<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 811-06650
LORD ABBETT RESEARCH FUND, INC.
-------------------------------
(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
---------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 201-6984
--------------
Date of fiscal year end: 11/30
Date of reporting period: November 30, 2005
<Page>
ITEM 1: REPORT TO SHAREHOLDERS.
<Page>
[LORD ABBETT LOGO]
2005
ANNUAL
REPORT
LORD ABBETT
AMERICA'S VALUE FUND
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2005
<Page>
- --------------------------------------------------------------------------------
LORD ABBETT RESEARCH FUND
LORD ABBETT AMERICA'S VALUE FUND
ANNUAL REPORT
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2005
DEAR SHAREHOLDERS: We are pleased to provide you with this overview of Lord
Abbett America's Value Fund's strategies and performance for the fiscal year
ended November 30, 2005. 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
- --------------------------------------------------------------------------------
Q: WHAT WERE THE OVERALL MARKET CONDITIONS OF THE FISCAL YEAR ENDED NOVEMBER
30, 2005?
A: Despite sharply higher energy prices, continued short-term interest rate
hikes by the Federal Reserve Board (the Fed), and a devastating hurricane season
for the Gulf Coast region, U.S. real (i.e., after inflation) gross domestic
product (GDP) continued to grow at a strong, if not robust, pace. With the
exception of a hurricane-induced fall in personal income in August 2005,
personal income generally remained positive throughout the fiscal year ended
November 30, 2005.
On November 1, 2005, the Fed raised the fed funds rate for the twelfth
consecutive time since June 2004, bringing the rate to 4.0 percent at the fiscal
year-end November 30, 2005. Meanwhile, 10-year Treasury yields were volatile,
reflecting investors' shifting perceptions about the health of the U.S. economy.
Yields on the benchmark Treasury note began the fiscal year ended November 30,
2005, at 4.2 percent, reaching 4.5 percent by March 2005. However, the trend
higher was disrupted in the spring and summer of 2005, amid investors' concerns
about an economic slowdown, with the 10-year yield touching 4.0 percent in June.
The yield then rose again in the last month of the fiscal year, to as high as
4.5 percent, driven by renewed concerns about inflation.
Against this backdrop of steady economic output and sharply rising
short-term interest rates, equity markets rose, with the S&P 500(R) Index(1)
gaining 8.4 percent in the fiscal year ended November 30, 2005. Driven by the
sharp rise in oil prices, the strongest performing sectors of the S&P 500 Index
in the fiscal year ended November 30, 2005, were energy stocks, recording a
return of 28.1 percent, and utilities, rising 18.6 percent.
1
<Page>
- --------------------------------------------------------------------------------
"Defensive" stocks, such as those in the healthcare sector, also outperformed
the S&P 500 Index, while economically sensitive sectors, such as materials,
industrials, telecommunication services, and consumer discretionary,
underperformed.
Q: HOW DID THE FUND PERFORM OVER THE FISCAL YEAR ENDED NOVEMBER 30, 2005?
A: The fund returned 6.3 percent, reflecting performance at the net asset value
(NAV) of Class A shares with all distributions reinvested, compared with its
benchmark, the S&P 500 Index, which returned 8.4 percent over the same period.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS, WHICH REFLECT PERFORMANCE AT THE
MAXIMUM 5.75 PERCENT SALES CHARGE APPLICABLE TO CLASS A SHARE INVESTMENTS AND
INCLUDE THE REINVESTMENT OF ALL DISTRIBUTIONS, ARE: 1 YEAR: 0.15 PERCENT AND
SINCE INCEPTION (DECEMBER 27, 2001): 6.50 PERCENT. Class A shares purchased with
a front-end sales charge have no contingent deferred sales charge (CDSC).
However, certain purchases of Class A shares made without a front-end sales
charge may be subject to a CDSC. Please see section "Your Investment-Purchases"
in the prospectus for more information on redemptions that may be subject to a
CDSC.
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.
NOTE: Lord Abbett America's Value Fund is not a balanced fund and has the
capability to adjust equity and fixed-income allocations, based on relative
value in the market and the investment team's proprietary fundamental research.
Q: WHAT WERE THE MOST SIGNIFICANT FACTORS AFFECTING PERFORMANCE?
EQUITY PORTION
A: The largest detractor to fund performance relative to its benchmark for the
fiscal year ended November 30, 2005, was stock selection in the utilities
sector. Underperformance here was not so much a result of the stocks held as it
was of those not held. The fund held primarily traditional electric utility
companies. In contrast, the benchmark's utility holdings included more companies
whose performance numbers are tied to the prices of oil and natural gas.
Stock selection in the consumer staples sector also hurt fund performance
relative
2
<Page>
- --------------------------------------------------------------------------------
to its benchmark. Consumer staples companies include those that produce or sell
regularly consumed goods, such as food, beverages, tobacco, prescription drugs,
and household products. Not owning beverage and tobacco stocks, which performed
well during the fiscal year ended November 30, 2005, was the primary detractor
to fund performance relative to its benchmark.
The greatest contributor to fund performance relative to its benchmark for
the fiscal year ended November 30, 2005, was stock selection in the
telecommunications services sector. Shares of PanAmSat Holding Corp., a provider
of global video and data broadcasting services via satellite, outperformed due
to the announcement that the company is being taken over by a private holding
company.
Stock selection in the energy sector also helped fund performance relative
to its benchmark. EOG Resources, Inc., a natural gas holding, reported good
returns as a result of robust gas prices and successful development of a major
property in Texas. Halliburton Co. and GlobalSantaFe Corp., two oil field
services companies, also aided performance, as rising demand for their services
and products drove revenues and earnings.
THE FUND'S PORTFOLIO IS ACTIVELY MANAGED AND, THEREFORE, ITS HOLDINGS AND
WEIGHTINGS OF A PARTICULAR ISSUER OR SECTOR AS A PERCENTAGE OF PORTFOLIO ASSETS
ARE SUBJECT TO CHANGE. SECTORS MAY INCLUDE MANY INDUSTRIES.
FIXED-INCOME PORTION
In the high-yield bonds portion of the portfolio, holdings in industrial and
auto parts companies detracted from fund performance relative to its benchmark
for the fiscal year ended November 30, 2005. Among the convertible securities
detracting from fund performance relative to its benchmark were those of media,
advertising, and technology companies.
Contributors to fund performance relative to its benchmark were the credits
of telecom, health services, cable media, and gaming companies. Also helping
performance were holdings in chemical and select utilities, reflecting
investors' renewed preference for large, stable companies exhibiting growth in
profitability. Other outperforming securities were positions in convertibles and
high-grade investment bonds, such as mortgage-backed securities and the credits
of a financial services arm of a major auto manufacturer.
The bond component of the fund remained focused on the identification of
individual credits that offered the potential for positive total returns, based
on above-average income and improving
3
<Page>
- --------------------------------------------------------------------------------
trends, and that were available at good relative valuations. In addition, the
fund's flexibility permitted a strategic allocation of assets as market
opportunities changed.
High-yield bonds typically benefit from some of the same factors that drive
equity market performance, including moderate economic growth, which supports
the ability of the issuing companies to pay back debt. Accordingly, the
post-election rally that boosted equity prices early in the fiscal year ended
November 30, 2005, also saw high-yield bond prices rise. Providing additional
support in the high-yield market was investors' continued search for yield in a
low interest-rate environment.
Later, as concerns about economic growth increased and the bonds of the two
largest issuers of corporate bonds (General Motors Acceptance Corp. and Ford
Motor Credit Co.) appeared likely to be downgraded, conditions in the high-yield
bond market deteriorated. Yield spreads widened, indicating a greater perception
of risk.
THE FUND'S PORTFOLIO IS ACTIVELY MANAGED AND, THEREFORE, ITS HOLDINGS AND
WEIGHTINGS OF A PARTICULAR ISSUER OR SECTOR AS A PERCENTAGE OF PORTFOLIO ASSETS
ARE SUBJECT TO CHANGE. SECTORS MAY INCLUDE MANY INDUSTRIES.
A PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT A FUND, INCLUDING ITS
INVESTMENT OBJECTIVE, RISKS, CHARGES, AND ONGOING EXPENSES, WHICH AN INVESTOR
SHOULD CAREFULLY CONSIDER BEFORE INVESTING. TO OBTAIN A PROSPECTUS ON ANY LORD
ABBETT MUTUAL FUND, PLEASE CONTACT YOUR INVESTMENT PROFESSIONAL OR LORD ABBETT
DISTRIBUTOR LLC AT 800-874-3733 OR VISIT OUR WEBSITE AT WWW.LORDABBETT.COM. READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
(1) The S&P 500(R) Index is widely regarded as the standard for measuring
large-cap U.S. stock market performance. This popular index includes a
representative sample of leading companies in leading industries. The index is
unmanaged, does not reflect the deduction of fees or expenses, and is 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 November 30, 2005; 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, A FUND'S 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.
4
<Page>
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares with the same
investment in the S&P 500(R) Index assuming reinvestment of all dividends and
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) S&P 500(R) INDEX(2)
Dec 27, 2001 $ 10,000 $ 9,425 $ 10,000
Mar 31, 2002 $ 10,739 $ 10,122 $ 9,949
Jun 30, 2002 $ 10,163 $ 9,579 $ 8,617
Sep 30, 2002 $ 8,818 $ 8,311 $ 7,129
Dec 31, 2002 $ 9,232 $ 8,701 $ 7,730
Mar 31, 2003 $ 8,671 $ 8,172 $ 7,486
Jun 30, 2003 $ 9,708 $ 9,150 $ 8,638
Sep 30, 2003 $ 9,997 $ 9,422 $ 8,867
Dec 31, 2003 $ 11,244 $ 10,597 $ 9,946
Mar 31, 2004 $ 11,641 $ 10,971 $ 10,114
Jun 30, 2004 $ 11,835 $ 11,155 $ 10,288
Sep 30, 2004 $ 12,067 $ 11,373 $ 10,096
Dec 31, 2004 $ 13,124 $ 12,370 $ 11,028
Mar 31, 2005 $ 12,988 $ 12,241 $ 10,791
Jun 30, 2005 $ 13,237 $ 12,476 $ 10,939
Sep 30, 2005 $ 13,585 $ 12,804 $ 11,332
Nov 30, 2005 $ 13,585 $ 12,804 $ 11,565
</Table>
AVERAGE ANNUAL TOTAL RETURN AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED NOVEMBER 30, 2005
<Table>
<Caption>
1 YEAR LIFE OF CLASS
CLASS A(3) 0.15% 6.50%
CLASS B(4) 1.66% 6.83%
CLASS C(5) 5.62% 7.47%
CLASS P(6) 6.17% 8.06%
CLASS Y(7) 6.64% 8.51%
</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 of the index
began on December 27, 2001.
(3) Class A shares commenced operations on December 27, 2001. Total return,
which is the percentage change in net asset value, after deduction of the
maximum initial sales charge of 5.75% applicable to Class A shares, with all
dividends and distributions reinvested for the periods shown ended November 30,
2005, is calculated using the SEC-required uniform method to compute such
return.
(4) Class B shares commenced operations on December 27, 2001. Performance
reflects the deduction of a CDSC of 4% for 1 year and 3% for life of the class.
(5) Class C shares commenced operations on December 27, 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) Class P shares commenced operations on December 27, 2001. Performance is at
net asset value.
(7) Class Y shares commenced operations on December 27, 2001. Performance is at
net asset value.
5
<Page>
- --------------------------------------------------------------------------------
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 (June 1, 2005 through November 30,
2005).
ACTUAL EXPENSES
For each class of the Fund, the first line of the applicable 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 6/1/05 - 11/30/05" 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 applicable 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.
6
<Page>
- --------------------------------------------------------------------------------
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 PERIOD+
----------- ----------- -----------
6/1/05 -
6/1/05 11/30/05 11/30/05
----------- ----------- -----------
CLASS A
Actual $ 1,000.00 $ 1,044.30 $ 6.92
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.30 $ 6.83
CLASS B
Actual $ 1,000.00 $ 1,041.40 $ 10.23
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,015.04 $ 10.10
CLASS C
Actual $ 1,000.00 $ 1,040.50 $ 10.23
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,015.04 $ 10.10
CLASS P
Actual $ 1,000.00 $ 1,043.70 $ 7.43
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.80 $ 7.34
CLASS Y
Actual $ 1,000.00 $ 1,045.80 $ 5.18
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.00 $ 5.11
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (1.35% for Class A, 2.00% for Classes B and C, 1.45%
for Class P and 1.01% for Class Y) multiplied by the average account value
over the period, multiplied by 183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY SECTOR
NOVEMBER 30, 2005
<Table>
<Caption>
SECTOR* %**
Auto Components 0.15%
Consumer Discretionary 17.58%
Consumer Staples 4.70%
Electronics 0.12%
Energy 6.65%
Financials 18.29%
Healthcare 4.66%
Industrials 9.02%
Information Technology 1.42%
Materials 17.23%
Short-Term Investment 3.10%
Telecommunication Services 7.39%
Transportation Miscellaneous 0.21%
Utilities 9.48%
Total 100.00%
</Table>
* A sector may comprise several industries.
