<PAGE>
LORD ABBETT SERIES FUND -- GLOBAL EQUITY PORTFOLIO
June 30, 1995
STATEMENT OF NET ASSETS
-----------------------
<TABLE>
<CAPTION>
Market
Value
Security Number of Shares (Notes 1a & 1b)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS IN COMMON STOCKS AND WARRANTS 88.31%
--------------------------------------------------------------------------------------------------------------------
FOREIGN 68.77%
--------------------------------------------------------------------------------------------------------------------
Australia -- 1.98%
AAPC................................................................. 13,000 $ 6,097
Australian Gas Light Co.............................................. 4,000 12,672
Australian National Industries....................................... 17,000 14,739
Broken Hill Proprietary.............................................. 1,100 13,532
Q.N.I................................................................ 7,000 9,548
Total................................................................ 56,588
France -- 7.37%
AXA.................................................................. 575 31,116
Christian Dior....................................................... 355 31,895
Elf-Aquitaine........................................................ 340 25,176
Lafarge Coppee....................................................... 407 31,709
Naf Naf.............................................................. 787 14,955
Naf Naf Warrants..................................................... 87 65
Saint Gobain......................................................... 338 40,908
Societe Generale..................................................... 300 35,133
Total................................................................ 210,957
Germany -- 2.59%
Mannesmann........................................................... 140 42,750
Veba................................................................. 80 31,433
Total................................................................ 74,183
Italy -- 2.71%
Italcementi.......................................................... 5,330 36,777
Italcementi Warrants................................................. 1,230 274
INA.................................................................. 30,000 40,380
Total................................................................ 77,431
Japan -- 22.26%
Canon Inc............................................................ 3,000 48,873
Fuji Machine Mfg..................................................... 1,000 30,575
Honda Motor.......................................................... 3,000 46,041
Kurimoto Iron........................................................ 4,000 42,216
Mitsubishi Bank...................................................... 2,000 43,206
Mitsubishi Heavy Industry............................................ 7,000 47,600
Nippon Meat Packers.................................................. 2,300 33,667
Nippondenso.......................................................... 2,000 36,360
Nomura Securities.................................................... 2,000 34,942
Sansei Yusoki Co., Ltd............................................... 4,400 37,660
Sony Corp............................................................ 1,000 48,046
Toray Industries..................................................... 9,000 55,989
Toshiba Corp......................................................... 8,000 50,712
Toshiba Engineering and Construction................................. 3,000 24,612
77th Bank Ltd........................................................ 5,000 56,015
Total................................................................ 636,514
</TABLE>
<PAGE>
LORD ABBETT SERIES FUND -- GLOBAL EQUITY PORTFOLIO
June 30, 1995
STATEMENT OF NET ASSETS
-----------------------
<TABLE>
<CAPTION>
Market
Value
Security Number of Shares (Notes 1a & 1b)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Malaysia -- 1.71%
Alcom................................................................ 9,000 $ 13,293
Southern Bank........................................................ 16,250 35,669
Total................................................................ 48,962
Netherlands -- 4.24%
Hunter Douglas....................................................... 730 31,825
ING.................................................................. 500 27,676
Philips Electronics.................................................. 830 35,166
Vendex International................................................. 1,000 26,545
Total................................................................ 121,212
Singapore -- 1.17%
Jurong Shipyard...................................................... 2,000 14,312
Singapore Airlines................................................... 1,000 9,231
United Overseas Bank................................................. 1,057 9,983
Total................................................................ 33,526
Spain -- 2.73%
Banco Santander...................................................... 440 17,382
Compania Telefonica Nacional......................................... 1,700 21,942
Europistas........................................................... 1,995 16,341
Repsol............................................................... 710 22,381
Total................................................................ 78,046
Sweden -- 1.35%
Atlas Copco.......................................................... 2,750 38,591
Switzerland -- 4.45%
Brown Boveri & Cie Series "A"........................................ 25 25,888
Ciba Geigy........................................................... 25 18,339
Nestle............................................................... 30 31,300
Roche Holdings....................................................... 8 51,723
Total................................................................ 127,250
