<PAGE>
Lord Abbett Tax-Free Income Trust
Florida Series o Pennsylvania Series o Michigan Series
o Georgia Series
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED APRIL 30, 1999
[GRAPHIC OMITTED]
A fund to help you keep more
of your investment income
[LOGO](R)
<PAGE>
Report to Shareholders
For the Six Months Ended April 30, 1999
[PHOTO OMITTED]
/s/ Robert S. Dow
- -----------------
Robert S. Dow
Chairman
May 17, 1999
"Lord Abbett Tax-Free Income Trust's focus on high-quality municipal bonds
helped our individual portfolios to provide shareholders with important benefits
during the period."
Lord Abbett Tax-Free Income Trust completed the first half of its fiscal year on
April 30, 1999 with aggregate net assets of $318 million versus $310 million in
assets six months earlier. During the period, many municipal bonds provided
yields close to those of taxable bonds -- making the tax advantages of municipal
bonds a hard-to-resist bonus. In this environment, many of the Trust's
portfolios performed well relative to competitors. Please see the inside front
cover of this report for the performance of each Series' portfolio.
Florida Series: $132 million Michigan Series: $55 million
Pennsylvania Series: $104 million Georgia Series: $27 million
What Happened in the Markets
The "flight to quality" that characterized the third quarter of 1998 subsided
during the fourth quarter and then reversed during the first three months of
1999. Consequently, municipal bonds outperformed Treasury bonds. The yield on
the 30-year Treasury bond advanced to 5.66% from 5.09% at the end of 1998, an
increase of 57 basis points (one basis point = one-hundredth of a percent). In
contrast, the yield on the Bond Buyer 40 Muni Bond Index* ended April 30, 1999
at 5.28%, versus 5.16% at the close of 1998, an increase of only 12 basis
points. This means that the ratio of long municipal yields compared to 30-year
Treasury yields dropped from 101% at the end of the year to 97% at the end of
April.
The reasons for municipal outperformance were threefold. First, a drop of 30% in
municipal issuance (new bonds entering the municipal market) versus 1998 served
to create a beneficial supply/demand dynamic. Second, as word of municipal
bonds' cheapness spread, more and more non-traditional buyers of municipal bonds
appeared. Third, we believe there has been some asset reallocation from equities
into bonds.
Key Fund Investment Strategies
Lord Abbett Tax-Free Income Trust's focus on high-quality municipal bonds helped
our individual portfolios to provide shareholders with important benefits during
the period. Specifically, high-quality municipal bonds held up better than
lower-rated municipal bonds during last autumn's "flight to quality" -- a trend
which translated into less volatility and downward price movement on a relative
basis for our municipal bond portfolios.
On a watchful note, we remain wary of BBB paper (the low end of the "Investment
Grade" spectrum) in general, because of the still-low incremental yield that
these bonds offer over insured and other high-quality bonds. In fact, with bond
insurers exercising more scrutiny as to what they will insure, we expect BBB
credits to experience some pressure. In the healthcare sector, for example, the
spreads between high- and low-quality investment-grade bonds have already begun
to widen. However, three of the four portfolios include a small portion of BBB,
or comparable quality, issues. This is because there is selected value to be
found in this credit category. By closely monitoring these issues, we aim to
find those bonds offering higher yields, thereby enhancing the total return of
the Series over time.
What May Be Ahead for Municipals
Although energy prices rose during the first quarter of 1999, we believe that
powerful competitive forces in the economy will help to limit consumer price
inflation. Given this backdrop and the relative cheapness in municipal bonds, we
believe that high-quality municipal bonds offer a superior investment
alternative to taxable equivalents.
Thank you for including Lord Abbett Tax-Free Income Trust in your investment
portfolio. We look forward to helping you reach your financial goals in the
years to come.
*The Bond Buyer 40 Muni Bond Index is an index of 40 tax-exempt municipal bonds.
The index is unmanaged, does not reflect the deduction of fees or expenses and
is not available for direct investment.
<PAGE>
Fund Facts
On April 30, 1999, the portfolios in Lord Abbett Tax-Free Income Trust were
invested in a wide variety of high-quality issues.
All tax-free portfolios managed by Lord Abbett emphasize:
o High quality
o Total return potential
o Call protection
Lord Abbett's Focus on Quality
[THE FOLLOWING WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Florida Series
AAA 80.4%
AA 6.1%
A 11.1%
BBB 2.4%
[THE FOLLOWING WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Pennsylvania Series
AAA 71.8%
AA 9.7%
A 11.1%
BBB 7.4%
[THE FOLLOWING WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Michigan Series
AAA 69.7%
AA 12.1%
A 11.2%
BBB(1) 7.0%
[THE FOLLOWING WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Georgia Series
AAA 51.6%
AA 23.4%
A 25.0%
Lord Abbett's Tax-Free Record and SEC-Required Information
<TABLE>
<CAPTION>
Florida Pennsylvania Michigan Georgia
Series(2) Series Series Series
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Date of Inception 9/25/91 2/3/92 12/1/92 12/27/94
Distribution Rate at Net Asset
Value (as of 4/30/99)(3) 4.74% 5.05% 4.89% 4.93%
- --------------------------------------------------------------------------------------
Average Annual Rate of Total Return
at Net Asset Value (as of 4/30/99)(4):
1 Year 6.12% 6.59% 6.67% 7.19%
3 Years 6.68% 7.47% 7.41% 8.51%
5 Years 6.35% 7.14% 7.05% --
Life of Series 6.54% 7.26% 7.10% 9.18%
30-Day SEC Yield (as of 4/30/99) 3.67% 3.89% 4.45% 4.00%
- --------------------------------------------------------------------------------
Average Annual Rate of Total Return at the
Maximum Offering Price (as of 3/31/99):
1 Year 0.30% 0.80% 0.90% 1.60%
5 Years 5.27% 6.15% 6.03% --
Life of Series 5.89% 6.58% 6.31% 8.10%
</TABLE>
The results quoted above represent past performance for Class A shares, which is
no indication of future results. The investment return and principal value of a
Series' investment will fluctuate so that shares, on any given day or when
redeemed, may be worth more or less than their original cost. The respective
SEC-required uniformly computed average annual rates of total return are at the
Class A share maximum sales charge of 4.75%. Effective May 3, 1999, the maximum
sales charge was reduced to 3.25%
(1) Includes holdings that are not rated by an independent ratings service but
are, in Lord Abbett's opinion, of comparable quality.
(2) Data shown represents Class A share performance. For Florida Series Class
C share performance, please see the Series' Financial Highlights table on
page 13. For a full discussion of the differences in pricing alternatives,
please call Lord Abbett Distributor LLC at 800-874-3733 and ask for the
Trust's current prospectus.
(3) Dividend Distribution Rate at Net Asset Value: The dividend distribution
rate is calculated by dividing the dividends of a class derived by net
investment income during a stated period by the net asset value on the
last day of the period.
(4) Total return is the percent change in value with dividends and capital
gains reinvested. In the event a portfolio invests in private activity
bonds, the interest income derived therefrom may increase the Alternative
Minimum Tax liability only for shareholders subject to that tax. In the
event a portfolio does not invest entirely in municipal bonds, federal,
state and local taxes (if any) may be applicable to that portion of
interest income derived from taxable sources.
1
<PAGE>
A Note About Year 2000 Matters
As you may know, there has been extensive media coverage about possible problems
that may arise as a result of uncertainties about the ability of computers to
"understand" dates using the year 2000. Potentially, these problems could
disrupt the services and systems that the Trust relies on in its daily
operations.
As a general matter, we believe the financial industry has taken a leadership
role addressing year 2000 (Y2K) issues and this should help to inspire
confidence among concerned investors. More specifically, Lord Abbett, Lord
Abbett Distributor LLC and the Trust's transfer agent, custodian and other
providers of services critical to the Trust have been actively working on
reviewing and replacing or updating computer systems and computer-to-computer
interfaces, as needed. Each has completed or is in the process of testing new or
revised systems and interfaces and generally expects that their systems, as well
as those of their key external service providers, will be ready to handle Y2K
without significant problems. Furthermore, the Trust has been routinely taking
companies' Y2K preparations into account when considering or reviewing
investments.
In summary, while the Y2K problem is unprecedented and we cannot eliminate
altogether the possibility that the Trust could be affected in some way, we are
confident that all parties involved are taking appropriate steps to resolve Y2K
concerns.
Important Information
Each portfolio may invest up to 20% of its net assets in residual interest bonds
("RIB"). 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 make lower interest payments and their values fall faster than
fixed-rate bonds. But when interest rates fall, not only do RIBs make higher
interest payments, their values also rise faster than fixed-rate bonds. If used
as sales material after 6/30/99, this report must be accompanied by Lord
Abbett's Performance Quarterly for the most recently completed calendar quarter.
