<PAGE>
LINCOLN LIFE
EMANCIPATOR LIFE
SEMI ANNUAL
REPORT 1995
<PAGE>
LINCOLN LIFE
July 31, 1995
Dear Emancipator Life Policyholder:
Thank you again for placing your confidence in Lincoln Life. We are pleased to
report very strong performance for most of the Emancipator Life subaccounts
during the first six months of 1995.
The following table shows the change in unit values of the subaccounts over
several time periods. These figures are slightly different from those appearing
in the report as they reflect the deduction of asset charges associated with
your policy.
% change in unit values
Periods ended 6/30/95
--------------------------------------------------
5-year average since inception
Emancipator Life subaccounts 6 months 1 year annual compound 2/6/87
--------------------------------------------------------------------------------
Bond Fund 10.98% 11.38% 9.10% 7.80%
Growth and Income Fund 20.51 25.40 11.31 10.63
Managed Fund 15.65 17.89 9.16 8.47
Money Market Fund* 2.50 4.46 3.86 5.13
Special Opportunities Fund 18.89 23.24 12.32 11.69
The first six months of 1995 saw a dramatic continuation of the rally of the
financial marketplace that began in late 1994. The positive outlook in the U.S.
for stable interest rates, strong corporate earnings and moderate inflation
provided an excellent environment for equity securities.
The positive performance of the subaccounts for the first half of this year, in
comparison to the relatively poor performance of 1994, illustrates the
importance of keeping a long-term perspective and maintaining a well-diversified
portfolio. It is important that your allocations among the available investment
options are consistent with your risk tolerance and your investment horizon.
The next few pages contain performance and investment commentary from the
investment management firms regarding each subaccount for the first six months
of 1995. The portfolio advisor and subadvisors continue to utilize their
expertise to obtain favorable relative returns in any given market condition.
More detailed information about the five subaccounts follows the commentary.
Please note that the following information pertains to the underlying
investments for your Emancipator Life policy.
We appreciate your patronage and the opportunity to help you achieve your
financial security goals. If we can be further service, please call one of our
customer service representatives on our toll free number -- 1-800-348-0851.
Sincerely,
/s/ Kelly D. Clevenger /s/ Edward B. Martin
Kelly D. Clevenger Edward B. Martin, CLU
President, Board of Directors Vice President, Life Products
The rates of return shown in the above table reflect the percentage change in
unit values of the Separate Account, and represent the gross investment results
of the subaccounts minus the asset management charges and any miscellaneous
expenses incurred by the funds, and minus the mortality and expense risk charges
made by the Separate Account.
* An investment in the Money Market Fund is neither insured nor guaranteed by
the U.S. Government, and there can be no assurance that the subaccount will
maintain a stable $1 share price.
<PAGE>
Lincoln Investment Management, Inc.
Jay Yentis
Managed Fund
The Managed Fund continues to maintain a very small cash position. The fixed
income allocation does include a small allocation in very short term treasuries.
This allocation was included to increase yields compared to cash, however this
is available if cash flow so dictates. The asset allocation as of June 30, 1995
for the Fund was: equities 51.5%, fixed income 47.7%, and cash .8%. The Fund may
deviate from the usual allocation ranges (equities 40% to 45%, fixed income 50%
to 55%, and cash 3% to 10%) when market conditions dictate that it is
appropriate.
Considering the reduction of risk due to diversification, the Managed Fund
performed quite well in comparison to the applicable indices. The Managed Fund
performance for the first 6 months of 1995 was 18.76% compared to the S&P 500
Index of 20.2% and the Lehman Brother Government/Corporate Bond Index
performance of 11.8%.
In my opinion the outlook for the second half of the year continues to favor
equities over bonds. For the near term I do not envision significant rebalancing
of the portfolio.
Lincoln Investment Management, Inc.
Tim Policinski
Bond Fund
The Bond Fund average duration was equal to the average duration of the Lehman
Brothers Government/Corporate Bond Index at the beginning of the quarter and
slightly longer than the Index by the close of the quarter. This slight
lengthening occurred as the economy started to show signs of weakness. The Fed
Policy is still not clear enough to justify a large duration adjustment. The
cash position was lowered to less than 5% by June 30, 1995 as selected
opportunities became available in the corporate bond market.
In the corporate sector, lower quality utilities were sold as spreads tightened.
Several other sectors including banks and airlines also performed very well in
the second quarter. The Fund continues to be overweighted in the airline sector.
The Bond Fund performance for the first half of 1995 was very respectable at
15.15%, in comparison to the Lehman Brothers Government/Corporate Bond Index
which performed at 11.8% over the same time period.
The near term strategy continues to be neutral to slightly long in duration
compared to our index (Lehman Brothers Government/Corporate Bond Index). We
would like to maintain our underweighting in mortgage backed securities and
overweighting in corporate fixed income securities in comparison to the Index.
<PAGE>
Vantage Global Advisors, Inc.
Scott Wittman
Growth & Income Fund
History was made in the first half of 1995 as the Dow Jones Industrial Average
broke through the 4000 level for the first time ever. Perhaps more significant,
however, was that the market's surge continued beyond that point to close at
almost 4600 at the midpoint of the year. The S&P 500 Index, which provides a
broader representation of stocks than the Dow Jones, climbed to 20.2% for the
first six months of 1995.
The Growth & Income Fund provides conservative, risk-controlled exposure to the
stock market. In the first half of 1995, it did just that, performing in line
with the S&P 500 Index and ahead of most other funds which, on average,
underperformed the Index. The Fund performance for 12/31/94 to 6/30/95 was
22.80%.
The market rose in the face of economic uncertainty. Growth in Gross Domestic
Product for the first quarter was reported at 2.7%, the slowest rate since the
third quarter of 1993. Automobile companies reported lower sales, increasing
inventory, and forecasts of decreasing earnings in the near term. The housing
market, despite lower long term interest rates continued to be sluggish. Housing
starts were down in May. The U.S. economy has been losing jobs, primarily in the
manufacturing and construction sectors of the economy, those sectors most
sensitive to an economic downturn.
Out of this first half comes an important lesson: market timing is difficult.
The market provided exceptional returns for the first half, despite the negative
economic news. That economic news may have led some to take money out of the
market. However, for investors with a long-term outlook, it is important to have
solid, risk-controlled equity exposure in an investment portfolio at all times.
Special Opportunities Fund
The stock market surged to record breaking heights during the first half of
1995. While the Dow Jones Industrial Average wavered back and forth before
struggling to break through the 4000 barrier, the 4500 mark quickly followed.
The market's rise has taken many analysts by surprise as steady negative
economic news has been followed illogically by the market continuing to climb.
Growth in Gross Domestic Product, a prime measure of domestic productivity,
slowed to the lowest level since 1993. Economically sensitive sectors of the
economy such as housing and automobiles showed strains as housing starts were
down and automobile companies reported low levels of sales.
Some investors steered toward larger companies on the theory that those
companies are less likely to be affected by an economic downturn. Thus, large
stocks outperformed smaller stocks for the first six months. Nevertheless, the
market's rise was so dramatic that small and large stocks alike provided
substantial returns for the first six months. The Special Opportunities Fund
outperformed the major mid-cap indices for the first half of 1995.
The Special Opportunities Fund performance for 12/31/94 to 6/30/95 was 20.69%
while the S&P Mid-Cap Index performance was 17.6% for the same time period.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Lincoln National Bond Fund, Inc.
Statement of Net Assets - Unaudited
June 30, 1995
Par Market
Investments Amount Value
--------- ----------
Long-Term Debt Investments:
U.S. Government and Agency Obligations:-26.0%
-----------------------------------------------------
Federal Home Loan Bank
5.6%, 2/22/99 $4,000,000 $3,847,240
5.8%, 4/20/99 3,000,000 3,000,570
-----------------------------------------------------
Federal Home Loan Mortgage Corp.
4.88%, 06/23/98 3,000,000 2,972,370
-----------------------------------------------------
Federal National Mortgage Association
8.0%, 4/1/17 496,553 505,705
-----------------------------------------------------
FNMA
5.85%, Med Term Note
02/02/98 3,000,000 2,966,580
5.24%, Med Term Note
07/15/98 3,000,000 2,920,350
-----------------------------------------------------
GNMA
9.0%, 5/15/17 320,755 336,790
9.0%, 9/15/19 1,031,932 1,083,518
6.5%, 11/15/23 977,639 938,534
-----------------------------------------------------
U.S. Treasury Bond
12.0%, 8/15/13 500,000 740,155
7.13%, 2/15/23 23,000,000 24,279,260
-----------------------------------------------------
U.S. Treasury Notes
6.0%, 6/30/96 3,000,000 3,007,500
7.88%, 11/15/04 7,000,000 7,791,840
6.5%, 8/15/05 5,000,000 5,103,100
-----------------------------------------------------
59,493,512
Collateralized Mortgage Obligations:-2.7%
-----------------------------------------------------
Federal Home Loan Mortgage Corp. Series 58
8.0% CMO, 4/15/16 1,510,156 1,507,770
-----------------------------------------------------
FNMA Remic
7.6%, 7/25/05 2,000,000 2,029,700
-----------------------------------------------------
Mid State Trust III
9.625%, 4/01/22 347,243 354,039
-----------------------------------------------------
Prudential Home Mortgage
6.7%, 11/25/07 1,500,000 1,476,090
-----------------------------------------------------
Resolution Trust Corp.
9.0%, 9/25/28 273,634 275,147
-----------------------------------------------------
Spiegel Charge Account Trust 2
6.95%, 12/17/01 500,000 507,275
-----------------------------------------------------
6,150,021
Indexed Securities:-2.8%
-----------------------------------------------------
Caterpillar Financial
Services Corporation
4.25%, 1/08/96,
coupon inversely
indexed to 2 year
Italian swap rate
multiplied by 5.11 3,500,000 3,384,500
-----------------------------------------------------
Goldman Sachs Group LP
4.24%, 12/29/95, coupon
inversely indexed to
Euro swap basket
multiplied by 6.5 3,000,000 2,907,300
-----------------------------------------------------
6,291,800
Air Transportation:-2.1%
-----------------------------------------------------
American Airlines Equipment Trust
10.18%, 1/02/13 1,500,000 1,716,915
-----------------------------------------------------
Delta Air Lines, Inc.
8.25%, Med Term Note,
12/27/07 1,500,000 1,576,395
-----------------------------------------------------
United Airline Inc. Equipment Trust
9.35%, 4/07/16 1,500,000 1,583,625
-----------------------------------------------------
4,876,935
Aluminum:-0.4%
-----------------------------------------------------
Alcan Aluminum LTD - Debentures
9.7%, 10/15/96 $250,000 $260,795
8.875%, 1/15/22 500,000 539,755
-----------------------------------------------------
800,550
Banking and Insurance:-6.7%
-----------------------------------------------------
Banc One Corp.
9.875%, 3/01/09 500,000 615,410
-----------------------------------------------------
Barclays Bank Services
3.56%, 2/14/49 2,000,000 1,725,000
-----------------------------------------------------
Dow Capital B V
9.0%, 5/15/10 3,000,000 3,523,710
-----------------------------------------------------
First Union Corp.
8.0%, 8/15/09 2,000,000 2,065,960
-----------------------------------------------------
First USA Bank
5.75%, 1/15/99 2,000,000 1,936,580
-----------------------------------------------------
Fleet Financial Group
7.65%, 9/01/99 1,000,000 1,028,300
-----------------------------------------------------
Fleet/Norstar Financial Group Inc.
7.65%, 3/01/97 500,000 508,810
-----------------------------------------------------
Great Western Bank
10.25% Subordinated
Notes, 6/15/00 500,000 556,420
-----------------------------------------------------
Harris Bankcorp Inc.
9.375% Subordinated
Notes, 6/1/01 250,000 282,313
-----------------------------------------------------
National Westminster Bancorp
3.69%, 7/30/49 3,000,000 2,557,500
-----------------------------------------------------
National Westminster Bank p.l.c.
9.45% Debentures,
5/01/01 500,000 565,680
-----------------------------------------------------
15,365,683
Broadcasting:-0.2%
-----------------------------------------------------
Viacom Inc.
8.75%, 5/15/01 500,000 518,125
-----------------------------------------------------
Building Materials:-0.5%
-----------------------------------------------------
Georgia Pacific Corp.
10.1%, 6/15/02 1,000,000 1,161,610
-----------------------------------------------------
Entertainment:-0.9%
-----------------------------------------------------
Time Warner Inc.
8.88%, 10/01/12 500,000 532,585
9.125%, 1/15/13 1,500,000 1,569,105
-----------------------------------------------------
2,101,690
Finance:-15.6%
-----------------------------------------------------
Aristar Finance
7.5% Senior Subordinate
Note, 7/1/99 1,500,000 1,550,205
-----------------------------------------------------
AT & T Capital Corp.
7.47%, 5/11/05 2,750,000 2,861,100
-----------------------------------------------------
Avco Financial Services Inc.
7.25%, 7/15/99 1,000,000 1,027,790
-----------------------------------------------------
Beneficial Corp.
9.0% Med. Term Notes,
1/19/96 1,250,000 1,270,213
-----------------------------------------------------
Chrysler Financial Corporation
9.5%, 12/15/99 1,500,000 1,660,890
-----------------------------------------------------
Discover Credit Corp.
8.73% Med. Term Note,
8/15/96 500,000 514,245
-----------------------------------------------------
Ford Motor Credit Co.
8.875% Med. Term Note,
5/1/96 2,000,000 2,042,840
-----------------------------------------------------
General Motors Acceptance Corp.
7.85%, 11/15/97 1,500,000 1,544,565
8.88%, 6/01/10 1,500,000 1,760,565
-----------------------------------------------------
Household Affinity Credit Card
6.05%, 5/15/01 1,000,000 984,390
-----------------------------------------------------
Household Finance Corp.
9.63% Senior
Subordinated Note,
7/15/00 875,000 981,435
-----------------------------------------------------
International Lease Finance Co
9.8%, 7/27/95 500,000 501,275
8.25%, 1/15/00 2,000,000 2,122,320
-----------------------------------------------------
John Deere Capital Corp.
8.27% Med. Term Note,
8/8/95 500,000 501,300
-----------------------------------------------------
Salomon Inc.
7.25%, 1/15/00 1,500,000 1,499,715
-----------------------------------------------------
Student Loan Marketing Association
4.63%, 3/02/99 15,000,000 14,710,500
-----------------------------------------------------
35,533,348
</TABLE>
<PAGE>
Par Market
Amount Value
---------- ----------
Food and Beverage:-2.0%
-----------------------------------------------------
Coca Cola Enterprises Inc.
8.0%, 1/04/05 $2,310,000 $2,550,910
-----------------------------------------------------
ConAgra, Inc.
