<PAGE>
Lord Abbett
Tax-Free
Income Trust
o Florida Series o Pennsylvania Series
o Michigan Series o Georgia Series
1998 ANNUAL REPORT
[PHOTO OMITTED]
A Fund to help you keep more
of your investment income
[LOGO](R)
<PAGE>
Report to Shareholders
For the Fiscal Year Ended October 31, 1998
[PHOTO OMITTED]
/s/ Robert S. Dow
- ----------------------------
ROBERT S. DOW
CHAIRMAN
November 30, 1998
"Our continued focus on high-quality municipal issues enabled our portfolios to
participate in the price appreciation that resulted from this `flight to
quality'."
Lord Abbett Tax-Free Income Trust completed its fiscal year on October 31, 1998,
with aggregate net assets of approximately $310 million. During the period, the
Trust posted strong returns and performed well, relative to competitors, for
many of its portfolios. Page 1 has more detailed information about each Series'
portfolio and performance. The net assets of each Series were as follows:
Florida Series: $135 million Michigan Series: $53 million
Pennsylvania Series: $103 million Georgia Series: $20 million
How the Trust Added Value
As economic and political uncertainties abroad created concern regarding the
domestic economy, investors moved from lower-rated fixed-income investments into
higher-quality bonds. Our continued focus on high-quality municipal issues
enabled our portfolios to participate in the price appreciation that resulted
from this "flight to quality."
In the spring, Long Island Power Authority ("LIPA") brought to market the
largest municipal bond issue ($3 billion) in history. Prior to this offering,
many portfolio managers raised cash by selling bonds from their portfolios in
order to invest in the LIPA issue. We correctly anticipated that managers would
need to liquidate some of their high-quality bonds to make room for LIPA, and
purchased several issues at prices that we believe were significantly discounted
to the market.
Other Portfolio Considerations
Throughout the fiscal year, the Trust held a high percentage (approximately 22%
overall) of defensive shorter-term investments, such as pre-refunded bonds. In
an environment of falling rates, many issuers pre-refund existing, higher-coupon
bonds. When an issuer pre-refunds bonds, the proceeds from a newly issued
lower-yielding bond are used to buy U.S. Treasury securities. The Treasury
securities are then held to pay interest and principal on the older,
higher-coupon bonds on the first call date. (The call date is a date upon which
an issuer may redeem a bond.) When a bond becomes a strong pre-refunding
candidate, it trades off its lower yield-to-call rather than its higher
yield-to-maturity. As a result, it appreciates in price due to the closer
maturity date (the call date) and the increase in the underlying credit quality
(through the use of the Treasury securities).
What's Ahead
Long-dated municipal bond yields are nearly equal to yields on government bond
issues. This unusual relationship has occurred because of the large supply of
municipal bonds available this year, and because of the "flight to quality" that
has significantly increased prices on government issues. Since interest received
from municipal bonds is exempt from Federal and often from state income taxes,
"munis" are particularly appealing to investors in a higher tax bracket looking
to hedge potential equity market volatility with allocations to fixed-income
investments.
Our outlook for the balance of 1998 is for the economy to grow at an annualized
rate of less than 2.5%, with inflation remaining moderate and interest rates
stable to lower, depending on how aggressively the Federal Reserve eases. We
remain watchful of economic developments overseas and any possible effects they
might have on the U.S. market. We believe that lower expectations regarding
corporate profits will be responsible for a widening of credit spreads (that is,
the yield at which lower-rated credits trade versus higher-rated credits), and
that this will similarly impact the municipal bond area. Thus, even with overall
interest rates declining, the yields (and hence the prices) between
higher-quality and lower-quality bonds may remain wide.
Thank you for including Lord Abbett Tax-Free Income Trust in your investment
portfolio. We look forward to helping you attain your financial goals in the
years ahead.
<PAGE>
Fund Facts
On October 31, 1998, the portfolios in Lord Abbett Tax-Free Income Trust were
invested in a wide variety of high-quality issues.
Lord Abbett's Focus on Quality
[The following tables were depicted as pie charts in the printed material.]
Florida Series Pennsylvania Series
AAA 74.4% AAA 69.0%
AA 10.1% AA 9.5%
A 13.0% A 12.8%
BBB 2.5% BBB(1) 8.7%
Michigan Series Georgia Series
AAA 75.3% AAA 56.6%
AA 15.7% AA 29.7%
A 3.0% A 11.1%
BBB(1) 6.0% BBB 2.6%
All tax-free portfolios managed by Lord Abbett emphasize:
o High quality
o Total return potential
o Call protection
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 10/31/98)(3) 4.70% 5.00% 4.86% 4.86%
- ----------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return
at Net Asset Value (as of 10/31/98):(4)
1 Year 7.30% 8.12% 7.59% 9.00%
3 Years 6.16% 7.39% 7.11% 8.31%
Life of Series 6.79% 7.58% 7.39% 9.90%
30-Day SEC Yield (as of 10/31/98) 4.11% 4.21% 4.57% 4.83%
- ----------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return at the
Maximum Offering Price (as of 9/30/98):
1 Year 3.10% 3.90% 3.60% 5.20%
5 Years 3.78% 4.68% 4.70% --
Life of Series 6.18% 6.94% 6.70% 8.89%
</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%.
(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 10. 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 probably know, the Trust depends on the proper functioning of computer
systems for most, if not all, aspects of its operations. Many computer systems
now in use cannot distinguish between the year 2000 (Y2K) and the year 1900, an
inability that could disrupt the services provided to the Trust.
Lord Abbett, Lord Abbett Distributor LLC, the Trust's transfer agent, the
Trust's custodian and other providers of services critical to the Trust all have
advised the Trust that they have been actively working on changes to their
computer systems to prepare for the Year 2000 and expect that their systems, and
those of their external service providers, will be adapted in time. Although the
Y2K issue is unprecedented and the process of Y2K preparedness evaluation and
systems remediation is an ongoing one, we presently believe that there will be
no material effect on the Trust and its financial statements.
Important Information
As of 10/31/98, no Series of the Trust had more than 15% 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 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 12/31/98, this report
must be accompanied by Lord Abbett's Performance Quarterly for the most recently
completed calendar quarter.
