Brambles Industries LTD (Australia) 20,000 191,067
------------------------------------------------------------------------
Ciadea S.A. (Argentina) 12,100 105,864
------------------------------------------------------------------------
Cir Compagnie Industries (Italy) 5,700 3,899
------------------------------------------------------------------------
Community Health Sys. Inc.* 3,200 87,200
------------------------------------------------------------------------
Computer Sciences Corporation* 11,400 581,400
------------------------------------------------------------------------
Corporate Express Inc.* 1,600 31,000
------------------------------------------------------------------------
CSK Corporation (Japan) 4,000 130,120
------------------------------------------------------------------------
Cycle & Carriage 22,000 197,736
------------------------------------------------------------------------
Cyrk Inc.* 2,100 86,888
------------------------------------------------------------------------
Danieli & C (Italy) 5,500 4,376
------------------------------------------------------------------------
Danieli & Company (Italy) 22,000 140,311
------------------------------------------------------------------------
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ------
<S> <C> <C>
Duracraft* 1,050 $33,403
------------------------------------------------------------------------
Edaran Otomobil (Malaysia) 24,000 182,338
------------------------------------------------------------------------
Elsevier NV 25,000 260,672
------------------------------------------------------------------------
Exar Corporation* 7,775 188,544
------------------------------------------------------------------------
Fischer AG (Switzerland) 400 467,532
------------------------------------------------------------------------
Fujitsu (Japan) 36,000 365,060
------------------------------------------------------------------------
Futaba Corporation (Japan) 3,000 160,843
------------------------------------------------------------------------
Greencore (Ireland) 53,294 333,499
------------------------------------------------------------------------
Hutchison Whampoa LTD (Hong Kong) 34,000 137,538
------------------------------------------------------------------------
IHC Caland NV (Netherlands) 8,500 214,961
------------------------------------------------------------------------
Infosoft International Inc. 1,100 38,500
------------------------------------------------------------------------
Inm Met Vasco Cent (Spain) 3,000 96,524
------------------------------------------------------------------------
Komori Corporation (Japan) 11,000 294,880
------------------------------------------------------------------------
Kon Ptt Nederland (Netherlands) 8,000 269,601
------------------------------------------------------------------------
Lafarge Coppee SA (France) 3,700 263,247
------------------------------------------------------------------------
Landair Services Inc.* 1,830 27,908
------------------------------------------------------------------------
Landstar Systems Inc.* 2,675 86,938
------------------------------------------------------------------------
Leader Univ. Holdings (Singapore) 26,000 142,710
------------------------------------------------------------------------
Maeda Corporation (Japan) 22,000 229,719
------------------------------------------------------------------------
Marui Company (Japan) 18,000 328,916
------------------------------------------------------------------------
Mayr Melnhof 7,000 102,375
------------------------------------------------------------------------
Medisense Inc.* 3,460 79,796
------------------------------------------------------------------------
Mercury Interactive Corporation* 3,900 50,700
------------------------------------------------------------------------
Meyer International (UK) 6,700 37,426
------------------------------------------------------------------------
Mitsui & Co. (Japan) 34,000 290,161
------------------------------------------------------------------------
Netmanage Inc.* 1,500 61,500
------------------------------------------------------------------------
New Park Res. Inc.* 5,300 128,525
------------------------------------------------------------------------
Nichicon Corp. (Japan) 22,000 322,490
------------------------------------------------------------------------
Nippondenso Company (Japan) 20,000 421,687
------------------------------------------------------------------------
Omron Corporation 20,000 367,470
------------------------------------------------------------------------
PPG Industries Inc. 10,300 382,388
------------------------------------------------------------------------
Sangetsu Company (Japan) 6,000 180,723
------------------------------------------------------------------------
SGS Holdings (Switzerland) 205 283,461
------------------------------------------------------------------------
Soc Elf Aquitaine (France) 4,108 289,121
------------------------------------------------------------------------
Softdesk Inc.* 1,000 19,375
------------------------------------------------------------------------
Solvay (Belgian) 700 332,285
------------------------------------------------------------------------
Sommer Allibert (France) 800 252,237
------------------------------------------------------------------------
Sovac (France) 2,190 153,353
------------------------------------------------------------------------
Spar Handels AG (Germany) 240 50,332
------------------------------------------------------------------------
Taihei Dengyo (Japan) 7,000 167,269
------------------------------------------------------------------------
Takuma Company (Japan) 9,000 162,651
------------------------------------------------------------------------
Tele Danmark* 13,000 331,500
------------------------------------------------------------------------
Toda Corporation (Japan) 19,000 169,779
------------------------------------------------------------------------
Toyo Seikan Kaisha (Japan) 5,000 166,667
------------------------------------------------------------------------
Transaction Network Services Inc.* 3,800 56,050
------------------------------------------------------------------------
Transnational Re Corp. 2,700 62,438
------------------------------------------------------------------------
Transportacion Maritima (Mexico) 900 5,738
------------------------------------------------------------------------
Ugine SA (France) 2,000 140,423
------------------------------------------------------------------------
Ultratech Stepper Inc.* 2,550 97,219
------------------------------------------------------------------------
VA Technologie Ag. (Austria) 1,500 150,997
------------------------------------------------------------------------
Wall Data Inc.* 1,715 68,386
------------------------------------------------------------------------
Zurich Versicherun (Switzerland) 100 95,111
------------------------------------------------------------------------
12,535,099
Motor Vehicles and Equipment:-0.8%
------------------------------------------------------------------------
APS Holding Corp.* 2,750 77,688
------------------------------------------------------------------------
Eaton Corp. 3,700 183,150
------------------------------------------------------------------------
Edelbrock Corp.* 3,650 49,275
------------------------------------------------------------------------
Exide Corp. 1,950 109,688
------------------------------------------------------------------------
General Motors Corp. 15,350 648,538
------------------------------------------------------------------------
Mascotech Inc. 3,200 44,000
------------------------------------------------------------------------
Mitsubishi Motors (Japan) 36,000 353,133
------------------------------------------------------------------------
Peugeot SA (France) 1,000 137,053
------------------------------------------------------------------------
1,602,525
Office and Business Equipment and Services:-3.1%
------------------------------------------------------------------------
Accustaff Ind.* 3,800 52,725
------------------------------------------------------------------------
Alternative Res. Corp.* 500 15,625
------------------------------------------------------------------------
America Online Inc.* 2,900 162,400
------------------------------------------------------------------------
Caere Corp.* 1,875 33,750
------------------------------------------------------------------------
Clinicom Inc.* 1,600 17,600
------------------------------------------------------------------------
Compaq Computer Corp.* 8,800 347,600
------------------------------------------------------------------------
Computer Associates Internationl Inc. 11,600 562,600
------------------------------------------------------------------------
Computer Horizons Corp.* 3,325 45,719
------------------------------------------------------------------------
EMC Corporation* 14,800 320,050
------------------------------------------------------------------------
Encad Inc.* 3,300 41,456
------------------------------------------------------------------------
Fiserv Inc.* 4,175 90,284
------------------------------------------------------------------------
FTP Software Inc.* 4,800 151,800
------------------------------------------------------------------------
Honeywell Inc. 2,100 66,150
------------------------------------------------------------------------
International Business Machines 13,400 984,900
------------------------------------------------------------------------
Network Pheripherals Inc.* 1,200 32,100
------------------------------------------------------------------------
Oracle Systems Corp.* 9,300 411,525
------------------------------------------------------------------------
Paging Network Inc.* 1,670 56,363
------------------------------------------------------------------------
People Soft Inc.* 1,530 57,375
------------------------------------------------------------------------
Plain Tree Sys. Inc. (Canada)* 9,300 91,157
------------------------------------------------------------------------
Platinum Software Corp.* 7,000 90,563
------------------------------------------------------------------------
Platinum Technology Inc.* 3,485 78,413
------------------------------------------------------------------------
Robert Half International Inc.* 8,375 201,000
------------------------------------------------------------------------
Security Dynamics Tech. Inc.* 1,200 22,282
------------------------------------------------------------------------
Security Services (UK) 21,100 270,064
------------------------------------------------------------------------
Shiva Corp.* 965 38,479
------------------------------------------------------------------------
Standard Microsystems Corp.* 1,200 36,150
------------------------------------------------------------------------
Sybase Inc.* 5,500 285,313
------------------------------------------------------------------------
Xerox Corp. 16,150 1,598,850
------------------------------------------------------------------------
6,162,293
Paper:-1.0%
------------------------------------------------------------------------
International Paper Co. 4,100 309,038
------------------------------------------------------------------------
Kimberly Clark Corp. 7,200 363,600
------------------------------------------------------------------------
Rengo Company 22,000 186,647
------------------------------------------------------------------------
Scott Paper Co. 8,100 559,913
------------------------------------------------------------------------
Svenska Cellulosa (Sweden) 20,000 313,568
------------------------------------------------------------------------
Union Camp Corp. 6,100 287,463
------------------------------------------------------------------------
2,020,229
Petroleum and Petroleum Related:-3.8%
------------------------------------------------------------------------
Amoco Corp. 3,250 192,156
------------------------------------------------------------------------
Atlantic Richfield Company 3,750 381,563
------------------------------------------------------------------------
Atlantic Richfield Co. 2,893 75,580
------------------------------------------------------------------------
British Peteroleum PLC 10,000 798,750
------------------------------------------------------------------------
Burmah Castrol PLC (UK) 20,396 260,096
------------------------------------------------------------------------
Chevron Corp. 10,200 455,175
------------------------------------------------------------------------
Enron Corp. 21,300 649,688
------------------------------------------------------------------------
Exxon Corp. 11,550 701,663
------------------------------------------------------------------------
Imperial Oil LTD 8,200 270,600
------------------------------------------------------------------------
McDermott Intl Inc. 15,300 378,675
------------------------------------------------------------------------
Mobil Corp. 13,200 1,112,100
------------------------------------------------------------------------
Pennzoil Company 3,600 158,850
------------------------------------------------------------------------
Phillips Petroleum Co. 8,100 265,275
------------------------------------------------------------------------
Repsol SA (Spain) 10,675 289,533
------------------------------------------------------------------------
Royal Dutch Petroleum Co. 2,700 290,250
------------------------------------------------------------------------
Sonat Inc. 6,950 194,600
------------------------------------------------------------------------
Tenneco Inc. 12,050 512,125
------------------------------------------------------------------------
Total S A 12,552 370,284
------------------------------------------------------------------------
Williams Cos Inc. 1,350 33,919
------------------------------------------------------------------------
7,390,882
Photography:-0.2%
------------------------------------------------------------------------
Toray Industries Inc. (Japan) 47,000 342,118
------------------------------------------------------------------------
Printing and Publishing:-0.6%
------------------------------------------------------------------------
Dai Nippon Printing (Japan) 18,000 307,229
------------------------------------------------------------------------
McGraw Hill Inc. 5,400 361,125
------------------------------------------------------------------------
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ------
<S> <C> <C>
Singapore Press HD (Singapore) 8,000 $ 145,455
----------------------------------------------------------------------
Stratcomm Media Ltd.* 1,600 56,200
----------------------------------------------------------------------
Wolters Kluwer NV (Netherlands) 5,375 397,575
----------------------------------------------------------------------
1,267,584
Public Utilities:-1.9%
----------------------------------------------------------------------
Cinergy Corp. 4,603 107,595
----------------------------------------------------------------------
Detroit Edison Company 200 5,225
----------------------------------------------------------------------