9.88%, 11/15/05 1,000,000 1,216,420
-----------------------------------------------------
Nabisco Inc.
7.55%, 6/15/15 750,000 742,297
-----------------------------------------------------
4,509,627
Foreign Government:-2.1%
-----------------------------------------------------
Hydro-Quebec
7.20%, Med Term
Note 10/05/09 3,000,000 3,281,700
-----------------------------------------------------
Manitoba (Province of)
7.75%, 7/07/26 1,500,000 1,576,545
-----------------------------------------------------
4,858,245
Machinery and Engineering:-1.0%
-----------------------------------------------------
Deere & Company
8.27%, 8/08/95 2,000,000 2,251,240
-----------------------------------------------------
Metals and Mining:-1.4%
-----------------------------------------------------
Newmont Gold Company Psthr
8.91%, 1/05/09 750,000 806,437
-----------------------------------------------------
Noranda Inc.
8.13%, 6/15/04 2,000,000 2,130,360
-----------------------------------------------------
Reynolds Metals Co.
9.0%, 8/15/03 250,000 281,737
-----------------------------------------------------
3,218,534
Miscellaneous:-1.2%
-----------------------------------------------------
Duquesne II Funding Corporation
8.7%, 6/01/16 2,479,000 2,605,379
-----------------------------------------------------
Motor Vehicles and Equipment:-0.5%
-----------------------------------------------------
General Motors Corp.
8.17%, 1/02/00 1,057,863 1,105,805
-----------------------------------------------------
Office and Business Equipment and Services:-0.2%
-----------------------------------------------------
Xerox Corporation - Euronote
8.375%, 9/25/96 500,000 512,430
-----------------------------------------------------
Paper:-0.7%
-----------------------------------------------------
Champion International Corp.
7.7%, 12/15/99 1,500,000 1,558,800
-----------------------------------------------------
Petroleum and Petroleum Related:-6.0%
-----------------------------------------------------
Atlantic Richfield Co.
10.25% Eurobond,
7/02/00 1,000,000 1,077,260
9.88%, 3/01/16 2,000,000 2,515,940
-----------------------------------------------------
Enron Corp.
9.5%, 6/15/01 1,000,000 1,134,410
-----------------------------------------------------
Enserch Corp.
7.0%, 8/15/99 1,500,000 1,518,000
-----------------------------------------------------
Noble Affiliates Inc.
7.25%, 10/15/23 600,000 564,852
-----------------------------------------------------
Occidental Petroleum Corp.
11.75%, 3/15/11 2,000,000 2,161,600
-----------------------------------------------------
Panhandle Eastern Pipe Line Co.
9.875%, 10/15/96 248,000 258,123
-----------------------------------------------------
Petro Canada - Debentures
8.60%, 10/15/01 1,500,000 1,623,090
-----------------------------------------------------
Tenneco Inc.
10.0%, 8/01/98 2,500,000 2,741,900
-----------------------------------------------------
13,595,175
Public Utilities:-15.9%
-----------------------------------------------------
Arkla Inc.
8.875%, 7/15/99 500,000 525,605
-----------------------------------------------------
Carolina Power & Light Company
9.0%, 4/01/22 500,000 536,670
-----------------------------------------------------
Central Maine Power Company
6.5%, 7/22/97 1,500,000 1,482,390
-----------------------------------------------------
Cleveland Electric Illuminating Company
8.26% Med. Term
Note, 10/30/98 2,500,000 2,497,525
-----------------------------------------------------
Commonwealth Edison Co.
9.375%, 2/15/00 500,000 549,690
-----------------------------------------------------
Consumers Power Company
8.75% 1st Mortgage
Bonds, 2/15/98 1,000,000 1,046,250
8.875% 1st Mortgage,
11/15/99 1,000,000 1,070,760
-----------------------------------------------------
Detroit Edison Company
6.56%, 5/01/01 2,000,000 1,979,760
-----------------------------------------------------
Great Lakes Power Inc.
8.9%, 12/01/99 1,500,000 1,583,130
-----------------------------------------------------
Illinois Power Co.
5.85% 1st Mortgage
Bonds, 10/01/96 625,000 621,919
-----------------------------------------------------
Long Island Lighting Co.
9.63%, 7/01/24 500,000 518,230
-----------------------------------------------------
Nevada Power Co.
7.06%, 5/01/00 1,500,000 1,518,300
-----------------------------------------------------
New Jersey Bell Telephone
7.85%, 11/15/29 1,950,000 2,166,996
-----------------------------------------------------
New York Telephone Co.
6.5%, 3/01/05 1,000,000 971,400
-----------------------------------------------------
Northeast Utilities Series A
8.58%, 12/01/06 982,857 1,055,323
-----------------------------------------------------
Old Dominion Electric Co-op SE
8.76%, 12/01/22 1,600,000 1,756,496
-----------------------------------------------------
Pacificorp
9.15% Med. Term Note,
8/09/11 2,000,000 2,323,840
-----------------------------------------------------
Pennsylvania Power & Light
7.7%, 10/01/09 3,000,000 3,234,750
-----------------------------------------------------
PSI Energy Inc.
8.56% Med. Term Note,
12/27/11 2,000,000 2,206,680
-----------------------------------------------------
Public Service Co. of Colorado
6.375%, 11/01/05 1,500,000 1,420,140
-----------------------------------------------------
Texas Gas Transmission Corp.
8.63%, 4/04/04 1,000,000 1,107,060
-----------------------------------------------------
Texas Utilities Electric Co.
9.85%, 2/05/03 1,500,000 1,748,445
-----------------------------------------------------
Utilicorp United Inc.
10.5%, 12/01/20 2,000,000 2,357,080
-----------------------------------------------------
Washington Water & Power Co.
8.01%, 12/17/01 2,000,000 2,150,700
-----------------------------------------------------
36,429,139
Railroads:-0.8%
-----------------------------------------------------
Burlington Northern RR
6.94%, 1/02/14 500,000 495,940
-----------------------------------------------------
Chicago & Northwestern Holdings Corporation
6.25%, 7/30/12 1,496,890 1,416,806
-----------------------------------------------------
1,912,746
Retail:-1.0%
-----------------------------------------------------
Sears, Roebuck and Co.
9.05%, 2/06/12 2,000,000 2,289,160
-----------------------------------------------------
Securities Dealers:-1.8%
-----------------------------------------------------
Lehman Brothers Holdings Inc.
8.5%, 5/01/07 1,000,000 1,063,540
-----------------------------------------------------
Smith Barney Holdings
7.88%, 10/01/99 3,000,000 3,129,090
-----------------------------------------------------
4,192,630
Telecommunications:-4.0%
-----------------------------------------------------
NYNEX Cap Funding
7.63%, 10/15/09 3,000,000 3,086,250
-----------------------------------------------------
Nynex Corp.
9.55% Debentures,
5/01/10 1,638,700 1,893,223
-----------------------------------------------------
Rochester Telephone Corp.
9% Med. Term Note,
7/19/00 2,000,000 2,206,000
-----------------------------------------------------
Tele-Communications Inc.
6.58%, 2/15/05 2,000,000 2,014,300
-----------------------------------------------------
9,199,773
Total Long-Term Debt Investments--96.5%
(Cost-$213,090,359) 220,531,957
-----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
Par Market
Amount Value
------ -----
<S> <C> <C>
MONEY MARKET INSTRUMENTS:
A.I. Credit Corp.
6.2%, 7/05/95 $4,785,000 $ 4,780,880
---------------------------------------------------------------------
BellSouth Telecommunications
6.0%, 7/05/95 3,000,000 2,997,500
---------------------------------------------------------------------
General Electric Company
6.11%, 7/05/95 2,951,000 2,951,000
---------------------------------------------------------------------
TOTAL MONEY MARKET INSTRUMENTS--4.7%
(Cost-$10,729,380) 10,729,380
---------------------------------------------------------------------
TOTAL INVESTMENTS--101.2%
(Cost-$223,819,739) 231,261,337
---------------------------------------------------------------------
Other Assets Under Liabilities-(1.2%) (2,644,099)
---------------------------------------------------------------------
NET ASSETS--100.0%
(equivalent to $11.793 per share
based on 19,385,690 shares
issued and outstanding) $228,617,238
=====================================================================
</TABLE>
Lincoln National Growth and Income
Fund, Inc.
Statement of Net Assets - Unaudited
June 30, 1995
Investments Number Market
of Shares Value
Common Stocks: --------- -----------
Aerospace:-1.4%
-----------------------------------------------------
McDonnell Douglas
Corporation 270,900 $20,791,575
-----------------------------------------------------
Air Transportation:-0.6%
-----------------------------------------------------
AMR Corp. * 128,200 9,566,925
-----------------------------------------------------
Banking and Insurance:-7.3%
-----------------------------------------------------
Bank of Boston
Corporation 521,500 19,556,250
-----------------------------------------------------
Bank of New York, Inc. 491,900 19,860,462
-----------------------------------------------------
Chase Manhattan Corp. 89,600 4,211,200
-----------------------------------------------------
Chemical Banking Corp. 404,300 19,103,175
-----------------------------------------------------
Cigna Corp. 236,800 18,381,600
-----------------------------------------------------
First Interstate Bank 19,300 1,548,825
-----------------------------------------------------
MBNA Corp. 339,500 11,458,125
-----------------------------------------------------
NWNL Cos. Inc. 18,700 715,275
-----------------------------------------------------
Ohio Casualty Corp. 120,800 3,835,400
-----------------------------------------------------
St. Paul Companies Inc. 90,000 4,432,500
-----------------------------------------------------
Transamerica Corp. 104,300 6,075,475
-----------------------------------------------------
109,178,287
Broadcasting:-1.7%
-----------------------------------------------------
Belo (A.H.) Corporation 36,500 $ 1,117,813
-----------------------------------------------------
Capital Cities ABC Inc. 218,100 23,554,800
-----------------------------------------------------
24,672,613
Building and Construction:-0.4%
-----------------------------------------------------
Armstrong World
Industries Inc. 114,900 5,759,363
-----------------------------------------------------
Chemicals:-3.7%
-----------------------------------------------------
Dow Chemical Co. 147,600 10,608,750
-----------------------------------------------------
Du Pont E I De Nemours
& Co. 248,300 17,070,625
-----------------------------------------------------
Eastman Chemical Company 82,900 4,932,550
-----------------------------------------------------
Georgia Gulf Corp. 126,400 4,123,800
-----------------------------------------------------
Olin Corp. 171,400 8,827,100
-----------------------------------------------------
Union Carbide Corp. 273,100 9,114,712
-----------------------------------------------------
54,677,537
Consumer Products and Services:-4.5%
-----------------------------------------------------
American Brands, Inc. 121,500 4,829,625
-----------------------------------------------------
Omnicom Group, Inc. 116,400 7,056,750
-----------------------------------------------------
Philip Morris Co. Inc. 547,000 40,683,125
-----------------------------------------------------
Procter & Gamble Co. 203,200 14,605,000
-----------------------------------------------------
67,174,500
Drug and Hospital Supplies:-7.6%
-----------------------------------------------------
Baxter International Inc. 581,900 21,166,613
-----------------------------------------------------
Bristol Myers Squibb Co. 429,300 29,246,063
-----------------------------------------------------
Lilly (Eli) & Company 225,800 17,725,300
-----------------------------------------------------
Schering-Plough
Corporation 541,600 23,898,100
-----------------------------------------------------
Upjohn Co. 549,900 20,827,462
-----------------------------------------------------
112,863,538
Electrical and Electronics:-5.3%
-----------------------------------------------------
Avnet Inc. 123,200 5,959,800
-----------------------------------------------------
General Electric Co. 628,700 35,442,963
-----------------------------------------------------
General Instrument
Corp. * 192,200 7,375,675
-----------------------------------------------------
Tektronix Inc. 209,600 10,322,800
-----------------------------------------------------
Teradyne Inc. * 307,400 20,096,275
-----------------------------------------------------
79,197,513
Entertainment:-1.6%
-----------------------------------------------------
Mattel Inc. 199,231 5,180,006
-----------------------------------------------------
Mirage Resorts Inc. * 609,900 18,678,187
-----------------------------------------------------
23,858,193
Financial Services:-3.0%
-----------------------------------------------------
American General Corp. 584,000 19,710,000
-----------------------------------------------------
Dean Witter Discover
& Co. 261,800 12,304,600
-----------------------------------------------------
Household International
Inc. 270,700 13,399,650
-----------------------------------------------------
45,414,250
Food and Beverage:-6.6%
-----------------------------------------------------
Archer Daniels Midland
Co. 149,600 2,786,300
-----------------------------------------------------
Campbell Soup Co. 238,800 11,701,200
-----------------------------------------------------
Coca Cola Co. 329,700 21,018,375
-----------------------------------------------------
ConAgra, Inc. 295,400 10,302,075
-----------------------------------------------------
Coors (Adolph) C.B. 263,900 4,271,749
-----------------------------------------------------
IBP, Inc. 425,600 18,513,600
-----------------------------------------------------
RJR Nabisco Holding Corp. 318,920 8,889,895
-----------------------------------------------------
Safeway Inc. * 456,200 17,050,475
-----------------------------------------------------
Universal Foods
Corporation 142,600 4,616,675
-----------------------------------------------------
99,150,344
Household Appliances:-0.6%
-----------------------------------------------------
Maytag Corp. 547,800 8,764,800
-----------------------------------------------------
Industrial:-0.7%
-----------------------------------------------------
TRW Inc. 126,100 10,072,238
-----------------------------------------------------
Machinery and Engineering:-2.6%
-----------------------------------------------------
Deere & Company 239,400 20,498,625
-----------------------------------------------------
Novellus Systems Inc. * 277,600 18,807,400
-----------------------------------------------------
39,306,025
Metals and Mining:-2.1%
-----------------------------------------------------
Cyprus Amax Minerials
Company 280,000 7,980,000
-----------------------------------------------------
Parker Hannifin Corp. 113,250 4,105,313
-----------------------------------------------------
Phelps Dodge Corp. 331,100 19,534,900
-----------------------------------------------------
31,620,213
Miscellaneous:-0.1%
-----------------------------------------------------
Outboard Marine
Corporation 45,800 898,825
-----------------------------------------------------
Motor Vehicles and Equipment:-3.1%
-----------------------------------------------------
Eaton Corp. 343,700 19,977,563
-----------------------------------------------------
Ford Motor Company 619,000 18,415,250
-----------------------------------------------------
Goodrich BF Company 139,400 7,475,325
-----------------------------------------------------
45,868,138
<PAGE>
Number Market
of Shares Value
--------- ----------
Office and Business Equipment and Services:-9.3%
-----------------------------------------------------
Advanced Micro Devices,
Inc. 142,500 5,183,438
-----------------------------------------------------
Avery Dennison Corp. 35,800 1,432,000
-----------------------------------------------------
Broderbund Software
Inc. * 150,200 9,556,475