Statements of Net Assets
FLORIDA SERIES October 31, 1998
<TABLE>
<CAPTION>
Rating*: S&P Principal
Investments or Moody's Amount Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Pre-refunded 18.18% Alachua Co FL Health Facs Auth Rev/Santa Fe Health Care
7.60% 11/15/2013 AAA $ 1,500M $ 1,648,125
Bay Co FL Hosp Sys Rev 8% 10/1/2019 AAA 500M 615,000
Charlotte Co FL Util Rev FGIC+ 6 3/4% 10/1/2013 AAA 1,100M 1,265,000
Dunedin FL Hosp Rev MBIA+ 6 3/4% 11/15/2021 AAA 1,000M 1,107,500
Manatee Co FL Util Rev MBIA+ 6 3/4% 10/1/2013 AAA 1,000M 1,103,750
Melbourne FL Wtr & Sewer Rev Ser B FGIC+ 6.40% 10/1/2022 AAA 1,700M 1,821,125
Orlando & Orange Co FL Expwy Auth Rev FGIC+ 6 1/2%
7/1/2020 AAA 395M 419,688
Palm Beach Co FL Health Facs Auth Rev Hosp/Good Samaritan
MBIA+ 6.30% 10/1/2022 AAA 7,935M 8,956,631
Stuart FL Util Rev FGIC+ 6.80% 10/1/2024 AAA 1,500M 1,696,875
Tampa FL Health Rev/Allegheny Health Sys/St Joseph
MBIA+ 6.70% 12/1/2018 AAA 5,000M 5,831,250
Total 24,464,944
- -----------------------------------------------------------------------------------------------------------------------============
General Obligation-
State 1.66% Florida St Bd Ed Cap Outlay Ser E 4 3/4% 6/1/2022 AA 1,000M 962,500
Puerto Rico Commonwealth RIBS MBIA+ 8.134% 7/1/2008++ AAA 1,100M 1,265,000
Total 2,227,500
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General Obligation-Local .99% Dade Co FL AMBAC+ 7.70% 10/1/2013 Aaa 1,000M 1,336,250
- -----------------------------------------------------------------------------------------------------------------------============
Education 2.09% Florida St Bd Reg Univ Sys MBIA+ 4 1/2% 7/1/2019 AAA 1,530M 1,426,725
Florida St Bd Reg Univ Sys MBIA+ 5 5/8% 7/1/2019 AAA 1,300M 1,384,500
Total 2,811,225
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Finance 4.10% Puerto Rico Muni Fin Agy Ser A 6 1/2% 7/1/2019 A 4,915M 5,517,087
- -----------------------------------------------------------------------------------------------------------------------============
Health and Hospital 9.07% Charlotte Co FL Health Care Facs Rev RIBS FSA+ 8.268%
8/26/2027++ AAA 7,500M 8,596,875
Lee Co FL Hosp Bd Hosp Rev Ser A MBIA+ 5 3/4% 4/1/2022 AAA 3,300M 3,601,125
Total 12,198,000
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Housing 2.94% Dade Co FL Hsg Fin Auth Sing Fam Mtge Rev
GNMA+ AMT+++ 6.70% 4/1/2028 AAA 1,000M 1,075,000
</TABLE>
2
<PAGE>
Statements of Net Assets
FLORIDA SERIES October 31, 1998
<TABLE>
<CAPTION>
Rating*: S&P Principal
Investments or Moody's Amount Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Dade Co FL Hsg Fin Auth Sing Fam Mtge Rev Ser E FNMA+
7% 3/1/2024 Aaa $ 40M $ 42,150
Miami-Dade Mtg-Vil-FL AMT+++ 5.45% 10/1/2038 A 1,250M 1,243,750
Orange Co FL Hsg Fin Auth Sing Fam Mtge Rev Ser A
GNMA+ AMT+++ 5.90% 9/1/2019 AAA 435M 458,381
Orange Hfa-A1-Cabs-FL GNMA+ AMT+++ Zero Coupon 3/1/2028 Aaa 1,000M 203,750
Palm Beach Co FL Hsg Fin Auth Sing Fam Mtge Rev Ser A
GNMA+ AMT+++ 6.55% 4/1/2027 Aaa 870M 935,250
Total 3,958,281
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Industrial Revenue
Bonds 4.21% Hillsborough Co FL Ind Dev Auth Rev Tampa Elec Prjt 8%
5/1/2022 Aa 2,000M 2,310,000
Puerto Rico Tel Auth Rev RIBS MBIA+ 7.083% 1/25/2007++ AAA 3,000M 3,356,250
Total 5,666,250
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Miscellaneous 11.67% Brevard Co FL Sales Tax Rev MBIA+ 7% 12/1/2018 AAA 1,000M 1,103,750
Broward Co FL Professional Sports Facs Tax Rev MBIA+
5 3/4% 9/1/2021 AAA 2,000M 2,162,500
Dade Co FL Spl Oblig Ser B AMBAC+ 5% 10/1/2035 AAA 4,140M 4,062,375
Florida State Brd Ed Admin AMT+++ 4 1/2% 6/1/2022 AAA 2,000M 1,860,000
Jacksonville FL Sales Tax Rev River City Renaissance Prjt
FGIC+ 5 3/8% 10/1/2018 AAA 2,685M 2,758,838
Miramar Wtr Impt-FL FGIC+ 5% 10/1/2019 AAA 500M 498,125
Orange Co FL Sales Tx Rev FGIC+ 5.10% 1/1/2023 AAA 2,000M 2,005,000
Orange Co Tourist Rev AMBAC+ 6% 10/1/2016 AAA 710M 733,075
Tampa FL Sports Auth Rev Gtd Pkg/Tampa Bay Arena Prjt
MBIA+ 6% 10/1/2015 AAA 450M 517,500
Total 15,701,163
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Pollution Control
Revenue 5.52% Citrus Co FL Poll Ctrl Rev/FL Pwr Crystal Rivers MBIA+
6 5/8% 1/1/2027 AAA 6,780M 7,424,100
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Power 9.64% Escambia Co FL Util Auth Sys Rev Ser D FGIC+ 5% 1/1/2011 AAA 1,000M 1,061,250
Florida St Muni Pwr Agency Rev AMBAC+ 4 1/2% 10/1/2027 AAA 1,680M 1,539,300
Jacksonville FL Elec Auth Rev RIBS 7.108% 10/1/2037++ AA 5,000M 5,337,500
Okeechobee FL Util Auth Sys Rev Acquisition & Imp MBIA+
5.60% 10/1/2025 AAA 825M 870,375
Royal Palm Bch FL Util MBIA+ 4 1/2% 10/1/2022 Aaa 1,000M 931,250
St Petersburg FL Util 5.60% 10/1/2015 Aa 500M 530,000
Tallahassee Fl Energy Sys Rev 4 3/4% 10/1/2026 Aa 1,000M 961,250
W Palm Beach Util Ref FL MBIA+ 5% 10/1/2027 AAA 1,750M 1,745,625
Total 12,976,550
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Transportation 18.59% Dade Co FL Aviation Rev Ser A MBIA+ AMT+++ 5 3/4%
10/1/2018 AAA 1,825M 1,968,719
Florida St Dept Trans Alligator Alley Rev FGIC+ 5 1/8%
7/1/2022 AAA 2,165M 2,186,650
Florida St-Jacksonville Trans 5% 7/1/2027 AA 3,000M 2,962,500
Hillsborough Co FL Aviation Auth Rev Ser B AMBAC+ 5 1/8%
10/1/2017 AAA 1,675M 1,702,218
Ocoee Rev-Ref/Impt-Tr-FL MBIA+ 4 1/2% 10/1/2028 AAA 1,500M 1,380,000
Palm Beach Co FL Arpt Sys Rev MBIA+ 7 3/4% 10/1/2010 AAA 1,290M 1,448,025
Puerto Rico Commonwealth Hwy & Trans Rev Ser A 4 3/4%
7/1/2038 A 5,000M 4,762,500
Santa Rosa Bay Brdg Auth FL Zero Coupon 7/1/2015 BBB 3,140M 1,342,350
Santa Rosa Bay Brdg Auth FL Zero Coupon 7/1/2022 BBB 3,000M 843,750
Santa Rosa Bay Brdg Auth FL 6 1/4% 7/1/2028 BBB 1,000M 1,113,750
Santa Rosa Bay Brdg Auth FL 6 1/4% 7/1/2028 A 4,700M 5,305,125
Total 25,015,587
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Water and Sewer 7.57% Broward Co FL Wtr & Sewer Util Rev FGIC+ 6% 10/1/2020 AAA 2,500M 2,621,875
Cocoa FL Wtr & Sewer Rev Ser 1997 FGIC+ 5 7/8% 10/1/2022 AAA 1,340M 1,492,425
Englewood Wtr Dist Rf FL 4 3/4% 10/1/2023 AAA 2,000M 1,930,000
Indian River Co FL Wtr & Sewer Rev FGIC+ 5 1/2% 9/1/2016 AAA 475M 501,719
Panama City FL Wtr & Sewer Rev MBIA+ 5 5/8% 10/1/2016 AAA 1,000M 1,065,000
Sarasota Co Fl Util Sys Rev FGIC+ 4 1/2% 10/1/2016 AAA 1,000M 952,500
Winter Haven Util Ref FL MBIA+ 4 3/4% 10/1/2028 AAA 1,700M 1,629,875
Total 10,193,394
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Total Municipal Bonds 96.23% (Cost $121,790,039) 129,490,331
- -----------------------------------------------------------------------------------------------------------------------============
</TABLE>
3
<PAGE>
Statements of Net Assets
FLORIDA SERIES October 31, 1998
<TABLE>
<CAPTION>
Investments
===================================================================================================================================
<S> <C> <C>
Other Assets, Less Liabilities 3.77%
===================================================================================================================================
Cash $ 5,194,030
===================================================================================================================================
Receivable for: Securities sold 3,820,666
Interest 1,379,190
Capital stock sold 193,672
Total Other Assets 10,587,558
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Payable for: Securities purchased 4,765,039
Distributions 416,729
Accrued payables 259,454
Capital stock reacquired 69,936
Total Other Liabilities 5,511,158
----------------------------------------------------------------------------------------============
Total Other Assets, Less Liabilities 5,076,400
===================================================================================================================================
Net Assets 100.00% $134,566,731
===================================================================================================================================
Class A Shares-Net asset value ($127,291,871 / 25,550,865 shares outstanding) $4.98
Maximum offering price (Class A) $5.23
Class C Shares-Net asset value ($7,274,860 / 1,459,525 shares outstanding) $4.98
</TABLE>
* Ratings have not been audited by Deloitte & Touche
LLP.