2
<PAGE>
Statement of Net Assets
FLORIDA SERIES April 30, 1999
<TABLE>
<CAPTION>
Principal
S&P or Amount
Investments Moody's (000) Value
=================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 18.36% Bay Cnty FL Hosp Sys Rev Bay Med Ctr Proj 8% 10/1/2019 AAA $ 500 $ 607,500
Charlotte Cnty FL Util Rev FGIC+ 6 3/4% 10/1/2013 AAA 500 568,750
Cocoa FL Wtr & Swr Rev FGIC+ 5 7/8% 10/1/2022 AAA 1,340 1,504,150
Dunedin FL Hosp Rev Mease Hlth Care MBIA+ 6 3/4% 11/15/2021 AAA 1,000 1,093,750
Manatee Cnty FL Pub Util Rev Ser 91A MBIA+ 6 3/4% 10/1/2013 AAA 1,000 1,091,250
Melbourne FL Wtr & Swr Rev Ser B FGIC+ 6.40% 10/1/2022 AAA 1,700 1,802,000
Orlando & Orange Cnty FL Expwy Rev FGIC+ 6 1/2% 7/1/2020 AAA 395 414,256
Palm Beach Cnty FL Hlth Fac Auth Rev Hosp Good Samaritan
MBIA+ 6.30% 10/1/2022 AAA 7,935 8,748,337
Stuart FL Util Rev FGIC+ 6.80% 10/1/2024 AAA 1,000 1,120,000
Tampa FL Rev Allegany Hlth Sys St Joseph MBIA+
6.70% 12/1/2018 AAA 5,000 5,781,250
Venice FL Hlth Fac Rev Venice Hosp Inc Proj 6% 12/1/2014 AAA 1,400 1,569,750
Total 24,300,993
- -----------------------------------------------------------------------------------------------------------------------==========
General Obligation- Florida St Brd Ed Cap Outlay Pub Ed Ser E 4 3/4% 6/1/2022 AA 750 717,187
State 1.49%
Puerto Rico Comwlth RIBS MBIA+ 7.88% 7/1/2008++ AAA 1,100 1,252,625
Total 1,969,812
- -----------------------------------------------------------------------------------------------------------------------==========
General Obligation-
Local 1.73% Dade Cnty FL Ser DD AMBAC+ 7.70% 10/1/2013 AAA 1,000 1,310,000
Manatee Cnty FL Rev MBIA+ 5% 4/1/2017 AAA 1,000 972,500
Total 2,282,500
- -----------------------------------------------------------------------------------------------------------------------==========
Education 2.75% Florida St Brd Regt Univ Sys Impt Rev MBIA+ 5 5/8% 7/1/2019 AAA 1,300 1,381,250
Florida St Brd Ed Cap Outlay Pub Ed Ser B MBIA+ 4 1/2% 6/1/2028 AAA 2,500 2,256,250
Total 3,637,500
- -----------------------------------------------------------------------------------------------------------------------==========
Finance 4.13% Puerto Rico Muni Fin Agy Ser A 6 1/2% 7/1/2019 A 4,915 5,467,938
- -----------------------------------------------------------------------------------------------------------------------==========
Health and Hospital Alachua Cnty FL Hlth Fac Auth Rev Shands Teaching Hosp Ser A
13.64% MBIA+ 5.80% 12/1/2026 AAA 3,500 3,780,000
Charlotte Cnty FL Hlth Care Fac Rev FSA+ 7.385% 8/26/2027 AAA 7,500 8,625,000
Lee Cnty FL Hosp Brd Directors Rev Lee Mem Sys
Ser A MBIA+ 5 3/4% 4/1/2022 AAA 3,300 3,559,875
Suwannee Cnty FL Hlth Care Fac ACA+ 5 1/4% 4/1/2024 A 500 487,500
Tampa FL Hosp Rev Cap Impt H Lee Moffitt Ser A 5 3/4% 7/1/2029 A 1,500 1,595,625
Total 18,048,000
- -----------------------------------------------------------------------------------------------------------------------==========
Housing 4.12% Broward Cnty FL Hsg Fin Auth Multi Fam Rev Bridgewtr Ser A
AMT+++ 5.35% 10/1/2023 A 1,000 1,000,000
Dade Cnty FL Hsg Fin Auth Sing Fam Mtg Rev Ser E
FNMA/GNMA+ 7% 3/1/2024 Aaa 40 41,800
Dade Cnty FL Hsg Fin Auth Sing Fam Mtg Rev
FNMA/GNMA+ AMT+++ 6.70% 4/1/2028 AAA 1,000 1,061,250
Miami-Dade Cnty FL Hsg Fin Auth Multi Fam Rev AMT+++
5.45% 10/1/2038 A 1,250 1,259,375
Orange Cnty FL Hsg Fin Auth Sing Fam Mtg Ser A
FNMA/GNMA+ AMT+++ 5.90% 9/1/2019 AAA 420 438,900
Orange Cnty FL Hsg Fin Auth Ser A1
FNMA/GNMA+ AMT+++ Zero Coupon 3/1/2028 Aaa 1,000 208,750
Palm Beach Cnty FL Hsg Fin Auth Sing Fam Mtg Rev Ser A
FNMA/GNMA+ AMT+++ 6.55% 4/1/2027 Aaa 870 923,288
Pinellas Cnty FL Hsg Fin Auth Sing Fam Hsg Rev
FNMA/GNMA+ AMT+++ Zero Coupon 3/1/2031 Aaa 3,000 525,000
Total 5,458,363
- -----------------------------------------------------------------------------------------------------------------------==========
Industrial Revenue Hillsborough Cnty FL Ind Dev Auth Poll Ctrl Rev Tampa
Bonds 4.29% Elec 8% 5/1/2022 AA 2,000 2,280,000
Puerto Rico Tel Auth Rev RIBS MBIA+ 6.91% 1/25/2007++ AAA 3,000 3,405,000
Total 5,685,000
- -----------------------------------------------------------------------------------------------------------------------==========
</TABLE>
3
<PAGE>
Statement of Net Assets
FLORIDA SERIES April 30, 1999
<TABLE>
<CAPTION>
Principal
S&P or Amount
Investments Moody's (000) Value
=================================================================================================================================
<S> <C> <C> <C> <C>
Miscellaneous 10.74% Brevard Cnty FL Sales Tax Rev MBIA+ 7% 12/1/2018 AAA $1,000 $ 1,092,500
Broward Cnty FL Prof Sports Fac Tax Rev Civic Arena
Ser A MBIA+ 5 3/4% 9/1/2021 AAA 2,000 2,125,000
Jacksonville FL Sales Tax Rev River City Renaissance Proj
FGIC+ 5 3/8% 10/1/2018 AAA 2,685 2,758,837
Miami-Dade Cnty FL Prof Sports Franchise Fac Tax
MBIA+ 4 3/4% 10/1/2030 AAA 5,400 5,042,250
Ocoee FL Cap Impt Rev FSA+ 4 3/4% 10/1/2028 AAA 790 742,600
Ocoee FL Rev MBIA+ 4 1/2% 10/1/2023 AAA 1,330 1,213,625
Orange Cnty FL Tourist Dev Tax Rev AMBAC+ 6% 10/1/2016 AAA 710 733,075
Tampa FL Sports Auth Rev Gtd Pkg Tampa Bay Arena
Proj MBIA+ 6% 10/1/2015 AAA 450 513,562
Total 14,221,449
- ---------------------------------------------------------------------------------------------------------------------============
Pollution Control Citrus Cnty FL Poll Ctrl Rev FL Pwr Corp
Revenue 4.72% MBIA+ 6 5/8% 1/1/2027 AAA 5,780 6,242,400
- ---------------------------------------------------------------------------------------------------------------------============
Power 6.43% Okeechobee FL Util Auth Sys Rev Acquisition &Impt
MBIA+ 5.60% 10/1/2025 AAA 825 910,594
Pembroke Pines FL Cap Impt Rev AMBAC+ 5 1/4% 12/1/2026 Aaa 1,000 1,015,000
Royal Palm Beach FL Util Sys Rev MBIA+ 4 1/2% 10/1/2022 Aaa 3,650 3,344,313
St Petersburg FL Pub Util Rev 5.60% 10/1/2015 AA 500 524,375
Tampa Bay Wtr FL Util Sys Rev Ser B FGIC+ 4 3/4% 10/1/2027 AAA 2,895 2,721,300
Total 8,515,582
- ---------------------------------------------------------------------------------------------------------------------============
Transportation 15.14% Dade Cnty FL Aviation Rev Ser A MBIA+ AMT+++ 5 3/4% 10/1/2018 AAA 1,825 1,943,625
Ocoee FL MBIA+ 4 1/2% 10/1/2028 AAA 3,805 3,434,013
Palm Beach Cnty FL Arpt Sys Rev MBIA+ 7 3/4% 10/1/2010 AAA 1,290 1,422,225
Puerto Rico Comwlth Hwy & Transn Auth Transn Rev Ser A
MBIA+ 4 3/4% 7/1/2038 AAA 5,000 4,768,750
Santa Rosa Bay Brdg Auth FL Rev Zero Coupon 7/1/2015 BBB 3,140 1,334,500
Santa Rosa Bay Brdg Auth FL Rev ACA+ Zero Coupon 7/1/2022 BBB 3,000 858,750
Santa Rosa Bay Brdg Auth FL Rev 6 1/4% 7/1/2028 BBB 1,000 1,090,000
Santa Rosa Bay Brdg Auth FL Rev ACA+ 6 1/4% 7/1/2028 A 4,700 5,193,500
Total 20,045,363
- ---------------------------------------------------------------------------------------------------------------------============
Water and Sewer 14.68% Broward Cnty FL Wtr & Swr Util Rev FGIC+ 6% 10/1/2020 AAA 2,500 2,618,750
Clearwater FL Wtr & Swr Rev FGIC+ Zero Coupon 12/1/2016 AAA 3,640 1,506,050
Cnty Wtr-Swr Dist Collier Cnty FL Wtr Rev Ser B
FGIC+ 5 1/8% 7/1/2016 AAA 335 340,444
Cocoa FL Wtr & Swr Rev FGIC+ 4 1/2% 10/1/2026 AAA 1,500 1,359,375
Indian River Cnty FL Wtr & Swr Rev FGIC+ 5 1/2% 9/1/2016 AAA 475 502,312
Orlando FL Util Cmnty Wtr & Elec Rev Ser A 5 1/4% 10/1/2023 Aa 4,625 4,677,031
Panama City FL Wtr & Swr Rev MBIA+ 5 5/8% 10/1/2016 AAA 1,000 1,062,500
Tampa Bay Wtr FL Util Sys Ser A FGIC+ 4 3/4% 10/1/2027 AAA 3,415 3,210,100
Tampa FL Solid Waste Sys Rev McKay Bay Ref To Energy Ser B
AMBAC+ AMT+++ 5% 10/1/2021 AAA 4,250 4,159,688
Total 19,436,250
- ---------------------------------------------------------------------------------------------------------------------============
Total Municipal Bonds 102.22% (Cost $130,131,863) 135,311,150
=================================================================================================================================
Cash and Receivables, Net of Liabilities (2.22)% (2,936,152)
=================================================================================================================================
Net Assets 100.00% $132,374,998
=================================================================================================================================
Class A Shares-Net asset value ($125,288,431 divided by 25,381,995 shares outstanding) $4.94
Maximum offering price (net asset value plus sales charge of 4.75% of the offering price) $5.19
Class C Shares-Net asset value ($7,086,567 divided by 1,434,505 shares outstanding) $4.94
</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, 1999.