East Midlands Electric (UK) 17,600 231,601
----------------------------------------------------------------------
Gaz Et Eaux (France)-Warrants 613 0
----------------------------------------------------------------------
Gaz Et Eaux (France) 643 204,662
----------------------------------------------------------------------
General Electric (UK) 25,714 111,048
----------------------------------------------------------------------
Houston Industries Inc. 8,050 286,781
----------------------------------------------------------------------
Kurita Water Industries (Japan) 5,000 129,518
----------------------------------------------------------------------
Matsushita Electric Industries (Japan) 17,000 279,920
----------------------------------------------------------------------
MCN Corp. 23,000 416,875
----------------------------------------------------------------------
Mitsui Fudosan Co. (Japan) 8,000 85,141
----------------------------------------------------------------------
North West Water (UK) 21,587 183,072
----------------------------------------------------------------------
Northeast Utilities 15,700 339,513
----------------------------------------------------------------------
Pacific Gas & Electric Company 7,250 176,719
----------------------------------------------------------------------
Panhandle Eastern Corporation 3,650 72,088
----------------------------------------------------------------------
Public Service Company of Colorado 4,650 136,594
----------------------------------------------------------------------
Southern Co. 4,600 92,000
----------------------------------------------------------------------
Texas Utilities Co. 10,450 334,400
----------------------------------------------------------------------
Union Electric Company 5,434 192,228
----------------------------------------------------------------------
Veba AG (Germany) 1,095 381,558
----------------------------------------------------------------------
3,766,538
Railroads:-0.5%
----------------------------------------------------------------------
Conrail Inc. 2,650 133,825
----------------------------------------------------------------------
Illinois Central Corp. 6,650 204,488
----------------------------------------------------------------------
Norfolk Southern Corp. 3,850 233,406
----------------------------------------------------------------------
Union Pac Corp. 8,850 403,781
----------------------------------------------------------------------
Union Switch & Signal* 3,000 40,875
----------------------------------------------------------------------
1,016,375
Real Estate:-0.2%
----------------------------------------------------------------------
Cheung Kong Holdings (Hong Kong) 27,000 109,919
----------------------------------------------------------------------
Hong Kong Land Holdings (Hong Kong) 49,000 95,625
----------------------------------------------------------------------
Hong Leong Industries (Singapore) 22,000 113,726
----------------------------------------------------------------------
Hong Leong Industries (Singapore) 24,000 123,499
----------------------------------------------------------------------
Meditrust 1,350 40,838
----------------------------------------------------------------------
483,607
Restaurant:-0.3%
----------------------------------------------------------------------
Buffets Inc.* 4,650 45,628
----------------------------------------------------------------------
Davco Restaurants Inc.* 3,200 39,600
----------------------------------------------------------------------
DF & R Restaurants Inc.* 2,500 37,344
----------------------------------------------------------------------
Landry's Seafood Restaurant Inc.* 3,600 101,250
----------------------------------------------------------------------
Taco Cabana Inc.* 4,700 42,300
----------------------------------------------------------------------
Wendy's International Inc. 26,300 378,063
----------------------------------------------------------------------
644,185
Retail:-2.9%
----------------------------------------------------------------------
Argyll Group (UK) 25,624 107,853
----------------------------------------------------------------------
Damark International Inc.* 9,450 76,781
----------------------------------------------------------------------
Department 56 Inc.* 3,840 152,640
----------------------------------------------------------------------
Fastenal Co. 2,775 113,428
----------------------------------------------------------------------
Federated Department Stores Inc. Del* 25,600 492,800
----------------------------------------------------------------------
Gymboree Corp.* 3,500 100,844
----------------------------------------------------------------------
Hollywood Entmt. Corp.* 3,915 117,450
----------------------------------------------------------------------
ITO Yokado Company (Japan) 6,000 321,084
----------------------------------------------------------------------
K Mart Corp. 11,450 148,850
----------------------------------------------------------------------
Lowes Cos. Inc. 12,700 441,325
----------------------------------------------------------------------
Michelin CGDE (France) 7,600 276,480
----------------------------------------------------------------------
Office Depot Inc. 20,150 482,837
----------------------------------------------------------------------
Penny J C Inc. 2,250 $100,406
----------------------------------------------------------------------
Pep Boys Manny Moe & Jack 14,400 446,400
----------------------------------------------------------------------
Revco DS Inc.* 9,800 231,525
----------------------------------------------------------------------
Rite Aid Corporation 17,600 411,976
----------------------------------------------------------------------
Sears Roebuck & Co. 12,100 556,600
----------------------------------------------------------------------
Sears (UK) 184,000 315,832
----------------------------------------------------------------------
Sports Auth. Inc.* 2,900 60,900
----------------------------------------------------------------------
Stein Mart Inc. 5,700 71,963
----------------------------------------------------------------------
Walgreen Co. 9,600 420,000
----------------------------------------------------------------------
Welcome Home Inc.* 4,730 29,858
----------------------------------------------------------------------
Woolworth Corp. 16,600 249,000
----------------------------------------------------------------------
5,726,832
Savings and Loan:-0.3%
----------------------------------------------------------------------
First Chicago Corp. 6,500 310,375
----------------------------------------------------------------------
First Fidelity Bancorp New 4,950 222,131
----------------------------------------------------------------------
532,506
Securities Dealers:-0.3%
----------------------------------------------------------------------
Bear Stearns Cos. Inc. 11,370 174,814
----------------------------------------------------------------------
Daiwa Securities (Japan) 24,000 346,988
----------------------------------------------------------------------
521,802
Shoes:-0.2%
----------------------------------------------------------------------
Melville Corp. 6,950 214,389
----------------------------------------------------------------------
Wolverine World Wide Inc. 3,715 95,661
----------------------------------------------------------------------
310,050
Steel:-0.5%
----------------------------------------------------------------------
Bekaert SA (Belgium) 400 283,244
----------------------------------------------------------------------
British Steel, Inc. (UK) 151,100 364,096
----------------------------------------------------------------------
Nisshin Steel Company 74,000 372,972
----------------------------------------------------------------------
1,020,312
Telecommunications:-3.2%
----------------------------------------------------------------------
ALC Communications Corp.* 2,850 88,706
----------------------------------------------------------------------
American Telephone & Telegraph Co. 24,050 1,208,513
----------------------------------------------------------------------
Bell Atlantic Corp. 5,600 278,600
----------------------------------------------------------------------
Cellular Comms Puerto Rico* 1,475 49,114
----------------------------------------------------------------------
Cellular Communications Intl 1 43
----------------------------------------------------------------------
Centennial Cellular Corp.* 7,600 127,300
----------------------------------------------------------------------
Century Communications Corp. 7,931 59,483
----------------------------------------------------------------------
Comnet Cellular Inc.* 2,465 71,793
----------------------------------------------------------------------
Comsat Corporation 6,650 123,856
----------------------------------------------------------------------
DSC Communications Corp.* 13,000 468,813
----------------------------------------------------------------------
EIS International Inc.* 1,500 22,875
----------------------------------------------------------------------
Ericsson L. M. Tel. Co. 7,200 397,800
----------------------------------------------------------------------
EZ Communications Inc.* 5,000 63,750
----------------------------------------------------------------------
General Datacomm Inds. Inc.* 850 27,519
----------------------------------------------------------------------
GTE Corporation 13,400 407,025
----------------------------------------------------------------------
Nynex Corp. 13,617 500,425
----------------------------------------------------------------------
Scientific Atlanta Inc. 13,500 283,487
----------------------------------------------------------------------
Sprint Corp. 25,950 716,869
----------------------------------------------------------------------
Tele Communications Inc. 24,400 532,225
----------------------------------------------------------------------
U S West Inc. 14,750 525,469
----------------------------------------------------------------------
Vodafone Group (UK) 105,000 348,302
----------------------------------------------------------------------
6,301,967
Textiles-Apparel Manufacturing:-0.1%
----------------------------------------------------------------------
St. John Knits Inc. 5,200 148,850
----------------------------------------------------------------------
Transportation:-0.4%
----------------------------------------------------------------------
Jurong Shipyard (Singapore) 17,000 130,635
----------------------------------------------------------------------
CSX Corp. 3,300 229,763
----------------------------------------------------------------------
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ------
<S> <C> <C>
Expeditores International of Washington Inc. 6,400 $ 136,800
---------------------------------------------------------------------------
Fritz Companies Inc.* 3,200 149,200
---------------------------------------------------------------------------
Yamato Transport (Japan) 17,000 209,940
---------------------------------------------------------------------------
856,338
Waste Management:-0.2%
---------------------------------------------------------------------------
Browning Ferris Industries Inc. 17,200 488,050
---------------------------------------------------------------------------
Total Common Stocks:-58.5%
(Cost - $109,515,951) 114,561,785
---------------------------------------------------------------------------
Preferred Stocks:
---------------------------------------------------------------------------
Chrysler Corp. 2,732 372,235
---------------------------------------------------------------------------
Essilor International (France) 2,900 268,770
---------------------------------------------------------------------------
Ford Motor Co. 3,500 322,000
---------------------------------------------------------------------------
Unisys Corporation 2,050 65,088
---------------------------------------------------------------------------
USF&G Corp. 1,274 75,166
---------------------------------------------------------------------------
Total Preferred Stocks:-0.6%
(Cost - $922,460) 1,103,259
---------------------------------------------------------------------------
Par
Currency Put Options Purchased: Amount
------
German Deutschemark
Expiring 12/16/94, strike price 1.55 $1,600,000 16
---------------------------------------------------------------------------
Japanese Yen
Expiring 1/10/95, strike price 101 2,189,000 2,189
---------------------------------------------------------------------------
Total Currency Put Options
Purchased:-0.0%
(Cost - $52,494) 2,205
---------------------------------------------------------------------------
Money Market Instruments:
Ciesco LP
5.85%, 1/31/95 1,000,000 995,125
---------------------------------------------------------------------------
Corporate Receivables Corp.
6.05%, 1/25/95 5,000,000 4,979,833
---------------------------------------------------------------------------
Federal Home Loan Mortgage Disc. Nts.
6.13%, 3/16/95 1,000,000 987,399
---------------------------------------------------------------------------
Ford Motor Credit Co.
5.95% 2/02/95 2,000,000 1,989,422
---------------------------------------------------------------------------
Household Financial Corp.
6.05%, 1/18/95 3,000,000 2,991,429
---------------------------------------------------------------------------
Morgan J P & Co. Inc.
5.9%, 1/09/95 2,000,000 1,997,378
---------------------------------------------------------------------------
Preferred Receivables Funding
5.75%, 1/04/95 3,000,000 2,998,563
---------------------------------------------------------------------------
Total Money Market Instruments:-8.7%
(Cost $16,939,149) 16,939,149
---------------------------------------------------------------------------
Maturity
Amount
--------
Repurchase Agreement:
Shearson Lehman repurchase agreement,
dated 12/30/94, 5.5%, maturing 1/03/95
collateralized by U.S. Treasury Bond
9.0%, 11/15/18 $1,788,092 1,787,000
---------------------------------------------------------------------------
Total Repurchase Agreement:-0.9%
(Cost-$1,787,000) 1,787,000
---------------------------------------------------------------------------
Total Investments:-101.8%
(Cost $195,579,002) 199,133,286
---------------------------------------------------------------------------
Par Market
Amount Value
------ ------
Liability for Currency Call
Option Written:
Australian Dollar
Expiring 1/23/95, strike price .7765 $ 926,000 ($5,093)
---------------------------------------------------------------------------
Total Liability for Currency
Call Option Written:-0.0%
(Premium Received - $5,556) (5,093)
---------------------------------------------------------------------------
Other Assets Under Total Liabilities-(1.8%) (3,431,294)
---------------------------------------------------------------------------
Net Assets: 100%
(equivalent to 11.144 per share based
on 17,561,387 shares issued and
outstanding) $195,696,899
===========================================================================
Lincoln National Social Awareness
Fund, Inc.