+ 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 October 31, 1998.
+++ Income from these investments may be subject to
the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
Statements of Net Assets
PENNSYLVANIA SERIES October 31, 1998
<TABLE>
<CAPTION>
Rating*: S&P Principal
Investments or Moody's Amount Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Pre-refunded 22.16% Bethlehem PA Area Sch Dist MBIA+ 6% 3/1/2016 AAA $1,000M $ 1,122,500
Northeastern PA Hosp & Ed/Luzerne Co Comm Coll
AMBAC+ 6 5/8% 8/15/2015 AAA 2,000M 2,290,000
Pennsylvania Conv Ctr Auth Ser A FGIC+ 6.70% 9/1/2016 AAA 855M 1,046,306
Pennsylvania Intergovernmental Coop Auth FGIC+ 6 3/4%
6/15/2021 AAA 2,000M 2,322,500
Philadelphia PA Gas Wks Rev ETM Ser B MBIA+ 7% 5/15/2020 AAA 2,220M 2,747,250
Puerto Rico Commonwealth 6.45% 7/1/2017 AAA 1,900M 2,170,750
Puerto Rico Commonwealth MBIA+ 6.45% 7/1/2017 AAA 700M 799,750
Puerto Rico Commonwealth 7.70% 7/1/2020 AAA 2,025M 2,202,187
Puerto Rico Commonwealth 6 1/2% 7/1/2023 AAA 1,000M 1,145,000
Puerto Rico Elec Pwr Auth RIBS FSA+ 9.473% 7/1/2018++ AAA 1,500M 1,910,625
Puerto Rico Elec Pwr Auth RIBS FSA+ 8.179% 7/1/2023++ AAA 3,000M 3,528,750
Puerto Rico Elec Pwr Auth Ser N 7 1/8% 7/1/2014 AAA 365M 380,212
Puerto Rico Elec Pwr Auth Ser X 6 1/8% 7/1/2021 AAA 500M 570,625
Scranton-Lackawanna PA Health & Welfare Auth/Univ Scran
Prjt AMBAC+ 6.80% 11/1/2014 AAA 500M 565,000
Total 22,801,455
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General Obligation-
State 4.38% Lycoming Co PA MBIA+ 5.80% 11/15/2022 AAA 3,050M 3,438,875
Puerto Rico Commonwealth 6% 7/1/2014 A 1,000M 1,066,250
Total 4,505,125
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General Obligation-
Local 11.94% Bradford PA Area Sch Dist FGIC+ 4 7/8% 10/1/2019 AAA 1,765M 1,742,938
Burrell PA Sch Dist FGIC+ 5.65% 11/15/2016 AAA 1,500M 1,591,875
Cambria Co PA FGIC+ 5 1/2% 8/15/2016 AAA 500M 531,875
</TABLE>
4
<PAGE>
Statements of Net Assets
PENNSYLVANIA SERIES October 31, 1998
<TABLE>
<CAPTION>
Rating*: S&P Principal
Investments or Moody's Amount Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Interboro Sch Dist Del Co MBIA+ 5 3/8% 8/15/2025 AAA $1,000M $ 1,023,750
Lancaster-Ser A-PA FGIC+ 4 1/2% 5/1/2028 AAA 2,000M 1,837,500
Pennsylvania Hsg Fin Agy AMT+++ 5.80% 10/1/2029 AA 2,250M 2,320,312
Punxsutawney PA Area Sch Dist FGIC+ 4 3/4% 4/15/2020 AAA 1,270M 1,231,900
West Mifflin PA Area Sch Dist FGIC+ 4 7/8% 2/15/2023 AAA 1,000M 978,750
Wilkes Barre PA Area Sch Dist FGIC+ 5 1/4% 4/1/2016 AAA 1,000M 1,025,000
Total 12,283,900
- -----------------------------------------------------------------------------------------------------------------------============
Education 7.44% Allegheny Co PA Higher Ed Bl 6% 5/1/2028 A 1,000M 1,138,750
Delaware Co PA Auth Villanova Univ AMBAC+ 5.80% 8/1/2025 AAA 1,600M 1,724,000
New Wilmington Clg-Ac PA 5.35% 3/1/2028 A 1,000M 1,015,000
Pennsylvania St Higher Ed MBIA+ 6 5/8% 8/15/2009 AAA 325M 359,938
Pennsylvania St Higher Ed RIBS AMBAC+ AMT+++ 8.513%
3/1/2022++ AAA 3,000M 3,416,250
Total 7,653,938
- -----------------------------------------------------------------------------------------------------------------------============
Finance 1.92% Delaware Valley PA Reg Fin Auth Loc Govt Rev Ser C
AMBAC+ 7 3/4% 7/1/2027 AAA 1,000M 1,416,250
Pennsylvania St Higher Ed 6 5/8% 8/15/2009 AAA 500M 558,125
Total 1,974,375
- -----------------------------------------------------------------------------------------------------------------------============
Health and Hospital 13.35% Chester Co PA Health & Ed Fac Auth Sys Rev/Mainline
Health RIBS AMBAC+ 7.47% 5/15/2020++ AAA 2,600M 2,798,250
Delaware Co PA Auth Hosp Rev 5 3/8% 12/1/2018 A 1,000M 1,021,250
Delaware Co PA Auth Hosp Rev 5.30% 12/1/2027 A 1,000M 1,008,750
Lehigh Co PA Gen Purp Auth R MBIA+ 5% 7/1/2028 Aaa 1,000M 980,000
Montgomery Co PA Higher Ed/Holy Redeemer Health
AMBAC+ 5 1/4% 10/1/2017 AAA 1,000M 1,021,250
Pennsylvania St Ind Dev Auth 5 1/8% 6/1/2018 A 1,000M 992,500
Philadelphia PA Hosp & Higher Ed 6 1/2% 7/1/2027 BBB 680M 701,250
Pottsville Hosp 5 5/8% 7/1/2024 A 500M 515,625
Puerto Rico Ind Tourist Ed Med & Environmental Ctrl
Fac Gr A MBIA+ 6 1/4% 7/1/2024 AAA 850M 947,750
Sayre PA Health Care Fac/Tioga Nursing AMBAC+ 7 1/4%
10/1/2018 AAA 1,500M 1,576,500
Scranton-Lackawanna PA Health & Welfare Auth Rev 6.20%
7/1/2017 BBB 1,055M 1,122,256
West Shore PA Area Hosp Auth MBIA+ 5.70% 1/1/2022 AAA 1,000M 1,055,000
Total 13,740,381
- -----------------------------------------------------------------------------------------------------------------------============
Housing 5.04% Pennsylvania Hsg Fin Agy Sing Fam Mtge Ser 41B AMT+++
6.65% 4/1/2025 AA 1,000M 1,070,000
Pennsylvania Hsg Fin Agy Sing Fam Mtge Ser 42 AMT+++
6.85% 4/1/2025 AA 2,000M 2,167,500
Pennsylvania Hsg Fin Agy Sing Fam Mtge Ser 43 AMT+++
7.40% 10/1/2014 AA 1,000M 1,098,750
Puerto Rico Pub Bldg Auth Ser J 6 1/2% 7/1/2003 A 770M 845,075
Total 5,181,325
- -----------------------------------------------------------------------------------------------------------------------============
Industrial Revenue Bonds
9.74% Allegheny Co PA Ind Dev Auth/USX Corp 6.10% 7/15/2020 Baa 1,000M 1,060,000
Beaver Co PA Ind Dev Auth/Ohio Edison FGIC+ 7 3/4%
9/1/2024 AAA 1,950M 2,056,061
Beaver Ida-A-Shipping PA AMBAC+ AMT+++ 5 3/8% 6/1/2028 AAA 1,000M 1,018,750
Bradford Co PA Ind Dev Auth/Int'l Paper AMT+++ 6.60%
3/1/2019 A 1,250M 1,381,250
Bucks Co PA Ind Dev Auth Environmental 5.60% 3/1/2033 BBB 1,000M 1,016,250
Philadelphia PA Auth For Indl MBIA+ 5% 6/1/2015 Aaa 500M 505,000
Puerto Rico Ind Med & Environmental Ctrl/Motorola
