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Previous: FLIGHT INTERNATIONAL GROUP INC, 10QSB, 1995-12-05 |
Next: BALCOR REALTY INVESTORS 85 SERIES I, SC 14D1/A, 1995-12-05 |
<PAGE>
-----------------------------------------------------------
LORD ABBETT TAX-FREE INCOME FUND
National . New York . Texas . New Jersey . Connecticut
Missouri . Hawaii . Washington . Minnesota
-----------------------------------------------------------
1995 Annual Report
A mutual fund
with an objective
of providing you
with high tax-free
income.
<PAGE>
- --------------------------------------------------------------------------------
REPORT TO SHAREHOLDERS For the Fiscal Year Ended September 30, 1995
[PHOTO OF RONALD P. LYNCH APPEARS HERE]
- ---------------------------------------
Ronald P. Lynch, Chairman
October 11, 1995
As we noted in our Report To Shareholders in both March 1995 and September 1994,
we thought the municipal markets represented significant value. Indeed, recent
performance in the municipal markets has been strong and each Series in Lord
Abbett Tax-Free Income Fund has performed very well. See the inside cover for
performance.
The Fund completed fiscal 1995 on September 30 with aggregate net assets of
$1.68 billion. The net assets of each Series are as follows:
<TABLE>
<S> <C>
National: $650.7 million
New York: $331.6 million
Texas: $100.3 million
New Jersey: $191.6 million
Connecticut: $113.4 million
Missouri: $131.8 million
Hawaii: $ 86.1 million
Washington: $ 74.4 million
Minnesota
(inception 12/27/94): $ 4.3 million
</TABLE>
From the beginning of 1994 through early 1995, the Federal Reserve (the
"Fed") raised short-term interest rates a total of six times in an attempt to
slow economic activity. The fixed-income markets responded negatively to this
less accommodative monetary policy until, in early 1995, evidence of the
economic slowdown finally surfaced and inflationary pressures began to recede.
On July 6, 1995, the Fed lowered the Federal Funds Rate for the first time in
almost three years from 6% to 5.75%; bond prices (which are inversely related to
yields) continued their rebound up from their November 1994 levels.
The past year has been one of extreme volatility in the fixed-income
markets; particularly for municipal bonds. The Bond Buyer 40 Index, which
measures yields on long-term municipal bonds, stood at 6.1% on September 30,
1995, after having been as high as 7.4% in November of 1994. While talk of tax
reform has heightened investor concerns, the end result has been beneficial:
tax-exempt securities have become less expensive, relative to other securities.
Presently, municipal bonds yield more than 90% of the 30-year Treasury bond,
indicating how attractive we believe the tax-exempt sector has become.
Currently, the average maturity of the portfolios in the Fund is 18.25
years. Given the recent decline in tax-free yields, call protection (assurance
by the issuer that a bond will not be redeemed before a specific date) is being
emphasized by institutional investors. As such, our strategy in fiscal 1995
focused on high-quality, longer term issues with good call protection. The high
quality of these securities should enhance portfolio value as credit quality and
liquidity concerns remain in the marketplace.
We continue to manage the portfolios' risk from a total return
perspective and believe that investors will benefit from our well diversified
high-quality portfolios. Going forward, we foresee more stable interest rates,
modest economic growth, low inflation and relatively attractive valuations for
municipal securities. The combination of these factors should bode well for
municipal bond investors. As always, we welcome any questions or comments you
may have regarding your Fund.
<PAGE>
================================================================================
FUND FACTS
- --------------------------------------------------------------------------------
LORD ABBETT'S FOCUS ON QUALITY
-------------------------------------------------------------------
ALL SERIES MANAGED BY LORD ABBETT EMPHASIZE HIGH QUALITY, CALL PROTECTION AND
TOTAL RETURN POTENTIAL. PORTFOLIO QUALITY SHOWN AS OF 9/30/95.
[PIE GRAPH HERE] [PIE GRAPH HERE] [PIE GRAPH HERE] [PIE GRAPH HERE]
National Series New York Series Texas Series New Jersey Series
AAA 64.5% AAA 72.2% AAA 45.9% AAA 66.8%
AA 22.5% AA 9.2% AA 30.1% AA 21.6%
A 5.6% A 13.3% A 21.9% A 7.7%
BBB(1) 7.4% BBB 5.3% BBB(1) 2.1% BBB(1) 3.9%
LORD ABBETT'S TAX-FREE RECORD AND SEC-REQUIRED INFORMATION
AS OF 9/30/95
------------------------------------------------------------------
<TABLE>
<CAPTION>
National New York Texas New Jersey
Series Series Series Series
<S> <C> <C> <C> <C>
Date of Inception 4/2/84 4/2/84 1/20/87 1/2/91
--------
Distribution Rate at Net Asset Value 5.45% 5.42% 5.49% 5.60%
--------
Average Annual Rate of Total Return(2) at Net Asset Value:
1 Year 9.48% 9.12% 11.14% 9.98%
--------
10 Years or Life of Series 9.40% 8.97% 8.05%(3) 8.62%(3)
(per yr.) (per yr.) (per yr.) (per yr.)
--------
30-Day SEC Yield 5.04% 4.72% 4.76% 4.78%
--------
Average Annual Rate of Total Return at the Maximum Offering Price:
1 Year 4.70% 3.90% 5.80% 4.60%
--------
5 Years 7.19% 6.99% 7.77% --
(per yr.) (per yr.) (per yr.) (per yr.)
--------
10 Years or Life of Series 8.86% 8.45% 7.44%(3) 7.51%(3)
(per yr.) (per yr.) (per yr.) (per yr.)
</TABLE>
- --------------------------------------------------------------------------------
(1) Includes holdings which are not rated by independent ratings services but
are, in Lord Abbett's opinion, of comparable quality.
(2) Total return is the percent change in value with dividends and capital gains
reinvested. In the event a portfolio invests in private activity bonds, the
interest income derived therefrom may increase the alternative minimum tax
liability only for shareholders subject to that tax. In the event a
portfolio does not invest entirely in municipal bonds, federal, state and/or
local taxes (as applicable) may be applicable to interest income of such
Series.
(3) Since inception.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[PIE GRAPH HERE] [PIE GRAPH HERE] [PIE GRAPH HERE] [PIE GRAPH HERE] [PIE GRAPH HERE]
<S> <C> <C> <C> <C>
Connecticut Series Missouri Series Hawaii Series Washington Series Minnesota Series
AAA 64.6% AAA 68.3% AAA 82.1% AAA 81.0% AAA 62.4%
AA 16.1% AA 16.8% AA 7.5% AA 10.9% AA 19.9%
A 16.8% A 8.1% A 10.4% A 8.1% A 17.7%
BBB 2.5% BBB(1) 6.8%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Connecticut Missouri Hawaii Washington Minnesota
Series Series Series Series Series
<S> <C> <C> <C> <C>
4/1/91 5/31/91 10/28/91 4/15/92 12/27/94
---------
5.69% 5.43% 5.62% 5.87% 5.99%
---------
10.52% 10.21% 10.30% 10.48% --
---------
8.10%(3) 8.02%(3) 7.25% 7.39%(3) 10.22%(3)
(per yr.) (per yr.) (per yr.) (per yr.) (9 mos.)
---------
5.15% 4.83% 4.80% 5.07% 4.72%
---------
5.30% 5.00% 5.00% 5.10% --
---------
-- -- -- -- --
6.95%(3) 6.82%(3) 5.93%(3) 5.86%(3) 4.90%(3)
---------
(per yr.) (per yr.) (per yr.) (per yr.) (per yr.)
</TABLE>
The results quoted herein represent past performance which is no indication of
future results. The investment return and principal value of an investment in
the Series will fluctuate so that shares, on any given day or when redeemed, may
be worth more or less than their original cost.
The respective SEC-required uniformly computed average annual rates of total
return are at the maximum sales charge of 4.75%.
See Important Information on page 1.
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
IMPORTANT INFORMATION
- --------------------------------------------------------------------------------
As of 9/30/95, no Series of the Fund had more than 7% of its net assets invested
in residual interest bonds ("RIBs"), although each portfolio may invest up to
20% of its net assets in such securities. A RIB, sometimes referred to as an
inverse floater, is a debt instrument with a floating or variable interest rate
that moves in the opposite direction of the interest rate on another security or
the value of an index. Changes in the interest rate on the other security or
index inversely affect the residual interest paid on the RIB, with the result
that when interest rates rise, RIBs give lower interest payments and their
values fall faster than other similar fixed-rate bonds. But when interest rates
fall, not only do RIBs give higher interest payments, their values also rise
faster than other similar fixed-rate bonds. The market for RIBs is relatively
new.
If used as sales material after 12/31/95, this report must be accompanied by
Lord Abbett's Performance Quarterly for the most recently completed calendar
quarter.
See prospectus for a discussion of fees waived and expenses assumed by Lord,
Abbett & Co.
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
NATIONAL SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C>
Prerefunded Austin TX Wtr Sewer & Elec Ref Rev 14 1/4% 11/15/2006 AAA $4,810M $5,567,575
22.05% Battery Pk City NY Auth Rev 7.70% 5/1/2015 AAA 3,290M 3,713,587
Bexar Co TX Health Facs 9 1/2% 11/1/2015 AAA 2,030M 2,078,213
Brainerd MN Health Care Facs/Benedictine Health/St Joseph Prjt
8 3/8% 2/15/2020 AAA 2,250M 2,629,687
Bristol TN Health & Ed FGIC+ 7% 9/1/2021 AAA 1,390M 1,574,175
Clark Co NV Arpt Imp Rev McCarran Intl Arpt Ser C 13 1/4% 7/1/2002 AAA 415M 476,731
Clermont Co OH Hosp Facs Ser A AMBAC+ 7 1/2% 9/1/2019 AAA 285M 328,106
Clermont Co OH Hosp Facs Ser A AMBAC+ 7 1/2% 9/1/2019 AAA 965M 1,089,243
Duluth MN Economic Dev Auth Health Care Facs Rev/Benedictine
8 3/8% 2/15/2020 AAA 1,000M 1,168,750
Franklin Co OH Hosp Rev 7.60% 5/15/2020 AAA 5,300M 6,075,125
Fulton Co GA Hosp Auth Rev Ser B MBIA+ 6.60% 10/1/2011 AAA 3,000M 3,390,000
Greene Co PA Gen Facs Auth Ser A 7% 7/1/2011 AAA 5,825M 6,611,375
Illinois St 11% 11/1/2004 AAA 1,600M 1,732,000
Illinois St 11% 11/1/2005 AAA 2,000M 2,165,000
Indiana Univ Bldg Auth Ser N 10 1/8% 7/1/2010 AAA 710M 903,475
Intermountain Pwr Agy UT Pwr Supply Rev 1986 Ser B 7 7/8% 7/1/2014 AAA 1,750M 1,833,125
Intermountain UT Pwr Auth Ser A 7 3/4% 7/1/2020 AAA 225M 248,905
King Co WA Sch Dist Ser A 6 3/4% 12/1/2008 AAA 1,150M 1,265,000
Los Angeles CA Harbor Rev 7.60% 10/1/2018 AAA 5,000M 5,487,500
Los Angeles Co CA Flood 7 7/8% 7/15/2017 AAA 3,000M 3,251,250
Metropolitan Govt Nashville & Davidson Co TN Wtr & Sewer
10 5/8% 12/1/2007 AAA 2,365M 2,675,406
Minneapolis & St Paul MN Hsg & Redev Auth Health Care Sys Ser C
8% 8/15/2019 AAA 2,000M 2,337,500
Missouri St Convention Ser A 6.90% 8/15/2021 AAA 3,000M 3,420,000
Montgomery Co PA Higher Ed & Health/Bryn Mawr 7 3/8% 12/1/2019 AAA 500M 565,000
New Jersey Health Care Facs Fin Auth Rev/St Peters Med Ctr Ser C
MBIA+ 8.60% 7/1/2017 AAA 2,100M 2,294,250
New York St Med Care FHA+ 8 7/8% 1/15/2026 AAA 2,650M 2,739,438
Ohio St Higher Ed Fac Ser A 7.70% 10/1/2018 AAA 2,650M 2,881,875
Oregon St 12.40% 9/1/2000 AAA 2,000M 2,190,000
Pennsylvania Tnpk Auth Ser A 7 7/8% 12/1/2015 AAA 5,865M 6,238,893
</TABLE>
1
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
NATIONAL SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Piedmont Muni Pwr Agy SC Elec Rev Ref AMBAC+ 9 1/4% AAA $15,000M $15,637,500
1/1/2019
Puerto Rico Commonwealth 8% 7/1/2007 AAA 500M 558,125
Puerto Rico Commonwealth 8% 7/1/2007 AAA 375M 412,030
Puerto Rico Commonwealth Hwy 6 5/8% 7/1/2018 AAA 372M 420,224
Puerto Rico Elec Pwr Auth Ser P 7% 7/1/2011 AAA 1,000M 1,141,250
Puerto Rico Ind Med & Environmental/Catholic Univ AAA 2,000M 2,252,500
9 3/8% 12/1/2007
Salt Lake City UT Arpt FGIC+ AMT+++ 7 7/8% 12/1/2018 AAA 1,500M 1,635,000
Salt Lake City UT Hosp Rev Ref/IHC Hosp Inc Ser A AAA 3,000M 3,348,750
7.60% 2/15/2020
Texas Muni Pwr Agy Rev 14 5/8% 9/1/2012 AAA 12,615M 14,412,637
Texas St 7 1/8% 4/1/2020 AAA 4,700M 5,275,750
Uintah Co UT Poll Ctrl Rev 84-F-2 10 1/2% 6/15/2014 AAA 1,000M 1,290,000
Washington St Pub Pwr Supply Prjt No 1 10 1/4% 7/1/2015 AAA 500M 532,500
Washington St Pub Pwr Supply Prjt No 3 7 1/4% 7/1/2015 AAA 9,760M 10,943,400
Washington St Pub Pwr Supply Prjt No 3 7 1/2% 7/1/2018 AAA 6,000M 6,855,000
Washington St Pub Pwr Supply Sys Nuclear Prjt No 2 Rev
Ser A 7 1/2% 7/1/2004 AAA 1,600M 1,828,000
-----------
Total 143,473,850
===========
General Obligation State Florida St Bd Pub Ed Ser B 6.70% 6/1/2022 AA 4,000M 4,240,000
2.69% Michigan St 5.40% 11/1/2019 AA 9,905M 9,422,130
Texas St Ser A AMT+++ 6.30% 6/1/2014 AA 1,500M 1,531,875
Texas St Wtr Dev Bd 7.15% 8/1/2035 AA 1,415M 1,583,030
Washington St Ser D 6% 9/1/2020 AA 750M 752,812
-----------
Total 17,529,847
===========
General Obligation Local Anne Arundel Co MD 6.30% 8/1/2023 AA 505M 527,094
3.22% Chatman Co GA Sch Dist MBIA+ 6 3/4% 8/1/2020 AAA 860M 930,950
Conroe TX Indpt Sch Dist 6 1/8% 8/15/2021 Aaa 2,000M 2,032,500
Decatur TX Indpt Sch Dist 6 1/8% 8/1/2025 Aaa 2,325M 2,348,250
Essex Co NJ Ser A AMBAC+ 5 1/2% 9/1/2015 AAA 1,000M 957,500
Harris Co TX 6 3/4% 8/1/2014 AA 1,000M 1,076,250
Harris Co TX Ser A 6 1/8% 8/15/2020 AA 5,000M 5,106,250
King Co WA Sewer 6 1/4% 1/1/2035 AA 3,000M 3,041,250
Nassau Co NY MBIA+ 6 3/8% 5/15/2014 AAA 250M 260,625
Phoenix AZ Ref Ser A 6 1/4% 7/1/2017 AA 1,400M 1,491,000
University City MO Sch Dist MBIA+ 10% 2/15/2008 AAA 2,250M 3,158,438
-----------
Total 20,930,107
===========
Education 8.23% Alabama Agric & Mechanical Univ Rev MBIA+ 6 1/2% AAA 2,315M 2,430,750
11/1/2025
Arkansas St Student Loan Auth Rev Ser B AMT+++ 7 1/4% A 3,500M 3,845,625
6/1/2009
Connecticut St Higher Ed Ser A AMT+++ 7 3/8% 11/15/2005 A 100M 105,500
District of Columbia Rev Ser A MBIA+ 7.40% 4/1/2018 AAA 2,815M 3,096,500
District of Columbia Rev Ser B MBIA+ 7.15% 4/1/2021 AAA 1,000M 1,078,750
Glendale AZ Ind Dev Auth Ed Facs Rev CNLA+ 7 1/8% AAA 1,000M 1,110,000
7/1/2020