Statement of Net Assets
December 31, 1994
Number Market
of Shares Value
--------- ------
Investments
Common Stocks:
Banking and Insurance:-24.9%
---------------------------------------------------------------------------
AFLAC Inc. 48,600 $1,555,200
---------------------------------------------------------------------------
Ahmanson HF & co 110,300 1,778,587
---------------------------------------------------------------------------
American General Corporation 93,500 2,641,375
---------------------------------------------------------------------------
Bank of Boston Corporation 87,300 2,258,887
---------------------------------------------------------------------------
Bank of New York 72,500 2,102,500
---------------------------------------------------------------------------
Beneficial Corporation 55,500 2,164,500
---------------------------------------------------------------------------
Chase Manhattan Corporation 78,300 2,691,562
---------------------------------------------------------------------------
Cigna Corporation 40,500 2,576,812
---------------------------------------------------------------------------
Conseco Inc. 15,000 646,875
---------------------------------------------------------------------------
First Bank System Inc. 48,200 1,602,650
---------------------------------------------------------------------------
First Chicago Corporation 48,300 2,306,325
---------------------------------------------------------------------------
First Interstate Bank 37,500 2,535,938
---------------------------------------------------------------------------
First Union Corporation 62,100 2,569,388
---------------------------------------------------------------------------
Healthcare Compare Corp.* 65,400 2,223,600
---------------------------------------------------------------------------
MBNA Corp. 100,200 2,342,175
---------------------------------------------------------------------------
Nationsbank Corporation 70,200 3,167,775
---------------------------------------------------------------------------
St. Paul Companies 25,200 1,127,700
---------------------------------------------------------------------------
SunAmerica Inc. 7,900 286,375
---------------------------------------------------------------------------
Transamerica Corp. 46,400 2,308,400
---------------------------------------------------------------------------
USLIFE Corp. 51,300 1,789,087
---------------------------------------------------------------------------
40,675,711
Broadcasting:-2.5%
---------------------------------------------------------------------------
Belo (A.H.) Corporation 9,800 553,700
---------------------------------------------------------------------------
Capital Cities ABC Inc. 42,300 3,606,075
---------------------------------------------------------------------------
4,159,775
Building Materials:-0.8%
---------------------------------------------------------------------------
Armstrong World Inc. 34,800 1,339,800
---------------------------------------------------------------------------
Consumer Products and Services:-0.5%
---------------------------------------------------------------------------
BIC Corp. 13,700 402,438
---------------------------------------------------------------------------
Handleman Company 36,800 418,600
---------------------------------------------------------------------------
821,038
Drug and Hospital Supplies:-4.6%
---------------------------------------------------------------------------
Amgen* 44,700 2,634,484
---------------------------------------------------------------------------
Baxter International Inc. 105,200 2,971,900
---------------------------------------------------------------------------
Cordis Corporation* 33,000 1,988,250
---------------------------------------------------------------------------
7,594,634
Electrical and Electronics:-0.9%
---------------------------------------------------------------------------
Avnet Inc. 12,600 466,200
---------------------------------------------------------------------------
Quantum Corp.* 70,000 1,054,340
---------------------------------------------------------------------------
1,520,540
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ------
<S> <C> <C>
Entertainment:-1.2%
------------------------------------------------------------------------
Mattel, Inc. 78,175 $1,964,147
------------------------------------------------------------------------
Finance:-1.1%
------------------------------------------------------------------------
Green Tree Acceptance, Inc. 60,400 1,834,650
------------------------------------------------------------------------
Financial Services:-0.4%
------------------------------------------------------------------------
Dean Witter Discover & Co. 18,000 609,750
------------------------------------------------------------------------
Food and Beverages:-10.0%
------------------------------------------------------------------------
Campbell Soup Company 75,400 3,327,025
------------------------------------------------------------------------
Coca Cola Company 134,000 6,901,000
------------------------------------------------------------------------
International Multifoods Corp. 51,700 949,988
------------------------------------------------------------------------
Pepsico, Inc. 37,600 1,363,000
------------------------------------------------------------------------
Quaker Oats Co. 43,600 1,340,700
------------------------------------------------------------------------
Safeway Inc.* 58,700 1,871,062
------------------------------------------------------------------------
Universal Foods Corporation 21,300 585,750
------------------------------------------------------------------------
16,338,525
Household Appliances:-1.0%
------------------------------------------------------------------------
Maytag Corporation 109,300 1,639,500
------------------------------------------------------------------------
Machinery & Engineering:-2.0%
------------------------------------------------------------------------
Briggs & Stratton Corporation 53,000 1,735,750
------------------------------------------------------------------------
Clark Equipment Company* 26,700 1,448,475
------------------------------------------------------------------------
3,184,225
Metals and Mining:-0.8%
------------------------------------------------------------------------
Cleveland-Cliffs, Inc. 36,200 1,339,400
------------------------------------------------------------------------
Miscellaneous:-2.2%
------------------------------------------------------------------------
Sealed Air Corp.* 39,500 1,431,875
------------------------------------------------------------------------
Whitman Corporation 124,000 2,139,000
------------------------------------------------------------------------
3,570,875
Office and Business Equipment and Services:-8.0%
------------------------------------------------------------------------
Comdisco Inc. 78,900 1,824,563
------------------------------------------------------------------------
Compaq Computer Corporation* 79,700 3,148,150
------------------------------------------------------------------------
Computer Associates International Inc. 63,300 3,070,050
------------------------------------------------------------------------
Federal Express Corporation* 30,300 1,825,575
------------------------------------------------------------------------
Kelly Services Inc. 40,600 1,111,425
------------------------------------------------------------------------
Reynolds & Reynolds Co. 84,600 2,115,000
------------------------------------------------------------------------
13,094,763
Petroleum and Petroleum Related:-1.4%
------------------------------------------------------------------------
Smith International Inc.* 79,900 998,750
------------------------------------------------------------------------
Williams Companies, Inc. 48,000 1,206,000
------------------------------------------------------------------------
2,204,750
Printing and Publishing:-1.5%
------------------------------------------------------------------------
Banta Corporation 40,750 1,227,594
------------------------------------------------------------------------
Ennis Business Forms, Inc. 64,100 801,250
------------------------------------------------------------------------
Jostens Inc. 25,700 478,662
------------------------------------------------------------------------
2,507,506
Public Utilities:-1.1%
------------------------------------------------------------------------
Portland General 90,100 1,734,425
------------------------------------------------------------------------
Retail:-11.8%
------------------------------------------------------------------------
Burlington Coat Factory Warehouse Corp.* 75,900 891,825
------------------------------------------------------------------------
C M L Group Inc. 59,250 599,906
------------------------------------------------------------------------
Dayton-Hudson Corporation 20,100 1,422,075
------------------------------------------------------------------------
Good Guys Inc.* 152,100 1,777,593
------------------------------------------------------------------------
Kroger Co.* 93,100 2,246,038
------------------------------------------------------------------------
Lowe's Companies 25,200 875,700
------------------------------------------------------------------------
May Department Stores Company 55,700 1,879,875
------------------------------------------------------------------------
Penney (J.C.) Company, Inc. 64,600 2,882,775
------------------------------------------------------------------------
Sears, Roebuck and Co. 74,600 3,431,600
------------------------------------------------------------------------
Smith's Food & Drug Centers Inc. 71,000 1,783,875
------------------------------------------------------------------------
Waban Inc.* 53,200 944,300
------------------------------------------------------------------------
Wal-Mart Stores 27,800 590,750
------------------------------------------------------------------------
19,326,312
Soaps, Cleaners and Cosmetics:-2.5%
------------------------------------------------------------------------
Clorox Company 40,900 2,407,988
------------------------------------------------------------------------
Dial Corp. 76,000 1,615,000
------------------------------------------------------------------------
4,022,988
Telecommunications:-12.5%
------------------------------------------------------------------------
Ameritech Corporation 99,400 4,013,275
------------------------------------------------------------------------
Bell Atlantic Corp. 40,700 2,024,825
------------------------------------------------------------------------
Bellsouth Corporation 58,100 3,144,662
------------------------------------------------------------------------
Cincinnati Bell Inc. 61,000 1,021,750
------------------------------------------------------------------------
Comsat Corporation 42,000 782,250
------------------------------------------------------------------------
Pacific Telesis Group 117,300 3,343,050
------------------------------------------------------------------------
Southern New England Telecomm 23,700 761,362
------------------------------------------------------------------------
Southwestern Bell Corp. 72,000 2,907,000
------------------------------------------------------------------------
Sprint Corporation 89,700 2,477,962
------------------------------------------------------------------------
20,476,136
Textiles-Apparel Manufacturing:-0.4%
------------------------------------------------------------------------
VF Corp. 14,400 700,200
------------------------------------------------------------------------
Total Common Stocks-92.1%
(Cost-$145,812,746) 150,659,650
------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Par
Money Market Instruments: Amount
---------
<S> <C> <C>
Commercial Credit Corp.
5.81%, 1/09/95 $5,495,000 5,495,000
------------------------------------------------------------------------
Corporate Asset Funding Co.
6.05%, 1/04/95 4,500,000 4,494,706
------------------------------------------------------------------------
Paccar Financial Corp.
5.95%, 1/03/95 400,000 399,736
------------------------------------------------------------------------
Smithkline Beecham Corp.
5.8%, 1/04/95 3,800,000 3,791,429
------------------------------------------------------------------------
United States Treasury Bill +
0.0%, 5/04/95 750,000 720,231
------------------------------------------------------------------------
Vermont American Corp.
5.85%, 1/09/95 1,200,000 1,197,465
------------------------------------------------------------------------
Total Money Market Instruments-9.9%
(Cost-$16,098,567) 16,098,567
------------------------------------------------------------------------
Total Investments-102.0%
(Cost-$161,911,313) 166,758,217
------------------------------------------------------------------------
Other Assets Under Liabilities-(2.0%) (3,244,058)
------------------------------------------------------------------------
Net Assets-100.0%
(equivalent to $16.642 per share
based on 9,825,197 shares
issued and outstanding) $163,514,159
========================================================================
</TABLE>
Lincoln National Special
Opportunities Fund, Inc.
Statement of Net Assets
December 31, 1994
<TABLE>
<CAPTION>
Number Market
Investments of Shares Value
--------- ------
<S> <C> <C>
Common Stocks:
Aerospace:-1.0%
------------------------------------------------------------------------
McDonnell Douglas Corporation 22,600 $3,209,200
------------------------------------------------------------------------
Air Transportation:-1.0%
------------------------------------------------------------------------
Lockheed Corp. 45,500 3,304,437
------------------------------------------------------------------------
Banking and Insurance:-13.5%
------------------------------------------------------------------------
Aon Corp. 94,600 3,027,200
------------------------------------------------------------------------
Beneficial Corporation 85,800 3,346,200
------------------------------------------------------------------------
Chase Manhattan Corporation 85,700 2,945,938
------------------------------------------------------------------------
Cigna Corporation 46,300 2,945,838
------------------------------------------------------------------------
Equifax Inc. 119,900 3,162,362
------------------------------------------------------------------------
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ------
<S> <C> <C>
First Chicago Corporation 67,400 $3,218,350
------------------------------------------------------------------------
First Interstate Bank 47,400 3,205,425
------------------------------------------------------------------------
First Union Corporation 70,400 2,912,800
------------------------------------------------------------------------
MBNA Corp. 133,900 3,129,913
------------------------------------------------------------------------
Nationsbank Corporation 64,800 2,924,100
------------------------------------------------------------------------
NBD Bancorp, Inc. 107,400 2,940,075
------------------------------------------------------------------------
NWNL COS 104,300 3,024,700
------------------------------------------------------------------------
Transamerica Corp. 62,900 3,129,275
------------------------------------------------------------------------
USLIFE Corp. 88,800 3,096,900
------------------------------------------------------------------------
43,009,076
Building Materials:-1.9%
------------------------------------------------------------------------
Armstrong World Inc. 77,400 2,979,900
------------------------------------------------------------------------
Sherwin-Williams Co. 93,700 3,103,813
------------------------------------------------------------------------
6,083,713
Chemicals:-4.1%
------------------------------------------------------------------------
Cabot Corporation* 19,800 561,825
------------------------------------------------------------------------
Georgia Gulf Corp.* 84,700 3,292,712
------------------------------------------------------------------------
Lyondell Petrochemical 131,000 3,389,625
------------------------------------------------------------------------
Olin Corp. 55,700 2,868,550
------------------------------------------------------------------------
PPG Industries Inc. 80,400 2,984,850
------------------------------------------------------------------------
13,097,562
Coal and Natural Gas:-2.0%
------------------------------------------------------------------------
Coastal Corporation 124,200 3,198,150
------------------------------------------------------------------------
Columbia Gas System Inc.* 131,000 3,078,500
------------------------------------------------------------------------
6,276,650
Consumer Products and Services:-3.7%
------------------------------------------------------------------------
American Brands, Inc. 88,500 3,318,750
------------------------------------------------------------------------