6 3/4% 1/1/2014*** AA 1,500M 1,648,125
Puerto Rico Ind Med & Environmental Ctrl/Upjohn 7 1/2%
12/1/2023 AA 1,300M 1,342,796
Total 10,028,232
- -----------------------------------------------------------------------------------------------------------------------============
Miscellaneous 5.77% Delaware VY PA Regl Fin Loc AMBAC+ 5 1/2% 8/1/2028 AAA 5,500M 5,940,000
- -----------------------------------------------------------------------------------------------------------------------============
Power 7.01% Pennsylvania Economic Dev Res Recov Northhampton 6.60%
1/1/2019 BBB** 1,500M 1,595,625
Puerto Rico Elec Pwr Auth 5% 7/1/2028 BBB 500M 490,625
Puerto Rico Elec Pwr Auth Ser EE 4 3/4% 7/1/2024 BBB 2,500M 2,384,375
Puerto Rico Elec Pwr Auth Ser X 6% 7/1/2015 AAA 1,000M 1,081,250
York Co PA Ind Dev Auth Poll Ctrl Rev MBIA+ 6.45% 10/1/2019 AAA 1,475M 1,664,906
Total 7,216,781
- -----------------------------------------------------------------------------------------------------------------------============
</TABLE>
5
<PAGE>
Statements of Net Assets
PENNSYLVANIA SERIES October 31, 1998
<TABLE>
<CAPTION>
Rating*: S&P Principal
Investments or Moody's Amount Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Transportation 5.84% Delaware River Port Auth PA MBIA+ 4 3/4% 1/1/2017 AAA $ 800M $ 781,000
Pennsylvania St Tnpk Comm MBIA+ 5 1/2% 12/1/2017 AAA 1,000M 1,027,500
Puerto Rico Commonwealth Hwy 6 5/8% 7/1/2012 A 2,615M 2,869,963
Puerto Rico Commonwealth Hwy 5% 7/1/2038 A 250M 244,063
Puerto Rico Port Auth Rev Ser D FGIC+ AMT+++ 7% 7/1/2014 AAA 1,000M 1,091,250
Total 6,013,776
- -----------------------------------------------------------------------------------------------------------------------============
Water and Sewer 4.21% Erie Wtr-PA FGIC+ 5% 12/1/2015 AAA 1,000M 1,010,000
North Penn PA Wtr Auth FGIC+ 7% 11/1/2024 AAA 1,150M 1,344,063
W Mifflin San Swr-PA MBIA+ 5% 8/1/2028 AAA 2,000M 1,982,500
Total 4,336,563
----------------------------------------------------------------------------------------============
Total Municipal Bonds 98.80% (Cost $95,566,352) 101,675,851
===================================================================================================================================
Other Assets, Less Liabilities 1.20%
===================================================================================================================================
Cash and Receivables, Net of Liabilities 1,230,713
===================================================================================================================================
Net Assets 100.00% $102,906,564
===================================================================================================================================
Net asset value ($102,906,564 / 19,492,934 shares outstanding) $5.28
Maximum offering price $5.54
</TABLE>
* Ratings have not been audited by Deloitte & Touche
LLP.
** This security has not been rated by an independent
ratings service but is, in Lord Abbett's opinion,
of comparable quality.
*** 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 October 31, 1998.
+++ Income from these investments may be subject to
the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
Statements of Net Assets
MICHIGAN SERIES October 31, 1998
<TABLE>
<CAPTION>
Rating*: S&P Principal
Investments or Moody's Amount Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Pre-refunded 20.67% Farmington Hills MI Hosp/Botsford Gen Hosp Ser A MBIA+
6 1/2% 2/15/2011 AAA $1,000M $ 1,105,000
Grand Rapids MI Water Supply Sys Rev FGIC+ 7% 1/1/2012 AAA 500M 530,000
Huron Valley MI Sch Dist FGIC+ 5 3/4% 5/1/2022 AAA 250M 280,313
Kent Hosp Fin Auth MI/Butterworth Health Ser A MBIA+
5 5/8% 1/15/2026 AAA 800M 893,000
Lake Orion MI Comm Sch Dist AMBAC+ 7% 5/1/2020 AAA 1,050M 1,242,938
Lincoln Pk MI Sch Dist FGIC+ 5.90% 5/1/2026 AAA 500M 565,000
Michigan St Hosp Fin Auth Rev 7 1/2% 2/15/2018 AAA 1,650M 1,821,187
Puerto Rico Commonwealth 6.45% 7/1/2017 AAA 1,500M 1,713,750
Puerto Rico Elec Pwr Auth RIBS FSA+ 9.473% 7/1/2018++ AAA 500M 636,875
Riverview MI Comm Sch Dist FGIC+ 6.55% 5/1/2014 AAA 500M 553,750
Romulus MI Comm Sch Ser II FGIC+ 6.40% 5/1/2017 AAA 500M 553,750
Royal Oak MI Hosp Fin Auth Hosp Rev William Beaumont Ser D
6 3/4% 1/1/2020 AAA 500M 542,500
Tri Co MI Area Sch Dist MBIA+ 6 7/8% 5/1/2016 AAA 500M 546,250
Total 10,984,313
- -----------------------------------------------------------------------------------------------------------------------============
General Obligation-State .90% Chippewa Valley MI Schs AMBAC+ 4 3/4% 5/1/2023 AAA 500M 480,625
- -----------------------------------------------------------------------------------------------------------------------============
General
Obligation-Local 15.00% Alpena MI Pub Sch MBIA+ 5 5/8% 5/1/2022 AAA 500M 526,250
Belding MI Area Sch AMBAC+ 5% 5/1/2026 AAA 500M 494,375
Chelsea Sd Ref MI FGIC+ 5% 5/1/2025 AAA 2,000M 1,977,500
Hastings MI Sch Dist FGIC+ 5 5/8% 5/1/2018 AAA 1,000M 1,052,500
Lakeview MI Comm Sch FGIC+ 5.60% 5/1/2022 AAA 500M 525,000
Plymouth-Canton MI Comm Sch Dist Ser C 6 1/2% 5/1/2016 AA 1,000M 1,092,500
Saline MI Area Sch FGIC+ 5 1/2% 5/1/2015 AAA 750M 782,812
</TABLE>
6
<PAGE>
Statements of Net Assets
MICHIGAN SERIES October 31, 1998
<TABLE>
<CAPTION>
Rating*: S&P Principal
Investments or Moody's Amount Value
===================================================================================================================================
<S> <C> <C> <C> <C>
South Lyon Comm Sch MI 4 3/4% 5/1/2023 AAA $ 500M $ 480,625
South Redford MI Sch Dist FGIC+ 5 1/2% 5/1/2022 AAA 500M 520,000
