<Page>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act File Number 811-10371
Lord Abbett Blend Trust
-----------------------
(Exact name of registrant as specified in charter)
90 Hudson Street, Jersey City, NJ 07302
---------------------------------------
(Address of principal executive offices) (zip code)
Christina T. Simmons, Vice President & Assistant Secretary
90 Hudson Street, Jersey City, NJ 07302
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(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 201-6984
--------------
Date of fiscal year end: 7/31
Date of reporting period: 7/31/2004
<Page>
ITEM 1: REPORT TO SHAREHOLDERS.
<Page>
[LORD ABBETT LOGO]
2004
ANNUAL
REPORT
LORD ABBETT
SMALL-CAP BLEND FUND
FOR THE YEAR ENDED JULY 31, 2004
<Page>
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LORD ABBETT SMALL-CAP BLEND FUND
ANNUAL REPORT
FOR THE FISCAL YEAR ENDED JULY 31, 2004
DEAR SHAREHOLDERS: We are pleased to provide you with this overview of the Lord
Abbett Small-Cap Blend Fund's (the Fund) strategies and performance for the
fiscal year ended July 31, 2004. On this and the following pages, we discuss the
major factors that influenced performance.
Thank you for investing in Lord Abbett Mutual Funds. We value the trust
that you place in us and look forward to serving your investment needs in the
years to come.
BEST REGARDS,
/s/ Robert S. Dow
ROBERT S. DOW
CHAIRMAN
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Q: WHAT WERE THE OVERALL MARKET CONDITIONS OF THE REPORTING PERIOD?
A: The U.S. economy continued to show signs of improvement early in the fiscal
year as domestic growth prospects and corporate profits improved. Further
evidence of an economic recovery sparked the equity markets. Specifically, gross
domestic product (GDP) numbers showed that the U.S. economy expanded by an
impressive 8.2% annualized rate in the third quarter of 2003. This was well
ahead of expectations. In addition, productivity data, an important gauge for
inflation, remained strong. However, while major indices advanced early in the
third quarter, concerns over the viability of future growth grew as the summer
of 2003 ended.
The employment report for October 2003 showed an increase of 126,000 jobs.
While the unemployment rate dropped to 5.6% in January of 2004, the data also
showed lower-than-expected job creation in December 2003 and January 2004. GDP
grew at a 4% annual pace in the fourth quarter of 2003, and although this was
slightly below expectations, the data continued to support expectations for an
improving economy. Furthermore, in the face of a strengthening equity market,
debates over the direction of interest rates intensified.
The U.S. economy continued to strengthen in the first half of calendar 2004,
largely due to strong consumer and capital spending. Corporate profits rose,
triggered by a rise in industrial production. In January and February, inflation
and short-term interest rates remained stable. However, somewhat disappointing
employment reports and higher energy prices weighed on consumer sentiment. In
March and April, the U.S. housing market remained strong and there were
improvements in durable goods spending. But, retail sales dropped 0.5% in April
after a 2% gain in March.
1
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Beginning in April and continuing through July, unemployment stabilized. The
Producer Price Index (PPI) rose 0.1% in July, seasonally adjusted, after a
decrease of 0.3% in June and a 0.8% rise in May. (The PPI measures wholesale
prices of goods, i.e. before they are sold through retailers. It is sometimes
used to predict movements in the Consumer Price Index, which is a measure of
retail prices and is commonly used as a measure of inflation.) Equity prices, as
measured by the S&P 500 Index, were roughly flat in April, May and June. On June
30, the Fed raised its fed funds rate from 1% to 1.25% and stocks responded
positively to the widely expected Fed action. (The fed funds rate is the rate at
which banks lend to each other overnight.)
However, equity prices declined slightly in July, as investors continued to
respond to uncertainties surrounding future interest-rate hikes, the continued
war in Iraq, the upcoming presidential election and record-high energy prices.
Q: HOW DID THE FUND PERFORM OVER THE FISCAL YEAR ENDED JULY 31, 2004?
A: For the fiscal year ended July 31, 2004, the Fund returned 25.0%, reflecting
performance at the Net Asset Value (NAV) of Class A shares with all
distributions reinvested, compared with its benchmark, the Russell 2000(R)
Index,(1) which returned 17.1% over the same period. Standardized Average Annual
Total Returns, which reflect performance at the maximum 5.75% sales charge
applicable to Class A share investments and include the reinvestment of all
distributions are 1 Year: 17.81% and Since Inception (6/26/01): 10.76%.
PERFORMANCE DATA QUOTED REFLECT PAST PERFORMANCE AND ARE NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE
QUOTED. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND
WILL FLUCTUATE SO THAT SHARES, ON ANY GIVEN DAY OR WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. YOU CAN OBTAIN PERFORMANCE DATA CURRENT
TO THE MOST RECENT MONTH END BY CALLING LORD ABBETT AT 800-821-5129 OR REFERRING
TO OUR WEBSITE AT www.LordAbbett.com.
Q: WHAT WERE THE MOST SIGNIFICANT FACTORS AFFECTING PERFORMANCE?
A: Strong stock selection within the healthcare sector was the greatest
positive contributor to the Fund's performance relative to the Russell 2000(R)
Index for the fiscal year ended July 31, 2004. The best performer in the sector,
a company that specializes in drug delivery systems, did exceptionally well as
its pipeline for new products was recognized by investors. In addition, the
2
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Fund was helped by a number of holdings in medical device manufacturers due to
strategic investing prior to the release of new products.
Within the technology sector, stock selection also boosted the Fund's
performance. The holding with the largest gains, a company that makes sensors
for vehicle stability systems, benefited from a large new contract with a major
automobile manufacturer. Another strong holding, a company that makes internet
content filtering software, took advantage of a growing desire among employers
to manage their employees' access to non-business related internet websites in
the workplace.
Stock selection and an underweight position within the materials and
processing sector detracted from Fund performance because of the portfolio's
lack of heavy industrial holdings, such as steel and aluminum companies, which
performed well during the period. This sector includes companies that extract or
process raw materials. Also, stock selection within the other energy sector
detracted from performance as two holdings suffered from company-specific
accounting issues.
THE FUND'S PORTFOLIO IS ACTIVELY MANAGED AND, THEREFORE, ITS HOLDINGS AND
WEIGHTINGS OF A PARTICULAR ISSUER OR PARTICULAR SECTOR AS A PERCENTAGE OF
PORTFOLIO ASSETS ARE SUBJECT TO CHANGE. SECTORS MAY INCLUDE MANY INDUSTRIES.
THE PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE FUND, INCLUDING THE
FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND ONGOING EXPENSES, THAT YOU
SHOULD CAREFULLY CONSIDER BEFORE INVESTING. TO OBTAIN A PROSPECTUS ON THIS FUND
OR ANY LORD ABBETT MUTUAL FUND, PLEASE CONTACT YOUR INVESTMENT PROFESSIONAL OR
LORD ABBETT DISTRIBUTOR LLC AT 800-874-3733 OR VISIT www.LordAbbett.com. READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
(1) The Russell 2000(R) Index measures the performance of the 2,000 smallest
companies in the Russell 3000(R) Index, which represents approximately 8% of the
total market capitalization of the Russell 3000(R) Index. Indices are unmanaged,
do not reflect the deduction of fees or expenses and are not available for
direct investment.
IMPORTANT PERFORMANCE AND OTHER INFORMATION
The views of the Fund's management and the portfolio holdings described in this
report are as of July 31, 2004; these views and portfolio holdings may have
changed subsequent to this date and they do not guarantee the future performance
of the markets or the Fund. Information provided in this report should not be
considered a recommendation to purchase or sell securities.
A NOTE ABOUT RISK: See Notes to Financial Statements for a discussion of
investment risks. For a more detailed discussion of the risks associated with
the Fund, please see the Fund's Prospectus.
PERFORMANCE: BECAUSE OF ONGOING MARKET VOLATILITY, FUND PERFORMANCE MAY BE
SUBJECT TO SUBSTANTIAL FLUCTUATION. Except where noted, comparative Fund
performance does not account for the deduction of sales charges and would be
different if sales charges were included. The Fund offers additional classes of
shares with distinct pricing options. For a full description of the differences
in pricing alternatives, please see the Fund's Prospectus.