Handleman Company 276,400 3,144,050
------------------------------------------------------------------------
Kimberly-Clark Corporation 49,700 2,509,850
------------------------------------------------------------------------
Universal Corporation 137,400 2,730,825
------------------------------------------------------------------------
11,703,475
Drug and Hospital Supplies:-3.0%
------------------------------------------------------------------------
Amgen Inc.* 53,000 3,123,661
------------------------------------------------------------------------
Baxter International Inc. 115,000 3,248,750
------------------------------------------------------------------------
Upjohn Co. 97,800 3,007,350
------------------------------------------------------------------------
9,379,761
Electrical and Electronics:-3.8%
------------------------------------------------------------------------
Advanced Micro Devices, Inc.* 101,400 2,522,325
------------------------------------------------------------------------
Cypress Semiconductor Corporation* 140,300 3,244,437
------------------------------------------------------------------------
Harris Corp. 73,400 3,119,500
------------------------------------------------------------------------
Texas Instruments Inc. 41,100 3,077,363
------------------------------------------------------------------------
11,963,625
Entertainment:-1.0%
------------------------------------------------------------------------
Mattel, Inc. 126,675 3,182,709
------------------------------------------------------------------------
Finance:-1.1%
------------------------------------------------------------------------
Green Tree Acceptance, Inc. 114,500 3,477,937
------------------------------------------------------------------------
Food and Beverages:-3.9%
------------------------------------------------------------------------
Coors (Adolph) C.B. 182,500 3,079,687
------------------------------------------------------------------------
Fleming Companies, Inc. 123,000 2,859,750
------------------------------------------------------------------------
IBP, Inc. 92,900 2,810,225
------------------------------------------------------------------------
International Multifoods Corp. 193,800 3,561,075
------------------------------------------------------------------------
12,310,737
Hospital and Health Care:-1.0%
------------------------------------------------------------------------
Humana, Inc.* 142,700 3,228,588
------------------------------------------------------------------------
Household Appliances:-0.9%
------------------------------------------------------------------------
Maytag Corporation 199,800 2,997,000
------------------------------------------------------------------------
Industrial:-2.0%
------------------------------------------------------------------------
SPX Corporation 183,500 3,050,688
------------------------------------------------------------------------
Timken Company 94,700 3,338,175
------------------------------------------------------------------------
6,388,863
Machinery and Engineering:-4.8%
------------------------------------------------------------------------
Briggs & Stratton Corporation 100,700 3,297,925
------------------------------------------------------------------------
Carpenter Technology Corporation 55,100 3,085,600
------------------------------------------------------------------------
Clark Equipment Company* 54,400 2,951,200
------------------------------------------------------------------------
Deere & Company 44,800 2,968,000
------------------------------------------------------------------------
Novellus Systems Inc.* 60,800 3,032,400
------------------------------------------------------------------------
15,335,125
Metals and Mining:-3.8%
------------------------------------------------------------------------
Cleveland-Cliffs, Inc. 82,700 3,059,900
------------------------------------------------------------------------
Parker Hannifin Corp. 73,800 3,357,900
------------------------------------------------------------------------
Phelps Dodge Corporation 53,600 3,316,500
------------------------------------------------------------------------
Precision Castparts Corporation 116,300 2,355,075
------------------------------------------------------------------------
12,089,375
Miscellaneous:-0.0%
------------------------------------------------------------------------
Flight Transportation Corporation* 4,725 1
------------------------------------------------------------------------
Motor Vehicles and Equipment:-1.8%
------------------------------------------------------------------------
Dana Corp. 132,000 3,085,500
------------------------------------------------------------------------
Fleetwood Enterprises Inc. 147,600 2,767,500
------------------------------------------------------------------------
5,853,000
Office and Business Equipment and Services:-9.3%
------------------------------------------------------------------------
Avery Dennison Corp. 93,200 3,308,600
------------------------------------------------------------------------
Comdisco Inc. 149,300 3,452,562
------------------------------------------------------------------------
Computer Associates International Inc. 67,300 3,264,050
------------------------------------------------------------------------
Reynolds & Reynolds Co. 130,400 3,260,000
------------------------------------------------------------------------
Xerox Corp. 32,700 3,237,300
------------------------------------------------------------------------
Harris Computer Systems Corp.* 3,285 39,213
------------------------------------------------------------------------
Micron Technology Inc. 74,500 3,287,313
------------------------------------------------------------------------
New England Business Services Inc. 181,000 3,371,125
------------------------------------------------------------------------
Sun Microsystems Inc.* 89,400 3,168,068
------------------------------------------------------------------------
Tandem Computers Inc.* 192,500 3,296,563
------------------------------------------------------------------------
29,684,794
Paper:-2.0%
------------------------------------------------------------------------
Bowater, Inc. 122,800 3,269,550
------------------------------------------------------------------------
Stone Container Corp.* 175,100 3,020,475
------------------------------------------------------------------------
6,290,025
Petroleum and Petroleum Related:-5.0%
------------------------------------------------------------------------
GATX Corporation 76,700 3,374,800
------------------------------------------------------------------------
Smith International Inc.* 251,900 3,148,750
------------------------------------------------------------------------
Tenneco, Inc. 75,700 3,217,250
------------------------------------------------------------------------
Williams Companies, Inc. 126,500 3,178,313
------------------------------------------------------------------------
Witco Corporation 118,000 2,905,750
------------------------------------------------------------------------
15,824,863
Printing and Publishing:-0.9%
------------------------------------------------------------------------
Banta Corporation 95,500 2,876,937
------------------------------------------------------------------------
Public Utilities:-6.7%
------------------------------------------------------------------------
Baltimore Gas & Electric Company 134,100 2,966,963
------------------------------------------------------------------------
Eastern Utilities Assocc 144,300 3,174,600
------------------------------------------------------------------------
General Public Utilities Corp. 118,700 3,115,875
------------------------------------------------------------------------
Northeast Utilities 137,900 2,982,088
------------------------------------------------------------------------
Portland General 159,000 3,060,750
------------------------------------------------------------------------
Rochester Gas & Electric Corp. 148,700 3,104,113
------------------------------------------------------------------------
Scana Corporation 69,600 2,931,900
------------------------------------------------------------------------
21,336,289
Railroads:-1.0%
------------------------------------------------------------------------
Burlington Northern Inc. 63,100 3,036,687
------------------------------------------------------------------------
Real Estate:-0.9%
------------------------------------------------------------------------
Lennar Corporation 194,300 3,011,650
------------------------------------------------------------------------
Restaurant:-1.1%
------------------------------------------------------------------------
Sbarro Inc. 129,800 3,374,800
------------------------------------------------------------------------
Retail:-5.7%
------------------------------------------------------------------------
American Stores Co. 117,000 3,144,375
------------------------------------------------------------------------
Burlington Coat Factory Warehouse Corp.* 137,100 1,610,925
------------------------------------------------------------------------
C M L Group Inc. 159,400 1,613,925
------------------------------------------------------------------------
Family Dollar Stores, Inc. 198,100 2,476,250
------------------------------------------------------------------------
Kroger Co.* 125,600 3,030,100
------------------------------------------------------------------------
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ------
<S> <C> <C>
Penney (J.C.) Company, Inc. 68,800 $3,070,200
------------------------------------------------------------------------------
Rite Aid Corp. 132,600 3,099,525
------------------------------------------------------------------------------
18,045,300
Shoes:-1.0%
------------------------------------------------------------------------------
Reebok International Ltd. 80,300 3,171,850
------------------------------------------------------------------------------
Soaps, Cleaners and Cosmetics:-1.9%
------------------------------------------------------------------------------
Clorox Company 55,500 3,267,562
------------------------------------------------------------------------------
Dial Corp. 137,300 2,917,625
------------------------------------------------------------------------------
6,185,187
Steel:-0.9%
------------------------------------------------------------------------------
USX Steel Group Inc. 83,300 2,957,150
------------------------------------------------------------------------------
Telecommunications:-1.6%
------------------------------------------------------------------------------
Comsat Corporation 127,100 2,367,237
------------------------------------------------------------------------------
Pacific Telesis Group 100,100 2,852,850
------------------------------------------------------------------------------
5,220,087
Textiles-Apparel Manufacturing:-2.0%
------------------------------------------------------------------------------
Springs Industries Inc. 88,500 3,274,500
------------------------------------------------------------------------------
VF Corp. 64,200 3,121,725
------------------------------------------------------------------------------
6,396,225
Transportation:-1.0%
------------------------------------------------------------------------------
CSX Corporation 45,900 3,195,787
------------------------------------------------------------------------------
Total Common Stocks-95.3%
(Cost-$300,153,080) 303,498,465
------------------------------------------------------------------------------
<CAPTION>
Par
Amount
------
<S> <C> <C>
Money Market Instruments:
Bridgestone/Firestone Inc.
6.1%, 1/04/95 $3,800,000 3,794,849
------------------------------------------------------------------------------
Daimler-Benz N. America Corp.
5.9%, 1/10/95 5,700,000 5,688,790
------------------------------------------------------------------------------
Paccar Financial Corp.
5.95%, 1/03/95 2,505,000 2,503,344
------------------------------------------------------------------------------
United States Treasury Bill +
0.0%, 5/04/95 750,000 717,581
------------------------------------------------------------------------------
Vermont American Corp.
5.9%, 1/09/95 8,000,000 7,984,266
------------------------------------------------------------------------------
Total Money Market Instruments:-6.5%
(Cost-$20,688,830) 20,688,830
------------------------------------------------------------------------------
Total Investments-101.8%
(Cost-$320,841,910) 324,187,195
------------------------------------------------------------------------------
<CAPTION>
Liability for Stock Call Options Number
Written: of Shares
---------
<S> <C> <C>
Kimberly-Clark Corp.
Expiring 1/21/95, strike price 50 49,700 (12,425)
------------------------------------------------------------------------------
Tenneco
Expiring, 1/21/95, strike price 40 75,700 (212,906)
------------------------------------------------------------------------------
Total Liability for Stock Call
Options Written: - (0.1%)
(Premium Received - $204,656) (225,331)
------------------------------------------------------------------------------
Other Assets Under Liabilities-(1.7%) (5,544,790)
------------------------------------------------------------------------------
Net Assets-100.0%
(equivalent to $22.164 per share
based on 14,366,113 shares
issued and outstanding) $318,417,174
==============================================================================
</TABLE>
* Non-income producing.
+ Pledged as collateral for financial futures contracts.
** Par amounts for foreign debt are expressed in local currency.
See accompanying notes to financial statements.
33
<PAGE>
STATEMENT OF OPERATIONS
Year Ended December 31, 1994
<TABLE>
<CAPTION>
Lincoln Lincoln Lincoln
National Lincoln National National Lincoln Lincoln
Aggressive National Capital Equity National National
Growth Bond Appreciation Income Growth International
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest $275,454 $14,549,025 $425,426 $257,413 $3,832,615 $422,366
------------------------------------------------------------------------------------------------------------------------------------
Dividends 135,452 -- 238,022 1,121,042 31,971,206 3,455,738
------------------------------------------------------------------------------------------------------------------------------------
Total investment income 410,906 14,549,025 663,448 1,378,455 35,803,821 3,878,104
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Management fees 232,200 999,397 211,773 348,255 3,896,902 2,262,664
------------------------------------------------------------------------------------------------------------------------------------
Dividend tax 1,014 -- 4,665 10,688 -- 411,160
------------------------------------------------------------------------------------------------------------------------------------
Professional fees 16,667 14,113 16,667 16,667 14,113 14,113
------------------------------------------------------------------------------------------------------------------------------------
Custodial fees 70,653 -- 71,439 77,153 -- 422,173
------------------------------------------------------------------------------------------------------------------------------------
Directors fees 3.000 3,000 3,000 3,000 3,000 3,000
------------------------------------------------------------------------------------------------------------------------------------
Registration fees -- 17,463 -- -- 68,040 30,826
------------------------------------------------------------------------------------------------------------------------------------
Other fees 285 350 285 285 350 285
------------------------------------------------------------------------------------------------------------------------------------
Other 21,292 22,752 3,559 9,094 113,298 82,164
------------------------------------------------------------------------------------------------------------------------------------
Total expenses 345,111 1,057,075 311,388 465,142 4,095,703 3,226,385
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 65,795 13,491,950 352,060 913,313 31,708,118 651,719
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) on:
Investment transactions (3,757,590) (9,964,996) (180,727) 580,270 69,061,295 16,361,018
------------------------------------------------------------------------------------------------------------------------------------
Foreign currency transactions 16 -- (12,730) (4) -- (459,103)
------------------------------------------------------------------------------------------------------------------------------------
Options written -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (3,757,574) (9,964,996) (193,457) 580,266 69,061,295 15,901,915
------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
or depreciation on:
Investments 2,469,310 (13,242,315) 578,415 (410,959) (86,360,322) (11,576,110)
------------------------------------------------------------------------------------------------------------------------------------
