Lord Abbett
National Tax-Free Income Fund
New York Tax-Free Income Fund
Texas Tax-Free Income Fund
New Jersey Tax-Free Income Fund
Connecticut Tax-Free Income Fund
Missouri Tax-Free Income Fund
Hawaii Tax-Free Income Fund
Washington Tax-Free Income Fund
Minnesota Tax-Free Income Fund
California Tax-Free Income Fund
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED MARCH 31, 2000
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Funds that seek to provide attractive levels of tax-advantaged income
Visit our Web Site and get up-to-date statistics and other useful information at
www.lordabbett.com
[LOGO]
<PAGE>
Report to Shareholders
For the Six Months Ended March 31, 2000
[PHOTO]
Robert S. Dow
Chairman
April 5, 2000
"Now could be an ideal time for investors to enjoy the potential for favorable
total returns . . . We see real value in the tax-free bond market now and over
the next several months."
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Lord, Abbett & Co. is proud to announce we have received a DALBAR award for
providing consistently good service to shareholders, the 1999 Key Honors Award
for Mutual Fund Service. DALBAR, Inc., an independent research firm and
evaluator of mutual fund service, presents the awards to financial services
firms that provide consistently solid service to clients.
Lord Abbett Tax-Free Income Fund completed the first six months of its fiscal
year on March 31, 2000 with aggregate net assets of $1.6 billion. Please see the
inside front cover of this report for individual net assets and performance of
each Fund.
Interest Rates Rise, Yield Spreads Widen
The fourth quarter of 1999 proved to be a volatile time for tax-free bonds. The
number of new bonds issued remained extremely low, and as 1999 ended, tax
selling and Y2K concerns led to a massive sell-off, driving the prices on most
tax-free bonds down to discount levels. However, since bond yields move in the
opposite direction of their prices, yields on tax-free bonds rose, becoming even
more attractive relative to those of Treasury securities(1) of similar
maturities.
From October to March, the two most significant factors affecting tax-free bonds
were rising interest rates and the widening of yield spreads, or the difference
in the yields of bonds of different quality levels. These conditions pushed
yields on tax-free bonds up to more than 95% of the yields on taxable Treasury
securities of similar maturities. (Typically, long-maturity tax-free bonds yield
approximately 83% to 87% of what Treasurys yield.) These wider spreads, we
believe, set the stage for tremendous value in tax-free bond mutual funds.
Attractive Tax-Equivalent Yields at Great Value
We maintained the high credit quality of your Portfolios because we were not
convinced the higher rates paid by lower-rated bonds were worth the additional
credit risk. In addition, we increased our allocation to tax-free bonds that we
identified as likely candidates for pre-refunding. Pre-refunded bonds, which
typically have coupons that are higher than current market rates, are bonds that
have been "prepaid" by the proceeds of a second bond issue. These proceeds are
used to "call" or pay off the original issue at its first call date. As a
result, pre-refunded bonds have virtually no default risk. Typically, when a
bond becomes pre-refunded it appreciates in value, because of its higher credit
quality and shortened maturity. These decisions added to the Fund's income as
well as its overall total return potential. Overall, now could be an ideal time
for investors to "lock in" attractive taxable-equivalent yields at relatively
lower prices -- and enjoy the potential for favorable total returns.
The Coming Months
We see real value in the tax-free bond market now and over the next several
months. Moving forward, we may selectively add deep discount bonds, which sell
at prices considerably below par. Also, the rates currently offered by
lower-rated, investment grade tax-free bonds (Baa-rated) are generally the
highest they have been in five years relative to higher-grade debt, and when
appropriate, we will selectively add some of these bonds. In general, we will
continue to stress the overall high quality of your Portfolios.
Thank you for making the Lord Abbett Tax-Free Income Fund part of your
diversified investment portfolio. We look forward to helping you attain your
financial goals in the years ahead.
(1) Unlike U.S. Treasury securities, an investment in the Fund is neither
insured nor guaranteed by the U.S. Government.
RISK: All or a portion of the income derived from this portfolio may be subject
to the Federal Alternative Minimum Tax. The Fund has the ability to invest in
derivatives, including options, financial futures, options on financial futures
and residual interest bonds (also known as "inverse floaters"). These
instruments involve special risks, which include but are not limited to: risk of
loss of principal due to potential illiquidity, risks arising from margin
requirements and related leverage factors, and the risk of extreme volatility,
sometimes associated with residual bonds and their variable interest rate
structure.
<PAGE>
Fund Facts
All Funds managed by Lord Abbett emphasize high quality, call protection and
total return potential. Portfolio quality shown as of 3/31/00.
Lord Abbett's Focus on Quality(1)
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National Tax-Free Income Fund
AAA 56.7%
AA 21.25
A 16.8%
BBB 3.8%
Other 1.5%
Texas Tax-Free Income Fund
AAA 59.6%
AA 13.7%
A 15.1%
BBB 10.3%
Other 1.3%
New York Tax-Free Income Fund
AAA 66.3%
AA 14.8%
A 15.1%
BBB 3.8%
New Jersey Tax-Free Income Fund
AAA 81.2%
AA 6.5%
A 8.2%
Other 4.1%
Connecticut Tax-Free Income Fund
AAA 64.3%
AA 15.6%
A 6.7%
Other 6.8%
BBB 6.6%
Washington Tax-Free Income Fund
AAA 69.8%
AA 21.2%
A 5.5%
BBB 3.5%
Missouri Tax-Free Income Fund
AAA 72.1%
AA 14.3%
A 6.8%
BBB 5.0%
Other 1.8%
Minnesota Tax-Free Income Fund
AAA 51.9%
AA 34.6%
A 7.2%
BBB 6.3%
Hawaii Tax-Free Income Fund
AAA 74.4%
AA 8.4%
A 12.9%
BBB 4.3%
california Tax-Free Income Fund
AAA 82.1%
AA 12.3%
A 3.7%
BBB 1.9%
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<TABLE>
<CAPTION>
Lord Abbett's Tax-Free Record and SEC-Required Information as of 3/31/00 for Class A Shares
National New York Texas New Jersey Connecticut
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Income Fund(2) Income Fund(2) Income Fund Income Fund Income Fund
<S> <C> <C> <C> <C> <C>
Date of Inception 4/2/84 4/2/84 1/20/87 1/2/91 4/1/91
Net Assets (in millions) $505.2 $230.7 $77.6 $152.5 $102.1
Dividend Distribution Rate at Net Asset Value(5) 5.16% 5.29% 5.36% 5.37% 5.30%
Average Annual Rate of Total Return(6) at Net Asset Value:
1 Year -3.29% -2.24% -4.28% -2.99% -3.12%
10 Years or Life of Series 6.61% 6.27% 6.62% 6.72%(7) 6.29%(7)
30-Day SEC Yield(8) 4.77% 4.42% 4.58% 4.62% 4.77%
Average Annual Rate of Total Return(6) at the Class A Share Maximum Offering
Price:
1 Year -6.40% -5.40% -7.40% -6.10% -6.30%
5 Years 4.70% 4.28% 4.31% 4.48% 4.35%
10 Years or Life of Series 6.26% 5.92% 6.27% 6.34%(7) 5.91%(7)
Missouri Hawaii Washington Minnesota California
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Income Fund Income Fund Income Fund Income Fund(3) Income Fund(2)
Date of Inception 5/31/91 10/28/91 4/15/92 12/27/94 9/3/85(4)
Net Assets (in millions) $119.1 $67.1 $46.7 $19.3 $188.6
Dividend Distribution Rate at Net Asset Value(5) 5.12% 5.03% 5.19% 5.58% 5.12%
Average Annual Rate of Total Return(6) at Net Asset Value:
1 Year -2.12% -3.01% -3.44% -2.72% -3.29%
10 Years or Life of Series 6.20%(7) 5.77%(7) 6.08%(7) 5.76%(7) 6.27%
30-Day SEC Yield(8) 4.89% 4.58% 5.09% 5.12% 4.71%
Average Annual Rate of Total Return(6) at the Class A Share Maximum Offering
Price:
1 Year -5.40% -6.10% -6.60% -5.80% -6.40%
5 Years 4.26% 4.35% 4.95% 4.41% 4.16%
10 Years or Life of Series 5.81%(7) 5.36%(7) 5.64%(7) 5.10%(7) 5.91%
</TABLE>
(1) Includes holdings which are not rated by independent ratings services but
are, in Lord Abbett' opinion, of comparable quality.
(2) For specific Class share performance, please see each Fund's Financial
Highlights (pages 35, 36 and 41).
(3) Returns and yield for Minnesota Tax-Free Income Fund reflect a voluntary
waiver of Lord, Abbett & Co's management fee. Absent this waiver, the
Fund's returns and yield would have been lower. Lord, Abbett & Co. may
revise or terminate this waiver at any time.
(4) Date shown is inception of a substantially similar predecessor fund that
became the Fund effective 7/15/96.
(5) Dividend Distribution Rate at Net Asset Value: The dividend distribution
rate is calculated by dividing the annualized dividend per share of a class
derived from net investment income during the month ended March 31, 2000 by
the net asset value on the last day of that period.
(6) 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 Federal
Alternative Minimum Tax liability 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 Fund.
(7) Since inception.
(8) 30-Day SEC Yield: The 30-day SEC yield for each class of shares is
calculated by dividing annualized net investment income per share during
the 30-day period ended March 31, 2000 by the maximum offering price per
share on the last day of that period. The results quoted in this summary
represent Class A share 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 Class A share maximum sales charge of 3.25%.
Effective May 3, 1999, the maximum sales charge was reduced from 4.75% to
3.25%.
Lord Abbett's National, California and New York Tax-Free Income Funds also
offer other classes of shares having varying fees and expenses.
See Important Information on page 1.
<PAGE>
IMPORTANT INFORMATION
Each portfolio may invest up to 20% of its net assets in residual interest
bonds ("RIBs"). RIBs, sometimes referred to as inverse floaters, are debt
instruments 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 make lower interest payments and their
values fall faster than fixed-rate bonds. But when interest rates fall, not
only do RIBs make higher interest payments, their values also rise faster
than fixed-rate bonds. If used as sales material after 6/30/00, this report
must be accompanied by Lord Abbett's Performance Quarterly for the most
recently completed calendar quarter.
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
NATIONAL TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education 13.01% Bourbon Cnty KY Sch Dist Fin Corp Sch Bldg Rev 5.45% 3/1/2016 Aa3 $ 380 $ 377,028
Bourbon Cnty KY Sch Dist Fin Corp Sch Bldg Rev 5.45% 3/1/2017 Aa3 400 394,624
Bourbon Cnty KY Sch Dist Fin Corp Sch Bldg Rev 5 1/2% 3/1/2018 Aa3 425 419,143
Bourbon Cnty KY Sch Dist Fin Corp Sch Bldg Rev 5 1/2% 3/1/2019 Aa3 460 450,869
Bourbon Cnty KY Sch Dist Fin Corp Sch Bldg Rev 5 1/2% 3/1/2020 Aa3 485 472,302
California Ed Fac Auth Rev CA Institute of Technology 4 1/2% 10/1/2027 AAA 1,000 820,000
Coastal Carolina Univ SC Rev AMBAC+ 5.30% 6/1/2022 Aaa 2,040 1,927,800
Connecticut St Higher Ed Supplemental Ln Auth Rev Ser A
AMT+++ 7 3/8% 11/15/2005 A1 65 65,784
Connecticut St Hlth & Ed Fac Auth Rev Fairfield Univ Ser I
MBIA+ 5 1/4% 7/1/2025 AAA 590 549,437
Connecticut St Hlth & Ed Fac Auth Rev Quinnipiac College Ser E
FSA+ 4 3/4% 7/1/2028 AAA 1,935 1,642,331
Delaware St Econ Dev Auth Rev DE St Univ Proj MBIA+ 5 1/4% 10/1/2017 AAA 935 912,794
Delaware St Econ Dev Auth Rev DE Tech Pk Univ DE Proj
AMBAC+ 6.00% 2/1/2021 AAA 1,000 1,027,500
District of Columbia Rev Amer College Obstetrician
AMBAC+ 4 3/4% 8/15/2018 Aaa 1,250 1,082,813
District of Columbia Rev Georgetown Univ Ser A MBIA+ 6.00% 4/1/2018 AAA 900 920,250
District of Columbia Rev Gonzaga College High Sch
FSA+ 5 3/8% 7/1/2019 AAA 1,000 955,000
District of Columbia Rev James F Oyster Elem Sch Pilot
ACA+ 6 1/4% 11/1/2021 A 850 865,938
District of Columbia Rev James F Oyster Elem Sch Pilot
ACA+ 6 1/4% 11/1/2031 A 1,250 1,265,625
Greenville Cnty SC Univ Ctr Univ Ctr Proj Ser A AMBAC+ 5 1/4% 4/1/2019 AAA 235 222,956
Indiana St Ed Fac Auth Rev 6.65% 3/1/2019 Aaa 10,740 11,438,100
Louisiana St Univ & Agric & Mech College Bd Hlth Sciences Ctr Proj
MBIA+ 6.20% 5/1/2020 AAA 750 773,437
Louisiana St Univ & Agric & Mech College Bd Hlth Sciences Ctr Proj
MBIA+ 6 3/8% 5/1/2031 AAA 600 623,250
Maine Hlth & Higher Ed Fac Auth Rev Ser B MBIA+ 6.00% 7/1/2029 AAA 700 705,250
Massachusetts St Dev Fin Agy Rev Applewild Sch Issue
ASSET GTY+ 5 3/4% 8/1/2019 AA 25 24,594
Massachusetts St Dev Fin Agy Rev Boston Univ Ser P 5 3/8% 5/15/2039 A3 2,000 1,740,000
Massachusetts St Dev Fin Agy Rev Boston Univ Ser P 6.00% 5/15/2059 A3 2,000 1,935,000
Massachusetts St Dev Fin Agy Rev Brooks Sch Issue Ser B
MBIA+ 5.00% 7/1/2029 Aaa 750 651,562
Massachusetts St Dev Fin Agy Rev Curry College Ser
A ACA+ 5 3/8% 3/1/2019 A 500 457,500
Massachusetts St Hlth & Ed Fac Auth Rev Univ MA Med Sch Resh Ser A
CONNIE LEE+ 6.00% 7/1/2023 AAA 30 30,150
Massachusetts St Hlth & Ed Fac Auth Rev Wellesley College Ser F
5 1/8% 7/1/2039 Aa1 165 143,138
Missouri St Hlth & Ed Fac Auth Ed Fac Rev William Jewell College
1
<PAGE>
Statement of Net Assets (unaudited)
NATIONAL TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
ACA+ 6 1/8% 8/1/2019 A 1,175 1,180,875
Monroe Cnty NY Ind Dev Agy Rev Student Hsg Ser A 5 3/8% 4/1/2029 Baa3 $ 500 $ 431,875
Montana St Student Assistance Corp Student Ln Rev Sub Ser B
AMT+++ 6.40% 12/1/2032 A2 2,150 2,160,750
New Jersey Econ Dev Auth Rev Princeton Jr Sch Inc 1996 Proj
7.00% 5/1/2020 BBB* 980 1,008,175
New Jersey Econ Dev Auth Rev United Methodist Homes 5 1/8% 7/1/2018 BBB 1,000 770,000
Pennsylvania St Higher Ed Assistance Agy Student Ln Rev
RIBs AMBAC+ AMT+++ 7.85% 3/1/2022++ AAA 4,500 4,826,250
Pennsylvania St Higher Ed Assistance Agy Student Ln Rev
RIBs AMBAC+ AMT+++ 9.47% 9/1/2026++ AAA 2,000 2,365,000
Pennsylvania St Higher Ed Fac Auth Rev College & Univ PA 588
RIBs 4.12% 7/15/2030++ AAA* 7,500 4,575,000
Pennsylvania St Higher Ed Fac Auth Rev College & Univ Trustees Univ
4 5/8% 7/15/2030 AA 1,060 853,300
Private Colleges & Univ Auth GA Emory Univ Ser A 6.40% 10/1/2023 Aa1 310 318,912
Private Colleges & Univ Auth GA Student Ln Rev Ser B
AMT+++ 5.00% 11/1/2033 Aa1 900 776,250
Puerto Rico Ind Tourist Ed Med & Envr Ctrl Fac Ana G Mendez
Univ Sys Proj 5 3/8% 2/1/2019 BBB 500 455,625
Rensselaer Cnty NY IDA Polytechnic Inst Dorm Proj
Ser A 5 1/8% 8/1/2029 A1 975 873,844
Rhode Island St Hlth & Ed Bldg Corp Rev Higher Ed Fac Brown Univ
6.00% 9/1/2025 Aa1 7,170 7,331,325
Texas St Higher Ed Coord Bd College Student Ln Rev
AMT+++ 7.70% 10/1/2025 A 400 411,500
University AZ Univ Rev Sys AZ Bd Regents Ser A FGIC+ 5.80% 6/1/2024 AAA 1,000 1,006,250
University Central AR Rev Hsg Sys FSA+ 6 1/2% 1/1/2031 AAA 2,675 2,852,219
University NC Sys Pool Rev Ser B MBIA+ 4 1/2% 10/1/2023 AAA 130 105,950
University NC Univ Rev Comp Int Util Sys Zero Coupon 8/1/2019 Aa2 680 224,400
University NC Univ Rev Comp Int Util Sys Zero Coupon 8/1/2021 Aa2 6,310 1,814,125
University OK Rev Util Sys MBIA+ 4 5/8% 7/1/2024 AAA 250 208,125
University TX Univ Rev Fin Sys Ser A 5.70% 8/15/2020 AAA 20 19,875
University WY Univ Rev Fac Impt MBIA+ 5 1/2% 6/1/2019 AAA 325 316,063
Virginia College Bldg Auth VA Ed Fac Rev Hampton Univ Proj
6.00% 4/1/2020 A 810 827,213
Virginia St Pub Sch Auth Ser A 6.20% 8/1/2014 Aa1 1,450 1,527,938
Wayne St Univ MI Univ Rev AMBAC+ 5.65% 11/15/2015 AAA 215 215,269
Wisconsin St Hlth & Ed Fac Auth Rev Marquette Univ
MBIA+ 4 3/4% 6/1/2023 AAA 1,470 1,247,663
Wyoming Student Ln Corp Student Ln Rev Ser A 6 1/4% 6/1/2029 AA 810 823,163
Total 72,421,109
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Finance .32% Delaware VY PA Regl Fin Auth Loc Govt Rev
Ser C AMBAC+ 7 3/4% 7/1/2027 AAA 1,000 1,257,500
Indiana Bd Bk Rev St Revolving Fund Prog Ser A 6 3/4% 2/1/2017 AAA 500 535,625
Total 1,793,125
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General Obligation Akron OH Impt 5.80% 11/1/2020 AA 950 961,875
10.02% Anchor Bay MI Sch Dist FGIC+ 4 3/4% 5/1/2026 AAA 255 214,837
Boulder CO Open Space Acq 5 1/2% 8/15/2018 Aa1 1,485 1,472,006
Deer Park TX Indpt Sch Dist 4.00% 2/15/2019 AAA 2,000 1,587,500
District Columbia Ser A FSA+ 5 3/8% 6/1/2024 AAA 350 324,625
Dodge KS Univ Sch Dist #443 FSA+ 4 3/8% 9/1/2018 AAA 2,025 1,703,531
Douglas Cnty NE Sch Dist #17 Millard FSA+ 4 3/4% 6/15/2017 AAA 1,745 1,572,681
Florida St Bd of Ed Cap Outl Pub Ed Ser D 4 3/4% 6/1/2022 Aa2 2,490 2,150,737
Freeport IL Swr Sys Impts AMBAC+ 6.00% 12/1/2029 AAA 1,500 1,503,750
Glen Cove NY FGIC+ 5.00% 9/15/2014 AAA 705 669,750
Harris Cnty TX Toll Rd 5.10% 8/15/2015 Aa1 2,000 1,922,500
2
<PAGE>
Statement of Net Assets (unaudited)
NATIONAL TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Highlands Ranch Met CO Dist #3 ACA+ 5.30% 12/1/2019 A $ 200 $ 179,000
Hilton Head IS SC Ser A FGIC+ 5 1/2% 12/1/2023 AAA 25 24,031
Hilton Head IS SC Ser A FGIC+ 5 1/8% 12/1/2024 AAA 705 633,618
Honolulu HI City & Cnty Ser D FGIC+ AMT+++ 4.45% 2/1/2005 AAA 4,230 4,076,663
Idaho Falls ID Elec Defd Int FGIC+ Zero Coupon 4/1/2013 AAA 500 243,750
Kilmarnock VA Pub Impt 6 1/4% 3/1/2027 BBB* 1,430 1,465,750
King Cnty WA RIBs 6.87% 12/1/2013++ AA* 2,000 2,140,000
Laredo TX Indpt Sch Dist 5 1/2% 8/1/2021 AAA 1,210 1,167,650
Mississippi St Cap Impt Ser B FGIC+ 4 1/4% 11/1/2018 AAA 2,035 1,668,700
New Haven CA Univ Sch Dist Ser B FGIC+ Zero Coupon 8/1/2022 AAA 4,625 1,208,281
New Orleans LA FGIC+ 4 3/4% 12/1/2026 AAA 1,900 1,593,625
New York St Ser B 6.00% 8/15/2018 A 200 204,250
North Providence RI Ser A MBIA+ 6 1/8% 7/1/2016 AAA 1,410 1,480,500
Ohio St Infrastructre Impt Ser A 5 1/2% 2/1/2019 Aa1 205 202,694
Omaha NE 5 1/8% 11/15/2016 AAA 880 841,500
Omaha NE 5 1/8% 11/15/2017 AAA 735 697,331
Oregon St Alternate Energy Proj Ser A AMT+++ 5.00% 1/1/2015 Aa2 1,915 1,819,250
Oregon St Alternate Energy Proj Ser A AMT+++ 5.05% 1/1/2016 Aa2 1,995 1,892,756
Oregon St Alternate Energy Proj Ser A AMT+++ 5.10% 1/1/2017 Aa2 1,130 1,070,675
Pearland TX Indpt Sch Dist 5 1/8% 2/15/2022 AAA 1,500 1,372,500
Plymouth-Canton MI Cmnty Sch Dist FGIC+ 4.60% 5/1/2014 AAA 1,780 1,604,225
Puerto Rico Comwlth Pub Impt 6.00% 7/1/2029 A 1,500 1,511,250
Richmond VA FSA+ 5 1/2% 1/15/2018 AAA 2,250 2,185,312
Richmond VA Pub Impt Ser B 5 1/2% 7/15/2023 AA 2,120 2,029,900
Taunton MA FSA+ 4 3/4% 5/1/2019 AAA 2,765 2,419,375
Texas St Wtr Dev Bd 7.15% 8/1/2035 Aa1 1,915 2,039,475
Washington Multnomah & Yamhill Cnty OR Sch Dist No 1J
FSA+ 5 1/2% 4/1/2017 Aaa 770 765,187
Washington Multnomah & Yamhill Cnty OR Sch Dist No 1J
FSA+ 5.60% 4/1/2020 Aaa 490 484,488
Washington St Ser A 5 3/4% 7/1/2014 Aa1 3,415 3,474,763
Wylie TX Indpt Sch Dist Zero Coupon 8/15/2029 Aaa 1,500 260,625
Wyoming OH City Sch Dist 5 1/4% 12/1/2022 Aa3 1,000 922,500