MUTUAL FUNDS ARE NOT INSURED BY THE FDIC, ARE NOT DEPOSITS OR OTHER OBLIGATIONS
OF, OR GUARANTEED BY BANKS, AND ARE SUBJECT TO INVESTMENT RISKS INCLUDING
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
3
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INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares with the same
investment in the Russell 2000(R) Index (the "Index") assuming reinvestment of
all distributions. The performance of other classes will be greater than or less
than the performance shown in the graph below due to different sales loads and
expenses applicable to such classes. The graph and performance table below do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND (CLASS A SHARES) THE FUND (CLASS A SHARES)
AT NET ASSET VALUE AT MAXIMUM OFFERING PRICE(1) RUSSELL 2000(R) INDEX(2)
June 26, 2001 $ 10,000 $ 9,425 $ 10,000
Jul-2001 $ 10,388 $ 9,791 $ 9,459
2002 $ 9,130 $ 8,605 $ 7,760
2003 $ 11,646 $ 10,977 $ 9,554
2004 $ 14,553 $ 13,716 $ 11,183
</Table>
FISCAL YEAR-END 7/31
AVERAGE ANNUAL TOTAL RETURN AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIOD ENDED JULY 31, 2004
<Table>
<Caption>
1 YEAR LIFE OF CLASS
CLASS A(3) 17.81% 10.76%
CLASS B(4) 20.19% 11.42%
CLASS C(5) 24.18% 12.19%
CLASS P(6) 24.97% 12.95%
CLASS Y(7) 25.45% 13.15%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 5.75%.
(2) Performance of the unmanaged Index does not reflect transaction costs,
management fees or sales charges. The performance of the Index is not
necessarily representative of the Fund's performance. Performance shown for the
Index begins on June 30, 2001.
(3) Performance is calculated from June 26, 2001, SEC effective date. Class A
shares were first offered to the public on July 2, 2001. Total return, which is
the percent change in net asset value, after deduction of the maximum initial
sales charge of 5.75% applicable to Class A Shares, with all distributions
reinvested for the periods shown ended July 31, 2004, is calculated using the
SEC-required uniform method to compute such return.
(4) Performance is calculated from June 26, 2001, SEC effective date. Class B
shares were first offered to the public on July 2, 2001. Performance reflects
the deduction of a CDSC of 4% for 1 year and 3% for the life of the class.
(5) Performance is calculated from June 26, 2001, SEC effective date. Class C
shares were first offered to the public on July 2, 2001. The 1% CDSC for Class C
shares normally applies before the first anniversary of the purchase date.
Performance is at net asset value.
(6) Performance is calculated from June 26, 2001, SEC effective date. Class P
shares were first offered to the public on July 2, 2001. Performance is at net
asset value.
(7) Performance is calculated from June 26, 2001, SEC effective date. Class Y
shares were first offered to the public on July 2, 2001. Performance is at net
asset value.
4
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EXPENSE EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges on purchase payments (these charges vary among
the share classes); and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees (these charges vary among the share
classes); and other Fund expenses. This Example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period (February 1, 2004 through July 31,
2004).
ACTUAL EXPENSES
For each class of the Fund, the first line of the table on the following
page provides information about actual account values and actual expenses. You
may use the information in this line, together with the amount you invested, to
estimate the expenses that you paid over the period. Simply divide your account
value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6),
then multiply the result by the number in the first line under the heading
entitled "Expenses Paid During the Period 2/1/04 - 7/31/04" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
For each class of the Fund, the second line of the table on the following
page provides information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio and an assumed rate of return
of 5% per year before expenses, which is not the Fund's actual return. The
hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
5
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Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
------------ ------------ ------------
2/1/04 -
2/1/04 7/31/04 7/31/04
------------ ------------ ------------
CLASS A
Actual $ 1,000.00 $ 1,000.70 $ 7.91
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,016.96 $ 7.98
CLASS B
Actual $ 1,000.00 $ 997.20 $ 11.09
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,013.76 $ 11.18
CLASS C
Actual $ 1,000.00 $ 997.20 $ 11.09
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,013.76 $ 11.18
CLASS P
Actual $ 1,000.00 $ 1,000.00 $ 8.35
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,016.51 $ 8.42
CLASS Y
Actual $ 1,000.00 $ 1,002.10 $ 6.11
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.76 $ 6.17
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense ratio
for such class (1.59% for Class A, 2.23% for Class B, 2.23% for Class C, 1.68%
for Class P and 1.23% for Class Y) multiplied by the average account value over
the period, multiplied by 182/366 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY SECTOR
JULY 31, 2004
<Table>
<Caption>
SECTOR %*
Auto & Transportation 5.55%
Consumer Discretionary 25.98%
Consumer Staples 2.58%
Financial Services 12.54%
Healthcare 22.03%
Materials & Processing 5.06%
Other Energy 5.42%
Producer Durables 10.21%
Technology 6.97%
Short-Term Investments 3.66%
Total 100.00%
</Table>
* Represents percent of total investments.
6
<Page>
SCHEDULE OF INVESTMENTS
JULY 31, 2004
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCKS 93.80%
AIR TRANSPORTATION 2.02%
Pinnacle Airlines Corp.* 560,741 $ 5,613
------------
AUTO COMPONENTS 1.69%
Wabash National Corp.* 162,650 4,697
------------
AUTO PARTS: AFTER MARKET 0.91%
Aftermarket Technology
Corp.* 168,750 2,530
------------
BANKS: OUTSIDE NEW YORK CITY 0.77%
Hanmi Financial Corp. 73,579 2,134
------------
BIOTECHNOLOGY RESEARCH &
PRODUCTION 2.22%
Discovery Partners Int'l.,
Inc.* 401,300 1,938
Enzon
Pharmaceuticals, Inc.* 341,300 4,236
------------
TOTAL 6,174
------------
BUILDING: HEATING & PLUMBING 0.83%
Aaon, Inc.* 127,972 2,304
------------
BUILDING: MATERIALS 1.68%
Watsco, Inc. 159,250 4,657
------------
BUILDING: ROOFING & WALLBOARD 1.96%
ElkCorp 249,400 5,444
------------
COMMUNICATIONS & MEDIA 0.45%
Entravision Communications
Corp.* 176,100 1,245
------------
COMPUTER SERVICES SOFTWARE &
SYSTEMS 3.46%
Aspen Technology, Inc.* 235,300 1,395
Callidus Software, Inc.* 15,782 58
Hummingbird Ltd.*(a) 29,087 618
Websense, Inc.* 197,400 7,539
------------
TOTAL 9,610
------------
COMPUTER TECHNOLOGY 3.12%
Stratasys, Inc.* 169,478 $ 4,447
Western Digital Corp.* 603,900 4,234
------------
TOTAL 8,681
------------
CONSTRUCTION 0.46%
Modtech Holdings, Inc.* 157,999 1,281
------------
CONSUMER ELECTRONICS 6.66%
LoJack Corp.* 397,281 3,758
Take-Two Interactive
Software, Inc.* 322,600 10,104
Universal Electronics, Inc.* 268,321 4,647
------------
TOTAL 18,509
------------
DIVERSIFIED FINANCIAL SERVICES 1.36%
U.S.I. Holdings Corp.* 270,339 3,785
------------
DRUGS & PHARMACEUTICALS 3.14%
Bentley Pharmaceuticals,
Inc.* 187,000 2,197
Bradley Pharmaceuticals,
Inc.* 152,500 3,590
Par Pharmaceutical Cos.,
Inc.* 78,400 2,951
------------
TOTAL 8,738
------------
ELECTRICAL & ELECTRONICS 0.20%
Pemstar, Inc.* 254,499 560
------------
ELECTRONICS: INSTRUMENTS GAUGES &
METERS 0.89%
Measurement Specialties,
Inc.* 115,200 2,473
------------
ELECTRONICS: MEDICAL SYSTEMS 3.02%
Analogic Corp. 130,647 5,427
TriPath Imaging, Inc.* 351,900 2,956
------------
TOTAL 8,383
------------
ENTERTAINMENT 1.18%
Alliance Gaming Corp.* 230,700 3,283
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
JULY 31, 2004
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------
FOODS 2.51%
Hain Celestial Group, Inc.* 148,000 $ 2,447
J & J Snack Foods Corp.* 123,639 4,541
------------
TOTAL 6,988
------------
HEALTH & PERSONAL CARE 2.51%
Matria Healthcare, Inc.* 148,400 3,710
VistaCare, Inc.* 177,100 3,269
------------
TOTAL 6,979
------------
HEALTHCARE FACILITIES 1.45%
Icon plc ADR* 39,440 1,457
LCA-Vision, Inc.* 98,659 2,574
------------
TOTAL 4,031
------------
HOMEBUILDING 4.32%
Centex Corp. 112,400 4,768
Ryland Group, Inc. 93,700 7,254
------------
TOTAL 12,022
------------
HOUSEHOLD FURNISHINGS 1.59%
Select Comfort Corp.* 216,345 4,420
------------
IDENTIFICATION CONTROL & FILTER
DEVICES 1.29%