Indiana St Ed Facs Auth Rev 6.65% 3/1/2019 Aaa 11,600M 12,600,500
Indiana Univ 6.80% 8/1/2004 AA 3,100M 3,441,000
Marietta GA Dev Auth Rev Ser B CGIC+ 6 1/4% 9/1/2025 AAA 1,500M 1,545,000
Massachusetts St Health & Ed Facs Auth Rev/Harvard
Univ Ser P 5 3/8% 11/1/2032 AAA 9,500M 9,013,125
Ohio St Higher Ed Fac Commn Rev 7.70% 10/1/2018 Aa 100M 107,750
Pennsylvania St Higher Ed LINK AMBAC+ AMT+++ 6.172% AAA 6,000M 6,000,000
3/1/2022
</TABLE>
2
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
NATIONAL SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Rhode Island St Health & Ed Bldg Corp 6% 9/1/2025 Aa $ 6,515M $ 6,620,869
Texas St Higher Ed Coord AMT+++ 7.70% 10/1/2025 A 770M 818,125
University Medicine & Dentistry NJ Ser E 5 3/4% AA 250M 244,688
12/1/2021
University NM Tech Dev Corp Lease Rev/Univ Ctr Res Pk
Prjt Ser A
MBIA+ 6.55% 8/15/2025 AAA 1,410M 1,478,738
-----------
Total 53,536,920
===========
Finance Cumberland Co NC Ctf Partn Civic Ctr AMBAC+ 6.40% AAA 2,800M 2,943,500
3.44% 12/1/2019
Indiana Bd Bk Rev Guarantee/St Revolving Fd PG Ser A A 500M 537,500
6 3/4% 2/1/2017
Indianapolis IN Loc Pub Imp Ser D 6 1/2% 2/1/2022 A 1,350M 1,368,562
Iowa Fin Auth Rev 6 1/4% 5/1/2024 A 1,500M 1,575,000
Municipal Assistance Corp NY 67 Ser 7.60% 7/1/2004 Aa 6,000M 6,757,500
Municipal Assistance Corp NY 7 5/8% 7/1/2008 Aa 4,460M 5,017,500
Palm Bay FL Lease Rev Ser A 6.85% 9/1/2013 Baa 750M 765,938
Weber Co UT Muni Bldg Auth Lease Rev 7 1/2% 12/15/2019 AA 3,000M 3,423,750
-----------
Total 22,389,250
===========
Health and Hospital Augusta Co VA Ind Dev Auth Hosp Rev AMBAC+ 6 5/8% AAA 925M 972,406
10.47% 9/1/2012
Colorado Health Fac Auth Ser A 7 1/2% 10/1/2020 BBB 2,845M 3,157,950
Galax VA Ind Dev Auth Hosp Fac Rev 5 3/4% 9/1/2020 AA 1,750M 1,693,125
Jackson TN Hosp Rev Ref & Imp AMBAC+ 5 5/8% 4/1/2015 AAA 3,500M 3,377,500
Louisiana Pub Facs Auth Hosp Rev LINK FSA+ 5.391% AAA 6,000M 5,482,500
7/22/2024
Massachusetts St Health & Ed Facs Auth Rev LINK MBIA+ AAA 8,000M 7,460,000
5.38% 7/1/2018
Massachusetts St Health & Ed Facs Auth Rev Brigham &
Womens Ser D MBIA+ 6 3/4% 7/1/2024 AAA 3,450M 3,674,250
Minneapolis & St Paul MN Hsg & Redev Auth Health Care
Sys 6.90% 12/1/2022 A 700M 742,875
Montgomery AL Med Clinic 7% 3/1/2015 A 1,750M 1,830,937
New Jersey Health Care Facs Ser C MBIA+ 6 5/8% 7/1/2010 AAA 250M 263,750
New Jersey Health Care Facs Fin Auth Rev/St Peters Med
Ctr MBIA+ 8.60% 7/1/2017 AAA 400M 434,500
New York St Med Care Facs Fin Agy Rev Ser A 8 7/8% BBB 2,905M 3,173,712
8/15/2007
New York St Med Care Facs Fin Agy Rev Mental Hlth Ser C
FGIC+ 5 1/4% 8/15/2014 AAA 4,000M 3,715,000
North Carolina Med Care Comm Ser A FSA+ 63/8% 8/15/2020 AAA 750M 774,375
Peninsula Ports Auth VA Healthcare Facs Rev 67/8% BBB 500M 518,125
8/1/2010
Peninsula Ports Auth VA Healthcare Facs Rev 7% 8/1/2017 BBB 1,000M 1,041,250
Pitt Co NC Rev Pitt Co Mem Hosp 51/4% 12/1/2021 Aa 2,500M 2,275,000
Rochester MN Health Care Reg Fixed ARS LINK 6.026% AA 19,800M 19,824,750
11/15/2015
Salt Lake City UT Hosp Rev 6.30% 2/15/2015 AA 2,500M 2,603,125
St Paul MN Hsg & Redev Auth Hosp Rev Ser B 9 5/8% Baa 1,000M 1,082,500
11/1/2008
West Virginia St Hosp Fin Auth Hosp Rev Linked Bears &
Bulls MBIA+ 6.10% 1/1/2018 AAA 4,000M 4,030,000
-----------
Total 68,127,630
===========
Housing Alaska St Hsg Fin Corp Ser B-2 GNMA+ 7 7/8% 6/1/2024 AAA 325M 342,063
7.42% Colorado Hsg & Fin Auth Ser A AMT+++ 6.65% 10/1/2028 AA 2,620M 2,678,950
Colorado Hsg & Fin Auth Ser A AMT+++ 6.80% 10/1/2037 AA 2,515M 2,571,588
Colorado Hsg & Fin Auth Ser C FHA+ 8 3/4% 9/1/2017 AA 185M 192,863
Connecticut St Hsg Fin Auth Ser A Sub Ser A-2
FHA+ AMT+++ 7.20% 11/15/2008 AA 890M 948,963
De Kalb Co GA Hsg Auth FSA+ AMT+++ 7.15% 1/1/2025 AAA 1,730M 1,816,500
Fulton Co GA Hsg Auth Sing Fam Rev Ser A
GNMA+ AMT+++ 6.20% 3/1/2013 AAA 1,000M 1,006,250
Georgia St Hsg & Fin Auth Rev Sub Ser A-2 AMT+++ 6.40% AA 3,295M 3,352,663
12/1/2015
</TABLE>
3
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
NATIONAL SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Georgia St Hsg & Fin Auth Rev Sing Fam Mtge-B-Sub Ser
B-2 FHA+ AMT+++ 6.55% 12/1/2027 AA $ 2,000M $ 2,040,000
Idaho Hsg Agy Ser A AMT+++ 6.70% 7/1/2027 AAA 3,000M 3,060,000
Idaho Hsg Agy Ser F AMT+++ 7.45% 7/1/2015 Aaa 1,250M 1,326,563
Illinois Hsg Dev Auth FHA+ AMT+++ 7.10% 12/1/2034 AAA 1,500M 1,560,000
Illinois Hsg Dev Auth Multi Fam Hsg/Lawndale
FHA+ AMT+++ 6.80% 12/1/2016 AAA 1,000M 1,038,750
Indiana St Hsg Fin Auth Ser D GNMA+ 7.80% 1/1/2022 Aaa 1,000M 1,036,250
Indiana St Hsg Fin Auth Sing Fam Mtge Ser A 10.20%
1/1/2016 Aaa 245M 251,431
Jefferson Co KY Multi Fam Rev 8 1/4% 5/1/2010 BBB** 400M 398,500
Jefferson Co KY Multi Fam Rev 6 3/4% 5/1/2025 A 460M 459,425
Kentucky Hsg Corp Hsg Rev Ser D-1 FHA+ AMT+++ 6.80%
1/1/2024 AAA 1,500M 1,556,250
King Co WA Hsg Auth Woodridge Park Prjt AMT+++ 6.35%
5/1/2025 AA 2,000M 2,000,000
Maryland Sing Fam Mtge 2nd Ser FHA/VA+ AMT+++ 7.85%
4/1/2029 Aa 1,495M 1,586,569
Maryland St Co Dev Admin Dept Hsg & Co Dev
FHA+ AMT+++ 6.70% 5/15/2036 Aa 2,500M 2,543,750
Maryland St Comm Dev Admin Sing Fam 7th Ser AMT+++
7.30% 4/1/2025 Aa 500M 531,875
Massachusetts Hsg Fin Auth 7th Ser AMT+++ 8.10%
6/1/2020 Aa 1,345M 1,407,206
Massachusetts St Hsg Fin Agy Hsg Ser 29 AMT+++ 6 3/4%
6/1/2026 Aa 1,425M 1,457,063
Massachusetts St Hsg Fin Agy Hsg Rev Rental-Mtge Ser A
AMBAC/FHA+ AMT+++ 7.35% 1/1/2035 AAA 1,480M 1,596,550
Missouri St Hsg Dev Comm Ser A GNMA+ AMT+++ 7 3/8%
8/1/2023 AAA 645M 681,281
New Jersey Hsg & Mtg Fin Agy Ser B MBIA+ AMT+++ 7.90%
10/1/2022 AAA 805M 848,269
North Carolina Hsg Fin Agy Amt-Sing Fam Rev-Ser BB
6 1/4% 3/1/2012 Aa 1,500M 1,539,375
Ohio Hsg Fin Auth Ser C GNMA+ AMT+++ 7.85% 9/1/2021 AAA 645M 685,313
Radcliff KY Hsg Auth 8 1/4% 5/1/2010 BBB** 330M 328,763
Radcliff KY Hsg Auth 6 3/4% 5/1/2025 A 100M 99,875
Seattle WA Hsg Auth Low Income Hsg Assistance Rev
GNMA+ 7.40% 11/20/2036 AAA 4,000M 4,270,000
Tennessee Hsg Dev Agy Mtge Ser A AMT+++ 7 1/8% 7/1/2026 A 500M 526,875
Texas Hsg Fin Agy Sing Fam Ser B 9 3/8% 9/1/2015 Aa 50M 51,063
Utah St Hsg Fin Agy Sing Fam Ser A-2 FHA+ AMT+++ 7 3/4%
1/1/2023 AA 500M 520,625
Vermont Hsg Fin Auth Ser B FHA/VA+ AMT+++ 8.10%
6/1/2022 A 1,890M 1,984,500
----------
Total 48,295,961
==========
Industrial Revenue Bonds Butler AL Ind Bd Solid Waste Disp Rev/James River Corp
7.13% AMT+++ 8% 9/1/2028 BBB 1,500M 1,670,625
Cartersville GA Dev Auth Rev AMT+++ 6 3/4% 2/1/2012 AA 1,800M 1,930,500
Connecticut St Dev Auth Solid Waste Disp Facs Rev
AMT+++ 7% 7/1/2025 AAA 2,000M 2,197,500
Courtland AL Ind Dev Bd Solid Waste Disp Rev/Champion
Int 61/2% 9/1/2025 Baa 1,000M 993,750
Delaware Economic Dev Auth Ser A MBIA+ AMT+++ 7.60%
3/1/2020 AAA 2,600M 2,843,750
Henderson Co KY Solid Waste Disp Rev/Macmillan Bloedel
Prjt 7% 3/1/2025 Baa 5,000M 5,156,250
Henrico Co VA Ind Dev Auth Rev 7 1/8% 8/1/2021 AA 1,000M 1,137,500
Maryland St Ind Dev Fin Auth Economic Dev Rev
LINK FSA+ 5.929% 8/26/2022 AAA 10,100M 10,137,875
Mississippi Business Fin Corp MS Port Gulfport Rev Ser
B AMT+++ 7.15% 5/1/2016 AA 1,000M 1,088,750
New York St Energy/Bklyn Union Gas 9% 5/15/2015 A 1,000M 1,025,000
Ohio St Wtr Dev Auth Solid Waste Disp Rev/North Star
BHP 6.30% 9/1/2020 AA 1,000M 1,001,250
Pennsylvania Economic Dev Fin Auth Exempt Facs
Rev/Macmillan AMT+++ 7.60% 12/1/2020 Baa 3,750M 4,087,500
</TABLE>
4
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
NATIONAL SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Puerto Rico Ind Med & Environmental Ctrl/Upjohn 7 1/2%
12/1/2023 AA $ 7,000M $ 7,665,000
Texas City TX Ind Dev Corp Marine Term Rev 7 3/8%
10/1/2020 A 4,500M 5,461,875
-----------
Total 46,397,125
===========
Miscellaneous 2.79% Atlanta GA Downtown Dev Auth Ref/Underground Atlanta
Prjt 6 1/4% 10/1/2016 AA 2,400M 2,484,000
Cobb-Marietta GA Coliseum & Exhibit Hall Auth Rev
MBIA+ 5 5/8% 10/1/2023 AAA 1,400M 1,363,250
New Jersey Economic Dev Auth Rev MBIA+ 5 1/4% 7/1/2020 AAA 1,000M 920,000
Northwood Comm Dev Dist FL Spcl Assmt Rev 7 1/8%
5/1/2000 BBB** 1,000M 991,250
St Louis Co MO Ind Dev Rev Arena Prjt AMT+++ 7 7/8%
12/1/2024 BBB** 3,500M 3,683,750
St Louis MO Land Clearance Rev 7 3/4% 7/1/2021 BBB** 7,275M 7,638,750
Tampa FL Sports Auth Rev MBIA+ 6.10% 10/1/2026 AAA 1,000M 1,041,250
-----------
Total 18,122,250
===========
Pollution Control Revenue Beaver Co PA Ind Dev Auth Poll Ctrl Rev AMBAC+ 5.45%
3.61% 9/15/2033 AAA 1,500M 1,385,625
Brazos River Auth TX Poll Ctrl Rev Coll/TX Util Elec
Co Prjt 7 7/8% 3/1/2021 BBB 5,000M 5,593,750
Burke Co GA Dev Auth Poll Ctrl Rev MBIA+ 6.60% 7/1/2024 AAA 450M 465,750
Indianapolis IN Resource Recovery Rev Ref/Ogden Martin
Sys AMBAC+ 6% 12/1/1997 AAA 2,000M 2,035,000
Missouri St Environmental Imp & Energy Wtr Poll Ctrl
Rev Ser B 7.20% 7/1/2016 Aa 3,250M 3,700,938
Monroe Co MI Poll Ctrl Rev AMBAC+ AMT+++ 7.30% 9/1/2019 AAA 4,230M 4,626,563
Ohio St Air Quality Dev Auth Rev FGIC+ 8% 12/1/2013 AAA 4,000M 4,760,000
Salem Co NJ Ind Poll Ctrl Fin Auth Rev MBIA+ 5.55%
11/1/2033 AAA 1,000M 937,500
-----------
Total 23,505,126
===========
Power 8.50% Colorado Springs CO Util Ser A 6 1/8% 11/15/2020 AA 3,400M 3,434,000
Effingham Co GA Dev Auth MBIA+ 6 3/4% 2/1/2022 AAA 2,350M 2,444,000
Hamilton City OH Elec Ser B FGIC+ 6.30% 10/15/2025 AAA 5,500M 5,658,125
Hawaii Elec Dept of Bdg & Fin AMT+++ 7 5/8% 12/1/2018 Baa 2,000M 2,162,500
Hawaii St Dept Bdg & Fin Spcl Purp Mtge Rev Reg Linked
Sav LINK 5.538% 12/15/2023 AAA 4,000M 3,720,000
Intermountain Pwr Agy UT Pwr Supply Rev MBIA+ 6 1/2%
7/1/2010 AAA 8,000M 8,800,000
Lakeland FL Elec & Wtr Rev FGIC+ 6% 10/1/2014 AAA 2,000M 1,990,000
Maryland St Energy Fin Admin Ltd Oblig Rev Cogeneration
AMT+++ 7.40% 9/1/2019 BBB** 1,500M 1,545,000
Nebraska Pub Gas Agy Gas Supply Sys Rev 5.65% 4/1/2006 Baa 1,000M 998,750
New York St Energy Res & Dev LINK 6.367% 4/1/2020 A 1,500M 1,537,500
New York St Energy Res & Dev/Con Edison AMT+++ 9 1/4%
9/15/2022 A 1,000M 1,095,000
Piedmont Muni Pwr Agy SC Elec Rev Ref FGIC+ 6 3/4%
1/1/2019 AAA 1,000M 1,112,500
Puerto Rico Elec Pwr Auth 5 1/2% 7/1/2016 A 1,000M 936,250
Puerto Rico Elec Pwr Auth Ser O 7 1/8% 7/1/2014 A 1,335M 1,455,150
Rock Hill SC Util Sys Rev FGIC+ 7 7/8% 1/1/2009 AAA 1,000M 1,077,500
Tacoma WA Elec Sys Rev LINK AMBAC+ 6.513% 1/2/2015 AAA 9,800M 10,130,750
Western Generation Agy OR Cogeneration Prjt Rev Ser B
AMT+++ 7.40% 1/1/2016 BBB** 1,500M 1,569,375
Wisconsin Pub Pwr Inc Sys Pwr Supply Sys Rev
LINK AMBAC+ 5.44% 7/1/2014 AAA 6,000M 5,662,500
-----------
Total 55,328,900
===========
Solid Waste 2.37% Broward Co FL Wtr & Sewer 7.95% 12/1/2008 A 67M 74,453
Cobb Co GA Solid Waste Mgmt Auth AMT+++ 6.40% 1/1/2015 Aaa 900M 945,000
Palm Beach Co FL Solid Waste 83/4% 7/1/2010 A 5,845M 6,385,662
</TABLE>
5
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
NATIONAL SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Regional Waste Sys ME Ser A-C 7.95% 7/1/2010 AA $ 3,900M $ 4,294,875
Upshur Co WV Solid Waste 7% 7/15/2025 BBB** 1,500M 1,526,250
York PA Solid Waste Ser B 8.10% 12/1/2007 A 2,000M 2,200,000
------------
Total 15,426,240
============
Transportation 9.04% Albuquerque NM Arpt Rev Ref AMBAC+ 6.70% 7/1/2018 AAA 4,000M 4,040,000
Albuquerque NM Arpt Rev Ser A AMBAC+ AMT+++ 6.60%
7/1/2016 AAA 1,900M 2,006,875
Allegheny Co PA Arpt Ser C MBIA+ AMT+++ 8 1/4% 1/1/2016 AAA 3,450M 3,738,938
Capital Regional Arpt Comm VA Ser B AMBAC+ 8 1/8%
7/1/2014 AAA 14,000M 17,097,500
Hawaii St Arpt Sys Rev Second Ser MBIA+ 6.90% 7/1/2012 AAA 1,000M 1,107,500
Hillsborough Co FL Aviation FGIC+ 6.90% 10/1/2011 AAA 500M 539,375
Houston TX Arpt Sys Rev MBIA+ AMT+++ 8.20% 7/1/2017 AAA 1,500M 1,648,125
Kansas City MO Arpt Rev Ser B CGIC+ 6 7/8% 9/1/2014 AAA 2,400M 2,601,000
Kent Co MI Arpt Fac Rev AMT+++ 6.10% 1/1/2025 AAA 8,445M 8,466,113
Melbourne FL Arpt Rev Ref MBIA+ 6 1/4% 10/1/2018 AAA 1,270M 1,254,125
Metropolitan Atlanta Rapid Trans Auth GA Sales Tax Rev
Ser P AMBAC+ 6 1/4% 7/1/2020 AAA 2,210M 2,353,650
Port Auth NY & NJ 70th Ser AMT+++ 7 1/4% 8/1/2025 AA 1,000M 1,071,250
Port Auth NY & NJ 93rd Ser 6 1/8% 6/1/2094 AA 12,750M 12,877,500
------------
Total 58,801,951
============
Water and Sewer 10.89% Beckley WV Sewer Sys Rev 6 7/8% 10/1/2025 BBB** 1,000M 1,008,750
Camden Co NJ Muni Util Auth FGIC+ 8 1/4% 12/1/2017 AAA 10,000M 10,937,500
Greensboro NC Enterprise Sys Rev Comb-Ser A 5 3/8%
6/1/2019 AA 1,900M 1,816,875
Kirkland WA Wtr & Sewer Rev 5 3/4% 6/1/2014 A 1,000M 1,008,750
Louisville & Jefferson Co KY Metro Sewer Dist Dr Rev
Ser B MBIA+ 5 1/2% 5/15/2023 AAA 3,975M 3,771,281
Maryland Wtr Quality Fin Admin Revolving LN FD Rev
Ref-Ser A 5 1/2% 9/1/2011 AA 2,605M 2,598,488
Metropolitan Govt Nashville Wtr & Sewer RIBS AMBAC+
8.013% 1/7/2022++ AAA 22,000M 22,330,000
Mississippi Gulf Coast Regl Wastewtr 7% 7/1/2012 AAA 1,000M 1,138,750
New York City Muni Wtr Fin Auth Wtr & Sewer Sys Rev
RIBS MBIA+ 6.58% 6/15/2013++ AAA 13,850M 12,378,438
New York City Muni Wtr Fin Auth Wtr & Sewer Sys Rev Reg
LINK MBIA+ 5.35% 6/15/2013 AAA 12,300M 11,685,000
Ohio Wtr Rev AMBAC+ 9 1/4% 12/1/2012 AAA 75M 77,813
Texas Wtr Resource Fin Auth 7 5/8% 8/15/2008 A 1,970M 2,130,063
------------
Total 70,881,708
============
Total Municipal Bonds 101.85% (Cost $650,071,876) 662,746,865
============
<CAPTION>
OTHER ASSETS, LESS LIABILITIES (1.85)%
<S> <C> <C> <C> <C>
Short-Term
Securities Texas St Tax & Rev Anticipation Notes Ser A 4 3/4%
8/30/1996 (Cost $75,543) MIG1 75M 75,557
============
Cash and Receivables,
Net of Liabilities (12,122,947)
------------
Total Other Assets, Less Liabilities (12,047,390)
============
Net Assets (equivalent to $11.00 a share on 59,167,629 shares of
100.00% $.001 par value capital
stock outstanding; authorized, 80,000,000 shares) $650,699,475
============
*Ratings have not been audited by Deloitte & Touche LLP.
