Lord Abbett
Tax-Free Income Trust
Florida Series o Pennsylvania Series
Michigan Series o Georgia Series
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED APRIL 30, 2000
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<PAGE>
Report to Shareholders
For the Six Months Ended April 30, 2000
[PHOTO]
Robert S. Dow
Chairman
May 5, 2000
Lord, Abbett & Co. is proud to announce we have received a DALBAR award for
providing consistently good service to shareholders, the 1999 Key Honors Award
for Mutual Fund Service. DALBAR, Inc., an independent research firm and
evaluator of mutual fund service, presents the awards to financial services
firms that provide consistently solid service to clients.
Lord Abbett Tax-Free Income Trust completed the first six months of its
fiscal year on April 30, 2000 with aggregate net assets of $265 million.
Please see page 1 of this report for individual net assets and performance
of each Series.
The six-month period ending April 30, 2000 proved to be a volatile time for
tax-free (municipal or muni) bonds. Due in part to issuers' and investors'
concerns about the onset of the Year 2000, late 1999 was characterized by
low issuance of new bonds and heavy selling for tax reasons. These
conditions drove the prices on most tax-free bonds down to discount levels.
Since bond yields move in the opposite direction of their prices, yields on
tax-free bonds rose, and became even more attractive relative to those of
Treasury(1) securities of similar maturities.
By the end of the first quarter of 2000, however, the municipal bond market
began to experience a turnaround. Yields on longer-maturity tax-free bonds
began to fall somewhat due to a shortage of supply, lower yields in the
taxable bond market and volatility in the equity markets. All of these
conditions helped push money into the tax-free bond market, particularly
among retail investors. In April, the overall tone of the market changed a
bit when interest rates backed up slightly, causing selling pressure in the
tax-free bond market. Throughout the period, the taxable equivalent yield
of longer-maturity municipals remained extremely attractive relative to
Treasurys.
High Credit Quality Maintained
In light of these conditions, the Fund performed well over the past six
months. During that time, we maintained the high credit quality of the
portfolios. We also increased our allocation to tax-free bonds that we
identified as being likely candidates for pre-refunding. Pre-refunded
bonds, which typically have coupons that are higher than current market
rates, are bonds that have been refinanced, or "prepaid" by the proceeds of
a second bond issue. The proceeds of this second issuance are used to
"call" or pay off the original issue at its first call date. Until that
time, the monies are held in escrow and are usually invested in U.S.
Treasurys. As a result, pre-refunded bonds have virtually no default risk.
Typically, when a bond becomes pre-refunded it appreciates in value because
of its higher credit quality and, if the bond is selling at a discount, due
to its shortened maturity. Our focus on candidates for pre-refunding helped
boost the Fund's income. In addition, if the economy slows and interest
rates drop, appreciation associated with pre-refunded bonds will aid
portfolio returns. We believe now could be an ideal time for investors to
"lock in" attractive taxable equivalent yields at relatively lower prices
and enjoy the potential for favorable total returns.
Real Value in Tax-Free Bond Funds
We believe tax-free bond mutual funds will likely continue to offer
investors real value over the next several months. As we move into the
second half of 2000, we may selectively add deep discount bonds to some of
your portfolios. Discount bonds are bonds that sell at prices considerably
below par and offer attractive total returns in a falling interest rate
environment. While we will continue to keep the average credit quality of
your portfolios high, we may also consider select lower-rated, investment
grade tax-free bonds. The rates currently offered by these securities are
generally the highest they have been in five or six years, relative to
higher grade debt.
Thank you for making the Lord Abbett Tax-Free Income Trust part of your
diversified investment portfolio. We look forward to helping you attain
your financial goals in the years ahead.
(1) Unlike with U.S. Treasury securities, an investment in the Fund is neither
insured nor guaranteed by the U.S. Government.
RISK: All or a portion of the income derived from this portfolio may be
subject to the Federal Alternative Minimum Tax. The Fund has the ability to
invest in derivatives, including options, financial futures, options on
financial futures and residual interest bonds (also known as "inverse
floaters"). These instruments involve special risks, which include but are
not limited to: risk of loss of principal due to potential illiquidity,
risks arising from margin requirements and related leverage factors, and
the risk of extreme volatility, sometimes associated with residual interest
bonds and their variable interest rate structure.
<PAGE>
Fund Facts
On April 30, 2000, 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 (1)
All tax-free portfolios managed by Lord Abbett emphasize:
o High quality
o Total return potential
o Call protection
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Florida Series
AAA 76.3%
AA 8.3%
A 8.6%
BBB 3.0%
Other 3.8%
Michigan Series
AAA 83.5%
AA 5.5%
A 1.8%
BBB 6.0%
Other 3.8%
Pennsylvania Series
AAA 76.6%
AA 4.3%
A 11.8%
BBB 7.3%
Georgia Series
AAA 71.4%
AA 4.5%
A 11.3%
BBB 8.0%
Other 4.8%
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Lord Abbett's Tax-Free Record and SEC-Required Information
<TABLE>
<CAPTION>
Florida Pennsylvania Michigan Georgia
Series(2) Series Series Series(3)
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Date of Inception 9/25/91 2/3/92 12/1/92 12/27/94
Net Assets (in millions) $98 $90 $45 $28
Distribution Rate at Net Asset Value
(as of 4/30/00)(4) 5.09% 5.26% 5.31% 5.34%
-------------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return
at Net Asset Value (as of 4/30/00)(5):
1 Year -4.64% -3.49% -2.77% -2.79%
3 Years 3.31% 4.19% 4.23% 5.04%
5 Years 4.21% 5.11% 5.29% 6.00%
Life of Series 5.18% 5.90% 5.72% 6.83%
30-Day SEC Yield(6) (as of 4/30/00) 4.38% 4.65% 4.83% 5.33%
-------------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return at the
Maximum Offering Price (as of 3/31/00)(5):
1 Year -6.50% -5.70% -4.70% -5.40%
5 Years 3.71% 4.70% 4.80% 5.42%
Life of Series 4.96% 5.64% 5.43% 6.38%
</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 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 refer to the Trust's current prospectus.
(3) Returns and yield for Tax-Free Income Trust - Georgia Series reflect a
voluntary waiver of Lord, Abbett & Co.'s management fee. Absent this
waiver, the Fund's returns and yield would have been lower. Lord, Abbett &
Co. may revise or terminate this waiver at any time.
(4) Dividend Distribution Rate at Net Asset Value: The dividend distribution
rate is calculated by dividing the annualized dividend per share of a class
derived from net investment income during the month ended April 30, 2000 by
the net asset value on the last day of that period.
(5) 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 Federal
Alternative Minimum Tax liability 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.
(6) 30-Day SEC Yield: The 30-day SEC yield for each class of shares is
calculated by dividing annualized net investment income per share during
the 30-day period ended April 30, 2000 by the maximum offering price per
share on the last day of that period.
1
<PAGE>
Important Information
Each portfolio may invest up to 20% of its net assets in residual interest
bonds ("RIBs"). A RIB, sometimes referred to as inverse floaters, are debt
instruments 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 6/30/00, this report
must be accompanied by Lord Abbett's Performance Quarterly for the most
recently completed calendar quarter.