X-Rite, Inc. 239,147 3,573
------------
INSURANCE: MULTI-LINE 3.22%
Hilb, Rogal & Hobbs Co. 266,100 8,938
------------
INSURANCE: PROPERTY-CASUALTY 4.80%
HCC Insurance
Holdings, Inc. 235,200 7,126
Ohio Casualty Corp.* 332,392 6,216
------------
TOTAL 13,342
------------
MACHINERY: INDUSTRIAL/SPECIALTY 2.51%
Actuant Corp. Class A* 191,600 6,986
------------
MACHINERY: OIL WELL EQUIPMENT &
SERVICES 2.77%
Key Energy Services, Inc.* 137,600 $ 1,387
Pride International, Inc.* 351,100 6,320
------------
TOTAL 7,707
------------
MACHINERY: SPECIALTY 0.93%
Helix Technology Corp. 178,757 2,581
------------
MEDICAL & DENTAL INSTRUMENTS &
SUPPLIES 8.30%
Bio-Rad Laboratories, Inc.* 63,600 3,333
Biosite Diagnostics, Inc.* 57,066 2,522
ICU Medical, Inc.* 179,848 5,000
Merit Medical Systems, Inc.* 227,620 3,842
SurModics, Inc.* 181,882 4,351
Theragenics Corp.* 970,800 4,038
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TOTAL 23,086
------------
MEDICAL SERVICES 0.81%
Option Care, Inc. 131,595 2,244
------------
OIL: CRUDE PRODUCERS 2.51%
Grey Wolf, Inc.* 1,550,700 6,963
------------
RADIO & TV BROADCASTERS 2.01%
Regent
Communications, Inc.* 967,431 5,592
------------
REAL ESTATE INVESTMENT TRUSTS 0.31%
La Quinta Corp.* 111,900 857
------------
RENTAL & LEASING SERVICES:
CONSUMER 0.79%
Dollar Thrifty Automotive
Group, Inc.* 91,700 2,209
------------
RESTAURANTS 3.11%
Dave & Buster's, Inc.* 292,200 4,979
Lone Star Steakhouse &
Saloon, Inc. 151,781 3,679
------------
TOTAL 8,658
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
JULY 31, 2004
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------
RETAIL 4.16%
Fred's, Inc. 192,100 $ 3,468
Global Imaging Systems,
Inc.* 220,210 6,679
Goody's Family Clothing,
Inc. 162,883 1,420
------------
TOTAL 11,567
------------
SAVINGS & LOAN 1.76%
Brookline Bancorp, Inc. 342,965 4,880
------------
SERVICES: COMMERCIAL 5.05%
Clean Harbors, Inc.* 2,485 24
First Consulting Group,
Inc.* 793,303 4,292
SM&A*(b) 1,214,515 9,728
------------
TOTAL 14,044
------------
TRANSPORTATION MISCELLANEOUS 0.79%
Vitran Corp, Inc.*(a) 136,300 2,193
------------
WHOLESALERS 0.28%
Brightpoint, Inc.* 59,200 787
------------
TOTAL COMMON STOCKS
(cost $250,969,277) 260,748
============
<Caption>
PRINCIPAL
AMOUNT VALUE
INVESTMENTS (000) (000)
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENT 3.56%
REPURCHASE AGREEMENT 3.56%
Repurchase Agreement
dated 7/30/2004,
1.20% due 8/2/2004
with State Street
Bank & Trust Co.
collateralized by
$10,160,000 of Federal
Home Loan Bank
at 1.95% due 4/2/2018;
value: $10,109,200;
proceeds: $9,909,457
(cost $9,908,466) $ 9,908 $ 9,908
------------
TOTAL INVESTMENTS IN
SECURITIES 97.36%
(cost $260,877,743) 270,656
============
OTHER ASSETS IN EXCESS OF
LIABILITIES 2.64% 7,339
------------
NET ASSETS 100.00% $ 277,995
============
</Table>
* Non-income producing security.
(a) Foreign security traded in U.S. dollars.
(b) Affiliated issuer (holding represents 5% or more of the underlying issuer's
outstanding voting shares). See Note 10.
ADR American Depository Receipt.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<Page>
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2004
<Table>
ASSETS:
Investments in unaffiliated issuers, at
value (cost $249,187,174) $ 260,927,284
Investment in affiliated issuer, at value
(cost $11,690,569) 9,728,265
Cash 144,360
Receivables:
Interest and dividends 130,975
Investment securities sold 6,139,455
Capital shares sold 3,132,923
Prepaid expenses and other assets 47,570
- --------------------------------------------------------------------------------
TOTAL ASSETS 280,250,832
- --------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 1,254,961
Capital shares reacquired 465,487
Management fee 175,089
12b-1 distribution fees 164,161
Fund administration 20,325
Trustees' fees 329
Accrued expenses and other liabilities 175,384
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 2,255,736
================================================================================
NET ASSETS $ 277,995,096
================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 238,040,342
Accumulated net investment loss (329)
Accumulated net realized gain on investments 30,177,277
Net unrealized appreciation on investments 9,777,806
- --------------------------------------------------------------------------------
NET ASSETS $ 277,995,096
================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 162,650,324
Class B Shares $ 45,384,111
Class C Shares $ 64,447,203
Class P Shares $ 218,150
Class Y Shares $ 5,295,308
OUTSTANDING SHARES BY CLASS
(UNLIMITED NUMBER OF AUTHORIZED SHARES OF
BENEFICIAL INTEREST):
Class A Shares 11,318,588
Class B Shares 3,206,454
Class C Shares 4,556,608
Class P Shares 15,124
Class Y Shares 366,399
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(NET ASSETS DIVIDED BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 14.37
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 5.75%) $ 15.25
Class B Shares-Net asset value $ 14.15
Class C Shares-Net asset value $ 14.14
Class P Shares-Net asset value $ 14.42
Class Y Shares-Net asset value $ 14.45
================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<Page>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2004
<Table>
INVESTMENT INCOME:
Dividends $ 740,930
Interest 98,147
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 839,077
- --------------------------------------------------------------------------------
EXPENSES:
Management fee 1,481,358
12b-1 distribution plan-Class A 418,535
12b-1 distribution plan-Class B 352,976
12b-1 distribution plan-Class C 440,657
12b-1 distribution plan-Class P 66
Shareholder servicing 563,168
Professional 45,550
Reports to shareholders 65,000
Fund administration 79,006
Custody 41,151
Trustees' fees 3,546
Registration 57,750
- --------------------------------------------------------------------------------
Gross expenses 3,548,763
Expense reductions (2,148)
- --------------------------------------------------------------------------------
NET EXPENSES 3,546,615
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (2,707,538)
================================================================================
NET REALIZED AND UNREALIZED GAIN:
Net realized gain on investments in unaffiliated issuers 36,226,172
Net realized gain on investment in affiliated issuer 34,112
Net change in unrealized appreciation/depreciation on
investments (2,171,628)
================================================================================
NET REALIZED AND UNREALIZED GAIN 34,088,656
================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 31,381,118
================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE YEAR ENDED FOR THE YEAR ENDED
INCREASE IN NET ASSETS JULY 31, 2004 JULY 31, 2003
OPERATIONS:
Net investment loss $ (2,707,538) $ (1,057,157)
Net realized gain on investments 36,260,284 9,303
Net change in unrealized appreciation/depreciation on
investments (2,171,628) 21,299,623
- -----------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 31,381,118 20,251,769
=====================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain
Class A (1,707,862) -
Class B (450,381) -
Class C (548,153) -
Class P (25) -
Class Y (73,076) -
- -----------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (2,779,497) -
=====================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 175,002,209 47,365,241
Reinvestment of distributions 2,267,482 -
Cost of shares reacquired (32,151,979) (15,750,280)
- -----------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS 145,117,712 31,614,961
=====================================================================================================
NET INCREASE IN NET ASSETS 173,719,333 51,866,730
=====================================================================================================
NET ASSETS:
Beginning of year 104,275,763 52,409,033
- -----------------------------------------------------------------------------------------------------
END OF YEAR $ 277,995,096 $ 104,275,763
=====================================================================================================
ACCUMULATED NET INVESTMENT LOSS $ (329) $ (285)
=====================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<Page>
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
----------------------------------------- TO
2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.71 $ 9.18 $ 10.45 $ 10.00
========== ========== ========== ============
Unrealized appreciation on investments .06