-----------------------------------------------------
Cadence Design Systems
Inc. * 329,500 10,667,563
-----------------------------------------------------
Ceridian Corporation * 90,100 3,322,438
-----------------------------------------------------
Computer Associates
International Inc. 227,000 15,379,250
-----------------------------------------------------
Digital Equipment Corp. * 106,700 4,348,025
-----------------------------------------------------
International Business
Machines 283,500 27,216,000
-----------------------------------------------------
Manpower Inc. 213,100 5,434,050
-----------------------------------------------------
Micron Technology Inc. 402,100 22,065,237
-----------------------------------------------------
Reynolds & Reynolds Co. 209,200 6,171,400
-----------------------------------------------------
Sun Microsystems Inc. * 431,000 20,930,222
-----------------------------------------------------
Tandem Computers Inc.* 502,400 8,101,200
-----------------------------------------------------
139,807,298
Paper:-2.3%
-----------------------------------------------------
Federal Paper Board Co. 451,000 15,954,125
-----------------------------------------------------
Stone Container Corp. * 465,500 9,891,875
-----------------------------------------------------
Union Camp Corp. 151,600 8,773,850
-----------------------------------------------------
34,619,850
Petroleum and Petroleum Related:-8.9%
-----------------------------------------------------
Amoco Corp. 346,200 23,065,575
-----------------------------------------------------
Atlantic Richfield Co. 54,900 6,025,275
-----------------------------------------------------
Exxon Corp. 523,900 37,000,438
-----------------------------------------------------
Halliburton Co. 243,100 8,690,825
-----------------------------------------------------
Lyondell Petrochemical
Company 588,300 15,075,187
-----------------------------------------------------
Mobil Corp. 105,800 10,156,800
-----------------------------------------------------
Royal Dutch Petroleum Co. 114,600 13,966,875
-----------------------------------------------------
Williams Companies, Inc. 537,500 18,745,312
-----------------------------------------------------
132,726,287
Public Utilities:-4.5%
-----------------------------------------------------
Baltimore Gas & Electric
Co. 474,300 11,857,500
-----------------------------------------------------
Consolidated Edison
Company 679,900 20,057,050
-----------------------------------------------------
General Public Utilities
Corp. 406,950 12,106,762
-----------------------------------------------------
Northeast Utilities 388,000 8,730,000
-----------------------------------------------------
Pacific Gas & Electric
Co. 150,000 4,350,000
-----------------------------------------------------
Public Service Enterprise 224,000 6,216,000
-----------------------------------------------------
SCE Corporation 203,700 3,488,362
-----------------------------------------------------
66,805,674
Railroads:-0.9%
-----------------------------------------------------
Conrail Inc. 108,400 6,029,750
-----------------------------------------------------
Illinois Central Corp. 207,800 7,169,100
-----------------------------------------------------
13,198,850
Retail:-4.4%
-----------------------------------------------------
Eckerd Corp.* 114,900 3,676,800
-----------------------------------------------------
Jostens Inc. 56,100 1,192,125
-----------------------------------------------------
Kroger Co.* 658,800 17,705,250
-----------------------------------------------------
Pier 1 Imports Inc. 416,700 3,854,475
-----------------------------------------------------
Sears, Roebuck and Co. 228,200 13,663,475
-----------------------------------------------------
Staples Inc. * 440,200 12,738,067
-----------------------------------------------------
Waban Inc. * 252,500 3,755,937
-----------------------------------------------------
Wal-Mart Stores 331,200 8,859,600
-----------------------------------------------------
65,445,729
<TABLE>
<CAPTION>
<S> <C> <C>
Savings and Loan:-1.3%
-------------------------------------------------------------------------------
First Chicago Corp. 334,500 $ 20,028,187
-------------------------------------------------------------------------------
Soaps, Cleaner and Cosmetics:-2.4%
-------------------------------------------------------------------------------
Clorox Company 185,800 12,123,450
-------------------------------------------------------------------------------
Colgate-Palmolive Company 264,900 19,370,813
-------------------------------------------------------------------------------
Dial Corp. 193,100 4,779,225
-------------------------------------------------------------------------------
36,273,488
Telecommunications:-8.1%
-------------------------------------------------------------------------------
American Telephone & Telegraph Co. 345,200 18,338,750
-------------------------------------------------------------------------------
Ameritech Corp. 541,600 23,830,400
-------------------------------------------------------------------------------
Bellsouth Corp. 341,800 21,704,300
-------------------------------------------------------------------------------
Comsat Corporation 281,600 5,526,400
-------------------------------------------------------------------------------
GTE Corp. 522,700 17,837,138
-------------------------------------------------------------------------------
Pacific Telesis Group 692,500 18,524,375
-------------------------------------------------------------------------------
SBC Communications Inc. 104,700 4,986,337
-------------------------------------------------------------------------------
Sprint Corp. 323,800 10,887,775
-------------------------------------------------------------------------------
121,635,475
Textiles-Apparel Manufacturing:-0.3%
-------------------------------------------------------------------------------
V F Corporation 90,900 4,885,875
-------------------------------------------------------------------------------
Transportation:-0.3%
-------------------------------------------------------------------------------
PHH Corporation 92,700 4,125,150
-------------------------------------------------------------------------------
Total Common Stocks:-95.6%
(Cost-$1,181,630,368) 1,428,386,740
-------------------------------------------------------------------------------
Par
Money Market Instruments: Amount
----------
American General Corp.
5.87%, 7/24/95 $7,700,000 7,655,308
-------------------------------------------------------------------------------
Donnelley (R.R.) & Sons Co.
5.85%, 7/18/95 5,900,000 5,860,691
-------------------------------------------------------------------------------
General Electric Co.
6.11%, 7/24/95 3,575,000 3,575,000
-------------------------------------------------------------------------------
Idaho Power Company
5.97%, 7/27/95 3,500,000 3,479,105
-------------------------------------------------------------------------------
Merrill Lynch & Company Inc.
5.9%, 7/03/95 2,700,000 2,688,053
5.97%, 7/13/95 5,300,000 5,274,511
5.95%, 7/17/95 4,400,000 4,371,638
-------------------------------------------------------------------------------
Mitsui & Co. (USA) Inc.
5.97%, 7/10/95 5,000,000 4,978,442
-------------------------------------------------------------------------------
Prudential Funding Inc.
5.96%, 7/11/95 6,000,000 5,981,127
-------------------------------------------------------------------------------
Smith Barney
5.94%, 8/02/95 1,400,000 1,390,760
-------------------------------------------------------------------------------
Southwestern Bell Telephone Co.
5.98%, 8/07/95 1,200,000 1,180,465
-------------------------------------------------------------------------------
Sumitomo Corp. of America
6.02%, 7/17/95 1,700,000 1,676,974
6.03%, 7/26/95 1,000,000 995,310
5.98%, 7/31/95 6,500,000 6,463,289
5.95%, 8/09/95 5,000,000 4,959,507
-------------------------------------------------------------------------------
Temple-Inland Inc.
5.98%, 7/26/95 5,000,000 4,965,947
5.95%, 8/02/95 2,000,000 1,984,133
5.95%, 8/22/95 1,900,000 1,880,216
-------------------------------------------------------------------------------
U.S. Treasury Bill *
0.0% 5/02/96 4,500,000 4,229,958
-------------------------------------------------------------------------------
Vermont American Corp.
5.95%, 7/24/95 1,400,000 1,390,513
5.95%, 7/27/95 6,400,000 6,352,400
-------------------------------------------------------------------------------
Total Money Market Instruments:-5.4%
(Cost-$81,333,347) 81,333,347
-------------------------------------------------------------------------------
Total Investments:-101.0%
(Cost-$1,262,963,715) 1,509,720,087
-------------------------------------------------------------------------------
Other Assets Under Liabilities-(1.0%) (15,097,350)
-------------------------------------------------------------------------------
Net Assets--100.0%
(equivalent to $26.276 per share
based on 56,881,977 shares
issued and outstanding) $1,494,622,737
===============================================================================
</TABLE>
<PAGE>
Lincoln National Managed Fund, Inc.
Statement of Net Assets - Unaudited
June 30, 1995
Par Market
Investments Amount Value
---------- ----------
Long-Term Debt Investments:
U.S. Government and Agency Obligations: - 17.3%
-------------------------------------------------------------------------
Federal Home Loan Bank
5.6%, 2/22/99 $4,000,000 $3,847,240
5.8%, 4/20/99 3,000,000 3,000,570
-------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.
4.88%, 6/23/98 3,000,000 2,972,370
8.5%, 1/01/17 1,328,983 1,360,945
-------------------------------------------------------------------------
Federal National Mortgage Association
0% Debenture, 7/05/14* 2,500,000 651,775
-------------------------------------------------------------------------
FNMA
5.85%, Med Term Note 2/02/98 3,000,000 2,966,580
5.24%, Med Term Note 7/15/98 3,000,000 2,920,350
-------------------------------------------------------------------------
GNMA
6.5%, 12/15/23 1,434,811 1,377,419
-------------------------------------------------------------------------
U.S. Treasury Bond
7.13%, 2/15/23 32,000,000 33,779,840
-------------------------------------------------------------------------
U.S. Treasury Notes
8.88%, 2/15/96 7,000,000 7,133,420
7.38%, 5/15/96 2,000,000 2,027,500
6.0%, 6/30/96 13,000,000 13,032,500
5.375%, 5/31/98 5,000,000 4,932,800
7.88%, 11/15/04 3,000,000 3,339,360
6.5%, 8/15/05 7,200,000 7,348,464
-------------------------------------------------------------------------
90,691,133
Collateralized Mortgage Obligations: - 2.0%
-------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Series 58
8.0% CMO, 4/15/16 2,265,234 2,261,655
-------------------------------------------------------------------------
Federal National Mortgage Association
REMIC 92-84
7.5%, 5/25/20 4,000,000 4,051,360
-------------------------------------------------------------------------
FNMA
7.6%, 7/25/05 2,000,000 2,029,700
-------------------------------------------------------------------------
Mid State Trust III
9.625%, 4/01/22 347,243 354,039
-------------------------------------------------------------------------
Prudential Home Mortgage
6.7%, 11/25/07 1,500,000 1,476,090
-------------------------------------------------------------------------
Spiegel Charge Account Trust 2
6.95%, 12/17/01 500,000 507,275
-------------------------------------------------------------------------
10,680,119
Indexed Securities: - 1.2%
-------------------------------------------------------------------------
Caterpillar Financial Services Corporation
4.25%, 1/08/96, coupon inversely
indexed to 2 year Italian swap
rate multiplied by 5.11 $3,500,000 $3,384,500
-------------------------------------------------------------------------
Goldman Sachs Group LP
4.24%, 12/29/95, coupon inversely
indexed to Euro swap basket
multiplied by 6.5 3,000,000 2,907,300
-------------------------------------------------------------------------
6,291,800
Air Transportation: - 0.9%
-------------------------------------------------------------------------
American Airlines Equipment Trust
10.18%, 1/02/13 1,500,000 1,716,915
-------------------------------------------------------------------------
Delta Air Lines, Inc.
8.25%, Med Term Note, 12/27/07 1,500,000 1,576,395
-------------------------------------------------------------------------
United Airline Inc. Equipment Trust
9.35%, 4/07/16 1,500,000 1,583,625
-------------------------------------------------------------------------
4,876,935
Banking and Insurance: - 4.1%
-------------------------------------------------------------------------
Banc One Corp.
9.875%, 3/01/09 500,000 615,410
-------------------------------------------------------------------------
Barclays Bank Services
3.875%, 11/30/49 2,000,000 1,730,000
-------------------------------------------------------------------------
Dow Capital B V
9.0%, 5/15/10 3,000,000 3,523,710
-------------------------------------------------------------------------
First Chicago Corp.
6.38%, 1/30/09 3,000,000 2,750,130
-------------------------------------------------------------------------
First Union Corp.
8.0%, 8/15/09 2,000,000 2,065,960
-------------------------------------------------------------------------
First USA Bank
5.75%, 1/15/99 2,000,000 1,936,580
-------------------------------------------------------------------------
Fleet Financial Group
7.65%, 9/01/99 1,000,000 1,028,300
-------------------------------------------------------------------------
National Westminster Bancorp
3.69%, 7/30/49 3,000,000 2,557,500
-------------------------------------------------------------------------
National Westminster Bank p.l.c.
9.45% Debentures, 5/01/01 500,000 565,680
-------------------------------------------------------------------------
NationsBank Corp.
8.125% Subordinated Debentures, 6/15/02 1,000,000 1,065,890
-------------------------------------------------------------------------
Travelers Inc.
8.63%, 2/01/07 3,000,000 3,336,480
-------------------------------------------------------------------------
21,175,640
Broadcasting: - 0.1%
-------------------------------------------------------------------------
Viacom Inc.
8.75%, 5/15/01 500,000 518,125
-------------------------------------------------------------------------
Entertainment: - 0.4%
-------------------------------------------------------------------------
Time Warner Inc.
8.88%, 10/01/12 500,000 532,585
9.125%, 1/15/13 1,500,000 1,569,105
-------------------------------------------------------------------------
2,101,690
Finance: - 7.5%
-------------------------------------------------------------------------
Aristar Finance
7.5% Senior Subordinated Note, 7/01/99 1,500,000 1,550,205
-------------------------------------------------------------------------
Avco Financial Services Inc.
7.25%, 7/15/99 1,000,000 1,027,790
-------------------------------------------------------------------------
Chrysler Financial Corporation
9.5%, 12/15/99 1,500,000 1,660,890
-------------------------------------------------------------------------
Discover Credit Corp.
8.73% Med. Term Note, 8/15/96 500,000 514,245
-------------------------------------------------------------------------
Ford Motor Credit Co.
7.95% Med. Term Notes, 5/17/99 2,000,000 2,089,620
-------------------------------------------------------------------------
General Electric Capital Corp.
8.3%, 9/20/09 3,000,000 3,462,000
-------------------------------------------------------------------------
General Motors Acceptance Corp.
7.85%, 11/15/97 1,500,000 1,544,565
8.88%, 6/01/10 1,500,000 1,760,565
-------------------------------------------------------------------------
Household Finance Corp.
9.63% Senior Subordinated Note, 7/15/00 875,000 981,435
-------------------------------------------------------------------------
International Lease Finance Co
8.25%, 1/15/00 2,000,000 2,122,320
-------------------------------------------------------------------------
John Deere Capital Corp.