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
FLORIDA SERIES APRIL 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education 1.98% Miami-Dade Cnty FL Ed Fac Auth Rev Ser A AMBAC+ 6.00% 4/1/2023 AAA $ 2,000 $ 2,035,000
----------------------------------------------------------------------------------------------------------------------==============
Finance 3.04% Puerto Rico Muni Fin Agy Ser A 6 1/2% 7/1/2019 AAA 2,915 3,126,338
----------------------------------------------------------------------------------------------------------------------==============
General Obligation Florida St Bd Ed Cap Outlay Pub Ed Ser D 5 1/8% 6/1/2015 AA+ 2,000 1,905,000
18.21% Florida St Bd Ed Cap Outlay Pub Ed Ser B 5 7/8% 6/1/2020 AA+ 2,000 2,010,000
Puerto Rico Comwlth RIBs 7.00% 7/1/2029++ AAA* 2,000 2,047,500
Puerto Rico Comwlth Pub Impt 4 1/2% 7/1/2023 A 500 401,250
Puerto Rico Comwlth Pub Impt MBIA+ 4 3/4% 7/1/2023 AAA 1,500 1,273,125
Puerto Rico Comwlth Pub Impt MBIA+ 5 3/4% 7/1/2026 AAA 10,000 9,925,000
Puerto Rico Comwlth RIBs MBIA+ 7.49% 7/1/2008++ AAA 1,100 1,153,625
Total 18,715,500
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Healthcare 6.29% Atlantic Beach FL Hlth Care Fac Rev Fleet Landing Proj
ACA+ 5 1/2% 10/1/2012 A 1,165 1,140,244
Atlantic Beach FL Hlth Care Fac Rev Fleet Landing Proj
ACA+ 5 5/8% 10/1/2013 A 1,000 990,000
Charlotte Cnty FL Hlth Care Fac Rev RIBs FSA+ 7.67% 8/26/2027++ AAA 3,000 3,007,500
Halifax Hosp Med Ctr FL Hlth Care Fac Rev Halifax Mgmt Sys Ser A
ACA+ 5.20% 4/1/2018 A 1,000 886,250
Suwannee Cnty FL Hlth Care Advent Christian Vlg Inc
ACA+ 5 1/4% 4/1/2019 A 500 436,250
Total 6,460,244
----------------------------------------------------------------------------------------------------------------------==============
Housing 4.00% Broward Cnty FL Hsg Fin Auth Multi Fam Rev Bridgewtr Ser A
AMT+++ 5.35% 10/1/2023 A 980 883,225
Dade Cnty FL Hsg Fin Auth Sing Fam Mtg Rev Ser E
GNMA/FNMA+ 7.00% 3/1/2024 Aaa 35 35,831
Lee Cnty FL Hsg Fin Auth Sing Fam Mtg Rev AMT+++ 6.40% 3/1/2029 Aaa 1,835 1,912,987
Miami Dade Cnty FL Hsg Fin Auth Multi Fam Rev Villa Esperanza Apt Proj
AMT+++ 5.45% 10/1/2038 A 1,250 1,112,500
Orange Cnty FL Hsg Fin Auth Ser A-1 GNMA/FNMA+ AMT+++
Zero Coupon 3/1/2028 Aaa 985 163,756
Total 4,108,299
----------------------------------------------------------------------------------------------------------------------==============
Miscellaneous 10.68% Brevard Cnty FL Sales Tax Rev MBIA+ 7.00% 12/1/2018 AAA 1,000 1,047,500
Florida Muni Ln Council Rev Zero Coupon 4/1/2020 AAA 4,000 1,210,000
Lynn Haven FL Cap Impt Rev MBIA+ 5 1/2% 12/1/2032 AAA 1,165 1,099,469
Miami Dade Cnty FL Sp Oblig Sub Ser B 5.00% 10/1/2037 AAA 1,500 1,263,750
Miami-Dade Cnty FL Sp Oblig Sub Ser A MBIA+ Zero Coupon 10/1/2024 AAA 17,875 3,932,500
Miami-Dade Cnty FL Sp Oblig Sub Ser B MBIA+ Zero Coupon 10/1/2033 AAA 10,000 1,237,500
Orange Cnty FL Tourist Dev Tax Rev AMBAC+ 6.00% 10/1/2016 AAA 710 711,370
Tampa FL Sports Auth Rev Tampa Bay Arena Proj MBIA+ 6.00% 10/1/2015 AAA 450 475,313
Total 10,977,402
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2
<PAGE>
Statement of Net Assets (unaudited)
FLORIDA SERIES APRIL 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Pollution 9.67% Citrus Cnty FL Poll Ctrl Rev FL Pwr Corp MBIA+ 6 5/8% 1/1/2027 AAA $ 5,740 $ 5,919,375
Hillsborough Cnty FL Ind Dev Auth Poll Ctrl Rev
Tampa Elec 8.00% 5/1/2022 AA 2,500 2,706,250
Jacksonville FL Poll Rev Anheuser-Busch Proj 5.70% 8/1/2031 A+ 1,400 1,314,250
Total 9,939,875
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Power 3.86% Gainesville FL Util Sys Rev Ser A 5.20% 10/1/2022 AA 2,000 1,832,500
Puerto Rico Elec Pwr Auth Pwr Rev Ser EE 4 3/4% 7/1/2024 BBB+ 2,545 2,131,438
Total 3,963,938
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 24.51% Bay Cnty FL Hosp Sys Rev Bay Med Ctr Proj 8.00% 10/1/2019 AAA 500 565,625
Dade Cnty FL Sch Bd Ser B 5.60% 8/1/2026 AAA 4,000 4,150,000
Dunedin FL Hosp Rev Mease Hlth Care MBIA+ 6 3/4% 11/15/2021 AAA 1,000 1,050,000
Florida St Jacksonville Transn 6.40% 7/1/2016 AAA 5,600 5,838,000
Manatee Cnty FL Pub Util Rev Ser 91-A MBIA+ 6 3/4% 10/1/2013 AAA 1,000 1,047,500
Melbourne FL Wtr & Swr Rev Ser B FGIC+ 6.40% 10/1/2022 AAA 1,700 1,748,025
Okeechobee FL Util Auth Sys Rev Acquisition & Impt
MBIA+ 5.60% 10/1/2025 AAA 200 208,750
Orlando & Orange Cnty Expwy Auth FL Expwy Rev FGIC+ 6 1/2% 7/1/2020 AAA 395 404,302
Puerto Rico Elec Pwr Auth Pwr Rev RIBs FSA+ 7.69% 7/1/2023++ AAA 1,500 1,610,625
Puerto Rico Tel Auth Rev RIBs MBIA+ 6.64% 1/25/2007++ AAA 3,000 3,127,500
Tampa FL Rev Allegany Hlth Sys St Joseph MBIA+ 6.70% 12/1/2018 AAA 5,000 5,437,500
Total 25,187,827
----------------------------------------------------------------------------------------------------------------------==============
Transportation 9.66% Dade Cnty FL Seaport MBIA+ 5 1/8% 10/1/2026 AAA 2,235 2,003,118
Jacksonville FL Port Auth Arpt Rev Ser A
FGIC+ AMT+++ 6 1/4% 10/1/2024 AAA 1,000 1,015,000
Miami-Dade Cnty FL Expwy Auth Toll Sys Rev Toll Sys Rev
FGIC+ 6 3/8% 7/1/2029 AAA 1,250 1,312,500
Pensacola FL Arpt Rev Ser A MBIA+ AMT+++ 6 1/8% 10/1/2018 AAA 1,250 1,282,813
Puerto Rico Comwlth Hwy & Transn Auth Transn Rev Ser A 4 3/4% 7/1/2038 A 2,000 1,617,500
Santa Rosa Bay FL Bdg Auth Rev Zero Coupon 7/1/2015 BB+ 3,140 1,134,325
Santa Rosa Bay FL Bdg Auth Rev Zero Coupon 7/1/2022 BB+ 3,000 641,250
Santa Rosa Bay FL Bdg Auth Rev 6 1/4% 7/1/2028 Baa3 1,000 926,250
Total 9,932,756
----------------------------------------------------------------------------------------------------------------------==============
Water/Sewer 7.19% Clearwater FL Wtr & Swr Rev FGIC+ Zero Coupon 12/1/2014 AAA 1,900 800,375
Dade Cnty Fla Wtr & Swr Sys 5 1/2% 10/1/2025 AAA 2,050 1,952,625
Miami-Dade Cnty FL Wtr & Swr Rev Ser A FGIC+ 5.00% 10/1/2029 AAA 1,000 862,500
Tampa Bay Wtr FL Util Sys Rev FGIC+ 6.00% 10/1/2024 AAA 2,000 2,035,000
Tampa Bay Wtr FL Util Sys Rev Ser B FGIC+ 4 3/4% 10/1/2027 AAA 2,100 1,745,625
Total 7,396,125
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Total Municipal Bonds 99.09% (Cost $102,199,605) 101,843,304
----------------------------------------------------------------------------------------------------------------------==============
3
<PAGE>
Statement of Net Assets (unaudited)
FLORIDA SERIES APRIL 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities .91%
------------------------------------------------------------------------------------------------------------------------------------
Cash $ 3,300,990
====================================================================================================================================
Receivables for: Securities sold 5,014,775
Interest 1,274,403
Capital stock sold 5,898
Total Other Assets 9,596,066
----------------------------------------------------------------------------------------------------------------------==============
Payables for: Securities purchased 7,456,608
Dividends 356,116
Capital stock reacquired 608,993
Other 239,713
Total Liabilities 8,661,430
----------------------------------------------------------------------------------------------------------------------==============
Total Other Assets, Less Liabilities 934,636
====================================================================================================================================
Net Assets 100.00% $102,777,940
====================================================================================================================================
Class A Shares-Net asset value ($97,694,720 / 21,792,643 shares outstanding) $4.48
Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $4.63
Class C Shares-Net asset value ($5,083,220 / 1,132,441 shares outstanding) $4.49
* 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. See
page 10 for Glossary of Terms.