Total 55,763,416
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Healthcare 15.44% Abag Fin Auth For Nonprofit Corp CA Ctfs Partn O'Connor Woods
Obligated Group ACA+ 6.20% 11/1/2029 A 1,500 1,537,500
Clackamas Cnty OR Hosp Fac Auth Rev Legacy Hlth Sys
MBIA+ 5.00% 2/15/2015 AAA 1,750 1,649,375
Clackamas Cnty OR Hosp Fac Auth Rev Legacy Hlth Sys
MBIA+ 5.00% 2/15/2016 AAA 1,000 940,000
Cobb Cnty GA Hosp Auth Rev Antic Ctfs Ser A AMBAC+ 4 3/4% 4/1/2026 AAA 375 313,125
Connecticut St Hlth & Ed Fac Auth Rev Child Care Fac Prog Ser C
AMBAC+ 5 1/2% 7/1/2019 AAA 125 120,312
Connecticut St Hlth & Ed Fac Auth Rev Horace Bushnell Mem Hall Ser A
MBIA+ 5 1/2% 7/1/2019 Aaa 100 96,250
Connecticut St Hlth & Ed Fac Auth Rev The Griffin Hosp Ser A
5 3/4% 7/1/2023 Baa2 2,980 2,525,550
Connecticut St Hlth & Ed Fac Auth Rev Waterbury Hosp Issue Ser C
ASSET GTY+ 5 3/4% 7/1/2029 AA 460 447,925
Cumberland Cnty PA Muni Auth Rev 1st Mtg Carlisle Hosp & Hlth
6.80% 11/15/2014 BBB 1,650 1,563,375
Dade Cnty FL Hlth Fac Auth Hosp Rev Miami Child
FGIC+ 6 7/8% 8/15/2017 AAA 3,000 3,014,370
3
<PAGE>
Statement of Net Assets (unaudited)
NATIONAL TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Delaware Cnty PA Auth Hosp Rev Crozer Chester Med Ctr
ACA+ 5 3/8% 12/1/2018 A $ 2,625 $ 2,395,312
District of Columbia Rev Amer Assoc of Homes & Svcs
ACA+ 6.00% 7/1/2024 A 325 318,094
Grand Forks ND Hlth Care Sys Rev Altru Hlth Sys Oblig Group
MBIA+ 5.60% 8/15/2017 AAA 1,310 1,285,437
Halifax Hosp Med Ctr FL Hlth Care Fac Rev Halifax Mgmt Sys Ser A
ACA+ 5.20% 4/1/2018 A 3,470 3,127,337
Hanover Cnty VA Ind Dev Auth Bon Secours Hlth Sys Proj
MBIA+ 5 1/2% 8/15/2025 AAA 175 167,781
Hastings MN Hlth Care Fac Rev Regina Med Ctr ACA+ 5.30% 9/15/2028 A 1,100 951,500
Illinois Hlth Fac Auth Rev Holy Cross Hosp Proj 6 3/4% 3/1/2024 Baa1 2,000 2,002,500
Illinois Hlth Fac Auth Rev Hosp Sisters Svc Inc Ser A
MBIA+ 5.00% 6/1/2018 Aaa 1,610 1,428,875
Indiana Cnty PA Hosp Auth Rev Ser A 7 1/8% 7/1/2023 AAA 1,500 1,552,500
Iowa Fin Auth Rev IA St Revolving Fd Comb Ser 6 1/4% 5/1/2024 A 3,400 3,531,750
Iowa Fin Auth Rev Mercy Hlth Sys Ser V 5 1/4% 8/15/2021 AA 500 443,750
Jackson OH Hosp Fac Rev Cons Hlth Sys Jackson Hosp
ASSET GTY+ 6 1/8% 10/1/2023 AA 3,050 3,072,875
Johnson City TN Hlth & Ed Fac Bd Hosp Rev 1st Mtg
Mtn States Hlth Ser A MBIA+ 6 3/4% 7/1/2017 AAA 3,000 3,333,750
Knox Cnty TN Hlth Ed & Hsg Fac Univ Hlth Sys Inc 5 5/8% 4/1/2029 Baa1 345 282,900
Lucas Cnty OH Hosp Rev Promedia Hlth Care Oblig Corp
AMBAC+ 5 3/8% 11/15/2039 AAA 755 683,275
Maryland St Hlth & Higher Ed Fac Auth Rev Catholic
Hlth Initiatives Ser A 6.00% 12/1/2024 AA 1,000 1,003,750
Maryland St Hlth & Higher Ed Fac Auth Rev Kaiser Permanente Ser A
5 3/8% 7/1/2015 A 5,000 4,712,500
Massachusetts St Dev Fin Agy Rev May Inst Issue
ASSET GTY+ 5 3/4% 9/1/2024 AA 845 813,313
Massachusetts St Dev Fin Agy Rev Northern Berkshire Cmnty Ser A
ACA+ 6 1/4% 8/15/2019 A 1,000 1,002,500
Mckean Cnty PA Hosp Auth Rev Bradford Hosp Proj ACA+ 6.00% 10/1/2013 A 3,500 3,591,875
Minneapolis & St Paul MN Hsg & Redev Auth Hlth Care Sys Group Hlth
Plan Proj 6.90% 10/15/2022 Baa1 700 706,125
Montgomery AL Med Clinic Bd Hlth Care Fac Rev 7.00% 3/1/2015 A 1,305 1,322,774
Montgomery Cnty OH Rev Catholic Hlth Initiatives
Ser S 6.00% 12/1/2026 AA 4,000 3,940,000
New Hampshire Higher Ed & Hlth Fac Auth Rev Androscoggin Vly Hosp
5.80% 11/1/2027 A 750 652,500
New Jersey Econ Dev Auth Rev 1st Mtg Cadbury Corp Ser A
ACA+ 5 1/2% 7/1/2028 A 1,000 920,000
New Jersey Econ Dev Auth Rev Transn Proj Sublease Ser A
FSA+ 5.00% 5/1/2018 AAA 200 183,750
New Jersey Hlth Care Fac Fin Auth Rev Ser C MBIA+ 8.60% 7/1/2017 AAA 325 334,019
New Jersey Hlth Care Fac Fin Auth Rev Society Of the VY Hosp Ser C
MBIA+ 6 5/8% 7/1/2010 AAA 250 253,762
New York St Med Care Fac Fin Agy Rev 8 7/8% 8/15/2007 A 1,035 1,040,848
North Carolina Med Care Commn Rev NC Hsg Fndtn Inc
ACA+ 6.45% 8/15/2020 A 950 973,750
Plymouth MN Hlth Fac Rev West Hlth Proj Ser A FSA+ 6 1/8% 6/1/2024 AAA 3,190 3,241,838
Pottsville PA Hosp Auth Hosp Rev Hosp & Warne
Clinic ACA+ 5 5/8% 7/1/2024 A 250 229,375
Rhode Island St Hlth & Ed Bldg Corp Rev Hlth Fac Tockwotton Home
6 1/4% 8/15/2022 BBB* 750 675,937
Rhode Island St Hlth & Ed Bldg Corp Rev Hosp Fin
ASSET GTY+ 5.30% 7/1/2029 AA 480 413,400
Rhode Island St Hlth & Ed Bldg Corp Rev Roger Williams Rlty
FHA+ 6 1/2% 8/1/2029 AAA 4,340 4,475,625
Rochester MN Hlth Care Fac Rev Ser H RIBs 7.76% 11/15/2015++ AA 9,000 9,416,250
4
<PAGE>
Statement of Net Assets (unaudited)
NATIONAL TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs Econ Dev Auth Hosp Fac Rev Hlth Alliance Ser A
7 3/8% 12/15/2021 Baa1 $ 1,000 $ 992,500
Teton Cnty WY Hosp Dist Hosp Rev Ref & Impt ACA+ 5.80% 12/1/2017 A 400 390,500
University MO Hlth Fac Rev Univ MO Hlth Sys Ser A
AMBAC+ 5 1/8% 11/1/2028 AAA 1,050 925,312
Vermont Ed & Hlth Bldg Fin Agy Rev Hosp Fletcher Allen Hlth Ser A
AMBAC+ 5 3/4% 12/1/2018 AAA 1,500 1,503,750
Wisconsin St Hlth & Ed Fac Auth Rev Aurora Hlth
Care Ser B 5 1/2% 2/15/2015 BBB 1,625 1,421,875
Wisconsin St Hlth & Ed Fac Auth Rev Hess Mem Hosp Assn
ACA+ 7 7/8% 11/1/2022 A 3,275 3,704,844
Wisconsin St Hlth & Ed Fac Auth Rev Wheaton Franciscan Svc
MBIA+ 6 1/2% 8/15/2011 AAA 315 326,812
Total 85,954,902
----------------------------------------------------------------------------------------------------------------------==============
Housing 10.62% Alexandria VA Redev & Hsg Auth Multi Fam Hsg Rev Parkwood
Court Apt Proj Ser A 6 1/8% 10/1/2029 A3 180 179,550
Arlington Cnty VA Ind Dev Auth Multi Fam Rev Hsg Mtg 8.00% 7/1/2015 BB* 890 893,337
Arlington Cnty VA Ind Dev Auth Multi Fam Rev Hsg Mtg 6.30% 7/1/2016 A 500 513,125
Bexar Cnty TX Hsg Fin Corp Rev Coll Mtg Ser A GNMA+ AMT+++
8.20% 4/1/2022 AAA 555 564,712
Clayton Cnty GA Hsg Auth Multi Fam Hsg Rev Pointe Clear Apts
FSA+ AMT+++ 5.70% 7/1/2023 AAA 850 828,750
Colorado Hsg Fin Auth Multi Fam Hsg Insd Mtg Ser B-2 AMT+++
5.90% 10/1/2038 Aa2 130 124,475
Colorado Hsg Fin Auth Multi Fam Hsg Ser A AMT+++
6.80% 10/1/2037 Aa2 2,360 2,480,950
Colorado Hsg Fin Auth Multi Fam Insd Mtg Ser C-3 FHA+ 5.70% 10/1/2021 Aa2 5,300 5,134,375
Georgia St Hsg & Fin Auth Rev Sing Fam Mtg Ser A Sub A-2
FHA+ AMT+++ 6.45% 12/1/2027 AAA 210 213,938
Georgia St Hsg & Fin Auth Rev Sing Fam Mtg Ser B Sub B-2
FHA+ AMT+++ 6.55% 12/1/2027 AAA 2,000 2,045,000
Georgia St Hsg & Fin Auth Rev Sing Fam Mtg Sub Ser A-2
FHA+ AMT+++ 6.40% 12/1/2015 AAA 1,250 1,289,062
Idaho Hsg Agy Sing Fam Mtg Ser F FHA+ AMT+++ 7.45% 7/1/2015 Aaa 775 817,625
Illinois Hsg Dev Auth Multi Fam Hsg Lawndale
FHA+ AMT+++ 6.80% 12/1/2016 AAA 1,000 1,055,000
Illinois Hsg Dev Auth Multi Fam Hsg Lawndale
FHA+ AMT+++ 7.10% 12/1/2034 AAA 1,500 1,603,125
Indiana St Hsg Fin Auth Sing Fam Mtg Rev Ser D
GNMA+ AMT+++ 7.80% 1/1/2022 Aaa 450 459,563
Maine St Hsg Auth Mtg Purp Ser A-2 AMT+++ 6 3/4% 11/15/2035 Aa2 130 133,900
Manchester NH Hsg & Redev Auth Rev Ser B ACA+ Zero Coupon 1/1/2019 A 2,570 719,600
Manchester NH Hsg & Redev Auth Rev Ser B ACA+ Zero Coupon 1/1/2022 A 5,140 1,156,500
Manchester NH Hsg & Redev Auth Rev Ser B ACA+ Zero Coupon 1/1/2023 A 5,140 1,079,400
Manchester NH Hsg & Redev Auth Rev Ser B ACA+ Zero Coupon 1/1/2026 A 5,140 867,375
Manchester NH Hsg & Redev Auth Rev Ser B ACA+ Zero Coupon 1/1/2029 A 4,140 569,250
Maryland St Cmnty Dev Admin Dept Hsg & Cmnty Dev Residential Ser B
AMT+++ 6.15% 9/1/2032 Aa2 2,000 2,002,500
Maryland St Cmnty Dev Admin Dept Hsg & Cmnty Dev Sing Fam Ser 7
AMT+++ 7.30% 4/1/2025 Aa2 375 384,375
Massachusetts St Hsg Fin Agy Hsg Rev Rental Mtg Ser A
AMBAC+ AMT+++ 7.35% 1/1/2035 AAA 1,430 1,519,375
Massachusetts St Hsg Fin Agy Hsg Rev Sing Fam Ser 29
AMT+++ 6 3/4% 6/1/2026 Aa3 1,460 1,509,275
Minneapolis St Paul MN Hsg Fin Bd Rev Sing Fam Mtg Ser AB
GNMA/FNMA+ AMT+++ 6 1/4% 11/1/2030 AAA 800 825,000
Minnesota St Hsg Fin Agy Sing Fam Mtg Ser G-1 AMT+++ 5.60% 7/1/2022 Aa2 995 948,981
5
<PAGE>
Statement of Net Assets (unaudited)
NATIONAL TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Minnesota St Hsg Fin Agy Sing Fam Mtg Ser H-1 AMT+++ 5.65% 7/1/2031 Aa2 $ 2,000 $ 1,867,500
Missouri St Hsg Dev Cmnty Mtg Sing Fam Mtg Rev Ser A
GNMA+ AMT+++ 7 3/8% 8/1/2023 AAA 400 412,084
Missouri St Hsg Dev Cmnty Mtg Rev Sing Fam Ser E-1
GNMA/FNMA+ AMT+++ Zero Coupon 3/1/2029 AAA 2,420 396,275
New Orleans LA Fin Auth Sing Fam Mtg Rev Ser B-2
GNMA/FNMA+ AMT+++ 6.00% 12/1/2018 Aaa 1,260 1,275,750
North Carolina Hsg Fin Agy Sing Fam Rev Ser BB AMT+++ 6 1/4% 3/1/2012 Aa2 1,245 1,282,350
Ohio Hsg Fin Auth Sing Fam Mtg Rev Ser C GNMA+ AMT+++ 7.85% 9/1/2021 AAA 230 236,164
Oklahoma Hsg Fin Agy Sing Fam Rev Ser B-1 Zero Coupon 3/1/2029 Aaa 5,000 793,750
Oklahoma Hsg Fin Agy Sing Fam Rev Ser B-2 AMT+++ Zero Coupon 9/1/2030 Aaa 9,900 1,435,500
Oklahoma Hsg Fin Agy Sing Fam Rev Ser D-1
GNMA/FNMA+ Zero Coupon 3/1/2029 Aaa 7,435 1,217,481
Oklahoma Hsg Fin Agy Sing Fam Rev Mtg Ser B-1 5.30% 9/1/2026 Aaa 750 702,187
Oklahoma Hsg Fin Agy Sing Fam Rev Mtg Homeowner Ser D-2
GNMA/FNMA+ AMT+++ Zero Coupon 9/1/2030 Aaa 4,425 625,031
Phoenix AZ Ind Dev Auth Multi Fam Hsg Rev Ventana Palms Apt Proj Ser A
MBIA+ 6.15% 10/1/2029 Aaa 75 75,937
South Dakota Hsg Dev Auth Home Ownership Mtg Ser A 51/8% 5/1/2027 AAA 5,500 4,915,625
Tennessee Hsg Dev Agy Mtg Fin Ser A AMT+++ 7 1/8% 7/1/2026 AA 1,325 1,346,531
Texas St Dept Hsg & Cmnty Affair Residential Mtg Rev Ser A
GNMA/FNMA+ AMT+++ 6.20% 7/1/2019 AAA 2,000 2,027,500
Utah St Hsg Fin Agy Sing Fam Mtg Ser A 2 FHA+ AMT+++ 7 3/4% 1/1/2023 AAA 35 35,971
Virginia St Hsg Dev Auth Comwlth Mtg Ser A 7.10% 1/1/2022 Aa1 7,600 7,856,500
Washington St Hsg Fin Cmnty Sing Fam Prog Ser 2-A
GNMA/FNMA+ AMT+++ 6.30% 12/1/2027 Aaa 895 905,068
West Virginia St Bldg Cmnty Lease Rev W. VA Regl Jail Ser A
AMBAC+ 5 3/8% 7/1/2018 AAA 1,000 975,000
Wyoming Cmnty Dev Auth Hsg Rev Ser 2 AMT+++ 6.35% 6/1/2029 Aa2 800 811,000
Total 59,111,322
----------------------------------------------------------------------------------------------------------------------==============
Industrial 4.13% Albany Dougherty GA Payroll Dev Auth Solid Waste Disp Rev Procter &
Gamble Paper Prod AMT+++ 5.20% 5/15/2028 Aa2 1,000 882,500
Bedford Cnty VA Ind Dev Auth Ind Dev Rev Nekoosa Packaging Proj
AMT+++ 6.30% 12/1/2025 Baa2 465 453,375
Broward Cnty FL Resource Recov Rev Ses Broward Co LP South Proj
7.95% 12/1/2008 A 2 2,064
Butler AL Ind Dev Bd Solid Waste Disp Rev James River Proj
AMT+++ 8.00% 9/1/2028 BBB 1,500 1,623,750
Carroll Cnty KY Collat Poll Ctrl KY Util Co Proj Ser A 7.45% 9/15/2016 A1 3,200 3,404,000
Clark Cnty NV Ind Dev Rev PA Ser 349 RIBs 5.97% 10/1/2030++ A* 12,500 10,390,625
Connecticut St Dev Auth Solid Waste Disp Fac Rev Pfizer Inc Proj
AMT+++ 7.00% 7/1/2025 AAA 2,500 2,721,875
Green Bay WI Redev Auth Fort James Proj AMT+++ 5.60% 5/1/2019 Baa2 1,000 903,750
Jacksonville FL Swr & Solid Waste Disp Fac Rev Anheuser-Busch Proj
AMT+++ 5 7/8% 2/1/2036 A1 500 488,750
Missouri St Dev Fin Bd Solid Waste Disp Rev Procter & Gamble Paper Proj
AMT+++ 5.20% 3/15/2029 AA 1,000 883,750
Moraine OH Solid Waste Disp General Motors Corp Proj
AMT+++ 5.65% 7/1/2024 A 450 437,062
Texas City TX Ind Dev Corp Marine Term Rev Arco Pipe Line
7 3/8% 10/1/2020 A 650 767,812
Total 22,959,313
----------------------------------------------------------------------------------------------------------------------==============
6
<PAGE>
Statement of Net Assets (unaudited)
NATIONAL TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 10.03% Aspen CO Sales Tax Rev 5.40% 11/1/2019 A $ 135 $ 128,925
Aurora IL Install Contrct 6.00% 1/1/2020 AA 865 859,957
Austin TX Ser A MBIA+ 4 1/4% 5/15/2028 AAA 9,750 7,446,562
Bemidji MN Lease Rev MN St Bureau Criminal Appreh
MBIA+ 5 3/4% 12/1/2018 Aaa 555 560,550
Bemidji MN Lease Rev MN St Bureau Criminal Appreh
MBIA+ 5 3/4% 12/1/2019 Aaa 590 594,425
Boise City ID Urban Renewal Lease Rev Urban Renewal ADA Cnty Courts
AMBAC+ 6 1/4% 8/15/2019 AAA 7,485 7,915,387
Chicago IL Sales Tax Rev FGIC+ 5 3/8% 1/1/2030 AAA 530 486,275
Chicago IL Sales Tax Rev FGIC+ 5 3/4% 1/1/2034 AAA 7,565 7,345,085
Cobb-Marietta GA Coliseum & Exhibit Hall Auth Rev
MBIA+ 5 5/8% 10/1/2026 AAA 3,550 3,532,250
Delaware St Econ Dev Auth Rev Student Hsg Univ Courtyard Ser A
ASSET GTY+ 5.90% 8/1/2019 AA 700 699,125
George L Smith II GA World Congress Ctr Auth Rev Domed Stadium Proj
MBIA+ AMT+++ 5 3/4% 7/1/2015 AAA 1,500 1,515,000
George L Smith II GA World Congress Ctr Auth Rev Domed Stadium Proj
MBIA+ AMT+++ 5 1/2% 7/1/2020 AAA 2,500 2,396,875
Henrico Cnty VA Econ Dev Auth Pub Fac Lease Rev Jail
Proj 6 1/8% 11/1/2019 Aa2 1,000 1,033,750
Indiana Bd Bk Sp Prog Ser C 7 1/8% 2/1/2010 A 1,750 1,815,765
Miami-Dade Cnty FL Sp Oblig Sub Ser A MBIA+ Zero Coupon 10/1/2024 AAA 3,650 825,813
Miami-Dade Cnty FL Sp Oblig Sub Ser B MBIA+ Zero Coupon 10/1/2033 AAA 10,000 1,287,500
Missouri St Ctfs Partn Bonne Terre Prison Proj Ser A
AMBAC+ 5.15% 6/1/2019 AAA 1,500 1,380,000
Navajo Cnty AZ Muni Ppty Corp Jail Fac ACA+ 6 1/4% 7/1/2020 BBB 1,000 992,500
Providence RI Redev Agy Rev Pub Safety & Muni Bldg Ser A
AMBAC+ 5 3/4% 4/1/2029 Aaa 690 687,413
Riverside VA Regl Jail Auth Jail Fac Rev MBIA+ 6.00% 7/1/2025 AAA 5,000 5,087,500
St Louis MO Ind Dev Auth Rev Kiel Ctr Multi Purp Arena
AMT+++ 7 7/8% 12/1/2024 BB* 3,500 3,679,375
Washington Cnty PA Auth Rev Cap Fdg Rev Cap Proj & Equip Prog
AMBAC+ 6.15% 12/1/2029 AAA 3,770 3,930,225
West Vy City UT Muni Bldg Auth Lease Rev MBIA+ 6.00% 1/15/2010 AAA 1,580 1,617,525
Total 55,817,782
----------------------------------------------------------------------------------------------------------------------==============
Pollution 1.23% Coconino Cnty AZ Poll Ctrl Cor Rev Nev Pwr Co Ser B
AMT+++ 5.80% 11/1/2032 BBB 2,000 1,747,500
Farmington NM Poll Ctrl Rev Svc Co San Juan Ser C
AMBAC+ 5.70% 12/1/2016 AAA 1,500 1,503,750
Missouri St Envr Impt & Enrg Res Auth Wtr Poll Ctrl
Ser B 7.20% 7/1/2016 Aaa 3,250 3,591,250
Total 6,842,500
----------------------------------------------------------------------------------------------------------------------==============
Power 7.26% Gainesville FL Util Sys Rev Ser A 5.20% 10/1/2022 AA 500 463,750
Grant Cnty WA Pub Util Dist #2 Priest Rapids Hydro 2nd Ser B
MBIA+ AMT+++ 5 3/8% 1/1/2018 AAA 300 285,375
Hamilton OH Elec Sys Mtg Rev Ser B FGIC+ 6.30% 10/15/2025 AAA 7,555 7,791,094
Hawaii St Dept Bdg & Fin Sp Purp Mtg Rev RIBs
AMT+++ 6.58% 12/15/2023++ AAA 2,000 1,782,500
Hawaii St Dept Bdg & Fin Sp Purp Mtg Rev HI Elec Co Ser A
MBIA+ AMT+++ 6.60% 1/1/2025 AAA 235 242,931
Indiana Muni Pwr Agy Pwr Supply Sys Ser A MBIA+ 5.30% 1/1/2023 AAA 1,920 1,759,200
Jacksonville FL Elec Auth Rev Wtr & Swr Sys Ser A 6.00% 10/1/2024 AA 2,830 2,847,688
Jacksonville FL Elec Auth Rev Wtr & Swr Sys Ser A 5 3/8% 10/1/2029 AA 1,785 1,653,356
Milwaukee WI Loc Dist Heating Fac Rev WI Elec Pwr Co Proj
AMT+++ 6.85% 10/1/2021 AA 4,100 4,299,875
Navajo Cnty AZ Poll Ctrl AZ Pub Svc Ser A AMBAC+ 5 7/8% 8/15/2028 AAA 650 654,875
North Carolina Eastern Muni Pwr Agy Pwr Sys Rev Ser G
ACA+ 5 3/4% 12/1/2016 A 5,000 4,987,500
North Carolina Muni Pwr Agy No 1 Catawba Elec Rev ACA+ 5.00% 1/1/2015 A 5,950 5,474,000
7
<PAGE>
Statement of Net Assets (unaudited)
NATIONAL TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Northwest AL Gas Dist AL Gassys Rev Ser A MBIA+ 6.00% 5/1/2030 Aaa $ 3,035 $ 3,084,319
Salt River Proj AZ Agric Impt Pwr Dist Elec Sys
Rev Ser A 5 1/2% 1/1/2019 Aa2 1,075 1,057,531
Salt River Proj AZ Agric Impt Pwr Dist Elec Sys
Rev Ser C 5.00% 1/1/2025 Aa2 2,750 2,464,688
Western Generation Agy OR Rev Wauna Cogeneration Ser B
AMT+++ 7.40% 1/1/2016 BBB* 1,500 1,560,000
Total 40,408,682
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 15.98% Amarillo TX Hlth Fac Corp Reg RIBs FSA+ 8.94% 1/3/2022++ AAA 4,050 4,449,938
Anne Arundel Cnty MD Cons Gen Impt 6.30% 8/1/2015 AAA 1,000 1,072,500
Anne Arundel Cnty MD Cons Wtr & Swr 6.30% 8/1/2023 AAA 505 541,613
Chattanooga Hamilton Cnty TN Hosp Auth Rev Ser B
RIBs FSA+ 9.37% 5/25/2021++ AAA 3,500 3,828,125
Clermont Cnty OH Hosp Fac Rev Mercey Hlth Ser A Prerefunded
AMBAC+ 7 1/2% 9/1/2019 AAA 285 296,400
Cobb Cnty GA Kennestone Hosp Auth Rev Ctfs Ser 86A ETM
MBIA+ Zero Coupon 8/1/2015 AAA 1,000 391,250
Connecticut St Hlth & Ed Fac Auth Rev Waterbury Hosp Ser B
FSA+ 7.00% 7/1/2020 AAA 1,000 1,026,860
Cumberland Cnty NC Ctfs Partn Civic Ctr Proj Ser A
AMBAC+ 6.40% 12/1/2019 AAA 2,800 3,031,000
Cumberland Cnty NC Ctfs Partn Civic Ctr Proj Ser A
AMBAC+ 6.40% 12/1/2024 AAA 500 541,250
District of Columbia Rev Catholic Univ America
CONNIE LEE+ 6.45% 10/1/2023 AAA 1,950 2,084,063
District of Columbia Rev RIBs 8.78% 4/25/2022++ AAA 7,750 8,554,063
Fulton Cnty GA Hosp Auth Rev Ctfs Northside Hosp Ser B
MBIA+ 6.60% 10/1/2011 AAA 3,000 3,183,750
Glendale AZ Dev Auth Ed Fac Rev Amer Graduate Sch Intl
CONNIE LEE+ 7 1/8% 7/1/2020 AAA 1,000 1,113,750
Henrico Cnty VA Ind Dev Auth Pub Fac Lease Rev 71/8% 8/1/2021 AAA 3,095 3,458,663
Hillsborough Cnty FL Sch Bd Ctfs Partn MBIA+ 6.00% 7/1/2014 AAA 1,500 1,591,875
Indiana St Ed Fac Auth Rev 6.65% 3/1/2019 AAA 860 926,650
Indiana Univ Rev 10 1/8% 7/1/2010 AAA 710 756,150
Kansas City MO Arpt Rev Gen Impt Ser B FSA+ 6 7/8% 9/1/2014 AAA 2,550 2,773,125
Lake Of The Ozarks Cmnty Bd Corp MO Bdg Sys Rev 6 1/4% 12/1/2016 AAA 2,535 2,756,813
Massachusetts St Hlth & Ed Fac VY Regl Hlth Sys Issue
Ser B 8.00% 7/1/2018 AAA 500 514,450
Met Govt Nashville & Davidson Cnty TN Wtr & Swr Rev RIBs
AMBAC+ 8.10% 1/1/2022++ AAA 10,750 11,583,125
Michigan St Hosp Fin Auth Rev Sister of Mercy Hlth Corp Ser J
7 1/2% 2/15/2018 AAA 1,000 1,046,840
Michigan St Trunk Line Ser A MBIA+ 5 1/2% 10/1/2021 AAA 1,000 967,500
Minneapolis & St Paul MN Hsg & Redev Auth Hlth Care Sys Ser A
MBIA+ 6 3/4% 8/15/2014 AAA 1,300 1,337,466
Montgomery AL Med Clinic Bd Hlth Care Fac Rev 7.00% 3/1/2015 AAA 445 455,533
New Jersey Econ Dev Auth Rev Ed Testing Svc Ser B
MBIA+ 6 1/4% 5/15/2025 AAA 3,000 3,228,750
New Jersey Hlth Care Fac Ocean Cnty Med Ctr FSA+ 6 3/4% 7/1/2020 AAA 1,000 1,046,250
New Jersey Sports & Exposition Auth Rev Monmouth Pk Ser A
8.00% 1/1/2025 AAA 1,600 1,830,000
Norfolk VA Ind Dev Auth Rev Childrens Hosp Kings Group
AMBAC+ 6 1/2% 6/1/2021 AAA 650 676,813
Ohio St 6.20% 8/1/2013 AAA 750 805,313
Ouachita Parish LA Hosp Svc Dist No 1 Rev Glenwood Regl Med Ctr
7 1/2% 7/1/2021 AAA 1,000 1,053,750
Philadelphia PA Auth For Ind Dev Rev Long Term Care FFE/Maplewood
8.00% 1/1/2024 AAA 2,475 2,812,219
Phoenix AZ Civic Impt Corp Wastewtr Sys Lease Rev 6.00% 7/1/2007 AAA 1,400 1,478,750
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev Ser S 6 1/2% 7/1/2022 AAA 150 158,438
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev Ser T 6 5/8% 7/1/2018 AAA 372 393,728