8.27% Med. Term Note, 8/08/95 $ 500,000 $ 501,300
------------------------------------------------------------------------------
National Rural Utilities Cooperative Finance Corp.
8.5%, 2/15/98 1,000,000 1,049,550
------------------------------------------------------------------------------
Salomon Inc.
7.25%, 1/15/00 1,500,000 1,499,715
------------------------------------------------------------------------------
Student Loan Marketing Association
4.63%, 3/02/99 20,000,000 19,614,000
------------------------------------------------------------------------------
39,378,200
Food and Beverage:-0.8%
------------------------------------------------------------------------------
Coca Cola Enterprises Inc.
8.0%, 1/04/05 3,000,000 3,312,870
------------------------------------------------------------------------------
Nabisco Inc.
7.55%, 6/15/15 750,000 742,297
------------------------------------------------------------------------------
4,055,167
<PAGE>
<TABLE>
<CAPTION>
Par Market
Amount Value
----------- ------------
<S> <C> <C>
Foreign Government:-0.9%
------------------------------------------------------------------------------
Hydro-Quebec
7.2%, Med Term Note 10/05/09 3,000,000 3,281,700
------------------------------------------------------------------------------
Manitoba (Province of)
7.75%, 7/07/26 1,500,000 1,576,545
------------------------------------------------------------------------------
4,858,245
Machinery and Engineering:-0.4%
------------------------------------------------------------------------------
Deere & Company
8.27%, 8/08/95 2,000,000 2,251,240
------------------------------------------------------------------------------
Metals and Mining:-0.6%
------------------------------------------------------------------------------
Newmont Gold Company Psthr
8.91%, 1/05/09 750,000 806,437
------------------------------------------------------------------------------
Noranda Inc.
8.13%, 6/15/04 2,000,000 2,130,360
------------------------------------------------------------------------------
2,936,797
Miscellaneous:-0.5%
------------------------------------------------------------------------------
Duquesne II Funding Corporation
8.7%, 6/01/16 2,480,000 2,606,430
------------------------------------------------------------------------------
Office and Business Equipment and Services:-0.1%
------------------------------------------------------------------------------
Xerox Corporation - Euronote
8.375%, 9/25/96 500,000 512,430
------------------------------------------------------------------------------
Paper:-0.8%
------------------------------------------------------------------------------
Champion International Corp.
7.7%, 12/15/99 1,500,000 1,558,800
------------------------------------------------------------------------------
Westvaco Corp.
8.3%, 8/01/22 2,500,000 2,647,825
------------------------------------------------------------------------------
4,206,625
Petroleum and Petroleum Related:-2.5%
------------------------------------------------------------------------------
Atlantic Richfield Co.
10.375% Debentures, 7/15/95 1,000,000 1,001,050
9.88%, 3/1/16 2,000,000 2,515,940
------------------------------------------------------------------------------
Enron Corp.
9.5%, 6/15/01 1,000,000 1,134,410
------------------------------------------------------------------------------
Enserch Corp.
7.0%, 8/15/99 1,500,000 1,518,000
------------------------------------------------------------------------------
Noble Affiliates Inc.
7.25%, 10/15/23 600,000 564,852
------------------------------------------------------------------------------
Occidental Petroleum Corp.
11.75%, 3/15/11 2,000,000 2,161,600
------------------------------------------------------------------------------
Petro Canada - Debentures
8.6%, 10/15/01 1,500,000 1,623,090
------------------------------------------------------------------------------
Tenneco Inc.
10.0%, 8/01/98 2,500,000 2,741,900
------------------------------------------------------------------------------
13,260,842
Public Utilities:-5.1%
------------------------------------------------------------------------------
Baltimore Gas & Electric Co.
8.92% Med. Term Note, 7/16/98 1,000,000 1,068,860
------------------------------------------------------------------------------
Carolina Power & Light Company
9.0%, 4/01/22 500,000 536,670
------------------------------------------------------------------------------
Central Maine Power Company
6.5%, 7/22/97 1,500,000 1,482,390
------------------------------------------------------------------------------
Commonwealth Edison Co.
9.375%, 2/15/00 500,000 549,690
------------------------------------------------------------------------------
Detroit Edison Company
6.56%, 5/01/01 2,000,000 1,979,760
------------------------------------------------------------------------------
Great Lakes Power Inc.
8.9%, 12/01/99 1,500,000 1,583,130
------------------------------------------------------------------------------
Gulf States Utilities Company
7.35%, 11/01/98 1,500,000 1,509,585
------------------------------------------------------------------------------
Illinois Power Co.
5.85% 1st Mortgage Bonds, 10/01/96 625,000 621,919
------------------------------------------------------------------------------
Long Island Lighting Co.
9.63%, 7/01/24 500,000 518,230
------------------------------------------------------------------------------
Nevada Power Co.
7.06%, 5/01/00 1,500,000 1,518,300
------------------------------------------------------------------------------
Old Dominion Electric Co-op
7.48%, 12/01/13 1,500,000 1,548,300
------------------------------------------------------------------------------
Pacificorp
9.15% Med. Term Note, 8/09/11 1,500,000 1,742,880
------------------------------------------------------------------------------
Pennsylvania Power & Light
7.70%, 10/01/09 3,000,000 3,234,750
------------------------------------------------------------------------------
Public Service Company of Indiana, Inc.
8.57% 1st Mortgage Bonds, 12/27/11 500,000 552,140
------------------------------------------------------------------------------
Public Service Co. of Colorado
6.375%, 11/01/05 1,500,000 1,420,140
------------------------------------------------------------------------------
Texas Gas Transmission Corp.
8.63%, 4/04/04 2,000,000 2,214,120
------------------------------------------------------------------------------
Texas Utilities Electric Co.
7.375%, 8/01/01 1,500,000 1,541,505
------------------------------------------------------------------------------
Utilicorp United Inc.
9.3% Senior Notes, 12/01/95 1,000,000 1,011,620
------------------------------------------------------------------------------
Utilicorp United Inc.
10.5%, 12/01/20 1,000,000 1,178,540
------------------------------------------------------------------------------
Washington Water Power Co.
8.01%, 12/17/01 1,000,000 1,075,350
------------------------------------------------------------------------------
26,887,879
Railroads:-0.4%
------------------------------------------------------------------------------
Burlington Northern RR
6.94%, 1/02/14 500,000 495,940
------------------------------------------------------------------------------
Chicago & Northwestern Holdings Corporation
6.25%, 7/30/12 1,496,890 1,416,806
------------------------------------------------------------------------------
1,912,746
Retail:-0.6%
------------------------------------------------------------------------------
Sears, Roebuck and Co.
9.05%, 2/06/12 2,500,000 2,861,450
------------------------------------------------------------------------------
Securities Dealers:-0.8%
------------------------------------------------------------------------------
Lehman Brothers Holdings Inc.
8.5%, 5/01/07 1,000,000 1,063,540
------------------------------------------------------------------------------
Smith Barney Holdings
7.88%, 10/01/99 3,000,000 3,129,090
------------------------------------------------------------------------------
4,192,630
Telecommunications:-1.0%
------------------------------------------------------------------------------
NYNEX Cap Funding
7.63%, 10/15/09 3,000,000 3,086,250
------------------------------------------------------------------------------
Tele-Communications Inc.
6.58%, 2/15/05 2,000,000 2,014,300
------------------------------------------------------------------------------
5,100,550
Total Long-Term Debt Investments-48.0%
(Cost-$243,568,455) 251,356,673
------------------------------------------------------------------------------
Number
Common Stocks: of Shares
-----------
Aerospace:-0.8%
------------------------------------------------------------------------------
McDonnell Douglas Corporation 52,600 4,037,050
------------------------------------------------------------------------------
Air Transportation:-0.2%
------------------------------------------------------------------------------
AMR Corp.* 15,900 1,186,537
------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
BANKING AND INSURANCE:-4.0%
------------------------------------------------------------------------------
Bank of Boston Corporation 107,700 $4,038,750
------------------------------------------------------------------------------
Bank of New York, Inc. 92,800 3,746,800
------------------------------------------------------------------------------
Chase Manhattan Corp. 12,400 582,800
------------------------------------------------------------------------------
Chemical Banking Corp. 73,100 3,453,975
------------------------------------------------------------------------------
Cigna Corp. 50,300 3,904,538
------------------------------------------------------------------------------
First Interstate Bank 3,200 256,800
------------------------------------------------------------------------------
Healthcare Compare Corp.* 29,300 879,000
------------------------------------------------------------------------------
MBNA Corp. 50,400 1,701,000
------------------------------------------------------------------------------
NWNL Cos. Inc. 3,300 126,225
------------------------------------------------------------------------------
Ohio Casualty Corp. 7,000 222,250
------------------------------------------------------------------------------
St. Paul Companies Inc. 14,100 694,425
------------------------------------------------------------------------------
Transamerica Corp. 20,700 1,205,775
------------------------------------------------------------------------------
20,812,338
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- -----
<S> <C> <C>
BROADCASTING:-0.6%
------------------------------------------------------------------------------
Belo (A.H.) Corporation 7,300 223,563
------------------------------------------------------------------------------
Capital Cities ABC Inc. 24,600 2,656,800
------------------------------------------------------------------------------
2,880,363
BUILDING AND CONSTRUCTION:-0.3%
------------------------------------------------------------------------------
Armstrong World Industries Inc. 29,300 1,468,662
------------------------------------------------------------------------------
CHEMICALS:-2.2%
------------------------------------------------------------------------------
ASARCO Inc. 32,700 997,350
------------------------------------------------------------------------------
Dow Chemical Co. 35,500 2,551,562
------------------------------------------------------------------------------
Du Pont E I De Nemours & Co. 25,900 1,780,625
------------------------------------------------------------------------------
Eastman Chemical Company 20,400 1,213,800
------------------------------------------------------------------------------
Georgia Gulf Corp. 24,800 809,100
------------------------------------------------------------------------------
Olin Corp. 53,000 2,729,500
------------------------------------------------------------------------------
Union Carbide Corp. 40,600 1,355,025
------------------------------------------------------------------------------
11,436,962
CONSUMER PRODUCTS AND SERVICES:-3.0%
------------------------------------------------------------------------------
American Brands, Inc. 21,100 838,725
------------------------------------------------------------------------------
Handleman Company 36,900 355,163
------------------------------------------------------------------------------
Omnicom Group, Inc. 11,000 666,875
------------------------------------------------------------------------------
Philip Morris Co. Inc. 105,000 7,809,375
------------------------------------------------------------------------------
Procter & Gamble Co. 81,400 5,850,625
------------------------------------------------------------------------------
15,520,763
DRUG AND HOSPITAL SUPPLIES:-4.2%
------------------------------------------------------------------------------
Baxter International Inc. 118,800 4,321,350
------------------------------------------------------------------------------
Bristol Myers Squibb Co. 81,500 5,552,188
------------------------------------------------------------------------------
Lilly (Eli) & Company 64,000 5,024,000
------------------------------------------------------------------------------
Schering-Plough Corporation 90,400 3,988,900
------------------------------------------------------------------------------
Upjohn Co. 86,100 3,261,037
------------------------------------------------------------------------------
22,147,475
ELECTRICAL AND ELECTRONICS:-2.9%
------------------------------------------------------------------------------
General Electric Co. 121,000 6,821,375
------------------------------------------------------------------------------
General Instrument Corp.* 41,000 1,573,375
------------------------------------------------------------------------------
Tektronix Inc. 63,300 3,117,525
------------------------------------------------------------------------------
Teradyne Inc.* 55,000 3,595,625
------------------------------------------------------------------------------
15,107,900
ENTERTAINMENT:-0.7%
------------------------------------------------------------------------------
Mattel Inc. 11,412 296,712
------------------------------------------------------------------------------
Mirage Resorts Inc.* 115,800 3,546,375
------------------------------------------------------------------------------
3,843,087
FINANCIAL SERVICES:-1.7%
------------------------------------------------------------------------------
American General Corp. 114,900 3,877,875
------------------------------------------------------------------------------
Household International Inc. 69,000 3,415,500
------------------------------------------------------------------------------
Dean Witter Discover & Co. 31,800 1,494,600
------------------------------------------------------------------------------
8,787,975
FOOD AND BEVERAGE:-3.6%
------------------------------------------------------------------------------
Campbell Soup Co. 55,100 2,699,900
------------------------------------------------------------------------------
Coca Cola Co. 48,600 3,098,250
------------------------------------------------------------------------------
ConAgra, Inc. 104,400 3,640,950
------------------------------------------------------------------------------
Coors (Adolph) C.B. 17,400 281,654
------------------------------------------------------------------------------
IBP, Inc. 90,700 3,945,450
------------------------------------------------------------------------------
RJR Nabisco Holding Corp. 73,580 2,051,043
------------------------------------------------------------------------------
Safeway Inc.* 80,000 2,990,000
------------------------------------------------------------------------------
18,707,247
HOUSEHOLD APPLIANCES:-0.3%
------------------------------------------------------------------------------
Maytag Corp. 103,600 1,657,600
------------------------------------------------------------------------------
INDUSTRIAL:-0.4%
------------------------------------------------------------------------------
TRW Inc. 24,600 1,964,925
------------------------------------------------------------------------------
MACHINERY AND ENGINEERING:-1.3%
------------------------------------------------------------------------------
Briggs & Stratton Corporation 38,000 1,311,000
------------------------------------------------------------------------------
Deere & Company 24,500 2,097,812
------------------------------------------------------------------------------
Novellus Systems Inc.* 53,900 3,651,725
------------------------------------------------------------------------------
7,060,537
METALS AND MINING:-1.0%
------------------------------------------------------------------------------
Cyprus Amax Minerals Company 15,600 444,600
------------------------------------------------------------------------------
Parker Hannifin Corp. 33,750 1,223,438
------------------------------------------------------------------------------
Phelps Dodge Corp. 60,000 3,540,000
------------------------------------------------------------------------------
5,208,038
MISCELLANEOUS:-0.1%
------------------------------------------------------------------------------
Outboard Marine Corporation 38,600 757,525
------------------------------------------------------------------------------
MOTOR VEHICLES AND EQUIPMENT:-1.6%
------------------------------------------------------------------------------
Eaton Corp. 66,200 3,847,875
------------------------------------------------------------------------------
Ford Motor Company 112,700 3,352,825
------------------------------------------------------------------------------
Goodrich BF Company 26,500 1,421,062
------------------------------------------------------------------------------
8,621,762
OFFICE AND BUSINESS EQUIPMENT AND SERVICES:-5.2%
------------------------------------------------------------------------------
Advanced Micro Devices, Inc. 17,200 625,650
------------------------------------------------------------------------------
Avery Dennison Corp. 38,700 1,548,000
------------------------------------------------------------------------------
Broderbund Software Inc.* 27,100 1,724,238
------------------------------------------------------------------------------
Cadence Design Systems Inc.* 46,100 1,492,488
------------------------------------------------------------------------------
Ceridian Corporation* 36,300 1,338,563
------------------------------------------------------------------------------
Computer Associates International Inc. 45,100 3,055,525
------------------------------------------------------------------------------
Digital Equipment Corp.* 14,800 603,100
------------------------------------------------------------------------------
International Business Machines 52,500 5,040,000
------------------------------------------------------------------------------
Micron Technology Inc. 82,000 4,499,750
------------------------------------------------------------------------------