++ 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, 2000. See page 2 for additional important
information.
+++Income from these investments may be subject to the Alternative Minimum Tax (AMT).
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
PENNSYLVANIA SERIES APRIL 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education 14.51% Delaware Cnty PA Auth Univ Rev Villanova Univ AMBAC+ 5.80% 8/1/2025 AAA $1,600 $ 1,564,000
Gettysburg PA Muni Auth College Rev Gettysburg College Ser B
AMBAC+ 4 3/4% 8/15/2018 AAA 1,200 1,032,000
Montgomery Cnty PA Ind Dev Auth Rev Hill Sch Proj 5.35% 8/15/2027 Aaa 2,250 2,044,688
New Wilmington PA Muni Auth Rev Westminster College
ACA+ 5.35% 3/1/2028 A 1,000 871,250
Pennsylvania St Higher Ed Assistance Agy Student Ln Rev
RIBs AMBAC+ AMT+++ 7.85% 3/1/2022++ AAA 3,000 3,150,000
Pennsylvania St Higher Ed Fac Auth Bryn Mawr College
AMBAC+ 5 1/8% 12/1/2029 AAA 1,400 1,223,250
Pennsylvania St Higher Ed Fac Auth Drexel Univ 6.00% 5/1/2029 A- 1,000 981,250
Pennsylvania St Higher Ed Fac Auth Ser A MBIA+ 6 5/8% 8/15/2009 AAA 325 342,875
Pennsylvania St Higher Ed Fac Auth Rev UPMC Hlth Sys Ser A
FSA+ 5.00% 8/1/2029 AAA 500 421,250
Puerto Rico Ind Tourist Ed Med & Envr Ctrl Fac Ana G Mendez Univ Sys
5 3/8% 2/1/2029 BBB 1,000 873,750
State Pub Sch Bldg Auth PA College Rev College Rev
AMBAC+ Zero Coupon 7/15/2013 AAA 295 137,912
State Pub Sch Bldg Auth PA College Rev College Rev
AMBAC+ Zero Coupon 7/15/2014 AAA 295 128,325
State Pub Sch Bldg Auth PA College Rev College Rev
AMBAC+ Zero Coupon 7/15/2015 AAA 295 119,106
State Pub Sch Bldg Auth PA College Rev College Rev
AMBAC+ Zero Coupon 7/15/2016 AAA 295 110,994
Total 13,000,650
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Finance 7.19% Delaware VY PA Regl Fin Auth Loc Govt Rev Ser A
AMBAC+ 5 1/2% 8/1/2028 AAA 5,500 5,204,375
Delaware VY PA Regl Fin Auth Loc Govt Rev Ser C
AMBAC+ 7 3/4% 7/1/2027 AAA 1,000 1,238,750
Total 6,443,125
----------------------------------------------------------------------------------------------------------------------==============
General Obligation Lancaster PA Ser A FGIC+ 4 1/2% 5/1/2028 AAA 1,950 1,528,313
12.44% Philadelphia PA Sch Dist Ser B AMBAC+ 5 3/8% 4/1/2027 AAA 1,000 925,000
Philadelphia PA Sch Dist Ser C MBIA+ 5 1/2% 3/1/2024 AAA 1,000 940,000
Puerto Rico Comwlth MBIA+ 5.00% 7/1/2024 AAA 1,000 883,750
Puerto Rico Comwlth FSA+ 5.00% 7/1/2027 AAA 500 438,125
Puerto Rico Comwlth Pub Impt 4 1/2% 7/1/2023 A 2,000 1,605,000
Puerto Rico Comwlth Ser A 6.00% 7/1/2014 A 1,000 1,027,500
Ridley PA Sch Dist FGIC+ 5.00% 11/15/2029 AAA 2,000 1,710,000
Spring-Ford Area Sch Dist PA FGIC+ 4 3/4% 3/1/2025 Aaa 1,500 1,239,375
West Mifflin PA Area Sch Dist FGIC+ 4 7/8% 2/15/2023 AAA 1,000 850,000
Total 11,147,063
----------------------------------------------------------------------------------------------------------------------==============
Healthcare 11.30% Chester Cnty PA Hlth & Ed Fac Auth Hlth Sys Rev IRS
RIBs AMBAC+ 7.32% 5/15/2020++ AAA 2,600 2,453,750
Delaware Cnty PA Auth Hosp Rev Crozer Chester Med Ctr
ACA+ 5 3/8% 12/1/2018 A 1,000 900,000
Delaware Cnty PA Auth Hosp Rev Crozer Chester Med Ctr
ACA+ 5.30% 12/1/2027 A 1,000 855,000
Northeastern PA Hosp & Ed Auth Sch Rev Wyo Seminary Proj
MBIA+ 4 3/4% 10/1/2028 AAA 1,500 1,207,500
Pottsville PA Hosp Auth Hosp Rev Hosp & Warne Clinic
ACA+ 5 5/8% 7/1/2024 A 500 451,875
Puerto Rico Ind Tourist Ed Mutuo Oblig Group Ser A
MBIA+ 6 1/4% 7/1/2024 AAA 850 868,063
Sayre PA Hlth Care Fac Auth Rev Tioga Nursing Fac Ser A
AMBAC+ 7 1/4% 10/1/2018 AAA 1,500 1,532,865
Scranton-Lackawanna PA Hlth & Welfare Auth Rev Hosp Moses Taylor
Hosp Proj 6.20% 7/1/2017 BBB- 1,055 920,487
York Cnty PA Hosp Auth Rev York Hosp AMBAC+ 5 1/4% 7/1/2017 AAA 1,000 933,750
Total 10,123,290
----------------------------------------------------------------------------------------------------------------------==============
5
<PAGE>
Statement of Net Assets (unaudited)
PENNSYLVANIA SERIES APRIL 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Housing 4.19% Pennsylvania Hsg Fin Agy Sing Fam Mtg Ser 41-B AMT+++ 6.65% 4/1/2025 AA+ $ 990 $ 1,009,800
Pennsylvania Hsg Fin Agy Sing Fam Mtg Ser 42 AMT+++ 6.85% 4/1/2025 AA+ 1,980 2,041,875
Pennsylvania Hsg Fin Agy Sing Fam Mtg Ser 59-A AMT+++ 5.80% 10/1/2029 AA+ 750 704,063
Total 3,755,738
----------------------------------------------------------------------------------------------------------------------==============
Industrial 1.40% Bradford Cnty PA Ind Dev Auth Intl Paper Co Proj Ser A
AMT+++ 6.60% 3/1/2019 BBB+ 1,250 1,256,250
----------------------------------------------------------------------------------------------------------------------==============
Miscellaneous 3.81% Philadelphia PA Auth Ind Dev Rev Ed Cmnty Foreign Med Grads
MBIA+ 5.00% 6/1/2015 AAA 500 453,124
Philadelphia PA Auth Ind Dev Rev Natl Bd Med Examiners
MBIA+ 4.60% 5/1/2012 AAA 1,000 911,250
Philadelphia PA Pkg Auth Rev Ser A AMBAC+ 5 1/4% 2/15/2029 AAA 180 160,650
Pittsburgh & Allegheny Cnty PA Hotel Room AMBAC+ 5.00% 2/1/2024 AAA 1,000 868,750
Washington Cnty PA Auth Rev Cap Fdg Rev Proj & Equip Prog
AMBAC+ 6.15% 12/1/2029 AAA 1,000 1,022,500
Total 3,416,274
----------------------------------------------------------------------------------------------------------------------==============
Pollution 2.78% Allegheny Cnty PA Ind Dev Auth Rev Envr Impt USX Proj
6.10% 7/15/2020 BBB 1,000 927,500
York Cnty PA Ind Dev Auth Poll Ctrl Rev Pub Svc Elec & Gas Ser A
MBIA+ 6.45% 10/1/2019 AAA 1,475 1,567,187
Total 2,494,687
----------------------------------------------------------------------------------------------------------------------==============
Power 3.69% Pennsylvania Econ Dev Recov Rev North Hampton Gen Ser A
AMT+++ 6.60% 1/1/2019 BBB- 1,500 1,428,750
Philadelphia PA Gas Wks Rev First Ser B FSA+ 5.00% 7/1/2028 AAA 1,000 857,500
Puerto Rico Elec Pwr Auth Pwr Rev Ser X 6.00% 7/1/2015 BBB+ 1,000 1,016,250
Total 3,302,500
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 26.29% Bethlehem PA Area Sch Dist MBIA+ 6.00% 3/1/2016 AAA 1,000 1,046,250
Burrell PA Sch Dist FGIC+ 5.65% 11/15/2016 AAA 1,500 1,543,125
Lycoming Cnty PA MBIA+ 5.80% 11/15/2022 AAA 3,050 3,179,625
North Penn PA Wtr Auth FGIC+ 7.00% 11/1/2024 AAA 1,150 1,250,625
Northeastern PA Hosp & Ed Auth Luzerne Cnty Cmnty College
AMBAC+ 6 5/8% 8/15/2015 AAA 2,000 2,132,500
Pennsylvania Conv Ctr Auth Rev Ser A FGIC+ 6.70% 9/1/2016 AAA 855 954,394
Pennsylvania Intergovt Coop Auth Sp Tax Rev Funding Prog
FGIC+ 6 3/4% 6/15/2021 AAA 2,000 2,152,500
Philadelphia PA Gas Wks Rev 12th Ser B MBIA+ 7.00% 5/15/2020 AAA 2,220 2,528,025
Puerto Rico Comwlth MBIA+ 6.45% 7/1/2017 AAA 700 750,750
Puerto Rico Comwlth 6.45% 7/1/2017 AAA 1,900 2,037,750
Puerto Rico Elec Pwr Auth Pwr Rev Ser X 6 1/8% 7/1/2021 AAA 500 535,625
Puerto Rico Elec Pwr Auth Pwr Rev RIBs FSA+ 7.69% 7/1/2023++ AAA 3,000 3,221,250
Puerto Rico Elec Pwr Auth Pwr Rev Ser T RIBs FSA+ 8.59% 7/1/2018++ AAA 1,500 1,693,125
Scranton-Lackawanna PA Hlth & Welfare Auth Rev Univ Scranton
AMBAC+ 6.80% 11/1/2014 AAA 500 528,750
Total 23,554,294
----------------------------------------------------------------------------------------------------------------------==============
Transportation 9.27% Delaware River Port Auth PA & NJ Port Dist Proj Ser B
FSA+ 5 5/8% 1/1/2026 AAA 1,500 1,453,125
