<PAGE>
================================================================================
Important Information
- --------------------------------------------------------------------------------
As of 4/30/95, no Series of the Trust had more than 5% of its net assets
invested in residual interest bonds ("RIBs"), although each portfolio may invest
up to 20% of its net assets in such securities. A RIB, sometimes referred to as
an inverse floater, is a debt instrument with a floating or variable interest
rate that moves in the opposite direction of the interest rate on another
security or the value of an index. Changes in the interest rate on the other
security or index inversely affect the residual interest paid on the RIB, with
the result that when interest rates rise, RIBs give lower interest payments and
their value falls faster than other similar fixed-rate bonds. But when interest
rates fall, not only do RIBs give higher interest payments, their values also
rise faster than other similar fixed-rate bonds. The market for RIBs is
relatively new.
If used as sales material after 6/30/95, this report must be accompanied by Lord
Abbett's Performance Quarterly for the most recently completed calendar quarter.
See prospectus for a discussion of fees waived and expense subsidies.
<TABLE>
<CAPTION>
===================================================================================================================================
Statement of Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
FLORIDA SERIES April 30, 1995
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Prerefunded Broward Co FL Wtr & Sewer FGIC+ 6 1/2% 10/1/2017 AAA $3,250M $ 3,530,313
25.24% -----------------------------------------------------------------------------------------------------------------
Dade Co FL Health Facs Auth Hosp Rev So Miami Hosp Prjt
MBIA+ 9 1/8% 7/1/2018 AAA 1,000M 1,071,250
-----------------------------------------------------------------------------------------------------------------
Dunedin FL Hosp Rev MBIA+ 6 3/4% 11/15/2021 AAA 1,000M 1,107,500
-----------------------------------------------------------------------------------------------------------------
Florida St Bd of Ed Cap Outlay 7 1/4% 6/1/2023 AAA 2,960M 3,307,800
-----------------------------------------------------------------------------------------------------------------
Florida St Bd Regent Univ Sys Imp Rev MBIA+ 7 7/8% 7/1/2009 AAA 1,000M 1,107,500
-----------------------------------------------------------------------------------------------------------------
Florida St Muni Pwr AMBAC+ 6 1/2% 10/1/2020 AAA 2,000M 2,197,500
-----------------------------------------------------------------------------------------------------------------
Manatee Co FL MBIA+ 6 3/4% 10/1/2013 AAA 1,000M 1,106,250
-----------------------------------------------------------------------------------------------------------------
Melbourne FL Wtr & Sewer Rev FGIC+ 6.40% 10/1/2022 AAA 1,700M 1,842,375
-----------------------------------------------------------------------------------------------------------------
Miami FL Health Facs Auth AMBAC+ 6 3/4% 8/1/2020 AAA 870M 961,350
-----------------------------------------------------------------------------------------------------------------
Miami FL Sports & Exhibit FGIC+ 7.20% 10/1/2020 AAA 1,690M 1,880,125
-----------------------------------------------------------------------------------------------------------------
Orlando & Orange Co FL Expwy Auth Rev FGIC+ 6 1/2% 7/1/2020 AAA 395M 423,144
-----------------------------------------------------------------------------------------------------------------
Orlando FL Util Comm Wtr 6 1/2% 10/1/2020 AAA 5,810M 6,347,425
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth 8% 7/1/2006 AAA 600M 669,000
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth 7 5/8% 7/1/2010 AAA 2,350M 2,687,813
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth 7.70% 7/1/2020 AAA 1,000M 1,146,250
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth 6.80% 7/1/2021 AAA 4,375M 4,905,469
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy 8% 7/1/2003 AAA 250M 278,750
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Pub Imp 7 1/4% 7/1/2012 AAA 800M 860,000
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth 8% 7/1/2008 AAA 3,250M 3,623,750
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth 7 1/8% 7/1/2014 AAA 2,000M 2,202,500
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth 7 7/8% 7/1/2007 AAA 1,200M 1,305,000
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth 7% 7/1/2019 AAA 1,000M 1,082,500
-----------------------------------------------------------------------------------------------------------------
Reedy Creek FL Imp Dist MBIA+ 6 1/2% 10/1/2016 AAA 1,050M 1,140,563
-----------------------------------------------------------------------------------------------------------------
Total 44,784,127
- -----------------------------------------------------------------------------------------------------------------------------------
General Florida St Bd of Ed Cap Outlay 7% 6/1/2019 AA 1,000M 1,067,500
Obligation -----------------------------------------------------------------------------------------------------------------
State Florida St Bd of Ed Cap Outlay 6 5/8% 6/1/2022 AA 1,500M 1,565,625
2.94% -----------------------------------------------------------------------------------------------------------------
Florida St Bd of Ed Cap Outlay 6.70% 6/1/2022 AA 1,500M 1,578,750
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth RIBS MBIA+ 7.484% 7/1/2008++ AAA 1,000M 1,003,750
-----------------------------------------------------------------------------------------------------------------
Total 5,215,625
- -----------------------------------------------------------------------------------------------------------------------------------
General Florida St Jacksonville Trans-SR Lien 6.40% 7/1/2022 AA 2,500M 2,550,000
Obligation
Local 1.44%
- -----------------------------------------------------------------------------------------------------------------------------------
Finance 2.54% Puerto Rico Muni Fin Agy 6 1/2% 7/1/2019 A 4,415M 4,514,337
- -----------------------------------------------------------------------------------------------------------------------------------
Health and Alachua Co FL Health/Santa Fe Health Care 7.60% 11/15/2013 BBB 1,000M 1,050,000
Hospital 13.35% -----------------------------------------------------------------------------------------------------------------
Charlotte Co FL Health Care Facs Rev LINK FSA+ 5.858% 8/26/2027 AAA 2,600M 2,554,500
-----------------------------------------------------------------------------------------------------------------
Charlotte Co FL Health Care Facs Rev RIBS FSA+ 7.457% 8/26/2027++ AAA 6,200M 5,975,250
-----------------------------------------------------------------------------------------------------------------
Miami FL Health Fac Auth Rev RIBS AMBAC+ 6.12% 8/15/2015++ AAA 1,600M 1,242,000
-----------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
FLORIDA SERIES April 30, 1995
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Puerto Rico Ind Tourist Ed Med & Environmental Ctrl Facs
MBIA+ 6 1/4% 7/1/2016 AAA $ 3,920M $ 4,008,200
-----------------------------------------------------------------------------------------------------------------
St Petersburg FL Health/Allegheny Health Sys MBIA+ 7% 12/1/2021 AAA 2,000M 2,157,500