Translation of assets and
liabilities in foreign currencies -- -- (51,684) (118) -- (80,823)
------------------------------------------------------------------------------------------------------------------------------------
Options written -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation
on investments 2,469,310 (13,242,315) 526,731 (411,077) (83,360,222) (11,656,933)
------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments (1,288,264) (23,207,311) 333,274 169,189 (17,298,927) 4,244,982
------------------------------------------------------------------------------------------------------------------------------------
Net increase(decrease) in net assets
resulting from operations ($1,222,469) ($9,715,361) $685,334 $1,082,502 $14,409,191 $4,896,701
====================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
34
<PAGE>
STATEMENT OF OPERATIONS (Continued)
Year Ended December 31, 1994
<TABLE>
<CAPTION>
Lincoln Lincoln Lincoln Lincoln
Lincoln National National National National
National Money Putnam Social Special
Managed Market Master Awareness Opportunities
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Interest $15,736,831 $3,627,953 $4,774,030 $440,089 $623,869
--------------------------------------------------------------------------------------------------------------
Dividends 6,455,612 - 2,810,865 3,775,567 8,242,681
--------------------------------------------------------------------------------------------------------------
Total investment income 22,192,443 3,627,953 7,584,895 4,215,656 8,866,550
--------------------------------------------------------------------------------------------------------------
Expenses:
Management fees 1,919,150 404,441 1,381,059 736,602 1,351,374
--------------------------------------------------------------------------------------------------------------
Dividend tax - - 102,787 - -
--------------------------------------------------------------------------------------------------------------
Professional fees 14,113 14,113 14,113 14,113 14,113
--------------------------------------------------------------------------------------------------------------
Custodial fees - - 237,382 - -
--------------------------------------------------------------------------------------------------------------
Directors fees 3,000 3,000 3,000 3,000 3,000
--------------------------------------------------------------------------------------------------------------
Registration fees 29,719 285 15,286 13,355 27,915
--------------------------------------------------------------------------------------------------------------
Other fees 350 225 285 350 350
--------------------------------------------------------------------------------------------------------------
Other 46,451 9,276 191,364 40,495 29,487
--------------------------------------------------------------------------------------------------------------
Total expenses 2,012,783 431,340 1,945,276 807,915 1,426,239
--------------------------------------------------------------------------------------------------------------
Net investment income 20,179,660 3,196,613 5,639,619 3,407,741 7,440,312
--------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain(loss) on:
Investment transactions 718,100 - (1,177,695) 6,175,723 313,823,511
--------------------------------------------------------------------------------------------------------------
Foreign currency transactions - - 76,568 - -
--------------------------------------------------------------------------------------------------------------
Options written - - (40,328) - 1,181,365
--------------------------------------------------------------------------------------------------------------
Net realized gain(loss) on
investments 718,100 - (1,141,455) 6,175,723 15,004,876
--------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
or depreciation on:
Investments (29,823,356) - (7,748,685) (9,493,018) (25,467,291)
--------------------------------------------------------------------------------------------------------------
Translation of assets and
liabilities in foreign
currencies - - (218,917) - -
--------------------------------------------------------------------------------------------------------------
Options written - - (8,629) - (75,586)
--------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation
on investments (29,823,356) - (7,976,231) (9,493,018) (25,542,877)
--------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments (29,105,256) - (9,117,686) (3,317,295) (10,538,001)
--------------------------------------------------------------------------------------------------------------
Net increase(decrease) in net assets
resulting from operations ($8,925,596) $3,196,613 ($3,478,067) $90,446 ($3,097,689)
--------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
35
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Years Ended December 31, 1993 and 1994
<TABLE>
<CAPTION>
+ + +
Lincoln Lincoln Lincoln
National Lincoln National National Lincoln Lincoln
Aggressive National Capital Equity National National
Growth Bond Appreciation Income Growth International
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Assets at January 1, 1993 $ - $168,636,211 $ - $ - $765,456,976 $45,627,052
---------------------------------------------------------------------------------------------------------------------------------
Changes from operations:
Net investment income - 12,368,141 - - 23,559,439 77,392
---------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investment - 9,456,561 - - 45,931,842 898,953
---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
or depreciation on investments - 1,659,443 - - 45,650,386 25,549,351
---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations - 23,484,145 - - 115,141,667 26,525,696
---------------------------------------------------------------------------------------------------------------------------------
Dividends to shareholder from:
Net investment income - (12,368,141) - - (23,559,439) (77,392)
---------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments - (4,072,472) - - (20,075,680) -
Total dividends to shareholder _ (16,440,613) - - (43,635,119) (77,392)
---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions 110,000 50,469,760 110,000 110,000 197,141,953 89,394,642
---------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets 110,000 57,513,292 110,000 110,000 268,648,501 115,842,946
---------------------------------------------------------------------------------------------------------------------------------
Net Assets at December 31, 1993 $110,000 $226,149,503 $110,000 $110,000 $1,034,105,477 $161,469.998
Changes from operations:
Net investment income 65,795 13,491,950 352,060 913,313 31,708,118 651,719
---------------------------------------------------------------------------------------------------------------------------------
Net realized gain(loss) on investments (3,757,574) (9,964,996) (193,457) 580,266 69,061,295 15,901,915
---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
or depreciation on investment 2,469,310 (13,242,315) 526,731 (411,077) (86,360,222) (11,656,933)
---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (1,222,469) (9,715,361) 685,334 1,082,502 14,409,191 4,896,701
---------------------------------------------------------------------------------------------------------------------------------
Dividends to shareholder from:
Net investment income (65,795) (13,491,950) (352,060) (913,313) (31,708,118) (651,719)
---------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments - (9,456,561) - - (45,931,842) -
---------------------------------------------------------------------------------------------------------------------------------
Total dividends to shareholder (65,795) (22,948,511) (352,060) (913,313) (77,639,960) (651,719)
---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions 61,875,525 1,524,135 52,460,614 78,581,998 190,449,599 150,634,925
---------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 60,587,261 (31,139,737) 52,793,888 78,751,187 127,218,830 154,879,907
---------------------------------------------------------------------------------------------------------------------------------
Net Assets at December 31, 1994 $60,697,261 $195,009,766 $52,903,888 $78,861,187 $1,161,324,307 $316,349,905
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ See note 8 "Organization of New Funds" for additional information.
See accompanying notes to financial statements.
36
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (Continued)
Years Ended December 31, 1993 and 1994
<TABLE>
<CAPTION>
Lincoln Lincoln Lincoln Lincoln
Lincoln National National National National
National Money Putnam Social Special
Managed Market Master Awareness Opportunities
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Assets at January 1, 1993 $343,438,729 $92,471,886 $ 95,606,538 $ 89,668,839 $189,867,109
----------------------------------------------------------------------------------------------------------------------
Changes from operations:
Net investment income 17,043,945 2,570,514 3,664,171 2,151,489 5,147,305
----------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 17,841,259 - 10,629,009 7,339,542 18,072,011
----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
or depreciation on investments 9,680,332 - 5,201,036 5,047,094 13,797,916
----------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 44,565,536 2,570,514 19,494,216 14,538,125 37,017,232
----------------------------------------------------------------------------------------------------------------------
Dividends to shareholder from:
Net investment income (17,043,945) (2,570,514) (3,664,171) (2,151,489) (5,147,305)
----------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (11,931,665) - (2,265,758) (3,005,416) (28,518,120)
----------------------------------------------------------------------------------------------------------------------
Total dividends to shareholder (28,975,610) (2,570,514) (5,929,929) (5,156,905) (33,665,425)
----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from capital share transactions 86,011,341 (11,430,119) 44,328,791 38,556,356 80,778,868
----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 101,601,267 (11,430,119) 57,893,078 47,937,576 84,130,675
----------------------------------------------------------------------------------------------------------------------
Net Assets at December 31, 1993 $445,039,996 $81,041,767 $153,499,616 $137,606,415 $273,997,784
Changes from operations:
Net investment income 20,179,660 3,196,613 5,639,619 3,407,741 7,440,312
----------------------------------------------------------------------------------------------------------------------
Net realized gain(loss) on investments 718,100 - (1,141,455) 6,175,723 15,004,876
----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
or depreciation on investments (29,823,356) - (7,976,231) (9,493,018) (25,542,877)
----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (8,925,596) 3,196,613 (3,478,067) 90,446 (3,097,689)
----------------------------------------------------------------------------------------------------------------------
Dividends to shareholder from:
Net investment income (20,179,660) (3,196,613) (5,639,619) (3,407,741) (7,440,312)
----------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (17,841,259) - (10,629,009) (7,339,542) (18,072,011)
----------------------------------------------------------------------------------------------------------------------
Total dividends to shareholder (38,020,919) (3,196,613) (16,268,628) (10,747,283) (25,512,323)
----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from capital share transactions 44,046,103 (3,864,330) 61,943,978 36,564,581 73,029,402
----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (2,900,412) (3,864,330) 42,197,283 25,907,744 44,419,390
----------------------------------------------------------------------------------------------------------------------
Net Assets at December 31, 1994 $442,139,584 $77,177,437 $195,696,899 $163,514,159 $318,417,174
======================================================================================================================
</TABLE>
See accompanying notes to financial statements.
37
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1994
1. Significant Accounting Policies
THE FUNDS: Lincoln National Aggressive Growth Fund, Inc., Lincoln National Bond
Fund, Inc., Lincoln National Capital Appreciation Fund, Inc., Lincoln National
Equity Income Fund, Inc., Lincoln National Growth Fund, Inc., Lincoln National
International Fund, Inc., Lincoln National Managed Fund, Inc., Lincoln National
Money Market Fund, Inc., Lincoln National Putnam Master Fund, Inc., and Lincoln
National Social Awareness Fund, Inc. are registered as open-end, diversified
management investment companies and Lincoln National Special Opportunities Fund,
Inc. is registered as an open-end, non-diversified management investment company
under the Investment Company Act of 1940, as amended. The Funds' shares are sold
only to The Lincoln National Life Insurance Company (the Company) for allocation
to its Variable Annuity Account C, which was established for the purpose of
funding variable annuity contracts, and to its Flexible Premium Variable Life
Accounts D, G, and K, which were established for the purpose of funding variable
universal life contracts.
INVESTMENT VALUATION: Investments are stated at value. Portfolio securities
which are traded on stock exchanges are valued at the last reported sale price
on the exchange or market where primarily traded or listed or, in the absence of
recent sales, at the mean between the last reported bid and asked prices.
Long-term debt investments are valued at their bid quotations. The Funds hedge
certain portions of their exposure to fluctuations in interest, market, and
foreign exchange risks by entering into derivative transactions. These hedges
include options, financial futures, and forward foreign currency contracts.
Options traded on exchanges are valued at the last bid price for options
purchased and the last sale price for options written. Options traded in the
over-the-counter market are valued at the last asked price for options written
and the last bid price for options purchased. Financial futures are valued at
the settlement price established each day by the board of trade or exchange on
which they are traded. Forward foreign currency contracts are valued at the
forward exchange rates prevailing on the day of valuation. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Funds' Board
of Directors. Money market instruments in securities are stated at amortized
cost, which approximates market value.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. Dividend income is recorded on the ex-dividend
date and interest income is recorded on the accrual basis. Interest income
includes premium and discount amortization on money market instruments and
mortgage-backed securities; it also includes original issue and market discount
amortization on long-term debt investments. Realized gains or losses from
investment transactions are reported on an identified cost basis. Gains and
losses on premiums from expired options are recognized on the date of
expiration.
FOREIGN CURRENCY TRANSACTIONS: The books and records of the Funds are maintained
in U.S. dollars. All assets and liabilities denominated in a foreign currency
are translated into U.S. dollars based upon foreign exchange rates prevailing at
the end of the period. Income and expenses and purchases and sales of
investments are translated into U.S. dollars at the rate of exchange prevailing
on the respective dates of such transactions. The effects of changes in foreign
currency rates on investments in securities are not segregated from the effects
of changes in market prices of those securities, but are included with the net
realized and unrealized gain or loss on investment in securities.
Reported net realized gains and losses on foreign currency transactions arise
from sales and maturities of forward foreign currency contracts, currency gains
and losses between the trade and settlement dates on securities transactions,
and the differences between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Funds' books and the U.S. dollar equivalent of
the amounts actually received or paid. Net change in unrealized appreciation or
depreciation on translation of assets and liability in foreign currencies arise
from changes in the value of other assets and liabilities at the end of the
period resulting from changes in the exchange rates.
TAXES: Each Fund has complied with the special provisions of the Internal
Revenue Code for regulated investment companies. As such, each Fund is not
subject to U.S. federal income taxes to the extent that it distributes all of
its taxable income for its fiscal year.
Withholding taxes on foreign interest have been provided for in accordance with
the applicable country's tax rates.