Pennsylvania St Tpk Cmnty Tpk Rev Ser N MBIA+ 5 1/2% 12/1/2017 AAA 445 431,650
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev Ser V 6 5/8% 7/1/2012 A 2,615 2,732,675
Puerto Rico Comwlth Hwy & Transn Auth Hwy Rev Ser Y 5 1/2% 7/1/2026 A 1,000 936,250
Puerto Rico Port Auth Rev Ser D FGIC+ AMT+++ 7.00% 7/1/2014 AAA 1,000 1,042,500
Southeastern PA Transn Auth FGIC+ 4 3/4% 3/1/2029 AAA 2,075 1,706,688
Total 8,302,888
----------------------------------------------------------------------------------------------------------------------==============
6
<PAGE>
Statement of Net Assets (unaudited)
PENNSYLVANIA SERIES APRIL 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Water/Sewer 1.18% Bucks Cnty PA Wtr & Swr Auth Neshaminy Interceptor Swr Sys
AMBAC+ 5 1/2% 6/1/2017 Aaa $ 665 $ 645,050
Warminster Twp PA Auth Swr & Wtr Rev AMBAC+ 4 3/4% 3/1/2023 AAA 500 415,625
Total 1,060,675
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 98.05% (Cost $89,940,011) 87,857,434
----------------------------------------------------------------------------------------------------------------------==============
Cash and Receivables, Net of Liabilities 1.95% 1,743,522
====================================================================================================================================
Net Assets 100.00% $89,600,956
====================================================================================================================================
Net asset value ($89,600,956 / 18,697,533 shares outstanding) $4.79
Maximum offering price (net asset value plus sales charge of 3.25% of theoffering price) $4.95
+ Insured or guaranteed by the indicated municipal bond insurance corporation or federal agency. See
page 10 for Glossary of Terms.
++ 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, 2000. See page 2 for additional important
information.
+++Income from these investments may be subject to the Alternative Minimum Tax (AMT).
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
MICHIGAN series April 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education 11.40% Eastern MI Univ Rev FGIC+ 5 1/2% 6/1/2027 AAA $ 500 $ 469,375
Fenton MI Pub Sch FGIC+ 5.00% 5/1/2024 AAA 1,000 870,000
Grand Valley MI St Univ Rev FGIC+ 5 1/2% 2/1/2018 AAA 1,150 1,129,875
Michigan Higher Ed Student Ln Auth Student Ln Ser XII-Q
AMBAC+ AMT+++ 5.20% 9/1/2010 AAA 275 264,343
Saginaw Valley St Univ MI Rev AMBAC+ 5 1/4% 7/1/2019 AAA 1,000 925,000
Saginaw Valley St Univ MI Rev AMBAC+ 5.30% 7/1/2028 AAA 250 225,938
Saginaw Valley St Univ MI Rev 5 5/8% 7/1/2029 Aaa 700 667,625
Wayne Cnty MI Cmnty College Impt AMBAC+ 5 1/2% 7/1/2019 AAA 565 544,519
Total 5,096,675
----------------------------------------------------------------------------------------------------------------------==============
General Obligation 37.29% Anchor Bay MI Sch Dist Sch Bldg & Site Ser I FGIC+ 6.00% 5/1/2023 AAA 600 605,250
Belding MI Area Sch AMBAC+ 5.00% 5/1/2026 AAA 400 346,500
Boyne City MI Pub Sch Dist FGIC+ 5 3/4% 5/1/2017 AAA 1,935 1,939,838
Central Montcalm MI Pub Sch MBIA+ 5.90% 5/1/2019 AAA 750 756,563
Genesee MI Sch Dist Bldg & Site FSA+ 6.00% 5/1/2029 Aaa 700 704,375
Greenville MI Pub Sch FSA+ 6.00% 5/1/2025 AAA 1,000 1,007,500
Howell MI Pub Sch MBIA+ 6.00% 5/1/2025 AAA 1,770 1,781,062
Kaleva Norman Etc MI Sch Dist Bldg & Site FGIC+ 6.00% 5/1/2025 Aaa 600 604,500
Mattawan MI Cons Sch Dist 5 3/4% 5/1/2025 AAA 2,230 2,190,975
Memphis MI Cmnty Sch FGIC+ 5 1/4% 5/1/2029 Aaa 150 134,250
Potterville MI Pub Sch Bldg & Site FSA+ 6.00% 5/1/2029 AAA 1,000 1,006,250
Puerto Rico Comwlth RIBs 7.00% 7/1/2029++ AAA* 925 946,968
Puerto Rico Comwlth Pub Impt MBIA+ 4 3/4% 7/1/2023 AAA 1,000 848,750
Puerto Rico Comwlth Pub Impt MBIA+ 5 3/4% 7/1/2026 AAA 1,500 1,488,750
Saline MI Area Sch FGIC+ 5 1/2% 5/1/2015 AAA 750 740,625
Wayne Cnty MI Bldg Auth Cap Impt Ser A MBIA+ 5 1/4% 6/1/2016 AAA 500 478,125
Zeeland MI Pub Sch FGIC+ 5 1/4% 5/1/2022 AAA 1,200 1,093,500
Total 16,673,781
----------------------------------------------------------------------------------------------------------------------==============
7
<PAGE>
Statement of Net Assets (unaudited)
MICHIGAN series April 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Healthcare 12.18% Kalamazoo MI Hosp Fin Auth Fac Rev Fac Rev RIBs
FGIC+ 6.02% 6/1/2011++ AAA $4,000 $ 3,930,000
Puerto Rico Ind Tourist Ed Ryder Mem Hosp Proj Ser A 6.70% 5/1/2024 BBB- 1,575 1,515,938
Total 5,445,938
----------------------------------------------------------------------------------------------------------------------==============
Housing 4.03% Michigan St Hsg Dev Auth Ser B 6.95% 12/1/2020 AA+ 415 426,413
Michigan St Hsg Dev Auth Ser D 5.95% 12/1/2016 AA+ 500 503,750
Michigan St Hsg Dev Auth Ser E AMT+++ 6.20% 12/1/2027 AA+ 880 873,400
Total 1,803,563
----------------------------------------------------------------------------------------------------------------------==============
Miscellaneous 4.08% Michigan Muni Bd Auth Rev St Revolving Fd 5 1/8% 10/1/2020 Aa1 750 685,313
Michigan Muni Bd Auth Rev Unrefunded Balance Ser B
AMBAC+ 6 3/4% 11/1/2014 AAA 295 316,756
Michigan St House Representative Ctfs Partn Zero Coupon 8/15/2024 AAA 3,565 824,406
Total 1,826,475
----------------------------------------------------------------------------------------------------------------------==============
Power 7.00% Grand Haven MI Elec Rev 5 1/4% 7/1/2016 AAA 450 432,562
Michigan St Strategic Fd Disp Rev Genesee Pwr Station
AMT+++ 7 1/2% 1/1/2021 BB* 500 510,625
Michigan St Strategic Fd Ltd Oblig Rev Detroit Ed Ser BB
MBIA+ 7.00% 7/15/2008 AAA 400 445,500
Michigan St Strategic Fd Ltd Oblig Rev Detroit Ed Ser BB
AMBAC+ 7.00% 5/1/2021 AAA 500 571,875
Puerto Rico Elec Pwr Auth Pwr Rev Ser EE 4 3/4% 7/1/2024 BBB+ 1,395 1,168,313
Total 3,128,875
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 19.11% Alpena MI Pub Sch MBIA+ 5 5/8% 5/1/2022 AAA 300 308,625
Alpena MI Pub Sch MBIA+ 5 5/8% 5/1/2022 AAA 200 205,750
Hastings MI Sch Dist Prerefunded FGIC+ 5 5/8% 5/1/2018 AAA 490 506,538
Hastings MI Sch Dist Prerefunded 1999 FGIC+ 5 5/8% 5/1/2018 AAA 510 527,212
Huron Valley MI Sch Dist FGIC+ 5 3/4% 5/1/2022 AAA 250 259,063
Kent Hosp MI Fin Auth Hlth Care Rev Butterworth Hlth Sys Ser A
MBIA+ 5 5/8% 1/15/2026 AAA 800 831,000
Lake Orion MI Cmnty Sch Dist AMBAC+ 7.00% 5/1/2020 AAA 1,050 1,148,437
Lakeview MI Cmnty Sch FGIC+ 5.60% 5/1/2022 AAA 210 215,775
Michigan Muni Bd Auth Rev Prerefunded Ser G AMBAC+ 6 3/4% 11/1/2014 AAA 1,205 1,308,931
Michigan St Hosp Fin Auth Rev Sister of Mercy Hlth Corp Ser J
7 1/2% 2/15/2018 AAA 650 678,106
Puerto Rico Elec Pwr Auth Pwr Rev Ser T RIBs FSA+ 8.59% 7/1/2018++ AAA 500 564,375
Puerto Rico Tel Auth Rev RIBs MBIA+ 6.56% 1/16/2015++ AAA 900 947,250
Romulus MI Cmnty Sch Ser II FGIC+ 6.40% 5/1/2017 AAA 500 524,375
Tri Cnty MI Area Sch Dist MBIA+ 6 7/8% 5/1/2016 AAA 500 518,845
Total 8,544,282
----------------------------------------------------------------------------------------------------------------------==============
Transportation 4.13% Puerto Rico Comwlth Hwy & Transn Auth Transn Rev Ser A 4 3/4% 7/1/2038 A 1,000 808,750
Wayne Charter Cnty MI Arpt Rev Detroit Met Arpt Ser B
MBIA+ AMT+++ 6 3/4% 12/1/2021 AAA 1,000 1,036,250
Total 1,845,000
----------------------------------------------------------------------------------------------------------------------==============