+++ Income from these securities may be subject to the Alternative
Minimum Tax. (AMT)
See Notes to Financial Statements.
4
<PAGE>
Statement of Net Assets
PENNSYLVANIA SERIES April 30, 1999
<TABLE>
<CAPTION>
Principal
S&P or Amount
Investments Moody's (000) Value
=================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 25.43% Bethlehem PA Area Sch Dist MBIA+ 6% 3/1/2016 AAA $1,000 $ 1,110,000
Lycoming Cnty PA MBIA+ 5.80% 11/15/2022 AAA 3,050 3,389,313
Northeastern PA Hosp & Ed Auth Luzerne Cnty Cmty College
AMBAC+ 6 5/8% 8/15/2015 AAA 2,000 2,265,000
Pennsylvania Conv Ctr Auth Rev Ser A FGIC+ 6.70% 9/1/2016 AAA 855 1,033,481
Pennsylvania Intergovt Coop Auth Spl Tax Rev Funding Prog
FGIC+ 6 3/4% 6/15/2021 AAA 2,000 2,292,500
Pennsylvania St Higher Ed Fac Auth Ser A 6 5/8% 8/15/2009 AAA 500 553,125
Philadelphia Penn Gas Wks Rev Twelfth Ser B MBIA+ 7% 5/15/2020 AAA 2,220 2,677,875
Puerto Rico Comwlth 6.45% 7/1/2017 AAA 1,900 2,158,875
Puerto Rico Comwlth MBIA+ 6.45% 7/1/2017 AAA 700 795,375
Puerto Rico Comwlth 7.70% 7/1/2020 AAA 2,025 2,164,219
Puerto Rico Comwlth 6 1/2% 7/1/2023 AAA 1,000 1,138,750
Puerto Rico Elec Pwr Auth Pwr Rev Ser N 7 1/8% 7/1/2014 AAA 365 372,621
Puerto Rico Elec Pwr Auth Pwr Rev Ser T RIBS
FSA+ 9.315% 7/1/2018 AAA 1,500 1,891,875
Puerto Rico Elec Pwr Auth Pwr Rev Ser X 6 1/8% 7/1/2021 AAA 500 564,375
Puerto Rico Elec Pwr Auth Pwr Rev RIBS
FSA+ 8.428% 7/1/2023 AAA 3,000 3,495,000
Scranton-Lackawanna PA Hlth & Welfare Auth Rev Univ Scranton
AMBAC+ 6.80% 11/1/2014 AAA 500 561,250
Total 26,463,634
- ---------------------------------------------------------------------------------------------------------------------============
General Obligation- Puerto Rico Comwlth Ser A 6% 7/1/2014 A 1,000 1,070,000
State 1.03%
- ---------------------------------------------------------------------------------------------------------------------============
General Obligation- Burrell PA Sch Dist FGIC+ 5.65% 11/15/2016 AAA 1,500 1,638,750
Local 10.88%
Cambria Cnty PA FGIC+ 5 1/2% 8/15/2016 AAA 500 525,625
Council Rock PA Sch Dist FGIC+ 4 3/4% 11/15/2017 AAA 1,000 971,250
Interboro Sch Dist PA Delaware Cnty MBIA+ 5 3/8% 8/15/2025 AAA 1,000 1,017,500
Lancaster PA Ser A FGIC+ 4 1/2% 5/1/2028 AAA 2,000 1,802,500
Philadelphia PA Sch Dist Ser A MBIA+ 4 1/2% 4/1/2023 AAA 1,000 912,500
Philadelphia PA Sch Dist Ser A MBIA+ 4 3/4% 4/1/2027 AAA 1,550 1,457,000
Philadelphia PA Sch Dist Ser B 5 3/8% 4/1/2027 AAA 1,000 1,018,750
West Mifflin PA Area Sch Dist FGIC+ 4 7/8% 2/15/2023 AAA 1,000 963,750
Wilkes-Barre PA Area Sch Dist FGIC+ 5 1/4% 4/1/2016 AAA 1,000 1,018,750
Total 11,326,375
- ---------------------------------------------------------------------------------------------------------------------============
Education 8.98% Allegheny Cnty PA Higher Ed Bldg Auth Rev Robert Morris
ACA+ 6% 5/1/2028 A 1,000 1,128,750
Delaware Cnty PA Auth Univ Rev Villanova Univ
AMBAC+ 5.80% 8/1/2025 AAA 1,600 1,714,000
Lehigh Cnty PA Gen Purp Auth Rev St Francis De Sales Ser A
AMBAC+ 5% 12/15/2020 AAA 500 491,875
New Wilmington PA Muni Auth Rev Westminster College
ACA+ 5.35% 3/1/2028 A 1,000 1,001,250
Pennsylvania St Higher Ed Asst Agy Student Ln Rev
RIBS AMBAC+ AMT+++ 8.797% 3/1/2022 AAA 3,000 3,555,000
Pennsylvania St Higher Ed Fac Auth Rev Gwynedd Mercy College
Asset Gty+ 5.30% 11/1/2029 AA 1,110 1,096,125
Pennsylvania St Higher Ed Fac Auth Ser A MBIA+ 6 5/8% 8/15/2009 AAA 325 356,687
Total 9,343,687
- ---------------------------------------------------------------------------------------------------------------------============
Finance 1.35% Delaware VY PA Regl Fin Auth Loc Govt Rev Ser C
AMBAC+ 7 3/4% 7/1/2027 AAA 1,000 1,403,750
- ---------------------------------------------------------------------------------------------------------------------============
Health and Hospital Chester Cnty PA Hlth & Ed Fac Auth Hlth Sys
13.61% RIBS AMBAC+ 7.72% 5/15/2020 AAA 2,600 2,769,000
Delaware Cnty PA Auth Hosp Rev Crozer Chester
Med Ctr ACA+ 5 3/8% 12/1/2018 A 1,000 1,010,000
Delaware Cnty PA Auth Hosp Rev Crozer Chester Med Ctr
ACA+ 5.30% 12/1/2027 A 1,000 995,000
</TABLE>
5
<PAGE>
Statement of Net Assets
PENNSYLVANIA SERIES April 30, 1999
<TABLE>
<CAPTION>
Principal
S&P or Amount
Investments Moody's (000) Value
=================================================================================================================================
<S> <C> <C> <C> <C>
Montgomery Cnty PA Higher Ed & Hlth Auth Redeemer Hlth Ser A
AMBAC+ 5 1/4% 10/1/2017 AAA $1,000 $ 1,021,250
Northeastern PA Hosp & Ed Auth Sch Rev Wyo Seminary Proj
MBIA+ 4 3/4% 10/1/2028 AAA 1,500 1,408,125
Philadelphia PA Auth Ind Dev Rev Natl Board Med Examiners
MBIA+ 4.60% 5/1/2012 AAA 1,000 988,750
Pottsville PA Hosp Auth Hosp Rev
Hosp & Warne Clinic ACA+ 5 5/8% 7/1/2024 A 500 513,125
Puerto Rico Ind Tourist Ed Mutuo Oblig Grp
Ser A MBIA+ 6 1/4% 7/1/2024 AAA 850 941,375
Puerto Rico Pub Bldg Auth Ser J 6 1/2% 7/1/2003 A 770 841,225
Sayre PA Hlth Care Fac Auth Rev Tioga Nursing
Fac Ser A AMBAC+ 7 1/4% 10/1/2018 AAA 1,500 1,550,550
Scranton-Lackawanna PA Hlth & Welfare Auth Rev
Hosp M Taylor 6.20% 7/1/2017 BBB 1,055 1,077,419
West Shore PA Area Hosp Auth Holy Spirit Hosp Proj
MBIA+ 5.70% 1/1/2022 AAA 1,000 1,047,500
Total 14,163,319
- ---------------------------------------------------------------------------------------------------------------------============
Housing 6.36% Pennsylvania Hsg Fin Agy Sing Fam Mtg Ser 43
AMT+++ 7.40% 10/1/2014 AA 1,000 1,082,500
Pennsylvania Hsg Fin Agy Sing Fam Mtg Ser 41B
AMT+++ 6.65% 4/1/2025 AA 1,000 1,063,750
Pennsylvania Hsg Fin Agy Sing Fam Mtg Ser 42
AMT+++ 6.85% 4/1/2025 AA 2,000 2,140,000
Pennsylvania Hsg Fin Agy Sing Fam Mtg Ser 59A
AMT+++ 5.80% 10/1/2029 AA 2,250 2,334,375
Total 6,620,625
- ---------------------------------------------------------------------------------------------------------------------============
Industrial Revenue Allegheny Cnty PA Ind Dev Auth Rev
Bonds 8.24% Environmental Impt USX Proj 6.10% 7/15/2020 Baa 1,000 1,052,500
Beaver Cnty PA Ind Dev Auth Poll Ctrl Rev OH Edison
Ser A FGIC+ 7 3/4% 9/1/2024 AAA 1,950 2,014,994
Beaver Cnty PA Ind Dev Auth Exempt Fac Rev Ship Port Ser A
AMBAC+ AMT+++ 5 3/8% 6/1/2028 AAA 1,000 1,007,500
Bradford Cnty PA Ind Dev Auth Intl Paper Co Proj
Ser A AMT+++ 6.60% 3/1/2019 A 1,250 1,365,625
Bucks Cnty PA Ind Dev Auth USX Corp Proj 5.60% 3/1/2033 Baa 1,000 993,750
Philadelphia PA Auth Ind Dev Rev Ed Cmnty Foreign Med Grads
MBIA+ 5% 6/1/2015 AAA 500 503,750
Puerto Rico Ind Med & Envirml Poll Ctrl Motorola
Ser A 6 3/4% 1/1/2014* AA 1,500 1,642,500
Total 8,580,619
- ---------------------------------------------------------------------------------------------------------------------============
Miscellaneous 6.60% Delaware VY PA Regl Fin Auth Loc Govt Rev Ser A
AMBAC+ 5 1/2% 8/1/2028 AAA 5,500 5,891,875
Pennsylvania Intergovt Coop Auth Spl Tax Rev Funding Prog
FGIC+ 5% 6/15/2021 AAA 1,000 980,000
Total 6,871,875
- ---------------------------------------------------------------------------------------------------------------------============
Power 5.52% Pennsylvania Econ Dev Recov Northhampton Gen
Ser A AMT+++ 6.60% 1/1/2019 BBB 1,500 1,595,625
Puerto Rico Elec Pwr Auth Pwr Rev Ser X 6% 7/1/2015 BBB 1,000 1,082,500
Puerto Rico Elec Pwr Auth Pwr Rev Ser EE 4 3/4% 7/1/2024 BBB 1,500 1,417,500
York Cnty PA Ind Dev Auth Poll Ctrl Rev Elec & Gas
Ser A MBIA+ 6.45% 10/1/2019 AAA 1,475 1,648,312
Total 5,743,937
- ---------------------------------------------------------------------------------------------------------------------============
Transportation 7.70% Delaware River Port Auth PA & NJ Port Dist Proj
Ser B MBIA+ 4 3/4% 1/1/2017 AAA 800 782,000
Pennsylvania St Tpk Comm Oil Franchise Tax Rev Ser A
AMBAC+ 4 3/4% 12/1/2027 AAA 2,415 2,285,194
Pennsylvania St Tpk Comm Tpk Rev Ser N MBIA+ 5 1/2% 12/1/2017 AAA 1,000 1,023,750
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev
Ser V 6 5/8% 7/1/2012 A 2,615 2,843,813
Puerto Rico Port Auth Rev Ser D FGIC+ AMT+++ 7% 7/1/2014 AAA 1,000 1,080,000
Total 8,014,757
- ---------------------------------------------------------------------------------------------------------------------============