Wayne County MI Bldg Auth MBIA+ 5 1/4% 6/1/2016 AAA 500M 516,875
Total 7,968,437
- -----------------------------------------------------------------------------------------------------------------------============
Education 8.16% Central MI Univ Rev FGIC+ 5% 10/1/2023 AAA 1,500M 1,481,250
Central MI Univ Rev FGIC+ 5% 10/1/2027 AAA 840M 819,000
Lincoln MI Cons Sch Dist FSA+ 5% 5/1/2028 AAA 1,000M 977,360
Michigan Higher Ed Student Loan Auth Rev AMBAC+ 5 3/4%
6/1/2013 AAA 250M 260,312
Oakland Co MI Economic Dev Corp 5% 11/1/2017 Aa 500M 500,000
Puerto Rico Ind Tourist Ed Med & Environmental Ctrl
American Univ MBIA+ 5% 10/1/2022 AAA 40M 40,050
Saginaw Vy St Univ MI Rev AMBAC+ 5.30% 7/1/2028 AAA 250M 256,250
Total 4,334,222
- -----------------------------------------------------------------------------------------------------------------------============
Health and Hospital 13.71% Flint MI Hosp Bldg Auth Rev 5 3/8% 7/1/2020 Baa 500M 500,000
Kalamazoo MI Hosp Fin Auth/Borgess Hosp RIBS 6.668%
6/1/2011++ AAA 4,000M 4,315,000
Michigan St Hosp Fin Auth Rev MBIA+ 5% 2/15/2022 Aaa 500M 491,875
Michigan St Hosp Fin Auth Rev AMBAC+ 5 5/8% 1/1/2028 AAA 250M 265,313
Puerto Rico Ind Tourist Ed Med & Environmental Ctrl Facs
6.70% 5/1/2024 BBB 1,575M 1,712,813
Total 7,285,001
- -----------------------------------------------------------------------------------------------------------------------============
Housing 6.79% Michigan St Hsg Dev Auth Sing Fam Mtge Rev Ser A
AMBAC+ AMT+++ 6.05% 12/1/2027 AAA 1,000M 1,057,500
Michigan St Hsg Dev Auth Sing Fam Mtge Rev Ser B 6.95%
12/1/2020 AA 860M 909,450
Michigan St Hsg Dev Auth Sing Fam Mtge Rev Ser B
AMT+++ 7.05% 6/1/2026 AA 55M 56,993
Michigan St Hsg Dev Auth Sing Fam Mtge Rev Ser D 5.95%
12/1/2016 AA 500M 530,000
Michigan St Hsg Dev Auth Sing Fam Mtge Rev Ser E
AMT+++ 6.20% 12/1/2027 AA 1,000M 1,055,000
Total 3,608,943
- -----------------------------------------------------------------------------------------------------------------------============
Industrial Revenue
Bonds 14.57% Kalamazoo MI Hosp Fin Auth/Bronson Methodist Hosp MBIA+
5 1/4% 5/15/2018 Aaa 1,000M 1,026,250
Kalamazoo MI Hosp Fin Auth/Bronson Methodist Hosp
5 1/2% 5/15/2028 Aaa 1,500M 1,563,750
Michigan St Strategic Fd Ltd AMT+++ 6 5/8% 12/1/2012 AA 1,000M 1,088,750
Michigan St Strategic Fd Ltd MBIA+ AMT+++ 5.55%
9/1/2029*** AAA 2,000M 2,035,000
Puerto Rico Ind Med & Environmental/Poll Ctrl Facs
7.60% 5/1/2014 Aa 1,000M 1,048,180
Puerto Rico Tel Auth Rev RIBS MBIA+ 7.27% 1/16/2015++ AAA 900M 979,875
Total 7,741,805
- -----------------------------------------------------------------------------------------------------------------------============
Miscellaneous 8.97% Detroit MI Loc Dev Fin Auth MBIA+ 4 3/4% 7/1/2018 AAA 1,000M 957,500
Detroit MI Loc Dev Fin Auth MBIA+ 4 3/4% 7/1/2025 AAA 1,100M 1,040,875
Michigan Muni Bd Auth Rev AMBAC+ 6 3/4% 11/1/2014 AAA 1,500M 1,713,750
Michigan Muni Bd Auth Rev 5 5/8% 10/1/2019 AA 1,000M 1,057,500
Total 4,769,625
- -----------------------------------------------------------------------------------------------------------------------============
Power 7.27% Michigan St Strategic Fd Ltd Oblig Rev MBIA+ 7%
7/15/2008 AAA 500M 609,375
Michigan St Strategic Fd Ltd Oblig Rev AMBAC+ 7%
5/1/2021 AAA 500M 646,875
Michigan St Strategic Fd Solid Waste Disp Rev/Rfdg
Genesee Pwr Station Prjt AMT+++ 7 1/2% 1/1/2021 BBB** 500M 540,625
Puerto Rico Elec Pwr Auth MBIA+ 5 1/2% 7/1/2016 AAA 1,500M 1,588,125
Puerto Rico Elec Pwr Auth Ser EE 4 3/4% 7/1/2024 BBB 500M 476,875
Total 3,861,875
- -----------------------------------------------------------------------------------------------------------------------============
Transportation 5.15% Puerto Rico Commonwealth Hwy Trans Auth 6 5/8% 7/1/2012 A 1,500M 1,646,250
Wayne Charter Co MI Arpt Rev MBIA+ AMT+++ 6 3/4%
12/1/2021 AAA 1,000M 1,091,250
Total 2,737,500
- -----------------------------------------------------------------------------------------------------------------------============
Water and Sewer 2.08% Michigan Muni Bd Auth Rev Drinking Wtr Revolving Ed
4 3/4% 10/1/2018 AA 1,140M 1,104,375
- -----------------------------------------------------------------------------------------------------------------------============
Total Municipal Bonds 103.27% (Cost $52,062,144) 54,876,721
- -----------------------------------------------------------------------------------------------------------------------============
</TABLE>
7
<PAGE>
Statements of Net Assets
MICHIGAN SERIES October 31, 1998
<TABLE>
===================================================================================================================================
<S> <C>
Other Assets, Less Liabilities (3.27)%
===================================================================================================================================
Cash and Receivables, Net of Liabilities $ (1,738,196)
===================================================================================================================================
Net Assets 100.00% $ 53,138,525
===================================================================================================================================
Net asset value ($53,138,525 / 10,257,583 shares outstanding) $5.18
Maximum offering price $5.44
</TABLE>
* Ratings have not been audited by Deloitte & Touche
LLP.
** This security has not been rated by an independent
ratings service but is, in Lord Abbett's opinion,
of comparable quality.
*** When-issued security.
+ 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 October 31, 1998.