38
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Other Assets Over(Under) Liabilities
The statement of net assets accounts "Other Assets Over(Under) Liabilities" at
December 31, 1994 consisted of the following assets (liabilities):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Lincoln Lincoln Lincoln
National Lincoln National National Lincoln Lincoln
Aggressive National Capital Equity National National
Growth Bond Appreciation Income Growth International
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
Foreign currency $ - $ - $ 15,947 $ - $ - $10,868,166
------------------------------------------------------------------------------------------------------------
Receivable for
dividends earned 33,589 - 15,608 258,802 3,563,395 232,493
------------------------------------------------------------------------------------------------------------
Receivable for
interest earned 3,330 3,929,235 - 26,282 205,380 970
------------------------------------------------------------------------------------------------------------
Receivable for
securities sold 623,484 1,439,360 3,334,309 879,192 - 3,959,439
------------------------------------------------------------------------------------------------------------
Dividends declared
and unpaid (65,795) (13,491,950) (352,060) (913,313) (31,708,118) (651,719)
------------------------------------------------------------------------------------------------------------
Payable for
securities purchased (327,412) (1,370,800) (2,608,398) (935,735) (10,214,709) (1,530,437)
------------------------------------------------------------------------------------------------------------
Management fees
payable (16,089) (79,449) (21,956) (26,123) (339,073) (185,989)
------------------------------------------------------------------------------------------------------------
Other, net 56,767 47,468 231,290 346,008 427,477 308,913
------------------------------------------------------------------------------------------------------------
$307,874 ($9,526,136) $614,740 ($364,887) ($38,065,648) $13,001,836
=========================================================================================
Lincoln Lincoln Lincoln Lincoln
Lincoln National National National National
National Money Putnam Social Special
Managed Market Master Awareness Opportunities
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
Foreign currency $ - $ - $ 1,379,519 $ - $ -
---------------------------------------------------------------------------------------------------
Receivable for
dividends earned 770,456 - 282,443 477,351 969,165
---------------------------------------------------------------------------------------------------
Receivable for
interest earned 4,712,855 330,214 1,237,008 29,696 31,854
---------------------------------------------------------------------------------------------------
Receivable for
securities sold 3,482,368 - 936,009 - 763,763
---------------------------------------------------------------------------------------------------
Dividends declared
and unpaid (20,179,660) (3,196,613) (5,639,619) (3,407,741) (7,440,312)
---------------------------------------------------------------------------------------------------
Payable for securities
purchased (3,427,000) - (1,435,289) (360,900) (764,609)
---------------------------------------------------------------------------------------------------
Management fees
payable (159,685) (32,107) (122,783) (65,518) (118,469)
---------------------------------------------------------------------------------------------------
Other, net 113,762 388,483 (68,582) 83,054 1,013,818
---------------------------------------------------------------------------------------------------
($14,686,904) ($2,510,023) ($3,431,294) ($3,244,058) ($5,544,790)
================================================================================
</TABLE>
39
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
3. Management Fees and Other Transactions With Affiliates
Lincoln National Investment Management Company (the Advisor) manages the Funds'
investment portfolios, maintains their accounts and records, and furnishes the
services of individuals to perform executive and administrative functions of the
Funds. In return for these services, the Advisor receives a management fee at an
annual rate of .48% of the first $200,000,000 of the average daily net asset
value of the Funds, .40% of the next $200,000,000, and .30% of the average daily
net asset value of the Funds in excess of $400,000,000 for all the Funds except
for the Lincoln National Putnam Master Fund, Inc. which has management fee
annual rates of .75%, .70%, and .68%, respectively, the Lincoln National
International Fund, Inc. which has management fee annual rates of .90%, .75%,
and .60%, respectively, and the Lincoln National Aggressive Growth Fund, Inc.
which has management fee annual rates of .75%, .70%, and .65%, respectively. The
Lincoln National Capital Appreciation Fund, Inc. and the Lincoln National Equity
Income Fund, Inc. have management fees of .80% and .95%, respectively, with no
breakpoints. If the aggregate annual expenses of the Funds, including the
management fee, but excluding taxes, interest, brokerage commissions relating to
the purchase or sale of portfolio securities and extraordinary non-recurring
expenses, exceeds 1 1/2% of the average daily net asset value of the Fund, the
Advisor will reimburse the Funds in the amount of such excess. No reimbursement
was due for the year ended December 31, 1994.
Certain officers and directors of the Funds are also officers or directors of
the Company. The compensation of unaffiliated directors of the Funds is borne by
the Funds.
4. Analysis of Net Assets
The analysis of net assets at December 31, 1994 consisted of the following:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Lincoln Lincoln Lincoln
National Lincoln National National Lincoln Lincoln
Aggressive National Capital Equity National National
Growth Bond Appreciation Income Growth International
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
Common Stock, par value
$.01 per share** $67,085 $178,234 $52,114 $76,304 $498,493 $242,837
------------------------------------------------------------------------------------------------------------
Paid-in capital in excess
of par value of shares
issued 61,918,440 211,357,633 52,518,500 78,615,694 1,046,899,279 288,197,135
------------------------------------------------------------------------------------------------------------
Undistributed net realized
gain (loss) on investments (3,757,574) (9,964,996) (193,457) 580,266 69,061,295 14,698,525
------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
or depreciation on
investments 2,469,310 (6,561,105) 526,731 (411,077) 44,865,240 13,211,408
------------------------------------------------------------------------------------------------------------
$60,697,261 $195,009,766 $52,903,888 $78,861,187 $1,161,324,307 $316,349,905
====================================================================================
Lincoln Lincoln Lincoln Lincoln
Lincoln National National National National
National Money Putnam Social Special
Managed Market Master Awareness Opportunities
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
Common Stock, par value
$.01 per share** $345,878 $77,178 $175,614 $98,252 $143,661
------------------------------------------------------------------------------------------------------------
Paid-in capital in excess of par
value of shares issued 439,350,526 77,100,259 193,201,148 152,340,960 299,904,687
------------------------------------------------------------------------------------------------------------
Undistributed net realized gain
(loss) on investments 718,100 - (1,141,455) 6,175,723 15,004,876
------------------------------------------------------------------------------------------------------------
Net unrealized appreciation or
depreciation on investments 1,725,080 - 3,461,592 4,899,224 3,363,950
------------------------------------------------------------------------------------------------------------
$442,139,584 $77,177,437 $195,696,899 $163,514,159 * $318,417,174
====================================================================================
</TABLE>
** Each Fund has 50,000,000 authorized shares except for the Lincoln National
Growth Fund, Inc. which has 100,000,000.
40
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
5. Investments
The cost of investments for federal income tax purposes is the same as for book
purposes. The aggregate cost of investments purchased, the aggregate proceeds
from investments sold, the aggregate gross unrealized appreciation, the
aggregate gross unrealized depreciation and the net unrealized appreciation
(depreciation) at December 31, 1994 are as follows:
<TABLE>
<CAPTION>
Aggregate Aggregate Gross Gross Net Unrealized
Cost of Proceeds Unrealized Unrealized Appreciation
Purchases From Sales Appreciation Depreciation (Depreciation)
-------------- ------------ ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Lincoln National Aggressive Growth Fund, Inc. $ 75,375,467 $ 25,334,799 $ 4,267,740 $ (1,798,430) $ 2,469,310
Lincoln National Bond Fund, Inc. 493,197,097 431,837,955 908,904 (7,470,009) (6,561,105)
Lincoln National Capital Appreciation Fund, Inc. 57,164,943 31,193,015 1,136,343 (609,612) 526,731
Lincoln National Equity Income Fund, Inc. 84,707,368 10,955,998 2,403,547 (2,814,624) (411,077)
Lincoln National Growth Fund, Inc. 1,011,678,328 792,706,585 103,024,494 (58,159,254) 44,865,240
Lincoln National International Fund, Inc. 274,166,684 134,636,241 27,002,020 (13,790,612) 13,211,408
Lincoln National Managed Fund, Inc. 742,715,446 697,590,827 22,914,472 (21,189,392) 1,725,080
Lincoln National Putnam Master Fund, Inc. 272,005,195 221,020,353 10,135,561 (6,673,969) 3,461,592
Lincoln National Social Awareness Fund, Inc. 114,171,320 94,577,295 14,981,174 (10,081,950) 4,899,224
Lincoln National Special Opportunities Fund, Inc. 272,982,591 214,544,457 20,827,802 (17,463,852) 3,363,950
</TABLE>
6. Supplemental Financial Instrument Information
Options: The Funds purchase or write options which are exchange traded to hedge
fluctuation risks in the price of certain securities. When the Funds write a
call or put option, an amount equal to the premium received is reflected as a
liability. The amount of the liability is subsequently "marked-to-market" to
reflect the current market value of the option written. The premium paid by the
Funds for the purchase of a call or put option is recorded as an investment and
subsequently "marked-to-market" to reflect the current market value of the
option purchased. The Funds are subject to the risk of an imperfect correlation
between movement in the price of the instrument and the price of the underlying
security or transaction. Risks may also arise due to illiquid secondary markets
for the instruments. Written call option activity for 1994 is summarized as
follows:
Lincoln National Putnam
Master Fund, Inc.
-----------------------
Par Premiums
Amount Received
-----------------------
Options outstanding at January 1, 1994 $1,420,000 $3,550
Options written 3,897,600 12,249
Options expired (1,420,000) (3,550)
Options closed (3,805,000) (6,693)
-----------------------
Options outstanding at December 31, 1994 $92,600 5,556
=======
Unrealized appreciation at December 31, 1994 463
---
Market value of options written at December 31, 1994 $5,093
======
Lincoln National Special
Opportunities Fund, Inc.
-----------------------
Number of Premiums
Shares Received
-----------------------
Options outstanding at January 1, 1994 57,000 $118,286
Options written 1,650,600 3,311,618
Options exercised (286,900) (933,004)
Options expired (271,800) (395,045)
Options closed (1,023,500) (1,897,199)
-----------------------
Options outstanding at December 31, 1994 125,400 204,656
=======
Unrealized depreciation at December 31, 1994 20,675
------
Market value of options written at December 31, 1994 $225,331
========
41
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
FORWARD FOREIGN CURRENCY CONTRACTS: The Funds may purchase or sell forward
foreign currency contracts to hedge risks of fluctuations in specific
transactions or portfolio positions. Forward foreign currency contracts
obligate the Funds to take or deliver a financial instrument of foreign
currency at a future date at a specified price. The unrealized gain or loss on
the contracts are reflected in the accompanying financial statements. The Funds
are subject to the credit risks that the counterparties to these contracts will
fail to perform; although the risk is minimized by purchasing such agreements
from financial institutions with long standing, superior performance records. In
addition, the Funds are subject to the market risks associated with
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar; however, such changes in the value generally are offset by changes in
the value of the items being hedged by such contracts. The sale of forward
foreign currency contracts that were open at December 31, 1994 were as follows:
<TABLE>
<CAPTION>
Foreign Aggregate Unrealized
Fund Currency Face Value Settlement Date(s) Gain (Loss)
---- -------- ---------- ------------------ ----------
<S> <C> <C> <C> <C> <C>
Capital 1,644,500 Deutschemark $1,000,000 March 1995 ($63,500)
Appreciation 2,000,000 Swedish Krona 280,376 January 1995 11,530
--------
($51,970)
========
Putmam 2,200,000 Australian Dollar 1,645,503 February 1995 $ --
Master 28,800,000 Belgian Franc 891,956 February 1995 (13,431)
600,000 Canadian Dollar 439,207 January 1995 (11,484)
January, February,
40,497,540 Deutschemark 26,173,693 March 1995 121,003
52,950,000 French Franc 9,882,247 January, February 1995 (44,571)
1,860,000 Great Britain Pound 2,924,283 February, March 1995 (17,935)
1,072,900,180 Japanese Yen 10,968,575 January, February 1995 36,643
1,120,000 Netherlands Guilder 636,906 February 1995 (9,085)
1,000,000 New Zealand Dollar 627,949 February, March 1995 --
110,435,000 Spanish Peseta 827,551 February 1995 (8,895)
3,120,000 Swiss Franc 2,340,675 January, February 1995 (45,275)
-------
$9,970
=======
</TABLE>
FINANCIAL FUTURES CONTRACTS: The Funds may purchase or sell financial futures
contracts, which are exchange traded, to hedge fluctuation risks of adverse
changes in exchange markets or interest rates. Financial futures contracts
obligate the Funds to take delivery or deliver a financial instrument at a
future date at a specified price. The Funds deposit with its custodian a
specified amount of cash or eligible securities called "initial margin" or
"variation margin". The market value of investments pledged to cover margin
requirements for open positions at December 31, 1994 was $4,305,488 for the
Lincoln National Growth Fund, Inc., $720,231 for the Lincoln National Social
Awareness Fund, Inc., and $717,581 for the Lincoln National Special
Opportunities Fund, Inc. The unrealized gain or loss on the contracts are
reflected in the accompanying financial statements. The Funds are subject to the
market risks of unexpected changes in the underlying markets and interest rates;
however, such changes in the value generally are offset by changes in the value
of the items being hedged by such contracts. Purchased financial futures
contracts open at December 31, 1994 were as follows:
<TABLE>
<CAPTION>
Underlying Expiration Unrealized
Fund Contracts Face Amount Date Gain
---- --------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Growth 80 S&P 500 contracts $18,244,720 March 1995 $209,280
Social Awareness 20 S&P 500 contracts 4,561,180 March 1995 52,320
Special Opportunities 15 S&P 500 contracts 3,420,885 March 1995 39,240
</TABLE>
INDEXED SECURITIES: The Funds may invest in indexed securities whose value is
linked either directly or inversely to changes in foreign currencies, interest
rates, commodities, indices, or other reference instruments. Indexed securities
may be more volatile than the reference instrument itself, but any loss is
limited to the amount of the original investment.
REPURCHASE AGREEMENTS: The Funds, through their respective custodians, receive
delivery of the underlying securities, whose market value is required to be at
least 102% of the repurchase price. The advisor is responsible for determining
that the value of the collateral is at least equal to the repurchase price.
