Lord Abbett
Securities Trust
Growth & Income Trust
1996 ANNUAL REPORT
An investment designed
to help you capture
capital growth over the
long term
[LOGO]
<PAGE>
[PHOTO]
Robert S. Dow
Chairman
Report to Shareholders For the Fiscal Year Ended October 31, 1996
Lord Abbett Securities Trust--Growth & Income Series completed its fiscal year
on October 31, 1996. Below is an overview of class-specific data as of the close
of the year.
Class A Class C*
Net Asset Value __________ __________
Dividends Paid __________ __________
Capital Gains Paid __________ __________
Total Return** __________ __________ss.
Over the past year, the stock market remained near all time highs against a
background of modest economic growth, low inflation and a volatile interest-rate
environment. We mainly identified investment opportunities based on the
characteristics of individual securities, as few areas (sectors) of the market
represented extraordinary value. One exception was the financial sector, where
we were heavily weighted. These holdings performed strongly and helped to offset
disappointments from our technology holdings.
We anticipate that, through the end of this year and into 1997, the economy will
slow to a sustainable growth rate of 2% or less with inflation averaging between
2 1/2- 3%. Against this backdrop, long-term interest rates should decline. As a
result, we will continue to overweight interest-sensitive stocks, particularly
financial companies. With the exception of this heavy weighting in the financial
sector, the performance of your portfolio will be heavily dependent on
individual stock selection. As the economy slows in 1997, we may also look to
increase our holdings of cyclical companies.
Although the benign interest-rate environment will benefit the stock market,
investors should note that many of the positive forces propelling the market
generally are reflected in current valuations and will have less impact as time
passes While 1996's corporate profits have proven more robust than expected
(attributable to the lingering effects of cost cutting and productivity gains),
we forecast flat profits for 1997 as individual earnings disappointments will
likely accelerate. We believe our disciplined investment process will continue
to uncover investment values that provide good opportunity for price
appreciation at less than market risk.
We regret to inform you that Ronald P. Lynch, Chairman of your Series, passed
away on June 27, 1996. Mr. Lynch had been with the Firm since 1965. He will be
sorely missed. The Board of Trustees has elected Robert S. Dow as the new
Chairman of your Series.
We are pleased that Lord Abbett Securities Trust - Growth & Income Series is a
part of your investment portfolio and thank you for the confidence and trust you
have placed in us.
/s/ Robert S. Dow
Robert S. Dow
Chairman
November 21, 1996
* Data for period 7/15/96 (commencement of offering of Class C shares)
through 10/31/96.
** Total return is the percent change in net asset value, assuming the
reinvestment of all distributions.
ss. Not annualized.
<PAGE>
Fund Facts
Lord Abbett Growth & Income Trust -- A Strong Performer
Average Annual Total Return as of 10/31/96:
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATTER]
1 Year 20.0%
Life of Fund(2) 15.04%
(1) Reflects the percent change in net asset value (for Class C shares) which
includes the reinvestment of all distributions.
(2) The Fund commenced operations on 1/3/94. Formerly Lord Abbett Securities
Trust - Growth & Income Series.
Average annual total returns for the periods ended 9/30/96, with all
distributions reinvested:
1 Year: 15.5%
Life of Fund: 14.9%
Past performance is not an indication of future results. The investment return
and principal value of an investment will fluctuate so that shares, on any given
day or when redeemed, may be worth more or less than their original cost.
Important Information
Results quoted herein reflect appropriate Rule 12b-1 Plan expenses from
commencement of the Plan. Tax consequences are not reflected. If used as sales
material after 12/31/96, this report must be accompanied by Lord Abbett's
Performance Quarterly for the most recently completed calendar quarter. It is
the intent of the Trust to issue additional classes of shares, with distinct
pricing options, in July 1996. For a full discussion of the differences in
pricing alternatives, please call 800-874-3733 and ask for the Trust's July 15,
1996 prospectus.