United Kingdom -- 16.21%
BPB Industries....................................................... 4,000 19,800
British Petroleum.................................................... 5,250 37,706
British Telecom...................................................... 7,000 43,743
BTR.................................................................. 6,123 31,184
BTR Warrants......................................................... 184 79
Cookson Group........................................................ 9,000 34,722
Grand Metropolitan................................................... 4,600 28,272
Greenalls Group...................................................... 4,000 30,228
Guardian Royal Exchange.............................................. 8,000 26,400
Mirror Group Newspapers.............................................. 10,000 21,200
National Westminster Bank............................................ 2,800 24,371
North West Water..................................................... 1,400 12,387
Peninsular and Oriental Steam Navigation Company..................... 3,191 29,453
</TABLE>
<PAGE>
LORD ABBETT SERIES FUND -- GLOBAL EQUITY PORTFOLIO
June 30, 1995
STATEMENT OF NET ASSETS
-----------------------
<TABLE>
<CAPTION>
Market
Number of Shares or Value
Security Principal Amount (Notes 1a & 1b)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Powergen............................................................. 6,000 $ 18,318
Sears................................................................ 16,000 25,376
Siebe................................................................ 2,600 25,948
Tomkins Ord.......................................................... 6,000 21,522
Tesco................................................................ 3,500 16,180
Yorkshire Electricity................................................ 1,500 16,596
Total................................................................ 463,485
TOTAL INVESTMENTS IN
FOREIGN SECURITIES (Cost $1,784,624)................................. 1,966,745
UNITED STATES 19.54%
Anheuser-Busch Companies Inc......................................... 400 22,750
Comerica Inc......................................................... 1,000 32,125
Equitable Resources, Inc............................................. 1,000 28,875
First Fidelity Bancorporation........................................ 1,000 59,000
Freeport Copper & Gold-Silver........................................ 3,000 58,500
Fruit of The Loom+................................................... 1,000 21,125
Great Western Financial Corp......................................... 2,000 41,250
International Paper Co............................................... 500 42,875
Mobil Corp........................................................... 500 48,000
National City Corp................................................... 2,000 58,750
RJR Nabisco.......................................................... 1,000 27,875
Standard Products Co................................................. 2,500 54,375
Thomas & Betts Corp.................................................. 500 34,187
Transamerica Corp.................................................... 500 29,125
TOTAL INVESTMENTS IN UNITED STATES
SECURITIES (Cost $551,225)........................................... 558,812
TOTAL INVESTMENTS IN COMMON STOCKS AND
WARRANTS (Cost $2,335,849)........................................... 2,525,557
OTHER ASSETS, LESS LIABILITIES 11.69%
Short-term Investments, at Cost
Beneficial Corp. 6.01% due 7/5/95.................................... 200M 200,000
General Electric Co. 5.70% due 7/3/95................................ 100M 100,000
Total Short-term Investments......................................... 300,000
Cash and Receivables, Net of Liabilities............................. 34,180
TOTAL OTHER ASSETS, LESS LIABILITIES................................. 334,180
NET ASSETS 100.00%
(equivalent to $11.03 a share on 259,253 shares of $.001 par value
capital stock outstanding; authorized, 50,000,000 shares)............ $2,859,737
</TABLE>
+Non-income producing.
See Notes to Financial Statements.
<PAGE>
Global Equity Portfolio
STATEMENT OF OPERATIONS
-----------------------
For the Six Months Ended June 30, 1995
<TABLE>
<S> <C> <C>
Investment Income
Income:
Dividends $ 42,081
Interest 11,872
Foreign taxes withheld (3,249)
-------------------------------------------------------------------------------------------------
Total income $ 50,704
Expenses:
Management fee (Note 5) 11,474
Pricing 5,850
Custodian 4,500
Audit 1,500
Organization 312
Shareholder servicing 150
Management fee waived and expenses assumed by
Lord, Abbett & Co. (Note 5) (22,157)
-------------------------------------------------------------------------------------------------
Net expenses 1,629
-------------------------------------------------------------------------------------------------
Net investment income 49,075
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions (Note 4)
Net realized gain from security transactions
(excluding short-term securities):
Proceeds from sales 1,162,865
Cost of securities sold 1,044,699
-------------------------------------------------------------------------------------------------
Net realized gain on securities sold 118,166
Realized loss from foreign currency transactions (8,227)
-------------------------------------------------------------------------------------------------
Net realized gain from security and foreign currency
transactions 109,939
-------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments
and foreign currency holdings
Beginning of period 345,793
End of period 132,627
Net unrealized depreciation of investments
and foreign currency holdings (213,166)
-------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments
and foreign currency transactions (103,227)