** Represents percent of total investments.
7
<Page>
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2005
<Table>
<Caption>
SHARES
INVESTMENTS (000) VALUE
- ----------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 96.90%
COMMON STOCKS 69.07%
AUTO COMPONENTS 0.80%
Dana Corp. 1,247 $ 8,688,802
--------------
CHEMICALS 7.98%
Chemtura Corp. 1,162 14,002,100
Dow Chemical Co. (The) 413 18,701,825
Eastman Chemical Co. 487 26,934,644
Monsanto Co. 255 18,654,542
Mosaic Co. (The)* 609 8,239,090
--------------
TOTAL 86,532,201
--------------
COMMERCIAL SERVICES & SUPPLIES 3.95%
R.R. Donnelley & Sons Co. 653 22,342,860
ServiceMaster Co. 1,719 20,474,481
--------------
TOTAL 42,817,341
--------------
COMMUNICATIONS EQUIPMENT 0.75%
Avaya, Inc.* 680 8,107,269
--------------
CONTAINERS & PACKAGING 1.02%
Ball Corp. 269 11,084,058
--------------
DIVERSIFIED TELECOMMUNICATION SERVICES 2.52%
PanAmSat Holding Corp. 1,128 27,354,000
--------------
ELECTRIC UTILITIES 5.85%
Ameren Corp. 415 21,770,900
Northeast Utilities 1,141 21,207,212
Puget Energy, Inc. 983 20,416,350
--------------
TOTAL 63,394,462
--------------
ENERGY EQUIPMENT & SERVICES 3.07%
GlobalSantaFe Corp. 266 12,056,688
Halliburton Co. 333 21,201,815
--------------
TOTAL 33,258,503
--------------
FOOD & STAPLES RETAILING 0.38%
Albertson's, Inc. 174 4,079,600
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 2005
<Table>
<Caption>
SHARES
INVESTMENTS (000) VALUE
- ----------------------------------------------------------------------------------
FOOD PRODUCTS 3.40%
H.J. Heinz Co. 607 $ 21,064,624
Kellogg Co. 360 15,847,572
--------------
TOTAL 36,912,196
--------------
GAS UTILITIES 1.97%
NiSource, Inc. 991 21,329,771
--------------
HOTELS, RESTAURANTS & LEISURE 1.13%
McDonald's Corp. 361 12,219,850
--------------
HOUSEHOLD DURABLES 5.71%
Newell Rubbermaid, Inc. 880 20,303,907
Snap-on Inc. 457 17,089,301
Tupperware Corp. 1,064 24,555,708
--------------
TOTAL 61,948,916
--------------
INDUSTRIAL CONGLOMERATES 0.98%
Hubbell, Inc. 220 10,681,902
--------------
INSURANCE 5.80%
ACE Ltd.(a) 299 16,583,400
Allstate Corp. 72 4,039,200
Max Re Capital Ltd.(a) 82 2,186,730
Montpelier Re Holdings Ltd.(a) 8 160,966
PartnerRe Ltd.(a) 163 11,136,468
Safeco Corp. 228 12,830,625
XL Capital Ltd. Class A(a) 241 15,990,942
--------------
TOTAL 62,928,331
--------------
LEISURE EQUIPMENT & PRODUCTS 0.54%
Foot Locker, Inc. 270 5,889,218
--------------
MACHINERY 2.98%
CNH Global N.V.(a) 77 1,294,944
Cummins, Inc. 133 11,801,400
Ingersoll-Rand Co., Ltd. Class A(a) 124 4,922,046
Timken Co. (The) 463 14,346,838
--------------
TOTAL 32,365,228
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 2005
<Table>
<Caption>
SHARES
INVESTMENTS (000) VALUE
- ----------------------------------------------------------------------------------
MEDIA 1.74%
Clear Channel Communications, Inc. 581 $ 18,910,848
--------------
METALS & MINING 0.12%
Metal Management, Inc. 52 1,313,874
--------------
MULTI-LINE RETAIL 0.91%
Federated Department Stores, Inc. 153 9,882,144
--------------
OIL & GAS 2.35%
Chevron Corp. 333 19,084,230
EOG Resources, Inc. 89 6,392,925
--------------
TOTAL 25,477,155
--------------
PAPER & FOREST PRODUCTS 5.45%
Bowater Inc. 440 13,665,105
Georgia-Pacific Corp. 542 25,635,909
MeadWestvaco Corp. 706 19,763,739
--------------
TOTAL 59,064,753
--------------
PHARMACEUTICALS 2.37%
Bristol-Myers Squibb Co. 940 20,296,759
Mylan Laboratories, Inc. 261 5,458,557
--------------
TOTAL 25,755,316
--------------
REAL ESTATE INVESTMENT TRUSTS 2.39%
Health Care Property
Investors, Inc. 554 14,550,953
Healthcare Realty Trust Inc. 325 11,385,002
--------------
TOTAL 25,935,955
--------------
SPECIALTY RETAIL 0.95%
OfficeMax, Inc. 354 10,318,048
--------------
TRADING COMPANIES & DISTRIBUTORS 1.64%
Genuine Parts Co. 401 17,750,586
--------------
UTILITIES: TELECOMMUNICATIONS 2.32%
AT&T Inc. 1,010 25,154,118
--------------
TOTAL COMMON STOCKS (cost $681,216,111) 749,154,445
==============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 2005
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
INVESTMENTS RATE DATE (000) VALUE
- ------------------------------------------------------------------------------------------------------------
CONVERTIBLE NOTES & BONDS 4.40%
AEROSPACE & DEFENSE 0.35%
Armor Holdings, Inc. 2.00% 11/1/2024 $ 2,500 $ 2,525,000
EDO Corp. 4.00% 11/15/2025 1,300 1,314,625
--------------
TOTAL 3,839,625
--------------
BIOTECHNOLOGY 0.27%
Fisher Scientific Int'l., Inc. 2.50% 10/1/2023 2,000 2,900,000
--------------
COMMERCIAL SERVICES & SUPPLIES 0.30%
DST Systems, Inc. 4.125% 8/15/2023 2,500 3,300,000
--------------
COMPUTERS & PERIPHERALS 0.15%
EMC Corp. 4.50% 4/1/2007 1,500 1,590,000
--------------
DIVERSIFIED TELECOMMUNICATION SERVICES 0.35%
Qwest Communications Int'l. Inc. 3.50% 11/15/2025 3,500 3,832,500
--------------
HOTELS, RESTAURANTS & LEISURE 0.46%
Hilton Hotels Corp. 3.375% 4/15/2023 3,000 3,386,250
International Game Technology Zero Coupon 1/29/2033 2,500 1,640,625
--------------
TOTAL 5,026,875
--------------
MACHINERY 0.22%
AGCO Corp. 1.75% 12/31/2033 2,500 2,350,000
--------------
MEDIA 0.42%
Liberty Media Corp. Class A 3.25% 3/15/2031 2,500 1,915,625
Sinclair Broadcast Group, Inc. 6.00% 9/15/2012 3,000 2,640,000
--------------
TOTAL 4,555,625
--------------
METALS & MINING 0.62%
Placer Dome, Inc.(a) 2.75% 10/15/2023 5,550 6,673,875
--------------
OIL & GAS 0.41%
Hanover Compressor Co. 4.75% 1/15/2014 4,000 4,405,000
--------------
PHARMACEUTICALS 0.43%
MGI PHARMA, Inc. 1.682% 3/2/2024 5,000 3,187,500
Watson Pharmaceuticals, Inc. 1.75% 3/15/2023 1,500 1,460,625
--------------
TOTAL 4,648,125
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 2005
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
INVESTMENTS RATE DATE (000) VALUE
- ------------------------------------------------------------------------------------------------------------
ROAD & RAIL 0.21%
CSX Corp. Zero Coupon 10/30/2021 $ 2,500 $ 2,321,875
--------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 0.12%
Cypress Semiconductor Corp. 1.25% 6/15/2008 525 615,563
LSI Logic Corp. 4.00% 5/15/2010 750 729,375
--------------
TOTAL 1,344,938
--------------
SOFTWARE 0.09%
Mentor Graphics Corp. 6.875% 6/15/2007 1,000 998,750
--------------
TOTAL CONVERTIBLE NOTES & BONDS
(cost $47,544,380) 47,787,188
==============
<Caption>
SHARES
(000)
--------------
CONVERTIBLE PREFERRED STOCKS 2.25%
ELECTRIC UTILITIES 0.64%
CMS Energy Corp. 4.50% 70 5,386,850
FPL Group, Inc. 8.00% 25 1,583,250
--------------
TOTAL 6,970,100
--------------
FOOD & STAPLES RETAILING 0.16%
Albertson's, Inc. 7.25% 75 1,748,250
--------------
INSURANCE 1.01%
Chubb Corp. 7.00% 75 2,612,250
Fortis Insurance N.V.+(a)(b) 7.75% 283 3,491,512
XL Capital Ltd. Class A(a) 6.50% 220 4,855,400
--------------
TOTAL 10,959,162
--------------
MEDIA 0.43%
Emmis Communications Corp. 6.25% 35 1,606,938
Interpublic Group of Cos. Inc. (The) 5.375% 85 3,065,950
--------------
TOTAL 4,672,888
--------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(cost $22,804,309) 24,350,400
==============
<Caption>
PRINCIPAL
AMOUNT
(000)
--------------
GOVERNMENT SPONSORED ENTERPRISES
PASS-THROUGHS 4.96%
Federal National Mortgage Assoc. 5.50% 11/1/2034 $ 8,135 8,024,642
Federal National Mortgage Assoc. 6.00% 8/1/2034 5,183 5,216,036
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 2005
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
INVESTMENTS RATE DATE (000) VALUE
- ------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assoc. 6.00% 11/1/2034 $ 8,270 $ 8,323,073
Federal National Mortgage Assoc. 6.00% 1/1/2035 11,691 11,766,377
Federal National Mortgage Assoc. 6.50% 11/1/2035 20,000 20,487,400
--------------
TOTAL GOVERNMENT SPONSORED ENTERPRISES
PASS-THROUGHS (cost $54,630,460) 53,817,528
==============
HIGH YIELD CORPORATE NOTES & BONDS 13.65%
AUTO COMPONENTS 0.30%
Cooper-Standard Automotive Inc. 8.375% 12/15/2014 2,500 1,887,500
Stanadyne Corp. 10.00% 8/15/2014 1,375 1,332,031
--------------
TOTAL 3,219,531
--------------
AUTOMOBILES 0.15%
Dana Corp. 5.85% 1/15/2015 2,200 1,573,000
--------------
CHEMICALS 0.52%
Crompton Corp. 9.875% 8/1/2012 2,000 2,270,000
Equistar Chemicals, L.P. 7.55% 2/15/2026 2,450 2,336,688
Nalco Co. 8.875% 11/15/2013 1,000 1,042,500
--------------
TOTAL 5,649,188
--------------
COMMERCIAL SERVICES & SUPPLIES 0.17%
Iron Mountain Inc. 6.625% 1/1/2016 2,000 1,870,000
--------------
CONSUMER FINANCE 1.00%
Ford Motor Credit Co. 7.375% 10/28/2009 4,800 4,415,933
General Motors Acceptance Corp. 7.25% 3/2/2011 7,000 6,471,640
--------------
TOTAL 10,887,573
--------------
CONTAINERS & PACKAGING 0.77%
Crown Cork & Seal, Inc. 7.375% 12/15/2026 3,500 3,202,500
Graham Packaging Co., L.P. 9.875% 10/15/2014 1,500 1,458,750
Rayovac Corp. 8.50% 10/1/2013 2,000 1,822,500
Stone Container Finance Co. of Canada II(a) 7.375% 7/15/2014 2,000 1,835,000
--------------
TOTAL 8,318,750
--------------
DIVERSIFIED TELECOMMUNICATION SERVICES 2.19%
Cincinnati Bell, Inc. 7.00% 2/15/2015 8,000 7,760,000
Lucent Technologies Inc. 6.50% 1/15/2028 2,450 2,107,000
Qwest Capital Funding, Inc. 7.90% 8/15/2010 10,000 10,325,000
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 2005
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
INVESTMENTS RATE DATE (000) VALUE
- ------------------------------------------------------------------------------------------------------------
Syniverse Technologies+ 7.75% 8/15/2013 $ 3,500 $ 3,561,250
--------------
TOTAL 23,753,250
--------------
ENERGY EQUIPMENT & SERVICES 0.45%
Dynegy Holdings, Inc. 6.875% 4/1/2011 2,500 2,443,750
Hornbeck Offshore Services, Inc. 6.125% 12/1/2014 2,500 2,475,000
--------------
TOTAL 4,918,750
--------------
FOOD & STAPLES RETAILING 0.50%
Rite Aid Corp. 8.125% 5/1/2010 2,000 2,010,000
Stater Bros. Holdings, Inc. 8.125% 6/15/2012 3,500 3,465,000
--------------
TOTAL 5,475,000
--------------
FOOD PRODUCTS 0.26%
Chiquita Brands Int'l., Inc. 7.50% 11/1/2014 1,925 1,771,000
Landry's Restaurants, Inc. 7.50% 12/15/2014 1,075 1,015,875
--------------
TOTAL 2,786,875
--------------
GAS UTILITIES 1.02%
El Paso Corp. 7.00% 5/15/2011 11,275 11,063,594
--------------
HEALTHCARE PROVIDERS & SERVICES 0.90%
AmeriPath, Inc. 10.50% 4/1/2013 1,000 1,050,000
DaVita, Inc. 7.25% 3/15/2015 2,000 2,052,500
National Nephrology Assoc. Inc.+ 9.00% 11/1/2011 150 165,750
Tenet Healthcare Corp.+ 9.25% 2/1/2015 4,500 4,432,500
Tenet Healthcare Corp. 9.875% 7/1/2014 2,000 2,015,000
--------------
TOTAL 9,715,750
--------------
HOTELS, RESTAURANTS & LEISURE 0.99%
Hard Rock Hotel, Inc. 8.875% 6/1/2013 1,000 1,077,500
LCE Acquisition Corp. 9.00% 8/1/2014 4,825 4,855,156
River Rock Entertainment
Authority 9.75% 11/1/2011 1,700 1,840,250
Wynn Las Vegas LLC/ Wynn Las
Vegas
Capital Corp. 6.625% 12/1/2014 3,000 2,913,750
--------------
TOTAL 10,686,656
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 2005
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
INVESTMENTS RATE DATE (000) VALUE
- ------------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES 0.43%
Allied Waste North America, Inc. 6.125% 2/15/2014 $ 3,000 $ 2,857,500
Park-Ohio Industries, Inc. 8.375% 11/15/2014 2,000 1,790,000
--------------
TOTAL 4,647,500
--------------
MEDIA 0.88%
Gaylord Entertainment Co. 8.00% 11/15/2013 2,875 2,990,000
Mediacom Broadband LLC+ 8.50% 10/15/2015 4,600 4,324,000
Mediacom Communications Corp. 9.50% 1/15/2013 2,250 2,221,875
--------------
TOTAL 9,535,875
--------------
METALS & MINING 0.35%
Allegheny Ludlum Corp. 6.95% 12/15/2025 2,000 1,960,000
Novelis, Inc.+(a) 7.50% 2/15/2015 2,000 1,880,000
--------------
TOTAL 3,840,000
--------------
OIL & GAS 0.38%
Colorado Interstate Gas Co.+ 6.80% 11/15/2015 1,850 1,886,088
EXCO Resources, Inc. 7.25% 1/15/2011 475 483,312
Foundation PA Coal Co. 7.25% 8/1/2014 1,000 1,025,000
Kerr-McGee Corp. 6.95% 7/1/2024 675 706,208
--------------
TOTAL 4,100,608
--------------
PAPER & FOREST PRODUCTS 0.40%
Boise Cascade Holdings, LLC 7.125% 10/15/2014 1,000 905,000
Bowater, Inc. 6.50% 6/15/2013 2,175 1,984,687
Buckeye Technologies, Inc. 8.00% 10/15/2010 1,500 1,432,500
--------------
TOTAL 4,322,187
--------------
PHARMACEUTICALS 0.70%
Mylan Laboratories Inc.+ 6.375% 8/15/2015 3,000 2,988,750
Warner Chilcott Corp.+ 8.75% 2/1/2015 5,000 4,575,000
--------------
TOTAL 7,563,750
--------------
REAL ESTATE 0.55%
Host Marriott L.P. 6.375% 3/15/2015 6,000 5,985,000
--------------
SOFTWARE 0.31%
SunGard Data Systems Inc.+ 9.125% 8/15/2013 3,225 3,354,000
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
NOVEMBER 30, 2005
<Table>
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
INVESTMENTS RATE DATE (000) VALUE
- ------------------------------------------------------------------------------------------------------------
TEXTILES & APPAREL 0.43%
Elizabeth Arden, Inc. 7.75% 1/15/2014 $ 3,000 $ 3,022,500
INVISTA+ 9.25% 5/1/2012 1,500 1,627,500
---------------
TOTAL 4,650,000
---------------
TOTAL HIGH YIELD CORPORATE NOTES & BONDS (cost $149,534,180) 147,916,837
===============
U.S. TREASURY OBLIGATIONS 2.57%
U.S. Treasury Note 4.375% 5/15/2007 15,000 14,997,660
U.S. Treasury Note 5.00% 2/15/2011 12,500 12,834,963
---------------
TOTAL U.S. TREASURY OBLIGATIONS
(cost $28,312,987) 27,832,623
===============
TOTAL LONG-TERM INVESTMENTS
(cost $ 984,042,427) 1,050,859,021
===============
SHORT-TERM INVESTMENT 3.10%
REPURCHASE AGREEMENT 3.10%
Repurchase Agreement dated 11/30/2005,
3.40% due 12/1/2005 with State Street
Bank & Trust Co. collateralized by
$34,255,000 of Freddie Mac at 5.25%
due 11/10/2010; value: $34,255,000;
proceeds: $33,581,682 (cost $33,578,510) 33,579 33,578,510
===============
TOTAL INVESTMENTS IN SECURITIES 100.00%
(cost $1,017,620,937) 1,084,437,531
===============
OTHER ASSETS IN EXCESS OF LIABILITIES 0.00% 36,620
---------------
Net Assets 100.00% $ 1,084,474,151
===============
</Table>
* Non-income producing security.
+ Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(a) Foreign security traded in U.S. dollars.
(b) Private placement.
SEE NOTES TO FINANCIAL STATEMENTS.
16
<Page>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 2005
<Table>
ASSETS:
Investments in securities, at value (cost $1,017,620,937) $ 1,084,437,531
Receivables:
Interest and dividends 5,889,717
Investment securities sold 1,434,013
Capital shares sold 3,467,806
Prepaid expenses 37,860
- ---------------------------------------------------------------------------------------------------
Total assets 1,095,266,927
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 8,144,305
Capital shares reacquired 1,368,794
Management fee 633,894
12b-1 distribution fees 357,319
Fund administration 33,842
Directors' fees 33,520
To affiliate 2,241
Accrued expenses and other liabilities 218,861
- ---------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 10,792,776
===================================================================================================
NET ASSETS $ 1,084,474,151
===================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 1,000,548,765
Undistributed net investment income 4,989,800
Accumulated net realized gain on investments 12,118,992
Net unrealized appreciation on investments 66,816,594
- ---------------------------------------------------------------------------------------------------
NET ASSETS $ 1,084,474,151
===================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 944,487,574
Class B Shares $ 58,379,709
Class C Shares $ 77,373,539
Class P Shares $ 1,336,619
Class Y Shares $ 2,896,710
OUTSTANDING SHARES BY CLASS:
Class A Shares (200 million shares of common stock authorized, par value $.001) 75,905,192
Class B Shares (30 million shares of common stock authorized, par value $.001) 4,723,738
Class C Shares (20 million shares of common stock authorized, par value $.001) 6,253,937
Class P Shares (20 million shares of common stock authorized, par value $.001) 107,158
Class Y Shares (30 million shares of common stock authorized, par value $.001) 231,713
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(NET ASSETS DIVIDED BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 12.44
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 5.75%) $ 13.20
Class B Shares-Net asset value $ 12.36
Class C Shares-Net asset value $ 12.37
Class P Shares-Net asset value $ 12.47
Class Y Shares-Net asset value $ 12.50
===================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<Page>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 2005
<Table>
INVESTMENT INCOME:
Dividends $ 19,500,889
Interest 12,364,449
Foreign withholding tax (2,945)
- ---------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 31,862,393
- ---------------------------------------------------------------------------------------------------
EXPENSES:
Management fee 6,198,175
12b-1 distribution plan-Class A 2,540,224
12b-1 distribution plan-Class B 455,520
12b-1 distribution plan-Class C 605,617
12b-1 distribution plan-Class P 3,961
Shareholder servicing 1,164,627
Professional 48,451
Reports to shareholders 210,493
Fund administration 330,569
Custody 64,332
Directors' fees 41,370
Registration 72,764
Subsidy (See Note 3) 22,111
Other 11,106
- ---------------------------------------------------------------------------------------------------
Gross expenses 11,769,320
Expense reductions (See Note 7) (25,012)
- ---------------------------------------------------------------------------------------------------
NET EXPENSES 11,744,308
- ---------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 20,118,085
===================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 13,097,864
Net change in unrealized appreciation (depreciation) on investments 17,055,933
===================================================================================================
NET REALIZED AND UNREALIZED GAIN 30,153,797
===================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 50,271,882
===================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE YEAR ENDED FOR THE YEAR ENDED
INCREASE IN NET ASSETS NOVEMBER 30, 2005 NOVEMBER 30, 2004
OPERATIONS:
Net investment income $ 20,118,085 $ 7,931,900
Net realized gain (loss) on investments 13,097,864 4,309,414
Net change in unrealized appreciation (depreciation) on investments 17,055,933 42,043,396
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 50,271,882 54,284,710
==================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (18,385,406) (4,319,651)
Class B (881,697) (220,980)
Class C (1,150,211) (173,278)
Class P (20,162) (2,172)
Class Y (32,148) (30)
Net realized gain
Class A (2,781,088) -
Class B (175,195) -
Class C (194,771) -
Class P (2,250) -
Class Y (3,853) -
- ------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders (23,626,781) (4,716,111)
==================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 623,724,444 322,799,116
Reinvestment of distributions 22,587,025 4,543,239
Cost of shares reacquired (85,441,018) (23,284,752)
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS 560,870,451 304,057,603
==================================================================================================================
NET INCREASE IN NET ASSETS 587,515,552 353,626,202
==================================================================================================================
NET ASSETS:
Beginning of year 496,958,599 143,332,397
- ------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 1,084,474,151 $ 496,958,599
==================================================================================================================
UNDISTRIBUTED NET INVESTMENT INCOME $ 4,989,800 $ 4,374,454
==================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<Page>
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
YEAR ENDED 11/30 12/19/2001(a)
------------------------------------- TO
2005 2004 2003 11/30/2002
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.12 $ 10.29 $ 9.45 $ 10.00
========= ========= ========= ==========
Unrealized appreciation on investments .01
----------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.01
==========
Investment operations:
Net investment income(b) .31 .32 .31 .29
Net realized and unrealized gain (loss) .43 1.74 .79 (.80)
--------- --------- --------- ----------
Total from investment operations .74 2.06 1.10 (.51)
--------- --------- --------- ----------
Distributions to shareholders from:
Net investment income (.35) (.23) (.26) (.05)
Net realized gain (.07) - - -
--------- --------- --------- ----------
Total distributions (.42) (.23) (.26) (.05)
--------- --------- --------- ----------
NET ASSET VALUE, END OF PERIOD $ 12.44 $ 12.12 $ 10.29 $ 9.45
========= ========= ========= ==========
Total Return(c) .10%(d)(e)
Total Return(c) 6.27% 20.29% 11.97% (5.10)%(d)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and
expenses assumed 1.33% 1.35% 1.35% 1.29%(d)
Expenses, excluding expense reductions and
expenses assumed 1.34% 1.35% 1.46% 2.25%(d)
Net investment income 2.51% 2.84% 3.24% 2.99%(d)
<Caption>
YEAR ENDED 11/30 12/19/2001(a)
------------------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 2003 11/30/2002
====================================================================================================================
Net assets, end of period (000) $ 944,488 $ 439,703 $ 128,030 $ 21,467
Portfolio turnover rate 31.65% 21.81% 28.71% 33.71%
====================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 11/30 12/19/2001(a)
------------------------------------- TO
2005 2004 2003 11/30/2002
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.03 $ 10.23 $ 9.40 $ 10.00
========= ========= ========= ==========
Unrealized appreciation on investments .01
----------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.01
==========
Investment operations:
Net investment income(b) .23 .25 .25 .24
Net realized and unrealized gain (loss) .43 1.72 .79 (.81)
--------- --------- --------- ----------
Total from investment operations .66 1.97 1.04 (.57)
--------- --------- --------- ----------
Distributions to shareholders from:
Net investment income (.26) (.17) (.21) (.04)
Net realized gain (.07) - - -
--------- --------- --------- ----------
Total distributions (.33) (.17) (.21) (.04)
--------- --------- --------- ----------
NET ASSET VALUE, END OF PERIOD $ 12.36 $ 12.03 $ 10.23 $ 9.40
========= ========= ========= ==========
Total Return(c) .10%(d)(e)
Total Return(c) 5.66% 19.50% 11.35% (5.69)%(d)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and
expenses assumed 1.98% 1.99% 1.99% 1.85%(d)
Expenses, excluding expense reductions and
expenses assumed 1.98% 1.99% 2.10% 2.81%(d)
Net investment income 1.86% 2.20% 2.60% 2.43%(d)
<Caption>
YEAR ENDED 11/30 12/19/2001(a)
------------------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 2003 11/30/2002
====================================================================================================================
Net assets, end of period (000) $ 58,380 $ 27,634 $ 9,398 $ 2,283
Portfolio turnover rate 31.65% 21.81% 28.71% 33.71%
====================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 11/30 12/19/2001(a)
------------------------------------- TO
2005 2004 2003 11/30/2002
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.05 $ 10.25 $ 9.41 $ 10.00
========= ========= ========= ==========
Unrealized appreciation on investments .01
----------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.01
==========
Investment operations:
Net investment income(b) .23 .25 .24 .24
Net realized and unrealized gain (loss) .43 1.73 .80 (.79)
--------- --------- --------- ----------
Total from investment operations .66 1.98 1.04 (.55)
--------- --------- --------- ----------
Distributions to shareholders from:
Net investment income (.27) (.18) (.20) (.05)
Net realized gain (.07) - - -
--------- --------- --------- ----------
Total distributions (.34) (.18) (.20) (.05)
--------- --------- --------- ----------
NET ASSET VALUE, END OF PERIOD $ 12.37 $ 12.05 $ 10.25 $ 9.41
========= ========= ========= ==========
Total Return(c) .10%(d)(e)
Total Return(c) 5.62% 19.50% 11.27% (5.54)%(d)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and
expenses assumed 1.98% 1.99% 1.99% 1.85%(d)
Expenses, excluding expense reductions and
expenses assumed 1.98% 1.99% 2.10% 2.81%(d)
Net investment income 1.86% 2.20% 2.60% 2.43%(d)
<Caption>
YEAR ENDED 11/30 12/19/2001(a)
------------------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 2003 11/30/2002
====================================================================================================================
Net assets, end of period (000) $ 77,374 $ 28,696 $ 5,902 $ 2,538
Portfolio turnover rate 31.65% 21.81% 28.71% 33.71%
====================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 11/30 12/19/2001(a)
------------------------------------- TO
2005 2004 2003 11/30/2002
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.15 $ 10.31 $ 9.45 $ 10.00
========= ========= ========= ==========
Unrealized appreciation on investments .01
----------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.01
==========
Investment operations:
Net investment income(b) .30 .31 .31 .28
Net realized and unrealized gain (loss) .43 1.75 .80 (.80)
--------- --------- --------- ----------
Total from investment operations .73 2.06 1.11 (.52)
--------- --------- --------- ----------
Distributions to shareholders from:
Net investment income (.34) (.22) (.25) (.04)
Net realized gain (.07) - - -
--------- --------- --------- ----------
Total distributions (.41) (.22) (.25) (.04)
--------- --------- --------- ----------
NET ASSET VALUE, END OF PERIOD $ 12.47 $ 12.15 $ 10.31 $ 9.45
========= ========= ========= ==========
Total Return(c) .10%(d)(e)
Total Return(c) 6.17% 20.21% 12.03% (5.20)%(d)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and
expenses assumed 1.43% 1.44% 1.44% 1.35%(d)
Expenses, excluding expense reductions and
expenses assumed 1.44% 1.44% 1.55% 2.31%(d)
Net investment income 2.42% 2.75% 3.15% 2.93%(d)
<Caption>
YEAR ENDED 11/30 12/19/2001(a)
------------------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 2003 11/30/2002
====================================================================================================================
Net assets, end of period (000) $ 1,337 $ 286 $ 1 $ 1
Portfolio turnover rate 31.65% 21.81% 28.71% 33.71%
====================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
<Table>
<Caption>
YEAR ENDED 11/30 12/19/2001(a)
------------------------------------- TO
2005 2004 2003 11/30/2002
PER SHARE OPERATING PERFORMANCE (CLASS Y SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.18 $ 10.33 $ 9.47 $ 10.00
========= ========= ========= ==========
Unrealized appreciation on investments .01
----------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.01
==========
Investment operations:
Net investment income(b) .35 .45 .34 .32
Net realized and unrealized gain (loss) .44 1.66 .80 (.80)
--------- --------- --------- ----------
Total from investment operations .79 2.11 1.14 (.48)
--------- --------- --------- ----------
Distributions to shareholders from:
Net investment income (.40) (.26) (.28) (.06)
Net realized gain (.07) - - -
--------- --------- --------- ----------
Total distributions (.47) (.26) (.28) (.06)
--------- --------- --------- ----------
NET ASSET VALUE, END OF PERIOD $ 12.50 $ 12.18 $ 10.33 $ 9.47
========= ========= ========= ==========
Total Return(c) .10%(d)(e)
Total Return(c) 6.64% 20.72% 12.47% (4.83)%(d)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and
expenses assumed .99% 1.09% .99%+ .93%(d)
Expenses, excluding expense reductions and
expenses assumed .99% 1.09% 1.10%+ 1.89%(d)
Net investment income 2.89% 3.74% 3.60%+ 3.35%(d)
<Caption>
YEAR ENDED 11/30 12/19/2001(a)
------------------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 2003 11/30/2002
====================================================================================================================
Net assets, end of period (000) $ 2,897 $ 640 $ 1 $ 1
Portfolio turnover rate 31.65% 21.81% 28.71% 33.71%
====================================================================================================================
</Table>
+ The ratios have been determined on a Fund basis.