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
============
Investment operations
Net investment loss(a) (.16) (.12) (.12) (.07)
Net realized and unrealized gain (loss) 3.07 2.65 (1.15) .46
---------- ---------- ---------- ------------
Total from investment operations 2.91 2.53 (1.27) .39
---------- ---------- ---------- ------------
Distributions to shareholders from:
Net realized gain (.25) - -(g) -
---------- ---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 14.37 $ 11.71 $ 9.18 $ 10.45
========== ========== ========== ============
Total Return(b)(e) .60%(c)
Total Return(b) 24.96% 27.56% (12.11)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS
Expenses, including waiver and expense
reductions 1.55% 1.71% 1.66% .69%(c)
Expenses, excluding waiver and expense
reductions 1.55% 1.89% 2.41% .81%(c)
Net investment loss (1.12)% (1.30)% (1.09)% (.67)%(c)
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
----------------------------------------- TO
SUPPLEMENTAL DATA: 2004 2003 2002 7/31/2001
==================================================================================================================
Net assets, end of period (000) $ 162,651 $ 59,717 $ 29,962 $ 2,214
Portfolio turnover rate 84.91% 68.48% 47.69% 5.86%
==================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
----------------------------------------- TO
2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.56 $ 9.12 $ 10.45 $ 10.00
========== ========== ========== ============
Unrealized appreciation on investments .06
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
============
Investment operations
Net investment loss(a) (.24) (.18) (.18) (.07)
Net realized and unrealized gain (loss) 3.02 2.62 (1.15) .46
---------- ---------- ---------- ------------
Total from investment operations 2.78 2.44 (1.33) .39
---------- ---------- ---------- ------------
Distributions to shareholders from:
Net realized gain (.19) - -(g) -
---------- ---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 14.15 $ 11.56 $ 9.12 $ 10.45
========== ========== ========== ============
Total Return(b)(e) .60%(c)
Total Return(b) 24.19% 26.75% (12.68)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS
Expenses, including waiver and expense
reductions 2.18% 2.33% 2.27% .75%(c)
Expenses, excluding waiver and expense
reductions 2.18% 2.51% 3.02% .87%(c)
Net investment loss (1.75)% (1.92)% (1.70)% (.76)%(c)
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
----------------------------------------- TO
SUPPLEMENTAL DATA: 2004 2003 2002 7/31/2001
==================================================================================================================
Net assets, end of period (000) $ 45,384 $ 21,518 $ 12,013 $ 283
Portfolio turnover rate 84.91% 68.48% 47.69% 5.86%
==================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
----------------------------------------- TO
2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.56 $ 9.12 $ 10.45 $ 10.00
========== ========== ========== ============
Unrealized appreciation on investments .06
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
============
Investment operations
Net investment loss(a) (.24) (.18) (.18) (.07)
Net realized and unrealized gain (loss) 3.02 2.62 (1.15) .46
---------- ---------- ---------- ------------
Total from investment operations 2.78 2.44 (1.33) .39
---------- ---------- ---------- ------------
Distributions to shareholders from:
Net realized gain (.20) - -(g) -
---------- ---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 14.14 $ 11.56 $ 9.12 $ 10.45
========== ========== ========== ============
Total Return(b)(e) .60%(c)
Total Return(b) 24.18% 26.75% (12.68)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS
Expenses, including waiver and expense
reductions 2.18% 2.33% 2.27% .75%(c)
Expenses, excluding waiver and expense
reductions 2.18% 2.51% 3.02% .87%(c)
Net investment loss (1.75)% (1.92)% (1.70)% (.76)%(c)
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
----------------------------------------- TO
SUPPLEMENTAL DATA: 2004 2003 2002 7/31/2001
==================================================================================================================
Net assets, end of period (000) $ 64,447 $ 23,039 $ 10,432 $ 468
Portfolio turnover rate 84.91% 68.48% 47.69% 5.86%
==================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
----------------------------------------- TO
2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.73 $ 9.19 $ 10.45 $ 10.00
========== ========== ========== ============
Unrealized appreciation on investments .06
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
============
Investment operations
Net investment loss(a) (.37) (.10) (.12) (.07)
Net realized and unrealized gain (loss) 3.28 2.64 (1.14) .46
---------- ---------- ---------- ------------
Total from investment operations 2.91 2.54 (1.26) .39
---------- ---------- ---------- ------------
Distributions to shareholders from:
Net realized gain (.22) - -(g) -
---------- ---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 14.42 $ 11.73 $ 9.19 $ 10.45
========== ========== ========== ============
Total Return(b)(e) .60%(c)
Total Return(b) 24.97% 27.64% (12.01)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS
Expenses, including waiver and expense
reductions 1.63%+ 1.78%+ 1.72% .70%(c)
Expenses, excluding waiver and expense
reductions 1.63%+ 1.96%+ 2.47% .82%(c)
Net investment loss (1.20)%+ (1.37)%+ (1.15)% (.68)%(c)
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
----------------------------------------- TO
SUPPLEMENTAL DATA: 2004 2003 2002 7/31/2001
==================================================================================================================
Net assets, end of period (000) $ 218 $ 1 $ 1 $ 1
Portfolio turnover rate 84.91% 68.48% 47.69% 5.86%
==================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
<Table>
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
----------------------------------------- TO
2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS Y SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.75 $ 9.20 $ 10.45 $ 10.00
========== ========== ========== ============
Unrealized appreciation on investments .06
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
============
Investment operations
Net investment loss(a) (.10) (.11) (.10) (.07)
Net realized and unrealized gain (loss) 3.07 2.66 (1.15) .46
---------- ---------- ---------- ------------
Total from investment operations 2.97 2.55 (1.25) .39
---------- ---------- ---------- ------------
Distributions to shareholders from:
Net realized gain (.27) - -(g) -
---------- ---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 14.45 $ 11.75 $ 9.20 $ 10.45
========== ========== ========== ============
Total Return(b)(e) .60%(c)
Total Return(b) 25.45% 27.72% (11.92)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS
Expenses, including waiver and expense
reductions 1.18%+ 1.33%+ 1.27% .66%(c)
Expenses, excluding waiver and expense
reductions 1.18%+ 1.51%+ 2.02% .78%(c)
Net investment loss (.75)%+ (.92)%+ (.70)% (.63)%(c)
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
----------------------------------------- TO
SUPPLEMENTAL DATA: 2004 2003 2002 7/31/2001
==================================================================================================================
Net assets, end of period (000) $ 5,295 $ 1 $ 1 $ 1
Portfolio turnover rate 84.91% 68.48% 47.69% 5.86%
==================================================================================================================
</Table>
+ The ratios have been determined on a Fund basis.
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) Commencement of investment operations; SEC effective date on June 26, 2001;
Fund shares became available to the public on July 2, 2001.
(e) Total return is for the period 6/18/01 through 6/26/01.
(f) Total return is for the period 6/26/01 through 7/31/01.
(g) Amount represents less than $.01.
SEE NOTES TO FINANCIAL STATEMENTS.
17
<Page>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Lord Abbett Blend Trust (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act") as an open-end management company, organized as a
Delaware Business Trust on May 1, 2001. The Trust has one series, Lord Abbett
Small-Cap Blend Fund (the "Fund"). The Securities and Exchange Commission
declared the registration of the Fund and its shares effective on June 26, 2001
and each class of shares became available to the public on July 2, 2001. The
Fund is diversified under the Act.