-------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Operations $(54,152)
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
Global Equity Portfolio
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------
<TABLE>
<CAPTION>
Year Ended
Six Months Ended Dec. 31,
June 30, 1995 1994
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 49,075 $ 72,693
Net realized gain from security transactions and
foreign currency holdings 109,939 326,515
Net unrealized depreciation of investments
and foreign currency holdings (213,166) (321,886)
---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (54,152) 77,322
---------------------------------------------------------------------------------------------------------------
Undistributed net investment income included in price
of shares sold and reacquired (Note 1d) (6,364) (11,166)
---------------------------------------------------------------------------------------------------------------
Distributions to shareholders from (Note 2)
Net investment income -- (73,774)
Net realized gain from security transactions -- (326,261)
Total distributions -- (400,035)
---------------------------------------------------------------------------------------------------------------
Capital share transactions
Net proceeds from sales of 4,275 and 10,522 shares, respectively 45,464 134,118
Net asset value of 35,654 shares issued to
shareholders in reinvestment of net investment income and
realized gain from security transactions -- 400,035
---------------------------------------------------------------------------------------------------------------
Total 45,464 534,153
Cost of 34,848 and 56,482 shares reacquired, respectively (376,133) (724,448)
---------------------------------------------------------------------------------------------------------------
Decrease in net assets derived from capital share
transactions (net decrease of 30,573 and 10,306
shares, respectively) (330,669) (190,295)
---------------------------------------------------------------------------------------------------------------
Decrease in net assets (391,185) (524,174)
Net Assets
Beginning of period 3,250,922 3,775,096
---------------------------------------------------------------------------------------------------------------
End of period (including undistributed (overdistributed) net
investment income of $41,160 and $(1,551), respectively) $2,859,737 $3,250,922
---------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
Global Equity Portfolio
FINANCIAL HIGHLIGHTS
--------------------
<TABLE>
<CAPTION>
For the Period
April 9, 1990
(Commencement
Six Months Ended Year Ended December 31, of Operations) to
Per Share Operating Performance: June 30, 1995 1994 1993 1992 1991 Dec. 31, 1990
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.22 $ 12.58 $ 10.25 $ 10.75 $ 9.73 $ 10.00
-----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .18* .27* .26* .29* .28* .24*
Net realized and unrealized gain
(loss) on investments (.37) (.0575) 2.4725 (.4575) 1.03 (.35)
Total from investment operations (.19) .2125 2.7325 (.1675) 1.31 (.11)
--------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income -- (.29) (.32) (.24) (.22) (.16)
Distributions from net realized gain -- (1.2825) (.0825) (.0925) (.07) --
--------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.03 $ 11.22 $ 12.58 $ 10.25 $ 10.75 $ 9.73
-----------------------------------------------------------------------------------------------------------------------------------
Total Return (1.69)%+ 1.69% 26.67% (1.54)% 13.48% (1.10)%+
-----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
-----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 2,860 $ 3,251 $ 3,775 $ 3,362 $ 4,407 $ 2,683
Ratios to Average Net Assets:
-----------------------------------------------------------------------------------------------------------------------------------
Expenses, including waiver .05%+ .09% .09% .10% .10% .21%+
Expenses, excluding waiver .78%+ 1.33% 1.62% 1.39% 2.15% 2.49%+
Net investment income 1.60%+ 2.04% 2.24% 2.72% 2.69% 2.40%+
Portfolio turnover rate 25.64% 50.63% 131.51% 128.59% 60.84% 25.59%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Net of management fee waiver.
+Not annualized.
See Notes to Financial Statements.
<PAGE>
Global Equity Portfolio
NOTES TO FINANCIAL STATEMENTS
-----------------------------
1. Significant Accounting Policies
The Company was incorporated under Maryland law on August 28, 1989 and is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The Company currently consists of two active
Series. The Global Equity Portfolio (the "Company") commenced operations on
April 9, 1990. Shares of the Company are currently issued and redeemed only in
connection with investment in, and payments under, certain variable annuity
contracts issued by COVA Financial Services Life Insurance Company ("COVA") and
its affiliated insurance companies. The following is a summary of significant
accounting policies consistently followed by the Company. The policies are in
conformity with generally accepted accounting principles.
(a) Market value is determined as follows: Securities listed or admitted to
trading privileges on any national securities exchange are valued at the last
sales price on the principal securities exchange on which such securities are
traded, or, if there is no sale, at the mean between the last bid and asked
prices on such exchange. Securities traded in the over-the-counter market are
valued at the mean between the last bid and asked prices in such market, except
that securities admitted to trading on the NASDAQ National Market System are
valued at the last sales price if it is determined that such price more
accurately reflects the value of such securities. Securities for which market
quotations are not available are valued at fair value under procedures approved
by the Board of Directors. Short-term securities are carried at cost which
approximates market.
