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[LOGO OF LINCOLN LIFE] Multi Fund (R)
Annual
Report
1995
<PAGE>
Multi Fund(R) 1995 Annual Report
Index
Statement of Net Assets:
Lincoln National Aggressive Growth Fund, Inc. 10
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Lincoln National Bond Fund, Inc. 11
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Lincoln National Capital Appreciation Fund, Inc. 13
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Lincoln National Equity Income Fund, Inc. 14
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Lincoln National Global Asset Allocation Fund, Inc. 18
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Lincoln National Growth and Income Fund, Inc. 24
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Lincoln National International Fund, Inc. 26
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Lincoln National Managed Fund, Inc. 27
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Lincoln National Money Market Fund, Inc. 31
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Lincoln National Social Awareness Fund, Inc. 32
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Lincoln National Special Opportunities Fund, Inc. 33
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Statement of Operations 36
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Statement of Changes in Net Assets 38
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Notes to Financial Statements:
1. Significant Accounting Policies 40
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2. Other Assets Over(Under) Liabilities 42
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3. Management Fees and Other
Transactions With Affiliates 42
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4. Analysis of Net Assets 43
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5. Investments 43
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6. Supplemental Financial Instrument
Information 44
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7. Concentration of Credit Risk 45
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8. Summary of Changes from
Capital Share Transactions 46
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9. Distribution To Shareholder 46
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10. Capital Loss Carryforward 46
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11. Fund Name Changes 46
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Financial Highlights 47
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Report of Ernst & Young LLP, Independent Auditors 49
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<PAGE>
Lincoln Life(TM)
January 1996
Dear Multi Fund(R) Contract Owner:
The following booklet is the latest annual report of the Multi Fund(R) Variable
Annuity's 11 underlying funds.
1995 was a very prosperous year for most investors. While we wish you much
success for 1996, history tells us that often after a sustained period of rising
prices a drop can be expected. As with "gains," "dips" in the market also
reverse. As we've mentioned in previous reports, your investment allocation
should continue to be guided by your individual risk tolerance profile and a
long term investment horizon. Major allocation changes in response to big market
swings, up or down, should be made with caution.
All 11 of the variable subaccounts had positive performance in 1995, with the
equity subaccounts showing particularly strong gains. The chart below reflects
the performance of the subaccounts of Multi Fund(R) for the year 1995. These
numbers are slightly different from the figures that appear later in this annual
report booklet because they reflect the deduction of asset charges that are
associated with your contract. The charges cover mortality and expense risk fees
and other expenses.
<TABLE>
<CAPTION>
1995 performance
<S> <C> <C> <C>
Aggressive Growth Fund........ 33.42% International Fund/1/..... 7.60%
Bond Fund..................... 17.96 Managed Fund/2/........... 27.97
Capital Appreciation Fund..... 27.20 Money Market Fund......... 4.59
Equity-Income Fund............ 32.87 Social Awareness Fund..... 41.82
Global Asset Allocation Fund.. 22.59 Special Opportunities Fund 30.54
Growth and Income Fund........ 37.00
</TABLE>
On page 2 of this letter, you will see an additional table which shows the
Securities and Exchange Commission (SEC) required performance. The SEC states
that we must present performance net of surrender charges and annual contract
fees. These performance numbers apply only in cases when surrenders and
withdrawals occur during the first seven or ten years of a contract (depending
upon the type of contract you own).
Beginning on page three, we have included commentary from each of the portfolio
managers about the Fund(s) they manage. We hope you find their review of 1995
and brief outlook for 1996 enlightening. More detailed information about each of
the 11 subaccounts follows the commentary.
Thank you for your continued confidence in Lincoln Life and our investment
managers. We look forward to reporting to you again in six months.
Sincerely,
/s/ Kelly D. Clevenger
Kelly D. Clevenger
Vice President
1
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<TABLE>
<CAPTION>
SEC required performance/3/
One year Five years Ten years or life
12/31/94 to 12/31/90 to 12/31/85 to
Multi Fund 12/31/95 12/31/95 12/31/95
<S> <C> <C> <C>
Bond....................... 8.45% 8.12% 8.48%
Growth and Income.......... 25.96 14.01 13.00
Special Opportunities...... 20.03 16.71 11.13
Money Market............... (3.81) 2.32 4.72
Managed.................... 17.66 10.24 10.19
Global Asset Allocation 12.71 10.40 8.03/4/
Social Awareness........... 30.39 16.18 13.88/4/
International.............. (1.07) N/A 4.96/4/
Aggressive Growth.......... 22.67 N/A 4.83/4/
Capital Appreciation....... 16.95 N/A 9.05/4/
Equity-Income.............. 22.17 N/A 13.07/4/
</TABLE>
1 An investment in the Money Market Fund is neither insured nor guaranteed by
U.S. Government. There is no assurance that the subaccount will maintain a
stable $1.00 value.
2 The risks associated with investing on a worldwide basis include differences
in regulation of financial data and reporting, currency exchange differences, as
well as economic and political systems which may be different from those in the
United States.
3 In compliance with SEC guidelines, these results show the percent change (on
an annualized basis) for each of the required periods with dividends reinvested
and include reduction of all recurring expenses (e.g., administrative fees) and
non-recurring expenses (e.g., surrender charges - periodic/years 1-5 = 8%, 6-10
= 4% and 11+ years 0%. Flexible premium/7-6-5-4-3-2-1 declining 1% annually.)
4 Indicates performance since inception.
Note:The investment return and principal value of an investment may fluctuate so
that an investor's shares, when redeemed, may be worth more or less than the
original cost.
This material must be preceded or accompanied by a prospectus for the Lincoln
National Life Variable Annuity Account C. Read the prospectus carefully before
you invest.
2
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How a $10,000 investment has grown
The following charts show the growth of $10,000 invested in each of the
investment portfolios. However, the variable annuity and life insurance
contracts that use these funds have certain fees and expenses not reflected
here.
Aggressive Growth Fund
Growth of $10,000 invested 1/3/94 through 12/31/95
[CHART APPEARS HERE]
---- Aggressive Growth Fund
Russell 2000
- ---------------------------------------------------------------
$13,000 $12,610
$12,195
- ---------------------------------------------------------------
$10,000
- ---------------------------------------------------------------
$7,000 1/3/94 12/31/95
As we had suggested in last year's report, 1995 has in fact been a very
rewarding year for mid cap (medium sized companies) growth stock investors. We
are glad to be able to deliver significant absolute and relative performance to
our shareholders this year after a disappointing 1994. We believe that the
drivers of 1995's performance have been stronger than expected corporate
earnings and lower long term interest rates.
Mid cap growth stock valuations are higher today than a year ago, but we believe
they are likely to move higher still as investors pay higher premiums for
companies showing above average revenue and earnings growth. The average
increase in expected 1996 earnings for companies whose shares are held in the
fund's portfolio is significantly higher than that of the broader market as
measured by the S&P 500 Index.
We believe that a principal driver to performance in 1996 is continued lower
long term interest rates which, among other things, will help to support higher
stock valuations. As always, our investment philosophy is based on identifying
and purchasing the shares of those companies undergoing positive fundamental
change. We are excited today about the number of companies we see undergoing
such fundamental improvements and we are working hard to properly position this
Fund for above average performance in 1996.
Ed Petner
Lynch & Mayer
Bond Fund
Growth of $10,000 invested 1/1/86 through 12/31/95
[CHART APPEARS HERE]
---- Bond Fund
Lehman Brothers Government/Corporate Bond Index
- ---------------------------------------------------------------
$30,000
- --------------------------------------------------------------- $25,117
$25,000 $24,751
- ---------------------------------------------------------------
$20,000
- ---------------------------------------------------------------
$15,000
- ---------------------------------------------------------------
$10,000 1/1/86 12/31/95
Throughout the financial markets, 1995 was an outstanding year. In a bull market
in which yields plummeted by approximately 2-2 1/2% across most of the treasury
curve, the Bond Fund outperformed relative to its peers.
A variety of factors helped to drive the bull run in the bond and stock markets
in 1995. The Mexican peso devaluation in December of 1994 and the negative
publicity from the Orange County and Barings investment losses, related to
speculative derivatives, helped set the stage for the 1995 rebound. Tightening
of monetary policy by the Federal Reserve during 1994 began to impact the
economy in 1995, as the economy experienced a "soft landing" consisting of slow
economic growth and low inflation. Finally, based in part on the Republican
landslide in the 1994 elections, the markets rallied throughout the year on
expectations of deficit reduction.
3
<PAGE>
The Fund employed several key strategies during the year which enhanced
portfolio returns. To take advantage of the soft landing, a strategy of
aggressively taking more credit risk was utilized. The Fund's exposure in
several sectors, including airlines and media, improved performance during the
year. Confident of a rebound in interest rates, we remained at longer durations
than our benchmark. This strategy was highly effective as the long bond rallied
throughout the year resulting in price appreciation for the Fund. In
anticipation of spread widening in the mortgage backed securities market, we
maintained a modest exposure to this sector.
We look for 1996 to be a year of continued slow economic growth and moderate
inflation. Although the bond market will not be able to repeat the extremely
strong performance of 1995, a favorable environment for fixed income securities
should exist as the Federal Reserve is likely to continue to ease interest
rates.
Tim Policinski
Lincoln Investment Management Co.
Capital Appreciation Fund
Growth of $10,000 invested 1/3/94 through 12/31/95
[CHART APPEARS HERE]
==== Capital Appreciation Fund
---- S&P 500 Index
- ---------------------------------------------------------------
$14,000 $13,932
$12,989
- ---------------------------------------------------------------
$12,000
- ---------------------------------------------------------------
$10,000 1/3/94 12/31/95
At year end the financial markets closed out one of the strongest performances
on record. Both stocks and bonds posted excellent gains against economic news
that included moderate growth, low inflation and a dramatic decline in interest
rates. In addition, corporate earnings grew at double-digit rates for the fourth
year in a row. According to Standard and Poor's, the last time corporate
earnings enjoyed this strong an expansion was 1934 -- 1937.
Although market momentum slowed in the fourth quarter, when many technology and
telecommunications stocks took a nosedive, the quarter still produced
substantial returns. The S&P 500 Index gained 6.02% for the three months, and
37.58% for the year, while the Fund's portfolio appreciated 5.28% and 29.76% for
the same respective periods.
A number of positions did well during the quarter. EDS (General Motors E), our
largest single holding, moved higher as the company's account base expanded.
General Motors should complete the spin off of EDS early this year. Robert Half
International turned in another good quarter, and our insurance stocks, UNUM,
General RE, and new addition Prudential Reinsurance were marked up as well. Also
helping performance were United Technologies, Pittway, a supplier of security
electronics systems and data transmission services, and Paging Network, which
recently signed a contract with Sprint. Sprint will market Paging Network's
services.
In Europe, most major markets did not keep up with the U.S., but our larger
holdings, drug companies Roche and new addition SmithKline Beecham, experienced
solid gains. SAP, which has been a terrific performer over the last two years,
spent the quarter treading water, but has excellent prospects going forward.
A slower economy has both benefits and drawbacks for the financial markets. If
the economy remains weak in 1996, a favorable interest rate environment should
continue and support equities. The drawback is that corporate earnings could
lose momentum. Even as the new year begins, we are experiencing an increase in
companies missing their earnings projections.
Slower and less consistent earnings growth could adversely affect many stocks,
but it could also expand the valuations of companies with
4
<PAGE>
more predictable earnings streams. Financial and pharmaceutical stocks are
candidates for increase in earnings multiples because they tend to grow
consistently. So, even as we experience more volatility in more market sectors
in 1996, we may also see a rise in the prices investors will pay for the large,
predictable growth stocks that make up the core holdings of this portfolio.
James P. Craig
Janus Capital Corp.
Equity-Income Fund
Growth of $10,000 invested 1/3/94 through 12/31/95
[CHART APPEARS HERE]
---- Equity Income Fund
S&P 500 Index
- ---------------------------------------------------------------
$14,000 $13,932
$13,728
- ---------------------------------------------------------------
$12,000
- ---------------------------------------------------------------
$10,000 1/3/94 12/31/95
In 1995, the portfolio performance trailed the exceptionally strong S&P 500
Index. Compared with its peer group, however, the portfolio performed well,
surpassing the Lipper Equity-Income Index's total return.
Lower interest rates, strong corporate profits and inflows into equity mutual
funds contributed to the S&P 500's strong advance and all sectors achieved solid
double-digit gains. Overweighted interest-sensitive positions led the
portfolio's performance as these companies posted above-consensus earnings and
the stocks benefited dramatically from interest rates. During the period, drug
and technology-related stocks also soared. Except for positions with compelling
valuations or turnarounds, however, the portfolio typically underweights these
growth-oriented groups. In the period, this underweighting detracted from
performance relative to the market.
While the year's strong stock market gains and signs of overly optimistic
bottom-up earnings estimates make it difficult to expect a repeat performance
for the market in 1996, the potential for lower interest rates and continued,
albeit slow, economic growth are positive in the outlook. Currently, investors
are paying up for companies with steady earning growth. The portfolio has
exposure in these stocks, including quality consumer non-durables, but it is
looking for value elsewhere. Although the near-term earnings momentum for
cyclicals is not exciting, we have added selectively to these positions because
of their attractive valuations and potential for earnings improvements.
Stephen Petersen
Fidelity Management Trust Co.
Global Asset Allocation
Growth of $10,000 invested 9/1/87 through 12/31/95
[CHART APPEARS HERE]
---- Global Asset Allocation Fund
Lehman Brothers Government/Corporate Bond Index
S&P 500 Index
EAFE
- ---------------------------------------------------------------
$35,000 $33,740
- ---------------------------------------------------------------
$30,000
- ---------------------------------------------------------------
$25,000 $21,726
$21,186
- --------------------------------------------------------------- $20,574
$20,000
- ---------------------------------------------------------------
$15,000
- ---------------------------------------------------------------
$10,000
- ---------------------------------------------------------------
$5,000 9/1/87 12/31/95
U.S. stock and bond markets roared to record highs in 1995, propelled by low
inflation, declining interest rates and moderate economic growth. The U.S. stock
market was led through most of the year by technology and financial issues. In
the last quarter of the year, these sectors gave up market leadership to more
defensive health care and consumer stocks. As interest rates fell, U.S. bonds
made up the losses from 1994, and then some. International stock exchanges
lagged the stellar performance of the U.S. market, led by the fickle Japanese
market
5
<PAGE>
which plunged in the first half of the year only to make good all of its losses
in the final six months of 1995. As in the U.S., interest rates have fallen
overseas, leading to strong price performance for international bonds. The
dollar exhibited dramatic volatility throughout the year, but finished only
slightly lower against most European currencies and approximately unchanged
versus the yen.
The Global Asset Allocation Fund returned more than 22% in 1995. The S&P 500
Index led virtually all world markets for the year, soaring 37.53%, the best
calendar-year return since 1958. While overseas markets, as measured by the
Morgan Stanley Capital International Europe, Australasia, Far East (EAFE) Index,
were up 11.2% in dollar terms. The Lehman Brothers Aggregate Bond Index returned
18.47% in 1995, the third best calendar-year performance since the inception of
the index. The Salomon World Government Bond Index was up 19.04% in dollar terms
as foreign bond markets kept pace with the U.S. bull market in fixed income
securities.
The worldwide economic environment of low inflation, low interest rates, and
slow-to-moderate growth continues to be very supportive of financial assets. The
performance of these assets in the U.S. in 1995 reflects the positive impact of
this environment. In our view, U.S. markets are fairly priced, while many
foreign stock and bond markets appear undervalued. We expect overseas markets to
benefit in 1996 from continued declines in interest rates and a pickup in
economic growth in the latter half of the year. As a result we will favor
foreign stocks and bonds over their U.S. equivalents, although we will continue
to monitor closely economic developments both at home and abroad and manage your
portfolio in a prudent and broadly diversified fashion.
William Landes, PhD.
Putnam Investments
Growth & Income Fund
Growth of $10,000 invested 1/1/86 through 12/31/95
[CHART APPEARS HERE]
==== Growth Fund
---- S&P 500 Index
- ---------------------------------------------------------------
$40,000 $40,043
$37,174
- ---------------------------------------------------------------
$30,000
- ---------------------------------------------------------------
$20,000
- ---------------------------------------------------------------
$10,000 1/1/86 12/31/95
Stocks provided extraordinary gains this year as the S&P 500 Index returned
37.6%. At the beginning of the year, the economic soil did not seem rich enough
to yield such a bountiful crop of returns. The Federal Reserve had aggressively
raised interest rates to cut off a perceived threat of inflation. This
tightening action was intended to slow down the economy and, in turn, may have
tamed corporate profits. Quite to the contrary, while growth in Gross Domestic
Product decreased early in the year, corporate profits were robust, surpassing
the average expectations. These strong earnings fueled the stock market returns
early in the year. Later in the year, while earnings continued to grow, the
Federal Reserve lowered interest rates. This action boosted both the stock and
bond markets.
Separate from the impact of raw earnings and economic forces on the market,
speculation and politics also played a role in the market's dramatic rise.
Technology stocks were hot. In part, the phenomenon of the Internet and the
convenience and affordability of high powered computers drove technology stocks
higher. However, politics played a role in that technology stocks generally do
not pay dividends and they would benefit from the anticipated capital gains tax
cut proposed by Congress.
The Growth and Income Fund had a strong year, outpacing the vast majority of
similar
6
<PAGE>
funds. While the economic environment at the beginning of the year did not seem
positive for stocks, investors with a long term perspective were rewarded for
investing in the Growth & Income Fund and participating fully in the rally of
1995.
T. Scott Wittman
Vantage Global Advisors
International Fund
Growth of $10,000 invested 5/1/91 through 12/31/95
[CHART APPEARS HERE]
==== International Fund
---- EAFE
- ---------------------------------------------------------------
$16,000
- ---------------------------------------------------------------
$15,000 $14,421
$14,205
- ---------------------------------------------------------------
$14,000
- ---------------------------------------------------------------
$13,000
- ---------------------------------------------------------------
$12,000
- ---------------------------------------------------------------
$11,000
- ---------------------------------------------------------------
$10,000
- ---------------------------------------------------------------
$9,000 5/1/91 12/31/95
1995 got off to a very rocky start for international investors as disasters
around the world, including a major earthquake in Japan, flooding in Central
Europe, a melt-down of the Mexican peso, the collapse of a prestigious British
merchant banking firm and a decline in the US dollar rocked the markets. In the
eleven months following January almost every international market showed a
positive return. For the full year the Fund's equity return was roughly in-line
with the EAFE Index. Very good stock selection throughout Europe, particularly
in France, the Netherlands and Southern Europe, was a strong positive
contributor to performance as was overweighting Scandinavia, the Deutschemark
Block and the Other Pacific region. Unfortunately, underperformance in Japan and
a half weighting to the UK (where our performance matched the Index at +22%)
kept the portfolio's equity performance in line with the Index for the year.
We are currently seeing a mild slow-down in Europe and expect it to continue at
least through the first quarter of 1996. We expect at least mild growth in Japan
and perhaps better if political consolidation materializes, and we expect
continued strong growth in many SE Asia economies. The emerging markets remain
selectively attractive. The results from international investing pale in
comparison to this year's stellar results from the US market, but the principals
of diversification suggest international markets will again enjoy their day to
shine.
Portfolio Management Team
Clay Finlay Inc.
Managed Fund
Growth of $10,000 invested 1/1/86 through 12/31/95
[CHART APPEARS HERE]
==== Managed Fund
---- Lehman Brothers Government/Corporate Bond Index
.... S&P 500 Index
- ---------------------------------------------------------------
$40,000 $40,043
- ---------------------------------------------------------------
$30,000 $28,689
$25,117
- ---------------------------------------------------------------
$20,000
- ---------------------------------------------------------------
$10,000 1/1/86 12/31/95
Last year's performance was in sharp contrast to that of 1994. Funds investing
in a mix of stocks and bonds should have performed well. The bond market as
measured by the Lehman Government/Corporate Bond Index recorded its third best
return since the index's inception in 1973. The S&P 500 performance in 1995 was
the best over that same time period.
As we entered 1995 many analysts were convinced that the Fed would continue on
its tightening agenda which began a year earlier. The Fed did indeed push up
rates in February, but ultimately the market came to realize that inflationary
pressures were under control. As the engineered "soft landing" actually evolved,
the Fed was able to lower short rates in July and again in December. The long
end of the
7
<PAGE>
interest rate curve was helped by foreign purchases of U.S. securities and the
renewed confidence that inflation was under control. Equity markets were the
beneficiary of lower interest rates and surprisingly good earnings reports.
Large capitalized issues generally did better than the smaller growth stocks,
although there was some exceptional performance in technology and biotech firms.
During the year we maintained a nearly fully invested position with a heavier
allocation towards equities. As we anticipated a decline in interest rates, our
bond manager increased duration versus the index. Cash was generally minimal
throughout the year, but was employed in barbell strategies in conjunction with
longer maturity instruments.
The Fund's asset allocation as of 12/31/95 in the Managed Fund was: Stocks
51.48%, Bonds 43.87% and Money Markets 4.65%. The Managed Fund's performance for
1995 was more than 27% compared to the S&P 500 Index of 37.50% and the Lehman
Government/Corporate Bond Index of 19.24% for the year.
It is not unusual for an excellent year in the stock market to be followed by
reasonably positive returns, but that is not necessarily the case for bonds. We
believe that inflation will remain under control in the near term, thus
providing a safety valve for bonds. Our major concern is the budget impasse,
which to date has had some negative impact on stock and bond prices, and which
could add volatility depending on its resolution. Given our outlook on the
economy and markets we expect to maintain a fully invested position with a
slight bias towards equities.
Jay Yentis
Lincoln Investment Management Co.
Social Awareness Fund
Growth of $10,000 invested 5/3/88 through 12/31/95
[CHART APPEARS HERE]
==== Social Awareness Fund
---- S&P 500 Index
- ---------------------------------------------------------------
$35,000
$32,037
- ---------------------------------------------------------------
$30,000 $29,081
- ---------------------------------------------------------------
$25,000
- ---------------------------------------------------------------
$20,000
- ---------------------------------------------------------------
$15,000
- ---------------------------------------------------------------
$10,000 5/3/88 12/31/95
If anyone thinks they have to give up investment returns to address social
concerns, think again. The performance for the Social Awareness Fund was
exceptional for 1995, leading the surging market. At the beginning of the year,
analysts debated whether or not the Dow Jones Industrial Average could break
through 4000. The economic environment did not seem ripe for such a move as the
economy was slowing due to the Federal Reserve's 1994 interest rate hikes. By
March they had their answer as it surged past 4000 and hit 5000 by November.
Consider the "smoke stack companies" available for purchase. They are those
companies that are highly industrial that are likely to pollute. By and large,
these companies which are screened out of the Social Awareness Fund performed
poorly. For example, the Social Awareness Fund holds few energy stocks since
energy stocks are comprised of mostly oil companies which pollute. Energy
companies underperformed the market as did the basic materials sector which
included steel and mining companies which harm the environment. In contrast
service companies such as banks and Wall Street investment houses performed
well. Service companies are socially responsible and are overweighted in the
Social Awareness Fund. Banks performed well due to a flurry of mergers and
acquisitions while Wall Street firms were driven up by strong profits.
8
<PAGE>
The Social Awareness Fund is ideal equity market exposure for the investor who
wants to earn a competitive return on investment while staying true to certain
ethical principles. In 1995 the Social Awareness Fund provided a strong return
on ethical investments which should make every contract holder glad they
invested with their head and heart.
T. Scott Wittman
Vantage Global Advisors
Special Opportunities Fund
Growth of $10,000 invested 1/1/86 through 12/31/95
[CHART APPEARS HERE]
==== Special Opportunities Fund
---- S&P Mid-Cap Index
- ---------------------------------------------------------------
$45,000 $42,018
- ---------------------------------------------------------------
$40,000
- ---------------------------------------------------------------
$35,000
$31,472
- ---------------------------------------------------------------
$30,000
- ---------------------------------------------------------------
$25,000
- ---------------------------------------------------------------
$20,000
- ---------------------------------------------------------------
$15,000
- ---------------------------------------------------------------
$10,000
- ---------------------------------------------------------------
$5,000 1/1/86 12/31/95
The stock market had a remarkable year in 1995 with larger stocks leading the
way. The Dow Jones Industrial Average broke through the 4000 mark early in the
year and surged straight through the 5000 mark by November. Larger stocks, as
represented by the S&P 500 returned 37.6% while the Russell 2000 which is
comprised of mostly smaller stocks returned 28.4%. In both cases, the returns
were well above historical averages. The Special Opportunities Fund which
invests in mid-sized companies performed in line with these benchmarks with a
return for the year in between the S&P 500 and the Russell 2000.
Throughout 1994 and into 1995, the Federal Reserve had been raising interest
rates, attempting to accomplish a "soft landing," (i.e. slow the economy without
causing a recession.) Some say Alan Greenspan and his associates have achieved
this objective as growth in GDP had decreased but remains positive. Greenspan's
intention was to slow the economy to fight off the threat of inflation. At this
point inflation appears to be in check.
Given this action by the Fed and the economic consequences, investors steered
toward issues that were less likely to be affected by an economic downturn.
Large consumer non-cyclicals such as tobacco and pharmaceutical companies
performed exceptionally well. Large companies were further bolstered by a flurry
of mergers and acquisitions in the banking industry with financial companies in
general outpacing the averages substantially. In contrast, economically
sensitive companies such as small retailers were weak.
Historically, smaller companies have provided a higher long term return. The
underperformance of smaller companies last year was due largely to the economic
uncertainty early in the year. The Special Opportunities Fund is designed to
capture the additional long term return opportunities of smaller companies and
has provided competitive returns relative to its peers and relevant mid-cap
indices.
T. Scott Wittman
Vantage Global Advisors
First time use with the public February 1996.
9
<PAGE>
Lincoln National Aggressive Growth Fund, Inc.
Statement of Net Assets
December 31, 1995
Investments
<TABLE>
<CAPTION>
Number Market
Common Stocks: of Shares Value
--------- ------------
<S> <C> <C>
Banking and Insurance: 8.4%
- ----------------------------------------------------------
Corestates Financial Corp. 25,500 $965,812
MBIA Inc. 36,600 2,745,000
TCF Financial Corp. 63,600 2,106,750
TIG Holdings Inc. 109,300 3,115,050
United Companies Financial
Corp. 54,200 1,436,300
Unum Corp. 24,000 1,320,000
- ----------------------------------------------------------
11,688,912
Chemicals: 0.9%
- ----------------------------------------------------------
FMC Corp.* 18,600 1,257,825
- ----------------------------------------------------------
Coal and Gas: 3.3%
- ----------------------------------------------------------
Apache Corp. 31,800 938,100
Benton Oil & Gas Co.* 84,500 1,262,219
BJ Services Co.* 83,900 2,433,100
- ----------------------------------------------------------
4,633,419
Consumer Products and Services: 5.3%
- ----------------------------------------------------------
Omnicom Group Inc. 59,800 2,227,550
Softkey International Inc.* 38,900 894,700
Sola International Inc.* 58,800 1,484,700
Tommy Hilfiger Corp.* 65,800 2,788,275
- ----------------------------------------------------------
7,395,225
Drug and Hospital Supplies: 11.1%
- ----------------------------------------------------------
Alpharma Inc. 60,400 1,577,950
Biochem Pharmacy Inc.* 93,500 3,751,687
Biogen Inc.* 20,500 1,255,625
Biomet Inc.* 124,800 2,223,000
Liposome Inc.* 147,000 2,958,375
St. Judes Medical Inc.* 37,200 1,594,950
Teva Pharmaceutical
Industries LTD 42,400 1,963,650
- ----------------------------------------------------------
15,325,237
Electrical and Electronics: 10.3%
- ----------------------------------------------------------
Glenayre Technologies Inc.* 29,700 1,848,825
Itron Inc.* 40,100 1,368,412
Lexmark International
Group Inc.* 100,000 1,825,000
MEMC Electric Materials Inc.* 33,900 1,105,988
Octel Communications Corp.* 52,700 1,702,869
Tektronix Inc. 96,400 4,735,650
UCAR International Inc.* 50,400 1,701,000
- ----------------------------------------------------------
14,287,744
Electrical and Electronics: 1.6%
- ----------------------------------------------------------
Altera Corp.* 44,100 2,191,219
- ----------------------------------------------------------
Entertainment: 2.2%
- ----------------------------------------------------------
Regal Cinemas Inc.* 47,550 1,396,781
Station Casinos Inc.* 109,800 1,619,550
- ----------------------------------------------------------
3,016,331
Finance: 3.1%
- ----------------------------------------------------------
Green Tree Financial Corp. 65,600 1,730,200
MGIC Investment Corp. 46,500 2,522,625
- ----------------------------------------------------------
4,252,825
Financial Services: 1.2%
- ----------------------------------------------------------
First USA Inc. 35,900 1,593,062
- ----------------------------------------------------------
Food and Beverage: 2.1%
- ----------------------------------------------------------
Coca Cola Enterprises Inc. 110,300 2,950,525
- ----------------------------------------------------------
Number Market
of Shares Value
--------- ------------
Hospital and Health Care: 2.7%
- ----------------------------------------------------------
Centocor Inc.* 28,600 $886,600
Healthsouth Rehabilitation
Corp.* 99,500 2,897,937
- ----------------------------------------------------------
3,784,537
Machinery and Engineering: 4.0%
- ----------------------------------------------------------
American Standard Cos. Inc.