The Fund's investment objective is to seek long-term growth of capital by
investing primarily in stocks of small companies. The Fund offers five classes
of shares: Classes A, B, C, P and Y, each with different expenses and dividends.
A front-end sales charge is normally added to the Net Asset Value ("NAV") for
Class A shares. There is no front-end sales charge in the case of the Class B,
C, P and Y shares, although there may be a contingent deferred sales charge
("CDSC") as follows: certain redemptions of Class A shares made within 24 months
following any purchases made without a sales charge; Class B shares redeemed
before the sixth anniversary of purchase; and Class C shares redeemed before the
first anniversary of purchase. Class B shares will convert to Class A shares on
the eighth anniversary of the original purchase of Class B shares.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results could
differ from those estimates.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) INVESTMENT VALUATION-Securities traded on any recognized U.S. or non-U.S.
exchange or on NASDAQ, Inc. are valued at the last sale price or official
closing price on the exchange or system on which they are principally
traded. Unlisted equity securities are valued at the last quoted sale price
or, if no sale price is available, at the mean between the most recently
quoted bid and asked price. Securities for which market quotations are not
readily available are valued at fair value as determined by management and
approved in good faith by the Board of Trustees. Short-term securities with
60 days or less remaining to maturity are valued using the amortized cost
method, which approximates current market value.
(b) SECURITY TRANSACTIONS-Security transactions are recorded as of the date that
the securities are purchased or sold (trade date). Realized gains and losses
on sales of portfolio securities are calculated using the identified-cost
method. 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.
(c) INVESTMENT INCOME-Dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis. Discounts are accreted and
premiums are amortized using the effective interest method. Investment
income is allocated to each class of shares based upon the relative
proportion of net assets at the beginning of the day.
18
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(d) FEDERAL TAXES-It is the policy of the Fund to meet the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all taxable income and capital
gains to its shareholders. Therefore, no federal income tax provision is
required.
(e) EXPENSES-Expenses, excluding class specific expenses, are allocated to each
class of shares based upon the relative proportion of net assets at the
beginning of the day. Class A, B, C, and P shares bear all expenses and fees
relating to their respective 12b-1 Distribution Plans.
(f) REPURCHASE AGREEMENTS-The Fund may enter into repurchase agreements with
respect to securities. A repurchase agreement is a transaction in which the
Fund acquires a security and simultaneously commits to resell that security
to the seller (a bank or securities dealer) at an agreed-upon price on an
agreed-upon date. The Fund requires at all times that the repurchase
agreement be collateralized by cash, U.S. Government securities or U.S.
Government sponsored enterprise securities having a value equal to, or in
excess of, the value of the repurchase agreement. If the seller of the
agreement defaults on its obligation to repurchase the underlying securities
at a time when the value of these securities has declined, the Fund may
incur a loss upon disposition of the securities.
3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE
The Trust has a management agreement with Lord, Abbett & Co. LLC ("Lord Abbett")
pursuant to which Lord Abbett supplies the Fund with investment management
services and executive and other personnel, pays the remuneration of officers,
provides office space and pays for ordinary and necessary office and clerical
expenses relating to research and statistical work and supervision of the Fund's
investment portfolio.
The management fee is based on average daily net assets at an annual rate of
..75%.
Lord Abbett provides certain administrative services to the Fund pursuant to an
Administrative Services Agreement at an annual rate of .04% of the Fund's
average daily net assets.
12b-1 DISTRIBUTION PLANS
The Fund has adopted a distribution plan with respect to one or more classes of
shares pursuant to Rule 12b-1 of the Act, which provides for the payment of
ongoing distribution and service fees to Lord Abbett Distributor LLC
("Distributor"), an affiliate of Lord Abbett. The fees are accrued daily at
annual rates based upon average daily net assets as follows:
<Table>
<Caption>
FEE CLASS A CLASS B CLASS C CLASS P
- -----------------------------------------------------------------------
Service .25% .25% .25% .20%
Distribution .10%(1) .75% .75% .25%
</Table>
(1) In addition, the Fund pays a one-time distribution fee of up to 1% on
certain qualifying purchases, which is generally amortized over a two-year
period. The Fund collected $3,226 of CDSCs during the year ended.
Class Y does not have a distribution plan.
19
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
COMMISSIONS
Distributor received the following commissions on sales of Class A shares of the
Fund, after concessions were paid to authorized dealers, for the year ended July
31, 2004:
<Table>
<Caption>
DISTRIBUTOR DEALERS'
COMMISSIONS CONCESSIONS
- -----------------------------
$ 339,828 $ 1,894,541
</Table>
One Trustee and certain of the Trust's officers have an interest in Lord Abbett.
4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARD
Dividends from net investment income, if any, are declared and paid at least
annually. Taxable net realized gains from investment transactions, reduced by
capital loss carryforwards, if any, are declared and distributed to shareholders
at least annually. The capital loss carryforward amount is available to offset
future net capital gains. Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions from
net investment income and net realized capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. These book/tax
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the components of net assets based on their federal tax basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for tax purposes are reported as distributions of paid-in capital.
The tax character of distributions paid during the years ended July 31, 2004 and
2003 are as follows:
<Table>
<Caption>
7/31/2004 7/31/2003
- ------------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 1,319,556 $ -
Net long-term capital gains 1,459,941 -
- ------------------------------------------------------------------------
Total distributions paid $ 2,779,497 $ -
========================================================================
</Table>
As of July 31, 2004, the Fund's components of accumulated earnings (losses) on a
tax basis are as follows:
<Table>
Undistributed ordinary income - net $ 17,482,874
Undistributed long-term capital gains 13,141,858
- --------------------------------------------------------------
Total undistributed earnings 30,624,732
Temporary differences (329)
Unrealized gains - net 9,330,351
- --------------------------------------------------------------
Total accumulated gains - net $ 39,954,754
==============================================================
</Table>
20
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As of July 31, 2004, the Fund's aggregate unrealized security gains and losses
based on cost for U.S. Federal income tax purposes are as follows:
<Table>
Tax cost $ 261,325,198
- ----------------------------------------------------------------
Gross unrealized gain 20,436,387
Gross unrealized loss (11,106,036)
- ----------------------------------------------------------------
Net unrealized security gain $ 9,330,351
================================================================
</Table>
The difference between book-basis and tax-basis unrealized gains (losses) is
primarily attributable to wash sales and other temporary tax adjustments.
Permanent items identified during the year ended July 31, 2004, have been
reclassified among the components of net assets based on their tax basis
treatment as follows:
<Table>
<Caption>
ACCUMULATED ACCUMULATED
NET INVESTMENT NET REALIZED
INCOME GAINS
- -----------------------------------
$ 2,707,494 $ (2,707,494)
</Table>
The permanent difference is primarily due to tax net investment losses.
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (other than short-term investments)
for the year ended July 31, 2004 are as follows:
<Table>
<Caption>
PURCHASES SALES
- -------------------------------
$ 288,929,398 $ 159,462,825
</Table>
There were no purchases or sales of U.S. Government securities for the year
ended July 31, 2004.
6. TRUSTEES' REMUNERATION
The Trust's officers and the one Trustee who are associated with Lord Abbett do
not receive any compensation from the Trust for serving in such capacities.
Outside Trustees' fees are allocated among all Lord Abbett-sponsored funds based
on the net assets of each fund. There is an equity based plan available to all
outside Trustees under which outside Trustees must defer receipt of a portion
of, and may elect to defer receipt of an additional portion of Trustees' fees.
The deferred amounts are treated as though equivalent dollar amounts have been
invested proportionately in the funds. Such amounts and earnings accrued thereon
are included in Trustees' fees on the Statement of Operations and in Trustees'
fees payable on the Statement of Assets and Liabilities and are not deductible
for U.S. Federal income tax purposes until such amounts are paid.
7. EXPENSE REDUCTIONS
The Fund has entered into arrangements with its transfer agent and custodian
whereby credits realized as a result of uninvested cash balances are used to
reduce a portion of the Fund's expenses.