8
<PAGE>
Statement of Net Assets (unaudited)
NATIONAL TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth Pwr Rev RIBs FSA+ 8.08% 7/1/2023++ AAA $ 2,500 $ 2,696,875
Springfield MO Sch Dist No R-12 Ser A FGIC+ 6 3/4% 3/1/2011 AAA 1,225 1,252,403
Uintah Cnty UT Poll Ctrl Rev Natl Rural Util Dsrt Ser 84F 2
10 1/2% 6/15/2014 AAA 1,000 1,067,500
University CO Hosp Auth Rev Ser A AMBAC+ 6.40% 11/15/2022 AAA 2,300 2,435,125
University NM Tech Dev Corp Lease Rev Univ Ctr Res Ser A MBIA+
6.55% 8/15/2025 AAA 1,410 1,526,325
Vermont Ed & Hlth Bldg Fin Agy Rev St Michaels College Proj
7.05% 10/1/2016 AAA 2,000 2,140,000
Virginia St 6 1/2% 6/1/2015 AAA 2,000 2,135,000
Washington St Ser B 6.70% 6/1/2016 AAA 500 512,500
Weber Cnty UT Muni Bldg Auth Lease Rev ASSET GTY+ 7 1/2% 12/15/2019 AAA 3,000 3,378,750
Total 88,911,241
----------------------------------------------------------------------------------------------------------------------==============
Solid Waste .17% Cobb Cnty GA Solid Waste Mgmt Auth Rev AMT+++ 6.40% 1/1/2015 AAA 900 951,750
----------------------------------------------------------------------------------------------------------------------==============
Transportation 9.23% Albany Cnty NY Arpt Auth Rev Ser B 4 3/4% 12/15/2018 AAA 4,165 3,696,438
Albuquerque NM Arpt Rev Ser A AMBAC+ AMT+++ 6.60% 7/1/2016 AAA 2,650 2,790,265
Atlanta GA Arpt Rev Ser A FGIC+ 5 1/2% 1/1/2026 AAA 2,000 1,909,880
Billings MT Arpt Rev MBIA+ AMT+++ 6.10% 7/1/2016 AAA 1,580 1,639,250
Billings MT Arpt Rev MBIA+ AMT+++ 6.20% 7/1/2020 AAA 3,285 3,383,550
Delaware River Port Auth PA & NJ Rev FGIC+ 5 1/2% 1/1/2026 AAA 890 857,738
Kansas St Dept Transn Hwy Rev 5 1/4% 9/1/2019 Aa2 150 141,938
Manchester NH Gen Arpt Rev Gen Ser A MBIA+ 4 1/2% 1/1/2028 AAA 1,000 798,750
Manchester NH Gen Arpt Rev PA 582 MBIA+ 3.82% 1/1/2028 AAA* 5,000 2,993,750
Maryland St Ctfs Partn Aviation Admin Fac AMT+++ 5.00% 5/1/2022 AA 4,440 3,996,000
Maryland St Ctfs Partn Aviation Admin Fac AMT+++ 5.00% 5/1/2026 AA 3,065 2,724,019
Massachusetts St Port Auth PFC Ser A FSA+ 5 1/8% 7/1/2017 AAA 450 425,813
Mesa AZ Str & Hwy Rev FGIC+ 5.00% 7/1/2015 AAA 1,000 961,250
Miami-Dade Cnty FL Aviation Rev MI Intl Arpt Ser B
FGIC+ 5 3/4% 10/1/2029 AAA 1,000 997,500
Pensacola FL Arpt Rev Ser A MBIA+ AMT+++ 6 1/8% 10/1/2018 AAA 1,000 1,031,250
Port Auth NY & NJ Cons 70th Ser AMT+++ 7 1/4% 8/1/2025 AA 500 507,815
Port Auth NY & NJ RIBs 4.96% 8/1/2033++ AA* 5,000 3,362,500
Port Kalama WA Rev Ser B AMT+++ 5 5/8% 12/1/2015 Baa1 1,025 1,016,031
Puerto Rico Comwlth Hwy & Transn Auth Transn Rev Ser A
MBIA+ 4 3/4% 7/1/2038 AAA 1,100 922,625
Santa Rosa Bay FL Bdg Auth Rev 6 1/4% 7/1/2028 Baa3 2,140 2,006,250
Santa Rosa Bay FL Bdg Auth Rev ACA+ 6 1/4% 7/1/2028 A 11,400 11,542,500
Southeastern PA Transn Auth PA Sp Rev Ser A FGIC+ 4 3/4% 3/1/2024 AAA 1,075 909,719
Virginia St Transn Bd Rev US Route 58 Corridor Dev
Ser B 5 1/2% 5/15/2018 Aa1 2,780 2,731,350
Total 51,346,181
----------------------------------------------------------------------------------------------------------------------==============
Water/Sewer 2.34% Arizona Wtr Infrastructure Wtr Quality Ser A 5 5/8% 10/1/2014 Aa2 1,110 1,126,650
Arizona Wtr Infrastructure Wtr Quality Ser A 5 3/8% 10/1/2015 Aa2 235 233,531
Arizona Wtr Infrastructure Wtr Quality Ser A 5 1/2% 10/1/2016 Aa2 410 409,488
Arizona Wtr Infrastructure Wtr Quality Ser A 5 1/2% 10/1/2017 Aa2 955 950,225
Boston MA Wtr & Swr Commn Rev Sr Ser D FGIC+ 5.00% 11/1/2028 AAA 120 104,250
Charlotte NC Wtr & Swr Sys Rev 5 1/4% 6/1/2024 Aa2 50 46,625
Colorado Wtr Res & Pwr Dev Drinking Wtr Rev Ser A 5.00% 9/1/2019 AAA 350 322,875
Colorado Wtr Res Pwr Dev Auth Clean Wtr Rev Ser A 5 1/4% 9/1/2019 AAA 355 341,688
Kansas St Dev Fin Auth Rev Pub Wtr Supply
Revolving Ln-2 4 3/4% 4/1/2018 A2 1,480 1,311,650
Louisville & Jefferson Cnty KY Ser A FGIC+ 5.00% 5/15/2022 AAA 2,380 2,139,025
New York NY City Muni Wtr Fin Auth Wtr & Swr Sys Rev Ser A
5 1/2% 6/15/2023 Aa3 1,500 1,436,250
9
<PAGE>
Statement of Net Assets (unaudited)
NATIONAL TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Royal Palm Beach FL Util Sys Rev MBIA+ 4 1/2% 10/1/2022 Aaa $ 2,800 $ 2,313,500
Scottsdale AZ Wtr & Swr Rev Proj of 1989 Ser E 4 1/2% 7/1/2020 Aa1 1,340 1,132,300
York Cnty VA Swr Rev 5 7/8% 6/1/2024 Aa3 630 636,300
York Cnty VA Swr Rev 5 7/8% 6/1/2029 Aa3 490 493,675
Total 12,998,032
----------------------------------------------------------------------------------------------------------------------==============
Total Long-Term Municipal Bonds 99.78% (Cost $560,427,509) 555,279,355
----------------------------------------------------------------------------------------------------------------------==============
Short-Term Investment .63% Puerto Rico Comwlth Tax & Rev Antic Nts Ser A-1 4 1/2% 7/30/2000
(Cost $3,508,966) MIG1 3,500 3,499,650
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 100.41% (Cost $563,936,475) 558,779,005
====================================================================================================================================
Other Assets, Less Liabilities (.41)%
====================================================================================================================================
Cash 1,490,285
----------------------------------------------------------------------------------------------------------------------==============
Receivables for: Securities sold 38,912,231
Interest 9,239,742
Capitalstock sold 229,542
Total Other Assets 49,871,800
----------------------------------------------------------------------------------------------------------------------==============
Payables for: Securities purchased 48,984,893
Dividends 1,937,680
Capital stock reacquired 709,251
Other 522,989
Total Liabilities 52,154,813
----------------------------------------------------------------------------------------------------------------------==============
Total Other Assets, Less Liabilities (2,283,013)
====================================================================================================================================
Net Assets 100.00% $556,495,992
====================================================================================================================================
Class A Shares-Net asset value ($505,201,565 / 47,287,113 shares outstanding) $10.68
Class A Shares-Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $11.04
Class B Shares-Net asset value ($15,938,732 / 1,487,959 shares outstanding) $10.71
Class C Shares-Net asset value ($35,355,695 / 3,304,540 shares outstanding) $10.70
* 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. See page 31 for
Glossary of Terms.
++ 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 March 31, 2000. See page 1 for additional important information.
+++ Income from these securities may be subject to the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
NEW YORK TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education 14.96% Hempstead Town NY Ind Dev Agy Civic Fac Rev Hofstra Univ Proj
MBIA+ 5.80% 7/1/2015 AAA $ 750 $ 765,000
New York NY City Ind Dev Agy Civic Fac Rev New Sch Ser A
MBIA+ 5 3/4% 9/1/2015 AAA 1,335 1,355,025
New York St Dorm Auth Lease Rev St Univ
Dorm Fac Ser A 6 1/4% 7/1/2020 A 1,250 1,301,563
New York St Dorm Auth Lease Rev St Univ Dorm Fac Ser A 6.00% 7/1/2030 A 3,500 3,513,125
New York St Dorm Auth Lease Rev St Univ Dorm Fac Ser C
MBIA+ 5 1/2% 7/1/2029 AAA 700 664,125
New York St Dorm Auth Rev City Univ Ser C FGIC+ 7.00% 7/1/2014 AAA 3,240 3,326,638
New York St Dorm Auth Rev Colgate Univ MBIA+ 6.00% 7/1/2016 AAA 1,000 1,062,500
New York St Dorm Auth Rev Cornell Univ Ser A 7 3/8% 7/1/2020 Aa1 5,075 5,204,869
10
<PAGE>
Statement of Net Assets (unaudited)
NEW YORK TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
New York St Dorm Auth Rev Long Island Univ ASSET GTY+ 5 1/8% 9/1/2023 AA $ 500 $ 440,625
New York St Dorm Auth Rev New York Univ Ser A AMBAC+ 5 3/4% 7/1/2015 AAA 2,000 1,992,500
New York St Dorm Auth Rev Pratt Institute ASSET GTY+ 6.00% 7/1/2024 AA 1,000 1,003,750
New York St Dorm Auth Rev Pratt Institute ASSET GTY+ 6.00% 7/1/2028 AA 2,000 2,015,000
New York St Dorm Auth Rev Sp Act Sch Dist Prog MBIA+ 6.00% 7/1/2016 AAA 1,400 1,440,250
New York St Dorm Auth Rev St Univ Ed Fac 5 1/2% 5/15/2026 A 75 70,593
New York St Dorm Auth Rev State Univ Ed Fac Ser A 5 1/4% 5/15/2021 A 1,025 944,281
New York St Dorm Auth Rev Univ Rochester Ser A 6.40% 7/1/2013 A1 2,030 2,164,488
New York St Dorm Auth Rev Upstate Cmnty College Ser A 5.00% 7/1/2028 AAA 6,000 5,317,500
Niagara Falls NY City Sch Dist Ctfs Partn High
Sch Fac 5 3/8% 6/15/2028 BBB 1,000 878,750
Puerto Rico Ind Tourist Ed Med & Envr Ctrl Fac Ana G Mendez Univ
Sys Proj 5 3/8% 2/1/2019 BBB 500 455,625
Tompkins Cnty NY Ind Dev Agy Rev Civic Fac Cornell Univ Lake
5 3/4% 7/1/2030 Aa1 1,500 1,496,250
Total 35,412,457
----------------------------------------------------------------------------------------------------------------------==============
General Obligation Bethlehem NY MBIA+ AMT+++ 7.20% 3/1/2022 AAA 1,080 1,183,950
9.07% Buffalo NY Gen Impt Ser A AMBAC+ 4 3/4% 2/1/2019 AAA 325 284,781
New York NY Ser H 5.00% 3/15/2021 A 5,000 4,375,000
Puerto Rico Comwlth FSA+ 5 3/8% 7/1/2025 AAA 750 720,000
Puerto Rico Comwlth MBIA+ 5.00% 7/1/2027 AAA 605 543,744
Puerto Rico Comwlth Pub Impt 6.00% 7/1/2029 A 2,000 2,015,000
Puerto Rico Comwlth Pub MBIA+ 5.00% 7/1/2028 AAA 235 211,206
Puerto Rico Comwlth RIBs FSA+ 8.13% 7/1/2020++ AAA 12,000 12,120,000
Total 21,453,681
----------------------------------------------------------------------------------------------------------------------==============
Healthcare 7.47% New York NY City Hlth & Hosp Corp Rev RIBs AMBAC+ 7.59% 2/15/2023++ AAA 6,300 5,772,375
New York St Dorm Auth Rev Hosp NY Hosp Med Ctr
AMBAC+ 5.60% 2/15/2039 AAA 500 475,625
New York St Dorm Auth Rev Mental Hlth Svc Fac Impt Ser B
MBIA+ 6.00% 2/15/2025 AAA 1,000 1,017,500
New York St Dorm Auth Rev Mental Hlth Svc Fac Impt Ser B
MBIA+ 6.00% 2/15/2030 AAA 1,000 1,017,500
New York St Dorm Auth Rev Mental Hlth Svc Fac Ser B
MBIA+ 6.00% 8/15/2012 AAA 1,460 1,551,250
New York St Dorm Auth Rev Mental Hlth Svc Fac Ser D
MBIA+ 6.00% 8/15/2021 AAA 1,000 1,016,250
New York St Dorm Auth Rev Mental Hlth Svc Fac Ser B 5 3/4% 2/15/2010 A 1,500 1,546,875
New York St Dorm Auth Rev Mental Hlth Svc Fac Ser B 5 3/4% 2/15/2011 A 1,385 1,423,087
New York St Dorm Auth Rev Mental Hlth Svc Fac Ser B 5 3/4% 2/15/2012 A 1,155 1,180,988
New York St Dorm Auth Rev Miriam Osborn Mem Home Ser B
ACA+ 6 7/8% 7/1/2025 A 750 794,062
New York St Dorm Auth Rev Sarah Neuman Nursing Home
AMBAC+ 5.45% 8/1/2027 AAA 550 521,125
New York St Med Care Fac Fin Agy Rev 7.80% 2/15/2019 A 355 362,242
New York St Med Care Fac Fin Agy Rev Montefiore Med Ser A
AMBAC+ 5 3/4% 2/15/2025 AAA 1,000 992,500
Total 17,671,379
----------------------------------------------------------------------------------------------------------------------==============
Housing 2.40% New York St Mtg Agy Rev Home Owner Mtg Ser 44 AMT+++ 7 1/2% 4/1/2026 Aa1 2,495 2,622,869
New York St Mtg Agy Rev Home Owner Mtg Ser 67 AMT+++ 5.80% 10/1/2028 Aa1 500 478,125
New York St Mtg Agy Rev Home Owner Mtg Ser 70 5.40% 4/1/2022 Aa1 520 494,650
New York St Mtg Agy Rev Ser 41 A MBIA+ 6.45% 10/1/2014 AAA 2,000 2,085,000
Total 5,680,644
----------------------------------------------------------------------------------------------------------------------==============
11
<PAGE>
Statement of Net Assets (unaudited)
NEW YORK TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Industrial 6.41% New York NY City Ind Dev Agy Civic Fac Rev Light House Intl
MBIA+ 4 1/2% 7/1/2023 AAA $ 950 $ 789,687
New York St Urban Dev Corp Rev Correctl Fac Svc Contrct Ser A
5.00% 1/1/2028 A 2,710 2,313,663
New York St Urban Dev Corp Rev Correctl Fac Svc Contrct Ser A
FSA+ 5.00% 1/1/2028 AAA 1,000 892,500
New York St Urban Dev Corp Rev Correctl Fac Svc Contrct Ser B
AMBAC+ 4 3/4% 1/1/2028 AAA 4,585 3,885,788
New York St Urban Dev Corp Rev Pine Barrens 5 1/4% 4/1/2012 A 1,765 1,734,112
New York St Urban Dev Corp Rev St Fac 5.70% 4/1/2020 A 4,150 4,139,625
Suffolk Cnty NY Ind Dev Agy Civic Fac Rev S Cnty Library
MBIA+ 4 3/4% 1/1/2019 Aaa 500 441,250
Yonkers NY Ind Dev Agy Rev Michael Malotz Skilled
MBIA+ 5.65% 2/1/2039 AAA 1,000 966,250
Total 15,162,875
----------------------------------------------------------------------------------------------------------------------==============
Miscellaneous 4.29% New York City Transitional Fin Auth Rev Future
Tax Secd Ser B6.00% 11/15/2024 AA 350 356,125
New York City Transitional Fin Auth Rev Future Tax Secd Ser B
6.00% 11/15/2029 AA 2,000 2,032,500
New York St Dorm Auth Lease Office Fac Audit & Control
MBIA+ 5 1/2% 4/1/2023 AAA 415 401,513
New York St Dorm Auth Lease Rev Court Fac Zero Coupon 8/1/2019 Aa1 2,850 933,375
New York St Dorm Auth Lease Rev Court Fac Zero Coupon 8/1/2021 Aa1 4,000 1,155,000
New York St Dorm Auth Lease Rev Court Fac Zero Coupon 8/1/2022 Aa1 3,165 858,506
New York St Dorm Auth Rev Office Gen Svc MBIA+ 5.00% 4/1/2028 AAA 5,000 4,425,000
Total 10,162,019
----------------------------------------------------------------------------------------------------------------------==============
Pollution 9.95% Essex Cnty NY Ind Dev Agy Poll Ctrl Rev Intl
Paper Ser B 5.55% 1/1/2014 A3 305 297,375
New York St Enrg Res & Dev Auth Poll Ctrl Rev Niagara Mohawk Ser A
FGIC+ 7.20% 7/1/2029 AAA 11,750 12,910,312
New York St Envr Fac Poll Ctrl Rev St Wtr Revolving Fd Ser A
7 1/2% 6/15/2012 Aa1 8,000 8,201,680
New York St Envr Fac Poll Ctrl Rev St Wtr Ser E 6 7/8% 6/15/2014 Aa1 1,985 2,141,319
Total 23,550,686
----------------------------------------------------------------------------------------------------------------------==============
Power 7.52% New York St Enrg Res & Dev Auth Fac Rev Con Edison Inc Ser A
MBIA+ AMT+++ 7 1/8% 12/1/2029 AAA 2,500 2,756,250
New York St Enrg Res & Dev Auth Gas Fac Rev Brklyn Union Ser A
MBIA+ AMT+++ 6 3/4% 2/1/2024 AAA 3,000 3,112,500
New York St Enrg Res & Dev Auth Gas Fac Rev Brklyn Union Ser B
RIBs AMT+++ 9.26% 7/1/2026++ A1 4,000 4,605,000
Puerto Rico Elec Pwr Auth Pwr Rev Ser DD 5.00% 7/1/2028 Baa1 1,150 1,006,250
Puerto Rico Elec Pwr Auth Pwr Rev Ser DD FSA+ 5.00% 7/1/2028 AAA 1,000 892,500
Puerto Rico Elec Pwr Auth Pwr Rev Ser U 6.00% 7/1/2014 Baa1 2,250 2,320,313
Puerto Rico Elec Pwr Auth Pwr Rev Ser X 5 1/2% 7/1/2025 Baa1 1,415 1,354,862
Puerto Rico Elec Pwr Auth Ser EE FSA+ 4 3/4% 7/1/2024 AAA 2,000 1,750,000
Total 17,797,675
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 19.31% Metropolitan Transn Auth NY Commuter Fac Rev Ser A
FGIC+ 6.00% 7/1/2021 AAA 4,000 4,295,000
Metropolitan Transn Auth NY Commuter Fac Rev Ser A
FGIC+ 6.10% 7/1/2026 AAA 2,000 2,157,500
New York St Dorm Auth Rev City Univ 3rd Gen Res Ser 2
MBIA+ 6 7/8% 7/1/2014 AAA 5,650 6,186,750
New York St Dorm Auth Rev Upstate Cmnty Colleges Ser A 6.20% 7/1/2015 AAA 1,000 1,077,500
New York St Envr Fac Poll Ctrl Rev St Wtr Ser E 6 7/8% 6/15/2014 AAA 2,795 3,046,550
New York St Loc Govt Assist Corp Ser A 6 1/2% 4/1/2020 AAA 5,000 5,198,750
New York St Med Care Fac Fin Agy Rev 7 1/2% 2/15/2021 AAA 10,000 10,472,800
New York St Med Care Fac Fin Agy Rev 7 1/2% 2/15/2021 AAA 3,955 4,105,251
12
<PAGE>
Statement of Net Assets (unaudited)
NEW YORK TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Comwlth Aqueduct & Swr Auth Rev ETM 10 1/4% 7/1/2009 AAA $ 965 $ 1,217,106
Puerto Rico Elec Pwr Auth Pwr Rev Ser T RIBs FSA+ 8.57% 7/1/2018++ AAA 3,500 3,994,375
Puerto Rico Tel Auth Rev RIBs MBIA+ 6.76% 1/16/2015++ AAA 700 742,875
United Nations Dev Corp NY Rev Ser B 6 1/4% 7/1/2026 AAA 3,000 3,187,500
Total 45,681,957
----------------------------------------------------------------------------------------------------------------------==============
Transportation 17.60% Metropolitan Transn Auth NY Commuter Fac Rev Ser A
FGIC+ 6.00% 7/1/2016 AAA 2,000 2,070,000
Metropolitan Transn Auth NY Commuter Fac Rev Ser B
FGIC+ 4 3/4% 7/1/2026 AAA 7,030 5,993,075
Metropolitan Transn Auth NY Dedicated Tax Fd Ser A
FGIC+ 4 3/4% 4/1/2028 AAA 2,500 2,118,750
Metropolitan Transn Auth NY Dedicated Tax Fd Ser A
FSA+ 5.00% 4/1/2029 AAA 2,775 2,483,625
Metropolitan Transn Auth NY Dedicated Tax Fd Ser A
FGIC+ 6.00% 4/1/2030 AAA 3,000 3,056,250
Metropolitan Transn Auth NY Svc Contrct Transn
Fac Ser O 5 3/4% 7/1/2008 A 1,000 1,033,750
Metropolitan Transn Auth NY Transn Fac Rev Svc
Contrct Ser R 5 1/2% 7/1/2017 A 1,000 971,250
Niagara NY Frontier Auth Arpt Buffalo Niagara Intl Arpt Ser B
MBIA+ 5 1/2% 4/1/2019 AAA 750 729,375
Port Auth NY & NJ Cons 93rd Ser 6 1/8% 6/1/2094 AA 5,000 5,231,250
Port Auth NY & NJ Cons 106th Ser AMT+++ 6.00% 7/1/2015 AA 350 359,625
Port Auth NY & NJ Cons 116th Ser FGIC+ 4 1/4% 10/1/2026 AAA 4,435 3,481,475
Port Auth NY & NJ Sp Oblig Rev 5th Installment Sp Proj Ser 4
AMT+++ 6 3/4% 10/1/2019 BBB-* 2,970 3,021,975
Port Auth NY & NJ Sp Oblig Rev Sp Proj JFK Intl Air Term 6
MBIA+ AMT+++ 5 3/4% 12/1/2025 AAA 10,345 10,228,619
Puerto Rico Comwlth Hwy & Transn Auth Transn Rev Sub PR St
Infrastructure Bk 5.00% 7/1/2028 A 1,000 875,000
Total 41,654,019
----------------------------------------------------------------------------------------------------------------------==============
Water/Sewer .86% Albany NY Muni Wtr Fin Auth Wtr & Swr Sys Rev Ser A
FGIC+ 6 3/8% 12/1/2017 AAA 650 692,250
Buffalo NY Muni Wtr Fin Auth Wtr Sys Rev FGIC+ 5 3/4% 7/1/2021 AAA 500 500,625
New York City Muni Wtr Fin Auth Wtr & Swr Sys Rev Ser A
FGIC+ 4 3/4% 6/15/2031 AAA 1,000 838,750
Total 2,031,625
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 99.84% (Cost $234,193,655) 236,259,017
----------------------------------------------------------------------------------------------------------------------==============
Cash and Receivables, Net of Liabilities .16% 385,148
====================================================================================================================================
Net Assets 100.00% $236,644,165
====================================================================================================================================
Class A Shares-Net asset value ($230,652,816 / 22,118,612 shares outstanding) $10.43
Class A Shares-Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $10.78
Class C Shares-Net asset value ($5,991,349 / 574,383 shares outstanding) $10.43
* 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. See page 31 for
Glossary of Terms.
++ 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 March 31, 2000. See page 1 for additional important information.