Del* 39,400 1,103,200
Cognex Corp.* 47,400 1,659,000
Harnnischfeger Industries Inc. 82,100 2,729,825
- ----------------------------------------------------------
5,492,025
Metals and Mining: 1.8%
- ----------------------------------------------------------
Potash Corp. of Saskatchewan 35,700 2,530,237
- ----------------------------------------------------------
Miscellaneous: 1.4%
- ----------------------------------------------------------
Westpoint Stevens Inc.* 97,400 1,941,913
- ----------------------------------------------------------
Office and Business Equipment and Services: 13.0%
- ----------------------------------------------------------
Adobe Sysinc 22,200 1,379,175
America Online Inc.* 21,000 783,562
Cadence Design Systems Inc.* 59,000 2,478,000
Danka Business Systems 57,800 2,134,988
DST Systems Inc. Del* 47,900 1,365,150
Filenet Corp.* 48,800 2,287,500
Oakley Inc.* 31,600 1,074,400
Office Max Inc.* 70,800 1,584,150
Parametric Technology Corp.* 26,600 1,765,575
Qual Communication Inc.* 52,300 2,245,631
Symantec Corp.* 38,500 892,719
- ----------------------------------------------------------
17,990,850
Petroleum and Petroleum Related: 9.6%
- ----------------------------------------------------------
Arethusa (Offshore) LTD 51,600 1,448,025
Ensco International Inc.* 105,100 2,417,300
Halliburton Co. 56,200 2,845,125
Reading & Bates Corp.* 202,400 3,036,000
Triton Energy Corp. 62,100 3,562,988
- ----------------------------------------------------------
13,309,438
Plastics: 0.9%
- ----------------------------------------------------------
LCI International Inc.* 58,800 1,205,400
- ----------------------------------------------------------
Printing and Publishing: 1.0%
- ----------------------------------------------------------
CBT Grouppub LTD* 25,500 1,338,750
- ----------------------------------------------------------
Retail: 6.1%
- ----------------------------------------------------------
Claire's Stores Inc. 138,900 2,448,113
Scholastic Corp.* 38,800 3,021,550
Staples Inc.* 57,150 1,400,175
Sunglass Hut International
Inc.* 65,200 1,540,350
- ----------------------------------------------------------
8,410,188
Soaps, Cleaner and Cosmetics: 1.0%
- ----------------------------------------------------------
Clorox Co. 18,500 1,325,063
- ----------------------------------------------------------
Transportation: 1.9%
- ----------------------------------------------------------
Fritz Companies Inc.* 45,500 1,893,938
Wisconsin Central
Transportation Corp.* 12,000 785,250
- ----------------------------------------------------------
2,679,188
Total Common Stocks: 92.9%
(Cost $103,822,119) 128,599,913
- ----------------------------------------------------------
Par
Options Purchased: Amount
--------
Morgan Stanley
Put Expiring 1/5/96,
strike price 100 $178,566 235,707
- ----------------------------------------------------------
Total Options Purchased: 0.1%
</TABLE>
<PAGE>
Maturity Market
Amount Value
---------- ------------
Repurchase Agreement:
State Street Bank and Trust
Co. repurchase agreement,
dated 12/29/95, 5.0%,
maturing 1/2/96
collateralized by U.S.
Treasury Notes 8.0%,
8/15/99 $9,142,344 $9,136,000
- ----------------------------------------------------------
Total Repurchase Agreement: 6.6%
(Cost $9,136,000) 9,136,000
- ----------------------------------------------------------
Total Investments: 99.6%
(Cost $113,918,804) 137,971,620
- ----------------------------------------------------------
Other Assets Over Liabilities: 0.4% 499,004
- ----------------------------------------------------------
Net Assets: 100.0%
(equivalent to $12.183 per share
based on 11,366,320 shares
issued and outstanding) $138,470,624
==========================================================
Lincoln National Bond Fund, Inc.
Statement of Net Assets
Investments
Par Market
Long-Term Debt Investments: Amount Value
---------- ------------
U.S. Government and Agency Obligations: 31.9%
- ----------------------------------------------------------
Federal Home Loan Mortgage Corp.
7.3%,12/15/12 $2,994,978 $3,191,149
3.5%, 12/15/21 2,000,000 1,618,220
FNMA
7.6%, 7/25/05 1,682,028 1,711,363
7.125%, 10/1/05 2,595,275 2,777,670
6.665%, 11/1/05 999,291 1,034,756
6.66%, 12/1/05 2,000,000 2,066,120
6.8%, 8/1/15 955,839 991,253
7.15%, 10/1/15 2,989,283 3,032,209
8.0%, 4/1/17 458,159 478,209
7.0%, 10/1/25 2,994,533 3,016,992
FNMA Principal Strip Step Up
Cpn*
7.56%, 12/20/01 4,000,000 3,774,800
GNMA
9.0%, 5/15/17 257,499 274,136
9.0%, 9/15/19 975,753 1,037,089
6.5%, 11/15/23 957,876 952,741
Tennessee Valley Authority
Generic*
0.0%, 11/1/00 9,500,000 7,246,600
U.S. Treasury Strips*
9.875%, 5/15/08 48,000,000 23,354,880
U.S. Treasury Bonds
12.0%, 8/15/13 500,000 771,714
8.0%, 11/15/21 6,500,000 8,135,140
U.S. Treasury Notes
6.0%, 6/30/96 3,000,000 3,011,250
7.88%, 11/15/04 10,000,000 11,581,200
- ----------------------------------------------------------
80,057,491
Collateralized Mortgage Obligations: 1.4%
- ----------------------------------------------------------
Federal Home Loan Mortgage
Corp. Series 58
8.0% CMO, 4/15/16 1,383,671 1,414,458
Mid State Trust III
9.625%, 4/1/22 321,520 331,323
Prudential Home Mortgage
6.7%, 11/25/07 1,500,000 1,517,160
Resolution Trust Corp.
9.0%, 9/25/28 241,831 249,756
- ----------------------------------------------------------
3,512,697
Indexed Securities: 1.4%
- ----------------------------------------------------------
Caterpillar Financial
Services Corp.*
4.25%, 1/8/96, coupon
inversely indexed to
2 year Italian swap
rate multiplied by 5.11. 3,500,000 3,476,900
- ----------------------------------------------------------
(Cost $960,685) 235,707
- ----------------------------------------------------------
Par Market
Amount Value
---------- ------------
Air Transportation: 2.1%
- ----------------------------------------------------------
American Airlines Equipment
Trust
10.18%, 1/2/13 $1,500,000 $1,881,855
Delta Air Lines Inc.
8.25%, Med. Term Note,
12/27/07 1,500,000 1,747,020
United Airline Inc.
Equipment Trust
9.35%, 4/7/16 1,500,000 1,718,145
- ----------------------------------------------------------
5,347,020
Aluminum: 0.3%
- ----------------------------------------------------------
Alcan Aluminum LTD--Debentures
9.7%, 10/15/96 250,000 257,955
8.875%, 1/15/22 500,000 555,100
- ----------------------------------------------------------
813,055
Banking and Insurance: 7.6%
- ----------------------------------------------------------
Ahmanson HF & Co.
8.25%, 10/1/02 2,000,000 2,205,740
Banc One Corp.
9.875%, 3/1/09 500,000 647,965
Barclays Bank Services
3.56%, 2/14/49 2,000,000 1,705,000
Barnett Banks Inc. Note
6.5%, 9/1/05 1,500,000 1,563,705
First America Bank Corp.
7.75% Subordinated Note,
7/15/04 2,000,000 2,186,860
First Bank System Inc.
6.875% Subordinated Note,
9/15/07 1,000,000 1,042,310
First Union Corp.
8.0%, 8/15/09 2,000,000 2,247,240
First USA Bank
5.75%, 1/15/99 2,000,000 1,989,920
Fleet Financial Group
7.65%, 9/1/99 1,000,000 1,046,880
Fleet/Norstar Financial
Group Inc.
7.65%, 3/1/97 500,000 510,635
Great Western Bank
10.25% Subordinated Notes,
6/15/00 500,000 558,900
Harris Bankcorp Inc.
9.375% Subordinated Notes,
6/1/01 250,000 287,858
National Westminster Bancorp p.l.c.
3.69%, 7/30/49 3,000,000 2,512,500
National Westminster Bank PLC
9.45% Debentures, 5/1/01 500,000 577,820
- ----------------------------------------------------------
19,083,333
Broadcasting: 0.2%
- ----------------------------------------------------------
Viacom Inc.
8.75%, 5/15/01 500,000 511,250
- ----------------------------------------------------------
Building Materials: 0.5%
- ----------------------------------------------------------
Georgia Pacific Corp.
10.1%, 6/15/02 1,000,000 1,187,970
- ----------------------------------------------------------
Entertainment: 1.3%
- ----------------------------------------------------------
ITT Corp. Note
6.25%, 11/15/00 1,000,000 1,005,530
Time Warner Inc.
8.88%, 10/1/12 500,000 559,330
9.125%, 1/15/13 1,500,000 1,687,710
- ----------------------------------------------------------
3,252,570
Finance: 8.3%
- ----------------------------------------------------------
Aristar Finance
7.5% Senior Subordinated
Note, 7/1/99 1,500,000 1,579,170
Avco Financial Services Inc.
7.25%, 7/15/99 1,000,000 1,047,760
Beneficial Corp.
9% Med. Term Notes,
1/19/96 1,250,000 1,252,813
Chrysler Financial Corp.
9.5%, 12/15/99 1,500,000 1,684,935
<PAGE>
Par Market
Amount Value
---------- ------------
Discover Credit Corp.
8.73% Med. Term Note,
8/15/96 $500,000 $509,805
Dow Capital B V
9.0%, 5/15/10 3,000,000 3,636,030
Ford Motor Credit Co.
8.875% Med. Term Note,
5/1/96 2,000,000 2,022,540
General Motors Acceptance
Corp.
7.85%, 11/15/97 1,500,000 1,558,650
8.88%, 6/1/10 1,500,000 1,826,670
Household Affinity Credit
Card
6.05%, 5/15/01 1,000,000 1,007,520
Household Finance Corp.
9.63% Senior Subordinated
Note, 7/15/00 875,000 999,748
International Lease
Finance Co.
8.25%, 1/15/00 2,000,000 2,167,860
Salomon Inc.
7.25%, 1/15/00 1,000,000 1,022,350
Spiegel Charge Account
Trust 2
6.95%, 12/17/01 500,000 510,264
- ----------------------------------------------------------
20,826,115
Financial Services: 2.2%
- ----------------------------------------------------------
AT & T Capital Corp.
7.47%, 5/11/05 2,750,000 2,968,872
B.A.T. Capital Corp. Euro
Bd (UK)
6.5%, 11/24/03 2,500,000 2,514,063
- ----------------------------------------------------------
5,482,935
Food and Beverage: 1.9%
- ----------------------------------------------------------
Coca Cola Enterprises Inc.
8.0%, 1/4/05 2,310,000 2,632,869
ConAgra Inc.
9.88%, 11/15/05 1,000,000 1,246,000
Nabisco Inc.
7.55%, 6/15/15 750,000 786,090
- ----------------------------------------------------------
4,664,959
Foreign Government: 2.1%
- ----------------------------------------------------------
Hydro-Quebec
7.2%, Med. Term Note
10/5/09 3,000,000 3,475,560
Manitoba (Province of)
7.75%, 7/7/26 1,500,000 1,688,970
- ----------------------------------------------------------
5,164,530
Machinery and Engineering: 1.0%
- ----------------------------------------------------------
Deere & Co.
8.27%, 8/8/95 2,000,000 2,401,440
- ----------------------------------------------------------
Metals and Mining: 3.0%
- ----------------------------------------------------------
Cyprus Amax Minerals Co. Note
7.375%, 5/15/07 2,500,000 2,670,324
Inco LTD Deb
9.6%, 6/15/22 1,300,000 1,499,810
Newmont Gold Co.
8.91%, 1/5/09 750,000 833,768
Noranda Inc.
8.13%, 6/15/04 2,000,000 2,220,380
Reynolds Metals Co.
9.0%, 8/15/03 250,000 292,468
- ----------------------------------------------------------
7,516,750
Miscellaneous: 1.1%
- ----------------------------------------------------------
Duquesne II Funding Corp.
8.7%, 6/1/16 2,474,000 2,771,969
- ----------------------------------------------------------
Motor Vehicles and Equipment: 0.4%
- ----------------------------------------------------------
General Motors Corp.
8.17%, 1/2/00 1,043,214 1,076,638
- ----------------------------------------------------------
Office and Business Equipment and Services: 0.2%
- ----------------------------------------------------------
Xerox Corp. - Euronote
8.375%, 9/25/96 500,000 505,745
- ----------------------------------------------------------
Par Market
Amount Value
---------- ------------
Paper: 1.5%
- ----------------------------------------------------------
Champion International Corp.
7.7%, 12/15/99 $1,500,000 $1,593,030
James River Corp. Note
6.7%, 11/15/03 2,000,000 2,026,160
- ----------------------------------------------------------
3,619,190
Petroleum and Petroleum Related: 3.1%
- ----------------------------------------------------------
Arkla Inc. Db
11/15/19 1,000,000 1,141,890
Atlantic Richfield Co.
10.25% Eurobond, 7/2/00 1,000,000 1,080,930
Enron Corp.
9.5%, 6/15/01 1,000,000 1,160,760
Noble Affiliates Inc.
7.25%, 10/15/23 600,000 611,418
Occidental Petroleum Corp.
11.75%, 3/15/11 2,000,000 2,113,360
Petro Canada - Debentures
8.6%, 10/15/01 1,500,000 1,670,895
- ----------------------------------------------------------
7,779,253
Public Utilities: 15.7%
- ----------------------------------------------------------
Carolina Power & Light Co.
9.0%, 4/1/22 500,000 534,625
Central Maine Power Co.
6.5%, 7/22/97 1,500,000 1,506,765
Cleveland Electric
Illuminating Co.
8.26% Med. Term Note,
10/30/98 2,500,000 2,584,675
Commonwealth Edison Co.
9.375%, 2/15/00 500,000 557,020
Consumers Power Co.
8.75% 1st Mortgage,
2/15/98 1,000,000 1,049,680
8.875% 1st Mortgage,
11/15/99 1,000,000 1,088,090
Detroit Edison Co.
6.56%, 5/1/01 2,000,000 2,042,980
Great Lakes Power Inc.
9.0%, 8/1/04 1,500,000 1,684,680
GTE Hawaiian Telephone Co.
Inc. Sr Db
7.0%, 2/1/06 2,000,000 2,097,200
Illinois Power Co.
5.85% 1st Mortgage Bonds,
10/1/96 625,000 625,363
Long Island Lighting Co.
9.63%, 7/1/24 500,000 529,995
National Rural Utilities
Coop Fin Coll Tr
7.2%, 10/1/15 1,000,000 1,049,250
Nevada Power Co.
7.06%, 5/1/00 1,500,000 1,553,235
New Jersey Bell Telephone
7.85%, 11/15/29 1,950,000 2,317,517
Northeast Utilities Series A
8.58%, 12/1/06 948,571 1,053,057
Old Dominion Electric
Co-op SE
8.76%, 12/1/22 1,600,000 1,890,240
Pacificorp
9.15% Med. Term Note,
8/9/11 2,000,000 2,496,540
Pennsylvania Power & Light
7.7%, 10/1/09 3,000,000 3,378,990
PSI Energy Inc.
8.56% Med. Term Note,
12/27/11 2,000,000 2,316,360
Public Service Co. of
Colorado
6.375%, 11/1/05 1,500,000 1,487,370
Texas Gas Transmission Corp.
8.63%, 4/4/04 1,000,000 1,151,290
Texas Utilities Electric Co.
9.85%, 2/5/03 1,500,000 1,800,944
Utilicorp United Inc.
10.5%, 12/1/20 2,000,000 2,418,540
Washington Water & Power Co.
8.01%, 12/17/01 2,000,000 2,198,540
- ----------------------------------------------------------
39,412,946
<PAGE>
Par Market
Amount Value
---------- ------------
Railroads: 0.8%
- ----------------------------------------------------------
Burlington Northern RR
6.94%, 1/2/14 $500,000 $524,930
Chicago & Northwestern
Holdings Corp.
6.25%, 7/30/12 1,460,551 1,464,144
- ----------------------------------------------------------
1,989,074
Retail: 1.0%
- ----------------------------------------------------------
Sears, Roebuck & Co.
9.05%, 2/6/12 2,000,000 2,431,560
- ----------------------------------------------------------
Savings and Loan: 0.4%
- ----------------------------------------------------------
First Security Corp. Bd
7.0%, 7/15/05 1,000,000 1,042,870
- ----------------------------------------------------------
Securities Dealers: 1.7%
- ----------------------------------------------------------
Lehman Brothers Holding Co.
Sr Note
8.875%, 3/1/02 1,000,000 1,117,000
Smith Barney Holdings
7.88%, 10/1/99 3,000,000 3,196,170
- ----------------------------------------------------------
4,313,170
Telecommunications: 3.0%
- ----------------------------------------------------------
NYNEX Capital Funding
7.63%, 10/15/09 3,000,000 3,465,450
Nynex Corp.
9.55% Debentures, 5/1/10 1,638,700 1,949,528
Rochester Telephone Corp.
9.0% Med. Term Note,
7/19/00 2,000,000 2,246,140
- ----------------------------------------------------------
7,661,118
Transportation: 1.0%
- ----------------------------------------------------------
Federal Express Corp. Note
9.65%, 6/15/12 2,000,000 2,534,120
- ----------------------------------------------------------
Total Long-Term Debt Investments: 95.1%
(Cost $225,322,149) 238,436,668
- ----------------------------------------------------------
Money Market Instruments:
Idaho Power Co.
5.8%, 1/2/96 1,300,000 1,295,602
ITT-Hartford Group, Inc
5.8%, 1/2/96 6,900,000 6,888,883
Sumitomo Corp. Of America
6.0%, 1/2/96 6,000,000 5,992,000
UBS Finance Inc
6.0%, 1/2/96 10,100,000 10,088,217
- ----------------------------------------------------------
Total Money Market Instruments: 9.6%
(Cost $24,264,702) 24,264,702
- ----------------------------------------------------------
Total Investments: 104.7%
(Cost $249,586,851) 262,701,370
- ----------------------------------------------------------
Other Assets Under Liabilities (4.7%) (11,885,316)
- ----------------------------------------------------------
Net Assets: 100.0%
(equivalent to $12.247 per share
based on 20,480,316 shares
issued and outstanding) $250,816,054
==========================================================
Lincoln National Capital Appreciation Fund, Inc.
Statement of Net Assets
December 31, 1995
Investments:
Number Market
Common Stocks: of Shares Value
---------- ------------
U.S. Government and Agency Obligations: 2.1%
- ----------------------------------------------------------
FNMA 21,150 $2,625,244
- ----------------------------------------------------------
Aerospace: 3.8%
- ----------------------------------------------------------
Allied Signal Inc. 14,075 668,563
Boeing Co. 18,150 1,422,506
McDonnell Douglas Corp. 12,100 1,113,200
United Technologies Corp. 17,000 1,612,875
- ----------------------------------------------------------
4,817,144
Air Transportation: 1.3%
- ----------------------------------------------------------
AMR Corp.* 21,875 1,624,219
- ----------------------------------------------------------
Banking and Insurance: 19.2%
- ----------------------------------------------------------
American International
Group Inc. 6,162 569,985
Bank of New York Inc. 70,400 3,432,000
Barclays PLC (UK) 100,507 1,151,952
Citicorp 61,350 4,125,787
First Bank System Inc. 12,550 622,794
First Chicago NBD Corp. 26,925 1,063,538
First Interstate Bank 20,375 2,781,187
General Re Corp. 8,625 1,336,875
ITT Hartford Group Inc.* 6,000 290,250
Prudential Reinsurance
Holdings Inc. 201,850 4,718,244
Risk Capital Holdings Inc.* 25,000 584,375
Travelers Inc. 20,725 1,303,084
Unum Corp. 46,100 2,535,500
- ----------------------------------------------------------
24,515,571
Broadcasting: 0.7%
- ----------------------------------------------------------
Grupo Television SA DE CV 15,000 337,500
Heritage Media Corp.* 20,000 512,500
- ----------------------------------------------------------
850,000
Chemicals: 2.1%
- ----------------------------------------------------------
Cytec Inds Inc.* 16,275 1,015,153
Grace WR & Co. 9,400 555,775
Hercules Inc. 20,725 1,168,372
- ----------------------------------------------------------
2,739,300
Consumer Products and Services: 0.8%
- ----------------------------------------------------------
Coleman Co. Inc.* 28,925 1,015,991
- ----------------------------------------------------------
Drug and Hospital Supplies: 8.5%
- ----------------------------------------------------------
Amgen Inc.* 19,325 1,146,214
Astra AB (Sweden) 27,369 1,092,336
Cardinal Health Inc. 25,000 1,368,750
Lilly (Eli) & Co. 51,750 2,910,937
Luxottica Group S P A 8,425 492,863
Pfizer Inc. 32,750 2,063,250
Smithkline Beecham PLC 33,500 1,859,250
- ----------------------------------------------------------
10,933,600
Electrical and Electronics: 1.7%
- ----------------------------------------------------------
Altera Corp.* 5,000 248,438
Analog Devices Inc.* 9,100 321,913
Newbridge Networks Corp.* 10,607 438,865
Pittway Corp. Del 13,125 889,219
Rohm Co. (Japan) 6,000 338,789
- ----------------------------------------------------------
2,237,223
<PAGE>
Number Market
of Shares Value
---------- ------------
Entertainment: 1.5%
- ----------------------------------------------------------
Circus Circus Enterprises Inc.* 25,750 $717,781
Mattel Inc. 39,950 1,228,463
- ----------------------------------------------------------
1,946,244
Finance: 0.2%
- ----------------------------------------------------------
HFNC Financial Corp. 19,400 256,646
- ----------------------------------------------------------
Food and Beverage: 1.5%
- ----------------------------------------------------------
Kellogg Co. 25,000 1,931,250
- ----------------------------------------------------------
Health and Personal Care: 1.5%
- ----------------------------------------------------------
Roche Holdings AG - Warrants
(Switzerland) 242 1,914,391
- ----------------------------------------------------------
Hospital and Health Care: 0.3%
- ----------------------------------------------------------
Centocor Inc.* 2,600 80,600
Healthsouth Rehabilitation
Corp.* 11,175 325,472
- ----------------------------------------------------------
406,072
Industrial: 0.5%
- ----------------------------------------------------------
First Brands Corp. 13,650 650,081
- ----------------------------------------------------------
Machinery and Engineering: 2.2%
- ----------------------------------------------------------
Agco Corp. 25,325 1,291,575
American Standard Cos.
Inc. Del.* 16,675 466,900
Deere & Co. 30,000 1,057,500
- ----------------------------------------------------------
2,815,975
Metals and Mining: 1.5%
- ----------------------------------------------------------
Minerals Technologies Inc. 40,475 1,477,337
Potash Corp. of Saskatchewan 7,081 501,866
- ----------------------------------------------------------
1,979,203
Miscellaneous: 5.2%
- ----------------------------------------------------------
First Data Corp. 53,400 3,571,125
Freeport McMoran Inc. 31,679 1,172,123
NTT Data Communications
Systems (Japan) 17 571,332
Partner Re Holding 12,000 327,750
Sealed Air Corp.* 34,700 975,937
- ----------------------------------------------------------
6,618,267
Motor Vehicles and Equipment: 5.0%
- ----------------------------------------------------------
Ford Motor Co. 20,000 580,000
General Motors Corp. 14,025 741,572
General Motors Corp. Series E 91,250 4,745,000
Honda Motor Co. (Japan) 13,000 268,184
- ----------------------------------------------------------
6,334,756
Office and Business Equipment and Services: 12.9%
- ----------------------------------------------------------
Cisco Systems Inc.* 27,325 2,040,836
Computer Associates
International Inc. 14,875 846,016
Fiserv Inc.* 45,475 1,361,408
Hewlett-Packard Co. 5,000 418,750
Manpower Inc. 5,825 163,828
Oce V/D Grinten NV
(Netherlands) 15,000 912,320
Paging Network Inc.* 39,000 938,437
Robert Half International Inc.* 71,650 3,000,344
Sap AG (Germany)* 26,610 4,127,379
Sun Microsystems Inc.* 55,350 2,528,803
Telxon Corp. 10,000 224,375
- ----------------------------------------------------------
16,562,496
Paper: 0.7%
- ----------------------------------------------------------
Alco Standard Corp. 19,000 866,875
- ----------------------------------------------------------
Petroleum and Petroleum Related: 0.8%
- ----------------------------------------------------------
Triton Energy Corp. 12,000 688,500
Witco Corp. 10,000 292,500
- ----------------------------------------------------------
981,000
Printing and Publishing: 2.5%
- ----------------------------------------------------------
Reuters Holdings PLC 13,425 $742,570
Wolters Kluwer NV (Netherlands) 25,490 2,411,281
- ----------------------------------------------------------
3,153,851
Railroads: 1.5%
- ----------------------------------------------------------
Burlington Northern Santa Fe 24,457 1,907,646
- ----------------------------------------------------------
Retail: 1.1%
- ----------------------------------------------------------
Autozone Inc.* 20,000 577,500
Credit Saison Co. (Japan) 3,900 92,920
Newell Co. 30,000 776,250
- ----------------------------------------------------------
1,446,670
Securities Dealers: 0.7%
- ----------------------------------------------------------
Merrill Lynch & Co. Inc. 9,450 481,950
Morgan Stanley Group Inc. 4,650 374,906
- ----------------------------------------------------------
856,856
Telecommunications: 1.4%
- ----------------------------------------------------------
DDI Corp. (Japan) 100 774,818
MFS Communications Inc.* 11,300 604,550
Telefonos De Mexico SA 15,000 478,125
- ----------------------------------------------------------
1,857,493
Total Common Stocks: 81.2%
(Cost $88,059,396) 103,844,064
- ----------------------------------------------------------
Par
Money Market Instruments: Amount
----------
Chevron Oil Finance Co.
0.01%,1/12/96 $5,000,000 4,991,246
Federal Home Loan Bank
5.65%, 1/16/96 5,000,000 4,988,229
5.4%, 2/27/96 2,000,000 1,982,900
General Electric Capital Corp.
0.01%, 1/2/96 6,000,000 5,999,062
Household Finance Corp.
0.01%, 1/2/96 5,200,000 5,199,176
- ----------------------------------------------------------
Total Money Market Instruments: 18.1%
(Cost $23,160,613) 23,160,613
- ----------------------------------------------------------
Total Investments: 99.3%
(Cost $111,220,009) 127,004,677
- ----------------------------------------------------------
Other Assets Over Liabilities: 0.7% 931,107
- ----------------------------------------------------------
Net Assets: 100.0%
(equivalent to $12.916 per share
based on 9,905,087 shares
issued and outstanding) $127,935,784
==========================================================
Lincoln National Equity Income Fund, Inc.
Statement of Net Assets
December 31, 1995
Investments
Par Market
Long-Term Debt Investments: Amount Value
---------- ------------
Air Transportation: 0.1%
- ----------------------------------------------------------
Delta Air Lines Inc.
3.23%, 6/15/03 $360,000 $341,100
- ----------------------------------------------------------
Banking and Insurance: 0.4%
- ----------------------------------------------------------
Fremont General Corp. -
Liquid Yield Option
0.01%, 10/12/13 1,710,000 820,800
NAC Re Corp.
5.25%, 12/15/02 100,000 97,500
- ----------------------------------------------------------
918,300
<PAGE>
Par Market
Amount Value
---------- ------------
Broadcasting 0.1%
- ----------------------------------------------------------
Rogers Communications Inc.
2.0%, 11/26/05 $220,000 $117,150
0.01%, 5/20/13 130,000 45,338
- ----------------------------------------------------------
162,488
Building and Construction: 0.1%
- ----------------------------------------------------------
Cemex
4.25%, 11/1/97 180,000 153,000
- ----------------------------------------------------------
Coal and Gas: 0.1%
- ----------------------------------------------------------
Apache Corp
6.0%, 1/15/02 120,000 138,600
- ----------------------------------------------------------
Consumer Products and Services: 0.2%
- ----------------------------------------------------------
Comcast Corp.
1.13%, 4/15/07 1,010,000 505,000
- ----------------------------------------------------------
Entertainment: 0.2%
- ----------------------------------------------------------
Time Warner Inc.
0.01%, 6/22/13 1,420,000 585,750
- ----------------------------------------------------------
Finance: 0.4%
- ----------------------------------------------------------
American Travellers Corp.
6.5%, 10/1/05 110,000 150,975
MBL International Financial
Bermuda Tr
3.0%, 11/30/02 780,000 916,500
- ----------------------------------------------------------
1,067,475
Industrial: 0.2%
- ----------------------------------------------------------
Gencorp Inc.
8.0%, 8/1/02 130,000 130,812
Thermo Electroncorp
4.25%, 1/1/03 300,000 300,000
- ----------------------------------------------------------
430,812
Machinery and Engineering: 0.2%
- ----------------------------------------------------------
Outboard Marine Corp.