21
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. LINE OF CREDIT
The Fund, along with certain other funds managed by Lord Abbett, has available a
$200,000,000 unsecured revolving credit facility ("Facility") from a consortium
of banks, to be used for temporary or emergency purposes as an additional source
of liquidity to fund redemptions of investor shares. Any borrowings under this
Facility will bear interest at current market rates as defined in the agreement.
The fee for this Facility is at an annual rate of .09%. At July 31, 2004, there
are no loans outstanding pursuant to this Facility nor was the Facility utilized
at any time during the year.
9. CUSTODIAN AND ACCOUNTING AGENT
State Street Bank and Trust Company ("SSB") is the Fund's custodian and
accounting agent. SSB performs custodian, accounting and recordkeeping functions
relating to portfolio transactions and calculating the Fund's NAV.
10. TRANSACTIONS WITH AFFILIATED ISSUER
An affiliated issuer is one in which the Fund has ownership of at least 5% of
the outstanding voting shares of the underlying issuer at any time during the
fiscal year. The Fund had the following transactions with an affiliated issuer
during the year ended July 31, 2004:
<Table>
<Caption>
REALIZED DIVIDEND
BALANCE OF BALANCE OF VALUE GAIN INCOME
SHARES HELD GROSS GROSS SHARES HELD AT 8/1/2003 8/1/2003
AFFILIATED ISSUER AT 7/31/2003 ADDITIONS SALES AT 7/31/2004 7/31/2004 TO 7/31/2004 TO 7/31/2004
- -------------------------------------------------------------------------------------------------------------------
SM&A 166,253 1,056,562 (8,300) 1,214,515 $ 9,728,265 $ 34,112 $ -
</Table>
11. INVESTMENT RISKS
The Fund is subject to the general risks and considerations associated with
equity investing as well as the particular risks associated with growth and
value stocks. The value of an investment will fluctuate in response to movements
in the stock market in general and to the changing prospects of individual
companies in which the Fund invests. Different types of stocks shift in and out
of favor depending on market and economic conditions. Growth stocks tend to be
more volatile than other stocks. The market may fail to recognize the intrinsic
value of particular value stocks for a long time. In addition, if the Fund's
assessment of a company's potential for growth or market conditions is wrong, it
could suffer losses or produce poor performance relative to other funds, even in
a rising market. The Fund invests primarily in small company stocks, which tend
to be more volatile and can be less liquid than large company stocks. Small
companies may also have more limited product lines, markets or financial
resources, and typically experience a higher risk of failure than large
companies. These factors can affect Fund performance.
22
<Page>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
12. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of beneficial interest are as follows:
<Table>
<Caption>
YEAR ENDED YEAR ENDED
JULY 31, 2004 JULY 31, 2003
- ------------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------
Shares sold 7,516,857 $ 104,897,437 2,908,482 $ 28,100,893
Reinvestment of distributions 112,438 1,503,302 - -
Shares reacquired (1,409,642) (19,954,176) (1,072,690) (10,036,648)
- ------------------------------------------------------------------------------------------------------------------
Increase 6,219,653 $ 86,446,563 1,835,792 $ 18,064,245
- ------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
- ------------------------------------------------------------------------------------------------------------------
Shares sold 1,681,290 $ 22,980,342 817,977 $ 7,840,219
Reinvestment of distributions 27,311 361,047 - -
Shares reacquired (362,759) (5,008,078) (274,061) (2,510,069)
- ------------------------------------------------------------------------------------------------------------------
Increase 1,345,842 $ 18,333,311 543,916 $ 5,330,150
- ------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- ------------------------------------------------------------------------------------------------------------------
Shares sold 3,059,464 $ 42,147,359 1,192,843 $ 11,424,129
Reinvestment of distributions 24,983 330,033 - -
Shares reacquired (520,096) (7,188,371) (343,914) (3,203,563)
- ------------------------------------------------------------------------------------------------------------------
Increase 2,564,351 $ 35,289,021 848,929 $ 8,220,566
- ------------------------------------------------------------------------------------------------------------------
CLASS P SHARES
- ------------------------------------------------------------------------------------------------------------------
Shares sold 15,107 $ 218,867 - $ -
Reinvestment of distributions 2 24 - -
Shares reacquired (97) (1,353) - -
- ------------------------------------------------------------------------------------------------------------------
Increase 15,012 $ 217,538 - $ -
- ------------------------------------------------------------------------------------------------------------------
CLASS Y SHARES
- ------------------------------------------------------------------------------------------------------------------
Shares sold 360,838 $ 4,758,204 - $ -
Reinvestment of distributions 5,449 73,076 - -
Shares reacquired -(a) (1) - -
- ------------------------------------------------------------------------------------------------------------------
Increase 366,287 $ 4,831,279 - $ -
- ------------------------------------------------------------------------------------------------------------------
</Table>
(a) Amount represents less than 1 share.
13. SUBSEQUENT EVENT
Effective October 1, 2004, Distributor will pay the one-time distribution fee of
up to 1% on certain qualifying purchases of Class A shares of the Fund. Such
payments are currently made by the Fund. The Fund will continue to amortize the
prepaid distribution fee balance outstanding at September 30, 2004, which is
generally amortized over a two-year period.
23
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF TRUSTEES AND SHAREHOLDERS,
LORD ABBETT BLEND TRUST - LORD ABBETT SMALL-CAP BLEND FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Lord Abbett Blend Trust - Lord Abbett Small-Cap
Blend Fund (the "Fund"), as of July 31, 2004, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods presented. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit 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 as of July 31, 2004 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Lord
Abbett Blend Trust - Lord Abbett Small-Cap Blend Fund as of July 31, 2004, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial highlights
for each of the periods presented, in conformity with accounting principles
generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
New York, New York
September 24, 2004
24
<Page>
BASIC INFORMATION ABOUT MANAGEMENT
The Board of Trustees (the "Board") is responsible for the management of the
business and affairs of the Trust in accordance with the laws of the State of
Delaware. The Board appoints officers who are responsible for the day-to-day
operations of the Trust and who execute policies authorized by the Board. The
Board also approves an investment adviser to the Trust and continues to monitor
the cost and quality of the services provided by the investment adviser, and
annually considers whether to renew the contract with the adviser. Generally,
each Trustee holds office until his/her successor is elected and qualified or
until his/her earlier resignation or removal, as provided in the Trust's
organizational documents.
Lord, Abbett & Co. LLC ("Lord Abbett"), a Delaware limited liability company, is
the Trust's investment adviser.
INTERESTED TRUSTEE
The following Trustee is the Managing Partner of Lord Abbett and is an
"interested person" as defined in the Act. Mr. Dow is also an officer, director,
or trustee of each of the fourteen Lord Abbett-sponsored funds, which consist of
49 portfolios or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
DATE OF BIRTH WITH TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- -------------------------------------------------------------------------------------------------------
ROBERT S. DOW Trustee and Managing Partner and Chief N/A
Lord, Abbett & Co. LLC Chairman since 2001 Investment Officer of Lord
90 Hudson Street Abbett since 1996.
Jersey City, NJ
Date of Birth: 3/8/1945
</Table>
----------
INDEPENDENT TRUSTEES
The following independent or outside Trustees are also directors or trustees of
each of the fourteen Lord Abbett-sponsored funds, which consist of 49 portfolios
or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
DATE OF BIRTH WITH TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- -------------------------------------------------------------------------------------------------------
E. THAYER BIGELOW Trustee since 2001 Managing General Partner, Currently
Bigelow Media, LLC Bigelow Media, LLC (since serves as
41 Madison Ave., 2000); Senior Adviser, director of
Suite 3810 Time Warner Inc. (1998 - Adelphia
New York, NY 2000); Acting Chief Communications,
Date of Birth: 10/22/1941 Executive Officer of Inc., Crane
Courtroom Television Co., and Huttig
Network (1997 - 1998); Building
President and Chief Products Inc.
Executive Officer of Time
Warner Cable Programming,
Inc. (1991 - 1997).
WILLIAM H.T. BUSH Trustee since 2001 Co-founder and Chairman Currently
Bush-O'Donnell & Co., Inc. of the Board of the serves as
101 South Hanley Road financial advisory firm director of
Suite 1250 of Bush-O'Donnell & Wellpoint
St. Louis, MO Company (since 1986). Health Networks
Date of Birth: 7/14/1938 Inc., DT
Industries
Inc., and
Engineered
Support
Systems, Inc.