Statement of Net Assets
GROWTH & INCOME SERIES October 31, 1996
<TABLE>
<CAPTION>
Number of
Security Shares Market Value
====================================================================================================================================
<S> <C> <C> <C>
Investments in Common Stocks 96.24%
====================================================================================================================================
Aerospace 1.37% Boeing Co. 16,400 $1,564,150
----------
- ------------------------------------------------------------------------------------------------------------------------------------
Agricultural Products Pioneer Hi-Bred
.88% International, Inc. 15,000 1,006,875
----------
- ------------------------------------------------------------------------------------------------------------------------------------
Airlines .95% British Airways plc ADR 12,000 1,083,000
----------
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Auto Parts 2.69% Genuine Parts Co. 41,100 1,798,125
Snap-On, Inc. 39,600 1,272,150
TRW Inc. 3,900 352,950
Total 3,423,225
----------
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Number of
Security Shares Market Value
====================================================================================================================================
<S> <C> <C> <C>
Automobiles 1.72% Ford Motor Co. 15,600 487,500
General Motors Corp. 20,600 1,109,825
Total 1,597,325
----------
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Banks: Chase Manhattan Corp. 30,400 2,606,800
Money Center 3.08% First Chicago NBD Corp. 17,745 904,995
Total 3,511,795
----------
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Banks: Bank of Boston Corp. 29,900 1,913,600
Regional 6.46% BankAmerica Corp. 18,400 1,683,600
Comerica Inc. 28,100 1,492,813
First Union Corp. 12,100 880,275
KeyCorp 29,800 1,389,425
Total 7,359,713
----------
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</TABLE>
1
<PAGE>
Statement of Net Assets
GROWTH & INCOME SERIES October 31, 1996
<TABLE>
<CAPTION>
Number of
Security Shares Market Value
====================================================================================================================================
<S> <C> <C> <C>
Brokers 1.03% Dean Witter, Discover & Co. 20,000 1,177,500
----------
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals 3.06% Air Products &
Chemicals Inc. 20,000 1,200,000
Dow Chemical Co. 10,500 816,375
Hanna, M.A. Co. 37,500 796,875
Union Carbide Corp. 15,700 669,212
Total 3,482,462
----------
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Containers .74% Sonoco Products Co. 31,500 838,688
----------
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Data Processing Digital Equipment
Equipment 4.28% Corporation 16,500 486,750
Hewlett-Packard Co. 37,400 1,650,275
International Business
Machines Corp. 15,900 2,051,100
Seagate Technology Inc. 10,300 687,525
Total 4,875,650
----------
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Data Processing Electronic Data Systems
Services 1.23% Corp. 31,209 1,404,405
----------
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Drugs/Health Care Baxter International Inc. 17,500 728,438
Products 8.45% Lilly, Eli & Co. 7,000 493,500
Mallinckrodt Group Inc. 30,000 1,305,000
Merck & Co., Inc. 13,000 963,625
SmithKline Beecham
plc ADR 38,700 2,423,587
Tambrands Inc. 33,600 1,432,200
Warner-Lambert Co. 35,800 2,277,775
Total 9,624,125
----------
- ------------------------------------------------------------------------------------------------------------------------------------
Electric Power 5.74% American Electric Power
Co., Inc. 12,000 $ 498,000
Baltimore Gas &
Electric Co. 32,500 885,625
Carolina Power &
Light Co. 25,000 903,125
Central & South
West Corp. 37,600 996,400
CINergy Corp. 52,900 1,752,312
DTE Energy 23,300 701,912
Ipalco Enterprises Inc. 30,000 806,250
Total 6,543,624
----------
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Electrical Equipment Emerson Electric Co. 34,800 3,097,200
3.15%
Raytheon Company 10,000 492,500
Total 3,589,700
----------
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Electronics: AMP Inc. 35,100 1,189,012
Components 2.40% Harris Corp. 24,600 1,540,575
Total 2,729,587
----------
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Food 6.77% Conagra Inc. 41,470 2,068,315
CPC International Inc. 14,500 1,143,687
Heinz H.J. Company 51,400 1,824,700
Hershey Foods Corp. 1,800 87,075
Sara Lee Corp. 24,000 852,000
Supervalu Inc. 58,300 1,734,425
Total 7,710,202
----------
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Hotel/Motel 1.12% Patriot American
Hospitality, Inc. REIT 17,900 628,738