Repurchase agreements are subject to the risk of the default or insolvency of
the counterparty.
42
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
7. Concentration of Credit Risk
The Lincoln National Money Market Fund, Inc. had investments in securities
issued by banks, including foreign banks, foreign branches of domestic banks,
and other financial institutions of $34,699,781 at December 31, 1994 (45.0% of
net assets). The ability of these entities to meet their obligations may be
affected by economic conditions related to the industry.
Lincoln National International Fund, Inc., Lincoln National Putnam Master Fund,
Inc., and Lincoln National Capital Appreciation Fund, Inc. invest in foreign
securities. As a result, there may be additional risks, such as the investments
being subject to restrictions as to repatriation of cash back to the United
States and to political or economic uncertainties. None of these Funds had
investments in excess of 20% in any individual foreign country except the
Lincoln National International Fund, Inc.
Distribution of investments for the Lincoln National International Fund, Inc. by
country of issue, as a percentage of total value of investment in securities,
consisted of the following at December 31, 1994:
<TABLE>
<S> <C>
Japan................................................. 32.7%
Great Britain......................................... 8.6
Netherlands........................................... 8.0
Germany............................................... 7.0
France................................................ 6.5
Sweden................................................ 6.1
Hong Kong............................................. 4.6
Finland............................................... 3.5
Malaysia.............................................. 3.3
Others (individually less than 3%).................... 19.7
-----
100.0%
=====
</TABLE>
8. Organization of New Funds
The Lincoln National Aggressive Growth Fund, Inc., the Lincoln National Capital
Appreciation Fund, Inc., and the Lincoln National Equity Income Fund, Inc., were
incorporated in Maryland on July 9, 1993. The Company purchased the initial
stock subscription of each for $110,000 on December 31, 1993. The Company
provided a seed money investment of $3,000,000 for each Fund on January 3, 1994.
The Funds were ordered effective by the Securities and Exchange Commission on
February 1, 1994.
9. Summary of Changes From Capital Share Transactions
<TABLE>
<CAPTION>
Shares Issued Upon
Capital Reinvestment of
Shares Sold Dividends
---------------------------------------------------------
Shares Amount Shares Amount
--------------------------------------------------------
<S> <C> <C> <C> <C>
Year Ended December 31, 1993:
Lincoln National Aggressive Growth Fund, Inc. 11,000 $110,000 - $ -
Lincoln National Bond Fund, Inc. 3,420,787 43,058,043 1,285,990 15,753,899
Lincoln National Capital Appreciation Fund, Inc. 11,000 110,000 - -
Lincoln National Equity Income Fund, Inc. 11,000 110,000 - -
Lincoln National Growth Fund, Inc. 7,589,934 177,637,802 1,767,966 39,730,476
Lincoln National International Fund, Inc. 8,290,325 95,036,448 14,733 26,897
Lincoln National Managed Fund, Inc. 4,609,288 63,539,549 2,013,880 27,047,116
Lincoln National Money Market Fund, Inc. 10,482,513 104,825,131 418,009 4,180,089
Lincoln National Putnam Master Fund, Inc. 3,416,797 40,675,481 485,545 5,447,170
Lincoln National Social Awareness Fund, Inc. 2,345,673 40,036,680 290,230 4,742,472
Lincoln National Special Opportunities Fund, Inc. 5,770,757 132,714,903 1,476,738 32,096,742
Year Ended December 31, 1994:
Lincoln National Aggressive Growth Fund, Inc. 6,740,944 62,268,594 - -
Lincoln National Bond Fund, Inc. 927,405 10,546,350 1,738,841 21,824,702
Lincoln National Capital Appreciation Fund, Inc. 5,209,541 52,552,638 - -
Lincoln National Equity Income Fund, Inc. 7,649,310 78,895,415 - -
Lincoln National Growth Fund, Inc. 6,010,672 141,925,232 2,859,641 69,491,281
Lincoln National International Fund, Inc. 11,973,168 156,601,805 6,025 77,392
Lincoln National Managed Fund, Inc. 2,079,210 27,714,248 2,489,916 34,885,204
Lincoln National Money Market Fund, Inc. 6,670,441 66,704,408 257,051 2,570,514
Lincoln National Putnam Master Fund, Inc. 4,504,338 52,281,703 1,187,851 14,293,180
Lincoln National Social Awareness Fund, Inc. 1,842,973 31,337,312 552,267 9,491,031
Lincoln National Special Opportunities Fund, Inc. 4,246,768 96,029,031 983,331 23,219,317
</TABLE>
<TABLE>
<CAPTION>
Net Increase (Decrease)
Capital Shares Resulting From Capital
Redeemed Share Transactions
----------------------------------------------------------
Shares Amount Shares Amount
---------------------------------------------------------
<S> <C> <C> <C> <C>
Year Ended December 31, 1993:
Lincoln National Aggressive Growth Fund, Inc. - $ - 11,000 $110,000
Lincoln National Bond Fund, Inc. (667,612) (8,342,182) 4,039,165 50,469,760
Lincoln National Capital Appreciation Fund, Inc. - - 11,000 110,000
Lincoln National Equity Income Fund, Inc. - - 11,000 110,000
Lincoln National Growth Fund, Inc. (865,191) (20,226,325) 8,492,709 197,141,953
Lincoln National International Fund, Inc. (551,196) (5,668,703) 7,753,862 89,394,642
Lincoln National Managed Fund, Inc. (331,419) (4,575,324) 6,291,749 86,011,341
Lincoln National Money Market Fund, Inc. (12,043,534) (120,435,339) (1,143,012) (11,430,119)
Lincoln National Putnam Master Fund, Inc. (157,687) (1,793,860) 3,744,655 44,328,791
Lincoln National Social Awareness Fund, Inc. (364,007) (6,222,796) 2,271,896 38,556,356
Lincoln National Special Opportunities Fund, Inc. (3,736,817) (84,032,777) 3,510,678 80,778,868
Year Ended December 31, 1994:
Lincoln National Aggressive Growth Fund, Inc. (43,447) (393,069) 6,697,497 61,875,525
Lincoln National Bond Fund, Inc. (2,659,758) (30,846,917) 6,488 1,524,135
Lincoln National Capital Appreciation Fund, Inc. (9,110) (92,024) 5,200,431 52,460,614
Lincoln National Equity Income Fund, Inc. (29,894) (313,417) 7,619,416 78,581,998
Lincoln National Growth Fund, Inc. (899,760) (20,966,914) 7,970,553 190,449,599
Lincoln National International Fund, Inc. (468,046) (6,044,272) 11,511,147 150,634,925
Lincoln National Managed Fund, Inc. (1,428,741) (18,553,349) 3,140,385 44,046,103
Lincoln National Money Market Fund, Inc. (7,313,925) (73,139,252) (386,433) (3,864,330)
Lincoln National Putnam Master Fund, Inc. (409,031) (4,630,905) 5,283,158 61,943,978
Lincoln National Social Awareness Fund, Inc. (251,218) (4,263,762) 2,144,022 36,564,581
Lincoln National Special Opportunities Fund, Inc. (2,057,740) (46,218,946) 3,172,359 73,029,402
</TABLE>
43
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
10. Distribution to Shareholder
The Funds declare dividends daily on net investment income and annually, if
any, on net realized gains. Dividends are distributed annually.
11. Capital Loss Carryforward
As of December 31, 1994 the following Funds had available for federal income tax
purposes unused capital loss carryforwards expiring in the year 2002:
<TABLE>
<S> <C>
Lincoln National Aggressive Growth Fund, Inc. $3,758,000
Lincoln National Bond Fund, Inc. 10,022,000
Lincoln National Capital Appreciation Fund, Inc. 181,000
Lincoln National Putnam Master Fund, Inc. 1,218,000
</TABLE>
12. Subsequent Events
Effective April 28, 1995, the name of the Lincoln National Growth Fund, Inc.
will be changed to the Lincoln National Growth and Income Fund, Inc. and the
Lincoln National Putnam Master Fund, Inc. will be changed to Lincoln National
Global Asset Allocation Fund, Inc.
44
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(Selected data for each share of Common Stock outstanding throughout the year)
Income from Investment Operation Less Dividends From:
-------------------------------------- ----------------------------------
Net Net
Asset Realized and Total
Year Value Net Unrealized From Net Net Realized
Ended Beginning Investment Gain(Loss) on Investment Investment Gain on Total
12/31 of Period Income(Loss) Investments Operations Income Investments Dividends
----------------------------------------------------------------------------------------------
Lincoln National Aggressive Growth Fund, Inc.
<S> <C> <C> <C> <C> <C> <C> <C>
1993 $10.000 $ - $ - $ - $ - $ - $ -
1994 10.000 0.019 (0.952) (0.971) (0.019) - (0.019)
Lincoln National Bond Fund, Inc.
1985 $10.819 $1.283 $1.085 $2.368 ($1.283) $ - ($1.283)
1986 11.904 1.192 0.780 1.972 (1.192) (0.236) (1.428)
1987 12.448 1.055 (0.873) 0.182 (1.055) (0.434) (1.489)
1988 11.141 1.053 (0.131) 0.922 (1.053) - (1.053)
1989 11.010 1.027 0.428 1.455 (1.027) - (1.027)
1990 11.438 0.998 (0.240) 0.758 (0.998) - (0.998)
1991 11.198 0.956 0.990 1.946 (0.956) - (0.956)
1992 12.188 0.903 0.052 0.955 (0.903) - (0.903)
1993 12.240 0.758 0.703 1.461 (0.758) (0.250) (1.008)
1994 12.693 0.741 (1.233) (0.492) (0.741) (0.519) (1.260)
Lincoln National Capital Appreciation Fund, Inc.
1993 $10.000 $ - $ - $ - $ - $ - $ -
1994 10.000 0.134 0.152 0.286 (0.134) - (0.134)
Lincoln National Equity Income Fund, Inc.
1993 $10.000 $ - $ - $ - $ - $ - $ -
1994 10.000 0.258 0.335 0.593 (0.258) - (0.258)
Lincoln National Growth Fund, Inc.
1985 $12.571 $0.462 $3.567 $4.029 ($0.462) $ - ($0.462)
1986 16.138 0.544 2.147 2.691 (0.544) (0.254) (0.798)
1987 18.031 0.587 2.148 2.735 (0.587) (0.539) (1.126)
1988 19.640 0.540 0.729 1.269 (0.540) (2.997) (3.537)
1989 17.372 0.793 2.859 3.652 (0.793) - (0.793)
1990 20.231 0.512 (0.539) (0.027) (0.512) (1.068) (1.580)
1991 18.624 0.617 5.142 5.759 (0.617) - (0.617)
1992 23.766 0.663 (0.336) 0.327 (0.663) (0.503) (1.166)
1993 22.927 0.610 2.285 2.895 (0.610) (0.519) (1.129)
1994 24.693 0.668 (0.428) 0.240 (0.668) (0.968) (1.636)
Lincoln National International Fund, Inc.
1991* $10.000 ($0.030) $0.047 $0.017 ($0.059) $ - ($0.059)
1992 9.958 0.037 (0.867) (0.830) (0.037) - (0.037)
1993 9.091 0.010 3.551 3.561 (0.010) - (0.010)
1994 12.642 0.033 0.385 0.418 (0.033) - (0.033)
Lincoln National Managed Fund, Inc.
1985 $9.670 $0.709 $1.635 $2.344 ($0.709) $ - ($0.709)
1986 11.305 0.699 0.943 1.642 (0.699) - (0.699)
1987 12.248 0.674 0.352 1.026 (0.674) (0.317) (0.991)
1988 12.283 0.666 0.352 1.018 (0.666) (1.108) (1.774)
1989 11.527 0.798 1.186 1.984 (0.798) - (0.798)
1990 12.713 0.705 (0.334) 0.371 (0.705) (0.438) (1.143)
1991 11.941 0.710 1.906 2.616 (0.710) - (0.710)
1992 13.847 0.653 (0.158) 0.495 (0.653) (0.036) (0.689)
1993 13.653 0.584 0.908 1.492 (0.584) (0.409) (0.993)
1994 14.152 0.628 (0.814) (0.186) (0.628) (0.555) (1.183)
Lincoln National Money Market Fund, Inc.