+++ Income from these investments may be subject to
the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
Statements of Net Assets
GEORGIA SERIES October 31, 1998
<TABLE>
<CAPTION>
Rating*: S&P Principal
Investments or Moody's Amount Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Pre-refunded 20.01% Albany GA Sewer Sys Rev MBIA+ 6 5/8% 7/1/2017 AAA $ 100M $ 111,625
Chatham Co GA Sch Dist MBIA+ 6 3/4% 8/1/2020 AAA 1,035M 1,186,369
Metropolitan Atlanta Rapid Trans Auth GA Sales Tax
Rev Ser O 6.55% 7/1/2020 AAA 1,000M 1,091,250
Puerto Rico Elec Pwr Auth RIBS FSA+ 9.473% 7/1/2018++ AAA 1,000M 1,273,750
Savannah GA Economic Dev Auth Rev Sub C Southern Care
Zero Coupon 12/1/2021 AAA 1,000M 291,250
Total 3,954,244
- -----------------------------------------------------------------------------------------------------------------------============
General Obligation-State
3.52% Georgia St Ser C 6 1/4% 8/1/2013 Aaa 350M 415,625
Puerto Rico Commonwealth RIBS FSA+ 8.232% 7/1/2020++ AAA 250M 280,000
Total 695,625
- -----------------------------------------------------------------------------------------------------------------------============
General Obligation-
Local 27.11% Atlanta GA Ser A 6 1/8% 12/1/2023 AA 750M 830,625
Atlanta GA Ser A 6.10% 12/1/2019 AA 500M 553,750
Bibb County GA 5 1/4% 8/1/2027 AA 500M 503,125
Columbia Co GA Courthouse/Detention Ctr 5 5/8% 2/1/2020 A 1,000M 1,047,500
De Kalb Co GA 6% 1/1/2020 AA 250M 267,813
Fayette Co GA Sch Dist 6 1/8% 3/1/2015 Aa 500M 552,500
Fulton Co GA Sch Dist 5 1/2% 1/1/2021 AA 1,000M 1,086,250
Houston Co GA Sch Dist MBIA+ 5 1/2% 3/1/2016 AAA 500M 516,875
Total 5,358,438
- -----------------------------------------------------------------------------------------------------------------------============
Health and Hospital 3.80% Cobb Co GA Kennestone Cap Apprec Hosp Auth Rev Ctfs
Ser 86A MBIA+ Zero Coupon 8/1/2015 AAA 495M 194,288
Glynn-Brunswick Mem Hosp Auth GA Rev Antic Ctfs Southeast
GA Hlth MBIA+ 6% 8/1/2016 AAA 500M 556,875
Total 751,163
- -----------------------------------------------------------------------------------------------------------------------============
Housing 5.05% De Kalb Co Hsg Auth Multi Fam Hsg Rev The Lakes at Indian
Creek FSA+ AMT+++ 7.15% 1/1/2025 AAA 500M 556,250
Georgia St Hsg & Fin Auth Rev Sing Fam Mtge A Sub Ser A-2
FHA+ AMT+++ 6.45% 12/1/2027 AAA 210M 226,275
Georgia St Hsg & Fin Auth Rev Sing Fam Mtge Sub Ser A-2
FHA+ AMT+++ 6.40% 12/1/2015 AAA 200M 214,750
Total 997,275
- -----------------------------------------------------------------------------------------------------------------------============
Industrial Revenue Bonds
3.92% Puerto Rico Ind Med & Environmental Poll F/R Ctrl Facs Fin
Auth Rev 7 1/2% 12/1/2023 AA 750M 774,690
----------------------------------------------------------------------------------------============
</TABLE>
8
<PAGE>
Statements of Net Assets
GEORGIA SERIES October 31, 1998
<TABLE>
<CAPTION>
Rating*: S&P Principal
Investments or Moody's Amount Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Miscellaneous 14.71% Cartersville GA Dev Auth Rev AMT+++ 6 1/8% 5/1/2027 A $1,000M $ 1,096,250
Cobb-Marietta GA Coliseum & Exhibit Hall Auth Rev MBIA+
5 5/8% 10/1/2026 AAA 1,600M 1,812,000
Total 2,908,250
- -----------------------------------------------------------------------------------------------------------------------============
Pollution Control Revenue
.26% Burke Co GA Dev Auth Poll Ctrl Rev MBIA+ 6.60% 7/1/2024 AAA 50M 51,834
- -----------------------------------------------------------------------------------------------------------------------============
Solid Waste .56% Cobb Co GA Solid Waste Mgmt Auth Rev AMT+++ 6.40%
1/1/2015 Aaa 100M 111,500
- -----------------------------------------------------------------------------------------------------------------------============
Transportation 17.70% Fulton Co GA Dev Auth Spl Facs Rev Delta Airlines Inc
Proj AMT+++ 5 1/2% 5/1/2033 BBB 500M 492,500
Metropolitan Atlanta Rapid Trans Auth GA Sales Tax Rev
Ser P AMBAC+ 6 1/4% 7/1/2020 AAA 1,625M 1,927,656
Puerto Rico Commonwealth Hwy & Trans Auth Hwy Rev Ser
Y 5 1/2% 7/1/2036 A 1,000M 1,077,500
Total 3,497,656
----------------------------------------------------------------------------------------============
Total Municipal Bonds 96.64% (Cost $18,183,104) 19,100,675
===================================================================================================================================
Other Assets, Less Liabilities 3.36%
===================================================================================================================================
Cash and Receivables, Net of Liabilities 663,783
===================================================================================================================================
Net Assets 100.00% $19,764,458
===================================================================================================================================
Net asset value ($19,764,458 / 3,637,950 shares outstanding) $5.43
Maximum offering price $5.70
</TABLE>
* Ratings have not been audited by Deloitte & Touche
LLP.
+ 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 October 31, 1998.
+++ Income from these investments may be subject to
the Alternative Minimum Tax (AMT).
See Notes to Financial Statements.
Statements of Operations
<TABLE>
<CAPTION>
Year Ended October 31, 1998
----------------------------------------------------
Florida Pennsylvania Michigan Georgia
Investment Income Series Series Series Series
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
Income Interest $ 7,878,691 $ 5,727,914 $ 3,023,337 $ 895,809
----------------------------------------------------------------------------------------------------------------------
Expenses Management fee 702,730 492,670 266,479 84,279
Management fee waived - - - (84,279)
12b-1 distribution plan-Class A 341,636 92,336 - -
12b-1 distribution plan-Class C 68,578 - - -
Shareholder servicing 84,920 68,355 52,730 16,760
Registration 3,000 2,400 1,500 1,200
Reports to shareholders 23,500 15,436 8,495 2,296
Professional 42,696 29,664 20,832 11,556
Directors' fees 5,036 3,632 1,804 410
Organization - - 614 792
Other 16,030 13,560 13,430 8,100
Total expenses 1,288,126 718,053 365,884 41,114
----------------------------------------------------------------------------------------------------------------------
Net investment income 6,590,565 5,009,861 2,657,453 854,695
----------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain on Investments
==================================================================================================================================
Realized gain from investment transactions
Proceeds from sales 220,139,579 67,102,289 44,504,248 21,613,764
Cost of securities sold 217,307,539 66,725,429 44,457,017 21,444,303
Net realized gain 2,832,040 376,860 47,231 169,461
----------------------------------------------------------------------------------------------------------------------
Unrealized appreciation of investments 342,625 2,421,388 1,185,432 401,895
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 3,174,665 2,798,248 1,232,663 571,356
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 9,765,230 $ 7,808,109 $ 3,890,116 $ 1,426,051
==================================================================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31, 1998 Year Ended October 31, 1997
------------------------------------------------------ -------------------------------------------
Increase (Decrease) Florida Pennsylvania Michigan Georgia Florida Pennsylvania Michigan
in Net Assets Series Series Series Series Series Series Series
===================================================================================== ============================================
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment income $ 6,590,565 $ 5,009,861 $ 2,657,453 $ 854,695 $ 7,592,428 $ 5,086,917 $ 2,779,370
Net realized gain from
investment transactions 2,823,936 376,860 47,231 169,461 1,146,444 981,723 245,609
Net unrealized appreciation
of investments 350,729 2,421,388 1,185,432 401,895 1,603,515 1,379,031 1,092,550
Net increase in net assets
resulting from operations 9,765,230 7,808,109 3,890,116 1,426,051 10,342,387 7,447,671 4,117,529
- ------------------------------------------------------------------------------------- -------------------------------------------
Distributions to
shareholders from
Net investment income (6,640,787) (5,096,457) (2,665,343) (838,393) (7,925,102) (5,109,328) (2,760,672)
Net realized gain from
investment transactions - - - (204,622) - - -
Total distributions (6,640,787) (5,096,457) (2,665,343) (1,043,015) (7,925,102) (5,109,328) (2,760,672)
- ------------------------------------------------------------------------------------- -------------------------------------------
Share transactions
Net proceeds from sales of
shares 8,004,729 18,457,191 5,381,047 6,912,841 9,015,704 9,506,178 4,143,719
Net asset value of shares
issued to shareholders in
reinvestment of net investment
income and realized gain from
investment transactions 2,709,366 2,310,650 1,455,413 666,699 3,171,449 2,363,497 1,432,311