Starwood Lodging
Trust REIT 14,400 648,000
Total 1,276,738
----------
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<CAPTION>
Number of
Security Shares Market Value
====================================================================================================================================
<S> <C> <C> <C>
Household James River Corp. 64,100 2,019,150
Products 3.78% Kimberly Clark Corp. 24,590 2,293,017
Total 4,312,167
----------
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Insurance 6.67% Aetna Life & Casualty Co. 24,650 1,648,469
Chubb Corp. 35,800 1,790,000
CIGNA Corp. 14,600 1,905,300
SAFECO Corp. 37,700 1,423,175
The Progressive
Corporation 12,200 838,750
Total 7,605,694
----------
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Machinery: Diversified Deere & Co. 33,800 1,411,150
1.92%
Goulds Pumps, Inc. 33,600 777,000
Total 2,188,150
----------
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Miscellaneous 2.94% Minnesota Mining &
Mfg. Co. 26,000 1,992,250
National Service
Industries, Inc. 39,400 1,359,300
Total 3,351,550
----------
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Natural Gas:
Distribution .49% Nicor Inc 16,000 $ 558,000
----------
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Natural Gas:
Diversified .82% The Coastal Corporation 21,800 937,400
----------
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</TABLE>
2
<PAGE>
Statement of Net Assets
GROWTH & INCOME SERIES October 31, 1996
<TABLE>
<CAPTION>
Number of
Security Shares Market Value
====================================================================================================================================
<S> <C> <C> <C>
Oil: Domestic 1.32% Amoco Corp. 19,900 1,507,425
----------
- ------------------------------------------------------------------------------------------------------------------------------------
Oil: International Chevron Corp. 23,600 1,551,700
3.70%
Exxon Corp. 9,900 877,388
Mobil Corp. 12,500 1,459,375
Royal Dutch Petroleum Co. 2,00O 330,750
Total 4,219,213
----------
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Paper and Forest International Paper Co. 11,750 502,313
Products 1.64%
Westvaco Corporation 47,900 1,365,150
Total 1,867,463
----------
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Printing and Deluxe Corp. 17,300 564,413
Publishing 1.01%
Gannett Co., Inc. 7,600 576,650
Total 1,141,063
----------
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Railroads .15% Canadian National Railway
(Partially Paid) 6,300 173,250
----------
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Restaurants .86% Brinker International Inc.* 57,700 980,900
----------
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Retail 3.16% Dayton Hudson Corp. 15,150 524,569
May Department Stores
Company 25,000 1,184,375
Toys R Us Inc. 56,000 1,897,000
Total 3,605,944
----------
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<CAPTION>
Number of
Security Shares Market Value
====================================================================================================================================
<S> <C> <C> <C>
Savings and Loan Ahmanson, H.F. & Co. 39,600 1,242,450
3.14%
Great Western Financial
Corp. 45,100 1,262,800
Standard Federal
Bancorporation Inc. 20,000 1,070,000
Total 3,575,250
----------
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Telecommunications AT&T Corp. 25,300 882,338
2.53%
MCI Communications
Corp. 79,700 2,002,462
Total 2,884,800
----------
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Telephone 2.28% Bell Atlantic Corp. 16,800 $1,012,200
BellSouth Corporation 14,400 586,800
SBC Communication Inc. 20,500 996,813
Total 2,595,813
----------
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Textiles: Apparel
1.27% VF Corp. 22,100 1,444,788
----------
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Tobacco 2.37% American Brands Inc. 36,900 1,761,975
RJR Nabisco Holdings Corp. 32,600 941,325
Total 2,703,300
----------
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Waste Management
1.07% WMX Technologies Inc. 35,600 1,223,750
----------
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Total Investments in
Common Stocks
(Cost $89,032,011) 109,674,684
====================================================================================================================================
Other Assets, Less Liabilities 3.76%
====================================================================================================================================
Corporate American Express
Obligations, Credit Corp.
at Cost 5.30% due 11/5/96 2,400M 2,400,000
Chevron Oil Finance Co.