(a) Commencement of investment operations was 12/19/2001; SEC effective date
and date shares first became available to the public was 12/27/2001.
(b) Calculated using average shares outstanding during the period.
(c) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(d) Not annualized.
(e) Total return for the period 12/19/2001 through 12/26/2001.
(f) Total return for the period 12/27/2001 through 11/30/2002.
SEE NOTES TO FINANCIAL STATEMENTS.
24
<Page>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Lord Abbett Research Fund, Inc. (the "Company") is registered under the
Investment Company Act of 1940 (the "Act") as a diversified open-end management
investment company incorporated under Maryland law on April 6, 1992. The Company
currently consists of four separate funds. This report covers one of the
funds--Lord Abbett America's Value Fund (the "Fund").
The Fund's investment objective is to seek current income and capital
appreciation. 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 Classes 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 (12 months if shares were purchased on
or after November 1, 2004) following certain 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
certain 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 prices. Fixed income securities are valued at the mean
between the bid and asked prices on the basis of prices supplied by
independent pricing services, which reflect broker/dealer supplied
valuations and electronic data processing techniques. 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
Directors. 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 (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.
(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
25
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
substantially all taxable income and capital gains to its shareholders.
Therefore, no Federal income tax provision is required.
(e) EXPENSES-Expenses incurred by the Company that do not specifically relate
to an individual fund are generally allocated to the Funds within the
Company on a pro-rata basis. 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, or by securities of the U.S.
Government, its agencies, its instrumentalities, or U.S. Government
sponsored enterprises having a value equal to, or in excess of, the value
of the repurchase agreement (including accrued interest). 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 Company 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 the Fund's average daily net assets at an annual
rate of .75%.
Effective December 1, 2005, the Fund's annual management fee rate was changed
from a flat fee rate of .75% to the following annual rate:
..75% of the first $1 billion of average daily net assets;
..70% of the next $1 billion of average daily net assets;
..65% of average daily net assets over $2 billion.
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.
The Fund, along with certain other funds managed by Lord Abbett (the "Underlying
Funds"), has entered into a Servicing Arrangement with Lord Abbett Income
Strategy Fund of Lord Abbett Investment Trust ("Income Strategy Fund"), pursuant
to which each Underlying Fund pays a portion of the expenses (excluding
management fees and distribution and service fees) of Income Strategy Fund in
proportion to the average daily value of the Underlying Fund shares owned by
Income Strategy Fund. Amounts paid pursuant to the Servicing Arrangement are
included in Subsidy Expense on the Statement of Operations.
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
26
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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) The amount of CDSC collected by the Fund during the year ended November 30,
2005 was $11,152.
Class Y does not have a distribution plan.
COMMISSIONS
Distributor received the following commissions on sales of shares of the Fund,
after concessions were paid to authorized dealers, for the year ended November
30, 2005:
<Table>
<Caption>
DISTRIBUTOR DEALERS'
COMMISSIONS CONCESSIONS
- ----------------------------------------------
$ 2,817,066 $ 14,738,483
</Table>
Distributor received CDSCs of $2,605 and $17,676 for Class A and Class C shares,
respectively, for the year ended November 30, 2005.
One Director and certain of the Fund's officers have an interest in Lord Abbett.
4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARDS
Dividends from net investment income, if any, are declared and paid at least
quarterly. 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, if any, 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 earnings and profits for tax purposes, are reported
as a tax return of capital.
The following distribution was declared on December 8, 2005 and paid on December
14, 2005 to the shareholders of record on December 13, 2005:
<Table>
<Caption>
NET INVESTMENT SHORT-TERM LONG-TERM
INCOME CAPITAL GAINS CAPITAL GAINS
- ----------------------------------------------------------------------------------
$ 8,475,000 $ 5,477,000 $ 6,794,000
</Table>
The tax character of distributions paid during the fiscal years ended November
30, 2005 and 2004 are as follows:
<Table>
<Caption>
11/30/2005 11/30/2004
- -------------------------------------------------------------
Distributions paid from:
Ordinary income $ 21,762,217 $ 4,716,111
Net long-term capital gains 1,864,564 -
- -------------------------------------------------------------
Total distributions $ 23,626,781 $ 4,716,111
=============================================================
</Table>
27
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As of November 30, 2005, the components of accumulated earnings on a tax basis
are as follows:
<Table>
Undistributed ordinary income - net $ 11,418,531
Undistributed long-term capital gains 6,788,871
- ----------------------------------------------------------
Total undistributed earnings $ 18,207,402
Temporary differences (33,520)
Unrealized gains - net 65,751,504
- ----------------------------------------------------------
Total accumulated gains - net $ 83,925,386
==========================================================
</Table>
As of November 30, 2005, 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 $ 1,018,686,027
- ----------------------------------------------------------
Gross unrealized gain 96,721,267
Gross unrealized loss (30,969,763)
- ----------------------------------------------------------
Net unrealized security gain $ 65,751,504
==========================================================
</Table>
The difference between book-basis and tax-basis unrealized gains (losses) is
primarily attributable to the tax treatment of amortization and other temporary
tax adjustments.
Permanent items identified during the year ended November 30, 2005, have been
reclassified among the components of net assets based on their tax basis
treatment as follows:
<Table>
<Caption>
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED
INCOME GAIN
- ------------------------------------------
$ 966,885 $ (966,885)
</Table>
The permanent difference is primarily due to the tax treatment of amortization,
investments of certain securities, and paydown gains and losses.
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the year ended November 30, 2005 are as follows:
<Table>
<Caption>
US GOVERNMENT NON-U.S. GOVERNMENT US GOVERNMENT NON-U.S. GOVERNMENT
PURCHASES* PURCHASES SALES* SALES
- -------------------------------------------------------------------------------------------
$ 185,006,486 $ 633,482,255 $ 128,668,669 $ 122,337,870
</Table>
* Includes U.S. Government sponsored enterprises securities.
6. DIRECTORS' REMUNERATION
The Company's officers and the one Director who are associated with Lord Abbett
do not receive any compensation from the Company for serving in such capacities.
Outside Directors' 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 Directors under which outside Directors must defer receipt of a
portion of, and may elect to defer receipt of an additional portion of
Directors' 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 Directors' Fees on the Statement of
Operations and in Directors' Fees Payable on the Statement
28
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
of Assets and Liabilities and are not deductible for U.S. Federal income tax
purposes until such amounts are paid.
7. EXPENSE REDUCTIONS
The Company 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.
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.
For the period December 1, 2004 through December 9, 2004, the fee for this
Facility was at an annual rate of .09%. Effective December 10, 2004, the fee for
this Facility is at an annual rate of .08%. At November 30, 2005, there were no
loans outstanding pursuant to this Facility nor was the Facility utilized at any
time during the fiscal year ended November 30, 2005.
Effective December 9, 2005, the Facility for the Fund, along with certain other
funds managed by Lord Abbett, was increased from $200,000,000 to $250,000,000.
The fee for this Facility remains at an annual rate of .08%.
9. CUSTODIAN AND ACCOUNTING AGENT
State Street Bank & Trust Company ("SSB") is the Company's custodian and
accounting agent. SSB performs custodial, accounting and recordkeeping functions
relating to portfolio transactions and calculating the Fund's NAV.
10. INVESTMENT RISKS
The Fund is subject to the general risks and considerations associated with
investing in equity and fixed income securities.
The values of the Fund's equity security holdings and, consequently, the value
of an investment in the Fund will fluctuate in response to movements in the
stock market in general and to the changing prospects of the individual
companies involved. With its emphasis on value stocks, the Fund may perform
differently than the market as a whole and other types of stocks, such as growth
stocks. The market may fail to recognize the intrinsic value of particular value
stocks for a long time. The Fund may invest a significant portion of its assets
in mid-sized companies that may be less able to weather economic shifts or other
adverse developments than larger, more established companies. Because the Fund
is not limited to investing in equity securities, the Fund may have smaller
gains in a rising stock market than a fund investing solely in equity
securities. In addition, if the Fund's assessment of a company's value or
prospects for market appreciation or market conditions is wrong, the Fund could
suffer losses or produce poor performance relative to other funds, even in a
rising market.
29
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The values of the Fund's fixed income holdings, and consequently, the value of
an investment in the Fund will change as interest rates fluctuate and in
response to market movements. When interest rates rise, the prices of these
holdings are likely to decline. There is also the risk that an issuer of a fixed
income security will fail to make timely payments of principal or interest to
the Fund, a risk that is greater with high yield bonds (sometimes called "junk
bonds") in which the Fund may invest. Some issuers, particularly of high yield
bonds, may default as to principal and/or interest payments after the Fund
purchases their securities. A default, or concerns in the market about an
increase in risk of default, may result in losses to the Fund. High yield bonds
are subject to greater price fluctuations, as well as additional risks.
The Fund may invest up to 20% of its assets in foreign securities, which present
increased market, liquidity, currency, political and other risks.
These factors can affect the Fund's performance.
11. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of beneficial interest are as follows:
<Table>
<Caption>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 2005 NOVEMBER 30, 2004
- ----------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 43,791,945 $ 532,741,256 25,253,127 $ 283,249,547
Reinvestment of distributions 1,702,370 20,618,748 387,401 4,226,860
Shares reacquired (5,875,391) (71,789,401) (1,793,329) (20,052,279)
- ----------------------------------------------------------------------------------------------------------------------------
Increase 39,618,924 $ 481,570,603 23,847,199 $ 267,424,128
- ----------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 2,829,339 $ 34,180,396 1,534,015 $ 17,186,378
Reinvestment of distributions 78,218 941,684 18,238 197,962
Shares reacquired (480,386) (5,797,872) (173,932) (1,933,208)
- ----------------------------------------------------------------------------------------------------------------------------
Increase 2,427,171 $ 29,324,208 1,378,321 $ 15,451,132
- ----------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 4,417,206 $ 53,369,060 1,910,302 $ 21,488,685
Reinvestment of distributions 80,272 968,185 10,622 116,218
Shares reacquired (624,785) (7,590,232) (115,422) (1,276,917)
- ----------------------------------------------------------------------------------------------------------------------------
Increase 3,872,693 $ 46,747,013 1,805,502 $ 20,327,986
- ----------------------------------------------------------------------------------------------------------------------------
CLASS P SHARES
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 96,441 $ 1,171,661 24,815 $ 274,503
Reinvestment of distributions 1,843 22,410 194 2,171
Shares reacquired (14,624) (177,289) (1,625) (18,003)
- ----------------------------------------------------------------------------------------------------------------------------
Increase 83,660 $ 1,016,782 23,384 $ 258,671
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Y SHARES
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 183,275 $ 2,262,071 52,806 $ 600,003
Reinvestment of distributions 2,958 35,998 3 28
Shares reacquired (7,085) (86,224) (359) (4,345)
- ----------------------------------------------------------------------------------------------------------------------------
Increase 179,148 $ 2,211,845 52,450 $ 595,686
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
30
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
LORD ABBETT RESEARCH FUND, INC. - LORD ABBETT AMERICA'S VALUE FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Lord Abbett Research Fund, Inc. - Lord Abbett
America's Value Fund (the "Fund") as of November 30, 2005, 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. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of November 30, 2005 by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. 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 Research Fund, Inc. - Lord Abbett America's Value Fund as of November 30,
2005, 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 its financial
highlights for each of the periods presented, in conformity with accounting
principles generally accepted in the United States of America.
Deloitte & Touche LLP
New York, New York
January 27, 2006
31
<Page>
BASIC INFORMATION ABOUT MANAGEMENT
The Board of Directors (the "Board") is responsible for the management of the
business and affairs of each Fund in accordance with the laws of the State of
Maryland. The Board appoints officers who are responsible for the day-to-day
operations of each Fund and who execute policies authorized by the Board. The
Board also approves an investment adviser to each Fund 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 Director holds office until his/her successor is elected and qualified or
until his/her earlier resignation or removal, as provided in the Fund's
organizational documents.
Lord, Abbett & Co. LLC ("Lord Abbett"), a Delaware limited liability company, is
the Fund's investment adviser.
INTERESTED DIRECTOR
The following Director 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
54 portfolios or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH FUND DURING PAST FIVE YEARS DIRECTORSHIPS
- -------------------------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Director and Chairman Managing Partner and Chief N/A
Lord, Abbett & Co. LLC since 1996 Executive Officer of Lord Abbett
90 Hudson Street since 1996.
Jersey City, NJ 07302
(1945)
</Table>
----------
INDEPENDENT DIRECTORS
The following independent or outside Directors are also directors or trustees of
each of the fourteen Lord Abbett-sponsored funds, which consist of 54 portfolios
or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH FUND DURING PAST FIVE YEARS DIRECTORSHIPS
- -------------------------------------------------------------------------------------------------------------------------------
E. THAYER BIGELOW Director since 1996 Managing General Partner, Bigelow Currently serves as director of
Lord, Abbett & Co. LLC Media, LLC (since 2000); Senior Adelphia Communications, Inc.,
c/o Legal Dept. Adviser, Time Warner Inc. (1998 - Crane Co., and Huttig Building
90 Hudson Street 2000); Acting Chief Executive Products Inc.
Jersey City, NJ 07302 Officer of Courtroom Television
(1941) Network (1997 - 1998); President
and Chief Executive Officer of
Time Warner Cable Programming,
Inc. (1991 - 1997).
WILLIAM H.T. BUSH Director since 1998 Co-founder and Chairman of the Currently serves as director of
Lord, Abbett & Co. LLC Board of the financial advisory WellPoint, Inc. (since 2002),
c/o Legal Dept. firm of Bush-O'Donnell & Company and Engineered Support Systems,
90 Hudson Street (since 1986). Inc. (since 2000).
Jersey City, NJ 07302
(1938)
</Table>
32
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH FUND DURING PAST FIVE YEARS DIRECTORSHIPS
- -------------------------------------------------------------------------------------------------------------------------------
ROBERT B. CALHOUN, JR. Director since 1998 Managing Director of Monitor Currently serves as director of
c/o Legal Dept. Clipper Partners (since 1997) and Avondale, Inc. and Interstate
Lord, Abbett & Co. LLC President of Clipper Asset Bakeries Corp.
90 Hudson Street Management Corp. (since 1991),
Jersey City, NJ 07302 both private equity investment
(1942) funds.
JULIE A. HILL Director since 2004 Owner and CEO of the Hillsdale Currently serves as director of
Lord, Abbett & Co. LLC Companies, a business consulting WellPoint, Inc.; Resources
c/o Legal Dept. firm (since 1998); Founder, Connection Inc.; and Holcim (US)
90 Hudson Street President and Owner of the Inc. (a subsidiary of Holcim
Jersey City, NJ 07302 Hiram-Hill and Hillsdale Ltd.).