Total 10,714,095 20,767,841 6,836,460 7,579,540 12,187,153 11,869,675 5,576,030
- ------------------------------------------------------------------------------------- -------------------------------------------
Cost of shares reacquired (24,019,865) (14,810,076) (7,552,518) (2,095,385) (31,926,100) (12,575,562) (7,278,245)
- ------------------------------------------------------------------------------------- -------------------------------------------
Increase (decrease) in net
assets derived from share
transactions (13,305,770) 5,957,765 (716,058) 5,484,155 (19,738,947) (705,887) (1,702,215)
- ------------------------------------------------------------------------------------- -------------------------------------------
Total increase (decrease)
in net assets (10,181,327) 8,669,417 508,715 5,867,191 (17,321,662) 1,632,456 (345,358)
- ------------------------------------------------------------------------------------- -------------------------------------------
Net Assets
Beginning of period 144,748,058 94,237,147 52,629,810 13,897,267 162,069,720 92,604,691 52,975,168
End of period+ $134,566,731 $102,906,564 $53,138,525 $19,764,458 $144,748,058 $ 94,237,147 $52,629,810
===================================================================================================================================
</TABLE>
Year Ended October 31, 1997
---------------------------
Increase (Decrease) Georgia
in Net Assets Series
=====================================================
Operations
Net investment income $ 625,667
Net realized gain from
investment transactions 188,948
Net unrealized appreciation
of investments 285,372
Net increase in net assets
resulting from operations 1,099,987
- -----------------------------------------------------
Distributions to
shareholders from
Net investment income (647,441)
Net realized gain from
investment transactions (20,485)
Total distributions (667,926)
- -----------------------------------------------------
Share transactions
Net proceeds from sales of
shares 4,086,242
Net asset value of shares
issued to shareholders in
reinvestment of net investment
income and realized gain from
investment transactions 345,337
Total 4,431,579
- -----------------------------------------------------
Cost of shares reacquired (1,654,042)
- -----------------------------------------------------
Increase (decrease) in net
assets derived from share
transactions 2,777,537
- -----------------------------------------------------
Total increase (decrease)
in net assets 3,209,598
- -----------------------------------------------------
Net Assets
Beginning of period 10,687,669
End of period+ $13,897,267
=====================================================
+ Including (overdistributed) net investment income of $(454,247),
$(129,603), $(4,450) and $(20,690), respectively, as of October 31, 1998
and undistributed (overdistributed) net investment income of $(448,358),
$(59,544), $4,442 and $(36,578), respectively, as of October 31, 1997.
See Notes to Financial Statements.
Financial Highlights
FLORIDA SERIES
<TABLE>
<CAPTION>
Class A Shares Class C Shares
------------------------------------------------- ---------------------------------
Year Ended October 31, Year Ended October 31, 7/15/96(b)
Per Share Operating Performance: 1998 1997 1996 1995 1994 1998 1997 to 10/31/96
================================================================================================= =================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.87 $4.79 $4.85 $4.49 $5.28 $4.87 $4.79 $4.70
- ------------------------------------------------------------------------------------------------- ---------------------------------
Income (loss) from investment operations
Net investment income .235 .240 .248 .271 .291 .200 .202 .064
Net realized and unrealized gain (loss)
on investments .113 .092 (.056) .352 (.695) .112 .093 .093
Total from investment operations .348 .332 .192 .623 (.404) .312 .295 .157
------------------------------------------------------------------------------------------- ---------------------------------
Distributions
Dividends from net investment income (.238) (.252) (.252) (.263) (.2835) (.202) (.215) (.067)
Distributions from net realized gain - - - - (.1025) - - -
------------------------------------------------------------------------------------------- ---------------------------------
Net asset value, end of period $4.98 $4.87 $4.79 $4.85 $4.49 $4.98 $4.87 $4.79
- ------------------------------------------------------------------------------------------------- ---------------------------------
Total Return(a) 7.30% 7.12% 4.09% 14.22% (8.03)% 6.52%(c) 6.33% 3.35%(c)
====================================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver .89% .86% .80% .74% .32% 1.58% 1.57% .44%(c)
Expenses, excluding waiver .89% .86% .82% .88% .82% 1.58% 1.57% .44%(c)
Net investment income 4.79% 5.03% 5.19% 5.81% 5.98% 4.09% 4.29% 1.37%(c)
=============================================================================================================================
<CAPTION>
Year Ended October 31,
Supplemental Data for All Classes: 1998 1997 1996 1995 1994
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net assets, end of period (000) $134,567 $144,748 $162,070 $173,242 $174,844
Portfolio turnover rate 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.
See Notes to Financial Statements.
10
<PAGE>
Financial Highlights
PENNSYLVANIA SERIES
<TABLE>
<CAPTION>
Year Ended October 31,
Per Share Operating Performance: 1998 1997 1996 1995 1994
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 5.14 $ 5.01 $ 5.01 $ 4.62 $ 5.33
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .264 .276 .2772 .282 .300
Net realized and unrealized gain (loss) on investments .144 .131 (.0011) .395 (.6975)
Total from investment operations .408 .407 .2761 .677 (.3975)
-----------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.268) (.277) (.2761) (.2870) (.2925)
Distribution from net realized gain - - - - (.02)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 5.28 $ 5.14 $ 5.01 $ 5.01 $ 4.62
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 8.12%(b) 8.37% 5.68% 15.02% (7.73)%
===================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of year (000) $102,907 $94,237 $92,605 $93,494 $81,258
-----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .72% .61%(c) .62% .50% .33%
Expenses, excluding waiver .72% .65%(c) .69% .65% .68%
Net investment income 5.05% 5.47%(c) 5.55% 5.83% 5.98%
Portfolio turnover rate 65.20% 70.99% 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.
See Notes to Financial Statements.
Financial Highlights
MICHIGAN SERIES
<TABLE>
<CAPTION>
Year Ended October 31,
Per Share Operating Performance: 1998 1997 1996 1995 1994
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 5.06 $ 4.93 $ 4.93 $ 4.53 $ 5.23
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .255 .267 .274 .284 .286
Net realized and unrealized gain (loss) on investments .121 .128 (.010) .395 (.651)
Total from investment operations .376 .395 .264 .679 (.365)
-----------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.256) (.265) (.264) (.279) (.293)
Distribution from net realized gain - - - - (.042)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 5.18 $ 5.06 $ 4.93 $ 4.93 $ 4.53
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 7.59%(c) 8.24% 5.53% 15.39% (7.29)%
===================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of year (000) $53,139 $52,630 $52,975 $54,186 $45,603
-----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .69% .60%(c) .44% .25% .34%
Expenses, excluding waiver .69% .68%(c) .73% .75% .84%
Net investment income 4.98% 5.37%(c) 5.59% 5.95% 5.69%
Portfolio turnover rate 82.33% 68.50% 85.26% 98.89% 137.31%
=============================================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
See Notes to Financial Statements.
11
<PAGE>
Financial Highlights
GEORGIA SERIES
<TABLE>
<CAPTION>
Year Ended October 31, 12/27/94(b)
Per Share Operating Performance: 1998 1997 1996 to 10/31/95
====================================================================================================================================
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 5.31 $ 5.14 $ 5.12 $ 4.76
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .276 .275 .290 .245
Net realized and unrealized gain on investments .187 .187 .0397 .370
Total from investment operations .463 .462 .3297 .615
------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.268) (.282) (.2872) (.255)
Distributions from net realized gain (.075) (.01) (.0225) -
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.43 $ 5.31 $ 5.14 $ 5.12
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 9.00%(c) 9.27% 6.69% 13.15%(c)
====================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (000) $19,764 $13,897 $10,688 $5,203
------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .24%(c) .38% .03% .00%(c)
Expenses, excluding waiver .74% .88% .83% 1.08%(c)
Net investment income 5.07% 5.23% 5.55% 5.44%(c)
Portfolio turnover rate 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.