(b) It is the policy of the Company to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income in taxable distributions. Therefore, no federal income tax
provision is required.
(c) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Interest income is recorded
on the accrual basis.
(d) A portion of proceeds from sales and costs of repurchases of capital shares,
equivalent to the amount of distributable net investment income on the date of
the transaction, is credited or charged to undistributed income. Undistributed
net investment income per share thus is unaffected by sales or repurchases of
shares.
(e) The organization expenses of the Company are amortized evenly over a period
of five years. If any of the 20,000 initial shares of the Company issued to
Lord, Abbett & Co. and COVA are redeemed during the amortization period, the
proceeds of any such redemption will be reduced by the proportionate amount of
the unamortized organization expenses which the number of shares redeemed bears
to the number of shares then outstanding.
(f) The Company enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings. A forward contract is a commitment to purchase or sell a foreign
currency at a future date (usually the security transaction settlement date) at
a negotiated forward rate. The contracts are valued daily at current exchange
rates and any unrealized gain or loss is included in net unrealized appreciation
or depreciation of investments and foreign currency holdings. The gain or loss,
if any, arising from the difference between the settlement value of the forward
contract and the closing of such contract, is included in net realized gain or
loss from security and foreign currency transactions. Risks may arise due to
changes in the value of the foreign currency and as a result of the potential
inability of the counterparties to meet the terms of their contracts.
<PAGE>
Global Equity Portfolio
(g) Foreign Currency Translation
Effective January 1, 1994, the Fund adopted Statement of Position (SOP) 93-4:
Foreign Currency Accounting and Financial Statement Presentation for Investment
Companies. In accordance with this SOP, reported net realized gains and losses
from foreign currency transactions represent net gains and losses from sales and
maturities of forward currency contracts, disposition of foreign currencies,
currency gains and losses realized between the trade and settlement dates on
securities transactions, and the difference between the amount of net investment
income accrued and the U.S. dollar amount actually received. Further, as
permitted under the SOP, the effects of changes in foreign currency exchange
rates on investments in securities are not segregated in the Statement of
Operations from the effects of changes in market prices of those securities.
2. Distributions
Net realized gain from security transactions, if any, is declared in December
and distributed to shareholders in the succeeding year. Undistributed net
realized capital gain at June 30, 1995 for financial reporting purposes, which
is substantially the same as for federal income tax purposes, aggregated
$138,203.
Income and capital gains distributions are determined in accordance with income
tax regulations which may differ from methods used to determine the
corresponding income and capital gains amounts in accordance with generally
accepted accounting principles.
3. Capital Paid In
At June 30, 1995, capital paid in aggregated $2,547,747.
4. Purchases and Sales of Securities
Purchases and sales of investment securities (other than short-term investments
and foreign currency transactions) aggregated $673,799 and $1,162,865,
respectively. Security gains and losses, if any, are computed on the identified
cost basis.
As of June 30, 1995, unrealized appreciation of investment securities for
federal income tax purposes aggregated $189,708 of which $312,028 related to
appreciated securities and $122,320 related to depreciated securities. For
federal income tax purposes, the identified cost of investments owned at
June 30, 1995 was substantially the same as the cost for financial reporting
purposes.
At June 30, 1995, the Global Equity Portfolio had an outstanding forward
currency contract to sell foreign currency as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current
Sell Receivable Value (Depreciation)
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Japanese Yen,
expiring 11/16/95 $400,000 $457,081 $(57,081)
--------------------------------------------------------------------------------
</TABLE>
<PAGE>
Global Equity Portfolio
5. Management Fee and Other Transactions with Affiliates
Lord, Abbett & Co. provided the Company with investment management services and
executive and other personnel, paid the remuneration of officers, provided
office space and paid for ordinary and necessary office and clerical expenses
relating to research and statistical work. Lord Abbett has entered into a sub-
advisory agreement with Dunedin Fund Managers Ltd. ("Dunedin"); Dunedin
furnishes investment advisory services in connection with the management of the
Company. Lord Abbett pays for the cost of Dunedin's services. For the six months
ended June 30, 1995, Lord, Abbett & Co. waived the Company's management fee of
$11,474. The management fee paid to Lord, Abbett & Co. is based on average daily
net assets at the rate of 3/4 of 1% per annum. Lord, Abbett & Co. has subsidized
the Company for $10,683 for the six months ended June 30, 1995. Certain of the
Company's officers and Directors have an interest in Lord, Abbett & Co.