Water and Sewer 2.71% Erie PA Wtr Auth Wtr Rev FGIC+ 5% 12/1/2015 AAA 1,000 1,007,500
North Penn PA Wtr Auth FGIC+ 7% 11/1/2024 AAA 1,150 1,335,437
</TABLE>
6
<PAGE>
Statement of Net Assets
PENNSYLVANIA SERIES April 30, 1999
<TABLE>
<CAPTION>
Principal
S&P or Amount
Investments Moody's (000) Value
=================================================================================================================================
<S> <C> <C> <C> <C>
Varminster Twp PA Auth Swr & Wtr Rev AMBAC+ 4 3/4% 3/1/2023 AAA $ 500 $ 473,750
Total 2,816,687
-------------------------------------------------------------------------------------------============
Total Municipal Bonds 98.41% (Cost $97,177,228) 102,419,265
=================================================================================================================================
Cash and Receivables, Net of Liabilities 1.59% 1,650,897
=================================================================================================================================
Net Assets 100.00% $104,070,162
=================================================================================================================================
Net asset value ($104,070,162 / 19,881,225 shares outstanding) $5.23
Maximum offering price (net asset value plus sales charge of
4.75% of the offering price) $5.49
</TABLE>
* Restricted security under Rule 144A.
+ 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, 1999.
+++ Income from these securities may be subject to the Alternative
Minimum Tax. (AMT)
See Notes to Financial Statements.
Statement of Net Assets
MICHIGAN SERIES April 30, 1999
<TABLE>
<CAPTION>
Principal
S&P or Amount
Investments Moody's (000) Value
=================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 21.05% Huron Valley MI Sch Dist FGIC+ 5 3/4% 5/1/2022 AAA $ 250 $ 275,625
Kent Hosp MI Fin Auth Hlth Car Rev Butterworth Hlth Sys Ser A
MBIA+ 5 5/8% 1/15/2026 AAA 800 881,000
Lake Orion MI Cmnty Sch Dist AMBAC+ 7% 5/1/2020 AAA 1,050 1,223,250
Lincoln Pk MI Sch Dist FGIC+ 5.90% 5/1/2026 AAA 500 556,875
Michigan St Hosp Fin Auth Rev Sistr of Mercy
Hlth Corp Ser J 7 1/2% 2/15/2018 AA 1,650 1,792,313
Plymouth-Canton MI Cmnty Sch Dist Ser C 6 1/2% 5/1/2016 AAA 1,000 1,096,250
Puerto Rico Comwlth 6.45% 7/1/2017 AAA 1,500 1,704,375
Puerto Rico Elec Pwr Auth Pwr Rev Ser TRIBS
FSA+ 9.315% 7/1/2018 AAA 500 630,625
Puerto Rico Tel Auth Rev RIBS MBIA+ 7.475% 1/16/2015++ AAA 900 1,033,875
Riverview MI Cmnty Sch Dist FGIC+ 6.55% 5/1/2014 AAA 500 547,500
Romulus MI Cmnty Schs Ser II FGIC+ 6.40% 5/1/2017 AAA 500 547,500
Royal Oak MI Hosp Fin Auth WN Beaumont Hosp
Ser D 6 3/4% 1/1/2020 AA 500 535,000
South Redford MI Sch Dist FGIC+ 5 1/2% 5/1/2022 AAA 250 271,250
Tri Cnty MI Area Sch Dist MBIA+ 6 7/8% 5/1/2016 AAA 500 538,750
Total 11,634,188
- ---------------------------------------------------------------------------------------------------------------------============
General Obligation- Puerto Rico Comwlth Pub Impt 5 1/4% 7/1/2018 A 1,000 1,035,000
State 3.73%
Puerto Rico Comwlth 5 3/8% 7/1/2025 A 1,000 1,026,250
Total 2,061,250
- ---------------------------------------------------------------------------------------------------------------------============
General Obligation- Alpena MI Pub Schs MBIA+ 5 5/8% 5/1/2022 AAA 500 546,875
Local 24.29%
Big Rapids MI Pub Sch Dist FSA+ 4 3/4% 5/1/2025 AAA 1,500 1,413,750
Chippewa Valley MI Schs AMBAC+ 4 3/4% 5/1/2023 AAA 500 473,125
Coopersville Area MI Pub Sch MBIA+ 5% 5/1/2029 AAA 500 486,250
Decatur MI Pub Schs Van Burn Cass Cntys FSA+ 5% 5/1/2029 AAA 1,000 972,500
Ecorse MI Pub Sch Dist FGIC+ 5 1/2% 5/1/2027 AAA 2,000 2,080,000
Hastings MI Sch Dist FGIC+ 5 5/8% 5/1/2018 AAA 1,000 1,092,500
Holly MI Area Sch Dist FGIC+ 5% 5/1/2022 AAA 1,250 1,226,562
Lakeview MI Cmnty Schs FGIC+ 5.60% 5/1/2022 AAA 500 531,250
Muskegon Heights MI Pub Schs MBIA+ 4 3/4% 5/1/2016 AAA 530 517,413
</TABLE>
7
<PAGE>
Statement of Net Assets
MICHIGAN SERIES April 30, 1999
<TABLE>
<CAPTION>
Principal
S&P or Amount
Investments Moody's (000) Value
=================================================================================================================================
<S> <C> <C> <C> <C>
Muskegon Heights MI Pub Schs MBIA+ 5% 5/1/2029 AAA $1,000 $ 972,500
Saline MI Area Schs FGIC+ 5 1/2% 5/1/2015 AAA 750 785,625
South Lyon MI Cmnty Sch FGIC+ 4 3/4% 5/1/2023 AAA 1,500 1,419,375
South Redford MI Sch Dist FGIC+ 5 1/2% 5/1/2022 AAA 375 388,594
Wayne Cnty MI Bldg Auth Cap Impt Ser A MBIA+ 5 1/4% 6/1/2016 AAA 500 515,000
Total 13,421,319
- ---------------------------------------------------------------------------------------------------------------------============
Education 2.76% Central MI Univ Rev FGIC+ 5% 10/1/2023 AAA 1,000 973,750
Michigan Higher Ed Student Ln Auth Rev Student Ln XVII Ser A
AMBAC+ AMT+++ 5 3/4% 6/1/2013 AAA 250 258,750
Puerto Rico Indl Tourist Ed Med & American Univ
Ser A MBIA+ 5% 10/1/2022 AAA 40 39,600
Saginaw Valley St Univ MI Rev AMBAC+ 5.30% 7/1/2028 AAA 250 252,812
Total 1,524,912
- ---------------------------------------------------------------------------------------------------------------------============
Health and Hospital Kalamazoo MI Hosp Fin Auth Fac Rev RIBS
11.37% FGIC+ 7.013% 6/1/2011 AAA 4,000 4,315,000
Michigan St Hosp Fin Auth Rev Holland
Cmnty Hosp AMBAC+ 5 5/8% 1/1/2028 AAA 250 261,562
Puerto Rico Ind Tourist Ed Ryder Mem Hosp Proj
Ser A 6.70% 5/1/2024 BBB 1,575 1,704,938
Total 6,281,500
- ---------------------------------------------------------------------------------------------------------------------============
Housing 5.88% Michigan St Hsg Dev Auth Ser D 5.95% 12/1/2016 AA 500 525,000
Michigan St Hsg Dev Auth Ser B 6.95% 12/1/2020 AA 650 681,687
Michigan St Hsg Dev Auth Ser A AMBAC/FHA+ AMT+++ 6.05% 12/1/2027 AAA 1,000 1,051,250
Michigan St Hsg Dev Auth Ser E AMT+++ 6.20% 12/1/2027 AA 950 991,562
Total 3,249,499
- ---------------------------------------------------------------------------------------------------------------------============
Industrial Revenue Kalamazoo MI Hosp Fin Auth Fac Rev Bronson Methodist Hosp
Bonds 5.65% MBIA+ 5 1/4% 5/15/2018 Aaa 1,000 1,011,250
Michigan St Strategic Fd Ltd Oblig Rev Waste Mgmt Inc Proj
AMT+++ 6 5/8% 12/1/2012 BBB 1,000 1,077,500
Puerto Rico Ind Med & Envirml Poll Ctrl
Warner Lambert 7.60% 5/1/2014 A 1,000 1,033,130
Total 3,121,880
- ---------------------------------------------------------------------------------------------------------------------============
Miscellaneous 6.38% Michigan Muni Bd Auth Rev AMBAC+ 4.85% 11/1/2016 AAA 755 743,675
Michigan Muni Bd Auth Rev AMBAC+ 6 3/4% 11/1/2014 AAA 1,500 1,734,375
Michigan Muni Bd Auth Rev Ser B 5 5/8% 10/1/2019 AA 1,000 1,048,750
Total 3,526,800
- ---------------------------------------------------------------------------------------------------------------------============
Power 6.05% Michigan St Strategic Fd Disp Rev Genesee Pwr Station
AMT+++ 7 1/2% 1/1/2021 BBB* 500 538,125
Michigan St Strategic Fd Ltd Oblig Rev Detroit Ed
Ser BB MBIA+ 7% 7/15/2008 AAA 500 599,375
Michigan St Strategic Fd Ltd Oblig Rev Detroit Ed
Ser BB AMBAC+ 7% 5/1/2021 AAA 500 625,625
Puerto Rico Elec Pwr Auth Pwr Rev Ser Z MBIA+ 5 1/2% 7/1/2016 AAA 1,500 1,576,875
Total 3,340,000
- ---------------------------------------------------------------------------------------------------------------------============
Transportation 12.74% Kent Cnty MI Arpt Fac Rev Kent Cnty Intl Arpt 5% 1/1/2020 AAA 1,155 1,139,119
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev
Ser V 6 5/8% 7/1/2012 A 1,500 1,631,250
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev
RIBS 6.84% 7/1/2026++ AAA 1,500 1,734,375
Puerto Rico Comwlth Hwy & Transn Auth Transn Rev 5% 7/1/2028 A 1,500 1,458,750
Wayne Charter Cnty MI Arpt Rev Detroit Met Arpt Ser B
MBIA+ AMT+++ 6 3/4% 12/1/2021 AAA 1,000 1,077,500
Total 7,040,994
-------------------------------------------------------------------------------------------============
Total Municipal Bonds 99.90% (Cost $53,013,894) 55,202,342