</Table>
25
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
DATE OF BIRTH WITH TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- -------------------------------------------------------------------------------------------------------
ROBERT B. CALHOUN, JR. Trustee since 2001 Managing Director of Currently
Monitor Clipper Partners Monitor Clipper Partners serves as
650 Madison Ave., 9th Fl. (since 1997) and director of
New York, NY President of Clipper Avondale, Inc.
Date of Birth: 10/25/1942 Asset Management Corp. and Interstate
(since 1991), both Bakeries Corp.
private equity investment
funds.
JULIE A. HILL Trustee since 2004 Owner and CEO of the Currently
20 Via Diamante Hillsdale Companies, a serves as
Newport Coast, CA business consulting firm director of
Date of Birth: 7/16/1946 (1997 - present); Wellpoint
Founder, President and Health Networks
Owner of the Hiram-Hill Inc.; Resources
and Hillsdale Development Connection
Companies from 1998 to Inc.; Holcim
2001. (US) Inc.
(parent company
Holcim Ltd).
FRANKLIN W. HOBBS Trustee since 2001 Senior Advisor (since Currently
Houlihan Lokey April 2003) and Former serves as
Howard & Zukin Chief Executive Officer director of
685 Third Ave. of Houlihan Lokey Howard Adolph Coors
New York, NY & Zukin, an investment Company.
Date of Birth: 7/30/1947 bank (January 2002 -
April 2003); Chairman of
Warburg Dillon Read (1999
- 2001); Global Head of
Corporate Finance of SBC
Warburg Dillon Read (1997
- 1999); Chief Executive
Officer of Dillon, Read &
Co. (1994 - 1997).
C. ALAN MACDONALD Trustee since 2001 Retired - General Currently
415 Round Hill Road Business and Governance serves as
Greenwich, CT Consulting (since 1992); director of
Date of Birth: 5/19/1933 formerly President and Lincoln Snacks,
CEO of Nestle Foods. and H.J. Baker.
THOMAS J. NEFF Trustee since 2001 Chairman of Spencer Currently
Spencer Stuart Stuart, an executive serves as
277 Park Avenue search consulting firm director of
New York, NY (since 1996); President Ace, Ltd. and
Date of Birth: 10/2/1937 of Spencer Stuart (1979 - Exult, Inc.
1996).
</Table>
26
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
OFFICERS
None of the officers listed below have received compensation from the Trust. All
the officers of the Trust may also be officers of the other Lord
Abbett-sponsored funds and maintain offices at 90 Hudson Street, Jersey City, NJ
07302.
<Table>
<Caption>
NAME AND CURRENT POSITION LENGTH OF SERVICE PRINCIPAL OCCUPATION
(DATE OF BIRTH) WITH TRUST OF CURRENT POSITION DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------
ROBERT S. DOW Chief Executive Elected in 2001 Managing Partner and
(3/8/1945) Officer and President Chief Investment Officer
of Lord Abbett since
1996.
MICHAEL T. SMITH Executive Vice Elected in 2001 Partner and Investment
(5/28/1963) President Manager, joined Lord
Abbett in 1987.
ROBERT G. MORRIS Vice President Elected in 2001 Partner and Director of
(11/6/1944) Equity Investments,
joined Lord Abbett in
1991.
TRACIE E. AHERN Vice President Elected in 2001 Partner and Director of
(1/12/1968) Portfolio Accounting and
Operations, joined Lord
Abbett in 1999, prior
thereto Vice President -
Head of Fund
Administration of Morgan
Grenfell.
JOAN A. BINSTOCK Chief Financial Elected in 2001 Partner and Chief
(3/4/1954) Officer and Vice Operations Officer,
President joined Lord Abbett in
1999, prior thereto Chief
Operating Officer of
Morgan Grenfell.
DANIEL E. CARPER Vice President Elected in 2001 Partner, joined Lord
(1/22/1952) Abbett in 1979.
PAUL A. HILSTAD Vice President and Elected in 2001 Partner and General
(12/13/1942) Secretary Counsel, joined Lord
Abbett in 1995.
LAWRENCE H. KAPLAN Vice President and Elected in 2001 Partner and Deputy
(1/16/1957) Assistant Secretary General Counsel, joined
Lord Abbett in 1997.
A. EDWARD OBERHAUS, III Vice President Elected in 2001 Partner and Manager of
(12/21/1959) Equity Trading, joined
Lord Abbett in 1983.
VINCENT SCIALLI Vice President Elected in 2002 Senior Equity Analyst -
(11/5/1969) Small Cap Blend Team,
joined Lord Abbett in
2001, formerly Senior
Research Analyst at Bear,
Stearns & Co. from 2000
to 2001, prior thereto
Senior Equity Analyst at
Prudential Securities.
</Table>
27
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONCLUDED)
<Table>
<Caption>
NAME AND CURRENT POSITION LENGTH OF SERVICE PRINCIPAL OCCUPATION
(DATE OF BIRTH) WITH TRUST OF CURRENT POSITION DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------
CHRISTINA T. SIMMONS Vice President and Elected in 2001 Assistant General
(11/12/1957) Assistant Secretary Counsel, joined Lord
Abbett in 1999, formerly
Assistant General Counsel
of Prudential Investments
from 1998 to 1999, prior
thereto Counsel of
Drinker, Biddle & Reath
LLP, a law firm.
JAMES W. BERNAICHE Chief Compliance Elected 2004 Chief Compliance Officer,
(7/28/1956) Officer joined Lord Abbett in
2001, prior thereto Vice
President and Chief
Compliance Officer of
Credit Suisse Asset
Management, LLC.
BERNARD J. GRZELAK Treasurer Elected in 2003 Director of Fund
(6/12/1971) Administration, joined
Lord Abbett in 2003,
formerly Vice President,
Lazard Asset Management
LLC from 2000 to 2003,
prior thereto Manager of
Deloitte & Touche LLP.
</Table>
Please call 888-522-2388 for a copy of the Statement of Additional Information
(SAI), which contains further information about the Trust's Trustees. It is
available free upon request.
28
<Page>
HOUSEHOLDING
The Trust has adopted a policy that allows it to send only one copy of the
Fund's Prospectus, proxy material, annual report and semi-annual report to
certain shareholders residing at the same "household." This reduces Fund
expenses, which benefits you and other shareholders. If you need additional
copies or do not want your mailings to be "householded," please call Lord Abbett
at 800-821-5129 or send a written request with your name, the name of your fund
or funds and your account number or numbers to Lord Abbett Family of Funds, P.O.
Box 219336, Kansas City, MO 64121.
PROXY VOTING POLICIES, PROCEDURES AND RECORD
A description of the policies and procedures that Lord Abbett uses to vote
proxies related to the Fund's portfolio securities, and information as to how
Lord Abbett voted the Fund's proxies during the 12-month period ended June 30,
2004, are available without charge, upon request, (i) by calling 888-522-2388;
(ii) on Lord Abbett's web site at www.LordAbbett.com; and (iii) on the
Securities and Exchange Commission's ("SEC") website at www.sec.gov.
SHAREHOLDER REPORTS AND QUARTERLY PORTFOLIO DISCLOSURE
The Fund will be required to file its complete schedule of portfolio holdings
with the SEC for its first and third fiscal quarters on Form N-Q for fiscal
quarters ending on or after July 9, 2004. Once filed, the Fund's Form N-Q will
be available without charge, upon request on the SEC's website at www.sec.gov
and may be available by calling Lord Abbett at 800-821-5129. You can also obtain
copies of Form N-Q by (i) visiting the SEC's Public Reference Room in
Washington, DC (information on the operation of the Public Reference Room may be
obtained by calling 800-SEC-0330); (ii) sending your request and duplicating fee
to the SEC's Public Reference Room, Washington, DC 20549-0102; or (iii) sending
your request electronically to publicinfo@sec.gov.
TAX INFORMATION
12.55% of the ordinary income distribution paid by the Fund during fiscal 2004
is qualifying dividend income for individual shareholders and also eligible for
the dividends received deduction for corporate shareholders.
Additionally, $1,459,941 paid to shareholders during the fiscal year ended July
31, 2004 represent long-term capital gains.