+++ Income from these securities may be subject to the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
TEXAS TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education 5.77% Texas St Higher Ed Coord Bd College Student Ln Rev
AMT+++ 7.70% 10/1/2025 A $ 455 $ 468,081
University TX Univ Rev Fin Sys Ser A 5 3/8% 8/15/2017 AAA 3,130 3,043,925
University TX Univ Rev Fin Sys Ser B 5 3/8% 8/15/2017 AAA 1,000 972,500
Total 4,484,506
----------------------------------------------------------------------------------------------------------------------==============
General Obligation 34.91% Azle TX Indpt Sch Dist Ser A 6.00% 2/15/2022 Aaa 250 250,205
Cedar Hill TX Indpt Sch Dist Zero Coupon 8/15/2020 AAA 2,500 665,625
Cypress-Fairbanks TX Indpt Sch Dist 4 3/4% 2/15/2022 AAA 1,000 857,500
Katy TX Indpt Sch Dist 6 1/8% 2/15/2032 AAA 1,000 1,017,500
Keller TX Indpt Sch Dist 4 3/4% 8/15/2020 AAA 1,000 865,000
Leander TX Indpt Sch Dist 5 3/8% 8/15/2020 AAA 1,000 953,750
Lewisville TX Indpt Sch Dist 5 3/4% 8/15/2014 Aaa 500 510,625
Mc Allen TX Indpt Sch Dist 5 1/4% 4/1/2019 AAA 825 776,531
Pearland TX Indpt Sch Dist 5 1/8% 2/15/2022 AAA 1,500 1,372,500
Port Beaumont TX Nav Dist Ser A FGIC+ 4 3/4% 3/1/2018 Aaa 500 440,000
Puerto Rico Comwlth Pub Impt MBIA+ 4 3/4% 7/1/2023 AAA 4,915 4,269,906
Puerto Rico Comwlth Pub Impt 6.00% 7/1/2029 A 750 755,625
South San Antonio TX Indpt Sch Dist 5 7/8% 8/15/2014 AAA 1,180 1,215,400
South San Antonio TX Indpt Sch Dist 5 3/4% 8/15/2024 AAA 1,275 1,267,031
Texas St 6.20% 9/30/2011 Aa1 5,000 5,425,000
Texas St Ser B RIBs 7.65% 9/30/2011++ Aa1 3,000 3,510,000
Texas St Wtr Dev Bd 7.15% 8/1/2035 Aa1 1,600 1,704,000
Waxahachie TX Indpt Sch Dist Zero Coupon 8/15/2021 Aaa 2,000 497,500
Weatherford TX Indpt Sch Dist Zero Coupon 2/15/2022 Aaa 3,105 749,081
Total 27,102,779
----------------------------------------------------------------------------------------------------------------------==============
Healthcare 1.85% Denton Cnty TX Hlth Fac Dev Corp Rev Lutheran
Social Svc 7 1/2% 8/15/2015 BB* 1,000 997,500
Georgetown TX Hlth Fac Dev Rev Wesleyan Homes Inc Proj
ACA+ 5 3/8% 8/15/2028 A 500 436,875
Total 1,434,375
----------------------------------------------------------------------------------------------------------------------==============
Housing .67% Puerto Rico Pub Bldg Auth Rev Gtd Govt Fac Ser B FSA+ 5 1/4% 7/1/2021 AAA 550 522,500
----------------------------------------------------------------------------------------------------------------------==============
Industrial 15.21% Brazos River Auth TX Rev AMBAC+ 5 1/8% 5/1/2019 AAA 2,000 1,832,500
Lower Neches Valley Auth TX Ind Dev Corp Envr Mobil Oil Refining
Corp Proj AMT+++ 6.35% 4/1/2026 AAA 1,000 1,014,350
Orange Cnty TX Nav & Port Dist Ind Dev Rev North
Star Steel 6 3/8% 2/1/2017 A 2,400 2,463,000
Texas City TX Ind Dev Corp Marine Term Rev Arco
Pipe Line 7 3/8% 10/1/2020 A 5,500 6,496,875
Total 11,806,725
----------------------------------------------------------------------------------------------------------------------==============
Pollution 3.39% Harris Cnty TX Ind Dev Corp Marine Term & Wtr
Poll Ctrl 6 5/8% 2/1/2024 Baa1 1,500 1,531,875
Trinity River Auth TX Poll Ctrl Rev Texas Instruments Inc
AMT+++ 6.20% 3/1/2020 A 1,105 1,096,713
Total 2,628,588
----------------------------------------------------------------------------------------------------------------------==============
Power 4.16% Fort Bend Cnty TX Muni Util Dist No 25 MBIA+ 6.00% 10/1/2028 AAA 2,170 2,210,688
Lubbock TX Elec Lt & Pwr Sys Rev AMBAC+ 4 1/4% 4/15/2018 AAA 460 376,050
Puerto Rico Elec Pwr Auth Pwr Rev Ser EE 4 3/4% 7/1/2024 Baa1 750 641,250
Total 3,227,988
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 16.07% Austin TX Util Sys Rev Ser A 8.00% 11/15/2016 AAA 1,000 1,037,500
Bexar Cnty TX Hlth Fac Dev Corp Hosp Rev Baptist Mem Sys
MBIA+ 7 1/2% 8/15/2010 AAA 750 773,880
Dallas Cnty TX Flood Ctrl Distano 1 9 1/4% 4/1/2010 AAA 1,460 1,686,300
Harris Cnty TX Toll Rd Ser A 6.10% 8/15/2016 AAA 2,640 2,805,000
14
<PAGE>
Statement of Net Assets (unaudited)
TEXAS TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Houston TX Wtr & Swr Sys Rev MBIA+ 7.40% 12/1/2018 AAA $1,000 $ 1,040,860
Houston TX Wtr & Swr Sys Rev Ser A AMBAC+ 6 1/2% 12/1/2021 AAA 335 351,331
Houston TX Wtr & Swr Sys Rev Ser A AMBAC+ 6 1/2% 12/1/2021 AAA 2,665 2,794,918
Puerto Rico Comwlth 6 1/2% 7/1/2023 AAA 750 812,813
Texas St Tpk Auth Rev Houston Ship Chan Zero Coupon 1/1/2020 AAA 995 1,176,588
Total 12,479,190
----------------------------------------------------------------------------------------------------------------------==============
Solid Waste 1.07% Gulf Coast Waste Disp Auth TX Rev AMT+++ 5.60% 4/1/2032 BBB 1,000 832,500
----------------------------------------------------------------------------------------------------------------------==============
Transportation 9.61% Dallas-Fort Worth TX Intl Arpt Rev Ser A FGIC+
AMT+++ 6 1/8% 11/1/2035 AAA 2,500 2,512,500
Dallas-Fort Worth TX Intl Arpt American Airlines Inc
AMT+++ 7 1/4% 11/1/2030 Baa1 2,000 2,050,000
Dallas-Fort Worth TX Intl Arpt Fac Impt Corp Rev
American Airlines Inc AMT+++ 6 3/8% 5/1/2035 Baa1 3,045 2,904,169
Total 7,466,669
----------------------------------------------------------------------------------------------------------------------==============
Water/Sewer 7.32% Nueces River Auth TX Wtr Supp Rev Fac Corpus Christi Lake
FSA+ 5 1/2% 3/1/2027 AAA 5,000 4,743,750
Texas Wtr Dev Bd Rev St Revolving Fd Ser B 5 1/8% 7/15/2018 AAA 1,000 937,500
Total 5,681,250
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 100.03% (Cost $76,756,842) 77,667,070
----------------------------------------------------------------------------------------------------------------------==============
Cash and Receivables, Net of Liabilities (.03)% (22,258)
----------------------------------------------------------------------------------------------------------------------==============
Net Assets 100.00% $77,644,812
----------------------------------------------------------------------------------------------------------------------==============
Net asset value ($77,644,812 / 8,262,961 shares outstanding) $9.40
Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $9.72
* 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. See page 31 for
Glossary of Terms.
++ 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 March 31, 2000. See page 1 for additional important information.
+++ Income from these securities may be subject to the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
NEW JERSEY TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education 5.96% Carteret NJ Bd Ed Ctfs Partn MBIA+ 6.00% 1/15/2024 Aaa $ 430 $ 438,062
Carteret NJ Bd Ed Ctfs Partn MBIA+ 5 3/4% 1/15/2030 Aaa 1,155 1,144,894
New Jersey Econ Dev Auth Rev Princeton Jr Sch Inc 1996 Proj
7.00% 5/1/2020 BBB 1,800 1,851,750
New Jersey Econ Dev Auth Rev The Seeing Eye Inc 6.20% 12/1/2024 A-* 1,000 1,003,750
New Jersey St Ed Fac Auth Rev Princeton Univ Ser A 5.00% 7/1/2029 AAA 700 616,875
New Jersey St Ed Fac Auth Rev Princeton Univ Ser B 5 1/8% 7/1/2019 AAA 400 371,500
New Jersey St Ed Fac Auth Rev Seton Hall Univ Proj
AMBAC+ 5.00% 7/1/2018 AAA 1,000 927,500
New Jersey St Ed Fac Auth Rev Trenton State College Ser E
AMBAC+ 6.00% 7/1/2019 AAA 1,190 1,206,363
North Bergen Twp NJ Bd Ed Ctfs Partn FSA+ 6 1/8% 12/15/2022 Aaa 1,185 1,227,956
West Orange NJ Bd Ed Ctfs MBIA+ 5 5/8% 10/1/2029 Aaa 300 296,625
Total 9,085,275
----------------------------------------------------------------------------------------------------------------------==============
15
<PAGE>
Statement of Net Assets (unaudited)
NEW JERSEY TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
General Obligation 15.93% Keansburg NJ 6.80% 12/1/2010 Aa2 $ 1,000 $ 1,062,500
Millburn Township NJ Sch Dist 5.35% 7/15/2018 Aaa 1,050 1,032,937
Millburn Township NJ Sch Dist 5.35% 7/15/2019 Aaa 250 244,375
Morristown NJ FSA+ 6 1/2% 8/1/2019 AAA 3,440 3,659,300
New Jersey St 4 1/2% 2/1/2019 Aa1 1,760 1,500,400
Paterson NJ FSA+ 9.30% 2/15/2004 AAA 4,200 4,856,250
Puerto Rico Comwlth Pub Impt 4 1/2% 7/1/2023 A 2,000 1,655,000
Puerto Rico Comwlth Pub Impt 6.00% 7/1/2029 A 1,500 1,511,250
Puerto Rico Comwlth RIBs MBIA+ 7.88% 7/1/2008++ AAA 5,000 5,300,000
South Brunswick Township NJ Bd Ed FGIC+ 5 5/8% 12/1/2023 AAA 45 44,550
Toms River NJ Sch Dist Regl Sch FGIC+ 5.00% 7/15/2022 AAA 1,210 1,087,488
Union Cnty NJ Gen Impt 5 1/8% 2/1/2018 Aaa 1,060 1,010,975
Winslow Twp NJ Sch Dist FGIC+ 5.20% 8/1/2017 AAA 840 808,500
Winslow Twp NJ Sch Dist FGIC+ 5.20% 8/1/2018 AAA 540 515,700
Total 24,289,225
----------------------------------------------------------------------------------------------------------------------==============
Healthcare 12.68% Camden Cnty NJ Impt Auth Rev Hlth Care Proj Cooper
ACA+ 6.00% 2/15/2027 A 7,710 7,661,812
New Jersey Econ Dev Auth Rev 1st Mtg Cadbury Corp Ser A
ACA+ 5 1/2% 7/1/2028 A 165 151,800
New Jersey Econ Dev Auth Rev Dept of Human Svc Ser A 6 1/4% 7/1/2024 A 335 339,606
New Jersey Econ Dev Auth Rev RWJ Health Care Corp
FSA+ 6 1/2% 7/1/2024 AAA 500 526,875
New Jersey Hlth Care Fac Fin Auth Rev Bayonne Hosp
FSA+ 6 1/4% 7/1/2012 AAA 1,370 1,460,762
New Jersey Hlth Care Fac Fin Auth Rev Hunterdon Med Ctr Ser A
AMBAC+ 7.00% 7/1/2020 AAA 5,000 5,121,850
New Jersey Hlth Care Fac Fin Auth Rev Spectrum For Living Ser B
FHA+ 6 1/2% 2/1/2022 AAA 880 907,500
New Jersey Hlth Care Fac Fin Auth Rev St Barnabas Hlth Ser B
MBIA+ 5 1/4% 7/1/2014 AAA 135 131,288
New Jersey Hlth Care Fac Fin Auth Rev St Barnabas Hlth Ser B
MBIA+ Zero Coupon 7/1/2022 AAA 1,130 305,100
New Jersey Hlth Care Fac Fin Auth Rev St Barnabas Hlth Ser C
MBIA+ 5.00% 7/1/2008 AAA 500 496,250
New Jersey Hlth Care Fac Fin Auth Rev St Barnabas Hlth Ser C
MBIA+ 5 1/4% 7/1/2018 AAA 1,000 945,000
New Jersey Hlth Care Fac Fin Auth Rev St Josephs Hosp & Med Ctr Ser A
CONNIE LEE+ 5 3/4% 7/1/2016 AAA 250 252,188
Puerto Rico Ind Tourist Ed Mutuo Oblig Group Ser A
MBIA+ 6 1/4% 7/1/2024 AAA 1,000 1,030,000
Total 19,330,031
----------------------------------------------------------------------------------------------------------------------==============
Housing 6.13% New Jersey St Hsg & Mtg Fin Agy Multi Fam Hsg Rev Ser A
FSA+ AMT+++ 5.15% 11/1/2030 AAA 3,800 3,396,250
New Jersey St Hsg & Mtg Fin Agy Multi Fam Hsg Rev Ser B
FSA+ 6 1/4% 11/1/2026 AAA 500 508,750
New Jersey St Hsg & Mtg Fin Agy Rev Home Buyer Ser S
MBIA+ AMT+++ 6.05% 10/1/2028 AAA 5,130 5,123,588
Puerto Rico Hsg Fin Corp Sing Fam Mtg Rev Portfolio 1 Ser B
GNMA+ 7.65% 10/15/2022 AAA 100 102,692
Virgin Islands Hsg Fin Auth Sing Fam Rev Ser A
GNMA+ AMT+++ 6 1/2% 3/1/2025 AAA 215 220,106
Total 9,351,386
----------------------------------------------------------------------------------------------------------------------==============
Miscellaneous 7.28% Atlantic City NJ Bd Ed Ctfs Partn MBIA+ 5.10% 5/1/2014 Aaa 320 309,600
Casino Reinvestment Dev Auth NJ Pkg Fee Rev Ser A
FSA+ 5 1/4% 10/1/2015 AAA 150 146,062
Hamilton Township NJ Bd Ctfs Partn Ser B FSA+ 7.00% 12/15/2015 AAA 970 1,007,588
Hudson Cnty NJ Impt Auth Lease Rev N Hudson Regl Fire & Rescue Ser A
AMBAC+ 5 5/8% 9/1/2019 Aaa 160 159,400
16
<PAGE>
Statement of Net Assets (unaudited)
NEW JERSEY TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Monmouth Cnty NJ Impt Auth Rev Govt Ln MBIA+ 6.40% 12/1/2009 AAA $ 1,075 $ 1,166,375
New Jersey Bldg Auth St Bldg Rev 5 3/8% 6/15/2019 Aa2 1,625 1,576,250
New Jersey Econ Dev Auth Rev Station Plaza Pk & Ride LP
AMT+++ 7.00% 7/1/2016 BBB* 4,245 4,414,800
New Jersey Sports & Exposition Auth St Contrct Ser A
MBIA+ 4 1/2% 3/1/2024 AAA 2,805 2,310,619
Total 11,090,694
----------------------------------------------------------------------------------------------------------------------==============
Pollution .36% Cape May Cnty NJ Ind Poll Ctrl Fin Auth Rev Atlantic City Ser B
MBIA+ 7.00% 11/1/2029 AAA 500 541,250
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 19.90% Essex Cnty NJ Impt Auth Rev Orange Muni Util & Lease
MBIA+ 6.80% 7/1/2014 AAA 1,710 1,885,275
New Jersey Econ Dev Auth Rev Ed Testing Svc Ser A
MBIA+ 6.00% 5/15/2025 AAA 3,250 3,461,250
New Jersey Hlth Care Fac Fin Auth Rev AMBAC+ 6.10% 7/1/2010 AAA 1,475 1,569,031
New Jersey Hlth Care Fac Fin Auth Rev Mtg Cathedral Hlth Ser A
FHA+ 7 1/4% 2/15/2021 AAA 1,485 1,550,815
New Jersey Hlth Care Fac Fin Auth Rev Prerefunded Bayonne Hosp Oblig
FSA+ 6 1/4% 7/1/2012 AAA 230 245,812
New Jersey Hlth Care Fac Ocean Cnty Med Ctr FSA+ 6 3/4% 7/1/2020 AAA 1,755 1,836,169
New Jersey Sports & Exposition Auth Rev Monmouth Pk Ser A
8.00% 1/1/2025 AAA 2,000 2,287,500
North Brunswick Twp NJ Bd Ed 6.30% 2/1/2014 AAA 1,000 1,060,000
Pohatcong Township NJ Sch Dist FSA+ 5.95% 7/15/2023 AAA 650 694,688
Pohatcong Township NJ Sch Dist FSA+ 5.95% 7/15/2026 AAA 250 267,188
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev Ser T 6 5/8% 7/1/2018 AAA 283 299,753
Puerto Rico Elec Pwr Auth Pwr Rev RIBs FSA+ 8.08% 7/1/2023++ AAA 5,000 5,393,750
Puerto Rico Elec Pwr Auth Pwr Rev Ser T RIBs FSA+ 8.57% 7/1/2018++ AAA 7,000 7,988,750
Puerto Rico Pub Bldg Auth Pub Ed & Hlth Fac Ser L 6 7/8% 7/1/2021 AAA 200 213,000
Puerto Rico Tel Auth Rev RIBs MBIA+ 6.76% 1/16/2015++ AAA 1,500 1,591,875
Total 30,344,856
----------------------------------------------------------------------------------------------------------------------==============
Solid Waste 1.59% Essex Cnty NJ Util Auth Solid Waste Rev Ser A FSA+ 5.00% 4/1/2022 Aaa 2,670 2,426,362
----------------------------------------------------------------------------------------------------------------------==============
Transportation 28.34% Delaware River Port Auth PA & NJ Rev FGIC+ 5 1/2% 1/1/2026 AAA 12,550 12,095,062
New Jersey ST Hwy Auth Garden St Pkwy Gen Rev 6.20% 1/1/2010 AA 2,000 2,172,500
New Jersey ST Hwy Auth Garden St Pkwy Gen Rev FGIC+ 5 3/4% 1/1/2015 AAA 1,100 1,128,875
New Jersey St Transn Tr Fd Auth Transn Sys
Ser A FSA+ 4 1/2% 6/15/2019 AAA 11,400 9,704,250
New Jersey St Transn Tr Fd Auth Transn Sys Ser A 6.00% 6/15/2019 Aa2 1,000 1,028,750
Port Auth NY & NJ Cons 117th Ser Sec Installment
FGIC+ AMT+++ 4 3/4% 11/15/2016 AAA 825 729,094
Port Auth NY & NJ Cons 112th Ser AMT+++ 5.00% 12/1/2016 AA* 1,000 912,500
Port Auth NY & NJ Cons 114th Ser MBIA+ 4 3/4% 8/1/2033 AAA 4,425 3,700,406
Port Auth NY & NJ Cons 119th Ser FGIC+ AMT+++ 5 1/2% 9/15/2019 AAA 150 145,313
Port Auth NY & NJ RIBs 4.96% 8/1/2033++ AA 2,500 1,681,250
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev Ser Y 5 1/2% 7/1/2036 A 380 358,625
Puerto Rico Comwlth Hwy & Transn Auth Transn Rev Ser A
MBIA+ 4 3/4% 7/1/2038 AAA 10,000 8,387,500
South Jersey NJ Port Corp Rev MBIA+ 5.10% 1/1/2017 AAA 315 295,706
South Jersey NJ Port Corp Rev Marine Terminal Ser J
MBIA+ 5.10% 1/1/2016 AAA 915 865,819
Total 43,205,650
----------------------------------------------------------------------------------------------------------------------==============
Water/Sewer 3.16% Middlesex Cnty NJ Impt Auth Util Sys Rev Ser B
AMBAC+ Zero Coupon 9/1/2023 AAA 3,000 757,500
Middlesex Cnty NJ Impt Auth Util Sys Rev Ser B
AMBAC+ Zero Coupon 9/1/2024 AAA 6,000 1,432,500
Middlesex Cnty NJ Impt Auth Util Sys Rev Perth Amboy Franchise Proj Ser A
AMBAC+ 5.00% 9/1/2029 AAA 2,700 2,389,500
17
<PAGE>
Statement of Net Assets (unaudited)
NEW JERSEY TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
New Jersey Waste Wtr Treatment Trust 6 7/8% 6/15/2009 Aa2 $ 155 $ 158,674
New Jersey Waste Wtr Treatment Trust Ser A MBIA+ 7.00% 5/15/2006 AAA 75 76,280
Total 4,814,454
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 101.33% (Cost $153,900,822) 154,479,183
----------------------------------------------------------------------------------------------------------------------==============
Cash and Receivables, Net of Liabilities (1.33)% (2,026,086)
====================================================================================================================================
Net Assets 100.00% $152,453,097
====================================================================================================================================
Net asset value ($152,453,097 / 30,976,407 shares outstanding) $4.92
Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $5.09
* 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. See page 31 for
Glossary of Terms.
++ 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 March 31, 2000. See page 1 for additional important information.
+++ Income from these securities may be subject to the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
CONNECTICUT TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education 23.26% Connecticut St Hlth & Ed Fac Auth Rev Brunswick Sch Ser A
MBIA+ 5.00% 7/1/2029 AAA $1,810 $ 1,592,800
Connecticut St Hlth & Ed Fac Auth Rev CT College Ser C-1
MBIA+ 5 1/2% 7/1/2027 AAA 1,000 961,250
Connecticut St Hlth & Ed Fac Auth Rev Catholic Hlth East Ser F
MBIA+ 5 5/8% 11/15/2020 AAA 1,000 991,250
Connecticut St Hlth & Ed Fac Auth Rev Catholic Hlth East Ser F
MBIA+ 5 3/4% 11/15/2029 AAA 1,000 992,500
Connecticut St Hlth & Ed Fac Auth Rev Child Care Fac Prog Ser C
AMBAC+ 5 5/8% 7/1/2029 AAA 2,005 1,954,875
Connecticut St Hlth & Ed Fac Auth Rev Fairfield Univ Ser I
MBIA+ 5 1/2% 7/1/2029 AAA 1,500 1,445,625
Connecticut St Hlth & Ed Fac Auth Rev Loomis Chaffee Sch Proj Ser B
MBIA+ 6.00% 7/1/2015 AAA 715 737,344
Connecticut St Hlth & Ed Fac Auth Rev Miss Porters Sch Ser A
5 3/4% 7/1/2029 A1 3,000 3,000,000
Connecticut St Hlth & Ed Fac Auth Rev Sacred
Heart Ser C 6 1/2% 7/1/2016 BBB 275 280,844
Connecticut St Hlth & Ed Fac Auth Rev Sacred Heart Univ Issue Ser E
ASSET GTY+ 5.00% 7/1/2028 AA 500 433,750
Connecticut St Hlth & Ed Fac Auth Rev Salisbury Sch Issue Ser A
ASSET GTY+ 4 3/4% 7/1/2028 AA 3,005 2,535,469
Connecticut St Hlth & Ed Fac Auth Rev St Joseph College Ser A
ASSET GTY+ 5.00% 7/1/2018 AA 585 530,887
Connecticut St Hlth & Ed Fac Auth Rev St Joseph College Ser A
ASSET GTY+ 5.00% 7/1/2019 AA 565 504,262
Connecticut St Hlth & Ed Fac Auth Rev Suffield Academy Ser A
5.40% 7/1/2027 MBIA+ AAA 1,500 1,421,250
Connecticut St Hlth & Ed Fac Auth Rev Trinity College Ser E
MBIA+ 5 7/8% 7/1/2026 AAA 1,000 1,012,500
Connecticut St Hlth & Ed Fac Auth Rev
Univ CT Fndtn Ser A 5 3/8% 7/1/2029 A2 660 612,150
Connecticut St Hlth & Ed Fac Auth Rev Univ New Haven Issue D
ACA+ 6.70% 7/1/2026 A 1,000 1,040,000
18
<PAGE>
Statement of Net Assets (unaudited)
CONNECTICUT TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Connecticut St Hsg Fin Auth Hsg Mtg Fin Ser A Sub Ser A-2
AMT+++ 6.45% 5/15/2022 Aa2 $ 820 $ 835,375
Connecticut St Hsg Fin Auth Hsg Mtg Fin Ser D-1 5.55% 11/15/2028 Aa2 1,690 1,594,937
University CT Rev Student Fee Ser A MBIA+ 4 3/4% 11/15/2027 AAA 1,500 1,275,000
Total 23,752,068
----------------------------------------------------------------------------------------------------------------------==============
General Obligation 12.68% Connecticut St Ser A 5.00% 6/15/2018 AA 2,150 2,021,000
Connecticut St Ser B 5 1/2% 11/1/2018 AA 50 50,062
Connecticut St Ser C 4 1/2% 10/15/2015 AA 1,000 892,500
Connecticut St Ser C 4 1/2% 10/15/2016 AA 500 441,875
Hartford CT 6 1/2% 12/15/2005 AA 730 789,312
Killingly CT 7 1/4% 12/15/2004 A1 250 255,125
Monroe CT 6.60% 4/15/2005 Aa2 100 107,875
Montville CT 6.70% 6/15/2009 Aa3 550 618,750
Montville CT 6.70% 6/15/2010 Aa3 575 650,469
Portland CT 7.10% 12/15/2000 A2 100 102,060
Puerto Rico Comwlth FSA+ 5 3/8% 7/1/2025 AAA 750 720,000
Puerto Rico Comwlth MBIA+ 5.00% 7/1/2024 AAA 1,000 907,500
Puerto Rico Comwlth Pub Impt Zero Coupon 7/1/2018 A 2,000 695,000
Puerto Rico Comwlth Pub Impt 4 1/2% 7/1/2023 A 500 413,750
Puerto Rico Comwlth Pub Impt FSA+ 5.00% 7/1/2028 AAA 2,090 1,875,775
Redding CT 6.60% 4/15/2010 Aa1 100 112,875
University of Connecticut Ser A 5 5/8% 3/1/2020 AAA 1,000 1,002,500
Voluntown CT 6 3/4% 10/1/2002 A3 100 104,750
Watertown CT 6 1/2% 6/15/2003 Aa3 100 105,125
West Haven CT MBIA+ 6 1/2% 6/15/2006 AAA 100 109,000
Westport CT 5 1/4% 7/15/2019 Aaa 1,000 975,000
Total 12,950,303
----------------------------------------------------------------------------------------------------------------------==============
Healthcare 18.93% Connecticut St Dev Auth Rev Duncaster Proj Ser A
ASSET GTY+ 5 3/8% 8/1/2024 AA 1,000 925,000
Connecticut St Hlth & Ed Fac Auth Rev RIBs 7.71% 6/10/2030++ AAA 6,800 6,783,000
Connecticut St Hlth & Ed Fac Auth Rev Bridgeport Hosp Ser A
MBIA+ 6 5/8% 7/1/2018 AAA 1,250 1,300,000
Connecticut St Hlth & Ed Fac Auth Rev Child Care Fac Prog Ser A
AMBAC+ 5.00% 7/1/2028 AAA 1,580 1,388,425
Connecticut St Hlth & Ed Fac Auth Rev Greenwich Hosp Ser A
MBIA+ 5 3/4% 7/1/2016 AAA 1,350 1,380,375
Connecticut St Hlth & Ed Fac Auth Rev Greenwich Hosp Ser A
MBIA+ 5.80% 7/1/2026 AAA 1,525 1,530,719
Connecticut St Hlth & Ed Fac Auth Rev Hosp For Sp Care Ser B
5 1/2% 7/1/2027 BBB 1,895 1,537,319
Connecticut St Hlth & Ed Fac Auth Rev Vet Mem Med Ctr Ser A
MBIA+ 5 1/2% 7/1/2026 AAA 1,000 956,250
Connecticut St Hlth & Ed Fac Auth Rev Waterbury Hosp Issue Ser C
ASSET GTY+ 5 3/4% 7/1/2029 AA 1,000 973,750
Connecticut St Hlth & Ed Fac Auth Rev William W.