1985 $10.000 $0.808 $ - $0.808 ($0.808) $ - ($0.808)
1986 10.000 0.662 - 0.662 (0.662) - (0.662)
1987 10.000 0.658 - 0.658 (0.658) - (0.658)
1988 10.000 0.744 - 0.744 (0.744) - (0.744)
1989 10.000 0.909 - 0.909 (0.909) - (0.909)
1990 10.000 0.802 - 0.802 (0.802) - (0.802)
1991 10.000 0.571 - 0.571 (0.571) - (0.571)
1992 10.000 0.354 - 0.354 (0.354) - (0.354)
1993 10.000 0.276 - 0.276 (0.276) - (0.276)
1994 10.000 0.381 - 0.381 (0.381) - (0.381)
</TABLE>
<TABLE>
<CAPTION>
Net Ratio of Net Net
Asset Ratio of Investment Assets
Year Value Expenses Income Portfolio At End
Ended End Total To Average To Average Turnover of Period
12/31 of Period Return** Net Assets Net Assets Rate (000's)
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Lincoln National Aggressive Growth Fund, Inc.
1993 $10.000 - - $ - - $110
1994 10.990 (9.52%) 1.11% 0.21% 100.31% 60,697
Lincoln National Bond Fund, Inc.
1985 $11.904 22.77% 0.61% 11.43% 237.82% $34,509
1986 12.448 16.53% 0.52% 9.75% 156.50% 59,449
1987 11.141 (0.47%) 0.56% 9.17% 176.75% 50,795
1988 11.010 9.24% 0.57% 9.41% 183.79% 59,947
1989 11.438 13.23% 0.53% 9.13% 121.19% 91,152
1990 11.198 5.45% 0.53% 9.00% 76.67% 103,845
1991 12.188 17.96% 0.52% 8.32% 72.80% 139,854
1992 12.240 7.68% 0.52% 7.45% 257.27% 168,636
1993 12.693 13.39% 0.50% 6.05% 324.90% 226,150
1994 10.941 (5.01%) 0.50% 6.40% 213.26% 195,010
Lincoln National Capital Appreciation Fund, Inc.
1993 $10.000 - - - - $110
1994 10.420 1.52% 1.18% 1.33% 185.28% 52,904
Lincoln National Equity Income Fund, Inc.
1993 $10.000 - - - - $110
1994 10.851 3.35% 1.26% 2.48% 33.40% 78,861
Lincoln National Growth Fund, Inc.
1985 $16.138 32.93% 0.57% 3.23% 30.93% $56,912
1986 18.031 16.77% 0.50% 3.06% 55.22% 105,781
1987 19.640 14.75% 0.52% 2.78% 142.01% 177,354
1988 17.372 8.06% 0.54% 3.08% 179.88% 209,513
1989 20.231 19.86% 0.50% 4.06% 208.98% 295,399
1990 18.624 1.68% 0.48% 2.79% 59.47% 356,329
1991 23.766 30.83% 0.44% 2.86% 33.59% 581,297
1992 22.927 1.24% 0.41% 2.97% 74.50% 765,457
1993 24.693 13.31% 0.38% 2.58% 60.76% 1,034,105
1994 23.297 0.65% 0.37% 2.85% 76.34% 1,161,324
Lincoln National International Fund, Inc.
1991* $9.958 (0.42%) 1.06% (0.30)% 25.18% $20,935
1992 9.091 (8.41%) 1.46% 0.39% 22.86% 45,627
1993 12.642 39.46% 1.24% 0.09% 61.44% 161,470
1994 13.027 3.09% 1.24% 0.25% 52.78% 316,350
Lincoln National Managed Fund, Inc.
1985 $11.305 25.39% 0.59% 6.80% 58.05% $39,149
1986 12.248 14.03% 0.51% 5.77% 76.05% 78,824
1987 12.283 7.35% 0.53% 5.23% 121.98% 121,167
1988 11.527 8.17% 0.55% 5.71% 166.57% 140,135
1989 12.713 16.00% 0.52% 6.47% 158.73% 182,576
1990 11.941 3.41% 0.52% 5.96% 93.38% 204,310
1991 13.847 22.59% 0.50% 5.53% 22.70% 276,899
1992 13.653 3.69% 0.49% 4.86% 226.66% 343,439
1993 14.152 11.91% 0.45% 4.24% 235.59% 445,040
1994 12.783 (2.42%) 0.44% 4.45% 160.79% 442,140
Lincoln National Money Market Fund, Inc.
1985 $10.000 9.88% 0.59% 8.08% - $42,587
1986 10.000 9.18% 0.55% 6.71% - 45,932
1987 10.000 8.02% 0.56% 6.50% - 55,093
1988 10.000 5.45% 0.55% 7.21% - 59,160
1989 10.000 7.20% 0.54% 9.09% - 88,551
1990 10.000 7.61% 0.53% 7.94% - 102,399
1991 10.000 7.48% 0.53% 5.79% - 149,555
1992 10.000 4.70% 0.53% 3.48% - 92,472
1993 10.000 4.46% 0.50% 2.76% - 81,042
1994 10.000 3.20% 0.52% 3.82% - 77,177
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (Continued)
(Selected data for each share of Common Stock outstanding throughout the year)
Income from investment Operation Less Dividends From:
--------------------------------------- -----------------------------------
Net Net
Asset Realized and Total
Year Value Net Unrealized From Net Net Realized
Ended Beginning Investment Gain(Loss) on Investment Investment Gain on Total
12/31 of Period Income Investments Operations Income Investments Dividends
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lincoln National Putnam Master Fund, Inc.
1987* $10.000 $0.146 ($0.973) ($0.827) ($0.146) $ - ($0.146)
1988 9.027 0.405 0.589 0.994 (0.405) - (0.405)
1989 9.616 0.573 1.165 1.738 (0.573) - (0.573)
1990 10.781 0.549 (0.516) 0.033 (0.549) (0.279) (0.828)
1991 9.986 0.426 1.391 1.817 (0.426) (0.138) (0.564)
1992 11.239 0.404 0.271 0.675 (0.404) (0.306) (0.710)
1993 11.204 0.362 1.522 1.884 (0.362) (0.224) (0.586)
1994 12.502 0.349 (0.702) (0.353) (0.349) (0.656) (1.005)
Lincoln National Social Awareness Fund, Inc.
1988* $10.000 $0.032 $0.454 $0.486 ($0.032) $ - ($0.032)
1989 10.454 0.309 2.920 3.229 (0.309) (0.024) (0.333)
1990 13.350 0.289 (0.989) (0.700) (0.289) (0.154) (0.443)
1991 12.207 0.348 4.242 4.590 (0.348) - (0.348)
1992 16.449 0.399 0.179 0.578 (0.399) (0.051) (0.450)
1993 16.577 0.326 1.792 2.118 (0.326) (0.454) (0.780)
1994 17.915 0.377 (0.461) (0.084) (0.377) (0.812) (1.189)
Lincoln National Special Opportunities Fund, Inc.
1985 $12.349 $0.216 $4.884 $5.100 ($0.216) $ - ($0.216)
1986 17.233 0.178 (0.616) (0.438) (0.178) - (0.178)
1987 16.617 0.064 1.316 1.380 (0.064) - (0.064)
1988 17.933 0.060 0.327 0.387 (0.060) (2.659) (2.719)
1989 15.601 0.276 4.904 5.180 (0.276) - (0.276)
1990 20.505 0.236 (1.931) (1.695) (0.236) (1.208) (1.444)
1991 17.366 0.323 7.195 7.518 (0.323) - (0.323)
1992 24.561 0.546 1.106 1.652 (0.546) (0.955) (1.501)
1993 24.712 0.530 2.703 3.233 (0.530) (2.937) (3.467)
1994 24.478 0.565 (0.942) (0.377) (0.565) (1.372) (1.937)
</TABLE>
<TABLE>
<CAPTION>
Net Ratio of Net
Asset Ratio of Investment Assets
Year Value Expenses Income Portfolio at End
Ended End Total To Average To Average Turnover of Period
12/31 of Period Return** Net Assets Net Assets Rate (000's)
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Lincoln National Putnam Master Fund, Inc.
1987* $9.027 (9.73%) 0.45% 1.42% 12.92% $21,084
1988 9.616 7.56% 1.16% 4.36% 136.79% 26,885
1989 10.781 16.74% 1.33% 5.59% 79.11% 44,913
1990 9.986 (0.12%) 1.14% 5.49% 56.28% 56,088
1991 11.239 20.17% 1.04% 4.01% 101.41% 76,269
1992 11.204 6.39% 1.07% 3.70% 128.53% 95,607
1993 12.502 17.88% 1.05% 3.04% 208.55% 153,500
1994 11.144 (2.43%) 1.06% 3.07% 134.33% 195,697
Lincoln National Social Awareness Fund, Inc.
1988* $10.454 4.54% 1.64% 0.30% 10.07% $2,067
1989 13.350 28.51% 0.99% 2.43% 63.37% 9,565
1990 12.207 (5.54%) 0.65% 2.34% 29.39% 24,674
1991 16.449 36.98% 0.56% 2.33% 45.00% 52,959
1992 16.577 2.87% 0.55% 2.50% 84.32% 89,669
1993 17.915 13.77% 0.51% 1.90% 84.43% 137,606
1994 16.642 (0.39%) 0.53% 2.22% 64.97% 163,514
Lincoln National Special Opportunities Fund, Inc.
1985 $17.233 43.16% 0.61% 1.45% 56.72% $39,346
1986 16.617 (2.50%) 0.54% 1.00% 102.32% 43,369
1987 17.933 8.77% 0.56% 0.31% 110.80% 58,866
1988 15.601 3.73% 0.59% 0.39% 73.91% 63,982
1989 20.505 31.92% 0.55% 1.50% 92.56% 75,245
1990 17.36 (7.28%) 0.55% 1.33% 37.50% 83,762
1991 24.561 43.14% 0.53% 1.49% 111.60% 132,753
1992 24.712 6.24% 0.53% 2.35% 128.49% 189,867
1993 24.478 18.31% 0.49% 2.29% 74.11% 273,998
1994 22.164 (1.55%) 0.48% 2.49% 74.63% 318,417
</TABLE>
* The per share data, total return, ratios, and portfolio turnover are
calculated for the period from commencement of investment activity on August
3, 1987 through December 31, 1987 for the Lincoln National Putnam Master
Fund, Inc., May 2, 1988 through December 31, 1988 for the Lincoln National
Social Awareness Fund, Inc., and May 1, 1991 through December 31, 1991 for
the Lincoln National International Fund, Inc.; accordingly, the total return
percentage , ratios and portfolio turnover have NOT been calculated on an
annualized basis.
** Total return percentages in this table are calculated on the basis
prescribed by the Securities and Exchange Commission. These percentages are
based on the underlying mutual fund shares in which Separate Accounts C, D,
G and K may invest. The total return percentages in the table are NOT
calculated on the same basis as the performance percentages noted in the
letter at the front of this booklet (those percentages are based upon the
change in unit values).
46
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors and Shareholder of Lincoln National Aggressive Growth Fund,
Inc., Lincoln National Bond Fund, Inc., Lincoln National Capital Appreciation
Fund, Inc., Lincoln National Equity Income Fund, Inc., Lincoln National Growth
Fund, Inc., Lincoln National International Fund, Inc., Lincoln National Managed
Fund, Inc., Lincoln National Money Market Fund, Inc., Lincoln National Putnam
Master Fund, Inc., Lincoln National Social Awareness Fund, Inc., and Lincoln
National Special Opportunities Fund, Inc.
We have audited the accompanying statements of net assets of Lincoln National
Aggressive Growth Fund, Inc., Lincoln National Bond Fund, Inc., Lincoln National
Capital Appreciation Fund, Inc., Lincoln National Equity Income Fund, Inc.,
Lincoln National Growth Fund, Inc., Lincoln National International Fund, Inc.,
Lincoln National Managed Fund, Inc., Lincoln National Money Market Fund, Inc.,
Lincoln National Putnam Master Fund, Inc., Lincoln National Social Awareness
Fund, Inc., and Lincoln National Special Opportunities Fund, Inc. (Funds) as of
December 31, 1994, and the related statements of operations, the statements of
changes in net assets, and the financial highlights presented herein for each of
the respective years or periods in the period ended December 31, 1994. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and 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 as of
December 31, 1994, by correspondence with the custodian and brokers. 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Funds at December 31, 1994, the results of their operations, the changes in
their net assets, and the financial highlights presented herein for each of the
respective years or periods in the period ended December 31, 1994 in conformity
with generally accepted accounting principles.
Fort Wayne, Indiana
January 24, 1995
ERNST & YOUNG LLP
47
<PAGE>
This page is intentionally blank.
48
<PAGE>
The Lincoln National Life Insurance Co. ------------------
1300 South Clinton Street Bulk Rate
Fort Wayne, IN 46802 U.S. Postage
PAID
Lansing, MI
Permit No. 1015
-------------------
[LOGO--LINCOLN]
Fort Wayne, Indiana 46801