=================================================================================================================================
</TABLE>
8
<PAGE>
Statement of Net Assets
MICHIGAN SERIES April 30, 1999
<TABLE>
<CAPTION>
Principal
S&P or Amount
Investments Moody's (000) Value
=================================================================================================================================
<S> <C> <C> <C> <C>
Other Assets, Less
Liabilities .10%
=================================================================================================================================
Cash $ 2,161,781
=================================================================================================================================
Receivable for: Securities sold 3,215,420
Interest 1,090,721
Capital stock sold 123,237
Total Other Assets 6,591,159
- ---------------------------------------------------------------------------------------------------------------------------------
Payable for: Securities purchased 6,288,913
Distributions 157,317
Capital stock reacquired 27,558
Other 62,129
Total Liabilities 6,535,917
-------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 55,242
=================================================================================================================================
Net Assets 100.00% $55,257,584
=================================================================================================================================
Net asset value ($55,257,584 / 10,728,537 shares outstanding) $5.15
Maximum offering price (net asset value plus sales charge of
4.75% of the offering price) $5.41
</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, 1999.
+++ Income from these securities may be subject to the Alternative
Minimum Tax. (AMT)
See Notes to Financial Statements.
Statement of Net Assets
GEORGIA SERIES April 30, 1999
<TABLE>
<CAPTION>
Principal
S&P or Amount
Investments Moody's (000) Value
=================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 22.98% Albany GA Swr Sys Rev MBIA+ 6 5/8% 7/1/2017 AAA $ 100 $ 110,500
Atlanta GA Ser A 6 1/8% 12/1/2023 AAA 2,000 2,245,000
Burke Cnty GA Dev Auth Poll Ctrl Rev GA Pwr Co 1st Ser
MBIA+ 6.60% 7/1/2024 AAA 50 51,184
Chatham Cnty GA Sch Dist MBIA+ 6 3/4% 8/1/2020 AAA 1,035 1,173,431
Metropolitan Atlanta GA Rapid Tran Auth Sales Tax Rev
Ser O 6.55% 7/1/2020 AAA 1,000 1,078,750
Puerto Rico Elec Pwr Auth Pwr Rev Ser TRIBS FSA+ 9.315% 7/1/2018 AAA 1,000 1,261,250
Savannah GA Economic Dev Aut Zero Coupon 12/1/2021 AAA 1,000 281,250
Total 6,201,365
- ---------------------------------------------------------------------------------------------------------------------============
General Obligation- Georgia St Ser C 6 1/4% 8/1/2013 AAA 350 409,500
State 2.55%
Puerto Rico Comwlth RIBS FSA+ 7.982% 7/1/2020++ AAA 250 278,750
Total 688,250
- ---------------------------------------------------------------------------------------------------------------------============
General Obligation- Columbia Cnty GA Courthouse/Detention Ctr Proj 5 5/8% 2/1/2020 A 750 795,938
Local 9.95%
De Kalb Cnty GA 6% 1/1/2020 AA 250 267,188
Fayette Cnty GA Sch Dist 6 1/8% 3/1/2015 Aa 500 550,000
Fulton Cnty GA Sch Dist 5 1/2% 1/1/2021 AA 1,000 1,071,250
Total 2,684,376
- ---------------------------------------------------------------------------------------------------------------------============
Health and Hospital Cobb Cnty GA Kennestone Hosp Auth Rev Ctfs Ser 86A
2.64% MBIA+ Zero Coupon 8/1/2015 AAA 395 163,431
Glynn-Brunswick GA Mem Hosp Auth Rev Southeast GA Hlth
MBIA+ 6% 8/1/2016 AAA 500 548,750
Total 712,181
- ---------------------------------------------------------------------------------------------------------------------============
</TABLE>
9
<PAGE>
Statement of Net Assets
GEORGIA SERIES April 30, 1999
<TABLE>
<CAPTION>
Principal
S&P or Amount
Investments Moody's (000) Value
=================================================================================================================================
<S> <C> <C> <C> <C>
Housing 3.69% De Kalb Cnty GA Hsg Auth Multi Fam Rev Lakes At Indian Creek
FSA+ AMT+++ 7.15% 1/1/2025 AAA $ 500 $ 561,250
Georgia St Hsg & Fin Auth Rev Sing Fam Mtg Sub Ser A2
FHA+ AMT+++ 6.40% 12/1/2015 AAA 200 212,000
Georgia St Hsg & Fin Auth Rev Sing Fam Mtg Ser A Sub A2
FHA+ AMT+++ 6.45% 12/1/2027 AAA 210 223,125
Total 996,375
- ---------------------------------------------------------------------------------------------------------------------============
Industrial Revenue Albany Dougherty GA Payroll Dev Auth Procter & Gamble
Bonds 7.39% AMT+++ 5.20% 5/15/2028 AA 2,000 1,995,000
- ---------------------------------------------------------------------------------------------------------------------============
Miscellaneous 10.53% Cartersville GA Dev Auth Rev Swr Fac Anheuser Busch
AMT+++ 6 1/8% 5/1/2027 A 1,000 1,087,500
Cobb-Marietta GA Coliseum & Exhibit Hall Auth Rev
MBIA+ 5 5/8% 10/1/2026 AAA 1,600 1,754,000
Total 2,841,500
- ---------------------------------------------------------------------------------------------------------------------============
Pollution Control Burke Cnty GA Dev Auth Poll Ctrl Rev GA Pwr Co 2nd Ser
Revenue 7.35% AMBAC+ 5 1/4% 5/1/2034 AAA 1,000 990,000
Burke Cnty GA Dev Auth Poll Ctrl Rev GA Pwr Co 3rd Ser
AMT+++ 5.45% 5/1/2034 A 1,000 992,500
Total 1,982,500
- ---------------------------------------------------------------------------------------------------------------------============
Solid Waste .41% Cobb Cnty GA Solid Waste Mgmt Auth Rev AMT+++ 6.40% 1/1/2015 AAA 100 110,875
- ---------------------------------------------------------------------------------------------------------------------============
Transportation 23.32% Atlanta GA Arpt Facs Rev Cap Apprec Bds MBIA+
AMT+++ Zero Coupon 1/1/2010 AAA 1,500 866,985
Metropolitan Atlanta GA Rapid Tran Auth Sales Tax Rev Ser P
AMBAC+ 6 1/4% 7/1/2020 AAA 1,625 1,880,938
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev
Ser Y 5 1/2% 7/1/2036 A 2,000 2,117,500
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev
Ser A 4 3/4% 7/1/2038 A 500 474,375
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev
Ser A MBIA+ 4 3/4% 7/1/2038 AAA 1,000 953,750
Total 6,293,548
- ---------------------------------------------------------------------------------------------------------------------============
Water and Sewer 6.06% Carroll Cnty GA Wtr Auth Wtr & Swr Rev AMBAC+ 4 3/4% 7/1/2022 Aaa 500 473,750
Douglasville-Douglas Cnty GA Wtr & Swr Auth Rev
FGIC+ 4 1/2% 6/1/2023 AAA 500 458,750
Fulton Cnty GA Wtr & Swr Rev FGIC+ 4 3/4% 1/1/2028 AAA 750 704,062
Total 1,636,562
-------------------------------------------------------------------------------------------============
Total Municipal Bonds 96.87% (Cost $25,461,135) 26,142,532
=================================================================================================================================
Other Assets, Less Liabilities 3.13%
=================================================================================================================================
Cash $ 2,097,847
=================================================================================================================================
Receivable for: Securities sold 508,146
Interest 384,405
Capital stock sold 72,805
Total Other Assets 3,063,203
- ---------------------------------------------------------------------------------------------------------------------------------
Payable for: Securities purchased 1,993,076
Capital stock reacquired 125,953
Distributions 85,219
Other 12,985
Total Liabilities 2,217,233
-------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 845,970
=================================================================================================================================
Net Assets 100.00% $26,988,502
=================================================================================================================================
Net asset value ($26,988,502 / 5,039,625 shares outstanding) $5.36
Maximum offering price (net asset value plus sales charge of
4.75% of the offering price) $5.63
</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, 1999.