Backus Hosp Issue Ser D AMBAC+ 5 3/4% 7/1/2027 AAA 1,000 986,250
Connecticut St Hlth & Ed Fac Auth Rev Windham Cmnty Hosp Ser C
5 3/4% 7/1/2011 BBB 1,700 1,570,375
Total 19,331,463
----------------------------------------------------------------------------------------------------------------------==============
Housing 1.65% Connecticut St Hsg Fin Auth Hsg Mtg Fin Prog Ser B 6 3/4% 11/15/2023 Aa2 1,605 1,683,244
----------------------------------------------------------------------------------------------------------------------==============
19
<PAGE>
Statement of Net Assets (unaudited)
CONNECTICUT TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Industrial 12.14% Connecticut St Dev Auth Govt Lease Rev MBIA+ 6.60% 6/15/2014 AAA $ 500 $ 535,000
Connecticut St Dev Auth Ind Dev Rev Watson Foods Co Inc
AMT+++ 5.90% 6/1/2028 BB -* 715 630,094
Connecticut St Dev Auth Poll Ctrl Rev Pfizer Inc
Proj 6.55% 2/15/2013 AAA 3,570 3,770,813
Connecticut St Dev Auth Solid Waste Disp Fac Rev Pfizer Inc Proj
AMT+++ 7.00% 7/1/2025 AAA 2,500 2,721,875
Connecticut St Res Recovery Auth American Fuel Co Ser A
AMT+++ 6.45% 11/15/2022 BB 4,985 4,741,981
Total 12,399,763
----------------------------------------------------------------------------------------------------------------------==============
Miscellaneous 9.63% Connecticut St Dev Auth Aquar Rev Mystic Marinelife Aquar Ser A
7.00% 12/1/2027 BB* 1,500 1,511,250
New Haven CT Air Rights Pkg Fac Rev MBIA+ 6 1/2% 12/1/2015 AAA 8,025 8,315,906
Total 9,827,156
----------------------------------------------------------------------------------------------------------------------==============
Power 3.47% Puerto Rico Elec Pwr Auth Pwr Rev Ser DD FSA+ 4 1/2% 7/1/2019 AAA 1,000 861,250
Puerto Rico Elec Pwr Auth Pwr Rev Ser DD MBIA+ 5.00% 7/1/2028 AAA 3,000 2,677,500
Total 3,538,750
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 12.71% Connecticut St Clean Wtr Fd Rev 7.00% 1/1/2011 AAA 2,050 2,130,914
Connecticut St Hlth & Ed Fac Auth Rev Prerefunded Sacred Heart Ser C
6 1/2% 7/1/2016 AAA 725 793,875
Connecticut St Hlth & Ed Fac Auth Rev Waterbury Hosp Ser B
FSA+ 7.00% 7/1/2020 AAA 100 102,686
Connecticut St Hlth & Ed Fac Auth Rev William W.
Backus Hosp Issue Ser C 6 3/8% 7/1/2022 AAA 850 895,688
Connecticut St Sp Tax Oblig Rev FGIC+ 6.10% 10/1/2011 AAA 1,000 1,062,500
Darien CT 5 1/2% 10/15/2015 AAA 500 520,625
Puerto Rico Comwlth 6.45% 7/1/2017 AAA 2,000 2,162,500
Puerto Rico Comwlth 6 1/2% 7/1/2023 AAA 1,500 1,625,625
Puerto Rico Comwlth 6.00% 7/1/2026 AAA 1,000 1,086,250
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev Ser T 6 5/8% 7/1/2018 AAA 3 3,303
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev Ser T 6 5/8% 7/1/2018 AAA 67 70,809
Puerto Rico Elec Pwr Auth Pwr Rev Ser T RIBs FSA+ 8.57% 7/1/2018++ AAA 1,500 1,711,875
Puerto Rico Elec Pwr Auth Pwr Rev Ser X 6 1/8% 7/1/2021 AAA 750 811,875
Total 12,978,525
----------------------------------------------------------------------------------------------------------------------==============
Solid Waste 3.28% Eastern CT Res Recov Auth Solid Waste Rev W. Libson Ser A
AMT+++ 5 1/2% 1/1/2020 BBB 4,000 3,345,000
----------------------------------------------------------------------------------------------------------------------==============
Transportation .59% Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev Ser W 5 1/2% 7/1/2015 A 600 598,500
----------------------------------------------------------------------------------------------------------------------==============
Water/Sewer .99% Connecticut St Dev Auth Wtr Fac Rev Brdgprt Rmkt
AMBAC+ AMT+++ 6.15% 4/1/2035 AAA 750 765,938
Connecticut St Dev Auth Wtr Fac Rev The CT Wtr Co Ser A
AMBAC+ AMT+++ 5 3/4% 7/1/2028 AAA 250 245,625
Total 1,011,563
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 99.33% (Cost $101,764,118) 101,416,335
----------------------------------------------------------------------------------------------------------------------==============
Cash and Receivables, Net of Liabilities .67% 679,397
====================================================================================================================================
Net Assets 100.00% $102,095,732
====================================================================================================================================
Net asset value ($102,095,732 / 10,483,632 shares outstanding) $ 9.74
Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $10.07
* 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. See page 31 for
Glossary of Terms.
++ 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 March 31, 2000. See page 1 for additional important information.
+++ Income from these securities may be subject to the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
MISSOURI TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education 7.19% Missouri St Hlth & Ed Fac Auth Ed Fac Rev William Jewell College
ACA+ 6 1/8% 8/1/2019 A $1,000 $ 1,005,000
Missouri St Hlth & Ed Fac Auth Ed Fac Rev William Jewell College
ACA+ 6.00% 8/1/2029 A 385 375,856
Missouri St Hlth & Ed Fac Auth Rev Maryville Univ St Louis Proj
5 3/4% 6/15/2017 Baa1 400 386,500
Missouri St Hlth & Ed Fac Auth Rev Washington Univ Ser A
6.00% 3/1/2030 Aa1 850 860,625
Missouri St Hlth & Ed Fac Auth Rev Washington Univ Ser A
4 3/4% 11/15/2037 Aa1 3,000 2,460,000
University MO Univ Rev Sys Fac 5 1/2% 11/1/2017 Aa2 1,500 1,488,750
University MO Univ Rev Sys Fac 5.80% 11/1/2027 Aa2 1,975 1,984,875
Total 8,561,606
----------------------------------------------------------------------------------------------------------------------==============
General Obligation 9.30% Missouri St Fourth State Bldg Ser A 4 1/2% 6/1/2020 AAA 645 550,669
Puerto Rico Comwlth Pub Impt 4 1/2% 7/1/2023 A 3,800 3,144,500
Puerto Rico Comwlth RIBs MBIA+ 7.88% 7/1/2008++ AAA 1,000 1,060,000
Puerto Rico Comwlth RIBs FSA+ 8.13% 7/1/2020++ AAA 4,000 4,040,000
St Louis MO Pub Safety FGIC+ 5.00% 2/15/2015 AAA 250 239,375
University City MO Sch Dist MBIA+ 10.00% 2/15/2008 AAA 1,550 2,040,188
Total 11,074,732
----------------------------------------------------------------------------------------------------------------------==============
Healthcare 14.54% Cape Girardeau Cnty MO Ind Dev Auth Hlth Care Fac Rev Hosp
MBIA+ 5 1/4% 6/1/2016 AAA 640 618,400
Hannibal MO Ind Dev Auth Hlth Fac Rev Regl Hosp Ser A
FSA+ 5 5/8% 3/1/2012 AAA 2,170 2,213,400
Jackson Cnty MO Ind Dev Auth Hlth Care Rev St
Joseph Ctr 7.00% 7/1/2022 Baa1 1,500 1,522,500
Lees Summit MO Ind Dev Auth Hlth Fac Rev 6.00% 8/15/2017 A-* 1,200 1,128,000
Missouri St Hlth & Ed Fac Auth Rev BJC Hlth Sys MBIA+ 5.00% 5/15/2038 AAA 1,000 847,500
Missouri St Hlth & Ed Fac Auth Rev Heartland Hlth Sys Proj
AMBAC+ 6.35% 11/15/2017 AAA 3,600 3,708,000
Missouri St Hlth & Ed Fac Auth Rev Hlth Midwest Ser B
MBIA+ 6 1/4% 2/15/2022 AAA 2,175 2,207,625
Missouri St Hlth & Ed Fac Auth Rev SSM Hlth Care Ser A
MBIA+ 5.00% 6/1/2022 AAA 1,750 1,553,125
North Kansas City MO Hosp Rev AMBAC+ 4 3/4% 11/15/2023 Aaa 3,830 3,198,050
Puerto Rico Ind Tourist Ed Med & Envr Ctrl Fac
Mennonite Gen Hosp Proj Ser A 5 5/8% 7/1/2017 BBB 370 317,275
Total 17,313,875
----------------------------------------------------------------------------------------------------------------------==============
Housing 9.57% Missouri St Dev Fin Bd Multi Fam Rev Quality Hill Proj Ser A
ASSET GTY+ 5.60% 9/15/2028 AA 2,365 2,264,488
Missouri St Hsg Dev Cmnty Mtg 13.5/2005 w/Warrants
GNMA/FNMA+ AMT+++ 6.22% 3/1/2026 AAA 4,715 4,750,363
Missouri St Hsg Dev Cmnty Mtg Rev Sing Fam Mtg Ser A
GNMA+ AMT+++ 6 3/4% 6/1/2024 AAA 290 297,612
Missouri St Hsg Dev Cmnty Mtg Rev Sing Fam Mtg Ser B
GNMA+ AMT+++ 6.40% 12/1/2024 AAA 1,920 1,944,000
Missouri St Hsg Dev Cmnty Mtg Rev Sing Fam Ser E-1
GNMA/FNMA+ AMT+++ Zero Coupon 3/1/2029 AAA 4,750 777,812
Puerto Rico Hsg Fin Corp Sing Fam Mtg Rev Portfolio 1 Ser B
GNMA+ 7.65% 10/15/2022 AAA 15 15,404
St Louis Cnty MO Ind Dev Auth Multi Fam Hsg Rev Bonhomme Village
Apt Proj Ser A FNMA+ 5.35% 7/1/2018 AAA 1,400 1,305,500
St Louis MO Pkg Fac Rev Argyle Bldg Fac Ser A
MBIA+ 57/8% 12/15/2021 Aaa 50 50,312
Total 11,405,491
----------------------------------------------------------------------------------------------------------------------==============
Industrial 6.91% Missouri St Dev Fin Bd Solid Waste Disp Rev Procter & Gamble
Paper Proj AMT+++ 5.20% 3/15/2029 AA 8,200 7,246,750
21
<PAGE>
Statement of Net Assets (unaudited)
MISSOURI TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
St Louis MO Ind Dev Auth Swr & Solid Waste Disp Fac Rev Anheuser-Busch
Proj AMT+++ 5 7/8% 11/1/2026 A1 $1,005 $ 986,156
Total 8,232,906
----------------------------------------------------------------------------------------------------------------------==============
Miscellaneous 10.55% Columbia MO Sp Oblig Cap Impt 5 1/2% 2/1/2016 A 380 374,775
Kansas City MO Muni Assist Corp Rev Ser A 5 1/8% 3/1/2019 A3 1,250 1,160,937
Missouri Sch Bd Assoc Lease Partn NIXA Reorg Sch Dist R-2
ASSET GTY+ 5.40% 3/1/2020 AA 900 857,250
Missouri St Ctfs Partn Bonne Terre Prison Proj Ser A
AMBAC+ 5.15% 6/1/2018 AAA 1,415 1,310,644
Missouri St Ctfs Partn Bonne Terre Prison Proj Ser A
AMBAC+ 5.15% 6/1/2019 AAA 1,405 1,292,600
Missouri St Dev Fin Bd Infra Fac Rev Hartman Heritage Ctr Proj Ser A
AMBAC+ 5 7/8% 4/1/2020 Aaa 1,000 1,012,500
St Louis MO Ind Dev Auth Rev Kiel Ctr Multi Purp Arena
AMT+++ 7 7/8% 12/1/2024 BB* 2,000 2,102,500
St Louis MO Ld Clearance Redev Auth Rev Kiel Site Lease Ser B
MBIA+ 5.30% 7/1/2016 AAA 100 98,125
St Louis MO Muni Fin Corp Lease Hold Rev City Justice Ctr Ser A
AMBAC+ 6.00% 2/15/2019 AAA 3,500 3,578,750
St Louis MO Muni Fin Corp Lease Hold Rev City Justice Ctr Ser A
AMBAC+ 6.00% 2/15/2020 Aaa 760 780,900
Total 12,568,981
----------------------------------------------------------------------------------------------------------------------==============
Pollution 8.72% Missouri St Envr Impt & Enrg Res Auth Wtr Poll Ctrl Ser A
6.55% 7/1/2014 Aaa 3,000 3,165,000
Missouri St Envr Impt & Enrg Res Auth Wtr Poll Ctrl Ser A
5 3/4% 1/1/2016 Aaa 1,220 1,239,825
Missouri St Envr Impt & Enrg Res Auth Wtr Poll Ctrl Ser B
7.20% 7/1/2016 Aaa 2,250 2,486,250
Missouri St Envr Impt & Enrg Res Auth Wtr Poll Ctrl Ser D
5.90% 1/1/2019 Aaa 2,100 2,149,875
Missouri St Envr Impt & Enrg Res Auth Wtr Poll Ctrl Ser E
5 5/8% 7/1/2016 Aaa 900 909,000
Missouri St Envr Impt & Enrg Res Auth Wtr Poll Ctrl St
Revolving FDS Prog Ser A 5.70% 7/1/2021 Aaa 435 433,913
Total 10,383,863
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 21.83% Clay Cnty MO Pub Bldg Auth Lease Hold Rev FGIC+ 7.00% 5/15/2014 AAA 1,000 1,078,750
Kansas City MO Arpt Rev Gen Impt Ser B FSA+ 6 7/8% 9/1/2014 AAA 1,490 1,620,375
Kansas City MO Wtr Rev 7th Issue Ser D 6.65% 12/1/2013 AAA 2,800 3,003,000
Missouri St Hlth & Ed Fac Auth Rev BJC
Hlth Sys Ser A 61/2% 5/15/2020 AAA 4,900 5,292,000
Missouri St Hlth & Ed Fac Auth Rev SSM Hlth Care Ser AA
MBIA+ 6 1/4% 6/1/2016 AAA 345 362,250
Missouri St Hlth & Ed Fac Auth Rev St Louis Univ
High Sch 6.35% 10/1/2014 AAA 2,000 2,132,500
Missouri St Regl Convention & Sports Complex Auth Ser A
6.90% 8/15/2021 AAA 5,000 5,325,000
Puerto Rico Elec Pwr Auth Pwr Rev RIBs FSA+ 8.08% 7/1/2023++ AAA 2,500 2,696,875
Puerto Rico Tel Auth Rev RIBs MBIA+ 6.76% 1/25/2007++ AAA 2,000 2,102,500
Puerto Rico Tel Auth Rev RIBs MBIA+ 6.76% 1/16/2015++ AAA 1,000 1,061,250
St Louis MO Pkg Fac Rev MBIA+ 5 3/8% 12/15/2021 AAA 10 9,638
St Louis MO Sch Dist FGIC+ 6.00% 4/1/2012 AAA 1,275 1,319,625
Total 26,003,763
----------------------------------------------------------------------------------------------------------------------==============
Transportation 10.84% Lake Of The Ozarks Cmnty Bdg Corp MO Bdg Sys Rev 5 1/4% 12/1/2020 BBB-* 1,500 1,280,625
Lake Of The Ozarks Cmnty Bdg Corp MO Bdg Sys Rev 5 1/4% 12/1/2026 BBB-* 3,000 2,493,750
Puerto Rico Comwlth Hwy & Transn Auth Transn Rev Ser A
MBIA+ 4 3/4% 7/1/2038 AAA 9,405 7,888,444
St Louis MO Arpt Rev Lambert St Louis Intl Ser B
FGIC+ AMT+++ 5 1/4% 7/1/2022 AAA 750 686,250
St Louis MO Arpt Rev Lambert St Louis Intl Ser B
FGIC+ AMT+++ 5 1/4% 7/1/2027 AAA 625 564,062
Total 12,913,131
----------------------------------------------------------------------------------------------------------------------==============
22
<PAGE>
Statement of Net Assets (unaudited)
MISSOURI TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Water/Sewer 1.31% Missouri St Envr Impt & Enrg Res Auth Wtr Fac Henry Cnty Wtr Ser A
MBIA+ AMT+++ 5.95% 11/1/2019 AAA $1,500 $ 1,530,000
St Charles Cnty MO Pub Wtr Supp Dist #2 Ctfs Partn Ser A
MBIA+ 5.00% 12/1/2020 Aaa 40 35,900
Total 1,565,900
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 100.76% (Cost $121,028,168) 120,024,248
----------------------------------------------------------------------------------------------------------------------==============
Cash and Receivables, Net of Liabilities (.76)% (906,365)
====================================================================================================================================
Net Assets 100.00% $119,117,883
====================================================================================================================================
Net asset value ($119,117,883 / 24,221,535 shares outstanding) $4.92
Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $5.09
* 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. See page 31 for
Glossary of Terms.
++ 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 March 31, 2000. See page 1 for additional important information.
+++ I ncome from these securities may be subject to the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
HAWAII TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education .42% University HI Univ Sys Rev Ser G AMBAC+ 5.45% 10/1/2006 AAA $ 275 $ 281,531
----------------------------------------------------------------------------------------------------------------------==============
Finance 1.34% Puerto Rico Pub Fin Corp Comwlth Approp Ser A FSA+ 5.00% 6/1/2026 AAA 1,000 901,250
----------------------------------------------------------------------------------------------------------------------==============
General Obligation 32.36% Hawaii Cnty HI Ser A FGIC+ 5.60% 5/1/2013 AAA 1,780 1,813,375
Hawaii Cnty HI Ser A FSA+ 5 5/8% 5/15/2019 AAA 545 539,550
Hawaii St Ser BZ 6.00% 10/1/2010 A1 500 530,625
Hawaii St Ser BZ 6.00% 10/1/2012 A1 500 531,875
Hawaii St Ser CA FGIC+ 8.00% 1/1/2013 AAA 2,000 2,482,500
Hawaii St Ser CP FGIC+ 5.00% 10/1/2016 AAA 900 844,875
Hawaii St Ser CR MBIA+ 4 3/4% 4/1/2018 AAA 3,000 2,651,250
Hawaii St Ser CT FSA+ 5 7/8% 9/1/2019 AAA 1,175 1,195,562
Honolulu HI City & Cnty Ser A 7.30% 7/1/2003 AA 2,500 2,684,375
Honolulu HI City & Cnty Ser A MBIA+ 5.00% 11/1/2015 AAA 1,095 1,036,144
Honolulu HI City & Cnty Ser A FGIC+ 5 1/2% 9/1/2016 AAA 5 4,963
Honolulu HI City & Cnty Ser B FGIC+ 5.00% 11/1/2016 AAA 265 248,768
Honolulu HI City & Cnty Wtr FGIC+ 6.00% 12/1/2015 AAA 1,000 1,050,000
Kauai Cnty HI Pub Impt Ser B MBIA+ 5 1/4% 8/1/2017 AAA 95 91,200
Kauai Cnty HI Ser A FGIC+ 6 1/8% 8/1/2024 AAA 580 593,050
Maui Cnty HI Ser A MBIA+ 5 3/4% 6/1/2016 AAA 1,035 1,046,644
Puerto Rico Comwlth MBIA+ 5.00% 7/1/2024 AAA 1,000 907,500
Puerto Rico Comwlth Pub Impt 4 1/2% 7/1/2023 A 500 413,750
Puerto Rico Comwlth RIBs FSA+ 8.13% 7/1/2020++ AAA 3,000 3,030,000
Total 21,696,006
----------------------------------------------------------------------------------------------------------------------==============
Healthcare 13.58% Hawaii St Dept Bdg & Fin Sp Purp Mtg Rev St Francis Med Ctr
FSA+ 6 1/2% 7/1/2022 AAA 1,200 1,237,500
Hawaii St Dept Bdg & Fin Sp Purp Rev Kaiser Permanente Ser A
5.15% 3/1/2015 A 2,000 1,805,000
23
<PAGE>
Statement of Net Assets (unaudited)
HAWAII TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Hawaii St Dept Bdg & Fin Sp Purp Rev Kapiolani Hlth 6.20% 7/1/2016 A $1,000 $ 981,250
Hawaii St Dept Bdg & Fin Sp Purp Rev Kapiolani Hlth 6 1/4% 7/1/2021 A 2,000 1,917,500
Hawaii St Dept Bdg & Fin Sp Purp Rev The Queens Hlth Sys Ser B
MBIA+ 5 1/4% 7/1/2023 AAA 1,000 905,000
Hawaii St Dept Bdg & Fin Sp Purp Rev Wilcox Mem
Hosp Proj 5 1/4% 7/1/2013 BBB 1,200 1,026,000
Hawaii St Dept Bdg & Fin Sp Purp Rev Wilcox Mem
Hosp Proj 5 1/2% 7/1/2028 BBB 1,350 1,081,688
Puerto Rico Ind Tourist Ed Mutuo Oblig Group Ser A
MBIA+ 6 1/4% 7/1/2024 AAA 150 154,500
Total 9,108,438
----------------------------------------------------------------------------------------------------------------------==============
Housing 4.93% Hawaii St Hsg Fin & Dev Corp Rev Univ Of HI Faculty Hsg Proj
AMBAC+ 5.65% 10/1/2016 AAA 1,000 1,008,750
Hawaii St Hsg Fin & Dev Corp Rev Univ Of HI Faculty Hsg Proj
AMBAC+ 5.70% 10/1/2025 AAA 380 378,100
Hawaii St Hsg Fin & Dev Corp Sing Fam Mtg Purp Rev Ser A
FNMA+ AMT+++ 7.10% 7/1/2024 Aa1 960 990,000
Hawaii St Hsg Fin & Dev Corp Sing Fam Mtg Purp Rev Ser B
FNMA+ 5.30% 7/1/2028 Aa1 1,000 916,250
Puerto Rico Hsg Fin Corp Sing Fam Mtg Rev Portfolio 1 Ser B
GNMA+ 7.65% 10/15/2022 AAA 15 15,404
Total 3,308,504
----------------------------------------------------------------------------------------------------------------------==============
Miscellaneous .99% Hawaii St Ctfs Partn Kapolei St Office Bldg Ser A
AMBAC+ 5.00% 5/1/2018 AAA 725 664,281
----------------------------------------------------------------------------------------------------------------------==============
Power 14.35% Hawaii St Dept Bdg & Fin Sp Purp Mtg Rev RIBs
AMT+++ 6.58% 12/15/2023++ AAA 5,000 4,456,250
Hawaii St Dept Bdg & Fin Sp Purp Mtg Rev HI Elec Co Ser A
MBIA+ AMT+++ 6.60% 1/1/2025 AAA 2,500 2,584,375
Hawaii St Dept Bdg & Fin Sp Purp Mtg Rev HI Elec Co Ser C
MBIA+ AMT+++ 7 3/8% 12/1/2020 AAA 1,750 1,806,962
Puerto Rico Elec Pwr Auth Pwr Rev Ser U 6.00% 7/1/2014 Baa1 750 773,438
Total 9,621,025
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 17.70% Hawaii St Dept Bdg & Fin Sp Purp Mtg Rev Pali Momi Med Ctr Proj
7.65% 7/1/2019 AAA 1,000 1,056,250
Honolulu HI City & Cnty Ser A MBIA+ 5.00% 11/1/2015 AAA 405 405,506
Honolulu HI City & Cnty Ser A FGIC+ 5 1/2% 9/1/2016 AAA 440 459,800
Honolulu HI City & Cnty Ser A FGIC+ 5 1/2% 9/1/2016 AAA 555 573,037
Honolulu HI City & Cnty Ser B FGIC+ 5.00% 11/1/2016 AAA 235 236,762
Puerto Rico Comwlth 6.45% 7/1/2017 AAA 2,575 2,784,219
Puerto Rico Comwlth 6 1/2% 7/1/2023 AAA 1,250 1,354,688
Puerto Rico Comwlth 6.00% 7/1/2026 AAA 1,000 1,086,250
Puerto Rico Elec Pwr Auth Pwr Rev RIBs FSA+ 8.08% 7/1/2023++ AAA 1,500 1,618,125
Puerto Rico Ind Med & Envr Poll Ctrl St Luke Hosp Ser A
6 1/4% 6/1/2010 AAA 1,390 1,443,863
Puerto Rico Tel Auth Rev RIBs MBIA+ 6.76% 1/16/2015++ AAA 800 849,000
Total 11,867,500
----------------------------------------------------------------------------------------------------------------------==============
Transportation 9.63% Hawaii St Arpt Sys Rev 2nd Ser MBIA+ AMT+++ 7.00% 7/1/2018 AAA 2,000 2,080,000
Hawaii St Hbr Cap Impt Rev FGIC+ AMT+++ 6 1/4% 7/1/2015 AAA 500 515,000
Hawaii St Hbr Cap Impt Rev FGIC+ AMT+++ 6 3/8% 7/1/2024 AAA 500 511,875
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev Ser V 6 5/8% 7/1/2012 A 500 525,000
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev Ser Y 5 1/2% 7/1/2026 A 1,000 951,250
Puerto Rico Comwlth Hwy & Transn Auth Transn Rev 5.00% 7/1/2022 A 20 17,750
Puerto Rico Comwlth Hwy & Transn Auth Transn Rev Ser A
AMBAC+ 5.00% 7/1/2028 AAA 1,100 980,375
Puerto Rico Comwlth Hwy & Transn Auth Transn Rev Sub PR St
Infrastructure Bk 5.00% 7/1/2028 A 1,000 875,000
Total 6,456,250
----------------------------------------------------------------------------------------------------------------------==============
24
<PAGE>
Statement of Net Assets (unaudited)
HAWAII TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Water/Sewer 3.90% Honolulu HI City & Cnty Bd Wtr Supply Wtr Sys Rev 5.80% 7/1/2021 AA $1,000 $ 1,005,000
Honolulu HI City & Cnty Waste Wtr Sys Rev 2nd Bd Resolution
FGIC+ 4 1/2% 7/1/2028 AAA 2,000 1,610,000
Total 2,615,000
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 99.20% (Cost $67,026,400) 66,519,785
----------------------------------------------------------------------------------------------------------------------==============
Cash and Receivables, Net of Liabilities .80% 536,770
====================================================================================================================================
Net Assets 100.00% $67,056,555
====================================================================================================================================
Net asset value ($67,056,555 / 14,050,461 shares outstanding) $4.77
Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $4.93
+ Insured or guaranteed by the indicated municipal bond insurance corporation or federal agency.
See page 31 for Glossary of Terms.
++ 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 March 31, 2000. See page 1 for additional important information.