29
<Page>
<Table>
<Caption>
[LORD ABBETT(R) LOGO]
This report when not used for the general
information of shareholders of the Fund, is to
be distributed only if preceded or accompanied
by a current Fund Prospectus. Lord Abbett Blend Trust
Lord Abbett Small-Cap Blend Fund
Lord Abbett Mutual Fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC LASCB-2-704
90 Hudson Street - Jersey City, New Jersey 07302-3973 (9/04)
</Table>
<Page>
ITEM 2: CODE OF ETHICS.
(a) In accordance with applicable requirements, the Registrant adopted a
Sarbanes-Oxley Code of Ethics on June 19, 2003 that applies to the
principal executive officer and senior financial officers of the
Registrant ("Code of Ethics"). The Code of Ethics was in effect during
the fiscal year ended July 31, 2004 (the "Period").
(b) Not applicable.
(c) The Registrant has not amended the Code of Ethics as described in Form
N-CSR during the Period.
(d) The Registrant has not granted any waiver, including an implicit
waiver, from a provision of the Code of Ethics as described in Form
N-CSR during the Period.
(e) Not applicable.
(f) See Item 11(a) concerning the filing of the Code of Ethics. The
Registrant will provide a copy of the Code of Ethics to any person
without charge, upon request. To obtain a copy, please call Lord Abbett
at 800-821-5129.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT.
The Registrant's Board of Trustees has determined that each of the
following independent Trustess who are members of the audit committee
are audit committee financial experts: E. Thayer Bigelow, Robert B.
Calhoun and Franklin W. Hobbs. Each of these persons is independent
within the meaning of the Form N-CSR.
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES.
In response to sections (a), (b), (c) and (d) of Item 4, the aggregate fees
billed to the Registrant for the fiscal years ended July 31, 2004 and 2003 by
the Registrant's principal accounting firm, Deloitte & Touche LLP, the member
firms of Deloitte Touche Tohmatsu and their respective affiliates (collectively,
"Deloitte") were as follows:
<Page>
<Table>
<Caption>
FISCAL YEAR ENDED:
2004 2003
Audit Fees {a} $ 34,000 $ 30,000
Audit-Related Fees {b} 31 20
--------- ---------
Total audit and audit-related fees 34,031 30,020
--------- ---------
Tax Fees {c} 6,595 6,567
All Other Fees {d} 36 -
--------- ---------
Total Fees $ 40,662 $ 36,587
--------- ---------
</Table>
- ----------
{a} Consists of fees for audits of the Registrant's annual financial
statements.
{b} Consists of the Registrant's proportionate share of fees for performing
certain agreed-upon procedures regarding compliance with the provisions of
Rule 17a-7 of the Investment Company Act of 1940 and related Board approved
procedures.
{c} Fees for the fiscal year ended July 31, 2004 consist of fees for
preparing the U.S. Income Tax Return for Regulated Investment Companies,
New Jersey Corporation Business Tax Return, New Jersey Annual Report Form,
U.S. Return of Excise Tax on Undistributed Income of Investment Companies,
IRS Forms 1099-MISC and 1096 Annual Summary and Transmittal of U.S.
Information Returns.
Fees for the fiscal year ended July 31, 2003 consist of fees for preparing
the U.S. Income Tax Return for Regulated Investment Companies, New Jersey
Corporation Business Tax Return, New Jersey Annual Report Form, U.S. Return
of Excise Tax on Undistributed Income of Investment Companies.
{d} Consists of the Registrant's proportionate share of fees for testing of
Anti-Money Laundering Compliance.
(e) (1) Pursuant to Rule 2-01(c) (7) of Regulation S-X, the Registrant's Audit
Committee has adopted pre-approval policies and procedures. Such policies and
procedures generally provide that the Audit Committee must pre-approve:
- any audit, audit-related, tax, and other services to be
provided to the Lord Abbett Funds, including the Registrant,
and
- any audit-related, tax, and other services to be provided to
the Registrant's investment adviser and any entity
controlling, controlled by or under common control with the
investment adviser that provides ongoing services to one or
more Funds comprising the Registrant if the engagement
relates directly to operations and financial reporting of a
Fund,
by the independent auditor to assure that the provision of such services does
not impair the auditor's independence.
<Page>
The Audit Committee has delegated pre-approval authority to its Chairman,
subject to a fee limit of $10,000 per event, and not to exceed $25,000 annually.
The Chairman will report any pre-approval decisions to the Audit Committee at
its next scheduled meeting. Unless a type of service to be provided by the
independent auditor has received general pre-approval, it must be pre-approved
by the Audit Committee. Any proposed services exceeding pre-approved cost levels
will require specific pre-approval by the Audit Committee.
(e) (2) The Registrant's Audit Committee has approved 100% of the services
described in this Item 4 (b) through (d).
(f) Not applicable.
(g) The aggregate non-audit fees billed by Deloitte for services rendered to the
Registrant are shown above in the response to Item 4 (a), (b), (c) and (d) as
"All Other Fees".
The aggregate non-audit fees billed by Deloitte for services rendered to the
Registrant's investment adviser, Lord, Abbett & Co. LLC ("Lord Abbett"), for the
fiscal years ended July 31, 2004 and 2003 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2004 2003
All Other Fees {a} $ 81,900 $ 77,000
</Table>
- ----------
{a} Fees for the fiscal year ended July 31, 2004 consist of fees of $81,900
for Independent Services Auditors' Report on Controls Placed in Operation
and Tests of Operating Effectiveness related to Lord Abbett's operations
and general computer controls over equity securities processing for
institutional and mutual fund accounts ("SAS 70 Report").
Fees for the fiscal year ended July 31, 2003 consist of fees of $2,000 for
testing of Business Continuity Planning and $75,000 for the SAS 70 Report.
The aggregate non-audit fees billed by Deloitte for services rendered to
entities under the common control of Lord Abbett (i.e., Lord Abbett Distributor
LLC, the Registrant's principal underwriter) for the fiscal years ended July 31,
2004 and 2003 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2004 2003
All Other Fees {b} $ 11,378 -0-
</Table>
<Page>
- ----------
{b} Fees for the fiscal year ended July 31, 2004 represent fees for testing
of Anti-Money Laundering Compliance.
(h) The Registrant's Audit Committee has considered the provision of non-audit
services that were rendered to the Registrant's investment adviser, and any
entity controlling, controlled by or under common control with the investment
adviser that provides ongoing services to the Registrant, that were not
pre-approved pursuant to Rule 2-01 (c)(7)(ii) of Regulation S-X and has
determined that the provision of such services is compatible with maintaining
Deloitte's independence.
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6: SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
ITEM 10: CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the Registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940) as of September 24, 2004, the Chief Executive Officer and
Chief Financial Officer of the Registrant have concluded that such
disclosure controls and procedures are reasonably designed and
effective to ensure that material information relating to the
Registrant, including its consolidated subsidiaries, is made known to
them by others within those entities.
(b) There were no significant changes in the Registrant's internal
controls over financial reporting (as defined in Rule 30a-3(d) under
the Investment Company Act of 1940) that occurred during the
Registrant's last fiscal half-year that have materially affected, or
are reasonably likely to materially affect, the Registrant's internal
control over financial reporting.
ITEM 11: EXHIBITS.
(a)(1) Amendments to Code of Ethics - Not applicable.
<Page>
(a)(2) Certification of each principal executive officer and principal
financial officer of the Registrant as required by Rule 30a-2 under
the Act (17 CFR 270.30a-2) is attached hereto as a part of
EX-99.CERT.
(a)(3) Certification of each principal executive officer and principal
financial officer of the Registrant as required by Section 906 of
the Sarbanes-Oxley Act of 2002 is attached hereto as a part of
EX-99.906CERT.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
LORD ABBETT BLEND TRUST
/s/Robert S. Dow
----------------
Robert S. Dow
Chief Executive Officer,
Chairman and President
/s/Joan A. Binstock
-------------------
Joan A. Binstock
Chief Financial Officer and Vice President
Date: September 24, 2004
<Page>
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
LORD ABBETT BLEND TRUST
/s/Robert S. Dow
----------------
Robert S. Dow
Chief Executive Officer,
Chairman and President
/s/Joan A. Binstock
-------------------
Joan A. Binstock
Chief Financial Officer and Vice President
Date: September 24, 2004