5.15% due 11/1/96 1,000M 1,000,000
General Electric Co.
5.10% due 11/4/1996 750M 750,000
Total 4,150,000
----------
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Cash and Receivables, Net of Liabilities 137,063
----------
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Total Other Assets,
Less Liabilities 4,287,063
====================================================================================================================================
Net Assets 100.00% $113,961,747
====================================================================================================================================
Class A Shares-Net asset value
($47,276,982 / 6,669,952
shares outstanding) $ 7.09
Class C Shares-Net asset value
($66,684,765 / 9,408,606
shares outstanding) $ 7.09
See Notes to Financial Statements
*Non-Income Producing.
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Year Ended
Investment Income October 31, 1996
====================================================================================================================================
<S> <C> <C>
Income Dividends $ 1,762,771
Interest 138,979
Total income $ 1,901,750
----------------------------------------------------------------------------------------------------------------------
Expenses Management fee 481,736
Management fee waived (242,341)
12b-1 distribution plan-Class A 28,799
12b-1 distribution plan-Class C 490,573
Shareholder servicing 80,963
Expenses reimbursed to manager 58,560
Audit and tax 24,906
Reports to shareholders 23,634
Registration 17,883
Organization 7,292
Other 27,645
Total expenses 999,650
----------------------------------------------------------------------------------------------------------------------
Net investment income 902,100
----------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain on Investments
====================================================================================================================================
Realized gain from security transactions
Proceeds from sales 14,859,234
Cost of securities sold 15,638,946
Net realized gain 1,220,288
----------------------------------------------------------------------------------------------------------------------
Unrealized appreciation of investments
Beginning of period 3,292,866
End of period 14,074,369
Net unrealized appreciation 10,781,503
Net realized and unrealized gain on investments 12,001,791
----------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $12,903,891
====================================================================================================================================
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Year Ended October 31,
Increase in Net Assets 1996 1995
====================================================================================================================================
<S> <C> <C>
Operations Net investment income $ 902,100 $ 394,421
Net realized gain from securities transactions 1,220,288 216,301
Net unrealized appreciation of investments 10,781,503 3,148,368
Net increase in net assets resulting from operations 12,903,891 3,759,090
- ---------------------------------------------------------------------------------------------------------- -----------
Undistributed net investment income included in price of shares sold 91,590 102,375
- ---------------------------------------------------------------------------------------------------------- -----------
Distributions to shareholders from
Net investment income-Class A (124,981) --
Net investment income-Class C (819,658) (369,231)
Net realized gain from securities transactions (220,851) --
Total distributions (1,165,490) (369,231)
- ---------------------------------------------------------------------------------------------------------- -----------
Share transactions
Net proceeds from sale of shares 35,645,485 22,484,213
Net asset value of shares issued to shareholders in reinvestment of
net investment income 1,078,899 309,319
Net asset value of shares issued in exchange for assets acquired
in tax-free acquisition 43,649,766 --
Total 80,374,450 22,793,532
-------------------------------------------------------------------------------------------- -----------
Cost shares reacquired (11,012,618) (2,676,007)
-------------------------------------------------------------------------------------------- -----------
Increase in net assets derived from capital share transactions 69,361,832 20,117,525
-------------------------------------------------------------------------------------------- -----------
Increase in net assets 81,191,823 23,609,759
- ---------------------------------------------------------------------------------------------------------- -----------
Net Assets
Beginning of year 32,769,924 9,160,165
-------------------------------------------------------------------------------------------- -----------
End of year (including undistributed net investment income
of $1,156,554 and $179,154, respectively) $113,961,747 $32,769,924
=====================================================================================================================
</TABLE>
See Notes to Financial Statements.