7.0%, 7/1/02 420,000 441,525
- ----------------------------------------------------------
Metals and Mining: 0.1%
- ----------------------------------------------------------
Pegasus Gold Inc.
6.25%, 4/30/02 180,000 198,900
- ----------------------------------------------------------
Miscellaneous: 0.1%
- ----------------------------------------------------------
ADT Operations Inc.
0.01%, 7/6/10 380,000 178,600
News America Holdings Inc.
0.01%, 3/11/23 360,000 162,000
- ----------------------------------------------------------
340,600
Motor Vehicles and Equipment: 0.1%
- ----------------------------------------------------------
Exide Corp.
2.9%, 12/15/05 330,000 238,590
- ----------------------------------------------------------
Office and Business Equipment and Services: 0.1%
- ----------------------------------------------------------
Automatic Data Processing Inc.
0.01%, 2/20/12 480,000 233,400
- ----------------------------------------------------------
Petroleum and Petroleum Related: 0.4%
- ----------------------------------------------------------
Pennzoil Co.
6.5%, 1/15/03 750,000 945,000
- ----------------------------------------------------------
Real Estate: 0.0%
- ----------------------------------------------------------
Liberty Property LTD Partnership
1.0%, 7/1/01 10,000 10,262
- ----------------------------------------------------------
918,300
Par Market
Amount Value
---------- ------------
Retail: 0.1%
- ----------------------------------------------------------
Baker J. Inc.
7.0%, 6/1/02 $260,000 $181,350
- ----------------------------------------------------------
Waste Management: 0.1%
- ----------------------------------------------------------
WMX Technologies Inc.
2.0%, 1/24/05 318,000 273,480
- ----------------------------------------------------------
Total Long-Term Debt Investments: 3.0%
(Cost $6,863,299) 7,165,632
- ----------------------------------------------------------
Number
Common Stocks: of Shares
----------
U.S. Government and Agency Obligations: 2.1%
- ----------------------------------------------------------
FNMA 40,500 5,027,063
- ----------------------------------------------------------
Aerospace: 4.1%
- ----------------------------------------------------------
Allied Signal Inc. 26,300 1,249,250
Lockheed Martin Corp. 31,800 2,512,200
Northrop Grumman Corp. 7,300 467,200
Pall Corp. 3,600 96,750
Parker Hannifin Corp. 18,300 626,775
Rockwell International Corp. 32,200 1,702,575
Textron Inc. 10,600 715,500
Thiokol Corp. Del 13,800 467,475
United Technologies Corp. 20,900 1,982,887
- ----------------------------------------------------------
9,820,612
Air Transportation: 0.1%
- ----------------------------------------------------------
Continental Airlines
Financial Tr* 6,100 323,300
- ----------------------------------------------------------
Aluminum: 0.9%
- ----------------------------------------------------------
Aluminum Co. of America 41,200 2,178,450
- ----------------------------------------------------------
Banking and Insurance: 12.9%
- ----------------------------------------------------------
Aetna Life & Casualty Co. 24,600 1,703,550
Ahmanson H F & Co. 22,500 596,250
AllState Corp. 96,305 3,960,543
American Bankers Insurance
Group Inc. 13,800 540,787
Banc One Corp. 56,700 2,140,425
Bank of New York Inc. 67,600 3,295,500
BankAmerica Corp. 10,800 699,300
Bankers Trust New York Corp. 6,800 452,200
Boatmens Bancshares Inc. 7,100 290,656
Brascan LTD 52,300 918,289
Chemical Banking Corp. 32,600 1,915,250
Cigna Corp. 7,200 743,400
Comerica Inc. 19,200 770,400
Conseco Inc. 7,600 402,800
First Chicago NBD Corp. 22,923 905,459
First Interstate Bank 6,700 914,550
Firstar Corp. 5,800 229,825
Fleet Financial Group Inc. 33,300 1,356,975
General Re Corp. 9,300 1,441,500
ITT Hartford Group Inc. 29,800 1,441,575
National Bank CDA
Montreal QUE 89,900 732,433
Norwest Corp. 28,483 939,939
NWNL Cos. Inc. 10,100 448,188
Prudential Reinsurance
Holdings Inc. 4,400 102,850
Republic NY Corp. 9,900 615,038
Toronto Dominion Bank Ontario
(Canada) 30,300 532,552
Transport Holdings Inc.* 24 999
Washington Mutual Insurance 45,900 1,319,625
Wells Fargo & Co. 6,400 1,382,400
- ----------------------------------------------------------
30,793,258
Broadcasting: 0.1%
- ----------------------------------------------------------
Gannett Inc. 3,200 196,400
- ----------------------------------------------------------
<PAGE>
Number Market
of Shares Value
---------- ------------
Building Materials: 0.2%
- ----------------------------------------------------------
Harsco Corp. 8,200 $476,625
- ----------------------------------------------------------
Building and Construction: 0.2%
- ----------------------------------------------------------
Armstrong World Industries Inc. 6,700 415,400
Kaufman & Broad Home Corp. 4,600 68,425
- ----------------------------------------------------------
483,825
Chemicals: 3.1%
- ----------------------------------------------------------
Corning Inc. 12,500 400,000
Dow Chemical Co. 4,900 344,837
Du Pont E I De Nemours & Co. 41,800 2,920,775
Eastman Chemical Co. 3,100 194,138
Grace WR & Co. 3,200 189,200
Great Lakes Chemical Corp. 3,700 266,400
Imperial Chemical
Industries PLC 5,000 233,750
Lubrizol Corp. 23,100 643,912
Montedison SPA* 400 2,600
Nalco Chemical Co. 33,300 1,003,163
Union Carbide Corp. 32,800 1,230,000
- ----------------------------------------------------------
7,428,775
Coal and Gas: 1.0%
- ----------------------------------------------------------
Coastal Corp. 8,400 312,900
Pacific Enterprises 39,800 1,124,350
Panhandle Eastern Corp. 34,000 947,750
- ----------------------------------------------------------
2,385,000
Consumer Products and Services: 5.3%
- ----------------------------------------------------------
Dimon Inc. 5,500 96,937
Fuji Photo Film Co. (Japan) 23,000 663,826
Imasco LTD 23,000 446,357
Johnson & Johnson 14,400 1,233,000
Philip Morris Co. Inc. 91,600 8,289,800
Tambrands Inc. 2,900 138,475
The Stanley Works 1,900 97,850
Universal Corp. 22,900 558,187
Whirlpool Corp. 19,900 1,059,675
- ----------------------------------------------------------
12,584,107
Drug and Hospital Supplies: 3.5%
- ----------------------------------------------------------
American Home Products Corp. 11,900 1,154,300
Bausch & Lomb Inc. 6,200 245,675
Baxter International Inc. 29,200 1,222,750
Becton, Dickinson & Co. 9,200 690,000
Bristol Myers Squibb Co. 22,700 1,949,363
Pfizer Inc. 17,000 1,071,000
Schering-Plough Corp. 19,800 1,084,050
Tenet Healthcare Corp.* 19,800 410,850
Warner Lambert Co. 5,200 505,050
- ----------------------------------------------------------
8,333,038
Electrical and Electronics: 6.1%
- ----------------------------------------------------------
AMP Inc. 16,700 640,863
Cooper Industries Inc. 25,398 933,377
Emerson Electric Co. 1,800 147,150
Entergy Corp. 33,500 979,875
General Electric Co. 83,300 5,997,600
General Signal Corp. 23,200 751,100
Harris Corp. 14,300 781,138
Mitsubishi Electric Corp.
(Japan) 57,000 410,179
National Semiconductor Corp.* 6,349 141,265
National Service Industries Inc. 20,600 666,925
NEC Corp. (Japan) 23,000 280,678
Nitto Denko Corp.(Japan) 18,000 278,935
Raychem Corp. 2,700 153,562
Thomas & Betts Corp. 6,600 486,750
Tyco International LTD 30,600 1,090,125
Westinghouse Electric Corp. 59,100 908,662
- ----------------------------------------------------------
14,648,184
Entertainment: 0.7%
- ----------------------------------------------------------
Bally Entertainment Corp. 35,000 476,875
Brunswick Corp. 2,700 64,800
Hasbro Inc. 20,600 638,600
ITT Industries Inc.* 15,900 381,600
- ----------------------------------------------------------
1,561,875
Number Market
of Shares Value
---------- ------------
Finance: 2.9%
- ----------------------------------------------------------
Acom Co. (Japan) 6,700 $280,329
Allmerica Financial Corp.* 600 16,200
American Express Co. 112,300 4,646,413
Beneficial Corp. 10,800 503,550
Brierley Investment LTD
(New Zealand) 543,600 430,018
Household International Inc. 10,400 614,900
Keycorp 8,800 319,000
- ----------------------------------------------------------
6,810,410
Financial Services: 0.8%
- ----------------------------------------------------------
American Financial Group Inc. 40,000 1,225,000
Dun & Bradstreet Corp. 2,900 187,775
Hees International Bancorp
Inc. (Canada) 2,800 28,451
Time Warner Financing Trust 13,400 418,750
Trilon Financial Corp. 39,900 128,568
- ----------------------------------------------------------
1,988,544
Food and Beverage: 3.3%
- ----------------------------------------------------------
Anheuser Busch Cos. Inc. 3,300 220,687
Fleming Companies Inc. 11,100 228,938
Goodman Fielderlt (Australia) 582,500 584,492
Great Atlantic & Pacific
Tea Inc. 15,700 361,100
Kellogg Co. 16,800 1,297,800
Pepsico Inc. 12,500 698,437
Ralston Purina Co. 16,000 998,000
RJR Nabisco Holding Corp. 94,680 2,923,245
SuperValu Inc. 20,600 648,900
- ----------------------------------------------------------
7,961,599
Forest Products: 0.8%
- ----------------------------------------------------------
Weyerhaeuser Co. 45,400 1,963,550
- ----------------------------------------------------------
Furniture Manufacturing: 0.4%
- ----------------------------------------------------------
Masco Corp. 33,600 1,054,200
- ----------------------------------------------------------
Hotels: 0.1%
- ----------------------------------------------------------
Brinker International Inc.* 20,900 316,113
Patriot Amern Hospitality Inc. 200 5,150
- ----------------------------------------------------------
321,263
Household Appliances: 0.4%
- ----------------------------------------------------------
Maytag Corp. 3,200 64,800
Rubbermaid Inc. 36,200 923,100
- ----------------------------------------------------------
987,900
Industrial: 1.5%
- ----------------------------------------------------------
Armco Inc.* 13,500 79,313
Goulds Pumps Inc. 1,600 39,900
ITT Corp. New* 15,900 842,700
Johnson Controls Inc. 14,700 1,010,625
McDermott International Inc. 10,600 233,200
Raytheon Co. 17,800 841,050
TRW Inc. 5,000 387,500
Zurn Industries Inc. 4,600 98,325
- ----------------------------------------------------------
3,532,613
Machinery and Engineering: 1.3%
- ----------------------------------------------------------
Caterpillar Inc. 8,000 470,000
Crane Co. 12,000 442,500
Deere & Co. 21,600 761,400
Dresser Industries Inc. 42,100 1,026,187
Ingersollrand Co. 10,900 382,863
- ----------------------------------------------------------
3,082,950
Metals and Mining: 0.9%
- ----------------------------------------------------------
Inco Limited 11,200 372,400
Lukens Inc. 3,300 94,875
Newmont Mining Corp. 5,000 226,250
Noranda Inc. 20,100 413,997
Reynolds Metals Co. 18,200 1,030,575
- ----------------------------------------------------------
2,138,097
<PAGE>
Number Market
of Shares Value
---------- ------------
Miscellaneous: 2.1%
- ----------------------------------------------------------
Dexter Corp. 9,400 $222,075
Grand Metropolitan 44,900 323,205
Illinova Corp. 41,200 1,236,000
Keystone International Inc. 38,500 770,000
Nordbanken AB (Sweden)* 12,000 207,841
Omron Corp. (Japan) 20,000 461,017
Public Storage Inc. 6,100 115,900
Ralcorp Holdings Inc.* 8,400 203,700
Safety Kleen Corp. 15,700 245,312
Snap On Inc. 16,300 737,575
St Paul Capital LLC 3,000 168,750
U S Industries Inc.* 19,100 350,962
- ----------------------------------------------------------
5,042,337
Motor Vehicles and Equipment: 4.9%
- ----------------------------------------------------------
Chrysler Corp. 70,100 3,881,787
Ford Motor Co. 24,300 704,700
General Motors Corp. 87,100 4,605,413
General Motors Corp. Series H 5,800 284,925
Genuine Parts Co. 32,300 1,324,300
Goodrich BF Co. 5,100 347,437
Honda Motor Co. (Japan) 27,000 556,998
- ----------------------------------------------------------
11,705,560
Office and Business Equipment and Services: 3.1%
- ----------------------------------------------------------
Digital Equipment Corp.* 41,600 2,667,600
IBM 24,100 2,211,175
Moore Corp. LTD 22,300 415,338
New England Business
Services Inc. 7,500 164,062
Standard Register 10,000 201,250
Xerox Corp. 12,100 1,657,700
- ----------------------------------------------------------
7,317,125
Paper: 1.2%
- ----------------------------------------------------------
International Paper Cap Tr 6,100 276,025
International Paper Co. 28,958 1,096,784
Kimberly Clark Corp. 16,692 1,381,263
- ----------------------------------------------------------
2,754,072
Petroleum and Petroleum Related: 12.6%
- ----------------------------------------------------------
Amerada Hess Corp. 22,300 1,181,900
Amoco Corp. 24,100 1,732,188
Atlantic Richfield Co. 27,700 3,067,775
Baker Hughes Inc. 22,000 536,250
British Petroleum PLC 64,897 6,627,606
Chevron Corp. 21,400 1,123,500
Diamond Shamrock Inc. 1,400 78,050
Enron Corp. 9,900 377,438
Enserch Corp. 14,600 237,250
Exxon Corp. 10,900 873,362
GATX 8,000 389,000
Halliburton Co. 24,700 1,250,437
Kerr McGee Corp. 17,000 1,079,500
Mobil Corp. 13,500 1,512,000
Occidental Petroleum Corp. 29,600 632,700
Petro Cda 10,700 61,525
Phillips Petroleum Co. 12,000 409,500
Questar Corp. 15,900 532,650
Royal Dutch Petroleum Co. 5,900 832,637
Schlumberger LTD 34,800 2,409,900
Tenneco Inc. 8,600 426,775
Texaco Inc. 4,100 321,850
Total S A 62,137 2,112,658
Union Pacific Resource
Group Inc. 7,600 192,850
Unocal Corp. 33,800 984,425
Witco Corp. 35,700 1,044,225
- ----------------------------------------------------------
30,027,951
Printing and Publishing: 0.7%
- ----------------------------------------------------------
Deluxe Corp. 37,500 1,087,500
Harland John H Co. 26,200 546,925
Times Mirror Co. New 2,400 81,300
- ----------------------------------------------------------
1,715,725
Number Market
of Shares Value
---------- ------------
Public Utilities: 1.0%
- ----------------------------------------------------------
Cinergy Corp. 5,000 $153,125
DPL Inc. 17,300 428,175
DQE Inc. 5,000 153,750
MCN Corp. 14,400 334,800
Pacificorp 10,000 212,500
Peco Energy Co. 8,000 241,000
Portland General 10,000 291,250
Unicom Corp. 16,500 540,375
- ----------------------------------------------------------
2,354,975
Railroads: 0.6%
- ----------------------------------------------------------
Burlington Northern Santa Fe 17,100 1,333,800
- ----------------------------------------------------------
Real Estate: 0.7%
- ----------------------------------------------------------
Equity Residential PPTYS TR 12,200 373,625
Lennar Corp. 14,500 364,312
Liberty Property 3,300 68,475
Pinnacle West Capital Corp. 18,000 517,500
Pulte Corp. 900 30,263
Ryland Group Inc. 14,800 207,200
Spieker Properties Inc. 1,500 37,687
Weeks Corp. 300 7,538
- ----------------------------------------------------------
1,606,600
Restaurant: 0.1%
- ----------------------------------------------------------
Darden Restaurants Inc. 16,600 197,125
- ----------------------------------------------------------
Retail: 3.7%
- ----------------------------------------------------------
Dayton Hudson Corp. 10,800 810,000
Dillard Department Stores Inc. 10,300 293,550
Federated Department
Stores Inc.* 67,900 1,867,250
Fingerhut Cos. Inc. 19,000 263,625
Hudsons Bay Co. (Canada) 9,500 136,534
Jostens Inc. 11,500 278,875
Limited Inc. 21,000 364,875
May Department Stores Co. 29,000 1,225,250
Sears, Roebuck & Co. 28,700 1,119,300
TJX Cos. Inc. 52,700 994,713
Wal-Mart Stores 67,400 1,508,075
- ----------------------------------------------------------
8,862,047
Savings and Loan: 0.3%
- ----------------------------------------------------------
Great Western Financial Corp. 31,700 808,350
- ----------------------------------------------------------
Securities Dealers: 1.3%
- ----------------------------------------------------------
Bear, Stearns & Co. Inc 7,665 152,342
First Marathon Inc. 92,100 935,838
Lehman Brothers Holdings Inc. 20,380 433,075
Nomura Securities (Japan) 70,000 1,525,424
- ----------------------------------------------------------
3,046,679
Shoes: 0.1%
- ----------------------------------------------------------
Melville Corp. 10,600 325,950
- ----------------------------------------------------------
Soaps, Cleaner and Cosmetics: 0.1%
- ----------------------------------------------------------
Dial Corp. 7,100 210,337
- ----------------------------------------------------------
Steel: 0.0%
- ----------------------------------------------------------
Macerich Co. 400 8,000
- ----------------------------------------------------------
Telecommunications: 6.2%
- ----------------------------------------------------------
Alcatel Alsthon (France) 2,500 215,540
American Telephone &
Telegraph Co. 13,900 900,025
Ameritech Corp. 43,500 2,566,500
Bell Atlantic Corp. 33,200 2,220,250
<PAGE>
Number Market
of Shares Value
---------- ------------
Bellsouth Corp. 45,800 $1,992,300
Frontier Corp. 41,800 1,254,000
Nynex Corp. 52,800 2,851,200
Pacific Telesis Group 7,000 235,375
SBC Communications Inc. 31,200 1,794,000
Sprint Corp. 1,100 41,800
Telefonica De Espana SA 5,600 234,500
U S West Inc.* 21,000 504,000
- ----------------------------------------------------------
14,809,490
Textiles-Apparel Manufacturing: 0.3%
- ----------------------------------------------------------
Burlington Industries Inc.* 1,400 18,375
Kellwood Co. 19,700 401,388
Stride Rite Corp. 6,900 51,750
V F Corp. 4,700 247,925
- ----------------------------------------------------------
719,438
Textile Products: 0.3%
- ----------------------------------------------------------
Unifi Inc. 30,700 679,237
- ----------------------------------------------------------
Transportation: 0.6%
- ----------------------------------------------------------
CSX Corp. 32,600 1,487,375
- ----------------------------------------------------------
Waste Management: 2.0%
- ----------------------------------------------------------
Betz Laboratories Inc. 9,000 369,000
Browning Ferris Industries Inc. 42,200 1,244,900
WMX Technologies Inc. 103,900 3,104,012
- ----------------------------------------------------------
4,717,912
Total Common Stocks: 94.5%
(Cost $190,573,874) 225,811,723
- ----------------------------------------------------------
Preferred Stocks:
Alexander & Alexander
Services Inc. 6,300 311,850
Alumax Inc. 9,100 1,127,262
Armco Inc. 1,500 74,625
Atlantic Richfield Co. 19,100 448,850
Chiquita Brands International
Inc. 9,500 428,687
Kaiser Aluminum Corp. 34,900 449,338
Occidental Petroleum Corp. 16,500 1,025,063
Reynolds Metals Co. 1,700 86,063
Times Mirror Co. 1,167 30,196
Travelers Inc. 500 43,625
US Surgical Inc. 6,600 166,650
Williams Companies Inc. 3,600 265,500
- ----------------------------------------------------------
Total Preferred Stocks: 1.9%
(Cost $4,222,650) 4,457,709
- ----------------------------------------------------------
Maturity
Repurchase Agreement: Amount
----------
State Street Bank and Trust
Co. repurchase agreement
dated 12/29/95, 5.0%,
maturing 1/2/96
collateralized by
U.S. Treasury
Notes 8.0%, 8/15/99 $8,788,099 8,782,000
- ----------------------------------------------------------
Total Repurchase Agreement: 3.7%
(Cost $8,782,000) 8,782,000
- ----------------------------------------------------------
Total Investments: 103.1%
(Cost $210,441,823) 246,217,064
- ----------------------------------------------------------
Other Assets Under Liabilities: (3.1%) (7,446,188)
- ----------------------------------------------------------
Net Assets: 100.0%
(equivalent to $13.507 per share
based on 17,677,029 shares
issued and outstanding) $238,770,876
==========================================================
Lincoln National Global Asset Allocation Fund, Inc.
Statement of Net Assets
December 31, 1995
Investments:
Par Market
Long-Term Debt Investments: Amount** Value
---------- ------------
U.S. Government and Agency Obligations: 13.6%
- ----------------------------------------------------------
FNMA
6.5%, 1/1/99 $2,285,000 $2,296,425
9.5%, 5/1/07 1,390,012 1,462,988
7.5%, 7/1/07 436,954 454,546
7.5%, 2/1/14 869,154 890,340
.01%, 2/25/17 41,195 40,881
7.0%, 10/25/23 961,131 947,310
7.0%, 8/1/25 2,231,149 2,249,266
GNMA
6.5%, 1/15/99 1,990,000 2,008,029
11.0%, 12/15/15 177,728 200,611
7.0%, 6/15/23 597,817 604,913
6.5%, 7/15/23 644,617 640,040
7.0%, 8/15/23 276,813 280,099
7.0%, 9/15/23 327,325 331,211
7.5%, 9/15/23 31 31
6.5%, 10/15/23 174,022 172,607
7.5%, 10/15/23 164 169
6.5%, 12/15/23 1,650,864 1,637,442
7.0%, 12/15/23 354,265 358,470
6.5%, 1/15/24 606,703 601,770
7.0%, 1/15/24 368,077 372,446
7.5%, 1/15/24 558 574
6.5%, 2/15/24 675,211 669,722
6.5%, 4/15/24 127,902 126,862
7.0%, 5/15/24 93,981 95,097
7.0%, 8/15/25 638,937 646,522
7.0%, 9/15/25 2,240,221 2,266,813
7.0%. 10/15/25 443,862 449,131
U.S. Treasury Bonds
11.625%, 11/15/04 1,500,000 2,123,438
10.375%, 11/15/12 + 2,590,000 3,582,294
8.875%, 8/15/17 650,000 870,796
8.125%, 8/15/19 2,685,000 3,375,958
8.0%, 11/15/21 640,000 800,999
U.S. Treasury Notes
5.875%, 7/31/97 2,000,000 2,020,622
6.875%, 3/31/00 1,105,000 1,168,538
6.25%, 2/15/03 160,000 167,000
- ----------------------------------------------------------
33,913,960
Collateralized Mortgage Obligations: 0.8%
- ----------------------------------------------------------
Citicorp Mortgage Securities
Inc.
5.75, 12/1/08 885,000 872,892
Standard Credit Card Master
TR I
8.25%, 11/7/03 1,000,000 1,106,769
- ----------------------------------------------------------
1,979,661
Banking and Insurance: 1.4%
- ----------------------------------------------------------
Bankamerica Corp.
8.375%, 3/15/02 600,000 669,129
Capital One Bank
8.125% Med. Term Notes,
3/1/00 1,000,000 1,072,800
Citicorp
7.625%, 5/1/05 1,050,000 1,149,814
First USA Bank
6.375%, 10/23/00 500,000 509,760
- ----------------------------------------------------------
3,401,503
<PAGE>
Par Market
Amount** Value
---------- ------------
Electrical and Electronics: 0.2%
- ----------------------------------------------------------
Motorola Inc.
0.01%, 9/27/13 $650,000 $499,688
- ----------------------------------------------------------
Finance: 2.0%
- ----------------------------------------------------------
Associates Corp. North America
6.375%, 7/15/02 550,000 560,109
Banponce Financial Corp.
6.16%, 7/30/98 400,000 402,936
Commercial Credit Group Inc.
7.875%, 2/1/25 535,000 609,199
Discover Card Mt 1
6.55%, 2/1/03 600,000 619,308
General Electric Capital
Mortgage Services Inc.
6.0%, 2/25/24 600,000 595,721
General Motors Accep Corp.
6.75% Med. Term Note,
6/10/02 1,000,000 1,030,959
Green Tree Financial Corp.
4.85%, 1/15/19 183,653 182,562
6.8%, 5/15/26 274,857 275,800
0.99%, 2/15/27 600,000 599,625
Merrill Lynch Mortgage
Invest. Inc.
10.35%, 5/15/09 213,356 230,356
- ----------------------------------------------------------
5,106,575
Financial Services: 0.7%
- ----------------------------------------------------------
Financing Corp.
9.8%, 11/30/17 900,000 1,261,404
MBNA Master Credit Card II
6.6%, 1/15/03 540,000 558,937
- ----------------------------------------------------------
1,820,341
Foreign Government: 7.2%
- ----------------------------------------------------------
Australia (Commonwealth)
12.0%, 11/15/01 480,000 424,807
Canada (Government of)
7.0%, 9/15/97 525,000 429,935
9.0%, 12/1/04 250,000 206,243
8.75%, 12/1/05 885,000 659,780
Denmark (Kingdom of)
8.0%, 5/15/03 11,540,000 2,209,487
Dutch Government
9.0%, 5/15/00 1,325,000 954,756
France (Government Of)
7.75%, 4/12/00 4,020,000 880,016
Germany (Republic of)
7.375%, 1/3/05 1,430,000 1,089,372
6.875%, 5/12/05 1,425,000 1,052,086
6.25%, 1/4/24 2,090,000 1,357,152
Italy (Republic of)
8.5%, 4/1/99 980,000,000 590,854
10.5%, 7/15/00 430,000,000 272,926
12.0%, 1/1/03 1,935,000,000 1,303,707
10.5%, 4/1/05 1,240,000,000 776,032
Quebec (Province of)
7.125%, 2/9/24 145,000 146,153
Spain (Government Of)
12.25%, 3/25/00 142,600,000 1,285,175
10.15%, 1/31/06 134,000,000 1,128,461
Treasury (UK)
7.5%, 12/7/06 1,415,000 2,200,293
7.5%, 12/7/06 565,000 881,578
- ----------------------------------------------------------
17,848,813
Health and Personal Care: 0.3%
- ----------------------------------------------------------
Columbia/HCA Healthcare Corp.
6.41%, 6/15/00 650,000 662,747
- ----------------------------------------------------------
Industrial: 0.8%
- ----------------------------------------------------------
Magna International Inc.
5.0%, 10/15/02 285,000 290,700
McDonnell Douglas Corp.
9.25%, 4/1/02 280,000 324,045
Par Market
Amount** Value
---------- ------------
Service Corp. International
6.375%, 10/1/00 $440,000 $447,872
TCI Communciations Inc.
8.65%, 9/15/04 900,000 1,003,955
- ----------------------------------------------------------
2,066,572
Machinery and Engineering: 0.2%
- ----------------------------------------------------------
AMBAC Inc
9.375%, 8/1/11 400,000 513,284
- ----------------------------------------------------------
Metals and Mining: 0.3%
- ----------------------------------------------------------
Noranda Inc.
7.0%, 7/15/05 650,000 674,795
- ----------------------------------------------------------
Miscellaneous: 1.4%
- ----------------------------------------------------------
Petroliam Nasional Berha
6.875%, 7/1/03 575,000 594,154
RBSG Capital Corp.
10.125%, 3/1/04 450,000 558,098
Treuhandanstalt (Germany)
7.125%, 1/29/03 2,932,000 2,207,636
- ----------------------------------------------------------
3,359,888
Office and Business Equipment and Services: 0.3%
- ----------------------------------------------------------
Comdisco Inc.
7.75%, 9/1/99 800,000 843,574
- ----------------------------------------------------------
Petroleum and Petroleum Related: 0.1%
- ----------------------------------------------------------
Occidental Petroleum Corp.
9.25% Senior Debentures,
8/1/19 245,000 296,756
- ----------------------------------------------------------
Public Utilities: 0.9%
- ----------------------------------------------------------
Commonwealth Edison Co.
6.625%, 7/15/03 600,000 609,722
Iberdrola International B V
7.5%, 10/1/02 725,000 768,825
Public Service Co.
8.875%, 5/15/96 400,000 403,992
Puget Sound Power & Light Co.
7.875%, 10/1/97 400,000 414,436
- ----------------------------------------------------------
2,196,975
Retail: 0.3%
- ----------------------------------------------------------
Sears, Roebuck & Co.
9.42%, 4/3/96 350,000 353,955
Wal-Mart Stores
8.0%, 9/15/06 300,000 343,697
- ----------------------------------------------------------
697,652
Securities Dealers: 0.2%
- ----------------------------------------------------------
Smith Barney Holdings
7.0%, 5/15/00 570,000 591,958
- ----------------------------------------------------------
Telecommunications: 0.5%
- ----------------------------------------------------------
Bell South Telecommunications
6.75%, 10/15/33 600,000 593,798
The Penn Central Corp.