**This security has not been rated by an independent
ratings service but is, in Lord Abbett's opinion, of
comparable quality.
+Insured or guaranteed by the indicated municipal bond
insurance corporation or Federal agency.
++The interest rate is subject to change periodically and
inversely to the prevailing market rate. The interest
rate shown is the rate in effect at September 30, 1995.
See page 1 for additional information.
+++Income from these securities may be subject to the
Alternative Minimum Tax.
See Notes to Financial Statements.
</TABLE>
6
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
NEW YORK SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Prerefunded 44.83% Albany Muni Wtr Fin Auth Ser A MBIA+ 7 1/2% 12/1/2017 AAA $ 1,445M $ 1,607,563
Battery Pk City NY Auth Rev 7.70% 5/1/2015 AAA 1,450M 1,636,688
New York City G.O. Ser A 8 3/4% 11/1/2014 AAA 5,000M 5,518,750
New York City Muni Wtr Fin 7 3/4% 6/15/2020 AAA 11,750M 13,791,563
New York City Muni Wtr Fin Ser A 9% 6/15/2017 AAA 5,000M 5,493,750
New York Housing Corp Rev Ser A 9% 11/1/2017 AAA 13,250M 14,757,188
New York St Dorm Auth Rev 7.70% 5/15/2012 AAA 12,850M 14,809,625
New York St Dorm Auth Rev Ser A 8 1/8% 7/1/2017 AAA 2,000M 2,172,500
New York St Dorm Auth Rev Ser A 7 5/8% 7/1/2020 AAA 1,150M 1,325,375
New York St Med Care Facs Fin Agy Rev Ser A 8 7/8%
8/15/2007 AAA 5,405M 5,965,769
New York St Med Care Facs Fin Agy Rev Ser A 7 1/2%
2/15/2021 AAA 2,150M 2,488,625
New York St Med Care Facs Fin Agy Rev Ser A FHA+ 8%
2/15/2025 AAA 9,005M 9,804,194
New York St Med Care Facs Fin Agy Rev Ser A FHA+ 8%
2/15/2028 AAA 2,240M 2,486,400
New York St Med Care Facs Fin Agy Rev Ser C 7.30%
2/15/2021 AAA 1,000M 1,158,750
New York St Med Care Facs Fin Agy Rev Ser C FHA+ 7.70%
2/15/2022 AAA 4,150M 4,627,250
New York St Pwr Auth 8% 1/1/2017 AAA 8,370M 9,186,075
Puerto Rico Commonwealth G.O. 7 3/4% 7/1/2006 AAA 4,500M 4,995,000
Puerto Rico Commonwealth G.O. 7.30% 7/1/2020 AAA 800M 913,000
Puerto Rico Commonwealth Aqu & Sewer Auth Rev 10 1/4%
7/1/2009 AAA 2,495M 3,449,338
Puerto Rico Commonwealth Hwy Ser O 8% 7/1/2005 AAA 550M 613,938
Puerto Rico Commonwealth Hwy Ser P 8 1/8% 7/1/2013 AAA 1,150M 1,286,563
Puerto Rico Commonwealth Hwy Ser Q 7 3/4% 7/1/2016 AAA 1,100M 1,276,000
Puerto Rico Elec Pwr Auth 9 1/4% 7/1/2006 AAA 2,050M 2,265,250
Puerto Rico Elec Pwr Auth 7% 7/1/2021 AAA 17,010M 19,348,875
Puerto Rico Elec Pwr Auth Ser L 8 3/8% 7/1/2007 AAA 2,500M 2,728,125
Puerto Rico Elec Pwr Auth Ser M 8% 7/1/2008 AAA 6,900M 7,702,125
Puerto Rico Ind Med & Environmental Catholic Univ 9 3/8%
12/1/2007 AAA 2,000M 2,252,500
Puerto Rico Pub Bldg Auth Ser H 7 7/8% 7/1/2016 AAA 2,250M 2,438,438
Triborough Brdg & Tunl Auth NY Ser O 7 1/2% 1/1/2011 AAA 2,300M 2,550,125
-----------
Total 148,649,342
===========
General Obligation State Puerto Rico Commonwealth RIBS FSA+ 7.683% 7/1/2020++ AAA 12,000M 12,015,000
3.62% -----------
General Obligation Local Bethlehem NY MBIA+ 7.20% 3/1/2022 AAA 1,080M 1,237,950
.37% -----------
Education 7.27% New York St Dorm Auth Rev/City Univ Ser C FGIC+ 7%
7/1/2014 AAA 4,425M 4,806,656
New York St Dorm Auth Rev/City Univ 2nd Ser MBIA+ 6 7/8%
7/1/2014 AAA 5,400M 5,906,250
New York St Dorm Auth Rev/Cornell Univ Ser A 73/8%
7/1/2020 AA 5,075M 5,728,406
New York St Dorm Auth Rev/St Univ Ed Fac Ser B 71/2%
5/15/2011 BBB 4,800M 5,526,000
New York St Dorm Auth Rev/Univ Rochester Ser A 6.40%
7/1/2013 A 2,030M 2,131,500
-----------
Total 24,098,812
===========
Finance 8.16% Municipal Assistance Corp NY 58th Ser 7 3/8% 7/1/2008 AA 850M 887,188
Municipal Assistance Corp NY 66th Ser 7 3/4% 7/1/2008 Aa 265M 299,450
Municipal Assistance Corp NY 67th Ser 7 5/8% 7/1/2008 Aa 2,515M 2,829,375
New York St Loc Govt Assistance Corp Ser A 6 7/8% 4/1/2019 A 7,050M 7,631,625
New York St Loc Govt Assistance Corp Ser A 6 1/2% 4/1/2020 A 9,750M 10,164,375
New York St Loc Govt Assistance Corp Ser C 6 1/2% 4/1/2015 A 5,075M 5,239,938
-----------
Total 27,051,951
===========
Health and Hospital 9.08% New York City Health & Hosp Corp LINK AMBAC+ 5.70%
2/15/2023 AAA 500M 484,375
New York City Health & Hosp Corp RIBS AMBAC+ 7.19%
2/15/2023++ AAA 6,000M 5,550,000
</TABLE>
7
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
NEW YORK SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
New York St Med Care Facs Fin/Beth Israel MBIA+ 71/2%
11/1/2010 AAA $ 1,250M $ 1,395,312
New York St Med Care Facs Fin/Mental Health Ser A 71/2%
2/15/2021 BBB 10,585M 11,815,505
New York St Med Care Facs Fin/North Shore Univ Hosp Ser A
MBIA+ 7.20% 11/1/2020 AAA 7,140M 7,854,000
New York St Med Care Facs Fin/St Francis Hosp Ser A
FGIC+ 7.60% 11/1/2008 AAA 1,000M 1,097,500
New York St Med Care Facs Fin/St Francis Hosp Ser A
FGIC+ 7 5/8% 11/1/2021 AAA 1,775M 1,928,093
------------
Total 30,124,785
============
Housing New York St Mtge Agy Rev FHA+ 9 3/4% 10/1/2010 Aa 15M 15,543
2.18% New York St Mtge Agy Rev 41-A MBIA+ 6.45% 10/1/2014 AAA 2,665M 2,734,955
New York St Mtge Agy Rev 44th Ser FHA+ AMT+++ 7 1/2%
4/1/2026 Aa 2,500M 2,709,375
Puerto Rico Hsg Fin Corp Mtge Rev GNMA+ 6.85% 10/15/2024 AAA 1,750M 1,752,187
------------
Total 7,212,060
============
Miscellaneous United Nations Dev Corp Ser A 6% 7/1/2026 A 4,200M 4,226,250
2.20% United Nations Dev Corp Ser B 6 1/4% 7/1/2026 A 3,000M 3,071,250
------------
Total 7,297,500
============
Pollution Control New York St Environmental Fac Poll Ctrl Rev St Wtr Ser A
7 1/2% 6/15/2012 Aa 7,000M 7,901,250
Revenue New York St Environmental Fac Poll Ctrl Rev St Wtr Ser E
3.98% 6 7/8% 6/15/2014 Aa 4,780M 5,299,825
------------
Total 13,201,075
============
Power New York St Energy Res & Dev Gas Facs Rev/Bklyn Union
12.96% Gas Ser II MBIA+ 7% 12/1/2020 AAA 2,500M 2,606,250
New York St Energy Res & Dev Poll Ctrl Rev/Niagara
Mohawk Ser A FGIC+ 7.20% 7/1/2029 AAA 11,600M 13,050,000
New York St Energy Res & Dev/Bklyn Union Gas 1st Ser
7 1/8% 12/1/2020 A 950M 992,750
New York St Energy Res & Dev/Bklyn Union Gas
MBIA+ AMT+++ 6 3/4% 2/1/2024 AAA 12,800M 13,488,000
New York St Energy Res & Dev/Bklyn Union Gas Ser B
RIBS AMT+++ 9.719% 7/1/2026++ A 4,000M 4,670,000
New York St Energy Res & Dev/Central Hudson Gas & Elec
MBIA+ AMT+++ 8 3/8% 12/1/2028 AAA 1,965M 2,215,538
New York St Energy Res & Dev/Con Edison Ser A AMT+++
7 1/2% 7/1/2025 A 1,700M 1,842,375
New York St Energy Res & Dev/Con Edison Ser A
MBIA+ AMT+++ 71/8% 12/1/2029 AAA 2,350M 2,570,313
New York St Energy Res & Dev/Con Edison Ser B AMT+++
7 3/8% 7/1/2024 A 1,465M 1,558,394
------------
Total 42,993,620
============
Solid Waste .73% Dutchess Co Resource Recovery Ser A FGIC+ 7 1/2% 1/1/2009 AAA 2,200M 2,420,000
============
Transportation Metropolitan Trans Auth NY Ser L AMBAC+ 7 1/2% 7/1/2017 AAA 2,310M 2,503,462
2.07% Triborough Brdg & Tunl Auth Ser L 8 1/8% 1/1/2012 Aa 4,000M 4,355,000
------------
Total 6,858,462
============
Water and Sewer New York City Muni Wtr Fin Auth Wtr & Sewer Sys Rev Ser A
1.10% FGIC+ 6% 6/15/2019 AAA 1,750M 1,756,562
Puerto Rico Commonwealth Aqu & Sewer Ser A 7 7/8% 7/1/2017 A 1,700M 1,887,000
------------
Total 3,643,562
============
Total Municipal Bonds 98.55% (Cost $311,898,168) 326,804,119
============
<CAPTION>
OTHER ASSETS, LESS LIABILITIES 1.45%
<S> <C> <C>
Cash and Receivables,
Net of Liabilities 4,813,530
============
Net Assets (equivalent to $10.85 a share on 30,576,552 shares of $.001
100.00% par value capital stock outstanding; authorized, 80,000,000
shares) $331,617,649
============
* Ratings have not been audited by Deloitte & Touche LLP.
+ Insured or guaranteed by the indicated municipal bond insurance corporation
or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
September 30, 1995. See page 1 for additional information.
+++ Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
</TABLE>
8
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
TEXAS SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Prerefunded Bexar Co TX Health Facs 6.70% 6/15/2009 AAA $ 1,000M $ 1,113,750
22.88% Board of Regents TX A&M Univ 7.80% 8/15/2009 AAA 900M 982,125
Colorado River TX Muni Wtr Ser A AMBAC+ 6 5/8%
1/1/2021 AAA 1,000M 1,093,750
Conroe TX Indpt Sch Dist 6.60% 8/15/2018 AAA 1,500M 1,704,375
Dallas Co TX Util & Reclamation Dist MBIA+ 8.30%
2/15/2016 AAA 700M 763,000
Harris Co TX Health Facs Dev Corp Rev/Hermann
Trust 9% 10/1/2017 AAA 2,500M 2,771,875
Harris Co TX Ser A 7.70% 5/1/2003 AAA 415M 459,094
Harris Co TX Detention MBIA+ 7.80% 12/15/2011 AAA 1,110M 1,241,813
Houston TX Wtr & Sewer Sys Rev Prior Lien MBIA+
7.40% 12/1/2018 AAA 1,000M 1,147,500
Lower CO River Auth TX MBIA+ 7 5/8% 1/1/2016 AAA 925M 1,008,250
North Central TX Health MBIA+ 7 7/8% 7/1/2018 AAA 750M 810,000
Puerto Rico Commonwealth 7.30% 7/1/2020 AAA 500M 570,625
Puerto Rico Pub Bldg Auth Ser G 7 7/8% 7/1/2007 AAA 650M 704,438
San Antonio TX Elec & Gas Rev Ser A 101/2%
2/1/2013 AAA 1,000M 1,153,750
Texas St G.O. Ser B 8.10% 6/1/2007 AAA 1,090M 1,192,188
Texas Muni Pwr Agy Rev 14 5/8% 9/1/2012 AAA 500M 571,250
Texas St 7 1/8% 4/1/2020 AAA 4,800M 5,388,000
Texas St Tnpk Auth Dallas Northwy Rev AMBAC+
7 1/8% 1/1/2015 AAA 250M 274,688
----------
Total 22,950,471
==========
General Obligation State Texas St Ser A AMT+++ 6.30% 6/1/2014 AA 2,000M 2,042,500
20.99% Texas St Ser B RIBS 6.82% 12/1/2023++ AA 6,000M 5,407,500
Texas St Ser B-1 & B-2 LINK 6.058% 9/30/2011 AA 11,000M 11,811,250
Texas St Wtr Dev Bd 7.15% 8/1/2035 AA 1,600M 1,790,000
----------
Total 21,051,250
==========
General Obligation Local Clear Creek TX Indpt Sch Dist Ser A 4 3/4%
14.10% 2/1/2015 AAA 1,500M 1,310,625
Decatur TX Indpt Sch Dist 6 1/8% 8/1/2025 Aaa 1,500M 1,515,000
Grapevine TX MBIA+ 5% 2/15/2016 AAA 1,340M 1,212,700
Harris Co TX Ser A 6 1/8% 8/15/2020 AA 5,975M 6,101,968
Leander TX Indpt Sch Dist 5 5/8% 8/15/2026 Aaa 1,500M 1,428,750
Tarrant Co TX Jr Coll Dist 4 5/8% 2/15/2015 AA 3,000M 2,568,750
----------
Total 14,137,793
==========
Education 1.01% Texas St Higher Ed Coord AMT+++ 7.70% 10/1/2025 A 955M 1,014,688
==========
Health and Hospital Amarillo TX Health Facs Corp LINK FSA+ 6.562%
9.28% 1/1/2022 AAA 8,100M 8,383,500
Bexar Co TX Health Facs MBIA+ 7 1/2% 8/15/2010 AAA 750M 827,813
North Central TX Health Facs 9 1/4% 11/1/2005 AA 95M 97,256
----------
Total 9,308,569
==========
Housing Dallas TX Hsg Corp Cap Prjt/Estell Vlg Apts Ser A
.67% 7 7/8% 12/1/2009 BBB** 530M 536,625
Texas Hsg Agy Ser D AMT+++ 8.40% 1/1/2021 Aa 125M 131,405
----------
Total 668,030
==========
Industrial Revenue Bonds Brazos River Auth TX MBIA+ 8.10% 5/1/2019 AAA 750M 816,563
15.29% Brazos River Auth TX Ser A 8 1/4% 5/1/2019 A 1,000M 1,090,000
Harris Co TX Ind Dev Corp Marine Term & Wtr
Poll Ctrl Rev 6 5/8% 2/1/2024 BBB 1,500M 1,546,875
Matagorda Co TX Nav Dist No 1 Poll Ctrl Rev
Ref-Cent Pwr FGIC+ 7.70% 2/1/2019 AAA 240M 258,900
Matagorda Co TX Nav Dist No 1 Poll Ctrl Rev
Ref-Cent Pwr MBIA+ 6.10% 7/1/2028 AAA 1,000M 1,002,500
Matagorda Co TX Nav Dist No 1 Poll Ctrl Rev
Ref-Cent Pwr Ser B 7.70% 2/1/2019 A 3,000M 3,198,750
</TABLE>
9
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
TEXAS SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Puerto Rico Ind Med & Environmental Ctrl/Baxter Lab
Ser A 8% 9/1/2012 A $2,315M $ 2,569,650
Texas City TX Ind Dev Corp Marine Term Rev 7 3/8%
10/1/2020 A 4,000M 4,855,000
------------
Total 15,338,238
============
Miscellaneous .90% Texas Correctional Facs MBIA+ 5% 3/15/2014 AAA 1,000M 901,250
============
Pollution Control
Revenue 4.22% Red River Auth TX Poll AMT+++ 6 7/8% 4/1/2017 A 4,000M 4,235,000
============
Power 4.34% Austin TX Util Sys Ser B 7.80% 11/15/2012 A 640M 699,200
Puerto Rico Elec Pwr Auth 5 1/2% 7/1/2016 A 1,000M 936,250
Texas Muni Pwr Agy Rev Ser A AMBAC+ 6 3/4% 9/1/2012 AAA 2,500M 2,715,625
------------
Total 4,351,075
============
Transportation 2.34% Austin TX Arpt Sys Rev Ser A MBIA+ AMT+++ 6 1/8% 1
1/15/2025 AAA 250M 248,125
Houston TX Arpt Sys Rev MBIA+ AMT+++ 8.20% 7/1/2017 AAA 1,500M 1,648,125
Puerto Rico Commonwealth Hwy 6 5/8% 7/1/2018 A 433M 454,775
------------
Total 2,351,025
============
Water and Sewer 3.13% Puerto Rico Commonwealth Aqu & Sewer Ser A 7 7/8%
7/1/2017 A 2,000M 2,220,000
Texas Wtr Resource Fin Auth 7 5/8% 8/15/2008 A 500M 540,625
Texas Wtr Resource Fin Auth AMBAC+ 7 1/2% 8/15/2013 AAA 350M 379,312
------------
Total 3,139,937
============
Total Municipal Bonds 99.15% (Cost $97,234,960) 99,447,326
============
<CAPTION>
OTHER ASSETS, LESS LIABILITIES .85%
<S> <C> <C> <C> <C>
Short-Term
Securities Texas St Tax & Rev Anticipation Notes Ser A
4 3/4% 8/30/1996 (Cost $503,679) MIG1 500M 503,710
============
Cash and Receivables,
Net of Liabilities 353,430
------------
Total Other Assets, Less Liabilities 857,140
============
Net Assets 100.00% (equivalent to $10.05 a share on 9,975,696 shares
of $.001 par value capital stock outstanding;
authorized, 40,000,000 shares) $100,304,466
============
* Ratings have not been audited by Deloitte & Touche LLP.