See Notes to Financial Statements.
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 class-specific
expenses such as 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 October 31, 1998, 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) a supplemental annual
distribution fee of 0.10% of the average daily net assets of Class A shares
serviced by certain qualifying institutions. 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.
12
<PAGE>
Notes to Financial Statements
Lord Abbett received the following commissions on sales of shares of the Trust
after concessions were paid to authorized distributors:
Lord Abbett Dealers'
Series Commissions Concessions
- --------------------------------------------------------------------------------
Florida-Class A $ 20,633 $137,234
- --------------------------------------------------------------------------------
Pennsylvania 33,594 306,913
- --------------------------------------------------------------------------------
Michigan 21,889 157,454
- --------------------------------------------------------------------------------
Georgia 30,707 195,680
- --------------------------------------------------------------------------------
Certain of the Trust's officers and trustees have an interest in Lord Abbett.
3. Distributions
As of October 31, 1998, accumulated net realized gain (loss) for financial
report- ing purposes, which is substantially the same as for federal income tax
purposes, aggregated $(7,323,643) for the Florida Series, $(455,598) for the
Pennsylvania Series, $(1,189,689) for the Michigan Series and $139,754 for the
Georgia Series. The capital loss carryforwards 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:
Class A $6,344,675
- --------------------------------------------------------------------------------
Class C $ 296,112
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. Capital
Transactions in shares of beneficial interest for the Florida Series (both
shares and dollar amount) were as follows:
<TABLE>
<CAPTION>
Year Ended 10/31/98 Year Ended 10/31/97
------------------------- -----------------------------
Class A Shares Amount Shares Amount
- -------------------------------------------------- -----------------------------
<S> <C> <C> <C> <C>
Sales of shares 1,389,830 $ 6,880,942 1,626,001 $ 7,812,607
Shares issued to
shareholders in
reinvestment of net
investment income 526,740 2,597,397 632,367 3,034,401
Total 1,916,570 9,478,339 2,258,368 10,847,008
- -------------------------------------------------- -----------------------------
Shares reacquired (4,542,387) (22,396,582) (6,029,983) (28,889,005)
Decrease (2,625,817) $(12,918,243) (3,771,615) $(18,041,997)
- ----------------------------------------------------------------------------------
<CAPTION>
Year Ended 10/31/98 Year Ended 10/31/97
------------------------- -----------------------------
Class C Shares Amount Shares Amount
- -------------------------------------------------- -----------------------------
<S> <C> <C> <C> <C>
Sales of shares 227,206 $ 1,123,787 250,976 $ 1,203,097
Shares issued to
shareholders in
reinvestment of net
investment income 23,490 111,969 28,569 137,048
Total 250,696 1,235,756 279,545 1,340,145
- -------------------------------------------------- -----------------------------
Shares reacquired (329,582) (1,623,283) (632,179) (3,037,095)
Decrease (78,886) $ (387,527) (352,634) $ (1,696,950)
- ----------------------------------------------------------------------------------
</TABLE>
Transactions in shares of beneficial interest for the single class Series were
as follows:
<TABLE>
<CAPTION>
Year Ended 10/31/98 Year Ended 10/31/97
- ------------------------------------------------------------------------------------------- --------------------------------------
Pennsylvania Michigan Georgia Pennsylvania Michigan Georgia
Series Series Series Series Series Series
- ------------------------------------------------------------------------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 3,532,337 1,049,221 1,288,523 1,886,645 830,953 788,606
Shares issued to shareholders in reinvestment of net
investment income and realized gain from investment
transactions 443,670 283,947 124,402 469,179 288,012 66,640
Total 3,976,007 1,333,168 1,412,925 2,355,824 1,118,965 855,246
- ------------------------------------------------------------------------------------------ --------------------------------------
Shares reacquired (2,833,326) (1,470,712) (390,439) (2,498,345) (1,465,934) (318,591)
- ------------------------------------------------------------------------------------------- --------------------------------------
Increase (decrease) in shares 1,142,681 (137,544) 1,022,486) (142,521) (346,969) 536,655
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
As of October 31, 1998, paid in capital for each Series was as follows:
$134,644,329 for the Florida Series, $97,382,266 for the Pennsylvania Series,
$51,518,087 for the Michigan Series and $18,727,823 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 $197,824,164 $214,803,370
- -----------------------------------------------------------------------------
Pennsylvania 69,981,086 64,891,084
- -----------------------------------------------------------------------------
Michigan 46,268,560 44,001,216
- -----------------------------------------------------------------------------
Georgia 25,618,321 20,611,394
- -----------------------------------------------------------------------------
As of October 31, 1998, 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 $7,700,292 $7,753,195 $ (52,903)
- -------------------------------------------------------------------------------
Pennsylvania 6,109,499 6,502,931 (393,432)
- -------------------------------------------------------------------------------
Michigan 2,814,577 2,959,531 (144,954)
- -------------------------------------------------------------------------------
Georgia 917,571 946,721 (29,150)
- -------------------------------------------------------------------------------
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
October 31, 1998 were $32,953.
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareholders,
Lord Abbett Tax-Free Income Trust:
We have audited the accompanying statements of net assets of Lord Abbett
Tax-Free Income Trust-Florida Series, Pennsylvania Series, Michigan Series and
Georgia Series as of October 31, 1998, the related statements of operations for
the year then ended and of changes in net assets for each of the years in the
two-year period then ended and the financial highlights for each of the periods
presented. These financial statements and the financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at October
31, 1998 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Lord Abbett Tax-Free
Income Trust-Florida Series, Pennsylvania Series, Michigan Series and Georgia
Series at October 31, 1998, the results of their operations, the changes in
their net assets and their financial highlights for the respective periods
presented, in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
New York, New York
December 11,1998
Our Management
Trustees
Robert S. Dow
E. Thayer Bigelow*+
William H. T. Bush*
Robert B. Calhoun, Jr.*
Stewart S. Dixon*
John C. Jansing*
C. Alan MacDonald*+
Hansel B. Millican, Jr.*
Thomas J. Neff*+
* Outside Director
+ Audit Committee
Officers
Robert S. Dow, Chairman and President
Zane E. Brown, Executive Vice President
Paul A. Hilstad, Vice President
and Secretary
Daniel E. Carper, Vice President
Philip Fang, Vice President
Robert G. Morris, Vice President
John R. Mousseau, Vice President
Lawrence H. Kaplan, Vice President
and Assistant Secretary
Thomas F. Konop, Vice President
and Assistant Secretary
A. Edward Oberhaus III, Vice President
Keith F. O'Connor, Vice President
Donna McManus, Treasurer
Joseph Van Dyke, Assistant Treasurer
Lydia Guzman, Assistant Secretary
Robert M. Hickey, Assistant Secretary
Investment Manager and Underwriter
Lord, Abbett & Co. and
Lord Abbett Distributor LLC
Custodian
The Bank of New York
New York, NY
Transfer Agent
United Missouri Bank of
Kansas City, N.A.
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City, MO 64141
800-821-5129
Auditors
Deloitte & Touche LLP
New York, NY
Counsel
Debevoise & Plimpton
New York, NY
Copyright (C) 1998 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.
There is no guarantee that the forecasts contained within this publication will
come to pass.
All rights reserved. Printed in the U.S.A.
[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
- ------------------------------------------------------------ LATFIT-2-1098
The GM Building o 767 Fifth Avenue o New York, NY 10153-0203 (12/98)