10.625%, 4/15/00 600,000 648,580
- ----------------------------------------------------------
1,242,378
Waste Management: 0.2%
- ----------------------------------------------------------
Waste Management Inc.
8.75%, 5/1/18 350,000 412,059
- ----------------------------------------------------------
Total Long-Term Debt Investments: 31.4%
(Cost $75,493,490) 78,129,179
- ----------------------------------------------------------
<PAGE>
Number Market
Common Stocks: of Shares Value
---------- ------------
U.S. Government and Agency Obligations: 0.4%
- ----------------------------------------------------------
FNMA 8,900 $1,104,713
Aerospace: 1.1%
- ----------------------------------------------------------
Allied Signal Inc. 9,300 441,750
Boeing Co. 11,400 893,475
Lockheed Martin Corp. 13,300 1,050,700
United Technologies Corp. 3,950 374,756
- ----------------------------------------------------------
2,760,681
Air Transportation: 0.2%
- ----------------------------------------------------------
KLM (Netherlands) 5,340 187,684
Singapore Airlines (Singapore) 26,000 242,630
- ----------------------------------------------------------
430,314
Banking and Insurance: 7.0%
- ----------------------------------------------------------
ABN Amro Holdings NV
(Netherlands) 4,280 194,970
Aetna Life & Casualty Co. 4,150 287,388
Allied Irish Banks (Ireland) 69,258 375,896
American International
Group Inc. 7,150 661,375
Bank of Boston Corp. 11,000 508,750
BankAmerica Corp. 23,050 1,492,488
Bankers Trust New York Corp. 10,250 681,625
Barclays PLC (UK) 16,408 188,059
Barnett Banks Inc. 1,000 59,000
BCO Bilbao Vizcaya (Spain) 9,000 324,237
Chemical Banking Corp. 9,300 546,375
Cigna Corp. 8,400 867,300
Citicorp 12,900 867,525
Compdent Corp.* 2,725 113,428
CRA Managed Care Inc.* 2,450 53,441
Credit Local De France
(France) 3,680 294,580
Development Bank Singapore
(Singapore) 24,000 298,621
First Commonwealth Inc.* 1,700 43,775
Fleet Financial Group Inc. 33,097 1,348,703
Guoco Group (Hong Kong) 19,000 91,652
HCC Insurance Holdings Inc.* 3,850 142,450
Healthwise America Inc.* 1,875 72,891
HSBC Holdings PLC (Hong Kong) 26,434 399,971
ITT Hartford Group Inc.* 6,150 297,506
J.P. Morgan & Co. Inc. 13,300 1,067,325
MBNA Corp. 12,200 449,875
Mitsubishi Bank (Japan) 13,000 305,956
Mitsui Marine & Fire
Insurance Co. (Japan) 29,000 206,722
Munchenerruckvers (Germany) 75 163,123
NationsBank Corp. 15,950 1,110,519
PNC Banking Corp. 25,650 827,213
Reinsurance Group America Inc. 2,900 106,213
Reliance Group Holdings Inc. 32,450 279,881
Royal Insurance (UK) 45,218 267,909
SCHW Ruckversicher (Switzerland) 185 215,232
Sierra Health Services Inc.* 1,995 63,341
Societe Generale (France) 1,455 179,758
Tokio Marine & Fire
Insurance (Japan) 24,000 313,801
Travelers Inc. 13,433 844,600
Trenwick Group Inc. 1,900 107,113
United Dental Care Inc.* 1,400 58,100
United Overseas Bank (Singapore) 40,274 387,223
USF & G Corp. 14,200 239,625
Wellcare Management. Inc.* 2,725 57,906
- ----------------------------------------------------------
17,463,441
Broadcasting: 1.0%
- ----------------------------------------------------------
Capital Cities ABC Inc. 4,400 542,850
Clear Channel Communications* 3,250 143,406
Evergreen Media* 3,800 121,600
HBO & Co. 6,700 512,550
Heartland Wireless
Communications Inc.* 3,000 87,750
LIN Television Corp.* 1,850 55,500
Pearson (UK) 13,000 125,881
Renaissance Communication Corp.* 1,900 42,038
Saga Communications - Class A* 3,100 50,375
SFX Broadcasting Inc.* 2,850 85,500
Sinclair Broadcasting Group Inc.* 1,500 25,500
Number Market
of Shares Value
---------- ------------
Telcom Semiconductor Inc.* 4,900 $35,219
Viacom Inc. - Class B* 13,600 644,300
Young Broadcasting Inc.* 3,225 89,494
- ----------------------------------------------------------
2,561,963
Building and Construction: 0.2%
- ----------------------------------------------------------
CRH (Ireland) 60,000 451,489
- ----------------------------------------------------------
Chemicals: 2.0%
- ----------------------------------------------------------
Akzo NV (Netherlands) 2,800 323,849
Brady (WH) Co. 3,630 96,195
Ciba Geigy AG (Switzerland) 380 334,374
Corning Inc. 27,230 871,360
DSM NV (Netherlands) 1,800 148,065
Du Pont E I De Nemours & Co. 12,480 872,040
Eastman Chemical Co. 4,350 272,419
Grace WR & Co. 4,498 265,944
Great Lakes Chemical Corp. 4,100 295,200
Praxair Inc. 16,100 541,363
Sekisui Chemical (Japan) 21,000 309,153
Union Carbide Corp. 14,950 560,625
- ----------------------------------------------------------
4,890,587
Coal and Gas: 0.1%
- ----------------------------------------------------------
Panhandle Eastern Corp. 9,850 274,569
- ----------------------------------------------------------
Construction: 0.4%
- ----------------------------------------------------------
Fluor Corp. 9,100 600,600
IHC Caland NV (Netherlands) 9,600 323,051
- ----------------------------------------------------------
923,651
Consumer Products and Services: 4.5%
- ----------------------------------------------------------
American Brands Inc. 22,850 1,019,681
Benson Eyecare Corp.* 8,450 76,050
Black & Decker Corp. 15,300 539,325
B.A.T. Industries (UK) 38,027 334,855
Cannondale Corp.* 2,525 40,716
Eastman Kodak Co. 24,150 1,618,050
Galoob Lewis Toys Inc.* 4,300 50,525
Genting Berhad (Singapore) 29,500 252,351
Home Depot Inc. 1 48
Johnson & Johnson 11,300 967,563
KAO Corp. (Japan) 24,000 297,530
Loewen Group Inc. 4,050 103,022
Magna International Inc. 3,650 157,863
Magna International Inc.
Class A (Canada) 4,100 176,401
Philip Morris Co. Inc. 26,900 2,434,450
Polaroid Corp. 24,850 1,177,269
Procter & Gamble Co. 10,500 871,500
Siebe (UK) 22,333 275,217
Softkey International Inc.* 1,999 45,977
Sola International Inc.* 4,675 118,044
Stewart Enterprises Inc. 3,800 139,650
Tabacalera SA (Spain) 7,700 292,003
Tommy Hilfiger Corp.* 4,100 173,738
- ----------------------------------------------------------
11,161,828
Drug and Hospital Supplies: 4.9%
- ----------------------------------------------------------
American Home Products Corp. 6,050 586,850
Amgen Inc.* 10,700 634,644
Astra AB (Sweden) 10,900 435,035
Avecor Cardiovascular Inc.* 4,750 82,531
Baxter International Inc. 34,500 1,444,688
Bio Vascular Inc.* 1,900 22,325
Bristol Myers Squibb Co. 8,600 738,525
Daig Corp.* 2,100 48,563
Dura Pharmaceuticals Inc.* 6,150 213,713
Endosonics Corp.* 1,000 15,000
Enterprise System Inc.* 700 21,000
Gilead Sciences Inc.* 700 22,575
Guidant Corp. 9,400 397,150
I STAT Corp.* 2,325 74,981
IDEX Labs Inc.* 3,300 154,275
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ----------
<S> <C> <C>
Immulogic Pharmaceutical Co.* 3,600 $68,625
Lilly (Eli) & Co. 13,400 753,750
Lincare Holdings Inc.* 2,700 67,163
Lunar Corp.* 2,100 56,963
Mecon Inc.* 1,000 15,875
Medtronic Inc. 4,300 240,263
Merck & Co. Inc. 11,000 723,250
Meridian Diognostic 4,300 47,569
Minntech Corp. 3,500 68,688
Parexel International
Corp.* 2,800 95,200
Pfizer Inc. 9,900 623,700
Pharmacia & Upjohn Inc.* 53,652 2,079,015
Pharmacia & Upjohn (Sweden)* 4,400 173,622
Research Industries Corp* 1,700 45,688
Santen Pharmaceutical Co. 6,000 135,981
Smithkline Beecham PLC 15,200 843,600
Target Therapeutics Inc.* 1,200 51,450
UROMED Corp.* 800 10,100
Warner Lambert Co. 9,650 937,256
Yamanouchi Pharmacy (Japan) 14,000 301,017
- ----------------------------------------------------------
12,230,630
Drug and Hospital Supplies: 0.4%
- ----------------------------------------------------------
Cambridge Technology
Partners* 2,275 128,822
Emerson Electric Co. 8,900 727,575
Sanmina Corp.* 2,525 131,300
- ----------------------------------------------------------
987,697
Electrical and Electronics: 2.1%
- ----------------------------------------------------------
Applied Materials Inc.* 13,200 518,925
Baldor Electric Co. 4,451 89,576
BBC Brown Boveri (Switzerland) 260 302,037
Coherent Communications
Systems Corp.* 600 11,400
CP Clare Corp.* 3,975 80,245
Cyberoptics Corp.* 700 27,825
Eltron International Inc.* 1,900 67,688
Flextronics International* 2,800 83,300
Getronics NV (Netherlands) 7,919 370,116
Harman International 2,088 83,781
Hirose Electric (Japan) 4,200 241,627
Iberdrola SA (Spain) 41,000 375,185
Intel Corp. 9,000 511,313
ITI Technologies Inc.* 2,625 77,109
Jabil Circuit Inc.* 1,400 15,400
Keane Inc.* 2,400 53,100
Kyocera Corp. (Japan) 2,000 148,571
Linear Technology Corp. 10,000 393,750
LSI Logic Corp.* 9,500 311,125
Mabuchi Motor Co. (Japan) 2,500 155,448
Microcom Inc.* 2,500 65,156
Murata Manufacturing Co.
(Japan) 7,000 257,627
Network Express Inc.* 3,800 19,950
P Com Inc.* 3,200 62,800
Rohm Co. (Japan) 5,000 282,324
SGS Thomson Microelectronics* 6,600 265,650
Sharp Corp. (Japan) 20,000 319,613
Sierra Semi Conductor Corp.* 6,200 86,413
Smartflexsys Inc.* 2,400 42,600
- ----------------------------------------------------------
5,319,654
Electrical and Electronics: 0.0%
- ----------------------------------------------------------
Actel Corp.* 6,800 73,525
- ----------------------------------------------------------
Entertainment: 0.5%
- ----------------------------------------------------------
Burgo(Cartiere) Spa (Italy) 25,820 128,846
ITT Industries Inc.* 6,150 147,600
Mirage Resorts Inc.* 16,400 565,800
Regal Cinemas Inc.* 1,950 57,281
Sierra On-Line Inc.* 3,450 98,756
Sodak Gaming Inc.* 4,900 101,063
Speedway Motorsports Inc.* 2,500 75,000
- ----------------------------------------------------------
1,174,346
Farm Supplies: 0.1%
Pioneer Hi-Bred International Inc. 6,100 339,313
- ----------------------------------------------------------
Number Market
of Shares Value
--------- ----------
Finance: 0.6%
- ----------------------------------------------------------
Aegon NV (Netherlands) 7,300 $322,989
Beneficial Corp. 10,200 475,575
MGIC Investment Corp. 7,800 423,150
SCHW Bankgesellsch
(Switzerland) 260 281,751
- ----------------------------------------------------------
1,503,465
Financial Services: 0.4%
- ----------------------------------------------------------
Concord Efs Inc.* 4,262 177,939
Dean Witter Discover & Co. 1 47
Dun & Bradstreet Corp. 11,450 741,388
PMT Services Inc.* 1,400 42,438
- ----------------------------------------------------------
961,812
Food and Beverage: 1.8%
- ----------------------------------------------------------
Anheuser Busch Cos. Inc. 8,100 541,688
Docks De France (France) 900 136,737
General Mills Inc. 7,450 430,238
Guinness (UK) 18,000 132,365
Heinz H.J. Co. 11,700 387,563
IBP Inc. 3,800 191,900
Nabisco Holdings Corp.
- Class A 14,700 479,588
Nestle SA (Switzerland) 283 313,054
Pepsico Inc. 15,400 860,475
Safeway Inc.* 9,200 473,800
Tate & Lyle (UK) 19,667 144,166
Unilever NV (Netherlands) 2,150 302,128
- ----------------------------------------------------------
4,393,702
Forest Products: 0.7%
- ----------------------------------------------------------
Rayonier Timerlands L.P. 15,100 503,963
Repola (Finland) 16,765 316,073
Weyerhaeuser Co. 20,000 865,000
- ----------------------------------------------------------
1,685,036
Furniture Manufacturing: 0.1%
- ----------------------------------------------------------
Masco Corp. 5,800 181,975
- ----------------------------------------------------------
Health and Personal Care: 0.3%
- ----------------------------------------------------------
Authentic Fitness Corp. 5,365 111,324
Columbia/HCA Healthcare Corp. 10,100 512,575
ICU Medical Inc.* 2,300 39,388
Instent Inc.* 2,550 38,569
- ----------------------------------------------------------
701,856
Hospital and Health Care: 0.3%
- ----------------------------------------------------------
Access Health Inc.* 1,100 48,950
Advantage Health Corp.* 1,330 58,188
American Homepatient Inc.* 3,700 108,225
ARV Assisted Living ONC.* 2,700 31,725
Emeritus Corp.* 1,100 12,788
Genesis Health Ventures Inc.* 3,300 120,450
Health Management Associates* 3,973 103,795
Healthcare Services Group Inc.* 5,100 46,538
Healthplan Services Corp.* 1,100 27,500
Living Centers of America Inc.* 3,075 107,625
National Surgery Center Inc.* 200 4,550
Owen Healthcare Inc.* 3,400 91,800
Pediatrix Medical Group* 500 13,875
Sterling House Corp.* 2,100 20,213
Vencor Inc.* 1,525 49,563
- ----------------------------------------------------------
845,785
Hotels: 0.2%
- ----------------------------------------------------------
Marriott International, Inc. 11,600 443,700
- ----------------------------------------------------------
Industrial: 1.3%
- ----------------------------------------------------------
Blyth Industries Inc.* 4,600 135,700
ITT Corp. New* 6,150 325,950
Johnson Controls Inc. 10,350 711,563
Sundstrand Corp. 10,150 714,306
TRW Inc. 16,460 1,275,650
Zebra Technologies Corp.* 4,526 155,016
- ----------------------------------------------------------
3,318,185
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ---------
<S> <C> <C>
Machinery and Engineering: 0.2%
- ----------------------------------------------------------
Computational Systems Inc.* 1,200 $18,225
Credence Systems Corp.* 3,625 82,469
JLG Industries Inc. 2,200 64,900
Molins (UK) 15,000 179,376
Rieter Holdings (Switzerland) 500 144,343
Rieter Holdings AG Warrants
(Switzerland)* 500 1,257
- ----------------------------------------------------------
490,570
Metals and Mining: 0.7%
- ----------------------------------------------------------
Freeport McMoran Copper
& Gold 30,350 849,800
Preussag AG (Germany) 440 122,998
Tostem Corp. (Japan) 9,000 298,983
Varity Corp.* 14,950 555,019
- ----------------------------------------------------------
1,826,800
Miscellaneous: 4.0%
- ----------------------------------------------------------
3M Co. 12,700 841,375
Anglian Water (UK) 15,600 147,060
Argentaria (Spain) 7,000 288,541
Baer Holdings AG (Switzerland) 100 111,400
BCO Tottae Acores-Registered
(Portugal) 5,720 94,547
Best Denki Co. (Japan) 8,000 118,547
Community Health System Inc.* 2,700 96,188
CUC International Inc.* 13,050 445,331
Cycle & Carriage (Singapore) 20,000 199,364
Danieli & Co. (Italy) 22,000 138,528
Danieli & Co. Warrants (Italy)* 5,500 2,871
Edaran Otomobil (Malaysia) 24,000 180,494
Essilor International (France) 2,200 307,290
First Data Corp. 10,500 702,188
Franklin Resources Inc. 8,000 403,000
Fujitsu (Japan) 28,000 311,864
Futaba Corp. (Japan) 4,000 183,245
Greencore (Ireland) 36,327 316,974
Hutchison Whampoa LTD
(Hong Kong) 37,000 225,373
IGEN Inc.* 3,900 22,425
Jardine Matheson 33,400 228,790
Komori Corp. (Japan) 6,000 151,090
Kon Ptt Nederland
(Netherlands) 5,200 188,920
Lafarge Coppee SA (France) 4,070 262,219
Leader Universal Holdings
(Singapore) 23,333 51,466
Maeda Corp. (Japan) 18,000 176,077
Marui Co. (Japan) 17,000 353,995
Mayr Melnhof* 10,600 132,500
Medisense Inc.* 24,293 59,171
Mercury Interactive Corp* 2,965 53,370
Mitsui & Co. (Japan) 34,000 298,344
Nichicon Corp. (Japan) 17,000 250,266
Nippondenso Co. (Japan) 13,000 243,002
Omron Corp. (Japan) 16,000 368,814
SGS Holdings (Switzerland) 150 297,789
Soc Elf Aquitaine (France) 3,950 291,027
Solvay (Belgian) 480 260,550
Sommer Allibert (France) 500 132,632
Swire Pacific (Hong Kong) 20,000 155,189
Tele Danmark 9,300 256,913
Toda Corp. (Japan) 19,000 164,697
Transaction Network Services
Inc.* 3,900 96,525
VA Technologie Ag. (Austria) 1,900 241,306
- ----------------------------------------------------------
9,851,257
Motor Vehicles and Equipment: 2.1%
- ----------------------------------------------------------
Bridgestone Corp. (Japan) 14,000 222,373
Chrysler Corp. 7,950 440,231
Custom Chrome Inc.* 2,650 60,784
Eaton Corp. 13,550 726,619
Echlin Inc. 17,800 649,700
Edelbrock Corp.* 3,050 46,894
General Motors Corp. 14,250 753,469
General Motors Corp. Series E 14,200 738,400
General Motors Corp. Series H 26,650 1,309,181
Mitsubishi Motors (Japan) 18,000 146,615
Peugeot SA (France) 1,000 131,918
- ----------------------------------------------------------
5,226,184
Number Market
of Shares Value
--------- ---------
Office and Business Equipment and Services: 4.5%
- ----------------------------------------------------------
ABR Information Services Inc.* 450 $19,463
Accustaff Industry* 4,900 213,763
Alternative Res. Corp.* 2,500 75,000
America Online Inc.* 1,980 73,879
American Business Information 4,375 83,672
Analyst International Corp. 1,800 54,675
Bisys Group Inc.* 2,300 70,150
Boca Research Inc.* 1,700 45,688
Business Objects SA* 1,300 62,888
Cabletron Systems Inc.* 6,800 550,800
Ceridian Corp.* 6,300 259,875
Cisco Systems Inc.* 7,700 575,094
Citrix Sys Inc.* 1,600 52,400
CMG Information Services Inc.* 600 55,500
Computer Horizons Corp.* 5,337 200,805
Corestaff Inc.* 1,200 44,250
Cort Business Services Corp.* 4,200 69,300
Fiserv Inc.* 2,975 89,064
Hewlett-Packard Co. 10,600 887,750
Honeywell Inc. 28,750 1,397,969
HPR Inc.* 1,200 36,000
IBM 14,000 1,284,500
IDX Systems Corp.* 400 13,850
IMNETt Systems Inc.* 2,300 55,200
INSO Corp* 1,550 66,069
McAfee Associates Inc.* 3,225 138,272
META Group Inc.* 1,700 52,063
Microsoft Corp.* 10,900 957,156
National Data Corp. 1,300 32,175
On Assignment Inc.* 2,850 94,406
Pairgain Technologies Inc.* 3,200 174,400
Parametric Technology Corp.* 9,200 610,650
Peak Technologies Group Inc.* 2,910 90,210
Project Software & Developement
Inc.* 1,848 64,796
Renaissance Solutions Inc.* 2,200 30,250
Robert Half International Inc.* 3,475 145,516
Secure Computing Corp.* 700 39,025
Security Dynamics Technologies
Inc.* 2,550 139,613
Security Services (UK) 21,100 292,955
Shiva Corp.* 600 43,800
SOS Staffing Services Inc.* 3,300 30,319
Sybase Inc.* 6,800 243,950
Tivoli Systems Inc.* 1,900 63,769
US Robotics Corp.* 2,500 219,688
Vantive Corp.* 2,000 45,000
Xerox Corp. 9,600 1,315,200
- ----------------------------------------------------------
11,160,817
Paper: 1.1%
- ----------------------------------------------------------
Alco Standard Corp. 6,000 273,750
Kimberly Clark Corp. 27,368 2,264,702
Svenska Cellulosa (Sweden) 17,000 263,717
- ----------------------------------------------------------
2,802,169
Petroleum and Petroleum Related: 4.5%
- ----------------------------------------------------------
Amoco Corp. 12,050 866,094
Atlantic Richfield Co. 4,100 454,075
British Peteroleum PLC 12,900 1,317,413
Burmah Castrol PLC (UK) 20,880 302,710
Enron Corp. 24,400 930,250
Exxon Corp. 9,900 793,238
Halliburton Co. 8,900 450,563
Mobil Corp. 12,450 1,394,400
Occidental Petroleum Corp. 40,671 869,343
Phillips Petroleum Co. 12,800 436,800
Repsol SA (Spain) 12,675 415,360
Shell Transport & Trading (UK) 7,000 92,569
Sonat Inc. 14,950 532,594
Tenneco Inc. 11,550 573,169
Total SA 36,552 1,242,768
Witco Corp. 17,300 506,025
- ----------------------------------------------------------
11,177,371
Plastics: 0.1%
- ----------------------------------------------------------
Toray Industries Inc. (Japan) 36,000 237,094
- ----------------------------------------------------------
</TABLE>
<PAGE>
Number Market
of Shares Value
--------- ----------
Printing and Publishing: 0.6%
- ----------------------------------------------------------
Dai Nippon Printing (Japan) 17,000 $288,136
Harcourt General Inc. 9,800 410,375
McGraw Hill Inc. 6,300 548,888
Mecklermedia Corp.* 1,300 20,475
Scientific Games Holdings Corp.* 3,120 118,560
Singapore Press HD (Singapore) 9,600 169,671
Wolters Kluwer NV (Netherlands) 45 4,257
- ----------------------------------------------------------
1,560,362
Public Utilities: 1.4%
- ----------------------------------------------------------
Cinergy Corp. 18,903 578,904
East Midlands Electricity (UK) 12,600 130,422
Gaz Et Eaux (France) 675 234,327
General Electric (UK) 50,714 278,813
Hong Kong Electric 50,000 163,919
Kurita Water Industries (Japan) 10,000 266,344
North West Water (UK) 15,560 148,858
Northeast Utilities 29,450 717,844
Public Service Co. of Colorado 7,650 270,619
Scottish Power (UK) 1,100 6,321
Texas Utilities Co. 7,242 297,827
Veba AG (Germany) 8,950 379,962
- ----------------------------------------------------------
3,474,160
Railroads: 0.8%
- ----------------------------------------------------------
Burlington Northern Santa Fe 8,500 663,000
Canadian National Railway Co.
(Canada)* 36,400 546,000
Union Pacific Corp. 11,050 729,300
- ----------------------------------------------------------
1,938,300
Real Estate: 0.5%
- ----------------------------------------------------------
Amoy Properties (Hong Kong) 152,000 151,361
Cheung Kong Holdings
(Hong Kong) 42,000 255,829
Hong Kong Land Holdings 59,000 109,150
Meditrust 18,400 641,700
- ----------------------------------------------------------
1,158,040
Restaurant: 0.1%
- ----------------------------------------------------------
Apple South Inc. 3,600 76,950
Landry's Seafood Restaurant Inc.* 4,200 72,188
Quantum Restaurant Group Inc.* 2,600 29,250
Studio Plus America Inc.* 4,450 115,700
- ----------------------------------------------------------
294,088
Retail: 2.1%
- ----------------------------------------------------------
Argyll Group (UK) 43,058 227,360
Dayton Hudson Corp. 4,700 352,500
Department 56 Inc.* 3,240 124,335
Fastenal Co. 3,595 152,788
Federated Department Stores
Inc.* 20,900 574,750
ITO Yokado Co. (Japan) 6,000 369,588
K Mart Corp. 47,650 345,463
Kenneth Cole Productions Inc.* 7,950 149,063
Michelin CGDE (France) 5,920 236,099
Moovies Inc.* 2,800 37,100
Penney (J.C.) Co. Inc. 9,500 452,438
Rexall Sundown Inc.* 6,900 152,231
Rite Aid Corp. 14,700 503,475
Sears (UK) 160,000 258,425
Sears, Roebuck & Co. 28,950 1,129,050
Sunglass Hut International Inc.* 3,200 75,600
West Marine Inc.* 1,800 56,475
- ----------------------------------------------------------
5,196,740
Securities Dealers: 0.3%
- ----------------------------------------------------------
Daiwa Securities (Japan) 27,000 413,172
Merrill Lynch & Co. Inc. 9,400 479,400
- ----------------------------------------------------------
892,572
Shoes: 0.6%
- ----------------------------------------------------------
Melville Corp. 17,300 531,975
Nike Inc. 9,500 661,438
Wolverine World Wide Inc. 7,360 231,840
- ----------------------------------------------------------
1,425,253
Soaps, Cleaner and Cosmetics: 0.6%
- ----------------------------------------------------------
Avon Products Inc. 12,800 $964,800
Colgate-Palmolive Co. 7,550 530,388
- ----------------------------------------------------------
1,495,188
Steel: 0.1%
- ----------------------------------------------------------
Bekaert SA (Belgium) 263 216,709
Nisshin Steel Co. (Japan) 18,000 72,697
- ----------------------------------------------------------
289,406
Telecommunications: 3.8%
- ----------------------------------------------------------
3Com Corp. * 12,700 592,931
American Telephone &
Telegraph Co. 9,350 605,413
Bell Atlantic Corp. 25,050 1,675,219
CAI Wireless Systems Inc.* 6,100 58,331
Cellular Communications
International 1 42
Centennial Cellular Corp.* 3,100 53,475
Century Communications Corp.* 4,831 38,648
Colonial Data Technologies* 3,850 78,925
Comnet Cellular Inc.* 2,165 62,785
EZ Communications Inc.* 4,700 82,838
GTE Corp. 19,300 849,200
MCI Communications Corp. 34,900 913,944
Midcom Communications Inc.* 1,875 33,281
Nippon Telephone & Telegraph
CP (Japan) 23 186,005
Nynex Corp. 16,867 910,818
Pacific Telesis Group 9,400 316,075
SBC Communications Inc. 29,450 1,693,375
Sprint Corp. 14,000 558,250
Tele Communications Inc. New* 14,975 401,517
Vodafone Group (UK) 75,860 272,149
Wireless One Inc.* 900 15,188
- ----------------------------------------------------------
9,398,409
Textiles-Apparel Manufacturing: 0.2%
- ----------------------------------------------------------
Nautica Enterprises Inc.* 4,105 178,054
St. John Knits Inc. 4,000 212,500
- ----------------------------------------------------------
390,554
Transportation: 0.1%
- ----------------------------------------------------------
Expeditores International of
Washington Inc. 3,825 99,928
Fritz Companies Inc.* 2,780 115,718
- ----------------------------------------------------------
215,646
Trucking Companies: 0.3%
- ----------------------------------------------------------
Ryder System Inc. 29,500 730,125
- ----------------------------------------------------------
Total Common Stocks: 59.3%
(Cost $122,171,383) 147,415,022
- ----------------------------------------------------------
Preferred Stocks:
Case Equipment Inc. 5,275 597,394
Citicorp 1,450 266,075
- ----------------------------------------------------------
Total Preferred Stocks: 0.3%
(Cost $613,009) 863,469
- ----------------------------------------------------------
Par
Options Purchased: Amount
---------
U.S. Dollar call/ German Mark put
Put Expiring 2/1/96, strike
price 1.49 $34,320 10,560
- ----------------------------------------------------------
Total Options Purchased: 0.0%
(Cost $34,320) 10,560
- ----------------------------------------------------------
Maturity
Repurchase Agreement: Amount
-----------
Shearson Lehman repurchase
agreement, dated 12/29/95,
6.55%, maturing 1/2/96
collateralized by U.S.
Treasury Bond
8.125%, 8/15/19 $31,954,043 31,925,000
- ----------------------------------------------------------
Total Repurchase Agreement: 12.8%
(Cost $31,925,000) 31,925,000
<PAGE>
Market
Value
------------
Total Investments: 103.8%
(Cost $230,237,202) $258,343,230
- ----------------------------------------------------------
Par
Securities Sold Short: Amount
----------
GNMA
1.0%, 1/1/99 $1,120,000 (1,110,894)
- ----------------------------------------------------------
Total Securities Sold Short: (0.4%)
(Proceeds $1,124,023) (1,110,894)
- ----------------------------------------------------------
Other Assets Under Liabilities: (3.4%) (8,460,074)
- ----------------------------------------------------------
Net Assets: 100%
(equivalent to 13.391 per share based
on 18,577,701 shares issued and
outstanding) $248,772,262
==========================================================
Lincoln National Growth and Income Fund, Inc.