(1946) Development Companies (1998 -
2000).
FRANKLIN W. HOBBS Director since 2004 Former Chief Executive Officer of Currently serves as director of
Lord, Abbett & Co. LLC Houlihan Lokey Howard & Zukin, an Adolph Coors Company.
c/o Legal Dept. investment bank (January 2002 -
90 Hudson Street April 2003); Chairman of Warburg
Jersey City, NJ 07302 Dillon Read (1999 - 2001); Global
(1947) Head of Corporate Finance of SBC
Warburg Dillon Read (1997 - 1999);
Chief Executive Officer of Dillon,
Read & Co. (1994 - 1997).
C. ALAN MACDONALD Director since 1996 Retired - General Business and Currently serves as director of
Lord, Abbett & Co. LLC Governance Consulting (since H.J. Baker (since 2003).
c/o Legal Dept. 1992); formerly President and CEO
90 Hudson Street of Nestle Foods.
Jersey City, NJ 07302
(1933)
THOMAS J. NEFF Director since 1992 Chairman of Spencer Stuart (U.S.), Currently serves as director of
Lord, Abbett & Co. LLC an executive search consulting Ace, Ltd. (since 1997) and
c/o Legal Dept. firm (since 1996); President of Hewitt Associates, Inc.
90 Hudson Street Spencer Stuart (1979 - 1996).
Jersey City, NJ 07302
(1937)
</Table>
33
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
OFFICERS
None of the officers listed below have received compensation from the Company.
All the officers of the Company 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
YEAR OF BIRTH WITH COMPANY OF CURRENT POSITION DURING PAST FIVE YEARS
- ---------------------------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Chief Executive Officer and Elected in 1996 Managing Partner and Chief
(1945) President Executive Officer of Lord
Abbett (since 1996).
KEVIN P. FERGUSON Executive Elected in 2001 Partner and Mid Cap Growth
(1964) Vice President Investment Manager, joined Lord
Abbett in 1999.
ROBERT P. FETCH Executive Elected in 1997 Partner and Small-Cap Value
(1953) Vice President Senior Investment Manager,
joined Lord Abbett in 1995.
DANIEL H. FRASCARELLI Executive Elected in 2005 Partner and Investment Manager,
(1954) Vice President joined Lord Abbett in 1990.
CHRISTOPHER J. TOWLE Executive Elected in 2001 Partner and Investment Manager,
(1957) Vice President joined Lord Abbett in 1987.
EDWARD K. VON DER LINDE Executive Elected in 2001 Partner and Investment Manager,
(1960) Vice President joined Lord Abbett in 1988.
JAMES BERNAICHE Chief Compliance Officer Elected in 2004 Chief Compliance Officer,
(1956) joined Lord Abbett in 2001;
formerly Vice President and
Chief Compliance Officer with
Credit Suisse Asset Management.
JOAN A. BINSTOCK Chief Financial Officer and Elected in 1999 Partner and Chief Operations
(1954) Vice President Officer, joined Lord Abbett in
1999.
JOHN K. FORST Vice President and Assistant Elected in 2005 Deputy General Counsel, joined
(1960) Secretary Lord Abbett in 2004; prior
thereto Managing Director and
Associate General Counsel at
New York Life Investment
Management LLC (2002 - 2003);
formerly Attorney at Dechert
LLP (2000 - 2002).
LAWRENCE H. KAPLAN Vice President and Secretary Elected in 1997 Partner and General Counsel,
(1957) joined Lord Abbett in 1997.
</Table>
34
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONCLUDED)
<Table>
<Caption>
NAME AND CURRENT POSITION LENGTH OF SERVICE PRINCIPAL OCCUPATION
YEAR OF BIRTH WITH COMPANY OF CURRENT POSITION DURING PAST FIVE YEARS
- ---------------------------------------------------------------------------------------------------------------------------------
ROBERT G. MORRIS Vice President Elected in 1996 Partner and Chief Investment
(1944) Officer, joined Lord Abbett in
1991.
A. EDWARD OBERHAUS, III Vice President Elected in 1996 Partner and Manager of Equity
(1959) Trading, joined Lord Abbett in
1983.
CHRISTINA T. SIMMONS Vice President and Assistant Elected in 2000 Assistant General Counsel,
(1957) Secretary joined Lord Abbett in 1999.
PAUL J. VOLOVICH Vice President Elected in 2004 Investment Manager--Large-Cap
(1973) Core Fund, joined Lord Abbett
in 1997.
BERNARD J. GRZELAK Treasurer Elected in 2003 Director of Fund Administration,
(1971) joined Lord Abbett in 2003;
formerly Vice President, Lazard
Asset Management LLC (2000 -
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 Fund's Directors. It is
available free upon request.
35
<Page>
HOUSEHOLDING
The Company has adopted a policy that allows it to send only one copy of the
Fund's Prospectus, proxy material, annual report and semiannual 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 on how Lord
Abbett voted the Fund's proxies during the 12-month period ended June 30, 2005
are available without charge, upon request, (i) by calling 888-522-2388; (ii) on
Lord Abbett's website 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 Company is required to file its complete schedule of portfolio holdings with
the SEC for its first and third fiscal quarters on Form N-Q. Copies of the
filings 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 a
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
57.99% of the ordinary income distribution paid by the Fund during fiscal 2005
is qualified dividend income. For corporate shareholders, only 57.46% of the
Fund's ordinary income distribution qualified for the dividends received
deduction.
Additionally, of the distributions paid to shareholders during the fiscal year
ended November 30, 2005, $1,864,564 represents long-term capital gains.
- -------------------------------------------------------------------------------
36
<Page>
This page is intentionally left blank.
<Page>
This page is intentionally left blank.
<Page>
This page is intentionally left blank.
<Page>
This page is intentionally left blank.
<Page>
[LORD ABBETT(R) LOGO]
<Table>
This report when not used for the general
information of shareholders of the fund, is to
be distributed only if preceded or accompanied Lord Abbett Research Fund, Inc.
by a current fund prospectus. Lord Abbett America's Value Fund
Lord Abbett mutual fund shares are distributed by LAAMF-2-1105
LORD ABBETT DISTRIBUTOR LLC (1/06)
</Table>
<Page>
[LORD ABBETT LOGO]
2005
ANNUAL
REPORT
LORD ABBETT
GROWTH OPPORTUNITIES FUND
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2005
<Page>
- --------------------------------------------------------------------------------
LORD ABBETT RESEARCH FUND
LORD ABBETT GROWTH OPPORTUNITIES FUND
ANNUAL REPORT
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2005
DEAR SHAREHOLDERS: We are pleased to provide you with this overview of the Lord
Abbett Growth Opportunities Fund's strategies and performance for the fiscal
year ended November 30, 2005. 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
- --------------------------------------------------------------------------------
Q: WHAT WERE THE OVERALL MARKET CONDITIONS OF THE FISCAL YEAR ENDED NOVEMBER
30, 2005?
A: Despite sharply higher energy prices, continued short-term interest rate
hikes by the Federal Reserve Board (the Fed), and a devastating hurricane season
for the Gulf Coast region, U.S. real (i.e., after inflation) gross domestic
product (GDP) continued to grow at a strong, if not robust, pace. With the
exception of a hurricane-induced fall in personal income in August 2005,
personal income generally remained positive throughout the fiscal year ended
November 30, 2005.
On November 1, 2005, the Fed raised the fed funds rate for the twelfth
consecutive time since June 2004, bringing the rate to 4.0 percent by fiscal
year-end November 30, 2005. Meanwhile, 10-year Treasury yields were volatile,
reflecting investors' shifting perceptions about the health of the U.S. economy.
Yields on the benchmark Treasury note began the fiscal year ended November 30,
2005, at 4.2 percent, reaching 4.5 percent by March 2005. However, the trend
higher was disrupted in the spring and summer of 2005, amid investors' concerns
about an economic slowdown, with the 10-year yield touching 4.0 percent in June.
The yield then rose again in the last month of the fiscal year, to as high as
4.5 percent, driven by renewed concerns about inflation.
Against this backdrop of steady economic output and sharply rising
short-term interest rates, equity markets rose, with the S&P 500(R) Index(1)
gaining 8.4 percent in the fiscal year ended November 30, 2005. Driven by the
sharp rise in oil prices, the strongest performing sectors of the S&P 500 Index
in the fiscal year ended November 30, 2005, were energy stocks, recording a
return of 28.1 percent, and utilities, rising 18.6 percent. "Defensive" stocks,
such as those in the healthcare sector, also outperformed the
1
<Page>
- --------------------------------------------------------------------------------
S&P 500 Index, while economically sensitive sectors, such as materials,
industrials, telecommunication services, and consumer discretionary,
underperformed.
Q: HOW DID THE FUND PERFORM OVER THE FISCAL YEAR ENDED NOVEMBER 30, 2005?
A: The fund returned 10.1 percent, reflecting performance at the net asset
value (NAV) of Class A shares with all distributions reinvested, compared with
its benchmark, the Russell Midcap(R) Growth Index,(2) which returned 16.2
percent over the same period. STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS, WHICH
REFLECT PERFORMANCE AT THE MAXIMUM 5.75 PERCENT SALES CHARGE APPLICABLE TO CLASS
A SHARE INVESTMENTS AND INCLUDE THE REINVESTMENT OF ALL DISTRIBUTIONS, ARE: 1
YEAR: 3.78 PERCENT, 5 YEARS: 0.78 PERCENT, AND 10 YEARS: 10.79 PERCENT. Class A
shares purchased with a front-end sales charge have no contingent deferred sales
charge (CDSC). However, certain purchases of Class A shares made without a
front-end sales charge may be subject to a CDSC. Please see section "Your
Investment-Purchases" in the prospectus for more information on redemptions that
may be subject to a CDSC.
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: Stock selection in the financial services sector was the largest detractor
to fund performance relative to its benchmark for the fiscal year ended November
30, 2005. Universal American Financial Corp., a specialty health and life
insurance holding company, underperformed due to disappointing third quarter
earnings. In October 2005, the company's management, regarding reasons for
reduced earnings, cited a higher than anticipated loss ratio in the Medicare
supplement business, and additional expenses incurred in implementing the
company's Medicare Part D growth initiatives.
Stock selection in the technology sector also took away from fund
performance relative to its benchmark. Symbol Technologies, Inc., a provider of
barcode scanning and radio frequency identification equipment, underperformed
due to softer than anticipated sales and lackluster second quarter financial
results.
A contributor to fund performance relative to its benchmark for the fiscal
year ended November 30, 2005, was stock selection in the auto and transportation
sector. UTi Worldwide Inc., an international, non-asset-based global
2
<Page>
- --------------------------------------------------------------------------------
integrated logistics company providing air and ocean freight forwarding,
contract logistics, customs brokerage, and other supply chain management
services, outperformed based on strong quarterly earnings. Landstar System,
Inc., another non-asset-based provider of specialized transportation services,
also helped performance due to robust quarterly financial reports.
In addition, ITT Industries, Inc., an industrial products and services
company, aided fund performance relative to its benchmark. During the fiscal
year ended November 30, 2005, the company was a fast growing industrial company
because of its focus on the growth areas of water treatment and defense
electronics.
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.
A PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT A FUND, INCLUDING ITS
INVESTMENT OBJECTIVE, RISKS, CHARGES, AND ONGOING EXPENSES, WHICH AN INVESTOR
SHOULD CAREFULLY CONSIDER BEFORE INVESTING. TO OBTAIN A PROSPECTUS ON ANY LORD
ABBETT MUTUAL FUND, PLEASE CONTACT YOUR INVESTMENT PROFESSIONAL OR LORD ABBETT
DISTRIBUTOR LLC AT 800-874-3733 OR VISIT OUR WEBSITE AT www.LordAbbett.com. READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
(1) The S&P 500(R) Index is widely regarded as the standard for measuring
large-cap U.S. stock market performance; this popular index includes a
representative sample of leading companies in leading industries.
(2) The Russell Midcap(R) Growth Index measures the performance of those Russell
Midcap companies with higher price-to-book ratios and higher forecasted growth
values. The stocks also are members of the Russell 1000(R) Growth Index.
Indexes are unmanaged, do not reflect the deductions 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 November 30, 2005; 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, A FUND'S 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. A fund offers additional classes of
shares with distinct pricing options. For a full description of the differences
in pricing alternatives, please see a 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
<Page>
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares with the same
investment in the Russell Midcap(R) Growth Index and the S&P MidCap 400/Barra
Growth Index, assuming reinvestment of all dividends and 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 RUSSELL MIDCAP(R) S&P MIDCAP 400/BARRA
AT NET ASSET VALUE MAXIMUM OFFERING PRICE(1) GROWTH INDEX(2) GROWTH INDEX(2)
12/1/1995 $ 10,000 $ 9,425 $ 10,000 $ 10,000
11/30/1996 $ 12,781 $ 12,046 $ 11,955 $ 11,769
11/30/1997 $ 16,475 $ 15,527 $ 14,217 $ 14,920
11/30/1998 $ 17,414 $ 16,412 $ 15,384 $ 17,096
11/30/1999 $ 26,128 $ 24,625 $ 21,895 $ 24,177
11/30/2000 $ 26,794 $ 25,253 $ 21,533 $ 27,335
11/30/2001 $ 24,417 $ 23,013 $ 17,438 $ 25,429
11/30/2002 $ 20,154 $ 18,995 $ 13,985 $ 22,376
11/30/2003 $ 24,989 $ 23,552 $ 18,550 $ 28,064
11/30/2004 $ 26,848 $ 25,304 $ 20,664 $ 30,543
11/30/2005 $ 29,560 $ 27,860 $ 24,012 $ 35,897
</Table>
AVERAGE ANNUAL TOTAL RETURN AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED NOVEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
CLASS A(3) 3.78% 0.78% 10.79% --
CLASS B(4) 5.39% 1.17% -- 9.97%
CLASS C(5) 9.34% 1.36% -- 9.54%
CLASS P(6) 9.97% 1.94% -- (0.27)%
CLASS Y(7) 10.50% 2.29% -- 8.00%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 5.75%.
(2) Performance for each unmanaged index does not reflect transaction costs,
management fees or sales charges. The performance of each index is not
necessarily representative of the Fund's performance.
(3) Total return, which is the percentage change in net asset value, after
deduction of the maximum initial sales charge of 5.75% applicable to Class A
shares, with all dividends and distributions reinvested for the periods shown
ended November 30, 2005, is calculated using the SEC-required uniform method to
compute such return.
(4) Class B shares commenced operations on October 16, 1998. Performance
reflects the deduction of a CDSC of 4% for 1 year, 1% for 5 years and 0% for
life of class.