-----------------------------------------------------------------------------------------------------------------
St Petersburg FL Health/Allegheny Health Sys MBIA+ 7% 12/1/2015 AAA 1,500M 1,620,000
-----------------------------------------------------------------------------------------------------------------
Tampa FL Health Rev Allegheny Health Sys/St Joseph MBIA+
6.70% 12/1/2018 AAA 4,750M 5,076,562
-----------------------------------------------------------------------------------------------------------------
Total 23,684,012
- -----------------------------------------------------------------------------------------------------------------------------------
Housing Dade Co FL Hsg Fin Auth FNMA+ 7% 3/1/2024 Aaa 40M 41,200
4.20% -----------------------------------------------------------------------------------------------------------------
Dade Co FL Hsg Fin Auth GNMA+ AMT 6.70% 10/1/2028 AAA 1,000M 1,001,250
-----------------------------------------------------------------------------------------------------------------
Florida Hsg Fin Agy Sing Fam Mtge Ser B GNMA+ AMT 6.65% 7/1/2026 AAA 3,985M 4,029,830
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Hsg Fin Corp GNMA+ 6.85% 10/15/2024 AAA 2,300M 2,380,500
-----------------------------------------------------------------------------------------------------------------
Total 7,452,780
- -----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Brevard Co FL Sales Tax MBIA+ 7% 12/1/2018 AAA 1,000M 1,081,250
7.89% -----------------------------------------------------------------------------------------------------------------
Dade Co FL Professional Sports Franchise Facs Tax Rev Ser B
FGIC+ 6% 10/1/2022 AAA 4,000M 3,955,000
-----------------------------------------------------------------------------------------------------------------
Jacksonville FL Cap Imp Rev Ctfs AMBAC+ 5 7/8% 10/1/2025 AAA 8,000M 7,760,000
-----------------------------------------------------------------------------------------------------------------
Orange Co FL Tourist Dev AMBAC+ 6% 10/1/2016 AAA 1,200M 1,198,500
-----------------------------------------------------------------------------------------------------------------
Total 13,994,750
- -----------------------------------------------------------------------------------------------------------------------------------
Pollution Citrus Co FL Poll Ctrl Rev FL Pwr Crystal MBIA+ 6.35% 2/1/2022 AAA 1,000M 1,021,250
Control -----------------------------------------------------------------------------------------------------------------
Revenue Citrus Co FL Poll Ctrl Rev FL Pwr Crystal MBIA+ 6 5/8% 1/1/2027 AAA 8,530M 8,956,500
5.62% -----------------------------------------------------------------------------------------------------------------
Total 9,977,750
- -----------------------------------------------------------------------------------------------------------------------------------
Power Charlotte Co FL Util Rev FGIC+ 6 3/4% 10/1/2013 AAA 900M 966,375
12.51% -----------------------------------------------------------------------------------------------------------------
Gainesville FL Util Sys 6 1/2% 10/1/2022 AA 3,675M 3,812,813
-----------------------------------------------------------------------------------------------------------------
Port St Lucie FL Util Rev FGIC+ 6% 9/1/2024 AAA 1,800M 1,784,250
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth 7% 7/1/2021 A 8,650M 9,352,813
-----------------------------------------------------------------------------------------------------------------
Reedy Creek FL Imp Dist Util Rev MBIA+ AMT 8 1/2% 10/1/2009 AAA 4,750M 5,213,125
-----------------------------------------------------------------------------------------------------------------
Stuart FL Util Rev FGIC+ 6.80% 10/1/2024 AAA 1,000M 1,061,250
-----------------------------------------------------------------------------------------------------------------
Total 22,190,626
- -----------------------------------------------------------------------------------------------------------------------------------
Solid Waste Orange Co FL Solid Waste Fac Rev FGIC+ 6 3/8% 10/1/2017 AAA 3,500M 3,574,375
2.01%
- -----------------------------------------------------------------------------------------------------------------------------------
Transportation Dade Co FL Aviation Rev MBIA+ AMT 6.60% 10/1/2022 AAA 12,400M 12,803,000
16.63% -----------------------------------------------------------------------------------------------------------------
Dade Co FL Aviation Rev Ser C MBIA+ AMT 6 1/8% 10/1/2020 AAA 2,650M 2,606,937
-----------------------------------------------------------------------------------------------------------------
Dade Co FL Seaport Bd AMBAC+ 6 1/4% 10/1/2021 AAA 1,850M 1,870,812
-----------------------------------------------------------------------------------------------------------------
Dade Co FL Seaport Bd AMBAC+ 6 1/2% 10/1/2026 AAA 6,000M 6,202,500
-----------------------------------------------------------------------------------------------------------------
Greater Orlando FL Aviation Auth Arpt Fac Rev AMT 8 3/8% 10/1/2016 A 3,150M 3,516,188
-----------------------------------------------------------------------------------------------------------------
Osceola Co FL Trans Rev MBIA+ 6.10% 4/1/2017 AAA 2,500M 2,509,375
-----------------------------------------------------------------------------------------------------------------
Total 29,508,812
- -----------------------------------------------------------------------------------------------------------------------------------
Water and Sewer Broward Co FL Wtr & Sewer FGIC+ 6% 10/1/2020 AAA 2,500M 2,481,250
5.67% -----------------------------------------------------------------------------------------------------------------
Melbourne FL Wtr & Sewer Rev FGIC+ 6 1/2% 10/1/2014 AAA 2,000M 2,095,000
-----------------------------------------------------------------------------------------------------------------
Orlando FL Util Comm Wtr 6 3/4% 10/1/2017 Aa 3,600M 3,991,500
-----------------------------------------------------------------------------------------------------------------
Titusville FL Wtr & Sewer MBIA+ 6% 10/1/2024 AAA 1,500M 1,486,875
-----------------------------------------------------------------------------------------------------------------
Total 10,054,625
-----------------------------------------------------------------------------------------------------------------
Total Municipal Bonds 100.04% (Cost $173,210,236) 177,501,819
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES (.04)%
- -----------------------------------------------------------------------------------------------------------------------------------
Short-Term Los Angeles Co CA Tax & Rev Anticipation Notes 4 1/2%
Security 6/30/1995 (Cost $749,992) MIG1 750M 749,948
- -----------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (822,302)
-----------------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities (72,354)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $4.70 a share on 37,736,043 shares of beneficial interest outstanding) $177,429,465
-----------------------------------------------------------------------------------------------------------------
</TABLE>
+Insured or guaranteed by the indicated municipal bond insurance corporation or
Federal agency.
++The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at April
30, 1995.