+++ Income from these securities may be subject to the Alternative
Minimum Tax. (AMT)
See Notes to Financial Statements.
10
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
Six Months Ended April 30, 1999
-----------------------------------------------------------------
Florida Pennsylvania Michigan Georgia
Investment Income Series Series Series Series
===================================================================================================================================
<S> <C> <C> <C> <C>
Income Interest $ 3,989,553 $ 2,918,421 $1,616,648 $ 603,177
-------------------------------------------------------------------------------------------------------------------------
Expenses Management fee 345,022 254,302 132,579 61,055
Management fee waived -- -- -- (61,055)
12b-1 distribution plan-Class A 181,012 127,495 -- --
12b-1 distribution plan-Class C 34,306 -- -- --
Shareholder servicing 45,290 35,066 26,072 9,406
Reports to shareholders 10,786 7,988 4,308 1,469
Professional 21,084 14,649 10,287 5,706
Registration 1,481 1,186 741 593
Directors' fees 2,220 1,448 845 216
Organization -- -- -- 193
Other 15,238 8,445 6,929 5,531
Total expenses 656,439 450,579 181,761 23,114
-------------------------------------------------------------------------------------------------------------------------
Net investment income 3,333,114 2,467,842 1,434,887 580,063
-------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
===================================================================================================================================
Net realized gain from investment transactions 1,072,655 84,917 176,721 49,073
- -----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments (2,521,005) (867,462) (626,129) (236,174)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments (1,448,350) (782,545) (449,408) (187,101)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 1,884,764 $1,685,297 $985,479 $392,962
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended April 30, 1999
---------------------------------------------------------------
Increase (Decrease) Florida Pennsylvania Michigan Georgia
in Net Assets Series Series Series Series
=====================================================================================================
<S> <C> <C> <C> <C>
Operations
Net investment income $ 3,333,114 $ 2,467,842 $ 1,434,887 $ 580,063
Net realized gain from
investment transactions 1,072,655 84,917 176,721 49,073
Net change in unrealized
appreciation of investments (2,521,005) (867,462) (626,129) (236,174)
Net increase in net assets
resulting from operations 1,884,764 1,685,297 985,479 392,962
- -----------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income (3,138,560) (2,566,165) (1,292,836) (589,902)
Net realized gain from
investment transactions -- -- -- (156,238)
Total distributions (3,138,560) (2,566,165) (1,292,836) (746,140)
- -----------------------------------------------------------------------------------------------------
Capital Share transactions
Net proceeds from sales of shares 8,618,163 6,031,964 4,682,921 9,173,478
Net asset value of shares issued to
shareholders in reinvestment of
dividends and distributions 1,409,467 1,150,169 782,353 595,420
Total 10,027,630 7,182,133 5,465,274 9,768,898
- -----------------------------------------------------------------------------------------------------
Cost of shares reacquired (10,965,567) (5,137,667) (3,038,858) (2,191,676)
- -----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
derived from share transactions (937,937) 2,044,466 2,426,416 7,577,222
- -----------------------------------------------------------------------------------------------------
Increase (decrease)
in net assets (2,191,733) 1,163,598 2,119,059 7,224,044
- -----------------------------------------------------------------------------------------------------
Net Assets
Beginning of period 134,566,731 102,906,564 53,138,525 19,764,458
End of period+ $ 132,374,998 $ 104,070,162 $ 55,257,584 $ 26,988,502
=====================================================================================================
<CAPTION>
Year Ended October 31, 1998
---------------------------------------------------------------
Increase (Decrease) Florida Pennsylvania Michigan Georgia
in Net Assets Series Series Series Series
====================================================================================================
<S> <C> <C> <C> <C>
Operations
Net investment income $ 6,590,565 $ 5,009,861 $ 2,657,453 $ 854,695
Net realized gain from
investment transactions 2,832,040 376,860 47,231 169,461
Net change in unrealized
appreciation of investments 342,625 2,421,388 1,185,432 401,895
Net increase in net assets
resulting from operations 9,765,230 7,808,109 3,890,116 1,426,051
- ----------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income (6,640,787) (5,096,457) (2,665,343) (838,393)
Net realized gain from
investment transactions -- -- -- (204,622)
Total distributions (6,640,787) (5,096,457) (2,665,343) (1,043,015)
- ----------------------------------------------------------------------------------------------------
Capital Share transactions
Net proceeds from sales of shares 8,004,729 18,457,191 5,381,047 6,912,841
Net asset value of shares issued to
shareholders in reinvestment of
dividends and distributions 2,709,366 2,310,650 1,455,413 666,699
Total 10,714,095 20,767,841 6,836,460 7,579,540
- ----------------------------------------------------------------------------------------------------
Cost of shares reacquired (24,019,865) (14,810,076) (7,552,518) (2,095,385)
- ----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
derived from share transactions (13,305,770) 5,957,765 (716,058) 5,484,155
- ----------------------------------------------------------------------------------------------------
Increase (decrease)
in net assets (10,181,327) 8,669,417 508,715 5,867,191
- ----------------------------------------------------------------------------------------------------
Net Assets
Beginning of period 144,748,058 94,237,147 52,629,810 13,897,267
End of period+ $ 134,566,731 $ 102,906,564 $ 53,138,525 $ 19,764,458
====================================================================================================
</TABLE>
+ Includes undistributed (overdistributed) net investment income of
$(259,693), $(227,926), $137,601 and $(30,529), respectively, as of April
30, 1999 and (overdistributed) net investment income of $(454,247),
$(129,603), $(4,450) and $(20,690), respectively, as of October 31, 1998.
See Notes to Financial Statements.
12
<PAGE>
Financial Highlights
FLORIDA SERIES
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------------------------------
Six
Months
Ended
April 30, Year Ended October 31,
Per Share Operating Performance: 1999 1998 1997 1996 1995 1994
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.98 $ 4.87 $ 4.79 $ 4.85 $ 4.49 $ 5.28
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .12(d) .235 .240 .248 .271 .291
Net realized and unrealized gain (loss)
on investments (.04) .113 .092 (.056) .352 (.695)
Total from investment operations .08 .348 .332 .192 .623 (.404)
-------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.12) (.238) (.252) (.252) (.263) (.2835)
Distributions from net realized gain -- -- -- -- -- (.1025)
Total distributions (.12) (.238) (.252) (.252) (.263) (.3860)
-------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.94 $ 4.98 $ 4.87 $ 4.79 $ 4.85 $ 4.49
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 1.55%(c) 7.30% 7.12% 4.09% 14.22% (8.03)%
==================================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver .47%(c) .89% .86% .80% .74% .32%
Expenses, excluding waiver .47%(c) .89% .86% .82% .88% .82%
Net investment income 2.47%(c) 4.79% 5.03% 5.19% 5.81% 5.98%
=========================================================================================================================
<CAPTION>
Class C Shares
---------------------------------------------------------
Six
Months
Ended Year Ended
April 30, October 31, 7/15/96(b)
Per Share Operating Performance: 1999 1998 1997 to 10/31/96
================================================= =========================================================
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.98 $ 4.87 $ 4.79 $ 4.70
- ------------------------------------------------- ---------------------------------------------------------
Income (loss) from investment operations
Net investment income .11(d) .200 .202 .064
Net realized and unrealized gain (loss)
on investments (.05) .112 .093 .093
Total from investment operations .06 .312 .295 .157
---------------------------------------- ---------------------------------------------------------
Distributions
Dividends from net investment income (.10) (.202) (.215) (.067)
Distributions from net realized gain -- -- -- --
Total distributions (.10) (.202) (.215) (.067)
---------------------------------------- ---------------------------------------------------------
Net asset value, end of period $ 4.94 $ 4.98 $ 4.87 $ 4.79
- ------------------------------------------------- ---------------------------------------------------------
Total Return(a) 1.18%(c) 6.52%(c) 6.33% 3.35%(c)
================================================= =========================================================
Ratios to Average Net Assets:
Expenses, including waiver .79%(c) 1.58% 1.57% .44%(c)
Expenses, excluding waiver .79%(c) 1.58% 1.57% .44%(c)
Net investment income 2.14%(c) 4.09% 4.29% 1.37%(c)
======================================== =========================================================
</TABLE>
<TABLE>
<CAPTION>
Six Months
Ended
April 30, Year Ended October 31,
Supplemental Data for All Classes: 1999 1998 1997 1996 1995 1994
============================================================================================= ===================================
<S> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $132,375 $134,567 $144,748 $162,070 $173,242 $174,844
Portfolio turnover rate 95.60% 140.61% 106.32% 167.95% 142.04% 122.36%
==================================================================================== ===================================
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Commencement of offering class shares.