Statement of Net Assets
December 31, 1995
Investments
Number Market
Common Stocks: of Shares Value
---------- ------------
Aerospace: 1.4%
- ----------------------------------------------------------
McDonnell Douglas Corp. 270,900 $24,922,800
- ----------------------------------------------------------
Air Transportation: 0.6%
- ----------------------------------------------------------
AMR Corp.* 154,900 11,501,325
- ----------------------------------------------------------
Banking and Insurance: 10.6%
- ----------------------------------------------------------
AllState Corp. 480,049 19,742,015
American General Corp. 584,000 20,367,000
Bank of Boston Corp. 521,500 24,119,375
Bank of New York Inc. 502,500 24,496,875
Chemical Banking Corp. 458,800 26,954,500
Cigna Corp. 248,800 25,688,600
First Chicago NBD Corp. 615,943 24,329,749
NationsBank Corp. 227,500 15,839,687
Transamerica Corp. 104,300 7,600,863
Transport Holdings Inc.* 77 3,138
Travelers Inc. 83,500 5,250,062
- ----------------------------------------------------------
194,391,864
Broadcasting: 1.3%
- ----------------------------------------------------------
Capital Cities ABC Inc. 82,400 10,166,100
King World Productions Inc.* 328,900 12,785,988
- ----------------------------------------------------------
22,952,088
Building Materials: 0.7%
- ----------------------------------------------------------
Dover Corp. 334,200 12,323,625
- ----------------------------------------------------------
Building and Construction: 0.4%
- ----------------------------------------------------------
Armstrong World Industries Inc. 114,900 7,123,800
- ----------------------------------------------------------
Chemicals: 3.1%
- ----------------------------------------------------------
Dow Chemical Co. 147,600 10,387,350
Du Pont E I De Nemours & Co. 248,300 17,349,962
Eastman Chemical Co. 82,900 5,191,613
Olin Corp. 171,400 12,726,450
Union Carbide Corp. 274,700 10,301,250
- ----------------------------------------------------------
55,956,625
Consumer Products and Services: 5.7%
- ----------------------------------------------------------
American Brands Inc. 133,500 5,957,437
Black & Decker Corp. 323,000 11,385,750
Omnicom Group Inc. 232,800 8,671,800
Philip Morris Co. Inc. 583,000 $52,761,500
Procter & Gamble Co. 320,700 26,618,100
- ----------------------------------------------------------
105,394,587
Drug and Hospital Supplies: 8.3%
- ----------------------------------------------------------
Baxter International Inc. 637,500 26,695,313
Bristol Myers Squibb Co. 488,300 41,932,762
Lilly (Eli) & Co. 260,000 14,625,000
Merck & Co. Inc. 150,800 9,915,100
Pharmacia & Upjohn Inc.* 719,490 27,880,237
Schering-Plough Corp. 578,900 31,694,775
- ----------------------------------------------------------
152,743,187
Electrical and Electronics: 7.7%
- ----------------------------------------------------------
Alliance Semiconductor Corp.* 296,100 3,442,163
Applied Materials Inc.* 565,400 22,262,625
Arrow Electrics Inc.* 115,200 4,968,000
Avnet Inc. 239,400 10,713,150
General Electric Co. 563,500 40,572,000
Harris Corp. 306,300 16,731,637
Mentor Graphics Corp.* 411,200 7,504,400
Read Rite Corp.* 638,700 14,849,775
Texas Instruments Inc. 100,100 5,180,175
Teradyne Inc.* 568,000 14,200,000
- ----------------------------------------------------------
140,423,925
Entertainment: 2.1%
- ----------------------------------------------------------
Bally Entertainment Corp.* 555,500 7,777,000
Mattel Inc. 252,031 7,749,953
Mirage Resorts Inc.* 678,400 23,404,800
- ----------------------------------------------------------
38,931,753
Finance: 0.9%
- ----------------------------------------------------------
Household International Inc. 270,700 16,005,137
- ----------------------------------------------------------
Food and Beverage: 6.9%
- ----------------------------------------------------------
Campbell Soup Co. 70,300 4,218,000
Coca Cola Co. 329,700 24,480,225
ConAgra Inc. 331,900 13,690,875
CPC International Inc. 146,100 10,026,112
Heinz H.J. Co. 407,150 13,486,844
IBP Inc. 355,300 17,942,650
RJR Nabisco Holding Corp. 318,920 9,846,655
Safeway Inc.* 515,900 26,568,850
Universal Foods Corp. 142,600 5,721,825
- ----------------------------------------------------------
125,982,036
Industrial: 0.5%
- ----------------------------------------------------------
TRW Inc. 126,100 9,772,750
- ----------------------------------------------------------
Machinery and Engineering: 1.2%
- ----------------------------------------------------------
Novellus Systems Inc.* 394,300 21,292,200
- ----------------------------------------------------------
Metals and Mining: 2.2%
- ----------------------------------------------------------
Cyprus Amax Minerals Co. 413,200 10,794,850
Parker Hannifin Corp. 261,950 8,971,787
Phelps Dodge Corp. 336,800 20,965,800
- ----------------------------------------------------------
40,732,437
Motor Vehicles and Equipment: 2.6%
- ----------------------------------------------------------
Eaton Corp. 373,100 20,007,488
Ford Motor Co. 405,400 11,756,600
Goodrich BF Co. 139,400 9,496,625
Navistar International Corp.* 679,900 7,138,950
- ----------------------------------------------------------
48,399,663
<PAGE>
Number Market
of Shares Value
---------- ------------
Office and Business Equipment and Services: 7.0%
- ----------------------------------------------------------
Adaptec Inc.* 200,400 $8,216,400
Cadence Design Systems Inc.* 494,250 20,758,500
Cisco Systems Inc.* 150,300 11,216,138
Computer Associates
International Inc. 95,300 5,420,187
Dell Computer Corp.* 626,200 21,682,175
Digital Equipment Corp.* 73,600 4,719,600
Manpower Inc. 213,100 5,993,437
Micron Technology Inc. 118,100 4,679,713
Reynolds & Reynolds Co. 209,200 8,132,650
Seagate Technology* 230,300 10,939,250
Sun Microsystems Inc.* 568,200 25,924,125
- ----------------------------------------------------------
127,682,175
Paper: 1.8%
- ----------------------------------------------------------
Bowater Inc. 546,800 19,411,400
Stone Container Corp. 465,500 6,691,562
Union Camp Corp. 151,600 7,219,950
- ----------------------------------------------------------
33,322,912
Petroleum and Petroleum Related: 9.1%
- ----------------------------------------------------------
Amoco Corp. 288,900 20,764,687
Atlantic Richfield Co. 92,900 10,288,675
Exxon Corp. 574,400 46,023,800
Halliburton Co. 277,800 14,063,625
Lyondell Petrochemical Co. 588,300 13,457,363
Mobil Corp. 123,200 13,798,400
Occidental Petroleum Corp. 195,000 4,168,125
Royal Dutch Petroleum Co. 147,600 20,830,050
Williams Companies Inc. 537,500 23,582,812
- ----------------------------------------------------------
166,977,537
Printing and Publishing: 0.5%
- ----------------------------------------------------------
New York Times Co. 321,800 9,533,325
- ----------------------------------------------------------
Public Utilities: 4.4%
- ----------------------------------------------------------
Baltimore Gas & Electric Co. 150,900 4,300,650
Consolidated Edison Co. 679,900 21,756,800
General Public Utilities Corp. 272,450 9,263,300
New York State Electric &
Gas Corp.* 331,300 8,572,388
Northeast Utilities 388,000 9,457,500
SCE Corp. 203,700 3,615,675
Unicom Corp. 730,900 23,936,975
- ----------------------------------------------------------
80,903,288
Railroads: 0.2%
- ----------------------------------------------------------
Conrail Inc. 44,200 3,094,000
- ----------------------------------------------------------
Retail: 3.6%
- ----------------------------------------------------------
Eckerd Corp.* 115,300 5,145,263
Jostens Inc. 56,100 1,360,425
Kroger Co.* 611,600 22,935,000
Pier 1 Imports Inc. 416,700 4,739,962
Sears, Roebuck & Co. 228,200 8,899,800
Staples Inc.* 773,800 18,861,375
Waban Inc.* 252,500 4,734,375
- ----------------------------------------------------------
66,676,200
Securities Dealers: 1.5%
- ----------------------------------------------------------
Bear, Stearns & Co. Inc. 807,100 16,041,113
Dean Witter Discover & Co. 261,800 12,304,600
- ----------------------------------------------------------
28,345,713
Shoes: 0.7%
- ----------------------------------------------------------
Nike Inc. 178,600 12,435,025
- ----------------------------------------------------------
Soaps, Cleaner and Cosmetics: 1.9%
- ----------------------------------------------------------
Clorox Co. 220,000 15,757,500
Colgate-Palmolive Co. 264,900 18,609,225
- ----------------------------------------------------------
34,366,725
Telecommunications: 9.2%
- ----------------------------------------------------------
American Telephone &
Telegraph Co. 345,200 $22,351,700
Ameritech Corp. 607,500 35,842,500
Bellsouth Corp. 573,600 24,951,600
Comsat Corp. 281,600 5,244,800
GTE Corp. 738,000 32,472,000
Pacific Telesis Group 821,000 27,606,125
SBC Communications Inc. 135,800 7,808,500
Sprint Corp. 333,500 13,298,313
- ----------------------------------------------------------
169,575,538
Transportation: 0.9%
- ----------------------------------------------------------
Illinois Central Corp. 311,300 11,946,138
PHH Corp. 92,700 4,333,725
- ----------------------------------------------------------
16,279,863
Total Common Stocks: 97.0%
(Cost $1,404,390,388) 1,778,042,103
- ----------------------------------------------------------
Par
Money Market Instrument: Amount
----------
AT&T Corp.
5.65%, 1/17/96 $5,000,000 4,984,306
U.S. Treasury Bill
0.0%, 5/2/96 4,500,000 4,229,957
Avco Financial Services
5.66%, 2/13/96 2,500,000 2,464,232
Bell Atlantic Financial
Services
5.77%, 1/17/96 7,600,000 7,556,148
Commercial Credit Co.
5.81%, 1/8/96 3,300,000 3,289,348
ITT-Hartford Group, Inc.
5.8%, 1/18/96 6,300,000 6,276,655
5.65%,1/19/96 5,900,000 5,880,555
PHH Corp.
5.85%, 1/10/96 3,725,000 3,717,131
5.75%,1/19/96 6,300,000 6,250,694
Smith Barney
5.8%, 1/3/96 4,200,000 4,185,790
5.9%, 1/3/96 5,600,000 5,593,521
Sony Captial Corp.
6.05%, 1/5/96 1,400,000 1,398,118
Sumitomo Corp. Of America
5.75%, 1/4/96 12,700,000 12,664,736
5.75%, 1/5/96 5,800,000 5,785,178
5.8%, 1/22/96 5,275,000 5,253,753
Temple-Inland Inc.
5.9%, 1/17/96 5,000,000 4,983,611
UBS Finance Inc.
5.75%, 1/2/96 6,800,000 6,786,967
- ----------------------------------------------------------
Total Money Market Instruments: 5.0%
(Cost $91,300,700) 91,300,700
- ----------------------------------------------------------
Total Investments: 102.0%
(Cost $1,495,691,088) 1,869,342,803
- ----------------------------------------------------------
Other Assets Under Liabilities (2.0%) (35,892,346)
- ----------------------------------------------------------
Net Assets: 100.0%
(equivalent to $29.756 per share
based on 61,615,296 shares
issued and outstanding) $1,833,450,457
==========================================================
<PAGE>
Lincoln National International Fund, Inc.
Statement of Net Assets
December 31, 1995
Investments
Number Market
Common Stocks: of Shares Value
---------- ------------
Argentina: 0.5%
- ----------------------------------------------------------
Argentinian Investment Co.* 100,200 $1,904,802
- ----------------------------------------------------------
Australia: 1.9%
- ----------------------------------------------------------
Broken Hill Proprietary
Co. LTD 4,212 59,483
News Corp. 400,000 2,134,681
Western Mining CP 350,000 2,247,659
Woodside Petroleum 465,000 2,377,880
- ----------------------------------------------------------
6,819,703
Brazil: 0.9%
- ----------------------------------------------------------
Brazilian Investment Co.* 109,000 3,332,130
- ----------------------------------------------------------
Chile: 1.0%
- ----------------------------------------------------------
Chile Fund Inc. 143,800 3,720,825
- ----------------------------------------------------------
China: 0.7%
- ----------------------------------------------------------
China North Industries* 2,850,000 2,565,000
- ----------------------------------------------------------
Finland: 0.7%
- ----------------------------------------------------------
Nokia A 66,400 2,610,567
- ----------------------------------------------------------
France: 5.5%
- ----------------------------------------------------------
AXA 63,800 4,299,367
BIC 37,100 3,772,881
Carrefour 7,100 4,307,556
Ecco 24,050 3,639,177
TF1 35,200 3,773,739
- ----------------------------------------------------------
19,792,720
Germany: 5.1%
- ----------------------------------------------------------
Gehe AG 7,560 3,847,194
Mannesmann AG 11,800 3,756,751
SAP AG* 21,750 3,290,171
Veba AG 92,600 3,931,223
Viag 8,760 3,511,328
- ----------------------------------------------------------
18,336,667
Hong Kong: 4.8%
- ----------------------------------------------------------
First Pacific Co. 1,814,000 2,017,511
Guoco Group 560,000 2,701,326
HSBC Holdings PLC 200,000 3,026,188
Hutchison Whampoa LTD 570,000 3,471,969
Peregrine Investment Holdings 2,000,000 2,586,485
Swire Pacific 364,000 2,824,442
Television Broadcast 200,000 712,577
- ----------------------------------------------------------
17,340,498
India: 0.7%
- ----------------------------------------------------------
India Magnum Fund* 56,250 2,475,000
- ----------------------------------------------------------
Ireland: 1.0%
- ----------------------------------------------------------
Elan Corp. PLC* 42,500 2,061,250
Waterford Wedgewood 1,530,000 1,469,741
- ----------------------------------------------------------
3,530,991
Italy: 1.1%
- ----------------------------------------------------------
Telecom Italia Mobile* 2,220,000 3,907,060
- ----------------------------------------------------------
Number Market
of Shares Value
---------- ------------
Japan: 33.3%
- ----------------------------------------------------------
Acom Co. 51,700 $2,163,137
Amway Japan LTD 79,200 3,344,426
Asahi Bank 240,000 3,021,792
Bridgestone Corp. 182,000 2,890,847
Canon Inc. 247,000 4,473,511
Daiwa Securities 208,000 3,182,954
DDI Corp. 191 1,479,903
Hitachi LTD 284,000 2,860,630
Hitachi Zosen Corp. 659,000 3,414,673
Honda Motor Co. 170,000 3,507,022
Kato Denki Co. 114,000 2,959,031
Keyence Corp. 26,500 3,054,237
Kinden Corp. 169,000 2,880,775
Kuraray Co. 147,000 1,608,814
Kyocera Corp. 20,000 1,485,714
Matsushita Electric Works 247,000 2,607,554
Mitsubishi Bank 123,000 2,894,818
Mitsubishi Heavy Industries 242,000 1,928,969
Mitsubishi Trust & Banking 171,000 2,848,620
Murata Manufacturing Co. 75,000 2,760,291
NEC Corp. 213,000 2,599,322
Nichiei Co. 44,000 3,281,356
Nintendo Co. 44,300 3,368,087
Nippon Steel Corp. 770,000 2,640,000
Nippon Telephone &
Telegraph CP 351 2,838,596
Nippon TV Network 11,200 2,993,898
Nishimatsu Construction 237,000 2,777,433
NKK Corp.* 1,000,000 2,692,494
Omron Corp. 135,000 3,111,864
Ricoh Co. 271,000 2,965,908
Rohm Co. 40,000 2,258,596
Sankyo Co. 65,600 3,049,685
Sanwa Bank 132,000 2,684,746
Sanyo Shinpan Financial 25,700 2,115,739
Secom Co. 44,000 3,059,758
Sekisui House 220,000 2,812,591
Seven Eleven Japan 37,000 2,608,814
Shin Etsu Chemical Co. 147,000 3,046,780
Sumitomo Bank 130,000 2,757,385
Tokyo Electron 78,000 3,021,792
Tostem Corp. 82,000 2,724,068
Yamanouchi Pharmacy 66,000 1,419,080
Yamato Transport 255,000 3,037,772
- ----------------------------------------------------------
119,233,482
Malaysia: 2.5%
- ----------------------------------------------------------
Hong Leong Credit 439,000 2,177,974
Hong Leong Properties BHD 1,500,000 1,559,239
Multi Purpose Holdings 1,600,000 2,343,584
Renonga BHD 1,841,000 2,725,582
- ----------------------------------------------------------
8,806,379
Netherlands: 8.4%
- ----------------------------------------------------------
Aegon NV 127,025 5,620,225
Heineken Holding 23,275 3,814,623
IHC Caland NV 123,300 4,149,187
ING Group 71,000 4,743,067
Polygram NV 52,900 2,808,675
Randstad Holdings 116,000 5,262,541
Wolters Kluwer NV 38,400 3,632,529
- ----------------------------------------------------------
30,030,847
New Zealand: 1.5%
- ----------------------------------------------------------
Carter Holt Harvey 1,185,000 2,556,551
Telecom Corp. Of New Zealand 666,000 2,873,692
- ----------------------------------------------------------
5,430,243
Norway: 0.8%
- ----------------------------------------------------------
Saga Petroleum 225,600 3,009,615
- ----------------------------------------------------------
Singapore: 1.9%
- ----------------------------------------------------------
Keppel Corp. 307,000 2,734,677
Overseas Chinese Banking Corp. 311,500 3,897,879
- ----------------------------------------------------------
6,632,556
<PAGE>
Number Market
of Shares Value
---------- ------------
Spain: 2.2%
- ----------------------------------------------------------
Centros Com Pryca 186,800 $3,919,258
Corporacion Mapfre 69,000 3,862,407
- ----------------------------------------------------------
7,781,665
South Korea: 1.3%
- ----------------------------------------------------------
Korea International
Investment Fund III* 14,286 1,783,036
Korea International
Investment Fund IV* 27,650 2,889,425
- ----------------------------------------------------------
4,672,461
Sweden: 5.4%
- ----------------------------------------------------------
Astra AB 107,490 4,290,081
Autoliv AB 66,800 3,903,550
Ericsson (LM) Tel 159,400 3,120,924
Skandia Foersaekrings 173,800 4,698,571
Volvo AB 165,500 3,389,912
- ----------------------------------------------------------
19,403,038
Switzerland: 5.0%
- ----------------------------------------------------------
BBC Brown Boveri 3,500 4,065,886
Roche Holdings AG - Warrants 590 4,667,317
Sandoz AG 5,965 5,460,806
SCHW Ruckversicher 3,110 3,618,223
- ----------------------------------------------------------
17,812,232
United Kingdom: 9.7%
- ----------------------------------------------------------
Abbey National 363,800 3,593,365
British Airport Authority 142,215 1,075,612
British Petroleum 476,400 3,976,782
Carlton Communications PLC 225,400 3,379,775
Powergen 425,000 3,511,414
Reed Elsevier International 258,200 3,935,755
Reuters Holdings 377,000 3,451,491
Standard Chartered Bank 600,000 5,106,383
Thorn EMI 108,335 2,551,484
Videotron* 86,000 1,101,875
Vodafone Group 847,000 3,038,624
- ----------------------------------------------------------
34,722,561
Total Common Stocks: 95.9%
(Cost $306,535,621) 343,871,042
- ----------------------------------------------------------
Maturity
Repurchase Agreement: Amount
----------
State Street Bank and Trust
Co. repurchase agreement
dated 12/29/95, 5.0%,
maturing on 1/2/96
collateralized by
U.S. Treasury
Notes 8.0%, 8/15/99 $5,359,719 5,356,000
- ----------------------------------------------------------
Total Repurchase Agreement: 1.5%
(Cost $5,356,000) 5,356,000
- ----------------------------------------------------------
Total Investments: 97.4%
(Cost $311,891,621) 349,227,042
- ----------------------------------------------------------
Other Assets Over Liabilities: 2.6% 9,163,561
- ----------------------------------------------------------
Net Assets: 100%
(Equivalent to $13.398 per share based
on 26,750,338 shares issued and
outstanding) $358,390,603
==========================================================
Lincoln National Managed Fund, Inc.
Statement of Net Assets
December 31, 1995
Investments
Par Market
Long-Term Debt Investments: Amount Value
---------- ------------
U.S. Government and Agency Obligations: 21.2%
- ----------------------------------------------------------
FHLMC Pool
7.3%, 12/15/12 $2,994,978 $3,191,149
8.5%, 1/1/17 1,222,426 1,270,236
Par Market
Amount Value
---------- ------------
FNMA
7.56% Principal Strip
12/20/01* $4,000,000 $3,774,800
7.6%, 7/25/05 1,682,028 1,711,363
6.73%, 8/1/05 2,143,791 2,215,929
7.0%, 10/1/05 2,994,533 3,016,992
7.175%, 10/1/05 3,994,881 4,275,641
6.655%, 11/1/05 999,291 1,034,756
6.66%, 12/1/05 2,000,000 2,066,120
0.0% Debenture, 7/5/14* 2,500,000 770,700
7.15%, 10/1/15 2,989,283 3,032,209
7.5%, 5/25/20 4,000,000 4,123,880
GNMA
6.5%, 12/15/23 1,386,208 1,378,778
Tennessee Valley Authority
Generic*
0.0%, 11/1/00 11,500,000 8,772,200
U.S. Treasury Bonds
8.0%, 11/15/21 6,500,000 8,135,140
U.S. Treasury Notes
7.875%, 11/15/04 6,000,000 6,948,720
6.5%, 8/15/05 7,200,000 7,672,464
7.375%, 5/15/96 2,000,000 2,015,620
8.875%, 2/15/96 7,000,000 7,030,590
6.0%, 6/30/96 13,000,000 13,048,750
5.375%, 5/31/98 5,000,000 5,015,600
U.S. Treasury Strip*
9.875%, 5/15/08 70,000,000 34,059,200
- ----------------------------------------------------------
124,560,837
Collateralized Mortgage Obligations: 0.7%
- ----------------------------------------------------------
FLHMC
8.0%, 4/15/16 2,075,507 2,121,687
Mid State Trust III
7.625%, 4/1/22 321,520 331,323
Prudential Home Mortgage
6.7%, 11/25/07 1,500,000 1,517,160
- ----------------------------------------------------------
3,970,170
Indexed Securities: 0.6%
- ----------------------------------------------------------
Caterpillar Financial
Services Corp.*
4.25%, 1/8/96, coupon
inversely indexed to
2 year Italian swap
rate multiplied by 5.11. 3,500,000 3,476,900
- ----------------------------------------------------------
Air Transportation: 0.9%
- ----------------------------------------------------------
American Airlines
Equipment Trust
10.18%, 1/2/13 1,500,000 1,881,855
Delta Air Lines Inc.
8.25%, 12/27/07 1,500,000 1,747,020
United Airline Inc.
Equipment Trust
9.35%, 4/7/16 1,500,000 1,718,145
- ----------------------------------------------------------
5,347,020
Banking and Insurance: 4.2%
- ----------------------------------------------------------
Ahmanson HF & Co.
8.25%, 10/1/02 2,000,000 2,205,740
Banc One Corp.
9.875%, 3/1/09 500,000 647,965
Barclays Bank Services
3.875%, 11/30/49 2,000,000 1,715,000
Barnett Banks Inc. Note
6.9%,9/1/05 1,500,000 1,563,705
Chase Manhatten Corp.
6.5% Subordinated
Note, 1/15/09 3,000,000 3,003,750
First America Bank Corp.
7.75% Subordinated
Note, 7/1/04 2,000,000 2,186,860
First Union Corp.
8.0%, 8/15/09 2,000,000 2,247,240
First USA Bank
5.75%, 1/15/99 2,000,000 1,989,920
Fleet Financial Group
7.25%, 9/1/99 1,000,000 1,046,880
National Westminster Bancorp
3.69%, 7/30/49 3,000,000 2,512,500
National Westminster
Bank p.l.c.
9.45% Debentures, 5/1/01 500,000 577,820
<PAGE>
Par Market
Amount Value
---------- ------------
NationsBank Corp.
8.125% Subordinated
Debentures, 6/15/02 $1,000,000 $1,103,600
Travelers Group Inc.
8.625%, 2/1/07 3,000,000 3,534,090
Viacom Inc.
8.75%, 5/15/01 500,000 511,250
- ----------------------------------------------------------
24,846,320
Entertainment: 0.4%
- ----------------------------------------------------------
Time Warner Inc.
8.875%, 10/1/12 500,000 559,330
9.125%, 1/15/13 1,500,000 1,687,710
- ----------------------------------------------------------
2,247,040
Finance: 3.8%
- ----------------------------------------------------------
Aristar Finance
7.5% Senior Subordinated
Note, 7/1/99 1,500,000 1,579,170
Avco Financial Services Inc.
7.25%, 7/15/99 1,000,000 1,047,760
Chrysler Financial Corp.
9.5%, 12/15/99 1,500,000 1,684,935
Discover Credit Corp.
8.73% Med. Term Note,
8/15/96 500,000 509,805
Dow Capital B V
9.0%, 5/15/10 3,000,000 3,636,030
Ford Motor Credit Co.
7.95% Med. Term Notes,
5/17/99 2,000,000 2,131,580
General Electric Capital
Corp.
8.3%, 9/20/09 3,000,000 3,613,050
General Motors Acceptance
Corp.
7.85%, 11/15/97 1,500,000 1,558,650
8.875%, 6/1/10 1,500,000 1,826,670
Household Finance Corp.
9.625% Senior Subordinated
Note, 7/15/00 875,000 999,749
International Lease
Finance Co.
8.25%, 1/15/00 2,000,000 2,167,860
Salomon Inc.
7.25%, 1/15/00 1,000,000 1,022,350
Spiegel Charge Account
Trust 2
6.95%, 12/17/01 500,000 510,265
- ----------------------------------------------------------
22,287,874
Financial Services: 0.4%
- ----------------------------------------------------------
B.A.T. Capital Corp.
Euro Bd (UK)
6.5%, 11/24/03 2,500,000 2,514,063
- ----------------------------------------------------------
Food and Beverage: 0.7%
- ----------------------------------------------------------
Coca Cola Enterprises Inc.
8.0%, 1/4/05 3,000,000 3,419,310
Nabisco Inc.
7.55%, 6/15/15 750,000 786,090
- ----------------------------------------------------------
4,205,400
Foreign Government: 0.9%
- ----------------------------------------------------------
Hydro-Quebec
7.2%, Med. Term Note
10/5/09 3,000,000 3,475,560
Manitoba (Province of)
7.75%, 7/7/16 1,500,000 1,688,970
- ----------------------------------------------------------
5,164,530
Machinery and Engineering: 0.4%
- ----------------------------------------------------------
Deere & Co. Capital Corp.
8.625%, 8/1/19 2,000,000 2,401,440
- ----------------------------------------------------------
Metals and Mining: 1.2%
- ----------------------------------------------------------
Cyprus Amax Minerals Co. Note
7.375%, 5/15/07 2,500,000 2,670,325
Inco LTD Deb
9.6%, 6/15/22 1,300,000 1,499,810
Newmont Gold Co.
8.91%, 1/5/09 750,000 833,767
Noranda Inc.
8.125%, 6/15/04 2,000,000 2,220,380
- ----------------------------------------------------------
7,224,282
Par Market
Amount Value
---------- ------------
Miscellaneous: 0.1%
- ----------------------------------------------------------
Xerox Corp. - Euronote
8.375%, 9/25/96 $500,000 $505,745
- ----------------------------------------------------------
Paper: 0.8%
- ----------------------------------------------------------
Champion International Corp.
7.7%, 12/15/99 1,500,000 1,593,030
Westvaco Corp.
8.3%, 8/1/22 2,500,000 2,792,550
- ----------------------------------------------------------
4,385,580
Petroleum and Petroleum Related: 0.9%
- ----------------------------------------------------------
Enron Corp.
9.5%, 6/15/01 1,000,000 1,160,760
Noble Affiliates Inc.
7.25%, 10/15/23 600,000 611,418
Occidental Petroleum Corp.
11.75%, 3/15/11 2,000,000 2,113,360
Petro Canada - Debentures
8.6%, 10/15/01 1,500,000 1,670,895
- ----------------------------------------------------------
5,556,433
Public Utilities: 5.6%
- ----------------------------------------------------------
Baltimore Gas & Electric Co.
8.92% Med. Term Note,
7/16/98 1,000,000 1,073,820
Carolina Power & Light Co.
9.0%, 4/1/22 500,000 534,625
Central Maine Power Co.
6.5% Med. Term Note,
7/22/97 1,500,000 1,506,765
Commonwealth Edison Co.
9.375%, 2/15/00 500,000 557,020
Detroit Edison Co.
6.56% Med. Term Note,
5/1/01 2,000,000 2,042,980
Duquesne II Funding Corp.