See Notes to Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA SERIES April 30, 1995
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Prerefunded
34.50%
Allegheny Co PA Hosp Dev Auth/Magee Womens 8 1/4% 10/1/2013 AAA $ 455M $ 499,931
-----------------------------------------------------------------------------------------------------------------
Bucks Co PA Wtr & Sewer Auth Rev FGIC+ 7 1/2% 12/1/2013 AAA 2,000M 2,175,000
-----------------------------------------------------------------------------------------------------------------
Chester Co PA Health & Ed/Bryn Mawr 6 3/4% 7/1/2014 AAA 1,025M 1,139,031
-----------------------------------------------------------------------------------------------------------------
Delaware River Joint Toll Bridge FGIC+ 7.80% 7/1/2018 AAA 2,180M 2,408,900
-----------------------------------------------------------------------------------------------------------------
Erie PA Higher Ed Bldg Auth Coll Rev 8 1/2% 6/1/2015 AAA 3,000M 3,438,750
-----------------------------------------------------------------------------------------------------------------
Hampton Township PA Sch Dist AMBAC+ 6.70% 11/15/2015 AAA 500M 555,625
-----------------------------------------------------------------------------------------------------------------
Hampton Township PA Sch Dist AMBAC+ 6 3/4% 11/15/2021 AAA 1,000M 1,115,000
-----------------------------------------------------------------------------------------------------------------
Lehigh Co PA FGIC+ 6.90% 8/1/2011 AAA 3,000M 3,315,000
-----------------------------------------------------------------------------------------------------------------
Montgomery Co PA Higher Ed & Health/Bryn Mawr 7 3/8% 12/1/2019 AAA 1,000M 1,116,250
-----------------------------------------------------------------------------------------------------------------
Pennsylvania Conv Ctr Auth 6.70% 9/1/2016 AAA 500M 554,375
-----------------------------------------------------------------------------------------------------------------
Pennsylvania St Ind Dev Auth 7% 1/1/2011 AAA 1,000M 1,111,250
-----------------------------------------------------------------------------------------------------------------
Pennsylvania St Tnpk Comm Tnpk Rev FGIC+ 7.30% 12/1/2010 AAA 1,275M 1,439,156
-----------------------------------------------------------------------------------------------------------------
Pennsylvania St Tnpk Comm Tnpk Rev MBIA+ 7.55% 12/1/2017 AAA 1,000M 1,123,750
-----------------------------------------------------------------------------------------------------------------
Pennsylvania St Univ 6 3/4% 7/1/2010 AAA 1,750M 1,920,625
-----------------------------------------------------------------------------------------------------------------
Philadelphia PA Gas Wks Rev 7.70% 6/15/2021 AAA 1,000M 1,152,500
-----------------------------------------------------------------------------------------------------------------
Philadelphia PA Gas Wks Rev ETM MBIA+ 7% 5/15/2020 AAA 2,150M 2,426,813
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth FGIC+ 7.10% 7/1/2002 AAA 600M 672,000
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth 7.30% 7/1/2020 AAA 1,000M 1,128,750
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth 6 7/8% 7/1/2021 AAA 1,250M 1,406,250
-----------------------------------------------------------------------------------------------------------------
Virgin Islands Pub Fin Auth 7.30% 10/1/2018 AAA 400M 449,000
-----------------------------------------------------------------------------------------------------------------
Washington Co PA Auth Lease Rev AMBAC+ 7.45% 12/15/2012 AAA 1,575M 1,787,625
-----------------------------------------------------------------------------------------------------------------
Total 30,935,581
- -----------------------------------------------------------------------------------------------------------------------------------
General Puerto Rico Commonwealth 6.45% 7/1/2017 A 1,500M 1,526,250
Obligation -----------------------------------------------------------------------------------------------------------------
State Puerto Rico Commonwealth MBIA+ 6.45% 7/1/2017 AAA 700M 735,000
2.52% -----------------------------------------------------------------------------------------------------------------
Total 2,261,250
- -----------------------------------------------------------------------------------------------------------------------------------
General Hampton Township PA Sch Dist Ref-Ser A AMBAC+ 5.90% 11/15/2015 AAA 600M 584,250
Obligation -----------------------------------------------------------------------------------------------------------------
Local Hampton Township PA Sch Dist Ref-Ser A AMBAC+ 6% 11/15/2021 AAA 1,000M 976,250
2.83% -----------------------------------------------------------------------------------------------------------------
Punxsutawney PA Area Sch Dist MBIA+ 5.85% 4/15/2015 AAA 1,000M 975,000
-----------------------------------------------------------------------------------------------------------------
Total 2,535,500
- -----------------------------------------------------------------------------------------------------------------------------------
Education Northeastern PA Hosp & Ed Auth Coll Rev Luzerne Co Comm
8.23% AMBAC+ 6 5/8% 8/15/2015 AAA 2,000M 2,085,000
-----------------------------------------------------------------------------------------------------------------
Pennsylvania St Higher Ed 6 5/8% 8/15/2009 Aa 825M 863,156
-----------------------------------------------------------------------------------------------------------------
Pennsylvania St Higher Ed 5.90% 9/1/2014 AA 1,000M 977,500
-----------------------------------------------------------------------------------------------------------------
Pennsylvania St Higher Ed RIBS AMBAC+ AMT 7.833% 3/1/2022++ AAA 3,000M 2,842,500
-----------------------------------------------------------------------------------------------------------------
University of Puerto Rico 6 1/2% 6/1/2013 A 600M 608,250
-----------------------------------------------------------------------------------------------------------------
Total 7,376,406
- -----------------------------------------------------------------------------------------------------------------------------------
Finance Berks Co PA Muni Auth Co FGIC+ 7.10% 5/15/2022 AAA 1,530M 1,631,363
5.92% -----------------------------------------------------------------------------------------------------------------
Pennsylvania Intergovernmental Coop Auth FGIC+ 7% 6/15/2014 AAA 1,450M 1,566,000
-----------------------------------------------------------------------------------------------------------------
Pennsylvania Intergovernmental Coop Auth FGIC+ 6 3/4% 6/15/2021 AAA 2,000M 2,112,500
-----------------------------------------------------------------------------------------------------------------
Total 5,309,863
- -----------------------------------------------------------------------------------------------------------------------------------
Health and Allegheny Co PA Hosp Dev Auth MBIA+ 6.20% 9/1/2015 AAA 400M 400,500
Hospital -----------------------------------------------------------------------------------------------------------------
9.17% Chester Co PA Health & Ed Facs Auth LINK AMBAC+ 5.055% 5/15/2020 AAA 5,200M 4,881,500
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth 6 1/2% 7/1/2003 A 770M 824,863
-----------------------------------------------------------------------------------------------------------------
Sayre PA Health Care Fac/Tioga Nursing AMBAC+ 7 1/4% 10/1/2018 AAA 1,500M 1,590,000
-----------------------------------------------------------------------------------------------------------------
Scranton-Lackawanna PA Health & Welfare Auth/Univ Scran Prjt
AMBAC+ 6.80% 11/1/2014 AAA 500M 525,625
-----------------------------------------------------------------------------------------------------------------
Total 8,222,488
- -----------------------------------------------------------------------------------------------------------------------------------
Housing Pennsylvania Hsg Fin Agy 7.40% 10/1/2015 AA 1,000M 1,063,750
4.02% -----------------------------------------------------------------------------------------------------------------
Pennsylvania Hsg Fin Agy 6.90% 4/1/2017 AA 1,500M 1,543,125
-----------------------------------------------------------------------------------------------------------------
Pennsylvania Hsg Fin Auth AMT 6.65% 4/1/2025 AA 1,000M 997,500
-----------------------------------------------------------------------------------------------------------------
Total 3,604,375