Reynolds & Reynolds Co. 27,800 820,100
------------------------------------------------------------------------------
Sun Microsystems Inc.* 77,700 3,773,267
------------------------------------------------------------------------------
Tandem Computers Inc.* 156,400 2,521,950
------------------------------------------------------------------------------
27,042,631
PAPER:-0.7%
------------------------------------------------------------------------------
Federal Paper Board Co. 50,900 1,800,587
------------------------------------------------------------------------------
Stone Container Corp.* 85,400 1,814,750
------------------------------------------------------------------------------
3,615,337
PETROLEUM AND PETROLEUM RELATED:-4.8%
------------------------------------------------------------------------------
Amoco Corp. 68,100 4,537,162
------------------------------------------------------------------------------
Atlantic Richfield Co. 23,500 2,579,125
------------------------------------------------------------------------------
Exxon Corp. 89,400 6,313,875
------------------------------------------------------------------------------
Halliburton Co. 45,800 1,637,350
------------------------------------------------------------------------------
Lyondell Petrochemical Company 123,600 3,167,250
------------------------------------------------------------------------------
Mobil Corp. 34,800 3,340,800
------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 22,500 2,742,188
------------------------------------------------------------------------------
Williams Companies, Inc. 25,200 878,850
------------------------------------------------------------------------------
25,196,600
PUBLIC UTILITIES:-2.4%
------------------------------------------------------------------------------
Baltimore Gas & Electric Co. 43,100 1,077,500
------------------------------------------------------------------------------
Consolidated Edison Company 121,000 3,569,500
------------------------------------------------------------------------------
General Public Utilities Corp. 71,400 2,124,150
------------------------------------------------------------------------------
Northeast Utilities 110,100 2,477,250
------------------------------------------------------------------------------
Ohio Edison Co. 28,500 644,813
------------------------------------------------------------------------------
SCE Corporation 167,100 2,861,588
------------------------------------------------------------------------------
12,754,801
Railroads:-0.6%
------------------------------------------------------------------------------
Conrail Inc. 20,800 1,157,000
------------------------------------------------------------------------------
Illinois Central Corp. 56,100 1,935,450
------------------------------------------------------------------------------
3,092,450
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
---------- ------------
<S> <C> <C>
Retail:-3.0%
-------------------------------------------------------------------------------
Eckerd Corp.* 21,900 700,800
-------------------------------------------------------------------------------
Jostens Inc. 129,500 2,751,875
-------------------------------------------------------------------------------
Kroger Co.* 100,700 2,706,312
-------------------------------------------------------------------------------
Pier 1 Imports Inc. 71,000 656,750
-------------------------------------------------------------------------------
Sears, Roebuck and Co. 62,900 3,766,137
-------------------------------------------------------------------------------
Staples Inc.* 64,200 1,857,755
-------------------------------------------------------------------------------
Waban Inc.* 60,200 895,475
-------------------------------------------------------------------------------
Wal-Mart Stores 83,600 2,236,300
-------------------------------------------------------------------------------
15,571,404
Savings and Loan:-0.7%
-------------------------------------------------------------------------------
First Chicago Corp. 63,500 3,802,063
-------------------------------------------------------------------------------
Shoes:-0.2%
-------------------------------------------------------------------------------
Nike, Inc. 15,800 1,327,200
-------------------------------------------------------------------------------
Soaps, Cleaner and Cosmetics:-0.9%
-------------------------------------------------------------------------------
Colgate-Palmolive Company 51,200 3,744,000
-------------------------------------------------------------------------------
Dial Corp. 29,800 737,550
-------------------------------------------------------------------------------
4,481,550
Telecommunications:-4.4%
-------------------------------------------------------------------------------
American Telephone & Telegraph Co. 66,100 3,511,562
-------------------------------------------------------------------------------
Ameritech Corp. 105,800 4,655,200
-------------------------------------------------------------------------------
Bellsouth Corp. 62,600 3,975,100
-------------------------------------------------------------------------------
Cincinnati Bell Inc. 63,500 1,603,375
-------------------------------------------------------------------------------
Comsat Corporation 18,000 353,250
-------------------------------------------------------------------------------
GTE Corp. 86,300 2,944,987
-------------------------------------------------------------------------------
Pacific Telesis Group 122,600 3,279,550
-------------------------------------------------------------------------------
SBC Communications Inc. 200 9,525
-------------------------------------------------------------------------------
Sprint Corp. 76,200 2,562,225
-------------------------------------------------------------------------------
22,894,774
Textiles-Apparel Manufacturing:-0.1%
-------------------------------------------------------------------------------
V F Corporation 11,900 639,625
-------------------------------------------------------------------------------
Transportation:-0.2%
-------------------------------------------------------------------------------
PHH Corporation 25,100 1,116,950
-------------------------------------------------------------------------------
Total Common Stocks--52.1%
(Cost-$225,785,633) 272,742,131
-------------------------------------------------------------------------------
Par
Amount
----------
Money Market Instruments:
General Electric Co.
6.11%, 7/05/95 $5,085,000 5,085,000
-------------------------------------------------------------------------------
Total Money Market Instruments:-1.0%
(Cost-$5,085,000) 5,085,000
-------------------------------------------------------------------------------
Total Investments:-101.1%
(Cost-$474,439,088) 529,183,804
-------------------------------------------------------------------------------
Other Assets Under Liabilities-(1.1%) (5,697,662)
-------------------------------------------------------------------------------
Net Assets--100.0%
(equivalent to $14.509 per share
based on 36,079,481 shares
issued and outstanding) $523,486,142
===============================================================================
</TABLE>
<TABLE>
<CAPTION>
Lincoln National Money Market
Fund, Inc.
Statement of Net Assets - Unaudited
June 30, 1995
Par Market
Investments Amount Value
---------- ------------
<S> <C> <C>
Money Market Instruments:
AT & T Corp.
5.73%, 9/01/95 $1,500,000 $ 1,479,468
-------------------------------------------------------------------------------
Boatman's Bank of Southern Missouri
6.25%, 2/14/96 4,100,000 4,099,559
-------------------------------------------------------------------------------
Caterpellar Financial Services Corp
6.12%, 7/25/96 4,000,000 4,000,000
-------------------------------------------------------------------------------
Chemical Banking Corp.
6.02%, 11/17/95 3,500,000 3,395,235
-------------------------------------------------------------------------------
Comerica Bank
6.11%, 11/22/95 3,900,000 3,898,568
-------------------------------------------------------------------------------
Daimler-Benz N America Corp.
5.94%, 7/20/95 4,000,000 3,961,720
-------------------------------------------------------------------------------
Donnelley (R.R.) & Sons Co.
5.92%, 7/27/95 3,000,000 2,968,920
-------------------------------------------------------------------------------
DuPont (E.I) De Nemours & Company
6.0%, 7/06/95 3,500,000 3,453,334
-------------------------------------------------------------------------------
General Electric Co.
6.11%, 7/05/95 2,960,000 2,960,000
-------------------------------------------------------------------------------
International Lease Finance Co.
5.93%, 7/17/95 4,000,000 3,955,854
-------------------------------------------------------------------------------
J.P. Morgan & Company
5.95%, 7/24/95 3,200,000 3,153,458
-------------------------------------------------------------------------------
Kimberly Clark Corp.
5.94%, 7/19/95 4,000,000 3,955,120
-------------------------------------------------------------------------------
Merrill Lynch & Company Inc.
5.93%, 8/21/95 4,000,000 3,936,747
-------------------------------------------------------------------------------
Monsanto Company
6.07%, 8/03/95 3,000,000 2,941,829
-------------------------------------------------------------------------------
Philip Morris Co. Inc.
6.02%, 7/12/95 3,500,000 3,447,325
-------------------------------------------------------------------------------
PNC Bank
4.86%, 8/07/95 4,000,000 3,999,885
-------------------------------------------------------------------------------
Prudential Funding Inc.
5.88%, 8/17/95 1,500,000 1,483,095
-------------------------------------------------------------------------------
Southwestern Bell Telephone Co.
5.98%, 8/07/95 3,800,000 3,738,140
-------------------------------------------------------------------------------
Temple-Inland Inc.
5.9%, 8/04/95 3,800,000 3,746,441
-------------------------------------------------------------------------------
Toyota Motor Credit
6.08%, 1/12/95 3,000,000 3,000,000
-------------------------------------------------------------------------------
Unilever Capital Corp.
5.97%, 7/06/95 3,700,000 3,652,754
-------------------------------------------------------------------------------
U.S. Treasury Bill
6.235%, 8/10/95 5,000,000 4,842,393
6.61%, 2/08/96 5,000,000 4,665,828
-------------------------------------------------------------------------------
U.S. West Communications Group
5.99%, 7/17/95 3,500,000 3,447,588
-------------------------------------------------------------------------------
Vermont American Corp.
5.95%, 7/27/95 2,000,000 1,985,125
-------------------------------------------------------------------------------
Total Money Market Instruments--101.7%
(Cost-$88,168,386) 86,168,386
-------------------------------------------------------------------------------
Other Assets Under Liabilities-(1.7%) (1,422,372)
-------------------------------------------------------------------------------
Net Assets--100.0%
(equivalent to $10.000 per share
based on 8,474,602 shares
issued and outstanding) $84,746,014
===============================================================================
</TABLE>
<PAGE>
Lincoln National Special Opportunities
Fund, Inc.
Statement of Net Assets - Unaudited
June 30, 1995
<TABLE>
<CAPTION>
Number Market
Investments of Shares Value
---------- ------------
<S> <C> <C>
Common Stocks:
Aerospace:-1.9%
-------------------------------------------------------------------------
McDonnell Douglas Corporation 52,100 $3,998,675
-------------------------------------------------------------------------
Parker Hannifin Corp. 109,050 3,953,063
-------------------------------------------------------------------------
7,951,738
Banking and Insurance:-9.4%
-------------------------------------------------------------------------
Aon Corp. 109,500 4,078,875
-------------------------------------------------------------------------
Bank of Boston Corporation 108,000 4,050,000
-------------------------------------------------------------------------
Bank of New York, Inc. 99,100 4,001,163
-------------------------------------------------------------------------
Chase Manhattan Corp. 67,300 3,152,888
-------------------------------------------------------------------------
Chemical Banking Corp. 81,900 3,869,775
-------------------------------------------------------------------------
Cigna Corp. 51,600 4,005,450
-------------------------------------------------------------------------
First Interstate Bank 48,800 3,916,200
-------------------------------------------------------------------------
NWNL Cos. Inc. 104,300 3,989,475
-------------------------------------------------------------------------
Transamerica Corp. 70,400 4,100,800
-------------------------------------------------------------------------
US Life Corporation 99,300 3,996,825
-------------------------------------------------------------------------
39,161,451
Building and Construction:-0.9%
-------------------------------------------------------------------------
Armstrong World Industries 77,400 3,879,675
-------------------------------------------------------------------------
Chemicals:-5.1%
-------------------------------------------------------------------------
ASARCO Inc. 141,700 4,321,850
-------------------------------------------------------------------------
Cabot Corp. 84,600 4,462,650
-------------------------------------------------------------------------
Georgia Gulf Corp. 122,300 3,990,037
-------------------------------------------------------------------------
Olin Corp. 78,200 4,027,300
-------------------------------------------------------------------------
Union Carbide Corp. 131,500 4,388,813
-------------------------------------------------------------------------
21,190,650
Coal and Gas:-1.0%
-------------------------------------------------------------------------
Pacific Enterprises 178,400 4,370,800
-------------------------------------------------------------------------
Consumer Products and Services:-4.5%
-------------------------------------------------------------------------
American Brands, Inc. 98,900 3,931,275
-------------------------------------------------------------------------
Handleman Company 382,800 3,684,450
-------------------------------------------------------------------------
Leggett & Platt Inc. 92,000 4,048,000
-------------------------------------------------------------------------
The Stanley Works 89,900 3,404,962
-------------------------------------------------------------------------
Universal Corporation 179,700 3,773,700
-------------------------------------------------------------------------
18,842,387
Drug and Hospital Supplies:-5.0%
-------------------------------------------------------------------------
Amsco International Inc. * 310,100 4,302,638
-------------------------------------------------------------------------
Baxter International Inc. 115,400 4,197,675
-------------------------------------------------------------------------
Marion Merrell Dow Inc. 158,800 4,049,400
-------------------------------------------------------------------------
Nellcor Inc. * 89,000 3,971,625
-------------------------------------------------------------------------
Upjohn Co. 112,000 4,242,000
-------------------------------------------------------------------------
20,763,338
Electrical and Electronics:-2.8%
-------------------------------------------------------------------------
Arrow Electrics Inc. * 83,200 4,139,200
-------------------------------------------------------------------------
Cypress Semiconductor Corporation * 94,900 3,843,450
-------------------------------------------------------------------------
Harris Corp. 74,100 3,825,412
-------------------------------------------------------------------------
11,808,062
Entertainment:-2.0%
-------------------------------------------------------------------------
Mattel Inc. 158,343 4,116,918
-------------------------------------------------------------------------
Mirage Resorts Inc. * 133,800 4,097,625
-------------------------------------------------------------------------
8,214,543
Financial Services:-1.8%
-------------------------------------------------------------------------
Beneficial Corp. 81,200 3,572,800
-------------------------------------------------------------------------
Household International Inc. 81,500 4,034,250
-------------------------------------------------------------------------
7,607,050
Food and Beverage:-2.9%
-------------------------------------------------------------------------
Coors (Adolph) C.B. 235,500 3,812,039
-------------------------------------------------------------------------
IBP, Inc. 96,900 4,215,150
-------------------------------------------------------------------------
International Multifoods Inc. 181,900 4,092,750
-------------------------------------------------------------------------
12,119,939
Industrial:-3.0%
-------------------------------------------------------------------------
Timken Company 94,700 4,368,038
-------------------------------------------------------------------------
Trinova Corp. 114,100 3,993,500
-------------------------------------------------------------------------
TRW Inc. 51,700 4,129,537
-------------------------------------------------------------------------
12,491,075
Machinery and Engineering:-3.8%
-------------------------------------------------------------------------
Briggs & Stratton Corporation 114,700 3,957,150
-------------------------------------------------------------------------
Carpenter Technology Corporation 61,500 4,189,688
-------------------------------------------------------------------------
Deere & Company 44,800 3,836,000
-------------------------------------------------------------------------
Novellus Systems Inc. * 57,900 3,922,725
-------------------------------------------------------------------------
15,905,563
Metals and Mining:-2.8%
-------------------------------------------------------------------------
Ball Corporation 104,500 3,644,437
-------------------------------------------------------------------------
Cleveland-Cliffs, Inc. 106,300 4,092,550
-------------------------------------------------------------------------
Phelps Dodge Corp. 67,400 3,976,600
-------------------------------------------------------------------------
11,713,587
Miscellaneous:-0.0%
-------------------------------------------------------------------------
Flight Transportation Corporation * 4,725 1
-------------------------------------------------------------------------
Motor Vehicles and Equipment:-2.0%
-------------------------------------------------------------------------
Dana Corp. 150,000 4,293,750
-------------------------------------------------------------------------
Eaton Corp. 72,500 4,214,062
-------------------------------------------------------------------------