8.7%, 6/1/16 2,475,000 2,773,089
Great Lakes Power Inc.
9.0%, 8/1/04 1,500,000 1,684,680
GTE Hawaiian Telephone
Co. Inc. Sr Db
7.0%, 2/1/06 2,000,000 2,097,200
Gulf States Utilities Co.
7.35%, 11/1/98 1,500,000 1,553,205
Illinois Power Co.
5.85% 1st Mortgage Bonds,
10/1/96 625,000 625,363
Long Island Lighting Co.
9.625%, 7/1/24 500,000 529,995
National Rural Utilities
Cooperative Finance Corp.
8.5%, 2/15/98 1,000,000 1,055,810
Nevada Power Co.
7.06%, 5/1/00 1,500,000 1,553,235
Old Dominion Electric Co-op
7.48%, 12/1/13 1,500,000 1,642,020
Pacificorp
9.15% Med. Term Note,
8/9/11 1,500,000 1,872,405
Pennsylvania Power & Light
7.7%, 10/1/09 3,000,000 3,378,990
Public Service Co. of
Colorado
6.375%, 11/1/05 1,500,000 1,487,370
PSI Energry, Inc.
8.57% Med. Term Note,
12/27/11 500,000 579,570
Texas Gas Transmission Corp.
8.625%, 4/4/04 2,000,000 2,302,580
Texas Utilities Electric Co.
7.375%, 8/1/01 1,500,000 1,588,770
Utilicorp United Inc.
10.5%, 12/1/20 1,000,000 1,209,270
Washington Water Power Co.
8.01% Med. Term Note,
12/17/01 1,000,000 1,099,270
- ----------------------------------------------------------
32,748,032
Railroads: 0.3%
- ----------------------------------------------------------
Burlington Northern RR
6.94%, 1/2/14 500,000 524,930
Chicago & Northwestern
Holdings Corp.
6.25%, 7/30/12 1,460,551 1,464,143
- ----------------------------------------------------------
1,989,073
<PAGE>
<TABLE>
<CAPTION>
Par Market
Amount Value
---------- ----------
<S> <C> <C>
Retail: 0.5%
- ----------------------------------------------------------
Sears, Roebuck & Co.
9.05%, 2/6/12 $2,500,000 $3,039,450
- ----------------------------------------------------------
Securities Dealers: 0.7%
- ----------------------------------------------------------
Lehman Brothers Holding Co.
Sr. Note
8.875%, 3/1/02 1,000,000 1,117,000
Smith Barney Holdings
7.875%, 10/1/99 3,000,000 3,196,170
- ----------------------------------------------------------
4,313,170
Telecommunications: 0.6%
- ----------------------------------------------------------
NYNEX Cap Funding
7.63% Med. Term Note,
10/15/09 3,000,000 3,465,450
- ----------------------------------------------------------
Transportation: 0.4%
- ----------------------------------------------------------
Federal Express Corp. Note
9.65%, 6/15/12 2,000,000 2,534,120
- ----------------------------------------------------------
Total Long-Term Debt Investments: 45.3%
(Cost $253,283,367) 266,782,929
- ----------------------------------------------------------
Number
Common Stocks: of Shares
---------
Aerospace: 1.0%
- ----------------------------------------------------------
McDonnell Douglas Corp. 44,600 4,103,200
Parker Hannifin Corp. 51,550 1,765,588
- ----------------------------------------------------------
5,868,788
Air Transportation: 0.4%
- ----------------------------------------------------------
America West Airlines Inc. CL B* 24,700 419,900
AMR Corp.* 15,900 1,180,575
Continental Airlines Holdings
Inc.* 11,400 495,900
Mesa Airlines Inc.* 52,500 472,500
- ----------------------------------------------------------
2,568,875
Banking and Insurance: 5.5%
- ----------------------------------------------------------
AllState Corp. 88,810 3,652,311
American Bankers Ins. Group
Inc. 12,000 468,000
American General Corp. 97,900 3,414,263
Bank of Boston Corp. 78,200 3,616,750
Bank of New York Inc. 69,400 3,383,250
Banknorth Group Inc.* 13,200 508,200
Chemical Banking Corp. 63,100 3,707,125
Cigna Corp. 33,900 3,500,175
Deposit Guaranty Corp. 9,800 436,100
First Chicago NBD Corp. 96,835 3,824,983
HCC Insurance Holdings Inc.* 14,100 521,700
MAIC Holdings Inc.* 13,400 455,600
NationsBank Corp. 33,500 2,332,437
Onebancorp Inc. 15,100 503,962
Provident Bancorp* 10,500 493,500
Transamerica Corp. 17,500 1,275,313
Transport Holdings Inc.* 13 530
Travelers Group Inc. 2,700 169,762
United Carolina Bancshares
Inc.* 11,900 401,625
- ----------------------------------------------------------
32,665,586
Broadcasting: 0.5%
- ----------------------------------------------------------
Heritage Media Corp.* 17,100 438,187
King World Productions Inc.* 54,200 2,107,025
Renaissance Communication
Corp.* 23,400 517,725
- ----------------------------------------------------------
3,062,937
Building Materials: 0.2%
- ----------------------------------------------------------
Dover Corp. 34,300 1,264,812
- ----------------------------------------------------------
Building and Construction: 0.6%
- ----------------------------------------------------------
Armstrong World Industries Inc. 24,900 1,543,800
Halliburton Co. 38,800 1,964,250
- ----------------------------------------------------------
3,508,050
Number Market
of Shares Value
---------- ----------
Chemicals: 1.8%
- ----------------------------------------------------------
Albelmarle Corp.* 23,600 $457,250
Bio Rad Laboratories Inc.* 11,000 467,500
Dow Chemical Co. 35,500 2,498,312
Du Pont E I De Nemours & Co. 20,900 1,460,388
Eastman Chemical Co. 20,400 1,277,550
International Specialty
Products* 44,400 482,850
Learonal Inc.* 16,800 386,400
Mississippi Chemical Corp.* 19,000 441,750
Olin Corp. 20,100 1,492,425
Somatogen Inc.* 22,300 420,912
Union Carbide Corp. 34,600 1,297,500
- ----------------------------------------------------------
10,682,837
Coal and Gas: 0.2%
- ----------------------------------------------------------
Louis Dreyfus Natural Gas
Corp.* 31,900 482,488
New Jersey Resources Corp. 16,100 485,013
Zeigler Coal Holding Co. 38,200 530,025
- ----------------------------------------------------------
1,497,526
Consumer Products and Services: 3.0%
- ----------------------------------------------------------
American Brands Inc. 17,800 794,325
Black & Decker Corp. 26,300 927,075
Hughes Supply Inc.* 17,000 480,250
Libbey Inc. 20,000 450,000
Nash Finch Co. 22,700 414,275
Omnicom Group Inc. 18,000 670,500
Philip Morris Co. Inc. 89,000 8,054,500
Procter & Gamble Co. 69,400 5,760,200
- ----------------------------------------------------------
17,551,125
Drug and Hospital Supplies: 4.4%
- ----------------------------------------------------------
Adac Laboratories 36,300 440,138
Baxter International Inc. 101,800 4,262,875
Bristol Myers Squibb Co. 68,300 5,865,262
Lilly (Eli) & Co. 75,000 4,218,750
Merck & Co. Inc. 11,700 769,275
Omnicare Inc.* 12,000 537,000
Pharmacia & Upjohn Inc.* 106,045 4,109,244
Schering-Plough Corp. 76,400 4,182,900
Sybron International Corp.* 19,200 456,000
Target Therapeutics Inc.* 13,600 581,400
Watson Pharmaceuticals Inc.* 9,500 465,500
- ----------------------------------------------------------
25,888,344
Electrical and Electronics: 4.1%
- ----------------------------------------------------------
Alliance Semiconductor
Corp.* 81,300 945,112
Applied Materials Inc.* 69,700 2,744,438
Arrow Electrics Inc.* 31,000 1,336,875
Auspex Systems Inc.* 29,600 540,200
Electroglas Inc.* 20,100 492,450
FSI International Inc.* 18,900 382,725
General Electric Co. 92,200 6,638,400
Harris Corp. 44,600 2,436,275
Helix Technology Corp.* 12,500 493,750
Kemet Corp. Class B* 19,100 456,013
Mentor Graphics Corp.* 101,100 1,845,075
Read Rite Corp.* 94,200 2,190,150
Rexel Inc.* 34,600 467,100
Sanmina Corp.* 8,800 456,500
Teradyne Inc.* 78,000 1,950,000
Texas Instruments Inc. 12,000 621,000
Wyle Electronics 11,500 403,937
- ----------------------------------------------------------
24,400,000
Entertainment: 1.0%
- ----------------------------------------------------------
Bally Entertainment Corp.* 61,500 861,000
Grand Casinos Inc.* 18,300 425,475
Mattel Inc. 33,512 1,030,494
Mirage Resorts Inc.* 96,800 3,339,600
- ----------------------------------------------------------
5,656,569
Finance: 0.7%
- ----------------------------------------------------------
Household International Inc. 58,000 3,429,250
One Valley Bancorp West
Virginia Inc. 14,000 437,500
- ----------------------------------------------------------
3,866,750
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number Market
of Shares Value
--------- ----------
<S> <C> <C>
Financial Services: 0.3%
- ----------------------------------------------------------
Dean Witter Discover & Co. 21,800 $1,024,600
Interpool, Inc. 27,300 487,988
Olympic Financial LTD* 28,800 468,000
- ----------------------------------------------------------
1,980,588
Food and Beverage: 3.5%
- ----------------------------------------------------------
Campbell Soup Co. 23,800 1,428,000
Coca Cola Co. 40,600 3,014,550
ConAgra Inc. 88,700 3,658,875
CPC International Inc. 23,000 1,578,375
Heinz H.J. Co. 71,250 2,360,156
Hudson Foods Inc. 28,000 483,000
IBP Inc. 53,800 2,716,900
RJR Nabisco Holding Corp. 38,480 1,188,070
Robert Mondavi Corp.* 14,000 386,750
Safeway Inc.* 52,400 2,698,600
Smithfield Foods Inc.* 14,400 457,200
WLR Foods Inc. 27,300 450,450
- ----------------------------------------------------------
20,420,926
Hospital and Health Care: 0.3%
- ----------------------------------------------------------
Healthcare Compare Corp.* 29,300 1,274,550
Universal Health Services Inc.* 11,000 488,125
- ----------------------------------------------------------
1,762,675
Hotels: 0.1%
- ----------------------------------------------------------
Marcus Corp.* 18,700 511,912
- ----------------------------------------------------------
Industrial: 0.3%
- ----------------------------------------------------------
TRW Inc. 20,800 1,612,000
- ----------------------------------------------------------
Machinery and Engineering: 0.6%
- ----------------------------------------------------------
Barnes Group Inc.* 12,000 432,000
Graco Inc. 13,600 414,800
Novellus Systems Inc.* 54,200 2,926,800
- ----------------------------------------------------------
3,773,600
Metals and Mining: 1.1%
- ----------------------------------------------------------
ASARCO Inc. 27,700 886,400
Chaparral Steel Co.* 30,100 504,175
Cyprus Amax Minerals Co. 15,600 407,550
Intermet Corp.* 38,000 399,000
Phelps Dodge Corp. 50,000 3,112,500
Texas Industries Inc.* 8,900 471,700
Tredegar Industries Inc. 14,400 468,000
- ----------------------------------------------------------
6,249,325
Miscellaneous: 0.3%
- ----------------------------------------------------------
Anthony Industries Inc. 19,700 453,100
CDW Computer Centers Inc.* 11,500 465,750
Medisense Inc.* 15,000 474,375
Ultratech Stepper Inc.* 17,100 440,325
- ----------------------------------------------------------
1,833,550
Motor Vehicles and Equipment: 1.6%
- ----------------------------------------------------------
Champion Enterprises Inc.* 17,000 524,875
Custom Chrome Inc.* 19,100 441,688
Dana Corp. 33,500 979,875
Eaton Corp. 56,200 3,013,725
Ford Motor Co. 61,400 1,780,600
Goodrich BF Co. 26,500 1,805,313
Navistar International Corp.* 68,700 721,350
Wynns International Inc.* 15,100 447,337
- ----------------------------------------------------------
9,714,763
Office and Business Equipment and Services: 4.0%
- ----------------------------------------------------------
Adaptec Inc.* 27,300 1,119,300
Applied Magnetics Corp.* 28,800 536,400
Avery Dennison Corp. 32,700 1,639,088
Boole & Babbage Inc.* 17,700 433,650
Cadence Design Systems Inc.* 59,150 2,484,300
Cisco Systems Inc.* 23,900 1,783,537
Computer Associates
International Inc. 18,150 1,032,281
Computervision Corp.* 31,600 485,850
Number Market
of Shares Value
--------- ----------
Dell Computer Corp.* 95,200 $3,296,300
Gateway 2000 Inc.* 19,000 465,500
Health Management Systems
Inc.* 12,600 491,400
Jack Henry & Associates* 19,900 492,525
Kronos Inc.* 10,300 489,250
Medic Computer Systems Inc.* 6,700 405,350
Micron Technology Inc. 20,800 824,200
Moore Corp. LTD 16,600 309,175
Optical Data Systems Inc.* 15,800 398,950
Reynolds & Reynolds Co. 21,800 847,475
Seagate Technology* 45,900 2,180,250
Sun Microsystems Inc.* 81,000 3,695,625
- ----------------------------------------------------------
23,410,406
Paper: 0.6%
- ----------------------------------------------------------
Bowater Inc. 35,000 1,242,500
Caraustar Industries Inc. 22,800 456,000
Republic Group* 34,900 488,600
Stone Container Corp. 85,400 1,227,625
- ----------------------------------------------------------
3,414,725
Petroleum and Petroleum Related: 4.3%
- ----------------------------------------------------------
Amoco Corp. 36,400 2,616,250
Atlantic Richfield Co. 13,600 1,506,200
Exxon Corp. 88,900 7,123,113
Lyondell Petrochemical Co. 123,600 2,827,350
Mitchell Energy & Development
Corp. 25,500 478,125
Mobil Corp. 41,500 4,648,000
Occidental Petroleum Corp. 38,200 816,525
Royal Dutch Petroleum Co. 19,000 2,681,375
Sonat Offshore Drilling Inc.* 11,000 492,250
Valero Energy Corp. * 17,500 428,750
Varco International Inc.* 38,700 464,400
Williams Companies Inc. 20,200 886,275
Yankee Energy System Inc. 18,800 474,700
- ----------------------------------------------------------
25,443,313
Plastics: 0.2%
- ----------------------------------------------------------
LCI International Inc.* 26,000 533,000
Safeskin Corp.* 26,800 455,600
- ----------------------------------------------------------
988,600
Printing and Publishing: 0.5%
- ----------------------------------------------------------
American Business Products
Inc.* 19,300 550,050
Bowne & Co. Inc. 22,900 458,000
New York Times Co. 36,300 1,075,387
Pulitzer Publishing Co.* 9,800 467,950
Scientific Games Holdings
Corp.* 13,300 502,075
- ----------------------------------------------------------
3,053,462
Public Utilities: 2.4%
- ----------------------------------------------------------
Consolidated Edison Co. 102,800 3,289,600
General Public Utilities Corp. 40,200 1,366,800
Green Mountain Power Corp. 16,300 452,325
Northeast Utilities 93,600 2,281,500
Northwestern Public Service Co. 16,800 470,400
Ohio Edison Co. 24,200 568,700
SCE Corp. 142,100 2,522,275
Southern California Water Co.* 23,500 475,875
TNP Enterprises Inc. 23,900 448,125
Tucson Electric Power Co.* 150,000 487,500
Unicom Corp. 51,100 1,673,525
- ----------------------------------------------------------
14,036,625
Railroads: 0.1%
- ----------------------------------------------------------
Conrail Inc. 8,600 602,000
- ----------------------------------------------------------
Restraurant: 0.1%
- ----------------------------------------------------------
Applebee's International Inc. 18,100 411,775
- ----------------------------------------------------------
Retail: 2.8%
- ----------------------------------------------------------
Carson Pirie Scott & Co.* 22,600 449,175
Caseys General Stores Inc.* 23,200 507,500
Claire's Stores Inc.* 21,000 370,125
</TABLE>
<PAGE>
Number Market
of Shares Value
---------- ------------
CompUSA Inc.* 15,500 $482,438
Eckerd Corp.* 21,900 977,288
Fabri Centers Of America* 32,000 424,000
Jostens Inc. 129,500 3,140,375
Kroger Co.* 85,200 3,195,000
National Media Corp.* 25,000 525,000
Pier 1 Imports Inc. 60,000 682,500
Sears, Roebuck & Co. 52,900 2,063,100
Staples Inc.* 104,700 2,552,062
Waban Inc.* 51,200 960,000
Zale Corp.* 27,000 435,375
- ----------------------------------------------------------
16,763,938
Securities Dealers: 0.4%
- ----------------------------------------------------------
Bear, Stearns & Co. Inc. 89,700 1,782,788
Raymond James Financial Inc. 19,800 418,275
- ----------------------------------------------------------
2,201,063
Shoes: 0.5%
- ----------------------------------------------------------
Nike Inc. 43,800 3,049,574
- ----------------------------------------------------------
Soaps, Cleaner and Cosmetics: 0.7%
- ----------------------------------------------------------
Clorox Co. 12,500 895,313
Colgate-Palmolive Co. 43,500 3,055,875
- ----------------------------------------------------------
3,951,188
Telecommunications: 4.2%
- ----------------------------------------------------------
American Telephone &
Telegraph Co. 56,100 3,632,475
Ameritech Corp. 89,800 5,298,200
Bellsouth Corp. 90,600 3,941,100
Cincinnati Bell Inc. 54,500 1,893,874
Comnet Cellular Inc.* 16,500 476,438
GTE Corp. 73,300 3,225,200
Pacific Telesis Group 119,600 4,021,550
Sprint Corp. 64,700 2,579,913
- ----------------------------------------------------------
25,068,750
Textiles-Apparel Manufacturing: 0.1%
- ----------------------------------------------------------
Pillowtex Corp.* 37,900 440,587
- ----------------------------------------------------------
Transportation: 0.6%
- ----------------------------------------------------------
Illinois Central Corp. 65,700 2,521,238
PHH Corp. 21,300 995,775
- ----------------------------------------------------------
3,517,013
Waste Management: 0.1%
- ----------------------------------------------------------
United Waste Systems Inc.* 11,200 417,199
- ----------------------------------------------------------
Total Common Stocks: 53.1%
(Cost $250,080,875) 313,111,756
- ----------------------------------------------------------
Par
Money Market Instruments: Amount
----------
ITT-Hartford Group Inc.
5.8%, 1/15/96 $9,700,000 9,684,372
UBS Finance Inc.
5.75%, 1/2/96 9,000,000 8,982,750
6.0%, 1/2/96 8,400,000 8,390,200
- ----------------------------------------------------------
Total Money Market Instruments: 4.6%
(Cost $27,057,322) 27,057,322
- ----------------------------------------------------------
Total Investments: 103.0%
(Cost $530,421,564) 606,952,007
- ----------------------------------------------------------
Other Assets Under Liabilities: (3.0%) (17,787,406)
- ----------------------------------------------------------
Net Assets: 100.0%
(equivalent to $15.895 per share
based on 37,066,794 shares
issued and outstanding) $589,164,601
==========================================================
Lincoln National Money Market Fund, Inc.
Statement of Net Assets
December 31, 1995
Investments
Par Market
Money Market Instruments: Amount Value
---------- ------------
U.S. Government and Agency Obligations: 19.4%
- ----------------------------------------------------------
Federal Home Loan Bank
5.61%, 9/20/96 $7,000,000 $6,994,171
Federal Home Loan Mortgage
Corp.
7.699%, 12/15/96 1,500,000 1,530,465
FNMA
7.07%, 11/18/96 1,400,000 1,418,489
U.S. Treasury Bill
6.61%, 2/8/96 5,000,000 4,665,828
- ----------------------------------------------------------
14,608,953
Banking and Insurance: 21.2%
- ----------------------------------------------------------
Boatmen's Bank of
Southern Missouri
6.25%, 2/14/96 4,100,000 4,099,912
Corporate Asset Funding Co.
5.53%, 2/22/96 1,200,000 1,188,387
First Bank of South Dakota
Floater
5.91% Med. Term Note,
5/6/96 4,000,000 3,999,727
Metlife Funding Inc.
5.67%, 2/2/96 3,000,000 2,972,122
Morgan Guaranty Trust Co.
of NY
6.0%, 10/11/96 3,700,000 3,700,000
- ----------------------------------------------------------
15,960,148
Chemicals: 4.1%
- ----------------------------------------------------------
Du Pont E I De Nemours & Co.
5.673%, 1/25/96 3,100,000 3,062,893
- ----------------------------------------------------------
Consumer Products and Services: 1.5%
- ----------------------------------------------------------
Kimberly Clark Corp.
5.6%, 1/30/96 1,100,000 1,094,524
- ----------------------------------------------------------
Finance: 19.3%
- ----------------------------------------------------------
American Express
Centurian Bank
5.72%, 10/29/96 3,800,000 3,799,417
Associates Corp. of
North America
5.853%, 1/2/96 3,100,000 3,100,000
Avco Financial Services Inc.
5.66%, 2/13/96 3,700,000 3,647,063
Caterpillar Financial
Services Corp.
6.12% Med. Term Note,
7/25/96 4,000,000 4,000,000
- ----------------------------------------------------------
14,546,480
Machinery and Engineering: 4.5%
- ----------------------------------------------------------
Vermont American Corp.
5.65%, 2/02/96 3,435,000 3,411,819
- ----------------------------------------------------------
Motor Vehicles and Equipment: 8.6%
- ----------------------------------------------------------
Daimler-Benz North America
Corp.
5.7%, 2/2/96 3,500,000 3,465,088
Toyota Motor Credit Floater
6.08%, 1/12/96 3,000,000 3,000,000
- ----------------------------------------------------------
6,465,088
Petroleum and Petroleum Related: 1.7%
- ----------------------------------------------------------
Exxon Imperial U.S. Inc.
5.7%, 1/12/96 1,300,000 1,290,943
- ----------------------------------------------------------
<PAGE>
Par Market
Amount Value
---------- -----------
Securities Dealers: 14.4%
- ----------------------------------------------------------
Dean Witter Discover & Co.
5.7%, 2/7/96 $3,500,000 $3,463,979
Merrill Lynch & Co. Inc.
5.8%, 1/11/96 3,700,000 3,679,136
Smith Barney Holdings
5.76%, 1/9/96 3,700,000 3,680,464
- ----------------------------------------------------------
10,823,579
Telecommunications: 4.9%
- ----------------------------------------------------------
Southwestern Bell Capital
Corp.
5.64%, 3/25/96 3,800,000 3,710,700
- ----------------------------------------------------------
Transportation: 5.3%
- ----------------------------------------------------------
PHH Corp. Floater
5.901% Med. Term Note,
8/21/96 4,000,000 3,998,996
- ----------------------------------------------------------
Total Money Market Instruments: 104.9%
(Cost $78,974,123) 78,974,123
- ----------------------------------------------------------
Other Assets Under Liabilities: (4.9%) (3,654,736)
- ----------------------------------------------------------
Net Assets: 100.0%
(equivalent to $10.000 per share
based on 7,531,939 shares
issued and outstanding) $75,319,387
==========================================================
Lincoln National Social Awareness Fund, Inc.
Statement of Net Assets
December 31, 1995
Investments:
Number Market
Common Stocks: of Shares Value
---------- -----------
Air Transportation: 1.5%
- ----------------------------------------------------------
AMR Corp.* 35,300 $2,621,025
Delta Air Lines Inc. 25,900 1,913,363
- ----------------------------------------------------------
4,534,388
Banking and Insurance: 18.8%
- ----------------------------------------------------------
AllState Corp. 117,534 4,833,586
American General Corp. 93,500 3,260,812
Bank of Boston Corp. 78,100 3,612,125
Bank of New York Inc. 88,600 4,319,250
BankAmerica Corp. 97,300 6,300,175
Chemical Banking Corp. 83,800 4,923,250
Cigna Corp. 37,100 3,830,575
First Chicago NBD Corp. 96,111 3,796,385
First Union Corp. 62,100 3,454,312
Healthcare Compare Corp.* 80,100 3,484,350
Mid Ocean LTD Shares 71,000 2,635,875
Nations Bank Corp. 82,200 5,723,175
Transamerica Corp. 47,600 3,468,850
US Life Corp. 76,950 2,298,880
- ----------------------------------------------------------
55,941,600
Broadcasting: 1.7%
- ----------------------------------------------------------
Capital Cities ABC Inc. 16,600 2,048,025
King World Productions Inc.* 75,300 2,927,288
- ----------------------------------------------------------
4,975,313
Building Materials: 2.0%
- ----------------------------------------------------------
Dover Corp. 56,500 2,083,437
Owens Corning Fiberglas Corp.* 89,300 4,007,338
- ----------------------------------------------------------
6,090,775
Building and Construction: 0.4%
- ----------------------------------------------------------
Armstrong World Industries Inc. 20,000 1,240,000
- ----------------------------------------------------------
Coal and Gas: 1.1%
- ----------------------------------------------------------
Union Planters Corp. 100,200 3,193,875
- ----------------------------------------------------------
Number Market
of Shares Value
---------- -----------
Consumer Products and Services: 4.6%
- ----------------------------------------------------------
Johnson & Johnson 30,500 $2,611,563
Omnicom Group Inc. 70,600 2,629,850
Procter & Gamble Co. 100,500 8,341,500
- ----------------------------------------------------------
13,582,913
Drug and Hospital Supplies: 4.5%
- ----------------------------------------------------------
Amgen Inc.* 89,400 5,308,125
Baxter International Inc. 108,500 4,543,438
Nellcor Inc.* 62,000 3,596,000
- ----------------------------------------------------------
13,447,563
Electrical and Electronics: 2.8%
- ----------------------------------------------------------
Alliance Semiconductor Corp.* 60,000 697,500
Applied Materials Inc.* 33,400 1,315,125
Avnet Inc. 42,300 1,892,925
Good Guys Inc.* 152,100 1,368,900
Lam Research Corp.* 28,600 1,308,450
Mentor Graphics Corp.* 93,200 1,700,900
- ----------------------------------------------------------
8,283,800
Entertainment: 1.3%
- ----------------------------------------------------------
Mattel Inc. 130,818 4,022,653
- ----------------------------------------------------------
Finance: 2.2%
- ----------------------------------------------------------
Green Tree Financial Corp. 101,400 2,674,425
Household International Inc. 65,200 3,854,950
- ----------------------------------------------------------
6,529,375
Financial Services: 0.3%
- ----------------------------------------------------------
Student Loan Marketing
Association 13,700 902,488
- ----------------------------------------------------------
Food and Beverage: 12.5%
- ----------------------------------------------------------
Campbell Soup Co. 75,400 4,524,000
Coca Cola Co. 134,000 9,949,500
Flowers Industries Inc. 201,300 2,440,763
Hershey Foods Corp. 38,600 2,509,000
Hormel Foods Corp. 80,400 1,979,850
International Multifoods Corp. 74,000 1,489,250
Pepsico Inc. 50,600 2,827,275
Safeway Inc.* 70,400 3,625,600
SuperValu Inc. 102,800 3,238,200
Universal Foods Corp. 34,500 1,384,312
Von Companies Inc.* 114,400 3,231,800
- ----------------------------------------------------------
37,199,550
Hospital and Health Care: 0.4%
- ----------------------------------------------------------
Oxford Health Plans Inc.* 17,500 1,292,812
- ----------------------------------------------------------
Machinery and Engineering: 0.9%
- ----------------------------------------------------------
Novellus Systems Inc.* 51,100 2,759,400
- ----------------------------------------------------------
Metals and Mining: 0.7%
- ----------------------------------------------------------
Cleveland-Cliffs Inc. 49,200 2,017,200
- ----------------------------------------------------------
Miscellaneous: 0.7%
- ----------------------------------------------------------
Sealed Air Corp.* 79,000 2,221,875
- ----------------------------------------------------------
Office and Business Equipment and Services: 8.0%
- ----------------------------------------------------------
Cadence Design Systems Inc.* 82,300 3,456,600
Computer Associates
International Inc. 64,600 3,674,125
Dell Computer Corp.* 93,600 3,240,900
Manpower Inc. 82,100 2,309,063
Reynolds & Reynolds Co. 84,600 3,288,825
Seagate Technology* 68,200 3,239,500
Sun Microsystems Inc.* 100,000 4,562,500
- ----------------------------------------------------------
23,771,513
Petroleum and Petroleum Related: 0.8%
- ----------------------------------------------------------
Reading & Bates Corp.* 152,500 2,287,500
- ----------------------------------------------------------
<PAGE>
Number Market
of Shares Value
--------- ------------
Printing and Publishing: 1.2%
- ----------------------------------------------------------
Ennis Business Forms Inc. 64,100 $785,225
New York Times Co. 90,100 2,669,212
- ----------------------------------------------------------
3,454,437
Public Utilities: 0.9%
- ----------------------------------------------------------
Portland General 90,200 2,627,075
- ----------------------------------------------------------
Retail: 6.2%
- ----------------------------------------------------------
Consolidated Stores Corp.* 63,400 1,378,950
Eckerd Corp.* 75,100 3,351,337
Jostens Inc. 83,300 2,020,025
Kroger Co.* 102,800 3,855,000
Rite Aid Corp. 51,100 1,750,175
Staples Inc.* 112,800 2,749,500
Tiffany & Co. 29,300 1,475,988
Waban Inc.* 64,200 1,203,750
Wal-Mart Stores 27,800 622,025
- ----------------------------------------------------------
18,406,750
Securities Dealers: 2.3%
- ----------------------------------------------------------
Bear, Stearns & Co. Inc. 125,600 2,496,300
Dean Witter Discover & Co. 18,000 846,000
Edwards (A G) Inc.* 143,500 3,426,063
- ----------------------------------------------------------
6,768,363
Shoes: 1.2%
- ----------------------------------------------------------
Nike Inc. 50,400 3,509,100
- ----------------------------------------------------------
Soaps, Cleaner and Cosmetics: 3.3%
- ----------------------------------------------------------
Clorox Co. 46,800 3,352,050
Dial Corp. 76,000 2,251,500
Gillette Co. 40,000 2,085,000
International Flavors &
Fragrances Inc. 44,700 2,145,600
- ----------------------------------------------------------
9,834,150
Telecommunications: 9.8%
- ----------------------------------------------------------
Ameritech Corp. 104,100 6,141,900
Bell Atlantic Corp. 56,400 3,771,750
Cincinnati Bell Inc. 116,100 4,034,475
Comsat Corp. 42,000 782,250
Pacific Telesis Group 149,200 5,016,850
SBC Communications Inc. 85,000 4,887,500
Southern New England Telecomm 26,800 1,065,300
Sprint Corp. 89,700 3,576,787
- ----------------------------------------------------------
29,276,812
Textiles-Apparel Manufacturing: 0.6%
- ----------------------------------------------------------
Jones Apparel Group Inc.* 47,200 1,858,500
- ----------------------------------------------------------
Transportation: 0.3%
- ----------------------------------------------------------
Paccar Inc. 25,600 1,078,400
- ----------------------------------------------------------
Total Common Stocks: 91.0%
(Cost $210,479,745) 271,108,180
- ----------------------------------------------------------
Par
Money Market Instruments: Amount
------------
Colgate Palmolive Co.