-----------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA SERIES April 30, 1995
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Industrial Bradford Co PA Ind Dev Auth Solid Waste Disp Rev AMT 6.60% 3/1/2019 A $1,250M $ 1,264,063
Revenue -----------------------------------------------------------------------------------------------------------------
Bonds Pennsylvania Economic Dev Fin Auth Exempt Facs Rev/Macmillan
7.33% AMT 7.60% 12/1/2020 Baa 1,000M 1,052,500
-----------------------------------------------------------------------------------------------------------------
Philadelphia PA Gas Wks Rev FSA+ 5 1/4% 8/1/2024 AAA 250M 220,312
-----------------------------------------------------------------------------------------------------------------
Philadelphia PA Gas Wks Rev 14th Ser-FSA-Cr FSA+ 6 1/4% 7/1/2008 AAA 1,000M 1,030,000
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Ind Med & Environmental/Motorola 6 3/4% 1/1/2014 AA 1,500M 1,599,375
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Ind Med & Environmental/Upjohn 7 1/2% 12/1/2023 AA 1,300M 1,408,875
-----------------------------------------------------------------------------------------------------------------
Total 6,575,125
- -----------------------------------------------------------------------------------------------------------------------------------
Pollution Beaver Co PA Ind Dev Auth/Ohio Edison
Control FGIC+ 7 3/4% 9/1/2024 AAA 1,950M 2,113,313
Revenue
2.36%
- -----------------------------------------------------------------------------------------------------------------------------------
Power Pennsylvania Economic Dev Res Recov Northhampton 6.60% 1/1/2019 Baa* 1,500M 1,383,750
11.95% -----------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth 7 1/8% 7/1/2014 A 365M 390,093
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth RIBS FSA+ 8.181% 7/1/2018++ AAA 1,500M 1,552,500
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth LINK FSA+ 5.789% 7/1/2023 AAA 6,000M 5,880,000
-----------------------------------------------------------------------------------------------------------------
York Co PA Ind Dev Auth Poll Ctrl Rev MBIA+ 6.45% 10/1/2019 AAA 1,475M 1,513,718
-----------------------------------------------------------------------------------------------------------------
Total 10,720,061
- -----------------------------------------------------------------------------------------------------------------------------------
Transportation Puerto Rico Commonwealth Hwy 6 5/8% 7/1/2012 A 1,750M 1,806,875
5.02% -----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy 6 5/8% 7/1/2012 A 1,000M 1,032,500
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy 5 3/4% 7/1/2018 A 650M 610,187
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Port Auth Rev FGIC+ AMT 7% 7/1/2014 AAA 1,000M 1,058,750
-----------------------------------------------------------------------------------------------------------------
Total 4,508,312
- -----------------------------------------------------------------------------------------------------------------------------------
Water and Philadelphia PA Wtr & Waste Wtr Rev MBIA+ 5 1/2% 8/1/2014 AAA 1,100M 1,032,625
Sewer -----------------------------------------------------------------------------------------------------------------
7.58% Philadelphia PA Wtr & Waste Wtr Rev MBIA+ 5.60% 8/1/2018 AAA 1,500M 1,410,000
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Aqu & Sewer 7 7/8% 7/1/2017 A 4,000M 4,355,000
-----------------------------------------------------------------------------------------------------------------
Total 6,797,625
-----------------------------------------------------------------------------------------------------------------
Total Municipal Bonds 101.43% (Cost $90,346,651) 90,959,900
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES (1.43)%
- -----------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (1,284,305)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets (equivalent to $4.88 a share on 18,386,573 shares of beneficial interest outstanding) $89,675,595
100.00% -----------------------------------------------------------------------------------------------------------------
</TABLE>
*This security has not been rated by an independent ratings service
but is, in Lord Abbett's opinion, of comparable quality.
+Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++The interest rate is subject to change periodically and inversely
to the prevailing market rate. The interest rate shown is the rate
in effect at April 30, 1995.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
MICHIGAN SERIES April 30, 1995
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Prerefunded Detroit MI Sewer Disp Rev MBIA+ 7 1/8% 7/1/2019 AAA $ 485M $ 531,075
21.73% -----------------------------------------------------------------------------------------------------------------
Detroit MI Wtr Supply MBIA+ 7 7/8% 7/1/2019 AAA 985M 1,090,887
-----------------------------------------------------------------------------------------------------------------
Michigan St Hosp Fin Auth/McLaren 7% 9/15/2015 AAA 1,000M 1,111,250
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth 7.70% 7/1/2020 AAA 1,000M 1,146,250
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy 6 5/8% 7/1/2018 AAA 500M 555,000
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy 6 5/8% 7/1/2018 AAA 870M 965,700
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth 6 7/8% 7/1/2012 AAA 1,000M 1,125,000
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth 8 7/8% 7/1/2012 AAA 500M 514,025
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth 6 7/8% 7/1/2021 AAA 1,000M 1,125,000
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth 6 7/8% 7/1/2021 AAA 530M 596,250
-----------------------------------------------------------------------------------------------------------------
Riverview MI Comm Sch Dist FGIC+ 6.55% 5/1/2014 AAA 1,500M 1,642,500
-----------------------------------------------------------------------------------------------------------------
Virgin Islands Pub Fin Auth 7.30% 10/1/2018 AAA 500M 561,250
-----------------------------------------------------------------------------------------------------------------
Total 10,964,187
-----------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
MICHIGAN SERIES April 30, 1995
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
General Byron Center MI Pub Schs Ref MBIA+ 5 7/8% 5/1/2024 AAA $ 500M $ 486,760
Obligation -----------------------------------------------------------------------------------------------------------------
Local Goodrich MI Area Sch Dist AMBAC+ 5.70% 5/1/2015 AAA 600M 576,000
5.31% -----------------------------------------------------------------------------------------------------------------
Lake Orion MI Comm Sch Dist AMBAC+ 7% 5/1/2020 AAA 1,500M 1,614,375
-----------------------------------------------------------------------------------------------------------------
Total 2,677,135
- -----------------------------------------------------------------------------------------------------------------------------------
Education .90% University of Michigan Hosp 5 1/2% 12/1/2021 AA 500M 452,500
- -----------------------------------------------------------------------------------------------------------------------------------
Health and Farmington Hills MI Hosp/Botsford Gen Hosp MBIA+ 6 1/2% 2/15/2011 AAA 1,000M 1,037,500
Hospital -----------------------------------------------------------------------------------------------------------------
16.82% Kalamazoo MI Hosp Fin Auth/Borgess Hosp RIBS 5.958% 6/1/2011++ AAA 2,000M 1,700,000
-----------------------------------------------------------------------------------------------------------------
Kalamazoo MI Hosp Fin Auth Reg LINK FGIC+ 5.244% 6/1/2011 AAA 4,000M 3,710,000
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Ind Tourist Ed Med & Environmental Ctrl Facs 6.70%
5/1/2024 BBB 1,575M 1,529,719
-----------------------------------------------------------------------------------------------------------------
Royal Oak MI Hosp Fin Auth/Wm Beaumont 6 3/4% 1/1/2020 AA 500M 513,125
-----------------------------------------------------------------------------------------------------------------
Total 8,490,344
- -----------------------------------------------------------------------------------------------------------------------------------
Housing 6.23% Michigan St Hsg Dev Auth 5.70% 4/1/2012 A 1,000M 952,500
-----------------------------------------------------------------------------------------------------------------
Michigan St Hsg Dev Auth 6.95% 12/1/2020 AA 1,130M 1,162,488