+++ Income from these securities may be subject to the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
WASHINGTON TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education 3.20% Washington St Higher Ed Fac Auth Rev Whitman College Proj
5 7/8% 10/1/2029 AA $1,500 $ 1,496,250
----------------------------------------------------------------------------------------------------------------------==============
General Obligation 18.62% King Cnty WA RIBs 6.87% 12/1/2013++ AA* 3,000 3,210,000
King Cnty WA Ser B 4 1/2% 1/1/2024 Aa1 320 260,400
Port Seattle WA Sp Fac Rev Ser C MBIA+ AMT+++ 6.00% 9/1/2029 AAA 1,000 1,011,250
Puerto Rico Comwlth Pub Impt 6.00% 7/1/2029 A 2,000 2,015,000
Washington St Ser A 5 3/4% 9/1/2019 Aa1 400 401,000
Washington St Ser B 5 3/4% 5/1/2016 Aa1 1,680 1,692,600
Whatcom Cnty WA 5 3/4% 12/1/2012 A1 115 116,438
Total 8,706,688
----------------------------------------------------------------------------------------------------------------------==============
Housing 5.41% Skagit Cnty WA Hsg Auth Low Income Hsg Assist Rev Mtg Ln
GNMA+ 7.00% 6/20/2035 AAA 750 800,625
Snohomish Cnty WA Hsg Auth Rev Cedar Str Apt Ser A
AMT+++ 6.40% 5/1/2027 A 500 510,625
Washington St Hsg Fin Cmnty Sing Fam Mtg Rev Mtg Ser A
GNMA/FNMA+ AMT+++ 6.65% 7/1/2016 AAA 140 140,180
Washington St Hsg Fin Cmnty Sing Fam Mtg Rev Mtg Ser A
GNMA/FNMA+ AMT+++ 7.05% 7/1/2022 AAA 1,035 1,077,694
Total 2,529,124
----------------------------------------------------------------------------------------------------------------------==============
Miscellaneous 4.38% Bellevue WA Convention Ctrl Auth Sp Oblig Rev Comp Int
MBIA+ Zero Coupon 2/1/2024 AAA 1,400 341,250
CDP-King Cnty III WA Lease Rev King Street Ctr Proj
MBIA+ 5 1/4% 6/1/2026 AAA 500 455,625
Port Seattle WA Passenger Fac Charge Rev Ser A MBIA+ 5.00% 12/1/2023 AAA 1,125 990,000
Spokane WA Pub Fac Dist Hotel Motel & Sales Use Tax Multi Purp
Arena Proj AMBAC+ 6 1/2% 1/1/2018 AAA 250 260,000
Total 2,046,875
----------------------------------------------------------------------------------------------------------------------==============
25
<PAGE>
Statement of Net Assets (unaudited)
WASHINGTON TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Power 27.69% Chelan Cnty WA Pub Util Dist #1 Columbia Riv Rock IS Hwy Ser A
MBIA+ Zero Coupon 6/1/2024 AAA $1,860 $ 439,425
Chelan Cnty WA Pub Util Dist #1 Cons Rev Chelan Hydroelec Ser A
MBIA+ AMT+++ 6.40% 7/1/2017 AAA 1,000 1,047,500
Chelan Cnty WA Pub Util Dist #1 Cons Rev Chelan Hydroelec Ser A
AMT+++ 6.20% 7/1/2034 Aa2 1,855 1,873,550
Douglas Cnty WA Pub Util Dist #1 Wells Hydroelec 8 3/4% 9/1/2018 AA 350 421,312
Douglas Cnty WA Pub Util Dist #1 Wells Hydroelec 2 Tier Ser B
AMBAC+ 8 v3/4% 9/1/2006 AAA 4,535 5,039,519
Lewis Cnty WA Pub Util Dist #1 Cowlitz Falls
Hydroelec 5 1/2% 10/1/2022 Aa1 755 718,194
Puerto Rico Elec Pwr Auth Pwr Rev Ser EE 4 3/4% 7/1/2024 Baa1 1,500 1,282,500
Seattle WA Mun Lt & Pwr Rev Ser A MBIA+ 5 5/8% 9/1/2015 AAA 720 724,500
Snohomish Cnty WA Pub Util #1 Elec Rev FSA+ 5 3/8% 12/1/2024 AAA 1,500 1,396,875
Total 12,943,375
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 17.81% Douglas Cnty WA Pub Util Dist #1 Wells Hydroelec 8 3/4% 9/1/2018 AAA 150 187,125
Mason Cnty WA Pub Util Dist #3 Elec Rev 6.35% 1/1/2013 AAA 1,040 1,080,300
Mount Vernon WA AMBAC+ 6.85% 12/1/2014 AAA 1,285 1,391,012
Port Seattle WA Rev Ser B AMT+++ 6.70% 11/1/2010 AAA 20 21,200
Puerto Rico Elec Pwr Auth Pwr Rev RIBs FSA+ 8.08% 7/1/2023++ AAA 3,500 3,775,625
Puerto Rico Tel Auth Rev RIBs MBIA+ 6.76% 1/16/2015++ AAA 500 530,625
Renton WA Wtr & Swr Rev 6.55% 11/1/2013 AAA 1,000 1,068,750
Washington St Higher Ed Fac Auth Rev Whitworth College
CONNIE LEE+ 7.00% 10/1/2015 AAA 250 271,563
Total 8,326,200
----------------------------------------------------------------------------------------------------------------------==============
Transportation 8.59% Central Puget Sound WA Regl Tran Auth Sales Tax & Motor
FGIC+ 5 1/4% 2/1/2021 AAA 2,750 2,585,000
Central Puget Sound WA Regl Tran Auth Sales Tax & Motor
FGIC+ 4 3/4% 2/1/2028 AAA 300 249,750
Port Kalama WA Rev Ser B AMT+++ 5 5/8% 12/1/2015 Baa1 400 396,500
Port Seattle WA Rev Ser B AMBAC+ AMT+++ 7.60% 12/1/2009 AA 525 544,609
Port Seattle WA Rev Ser B AMT+++ 6.70% 11/1/2010 AA 230 242,362
Total 4,018,221
----------------------------------------------------------------------------------------------------------------------==============
Water/Sewer 16.49% King Cnty WA Swr Rev FGIC+ 5 1/2% 1/1/2022 AAA 2,000 1,917,500
King Cnty WA Swr Rev FGIC+ 5 1/4% 1/1/2026 AAA 1,525 1,383,938
Seattle WA Drain & Waste Wtr Util Rev 53/4% 12/1/2022 Aa2 1,500 1,503,750
Seattle WA Wtr Sys Rev 5 1/4% 12/1/2023 Aa2 1,040 964,600
Seattle WA Wtr Sys Rev FGIC+ 5 3/8% 3/1/2029 AAA 1,000 923,750
Vancouver WA Wtr & Swr Rev FGIC+ 6.00% 6/1/2020 AAA 1,000 1,015,000
Total 7,708,538
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 102.19% (Cost $47,635,477) 47,775,271
----------------------------------------------------------------------------------------------------------------------==============
Cash and Receivables, Net of Liabilities (2.19)% (1,025,805)
====================================================================================================================================
Net Assets 100.00% $46,749,466
====================================================================================================================================
Net asset value ($46,749,466 / 9,621,106 shares outstanding) $4.86
Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $5.02
* 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.
See page 31 for Glossary of Terms.
++ 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 March 31, 2000. See page 1 for additional important information.
+++ Income from these securities may be subject to the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
MINNESOTA TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education 7.80% Minnesota St Higher Ed Fac Auth Rev Hamline Univ Ser 5-B
6.00% 10/1/2029 Baa1 $ 500 $ 500,000
Minnesota St Higher Ed Fac Auth Rev Macalester College Ser 4-J
5.55% 3/1/2017 Aa3 260 259,025
Minnesota St Higher Ed Fac Auth Rev Univ of St Thomas Ser 4-A1
5 5/8% 10/1/2016 A2 250 248,125
Minnesota St Higher Ed Fac Auth Rev Univ of St Thomas Ser 4-M
5.35% 4/1/2017 A2 250 239,063
University MN Ser A 5 3/4% 7/1/2018 Aa2 250 258,125
Total 1,504,338
----------------------------------------------------------------------------------------------------------------------==============
General Obligation 22.83% Minneapolis MN Sp Sch Dist #1 Ctfs Partn 5 3/4% 2/1/2017 Aa1 1,120 1,138,200
Minneapolis MN Sp Sch Dist #1 FGIC+ 5 3/8% 2/1/2014 AAA 250 250,312
Minneapolis MN Sp Sch Dist #1 Ctfs Partn Ser B 5 1/8% 2/1/2018 Aa1 500 468,750
Minnesota St 5 1/4% 8/1/2014 AAA 265 262,681
North St Paul Maplewood MN Indpt Sch Dist #622 Ser A 5 1/8% 2/1/2020 Aa1 550 508,750
Park Rapids MN Indpt Sch Dist #309 4 3/4% 2/1/2018 Aa1 250 221,562
Princeton MN Indpt Sch Dist #477 FSA+ 5 1/8% 2/1/2024 Aaa 1,000 911,250
St Cloud MN Ctfs Partn 5.90% 12/1/2017 BBB 200 196,500
St Michael MN Indpt Sch Dist #885 5.00% 2/1/2025 Aa1 250 222,500
Windom MN Indpt Sch Dist #177 4 3/4% 2/1/2019 Aa1 250 220,313
Total 4,400,818
----------------------------------------------------------------------------------------------------------------------==============
Healthcare 18.35% Hastings MN Hlth Care Fac Rev Regina Med Ctr ACA+ 5.30% 9/15/2028 A 500 432,500
Minneapolis & St Paul MN Hsg & Redev Auth Hlth Care Sys
Childrens Hlth Care Ser A FSA+ 5.70% 8/15/2016 AAA 150 148,875
Minneapolis & St Paul MN Hsg & Redev Auth Hlth Care Sys
Group Hlth Plan Proj 6.90% 10/15/2022 Baa1 300 302,625
Minnesota Agric & Econ Dev Bd Rev Evangelical Lutheran Proj
AMBAC+ 5.00% 12/1/2015 AAA 250 232,813
Minnesota Agric & Econ Dev Bd Rev Hlth Care Fairview Hosp Ser A
MBIA+ 5 1/2% 11/15/2017 AAA 220 215,050
Rochester MN Hlth Care Fac Rev Mayo Fndtn Ser A 5 1/2% 11/15/2027 AA 500 477,500
Rochester MN Hlth Care Fac Rev Mayo Fndtn Ser B 5 1/2% 11/15/2027 AA 500 477,500
Rochester MN Hlth Care Fac Rev Ser H RIBs 7.76% 11/15/2015++ AA 1,000 1,046,250
St Paul MN Hsg & Redev Auth Hosp Rev Hlth
East Proj Ser A 5.70% 11/1/2015 BBB 250 205,312
Total 3,538,425
----------------------------------------------------------------------------------------------------------------------==============
Housing 14.84% Fairbault MN Hsg & Redev Auth Govt Trails Edge Apt Ser A
5 1/4% 2/1/2028 A3 500 452,500
Minneapolis MN Multi Fam Hsg Rev East Village South
GNMA+ 6.10% 7/20/2020 Aaa 1,000 1,013,750
Minnesota St Hsg Fin Agy Sing Fam Mtg Ser B-1 AMT+++ 6 3/4% 1/1/2026 Aa2 95 97,375
Minnesota St Hsg Fin Agy Sing Fam Mtg Ser D AMT+++ 6.40% 7/1/2015 Aa2 245 252,350
Minnesota St Hsg Fin Agy Sing Fam Mtg Ser D AMT+++ 5.85% 7/1/2019 Aa 205 202,694
Minnesota St Hsg Fin Agy Sing Fam Mtg Ser E 5.90% 7/1/2025 Aa2 205 203,975
Minnesota St Hsg Fin Agy Sing Fam Mtg Ser G AMT+++ 6 1/4% 7/1/2026 Aa2 210 211,837
Robbinsdale MN Sr Hsg Proj Ser B FGIC+ 5 3/4% 1/1/2023 Aaa 250 244,688
Scott Cnty MN Hsg & Redev Savage City Hamilton Apt Proj
AMBAC+ 5.60% 2/1/2019 Aaa 80 78,400
St Louis Park MN Multi Fam Hsg Mtg Cmnty Hsg FHA+ 6.15% 12/1/2016 Aa 100 102,625
Total 2,860,194
----------------------------------------------------------------------------------------------------------------------==============
Miscellaneous 5.95% Bemidji MN Lease Rev MN St Bureau Criminal Appreh
MBIA+ 5.80% 12/1/2021 Aaa 460 462,300
Minneapolis MN Sports Arena Proj 5 1/8% 10/1/2020 AAA 500 466,250
St Paul MN Tax Increment Block 39 Ser A 4 3/4% 2/1/2019 Aa2 250 219,063
Total 1,147,613
----------------------------------------------------------------------------------------------------------------------==============
27
<PAGE>
Statement of Net Assets (unaudited)
MINNESOTA TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Pollution 1.41% Minnesota Pub Fac Auth Wtr Poll Ctrl Rev Ser A 4 3/4% 3/1/2017 AAA $ 300 $ 271,500
----------------------------------------------------------------------------------------------------------------------==============
Power 4.43% Puerto Rico Elec Pwr Auth Pwr Rev Ser DD FSA+ 4 1/2% 7/1/2019 AAA 95 81,819
South Minnesota Muni Pwr Agy Pwr Supply Sys Rev Ser A
MBIA+ Zero Coupon 1/1/2021 AAA 1,000 302,500
South Minnesota Muni Pwr Agy Pwr Supply Sys Rev Ser A
MBIA+ 5.00% 1/1/2016 AAA 500 469,375
Total 853,694
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 16.45% Marshall MN Elec & Wtr Util Rev FSA+ 6.45% 7/1/2011 AAA 150 156,187
Minneapolis & St Paul MN Hsg & Redev Auth Hlth Care Sys Hlth One
Obligated Group Ser A 7.40% 8/15/2011 AAA 500 515,560
Minneapolis & St Paul MN Hsg & Redev Auth Hlth Care Sys Hlth One
Obligated Group Ser B 8.00% 8/15/2014 AAA 650 671,482
Minneapolis & St Paul MN Hsg & Redev Auth Hlth Care Sys Ser A
MBIA+ 6 3/4% 8/15/2014 AAA 245 252,061
Minneapolis MN Hosp Rev Childrens Med Ctr Proj Ser C 7.30% 12/1/2006 AAA 200 210,000
Minneapolis MN Hosp Rev Childrens Med Ctr Proj Ser C 7.00% 12/1/2020 AAA 200 209,250
Minnesota Pub Fac Auth Wtr Poll Ctrl Rev Ser A 6 1/4% 3/1/2016 AAA 100 105,875
Minnesota Pub Fac Auth Wtr Poll Ctrl Rev Ser A 6 1/2% 3/1/2014 AAA 1,000 1,051,250
Total 3,171,665
----------------------------------------------------------------------------------------------------------------------==============
Transportation 6.86% Minneapolis & St Paul MN Met Arpt Cmnty Ser 13 AMT+++ 4 1/2% 1/1/2014 AAA 250 220,313
Minneapolis & St Paul MN Met Arpt Cmnty Arpt Rev Ser A
AMBAC+ 5.00% 1/1/2030 AAA 1,250 1,103,125
Total 1,323,438
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 98.92% (Cost $19,576,807) 19,071,685
----------------------------------------------------------------------------------------------------------------------==============
Cash and Receivables, Net of Liabilities 1.08% 207,698
----------------------------------------------------------------------------------------------------------------------==============
Net Assets 100.00% $19,279,383
----------------------------------------------------------------------------------------------------------------------==============
Net asset value ($19,279,383 / 4,075,474 shares outstanding) $4.73
Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $4.89
+ Insured or guaranteed by the indicated municipal bond insurance corporation or federal agency.
See page 31 for Glossary of Terms.
++ 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 March 31, 2000. See page 1 for additional important information.
+++ Income from these securities may be subject to the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
CALIFORNIA TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education 15.15% California Cmnty College Fin Auth Lease Rev Ser A
MBIA+ 4 5/8% 9/1/2023 AAA $ 1,850 $ 1,577,125
California Ed Fac Auth Rev CA Inst of Technology 4 1/2% 10/1/2027 AAA 10,145 8,318,900
California Ed Fac Auth Rev Fresno Pacific Univ Ser A 6 3/4% 3/1/2019 Baa3 1,250 1,292,187
California Ed Fac Auth Rev Pooled College & Univ Proj Ser B
6 1/8% 4/1/2013 Baa2 1,340 1,388,575
California Ed Fac Auth Rev Pooled College & Univ Proj Ser B
6.30% 4/1/2021 Baa2 1,000 1,007,500
California Ed Fac Auth Rev Residual Ctfs Ser 113
RIBs 6.69% 12/1/2027++ AAA 2,525 2,187,281
California Ed Fac Auth Rev Univ San Diego
AMBAC+ Zero Coupon 10/1/2022 Aaa 960 256,800
California Ed Fac Auth Rev Univ San Diego
AMBAC+ Zero Coupon 10/1/2024 Aaa 1,080 255,150
California Ed Fac Auth Rev Univ of San Francisco
MBIA+ 6.00% 10/1/2016 AAA 75 78,281
28
<PAGE>
Statement of Net Assets (unaudited)
CALIFORNIA TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
California Ed Fac Auth Rev Univ of San Francisco
MBIA+ 6.00% 10/1/2026 AAA $ 3,935 $ 4,008,781
California Ed Fac Auth Rev Univ of Southern CA 5 1/2% 10/1/2027 Aa2 2,295 2,208,937
California St Univ Rev & Colleges Hsg Sys FGIC+ 5.90% 11/1/2021 AAA 2,350 2,388,187
Capistrano CA Univ Sch Dist Sch Fac Impt Dist #1 Ser A
FGIC+ 6 1/4% 8/1/2018 AAA 1,845 1,969,538
Capistrano CA Univ Sch Dist Sch Fac Impt Dist #1 Ser A
FGIC+ 6.00% 8/1/2024 AAA 2,500 2,562,500
Santa Ana CA Univ Sch Dist Ctfs Partn Fin Proj
FSA+ Zero Coupon 4/1/2019 AAA 2,295 763,088
Total 30,262,830
----------------------------------------------------------------------------------------------------------------------==============
Finance 1.68% Orange Cnty CA Recovery Ctfs Partn Residual Ctfs Ser 128
RIBs MBIA+ 8.04% 7/1/2019++ AAA* 2,500 2,593,750
Orange Cnty CA Recovery Ctfs Partn Ser A MBIA+ 6.00% 7/1/2026 AAA 750 764,063
Total 3,357,813
----------------------------------------------------------------------------------------------------------------------==============
General Obligation 9.36% ABC CA Univ Sch Dist Ser B FGIC+ Zero Coupon 8/1/2024 AAA 1,605 377,175
Cabrillo CA Cmnty College FGIC+ Zero Coupon 8/1/2018 AAA 2,770 966,037
Cabrillo CA Cmnty College FGIC+ Zero Coupon 8/1/2019 AAA 2,065 673,706
California St 5 1/2% 9/1/2018 AA 750 746,250
California St 4 1/2% 10/1/2018 AA 2,000 1,712,500
California St FGIC+ 4 3/4% 4/1/2020 AAA 1,300 1,145,625
California St Ser BR AMT+ 5 1/4% 12/1/2026 AA 90 80,662
New Haven CA Univ Sch Dist Ser B FGIC+ Zero Coupon 8/1/2022 AAA 10,000 2,612,500
Oak Grove CA Sch Dist FGIC+ Zero Coupon 8/1/2022 AAA 2,515 657,044
Oak Grove CA Sch Dist FGIC+ Zero Coupon 8/1/2023 AAA 1,270 312,738
Oak Grove CA Sch Dist FGIC+ Zero Coupon 8/1/2024 AAA 1,130 259,900
Pittsburgh CA Redev Agy Tax Alloc Los Medanos Cmnty Dev Proj
AMBAC+ Zero Coupon 8/1/2026 AAA 3,500 730,625
Pomona CA Univ Sch Dist Ser A MBIA+ 6.55% 8/1/2029 AAA 1,000 1,123,750
Puerto Rico Comwlth FSA+ 5 3/8% 7/1/2025 AAA 1,000 960,000
San Diego CA Convention Ctr Expansn Fin Auth Lease Rev Ser A
AMBAC+ 4 3/4% 4/1/2028 AAA 5,020 4,292,100
Santa Cruz CA City Elem Sch Dist Ser B FGIC+ 6.00% 8/1/2029 AAA 2,000 2,050,000
Total 18,700,612
----------------------------------------------------------------------------------------------------------------------==============
Healthcare 5.62% Abag Fin Auth For Nonprofit Corp CA Ctfs Partn O'Connor Woods
Obligated Group ACA+ 6.20% 11/1/2029 A 1,975 2,024,375
California Statewide Cmnty Dev Auth Ctfs Partn FSA+ 5 3/4% 8/15/2027 AAA 935 926,819
Contra Costa Cnty CA Ctfs Merrithew Mem Hosp Proj MBIA+
5 1/2% 11/1/2022 AAA 1,245 1,195,200
University CA Rev Hosp UC Med Ctr AMBAC+ 6.00% 7/1/2026 AAA 2,200 2,227,500
Valley Hlth Sys CA Hosp Rev Impt Proj Ser A ACA+ 6 1/2% 5/15/2025 A 575 592,969
Valley Hlth Sys CA Hosp Rev RIBs 8.40% 5/15/2025++ A* 4,000 4,255,000
Total 11,221,863
----------------------------------------------------------------------------------------------------------------------==============
Housing 3.52% California Hsg Fin Agy Rev Home Mtg Ser A FHA+ 7 3/8% 8/1/2017 Aa2 3,765 3,854,419
California Hsg Fin Agy Rev Home Mtg Ser F
FSA+ AMT+++ Zero Coupon 8/1/2031 AAA 5,000 662,500
California Hsg Fin Agy Rev Multi Fam Hsg III Ser A
AMT+++ 5 3/8% 8/1/2028 AA 1,000 910,000
California Hsg Fin Agy Sing Fam Mtg Purp Ser A Class I
FHA+ AMT+++ 5.40% 8/1/2026 AAA 1,745 1,603,219
Total 7,030,138
----------------------------------------------------------------------------------------------------------------------==============
Miscellaneous 4.68% Concord CA Redev Agy Tax Alloc Ser 3 BIG+ 8.00% 7/1/2018 AAA 35 35,308
Corona CA Pub Fin Auth Rev Ser A FSA+ 5.00% 9/1/2020 AAA 1,200 1,110,000
Escondido CA Rev Ctfs Partn Ser A FGIC+ 6.00% 9/1/2018 AAA 960 997,200
Inglewood CA Pub Fin Auth Rev Ser A AMBAC+ 5 1/4% 8/1/2021 AAA 1,000 971,250
29
<PAGE>
Statement of Net Assets (unaudited)
CALIFORNIA TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Los Angeles CA Pkg Rev Ser A AMBAC+ 4 3/4% 5/1/2020 AAA $ 935 $ 823,969
Midpeninsula Regl Open Space Dist CA Fin Auth Rev
AMBAC+ Zero Coupon 9/1/2024 AAA 3,335 762,881
Oakland CA JT Pwr Fin Auth Reassmt Rev 5 1/2% 9/2/2024 A 520 477,750
Palmdale CA Civic Auth Rev Unrefunded Bal Merged Redev Ser A
MBIA+ 6.00% 9/1/2015 AAA 1,130 1,172,375
Pomona CA Pub Fin Auth Rev S W Pomona Redev Proj Ser W
MBIA+ 5.00% 2/1/2030 AAA 750 673,125
Sacramento CA City Fin Auth Rev Solid Waste & Redev Proj
AMBAC+ 5 3/4% 12/1/2022 AAA 100 100,750
San Francisco CA St Bldg Auth Lease Rev Civic Ctr Complex Ser A
AMBAC+ 5 1/4% 12/1/2021 AAA 2,140 2,038,350
Santa Fe Springs CA Cmnty Dev Cons Redev Proj Ser A
MBIA+ 5 1/8% 9/1/2022 AAA 195 181,838
Total 9,344,796
----------------------------------------------------------------------------------------------------------------------==============
Pollution 6.42% California Poll Ctrl Fin Auth Rev Southern CA Ser B
AMBAC+ AMT+++ 6.40% 12/1/2024 AAA 12,435 12,823,594
----------------------------------------------------------------------------------------------------------------------==============
Power 13.48% Alameda CA Pwr & Telecom Elec Sys Rev Ctfs MBIA+ 5 1/2% 7/1/2025 AAA 2,355 2,293,181
Los Angeles CA Dept Wtr & Pwr Elec Rev 6.40% 5/15/2028 AA 3,000 3,082,500
M-S-R Pub Pwr Agy CA San Juan Proj Rev Ser D MBIA+ 6 3/4% 7/1/2020 AAA 1,000 1,114,730
Northern CA Transmission Rev CA Ore Transmission Ser A
MBIA+ 6 1/2% 5/1/2016 AAA 4,250 4,462,500
Northern CA Transmission Rev RIBs MBIA+ 6.56% 4/29/2024++ AAA 8,500 7,820,000
Palo Alto CA Util Rev Ser A 6 1/4% 6/1/2020 Aa2 1,610 1,670,375
Sacramento CA Muni Util Dist Elec Rev RIBs FGIC+ 8.89% 8/15/2018++ AAA 6,000 6,480,000
Total 26,923,286
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 15.75% California Ed Fac Auth Rev Loyola Marymount Univ Ser B
6.60% 10/1/2022 AAA 1,400 1,494,500
California Hlth Fac Fin Auth Rev Cedarknoll Ser B 7 1/2% 8/1/2020 AAA 1,000 1,031,640
California Hlth Fac Fin Auth Rev San Diego Assn Ser A
MBIA+ 6.95% 10/1/2021 AAA 1,600 1,692,000
East Bay CA Muni Util Dist Wtr Sys Rev Sub AMBAC+ 6 1/2% 6/1/2017 AAA 7,935 8,659,069
Metropolitan Wtr Dist Southern CA Wtr Wks Rev RIBs 7.41% 8/5/2022++ AAA 7,300 7,966,125
San Francisco CA Bay Area Rapid Transn Dist Sales Tax Rev
FGIC+ 6.60% 7/1/2012 AAA 1,540 1,613,150
Santa Clara CA Elec Rev Ser A MBIA+ 6 1/4% 7/1/2019 AAA 3,890 4,060,188
Vallejo CA Rev Wtr Impt Proj Ser B FGIC+ 6 1/2% 11/1/2014 AAA 4,565 4,935,906
Total 31,452,578
----------------------------------------------------------------------------------------------------------------------==============
Transportation 11.04% Alameda Corridor Transn Auth MBIA+ 4 3/4% 10/1/2025 AAA 3,420 2,945,475
Foothill/Eastern Corridor Agy CA Toll Rd Rev MBIA+ 5 1/8% 1/15/2019 AAA 935 884,744
Los Angeles CA Hbr Dept Rev Ser B AMT+++ 6 5/8% 8/1/2025 AA 1,000 1,037,500
San Francisco CA City & Cnty Arpt Cmnty Intl Arpt Rev Ser Issue 6
AMBAC+ AMT+++ 6 1/2% 5/1/2018 AAA 4,500 4,747,500
San Francisco CA City & Cnty Arpt Cmnty Intl Rev Ser Issue 2
MBIA+ 6 3/4% 5/1/2020 AAA 3,230 3,448,025
San Francisco CA City & Cnty Arpt Cmnty Intl Rev Ser Issue 20
MBIA+ 4 1/2% 5/1/2023 AAA 1,690 1,404,812
San Francisco CA City & Cnty Arpt Cmnty Intl Rev Ser Issue 20
MBIA+ 4 1/2% 5/1/2026 AAA 4,000 3,275,000
San Mateo Cnty CA Transn Dist Ser A MBIA+ 4 1/2% 6/1/2018 AAA 5,030 4,300,650
Total 22,043,706
----------------------------------------------------------------------------------------------------------------------==============
Water/Sewer 12.30% California St Dept Wtr Res Cent VY Proj Rev Ser S 5.00% 12/1/2029 Aa2 3,115 2,795,712
Chino Basin CA Regl Fin Auth Rev Inland Empire Util Agy Swr Proj
MBIA+ 5 3/4% 11/1/2022 AAA 145 146,088
30
<PAGE>
Statement of Net Assets (unaudited)
CALIFORNIA TAX-FREE INCOME FUND March 31, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
East Bay CA Muni Util Dist Waste Wtr Treatment Sys Rev
RIBs AMBAC+ 6.72% 6/1/2020++ AAA $ 1,750 $ 1,708,437
East Bay CA Muni Util Dist Wtr Sys Rev Sub MBIA+ 4 3/4% 6/1/2028 AAA 2,000 1,710,000
Los Angeles CA Dept Wtr & Pwr Wtrwks Rev FGIC+ 6.10% 10/15/2039 AAA 150 154,500
Los Angeles CA Waste Wtr Sys Rev Ser C MBIA+ 4.00% 6/1/2019 AAA 1,905 1,509,713
Metropolitan Wtr Dist Southern CA Wtrwks Rev Ser A 5 1/2% 7/1/2019 Aa2 835 826,650
Metropolitan Wtr Dist Southern CA Wtrwks Rev Ser A 5.00% 7/1/2026 Aa2 5,750 5,196,562
Pajaro Valley CA Wtr Mgmt Agy Rev Ctfs Partn Ser A
AMBAC+ 5 1/2% 3/1/2019 AAA 65 63,944
Reedley CA Pub Fin Auth Lease Rev Waste Wtr Treatment Plant Proj
AMBAC+ 6.05% 5/1/2015 AAA 1,400 1,440,250
San Diego CA Pub Fac Fin Auth Swr Rev FGIC+ 5.00% 5/15/2015 AAA 4,000 3,855,000
San Diego CA Pub Fac Fin Ser B FGIC+ 5.00% 5/15/2029 AAA 2,000 1,782,500
Vallejo CA Rev Wtr Impt Proj Ser A FSA+ 5 7/8% 5/1/2026 AAA 3,350 3,383,500
Total 24,572,856
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 99.00% (Cost $196,242,263) 197,734,072
====================================================================================================================================
Other Assets, Less Liabilities 1.00%
====================================================================================================================================
Cash 3,289,097
----------------------------------------------------------------------------------------------------------------------==============
Receivables for: Interest 3,953,070
Securities sold 3,585,113
Capitalstock sold 110,546
Total Other Assets 10,937,826
----------------------------------------------------------------------------------------------------------------------==============
Payables for: Securities purchased 7,519,919
Dividends 662,414
Capital stock reacquired 323,791
Other 432,205
Total Liabilities 8,938,329
----------------------------------------------------------------------------------------------------------------------==============
Total Other Assets, Less Liabilities 1,999,497
====================================================================================================================================
Net Assets 100.00% $199,733,569
====================================================================================================================================
Class A Shares-Net asset value ($188,591,664 / 18,733,874 shares outstanding) $10.07
Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $10.41
Class C Shares-Net asset value ($11,141,905 / 1,106,457 shares outstanding) $10.07
* 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. See Glossary of
Terms.