(c) Not annualized.
(d) Calculated using average shares outstanding during the period.
See Notes to Financial Statements.
Financial Highlights
PENNSYLVANIA SERIES
<TABLE>
<CAPTION>
Six Months Ended
Per Share Operating Performance: April 30, 1999 1998 1997
==========================================================================================================================
<S> <C> <C> <C>
Net asset value, beginning of period $ 5.28 $ 5.14 $ 5.01
- --------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .13(b) .264 .276
Net realized and unrealized gain (loss) on investments (.05) .144 .131
Total from investment operations .08 .408 .407
-----------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.13) (.268) (.277)
Distribution from net realized gain -- -- --
Total distributions (.13) (.268) (.277)
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.23 $ 5.28 $ 5.14
- --------------------------------------------------------------------------------------------------------------------------
Total Return(a) 1.55%(c) 8.12%(b) 8.37%
==========================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (000) $ 104,070 $ 102,907 $ 94,237
-----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .44%(c) .72% .61%(c)
Expenses, excluding waiver .44%(c) .72% .65%(c)
Net investment income 2.40%(c) 5.05% 5.47%(c)
Portfolio turnover rate 18.99% 65.20% 70.99%
=================================================================================================================
<CAPTION>
Year Ended October 31,
Per Share Operating Performance: 1996 1995 1994
==============================================================================================================
<S> <C> <C> <C>
Net asset value, beginning of period $ 5.01 $ 4.62 $ 5.33
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .2772 .282 .300
Net realized and unrealized gain (loss) on investments (.0011) .395 (.6975)
Total from investment operations .2761 .677 (.3975)
-----------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.2761) (.2870) (.2925)
Distribution from net realized gain -- -- (.02)
Total distributions (.2761) (.2870) (.3125)
-----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.01 $ 5.01 $ 4.62
- --------------------------------------------------------------------------------------------------------------
Total Return(a) 5.68% 15.02% (7.73)%
==============================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (000) $ 92,605 $ 93,494 $ 81,258
-----------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .62% .50% .33%
Expenses, excluding waiver .69% .65% .68%
Net investment income 5.55% 5.83% 5.98%
Portfolio turnover rate 78.30% 126.11% 137.22%
=====================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Calculated using average shares outstanding during the period.
(c) Not annualized.
See Notes to Financial Statements.
13
<PAGE>
Financial Highlights
MICHIGAN SERIES
<TABLE>
<CAPTION>
Six Month
Ended
April 30,
Per Share Operating Performance: 1999 1998 1997 1996
===================================================================================================================================
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 5.18 $ 5.06 $ 4.93 $ 4.93
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .14(b) .255 .267 .274
Net realized and unrealized gain (loss) on investments (.04) .121 .128 (.010)
Total from investment operations .10 .376 .395 .264
------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.13) (.256) (.265) (.264)
Distribution from net realized gain -- -- -- --
Total distributions (.13) (.256) (.265) (.264)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.15 $ 5.18 $ 5.06 $ 4.93
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 1.86%(c) 7.59%(c) 8.24% 5.53%
===================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (000) $ 55,258 $ 53,139 $ 52,630 $ 52,975
------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .34%(c) .69% .60%(c) .44%
Expenses, excluding waiver .34%(c) .69% .68%(c) .73%
Net investment income 2.66%(c) 4.98% 5.37%(c) 5.59%
Portfolio turnover rate 76.99% 82.33% 68.50% 85.26%
==============================================================================================================================
<CAPTION>
Year Ended October 31,
Per Share Operating Performance: 1995 1994
==========================================================================================
<S> <C> <C>
Net asset value, beginning of period $ 4.53 $ 5.23
- ------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .284 .286
Net realized and unrealized gain (loss) on investments .395 (.651)
Total from investment operations .679 (.365)
-------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.279) (.293)
Distribution from net realized gain -- (.042)
Total distributions (.279) (.335)
- ------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.93 $ 4.53
- ------------------------------------------------------------------------------------------
Total Return(a) 15.39% (7.29)%
==========================================================================================
Ratios/Supplemental Data:
Net assets, end of period (000) $ 54,186 $ 45,603
-------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .25% .34%
Expenses, excluding waiver .75% .84%
Net investment income 5.95% 5.69%
Portfolio turnover rate 98.89% 137.31%
=====================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Calculated using average shares outstanding during the period.
(c) Not annualized.
See Notes to Financial Statements.
Financial Highlights
GEORGIA SERIES
<TABLE>
<CAPTION>
Six Months
Ended
April 30, Year Ended October 31, 12/27/94(b)
Per Share Operating Performance: 1999 1998 1997 1996 to 10/31/95
==============================================================================================================================
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 5.43 $ 5.31 $ 5.14 $ 5.12 $ 4.76
- ------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .13(d) .276 .275 .290 .245
Net realized and unrealized gain (loss) on investments (.03) .187 .187 .0397 .370
Total from investment operations .10 .463 .462 .3297 .615
-------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.13) (.268) (.282) (.2872) (.255)
Distributions from net realized gain (.04) (.075) (.01) (.0225) --
Total distributions (.17) (.343) (.292) (.3097) (.255)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.36 $ 5.43 $ 5.31 $ 5.14 $ 5.12
- ------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 1.88%(c) 9.00%(c) 9.27% 6.69% 13.15%(c)
==============================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (000) $ 26,989 $ 19,764 $ 13,897 $ 10,688 $ 5,203
-------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .10%(c) .24%(c) .38% .03% .00%(c)
Expenses, excluding waiver .35%(c) .74% .88% .83% 1.08%(c)
Net investment income 2.38%(c) 5.07% 5.23% 5.55% 5.44%(c)
Portfolio turnover rate 61.48% 126.52% 90.40% 72.53% 142.69%
=========================================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Commencement of operations.
(c) Not annualized.
(d) Calculated using average shares outstanding during the period.
See Notes to Financial Statements.
14
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Lord Abbett Tax-Free Income Trust (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on September
11, 1991. The Trust consists of four separate portfolios ("Series"). Each Series
is non-diversified as defined under the Investment Company Act of 1940. The
financial statements have been prepared in conformity with generally accepted
accounting principles which require management to make certain estimates and
assumptions at the date of the financial statements. The following summarizes
the significant accounting policies of the Trust:
(a) Security valuation is determined as follows: Portfolio securities are valued
at latest prices on the basis of valuations furnished by an independent pricing
service or, in their absence, at fair value as determined under procedures
approved by the Board of Trustees. (b) It is the policy of the Trust 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 taxes. (c)
Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Realized gains and losses from investment
transactions are calculated on the identified cost basis. Interest income is
recorded on the accrual basis. Net investment income (other than distribution
and service fees) and realized and unrealized gains or losses are allocated to
each class of shares based upon the relative proportion of net assets at the
beginning of the day. (d) Dividends from net investment income are declared
daily and paid monthly. Taxable net realized gains from investment transactions,
if any, reduced by capital loss carryforwards are distributed annually. (e)
Organization expenses are amortized evenly over a period of five years.
2. Management Fee and Other Transactions with Affiliates
The Trust has a management agreement with Lord, Abbett & Co. ("Lord Abbett")
pursuant to which Lord Abbett provides the Trust 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
Trust's investment portfolios. The management fee is based on average daily net
assets for each month at the annual rate of 0.50%. Lord Abbett may waive its
management fees and reimburse the Trust for certain of its other expenses. Any
such other expenses reimbursed 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 operations or the termination of the management
agreement, whichever is earlier. As of April 30, 1999, other expenses reimbursed
by Lord Abbett and not repaid by the Georgia Series amounted to $40,765.
Each Series of the Trust has Rule 12b-1 plans and agreements with respect to one
or more classes of shares as described below (the "Class A and Class C Plans")
with Lord Abbett Distributor LLC ("Distributor"), an affiliate of Lord Abbett.
Each Series makes payments to Distributor, which uses or passes on such payments
to authorized institutions. Pursuant to the Class A Plan, the Series pays
Distributor (1) an annual service fee of 0.15% of the average daily net asset
value of shares sold prior to June 1, 1990 and 0.25% of the average daily net
asset value of shares sold on or after that date, (2) a one-time distribution
fee of up to 1% on certain qualifying purchases and (3) an annual distribution
fee of 0.10% of the average daily net asset value of the Class A shares. The
Class A Plan of the Michigan and Georgia Series will not become operative until
the first day of the calendar quarter subsequent to the Series' net assets
reaching $100 million. Pursuant to the Class C Plan of the Florida Series, the
Series pays Distributor (1) a service fee and a distribution fee, at the time
such shares are sold, not to exceed 0.25% and 0.75%, respectively, of the net
asset value of such shares sold and (2) at each quarter-end after the first
anniversary of the sale of such shares, a service fee and a distribution fee at
an annual rate not to exceed 0.25% and 0.75%, respectively, of the average
annual net asset value of such shares outstanding.
Distributor received the following commissions on sales of shares of the Trust
after concessions were paid to authorized distributors:
Distributor Dealers'
Series Commissions Concessions
- --------------------------------------------------------------------------------
Florida-Class A $14,826 $103,321
- --------------------------------------------------------------------------------
Pennsylvania 22,305 157,408
- --------------------------------------------------------------------------------
Michigan 14,742 108,965
- --------------------------------------------------------------------------------
Georgia 25,213 185,886
- --------------------------------------------------------------------------------
Certain of the Trust's officers and trustees have an interest in Lord Abbett.
3. Distributions
As of April 30, 1999, accumulated net realized gain (loss) for financial
reporting purposes, which is substantially the same as for federal income tax
purposes, aggregated $(6,250,988) for the Florida Series, $(370,681) for the
Pennsylvania Series, $(1,012,968) for the Michigan Series and $32,589 for the
Georgia Series. The capital loss carry forwards expire in 2002, 2003 and 2004.