5.85%, 1/8/96 $1,800,000 1,794,150
5.9%, 1/8/96 1,300,000 1,297,230
Consolidated Natural Gas Co.
5.65%, 1/8/96 5,200,000 5,184,494
Merrill Lynch
5.7%, 1/16/96 7,900,000 7,877,485
PHH Corp.
5.85%, 1/10/96 5,300,000 5,288,804
Par Market
Amount Value
------------ ------------
Smith Barney
5.85%, 1/2/96 $4,000,000 $3,990,250
5.95%, 1/3/96 4,800,000 4,794,447
United States Treasury Bill
0.0%, 5/2/96 750,000 704,993
- ----------------------------------------------------------
Total Money Market Instruments: 10.4%
(Cost $30,931,853) 30,931,853
- ----------------------------------------------------------
Total Investments: 101.4%
(Cost $241,411,598) 302,040,033
- ----------------------------------------------------------
Other Assets Under Liabilities: (1.4%) (4,057,131)
- ----------------------------------------------------------
Net Assets: 100.0%
(equivalent to $22.590 per share
based on 13,190,885 shares
issued and outstanding) $297,982,902
==========================================================
LINCOLN NATIONAL SPECIAL OPPORTUNITIES
FUND, INC.
Statement of Net Assets
December 31, 1995
Investments
Number Market
Common Stocks: of Shares Value
--------- ------------
Aerospace: 1.0%
- ----------------------------------------------------------
McDonnell Douglas Corp. 53,400 $4,912,800
- ----------------------------------------------------------
Banking and Insurance: 10.9%
- ----------------------------------------------------------
Bank of Boston Corp. 110,000 5,087,500
Bank of New York Inc. 109,500 5,338,125
Chemical Banking Corp. 84,500 4,964,375
Cigna Corp. 47,100 4,863,075
First Chicago NBD Corp. 121,994 4,818,763
Mid Ocean LTD Shares 138,600 5,145,525
NationsBank Corp. 71,100 4,950,338
Star Banc Corp. 80,000 4,760,000
Transamerica Corp. 70,400 5,130,400
Travelers Inc. 80,800 5,080,300
US Life Corp. 166,950 4,987,631
- ----------------------------------------------------------
55,126,032
Building Materials: 1.0%
- ----------------------------------------------------------
Dover Corp. 135,700 5,003,938
- ----------------------------------------------------------
Chemicals: 2.9%
- ----------------------------------------------------------
Eastman Chemical Co. 74,800 4,684,350
Olin Corp. 69,700 5,175,225
Union Carbide Corp. 129,500 4,856,250
- ----------------------------------------------------------
14,715,825
Consumer Products and Services: 3.9%
- ----------------------------------------------------------
American Brands Inc. 111,900 4,993,538
Leggett & Platt Inc. 210,900 5,114,325
The Stanley Works 89,900 4,629,850
Universal Corp. 207,700 5,062,687
- ----------------------------------------------------------
19,800,400
Drug and Hospital Supplies: 4.0%
- ----------------------------------------------------------
Baxter International Inc. 118,000 4,941,250
Medtronic Inc. 87,800 4,905,825
Nellcor Inc.* 87,800 5,092,400
Pharmacia & Upjohn Inc.* 136,590 5,292,863
- ----------------------------------------------------------
20,232,338
<PAGE>
Number Market
of Shares Value
--------- ------------
Electrical and Electronics: 7.5%
- ----------------------------------------------------------
Alliance Semiconductor Corp.* 256,600 $2,982,975
Applied Materials Inc.* 116,800 4,599,000
Cirrus Logic Inc.* 111,500 2,202,125
Cypress Semiconductor Corp.* 362,100 4,616,775
Harris Corp. 92,900 5,074,663
Lam Research Corp.* 108,000 4,941,000
Teradyne Inc.* 206,100 5,152,500
Texas Instruments Inc. 77,200 3,995,100
TRW Inc. 57,700 4,471,750
- ----------------------------------------------------------
38,035,888
Entertainment: 2.1%
- ----------------------------------------------------------
Mattel Inc. 176,843 5,437,922
Mirage Resorts Inc.* 151,300 5,219,850
- ----------------------------------------------------------
10,657,772
Finance: 0.9%
- ----------------------------------------------------------
Household International Inc. 78,500 4,641,312
- ----------------------------------------------------------
Food and Beverage: 3.7%
- ----------------------------------------------------------
Heinz H.J. Co. 156,300 5,177,438
IBP Inc. 79,400 4,009,700
International Multifoods Corp. 220,700 4,441,587
Von Companies Inc.* 183,700 5,189,525
- ----------------------------------------------------------
18,818,250
Industrial: 0.7%
- ----------------------------------------------------------
Measurex Corp. 111,100 3,138,575
Trinova Corp. 8,500 243,313
- ----------------------------------------------------------
3,381,888
Machinery and Engineering: 2.0%
- ----------------------------------------------------------
Carpenter Technology Corp. 123,000 5,058,375
Novellus Systems Inc.* 90,300 4,876,200
- ----------------------------------------------------------
9,934,575
Metals and Mining: 4.5%
- ----------------------------------------------------------
ASARCO Inc. 157,100 5,027,200
Ball Corp. 130,500 3,588,750
Cleveland-Cliffs Inc. 118,700 4,866,700
Parker Hannifin Corp. 140,150 4,800,138
Phelps Dodge Corp. 75,400 4,693,650
- ----------------------------------------------------------
22,976,438
Miscellaneous: 1.0%
- ----------------------------------------------------------
Flight Transportation Corp.* 4,725 1
Snap On Inc. 110,900 5,018,225
- ----------------------------------------------------------
5,018,226
Motor Vehicles and Equipment: 1.9%
- ----------------------------------------------------------
Dana Corp. 168,000 4,914,000
Eaton Corp. 86,500 4,638,563
- ----------------------------------------------------------
9,552,563
Office and Business Equipment and Services: 8.8%
- ----------------------------------------------------------
Borland International Inc.* 271,300 4,476,450
Cadence Design Systems Inc.* 128,850 5,411,700
Mentor Graphics Corp.* 270,600 4,938,450
Moore Corp. LTD 255,200 4,753,100
New England Business
Services Inc. 223,600 4,863,300
Reynolds & Reynolds Co. 133,100 5,174,263
Seagate Technology* 105,700 5,020,750
Sun Microsystems Inc.* 112,100 5,114,562
Symantec Corp.* 193,700 4,503,525
- ----------------------------------------------------------
44,256,100
Paper: 4.1%
- ----------------------------------------------------------
Avery Dennison Corp. 104,900 5,258,112
Boise Cascade Corp. 129,500 4,483,937
Chesapeake Corp. 127,900 3,789,038
Stone Container Corp. 216,500 3,112,187
Westvaco Corp. 152,850 4,241,587
- ----------------------------------------------------------
20,884,861
Petroleum and Petroleum Related: 6.7%
- ----------------------------------------------------------
GATX 95,700 $4,653,412
Lyondell Petrochemical Co. 215,000 4,918,125
Occidental Petroleum Corp. 239,000 5,108,625
Phillips Petroleum Co. 139,900 4,774,087
Smith International Inc.* 212,100 4,984,350
Union Texas Petroleum 236,900 4,589,938
Williams Companies Inc. 115,000 5,045,625
- ----------------------------------------------------------
34,074,162
Printing and Publishing: 1.9%
- ----------------------------------------------------------
Banta Corp. 112,500 4,950,000
New York Times Co. 165,300 4,897,013
- ----------------------------------------------------------
9,847,013
Public Utilities: 7.6%
- ----------------------------------------------------------
Baltimore Gas & Electric Co. 170,700 4,864,950
General Public Utilities Corp. 153,200 5,208,800
Northeast Utilities 195,900 4,775,062
Rochester Gas & Electric Corp. 198,000 4,479,750
SCE Corp. 260,400 4,622,100
Sierra Pacific Resources* 209,600 4,899,400
Southwestern Public
Service Co.* 145,800 4,774,950
Unicom Corp. 149,300 4,889,575
- ----------------------------------------------------------
38,514,587
Railroads: 2.0%
- ----------------------------------------------------------
Burlington Northern Inc. 58,100 4,531,800
Burlington Northern Santa Fe 7,000 546,000
Conrail Inc. 68,700 4,809,000
- ----------------------------------------------------------
9,886,800
Restraurant: 0.9%
- ----------------------------------------------------------
Buffets Inc.* 330,100 4,538,875
- ----------------------------------------------------------
Retail: 7.1%
- ----------------------------------------------------------
Eckerd Corp.* 114,200 5,096,175
Kroger Co.* 138,500 5,193,750
Rite Aid Corp. 158,100 5,414,925
Smith's Food & Drug
Centers Inc. 193,400 4,883,350
Staples Inc.* 224,450 5,470,969
Tiffany & Co. 95,600 4,815,850
Waban Inc.* 267,900 5,023,125
- ----------------------------------------------------------
35,898,144
Securities Dealers: 1.9%
- ----------------------------------------------------------
Bear, Stearns & Co. Inc. 238,400 4,738,200
Edwards (A G) Inc.* 200,000 4,775,000
- ----------------------------------------------------------
9,513,200
Shoes: 1.1%
- ----------------------------------------------------------
Nike Inc. 78,700 5,479,487
- ----------------------------------------------------------
Soaps, Cleaner and Cosmetics: 1.8%
- ----------------------------------------------------------
Clorox Co. 66,300 4,748,738
International Flavors &
Fragrances Inc. 94,000 4,512,000
- ----------------------------------------------------------
9,260,738
Steel: 0.6%
- ----------------------------------------------------------
USX Steel Group Inc. 105,300 3,237,975
- ----------------------------------------------------------
Telecommunications: 1.0%
- ----------------------------------------------------------
Pacific Telesis Group 143,100 4,811,737
- ----------------------------------------------------------
Textiles-Apparel Manufacturing: 0.9%
- ----------------------------------------------------------
Springs Industries Inc. 108,700 4,497,462
- ----------------------------------------------------------
Total Common Stocks: 94.4%
(Cost $410,931,424) 477,509,386
- ----------------------------------------------------------
<PAGE>
Par Market
Amount Value
--------- ------------
Money Market Instruments:
ITT-Hartford Group Inc.
5.8%, 1/8/96 $9,600,000 $9,584,534
Sumitomo Corp. Of America
6.0%, 1/5/96 18,100,000 18,072,850
UBS Finance Inc.
5.75%, 2/1/96 6,200,000 6,188,117
6.0%, 2/1/996 1,400,000 1,398,366
United States Treasury Bill
0.0%, 5/1/96+ 750,000 704,993
- ----------------------------------------------------------
Total Money Market Instruments: 7.1%
(Cost $35,948,860) 35,948,860
- ----------------------------------------------------------
Total Investments: 101.5%
(Cost $446,880,284) 513,458,246
- ----------------------------------------------------------
Other Assets Under Liabilities: (1.5%) (7,703,566)
- ----------------------------------------------------------
Net Assets: 100.0%
(equivalent to $27.383 per share
based on 18,469,661 shares
issued and outstanding) $505,754,680
==========================================================
* Non-income producing.
+ Pledged as collateral for financial futures contracts.
** Par amounts for foreign debt are expressed in local currency.
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
Year Ended December 31, 1995
<TABLE>
<CAPTION>
Lincoln Lincoln Lincoln Lincoln Lincoln
National Lincoln National National National National
Aggressive National Capital Equity Global Asset Growth
Growth Bond Appreciation Income Allocation and Income
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest $ 457,978 $16,669,644 $ 967,072 $ 839,554 $ 6,485,461 $ 5,126,223
- ---------------------------------------------------------------------------------------------------------------------------
Dividends 511,448 -- 903,961 4,400,328 3,062,699 39,790,594
- ---------------------------------------------------------------------------------------------------------------------------
Total investment income 969,426 16,669,644 1,871,033 5,239,882 9,548,160 44,916,817
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Management fees 725,544 1,061,701 726,011 1,457,623 1,570,876 5,077,981
- ---------------------------------------------------------------------------------------------------------------------------
Dividend tax 7,359 -- 17,809 55,996 123,638 --
- ---------------------------------------------------------------------------------------------------------------------------
Custodial fees 73,401 -- 104,956 122,340 252,730 --
- ---------------------------------------------------------------------------------------------------------------------------
Directors fees 3,000 3,000 3,000 3,000 3,000 3,000
- ---------------------------------------------------------------------------------------------------------------------------
Printing and Postage 85,816 7,462 82,086 82,086 29,849 14,924
- ---------------------------------------------------------------------------------------------------------------------------
Other 13,919 42,709 30,899 41,893 78,306 189,603
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses 909,039 1,114,872 964,761 1,762,938 2,058,399 5,285,508
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income 60,387 15,554,772 906,272 3,476,944 7,489,761 39,631,309
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments:
Net realized gain (loss) on:
Investment transactions 6,547,737 5,612,959 6,661,868 4,268,897 15,704,684 112,217,388
- ---------------------------------------------------------------------------------------------------------------------------
Foreign currency transactions (6) -- 95,066 9,551 (57,069) --
- ---------------------------------------------------------------------------------------------------------------------------
Options written -- -- -- -- 10,833 --
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 6,547,731 5,612,959 6,756,934 4,278,448 15,658,448 112,217,388
- ---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation on:
Investments 21,583,506 19,675,624 15,206,253 36,186,200 24,681,168 328,786,475
- ---------------------------------------------------------------------------------------------------------------------------
Translation of assets and
liabilities in foreign
currencies -- -- 74,580 75 578,031 --
- ---------------------------------------------------------------------------------------------------------------------------
Options written -- -- -- -- 463 --
- ---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation
on investments 21,583,506 19,675,624 15,280,833 36,186,275 25,259,662 328,786,475
- ---------------------------------------------------------------------------------------------------------------------------
Net gain on investments 28,131,237 25,288,583 22,037,767 40,464,723 40,918,110 441,003,863
- ---------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations $28,191,624 $40,843,355 $22,944,039 $43,941,667 $48,407,871 $480,635,172
==========================================================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS - (Continued)
Year Ended December 31, 1995
<TABLE>
<CAPTION>
Lincoln Lincoln Lincoln
Lincoln Lincoln National National National
National National Money Social Special
International Managed Market Awareness Opportunities
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Interest $ 286,150 $ 17,168,999 $4,972,995 $ 1,296,978 $ 1,659,405
- ---------------------------------------------------------------------------------------------------------------
Dividends 5,854,392 7,482,245 -- 4,732,608 10,372,607
- ---------------------------------------------------------------------------------------------------------------
Total investment income 6,140,542 24,651,244 4,972,995 6,029,586 12,032,012
- ---------------------------------------------------------------------------------------------------------------
Expenses:
Management fees 2,770,197 2,120,656 385,019 1,048,366 1,809,514
- ---------------------------------------------------------------------------------------------------------------
Dividend tax 780,822 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Custodial fees 527,342 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Directors fees 3,000 3,000 3,000 3,000 3,000
- ---------------------------------------------------------------------------------------------------------------
Printing and Postage 7,462 11,193 7,462 14,925 29,849
- ---------------------------------------------------------------------------------------------------------------
Other 114,039 80,925 25,165 47,618 59,359
- ---------------------------------------------------------------------------------------------------------------
Total expenses 4,202,862 2,215,774 420,646 1,113,909 1,901,722
- ---------------------------------------------------------------------------------------------------------------
Net investment income 1,937,680 22,435,470 4,552,349 4,915,677 10,130,290
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain(loss) on:
Investment transactions 2,363,240 37,948,391 -- 18,559,957 40,236,411
- ---------------------------------------------------------------------------------------------------------------
Foreign currency transactions 135,456 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Options written -- -- -- -- (2,078,011)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain on
investments 2,498,696 37,948,391 -- 18,559,957 38,158,400
- ---------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation on:
Investments 24,061,865 74,805,363 -- 55,729,211 62,954,572
- ---------------------------------------------------------------------------------------------------------------
Translation of assets and
liabilities in foreign
currencies 166,890 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Options written -- -- -- -- 20,675
- ---------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation
on investments 24,228,755 74,805,363 -- 55,729,211 62,975,247
- ---------------------------------------------------------------------------------------------------------------
Net gain on investments 26,727,451 112,753,754 -- 74,289,168 101,133,647
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations $28,665,131 $135,189,224 $4,552,349 $79,204,845 $111,263,937
===============================================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Years Ended December 31, 1994 and 1995
<TABLE>
<CAPTION>
Lincoln Lincoln Lincoln Lincoln Lincoln
National Lincoln National National National National
Aggressive National Capital Equity Global Asset Growth
Growth Bond Appreciation Income Allocation and Income
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Assets at January 1, 1994 $ 110,000 $226,149,503 $ 110,000 $ 110,000 $153,499,616 $1,034,105,477
- ---------------------------------------------------------------------------------------------------------------------------------
Changes from operations:
Net investment income 65,795 13,491,950 352,060 913,313 5,639,619 31,708,118
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss)
on investments (3,757,574) (9,964,996) (193,457) 580,266 (1,141,455) 69,061,295
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or
depreciation on
investments 2,469,310 (13,242,315) 526,731 (411,077) (7,976,231) (86,360,222)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting from
operations (1,222,469) (9,715,361) 685,334 1,082,502 (3,478,067) 14,409,191
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends to shareholder from:
Net investment income (65,795) (13,491,950) (352,060) (913,313) (5,639,619) (31,708,118)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain on
investments - (9,456,561) - - (10,629,009) (45,931,842)
- ---------------------------------------------------------------------------------------------------------------------------------
Total dividends to
shareholder (65,795) (22,948,511) (352,060) (913,313) (16,268,628) (77,639,960)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting from
capital share transactions 61,875,525 1,524,135 52,460,614 78,581,998 61,943,978 190,449,599
- ---------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets 60,587,261 (31,139,737) 52,793,888 78,751,187 42,197,283 127,218,830
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets at December 31, 1994 $60,697,261 $195,009,766 $ 52,903,888 $ 78,861,187 $195,696,899 $1,161,324,307
Changes from operations:
Net investment income 60,387 15,554,772 906,272 3,476,944 7,489,761 39,631,309
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain on
investments 6,547,731 5,612,959 6,756,934 4,278,448 15,658,448 112,217,388
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or
depreciation on
investments 21,583,506 19,675,624 15,280,833 36,186,275 25,259,662 328,786,475
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 28,191,624 40,843,355 22,944,039 43,941,667 48,407,871 480,635,172
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends to shareholder from:
Net investment income (60,387) (15,554,772) (906,272) (3,476,944) (7,489,761) (39,631,309)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain on
investments - - - (580,266) - (69,061,295)
- ---------------------------------------------------------------------------------------------------------------------------------
Total dividends to
shareholder (60,387) (15,554,772) (906,272) (4,057,210) (7,489,761) (108,692,604)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting from
capital share transactions 49,642,126 30,517,705 52,994,129 120,025,232 12,157,253 300,183,582
- ---------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets 77,773,363 55,806,288 75,031,896 159,909,689 53,075,363 672,126,150
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets at December 31, 1995 $138,470,624 $250,816,054 $127,935,784 $238,770,876 $248,772,262 $1,833,450,457
=================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS - (Continued)
Years Ended December 31, 1994 and 1995
<TABLE>
<CAPTION>
Lincoln Lincoln Lincoln
Lincoln Lincoln National National National
National National Money Social Special
International Managed Market Awareness Opportunities
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Assets at January 1, 1994 $161,469,998 $445,039,996 $81,041,767 $137,606,415 $273,997,784
- ----------------------------------------------------------------------------------------------------------------
Changes from operations:
Net investment income 651,719 20,179,660 3,196,613 3,407,741 7,440,312
- ----------------------------------------------------------------------------------------------------------------
Net realized gain (loss)
on investments 15,901,915 718,100 -- 6,175,723 15,004,876
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or
depreciation on investments (11,656,933) (29,823,356) -- (9,493,018) (25,542,877)
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 4,896,701 (8,925,596) 3,196,613 90,446 (3,097,689)
- ----------------------------------------------------------------------------------------------------------------
Dividends to shareholder from:
Net investment income (651,719) (20,179,660) (3,196,613) (3,407,741) (7,440,312)
- ----------------------------------------------------------------------------------------------------------------
Net realized gain on
investments -- (17,841,259) -- (7,339,542) (18,072,011)
- ----------------------------------------------------------------------------------------------------------------
Total dividends to
shareholder (651,719) (38,020,919) (3,196,613) (10,747,283) (25,512,323)
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from capital
share transactions 150,634,925 44,046,103 (3,864,330) 36,564,581 73,029,402
- ----------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 154,879,907 (2,900,412) (3,864,330) 25,907,744 44,419,390
- ----------------------------------------------------------------------------------------------------------------
Net Assets at December 31, 1994 $316,349,905 $442,139,584 $77,177,437 $163,514,159 $318,417,174
Changes from operations:
Net investment income 1,937,680 22,435,470 4,552,349 4,915,677 10,130,290
- ----------------------------------------------------------------------------------------------------------------
Net realized gain on
investments 2,498,696 37,948,391 -- 18,559,957 38,158,400
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or
depreciation on investments 24,228,755 74,805,363 -- 55,729,211 62,975,247
- ----------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 28,665,131 135,189,224 4,552,349 79,204,845 111,263,937
- ----------------------------------------------------------------------------------------------------------------
Dividends to shareholder from:
Net investment income (1,937,680) (22,435,470) (4,552,349) (4,915,677) (10,130,290)
- ----------------------------------------------------------------------------------------------------------------
Net realized gain on
investments (14,698,525) (718,100) -- (6,175,723) (15,004,876)
- ----------------------------------------------------------------------------------------------------------------
Total dividends to
shareholder (16,636,205) (23,153,570) (4,552,349) (11,091,400) (25,135,166)
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from capital
share transactions 30,011,772 34,989,363 (1,858,050) 66,355,298 101,208,735
- ----------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 42,040,698 147,025,017 (1,858,050) 134,468,743 187,337,506
- ----------------------------------------------------------------------------------------------------------------
Net Assets at December 31, 1995 $358,390,603 $589,164,601 $75,319,387 $297,982,902 $505,754,680
================================================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES
THE FUNDS: Lincoln National Aggressive Growth Fund, Inc., Lincoln National Bond
Fund, Inc., Lincoln National Capital Appreciation Fund, Inc., Lincoln National
Equity Income Fund, Inc., Lincoln National Global Asset Allocation Fund, Inc.,
Lincoln National Growth and Income Fund, Inc., Lincoln National International
Fund, Inc., Lincoln National Managed Fund, Inc., Lincoln National Money Market
Fund, Inc., and Lincoln National Social Awareness Fund, Inc. are registered as
open-end, diversified management investment companies and Lincoln National
Special Opportunities Fund, Inc. is registered as an open-end, non-diversified
management investment company under the Investment Company Act of 1940, as
amended. The Funds' shares are sold only to The Lincoln National Life Insurance
Company (the Company) for allocation to its Variable Annuity Account C, which
was established for the purpose of funding variable annuity contracts, and to
its Flexible Premium Variable Life Accounts D, G, and K, which were established
for the purpose of funding variable universal life contracts.
The Funds' investment objectives are as follows:
FUND INVESTMENT OBJECTIVE
---- --------------------
Lincoln National Aggressive The investment objective is to maximize capital
Growth Fund, Inc. appreciation. The Fund invests in stocks of
smaller, lesser-known companies which have a
chance to grow significantly in a short time.
Lincoln National Bond The investment objective is to maximize current
Fund, Inc. income consistent with prudent investment
strategy. The Fund invests primarily in medium
and long-term corporate and government bonds.
Lincoln National Capital The investment objective is to maximize long-term
Appreciation Fund, Inc. growth of capital in a manner consistent with
preservation of capital. The Fund primarily buys
stocks in a large number of companies of all sizes
if the companies are competing well and if their
products or services are in high demand. It may
also buy some money market securities and bonds,
including junk (high-risk) bonds.
Lincoln National Equity The investment objective is to achieve reasonable
Income Fund, Inc. income by investing primarily in income-producing
equity securities. The Fund invests mostly in
high-income stocks and some high-yielding bonds
(including junk bonds).
Lincoln National Global The investment objective is to maximize long-term
Asset Allocation Fund, Inc. total return consistent with preservation of
capital. The Fund allocates its assets among
several categories of equity and fixed-income
securities, both of U.S. and foreign issuers.
Lincoln National Growth The investment objective is to maximize long-term
and Income Fund, Inc. capital appreciation. The Fund buys stocks of
established companies.
Lincoln National The investment objective is to maximize long-term
International Fund, Inc. capital appreciation. The Fund trades in
securities issued outside the U.S.--mostly stocks,
with an occasional bond or money market security.
Lincoln National Managed The investment objective is to maximize long-term
Fund, Inc. total return (capital gains plus income)
consistent with prudent investment strategy. The
Fund invests in a mix of stocks, bonds, and money
market securities, as determined by an investment
committee.
Lincoln National Money The investment objective is to maximize current
Market Fund, Inc. income consistent with the preservation of
capital. The Fund invests in short-term
obligations issued by U.S. corporations, the U.S.
Government, and federally-chartered banks and U.S.
branches of foreign banks.
Lincoln National Social The investment objective is to maximize long-term
Awareness Fund, Inc. capital appreciation. The Fund buys stocks of
established companies which adhere to certain
specific social criteria.
Lincoln National Special The investment objective is to maximize capital
Opportunities Fund, Inc. appreciation. The Fund primarily invests in mid-
size companies whose stocks have significant
growth potential. Current income is a secondary
consideration.
<PAGE>
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
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 bid price for options purchased
and the last asked price for options written. 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.
SECURITIES SOLD SHORT: Short-selling of securities obligate the Funds to replace
the security borrowed by purchasing it at market value at the replacement date.
The Funds would realize a gain (loss) if the price of the security declines
(increases) between the sale and replacement date.
FOREIGN CURRENCY TRANSACTIONS: The books and records of the Funds are maintained
in U.S. dollars. All assets and liabilities denominated in a foreign currency
are translated into U.S. dollars based upon foreign exchange rates prevailing at
the end of the period. Income and expenses and purchases and sales of
investments are translated into U.S. dollars at the rate of exchange prevailing
on the respective dates of such transactions. The effects of changes in foreign
currency exchange rates on investments in securities are not segregated from the
effects of changes in market prices of those securities, but are included with
the net realized and unrealized gain or loss on investment in securities.
Reported net realized gains and losses on foreign currency transactions arise
from sales and maturities of forward foreign currency contracts, currency gains
and losses between the trade and settlement dates on securities transactions,
and the differences between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Funds' books and the U.S. dollar equivalent of
the amounts actually received or paid. Net change in unrealized appreciation or
depreciation on translation of assets and liability in foreign currencies arise
from changes in the value of other assets and liabilities at the end of the
period resulting from changes in the exchange rates.
EXPENSES: The custodian bank of the Lincoln National Bond Fund, Inc., Lincoln
National Growth and Income Fund, Inc., Lincoln National Managed Fund, Inc.,
Lincoln National Money Market Fund, Inc., Lincoln National Social Awareness
Fund, Inc. and Lincoln National Special Opportunities Fund, Inc. has agreed to
waive its custodial fees when the Funds maintain a prescribed amount of cash on
deposit in certain non-interest bearing accounts. For the year ended December
31, 1995, the custodial fees offset arrangements were not material to either
total expenses or the calculation of average net assets and the ratio of
expenses to average net assets.