<PAGE>
LORD ABBETT SERIES FUND -- GROWTH AND INCOME PORTFOLIO
June 30, 1995
STATEMENT OF NET ASSETS
-----------------------
<TABLE>
<CAPTION>
Market
Value
Security Number of Shares (Note 1a)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS IN COMMON AND
CONVERTIBLE-PREFERRED STOCKS 92.22%
--------------------------------------------------------------------------------------------------------------------
Aerospace -- 2.24%
Boeing Co............................................................... 30,000 $1,878,750
Rockwell International Corp............................................. 30,000 1,372,500
Total................................................................... 3,251,250
Airlines -- 1.39%
British Airways ADS..................................................... 30,000 2,017,500
Apparel -- 1.10%
Warnaco Group Inc....................................................... 80,000 1,600,000
Auto Parts -- 3.04%
Genuine Parts Co........................................................ 45,000 1,704,375
Snap-On, Inc............................................................ 70,000 2,712,500
Total................................................................... 4,416,875
Automobiles -- .65%
General Motors Corp..................................................... 20,000 937,500
Banks: Regional -- 2.74%
BankAmerica Corp........................................................ 20,000 1,052,500
Comerica Inc............................................................ 40,000 1,285,000
George Mason Bankshares Inc............................................. 35,000 700,000
KeyCorp................................................................. 30,000 941,250
Total................................................................... 3,978,750
Building Materials -- .87%
Crane Co................................................................ 35,000 1,268,750
Chemicals -- 3.86%
Atlantic Richfield (Lyondell) $2.23 Conv. Pfd........................... 80,000 2,080,000
Dow Chemical Co......................................................... 20,000 1,437,500
Hanna, M.A. Co.......................................................... 80,000 2,080,000
Total................................................................... 5,597,500
Containers -- 1.53%
Sonoco Products Co. $2.25 Conv. Pfd..................................... 40,000 2,220,000
Data Processing Services -- 2.29%
H & R Block, Inc........................................................ 50,000 2,056,250
General Motors Corp. $3.25 Conv. Pfd.................................... 20,000 1,260,000
Total................................................................... 3,316,250
Drugs/Health Care Products -- 4.51%
Baxter International Inc................................................ 40,000 1,455,000
Merck & Co., Inc........................................................ 45,000 2,205,000
SmithKline Beecham plc ADR.............................................. 63,600 2,877,900
Total................................................................... 6,537,900
</TABLE>
<PAGE>
LORD ABBETT SERIES FUND -- GROWTH AND INCOME PORTFOLIO
June 30, 1995
STATEMENT OF NET ASSETS
-----------------------
<TABLE>
<CAPTION>
Market
Value
Security Number of Shares (Note 1a)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Electric Power -- 5.13%
CINergy Corp............................................................ 120,000 $ 3,150,000
Ohio Edison Co.......................................................... 80,000 1,810,000
Potomac Electric Power Co............................................... 40,000 860,000
Public Service Co. of Colorado.......................................... 50,000 1,625,000
Total................................................................... 7,445,000
Electrical Equipment -- 1.97%
Emerson Electric Co..................................................... 40,000 2,860,000
Electronics: Communications -- 1.07%
Harris Corp............................................................. 30,000 1,548,750
Electronics: Components -- 1.31%
AMP Inc................................................................. 45,000 1,901,250
Electronics: Equipment -- 3.03%
Perkin-Elmer Corp....................................................... 80,000 2,840,000
Raytheon Co............................................................. 20,000 1,552,500
Total................................................................... 4,392,500
Financial: Miscellaneous -- 2.98%
American Express Co..................................................... 40,000 1,405,000
Transamerica Corp....................................................... 50,000 2,912,500
Total................................................................... 4,317,500
Food -- 9.04%
Archer-Daniels-Midland Co............................................... 130,000 2,421,250
Conagra Inc. $1.6875 Conv. Pfd.......................................... 70,000 2,476,250
Dean Foods Co........................................................... 100,000 2,800,000
Hershey Foods Corp...................................................... 30,000 1,657,500
Sara Lee Corp........................................................... 50,000 1,425,000
Supervalu Inc........................................................... 80,000 2,330,000
Total................................................................... 13,110,000
Insurance -- 8.06%
Aetna Life & Casualty Company........................................... 30,000 1,886,250