Financial Highlights
<TABLE>
<CAPTION>
Class C Shares
------------------------------------------------
Class A Shares For the Period
-------------- 1/3/94
For the Period Year Ended 10/31 (Commencement
7/15/96* ----------------------------- of Operations)
Per Share Operating Performance: to 10/31/96 1996 1995 to 10/31/94
====================================================================================================================================
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 6.50 $ 6.04 $5.07 $5.00
- ------------------------------------------------------------------------------- ------------------------------------------------
Income from investment operations
Net investment income .589+ .0949 .12 .089+
Net realized and unrealized gain on investments .028 1.0986 .97 .041
Total from investment operations .617 1.1935 1.09 .130
------------------------------------------------------------------------- ------------------------------------------------
Distributions
Dividends from net investment income (.027) (.1035) (.12) (.06)
Distributions from net realized gain -- (.04) -- --
------------------------------------------------------------------------- ------------------------------------------------
Net asset value, end of year $ 7.09 $ 7.09 $6.04 $5.07
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 12.10%+ 20.02% 21.83% 2.62%+
====================================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver .39%+ 1.55% 1.16% .61%+
Expenses, excluding waiver .39%+ 2.01% 1.91% 1.94%+
Net investment income .40%+ 1.36% 2.06% 2.03%+
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
For the Period
1/3/94
Year Ended 10/31, (Commencement
--------------------------- of Operations)
Supplemental Data for AllClasses: 1996 1995 to 10/31/94
=================================================================================================================
<S> <C> <C> <C>
Net assets, end of year (000) $113,962 $32,770 $9,160
Portfolio turnover rate 23.84% 23.17% 31.95%
=================================================================================================================
</TABLE>
* Commencement of offering Class A shares.
+ Not annualized.
See Notes to Financial Statements.
4
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Lord Abbett Securities Trust (the "Trust") is an open-end management investment
company, organized as a Delaware business trust on February 26, 1993. The Trust
consists of one portfolio, the Growth & Income Series. The Trust is diversified
as defined under the Investment Company Act of 1940. The following is a summary
of significant accounting policies consistently followed by the Trust. The
policies are in conformity with generally accepted accounting principles. (a)
Market value is determined as follows: Securities listed or admitted to trading
privileges on any national securities exchange are valued at the last sales
price on the principal securities exchange on which such securities are traded,
or, if there is no sale, at the mean between the last bid and asked prices on
such exchange. Securities traded in the over-the-counter market are valued at
the mean between the last bid and asked prices in such market, except that
securities admitted to trading on the NASDAQ National Market System are valued
at the last sales price if it is determined that such price more accurately
reflects the value of such securities. Securities for which market quoations are
not available are valued at fair value under procedures approved by the Board of
Trustees. Short-term securities are carried at cost which approximates market.
(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 all
of its taxable income in taxable distributions. Therefore, no federal income tax
provision is required. (c) Security transactions are accounted for on the date
that the securities are purchased or sold (trade date). Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income is recorded on the accrual basis. (d) A portion of the proceeds from
sales and costs of repurchases of shares, equivalent to the amount of
distributable net investment income on the date of the transaction, is credited
or charged to undistributed income. Undistributed net investment income per
share thus is unaffected by sales or repurchases of shares. (e) The 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 it supplies the Trust with investment management services and
executive and other personnel, paid the remuneration of officers, provides
office space and pays for ordinary and necessary office and clerical expenses
relating to research and statistical work and supervision of the Trust's
investment portfolio. The management fee paid is based on average daily net
assets at the rate of .75 of 1% per annum. For the year ending October 31, 1996,
Lord, Abbett & Co. waived $242,341 of the management fee. Lord, Abbett & Co. may
waive its management fee and pay or reimburse the Trust for certain of its other
expenses. Any such expenses paid are subject to repayment by the Trust, pursuant
to a formula based on the asset size and expense ratio of the Trust. The Trust
shall not be obligated to repay Lord, Abbett & Co. after five full fiscal years
after the commencement of the repayment formula or the termination of the
Management Agreement, whichever is earlier.
The Trust has Rule 12b-1 plans and agreements (the "Class A and Class C Plans")
with Lord Abbett Distributor LLC ("Distributor"), an affiliate of Lord Abbett.