Water/Sewer 1.71% Detroit MI Sewer Disp Rev Ser A MBIA+ 5 1/2% 7/1/2020 AAA 800 764,000
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 100.93% (Cost $44,733,666) 45,128,589
----------------------------------------------------------------------------------------------------------------------==============
8
<PAGE>
Statement of Net Assets (unaudited)
MICHIGAN series April 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
-----------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (.93%) $ (413,769)
----------------------------------------------------------------------------------------------------------------------==============
Net Assets 100.00% $44,714,820
----------------------------------------------------------------------------------------------------------------------==============
Net asset value ($44,714,820 / 9,408,971 shares outstanding) $4.75
Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $4.91
* 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. See
page 10 for Glossary of Terms.
++ 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, 2000. See page 2 for additional important
information.
+++Income from these investments may be subject to the Alternative Minimum Tax (AMT).
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Statement of Net Assets (unaudited)
GEORGIA SERIES APRIL 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education 10.97% Private Colleges & Univ Auth GA Mercer Hsg Corp Proj Ser A
ACA+ 5 3/8% 6/1/2031 A $1,000 $ 886,250
Private Colleges & Univ Auth GA Mercer Univ Proj Ser A
5 1/4% 10/1/2025 A3 1,300 1,134,250
Richmond County GA Pub Fac Cnty Bd Ed Proj AMBAC+ 6.00% 11/1/2024 Aaa 500 508,125
University VI Ser A ACA+ 6.00% 12/1/2019 A 500 498,750
Total 3,027,375
----------------------------------------------------------------------------------------------------------------------==============
General Obligation 8.15% Atlanta GA 5.60% 12/1/2015 AA 95 95,118
De Kalb Cnty GA 6.00% 1/1/2020 Aa1 250 253,125
Puerto Rico Comwlth FSA+ 5 1/2% 7/1/2017 AAA 500 496,875
Puerto Rico Comwlth RIBs 7.00% 7/1/2029++ AAA* 1,125 1,151,719
Puerto Rico Comwlth RIBs FSA+ 8.20% 7/1/2020++ AAA 250 250,313
Total 2,247,150
----------------------------------------------------------------------------------------------------------------------==============
Healthcare 11.37% Cobb Cnty GA Hosp Auth Rev Antic Ctfs Ser A AMBAC+ 4 3/4% 4/1/2026 AAA 2,050 1,681,000
Glynn-Brunswick GA Mem Hosp Auth Rev Southeast GA Hlth
MBIA+ 6.00% 8/1/2016 AAA 400 408,000
Royston GA Hosp Auth Hosp Rev Ty Cobb
Hlthcare Sys Inc 6 1/2% 7/1/2027 BBB* 1,175 1,048,688
Total 3,137,688
----------------------------------------------------------------------------------------------------------------------==============
Housing 6.24% De Kalb Cnty GA Hsg Auth Multi Fam Rev Lakes At Indian Creek
FSA+ AMT+++ 7.15% 1/1/2025 AAA 500 535,000
Georgia St Hsg & Fin Auth Rev Sing Fam Mtg Ser A Sub Ser A-2
FHA+ AMT+++ 6.45% 12/1/2027 AAA 210 212,362
Georgia St Hsg & Fin Auth Rev Sing Fam Mtg Sub Ser A-2
FHA+ AMT+++ 6.40% 12/1/2015 AAA 950 972,563
Total 1,719,925
----------------------------------------------------------------------------------------------------------------------==============
Industrial 4.89% Albany Dougherty GA Payroll Dev Auth Procter & Gamble
AMT+++ 5.20% 5/15/2028 Aa2 500 443,750
Effingham Cnty GA Dev Auth Fort James Proj AMT+++ 5 5/8% 7/1/2018 Baa2 1,000 905,000
Total 1,348,750
----------------------------------------------------------------------------------------------------------------------==============
9
<PAGE>
Statement of Net Assets (unaudited)
GEORGIA SERIES APRIL 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 6.34% Association Cnty GA Leasing Proj Rockdale Cnty GA Pub Purp Proj
AMBAC+ 5 5/8% 7/1/2020 AAA $ 25 $ 24,000
Cartersville GA Dev Auth Rev Swr Fac Anheuser-Busch
FGIC+ AMT+++ 6 1/8% 5/1/2027 A+ 250 246,562
Cobb Marietta GA Coliseum & Exhibit Hall Auth Rev
MBIA+ 5 5/8% 10/1/2026 AAA 1,000 977,500
George L Smith II GA World Congress Ctr Auth Rev Domed Stadium Proj
MBIA+ AMT+++ 5 3/4% 7/1/2015 AAA 500 501,875
Total 1,749,937
----------------------------------------------------------------------------------------------------------------------==============
Pollution 3.32% Burke Cnty GA Dev Auth Poll GA Pwr Plant 1st Ser MBIA+ 5.40% 5/1/2034 AAA 1,000 916,250
----------------------------------------------------------------------------------------------------------------------==============
Prerefunded 21.35% Albany GA Sew Sys Rev MBIA+ 6 5/8% 7/1/2017 AAA 100 105,500
Atlanta GA Ser A 6 1/8% 12/1/2023 AAA 2,000 2,115,000
Chatham Cnty GA Sch Dist MBIA+ 6 3/4% 8/1/2020 AAA 1,035 1,108,744
Cobb Cnty GA Kennestone Hosp Auth Rev Ctfs Ser 86-A
MBIA+ Zero Coupon 8/1/2015 AAA 395 152,569
Metropolitan Atlanta GA Rapid Transn Auth Sales Tax Rev Ser O
6.55% 7/1/2020 AAA 1,000 1,041,250
Puerto Rico Elec Pwr Auth Pwr Rev Ser T RIBs FSA+ 8.59% 7/1/2018++ AAA 1,000 1,128,750
Savannah GA Economic Dev Auth Rev Sub Ser C Zero Coupon 12/1/2021 AAA 1,000 237,500
Total 5,889,313
----------------------------------------------------------------------------------------------------------------------==============
Solid Waste .38% Cobb Cnty GA Solid Waste Mgmt Auth Rev AMT+++ 6.40% 1/1/2015 AAA 100 105,000
----------------------------------------------------------------------------------------------------------------------==============
Transportation 9.37% Atlanta GA Arpt Fac Rev MBIA+ AMT+++ Zero Coupon 1/1/2010 AAA 1,500 849,375
Puerto Rico Comwlth Hwy & Transn Auth Transn Rev Ser A
MBIA+ 4 3/4% 7/1/2038 AAA 2,125 1,734,531
Total 2,583,906
----------------------------------------------------------------------------------------------------------------------==============
Water/Sewer 6.04% Carroll Cnty GA Wtr Auth Wtr & Swr Rev AMBAC+ 4 3/4% 7/1/2022 Aaa 40 33,450
Columbia Cnty GA Wtr & Swr Rev FGIC+ 5 1/2% 6/1/2025 AAA 1,380 1,326,525
De Kalb Cnty GA Wtr & Swr 5.00% 10/1/2028 Aa2 355 306,187
Total 1,666,162
----------------------------------------------------------------------------------------------------------------------==============
Total Municipal Bonds 88.42% (Cost $24,859,472) 24,391,456
====================================================================================================================================
Other Assets, Less Liabilities 11.58%
====================================================================================================================================
Cash 1,443,570
====================================================================================================================================
Receivables for: Securities sold 1,476,766
Interest 405,241
Capital stock sold 98,333
Total Other Assets 3,423,910
----------------------------------------------------------------------------------------------------------------------==============
Payables for: Capital stock reacquired 112,914
Dividends 104,079
Other 12,492
Total Liabilities 229,485
----------------------------------------------------------------------------------------------------------------------==============
Total Other Assets, Less Liabilities 3,194,425
----------------------------------------------------------------------------------------------------------------------==============
10
<PAGE>
Statement of Net Assets (unaudited)
GEORGIA SERIES APRIL 30, 2000
Rating: Principal
S&P or Amount