TAXES: Each Fund has complied with the special provisions of the Internal
Revenue Code for regulated investment companies. As such, each Fund is not
subject to U.S. federal income taxes to the extent that it distributes all of
its taxable income for its fiscal year.
Withholding taxes on foreign interest have been provided for in accordance with
the applicable country's tax rates.
<PAGE>
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
2. OTHER ASSETS OVER (UNDER) LIABILITIES
The statement of net assets accounts "Other Assets Over (Under) Liabilities" at
December 31, 1995 consisted of the following assets (liabilities):
<TABLE>
<CAPTION>
Lincoln Lincoln Lincoln
National Lincoln National National
Aggressive National Capital Equity
Growth Bond Appreciation Income
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
---------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Cash $ 88 $ 339,473 $ 67,156 $ 204
- ------------------------------------------------------------------------------------------------------
Foreign currency -- -- 67,804 37,912
- ------------------------------------------------------------------------------------------------------
Receivable for dividends earned 55,978 -- 59,675 664,972
- ------------------------------------------------------------------------------------------------------
Receivable for interest earned 3,807 3,436,206 -- 64,004
- ------------------------------------------------------------------------------------------------------
Receivable for securities sold -- -- 2,651,156 1,058,144
- ------------------------------------------------------------------------------------------------------
Receivable for capital shares sold 606,011 -- 274,145 413,025
- ------------------------------------------------------------------------------------------------------
Dividends declared and unpaid (60,387) (15,554,772) (906,272) (3,476,944)
- ------------------------------------------------------------------------------------------------------
Payable for securities purchased -- -- (1,203,370) (5,980,421)
- ------------------------------------------------------------------------------------------------------
Management fees payable (84,472) (97,784) (84,236) (185,137)
- ------------------------------------------------------------------------------------------------------
Other, net (22,021) (8,439) 5,049 (41,947)
- ------------------------------------------------------------------------------------------------------
$499,004 $(11,885,316) $ 931,107 $(7,446,188)
=============================================================
</TABLE>
<TABLE>
<CAPTION>
Lincoln Lincoln
National National Lincoln Lincoln
Global Asset Growth National National
Allocation and Income International Managed
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
------------ ------------- ------------- ------------
<S> <C> <C> <C> <C>
Cash $ 544,472 $ 830,757 $ 571 $ 1,258,934
- ----------------------------------------------------------------------------------------------------------
Foreign currency 871,848 -- 11,447,664 --
- ----------------------------------------------------------------------------------------------------------
Receivable for dividends earned 273,633 4,440,444 297,616 749,005
- ----------------------------------------------------------------------------------------------------------
Receivable for interest earned 1,555,633 358,793 2,232 3,855,207
- ----------------------------------------------------------------------------------------------------------
Receivable for securities sold 1,836,969 -- 383,892 106,557
- ----------------------------------------------------------------------------------------------------------
Receivable for capital shares sold 36,821 -- 395,827 --
- ----------------------------------------------------------------------------------------------------------
Dividends declared and unpaid (7,489,761) (39,631,309) (1,937,680) (22,435,470)
- ----------------------------------------------------------------------------------------------------------
Payable for securities purchased (6,597,545) (1,368,346) (1,434,861) (1,115,977)
- ----------------------------------------------------------------------------------------------------------
Management fees payable (154,346) (511,243) (249,453) (196,393)
- ----------------------------------------------------------------------------------------------------------
Other, net 662,202 (11,442) 257,755 (9,269)
- ----------------------------------------------------------------------------------------------------------
$(8,460,074) $(35,892,346) $ 9,163,561 $(17,787,406)
==================================================================
</TABLE>
<TABLE>
<CAPTION>
Lincoln Lincoln Lincoln
National National National
Money Social Special
Market Awareness Opportunities
Fund, Inc. Fund, Inc. Fund, Inc.
----------- ----------- -------------
<S> <C> <C> <C>
Cash $ 146,890 $ 362,195 $ 1,203,486
- ---------------------------------------------------------------------------------------
Foreign currency -- -- --
- ---------------------------------------------------------------------------------------
Receivable for dividends earned -- 529,323 1,190,953
- ---------------------------------------------------------------------------------------
Receivable for interest earned 789,708 65,061 61,939
- ---------------------------------------------------------------------------------------
Receivable for securities sold -- 676,725 3,791,213
- ---------------------------------------------------------------------------------------
Receivable for capital shares sold -- -- --
- ---------------------------------------------------------------------------------------
Dividends declared and unpaid (4,552,349) (4,915,677) (10,130,290)
- ---------------------------------------------------------------------------------------
Payable for securities purchased -- (652,862) (3,338,623)
- ---------------------------------------------------------------------------------------
Management fees payable (30,721) (113,396) (175,592)
- ---------------------------------------------------------------------------------------
Other, net (8,264) (8,500) (306,652)
- ---------------------------------------------------------------------------------------
$(3,654,736) $(4,057,131) $(7,703,566)
================================================
</TABLE>
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Lincoln Investment Management, Inc. (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 December 31, 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.
<PAGE>
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
4. ANALYSIS OF NET ASSETS
The analysis of net assets at December 31, 1995 consisted of the following:
<TABLE>
<CAPTION>
Lincoln Lincoln Lincoln
National Lincoln National National
Aggressive National Capital Equity
Growth Bond Appreciation Income
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share ** $ 113,663 $ 204,803 $ 99,051 $ 176,770
- --------------------------------------------------------------------------------------------------------
Paid-in capital in excess of par
value of shares issued 111,513,988 241,848,769 105,465,692 198,540,460
- --------------------------------------------------------------------------------------------------------
Undistributed net realized gain (loss)
on investments 2,790,157 (4,352,037) 6,563,477 4,278,448
- --------------------------------------------------------------------------------------------------------
Net unrealized appreciation or
depreciation on investments 24,052,816 13,114,519 15,807,564 35,775,198
- --------------------------------------------------------------------------------------------------------
$138,470,624 $250,816,054 $127,935,784 $238,770,876
================================================================
</TABLE>
<TABLE>
<CAPTION>
Lincoln Lincoln
National National Lincoln Lincoln
Global Asset Growth National National
Allocation and Income International Managed
Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
------------ -------------- ------------- ------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share ** $ 185,777 $ 616,153 $ 267,503 $ 370,668
- ----------------------------------------------------------------------------------------------------------
Paid-in capital in excess of par
value of shares issued 205,348,238 1,346,965,201 318,184,241 474,315,099
- ----------------------------------------------------------------------------------------------------------
Undistributed net realized gain (loss)
on investments 14,516,993 112,217,388 2,498,696 37,948,391
- ----------------------------------------------------------------------------------------------------------
Net unrealized appreciation or
depreciation on investments 28,721,254 373,651,715 37,440,163 76,530,443
- ----------------------------------------------------------------------------------------------------------
$248,772,262 $1,833,450,457 $358,390,603 $589,164,601
==================================================================
</TABLE>
<TABLE>
<CAPTION>
Lincoln Lincoln Lincoln
National National National
Money Social Special
Market Awareness Opportunities
Fund, Inc. Fund, Inc. Fund, Inc.
----------- ------------ -------------
<S> <C> <C> <C>
Common Stock, par value
$.01 per share ** $ 75,319 $ 131,909 $ 184,697
- ----------------------------------------------------------------------------------------
Paid-in capital in excess of par
value of shares issued 75,244,068 218,662,601 401,072,386
- ----------------------------------------------------------------------------------------
Undistributed net realized gain (loss)
on investments -- 18,559,957 38,158,400
- ----------------------------------------------------------------------------------------
Net unrealized appreciation or
depreciation on investments -- 60,628,435 66,339,197
- ----------------------------------------------------------------------------------------
$75,319,387 $297,982,902 $505,754,680
================================================
</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 of
investments and other financial instruments at December 31, 1995 are as follows:
<TABLE>
<CAPTION>
Aggregate Aggregate Gross Gross Net
Cost of Proceeds Unrealized Unrealized Unrealized
Purchases From Sales Appreciation Depreciation Appreciation
------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Lincoln National
Aggressive Growth Fund,
Inc. $127,542,310 $ 76,551,006 $ 26,366,155 $ (2,313,339) $ 24,052,816
Lincoln National Bond
Fund, Inc. 316,532,400 300,710,759 13,617,673 (503,154) 13,114,519
Lincoln National Capital
Appreciation Fund, Inc. 198,079,335 142,994,566 16,389,980 (582,416) 15,807,564
Lincoln National Equity
Income Fund, Inc. 163,425,199 40,525,669 37,774,153 (1,998,955) 35,775,198
Lincoln National Global
Asset Allocation Fund, Inc. 303,779,578 301,637,967 30,778,320 (2,057,066) 28,721,254
Lincoln National Growth
and Income Fund, Inc. 956,735,084 746,186,273 419,990,161 (46,338,446) 373,651,715
Lincoln National
International Fund, Inc. 222,318,630 207,467,136 44,903,382 (7,463,219) 37,440,163
Lincoln National Managed
Fund, Inc. 588,376,075 576,174,240 85,821,159 (9,290,716) 76,530,443
Lincoln National Social
Awareness Fund, Inc. 156,868,225 109,970,497 65,187,045 (4,558,610) 60,628,435
Lincoln National Special
Opportunities Fund, Inc. 430,824,124 358,721,194 84,294,639 (17,955,442) 66,339,197
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS - (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 1995 is summarized as
follows:
<TABLE>
<CAPTION>
LINCOLN NATIONAL GLOBAL LINCOLN NATIONAL SPECIAL
ASSET ALLOCATION FUND, INC. OPPORTUNITIES FUND, INC.
---------------------------- --------------------------
PAR PREMIUMS NUMBER OF PREMIUMS
AMOUNT RECEIVED SHARES RECEIVED
---------------------------- --------------------------
<S> <C> <C> <C> <C>
Options outstanding at January 1, 1995 $ 92,600 $ 5,556 125,400 $ 204,656
Options written 923,400 111,099 2,455,200 11,009,524
Options exercised -- -- (399,500) (2,744,150)
Options expired (499,600) -- (134,800) (241,498)
Options closed (516,400) (116,655) (2,046,300) (8,228,532)
---------------------------- --------------------------
Options outstanding at December 31, 1995 $ 0 $ 0 0 $ 0
============================ ==========================
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS: The Funds may purchase or sell forward
foreign currency contracts to hedge risks of fluctuations in specific
transactions or portfolio positions. Forward foreign currency contracts
obligate the Funds to take or deliver a financial instrument of foreign currency
at a future date at a specified price. The unrealized gain or loss on the
contracts are reflected in the accompanying financial statements. The Funds are
subject to the credit risks that the counter parties to these contracts will
fail to perform; although this risk is minimized by purchasing such agreements
from financial institutions with long standing, superior performance records.
In addition, the Funds are subject to the market risks associated with
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar; however, such changes in the value generally are offset by changes in
the value of the items being hedged by such contracts. The sale of forward
foreign currency contracts that were open at December 31, 1995 were as follows:
<TABLE>
<CAPTION>
FOREIGN AGGREGATE UNREALIZED
FUND CURRENCY FACE VALUE SETTLEMENT DATE(S) GAIN (LOSS)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Lincoln National 5,000,000 Deutschemark $ 3,485,900 June 1996 $(28,288)
Capital Appreciation 975,000 Great Britain Pound 1,493,846 March 1996 (17,603)
Fund, Inc. 178,500,000 Japanese Yen 1,819,076 January, February, March 1996 73,269
1,000,000 Netherlands Guilder 623,267 June 1996 (5,537)
18,254,000 Swedish Krona 2,727,659 February 1996 1,833
--------
$ 23,674
========
Lincoln National 980,000 Australian Dollar $ 722,954 March 1996 $ 2,868
Global Asset 1,455,000 Canadian Dollar 1,065,567 March 1996 (112)
Allocation 11,993,800 Danish Krone 2,153,913 March 1996 (127)
Fund, Inc. 28,672,572 Deutschemark 20,064,950 January, March 1996 21,151
14,050,000 French Franc 2,840,203 March, May 1996 25,075
2,124,000 Great Britain Pound 3,267,642 March, May 1996 (7,819)
11,875,400 Italian Lira 7,292,476 January, March 1996 121,742
1,069,050,000 Japanese Yen 10,952,540 February, March 1996 344,892
3,110,000 Netherlands Guilder 1,950,736 March, May 1996 286
348,900,000 Spanish Peseta 2,823,559 March 1996 (9,549)
4,500,000 Swedish Krona 684,275 March 1996 (10,442)
1,320,000 Swiss Franc 1,141,849 March 1996 (11,274)
--------
$476,691
========
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS - (Continued)
FINANCIAL FUTURES CONTRACTS: The Funds may purchase or sell financial futures
contracts, which are exchange traded, to hedge fluctuation risks of adverse
changes in exchange markets or interest rates. Financial futures contracts
obligate the Funds to take delivery or deliver a financial instrument at a
future date at a specified price. The Funds deposit with its custodian a
specified amount of cash or eligible securities called "initial margin" or
"variation margin". The market value of investments pledged to cover margin
requirements for open positions at December 31, 1995 was $704,993 for the
Lincoln National Special Opportunities Fund, Inc., and $3,582,294 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 December 31, 1995 were as follows:
<TABLE>
<CAPTION>
UNDERLYING EXPIRATION UNREALIZED
FUND CONTRACTS FACE AMOUNT DATE GAIN (LOSS)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lincoln National Special 85 S&P 400 midcap stock index $ 9,505,890 March 1996 $(238,765)
Opportunities Fund, Inc.
Lincoln National Global 98 U.S. Treasury contracts 11,548,688 March 1996 $(355,250)
Asset Allocation 103 Gilt contracts 8,510,789 March 1996 245,203
Fund, Inc. 53 German 10 year contracts 8,601,775 March 1996 226,341
---------
$ 116,294
=========
</TABLE>
INDEXED SECURITIES: The Funds may invest in indexed securities whose value is
linked either directly or inversely to changes in foreign currencies, interest
rates, commodities, indices, or other reference instruments. Indexed securities
may be more volatile than the reference instrument itself, but any loss is
limited to the amount of the original investment.
REPURCHASE AGREEMENTS: The Funds, through their respective custodians, receive
delivery of the underlying securities, whose market value is required to be at
least 102% of the repurchase price. The advisor is responsible for determining
that the value of the collateral is at least equal to the repurchase price.
Repurchase agreements are subject to the risk of the default or insolvency of
the counterparty.
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 representing 40.5% of net assets at December
31, 1995. The ability of these entities to meet their obligations may be
affected by economic conditions related to the industry.
Lincoln National Capital Appreciation Fund, Inc., Lincoln National Equity Income
Fund, Inc., Lincoln National Global Asset Allocation Fund, Inc., and Lincoln
National International Fund, Inc., invest in foreign securities. As a result,
there may be additional risks, such as the investments being subject to
restrictions as to repatriation of cash back to the United States and to
political or economic uncertainties. None of these Funds had investments in
excess of 4% in any individual foreign country except the Lincoln National
International Fund, Inc.
Distribution of investments for the Lincoln National International Fund, Inc. by
industry, as a percentage of net assets, consisted of the following at December
31, 1995:
Banking and Insurance......................... 13.3%
Electrical and Electronics.................... 9.9
Telecommunications............................ 5.1
Finance....................................... 5.0
Motor Vehicles and Equipment.................. 4.8
Broadcasting.................................. 4.7
Consumer Products and Services................ 4.3
Office and Business Equipment and Services.... 4.2
Financial Services............................ 4.0
Others (individually less than 4%)............ 44.7
-----
100.0%
=====
<PAGE>
NOTES TO FINANCIAL STATEMENTS - (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>
Year Ended
December 31, 1994:
Lincoln National
Aggressive
Growth Fund,
Inc. 6,740,944 $ 62,268,594 -- $ -- (43,447) $ (393,069) 6,697,497 $ 61,875,525
Lincoln National
Bond Fund, Inc. 927,405 10,546,350 1,738,841 21,824,702 (2,659,758) (30,846,917) 6,488 1,524,135
Lincoln National
Capital
Appreciation
Fund, Inc. 5,209,541 52,552,638 -- -- (9,110) (92,024) 5,200,431 52,460,614
Lincoln National
Equity Income
Fund, Inc. 7,649,310 78,895,415 -- -- (29,894) (313,417) 7,619,416 78,581,998
Lincoln National
Global Asset
Allocation Fund,
Inc. 4,504,338 52,281,703 1,187,851 14,293,180 (409,031) (4,630,905) 5,283,158 61,943,978
Lincoln National
Growth and Income
Fund, Inc. 6,010,672 141,925,232 2,859,641 69,491,281 (899,760) (20,966,914) 7,970,553 190,449,599
Lincoln National
International
Fund, Inc. 11,973,168 156,601,805 6,025 77,392 (468,046) (6,044,272) 11,511,147 150,634,925
Lincoln National
Managed
Fund, Inc. 2,079,210 27,714,248 2,489,916 34,885,204 (1,428,741) (18,553,349) 3,140,385 44,046,103
Lincoln National
Money Market
Fund, Inc. 6,670,441 66,704,408 257,051 2,570,514 (7,313,925) (73,139,252) (386,433) (3,864,330)
Lincoln National
Social Awareness
Fund, Inc. 1,842,973 31,337,312 552,267 9,491,031 (251,218) (4,263,762) 2,144,022 36,564,581
Lincoln National
Special
Opportunities
Fund, Inc. 4,246,768 96,029,031 983,331 23,219,317 (2,057,740) (46,218,946) 3,172,359 73,029,402
Year Ended
December 31, 1995:
Lincoln National
Aggressive Growth
Fund, Inc. 5,242,400 56,157,989 7,077 65,795 (591,654) (6,581,658) 4,657,823 49,642,126
Lincoln National
Bond Fund, Inc. 2,340,450 27,385,295 1,218,139 13,491,950 (901,701) (10,359,540) 2,656,888 30,517,705
Lincoln National
Capital
Appreciation
Fund, Inc. 4,988,791 56,695,794 33,385 352,060 (328,520) (4,053,725) 4,693,656 52,994,129
Lincoln National
Equity Income
Fund, Inc. 10,160,881 121,799,890 139,249 1,493,579 (253,517) (3,268,237) 10,046,613 120,025,232
Lincoln National
Global Asset
Allocation Fund,
Inc. 1,445,957 17,741,652 498,073 5,639,619 (927,716) (11,224,018) 1,016,314 12,157,253
Lincoln National
Growth and Income
Fund, Inc. 8,053,315 216,522,961 4,377,795 100,769,413 (665,107) (17,108,792) 11,766,003 300,183,582
Lincoln National
International
Fund, Inc. 3,749,122 47,488,828 1,305,767 15,350,244 (2,588,240) (32,827,300) 2,466,649 30,011,772
Lincoln National
Managed
Fund, Inc. 2,090,355 30,761,358 1,590,320 20,897,760 (1,201,733) (16,669,755) 2,478,942 34,989,363
Lincoln National
Money Market
Fund, Inc. 4,195,254 41,952,539 319,661 3,196,613 (4,700,720) (47,007,202) (185,805) (1,858,050)
Lincoln National
Social Awareness
Fund, Inc. 2,904,034 58,598,901 560,629 9,583,464 (98,975) (1,827,067) 3,365,688 66,355,298
Lincoln National
Special
Opportunities
Fund, Inc. 3,684,568 92,454,762 1,003,269 22,445,188 (584,289) (13,691,215) 4,103,548 101,208,735
</TABLE>
9. DISTRIBUTION TO SHAREHOLDER
The Funds declare dividends daily on net investment income and annually on net
realized gains, if any. Dividends are distributed annually.
10. CAPITAL LOSS CARRYFORWARD
As of December 31, 1995, the Lincoln National Bond Fund, Inc. had $4,433,131 of
unused capital loss carryforward for federal tax purposes. The loss
carryforward expires 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. and the Lincoln
National Putnam Master Fund, Inc. was changed to Lincoln National Global Asset
Allocation Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(Selected data for each capital share outstanding throughout the year)
Income from Investment Operation Less Dividends From:
--------------------------------------------- ---------------------------------------
Net Net
Asset Realized and Total
Year Value Net Unrealized From Net Net Realized
Ended Beginning Investment Gain (Loss) on Investment Investment Gain on Total
12/31 of Period Income (Loss) Investments Operations Income Investments Dividends
=================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Lincoln National Aggressive Growth Fund, Inc.
1993 $10.000 $ - $ - $ - $ - $ - $ -
1994 10.000 0.019 (0.952) (0.933)** (0.019) - (0.019)
1995 9.048 0.007 3.135 3.142 (0.007) - (0.007)
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 0.803 1.306 2.109 (0.803) - (0.803)
Lincoln National Capital Appreciation Fund, Inc.
1993 $10.000 $ - $ - $ - $ - $ - $ -
1994 10.000 0.134 0.152 0.286 (0.134) - (0.134)
1995 10.152 0.116 2.764 2.880 (0.116) - (0.116)
Lincoln National Equity Income Fund, Inc.
1993 $10.000 $ - $ - $ - $ - $ - $ -
1994 10.000 0.258 0.335 0.593 (0.258) - (0.258)
1995 10.335 0.275 3.218 3.493 (0.275) (0.046) (0.321)
Lincoln National Global Asset Allocation Fund, Inc.
1987* $10.000 $0.146 $(0.973) $(0.827) $(0.146) $ - $(0.146)
1988 9.027 0.405 0.589 0.994 (0.405) - (0.405)
1989 9.616 0.573 1.165 1.738 (0.573) - (0.573)
1990 10.781 0.549 (0.516) 0.033 (0.549) (0.279) (0.828)
1991 9.986 0.426 1.391 1.817 (0.426) (0.138) (0.564)
1992 11.239 0.404 0.271 0.675 (0.404) (0.306) (0.710)
1993 11.204 0.362 1.522 1.884 (0.362) (0.224) (0.586)
1994 12.502 0.349 (0.702) (0.353) (0.349) (0.656) (1.005)
1995 11.144 0.412 2.247 2.659 (0.412) - (0.412)
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 0.701 7.680 8.380 (0.701) (1.221) (1.921)
Lincoln National International Fund, Inc.
1991* $10.000 $(0.030) $0.047 $0.017 $(0.059) $ - $(0.059)
1992 9.958 0.037 (0.867) (0.830) (0.037) - (0.037)
1993 9.091 0.010 3.551 3.561 (0.010) - (0.010)
1994 12.642 0.033 0.385 0.418 (0.033) - (0.033)
1995 13.027 0.069 0.892 0.961 (0.069) (0.521) (0.590)
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)
=========================================================================================
Lincoln National Aggressive Growth Fund, Inc.
1993 $10.000 - - - - $110
1994 9.048** (9.52%) 1.11% 0.21% 100.31% 60,697
1995 12.183 34.78% 0.94% 0.06% 85.82% 138,471
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 12.247 19.59% 0.49% 6.90% 139.61% 250,816
Lincoln National Capital Appreciation Fund, Inc.
1993 $10.000 - - - - $110
1994 10.152** 1.52% 1.18% 1.33% 185.28% 52,904
1995 12.916 27.95% 1.07% 1.00% 195.63% 127,936
Lincoln National Equity Income Fund, Inc.
1993 $10.000 - - - - $110
1994 10.335** 3.35% 1.26% 2.48% 33.40% 78,861
1995 13.507 32.84% 1.15% 2.27% 27.81% 238,771
Lincoln National Global Asset Allocation Fund, Inc.
1987* $9.027 (9.73%) 0.45% 1.42% 12.92% $21,084
1988 9.616 7.56% 1.16% 4.36% 136.79% 26,885
1989 10.781 16.74% 1.33% 5.59% 79.11% 44,913
1990 9.986 (0.12%) 1.14% 5.49% 56.28% 56,088
1991 11.239 20.17% 1.04% 4.01% 101.41% 76,269
1992 11.204 6.39% 1.07% 3.70% 128.53% 95,607
1993 12.502 17.88% 1.05% 3.04% 208.55% 153,500
1994 11.144 (2.43%) 1.06% 3.07% 134.33% 195,697
1995 13.391 23.58% 0.92% 3.36% 146.49% 248,772
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 0.65% 0.37% 2.85% 76.34% 1,161,324
1995 29.756 39.06% 0.35% 2.64% 51.76% 1,833,450
Lincoln National International Fund, Inc.
1991* $9.958 (0.42%) 1.06% (0.30%) 25.18% $20,935
1992 9.091 (8.41%) 1.46% 0.39% 22.86% 45,627
1993 12.642 39.46% 1.24% 0.09% 61.44% 161,470
1994 13.027 3.09% 1.24% 0.25% 52.78% 316,350
1995 13.398 8.34% 1.27% 0.59% 63.15% 358,391
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (Continued)
(Selected data for each capital share 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 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 0.623 3.132 3.755 (0.623) (0.020) (0.643)
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 0.570 - 0.570 (0.570) - (0.570)
Lincoln National Social Awareness Fund, Inc.
1988* $10.000 $0.032 $0.454 $0.486 ($0.032) $ - ($0.032)
1989 10.454 0.309 2.920 3.229 (0.309) (0.024) (0.333)
1990 13.350 0.289 (0.989) (0.700) (0.289) (0.154) (0.443)
1991 12.207 0.348 4.242 4.590 (0.348) - (0.348)
1992 16.449 0.399 0.179 0.578 (0.399) (0.051) (0.450)
1993 16.577 0.326 1.792 2.118 (0.326) (0.454) (0.780)
1994 17.915 0.377 (0.461) (0.084) (0.377) (0.812) (1.189)
1995 16.642 0.432 6.491 6.923 (0.432) (0.543) (0.975)
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 0.616 6.131 6.747 (0.616) (0.912) (1.528)
</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 15.895 30.11% 0.43% 4.37% 112.52% 589,165
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% 0.52% 5.67% - 75,319
Lincoln National Social Awareness Fund, Inc.
1988* $10.454 4.54% 1.64% 0.30% 10.07% $2,067
1989 13.350 28.51% 0.99% 2.43% 63.37% 9,565
1990 12.207 (5.54%) 0.65% 2.34% 29.39% 24,674
1991 16.449 36.98% 0.56% 2.33% 45.00% 52,959
1992 16.577 2.87% 0.55% 2.50% 84.32% 89,669
1993 17.915 13.77% 0.51% 1.90% 84.43% 137,606
1994 16.642 (0.39%) 0.53% 2.22% 64.97% 163,514
1995 22.590 43.50% 0.50% 2.21% 54.02% 297,983
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 27.383 32.05% 0.45% 2.39% 90.12% 505,755
* The per share data, total return, ratios and portfolio turnover are calculated for the period from commencement of investment
activity on August 3, 1987 through December 31, 1987 for the Lincoln National Global Asset Allocation Fund, Inc., May 2, 1988
through December 31, 1988 for the Lincoln National Social Awareness Fund, Inc., and May 1, 1991 through December 31, 1991 for
the Lincoln National International Fund, Inc. Accordingly, the total return percentage, ratios, and portfolio turnover have
NOT been calculated on an annualized basis.
** The amounts differ from December 31, 1994 Annual Report due to restatement.
*** 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 Account 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).
</TABLE>
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
BOARD OF DIRECTORS AND SHAREHOLDER OF LINCOLN NATIONAL AGGRESSIVE GROWTH FUND,
INC., LINCOLN NATIONAL BOND FUND, INC., LINCOLN NATIONAL CAPITAL APPRECIATION
FUND, INC., LINCOLN NATIONAL EQUITY INCOME FUND, INC., LINCOLN NATIONAL GLOBAL
ASSET ALLOCATION FUND, INC., LINCOLN NATIONAL GROWTH AND INCOME FUND, INC.,
LINCOLN NATIONAL INTERNATIONAL FUND, INC., LINCOLN NATIONAL MANAGED FUND, INC.,
LINCOLN NATIONAL MONEY MARKET FUND, INC., LINCOLN NATIONAL SOCIAL AWARENESS
FUND, INC., AND LINCOLN NATIONAL SPECIAL OPPORTUNITIES FUND, INC.
We have audited the accompanying statements of net assets of Lincoln National
Aggressive Growth Fund, Inc., Lincoln National Bond Fund, Inc., Lincoln National
Capital Appreciation Fund, Inc., Lincoln National Equity Income Fund, Inc.,
Lincoln National Global Asset Allocation Fund, Inc., Lincoln National Growth and
Income Fund, Inc., Lincoln National International Fund, Inc., Lincoln National
Managed Fund, Inc., Lincoln National Money Market Fund, Inc., Lincoln National
Social Awareness Fund, Inc., and Lincoln National Special Opportunities Fund,
Inc. (Funds) as of December 31, 1995, and the related statements of operations,
the statements of changes in net assets, and the financial highlights presented
herein for each of the respective years or periods in the period ended December
31, 1995. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of the
Funds at December 31, 1995, the results of their operations, the changes in
their net assets, and the financial highlights presented herein for each of the
respective years or periods in the period ended December 31, 1995 in conformity
with generally accepted accounting principles.
[SIGNATURE OF ERNST & YOUNG, LLP]
Fort Wayne, Indiana
January 24, 1996
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