The Trust makes payments to Distributor which uses or passes on such payments to
authorized institutions. Pursuant to the Class A Plan, the Trust pays
Distributor (1) an annual service fee of 0.25% of the average daily net assets
of Class A shares and (2) a one-time distribution fee of up to 1% on certain
qualifying purchases and a supplemental annual distribution fee of 0.10% of the
average daily net assets of Class A shares serviced by certain qualifying
institutions. Such expenses under the Class A Plan were 0.25% of the average
daily net assets of the Class A shares during the year. Pursuant to the Class C
Plan, the Trust 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. Such expenses under
the Class C Plan were 0.99% (annualized) of the average daily net assets of the
Class C shares during the period. Distributor received $4,139 representing
payment of commissions on sales of Class A shares after deducting $37,977
allowed to authorized distributors as concessions. Certain of the Trust's
officers and trustees have an interest in Lord Abbett.
3. Distributions
Dividends from net investment income are declared and paid quarterly. Net
realized gain from security transactions, if any, will be distributed to
shareholders in December 1996. At October 31, 1996 the accumulated undistributed
net realized gain for financial reporting purposes, which is substantially the
same as for federal income tax purposes, aggregated $ . A distribution of
$.075 a share aggregating $ was declared on November 20,1996. Dividends
from net investment income declared on November 21, 1996 by class and paid on
November 29, 1996 to each shareholder on record, were as follows:
Rate Aggregate
Per Share Amount
- -----------------------------------------------------------------
Class A $.0270 $180,374
- -----------------------------------------------------------------
Class C $.0135 $126,308
- -----------------------------------------------------------------
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.
4. Capital
Transactions in shares were as follows:
For the Period
July 15, 1996
(Commencement of
offering of Class A Shares)
to October 31, 1996
-----------------------------
Class A Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 294,449 $ 1,974,458
Shares issued to
shareholders in
reinvestment of net
investment income 24,116 160,559
Shares issued to
shareholders in
exchange for assets
acquired in tax-free acquisition 6,718,449 43,649,766
Total 7,037,014 45,784,783
- --------------------------------------------------------------------------------
Shares reaquired (367,062) (2,474,054)
Increase in shares 6,669,952 43,310,729
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1996 October 31, 1995
---------------------------------------------------------
Class C Shares Amount Shares Amount
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales of shares 5,117,940 $ 33,671,327 4,043,647 $ 22,484,213
Shares issued to
shareholders in
reinvestment of net
investment income 142,172 918,340 56,327 309,319
Total 5,260,112 34,589,667 4,099,974 22,793,532
- ----------------------------------------------------------------------------------
Shares reaquired (1,279,728) (8,538,564) (477,215) (2,676,007)
Increase in shares 3,980,384 26,051,103 3,622,759 20,117,525
- ----------------------------------------------------------------------------------
</TABLE>
5. Paid In Capital
At October 31, 1996, paid in capital aggregated $ .
6. Purchases and Sales of Securities
Purchases and sales of investment securities (other than short-term investments)
aggregated $39,878,933 and $15,209,840, respectively. Security gains and losses
are computed on the identified cost basis. As of October 31, 1996, unrealized
appreciation for federal income tax purposes for the Company aggregated
$20,642,673 of which $21,516,280 related to appreciated securities and $873,607
related to depreciated securities. For federal income tax purposes, the
identified cost of investments owned at October 31, 1996 was substantially the
same as the cost for financial reporting purposes.
7. Trustees' Remuneration
The Trustees of the Company associated with Lord Abbett and all officers of the
Company receive no compensation from the Company for acting as such. Outside
Trustees' fees and retirement costs are allocated among all funds in the Lord
Abbett group based on net assets of each fund. Director's fees accrued during
the year were $662, a portion of which has been deemed invested in shares of the
Company under a deferred compensation plan contemplating future payment of the
value of those shares. As of October 31, 1996, the aggregate amount in Trustees'
accounts maintained under the plan was $ . Retirement costs accrued
during the year ended October 31, 1996 amounted to $645.