Investments Moody's (000) Value
------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.00% $27,585,881
====================================================================================================================================
Net asset value ($27,585,881 / 5,589,659 shares outstanding) $4.94
Maximum offering price (net asset value plus sales charge of 3.25% of the offering price) $5.11
* 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. See
Glossary of Terms.
++ 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, 2000. See page 2 for additional important
information.
+++Income from these investments may be subject to the Alternative Minimum Tax (AMT).
</TABLE>
See Notes to Financial Statements.
GLOSSARY OF TERMS:
AMBAC American Municipal Bond Assurance Corporation
ACA American Capital Assets
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
MBIA Municipal Bond Investors Assurance
<TABLE>
<CAPTION>
Statements of Operations (unaudited)
Six Months Ended April 30, 2000
-----------------------------------------------------------------------------------------------------------------------------------
Florida Pennsylvania Michigan Georgia
Investment Income Series Series Series Series
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income Interest $ 3,597,711 $ 3,504,420 $1,242,778 $ 558,690
-----------------------------------------------------------------------------------------------------------------------
Expenses Management fee 253,973 226,665 117,119 67,138
Management fee waived - - - (67,138)
12b-1 distribution plan-Class A 167,794 124,234 - -
12b-1 distribution plan-Class C 26,352 - - -
Shareholder servicing 35,706 35,544 21,335 8,002
Professional 13,059 17,291 10,387 6,641
Reports to shareholders 9,479 8,066 4,350 2,083
Registration 1,496 2,095 748 149
Trustees' fees 2,244 1,437 824 251
Organization - - - 122
Other 7,318 8,527 7,031 6,185
Total expenses 517,421 423,859 161,794 23,433
-----------------------------------------------------------------------------------------------------------------------
Net investment income 3,080,290 3,080,561 1,080,984 535,257
-----------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
===================================================================================================================================
Net realized loss from investment transactions (1,524,492) (1,652,906) (687,086) (552,565)
-----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation of investments 126,722 681,522 851,971 898,020
-----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (1,397,770) (971,384) 164,885 345,455
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 1,682,520 $ 2,109,177 $1,245,869 $ 880,712
===================================================================================================================================
See Notes to Financial Statements.
11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Six Months Ended April 30, 2000 (unaudited)
-----------------------------------------------------------------------------------------------------------------
Increase (Decrease) Florida Pennsylvania Michigan Georgia
in Net Assets Series Series Series Series
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 3,080,290 $ 3,080,561 $ 1,080,984 $ 535,257
Net realized loss from
investment transactions (1,524,492) (1,652,906) (687,086) (552,565)
Net change in unrealized
appreciation (depreciation)
of investments 126,722 681,522 851,971 898,020
Net increase (decrease) in net
assets resulting from operations 1,682,520 2,109,177 1,245,869 880,712
-----------------------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income (2,566,132) (2,392,040) (1,251,218) (726,441)
Net realized gain from
investment transactions - - - -
Total distributions (2,566,132) (2,392,040) (1,251,218) (726,441)
-----------------------------------------------------------------------------------------------------------------
Capital Share transactions
Net proceeds from sales of shares 9,637,298 4,146,819 772,861 2,045,398
Net asset value of shares
issued in reinvestment of
dividends and distributions 847,214 1,086,816 767,273 593,137
Total 10,484,512 5,233,635 1,540,134 2,638,535
-----------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (13,792,676) (9,184,482) (6,176,030) (2,638,755)
-----------------------------------------------------------------------------------------------------------------
Increase (decrease) in
net assets derived from
capital share transactions (3,308,164) (3,950,847) (4,635,896) (220)
-----------------------------------------------------------------------------------------------------------------
Increase (decrease)
in net assets (4,191,776) (4,233,710) (4,641,245) 154,051
-----------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of period 106,969,716 93,834,666 49,356,065 27,431,830
End of period $102,777,940 $89,600,956 $44,714,820 $27,585,881
=================================================================================================================
Year Ended October 31, 1999
----------------------------------------------------------------------------------------------------------------
Increase (Decrease) Florida Pennsylvania Michigan Georgia
in Net Assets Series Series Series Series
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 6,055,123 $ 5,064,698 $ 2,769,291 $ 1,376,920
Net realized loss from
investment transactions (3,917,644) (383,441) (1,385,665) (363,336)
Net change in unrealized
appreciation (depreciation)
of investments (8,183,315) (8,873,598) (3,271,625) (2,283,607)
Net increase (decrease) in net
assets resulting from operations (6,045,836) (4,192,341) (1,887,999) (1,270,023)
----------------------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income (6,143,545) (5,110,986) (2,666,930) (1,303,721)
Net realized gain from
investment transactions - - - (156,238)
Total distributions (6,143,545) (5,110,986) (2,666,930) (1,459,959)
----------------------------------------------------------------------------------------------------------------
Capital Share transactions
Net proceeds from sales of shares 11,496,856 9,216,617 6,967,293 14,058,781
Net asset value of shares
issued in reinvestment of
dividends and distributions 2,648,817 2,334,947 1,584,103 1,157,234
Total 14,145,673 11,551,564 8,551,396 15,216,015
---------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (29,553,307) (11,320,135) (7,778,927) (4,818,661)
---------------------------------------------------------------------------------------------------------------
Increase (decrease) in
net assets derived from
capital share transactions (15,407,634) 231,429 772,469 10,397,354
---------------------------------------------------------------------------------------------------------------
Increase (decrease)
in net assets (27,597,015) (9,071,898) (3,782,460) 7,667,372
---------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of period 134,566,731 102,906,564 53,138,525 19,764,458
End of period $106,969,716 $ 93,834,666 $49,356,065 $27,431,830
===============================================================================================================
+ Includes undistributed (overdistributed) net investment income of $(14,887), $512,630, $(72,323) and $(138,675),
respectively, as of April 30, 2000 and $(529,045),$(175,891), $97,911 and $52,509, respectively, as of
October 31, 1999.