(5) Class C shares commenced operations on October 19, 1998. The 1% CDSC for
Class C shares normally applies before the first anniversary of the purchase
date. Performance is at net asset value.
(6) Class P shares commenced operations on August 15, 2000. Performance is at
net asset value.
(7) Class Y shares commenced operations on December 9, 1998. Performance is at
net asset value.
4
<Page>
- --------------------------------------------------------------------------------
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 (June 1, 2005 through November 30,
2005).
ACTUAL EXPENSES
For each class of the Fund, the first line of the applicable 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 6/1/05 - 11/30/05" 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 applicable 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
<Page>
- --------------------------------------------------------------------------------
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 PERIOD+
----------- ----------- -----------
6/1/05 -
6/1/05 11/30/05 11/30/05
----------- ----------- -----------
CLASS A
Actual $ 1,000.00 $ 1,073.10 $ 8.06
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.30 $ 7.84
CLASS B
Actual $ 1,000.00 $ 1,069.70 $ 11.42
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,014.04 $ 11.11
CLASS C
Actual $ 1,000.00 $ 1,069.10 $ 11.41
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,014.04 $ 11.11
CLASS P
Actual $ 1,000.00 $ 1,072.40 $ 8.57
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,016.80 $ 8.34
CLASS Y
Actual $ 1,000.00 $ 1,074.70 $ 6.24
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,019.05 $ 6.07
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (1.55% for Class A, 2.20% for Classes B and C, 1.65%
for Class P and 1.20% for Class Y) multiplied by the average account value
over the period, multiplied by 183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY SECTOR
NOVEMBER 30, 2005
<Table>
<Caption>
SECTOR* %**
Auto & Transportation 3.71%
Consumer Discretionary 19.60%
Consumer Staples 0.89%
Financial Services 11.52%
Healthcare 17.66%
Materials & Processing 6.32%
Other 1.40%
Other Energy 7.35%
Producer Durables 4.48%
Short-Term Investment 10.18%
Technology 15.87%
Utilities 1.02%
Total 100.00%
</Table>
* A sector may comprise several industries.
** Represents percent of total investments.
6
<Page>
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------------------------------------
COMMON STOCKS 89.92%
AEROSPACE 0.92%
Rockwell Collins, Inc. 170,500 $ 7,792
----------------
AGRICULTURE, FISHING & RANCHING 2.03%
Monsanto Co. 235,800 17,277
----------------
BANKS 0.43%
Lazard Ltd. Class A(a) 117,600 3,681
----------------
BANKS: OUTSIDE NEW YORK CITY 0.77%
SVB Financial Group* 136,400 6,559
----------------
BIOTECHNOLOGY RESEARCH & PRODUCTION 3.90%
Cephalon, Inc.* 98,700 5,019
Genzyme Corp.* 227,500 16,912
Integra LifeSciences Holdings Corp.* 109,100 3,986
Invitrogen Corp.* 36,500 2,433
OSI Pharmaceuticals, Inc.* 93,800 2,275
Protein Design Labs, Inc.* 89,900 2,504
----------------
TOTAL 33,129
----------------
CASINOS & GAMBLING 0.71%
Scientific Games Corp. Class A* 211,700 5,997
----------------
CHEMICALS 1.13%
Ecolab Inc. 216,900 7,216
Rohm & Haas Co. 54,000 2,365
----------------
TOTAL 9,581
----------------
COMMUNICATIONS TECHNOLOGY 5.81%
ADC Telecommunications, Inc.* 252,790 5,164
ADTRAN, Inc. 68,700 2,031
Avaya Inc.* 662,300 7,894
Comverse Technology, Inc.* 279,700 7,331
Harris Corp. 149,000 6,642
Juniper Networks, Inc.* 286,200 6,437
McAfee, Inc.* 249,900 $ 6,950
Tibco Software, Inc.* 832,100 6,965
----------------
TOTAL 49,414
----------------
COMPUTER SERVICES, SOFTWARE & SYSTEMS 4.99%
Amdocs Ltd.*(a) 142,500 3,766
Autodesk, Inc. 103,300 4,310
CACI Int'l. Inc. Class A* 40,300 2,231
Citrix Systems, Inc.* 241,000 6,541
Hyperion Solutions Corp.* 166,000 8,790
Informatica Corp.* 515,900 5,799
Red Hat, Inc.* 129,500 3,052
Symantec Corp.* 201,027 3,552
Websense, Inc.* 67,900 4,410
----------------
TOTAL 42,451
----------------
COMPUTER TECHNOLOGY 0.95%
Network Appliance, Inc.* 277,800 8,090
----------------
CONSUMER ELECTRONICS 0.75%
VeriSign, Inc.* 285,900 6,355
----------------
DIVERSIFIED FINANCIAL SERVICES 2.21%
CIT Group Inc. 379,400 18,780
----------------
DIVERSIFIED PRODUCTION 1.38%
Danaher Corp. 211,300 11,727
----------------
DRUG & GROCERY STORE CHAINS 0.89%
Safeway Inc. 324,900 7,554
----------------
DRUGS & PHARMACEUTICALS 3.22%
Barr Pharmaceuticals, Inc.* 74,000 4,244
Endo Pharmaceuticals Holdings Inc.* 414,700 12,408
Kos Pharmaceuticals, Inc.* 71,500 4,760
Medicines Co. (The)* 106,805 1,951
Sepracor Inc.* 73,900 4,063
----------------
TOTAL 27,426
----------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------------------------------------
ELECTRONICS: SEMI-CONDUCTORS/COMPONENTS 4.13%
Agere Systems Inc.* 405,000 $ 5,338
Analog Devices, Inc. 202,900 7,694
Broadcom Corp. Class A* 188,900 8,791
National Semiconductor Corp. 336,600 8,711
Xilinx, Inc. 175,100 4,630
----------------
TOTAL 35,164
----------------
ENGINEERING & CONTRACTING SERVICES 1.49%
Jacobs Engineering Group Inc.* 195,600 12,708
----------------
FINANCIAL DATA PROCESSING SERVICES & SYSTEMS 1.43%
Alliance Data Systems Corp.* 316,000 12,188
----------------
HEALTH & PERSONAL CARE 1.63%
Lincare Holdings Inc.* 168,000 7,212
Omnicare, Inc. 116,200 6,618
----------------
TOTAL 13,830
----------------
HEALTHCARE FACILITIES 0.31%
DaVita Inc.* 49,900 2,619
----------------
HEALTHCARE MANAGEMENT SERVICES 5.51%
Caremark Rx, Inc.* 149,500 7,683
Community Health Systems, Inc.* 450,000 18,041
PacifiCare Health Systems, Inc.* 198,400 17,070
Sierra Health Services, Inc.* 52,200 4,083
----------------
TOTAL 46,877
----------------
HOTEL/MOTEL 1.93%
Hilton Hotels Corp. 278,500 6,105
Starwood Hotels & Resorts Worldwide, Inc. 171,000 $ 10,345
----------------
TOTAL 16,450
----------------
INSURANCE: LIFE 0.28%
Universal American Financial Corp.* 158,300 2,337
----------------
INSURANCE: PROPERTY-CASUALTY 5.46%
ACE Ltd.(a) 231,600 12,854
AXIS Capital Holdings Ltd.(a) 414,100 12,539
HCC Insurance Holdings, Inc. 468,800 14,322
W.R. Berkley Corp. 143,600 6,695
----------------
TOTAL 46,410
----------------
LEISURE TIME 1.43%
Penn National Gaming, Inc.* 254,700 8,448
Royal Caribbean Cruises Ltd. 81,000 3,715
----------------
TOTAL 12,163
----------------
MACHINERY: OIL WELL EQUIPMENT & SERVICES 5.84%
Cooper Cameron Corp.* 117,700 9,373
Halliburton Co. 276,800 17,618
SEACOR Holdings Inc.* 116,900 7,873
Weatherford Int'l. Ltd.* 212,600 14,778
----------------
TOTAL 49,642
----------------
MANUFACTURING 1.59%
Ingersoll-Rand Co. Ltd. Class A(a) 342,000 13,553
----------------
MEDICAL & DENTAL INSTRUMENTS & SUPPLIES 2.13%
Fisher Scientific Int'l. Inc.* 210,300 13,560
Sybron Dental Specialties, Inc.* 104,600 4,575
----------------
TOTAL 18,135
----------------
MEDICAL SERVICES 0.98%
Covance Inc.* 176,100 8,372
----------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------------------------------------
METAL FABRICATING 0.87%
Timken Co. (The) 238,700 $ 7,395
----------------
MULTI-SECTOR COMPANIES 1.40%
ITT Industries, Inc. 109,700 11,931
----------------
OIL: CRUDE PRODUCERS 1.53%
XTO Energy Inc. 318,900 12,976
----------------
POLLUTION CONTROL & ENVIRONMENTAL SERVICES 0.45%
Headwaters Inc.* 108,274 3,858
----------------
RADIO & TV BROADCASTERS 1.08%
Univision Communications Inc. Class A* 302,800 9,154
----------------
RENTAL & LEASING SERVICES: COMMERCIAL 0.96%
United Rentals, Inc.* 387,300 8,195
----------------
RESTAURANTS 1.41%
Cheesecake Factory, Inc. (The)* 272,925 10,000
Texas Roadhouse, Inc. Class A* 133,300 2,013
----------------
TOTAL 12,013
----------------
RETAIL 6.77%
Abercrombie & Fitch Co. 95,900 5,881
Advance Auto Parts, Inc.* 248,450 10,519
Bed Bath & Beyond Inc.* 291,500 12,435
Hibbett Sporting Goods, Inc.* 95,200 2,852
MSC Industrial Direct Co., Inc. Class A 255,600 9,992
Nordstrom, Inc. 220,000 8,114
O'Reilly Automotive, Inc.* 257,300 7,832
----------------
TOTAL 57,625
----------------
SERVICES: COMMERCIAL 5.55%
FTI Consulting, Inc.* 278,060 7,886
IAC/InterActiveCorp* 313,027 8,643
Iron Mountain Inc.* 208,350 $ 8,594
Labor Ready, Inc.* 311,400 6,876
Monster Worldwide, Inc.* 194,000 7,546
Robert Half Int'l. Inc. 199,400 7,629
----------------
TOTAL 47,174
----------------
SHIPPING 0.97%
UTi Worldwide Inc.(a) 85,000 8,270
----------------
STEEL 0.80%
Nucor Corp. 101,700 6,822
----------------
TELECOMMUNICATIONS EQUIPMENT 0.15%
Powerwave Technologies, Inc.* 99,200 1,246
----------------
TRANSPORTATION MISCELLANEOUS 0.79%
Tidewater Inc. 149,400 6,753
----------------
TRUCKERS 1.94%
Heartland Express, Inc. 233,550 4,977
Landstar System, Inc. 268,718 11,566
----------------
TOTAL 16,543
----------------
UTILITIES: TELECOMMUNICATIONS 1.02%
Nextel Partners, Inc. Class A* 327,500 8,679
----------------
TOTAL COMMON STOCKS
(cost $650,915,047) 764,895
================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
NOVEMBER 30, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
INVESTMENTS (000) (000)
- ------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT 10.19%
REPURCHASE AGREEMENT 10.19%
Repurchase Agreement dated 11/30/2005, 3.40% due 12/1/2005 with State
Street Bank & Trust Co. collateralized by $88,395,000 of Federal Home
Loan Bank at 4.375% due 9/11/2009; value: $88,395,000; proceeds:
$86,669,026 (cost $86,660,841) $ 86,661 $ 86,661
----------------
TOTAL INVESTMENTS IN SECURITIES 100.11%
(cost $737,575,888) 851,556
================
LIABILITIES IN EXCESS OF OTHER ASSETS (0.11%) (911)
----------------
NET ASSETS 100.00% $ 850,645
================
</Table>
* Non-income producing security.