-----------------------------------------------------------------------------------------------------------------
Michigan St Hsg Dev Auth AMT 7.05% 6/1/2026 AA 1,000M 1,030,000
-----------------------------------------------------------------------------------------------------------------
Total 3,144,988
- -----------------------------------------------------------------------------------------------------------------------------------
Industrial Michigan St Strategic Fd Ltd/Waste Mgmt Inc AMT 6 5/8% 12/1/2012 AA 1,000M 1,038,750
Revenue -----------------------------------------------------------------------------------------------------------------
Bonds Puerto Rico Ind Med & Environmental/Warner Lambert 7.60% 5/1/2014 Aa 1,000M 1,101,250
13.36% -----------------------------------------------------------------------------------------------------------------
Puerto Rico Ind Med & Environmental/Baxter Lab 8% 9/1/2012 A 1,000M 1,105,000
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Ind Med & Environmental/Upjohn 7 1/2% 12/1/2023 AA 1,500M 1,625,625
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Tel Auth Rev LINK MBIA+ 5.51% 1/16/2015 AAA 2,000M 1,870,000
-----------------------------------------------------------------------------------------------------------------
Total 6,740,625
- -----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Michigan Muni Bd Auth AMBAC+ 6 3/4% 5/1/2014 AAA 2,000M 2,110,000
4.18%
- ------------------------------------------------------------------------------------------------------------------------------------
Power Michigan St Strategic Fd Ltd/Detroit Edison MBIA+ 7% 7/15/2008 AAA 500M 558,750
13.57% -----------------------------------------------------------------------------------------------------------------
Michigan St Strategic Fd Ltd/Detroit Edison AMBAC+ 7% 5/1/2021 AAA 500M 558,750
-----------------------------------------------------------------------------------------------------------------
Michigan St Strategic Fd Rev/Genesee Pwr Prjt AMT 7 1/2% 1/1/2021 BBB* 500M 483,750
-----------------------------------------------------------------------------------------------------------------
Monroe Co MI Poll Ctrl Rev/Detroit Edison Prjt AMBAC+ 7 1/2%
12/1/2019 AAA 3,340M 3,648,950
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth RIBS FSA+ 8.181% 7/1/2018++ AAA 500M 517,500
-----------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth 7% 7/1/2021 A 1,000M 1,081,250
-----------------------------------------------------------------------------------------------------------------
Total 6,848,950
- -----------------------------------------------------------------------------------------------------------------------------------
Transportation Puerto Rico Commonwealth Hwy 6 5/8% 7/1/2012 A 2,365M 2,441,863
11.98% -----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy 5 3/4% 7/1/2018 A 550M 516,312
-----------------------------------------------------------------------------------------------------------------
Wayne Charter Co MI Arpt Rev MBIA+ AMT 6 3/4% 12/1/2021 AAA 3,000M 3,090,000
-----------------------------------------------------------------------------------------------------------------
Total 6,048,175
- -----------------------------------------------------------------------------------------------------------------------------------
Water and Lansing MI Sewer Disp Sys Rev FGIC+ 5.85% 5/1/2014 AAA 400M 389,500
Sewer -----------------------------------------------------------------------------------------------------------------
5.86% Puerto Rico Commonwealth Aqu & Sewer 7 7/8% 7/1/2017 A 2,000M 2,177,500
-----------------------------------------------------------------------------------------------------------------
Saginaw-Midland MI Muni Wtr 5 1/2% 9/1/2012 A 425M 388,343
-----------------------------------------------------------------------------------------------------------------
Total 2,955,343
-----------------------------------------------------------------------------------------------------------------
Total Municipal Bonds 99.94% (Cost $51,210,275) 50,432,247
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES .06%
- -----------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities 30,634
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $4.77 a share on 10,578,262 shares of beneficial interest outstanding) $50,462,881
-----------------------------------------------------------------------------------------------------------------
</TABLE>
*This security has not been rated by an independent ratings service but is, in
Lord Abbett's opinion, of comparable quality.
+Insured or guaranteed by the indicated municipal bond insurance corporation or
Federal agency.
++The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
April 30, 1995.
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
GEORGIA SERIES April 30, 1995 Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Prerefunded Puerto Rico Commonwealth 8% 7/1/2007 AAA $320M $2,356,800
32.62% ------------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy 6 5/8% 7/1/2018 AAA 250M 277,500
------------------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth 7 7/8% 7/1/2007 AAA 300M 326,250
------------------------------------------------------------------------------------------------------------------
Total 960,550
- ------------------------------------------------------------------------------------------------------------------------------------
General Chatman Co GA Sch Dist MBIA+ 6 3/4% 8/1/2020 AAA 250M 265,625
Obligation ------------------------------------------------------------------------------------------------------------------
Local De Kalb Co GA 6% 1/1/2020 AA 50M 49,438
23.24% ------------------------------------------------------------------------------------------------------------------
Fulton Co GA Sch Dist 6 3/8% 5/1/2016 AA 350M 369,250
------------------------------------------------------------------------------------------------------------------
Total 684,313
- ------------------------------------------------------------------------------------------------------------------------------------
Housing De Kalb Co GA Hsg Auth FSA+ AMT 7.15% 1/1/2025 AAA 100M 102,375
13.64% ------------------------------------------------------------------------------------------------------------------
Georgia St Hsg & Fin Auth Rev AMT 6.40% 12/1/2015 AA 250M 247,500
------------------------------------------------------------------------------------------------------------------
Puerto Rico Hsg Fin Corp GNMA+ 6.85% 10/15/2024 AAA 50M 51,750
------------------------------------------------------------------------------------------------------------------
Total 401,625
- ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Atlanta GA Downtown Dev Auth Ref-Underground
9.82% Atlanta Prjt 6 1/4% 10/1/2016 AA 100M 101,500
------------------------------------------------------------------------------------------------------------------
Cobb-Marietta GA Coliseum & Exhibit Hall Auth
Rev MBIA+ 5 5/8% 10/1/2023 AAA 200M 187,750
------------------------------------------------------------------------------------------------------------------
Total 289,250
- ------------------------------------------------------------------------------------------------------------------------------------
Pollution Burke Co GA Dev Auth Poll Ctrl Rev
Control MBIA+ 6.60% 7/1/2024 AAA 50M 51,187
Revenue
1.74%
- ------------------------------------------------------------------------------------------------------------------------------------
Power Effingham Co GA Dev Auth MBIA+ 6 3/4% 2/1/2022 AAA 50M 51,000
3.55% ------------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth 7 1/8% 7/1/2014 A 50M 53,438
------------------------------------------------------------------------------------------------------------------
Total 104,438
- ------------------------------------------------------------------------------------------------------------------------------------
Solid Waste Cobb Co GA Solid Waste Mgmt Auth AMT 6.40% 1/1/2015 Aa 100M 101,500
3.44%
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation Metropolitan Atlanta Rapid Trans Auth GA Sales Tax Rev
10.53% AMBAC+ 6 1/4% 7/1/2020 Aaa 300M 310,125
- ------------------------------------------------------------------------------------------------------------------------------------
Water and
Sewer 3.59% Albany GA Sewer Sys Rev MBIA+ 6 5/8% 7/1/2017 AAA 100M 105,750
- ------------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds 102.17% (Cost $2,963,252) 3,008,738
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES (2.17)%