Chubb Corp.............................................................. 40,000 3,205,000
Cigna Corp.............................................................. 30,000 2,328,750
Lincoln National Corp................................................... 50,000 2,187,500
St. Paul's Capital $3.00 Conv. Pfd...................................... 40,000 2,090,000
Total................................................................... 11,697,500
Machinery: Diversified -- .90%
Goulds Pumps, Inc....................................................... 60,000 1,305,000
Metals: Miscellaneous -- 1.30%
Cyprus Amax Minerals $4.00 Conv. Pfd.+.................................. 30,000 1,890,000
</TABLE>
<PAGE>
LORD ABBETT SERIES FUND -- GROWTH AND INCOME PORTFOLIO
June 30, 1995
STATEMENT OF NET ASSETS
-----------------------
<TABLE>
<CAPTION>
Market
Value
Security Number of Shares (Note 1a)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Miscellaneous -- 3.89%
Minnesota Mining & Mfg. Co.............................................. 60,000 $ 3,435,000
Moore Corp. Ltd......................................................... 100,000 2,212,500
Total................................................................... 5,647,500
Natural Gas Distribution -- 1.56%
Consolidated Natural Gas Co............................................. 60,000 2,265,000
Natural Gas Diversified -- 1.79%
Equitable Resources, Inc................................................ 90,000 2,598,750
Natural Gas Transmission -- 1.68%
Coastal Corp............................................................ 80,000 2,430,000
Office Equipment/Supplies -- .48%
Apple Computer Inc...................................................... 15,000 696,563
Oil: Domestic -- 1.10%
Unocal Corp. $3.50 Conv. Pfd.+.......................................... 30,000 1,597,500
Oil: International -- 3.71%
Chevron Corp............................................................ 70,000 3,263,750
Exxon Corp.............................................................. 30,000 2,118,750
Total................................................................... 5,382,500
Paper and Forest Products -- .95%
James River Corp........................................................ 50,000 1,381,250
Printing and Publishing -- 3.00%
Deluxe Corp............................................................. 50,000 1,656,250
Donnelley, R.R. & Sons Co............................................... 75,000 2,700,000
Total................................................................... 4,356,250
Restaurants -- .71%
Brinker International Inc............................................... 60,000 1,035,000
Retail -- 2.60%
Dayton Hudson Corp...................................................... 15,000 1,076,250
Sears, Roebuck & Co..................................................... 45,000 2,694,375
Total................................................................... 3,770,625
Savings and Loan -- 2.13%
Ahmanson, H.F. & Co..................................................... 70,000 1,540,000
Great Western Financial Corp............................................ 75,000 1,546,875
Total................................................................... 3,086,875
Telecommunications -- 3.65%
American Telephone & Telegraph Co....................................... 50,000 2,656,250
MCI Communications Corp................................................. 120,000 2,640,000
Total................................................................... 5,296,250
</TABLE>
<PAGE>
LORD ABBETT SERIES FUND -- GROWTH AND INCOME PORTFOLIO
June 30, 1995
STATEMENT OF NET ASSETS
-----------------------
<TABLE>
<CAPTION>
Market
Number of Shares or Value
Security Principal Amount (Note 1a)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Textiles: Apparel -- 1.59%
National Service Industries, Inc........................................ 80,000 $ 2,310,000
Tire and Rubber Goods -- 1.20%
Standard Products Co.................................................... 80,000 1,740,000
Waste Disposal -- 3.17%
Browning Ferris Industries Inc.......................................... 80,000 2,890,000
WMX Technologies Inc.................................................... 60,000 1,702,500
Total................................................................... 4,592,500
TOTAL INVESTMENTS IN
COMMON AND CONVERTIBLE-PREFERRED STOCKS (Cost $119,425,570)............. 133,796,338
OTHER ASSETS, LESS LIABILITIES 7.78%
Short-term Investments, at Cost
American Express Credit Corp.
5.50% due 7/3/95........................................................ 2,000M 2,000,000
Beneficial Corp.
5.89% due 7/5/95........................................................ 3,900M 3,900,000
Federal National Mortgage Association
5.87% due 7/14/95....................................................... 3,000M 2,992,663
Prudential Funding Corp.
5.95% due 7/6/95........................................................ 2,600M 2,600,000
Total Short-term Investments............................................ 11,492,663
Cash and Receivables, Net of Liabilities................................ (205,056)
TOTAL OTHER ASSETS, LESS LIABILITIES.................................... 11,287,607
NET ASSETS 100.00%
(equivalent to $14.93 a share on 9,717,816 shares of $.001 par value
capital stock outstanding; authorized, 50,000,000 shares)............... $145,083,945
</TABLE>
+Restricted security under Rule 144A.