(a) Foreign security traded in U.S. dollars.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<Page>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 2005
<Table>
ASSETS:
Investments in securities, at value (cost $650,915,047) $ 764,894,929
Repurchase agreement, at cost and value 86,660,841
Receivables:
Interest and dividends 397,494
Investment securities sold 13,212,657
Capital shares sold 952,922
Prepaid expenses and other assets 102,038
- -------------------------------------------------------------------------------------------------
TOTAL ASSETS 866,220,881
- -------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 12,846,686
Capital shares reacquired 1,243,710
Management fee 547,262
12b-1 distribution fees 345,397
Fund administration 27,478
Directors' fees 35,566
To affiliate 827
Accrued expenses and other liabilities 529,029
- -------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 15,575,955
=================================================================================================
NET ASSETS $ 850,644,926
=================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 705,774,688
Accumulated net investment loss (1,379,502)
Accumulated net realized gain on investments 32,269,858
Net unrealized appreciation on investments 113,979,882
- -------------------------------------------------------------------------------------------------
NET ASSETS $ 850,644,926
=================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 634,058,840
Class B Shares $ 106,809,136
Class C Shares $ 83,339,264
Class P Shares $ 17,536,335
Class Y Shares $ 8,901,351
OUTSTANDING SHARES BY CLASS:
Class A Shares (50 million shares of common stock authorized, $.001 par value) 29,982,271
Class B Shares (30 million shares of common stock authorized, $.001 par value) 5,270,109
Class C Shares (20 million shares of common stock authorized, $.001 par value) 4,112,881
Class P Shares (20 million shares of common stock authorized, $.001 par value) 828,328
Class Y Shares (30 million shares of common stock authorized, $.001 par value) 412,758
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (NET ASSETS DIVIDED
BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 21.15
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 5.75%) $ 22.44
Class B Shares-Net asset value $ 20.27
Class C Shares-Net asset value $ 20.26
Class P Shares-Net asset value $ 21.17
Class Y Shares-Net asset value $ 21.57
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<Page>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 2005
<Table>
INVESTMENT INCOME:
Dividends $ 3,948,947
Interest 963,291
Securities lending-net 10,790
Foreign withholding tax (14,847)
- -------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 4,908,181
- -------------------------------------------------------------------------------------------------
EXPENSES:
Management fee 6,615,756
12b-1 distribution plan-Class A 2,254,035
12b-1 distribution plan-Class B 1,053,856
12b-1 distribution plan-Class C 828,254
12b-1 distribution plan-Class P 67,931
Shareholder servicing 2,738,326
Professional 50,421
Reports to shareholders 229,695
Fund administration 330,788
Custody 42,340
Directors' fees 42,561
Registration 71,646
Subsidy (See Note 3) 5,900
Other 26,594
- -------------------------------------------------------------------------------------------------
Gross expenses 14,358,103
Expense reductions (See Note 7) (14,027)
Expenses assumed by advisor (See Note 3) (318,170)
- -------------------------------------------------------------------------------------------------
NET EXPENSES 14,025,906
- -------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (9,117,725)
=================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 86,614,819
Net change in unrealized appreciation (depreciation) on investments 782,332
=================================================================================================
NET REALIZED AND UNREALIZED GAIN 87,397,151
=================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 78,279,426
=================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE YEAR ENDED FOR THE YEAR ENDED
INCREASE IN NET ASSETS NOVEMBER 30, 2005 NOVEMBER 30, 2004
OPERATIONS:
Net investment loss $ (9,117,725) $ (10,030,735)
Net realized gain (loss) on investments 86,614,819 57,652,736
Net change in unrealized appreciation (depreciation) on investments 782,332 4,466,639
- --------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 78,279,426 52,088,640
==============================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 154,082,808 282,046,048
Cost of shares reacquired (184,595,168) (142,535,623)
- --------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS (30,512,360) 139,510,425
==============================================================================================================
NET INCREASE IN NET ASSETS 47,767,066 191,599,065
==============================================================================================================
NET ASSETS:
Beginning of year 802,877,860 611,278,795
- --------------------------------------------------------------------------------------------------------------
END OF YEAR $ 850,644,926 $ 802,877,860
==============================================================================================================
ACCUMULATED NET INVESTMENT LOSS $ (1,379,502) $ (1,730,353)
==============================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<Page>
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
YEAR ENDED 11/30
----------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 19.21 $ 17.88 $ 14.42 $ 17.47 $ 19.17
========== ========== ========== ========== ==========
Investment operations:
Net investment income(a) (.19) (.23) (.24) (.23) (.28)
Net realized and unrealized gain (loss) 2.13 1.56 3.70 (2.82) (1.42)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.94 1.33 3.46 (3.05) (1.70)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 21.15 $ 19.21 $ 17.88 $ 14.42 $ 17.47
========== ========== ========== ========== ==========
Total Return(b) 10.10% 7.44% 23.99% (17.46)% (8.87)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions
and expenses assumed 1.55% 1.73% 1.85% 1.80% 1.72%
Expenses, excluding expense reductions
and expenses assumed 1.59% 1.73% 1.85% 1.80% 1.72%
Net investment loss (.96)% (1.27)% (1.53)% (1.48)% (1.48)%
<Caption>
YEAR ENDED 11/30
----------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 634,059 $ 594,524 $ 430,991 $ 250,380 $ 213,580
Portfolio turnover rate 97.35% 90.23% 78.58% 97.63% 101.15%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 11/30
----------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 18.53 $ 17.35 $ 14.08 $ 17.16 $ 18.95
========== ========== ========== ========== ==========
Investment operations:
Net investment loss(a) (.31) (.33) (.32) (.32) (.39)
Net realized and unrealized gain (loss) 2.05 1.51 3.59 (2.76) (1.40)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.74 1.18 3.27 (3.08) (1.79)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 20.27 $ 18.53 $ 17.35 $ 14.08 $ 17.16
========== ========== ========== ========== ==========
Total Return(b) 9.39% 6.80% 23.22% (17.95)% (9.45)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions
and expenses assumed 2.20% 2.30% 2.44% 2.43% 2.35%
Expenses, excluding expense reductions
and expenses assumed 2.23% 2.30% 2.44% 2.43% 2.35%
Net investment loss (1.61)% (1.84)% (2.12)% (2.10)% (2.11)%
<Caption>
YEAR ENDED 11/30
----------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 106,809 $ 104,282 $ 94,561 $ 66,623 $ 69,738
Portfolio turnover rate 97.35% 90.23% 78.58% 97.63% 101.15%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 11/30
----------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 18.53 $ 17.34 $ 14.08 $ 17.15 $ 18.94
========== ========== ========== ========== ==========
Investment operations:
Net investment loss(a) (.31) (.33) (.32) (.32) (.39)
Net realized and unrealized gain (loss) 2.04 1.52 3.58 (2.75) (1.40)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.73 1.19 3.26 (3.07) (1.79)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 20.26 $ 18.53 $ 17.34 $ 14.08 $ 17.15
========== ========== ========== ========== ==========
Total Return(b) 9.34% 6.86% 23.15% (17.90)% (9.45)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions
and expenses assumed 2.20% 2.30% 2.44% 2.42% 2.37%
Expenses, excluding expense reductions
and expenses assumed 2.23% 2.30% 2.44% 2.42% 2.37%
Net investment income loss (1.61)% (1.84)% (2.12)% (2.09)% (2.14)%
<Caption>
YEAR ENDED 11/30
----------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 83,339 $ 85,666 $ 79,415 $ 55,115 $ 52,272
Portfolio turnover rate 97.35% 90.23% 78.58% 97.63% 101.15%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 11/30
----------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 19.25 $ 17.92 $ 14.47 $ 17.53 $ 19.23
========== ========== ========== ========== ==========
Investment operations:
Net investment loss(a) (.21) (.24) (.25) (.24) (.28)
Net realized and unrealized gain (loss) 2.13 1.57 3.70 (2.82) (1.42)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.92 1.33 3.45 (3.06) (1.70)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 21.17 $ 19.25 $ 17.92 $ 14.47 $ 17.53
========== ========== ========== ========== ==========
Total Return(b) 9.97% 7.42% 23.84% (17.46)% (8.84)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions
and expenses assumed 1.65% 1.77% 1.89% 1.88% 1.80%
Expenses, excluding expense reductions
and expenses assumed 1.68% 1.77% 1.89% 1.88% 1.80%
Net investment loss (1.05)% (1.31)% (1.57)% (1.55)% (1.52)%
<Caption>
YEAR ENDED 11/30
----------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 17,536 $ 12,094 $ 6,310 $ 1,620 $ 294
Portfolio turnover rate 97.35% 90.23% 78.58% 97.63% 101.15%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
<Table>
<Caption>
YEAR ENDED 11/30
----------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS Y SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 19.52 $ 18.09 $ 14.56 $ 17.60 $ 19.26
========== ========== ========== ========== ==========
Investment operations:
Net investment loss(a) (.12) (.15) (.20) (.19) (.23)
Net realized and unrealized gain (loss) 2.17 1.58 3.73 (2.85) (1.43)
---------- ---------- ---------- ---------- ----------
Total from investment operations 2.05 1.43 3.53 (3.04) (1.66)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 21.57 $ 19.52 $ 18.09 $ 14.56 $ 17.60
========== ========== ========== ========== ==========
Total Return(b) 10.50% 7.90% 24.24% (17.27)% (8.62)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions
and expenses assumed 1.20% 1.37% 1.44%+ 1.43% 1.35%
Expenses, excluding expense reductions
and expenses assumed 1.23% 1.37% 1.44%+ 1.43% 1.35%
Net investment loss (.60)% (.80)% (1.12)%+ (1.10)% (1.10)%
<Caption>
YEAR ENDED 11/30
----------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 8,901 $ 6,312 $ 2 $ 2 $ 2
Portfolio turnover rate 97.35% 90.23% 78.58% 97.63% 101.15%
</Table>
+ The ratios have been determined on a Fund basis.
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
SEE NOTES TO FINANCIAL STATEMENTS.
18
<Page>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Lord Abbett Research Fund, Inc. (the "Company") is registered under the
Investment Company Act of 1940 (the "Act") as a diversified open-end management
investment company incorporated under Maryland law on April 6, 1992. The Company
currently consists of four separate funds. This report covers one of the funds -
Lord Abbett Growth Opportunities Fund (the "Fund").
The Fund's investment objective is capital appreciation. 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 Classes 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 (12 months if shares were purchased on or after November 1,
2004) following certain 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. Events occurring after the close of trading on non-U.S. exchanges
may result in adjustments to the valuation of foreign securities to more
accurately reflect their fair value as of the close of regular trading on
the New York Stock Exchange. The Fund may rely on an independent fair
valuation service in adjusting the valuations of foreign securities.
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 prices. 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 Directors. 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 (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.
19
<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 incurred by the Company that do not specifically relate to
an individual fund are generally allocated to the funds within the Company
on a pro rata basis. 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. Classes A, B, C and P shares bear all
expenses and fees relating to their respective 12b-1 Distribution Plans.
(f) SECURITIES LENDING-The Fund may lend its securities to member banks of the
Federal Reserve System and to registered broker/dealers approved by the
Fund. The loans are collateralized at all times by cash and/or U.S.
Government securities in an amount at least equal to 102% of the market
value of the domestic securities loaned (105% in the case of foreign
securities loaned) as determined at the close of business on the preceding
business day. The dividend and interest income earned on the securities
loaned is accounted for in the same manner as other dividend and interest
income. Lending portfolio securities could result in a loss or delay in
recovering the Fund's securities if the borrower defaults. At their October
21, 2004 meeting, the Board of Directors voted to discontinue, as soon as
practicable, the Fund's securities lending program. State Street Bank &
Trust Company ("SSB") received fees of $4,624 for the year ended November
30, 2005, which are netted against Securities Lending Income on the
Statement of Operations. As of November 30, 2005, there were no securities
on loan.
(g) 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, or by securities of the U.S.
Government, its agencies, its instrumentalities, or U.S. Government
sponsored enterprises having a value equal to, or in excess of, the value of
the repurchase agreement (including accrued interest). 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 Company 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.
20
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The management fee is based on average daily net assets at the following annual
rates:
<Table>
First $1 billion .80%
Next $1 billion .75%
Next $1 billion .70%
Over $3 billion .65%
</Table>
For the fiscal year ending November 30, 2005, Lord Abbett contractually agreed
to reimburse the Fund to the extent necessary so that each class' net annual
operating expenses did not exceed the following annual rates(1):
<Table>
<Caption>
CLASS % OF AVERAGE DAILY NET ASSETS
- ------------------------------------------------------
A 1.55%
B 2.20%
C 2.20%
P 1.65%
Y 1.20%
</Table>
(1) Lord Abbett has renewed the contractual expense cap agreement through the
fiscal year ending November 30, 2006.
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.
The Fund, along with certain other funds managed by Lord Abbett (the "Underlying
Funds"), has entered into a Servicing Arrangement with Lord Abbett World Growth
& Income Strategy Fund of Lord Abbett Investment Trust ("World Growth & Income
Strategy Fund"), pursuant to which each Underlying Fund pays a portion of the
expenses (excluding management fees and distribution and service fees) of World
Growth & Income Strategy Fund in proportion to the average daily value of the
Underlying Fund shares owned by World Growth & Income Strategy Fund. Amounts
paid pursuant to the Servicing Arrangement are included in Subsidy Expense on
the Statement of Operations.
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) The amount of CDSC collected by the Fund during the year ended November 30,
2005 was $49,138.
Class Y does not have a distribution plan.
21
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
COMMISSIONS
Distributor received the following commissions on sales of shares of the Fund,
after concessions were paid to authorized dealers, for the year ended November
30, 2005:
<Table>
<Caption>
DISTRIBUTOR DEALERS'
COMMISSIONS CONCESSIONS
- ---------------------------
$ 476,904 $ 2,561,243
</Table>
Distributor received CDSCs of $1,154 and $2,749 for Class A and Class C shares,
respectively, for the year ended November 30, 2005.
One Director and certain of the Fund'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, if any, 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 earnings and profits for tax purposes, are reported
as a tax return of capital.
On December 8, 2005, a long-term capital gain distribution of $26,382,000 was
declared by the Fund. The distribution was paid on December 14, 2005 to
shareholders of record on December 13, 2005.
As of November 30, 2005, the components of accumulated earnings on a tax basis
are as follows:
<Table>
Undistributed long-term capital gains $ 24,381,531
- --------------------------------------------------------------------------------
Total undistributed earnings $ 24,381,531
Temporary differences 7,512,446
Unrealized gains - net 112,976,261
- --------------------------------------------------------------------------------
Total accumulated gains - net $ 144,870,238
================================================================================
</Table>
As of November 30, 2005, 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 $ 738,579,509
- --------------------------------------------------------------------------------
Gross unrealized gain 123,590,467
Gross unrealized loss (10,614,206)
- --------------------------------------------------------------------------------
Net unrealized security gain $ 112,976,261
================================================================================
</Table>
The difference between book-basis and tax-basis unrealized gains (losses) are
primarily attributable to wash sales and other temporary tax adjustments.
22
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Permanent items identified during the year ended November 30, 2005, 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 PAID-IN
LOSS GAIN CAPITAL
- ---------------------------------------------
$ 9,468,576 $ (14,806) $ (9,453,770)
</Table>
The permanent difference is primarily due to tax net investment losses.
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the year ended November 30, 2005 are as follows:
<Table>
<Caption>
PURCHASES SALES
- -----------------------------
$ 772,905,899 $ 891,861,188
</Table>
There were no purchases or sales of U.S. Government securities for the year
ended November 30, 2005.
6. DIRECTORS' REMUNERATION
The Company's officers and the one Director who are associated with Lord Abbett
do not receive any compensation from the Fund for serving in such capacities.
Outside Directors' 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 Directors under which outside Directors must defer receipt of a
portion of, and may elect to defer receipt of an additional portion of
Directors' 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 Directors' Fees on the Statement of
Operations and in Directors' 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 Company 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.
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.
For the period November 1, 2004 through December 9, 2004, the fee for this
Facility was at an annual rate of .09%. Effective December 10, 2004, the fee for
this Facility was renewed at an annual rate of .08%. At November 30, 2005, there
were no loans
23
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
outstanding pursuant to this Facility nor was the Facility utilized at any time
during the fiscal year ended November 30, 2005.
Effective December 9, 2005, the Facility for the Fund, along with certain other
funds managed by Lord Abbett, was increased from $200,000,000 to $250,000,000.
The fee for this Facility remains at an annual rate of .08%.
9. CUSTODIAN AND ACCOUNTING AGENT
SSB is the Company's custodian and accounting agent. SSB performs custodial,
accounting and recordkeeping functions relating to portfolio transactions and
calculating the Fund's NAV.
10. INVESTMENT RISKS
The Fund is subject to the general risks and considerations associated with
equity investing. 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. The Fund has particular risks
associated with growth stocks. Growth companies may grow faster than other
companies, which may result in more volatility in their stock prices. In
addition, if the Fund's assessment of a company's potential for growth or market
condition is wrong, it could suffer losses or produce poor performance relative
to other funds, even in a rising market. The Fund invests largely in mid-sized
company stocks, which may be less able to weather economic shifts or other
adverse developments than larger, more established companies.
These factors can affect the Fund's performance.