** This security has not been rated by an independent ratings
service but is, in Lord Abbett's opinion, of comparable
quality.
+ Insured or guaranteed by the indicated municipal bond
insurance corporation or Federal agency.
++ The interest rate is subject to change periodically and
inversely to the prevailing market rate. The interest rate
shown is the rate in effect at September 30, 1995. See page
1 for additional information.
+++ Income from these securities may be subject to the Alternative
Minimum Tax.
See Notes to Financial Statements.
</TABLE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
NEW JERSEY SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Prerefunded 19.71% Bergen Co NJ Util Auth FGIC+ 7 3/4% 3/15/2013 AAA $ 2,000M $ 2,162,500
Hudson Co NJ Ctf Correctional Fac MBIA+ 7.60% 12/1/2021 AAA 10,225M 11,388,094
Hudson Co NJ Util Auth Util Sys Rev 10% 7/1/2011 AAA 1,000M 1,302,500
Monmouth Co NJ MBIA+ 6 7/8% 8/1/2012 AAA 750M 840,000
Monmouth Co NJ Muni Util Imp Auth MBIA+ 6 3/4% 2/1/2013 AAA 500M 559,375
New Jersey Healthcare Facs Fin Auth Rev Ser B AMBAC+ 8%
7/1/2018 AAA 460M 511,750
New Jersey St 7.30% 4/15/2010 AAA 290M 320,813
New Jersey St Ed Facs Auth Ser B 8 3/8% 7/1/2012 AAA 500M 531,250
New Jersey St Ed Facs Auth Ser C AMBAC+ 7.20% 7/1/2019 AAA 320M 356,400
New Jersey St G.O. 7.10% 4/1/2011 AAA 305M 345,031
New Jersey St Hwy Auth 7 1/4% 1/1/2016 AAA 250M 275,938
Northeast Monmouth Co NJ MBIA+ 6.70% 11/1/2016 AAA 1,340M 1,485,725
Puerto Rico Commonwealth MBIA+ 6.60% 7/1/2013 AAA 475M 536,156
Puerto Rico Commonwealth 7.30% 7/1/2020 AAA 250M 285,313
</TABLE>
10
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
NEW JERSEY SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Puerto Rico Commonwealth 7.70% 7/1/2020 AAA $5,000M $ 5,793,750
Puerto Rico Pub Bldg Auth Ser G 7 7/8% 7/1/2007 AAA 375M 406,406
Rutgers St Univ NJ 7.90% 5/1/2010 AAA 400M 442,500
Rutgers St Univ NJ Univ Ser O 8% 5/1/2018 AAA 3,255M 3,604,913
Rutgers St Univ NJ Univ Rev Ser O 7.90%
5/1/2008 AAA 1,230M 1,360,688
Stony Brook Regl Sewer Auth NJ Rev Ser A 7.40%
12/1/2009 AAA 1,000M 1,130,000
Tinton Falls NJ Sch Bd Ed FSA+ 6 1/2% 6/15/2017 AAA 1,000M 1,105,000
Union Co NJ Ser L 6 1/2% 2/1/2011 AAA 1,000M 1,107,500
University of Puerto Rico Ser L 6 1/2% 6/1/2013 AAA 25M 26,469
Virgin Islands Pub Fin Auth Ser A 7.30%
10/1/2018 AAA 1,650M 1,878,938
----------
Total 37,757,009
==========
General Obligation State Puerto Rico Commonwealth RIBS MBIA+ 7.594%
.88% 7/1/2008++ AAA 5,000M 5,350,000
Puerto Rico Commonwealth 6.35% 7/1/2010 A 3,000M 3,168,750
Puerto Rico Commonwealth LINK MBIA+ 5.831%
7/1/2020 AAA 2,750M 2,756,875
----------
Total 11,275,625
==========
General Obligation Local Essex Co NJ Imp Auth Lease-Jail & Youth Hsg
10.72% Prjts AMBAC+ 7% 12/1/2024 AAA 2,875M 3,176,875
Essex Co NJ Ser A AMBAC+ 5 1/2% 9/1/2015 AAA 2,200M 2,106,500
Keansburg NJ 6.80% 12/1/2010 A 1,000M 1,080,000
Millburn Township NJ Sch Dist 5.35% 7/15/2018 Aaa 1,150M 1,112,625
Millburn Township NJ Sch Dist 5.35% 7/15/2019 Aaa 1,100M 1,064,250
Morristown NJ FSA+ 6 1/2% 8/1/2019 AAA 3,440M 3,659,300
Newark NJ AMBAC+ 4.90% 12/1/2010 AAA 1,300M 1,223,625
Paterson NJ FSA+ 9.30% 2/15/2004 AAA 4,200M 5,433,750
South Brunswick Township NJ Bd Ed FGIC+
6.40% 8/1/2024 AAA 1,600M 1,686,000
----------
Total 20,542,925
==========
Education Essex Co NJ Imp Auth Rev GTD-College AMBAC+ 7%
7.20% 12/1/2024 AAA 1,750M 1,929,375
New Jersey St Ed Facs Auth Ser C MBIA+ 6.85%
7/1/2019 AAA 1,150M 1,244,875
New Jersey St Ed Facs Auth Ser C 6 3/8%
7/1/2022 AA 5,000M 5,212,500
New Jersey St Ed Facs Auth Rowan College
AMBAC+ 5 3/4% 7/1/2023 AAA 1,280M 1,268,800
Rutgers St Univ NJ Ser P 6.85% 5/1/2021 AA 800M 857,000
University Medicine & Dentistry Ser E 5 3/4%
12/1/2021 AA 3,350M 3,278,813
----------
Total 13,791,363
==========
Finance .55% Hamilton Township NJ Bd Ed Ser B FSA+ 7%
12/15/2015 AAA 970M 1,047,600
Health and Hospital New Jersey Health Care Facs Ser A FHA+ 7 1/4%
3.50% 2/15/2021 AA 1,485M 1,596,375
New Jersey Health Care Facs Ser B FHA+ 6 1/2%
2/1/2022 AAA 960M 999,600
New Jersey Health Care Facs Ser C FSA+ 6 3/4%
7/1/2020 AAA 735M 803,906
New Jersey Health Care Facs Fin Auth
Rev/Warren Hosp FSA+ 5 7/8% 7/1/2018 AAA 1,135M 1,133,581
New Jersey Health Care Facs Fin Auth
Rev/Bayonne Hosp FSA+ 6 1/4% 7/1/2012 AAA 1,600M 1,672,000
Puerto Rico Ind Tourist Ed Med & Environmental
Ctrl Facs Ser A FHA+ 6 1/4% 8/1/2032 AAA 500M 506,250
----------
Total 6,711,712
==========
Housing New Jersey St Hsg & Mtge Fin AMBAC+ 6%
2.65% 11/1/2014 AAA 1,000M 1,001,250
New Jersey St Hsg & Mtge Fin 1st Ser 6.70%
11/1/2028 A 1,000M 1,036,250
New Jersey St Hsg & Mtge Fin MBIA+ 7.70%
10/1/2029 AAA 1,740M 1,831,350
Puerto Rico Hsg Fin Corp Mtge Rev Ser B GNMA+
7.65% 10/15/2022 AAA 580M 614,075
Virgin Islands Hsg Fin Auth Sing Fam Rev
Ser A GNMA+ AMT+++ 6 1/2% 3/1/2025 AAA 600M 603,750
----------
Total 5,086,675
==========
</TABLE>
11
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
NEW JERSEY SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Industrial Revenue New Jersey Economic Dev Auth
Bonds Ser B AMT+++ 7 1/4% 3/1/2021 A $ 1,500M $ 1,584,375
3.19% Puerto Rico Ind Med &
Environmental Ctrl/Upjohn
71/2% 12/1/2023 AA 1,500M 1,642,500
Puerto Rico Tel Auth Rev LINK
MBIA+ 5.51% 1/16/2015 AAA 3,000M 2,876,250
-------------
Total 6,103,125
=============
Miscellaneous Monmouth Co NJ Imp Auth Rev Govt
3.45% Loan MBIA+ 6.40% 12/1/2009 AAA 1,075M 1,159,656
New Jersey Economic Dev Auth
6 3/4% 6/15/2012 A 2,375M 2,517,500
New Jersey Economic Dev Auth Rev
MBIA+ 5 1/4% 7/1/2020 AAA 2,000M 1,840,000
New Jersey Sports & Expo Auth Rev
Ser A 8% 1/1/2025 BBB** 1,000M 1,091,250
-------------
Total 6,608,406
=============
Pollution Control Cape May Co NJ Ind Poll Ctrl Rev
Revenue Fin Auth Ser B MBIA+ 7% 11/1/2029 AAA 500M 557,500
4.77% Salem Co NJ Ind Poll Ctrl Fin Auth
Rev Ser A MBIA+ AMT+++ 5.45%
2/1/2032 AAA 1,190M 1,088,850
Salem Co NJ Ind Poll Ctrl Fin Auth
Rev Ser C MBIA+ 5.55% 11/1/2033 AAA 1,045M 979,687
Salem Co NJ Poll Ctrl Auth Ser A
AMT+++ 6 1/2% 11/15/2021 AA 5,500M 5,733,750
Union Co NJ Ind Poll Ctrl Fin Auth
Poll Ctrl Rev 5.80% 9/1/2009 A 750M 770,625
-------------
Total 9,130,412
=============
Power Essex Co NJ Imp Auth Rev Orange
14.72% Muni Util & Lease MBIA+ 6.80%
7/1/2014 AAA 1,710M 1,891,688
Evesham NJ Muni Util Auth Rev MBIA+
5.65% 7/1/2015 AAA 620M 610,700
Evesham NJ Muni Util Auth Rev MBIA+
5.70% 7/1/2020 AAA 1,015M 997,237
Guam Pwr Auth Rev Ser A 6 5/8%
10/1/2014 BBB 500M 512,500
Puerto Rico Elec Pwr Auth 7 1/8%
7/1/2014 A 715M 779,350
Puerto Rico Elec Pwr Auth LINK 6.30%
7/1/2018 AAA 16,000M 16,640,000
Puerto Rico Elec Pwr Auth RIBS FSA+
7.928% 7/1/2023++ AAA 4,500M 4,533,750
Puerto Rico Elec Pwr Auth Rev LINK
FSA+ 5.929% 7/1/2023 AAA 1,000M 1,007,500
Raritan Township NJ Muni Util Auth
6.45% 5/1/2012 A 1,180M 1,219,825
-------------
Total 28,192,550
=============
Transportation New Jersey Economic Dev Auth 7%
16.22% 7/1/2016 BBB** 5,545M 5,843,043
New Jersey St Tnpk Auth Ser C-IBC
MBIA+ 6 1/2% 1/1/2016 AAA 4,000M 4,395,000
Port Auth NY & NJ 63rd Ser AMT+++
7 7/8% 3/1/2024 AA 2,990M 3,090,912
Port Auth NY & NJ 72nd Ser 7.35%
10/1/2027 AA 5,500M 6,125,625
Port Auth NY & NJ 93rd Ser 6 1/8%
6/1/2094 AA 11,500M 11,615,000
-------------
Total 31,069,580
=============
Water and Serwer Camden Co NJ Muni Util Auth FGIC+
6.91% 8 1/4% 12/1/2017 AAA 5,580M 6,103,125
Middlesex Co NJ Util FGIC+ 6 1/2%
9/15/2011 AAA 1,000M 1,061,250
New Jersey Economic Dev Auth Ser A
MBIA+ AMT+++ 5 1/4% 2/1/2029 AAA 950M 827,688
New Jersey Economic Dev Auth Ser B
6.70% 8/1/2021 A 1,250M 1,317,188
New Jersey Economic Dev Auth Ser D 7%
10/1/2017 A 1,250M 1,287,500
New Jersey Wastewtr Ser A MBIA+ 7%
5/15/2006 AAA 500M 542,500
New Jersey Wastewtr 6 7/8% 6/15/2009 AA 1,905M 2,097,880
-------------
Total 13,237,131
=============
Total Municipal Bonds 99.47% (Cost
$184,137,359) 190,554,113
=============
<CAPTION>
OTHER ASSETS, LESS LIABILITIES .53%
<S> <C> <C>
Cash and Receivables,
Net of Liabilities 1,007,974
=============
Net Assets (equivalent to $5.14 a share on 37,251,315 shares of $.001 par value capital
100.00% stock outstanding; authorized, 40,000,000 shares) $191,562,087
=============
* Ratings have not been audited by Deloitte & Touche LLP.
** This security has not been rated an independent ratings service but is,
in Lord Abbett's opinion, of comparable quality.
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
September 30, 1995. See page 1 for additional information.
+++ Income from these securities may be subject to the Alternative Minimum
Tax.
See Notes to Financial Statements.
</TABLE>
12
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
CONNECTICUT SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Prerefunded Connecticut St Ser A 6 1/2% 3/15/2009 AAA $ 1,000M $ 1,113,750
25.58% Connecticut St Ser A 6 3/4% 3/1/2011 AAA 100M 111,750
Connecticut St Health & Ed/St Raphael Hosp Ser
C AMBAC+ 7 1/2% 7/1/2014 AAA 1,000M 1,101,250
Connecticut St Spcl Tax Oblig Ser A 7.20%
2/1/2009 AAA 1,400M 1,547,000
Connecticut St Spcl Tax Oblig Rev Ser A 6.80%
6/1/2006 AAA 1,250M 1,407,813
Connecticut St Spcl Tax Oblig Rev Ser A 7 1/8%
6/1/2007 AAA 6,460M 7,332,100
Puerto Rico Commonwealth FGIC+ 7.10% 7/1/2002 AAA 1,900M 2,151,750
Puerto Rico Commonwealth 7.30% 7/1/2020 AAA 650M 741,813
Puerto Rico Commonwealth 7.70% 7/1/2020 AAA 4,800M 5,562,000
Puerto Rico Commonwealth Hwy Ser P 8 1/8%
7/1/2013 AAA 1,200M 1,342,500
Puerto Rico Commonwealth Hwy Ser Q 7 3/4%
7/1/2016 AAA 650M 754,000
Puerto Rico Commonwealth Hwy Ser T 6 5/8%
7/1/2018 AAA 483M 545,926
Puerto Rico Pub Bldg Auth Ser H 7 7/8% 7/1/2007 AAA 3,000M 3,251,250
Virgin Islands Pub Fin Auth Ser A 7.30% 10/1/2018 AAA 1,800M 2,049,750
----------
Total 29,012,652
==========
General Obligation Local Hartford CT 6 1/2% 12/15/2005 AA 730M 813,038
2.67% Killingly CT 7 1/4% 12/15/2004 A 250M 268,125
Monroe CT 6.60% 4/15/2005 A 100M 110,750
Montville CT 6.70% 6/15/2009 Aa 550M 629,062
Montville CT 6.70% 6/15/2010 Aa 575M 655,500
Portland CT 7.10% 12/15/2000 A 100M 110,750
Redding CT 6.60% 4/15/2010 Aa 100M 112,375
Voluntown CT 6 3/4% 10/1/2002 A 100M 110,000
Watertown CT 6 1/2% 6/15/2003 A 100M 108,375
West Haven CT MBIA+ 6 1/2% 6/15/2006 AAA 100M 111,750
----------
Total 3,029,725
==========
Education Connecticut St Health & Ed Fac LINK 5.928%
14.51% 6/10/2030 AAA 13,600M 13,702,000
Connecticut St Health & Ed Fac Kent Sch Ser B
MBIA+ 5.40% 7/1/2023 AAA 1,500M 1,421,250
Connecticut St Higher Ed Ser A AMT+++ 7 3/8%
11/15/2005 A 810M 854,550
Connecticut St Higher Ed Ser A AMT+++ 7.20%
11/15/2010 A 450M 477,562
----------
Total 16,455,362
==========
Health and Hospital Connecticut St Health & Ed/Bridgeport Hosp Ser
7.35% A MBIA+ 6 5/8% 7/1/2018 AAA 1,250M 1,328,125
Connecticut St Health & Ed/St Marys Hosp Ser C
7 3/8% 7/1/2020 Baa 2,750M 2,842,813
Connecticut St Health & Ed/Waterbury Hosp Ser
B FSA+ 7% 7/1/2020 AAA 100M 110,000
Connecticut St Health & Ed/William Backus Hosp
Ser C 6 3/8% 7/1/2022 A 850M 855,313
Connecticut St Health & Ed/Yale-New Haven Hosp
Ser F MBIA+ 7.10% 7/1/2025 AAA 1,105M 1,219,644
Connecticut St Health & Ed Facs Auth Rev Yale-New
Haven Hosp Ser F MBIA+ 7% 7/1/2010 AAA 75M 82,500
Puerto Rico Pub Bldg Auth Rev GTD Ser A
AMBAC+ 5 1/2% 7/1/2021 AAA 2,000M 1,902,500
----------
Total 8,340,895
==========
Housing Connecticut St Hsg Fin Auth Ser A-2 FHA+ AMT+++
5.54% 7.20% 11/15/2008 AA 950M 1,012,937
Connecticut St Hsg Fin Auth Ser A-2 AMT+++ 6.45%
5/15/2022 AA 1,100M 1,111,000
Connecticut St Hsg Fin Auth Ser B 6 3/4%
11/15/2023 AA 3,000M 3,123,750
Connecticut St Hsg Fin Auth Ser D-2 6.90%
5/15/2020 AA 1,000M 1,040,000
----------
Total 6,287,687
==========
Industrial Revenue Bonds Connecticut St Dev Auth Solid Waste Disp Facs
9.23% Rev AMT+++ 7% 7/1/2025 AAA 2,000M 2,197,500
Eastern CT Resource Recovery/Wheelabrator Lisbon
Prjt Ser A AMT+++ 5 1/2% 1/1/2020 A 4,000M 3,585,000
Puerto Rico Ind Med & Environmental Ctrl/Upjohn
7 1/2% 12/1/2023 AA 1,000M 1,095,000
</TABLE>
13
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
CONNECTICUT SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Puerto Rico Ind Med & Environmental/American
Home Product 5.10% 12/1/2018 A $2,000M $ 1,762,500
Puerto Rico Ind Med & Environmental/Warner
Lambert 7.60% 5/1/2014 Aa 1,650M 1,831,500
------------
Total 10,471,500
============
Miscellaneous Connecticut Middletown Courthouse MBIA+ 6 1/4%
9.82% 12/15/2010 AAA 575M 603,750
Connecticut St Dev Govt Lease Rev MBIA+ 6.60%
6/15/2014 AAA 500M 535,625
New Haven CT Air Rights Pkg MBIA+ 6 1/2%
12/1/2015 AAA 9,475M 9,996,125
------------
Total 11,135,500
============
Pollution Control
Revenue 3.30% Connecticut St Dev Auth/Pfizer Inc 6.55%
2/15/2013 AAA 3,470M 3,747,600
Power Connecticut St Dev Auth/New England Pwr Co 7
6.26% 1/4% 10/15/2015 A 760M 817,000
Puerto Rico Elec Pwr Auth RIBS FSA+ 8.478%
7/1/2018++ AAA 5,000M 5,375,000
Puerto Rico Elec Pwr Auth Ser X 5 1/2%
7/1/2025 A 1,000M 912,500
------------
Total 7,104,500
===========
Solid Waste Connecticut St Resource Recovery/American
5.53% Ref Fuel Ser A AMT+++ 8% 11/15/2015 AA 1,100M 1,214,125
Connecticut St Resource Recovery/American
Ref Fuel Ser A AMT+++ 6.45% 11/15/2022 A 4,985M 5,053,543
------------
Total 6,267,668
============
Transportation Connecticut St Spcl Tax Oblig Rev Ser B 10%
10/1/2000 AA 4,000M 5,005,000
Connecticut St Spcl Tax Oblig Rev Ser B
FGIC+ 6.10% 10/1/2011 AAA 1,000M 1,030,000
Puerto Rico Commonwealth Hwy Ser T 6 5/8%
7/1/2018 A 67M 70,223
------------
Total 6,105,223
============
Water and Sewer Connecticut St Clean Wtr Fd 7% 1/1/2011 AA 400M 440,500
3.67% Puerto Rico Commonwealth Aqu & Sewer Ser A
7 7/8% 7/1/2017 A 3,350M 3,718,500
------------
Total 4,159,000
============
Total Municipal Bonds 98.84% (Cost $109,677,796) 112,117,312
============
<CAPTION>
OTHER ASSETS, LESS LIABILITIES 1.16%
<S> <C> <C>
Cash and Receivables,
Net of Liabilities 1,318,884
============
Net Assets 100.00% (equivalent to $10.12 a share on 11,206,061 shares
of $.001 par value capital stock outstanding;
authorized, 40,000,000 shares) $113,436,196
============
* Ratings have not been audited by Deloitte & Touche LLP.