See Notes to Financial Statements.
<PAGE>
Growth and Income Portfolio
STATEMENT OF OPERATIONS
-----------------------
For the Six Months Ended June 30, 1995
<TABLE>
<S> <C> <C>
Investment Income
Income:
Dividends $ 2,016,337
Interest 326,173
--------------------------------------------------------------------------------------------------
Total income $ 2,342,510
Expenses:
Management fee (Note 5) 309,715
Audit and tax 15,000
Legal 6,000
Registration 3,000
Shareholder servicing 2,400
Pricing 750
Other 2,100
Total expenses 338,965
--------------------------------------------------------------------------------------------------
Net investment income 2,003,545
Net Realized and Unrealized Gain on Investments (Note 4)
Net realized gain from security transactions
(excluding short-term securities):
Proceeds from sales 43,529,742
Cost of securities sold 38,506,018
--------------------------------------------------------------------------------------------------
Net realized gain 5,023,724
--------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments:
Beginning of period 865,512
End of period 14,370,768
--------------------------------------------------------------------------------------------------
Net unrealized appreciation 13,505,256
--------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 18,528,980
--------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations $20,532,525
--------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
Growth and Income Portfolio
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------
<TABLE>
<CAPTION>
Year Ended
Six Months Ended December 31,
June 30, 1995 1994
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 2,003,545 $ 2,978,323
Net realized gain from security transactions 5,023,724 3,923,110
Net unrealized appreciation (depreciation) of investments 13,505,256 (4,040,441)
-----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 20,532,525 2,860,992
-----------------------------------------------------------------------------------------------------------------
Undistributed net investment income included in price
of shares sold and reacquired (Note 1d) 477,583 1,371,924
-----------------------------------------------------------------------------------------------------------------
Distributions to shareholders from (Note 2)
Net investment income -- (2,794,800)
Net realized gain from security transactions -- (4,022,817)
-----------------------------------------------------------------------------------------------------------------
Total distributions -- (6,817,617)
-----------------------------------------------------------------------------------------------------------------
Capital share transactions
Net proceeds from sales of 904,107 and 2,524,309 shares, respectively 12,109,536 31,847,505
Net asset value of 536,398 shares issued to shareholders in
reinvestment of net investment income and realized gain
from security transactions -- 6,817,617
-----------------------------------------------------------------------------------------------------------------
Total 12,109,536 38,665,122
Cost of 204,225 and 294,061 shares reacquired, respectively (2,643,338) (3,691,518)
-----------------------------------------------------------------------------------------------------------------
Increase in net assets derived from capital share transactions
(net increase of 699,882 and 2,766,646 shares, respectively) 9,466,198 34,973,604
-----------------------------------------------------------------------------------------------------------------
Increase in net assets 30,476,306 32,388,903
Net Assets
Beginning of period 114,607,639 82,218,736
-----------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment income
of $6,890,278 and $4,409,150, respectively) $145,083,945 $114,607,639
-----------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
Growth and Income Portfolio
FINANCIAL HIGHLIGHTS
--------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
Per Share Operating Performance: June 30, 1995 1994 1993 1992 1991 1990
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.71 $ 13.15 $ 12.27 $ 11.61 $ 9.93 $ 10.07
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .22 .41 .34 .45* .50* .41*
Net realized and unrealized gain
(loss) on investments 2.00 (.045) 1.48 1.3575 2.18 (.19)
Total from investment operations 2.22 .365 1.82 1.8075 2.68 .22
------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income -- (.33) (.27) (.32) (.35) (.29)
Distributions from net realized gain -- (.475) (.67) (.8275) (.65) (.07)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.93 $ 12.71 $ 13.15 $ 12.27 $ 11.61 $ 9.93
---------------------------------------------------------------------------------------------------------------------------------
Total Return 17.46%+ 2.76% 14.80% 15.62% 27.00% 2.18%
---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $145,084 $114,608 $82,219 $37,307 $18,297 $10,754
Ratios to Average Net Assets:
---------------------------------------------------------------------------------------------------------------------------------
Expenses, including waiver .26%+ .59% .57% .51% .13% .46%
Expenses, excluding waiver .26%+ .59% .57% .65% .72% .91%
Net investment income 1.55%+ 2.97% 2.76% 3.38% 4.20% 4.38%
Portfolio turnover rate 37.00% 68.94% 78.26% 107.30% 70.82% 49.06%
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+Not annualized.