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (63,798)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.00% (equivalent to $4.96 a share on 593,650 shares of beneficial interest outstanding) $2,944,940
----------------------------------------------------------------------------------------------------------------
</TABLE>
+Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statements of Operations
- ------------------------------------------------------------------------------------------------------------------------------------
For the Period
12/27/94
(Commencement
of Operations)
Six Months Ended 4/30/95 to 4/30/95
---------------------------------------------- -----------------
Florida Pennsylvania Michigan Georgia
Investment Income Series Series Series Series
- ------------------------------------------------------------------------------------------------------------------ -----------------
<C> <S> <C> <C> <C> <C>
Income Interest $ 5,979,795 $ 2,745,095 $ 1,497,587 $ 32,450
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses Management fee 435,160 208,474 117,350 3,255
(Note 3) ---------------------------------------------------------------------------------------------------------------------
12b-1 distribution plan (Note 3) 215,876 - - -
---------------------------------------------------------------------------------------------------------------------
Shareholder servicing 28,000 36,000 26,500 800
---------------------------------------------------------------------------------------------------------------------
Audit and tax 22,500 11,250 9,750 2,000
---------------------------------------------------------------------------------------------------------------------
Reports to shareholders 8,500 5,850 5,100 500
---------------------------------------------------------------------------------------------------------------------
Legal 10,500 4,000 900 50
---------------------------------------------------------------------------------------------------------------------
Registration - 500 4,500 500
---------------------------------------------------------------------------------------------------------------------
Organization (Note 1e) 3,768 1,206 1,992 300
---------------------------------------------------------------------------------------------------------------------
Other 18,245 7,115 7,942 758
---------------------------------------------------------------------------------------------------------------------
Management fees waived and expenses assumed by
Lord, Abbett & Co. (130,513) (63,173) (117,350) (8,163)
---------------------------------------------------------------------------------------------------------------------
Net expenses 612,036 211,222 56,684 -
---------------------------------------------------------------------------------------------------------------------
Net investment income 5,367,759 2,533,873 1,440,903 32,450
---------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments (Note 6)
- ------------------------------------------------------------------------------------------------------------------------------------
Realized loss from security transactions
---------------------------------------------------------------------------------------------------------------------
Proceeds from sales 184,388,052 95,555,256 51,214,905 1,108,450
---------------------------------------------------------------------------------------------------------------------
Cost of securities sold 190,173,526 97,877,278 51,697,516 1,094,548
---------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (5,785,474) (2,322,022) (482,611) 13,902
- ------------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investments
---------------------------------------------------------------------------------------------------------------------
Beginning of period (9,076,076) (6,259,098) (3,583,924) -
---------------------------------------------------------------------------------------------------------------------
End of period 4,291,539 613,249 (778,028) 45,486
---------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation 13,367,615 6,872,347 2,805,896 45,486
---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 7,582,141 4,550,325 2,323,285 59,388
---------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 12,949,900 $ 7,084,198 $ 3,764,188 $ 91,838
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statements of Changes in Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
For the Period
12/27/94
(Commencement
of Operations) to
Six Months Ended 4/30/95 4/30/95 Year Ended 10/31/94
---------------------------------------- ----------- ----------------------------------------
Florida Pennsylvania Michigan Georgia Florida Pennsylvania Michigan
Increase (Decrease) in Net Assets Series Series Series Series Series Series Series
- ----------------------------------- ------------ ----------- ----------- ---------- ------------ ----------- -----------
<C> <S> <C> <C> <C> <C> <C> <C> <C>
Operations Net investment
income $ 5,367,759 $ 2,533,873 $ 1,440,903 $ 32,450 $ 11,420,101 $ 5,126,654 $ 2,452,256
--------------------------------------------------------------------------------------------------------------------
Net realized gain
(loss)
from security
transactions (5,785,474) (2,322,022) (482,611) 13,902 (6,388,904) (257,737) (1,281,773)
--------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation)
of investments 13,367,615 6,872,347 2,805,896 45,486 (20,799,243) (11,851,791) (4,522,615)
--------------------------------------------------------------------------------------------------------------------
Net increase
(decrease)
in net assets
resulting
from operations 12,949,900 7,084,198 3,764,188 91,838 (15,768,046) (6,982,874) (3,352,132)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from
--------------------------------------------------------------------------------------------------------------------
Net investment
income (4,951,761) (2,524,320) (1,417,035) (36,073) (11,154,659) (5,007,567) (2,549,530)
--------------------------------------------------------------------------------------------------------------------
Net realized gain
from security
transactions - - - - (3,805,846) (320,841) (312,927)
--------------------------------------------------------------------------------------------------------------------
Total distributions (4,951,761) (2,524,320) (1,417,035) (36,073) (14,960,505) (5,328,408) (2,862,457)
- ------------------------------------------------------------------------------------------------------------------------------------
Share transactions (Note 4)
--------------------------------------------------------------------------------------------------------------------
Net proceeds from
sales of shares 16,901,325 7,781,889 5,142,768 2,880,098 43,830,527 20,549,304 20,489,416
--------------------------------------------------------------------------------------------------------------------
Net asset value of
shares issued to
shareholders in
reinvestment of net
investment income
and realized gain
from security
transactions 1,600,862 1,177,936 751,279 13,100 4,769,963 2,464,814 1,377,372
--------------------------------------------------------------------------------------------------------------------
Total 18,502,187 8,959,825 5,894,047 2,893,198 48,600,490 23,014,118 21,866,788
--------------------------------------------------------------------------------------------------------------------
Cost of shares
reacquired (23,915,081) (5,101,957) (3,381,155) (5,023) (34,490,402) (11,558,288) (5,006,862)
--------------------------------------------------------------------------------------------------------------------
Increase (Decrease)
in net assets derived
from share
transactions (5,412,894) 3,857,868 2,512,892 2,888,175 14,110,088 11,455,830 16,859,926
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net
assets 2,585,245 8,417,746 4,860,045 2,943,940 (16,618,463) (855,452) 10,645,337
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning of period 174,844,220 81,257,849 45,602,836 1,000 191,462,683 82,113,301 34,957,499
--------------------------------------------------------------------------------------------------------------------
End of period+ $177,429,465 $89,675,595 $50,462,881 $2,944,940 $174,844,220 $81,257,849 $45,602,836
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Includes (overdistributed) undistributed net investment income of $123,689,
$40,550, $(142,185) and $(3,623), respectively, as of April 30, 1995 and
(overdistributed) undistributed net investment income of $(292,309), $30,997
and $(166,053), respectively, as of October 31, 1994.