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.
Dividends declared by class for the Florida Series were as follows:
Six Months Ended 4/30/99 Year Ended 10/31/98
------------------------ ---------------------
Class A $2,994,193 $6,344,675
- -------------------------------------------------------- ---------------------
Class C $ 144,367 $ 296,112
- -------------------------------------------------------------------------------
4. Capital
Transactions in shares of beneficial interest for the Florida Series (both
shares and dollar amount) were as follows:
Six Months Ended 4/30/99 Year Ended 10/31/98
------------------------------------------------------
Class A Shares Amount Shares Amount
- ------------------------------------------------- -------------------------
Sales of shares 1,595,833 $ 7,956,445 1,389,830 $ 6,880,942
Shares issued to
shareholders in
reinvestment of
dividends 270,213 1,342,365 526,740 2,597,397
Total 1,866,046 9,298,810 1,916,570 9,478,339
- ------------------------------------------------- -------------------------
Shares reacquired (2,034,916) (10,114,005) (4,542,387) (22,396,582)
Decrease (168,870) $ (815,195) (2,625,817) $(12,918,243)
- ------------------------------------------------- -------------------------
Six Months Ended 4/30/99 Year Ended 10/31/98
------------------------------------------------------
Class C Shares Amount Shares Amount
- ------------------------------------------------- -------------------------
Sales of shares 132,894 $ 661,718 227,206 $ 1,123,787
Shares issued to
shareholders in
reinvestment of
dividends 13,493 67,102 23,490 111,969
Total 146,387 728,820 250,696 1,235,756
- ------------------------------------------------- -------------------------
Shares reacquired (171,407) (851,562) (329,582) (1,623,283)
Decrease (25,020) $(122,742) (78,886) $ (387,527)
- ------------------------------------------------- -------------------------
15
<PAGE>
Notes to Financial Statements
Transactions in shares of beneficial interest for the single class Series were
as follows:
<TABLE>
<CAPTION>
Six Months Ended 4/30/99 Year Ended 10/31/98
--------------------------------------------------------------------------------------
Pennsylvania Michigan Georgia Pennsylvania Michigan Georgia
Series Series Series Series Series Series
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 1,146,733 907,245 1,698,217 3,532,337 1,049,221 1,288,523
Shares issued to shareholders in
reinvestment of dividends and distributions 219,035 151,582 110,091 443,670 283,947 124,402
Total 1,365,768 1,058,827 1,808,308 3,976,007 1,333,168 1,412,925
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (977,477) (587,873) (406,633) (2,833,326) (1,470,712) (390,439)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in shares 388,291 470,954 1,401,675) 1,142,681 (137,544) 1,022,486)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
As of April 30, 1999, paid in capital for each Series was as follows:
$133,706,392 for the Florida Series, $99,426,732 for the Pennsylvania Series,
$53,944,503 for the Michigan Series and $26,305,045 for the Georgia Series.
5. Purchases and Sales of Securities
Purchases and sales of investment securities (other than short-term investments)
were as follows:
Series Purchases Sales
- --------------------------------------------------------------------------------
Florida $136,199,436 $129,196,593
- --------------------------------------------------------------------------------
Pennsylvania 20,982,806 19,428,326
- --------------------------------------------------------------------------------
Michigan 44,119,127 42,432,784
- --------------------------------------------------------------------------------
Georgia 21,795,295 14,546,753
- --------------------------------------------------------------------------------
As of April 30, 1999, net unrealized appreciation, unrealized appreciation and
unrealized depreciation of investments based on cost for federal income tax
purposes were as follows:
Net Unrealized Unrealized Unrealized
Series Appreciation Appreciation (Depreciation)
- -------------------------------------------------------------------------------
Florida $5,179,287 $5,957,530 $(778,243)
- -------------------------------------------------------------------------------
Pennsylvania 5,242,037 5,574,982 (332,945)
- -------------------------------------------------------------------------------
Michigan 2,188,448 2,478,323 (289,875)
- -------------------------------------------------------------------------------
Georgia 681,397 759,052 (77,655)
- -------------------------------------------------------------------------------
The cost of investments for federal income tax purposes is substantially the
same as that used for financial reporting purposes.
6. Trustees' Remuneration
The Trustees of the Trust associated with Lord Abbett and all officers of the
Trust receive no compensation from the Trust for acting as such. Outside
Trustees' fees and retirement costs are allocated among all funds in the Lord
Abbett group based on the net assets of each fund. Trustee fees payable at April
30, 1999 were $33,532.
Copyright (C) 1999 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 the
Trust's investment objective and policies, sales charges and other matters.
Please read the prospectus carefully before you invest. There is no guarantee
that the forecasts contained within this publication will come to pass.
All rights reserved. Printed in the U.S.A.
16
<PAGE>
Lord, Abbett & Co.
A Tradition of Performance Through
Disciplined
Investing
[PHOTO OMITTED]
(standing, left to right)
Lisa D'Emic, Municipal portfolio manager
Richard Smola, Municipal portfolio manager
Philip Fang, Fund portfolio manager
(seated, left to right)
Zane E. Brown, partner in charge of
Fixed Income and Fund Portfolio Manager
John R. Mousseau, director of municipal
Bond Management and Fund Portfolio Manager
A successful long-term track record is evidence of a successful investment
strategy. For decades, we at Lord, Abbett & Co. have believed that investing
with a disciplined, value approach is the best way to achieve competitive
returns and reduce portfolio risk. This commitment and the dedication of our
team of 68 investment professionals have helped us earn the trust of financial
professionals and investors for the past 70 years.
About Your
Trust's
Board of
Trustees
The Securities and Ex change Commission (SEC) views the role of the independent
Board of Trustees as one of the most important components in overseeing a
mutual fund. The Board of Trustees watches over your Trust's general operations
and represents your interests. Trustees review and approve every contract
between your Trust and Lord, Abbett & Co. (the Trust's investment manager) and
Lord Abbett Distributor LLC (the Trust's underwriter). They meet regularly to
review a wide variety of information and issues regarding your Trust. Every
Trustee possesses extensive business experience. Lord Abbett Tax-Free Income
Trust shareholders are indeed fortunate to have a group of independent Trustees
with diverse backgrounds to provide a variety of viewpoints in the oversight of
their Trust. Below, we feature one of our Trustees, William Bush.
William Bush
Trustee -- Lord Abbett
Tax-Free Income Trust
[PHOTO OMITTED]
Mr. Bush received his B.A. degree from Yale University in 1960. Mr. Bush
co-founded the financial advisory firm of Bush-O'Donnell & Company which
provides investment management and financial advisory services to corporations
and individuals throughout the United States and abroad.
Mr. Bush serves as a member of the Board of Directors of Right Choice Managed
Care Inc., Maritz Inc., Mississippi Valley Bancshares, Inc. and INTRAV, Inc. all
of St. Louis, and DT Industries Inc. of Springfield, Missouri. He was named an
independent director for all of Lord Abbett's funds in 1998.
<PAGE>
Investing in the
Lord Abbett
Family of Funds
Growth
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
GROWTH
- --------------------------------------------------------------------------------------------------------------------------
INCOME
- --------------------------------------------------------------------------------------------------------------------------
Aggressive Growth Funds Growth & Balanced Fund Income Funds Tax-Free Money
Growth Fund Income Funds Income Funds Market Fund
<S> <C> <C> <C> <C> <C> <C>
Developing Research Fund - Research Fund - Balanced World Bond- o National U.S. Government
Growth Fund Small-Cap Value Large-Cap Series** Debenture Series o California Securities
Series Series o Connecticut Money Market
Global Fund - o Florida Fund+++
Alpha Series* Growth & Income Series o Georgia
Income o Hawaii
International Series High Yield o Michigan
Series Fund o Minnesota
Affiliated o Missouri
Mid-Cap Fund Bond-Debenture o New Jersey
Value Fund Fund o New York
o Pennsylvania
Growth Limited Duration o Texas
Opportunities U.S. Government o Washington
Fund Securities Series+
Global Fund - U.S. Government
Equity Series Securities Series+
</TABLE>
Finding the right mutual fund can be confusing. At Lord, Abbett & Co., we
believe your investment professional provides value in helping you identify and
under stand your investment objectives and, ultimately, offering fund
recommendations suitable for your individual needs.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a cur rent prospectus for the fund(s) covered by this
report.
For more complete information about any Lord Abbett fund, including risks,
charges and ongoing expenses, call your investment professional or Lord Abbett
Distributor LLC at 800-874-3733 for a prospectus. Read it carefully before
investing.
The Lord Abbett Family of Funds lets you access more than 30 portfolios designed
to meet a variety of investment needs.
Diversification. You and your investment professional can diversify your
investments between equity and income funds.
Flexibility. As your investment goals change, your investment professional can
help you reallocate your portfolio.
You may reallocate assets among our funds at any time. Speak with your
investment professional to help you customize your investment plan.
Numbers to Keep Handy
For Shareholder Account or Statement Inquiries: 800-821-5129
For Literature Only: 800-874-3733
24-Hour Automated Shareholder
Service Line: 800-865-7582
Visit Our Web Site:
http://www.lordabbett.com
* Lord Abbett Securities Trust - Alpha Series is a fund of funds investing
in shares of Lord Abbett Developing Growth Fund, Lord Abbett Research Fund
- Small-Cap Value Series and Lord Abbett Securities Trust - International
Series.
** Lord Abbett Balanced Series is a fund of funds investing in shares of
certain other Lord Abbett funds.
+ An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
++ An investment in this Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund. This Fund is managed
to maintain, and has maintained its stable $1.00 price per share.
[LOGO](R) LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
Lord Abbett mutual fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC
- ------------------------------------------------------------
The GM Building o 767 Fifth Avenue o New York, NY 10153-0203 LATFIT-3-499
(6/99)