8,507,812
Office and Business Equipment and Services:-11.3%
-------------------------------------------------------------------------
Advanced Micro Devices, Inc. 112,700 4,099,463
-------------------------------------------------------------------------
Avery Dennison Corp. 93,200 3,728,000
-------------------------------------------------------------------------
Cadence Design Systems Inc. * 136,200 4,409,475
-------------------------------------------------------------------------
Comdisco Inc. 133,300 4,048,987
-------------------------------------------------------------------------
Computer Associates International Inc. 57,300 3,882,075
-------------------------------------------------------------------------
Manpower Inc. 160,000 4,080,000
-------------------------------------------------------------------------
Micron Technology Inc. 71,100 3,680,404
-------------------------------------------------------------------------
New England Business Services Inc. 181,000 3,574,750
-------------------------------------------------------------------------
Reynolds & Reynolds Co. 132,100 3,896,950
-------------------------------------------------------------------------
Sun Microsystems Inc. * 81,300 3,948,091
-------------------------------------------------------------------------
Tandem Computers Inc. * 243,500 3,926,438
-------------------------------------------------------------------------
Xerox Corp. 33,200 3,892,700
-------------------------------------------------------------------------
47,167,333
Paper:-4.1%
-------------------------------------------------------------------------
Boise Cascade Corp. 110,300 4,467,150
-------------------------------------------------------------------------
Chesapeake Corp. 127,900 3,980,887
-------------------------------------------------------------------------
Stone Container Corp. * 210,400 4,471,000
-------------------------------------------------------------------------
Westvaco Corp. 91,900 4,066,575
-------------------------------------------------------------------------
16,985,612
Petroleum and Petroleum Related:-5.8%
-------------------------------------------------------------------------
GATX 85,700 4,038,613
-------------------------------------------------------------------------
Lyondell Petrochemical Company 170,000 4,356,250
-------------------------------------------------------------------------
Oryx Energy Company * 275,200 3,784,000
-------------------------------------------------------------------------
Phillips Petroleum Co. 124,600 4,158,525
-------------------------------------------------------------------------
Smith International Inc. * 230,600 3,862,550
-------------------------------------------------------------------------
Williams Companies, Inc. 113,000 3,940,875
-------------------------------------------------------------------------
24,140,813
Printing and Publishing:-0.9%
-------------------------------------------------------------------------
Banta Corporation 108,500 3,648,312
-------------------------------------------------------------------------
Public Utilities:-6.7%
-------------------------------------------------------------------------
Baltimore Gas & Electric Co. 152,200 3,805,000
-------------------------------------------------------------------------
General Public Utilities Corp. 133,200 3,962,700
-------------------------------------------------------------------------
Kansas City Power & Light Co. 174,500 3,991,688
-------------------------------------------------------------------------
Northeast Utilities 170,700 3,840,750
-------------------------------------------------------------------------
Ohio Edison Co. 192,900 4,364,363
-------------------------------------------------------------------------
Rochester Gas & Electric Corp. 184,700 3,924,875
-------------------------------------------------------------------------
SCE Corporation 235,400 4,031,225
-------------------------------------------------------------------------
27,920,601
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
----------- ------
<S> <C> <C>
Railroads:-1.9%
-------------------------------------------------------------------------------
Burlington Northern Inc. 68,100 4,287,915
-------------------------------------------------------------------------------
Conrail Inc. 68,700 3,821,437
-------------------------------------------------------------------------------
8,109,352
Restraurant:-0.8%
-------------------------------------------------------------------------------
Sbarro Inc. 148,900 3,443,661
-------------------------------------------------------------------------------
Retail:-6.7%
-------------------------------------------------------------------------------
C M L Group Inc. 159,400 1,255,275
-------------------------------------------------------------------------------
Eckerd Corp. * 125,400 4,012,800
-------------------------------------------------------------------------------
Family Dollar Stores, Inc. 163,100 2,405,725
-------------------------------------------------------------------------------
Kroger Co.* 153,500 4,125,312
-------------------------------------------------------------------------------
Rite Aid Corp. 166,100 4,256,312
-------------------------------------------------------------------------------
Smith's Food & Drug Centers Inc. 190,500 3,762,375
-------------------------------------------------------------------------------
Staples Inc. * 140,500 4,065,648
-------------------------------------------------------------------------------
Waban Inc. * 275,900 4,104,012
-------------------------------------------------------------------------------
27,987,459
Savings and Loan:-1.0%
-------------------------------------------------------------------------------
First Chicago Corp. 67,400 4,035,575
-------------------------------------------------------------------------------
Shoes:-1.0%
-------------------------------------------------------------------------------
Nike, Inc. 47,700 4,006,800
-------------------------------------------------------------------------------
Soaps, Cleaner and Cosmetics:-2.1%
-------------------------------------------------------------------------------
Clorox Company 68,100 4,350,421
-------------------------------------------------------------------------------
International Flavors & Fragrances, Inc. 85,500 4,253,625
-------------------------------------------------------------------------------
8,604,046
Steel:-0.9%
-------------------------------------------------------------------------------
USX Steel Group Inc. 105,300 3,598,645
-------------------------------------------------------------------------------
Telecommunications:-1.7%
-------------------------------------------------------------------------------
Comsat Corporation 194,200 3,811,175
-------------------------------------------------------------------------------
Pacific Telesis Group 128,100 3,426,675
-------------------------------------------------------------------------------
7,237,850
Textiles-Apparel Manufacturing:-1.0%
-------------------------------------------------------------------------------
Springs Industries Inc. 107,800 4,015,550
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Total Common Stocks-94.8%
(Cost-$344,573,199) $395,429,280
-------------------------------------------------------------------------------
Par
Money Market Instruments: Amount
------
BellSouth Telecommunications
5.95%, 7/20/95 $ 1,300,000 1,295,488
-------------------------------------------------------------------------------
Corporate Asset Funding Co.
6.05%, 7/13/95 1,000,000 997,479
-------------------------------------------------------------------------------
Credit Suisse Financial
6.0%, 7/06/95 11,600,000 11,582,600
-------------------------------------------------------------------------------
Du Pont E I De Nemours & Co.
6.0%, 7/07/95 8,219,000 8,209,411
-------------------------------------------------------------------------------
General Electric Co.
6.1%, 7/05/95 380,000 380,000
-------------------------------------------------------------------------------
Prudential Funding Inc.
5.94%, 7/20/95 6,000,000 5,991,090
-------------------------------------------------------------------------------
U.S. Treasury Bill
0.0%, 5/02/96 + 750,000 704,993
-------------------------------------------------------------------------------
Total Money Market Instruments:-7.0%
(Cost-$29,161,061) 29,161,061
-------------------------------------------------------------------------------
Total Investments-101.8%
(Cost-$373,735,260) 424,590,341
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Liability for Stock Call Options Number
Written: of Shares
-----------
<S> <C> <C>
Armstrong World Industries Inc.
Expiring 7/22/95, strike price 45 60,000 (322,500)
-------------------------------------------------------------------------------
Beneficial Corp.
Expiring 7/22/95, strike price 40 51,400 (215,238)
-------------------------------------------------------------------------------
Burlington Northern Inc.
Expiring 7/22/95, strike price 60 66,000 (247,500)
-------------------------------------------------------------------------------
Chase Manhattan Corp.
Expiring 7/22/95, strike price 40 25,200 (177,975)
-------------------------------------------------------------------------------
Clorox Company
Expiring 7/22/95, strike price 55 20,000 (207,500)
-------------------------------------------------------------------------------
Comdisco Inc.
Expiring 7/22/95, strike price 23 80,000 (640,000)
-------------------------------------------------------------------------------
General Public Utilities Corp.
Expiring 7/22/95, strike price 30 35,000 (17,500)
-------------------------------------------------------------------------------
Micron Technology Inc.
Expiring 7/22/95, strike price 43 40,000 (502,500)
-------------------------------------------------------------------------------
Sbarro Inc.
Expiring 7/22/95, strike price 20 15,000 (55,313)
-------------------------------------------------------------------------------
USX Steel Group Inc.
Expiring 7/22/95, strike price 30 45,000 (199,687)
-------------------------------------------------------------------------------
Total Liability for Stock Call
Options Written:-(0.6%)
(Premium Received - $2,223,883) (2,585,713)
-------------------------------------------------------------------------------
Other Assets Under Liabilities-(1.25%) (5,000,189)
-------------------------------------------------------------------------------
Net Assets-100.0%
(equivalent to $25.027 per share
based on 16,661,883 shares
issued and outstanding) $417,004,439
===============================================================================
</TABLE>
* Non-income producing.
+ Pledged as collateral for financial futures contracts.
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS - Unaudited
Six Months Ended June 30, 1995
<TABLE>
<CAPTION>
Lincoln
Lincoln National
National Growth
Bond and Income
Fund, Inc. Fund, Inc.
-----------------------------
<S> <C> <C>
Investment income:
Interest $8,106,889 $2,312,282
--------------------------------------------------------------------
Dividends - 18,134,088
--------------------------------------------------------------------
Total investment income 8,106,889 20,446,370
--------------------------------------------------------------------
Expenses:
Management fees 503,893 2,245,055
--------------------------------------------------------------------
Directors fees 1,500 1,500
--------------------------------------------------------------------
Other fees 325 325
--------------------------------------------------------------------
Other 20,489 88,580
--------------------------------------------------------------------
Total expenses 526,207 2,335,460
--------------------------------------------------------------------
Net investment income 7,580,682 18,110,910
--------------------------------------------------------------------
Net realized and unrealized
gain (loss) on
investments:
Net realized gain
(loss) on:
Investment transactions 2,123,321 34,664,505
--------------------------------------------------------------------
Options written - -
--------------------------------------------------------------------
Net realized
gain (loss) on
investments 2,123,321 34,664,505
--------------------------------------------------------------------
Net change in unrealized
appreciation or
depreciation on:
Investments 14,002,702 201,891,132
--------------------------------------------------------------------
Options written - -
--------------------------------------------------------------------
Net change in
unrealized
appreciation
or depreciation
on investments 14,002,702 201,891,132
--------------------------------------------------------------------
Net gain on investments 16,126,023 236,555,637
--------------------------------------------------------------------
Net increase in net assets
resulting from operations $23,706,705 $254,666,547
====================================================================
See accompanying notes to financial statements.
</TABLE>
STATEMENT OF OPERATIONS - Unaudited (Continued)
Six Months Ended June 30, 1995
<TABLE>
<CAPTION>
Lincoln Lincoln
Lincoln National National
National Money Special
Managed Market Opportunities
Fund, Inc. Fund, Inc. Fund, Inc.
--------------------------------------------
<S> <C> <C> <C>
Investment income:
Interest $8,741,981 $2,514,290 $676,932
---------------------------------------------------------------------------------------------
Dividends 3,556,557 - 4,824,743
---------------------------------------------------------------------------------------------
Total investment income 12,298,538 2,514,290 5,501,675
---------------------------------------------------------------------------------------------
Expenses:
Management fees 998,473 193,747 811,084
---------------------------------------------------------------------------------------------
Directors fees 1,500 1,500 1,500
---------------------------------------------------------------------------------------------
Other fees 325 325 325
---------------------------------------------------------------------------------------------
Other 38,595 13,032 38,934
---------------------------------------------------------------------------------------------
Total expenses 1,038,893 208,604 851,843
---------------------------------------------------------------------------------------------
Net investment income 11,259,645 2,305,686 4,649,832
---------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain(loss) on:
Investment transactions 9,207,676 - 14,394,227
---------------------------------------------------------------------------------------------
Options written - - (848,799)
---------------------------------------------------------------------------------------------
Net realized gain(loss) on
investments 9,207,676 - 13,545,428
---------------------------------------------------------------------------------------------
Net change in unrealized appreciation
or depreciation on:
Investments 53,019,636 - 47,668,716
---------------------------------------------------------------------------------------------
Options written - - (341,154)
---------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation
on investments 53,019,636 - 47,327,562
---------------------------------------------------------------------------------------------
Net gain on investments 62,227,312 - 60,872,990
---------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations $73,486,957 $2,305,686 $65,522,822
=============================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS - Unaudited
Six Months Ended June 30, 1994 and 1995
<TABLE>
<CAPTION>
Lincoln
Lincoln National
National Growth
Bond and Income
Fund, Inc. Fund, Inc.
--------------------------------
<S> <C> <C>
Net Assets at January 1, 1994 $226,149,503 $1,034,105,477
------------------------------------------------------------------
Changes from operations:
Net investment income 6,597,854 14,682,737
------------------------------------------------------------------
Net realized gain (loss)
on investments (4,510,446) 41,981,099
------------------------------------------------------------------
Net change in unrealized
appreciation or
depreciation on
investments (13,218,194) (90,040,847)
------------------------------------------------------------------
Net increase (decrease) in
net assets resulting from
operations (11,130,786) (33,377,011)
------------------------------------------------------------------
Dividends to shareholder from:
Net investment income (6,597,854) (14,682,737)
------------------------------------------------------------------
Net realized gain on
investments (9,456,561) (45,931,842)
------------------------------------------------------------------
Total dividends to
shareholder (16,054,415) (60,614,579)
------------------------------------------------------------------
Net increase in net assets
resulting from capital share
transactions 10,610,597 137,186,311
------------------------------------------------------------------
Total increase (decrease)
in net assets (16,574,604) 43,194,721
------------------------------------------------------------------
Net Assets at June 30, 1994 $209,574,899 $1,077,300,198
==================================================================
Net Assets at January 1, 1995 $195,009,766 $1,161,324,307
Changes from operations:
Net investment income 7,580,682 18,110,910
------------------------------------------------------------------
Net realized gain (loss)
on investments 2,123,321 34,664,505
------------------------------------------------------------------
Net change in unrealized
appreciation or
depreciation on
investments 14,002,702 201,891,132
------------------------------------------------------------------
Net increase (decrease) in
net assets resulting from
operations 23,706,705 254,666,547
------------------------------------------------------------------
Dividends to shareholder from:
Net investment income (7,580,682) (18,110,910)
------------------------------------------------------------------
Net realized gain on
investments - (69,061,295)
------------------------------------------------------------------
Total dividends to
shareholder (7,580,682) (87,172,205)
------------------------------------------------------------------
Net increase in net assets
resulting from capital share
transactions 17,481,449 165,804,088
------------------------------------------------------------------
Total increase in net
assets 33,607,472 333,298,430
------------------------------------------------------------------
Net Assets at June 30, 1995 $228,617,238 $1,494,622,737
==================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS - Unaudited (Continued)
Six Months Ended June 30, 1994 and 1995
<TABLE>
<CAPTION>
Lincoln Lincoln
Lincoln National National
National Money Special
Managed Market Opportunities
Fund, Inc. Fund, Inc. Fund, Inc.