See Notes to Financial Statements.
</TABLE>
12
<PAGE>
Financial Highlights
FLORIDA SERIES
<TABLE>
<CAPTION>
Class A Shares Class C Shares
------------------------------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended 4/30, Ended 4/30, 7/15/1996(d)
Per Share 2000 Year Ended October 31, 2000 Year Ended October 31, to
Operating Performance: (unaudited) 1999 1998 1997 1996 1995 (unaudited) 1999 1998 1997 10/31/1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $4.52 $4.98 $4.87 $4.79 $4.85 $4.49 $4.52 $4.98 $4.87 $4.79 $4.70
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations
Net investment income .14(b) .23(b) .235 .240 .248 .271 .12(b) .20(b) .200 .202 .064
Net realized and unrealized
gain (loss) on investments (.07) (.46) .113 .092 (.056) .352 (.05) (.46) .112 .093 .093
Total from investment
operations .07 (.23) .348 .332 .192 .623 .07 (.26) .312 .295 .157
------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net
investment income (.11) (.23) (.238) (.252) (.252) (.263) (.10) (.20) (.202) (.215) (.067)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.48 $4.52 $4.98 $4.87 $4.79 $4.85 $4.49 $4.52 $4.98 $4.87 $4.79
------------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 1.66%(c)(4.74)% 7.30% 7.12% 4.09% 14.22% 1.54%(c)(5.43)% 6.52% 6.33% 3.35%(c)
====================================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver .49%(c) .97% .89% .86% .80% .74% .79%(c) 1.62% 1.58% 1.57% .44%(c)
Expenses, excluding waiver .49%(c) .97% .89% .86% .82% .88% .79%(c) 1.62% 1.58% 1.57% .44%(c)
Net investment income 3.04%(c) 4.73% 4.79% 5.03% 5.19% 5.81% 2.75%(c) 4.07% 4.09% 4.29% 1.37%(c)
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Six Months
Ended 4/30,
2000 Year Ended October 31,
Supplemental Data for All Classes: (unaudited) 1999 1998 1997 1996 1995
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $102,778 $106,970 $134,567 $144,748 $162,070 $173,242
Portfolio turnover rate 90.81% 191.12% 140.61% 106.32% 167.95% 142.04%
====================================================================================================================================
(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. (d)Commencement of offering class shares. See Notes to
Financial Statements.
</TABLE>
Financial Highlights
PENNSYLVANIA SERIES
<TABLE>
<CAPTION>
Six Months
Ended 4/30,
2000 Year Ended October 31,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.81 $5.28 $5.14 $5.01 $5.01 $4.62
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .16(b) .26(b) .264 .276 .2772 .282
Net realized and unrealized gain (loss)
on investments (.05) (.47) .144 .131 (.0011) .395
Total from investment operations .11 (.21) .408 .407 .2761 .677
------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.13) (.26) (.268) (.277) (.2761) (.287)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.79 $4.81 $5.28 $5.14 $5.01 $5.01
------------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 2.23%(c) (4.13)% 8.12% 8.37% 5.68% 15.02%
====================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (000) $89,601 $93,835 $102,907 $94,237 $92,605 $93,494
====================================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver .47%(c) .96% .72% .61% .62% .50%
Expenses, excluding waiver .47%(c) .96% .72% .65% .69% .65%
Net investment income 3.39%(c) 5.02% 5.05% 5.47% 5.55% 5.83%
Portfolio turnover rate 20.26% 40.76% 65.20% 70.99% 78.30% 126.11%
====================================================================================================================================
(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
</TABLE>
<PAGE>
Financial Highlights
MICHIGAN SERIES
<TABLE>
<CAPTION>
Six Months
Ended 4/30,
2000 Year Ended October 31,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.75 $5.18 $5.06 $4.93 $4.93 $4.53
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .11(b) .26(b) .255 .267 .274 .284
Net realized and unrealized gain (loss)
on investments .02 (.44) .121 .128 (.010) .395
Total from investment operations .13 (.18) .376 .395 .264 .679
------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.13) (.25) (.256) (.265) (.264) (.279)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.75 $4.75 $5.18 $5.06 $4.93 $4.93
------------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 2.69%(c) (3.55)% 7.59% 8.24% 5.53% 15.39%
====================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (000) $44,715 $49,356 $53,139 $52,630 $52,975 $54,186
------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .34%(c) .69% .69% .60% .44% .25%
Expenses, excluding waiver .34%(c) .69% .69% .68% .73% .75%
Net investment income 2.30%(c) 5.21% 4.98% 5.37% 5.59% 5.95%
Portfolio turnover rate 57.61% 186.97% 82.33% 68.50% 85.26% 98.89%
====================================================================================================================================
(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.
</TABLE>
Financial Highlights
GEORGIA SERIES
<TABLE>
<CAPTION>
Six Months
Ended 4/30,
2000 Year Ended October 31, 12/27/1994(d)
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 to 10/31/1995
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.91 $5.43 $5.31 $5.14 $5.12 $4.76
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .10(b) .28(b) .276 .275 .290 .245
Net realized and unrealized gain (loss)
on investments .06 (.50) .187 .187 .0397 .370
Total from investment operations .16 (.22) .463 .462 .3297 .615
-----------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.13) (.26) (.268) (.282) (.2872) (.255)
Distributions from net realized gain - (.04) (.075) (.01) (.0225) -
Total distributions (.13) (.30) (.343) (.292) (.3097) (.255)
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.94 $4.91 $5.43 $5.31 $5.14 $5.12
-----------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 3.56%(c) (4.36)% 9.00% 9.27% 6.69% 13.15%(c)
===================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (000) $27,586 $27,432 $19,764 $13,897 $10,688 $5,203
-----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver .09%(c) .18% .24% .38% .03% .00%(c)
Expenses, excluding waiver .34%(c) .68% .74% .88% .83% 1.08%(c)
Net investment income 1.98%(c) 5.32% 5.07% 5.23% 5.55% 5.44%(c)
Portfolio turnover rate 75.68% 115.87% 126.52% 90.40% 72.53% 142.69%
===================================================================================================================================
(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. (d)Commencement of operations.
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
Notes to Financial Statements (unaudited)
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 September11,
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) 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 invest- ment 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. Lord
Abbett waived its management fee for the period ended April 30, 2000, for
Georgia Series. At April 30, 2000, the management fees payable were $42,852 for
the Florida Series, $37,843 for the Pennsylvania Series and $19,779 for the
Michigan Series.
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 the effective date of the Class A Plan 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 assets of 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. At April 30, 2000,
the 12b-1 fees payable were $76,162 for the Florida Series and $56,595 for the
Pennsylvania Series.