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
September 30, 1995. See page 1 for additional information.
+++ Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
</TABLE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
MISSOURI SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Prerefunded Central MO St Univ MBIA+ 7% 7/1/2014 AAA $ 150M $ 170,625
22.74% Missouri St Health & Ed Facs Rev Christian
Health Ser B FGIC+ 6 7/8% 2/15/2013 AAA 2,100M 2,362,500
Missouri St Health & Ed Facs Rev St Lukes
MBIA+ 7% 11/15/2013 AAA 1,030M 1,179,350
Missouri St Reg Convention Ser A 6.90% 8/15/2021 AAA 13,500M 15,390,000
Puerto Rico Commonwealth 7.70% 7/1/2020 AAA 2,570M 2,977,988
Puerto Rico Elec Pwr Auth Rev Ser N 8% 7/1/2008 AAA 2,700M 3,013,875
</TABLE>
14
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
MISSOURI SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Puerto Rico Ind Med & Environmental/
Catholic Univ 9 3/8% 12/1/2007 AAA $ 3,135M $ 3,530,794
Springfield MO Sch Dist No 12 Ser A FGIC+
6 3/4% 3/1/2011 AAA 1,225M 1,352,094
----------
Total 29,977,226
==========
General Obligation State Puerto Rico Commonwealth RIBS MBIA+ 7.594%
3.69% 7/1/2008++ AAA 1,000M 1,070,000
Puerto Rico Commonwealth RIBS FSA+ 7.683%
7/1/2020++ AAA 2,750M 2,753,438
Puerto Rico Commonwealth 6 1/2% 7/1/2023 A 1,000M 1,043,750
----------
Total 4,867,188
==========
Education Missouri Sch Bd Assn Ctfs Ser A-5 7 3/8%
6.44% 3/1/2006 AAA 980M 1,042,475
Missouri St Health & Ed Facs Rev/St Louis
Univ HS 6.35% 10/1/2014 A 1,600M 1,676,000
Platte Co MO Reorg Sch Dist Ctfs 7 1/8%
1/1/2011 A 500M 536,250
St Louis MO Sch Dist FGIC+ 6% 4/1/2012 AAA 1,275M 1,313,250
University of MO Rev AMBAC+ 6 1/2% 11/1/2011 AAA 3,250M 3,445,000
University of MO Rev 5 1/2% 11/1/2023 AA 500M 481,250
----------
Total 8,494,225
==========
Finance Kansas City MO Muni Assistance Corp Rev
15.69% AMBAC+ 7 1/8% 4/15/2016 AAA 805M 876,444
Kansas City MO Muni Assistance Corp Rev
Ser B AMBAC+ 6 5/8% 4/15/2015 AAA 5,225M 5,584,219
Kansas City MO Muni Assistance Corp Rev
Ser B AMBAC+ 6% 4/15/2020 AAA 14,030M 14,222,912
----------
Total 20,683,575
==========
Health and Hospital Jackson Co MO Ind Dev Rev/St Joseph Health
13.58% Ctr 7% 7/1/2022 Baa 1,500M 1,573,125
Missouri St Health & Ed Facs Rev/BJC Health
Ser A 6 1/2% 5/15/2020 AA 4,650M 4,905,750
Missouri St Health & Ed Facs Rev/Health
Midwest MBIA+ 6 1/4% 6/1/2014 AAA 2,490M 2,592,712
Missouri St Health & Ed Facs Rev/Health
Midwest Ser B MBIA+ 6 1/4% 2/15/2022 AAA 800M 818,000
Missouri St Health & Ed Facs Rev/Heartland
Health Sys AMBAC+ 6.35% 11/15/2017 AAA 2,600M 2,694,250
Missouri St Health & Ed Facs Rev/Jefferson
Mem Hosp 6% 8/15/2023 Baa 3,000M 2,763,750
Missouri St Health & Ed Facs Rev/SE Hosp
MBIA+ 6 5/8% 6/1/2011 AAA 475M 506,468
Missouri St Health & Ed Facs Rev/Ssm Health
Care Ser AA MBIA+ 6 1/4% 6/1/2016 AAA 2,000M 2,052,500
----------
Total 17,906,555
==========
Housing Missouri St Hsg Dev Comm Mtge Rev Ser A
5.91% GNMA+ AMT+++ 6 3/4% 6/1/2024 AAA 355M 367,425
Missouri St Hsg Dev Comm Mtge Rev Ser A
GNMA+ AMT+++ 6.22% 3/1/2026 AAA 5,000M 5,006,250
Missouri St Hsg Dev Comm Mtge Rev Ser B
GNMA+ AMT+++ 6.40% 12/1/2024 AAA 2,135M 2,161,687
Puerto Rico Hsg Fin Corp Mtge Rev Ser A
GNMA+ 7.80% 10/15/2021 AAA 80M 83,700
Puerto Rico Hsg Fin Corp Mtge Rev Ser B
GNMA+ 7.65% 10/15/2022 AAA 160M 169,400
----------
Total 7,788,462
==========
Industrial Revenue Bonds Missouri St Environmental Imp & Energy Rev/
.46% Union Elec Ser A 7.40% 5/1/2020 AA 550M 604,313
Miscellaneous Clay Co MO Pub Bldg Auth Leasehold Rev
4.22% FGIC+ 7% 5/15/2014 AAA 1,000M 1,106,250
St Louis Co MO Ind Dev Rev Arena Prjt AMT+++
7 7/8% 12/1/2024 BBB** 2,000M 2,105,000
St Louis MO Land Clearance Rev 7 3/4%
7/1/2021 BBB** 2,235M 2,346,750
----------
Total 5,558,000
==========
Pollution Control Revenue Missouri St Environmental Imp & Energy Wtr
5.80% Poll Ctrl Rev Ser A 6.55% 7/1/2014 Aa 3,000M 3,202,500
Missouri St Environmental Imp & Energy Wtr
Poll Ctrl Rev Ser A CGIC+ 6.05% 7/1/2016 AAA 1,850M 1,882,375
Missouri St Environmental Imp & Energy Wtr
Poll Ctrl Rev Ser B 7.20% 7/1/2016 Aa 2,250M 2,562,188
----------
Total 7,647,063
==========
</TABLE>
15
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
MISSOURI SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Power
7.19%
Puerto Rico Elec Pwr Auth Rev
6% 7/1/2016 A $1,000M $ 991,250
Puerto Rico Elec Pwr Auth Rev
6 1/4% 7/1/2017 A 2,315M 2,352,618
Puerto Rico Elec Pwr Auth Rev
RIBS FSA+ 7.928% 7/1/2023++ AAA 2,500M 2,518,750
Puerto Rico Elec Pwr Auth Rev
Ser X 6 1/8% 7/1/2021 A 2,885M 2,892,212
Sikeston MO Elec Rev
MBIA+ 6 1/4% 6/1/2022 AAA 710M 729,525
-----------
Total 9,484,355
===========
Transportation
1.98%
Kansas City MO Arpt Rev
Ser B CGIC+ 6 7/8% 9/1/2014 AAA 1,490M 1,614,788
Puerto Rico Commonwealth Hwy Rev
Ser Q 6% 7/1/2020 A 1,000M 988,750
-----------
Total 2,603,538
===========
Water and Sewer
10.66 %
Cape Girardeau MO Wtrwks Sys Rev
FGIC+ 6.40% 3/1/2012 AAA 1,150M 1,201,750
Kansas City MO Sewer Rev
6.40% 3/1/2010 Aa 730M 763,763
Kansas City MO Sewer Rev
6.40% 3/1/2011 Aa 780M 815,100
Kansas City MO Sewer Rev
6.40% 3/1/2012 Aa 755M 788,975
Kansas City MO Wtr Rev
Ser C 6.40% 3/1/2012 AA 4,425M 4,624,125
Kansas City MO Wtr Rev
Ser D 7th Issue 6.65% 12/1/2013 AA 2,800M 3,034,500
St Louis MO Wtr Rev
FGIC+ 6% 7/1/2014 AAA 2,750M 2,822,187
-----------
Total 14,050,400
===========
Total Municipal Bonds 98.36%
(Cost $124,373,452) 129,664,900
===========
<CAPTION>
OTHER ASSETS, LESS LIABILITIES 1.64%
<S> <C> <C>
Cash and Receivables,
Net of Liabilities 2,158,047
============
Net Assets
100.00%
(equivalent to $5.08 a share on
25,970,462 shares of $.001 par
value capital stock outstanding;
authorized, 40,000,000 shares) $131,822,947
============
* Ratings have not been audited by Deloitte & Touche LLP.
** This security has not been rated by an independent ratings service but is, in
Lord Abbett's opinion, of comparable quality.
+ Insured or guaranteed by the indicated municipal bond insurance corporation or
Federal agency.
++ The interest rate is subject to change periodically and inversely to the prevailing
market rate. The interest rate shown is the rate in effect at September 30, 1995.
See page 1 for additional information.
+++ Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
</TABLE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
HAWAII SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
Prerefunded <C> <C> <C> <C>
33.98%
Hawaii St Dept Bdg & Fin/Pali Moni
Med Ctr 7.60% 7/1/2010 AAA $ 200M $ 234,250
Hawaii St Dept Bdg & Fin/Pali Moni
Med Ctr 7.65% 7/1/2019 AAA 1,000M 1,173,750
Hawaii St G.O. Ser B-R
6.90% 6/1/2002 AAA 1,000M 1,103,750
Hawaii St G.O. Ser B-R
7% 6/1/2009 AAA 1,000M 1,108,750
Hawaii St G.O. Ser B-R
7% 6/1/2010 AAA 2,430M 2,694,263
Hawaii St G.O. Ser B-S
7% 9/1/2003 AAA 500M 560,625
Hawaii St G.O. Ser B-S
7 1/8% 9/1/2009 AAA 700M 789,250
Honolulu HI City & Co
7.10% 6/1/2006 AAA 1,000M 1,118,750
Honolulu HI City & Co
G.O. Ser A 7.15% 6/1/2008 AAA 500M 561,250
Honolulu HI City & Co
G.O. Ser B 7% 10/1/2005 AAA 1,000M 1,090,000
Honolulu HI City & Co
G.O. Ser B 7% 10/1/2007 AAA 1,500M 1,635,000
Honolulu HI City & Co
G.O. Ser B 7.10% 10/1/2009 AAA 425M 464,313
Honolulu HI City & Co
G.O. Ser C 7.15% 6/1/2010 AAA 1,000M 1,122,500
Honolulu HI City & Co
G.O. Ser D 6.90% 12/1/2010 AAA 400M 449,000
Honolulu HI City & Co
Ser A 6.70% 8/1/2007 AAA 3,000M 3,356,250
Puerto Rico Commonwealth 7 5/8%
7/1/2010 AAA 375M 433,125
Puerto Rico Commonwealth 7.70%
7/1/2020 AAA 2,750M 3,186,563
</TABLE>
16
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
HAWAII SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C>
Puerto Rico Commonwealth 6.80% 7/1/2021 AAA $ 1,000M $ 1,140,000
Puerto Rico Commonwealth G.O. 7.30% 7/1/2020 AAA 200M 228,250
Puerto Rico Commonwealth Hwy Ser O 73/4% 7/1/2010 AAA 525M 609,000
Puerto Rico Commonwealth Hwy Ser P 81/8% 7/1/2013 AAA 1,475M 1,650,156
Puerto Rico Commonwealth Pub Imp Ser A 7.70% 7/1/2008 AAA 1,200M 1,354,500
Puerto Rico Pub Bldg Auth Ser K 67/8% 7/1/2012 AAA 450M 515,250
Puerto Rico Pub Bldg Auth Ser L 67/8% 7/1/2012 AAA 350M 400,750
Virgin Islands Pub Fin Auth Ser A 7.30% 10/1/2018 AAA 2,000M 2,277,500
----------
Total 29,256,795
==========
General Obligation Hawaii St Ser B-Z 6% 10/1/2010 AA 500M 532,500
State 8.44% Hawaii St Ser B-Z 6% 10/1/2012 AA 500M 529,375
Hawaii St Ser C-J 61/4% 1/1/2015 AA 2,500M 2,581,250
Puerto Rico Commonwealth 6.45% 7/1/2017 A 600M 624,000
Puerto Rico Commonwealth RIBS FSA+ 7.683% 7/1/2020++ AAA 3,000M 3,003,750
----------
Total 7,270,875
==========
General Obligation Hawaii Co HI Ser A FGIC+ 5.60% 5/1/2013 AAA 1,780M 1,793,350
Local 3.30% Honolulu HI City & Co FGIC+ 6% 12/1/2015 AAA 1,000M 1,052,500
----------
Total 2,845,850
==========
Education .33% University of Hawaii Sys Rev Ser G AMBAC+ 5.45% 10/1/2006 AAA 275M 281,188
==========
Health and Hospital Hawaii St Dept Bdg & Fin/Queens Med Hosp FGIC+ 61/2% 7/1/2012 AAA 250M 257,188
5.21% Hawaii St Dept Bdg & Fin/St Francis Hosp CGIC+ 61/2% 7/1/2022 AAA 2,200M 2,290,750
Puerto Rico Ind Med & Environmental/St Luke Hosp 61/4% 6/1/2010 A 1,390M 1,402,162
Puerto Rico Ind Tourist Ed Med & Environmental Ctrl Facs Ser A
MBIA+ 61/4% 7/1/2024 AAA 150M 154,312
Puerto Rico Pub Bldg Auth Rev GTD Ser A AMBAC+ 51/2% 7/1/2021 AAA 400M 380,500
----------
Total 4,484,912
==========
Housing Hawaii St Hsg Fin & Dev Corp Ser A FNMA+ AMT+++ 7.10% 7/1/2024 Aa 960M 987,600
1.23% Puerto Rico Hsg Fin Corp Mtge Rev Ser B GNMA+ 7.65% 10/15/2022 AAA 70M 74,112
----------
Total 1,061,712
==========
Industrial Revenue Puerto Rico Ind Med & Environmental Lab Ser A 8% 9/1/2012 A 1,000M 1,110,000
Bonds 7.68% Puerto Rico Ind Med & Environmental/Warner Lambert 7.60% 5/1/2014 Aa 1,500M 1,665,000
Puerto Rico Tel Auth Rev LINK MBIA+ 5.51% 1/16/2015 AAA 4,000M 3,835,000
----------
Total 6,610,000
==========
Power Hawaii St Dept Bdg & Fin Spcl Purp Mtge Rev Reg Linked Sav
20.76% LINK AMT+++ 5.538% 12/15/2023 AAA 10,000M 9,300,000
Hawaii St Dept Bdg & Fin/HI Elec MBIA+ AMT+++ 6.55% 12/1/2022 AAA 1,000M 1,036,250
Hawaii St Dept Bdg & Fin/HI Elec Ser A MBIA+ AMT+++ 6.60% 1/1/2025 AAA 2,750M 2,866,875
Hawaii St Dept Bdg & Fin/HI Elec Ser C MBIA+ AMT+++ 7 3/8% 12/1/2020 AAA 2,500M 2,765,625
Puerto Rico Elec Pwr Auth 7 1/8% 7/1/2014 A 365M 397,850
Puerto Rico Elec Pwr Auth RIBS FSA+ 7.928% 7/1/2023++ AAA 1,500M 1,511,250
----------
Total 17,877,850
==========
Transportation
12.26%
Hawaii St Arpt Sys Rev 2nd Ser MBIA+ AMT+++ 7% 7/1/2018 AAA 2,125M 2,308,281
Hawaii St Arpt Sys Rev 2nd Ser FGIC+ AMT+++ 7 1/2% 7/1/2020 AAA 250M 277,500
Hawaii St Arpt Sys Rev 2nd Ser MBIA+ AMT+++ 6 3/4% 7/1/2021 AAA 2,745M 2,882,250
Hawaii St Hbr Cap Imp Rev FGIC+ AMT+++ 6 1/2% 7/1/2012 AAA 1,000M 1,048,750
Hawaii St Hbr Cap Imp Rev FGIC+ AMT+++ 6 1/4% 7/1/2015 AAA 500M 510,625
Hawaii St Hbr Cap Imp Rev FGIC+ AMT+++ 6 1/2% 7/1/2019 AAA 1,350M 1,402,312
</TABLE>
17
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
HAWAII SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ----------- --------- ------------
<S> <C> <C> <C> <C>
Hawaii St Hbr Cap Imp Rev FGIC+
AMT+++ 6 3/8% 7/1/2024 AAA $ 500M $ 513,125
Puerto Rico Commonwealth Hwy
Ser R 6 3/4% 7/1/2005 A 1,000M 1,083,750
Puerto Rico Commonwealth Hwy Ser
V 6 5/8% 7/1/2012 A 500M 528,125
-----------
Total 10,554,718
===========
Water and Sewer 4.13% Puerto Rico Commonwealth Aqu &
Sewer Ser A 7 7/8% 7/1/2017 A 3,200M 3,552,000
===========
Total Municipal Bonds 97.32%
(Cost $81,917,273) 83,795,900
===========
<CAPTION>
OTHER ASSETS, LESS LIABILITIES 2.68%
<S> <C> <C>
Cash and Receivables,
Net of Liabilities 2,309,213
===========
Net Assets 100.00% (equivalent to $4.91 a share on
17,519,394 shares of $.001 par
value capital stock outstanding;
authorized, 40,000,000 shares) $86,105,113
===========
* Ratings have not been audited by Deloitte & Touche LLP.