--------------------------------------------------
<S> <C> <C> <C>
Net Assets at January 1, 1994 $445,039,996 $81,041,767 $273,997,784
-------------------------------------------------------------------------------------------------
Changes from operations:
Net investment income 9,733,894 1,373,640 3,382,145
-------------------------------------------------------------------------------------------------
Net realized gain(loss) on investments 2,078,926 - 9,512,228
-------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
or depreciation on investments (30,916,026) - (27,597,292)
-------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (19,103,206) 1,373,640 (14,702,919)
-------------------------------------------------------------------------------------------------
Dividends to shareholder from:
Net investment income (9,733,894) (1,373,640) (3,382,145)
-------------------------------------------------------------------------------------------------
Net realized gain on investments (17,841,259) - (18,072,011)
-------------------------------------------------------------------------------------------------
Total dividends to shareholder (27,575,153) (1,373,640) (21,454,156)
-------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions 49,202,594 5,778,452 48,197,925
-------------------------------------------------------------------------------------------------
Total increase in net assets 2,524,235 5,778,452 12,040,850
-------------------------------------------------------------------------------------------------
Net Assets at June 30, 1994 $447,564,231 $86,820,219 $286,038,634
=================================================================================================
Net Assets at January 1, 1995 $442,139,584 $77,177,437 $318,417,174
Changes from operations:
Net investment income 11,259,645 2,305,686 4,649,832
-------------------------------------------------------------------------------------------------
Net realized gain(loss) on investments 9,207,676 - 13,545,428
-------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
or depreciation on investments 53,019,636 - 47,327,562
-------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 73,486,957 2,305,686 65,522,822
-------------------------------------------------------------------------------------------------
Dividends to shareholder from:
Net investment income (11,259,645) (2,305,686) (4,649,832)
-------------------------------------------------------------------------------------------------
Net realized gain on investments (718,100) - (15,004,876)
-------------------------------------------------------------------------------------------------
Total dividends to shareholder (11,977,745) (2,305,686) (19,654,708)
-------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions 19,837,346 7,568,577 52,719,151
-------------------------------------------------------------------------------------------------
Total increase in net assets 81,346,558 7,568,577 98,587,265
-------------------------------------------------------------------------------------------------
Net Assets at June 30, 1995 $523,486,142 $84,746,014 $417,004,439
=================================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS - UNAUDITED
June 30, 1995
1. SIGNIFICANT ACCOUNTING POLICIES
THE FUNDS: Lincoln National Bond Fund, Inc., Lincoln National Growth and Income
Fund, Inc., Lincoln National Managed Fund, Inc., and Lincoln National Money
Market Fund, Inc., are registered as open-end, diversified management investment
companies and Lincoln National Special Opportunities Fund, Inc. is registered as
an open-end, non-diversified management investment company under the Investment
Company Act of 1940, as amended. The Funds' shares are sold only to The Lincoln
National Life Insurance Company (the Company) for allocation to its Variable
Annuity Account C, which was established for the purpose of funding variable
annuity contracts, and to its Flexible Premium Variable Life Accounts D, G, and
K, which were established for the purpose of funding variable universal life
contracts.
INVESTMENT VALUATION: Investments are stated at value. Portfolio securities
which are traded on stock exchanges are valued at the last reported sale price
on the exchange or market where primarily traded or listed or, in the absence of
recent sales, at the mean between the last reported bid and asked prices. Long-
term debt investments are valued at their bid quotations. The Funds hedge
certain portions of their exposure to fluctuations in interest, market, and
foreign exchange risks by entering into derivative transactions. These hedges
include options, financial futures, and forward foreign currency contracts.
Options traded on exchanges are valued at the last bid price for options
purchased and the last sale price for options written. Options traded in the
over-the-counter market are valued at the last asked price for options written
and the last bid price for options purchased. Financial futures are valued at
the settlement price established each day by the board of trade or exchange on
which they are traded. Forward foreign currency contracts are valued at the
forward exchange rates prevailing on the day of valuation. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Funds' Board
of Directors. Money market instruments in securities are stated at amortized
cost, which approximates market value.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. Dividend income is recorded on the ex-dividend
date and interest income is recorded on the accrual basis. Interest income
includes premium and discount amortization on money market instruments and
mortgage-backed securities; it also includes original issue and market discount
amortization on long-term debt investments. Realized gains or losses from
investment transactions are reported on an identified cost basis. Gains and
losses on premiums from expired options are recognized on the date of
expiration.
TAXES: Each Fund has complied with the special provisions of the Internal
Revenue Code for regulated investment companies. As such, each Fund is not
subject to U.S. federal income taxes to the extent that it distributes all of
its taxable income for its fiscal year.
2. OTHER ASSETS OVER (UNDER) LIABILITIES
The statement of net assets accounts "Other Assets Over(Under) Liabilities" at
June 30, 1995 consisted of the following assets (liabilities):
<TABLE>
<CAPTION>
LINCOLN LINCOLN
LINCOLN NATIONAL
NATIONAL GROWTH
BOND AND INCOME
FUND, INC. FUND, INC.
<S> <C> <C>
Receivable for dividends earned $ - $ 3,585,149
--------------------------------------------------------------
Receivable for interest earned 4,377,612 244,798
--------------------------------------------------------------
Receivable for securities sold - 3,265,719
--------------------------------------------------------------
Dividends declared and unpaid (7,580,682) (18,110,910)
--------------------------------------------------------------
Payable for securities purchased - (3,150,436)
--------------------------------------------------------------
Management fees payable (88,397) (408,755)
--------------------------------------------------------------
Other, net 647,368 (522,915)
--------------------------------------------------------------
$(2,644,099) $(15,097,350)
===========================
</TABLE>
<TABLE>
<CAPTION>
LINCOLN LINCOLN
LINCOLN NATIONAL NATIONAL
NATIONAL MONEY SPECIAL
MANAGED MARKET OPPORTUNITIES
FUND, INC. FUND, INC. FUND, INC.
<S> <C> <C> <C>
Foreign currency $ - $ - $ -
-------------------------------------------------------------------------------
Receivable for dividends earned 745,672 - 1,027,680
-------------------------------------------------------------------------------
Receivable for interest earned 5,810,685 927,214 20,789
-------------------------------------------------------------------------------
Receivable for securities sold (115,955) - 183,994
-------------------------------------------------------------------------------
Dividends declared and unpaid (11,259,645) (2,305,686) (4,649,832)
-------------------------------------------------------------------------------
Payable for securities purchased (204,350) - (919,016)
-------------------------------------------------------------------------------
Management fees payable (174,458) (33,093) (147,287)
-------------------------------------------------------------------------------
Other, net (499,611) (10,807) (516,517)
-------------------------------------------------------------------------------
$(5,697,662) $(1,422,372) $(5,000,189)
===========================================
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS - Unaudited (continued)
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Lincoln National Investment Management Company (the Advisor) manages the Funds'
investment portfolios, maintains their accounts and records, and furnishes the
services of individuals to perform executive and administrative functions of the
Funds. In return for these services, the Advisor receives a management fee at
an annual rate of .48% of the first $200,000,000 of the average daily net asset
value of the Funds, .40% of the next $200,000,000, and .30% of the average daily
net asset value of the Funds in excess of $400,000,000 for all the Funds except
for the Lincoln National Global Asset Allocation Fund, Inc. which has management
fee annual rates of .75%, .70%, and .68%, respectively, the Lincoln National
International Fund, Inc. which has management fee annual rates of .90%, .75%,
and .60%, respectively, and the Lincoln National Aggressive Growth Fund, Inc.
which has management fee annual rates of .75%, .70%, and .65%, respectively. The
Lincoln National Capital Appreciation Fund, Inc. and the Lincoln National Equity
Income Fund, Inc. have management fees of .80% and .95%, respectively, with no
breakpoints. If the aggregate annual expenses of the Funds, including the
management fee, but excluding taxes, interest, brokerage commissions relating to
the purchase or sale of portfolio securities and extraordinary non-recurring
expenses, exceeds 1 1/2% of the average daily net asset value of the Fund, the
Advisor will reimburse the Funds in the amount of such excess. No reimbursement
was due for the year ended June 30, 1995.
Certain officers and directors of the Funds are also officers or directors of
the Company. The compensation of unaffiliated directors of the Funds is borne
by the Funds.
4. ANALYSIS OF NET ASSETS
The analysis of net assets at June 30, 1995 consisted of the following:
<TABLE>
<CAPTION>
LINCOLN
LINCOLN NATIONAL
NATIONAL GROWTH
BOND AND INCOME
FUND, INC. FUND, INC.
<S> <C> <C>
Common Stock, par value
$.01 per share ** $ 193,857 $ 568,820
----------------------------------------------------------------
Paid-in capital in excess
of par value of shares
issued 228,823,459 1,212,633,039
----------------------------------------------------------------
Undistributed net realized
gain (loss) on
investments (7,841,675) 34,664,506
----------------------------------------------------------------
Net unrealized
appreciation or
depreciation on
investments 7,441,597 246,756,372
----------------------------------------------------------------
$228,617,238 $1,494,622,737
===============================
</TABLE>
<TABLE>
<CAPTION>
LINCOLN LINCOLN
LINCOLN NATIONAL NATIONAL
NATIONAL MONEY SPECIAL
MANAGED MARKET OPPORTUNITIES
FUND, INC. FUND, INC. FUND, INC.
<S> <C> <C> <C>
Common Stock, par value
$.01 per share ** $ 360,795 $ 84,746 $ 166,619
-----------------------------------------------------------------------------
Paid-in capital in excess
of par value of shares
issued 459,172,955 84,661,268 352,600,881
-----------------------------------------------------------------------------
Undistributed net realized
gain (loss) on
investments 9,207,676 - 13,545,427
-----------------------------------------------------------------------------
Net unrealized
appreciation or
depreciation on
investments 54,744,716 - 50,691,512
-----------------------------------------------------------------------------
$523,486,142 $84,746,014 $417,004,439
=============================================
</TABLE>
** Each Fund has 50,000,000 authorized shares except for the Lincoln
National Growth and Income Fund, Inc. which has 100,000,000.
5. INVESTMENTS
The cost of investments for federal income tax purposes is the same as for book
purposes. The aggregate cost of investments purchased, the aggregate proceeds
from investments sold, the aggregate gross unrealized appreciation, the
aggregate gross unrealized depreciation and the net unrealized appreciation
(depreciation) at June 30, 1995 are as follows:
<TABLE>
<CAPTION>
NET
AGGREGATE AGGREGATE GROSS GROSS UNREALIZED
COST OF PROCEEDS UNREALIZED UNREALIZED APPRECIATION
PURCHASES FROM SALES APPRECIATION DEPRECIATION (DEPRECIATION)
----------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Lincoln National Bond
Fund, Inc. $153,610,129 $144,376,821 $ 8,711,848 $ (1,270,251) $ 7,441,597
Lincoln National Growth
and Income Fund, Inc. 432,622,281 367,280,613 260,292,893 (13,536,521) 246,756,372
Lincoln National Managed
Fund, Inc. 277,150,146 270,217,770 59,501,568 (4,756,852) 54,744,716
Lincoln National Special
Opportunities Fund, Inc. 194,864,383 163,944,217 61,506,652 (10,815,140) 50,691,512
</TABLE>
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS - UNAUDITED (CONTINUED)
6. SUPPLEMENTAL FINANCIAL INSTRUMENT INFORMATION
OPTIONS: The Funds purchase or write options which are exchange traded to hedge
fluctuation risks in the price of certain securities. When the Funds write a
call or put option, an amount equal to the premium received is reflected as a
liability. The amount of the liability is subsequently "marked-to-market" to
reflect the current market value of the option written. The premium paid by the
Funds for the purchase of a call or put option is recorded as an investment and
subsequently "marked-to-market" to reflect the current market value of the
option purchased. The Funds are subject to the risk of an imperfect correlation
between movement in the price of the instrument and the price of the underlying
security or transaction. Risks may also arise due to illiquid secondary markets
for the instruments. Written call option activity for the six months ended June
30, 1995 is summarized as follows:
<TABLE>
<CAPTION>
LINCOLN NATIONAL SPECIAL
OPPORTUNITIES FUND, INC.
---------------------------------------
NUMBER OF PREMIUMS
SHARES RECEIVED
---------------------------------------
<S> <C> <C>
Options outstanding at January 1, 1995 125,400 $ 204,656
Options written 2,010,500 7,773,092
Options exercised (140,700) (651,982)
Options expired (94,800) (184,575)
Options closed (1,462,800) (4,917,308)
---------------------------------------
Options outstanding at June 30, 1995 437,600 2,223,883
---------- ----------
Unrealized depreciation at June 30, 1995 361,830
----------
Market value of options written at June 30, 1995 $2,585,713
----------
</TABLE>
FINANCIAL FUTURES CONTRACTS: The Funds may purchase or sell financial futures
contracts, which are exchange traded, to hedge fluctuation risks of adverse
changes in exchange markets or interest rates. Financial futures contracts
obligate the Funds to take delivery or deliver a financial instrument at a
future date at a specified price. The Funds deposit with its custodian a
specified amount of cash or eligible securities called "initial margin" or
"variation margin". The market value of investments pledged to cover margin
requirements for open positions at June 30, 1995 was $704,993 for the Lincoln
National Special Opportunities Fund, Inc., and $681,819 for Lincoln National
Global Asset Allocation Fund, Inc. The unrealized gain or loss on the contracts
are reflected in the accompanying financial statements. The Funds are subject
to the market risks of unexpected changes in the underlying markets and interest
rates; however, such changes in the value generally are offset by changes in the
value of the items being hedged by such contracts. Purchased financial futures
contracts open at June 30, 1995 were as follows:
<TABLE>
<CAPTION>
UNDERLYING EXPIRATION UNREALIZED
FUND CONTRACTS FACE AMOUNT DATE GAIN
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Special Opportunities 85 S&P 500 contracts $ 8,283,615 September 1995 $ 197,260
</TABLE>
INDEXED SECURITIES: The Funds may invest in indexed securities whose value is
linked either directly or inversely to changes in foreign currencies, interest
rates, commodities, indices, or other reference instruments. Indexed securities
may be more volatile than the reference instrument itself, but any loss is
limited to the amount of the original investment.