++ 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 March 31, 2000. See page 1 for additional important information.
+++ Income from these investments may be subject to the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
</TABLE>
GLOSSARY OF TERMS:
AMBAC American Municipal Bond Assurance Corporation
ACA American Capital Assets
ASSETGTY Asset Guaranty
BIG Bond Investors Guaranty
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
MBIA Municipal Bond Investors Assurance
31
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations (unaudited)
Six Months Ended 3/31/2000
----------------------------------------------------------------------------------------------------------------------------------
National New York Texas New Jersey Connecticut
Investment Income Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest $ 19,026,981 $ 8,238,708 $ 2,136,836 $ 4,697,950 $ 2,649,911
----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fee 1,419,751 605,793 199,840 389,944 260,782
12b-1 distribution plan 1,161,606 443,373 149,345 279,002 182,547
Shareholder servicing 167,325 76,360 21,681 44,165 24,416
Reports to shareholders 49,993 21,437 6,733 12,573 8,855
Professional 42,607 19,288 9,483 14,133 10,859
Registration 27,075 2,167 4,222 3,009 602
Directors' fees 3,986 2,517 912 2,571 1,483
Other 43,318 10,373 3,863 7,428 11,432
Total expenses 2,915,661 1,181,308 396,079 752,825 500,976
----------------------------------------------------------------------------------------------------------------------------------
Net investment income 16,111,320 7,057,400 1,740,757 3,945,125 2,148,935
----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
----------------------------------------------------------------------------------------------------------------------------------
Net realized loss from investment transactions (17,279,420) (6,782,246) (1,811,881) (4,151,661) (2,382,120)
----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation/
depreciation of investments 9,028,905 3,929,777 828,005 2,603,089 1,241,956
----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments (8,250,515) (2,852,469) (983,876) (1,548,572) (1,140,164)
----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 7,860,805 $ 4,204,931 $ 756,881 $ 2,396,553 $ 1,008,771
----------------------------------------------------------------------------------------------------------------------------------
Six Months Ended 3/31/2000
----------------------------------------------------------------------------------------------------------------------------------
Missouri Hawaii Washington Minnesota California
Investment Income Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
Interest $ 3,590,190 $ 2,479,749 $ 1,663,866 $ 604,969 $ 6,387,581
----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fee 302,522 169,937 121,372 47,935 503,826
Management fee waived - - - (47,935) -
12b-1 distribution plan 211,354 114,690 - - 392,636
Shareholder servicing 48,577 19,685 19,103 6,478 47,904
Reports to shareholders 10,504 5,975 4,257 1,434 19,361
Professional 12,635 8,868 7,711 5,831 17,983
Registration 1,805 452 602 1,733 1,804
Directors' fees 1,888 958 682 192 72
Other 9,205 7,132 10,541 3,725 9,831
Total expenses 598,490 327,697 164,268 19,393 993,417
----------------------------------------------------------------------------------------------------------------------------------
Net investment income 2,991,700 2,152,052 1,499,598 585,576 5,394,164
----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
----------------------------------------------------------------------------------------------------------------------------------
Net realized loss from investment transactions (1,129,196) (1,186,508) (1,851,080) (744,515) (4,834,545)
----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation/
depreciation of investments (525,198) (269,706) 1,032,789 496,187 2,477,687
----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments (1,654,394) (1,456,214) (818,291) (248,328) (2,356,858)
----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 1,337,306 $ 695,838 $ 681,307 $ 337,248 $ 3,037,306
----------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Six Months Ended 3/31/2000 (unaudited) Year Ended 9/30/1999
-----------------------------------------------------------------------------------------------------------------------------------
National New York Texas National New York Texas
Increase (Decrease) in Net Assets Fund Fund Fund Fund Fund Fund
-----------------------------------------------------------------------------------------------------------------------------------
Operations
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 16,111,320 $ 7,057,400 $ 1,740,757 $ 32,381,444 $ 14,517,491 $ 4,618,764
Net realized loss from investment transactions (17,279,420) (6,782,246) (1,811,881) (6,453,149) (247,046) (2,194,752)
Net change in unrealized appreciation
(depreciation) of investments 9,028,905 3,929,777 828,005 (50,382,900) (23,097,350) (6,921,083)
Net increase (decrease) in net assets
resulting from operations 7,860,805 4,204,931 756,881 (24,454,605) (8,826,905) (4,497,071)
-----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income (14,704,968) (6,455,698) (2,163,886) (31,197,508) (14,166,280) (4,626,876)
Net realized gain from investment transactions - - - (10,518,533) - (962,026)
Total distributions (14,704,968) (6,455,698) (2,163,886) (41,716,041) (14,166,280) (5,588,902)
-----------------------------------------------------------------------------------------------------------------------------------
Capital share transactions
Net proceeds from sales of shares 26,106,740 6,575,591 1,426,314 59,929,700 11,967,741 8,191,331
Net asset value of shares issued to shareholders
in reinvestment of dividends and distributions 8,847,247 3,644,517 1,420,644 27,589,196 8,196,054 3,727,256
Total 34,953,987 10,220,108 2,846,958 87,518,896 20,163,795 11,918,587
-----------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (68,676,815) (26,357,882) (8,285,844) (82,595,438) (32,394,646) (9,949,181)
-----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets derived from
capital share transactions (33,722,828) (16,137,774) (5,438,886) 4,923,458 (12,230,851) 1,969,406
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets (40,566,991) (18,388,541) (6,845,891) (61,247,188) (35,224,036) (8,116,567)
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of period 597,062,983 255,032,706 84,490,703 658,310,171 290,256,742 92,607,270
-----------------------------------------------------------------------------------------------------------------------------------
End of period+ $556,495,992 $236,644,165 $77,644,812 $597,062,983 $255,032,706 $84,490,703
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Includes undistributed (overdistributed) net investment income of
$2,311,252, $54,634 and $(668,140), respectively, at March 31, 2000 and
$904,900, $(547,068) and $(245,011), respectively, at September 30, 1999.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Statements of Changes in Net Assets (unaudited)
Six Months Ended 3/31/2000
------------------------------------------------------------------------------------------------------------------------------------
New Jersey Connecticut Missouri Hawaii Washington Minnesota California
Increase (Decrease) in Net Assets Fund Fund Fund Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------------------------------------
Operations
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment income $ 3,945,125 $ 2,148,935 $ 2,991,700 $ 2,152,052 $ 1,499,598 $ 585,576 $ 5,394,164
Net realized loss from
investment transactions (4,151,661) (2,382,120) (1,129,196) (1,186,508) (1,851,080) (744,515) (4,834,545)
Net change in unrealized appreci-
ation (depreciation) of investments 2,603,089 1,241,956 (525,198) (269,706) 1,032,789 496,187 2,477,687
Net increase in net assets result-
ing from operations 2,396,553 1,008,771 1,337,306 695,838 681,307 337,248 3,037,306
------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income (4,214,199) (2,803,730) (3,132,502) (1,729,965) (1,274,318) (539,836) (5,283,849)
------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions
Net proceeds from sales of shares 5,708,760 3,288,327 3,151,550 3,132,141 825,182 2,234,854 5,310,799
Net asset value of
shares issued to shareholders
in reinvestment of dividends 2,267,732 1,157,663 2,276,983 671,392 783,917 384,688 2,431,226
Total 7,976,492 4,445,990 5,428,533 3,803,533 1,609,099 2,619,542 7,742,025
------------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (16,942,886) (12,313,529) (10,290,091) (7,332,198) (6,115,280) (2,980,850) (25,642,074)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets derived
from capital share transactions (8,966,394) (7,867,539) (4,861,558) (3,528,665) (4,506,181) (361,308) (17,900,049)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets (10,784,040) (9,662,498) (6,656,754) (4,562,792) (5,099,192) (563,896) (20,146,592)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of period 163,237,137 111,758,230 125,774,637 71,619,347 51,848,658 19,843,279 219,880,161
------------------------------------------------------------------------------------------------------------------------------------
End of period+ $152,453,097 $102,095,732 $119,117,883 $67,056,555 $46,749,466 $19,279,383 $199,733,569
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Includes undistributed (overdistributed) net investment income of
$(500,691), $(664,466) ,$(587,353), $535,941, $529,073, $76,485 and
$(39,589), respectively, at March 31, 2000. See Notes to Financial
Statements.
33
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Year Ended 9/30/1999
------------------------------------------------------------------------------------------------------------------------------------
New Jersey Connecticut Missouri Hawaii Washington Minnesota California
Increase (Decrease) in Net Assets Fund Fund Fund Fund Fund Fund Fund
-----------------------------------------------------------------------------------------------------------------------------------
Operations
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment income $ 9,173,658 $ 6,089,046 $ 6,610,014 $ 3,835,503 $ 3,205,394 $ 942,107 $ 12,181,601
Net realized gain (loss)
from investment transactions (1,091,791) (78,227) 1,347,189 (486,199) 109,993 12,207 286,600
Net change in unrealized
depreciation of investments (14,686,316) (9,571,217) (11,024,090) (5,845,381) (5,739,926) (1,551,262) (22,493,114)
Net decrease in net assets resulting
from operations (6,604,449) (3,560,398) (3,066,887) (2,496,077) (2,424,539) (596,948) (10,024,913)
-----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income (9,017,246) (6,007,093) (6,637,087) (3,617,258) (2,874,908) (913,056) (11,801,694)
Net realized gain from
investment transactions (3,695,316) - - - - - -
Total distributions (12,712,562) (6,007,093) (6,637,087) (3,617,258) (2,874,908) (913,056) (11,801,694)
----------------------------------------------------------------------------------------------------------------------------------
Capital share transactions
Net proceeds from sales of shares 12,758,881 13,939,413 11,685,863 4,060,791 2,052,719 8,299,061 15,242,324
Net asset value of shares issued
to shareholders in reinvestment
of dividends and distributions 7,542,942 2,689,871 4,683,324 1,536,085 1,877,380 647,287 5,540,482
Total 20,301,823 16,629,284 16,369,187 5,596,876 3,930,099 8,946,348 20,782,806
-----------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (23,874,345) (16,286,208) (25,045,944) (8,834,623) (9,535,733) (1,992,279) (43,480,555)
-----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
derived from capital
share transactions (3,572,522) 343,076 (8,676,757) (3,237,747) (5,605,634) 6,954,069 (22,697,749)
-----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (22,889,533) (9,224,415) (18,380,731) (9,351,082) (10,905,081) 5,444,065 (44,524,356)
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of year 186,126,670 120,982,645 144,155,368 80,970,429 62,753,739 14,399,214 264,404,517
-----------------------------------------------------------------------------------------------------------------------------------
End of year+ $163,237,137 $111,758,230 $125,774,637 $71,619,347 $51,848,658 $19,843,279 $ 219,880,161
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Includes undistributed (overdistributed) net investment income of
$(231,617), $(9,671), $(446,551), $113,854, $303,793, $30,745 and
$(149,904), respectively, at September 30, 1999. See Notes to Financial
Statements.
34
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
National Tax-Free Income Fund
Class A Shares
------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 3/31, Year
2000 Ended 9/30,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.79 $11.98 $11.48 $11.08 $11.00 $10.62
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .30 .59 .604 .587 .603 .626
Net realized and unrealized gain (loss)on investments (.13)(a) (1.03) .470 .415 .075 .382
Total from investment operations .17 (.44) 1.074 1.002 .678 1.008
------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.28) (.56) (.574) (.602) (.598) (.628)
Distributions from net realized gain - (.19) - - - -
Total distributions (.28) (.75) (.574) (.602) (.598) (.628)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.68 $10.79 $11.98 $11.48 $11.08 $11.00
------------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.71%(c) (3.85)% 9.60% 9.30% 6.31% 9.84%
------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses .48%(c) .95% .88% .87% .90% .82%
Net investment income 2.87%(c) 5.10% 5.18% 5.27% 5.63% 5.92%
</TABLE>
<TABLE>
<CAPTION>
Class B Shares
---------------------------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended 3/31, Year 8/1/1996(d)Ended 3/31,
Per Share Operating 2000 Ended 9/30, to 2000
Performance: (unaudited) 1999 1998 1997 9/30/1996 (unaudited)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $10.82 $11.98 $11.50 $11.08 $11.05 $10.81
---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment
operations
Net investment income .27(a) .51 .518 .553 .089 .27(a)
Net realized and
unrealized gain (loss)
on investments (.14) (.99) .466 .413 .033 (.14)
Total from investment
operations .13 (.48) .984 .966 .122 .13
---------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net
investment income (.24) (.49) (.504) (.546) (.092) (.24)
Distributions from
net realized gain - (.19) - - - -
Total distributions (.24) (.68) (.504) (.546) (.092) (.24)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $10.71 $10.82 $11.98 $11.50 $11.08 $10.70
---------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.27%(c) (4.30)% 8.85% 8.95% 1.16%(c) 1.27%(c)
---------------------------------------------------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses .81%(c) 1.54% 1.47% 1.37% .20%(c) .81%(c)
Net investment income 2.56%(c) 4.41% 4.49% 4.65% .68%(c) 2.55%(c)
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class C Shares
----------------------------------- -----------------------------------------------------
Year 7/15/1996(d)
Per Share Operating Ended 9/30, to
Performance: 1999 1998 1997 9/30/1996
----------------------------------- -----------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of year $11.99 $11.49 $11.08 $10.90
----------------------------------- -----------------------------------------------------
Income (loss) from
investment
operations
Net investment income .50 .520 .507 .106
Net realized and
unrealized gain (loss)
on investments (1.01) .471 .423 .190
Total from investment
operations (.51) .991 .930 .296
----------------------------------- -----------------------------------------------------
Distributions
Dividends from net
investment income (.48) (.491) (.520) (.116)
Distributions from
net realized gain (.19) - - -
Total distributions (.67) (.491) (.520) (.116)
----------------------------------- -----------------------------------------------------
Net asset value,
end of period $10.81 $11.99 $11.49 $11.08
----------------------------------- -----------------------------------------------------
Total Return(b) (4.45)% 8.80% 8.61% 2.71%(c)
----------------------------------- -----------------------------------------------------
Ratios to Average
Net Assets:
Expenses 1.63% 1.61% 1.59% .34%(c)
Net investment income 4.38% 4.44% 4.54% .96%(c)
----------------------------------- -----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six Months
Ended 3/31,
2000 Ended 9/30,
Supplemental Data for All Classes: (unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net assets, end of period $556,496 $597,063 $658,310 $646,736 $672,344 $650,699
Portfolio turnover rate 93.51% 254.13% 304.15% 232.64% 205.35% 225.39%
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and
assumes the reinvestment of all distributions.
(c) Not annualized.
(d) Commencement of offering class shares.
See Notes to Financial Statements.
35
<PAGE>
Financial Highlights
New York Tax-Free Income Fund
<TABLE>
<CAPTION>
Class A Shares
-----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 3/31, Year
2000 Ended 9/30,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.51 $11.43 $11.03 $10.78 $10.85 $10.54
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .30(a) .58 .562 .578 .597 .610
Net realized and unrealized gain
(loss)on investments (.10) (.94) .408 .262 (.081) .316
Total from investment operations .20 (.36) .970 .840 .516 .926
-----------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.28) (.56) (.570) (.590) (.586) (.616)
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.43 $10.51 $11.43 $11.03 $10.78 $10.85
-----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.95%(c) (3.23)% 9.03% 8.01% 4.87% 9.12%
-----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses .48%(c) .93% .85% .85% .81% .82%
Net investment income 2.93%(c) 5.21% 5.06% 5.35% 5.54% 5.83%
</TABLE>
<TABLE>
<CAPTION>
Class C Shares
-----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 3/31, Year 7/15/1996(d)
2000 Ended 9/30, to
Per Share Operating Performance: (unaudited) 1999 1998 1997 9/30/1996
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.51 $11.42 $11.02 $10.78 $10.63
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .27(a) .50 .485 .483 .111
Net realized and unrealized
gain (loss) on investments (.11) (.93) .402 .267 .152
Total from investment operations .16 (.43) .887 .750 .263
-----------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.24) (.48) (.487) (.510) (.113)
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.43 $10.51 $11.42 $11.02 $10.78
-----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.61%(c) (3.93)% 8.34% 7.13% 2.48%(c)
-----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses .81%(c) 1.62% 1.57% 1.57% .34%(c)
Net investment income 2.59%(c) 4.49% 4.32% 4.60% 1.04%(c)
-----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 3/31, Year
2000 Ended 9/30,
Supplemental Data for AllClasses: (unaudited) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period $236,644 $255,033 $290,257 $300,490 $319,553 $331,618
Portfolio turnover rate 35.44% 52.67% 64.63% 110.28% 64.25% 105.62%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) Commencement of offering class shares. See Notes to Financial Statements.
36
<PAGE>
Financial Highlights
Texas Tax-Free Income Fund
<TABLE>
<CAPTION>
Six months
Ended 3/31, Year
2000 Ended 9/30,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $9.55 $10.69 $10.40 $10.11 $10.05 $9.59
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .20(a) .52 .507 .548 .567 .571
Net realized and unrealized gain (loss)
on investments (.10) (1.03) .407 .367 .045 .452
Total from investment operations .10 (.51) .914 .915 .612 1.023
-----------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.25) (.52) (.534) (.555) (.552) (.563)
Distributions from net realized gain - (.11) (.090) (.070) - -
Total distributions (.25) (.63) (.624) (.625) (.552) (.563)
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.40 $9.55 $10.69 $10.40 $10.11 $10.05
-----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.15%(c) (4.96)% 9.24% 9.25% 6.11% 11.14%
------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period $77,645 $84,491 $92,607 $91,301 $94,414 $100,304
------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .50%(c) .94% .91% .88% .69% .62%
Expenses, excluding waiver .50%(c) .94% .91% .88% .87% .87%
Net investment income 2.18%(c) 5.12% 4.85% 5.38% 5.58% 5.90%
Portfolio turnover rate 82.96% 168.04% 143.78% 127.88% 112.34% 108.00%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes
the reinvestment of all distributions.
(c) Not annualized. See Notes to Financial Statements.
<TABLE>
<CAPTION>
Financial Highlights
New Jersey Tax-Free Income Fund
Six Months
Ended 3/31, Year
2000 Ended 9/30,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 4.97 $ 5.54 $ 5.32 $ 5.18 $ 5.14 $ 4.95
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .12(a) .27 .262 .272 .277 .287
Net realized and unrealized gain (loss)
on investments (.04) (.47) .223 .144 .041 .192
Total from investment operations .08 (.20) .485 .416 .318 .479
------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.13) (.26) (.265) (.276) (.278) (.289)
Distributions from net realized gain -- (.11) -- -- -- --
Total distributions (.13) (.37) (.265) (.276) (.278) (.289)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.92 $ 4.97 $ 5.54 $ 5.32 $ 5.18 $ 5.14
------------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.73%(c) (3.73)% 9.34% 8.25% 6.29% 9.98%
------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period $ 152,453 $ 163,237 $ 186,127 $ 184,465 $ 186,402 $ 191,562
------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .48%(c) .93% .86% .82% .79% .72%
Expenses, excluding waiver .48%(c) .93% .86% .86% .86% .87%
Net investment income 2.54%(c) 5.11% 4.85% 5.21% 5.31% 5.73%
Portfolio turnover rate 59.56% 185.16% 118.38% 154.80% 171.63% 133.11%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized. See Notes to Financial Statements.
37
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
Connecticut Tax-Free Income Fund
Six Months
Ended 3/31, Year
2000 Ended 9/30,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $9.89 $10.73 $10.42 $10.13 $10.12 $9.71
-----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .20(a) .54 .521 .556 .576 .579
Net realized and unrealized gain (loss)
on investments (.09) (.86) .322 .287 (.013) .407
Total from investment operations .11 (.32) .843 .843 .563 .986
-----------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.26) (.52) (.533) (.553) (.553) (.576)
-----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.74 $9.89 $10.73 $10.42 $10.13 $10.12
-----------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.17%(c) (3.04)% 8.32% 8.56% 5.70% 10.52%
-----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period $102,096 $111,758 $120,983 $119,909 $122,885 $113,436
-----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .48%(c) .95% .81% .59% .38% .41%
Expenses, excluding waiver .48%(c) .95% .81% .78% .80% .86%
Net investment income 2.06%(c) 5.12% 4.95% 5.45% 5.66% 5.89%
Portfolio turnover rate 16.91% 53.76% 61.06% 37.09% 63.61% 54.19%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Financial Highlights
Missouri Tax-Free Income Fund
Six Months
Ended 3/31, Year
2000 Ended 9/30,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $4.99 $5.36 $5.22 $5.08 $5.08 $4.88
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .12(a) .25 .253 .268 .267 .277
Net realized and unrealized gain (loss)
on investments (.06) (.37) .142 .138 .008 .204
Total from investment operations .06 (.12) .395 .406 .275 .481
-----------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.13) (.25) (.255) (.266) (.275) (.281)
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.92 $4.99 $5.36 $5.22 $5.08 $5.08
-----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.20%(c) (2.25)% 7.75% 8.22% 5.54% 10.21%
-----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period $119,118 $125,775 $144,155 $140,280 $134,144 $131,823
-----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .50%(c) .99% .92% .70% .77% .74%
Expenses, excluding waiver .50%(c) .99% .93% .94% .92% .89%
Net investment income 2.48%(c) 4.84% 4.80% 5.22% 5.21% 5.61%
Portfolio turnover rate 23.06% 78.85% 72.89% 27.34% 93.17% 58.17%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
See Notes to Financial Statements.
38
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
Hawaii Tax-Free Income Fund
Six Months
Ended 3/31, Year
2000 Ended 9/30,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $4.84 $5.25 $5.07 $4.93 $4.91 $4.72
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .15(a) .26 .245 .266 .273 .271
Net realized and unrealized gain (loss)
on investments (.10) (.43) .180 .138 .015 .198
Total from investment operations .05 (.17) .425 .404 .288 .469
------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.12) (.24) (.245) (.264) (.268)
(.279)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.77 $4.84 $5.25 $5.07 $4.93 $4.91
------------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.10%(c) (3.31)% 8.59% 8.42% 5.94% 10.30%
------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period $67,057 $71,619 $80,970 $79,079 $85,344 $86,105
------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .48%(c) .97% .92% .58% .57% .58%
Expenses, excluding waiver .48%(c) .97% .93% .87% .87% .87%
Net investment income 3.17%(c) 5.03% 4.78% 5.39% 5.46% 5.74%
Portfolio turnover rate 16.45% 27.63% 52.65% 29.09% 59.46% 70.64%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Financial Highlights
Washington Tax-Free Income Fund
Six Months
Ended 3/31, Year
2000 Ended 9/30,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $4.91 $5.38 $5.16 $4.96 $4.91 $4.72
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .15(a) .28 .273 .268 .271 .277
Net realized and unrealized gain (loss)
on investments (.07) (.50) .206 .206 .056 .200
Total from investment operations .08 (.22) .479 .474 .327 .477
------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.13) (.25) (.259) (.274) (.277) (.287)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.86 $4.91 $5.38 $5.16 $4.96 $4.91
------------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.63%(c) (4.17)% 9.48% 9.82% 6.80% 10.48%
------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period $46,749 $51,849 $62,754 $66,215 $71,295 $74,359
------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .34%(c) .66% .65% .57% .60% .53%
Expenses, excluding waiver .34%(c) .66% .65% .62% .68% .68%
Net investment income 3.10%(c) 5.42% 5.20% 5.36% 5.47% 5.84%
Portfolio turnover rate 56.16% 180.42% 141.56% 132.37% 78.02% 92.85%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
See Notes to Financial Statements.