+ Insured or guaranteed by the indicated municipal bond insurance corporation
or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
September 30, 1995. See page 1 for additional information.
+++ Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
</TABLE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
WASHINGTON SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------- --------- ------------
<S> <C> <C> <C> <C>
Prerefunded 19.26% Douglas Co WA Pub Util Dist No 1
Wells Hydroelec Ser A 8 3/4%
9/1/2018 AAA $ 150M $ 200,063
King Co WA Sch Dist Ser A 6 3/4%
12/1/2008 AAA 2,415M 2,656,500
Lewis Co WA Pub Util Dist No 1
Cowlitz Falls Hydroelec 7%
10/1/2022 AAA 500M 570,000
Seattle WA Muni Metro Ser T 6 7/8%
1/1/2014 AAA 500M 553,750
Seattle WA Muni Metro Ser T 6 7/8%
1/1/2031 AAA 500M 553,750
Tacoma WA Elec Sys Rev FGIC+ 7 3/8%
1/1/2009 AAA 500M 555,000
Washington St Pub Pwr Supply Ser B
FGIC+ 7 3/8% 7/1/2012 AAA 1,790M 2,036,125
Washington St Pub Pwr Supply Ser B
7 1/4% 7/1/2015 AAA 1,250M 1,401,563
Washington St Pub Pwr Supply Ser B
7 1/4% 7/1/2015 AAA 3,700M 4,148,625
Washington St Pub Pwr Supply Ser C
10 1/4% 7/1/2015 AAA 600M 639,000
Washington St Pub Pwr Supply Ser C
8% 7/1/2017 AAA 475M 552,187
Washington St Pub Pwr Supply Sys
Nuclear Prjt No 2 Rev Ser A
7 1/2% 7/1/2004 AAA 400M 457,000
-----------
Total 14,323,563
===========
General Obligation State
1.35% Washington St Ser D 6% 9/1/2020 AA 1,000M 1,003,750
General Obligation Local
5.58% King Co WA Sch Dist No 415 Kent
AMBAC+ 7 1/2% 6/1/2008 AAA 500M 603,125
King Co WA Sewer 6 1/4% 1/1/2035 AA 2,000M 2,027,500
Mount Vernon WA AMBAC+ 6.85%
12/1/2014 AAA 1,285M 1,403,862
Whatcom Co WA 5 3/4% 12/1/2012 A 115M 114,569
-----------
Total 4,149,056
===========
Education 1.61% Eastern Washington Univ WA Rev
AMBAC+ 5% 10/1/2018 AAA 1,045M 927,438
Washington St Higher Ed Facs Auth
Rev CNLA 7% 10/1/2015 AAA 250M 267,812
-----------
Total 1,195,250
===========
Housing 7.31% Skagit Co WA Hsg Auth Low Income Hsg
Assistance Coll GNMA+ 7% 6/20/2035 AAA 750M 792,187
Snohomish Co WA Hsg Auth Ser A AMT+++
6 1/2% 9/1/2015 A 1,520M 1,521,900
Washington St Hsg Fin Comm Sing Fam
Mtge Rev GNMA+ AMT+++ 7.05% 7/1/2022 AAA 2,000M 2,097,500
</TABLE>
18
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
WASHINGTON SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Washington St Hsg Fin Comm Sing Fam Mtge Rev Ser A
GNMA+ AMT+++ 6.65% 7/1/2016 AAA $1,000M $1,021,250
----------
Total 5,432,837
==========
Industrial Revenue Bonds
1.35% Port Longview WA Ind Dev Corp Solid Waste Disp Rev
AMT+++ 6 7/8% 10/1/2008 A 500M 545,625
Puerto Rico Tel Auth Rev RIBS MBIA+ 6.743%
1/16/2015++ AAA 500M 461,875
----------
Total 1,007,500
==========
Miscellaneous 2.81% Pike Place Mkt Preservation Ser A 6.60% 12/1/2021 AA 2,000M 2,090,000
==========
Power
41.11%
Douglas Co WA Pub Util Dist No 1 Wells
Hydroelec Ser A 8 3/4% 9/1/2018 A 350M 440,562
Douglas Co WA Pub Util Dist No 1 Wells
Hydroelec Ser B
AMBAC+ 8 3/4% 9/1/2006 AAA 6,230M 7,491,575
Grant Co WA Pub Util Dist No 2 Wanapum
Hydroelec Rev Ser A 6 3/8% 1/1/2023 A 630M 642,600
Mason Co WA Pub Util Dist 6.35% 1/1/2013 A 1,040M 1,068,600
Puerto Rico Elec Pwr Auth RIBS FSA+ 7.928%
7/1/2023++ AAA 3,000M 3,022,500
Puerto Rico Elec Pwr Auth Rev LINK FSA+
5.929% 7/1/2023 AAA 1,000M 1,007,500
Tacoma WA Elec Sys Rev LINK AMBAC+ 6.513%
1/2/2015 AAA 9,000M 9,303,750
Washington St Pub Pwr Supply Sys Nuclear
Prjt No 2 Rev Reg FSA+ 5.40% 7/1/2012 AAA 8,000M 7,590,000
-----------
Total 30,567,087
===========
Solid Waste .52% Snohomish Co WA MBIA+ 7% 12/1/2010 AAA 360M 386,100
===========
Transportation
6.91%
Port Seattle WA Rev Ser B AMT+++ 7.60%
12/1/2009 AA 750M 846,562
Port Seattle WA Rev Ser B AMT+++ 6.70%
11/1/2010 AA 250M 265,625
Port Seattle WA Rev Ser AMBAC+AMT+++ 7.70%
12/1/2011 AAA 3,000M 3,397,500
Puerto Rico Commonwealth Hwy Ser W
5 1/4% 7/1/2020 A 700M 625,625
---------
Total 5,135,312
=========
Water and Sewer
11.49%
Pasco WA Wtr & Sewer Rev MBIA+ 6.40%
6/1/2014 AAA 865M 907,169
Renton WA Wtr & Sewer Rev 6.55% 11/1/2013 A 1,000M 1,050,000
Seattle WA Drain & Wtr Sewer Util 7% 12/1/2011 AA 950M 1,040,250
Seattle WA Muni Metro AMBAC+ 5.45% 1/1/2020 AAA 1,000M 930,000
Seattle WA Muni Metro Ser U FGIC+ 6.60%
1/1/2032 AAA 2,250M 2,314,688
Tacoma WA Wtr Rev 5 1/2% 12/1/2013 Aa 750M 755,625
Tukwila WA Wtr & Sewer Rev MBIA+ 6 5/8%
2/1/2015 AAA 1,370M 1,546,388
----------
Total 8,544,120
==========
Total Municipal Bonds 99.30% (Cost $71,213,885) 73,834,575
===========
<CAPTION>
OTHER ASSETS, LESS LIABILITIES 0.70%
<S> <C> <C> <C> <C>
Short-Term
Securities
Texas St Tax & Rev Anticipation Notes Ser
A 4 3/4% 8/30/1996 MIG1 355M 357,634
University MO Prjt Notes 4 3/4% 6/28/1996 MIG1 375M 377,468
-----------
Total (Cost $734,871) 735,102
===========
Cash and Receivables, (210,370)
-----------
Net of Liabilities Total Other Assets, Less Liabilities 524,732
===========
Net Assets (equivalent to $4.91 a share on 15,131,351
100.00% shares of $.001 par value capital stock
outstanding; authorized, 40,000,000 shares) $74,359,307
===========
* Ratings have not been audited by Deloitte & Touche LLP.
+ Insured or guaranteed by the indicated municipal bond insurance corporation
or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
September 30, 1995. See page 1 for additional information.
+++ Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
</TABLE>
19
<PAGE>
================================================================================
STATEMENT OF NET ASSETS September 30, 1995
- --------------------------------------------------------------------------------
MINNESOTA SERIES
<TABLE>
<CAPTION>
Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
-------- ----------- --------- ------------
<S> <C> <C> <C> <C>
Prerefunded Brainerd MN Health Care Facs/
37.50% Benedictine Health/St Joseph Prjt
83/8% 2/15/2020 AAA $ 775M $ 905,781
Breckenridge MN Hosp Facs/Franciscan
Sisters Healthcare Ser B-1 9 3/8%
9/1/2017 AAA 350M 389,375
Puerto Rico Commonwealth Hwy Ser P
8 1/8% 7/1/2013 AAA 150M 167,813
Southern MN Muni Pwr Agy Ser A 9 1/2%
1/1/2017 AAA 150M 155,063
---------
Total 1,618,032
=========
General Obligation
State 5.87% Minnesota St 5 1/4% 8/1/2014 AA 265M 253,406
=========
General Obligation Fairbault MN Indpt Sch Dist No 656 CGIC+
Local 5 3/4% 6/1/2015 AAA 100M 100,625
6.75% Minneapolis MN Spcl Sch Dist FGIC+ 5 3/8%
2/1/2014 AAA 200M 190,750
--------
Total 291,375
========
Health and Hospital Minneapolis & St Paul MN Hsg & Redev Auth
20.78% Health Care Sys AMBAC+ 5% 11/15/2013 AAA 255M 230,138
Minneapolis & St Paul MN Hsg & Redev Auth
Health Care Sys 6.90% 12/1/2022 A 300M 318,375
Minneapolis & St Paul MN Hsg & Redev Auth
Health Care Sys Ser A CGIC+ 5.70% 8/15/2016 AAA 150M 147,750
Rochester MN Health Care Reg Fixed ARS LINK
6.026% 11/15/2015 AA 200M 200,250
-------
Total 896,513
=======
Housing Minnesota St Hsg Fin Agy AMT++ 6 3/4%
13.09% 1/1/2026 AA 100M 103,125
Minnesota St Hsg Fin Agy Ser B 7.10%
2/1/2021 A 205M 207,562
Minnesota St Hsg Fin Agy Ser D AMT++ 6.40%
7/1/2015 AA 250M 254,063
-------
Total 564,750
=======
Pollution Control Bass Brook MN Poll Ctrl Ref-Coll-MN Pwr & Lt
Revenue 4.51% Co Prjt 6% 7/1/2022 A 200M 194,750
=========
Water and Sewer Marshall MN Elec & Wtr Util 6.45% 7/1/2011 AAA 150M 158,437
6.11% Minnesota Pub Facs Auth Wtr Poll Ctrl Rev Ser
A 6 1/4% 3/1/2016 AAA 100M 105,125
---------
Total 263,562
=========
Total Municipal Bonds 94.61% (Cost $4,041,547) 4,082,388
=========
<CAPTION>
OTHER ASSETS, LESS LIABILITIES 5.39%
<S> <C> <C>
Cash and Receivables,
Net of Liabilities 232,761
=========
Net Assets (equivalent to $5.01 a share on 862,148 shares of
100.00% $.001 par value capital
stock outstanding; authorized, 80,000,000 shares) $ 4,315,149
=========
* Ratings have not been audited by Deloitte & Touche LLP.
+ Insured or guaranteed by the indicated municipal bond insurance corporation
or Federal agency.
++ Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
</TABLE>
20
<PAGE>
================================================================================
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended 9/30/95
----------------------------------------------------------------------------
National New York Texas New Jersey Connecticut
Investment Income Series Series Series Series Series
-------------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Income
Interest $ 43,425,507 $ 21,922,532 $ 6,527,510 $ 12,032,942 $ 6,839,476
Expenses (Note 2)
Management fee 3,174,906 1,645,366 500,416 933,520 542,390
Management fee waived - - (249,916) (283,466) (480,744)
12b-1 distribution plan 1,534,899 772,287 245,411 486,294 271,196
Shareholder servicing 355,000 185,000 72,000 120,000 56,000
Registration 12,000 - 6,000 500 6,000
Reports to shareholders 38,000 18,000 6,000 18,000 7,500
Audit and tax 71,500 40,000 14,500 31,700 19,500
Legal 14,000 7,600 1,200 5,500 1,800
Directors' fees 27,400 15,000 900 5,900 2,500
Organization (Note 1e) - - - 3,648 3,168
Other 66,308 17,092 23,335 15,880 20,551
Expenses assumed
by Lord, Abbett & Co. - - - - -
Net expenses 5,294,013 2,700,345 619,846 1,337,476 449,861
Net investment income 38,131,494 19,222,187 5,907,664 10,695,466 6,389,615
Net Realized and Unrealized Gain
(Loss) on Investments (Note 6)
Net realized gain (loss) from
security transactions
Proceeds from sales 1,739,542,743 361,537,890 157,198,632 258,649,934 57,838,617
Cost of securities sold 1,744,039,337 368,385,053 157,025,022 259,400,204 58,701,708
Net realized gain (loss) (4,496,594) (6,847,163) 173,610 (750,270) (863,091)
Net unrealized appreciation
(depreciation) of investments
Beginning of period (13,757,037) (1,065,205) (2,084,740) (1,447,630) (3,091,394)
End of period 12,675,003 14,905,951 2,212,397 6,416,754 2,439,516
Net unrealized appreciation 26,432,040 15,971,156 4,297,137 7,864,384 5,530,910
Net realized and unrealized gain
on investments 21,935,446 9,123,993 4,470,747 7,114,114 4,667,819
Net Increase in Net Assets Resulting
from Operations $ 60,066,940 $ 28,346,180 $ 10,378,411 $ 17,809,580 $ 11,057,434
</TABLE>
<TABLE>
<CAPTION>
For the Period
12/27/94
(Commencement
of Operations
For the Year Ended 9/30/95 to 9/30/95
------------------------------------------ --------------
Missouri Hawaii Washington Minnesota
Investment Income Series Series Series Series
----------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Income
Interest $ 7,932,995 $5,437,225 $4,697,729 $ 112,411
Expenses (Note 2)
Management fee 625,187 430,143 368,444 9,540
Management fee waived (188,122) (256,798) (109,631) (9,540)
12b-1 distribution plan 303,291 234,262 - -
Shareholder servicing 125,000 33,000 70,000 3,200
Registration 500 500 6,000 2,000
Reports to shareholders 7,750 9,500 6,500 2,000
Audit and tax 20,700 19,700 19,200 5,500
Legal 1,800 3,000 2,200 250
Directors' fees 4,200 2,150 2,300 250
Organization (Note 1e) 1,692 900 5,724 1,035
Other 22,752 19,187 23,495 1,400
Expenses assumed
by Lord, Abbett & Co. - - - (15,635)
Net expenses 924,750 495,544 394,232 -
Net investment income 7,008,245 4,941,681 4,303,497 112,411
Net Realized and Unrealized Gain
(Loss) on Investments (Note 6)
Net realized gain (loss) from
security transactions
Proceeds from sales 85,472,075 72,825,077 93,284,314 3,168,411
Cost of securities sold 88,137,376 75,091,291 95,386,486 3,127,021
Net realized gain (loss) (2,665,301) (2,266,214) (2,102,172) 41,390
Net unrealized appreciation
(depreciation) of investments
Beginning of period (2,528,771) (3,654,705) (2,224,984) -
End of period 5,291,448 1,878,627 2,620,921 40,841
Net unrealized appreciation 7,820,219 5,533,332 4,845,905 40,841
Net realized and unrealized gain
on investments 5,154,918 3,267,118 2,743,733 82,231
-----------
Net Increase in Net Assets Resulting
from Operations $ 12,163,163 $ 8,208,799 $ 7,047,230 $ 194,642
===========
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended 9/30/95 Year Ended 9/30/94
------------------------------------------- -----------------------------------------
National New York Texas National New York Texas
Increase (Decrease) in Net Assets Series Series Series Series Series Series
<S> <C> <C> <C> <C> <C> <C>
Operations Net investment income $ 38,131,494 $ 19,222,187 $ 5,907,664 $ 39,800,670 $ 20,801,208 $ 6,424,404
------------- ------------ ------------ ------------ ------------ ------------
Net realized gain (loss)
from security
transactions (4,496,594) (6,847,163) 173,610 (15,259,353) (11,962,835) (266,516)
------------- ------------ ------------ ------------ ------------ ------------
Net unrealized
appreciation
(depreciation)
of investments 26,432,040 15,971,156 4,297,137 (65,253,454) (32,300,490) (11,253,087)
------------- ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
in net assets resulting
from operations 60,066,940 28,346,180 10,378,411 (40,712,137) (23,462,117) (5,095,199)
------------- ------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
Net investment income (38,145,154) (19,378,819) (5,809,683) (40,073,629) (20,788,545) (6,437,223)
------------- ------------ ------------ ------------ ------------ ------------
Net realized gain from
security transactions - - - (25,470,289) (11,442,158) (1,504,645)
------------- ------------ ------------ ------------ ------------ ------------
Total distributions (38,145,154) (19,378,819) (5,809,683) (65,543,918) (32,230,703) (7,941,868)
------------- ------------ ------------ ------------ ------------ ------------
Capital share transactions (Note 4)
Net proceeds from sales
of shares 70,991,645 34,159,185 7,991,552 97,045,511 43,572,278 18,132,364
------------- ------------ ------------ ------------ ------------ ------------
Net asset value of
shares issued to
shareholders
in reinvestment of
net investment income
and realized gain from
security transactions 20,425,516 11,332,845 2,885,936 38,761,464 19,920,756 4,061,906
------------- ------------ ------------ ------------ ------------ ------------
Total 91,417,161 45,492,030 10,877,488 135,806,975 63,493,034 22,194,270
------------- ------------ ------------ ------------ ------------ ------------
Cost of shares
reacquired (125,019,799) (61,380,990) (18,977,324) (76,583,576) (45,716,920) (14,553,753)
------------- ------------ ------------ ------------ ------------ ------------
Increase (decrease) in
net assets derived
from capital share
transactions (33,602,638) (15,888,960) (8,099,836) 59,223,399 17,776,114 7,640,517
------------- ------------ ------------ ------------ ------------ ------------
Total decrease in net assets (11,680,852) (6,921,599) (3,531,108) (47,032,656) (37,916,706) (5,396,550)
Net Assets
============= ============ ============ ============ ============ ============
Beginning of year 662,380,327 338,539,248 103,835,574 709,412,983 376,455,954 109,232,124
------------
End of year+ $650,699,475 $331,617,649 $100,304,466 $662,380,327 $338,539,248 $103,835,574
============
</TABLE>
+ Includes overdistributed net investment income of $1,881,464, $1,068,896 and
$96,922, respectively, at September 30, 1995 and overdistributed net investment
income of $1,867,804, $912,264 and $194,903, respectively, at September 30,1994.