See Notes to Financial Statements.
9
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------------------
Florida Series
For the Period
9/25/91
Six Months Year Ended 10/31, (Commencement
Ended ------------------------------------- of Operations) to
Per Share Operating Performance: 4/30/95 1994 1993 1992 10/31/91
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.49 $ 5.28 $ 4.75 $ 4.76 $ 4.76
--------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
----------------------------------------------------------------------------------------------------------------------------
Net investment income .1405+ .291 .297 .308 .027+
-----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments .1992 (.695) .549 .002 .000
-----------------------------------------------------------------------------------------------------------------------------
Total from investment operations .3397 (.404) .846 .310 .027
--------------------------------------------------------------------------------------------------------------------------------
Distributions
-----------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (.1297) (.2835) (.301) (.320) (.027)
-----------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain -- (.1025) (.015) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.70 $ 4.49 $ 5.28 $ 4.75 $ 4.76
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 7.67%+ (8.03)% 18.24% 6.65% .57%+
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 177,429 $174,844 $191,463 $ 121,408 $ 108,550
-----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
--------------------------------------------------------------------------------------------------------------------------------
Expenses, including waiver .35%+ .32% .38% .29% .00%+
-----------------------------------------------------------------------------------------------------------------------------
Expenses, excluding waiver .43%+ .82% .88% .78% 5.10%+
-----------------------------------------------------------------------------------------------------------------------------
Net investment income 3.08%+ 5.98% 5.71% 5.84% .55%+
-----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 80.20% 122.36% 89.32% 94.90% 100.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
====================================================================================================================================
Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Series
For the Period
2/3/92
Six Months Year Ended 10/31, Commencement
Ended ------------------------------ of Operations) to
Per Share Operating Performance: 4/30/95 1994 1993 10/31/92
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.62 $ 5.33 $ 4.75 $ 4.76
-----------------------------------------------------------------------------------------------------------------------
Income from investment operations
----------------------------------------------------------------------------------------------------------------
Net investment income .1414+ .300 .299 .228+
----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments .2600 (.6975) .582 (.006)
----------------------------------------------------------------------------------------------------------------
Total from innvestment operations .4014 (.3975) .881 .222
----------------------------------------------------------------------------------------------------------------------
Distributions
----------------------------------------------------------------------------------------------------------------
Dividends from net investment income (.1414) (.2925) (.301) (.232)
----------------------------------------------------------------------------------------------------------------
Distribution from net realized gain -- (.02) -- --
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.88 $ 4.62 $ 5.33 $ 4.75
- -------------------------------------------------------------------------------------------------------------------------------
Total Return* 8.83%+ (7.73)% 18.95% 4.68%+
- -------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 89,675 $ 81,258 $ 82,113 $ 41,207
----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
---------------------------------------------------------------------------------------------------------------------
Expenses, including waiver .25%+ .33% .31% .00%+
----------------------------------------------------------------------------------------------------------------
Expenses, excluding waiver .33%+ .68% .81% .61%+
----------------------------------------------------------------------------------------------------------------
Net investment income 3.01%+ 5.98% 5.70% 4.42%+
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 92.16% 137.22% 7.71% 32.66%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
10
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Financial Highlights
- ----------------------------------------------------------------------------------------------------------------------------------
Michigan Series Michigan Series Georgia Series
Georgia Series ----------------------------------------------- ------------------
For the Period For the Period
12/1/92 12/27/94
Six Months (Commencement (Commencement
Ended Year Ended of Operations) to of Operations) to
Per Share Operating Performance: 4/30/95 10/31/94 10/31/93 4/30/95
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.53 $ 5.23 $ 4.76 $ 4.76
------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
---------------------------------------------------------------------------------------------------------------------------
Net investment income .1428+ .286 .266+ .0972+
---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments .2369 (.651) .480 .2065
---------------------------------------------------------------------------------------------------------------------------
Total from investment operations .3797 (.365) .746 .3037
------------------------------------------------------------------------------------------------------------------------------
Distributions
---------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (.1397) (.2925) (.276) (.1037)
---------------------------------------------------------------------------------------------------------------------------
Distribution from net realized gain -- (.0425) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.77 $ 4.53 $ 5.23 $ 4.96
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return* 8.53%+ (7.29)% 16.01%+ 6.40%+
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 50,463 $ 45,603 $ 34,957 $ 2,945
---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
------------------------------------------------------------------------------------------------------------------------------
Expenses, including waiver .12%+ .34% .00%+ .00%+
---------------------------------------------------------------------------------------------------------------------------
Expenses, excluding waiver .37%+ .84% .75%+ .45%+
---------------------------------------------------------------------------------------------------------------------------
Net investment income 3.07%+ 5.69% 4.75%+ 1.80%+
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 101.57% 137.31% 68.10% 64.09%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES The Company was organized as a Massachusetts
business trust on September 11, 1991, and is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company. On
February 3, 1992, the Pennsylvania Series commenced operations when the Company
received an initial capital contribution of $117,125 and issued 24,606 shares of
the Pennsylvania Series to the partners of Lord, Abbett & Co. On December 1,
1992, the Michigan Series commenced operations when the Company received an
initial capital contribution of $120,083 and issued 25,228 shares of the
Michigan Series to the partners of Lord, Abbett & Co. On December 22, 1994, the
Georgia Series received an initial capital contribution of $1,000 and issued 210
shares of the Georgia Series to the partners of Lord, Abbett & Co. The following
is a summary of significant accounting policies consistently followed by the
Company. The policies are in conformity with generally accepted accounting
principles.
(a) Market value is determined as follows: Securities are valued at latest
prices on the basis of valuations furnished by an independent pricing service
or, in their absence, fair value as determined under procedures approved by the
Board of Trustees. (b) It is the policy of the Company to meet the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all net investment income and net realized gains.
Therefore, there is no provision for federal income tax. (c) Security
transactions are accounted for on the date that the securities are purchased or
sold (trade date). Interest income is recorded on the accrual basis. (d)
Dividends from net investment income are declared daily and paid monthly. (e)
The organization expenses of the Company are amortized evenly over a period of
five years.