8. Acquisition
On July 12, 1996, the Trust acquired the net assets of Lord Abbett Fundamental
Value Fund, Inc. pursuant to a plan of reorganization approved by the Company's
shareholders on June 19, 1996. The acquisition was accomplished by a tax-free
exchange of 6,718,449 shares of newly issued Class A shares for 3,251,614 shares
of the Company valued at $43,649,766 in the aggregate on July 12, 1996. The
aggregate net assets of the Trust and the Company immediately before the
acquisition were $59,420,311 and $43,649,766 (including $6,568,304 of net
unrealized appreciation and $2,229,561 of accumulated net realized gains),
respectively.
Copyright (C) 1996 by Lord Abbett Securities Trust-Growth & Income Trust, 767
Fifth Avenue, New York, NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett Securities Trust-Growth & Income Trust, is to be distributed only if
preceded or accompanied by a current prospectus which includes information
concerning the Trust's investment objective, policies 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.
<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, 1996, the related statements of operations and
of changes in net assets and the financial highlights for each of the periods
presented. These financial statements and the financial highlights are the
responsibility of the Company'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, 1996 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, 1996, the results of their operations, the changes in
their net assets and the financial highlights for each of the periods presented,
in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
December 8, 1995 Deloitte & Touche LLP
New York, New York
May 31, 1996
Our Management
Board of Directors
Ronald P. Lynch
Robert S. Dow
Thomas S. Henderson
E. Thayer Bigelow*+
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
W.Thomas Hudson, Jr., Executive
Vice President and Portfolio Manager
Kenneth B. Cutler, Vice President
and Secretary
Stephen I. Allen, Vice President
Investment Manager and
Underwriter
Lord, Abbett & Co.
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
212-848-1800
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) 1996 by Lord Abbett Tax-Free Income Trust, 767 Fifth Avenue, New
York, NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett Tax-Free Income Trust, is to be distributed only if preceded or
accompanied by a current prospectus which includes information concerning each
Series' investment objective and policies, sales charges and other matters. All
rights reserved. Printed in the U.S.A.
<PAGE>
Investing in the
Lord Abbett
Family of Funds
<TABLE>
<CAPTION>
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GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth Growth & Balanced Income Tax-Free Money
Growth Funds Funds Income Funds Fund Funds Income Funds Market Fund
International Mid-Cap Affiliated Fund Balanced Series U.S. Government o National U.S. Government
Series Value Fund Securities Series* o California Securities
Growth & o Connecticut Money Market
Developing Global Fund- Income Series Bond-Debenture o Florida Fund*+
Growth Fund Equity Series Fund o Georgia
Research Fund- o Hawaii
Research Fund - Large-Cap Global Fund- o Michigan
Small-Cap Series Income Series o Minnesota
Series o Missouri
Limited Duration o New Jersey
U.S. Government o New York
Securities Series* o Pennsylvania
o Texas
o Washington
</TABLE>
Finding the right mutual fund can be confusing. At Lord, Abbett & Co., we
believe your financial adviser provides value in helping you identify and
understand your investment objectives and, ultimately, offering fund
recommendations suitable for your individual needs.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a current prospectus for Lord Abbett Affiliated Fund.
For more complete information about any other Lord Abbett fund, including
charges and expenses, call your financial adviser or Lord Abbett Distributor LLC
at 800-874-3733 for a prospectus. Read it carefully before investing.
When you invest in a family of funds, you benefit from:
Diversification. You and your financial adviser can diversify your investments
between equity and income funds.
Flexibility. As your investment goals change, your financial adviser can help
you reallocate your portfolio.
As an investor in the Lord Abbett Family of Funds, you have access to 28
portfolios designed to meet a variety of investment needs. While you may
reallocate your assets among our funds at any time, we recommend speaking with
your financial adviser to help you customize your investment plan.
* An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
+ There can be no assurance that this Fund will be able to maintain a stable
net asset value of $1.00 per share. This Fund is managed to maintain, and
has maintained, its stable $1.00 per share price.
Numbers to Keep Handy
For Literature: 800-874-3733
For Shareholder Account
or Statement Inquiries: 800-821-5129
For More Information: 800-426-1130
LORD ABBETT DISTRIBUTOR LLC
- ------------------------------------------------------------ LAA-2-1096
The GM Building o 767 Fifth Avenue o New York, NY 10153-0203 (12/96)