See Notes to Financial Statements.
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
12/27/95
(Commencement
of Operations)
For the Year Ended 9/30/95 to 9/30/95
---------------------------------------------------------------------------- --------------
New Jersey Connecticut Missouri Hawaii Washington Minnesota
Increase (Decrease) in Net Assets Series Series Series Series Series Series
- ---------------------------------------- ---------------------------------------------------------------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Operations Net income invested $ 10,695,466 $ 6,389,615 $ 7,008,245 $ 4,941,681 $ 4,303,497 $ 112,411
Net realized gain (loss) from (750,270) (863,091) (2,665,301) (2,266,214) (2,102,172) 41,390
security transactions
Net unrealized appreciation 7,864,384 5,530,910 7,820,219 5,533,332 4,845,905 40,841
of investments
Net increase in net assets resulting
from operations 17,809,580 11,057,434 12,163,163 8,208,799 7,047,230 194,642
Distributions to shareholders from
Net investment income (10,767,877) (6,378,895) (7,134,709) (5,058,302) (4,454,972) (111,440)
Capital share transactions (Note 4)
Net proceeds from sales of shares 37,494,837 21,140,560 18,499,072 9,444,574 4,847,026 4,366,457
Net asset value of shares issued to
shareholdersin reinvestment of net
investment income and realized gain
from security transactions 5,789,415 3,020,814 3,919,019 2,109,022 2,352,040 67,117
Total 43,284,252 24,161,374 22,418,091 11,553,596 7,199,066 4,433,574
Cost of shares reacquired (42,993,555) (17,022,919) (15,313,492) (21,570,981) (14,285,705) (202,627)
Increase (decrease) in net assets
derived from capital share transactions 290,697 7,138,455 7,104,599 (10,017,385) (7,086,639) 4,230,947
Total increase (decrease) in net assets 7 ,332,400 11,816,994 12,133,053 (6,866,888) (4,494,381) 4,314,149
Net Assets
Beginning of period 184,229,687 101,619,202 119,689,894 92,972,001 78,853,688 1,000
------------
End of period+ $ 191,562,087 $113,436,196 $131,822,947 $ 86,105,113 $ 74,359,307 $ 4,315,149
============
</TABLE>
+ Includes (overdistributed) undistributed net investment income of $(216,835),
$(268,531),$(325,387), $(304,239), $(109,770)and $971, respectively, for the
period ended September 30, 1995.
See Notes to Financial Statements.
22
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended 9/30/94
---------------------------------------------------------------------------
Increase (Decrease) in New Jersey Connecticut Missouri Hawaii Washington
Net Assets Series Series Series Series Series
- ------------------------------------------------------- ----------- ----------- -------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Operations Net investment income $ 10,820,795 $ 5,819,564 $ 6,539,831 $ 5,477,269 $ 4,834,029
Net realized loss from
security transactions (3,826,489) (1,602,822) (2,796,757) (821,739) (2,257,881)
Net unrealized depreciation
of investments (14,699,515) (9,813,447) (10,133,472) (10,048,115) (7,445,006)
Net decrease in net assets
resulting from operations (7,705,209) (5,596,705) (6,390,398) (5,392,585) (4,868,858)
Distributions to
shareholders from
Net investment income (10,935,474) (6,035,780) (6,666,054) (5,448,147) (4,763,181)
Net realized gain from
security transactions (3,073,699) (1,383,528) (1,193,677) (813,711) (699,466)
Total distributions (14,009,173) (7,419,308) (7,859,731) (6,261,858) (5,462,647)
Capital share
transactions
(Note 4)
Net proceeds from sales
of shares 49,131,677 34,728,051 32,915,805 17,819,078 17,475,210
Net asset value of shares
issued to shareholders in
reinvestment of net
investment income and realized
gain from security transactions 7,845,477 3,579,297 4,430,504 2,745,623 2,682,763
Total 56,977,154 38,307,348 37,346,309 20,564,701 20,157,973
Cost of shares reacquired (29,799,791) (16,691,968) (10,884,365) (8,821,275) (8,296,424)
Increase in net assets derived
from capital share transactions 27,177,363 21,615,380 26,461,944 11,743,426 11,861,549
Total increase in net
assets 5,462,981 8,599,367 12,211,815 88,983 1,530,044
Net Assets
Beginning of year 178,766,706 93,019,835 107,478,079 92,883,018 77,323,644
-----------
End of year+ $184,229,687 $101,619,202 $119,689,894 $92,972,001 $78,853,688
===========
</TABLE>
+Includes overdistributed net investment income of $144,424, $279,251, $198,923,
$187,618 and undistributed net investment income of $41,705, respectively, for
the year ended September 30, 1994. See Notes to Financial Statements.
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
National Series
<TABLE>
<CAPTION>
Year Ended
Year Ended 9/30, Six Months 3/31,
--------------------------------------------------- Ended -----------
Per Share Operating Performance: 1995 1994 1993 1992 9/30/91 1991
- -------------------------------- ---- ---- ---- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 10.62 $ 12.37 $ 11.72 $ 11.31 $ 11.05 $ 10.86
Income (loss) from investment
operations
Net investment income .626 .657 .695 .700 .359 .743
Net realized and unrealized
gain (loss) on investments .382 (1.3124) .9255 .4795 .293 .2225
-------
Total from investment
operations 1.008 (.6554) 1.6205 1.1795 .652 .9655
-------
Distributions
Dividends from net investment
income (.628) (.6596) (.693) (.717) (.362) (.738)
Distributions from net
realized gain - (.435) (.2775) (.0525) (.03) (.0375)
-------
Net asset value, end of period $ 11.00 $ 10.62 $ 12.37 $ 11.72 $ 11.31 $ 11.05
=======
Total Return* 9.84% (5.64)% 14.57% 10.78% 6.01%+ 9.21%
=======
Ratios/Supplemental Data:
Net assets, end of period
(000) $650,699 $662,380 $709,413 $546,768 $396,221 $340,476
Ratios to Average Net
Assets:
Expenses 0.82% 0.86% 0.87% 0.83% 0.43%+ 0.75%
Net investment income 5.92% 5.76% 5.79% 6.00% 3.20%+ 6.79%
Portfolio turnover rate 225.39% 184.07% 138.06% 87.56% 18.77% 57.71%
=======
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
23
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
New York Series
<TABLE>
<CAPTION>
Year Ended
Year Ended 9/30, Six Months 3/31,
------------------------------------------- Ended --------
Per Share Operating Performance: 1995 1994 1993 1992 9/30/91 1991
- -------------------------------------------------------------- ------------------------------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.54 $ 12.27 $ 11.60 $ 11.26 $ 10.89 $ 10.78
Income (loss) from investment operations
Net investment income .610 .649 .682 .691 .366 .741
Net realized and unrealized
gain (loss) on investments .316 (1.3665) .874 .458 .407 .179
--------
Total from investment operations .926 (.7175) 1.556 1.149 .773 .92
========
Distributions
Dividends from net investment income (.616) (.6475) (.681) (.709) (.368) (.750)
Distributions from net realized gain - (.365) (.205) (.10) (.035) (.06)
--------
Net asset value, end of period $ 10.85 $ 10.54 $ 12.27 $ 11.60 $ 11.26 $ 10.89
========
Total Return* 9.12% ( 6.21)% 13.95% 10.69% 7.24%+ 8.87%
========
Ratios/Supplemental Data:
Net assets, end of period (000) $331,618 $338,539 $376,456 $306,447 $230,014 $201,132
--------
Ratios to Average Net Assets:
Expenses 0.82% 0.83% 0.85% 0.81% 0.37%+ 0.76%
Net investment income 5.83% 5.72% 5.72% 5.98% 3.29%+ 6.83%
Portfolio turnover rate 105.62% 149.13% 101.59% 146.68% 51.79% 39.84%
========
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Texas Series
<TABLE>
<CAPTION>
Year Ended
Year Ended 9/30, Six Months 3/31,
------------------------------------------- Ended --------
Per Share Operating Performance: 1995 1994 1993 1992 9/30/91 1991
- -------------------------------------------------------------- ------------------------------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.59 $ 10.82 $ 10.28 $ 9.94 $ 9.64 $ 9.41
Income (loss) from investment operations
Net investment income .571 .604 .624 .611 .317 .658
Net realized and unrealized
gain (loss) on investments .452 (1.0802) .7135 .4155 .309 .227
---------
Total from investment operations 1.023 (.4762) 1.3375 1.0265 .626 .885
=========
Distributions
Dividends from net investment income (.563) (.6038) (.615) (.629) (.326) (.655)
Distributions from net realized gain - (.15) (.1825) (.0575) - -
---------
Net asset value, end of period $ 10.05 $ 9.59 $ 10.82 $ 10.28 $ 9.94 $ 9.64
=========
Total Return* 11.14% (4.60)% 13.64% 10.68% 6.59%+ 9.74%
=========
Ratios/Supplemental Data:
Net assets, end of period (000) $100,304 $103,836 $109,232 $ 90,205 $ 66,746 $ 30,529
Ratios to Average Net Assets:
Expenses, including waiver 0.62% 0.50% 0.57% 0.60% 0.25%+ 0.40%
Expenses, excluding waiver 0.87% 0.87% 0.97% 1.00% 0.45%+ 0.84%
Net investment income 5.90% 5.97% 5.96% 5.96% 3.09%+ 6.91%
---------
Portfolio turnover rate 108.00% 96.79% 58.10% 123.33% 50.19% 50.52%
=========
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
24
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
New Jersey Series
<TABLE>
<CAPTION>
For the Period
1/2/91
Year Ended 9/30, Six Months (Commencement
-------------------------------------------------------- Ended of Operations)
Per Share Operating Performance: 1995 1994 1993 1992 9/30/91 to 3/31/91
- ------------------------------------------- -------------------------------------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.95 $ 5.55 $ 5.14 $ 4.97 $ 4.81 $ 4.76
Income (loss) from investment operations
Net investment income .287 .300 .318 .320 .167 .083
Net realized and unrealized
gain (loss) on investments .192 (.507) .439 .185 .165 .051
--------
Total from investment operations .479 (.207) .757 .505 .332 .134
========
Distributions
Dividends from net investment income (.289) (.303) (.307) (.325) (.172) (.084)
Distributions from net realized gain - (.09) (.04) (.01) - -
--------
Net asset value, end of period $ 5.14 $ 4.95 $ 5.55 $ 5.14 $ 4.97 $ 4.81
========
Total Return* 9.98% (3.91)% 15.26% 10.51% 7.01%+ 2.77%+
========
Ratios/Supplemental Data:
Net assets, end of period (000) $191,562 $184,230 $178,767 $118,386 $ 59,463 $ 23,203
--------
Ratios to Average Net Assets:
Expenses, including waiver 0.72% 0.51% 0.35% 0.19% 0.00%+ 0.00%+
Expenses, excluding waiver 0.87% 0.83% 0.83% 0.73% 0.38%+ 0.28%+
Net investment income 5.73% 5.76% 5.88% 6.09% 3.23%+ 1.42%+
--------
Portfolio turnover rate 133.11% 75.62% 88.29% 54.63% 49.33% 6.51%
========
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Connecticut Series
<TABLE>
<CAPTION>
For the Period
4/1/91
Year Ended 9/30, (Commencement
-------------------------------------------------------- of Operations)
Per Share Operating Performance: 1995 1994 1993 1992 to 3/31/91
- ------------------------------------------- -------------------------------------------------------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.71 $ 11.01 $ 10.16 $ 9.86 $ 9.525
Income (loss) from investment operations
Net investment income .579 .585 .612 .617 .313
Net realized and unrealized gain (loss)
on investments .407 (1.1287) .906 .311 .335
---------
Total from investment operations .986 (.5437) 1.518 .928 .648
=========
Distributions
Dividends from net investment income (.576) (.6038) (.608) (.628) (.313)
Distributions from net realized gain - (.1525) (.06) - -
---------
Net asset value, end of period $ 10.12 $ 9.71 $ 11.01 $ 10.16 $ 9.860
=========
Total Return* 10.52% (5.13)% 15.48% 9.69% 6.91%+
=========
Ratios/Supplemental Data:
Net assets, end of period (000) $113,436 $101,619 $ 93,020 $ 58,880 $ 21,895
---------
Ratios to Average Net Assets:
Expenses, including waiver 0.41% 0.49% 0.44% 0.20% 0.00%+
Expenses, excluding waiver 0.86% 0.86% 0.91% 0.74% 0.40%+
Net investment income 5.89% 5.67% 5.60% 5.96% 3.00%+
---------
Portfolio turnover rate 54.19% 97.42% 45.81% 54.90% 2.15%
=========
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
25
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Missouri Series
<TABLE>
<CAPTION>
For the Period
5/31/91
Year Ended 9/30, (Commencement
------------------------------------------------------------ of Operations)
Per Share Operating Performance: 1995 1994 1993 1992 to 9/30/91
- -------------------------------------------------------- ------------------------------------------------------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.88 $ 5.51 $ 5.14 $ 4.91 $ 4.762
Income (loss) from investment operations
Net investment income .277 .2926 .305 .310 .106
Net realized and unrealized gain (loss)
on investments .204 (.5681) .381 .236 .150
--------
Total from investment operations .481 (.2755) .686 .546 .256
========
Distributions
Dividends from net investment income (.281) (.297) (.301) (.316) (.108)
Distributions from net realized gain - (.0575) (.015) - -
--------
Net asset value, end of period $ 5.08 $ 4.88 $ 5.51 $ 5.14 $ 4.910
========
Total Return* 10.21% (5.22)% 13.80% 11.47% 5.46%+
========
Ratios/Supplemental Data:
Net assets, end of period (000) $131,823 $ 119,690 $107,478 $65,812 $24,230
-------
Ratios to Average Net Assets:
Expenses, including waiver 0.74% 0.60% 0.48% 0.26% 0.00%+
Expenses, excluding waiver 0.89% 0.91% 0.92% 0.79% 0.37%+
Net investment income 5.61% 5.60% 5.66% 5.94% 1.81%+
-------
Portfolio turnover rate 58.17% 50.59% 56.20% 44.19% 0.00%
=======
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Hawaii Series
<TABLE>
<CAPTION>
For the Period
10/28/91
(Commencement
Year Ended 9/30, of Operations)
Per Share Operating Performance: 1995 1994 1993 to 9/30/92
- --------------------------------------------------------------------- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.72 $ 5.34 $ 4.89 $ 4.76
Income (loss) from investment operations
Net investment income .271 .2918 .297 .281
Net realized and unrealized gain (loss) on investments .198 (.578) .454 .138
--------
Total from investment operations .469 (.2862) .751 .419
========
Distributions
Dividends from net investment income (.279) (.2888) (.301) (.289)
Distribution from net realized gain - (.045) - -
--------
Net asset value, end of period $ 4.91 $ 4.72 $ 5.34 $ 4.89
========
Total Return* 10.30% (5.54)% 15.85% 9.06%+
========
Ratios/Supplemental Data:
Net assets, end of period (000) $86,105 $ 92,972 $ 92,883 $47,031
--------
Ratios to Average Net Assets:
Expenses, including waiver 0.58% 0.41% 0.40% 0.00%+
Expenses, excluding waiver 0.87% 0.87% 0.90% 0.74%+
Net investment income 5.74% 5.80% 5.62% 5.96%+
--------
Portfolio turnover rate 70.64% 66.04% 34.49% 53.24%
========
</TABLE>
*Total return does not consider the effects of
sales loads.
+Not annualized.
See Notes to Financial Statements.