*Net of management fee waiver.
See Notes to Financial Statements.
<PAGE>
Growth and Income Portfolio
NOTES TO FINANCIAL STATEMENTS
-----------------------------
1. Significant Accounting Policies
The Company was incorporated under Maryland law on August 28, 1989 and is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The Company currently consists of two active
Series. The Growth and Income Portfolio (the "Company") commenced operations on
December 11, 1989. Shares of the Company are currently issued and redeemed only
in connection with investment in, and payments under, certain variable annuity
contracts issued by COVA Financial Services Life Insurance Company ("COVA") and
its affiliated insurance companies. The following is a summary of significant
accounting policies consistently followed by the Company. The policies are in
conformity with generally accepted accounting principles.
(a) Market value is determined as follows: Securities listed or admitted to
trading privileges on any national securities exchange are valued at the last
sales price on the principal securities exchange on which such securities are
traded, or, if there is no sale, at the mean between the last bid and asked
prices on such exchange. Securities traded in the over-the-counter market are
valued at the mean between the last bid and asked prices in such market, except
that securities admitted to trading on the NASDAQ National Market System are
valued at the last sales price if it is determined that such price more
accurately reflects the value of such securities. Securities for which market
quotations are not available are valued at fair value under procedures approved
by the Board of Directors. Short-term securities are carried at cost which
approximates market.
(b) It is the policy of the Company to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income in taxable distributions. Therefore, no federal income tax
provision is required.
(c) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Interest income is recorded
on the accrual basis.
(d) A portion of proceeds from sales and costs of repurchases of capital shares,
equivalent to the amount of distributable net investment income on the date of
the transaction, is credited or charged to undistributed income. Undistributed
net investment income per share thus is unaffected by sales or repurchases of
shares.
2. Distributions
Net realized gain from security transactions, if any, is declared in December
and distributed to shareholders in the succeeding year. At June 30, 1995, the
accumulated undistributed net realized gain for financial statement purposes,
which is substantially the same as for federal income tax purposes, aggregated
$4,836,393.
<PAGE>
Growth and Income Portfolio
Income and capital gains distributions are determined in accordance with income
tax regulations which may differ from methods used to determine the
corresponding income and capital gains amounts in accordance with generally
accepted accounting principles.
3. Capital Paid In
At June 30, 1995, capital paid in aggregated $118,986,506.
4. Purchases and Sales of Securities
Purchases and sales of investment securities (other than short-term investments)
aggregated $54,251,224 and $43,529,742, respectively. Security gains and losses
are computed on the identified cost basis.
As of June 30, 1995, unrealized appreciation for federal income tax purposes for
the Company aggregated $14,370,768 of which $15,217,145 related to appreciated
securities and $846,377 related to depreciated securities. For federal income
tax purposes, the identified cost of investments owned at June 30, 1995 was
substantially the same as the cost for financial reporting purposes.
5. Management Fee and Other Transactions with Affiliates
Lord, Abbett & Co. received a management fee of $309,715 for which it provided
the Company with investment management services and executive and other
personnel, paid the remuneration of officers, provided office space and paid for
ordinary and necessary office and clerical expenses relating to research and
statistical work. The management fee paid to Lord, Abbett & Co. is based on
average daily net assets at the rate of 1/2 of 1% per annum. Certain of the
Company's officers and Directors have an interest in Lord, Abbett & Co.
The Company adopted a Rule 12b-1 Plan on April 20, 1994 which permits the
Company to make payments to Lord, Abbett & Co. for remittance to a Life
Insurance Company at the annual rate of .15% of the average daily net asset
value of shares of the Company attributable to such Life Insurance Company's
variable contract owners. No payments were made under the Plan during the period
ended June 30, 1995 to reimburse such Company for distribution expenses.
6. Directors' Remuneration
The Directors of the Company associated with Lord, Abbett & Co. and all officers
of the Company receive no compensation from the Company for acting as such.
Outside Directors' fees, including attendance fees for board and committee
meetings, and outside Directors' retirement costs, are allocated among all funds
in the Lord Abbett group based on net assets of each fund. The direct
remuneration accrued during the period for outside Directors of the Company as a
group was $1,180 (exclusive of expenses), which has been deemed invested in
shares of the Company under a deferred compensation plan contemplating future
payment of the value of those shares. As of June 30, 1995, the aggregate amount
in Directors' accounts maintained under the plan was $2,203. Retirement costs
accrued during the six months ended June 30, 1995 amounted to $900.