7. CONCENTRATION OF CREDIT RISK
The Lincoln National Money Market Fund, Inc. had investments in securities
issued by banks, including foreign banks, foreign branches of domestic banks,
and other financial institutions of $34,638,448 at June 30, 1995 (40.1% of net
assets). The ability of these entities to meet their obligations may be
affected by economic conditions related to the industry.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS - UNAUDITED (CONTINUED)
8. SUMMARY OF CHANGES FROM CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
SHARES ISSUED UPON NET INCREASE (DECREASE)
CAPITAL REINVESTMENT OF CAPITAL SHARES RESULTING FROM CAPITAL
SHARES SOLD DIVIDENDS REDEEMED SHARE TRANSACTIONS
---------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- ----------- ---------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended June 30,
1994:
Lincoln National Bond
Fund, Inc. 498,329 5,788,825 1,738,842 21,824,702 (1,415,926) (17,002,930) 821,245 10,610,597
Lincoln National Growth
and Income Fund, Inc. 3,325,648 78,867,606 2,858,034 69,491,281 (480,372) (11,172,576) 5,703,310 137,186,311
Lincoln National Managed
Fund, Inc. 1,499,837 20,222,486 2,489,917 34,885,203 (447,936) (5,905,095) 3,541,818 49,202,594
Lincoln National Money
Market Fund, Inc. 4,519,498 45,194,981 257,051 2,570,513 (4,198,704) (41,987,042) 577,845 5,778,452
Lincoln National Special
Opportunities Fund, Inc. 2,453,096 55,990,532 983,330 23,219,317 (1,381,144) (31,011,924) 2,055,282 48,197,925
Six Months Ended June 30, 1995:
Lincoln National Bond Fund, Inc. 914,424 10,413,461 1,218,139 13,491,950 (570,301) (6,423,962) 1,562,262 17,481,449
Lincoln National Growth and
Income Fund, Inc. 3,080,048 75,306,254 4,377,795 100,769,414 (425,159) (10,271,580) 7,032,684 165,804,088
Lincoln National Managed Fund,
Inc. 731,886 10,029,024 1,590,320 20,897,760 (830,577) (11,089,438) 1,491,629 19,837,346
Lincoln National Money Market
Fund, Inc. 2,497,026 24,970,258 319,661 3,196,614 (2,059,829) (20,598,295) 756,858 7,568,577
Lincoln National Special
Opportunities Fund, Inc. 1,782,194 41,428,814 1,003,269 22,445,189 (489,693) (11,154,852) 2,295,770 52,719,151
</TABLE>
9. DISTRIBUTION TO SHAREHOLDER
The Funds declare dividends daily on net investment income and annually, if any,
on net realized gains. Dividends are distributed annually.
10. CAPITAL LOSS CARRYFORWARD
As of June 30, 1995 the Lincoln National Bond Fund, Inc. had $7,898,450
available for federal income tax purposes as an unused capital loss carryforward
expiring in the year 2002.
11. FUND NAME CHANGES
Effective April 28, 1995, the name of the Lincoln National Growth Fund, Inc. was
changed to the Lincoln National Growth and Income Fund, Inc.
<PAGE>
FINANCIAL HIGHLIGHTS - Unaudited
(Selected data for each share of Common Stock outstanding throughout the year)
<TABLE>
<CAPTION>
Income from Investment Operation Less Dividends From:
----------------------------------------- -------------------------------------
Net Net
Asset Realized and Total
Year Value Net Unrealized From Net Net Realized
Ended Beginning Investment Gain(Loss) on Investment Investment Gain on Total
12/31 of Period Income(Loss) Investments Operations Income Investments Dividends
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lincoln National Bond Fund, Inc.
1986 $11.904 $1.192 $ 0.780 $ 1.972 $(1.192) $(0.236) $(1.428)
1987 12.448 1.055 (0.873) 0.182 (1.055) (0.434) (1.489)
1988 11.141 1.053 (0.131) 0.922 (1.053) - (1.053)
1989 11.010 1.027 0.428 1.455 (1.027) - (1.027)
1990 11.438 0.998 (0.240) 0.758 (0.998) - (0.998)
1991 11.198 0.956 0.990 1.946 (0.956) - (0.956)
1992 12.188 0.903 0.052 0.955 (0.903) - (0.903)
1993 12.240 0.758 0.703 1.461 (0.758) (0.250) (1.008)
1994 12.693 0.741 (1.233) (0.492) (0.741) (0.519) (1.260)
1995+ 10.941 0.402 0.852 1.254 (0.402) 0.000 (0.402)
Lincoln National Growth and Income Fund, Inc.
1986 $16.138 $ 0.544 $ 2.147 $ 2.691 $(0.544) $(0.254) $(0.798)
1987 18.031 0.587 2.148 2.735 (0.587) (0.539) (1.126)
1988 19.640 0.540 0.729 1.269 (0.540) (2.997) (3.537)
1989 17.372 0.793 2.859 3.652 (0.793) - (0.793)
1990 20.231 0.512 (0.539) (0.027) (0.512) (1.068) (1.580)
1991 18.624 0.617 5.142 5.759 (0.617) - (0.617)
1992 23.766 0.663 (0.336) 0.327 (0.663) (0.503) (1.166)
1993 22.927 0.610 2.285 2.895 (0.610) (0.519) (1.129)
1994 24.693 0.668 (0.428) 0.240 (0.668) (0.968) (1.636)
1995+ 23.297 0.334 4.252 4.586 (0.334) (1.273) (1.607)
</TABLE>
<TABLE>
<CAPTION>
Net Ratio of Net
Asset Ratio of Investment Net Assets
Year Value Expenses Income Portfolio At End
Ended End Total To Average To Average Turnover of Period
12/31 of Period Return** Net Assets Net Assets Rate (000's)
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Lincoln National Bond Fund, Inc.
1986 $12.448 16.53% 0.52% 9.75% 156.50% $ 59,449
1987 11.141 (0.47%) 0.56% 9.17% 176.75% 50,795
1988 11.010 9.24% 0.57% 9.41% 183.79% 59,947
1989 11.438 13.23% 0.53% 9.13% 121.19% 91,152
1990 11.198 5.45% 0.53% 9.00% 76.67% 103,845
1991 12.188 17.96% 0.52% 8.32% 72.80% 139,854
1992 12.240 7.68% 0.52% 7.45% 257.27% 168,636
1993 12.693 13.39% 0.50% 6.05% 324.90% 226,150
1994 10.941 (5.01%) 0.50% 6.40% 213.26% 195,010
1995+ 11.793 15.15% 0.25% 3.56% 69.62% 228,617
Lincoln National Growth and Income Fund, Inc.
1986 $18.031 16.77% 0.50% 3.06% 55.22% $105,781
1987 19.640 14.75% 0.52% 2.78% 142.01% 177,354
1988 17.372 8.06% 0.54% 3.08% 179.88% 209,513
1989 20.231 19.86% 0.50% 4.06% 208.98% 295,399
1990 18.624 1.68% 0.48% 2.79% 59.47% 356,329
1991 23.766 30.83% 0.44% 2.86% 33.59% 581,297
1992 22.927 1.24% 0.41% 2.97% 74.50% 765,457
1993 24.693 13.31% 0.38% 2.58% 60.76% 1,034,105
1994 23.297 0.94% 0.37% 2.85% 76.34% 1,161,324
1995+ 26.276 22.80% 0.18% 1.38% 29.11% 1,494,623
</TABLE>
<TABLE>
<CAPTION>
Income from Investment Operation Less Dividends From:
----------------------------------------- -------------------------------------
Net Net
Asset Realized and Total
Year Value Net Unrealized From Net Net Realized
Ended Beginning Investment Gain(Loss) on Investment Investment Gain on Total
12/31 of Period Income Investments Operations Income Investments Dividends
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lincoln National Managed Fund, Inc.
1986 $11.305 $0.699 $ 0.943 $ 1.642 $(0.699) - $(0.699)
1987 12.248 0.674 0.352 1.026 (0.674) (0.317) (0.991)
1988 12.283 0.666 0.352 1.018 (0.666) (1.108) (1.774)
1989 11.527 0.798 1.186 1.984 (0.798) - (0.798)
1990 12.713 0.705 (0.334) 0.371 (0.705) (0.438) (1.143)
1991 11.941 0.710 1.906 2.616 (0.710) - (0.710)
1992 13.847 0.653 (0.158) 0.495 (0.653) (0.036) (0.689)
1993 13.653 0.584 0.908 1.492 (0.584) (0.409) (0.993)
1994 14.152 0.628 (0.814) (0.186) (0.628) (0.555) (1.183)
1995+ 12.783 0.316 1.746 2.063 (0.316) (0.020) (0.337)
Lincoln National Money Market Fund, Inc.
1986 $10.000 $0.662 - $ 0.662 $(0.662) - $(0.662)
1987 10.000 0.658 - 0.658 (0.658) - (0.658)
1988 10.000 0.744 - 0.744 (0.744) - (0.744)
1989 10.000 0.909 - 0.909 (0.909) - (0.909)
1990 10.000 0.802 - 0.802 (0.802) - (0.802)
1991 10.000 0.571 - 0.571 (0.571) - (0.571)
1992 10.000 0.354 - 0.354 (0.354) - (0.354)
1993 10.000 0.276 - 0.276 (0.276) - (0.276)
1994 10.000 0.381 - 0.381 (0.381) - (0.381)
1995+ 10.000 0.283 - 0.283 (0.283) - (0.283)
Lincoln National Special Opportunities Fund, Inc.
1986 $17.233 $0.178 $(0.616) $(0.438) $(0.178) - $(0.178)
1987 16.617 0.064 1.316 1.380 (0.064) - (0.064)
1988 17.933 0.060 0.327 0.387 (0.060) (2.659) (2.719)
1989 15.601 0.276 4.904 5.180 (0.276) - (0.276)
1990 20.505 0.236 (1.931) (1.695) (0.236) (1.208) (1.444)
1991 17.366 0.323 7.195 7.518 (0.323) - (0.323)
1992 24.561 0.546 1.106 1.652 (0.546) (0.955) (1.501)
1993 24.712 0.530 2.703 3.233 (0.530) (2.937) (3.467)
1994 24.478 0.565 (0.942) (0.377) (0.565) (1.372) (1.937)
1995+ 22.164 0.296 3.818 4.114 (0.296) (0.955) (1.251)
</TABLE>
<TABLE>
<CAPTION>
Net Ratio of Net
Asset Ratio of Investment Net Assets
Year Value Expenses Income Portfolio At End
Ended End Total To Average To Average Turnover of Period
12/31 of Period Return** Net Assets Net Assets Rate (000's)
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Lincoln National Managed Fund, Inc.
1986 $12.248 14.03% 0.51% 5.77% 76.05% $ 78,824
1987 12.283 7.35% 0.53% 5.23% 121.98% 121,167
1988 11.527 8.17% 0.55% 5.71% 166.57% 140,135
1989 12.713 16.00% 0.52% 6.47% 158.73% 182,576
1990 11.941 3.41% 0.52% 5.96% 93.38% 204,310
1991 13.847 22.59% 0.50% 5.53% 22.70% 276,899
1992 13.653 3.69% 0.49% 4.86% 226.66% 343,439
1993 14.152 11.91% 0.45% 4.24% 235.59% 445,040
1994 12.783 (2.42%) 0.44% 4.45% 160.79% 442,140
1995+ 14.509 18.76% 0.22% 2.34% 56.52% 523,486
Lincoln National Money Market Fund, Inc.
1986 $10.000 9.18% 0.55% 6.71% - $ 45,932
1987 10.000 8.02% 0.56% 6.50% - 55,093
1988 10.000 5.45% 0.55% 7.21% - 59,160
1989 10.000 7.20% 0.54% 9.09% - 88,551
1990 10.000 7.61% 0.53% 7.94% - 102,399
1991 10.000 7.48% 0.53% 5.79% - 149,555
1992 10.000 4.70% 0.53% 3.48% - 92,472
1993 10.000 4.46% 0.50% 2.76% - 81,042
1994 10.000 3.20% 0.52% 3.82% - 77,177
1995+ 10.000 4.22% 0.26% 2.82% - 84,746
Lincoln National Special Opportunities Fund, Inc.
1986 $16.617 (2.50%) 0.54% 1.00% 102.32% $ 43,369
1987 17.933 8.77% 0.56% 0.31% 110.80% 58,866
1988 15.601 3.73% 0.59% 0.39% 73.91% 63,982
1989 20.505 31.92% 0.55% 1.50% 92.56% 75,245
1990 17.366 (7.28%) 0.55% 1.33% 37.50% 83,762
1991 24.561 43.14% 0.53% 1.49% 111.60% 132,753
1992 24.712 6.24% 0.53% 2.35% 128.49% 189,867
1993 24.478 18.31% 0.49% 2.29% 74.11% 273,998
1994 22.164 (1.55%) 0.48% 2.49% 74.63% 318,417
1995+ 25.027 20.69% 0.23% 1.27% 46.81% 417,004
</TABLE>
* Total return percentages in this table are calculated on the basis
prescribed by the Securities and Exchange Commission. These percentages are
based on the underlying mutual fund shares in which Separate Accounts C, D,
G and K may invest. The total return percentages in the table are NOT
calculated on the same basis as the performance percentages noted in the
letter at the front of this booklet (those percentages are based upon the
change in unit values).
+ Six Months ended June 30, 1995. Returns, ratios and portfolio turnovers
have NOT been calculated on an annualized basis.
<PAGE>
________________________
[LOGO OF LONCOLN NATIONAL LIFE INSURANCE CO.] | Bulk Rate |
| U.S. Postage |
LINCOLN NATIONAL | Permit No. 14 |
LIFE INSURANCE CO. | Fort Wayne, IN 46801 |
---------------------------- ________________________
A part of LINCOLN NATIONAL CORPORATION
P.O. Box 7825
Fort Wayne, Indiana 46801-7825