Lord Abbett 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 $3,101 $14,559
--------------------------------------------------------------------------------
Pennsylvania 6,489 34,699
Michigan 3,493 16,239
Georgia 6,382 34,014
--------------------------------------------------------------------------------
Certain of the Trust's officers and trustees have an interest in Lord Abbett.
3. Distributions
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. 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 gen erally accepted account ing principles.
At April 30, 2000, accumulated net realized loss for financial reporting
purposes was as follows:
Florida $12,773,883 Pennsylvania $2,491,945
--------------------------------------------------------------------------------
Michigan 3,262,440 Georgia 915,901
--------------------------------------------------------------------------------
At April 30, 2000, the capital loss carryforwards were as follows:
Expiration Date
--------------------------------------------------------------------------------
2002 2003 2004 2007 Total
--------------------------------------------------------------------------------
Florida $3,194,374 $2,973,819 $1,163,554 $3,917,644 $11,249,391
--------------------------------------------------------------------------------
Pennsylvania - 455,598 - 383,441 839,039
--------------------------------------------------------------------------------
Michigan 818,540 371,149 - 1,385,665 2,575,354
--------------------------------------------------------------------------------
Georgia - - - 363,336 363,336
--------------------------------------------------------------------------------
Dividends declared by class for the Florida Series were as follows:
Six Months Ended 4/30/2000 Year Ended 10/31/1999
--------------------------------------------------------------------------------
Class A $2,443,582 $5,861,053
--------------------------------------------------------------------------------
Class C 122,550 282,492
--------------------------------------------------------------------------------
15
<PAGE>
Notes to Financial Statements (unaudited)
4. Capital
Transactions in shares of beneficial interest for the Florida Series (both
shares and dollar amount) were as follows:
Six Months Ended 4/30/2000 Year Ended 10/31/1999
--------------------------------------------------------------------------------
Class A Shares Amount Shares Amount
--------------------------------------------------------------------------------
Sales of shares 2,018,431 $ 9,174,287 2,140,580 $ 10,489,982
Shares issued to
shareholders in
reinvestment of
dividends 181,758 818,677 521,529 2,536,233
Total 2,200,189 9,992,964 2,662,109 13,026,215
--------------------------------------------------------------------------------
Shares reacquired (2,747,546) (12,374,464) (5,872,974) (27,847,385)
Decrease (547,357) $ (2,381,500) (3,210,865) $(14,821,170)
--------------------------------------------------------------------------------
Six Months Ended 4/30/2000 Year Ended 10/31/1999
--------------------------------------------------------------------------------
Class C Shares Amount Shares Amount
--------------------------------------------------------------------------------
Sales of shares 102,717 $ 463,011 206,290 $ 1,006,874
Shares issued to
shareholders in
reinvestment of
dividends 6,329 28,537 23,004 112,584
Total 109,046 491,548 229,294 1,119,458
--------------------------------------------------------------------------------
Shares reacquired (313,503) (1,418,212) (351,921) (1,705,922)
Decrease (204,457) $ (926,664) (122,627) $ (586,464)
--------------------------------------------------------------------------------
Transactions in shares of beneficial interest for the single class Series were
as follows:
<TABLE>
<CAPTION>
Six Months Ended 4/30/2000 Year Ended 10/31/1999
------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Michigan Georgia Pennsylvania Michigan Georgia
Series Series Series Series Series Series
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 866,507 163,088 416,101 1,782,011 1,369,248 2,650,359
Shares issued to shareholders
in reinvestment of dividends
and distributions 227,084 161,947 120,986 453,990 313,540 219,532
Total 1,093,591 325,035 537,087 2,236,001 1,682,788 2,869,891
------------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (1,914,338) (1,301,934) (537,158) (2,210,655) (1,554,501) (918,111)
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in shares (820,747) (976,899) (71) 25,346 128,287 1,951,780
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
As of April 30, 2000, paid in capital for each Series was as follows:
$115,923,011 for the Florida Series, $93,662,848 for the Pennsylvania Series,
$47,654,660 for the Michigan Series and $29,108,473 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 $92,490,502 $97,010,241
--------------------------------------------------------------------------------
Pennsylvania 18,164,783 21,920,346
Michigan 27,049,274 33,440,900
Georgia 19,945,757 21,407,887
As of April 30, 2000, net unrealized appreciation (depreciation), gross
unrealized appreciation and gross unrealized depreciation of investments based
on cost for federal income tax purposes were as follows:
Net Unrealized
Appreciation Unrealized Unrealized
Series (Depreciation) Appreciation (Depreciation)
--------------------------------------------------------------------------------
Florida $ (356,301) $1,565,787 $(1,922,088)
--------------------------------------------------------------------------------
Pennsylvania (2,082,577) 1,747,967 (3,830,544)
Michigan 394,923 783,770 (388,847)
--------------------------------------------------------------------------------
Georgia (468,016) 214,790 (682,806)
--------------------------------------------------------------------------------
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 withLord 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, 2000, were $39,238.
Copyright(C)2000 by Lord Abbett Tax-Free Income Trust, 90 Hudson Street, Jersey
City, NJ 07302-3973
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
Fund's investment objective and policies, sales charges and other matters.
Please read the prospectus carefully before you invest. The views of the Funds'
management are as of the date of this publication and may have changed
subsequent to this date. Nothing in this document is a recommendation to
purchase or sell securities.
All rights reserved. Printed in the U.S.A.
16
<PAGE>
Lorsd, Abbett & Co.
Investment
Team Leader
Profile
[PHOTO OMITTED]
Zane E. Brown
Partner and Investment Team Leader
in Charge of Fixed Income Management
Zane E. Brown, Partner and Director of Fixed Income Management at Lord, Abbett &
Co., has over 20 years experience in the financial services industry. He joined
Lord Abbett in 1992 as Portfolio Manager of Global Fund - Income Series. Zane
holds a BA in Management and Marketing from Clarion University and an MBA in
Investment Management from Colorado State University.
About Your Trust's
Board of
Trustees
The Securities and Exchange Commission (SEC) views the role of the independent
Board of Trustees as one of the most important com po nents in overseeing a
mutual fund. The Board of Trustees watches over your Trust's general oper ations
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 regard ing 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, E. Thayer Bigelow, Jr.
E. Thayer Bigelow, Jr.
Director Lord Abbett
Tax-Free Income Fund
[PHOTO]
Mr. Bigelow is a graduate of Trinity College and earned his MBA at the
University of Virginia's Darden Business School. He is currently Senior Advisor
at Time Warner Inc. Prior to that, he was acting CEO of Courtroom Television
Network, and previously served for five years as President and CEO of Time
Warner Cable Programming, Inc.
Mr. Bigelow serves as a member of the Board of Trustees for the Cate School. He
is also a member of the Board of Directors of Crane Co. He has been an
independent director for all of Lord Abbett's Family of Funds since 1994.
<PAGE>
Investing in the
Lord Abbett
Family of Funds
<TABLE>
<CAPTION>
GROWTH
---------------------------------------------------------------------------------------------------------------------------
INCOME
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth Funds Growth & Balanced Fund Income Funds Tax-Free Money
Growth Fund Income Funds Income Funds Market Fund
Growth Large-Cap Research Fund - Balanced World Bond- National U. S. Government
Opportunities Growth Fund Large-Cap Series** Debenture Series California Securities Money
Fund Research Fund- Series Global Fund - Connecticut Market Fund +++
Small-Cap Value Growth & Income Series Florida
Series Income Series High Yield Fund Georgia
Alpha Series* Affiliated Fund Bond-Debenture Hawaii
Developing International Fund Michigan
Growth Fund Series Limited Duration Minnesota
Lord Abbett Mid-Cap U. S. Government Missouri
Developing Value Fund Securities Series+ New Jersey
Growth Fund Global Fund- U. S. Government) New York
is closed to Equity Series Securities Series+ Pennsylvania
new investors Texas
Washington
</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 recom
mendations suitable for your individual needs.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a current prospectus for the fund(s) covered by this
report.
For more complete information about any Lord Abbett fund, in cluding 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:
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]
Lord Abbett mutual fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC
90 Hudson Street o Jersey City, New Jersey 07302-3973
LATFIT-3-400
(6/00)