26
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Washington Series
Minnesota Series
<TABLE>
<CAPTION>
Washington Series Minnesota Series
----------------------------------------------------------- ----------------
For the Period For the Period
4/15/92 12/27/94
Year Ended 9/30, (Commencement (Commencement
----------------------------------------- of Operations) of Operations)
Per Share Operating Performance: 1995 1994 1993 to 9/30/92 to 9/30/95
- ------------------------------------------- ----------------------------------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.72 $ 5.35 $ 4.92 $ 4.76 $ 4.76
--------
Income (loss) from investment operations
Net investment income .277 .2976 .304 .140 .230
Net realized and unrealized gain (loss)
on investments .200 (.5895) .427 .165 .249
---------
Total from investment operations .477 (.2919) .731 .305 .479
=========
Distributions
Dividends from net investment income (.287) (.2931) (.301) (.145) (.229)
Distribution from net realized gain - (.045) - - -
---------
Net asset value, end of period $ 4.91 $ 4.72 $ 5.35 $ 4.92 $ 5.01
=========
Total Return* 10.48% (5.65)% 15.32% 6.47%+ 10.22%+
========
Ratios/Supplemental Data:
Net assets, end of period (000) $74,359 $78,854 $77,324 $42,627 $4,315
--------
Ratios to Average Net Assets:
Expenses, including waiver 0.53% 0.29% 0.30% 0.00%+ 0.00%+
Expenses, excluding waiver 0.68% 0.67% 0.80% 0.38%+ 0.64%+
Net investment income 5.84% 5.93% 5.86% 2.58%+ 4.58%+
--------
Portfolio turnover rate 92.85% 137.74% 85.45% 37.23% 121.41%
========
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
27
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Company is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. Effective December 22,
1994, the Minnesota Series was added to the Fund, and the Company received an
initial capital contribution of $1,000 and issued 210 shares to the partners of
Lord, Abbett & Co. The following is a summary of significant accounting policies
consistently followed by the Company. The policies are in conformity with
generally accepted accounting principles.
(a) Market value is determined as follows: Securities are valued at latest
prices on the basis of valuations furnished by an independent pricing service
or, in their absence, fair value as determined under procedures approved by the
Board of Directors.
(b) It is the policy of the Company to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all net investment income and net realized gains. Therefore, there
is no provision for federal income tax.
(c) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Interest income is recorded on the accrual
basis.
(d) Dividends from net investment income are declared daily and paid monthly.
(e) The organization expenses of the New Jersey Series, Connecticut Series,
Missouri Series, Hawaii Series, Washington Series and Minnesota Series are being
amortized evenly over a period of five years from their respective commencements
of operations.
2. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has a management agreement with Lord, Abbett & Co. Pursuant to the
agreement, Lord, Abbett & Co. supplies the Company with investment management
services and executive and other personnel, pays the remuneration of officers,
provides office space and pays for ordinary and necessary office and clerical
expenses relating to research, statistical work and the supervision of the
Company's investment portfolios. The management fee is based on average daily
net assets for each month at the annual rate of 1/2 of 1%. Lord, Abbett & Co.
may voluntarily pay or reimburse any Series for certain of its other expenses.
Any such other expenses paid or reimbursed for the Hawaii and Washington Series
are subject to repayment by the respective Series pursuant to a formula based on
the expense ratio of that Series until five years from the commencement of its
operations or the termination of the management agreement, whichever is earlier.
As of September 30, 1993, all such amounts were accrued for the Hawaii and
Washington Series. As of September 30, 1995, no additional amounts were accrued.
From December 22, 1994 to September 30, 1995, Lord, Abbett & Co. waived the
Minnesota Series' management fee of $9,540 and assumed $15,635 of other
expenses. Lord, Abbett & Co. received the following commissions on sales of
capital stock of the Company after concessions were paid to authorized
distributors:
<TABLE>
<CAPTION>
Lord, Abbett & Co. Distributors'
Series Commissions Concessions
------------------ -------------
<S> <C> <C>
National $148,596 $971,678
New York 63,196 468,133
Texas 23,284 155,959
New Jersey 98,066 670,456
Connecticut 48,596 327,416
Missouri 72,983 477,015
Hawaii 29,276 203,353
Washington 23,101 145,376
Minnesota 10,113 180,315
</TABLE>
28
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The Company adopted a separate Rule 12b-1 Plan which became effective June 1,
1990 for each of the National, New York and Texas Series, and which provides for
the payment of (1) an annual fee for services (payable quarterly) of .15% of the
average daily net asset value of the Company's shares sold by dealers prior to
that date and .25% of the average daily net asset value of such shares sold on
and after that date, and (2) a one-time 1% sales distribution fee, at the time
of sale, on such shares sold at net asset value of $1 million or more. Separate
Rule 12b-1 Plans have been approved for each of the New Jersey, Connecticut,
Missouri, Hawaii, Washington and Minnesota Series. Each Series' initial and
public shareholders approved its Plan, except for the Washington and Minnesota
Series' Plans which have initial shareholders' approval. Each Plan has become
effective except for the Washington and Minnesota Series which will go into
effect on the first day (the "effective date") of the calendar quarter
subsequent to each Series' net assets reaching $100 million. Each Plan provides
for the payment of (1) an annual service fee (payable quarterly) of (a) in the
case of the Connecticut and Missouri Series, .25% of the average daily net asset
value of shares sold by broker-dealers from commencement of each Series' public
offering, and (b) in the case of the Hawaii, New Jersey, Washington and
Minnesota Series, .15% of the average daily net asset value of such shares sold
prior to each Series' effective date and .25% of the average daily net asset
value of such shares sold on or after that date, and (2) a one-time 1% sales
distribution fee, at the time of sale, on such shares sold on or after the
Plan's effective date at net asset value of $1 million or more. Certain of the
Company's officers and directors have an interest in Lord, Abbett & Co.
3. DISTRIBUTIONS
Dividends from net investment income are declared daily and paid monthly.
Taxable net realized gains from security transactions, if any, will be
distributed to shareholders in December 1995. At September 30, 1995, the
accumulated net realized gain (loss) for financial reporting purposes, which is
substantially the same as for federal income tax purposes, aggregated
$(19,794,291) for the National Series, $(18,755,680) for the New York Series,
$(107,214) for the Texas Series, $(4,730,802) for the New Jersey Series,
$(2,551,007) for the Connecticut Series, $(5,603,014) for the Missouri Series,
$(3,102,089) for the Hawaii Series, $(4,385,011) for the Washington Series and
$41,390 for the Minnesota Series. The losses expire in 2003 and 2004. Income and
capital gains distributions are determined in accordance with income tax
regulations which may differ from methods used to determine the corresponding
income and capital gains amounts in accordance with generally accepted
accounting principles. These differences are primarily caused by differences in
the timing of recognition of certain components of income, expenses or capital
gains and losses. Where such differences are permanent in nature, they are
reclassified based upon their ultimate characterization for federal income tax
purposes. Any such reclassifications will have no effect on net assets, results
of operations or net asset value of the Fund.
29
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
4. CAPITAL SHARE TRANSACTIONS Transactions in shares of capital stock were as
follows:
<TABLE>
<CAPTION>
Year Ended 9/30/95 Year Ended 9/30/94
------------------------------------------------- ------------------------------------------------
National New York Texas New Jersey National New York Texas New Jersey
Series Series Series Series Series Series Series Series
--------- --------- ---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of shares 6,777,988 3,314,242 834,676 7,613,373 8,460,951 3,769,712 1,772,757 9,284,688
----------
Shares issued to shareholders
in reinvestment of net
investment income and realized
gain from security transactions 1,917,292 1,077,774 297,890 1,161,742 3,352,904 1,731,651 395,615 1,487,941
----------
Total 8,695,280 4,392,016 1,132,566 8,775,115 11,813,855 5,501,363 2,168,372 10,772,629
----------
Shares reacquired (11,882,872) (5,937,848) (1,983,550) (8,753,334) (6,793,428) (4,053,755) (1,433,403) (5,753,941)
----------
Increase (decrease) in
shares (3,187,592) (1,545,832) (850,984) 21,781 5,020,427 1,447,608 734,969 5,018,688
----------
</TABLE>
<TABLE>
<CAPTION> For the
Period
12/27/94
(Commencement
of Operations)
Year Ended 9/30/95 to 9/30/95
------------------------------------------------------- --------------
Connecticut Missouri Hawaii Washington Minnesota
Series Series Series Series Series
----------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Sales of shares 2,208,179 3,777,825 2,008,926 1,016,217 888,992
Shares issued to shareholders in
reinvestment of net investment income and
realized gain from security transactions 309,088 798,404 445,406 496,267 13,479
Total 2,517,267 4,576,229 2,454,332 1,512,484 902,471
Shares reacquired (1,776,654) (3,138,331) (4,635,494) (3,072,443) (40,533)
Increase (decrease) in shares 740,613 1,437,898 (2,181,162) (1,559,959) 861,938
<CAPTION>
Year Ended 9/30/94
-------------------------------------------------------
Connecticut Missouri Hawaii Washington
Series Series Series Series
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales of shares 3,303,066 6,265,978 3,519,234 3,401,499
----------
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 345,225 844,562 544,401 532,182
----------
Total 3,648,291 7,110,540 4,063,635 3,933,681
----------
Shares reacquired (1,632,769) (2,095,634) (1,756,220) (1,692,858)
----------
Increased (decrease) in shares 2,015,522 5,014,906 2,307,415 2,240,823
----------
</TABLE>
5. CAPITAL PAID IN
At September 30, 1995, capital paid in aggregated $659,700,227 for the National
Series, $336,536,274 for the New York Series, $98,296,205 for the Texas Series,
$190,092,970 for the New Jersey Series, $113,816,218 for the Connecticut Series,
$132,459,900 for the Missouri Series, $87,632,814 for the Hawaii Series,
$76,233,167 for the Washington Series and $4,231,947 for the Minnesota Series.
6. PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (other than short-term investments)
were as follows:
<TABLE>
<CAPTION>
Series Purchases Sales
- ------ --------- -----
<S> <C> <C>
National $1,449,906,035 $1,463,573,728
New York 344,291,799 359,336,952
Texas 105,238,509 110,545,591
New Jersey 244,825,275 243,587,966
Connecticut 65,480,247 57,838,617
Missouri 79,049,913 72,496,308
Hawaii 60,517,322 72,825,077
Washington 68,010,088 73,199,802
Minnesota 7,172,248 3,168,411
</TABLE>
Security gains and losses are computed on the identified cost basis. As of
September 30, 1995, unrealized appreciation and depreciation of investments
based on cost for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Series Unrealized Appreciation Unrealized Depreciation
- ------ ----------------------- -----------------------
<S> <C> <C>
National $18,593,505 $5,918,502
New York 16,479,100 1,573,149
Texas 3,574,770 1,362,373
New Jersey 6,730,527 313,773
Connecticut 3,441,391 1,001,875
Missouri 5,508,496 217,048
Hawaii 2,246,833 368,206
Washington 2,786,142 165,221
Minnesota 54,795 13,954
</TABLE>
The cost of investments for federal income tax purposes is the same as that used
for financial reporting purposes.
30
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
7. DIRECTORS' REMUNERATION
The Directors of the Company associated with Lord, Abbett & Co. and all officers
of the Company receive no compensation from the Company for acting as such.
Outside Directors' fees, including attendance fees for board and committee
meetings, and outside Directors' retirement costs, are allocated among all funds
in the Lord Abbett group based on net assets of each fund. The direct
remuneration accrued during the period for outside Directors of the Company as a
group was $33,909 (exclusive of expenses), which has been deemed invested in
shares of the Company under a deferred compensation plan contemplating future
payment of the value of those shares. As of September 30, 1995, the aggregate
amount in Directors' accounts maintained under the plan was $287,171. Retirement
costs accrued during the period amounted to $20,731.
8. CHANGE IN FISCAL YEAR-END
The financial highlights cover a short year (six months ended September 30,
1991) because the fiscal year-end was changed from March 31 to September 30.
Copyright (C) 1995 by Lord Abbett Tax-Free Income Fund, Inc., 767 Fifth Avenue,
New York, NY 10153-0203 This publication, when not used for the general
information of shareholders of Lord Abbett Tax-Free Income Fund, Inc., is to be
distributed only if preceded or accompanied by a current prospectus which
includes information concerning the Fund's investment objective and policies,
sales charges and other matters. All rights reserved. Printed in the U.S.A.
31
<PAGE>
================================================================================
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders,
Lord Abbett Tax-Free Income Fund, Inc.:
We have audited the accompanying statements of net assets of the National
Series, New York Series, Texas Series, New Jersey Series, Connecticut Series,
Missouri Series, Hawaii Series, Washington Series and Minnesota Series of Lord
Abbett Tax-Free Income Fund, Inc. as of September 30, 1995, the related
statements of operations, and of changes in net assets and the financial
highlights for the respective periods presented. These financial statements and
the financial highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at
September 30, 1995 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the National Series,
New York Series, Texas Series, New Jersey Series, Connecticut Series, Missouri
Series, Hawaii Series, Washington Series and Minnesota Series of Lord Abbett
Tax-Free Income Fund, Inc. at September 30, 1995, the results of their
operations, the changes in their net assets and the financial highlights for the
respective periods presented, in conformity with generally accepted accounting
principles.
Deloitte & Touche LLP
New York, New York
November 6, 1995
This report to shareholders inaugurates a new procedure whereby a single copy of
the report is sent to an address to which more than one registered shareholder
of the Fund with the same last name has indicated mail is to be delivered,
unless additional reports are specifically requested in writing or by telephone.
32
<PAGE>
SUCCESSFUL INVESTING
REQUIRES AN EXPERIENCED,
PROFESSIONAL TEAM.
"UNCERTAINTY OVER TAX-REFORM HAS MADE MUNICIPAL BONDS ONE OF THE MOST ATTRACTIVE
AREAS FOR FIXED-INCOME INVESTING."
John R. Mousseau
Director of Municipal Bond Management
and Portfolio Manager
Identifying value and reducing risk require a disciplined approach and a
talented and experienced investment team. At Lord, Abbett & Co., a staff of 42
investment professionals, averaging 19 years of industry experience and 9 years
of tenure with the Firm, performs research to determine an overall view of the
economy and discover opportunities with the potential for high total return.
SEARCHING FOR VALUE BY:
. Anticipating economic changes and their impact on fixed-income securities;
. Taking advantage of security combinations that result from the interaction of
credit markets; and
. Understanding the historical yield relationship among securities.
[PHOTO APPEARS HERE OF THE LORD ABBETT PERSONNEL LISTED BELOW]
(from left to right)
Zane E. Brown is director of Lord, Abbett & Co.'s fixed-income area and also
serves as a portfolio manager. Mr. Brown earned his MBA in investment management
at Colorado State University. He has over 18 years of investment experience.
Barbara A. Grummel is portfolio manager for several tax-free series including
California, Florida and Missouri. Ms. Grummel began her career at National
Association of Securities Dealers (NASD) and has over 17 years of investment
experience.
John R. Mousseau is director of Lord, Abbett & Co.'s municipal bond area and
also serves as a portfolio manager. He has over 15 years of investment
experience. Mr. Mousseau earned his MA in economics from Brown University.
Robert S. Dow, partner and chief investment officer, has 24 years of investment
experience. In addition to portfolio management, Mr. Dow serves as president of
all Lord Abbett's tax-free portfolios. He earned his MBA at Columbia Graduate
School of Business Administration.
<PAGE>
- --------------------------------------------------------
THE LORD ABBETT FAMILY Meeting Investor Needs Since 1929
- --------------------------------------------------------
Lord, Abbett & Co. manages a spectrum of mutual funds to meet the investment
goals of its shareholders. Assets may be allocated or transferred among these
funds as described in the relevant prospectus. The exchange privilege may be
modified or terminated. For more information about a Lord Abbett fund, including
charges and expenses, please call us at 800-874-3733 for a prospectus. Please
read the prospectus carefully before investing.
EQUITY PORTFOLIOS
- -----------------
AFFILIATED FUND
Established 1934
Seeks long-term growth of capital and income without excessive fluctuations in
market value. Portfolio emphasis: The stocks of large, well-seasoned companies.
LORD ABBETT DEVELOPING GROWTH FUND
Established 1973
Seeks aggressive, long-term capital appreciation. Price volatility is not
uncommon. Portfolio emphasis: The stocks of small growth companies mostly traded
over the counter.
LORD ABBETT FUNDAMENTAL VALUE FUND
Established 1986
Seeks growth of capital and growth of income consistent with reasonable risk.
Portfolio emphasis: The stocks of large and midsized companies with strong
underlying fundamentals.
LORD ABBETT GLOBAL FUND
Equity Series
Established 1988
Seeks long-term growth of capital and, secondarily, production of current
income. Portfolio: A diversified portfolio of stocks from around the world.
LORD ABBETT VALUE APPRECIATION FUND
Established 1983
Seeks capital appreciation. Portfolio emphasis: The stocks of midsized
companies.
BALANCED PORTFOLIO
- ------------------
LORD ABBETT BALANCED SERIES
Established 1994
Seeks current income and capital growth. Portfolio: A blend of stocks and fixed-
income securities.
FIXED-INCOME PORTFOLIOS
- -----------------------
LORD ABBETT BOND-DEBENTURE FUND
Established 1971
Seeks high current income and capital growth to produce a high total return.
Portfolio emphasis: Convertible issues and lower rated debt.
LORD ABBETT GLOBAL FUND
Income Series
Established 1988
Seeks high current income and, secondarily, capital appreciation. Portfolio:
High-quality international and U.S. debt.
LORD ABBETT LIMITED DURATION U.S. GOVERNMENT
SECURITIES SERIES*
Established 1993
Seeks a high level of income, relative to money market instruments, with less
fluctuations in principal than long-term U.S. Government securities. Portfolio
emphasis: Limited duration fixed-income securities (primarily U.S. Government
securities).
LORD ABBETT U.S. GOVERNMENT SECURITIES FUND*
Established 1932
Seeks high current income. Portfolio: Since 1985, U.S. Government securities
exclusively.
TAX-FREE PORTFOLIOS
- -------------------
LORD ABBETT TAX-FREE INCOME FUNDS
- ---------------------------------
National and New York Series Established 1984
- ---------------------------------------------
California Fund Established 1985
- --------------------------------
Texas Series Established 1987
- -----------------------------
New Jersey, Connecticut, Missouri, Hawaii, Florida and Pennsylvania Series
Established 1991
- ----------------
Washington and Michigan Series Established 1992
- -----------------------------------------------
Georgia and Minnesota Series Established 1994
- ---------------------------------------------
Seek high tax-free income. Portfolios' emphasis: High-quality municipal bonds.
MONEY MARKET PORTFOLIO
- ----------------------
LORD ABBETT U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND
Established 1979
Seeks high current income and preservation of capital. Portfolio: U.S.
Government money market instruments.
An investment in this Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that this Fund will be able to maintain
a stable net asset value of $1.00 per share. This Fund is managed to maintain,
and has maintained, its stable $1.00 per share price.
* An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
[LOGO] LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
LATFI-2-995
The GM Building . 767 Fifth Avenue . New York, NY 10153-0203 (11/95)
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