2. DISTRIBUTIONS Dividends from net investment income are declared daily and
paid monthly. Taxable net realized gain from security transactions, if any, will
be distributed to shareholders in December 1995. At April 30, 1995, accumulated
net realized gain (loss) for financial reporting purposes, which is
substantially the same as for federal income tax purposes, aggregated
$(12,223,104) for the Florida Series, $(2,604,755) for the Pennsylvania Series,
$(1,780,781) for the Michigan Series, and $13,902 for the Georgia Series. Income
and capital gains distributions are determined in accordance with income tax
regulations which may differ from methods used to determine the corresponding
income and capital gains amounts in accordance with generally accepted
accounting principles.
3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Lord, Abbett & Co.
provides the Company with investment management services and executive and other
personnel, pays the remuneration of officers, provides office space and pays for
ordinary and necessary office and clerical expenses relating to research,
statistical work and the supervision of the Company's investment portfolios. The
management fee is based on average daily net assets for each month at the annual
rate of 1/2 of 1%. Lord, Abbett & Co. may waive its management fees and pay or
reimburse the Trust for certain of its other expenses. Any such expenses paid
are subject to repayment by each Series, pursuant to a formula based on the
asset size and expense ratio of each Series. Each Series shall not be obligated
to repay Lord Abbett after five full fiscal years after the commencement of the
repayment formula or the termination of the Management Agreement, whichever is
earlier. For the Florida, Pennsylvania and Michigan Series, all expenses assumed
pursuant to the aforementioned formula have been accrued. For the six months
11
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
ended April 30, 1995, with respect to the Florida, Pennsylvania and Michigan
Series, Lord Abbett waived $130,513, $63,173 and $117,350, respectively, in
management fees. With respect to the Georgia Series, for the period December 22,
1994 to April 30, 1995, Lord, Abbett & Co. waived the Georgia Series management
fee of $3,255 and assumed expenses of $4,908. Lord, Abbett & Co. received the
following commissions on sales of shares of the Company after concessions were
paid to authorized distributors:
<TABLE>
<CAPTION>
Lord, Abbett & Co. Distributors'
Series Commissions Concessions
<S> <C> <C>
- -------------------------------------------------------------------
Florida $27,300 $176,628
- -------------------------------------------------------------------
Pennsylvania $31,357 $195,514
- -------------------------------------------------------------------
Michigan $26,448 $176,631
- -------------------------------------------------------------------
Georgia -- $ 99,237
- -------------------------------------------------------------------
</TABLE>
The Company has adopted a plan of distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Each Series' Plan will go into effect on the
first day ("effective date") of the calendar quarter subsequent to each Series'
net assets reaching $100 million. The Plan provides for the payment through
Lord, Abbett & Co. to dealers of (1) an annual service fee (payable quarterly)
of .15% of the average daily net asset value of shares sold prior to the Plan's
effective date and .25% of the average daily net asset value of the shares sold
by dealers on or after that date and (2) a one-time 1% distribution fee, at the
time of sale, on such shares sold of $1 million or more on or after the
effective date.
Certain of the Company's officers and Trustees have an interest in Lord, Abbett
& Co.
4. SHARE TRANSACTIONS Transactions in shares were as follows:
<TABLE>
<CAPTION>
For the Period
12/27/94
(Commencement
of Operations) to
Six Months Ended 4/30/95 4/30/95 Year Ended 10/31/94
------------------------------------------------------------------------------------------
Florida Pennsylvania Michigan Georgia Florida Pennsylvania Michigan
Series Series Series Series Series Series Series
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales of shares 3,763,477 1,656,844 1,105,390 591,822 8,834,007 4,034,948 4,124,391
- --------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 351,406 251,087 163,391 2,639 965,339 490,558 279,805
- --------------------------------------------------------------------------------------------------------------------------------
Total 4,114,883 1,907,931 1,268,781 594,461 9,799,346 4,525,506 4,404,196
- --------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (5,320,352) (1,110,598) (748,629) (1,021) (7,130,840) (2,342,447) (1,029,543)
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in shares (1,205,469) 797,333 520,152 593,440 2,668,506 2,183,059 3,374,653
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
5. CAPITAL PAID IN At April 30, 1995, capital paid in aggregated $185,237,373
for the Florida Series, $91,626,551 for the Pennsylvania Series, $53,163,876 for
the Michigan Series and $2,889,177 for the Georgia Series.
6. PURCHASES AND SALES OF SECURITIES Purchases and sales of investment
securities (other than short-term investments) were as follows:
<TABLE>
<CAPTION>
Series Purchases Sales
- --------------------------------------------------------------------------------
<S> <C> <C>
Florida $137,954,765 $145,262,968
- --------------------------------------------------------------------------------
Pennsylvania $ 79,048,178 $ 77,596,062
- --------------------------------------------------------------------------------
Michigan $ 51,170,814 $ 47,201,182
- --------------------------------------------------------------------------------
Georgia $ 4,058,481 $ 1,108,450
- --------------------------------------------------------------------------------
</TABLE>
Security gains and losses are computed on the identified cost basis.
As of April 30, 1995, unrealized appreciation and depreciation of investments
based on cost for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Series Unrealized Appreciation Unrealized Depreciation
- --------------------------------------------------------------------------------
<S> <C> <C>
Florida $5,859,844 $1,568,305
- --------------------------------------------------------------------------------
Pennsylvania $1,903,996 $1,290,747
- --------------------------------------------------------------------------------
Michigan $ 634,144 $1,412,172
- --------------------------------------------------------------------------------
Georgia $ 50,503 $ 5,017
- --------------------------------------------------------------------------------
</TABLE>
The cost of investments for federal income tax purposes is the same as that
used for financial statement purposes.
7. TRUSTEES' REMUNERATION The Trustees of the Company associated with Lord,
Abbett & Co. and all officers of the Company receive no compensation from the
Company for acting as such. Outside Trustees' fees, including attendance fees
for board and committee meetings, and outside Trustees' retirement costs, are
allocated among all funds in the Lord Abbett group based on net assets of each
fund. The direct remuneration accrued during the period for outside Trustees of
the Company as a group was $2,552 (exclusive of expenses), which has been deemed
invested in shares of the Company under a deferred compensation plan
contemplating future payment of the value of those shares. As of April 30, 1995,
the aggregate amount in Trustees' accounts maintained under the plan was
$12,238. Retirement costs accrued during the period amounted to $2,014.
- --------------------------------------------------------------------------------
Copyright (C) 1995 by Lord Abbett Tax-Free Income Trust, 767 Fifth Avenue,
New York, NY 10153-0203
This publication, when not used for the general information of
shareholders of Lord Abbett Tax-Free Income Trust, is to be distributed
only if preceded or accompanied by a current prospectus which includes
information concerning each Series' investment objective and policies,
sales charges and other matters.
All rights reserved. Printed in the U.S.A.
- --------------------------------------------------------------------------------
12