39
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
Minnesota Tax-Free Income Fund
Six Months
Ended 3/31, Year
2000 Ended 9/30, 12/27/1994(d)
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 to 9/30/1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $4.78 $5.18 $5.05 $4.90 $5.01 $4.76
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations
Net investment income .14(a) .27 .265 .273 .294 .230
Net realized and unrealized gain (loss)
on investments (.06) (.41) .134 .155 (.078) .249
Total from investment operations .08 (.14) .399 .428 .216 .479
------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.13) (.26) (.269) (.278) (.286) (.229)
Distribution from net realized gain -- -- -- -- (.040) --
Total distributions (.13) (.26) (.269) (.278) (.326) (.229)
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.73 $4.78 $5.18 $5.05 $4.90 $5.01
----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.81%(c) (2.72)% 8.11% 8.97% 4.44% 10.22%(c)
----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period $19,279 $19,843 $14,399 $10,510 $8,047 $4,315
----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .10%(c) .23% .27% .36% .00% .00%(c)
Expenses, excluding waiver .35%(c) .73% .77% .86% .91% .64%(c)
Net investment income 3.06%(c) 5.43% 5.19% 5.51% 5.91% 4.58%(c)
Portfolio turnover rate 34.72% 22.87% 40.65% 41.45% 43.08% 121.41%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding ding the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) Commencement of offering class shares.
See Notes to Financial Statements.
40
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
California Tax-Free Income Fund
Class A Shares
------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 3/31, Year One Month Year
2000 Ended 9/30, Ended 9/30, Ended 8/31,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.16 $11.12 $10.72 $10.43 $10.32 $10.41 $10.45
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations
Net investment income .26(a) .54 .538 .560 .046 .566 .588
Net realized and unrealized gain (loss)
on investments (.09) (.98) .388 .290 .112 (.089) (.038)
Total from investment operations .17 (.44) .926 .850 .158 .477 .550
------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.26) (.52) (.526) (.560) (.048) (.567) (.590)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.07 $10.16 $11.12 $10.72 $10.43 $10.32 $10.41
------------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.74%(c) (4.09)% 8.86% 8.39% 1.53%(c) 4.65% 5.58%
------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .47%(c) .93% .87% .72% .07%(c) .75% .76%
Expenses, excluding waiver .47%(c) .93% .87% .85% .07%(c) .86% .86%
Net investment income 2.66%(c) 4.96% 4.98% 5.38% .44%(c) 5.41% 5.84%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class C Shares
------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 3/31, Year One Month
2000 Ended 9/30, Ended 9/3 7/15/1996(d)
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 to 8/31/1996
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.16 $11.12 $10.72 $10.43 $10.32 $10.28
------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .23(a) .46 .465 .485 .039 .068
Net realized and unrealized
gain (loss) on investments (.10) (.98) .383 .287 .113 .041
Total from investment operations .13 (.52) .848 .772 .152 .109
------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net
investment income (.22) (.44) (.448) (.482) (.042) (.069)
------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.07 $10.16 $11.12 $10.72 $10.43 $10.32
------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.40%(c) (4.77)% 8.09% 7.59% 1.47%(c) 1.16%(c)
------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .77%(c) 1.60% 1.59% 1.46% .13%(c) .17%(c)
Expenses, excluding waiver .77%(c) 1.60% 1.59% 1.59% .13%(c) .21%(c)
Net investment income 2.37%(c) 4.28% 4.26% 4.64% .38%(c) .65%(c)
------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six Months
Ended 3/31, Year One Month Year
Supplemental Data 2000 Ended 9/30, Ended 9/30, Ended 8/31,
for AllClasses: (unaudited) 1999 1998 1997 1996 1996 1995
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets, end of period $199,734 $219,880 $264,405 $273,009 $294,837 $291,611 $296,274
Portfolio turnover rate 47.40% 185.43% 187.26% 121.97% 2.74% 132.37% 100.20%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) Commencement of offering class shares.
See Notes to Financial Statements.
41
<PAGE>
Notes to Financial Statements (unaudited)
1. Significant Accounting Policies Lord Abbett Tax-Free Income Fund, Inc. (the
"Company") is an open-end management investment company. The Company consists of
ten separate portfolios ("Funds"). Each Fund is non-diversified as defined under
the Investment Company Act of 1940 except for the National Fund. The financial
statements have been prepared in conformity with generally accepted accounting
principles, which permit management to make certain estimates and assumptions at
the date of the financial statements. The following summarizes the significant
accounting policies of the Company. (a) Security valuation 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, at 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 com panies and to distribute substantially
all net investment income and net realized gains. Therefore, no federal income
tax provision is required. (c) Security transactions are accounted for on the
date that the securi ties are purchased or sold (trade date). Interest income is
recorded on the accrual basis. Net invest ment income (other than distribution
and service fees) and realized and unrealized gains or losses are allocated to
each class of shares based upon the relative proportion of net assets at the
beginning of the day. (d) The organization expenses of the Min ne sota Fund are
being amortized evenly over a period of five years from its commencement of
operations.
2. Management Fee and Other Transactions With Affiliates The Company has a
management agreement with Lord, Abbett & Co. ("Lord Abbett") pursuant to which
Lord Abbett supplies the Company with investment management services and
executive and other personnel, pays the remuner ation 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 an annual rate of 0.50%. Lord Abbett may voluntarily waive
management fees or reimburse any Fund for certain of its other expenses. Lord
Abbett waived its management fee for the period ended March 31, 2000, for the
Minnesota Fund.
At March 31, 2000, the management fees payable to Lord Abbett were as follows:
National $233,945 Missouri $50,149
--------------------------------------------------------------------------------
New York 112,768 Hawaii 28,253
--------------------------------------------------------------------------------
Texas 32,761 Washington 19,764
--------------------------------------------------------------------------------
New Jersey 64,487 Minnesota -
--------------------------------------------------------------------------------
Connecticut 43,233 California 84,222
--------------------------------------------------------------------------------
Each Fund of the Company has Rule 12b-1 plans and agreements with respect to one
or more classes of shares as described below (the "Class A, Class B and Class C
Plans") with Lord Abbett Distributor LLC ("Distributor"), an affiliate of Lord
Abbett. Each Fund makes payments to Distributor which uses or passes on such
payments to authorized institutions. Pursuant to the Class A Plan, the Funds pay
Distributor(1) an annual service fee of (a) 0.25% of the average daily net
assets of Class A shares of the Connecticut, Missouri and California Funds and
(b) 0.15% of the average daily net asset value of shares sold prior to the
effective date of the Class A Plan and 0.25% of the average daily net asset
value of shares sold on or after that date for the National, New York, Texas,
New Jersey, Hawaii, Washington and Minnesota Funds; (2) a one-time distribution
fee of up to 1% on certain qualifying purchases and (3) an annual distribution
fee of 0.10% of the average daily net asset value of Class A shares serviced by
certain qualifying institutions. The Class A Plan of the Washington and
Minnesota Funds will not go into effect until the quarter subsequent to the net
assets of each Fund reaching $100 million. Pursuant to the Class B Plan of the
National Fund, the Fund pays Distributor an annual service and distribution fee
of 0.25% and 0.75%, respectively, of the average daily net asset value of the
Class B shares. Pursuant to the Class C Plan of the National, New York and
California Funds, the Funds pay Distributor (1) a service fee and a distribution
fee, at the time shares are sold, not to exceed 0.25% and 0.75%, respectively,
of the net asset value of such shares and (2) at each quarter-end after the
first anniversary of the sale of shares, a service fee and a distribution fee at
an annual rate not to exceed 0.25% and 0.75%, respectively, of the average daily
net asset value of such shares outstanding.
At March 31, 2000 the 12b-1 fees payable were as follows:
National $254,226 Missouri $ 60,489
--------------------------------------------------------------------------------
New York 162,884 Hawaii 37,004
--------------------------------------------------------------------------------
Texas 39,428 Washington -
--------------------------------------------------------------------------------
New Jersey 73,903 Minnesota -
--------------------------------------------------------------------------------
Connecticut 41,803 California 116,701
--------------------------------------------------------------------------------
12b-1 distribution plan expenses for the multiple share class Funds were as
follows:
12b-1 Expenses
--------------------------------------------------------------------------------
Fund Class A Class B Class C
--------------------------------------------------------------------------------
National $900,741 $79,437 $181,428
--------------------------------------------------------------------------------
New York 412,465 - 30,908
--------------------------------------------------------------------------------
California 336,845 - 55,791
--------------------------------------------------------------------------------
Distributor received the following commissions on sales of capital stock of the
Company after concessions were paid to authorized dealers:
Distributor Dealers'
Fund Commissions Concessions
--------------------------------------------------------------------------------
National-Class A $17,745 $83,149
--------------------------------------------------------------------------------
New York-Class A 6,457 29,022
--------------------------------------------------------------------------------
Texas 3,777 17,659
--------------------------------------------------------------------------------
New Jersey 9,678 45,869
--------------------------------------------------------------------------------
Connecticut 10,093 46,561
--------------------------------------------------------------------------------
Missouri 10,102 52,355
--------------------------------------------------------------------------------
Hawaii 5,146 24,733
--------------------------------------------------------------------------------
Washington 2,841 13,231
--------------------------------------------------------------------------------
Minnesota 6,675 30,986
--------------------------------------------------------------------------------
California-Class A 6,228 28,161
--------------------------------------------------------------------------------
Certain of the Company's officers and directors have an interest in Lord Abbett.
3. Capital Share Transactions Transactions in shares of capital stock for the
single class Funds were as follows:
<TABLE>
<CAPTION>
Six Months Ended 3/31/2000
----------------------------------------------------------------------------------------------------------------------------------
Texas New Jersey Connecticut Missouri Hawaii Washington Minnesota
Fund Fund Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales of shares 152,852 1,178,031 341,137 648,219 669,739 172,609 481,008
----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders
in reinvestment of dividends 152,716 466,787 120,367 467,111 142,161 163,473 82,555
----------------------------------------------------------------------------------------------------------------------------------
Total 305,568 1,644,818 461,504 1,115,330 811,900 336,082 563,563
----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (892,240) (3,497,212) (1,274,802) (2,116,344) (1,552,437) (1,277,617) (641,338)
----------------------------------------------------------------------------------------------------------------------------------
Decrease in shares (586,672) (1,852,394) (813,298) (1,001,014) (740,537) (941,535) (77,775)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
42
<PAGE>
Notes to Financial Statements (unaudited)
<TABLE>
<CAPTION>
Year Ended 9/30/1999
----------------------------------------------------------------------------------------------------------------------------------
Texas New Jersey Connecticut Missouri Hawaii Washington Minnesota
Fund Fund Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales of shares 800,026 2,390,789 1,319,866 2,223,451 796,560 389,460 1,638,218
----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders
in reinvestment of dividends
and distributions 361,537 1,410,888 256,280 894,762 300,269 358,276 127,846
----------------------------------------------------------------------------------------------------------------------------------
Total 1,161,563 3,801,677 1,576,146 3,118,213 1,096,829 747,736 1,766,064
----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (974,822) (4,548,695) (1,552,956) (4,783,618) (1,723,055) (1,843,141) (391,138)
----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in shares 186,741 (747,018) 23,190 (1,665,405) (626,226) (1,095,405) 1,374,926
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Transactions in Funds with multiple classes (both shares and dollars) were as
follows:
<TABLE>
<CAPTION>
Six Months Ended 3/31/2000
---------------------------------------------------------------------------------------------------------------------------------
National Fund New YorkFund California Fund
Class A Shares Amount Shares Amount Shares Amount
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 2,005,853 $ 21,142,439 601,608 $ 6,178,411 482,205 $ 4,740,529
--------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders
in reinvestment of dividends 788,503 8,304,396 345,962 3,559,935 237,553 2,346,963
--------------------------------------------------------------------------------------------------------------------------------
Total 2,794,356 29,446,835 947,570 9,738,346 719,758 7,087,492
--------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (5,775,591) (60,620,351) (2,468,680) (25,354,271)( (2,379,643) (23,503,781)
--------------------------------------------------------------------------------------------------------------------------------
Decrease (2,981,235)$(31,173,516) (1,521,110) $(15,615,925) (1,659,885) $(16,416,289)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended 9/30/1999
---------------------------------------------------------------------------------------------------------------------------------
National Fund New YorkFund California Fund
Class A Shares Amount Shares Amount Shares Amount
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 3,553,093 $ 41,120,760 962,807 $ 10,721,047 1,200,714 $ 12,975,648
--------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders
in reinvestment of
dividends and distributions 2,202,784 25,529,495 718,857 7,998,946 484,951 5,243,714
--------------------------------------------------------------------------------------------------------------------------------
Total 5,755,877 66,650,255 1,681,664 18,719,993 1,685,665 18,219,362
--------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (6,125,009) (70,108,828) (2,855,684) (31,414,585)( (3,813,581) (40,951,155)
--------------------------------------------------------------------------------------------------------------------------------
Decrease (369,132) $ (3,458,573) (1,174,020) $(12,694,592) (2,127,916) $(22,731,793)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended 3/31/2000 Year Ended 9/30/1999
--------------------------------------------------------------------------------------------------------------------------------
National Fund National Fund
Class B Shares Amount Shares Amount
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales of shares 250,161 $ 2,635,756 916,903 $10,609,930
--------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders
in reinvestment
of dividends and distributions 12,792 135,069 36,662 425,255
--------------------------------------------------------------------------------------------------------------------------------
Total 262,953 2,770,825 953,565 11,035,185
--------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (258,541) (2,716,389) (260,671) (2,964,850)
--------------------------------------------------------------------------------------------------------------------------------
Increase 4,412 $ 54,436 692,894 $ 8,070,335
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended 3/31/2000
---------------------------------------------------------------------------------------------------------------------------------
NationalFund New York Fund California Fund
Class C Shares Amount Shares Amount Shares Amount
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 220,531 $ 2,328,545 38,692 $ 397,180 57,533 $ 570,270
--------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders
in reinvestment of dividends 38,661 407,782 8,218 84,582 8,522 84,263
--------------------------------------------------------------------------------------------------------------------------------
Total 259,192 2,736,327 46,910 481,762 66,055 654,533
--------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (508,382) (5,340,075) (98,274) (1,003,611) (216,706) (2,138,293)
--------------------------------------------------------------------------------------------------------------------------------
Decrease (249,190) $(2,603,748) (51,364) $ (521,849) (150,651) $(1,483,760)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended 9/30/1999
--------------------------------------------------------------------------------------------------------------------------------
NationalFund New York Fund California Fund
Class C Shares Amount Shares Amount Shares Amount
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 703,876 $ 8,199,010 110,588 $1,246,694 208,570 $ 2,266,676
--------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders
in reinvestment of
dividends and distributions 140,566 1,634,446 17,744 197,108 27,360 296,768
--------------------------------------------------------------------------------------------------------------------------------
Total 844,442 9,833,456 128,332 1,443,802 235,930 2,563,444
--------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (828,590) (9,521,760) (89,612) (980,061) (235,865) (2,529,400)
--------------------------------------------------------------------------------------------------------------------------------
Increase 15,852 $ 311,696 38,720 $ 463,741 65 $ 34,044
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
43
<PAGE>
Notes to Financial Statements (unaudited)
The Company has 1,000,000,000 authorized shares (par value $.001) of which
900,000,000 are issued and allocated as follows: 150,000,000 to the National
Fund, 110,000,000 to each of the New York, New Jersey and California Fund, and
70,000,000 to each of the Texas, Connecticut, Missouri, Hawaii, Washington and
Minnesota Fund.
4. Distributions Dividends from net investment income are declared daily and
paid monthly. Taxable net realized gains from securities transactions, if any,
reduced by capital loss carryforwards, will be distributed to shareholders
annually. 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. At March 31, 2000, accumulated net realized loss
for financial reporting purposes was as follows:
National $25,041,539 Missouri $ 2,759,038
--------------------------------------------------------------------------------
New York 17,447,936 Hawaii 3,316,447
--------------------------------------------------------------------------------
Texas 4,015,033 Washington 2,322,041
--------------------------------------------------------------------------------
New Jersey 5,757,282 Minnesota 743,481
--------------------------------------------------------------------------------
Connecticut 3,868,709 California 23,628,025
--------------------------------------------------------------------------------
At March 31, 2000, the capital loss carryforwards were as follows:
Expiration Date
--------------------------------------------------------------------------------
Fund 2003 2004 2005 2007 Total
--------------------------------------------------------------------------------
New York $8,259,602 $1,668,796 $ - $ - $ 9,928,398
--------------------------------------------------------------------------------
Connecticut 721,307 537,856 - - 1,259,163
--------------------------------------------------------------------------------
Missouri 495,713 1,103,066 31,063 - 1,629,842
--------------------------------------------------------------------------------
Hawaii 68,514 1,575,226 - 37,384 1,681,124
--------------------------------------------------------------------------------
Washington - 470,961 - - 470,961
--------------------------------------------------------------------------------
California 11,890,149 5,761,785 - - 17,651,934
--------------------------------------------------------------------------------
Dividends and capital gains declared by class for the multiple share class Funds
were as follows:
Six Months Ended 3/31/2000
Dividends
--------------------------------------------------------------------------------
Fund Class A Class B Class C
--------------------------------------------------------------------------------
National $13,513,752 $362,024 $829,192
--------------------------------------------------------------------------------
New York 6,311,507 - 144,191
--------------------------------------------------------------------------------
California 5,023,096 - 260,753
--------------------------------------------------------------------------------
Year Ended 9/30/1999
Dividends
--------------------------------------------------------------------------------
Fund Class A Class B Class C
--------------------------------------------------------------------------------
National $28,839,888 $591,671 $1,765,949
--------------------------------------------------------------------------------
New York 13,857,824 - 308,456
--------------------------------------------------------------------------------
California 11,225,807 - 575,887
--------------------------------------------------------------------------------
Capital Gains
--------------------------------------------------------------------------------
Fund Class A Class B Class C
--------------------------------------------------------------------------------
National $9,645,280 $182,252 $691,001
--------------------------------------------------------------------------------
5. Paid In Capital At March 31, 2000, paid in capital for each Fund was as
follows:
National $584,383,749 Missouri $123,468,194
--------------------------------------------------------------------------------
New York 251,972,105 Hawaii 70,343,676
--------------------------------------------------------------------------------
Texas 81,417,757 Washington 48,402,640
--------------------------------------------------------------------------------
New Jersey 158,132,709 Minnesota 20,451,501
--------------------------------------------------------------------------------
Connecticut 106,976,690 California 221,909,374
--------------------------------------------------------------------------------
6. Purchases and Sales of Securities Purchases and sales of investment
securities (other than short-term investments) were as follows:
Fund Purchases Sales
--------------------------------------------------------------------------------
National $533,082,069 $601,544,652
--------------------------------------------------------------------------------
New York 85,344,721 99,044,092
--------------------------------------------------------------------------------
Texas 66,687,760 74,356,736
--------------------------------------------------------------------------------
New Jersey 91,481,024 102,677,638
--------------------------------------------------------------------------------
Connecticut 17,349,746 25,425,244
--------------------------------------------------------------------------------
Missouri 27,478,553 28,328,974
--------------------------------------------------------------------------------
Hawaii 11,006,456 13,566,403
--------------------------------------------------------------------------------
Washington 27,030,132 32,175,806
--------------------------------------------------------------------------------
Minnesota 6,732,059 6,174,033
--------------------------------------------------------------------------------
California 94,616,613 107,969,918
--------------------------------------------------------------------------------
Security gains and losses are computed on the identified cost basis. As of March
31, 2000, net unrealized appreciation (depreciation), gross unrealized
appreciation and gross unrealized depreciation of investments based on cost for
federal income tax purposes were as follows:
Net Unrealized
Appreciation Unrealized Unrealized
Fund (Depreciation) Appreciation Depreciation
--------------------------------------------------------------------------------
National $(5,157,470) $9,871,296 $(15,028,766)
--------------------------------------------------------------------------------
New York 2,065,362 6,041,502 (3,976,140)
--------------------------------------------------------------------------------
Texas 910,228 1,957,296 (1,047,068)
--------------------------------------------------------------------------------
New Jersey 578,361 4,110,197 (3,531,836)
--------------------------------------------------------------------------------
Connecticut (347,783) 2,850,622 (3,198,405)
--------------------------------------------------------------------------------
Missouri (1,003,920) 2,722,641 (3,726,561)
--------------------------------------------------------------------------------
Hawaii (506,615) 1,346,977 (1,853,592)
--------------------------------------------------------------------------------
Washington 139,794 919,768 (779,974)
--------------------------------------------------------------------------------
Minnesota (505,122) 213,753 (718,875)
--------------------------------------------------------------------------------
California 1,491,809 5,511,554 (4,019,745)
--------------------------------------------------------------------------------
The cost of investments for federal income tax purposes is the same as that used
for financial reporting purposes.
7. Directors' Remuneration The Directors of the Company associated with Lord
Abbett and all officers of the Company receive no compensation from the Company
for acting as such. Outside Directors' fees and retirement costs are allocated
among all funds in the Lord Abbett group based on the net assets of each fund.
Directors' fees payable at March 31, 2000, under a deferred compensation plan,
were $567,199.
Copyright(C)2000 by Lord Abbett Tax-Free Income Fund, Inc., 90 Hudson Street,
Jersey City, NJ 07302-3973 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. Please read the prospectus carefully before you
invest. There is no guarantee that the forecasts contained within this
publication will come to pass. All rights reserved. Printed in the U.S.A.
44
<PAGE>
Lord, Abbett & Co.
A Tradition of Performance Through
Disciplined
Investing
[PHOTO]
(standing, left to right)
Lisa D'Emic, Investment Team Leader
Richard Smola, Investment Team Leader
Philip Fang, Investment Team Leader
(seated, left to right)
Zane E. Brown, partner in charge of
fixed income and Investment Team Leader
John R. Mousseau, director of municipal
bond management and Investment Team Leader
A successful long-term track record is evidence of a successful investment
strategy. For decades, we at Lord, Abbett & Co. have believed that investing
with a disciplined, value approach is the best way to achieve competitive
returns and reduce portfolio risk. This commitment and the dedication of our
team of 72 investment professionals have helped us earn the trust of financial
professionals and investors for the past 70 years.
About Your Fund's
Board of
Directors
The Securities and Ex change Com mission (SEC) views the role of the independent
Board of Directors as one of the most important com ponents in overseeing a
mutual fund. The Board of Directors watches over your Fund's general oper ations
and represents your interests. Board members review and approve every contract
between your Fund and Lord, Abbett & Co. (the Fund's investment manager) and
Lord Abbett Distributor LLC (the Fund's underwriter). They meet regularly to
review a wide variety of information and issues regard ing your Fund. Every
member of the Board possesses extensive business experience. Lord Abbett
Tax-Free Income Fund's shareholders are indeed fortunate to have a group of
independent directors with diverse backgrounds to provide a variety of
viewpoints in the oversight of their Fund. Below, we feature one of our
independent directors, E. Thayer Bigelow, Jr.
[PHOTO]
E. Thayer Bigelow, Jr.
Director -Lord Abbett
Tax-Free Income Fund
Mr. Bigelow is a graduate of Trinity College and earned his MBA at the
University of Virginia's Darden Business School. He is currently Senior Advisor
at Time Warner Inc. Prior to that, he was acting CEO of Courtroom Television
Network, and previously served for five years as President and CEO of Time
Warner Cable Programming, Inc.
Mr. Bigelow serves as a member of the Board of Trustees for the Cate School. He
is also a member of the Board of Directors of Crane Co. He has been an
independent director for all of Lord Abbett's Family of Funds since 1994.
<PAGE>
Investing in the
Lord Abbett
Family of Funds
<TABLE>
<CAPTION>
GROWTH
---------------------------------------------------------------------------------------------------------------------------
INCOME
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth Funds Growth & Balanced Fund Income Funds Tax-Free Money
Growth Fund Income Funds Income Funds Market Fund
Growth Large-Cap Research Fund - Balanced World Bond- National U. S. Government
Opportunities Growth Fund Large-Cap Series** Debenture Series California Securities Money
Fund Research Fund- Series Global Fund - Connecticut Market Fund + ++
Small-Cap Value Growth & Income Series Florida
Series Income Series High Yield Fund Georgia
Alpha Series* Affiliated Fund Bond-Debenture Hawaii
Developing International Fund Michigan
Growth Fund Series Limited Duration Minnesota
Lord Abbett Mid-Cap U. S. Government Missouri
Developing Value Fund Securities Series+ New Jersey
Growth Fund Global Fund- U. S. Government) New York
is closed to Equity Series Securities Series+ Pennsylvania
new investors. Texas
Washington
</TABLE>
Finding the right mutual fund can be confusing. At Lord, Abbett & Co., we
believe your investment professional provides value in helping you identify and
under stand your investment objectives and, ultimately, offering fund recom
mendations suitable for your individual needs.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a current prospectus for the fund(s) covered by this
report.
For more complete information about any Lord Abbett fund, in cluding risks,
charges and ongoing expenses, call your investment professional or Lord Abbett
Distributor LLC at 800-874-3733 for a prospectus. Read it carefully before
investing.
The Lord Abbett Family of Funds lets you access more than 30 portfolios designed
to meet a variety of investment needs.
Diversification. You and your investment professional can diversify your
investments between equity and income funds.
Flexibility. As your investment goals change, your investment professional
can help you reallocate your portfolio.
You may reallocate assets among our funds at any time. Speak with your
investment professional to help you customize your investment plan.
Numbers to Keep Handy
For Shareholder Account or Statement Inquiries: 800-821-5129
For Literature Only: 800-874-3733
24-Hour Automated Shareholder
Service Line: 800-865-7582
Visit Our Web Site:
www.lordabbett.com
** Lord Abbett Securities Trust - Alpha Series is a fund of funds investing in
shares of Lord Abbett Developing Growth Fund, Lord Abbett Research Fund -
Small-Cap Value Series and Lord Abbett Securities Trust - International
Series.
** Lord Abbett Balanced Series is a fund of funds investing in shares of
certain other Lord Abbett funds.
+ An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
++ An investment in this Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund. This Fund is managed to
maintain and has maintained its stable $1.00 price per share.
[LOGO]
Lord Abbett mutual fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC
90 Hudson Street o Jersey City, New Jersey 07302-3973
LATFI-3-300
(5/00)