24
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
11. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of beneficial interest are as follows:
<Table>
<Caption>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 2005 NOVEMBER 30, 2004
- ------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Shares sold 5,446,581 $ 109,201,116 12,164,999 $ 220,802,534
Shares reacquired (6,412,545) (128,861,895) (5,326,989) (96,399,497)
- ------------------------------------------------------------------------------------------------------------------
Increase (decrease) (965,964) $ (19,660,779) 6,838,010 $ 124,403,037
- ------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Shares sold 804,467 $ 15,488,888 1,285,543 $ 22,707,457
Shares reacquired (1,162,326) (22,439,358) (1,108,736) (19,465,289)
- ------------------------------------------------------------------------------------------------------------------
Increase (decrease) (357,859) $ (6,950,470) 176,807 $ 3,242,168
- ------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Shares sold 865,960 $ 16,738,495 1,328,073 $ 23,460,896
Shares reacquired (1,377,074) (26,511,868) (1,283,399) (22,441,443)
- ------------------------------------------------------------------------------------------------------------------
Increase (decrease) (511,114) $ (9,773,373) 44,674 $ 1,019,453
- ------------------------------------------------------------------------------------------------------------------
CLASS P SHARES
Shares sold 463,393 $ 9,289,835 474,588 $ 8,501,829
Shares reacquired (263,308) (5,287,840) (198,431) (3,602,630)
- ------------------------------------------------------------------------------------------------------------------
Increase 200,085 $ 4,001,995 276,157 $ 4,899,199
- ------------------------------------------------------------------------------------------------------------------
CLASS Y SHARES
Shares sold 162,602 $ 3,364,474 357,143 $ 6,573,332
Shares reacquired (73,181) (1,494,207) (33,919) (626,764)
- ------------------------------------------------------------------------------------------------------------------
Increase 89,421 $ 1,870,267 323,224 $ 5,946,568
- ------------------------------------------------------------------------------------------------------------------
</Table>
25
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
LORD ABBETT RESEARCH FUND, INC. - LORD ABBETT GROWTH OPPORTUNITIES FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Lord Abbett Research Fund, Inc. - Lord Abbett
Growth Opportunities Fund (the "Fund") as of November 30, 2005, 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 five years in the period then ended. 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. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of November 30, 2005 by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. 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 Research Fund, Inc. - Lord Abbett Growth Opportunities Fund as of
November 30, 2005, 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 its financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the United
States of America.
DELOITTE & TOUCHE LLP
New York, New York
January 27, 2006
26
<Page>
BASIC INFORMATION ABOUT MANAGEMENT
The Board of Directors (the "Board") is responsible for the management of the
business and affairs of each Fund in accordance with the laws of the State of
Maryland. The Board appoints officers who are responsible for the day-to-day
operations of each Fund and who execute policies authorized by the Board. The
Board also approves an investment adviser to each Fund 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 Director holds office until his/her successor is elected and qualified or
until his/her earlier resignation or removal, as provided in the Fund's
organizational documents.
Lord, Abbett & Co. LLC ("Lord Abbett"), a Delaware limited liability company, is
the Fund's investment adviser.
INTERESTED DIRECTOR
The following Director 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
54 portfolios or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH FUND DURING PAST FIVE YEARS DIRECTORSHIPS
- -------------------------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Director since Managing Partner and Chief Executive N/A
Lord, Abbett & Co. LLC 1995; Chairman Officer of Lord Abbett since 1996.
90 Hudson Street since 1996
Jersey City, NJ 07302
(1945)
</Table>
----------
INDEPENDENT DIRECTORS
The following independent or outside Directors are also directors or trustees of
each of the fourteen Lord Abbett-sponsored funds, which consist of 54 portfolios
or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH FUND DURING PAST FIVE YEARS DIRECTORSHIPS
- -------------------------------------------------------------------------------------------------------------------------------
E. THAYER BIGELOW Director since 1996 Managing General Partner, Bigelow Media, Currently serves as director of Adelphia
Lord, Abbett & Co. LLC LLC (since 2000); Senior Adviser, Time Communications, Inc., Crane Co., and
c/o Legal Dept. Warner Inc. (1998 - 2000); Acting Chief Huttig Building Products Inc.
90 Hudson Street Executive Officer of Courtroom
Jersey City, NJ 07302 Television Network (1997 - 1998);
(1941) President and Chief Executive Officer of
Time Warner Cable Programming, Inc.
(1991 - 1997).
WILLIAM H.T. BUSH Director since 1998 Co-founder and Chairman of the Board of Currently serves as director of
Lord, Abbett & Co. LLC the financial advisory firm of WellPoint, Inc. (since 2002), and
c/o Legal Dept. Bush-O'Donnell & Company (since 1986). Engineered Support Systems, Inc. (since
90 Hudson Street 2000).
Jersey City, NJ 07302
(1938)
</Table>
27
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH FUND DURING PAST FIVE YEARS DIRECTORSHIPS
- -------------------------------------------------------------------------------------------------------------------------------
ROBERT B. CALHOUN, JR. Director since 1998 Managing Director of Monitor Clipper Currently serves as director of
c/o Legal Dept. Partners (since 1997) and President of Avondale, Inc. and Interstate Bakeries
Lord, Abbett & Co. LLC Clipper Asset Management Corp. (since Corp.
90 Hudson Street 1991), both private equity investment
Jersey City, NJ 07302 funds.
(1942)
JULIE A. HILL Director since 2004 Owner and CEO of the Hillsdale Currently serves as director of
Lord, Abbett & Co. LLC Companies, a business consulting firm WellPoint, Inc.; Resources Connection
c/o Legal Dept. (since 1998); Founder, President and Inc.; and Holcim (US) Inc. (a subsidiary
90 Hudson Street Owner of the Hiram-Hill and Hillsdale of Holcim Ltd.).
Jersey City, NJ 07302 Development Companies (1998 - 2000).
(1946)
FRANKLIN W. HOBBS Director since 2001 Former Chief Executive Officer of Currently serves as director of Adolph
Lord, Abbett & Co. LLC Houlihan Lokey Howard & Zukin, an Coors Company.
c/o Legal Dept. investment bank (January 2002 - April
90 Hudson Street 2003); Chairman of Warburg Dillon Read
Jersey City, NJ 07302 (1999 - 2001); Global Head of Corporate
(1947) Finance of SBC Warburg Dillon Read (1997
- 1999); Chief Executive Officer of
Dillon, Read & Co. (1994 - 1997).
C. ALAN MACDONALD Director since 1996 Retired - General Business and Currently serves as director of H.J.
Lord, Abbett & Co. LLC Governance Consulting (since 1992); Baker (since 2003).
c/o Legal Dept. formerly President and CEO of Nestle
90 Hudson Street Foods.
Jersey City, NJ 07302
(1933)
THOMAS J. NEFF Director since 1992 Chairman of Spencer Stuart (U.S.), an Currently serves as director of Ace,
Lord, Abbett & Co. LLC executive search consulting firm (since Ltd. (since 1997) and Hewitt Associates,
c/o Legal Dept. 1996); President of Spencer Stuart (1979 Inc.
90 Hudson Street - 1996).
Jersey City, NJ 07302
(1937)
</Table>
28
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
OFFICERS
None of the officers listed below have received compensation from the Company.
All the officers of the Company 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
YEAR OF BIRTH WITH COMPANY OF CURRENT POSITION DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Chief Executive Elected in 1996 Managing Partner and Chief Executive
(1945) Officer and President Officer of Lord Abbett (since 1996).
KEVIN P. FERGUSON Executive Vice Elected in 2001 Partner and Mid Cap Growth Investment
(1964) President Manager, joined Lord Abbett in 1999.
ROBERT P. FETCH Executive Vice Elected in 1997 Partner and Small-Cap Value Senior
(1953) President Investment Manager, joined Lord Abbett
in 1995.
DANIEL H. FRASCARELLI Executive Vice Elected in 2005 Partner and Investment Manager, joined
(1954) President Lord Abbett in 1990.
CHRISTOPHER J. TOWLE Executive Vice Elected in 2001 Partner and Investment Manager, joined
(1957) President Lord Abbett in 1987.
EDWARD K. VON DER LINDE Executive Vice Elected in 2001 Partner and Investment Manager, joined
(1960) President Lord Abbett in 1988.
JAMES BERNAICHE Chief Compliance Elected in 2004 Chief Compliance Officer, joined Lord
(1956) Officer Abbett in 2001; formerly Vice President
and Chief Compliance Officer with Credit
Suisse Asset Management.
JOAN A. BINSTOCK Chief Financial Elected in 1999 Partner and Chief Operations Officer,
(1954) Officer and Vice joined Lord Abbett in 1999.
President
JOHN K. FORST Vice President and Elected in 2005 Deputy General Counsel, joined Lord
(1960) Assistant Secretary Abbett in 2004; prior thereto Managing
Director and Associate General Counsel
at New York Life Investment Management
LLC (2002 - 2003); formerly Attorney at
Dechert LLP (2000 - 2002).
LAWRENCE H. KAPLAN Vice President and Elected in 1997 Partner and General Counsel, joined Lord
(1957) Secretary Abbett in 1997.
</Table>
29
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONCLUDED)
<Table>
<Caption>
NAME AND CURRENT POSITION LENGTH OF SERVICE PRINCIPAL OCCUPATION
YEAR OF BIRTH WITH COMPANY OF CURRENT POSITION DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------
ROBERT G. MORRIS Vice President Elected in 1996 Partner and Chief Investment Officer,
(1944) joined Lord Abbett in 1991.
A. EDWARD OBERHAUS, III Vice President Elected in 1996 Partner and Manager of Equity Trading,
(1959) joined Lord Abbett in 1983.
CHRISTINA T. SIMMONS Vice President and Elected in 2000 Assistant General Counsel, joined Lord
(1957) Assistant Secretary Abbett in 1999.
PAUL J. VOLOVICH Vice President Elected in 2004 Investment Manager - Large-Cap Core
(1973) Fund, joined Lord Abbett in 1997.
BERNARD J. GRZELAK Treasurer Elected in 2003 Director of Fund Administration, joined
(1971) Lord Abbett in 2003; formerly Vice
President, Lazard Asset Management LLC
(2000 - 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 Fund's Directors. It is
available free upon request.
30
<Page>
HOUSEHOLDING
The Company has adopted a policy that allows it to send only one copy of the
Fund's Prospectus, proxy material, annual report and semiannual 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 on how Lord
Abbett voted the Fund's proxies during the 12-month period ended June 30, 2005,
are available without charge, upon request, (i) by calling 888-522-2388; (ii) on
Lord Abbett's website 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 is required to file its complete schedule of portfolio holdings with
the SEC for its first and third fiscal quarters on Form N-Q. Copies of the
filings 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 a
duplicating fee to the SEC's Public Reference Room, Washington, DC 20549-0102;
or (iii) sending your request electronically to publicinfo@sec.gov.
31
<Page>
This page is intentionally left blank.
<Page>
[LORD ABBETT(R) LOGO]
<Table>
This report when not used for the general
information of shareholders of the fund, is to
be distributed only if preceded or accompanied Lord Abbett Research Fund, Inc.
by a current fund prospectus. Lord Abbett Growth Opportunities Fund
Lord Abbett mutual fund shares are distributed by LAGOF-2-1105
LORD ABBETT DISTRIBUTOR LLC (1/06)
</Table>
<Page>
[LORD ABBETT LOGO]
2005
ANNUAL
REPORT
LORD ABBETT
LARGE-CAP CORE FUND
SMALL-CAP VALUE FUND
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2005
<Page>
- --------------------------------------------------------------------------------
LORD ABBETT RESEARCH FUND
LORD ABBETT LARGE-CAP CORE FUND AND
LORD ABBETT SMALL-CAP VALUE FUND
ANNUAL REPORT
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2005
DEAR SHAREHOLDERS: We are pleased to provide you with this overview of the Lord
Abbett Large-Cap Core Fund's and Lord Abbett Small-Cap Value Fund's strategies
and performance for the fiscal year ended November 30, 2005. 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
- --------------------------------------------------------------------------------
Q: WHAT WERE THE OVERALL MARKET CONDITIONS OF THE FISCAL YEAR ENDED NOVEMBER 30,
2005?
A: Despite sharply higher energy prices, continued short-term interest rate
hikes by the Federal Reserve Board (the Fed), and a devastating hurricane season
for the Gulf Coast region, U.S. real (i.e., after inflation) gross domestic
product (GDP) continued to grow at a strong, if not robust, pace. With the
exception of a hurricane-induced fall in personal income in August 2005,
personal income generally remained positive throughout the fiscal year ended
November 30, 2005.
On November 1, 2005, the Fed raised the fed funds rate for the twelfth
consecutive time since June 2004, bringing the rate to 4.0 percent by fiscal
year-end November 30, 2005. Meanwhile, 10-year Treasury yields were volatile,
reflecting investors' shifting perceptions about the health of the U.S. economy.
Yields on the benchmark Treasury note began the fiscal year at 4.2 percent,
reaching 4.5 percent by March 2005. However, the trend higher was disrupted in
the spring and summer of 2005, amid investors' concerns about an economic
slowdown, with the 10-year yield touching 4.0 percent in June. The yield then
rose again in the last month of the fiscal year, to as high as 4.5 percent,
driven by renewed concerns about inflation.
Against this backdrop of steady economic output and sharply rising
short-term interest rates, equity markets rose, with the S&P 500(R) Index(1)
gaining 8.4 percent in the fiscal year ended November 30, 2005. Driven by the
sharp rise in oil prices, the strongest performing sectors of the S&P 500 Index
in the fiscal year ended November 30, 2005, were energy stocks, recording a
return
1
<Page>
- --------------------------------------------------------------------------------
of 28.1 percent, and utilities, rising 18.6 percent. "Defensive" stocks, such as
those in the healthcare sector, also outperformed the S&P 500 Index, while
economically sensitive sectors, such as materials, industrials,
telecommunication services, and consumer discretionary, underperformed.
LORD ABBETT LARGE-CAP CORE FUND
(FORMERLY NAMED LORD ABBETT LARGE-CAP RESEARCH FUND)
The fund entered the final two months of the previous fiscal year (ended
November 30, 2004) with a broader mandate and a new name to better reflect the
fund's shift in investment style - from a large-cap value focus to a blend of
value and growth.
Q: HOW DID THE FUND PERFORM OVER THE FISCAL YEAR ENDED NOVEMBER 30, 2005?
A: The fund returned 4.5 percent, reflecting performance at the net asset value
(NAV) of Class A shares with all distributions reinvested, compared with its
benchmark, the Russell 1000(R) Index,(2) which returned 10.0 percent over the
same period. STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS, WHICH REFLECT
PERFORMANCE AT THE MAXIMUM 5.75 PERCENT SALES CHARGE APPLICABLE TO CLASS A SHARE
INVESTMENTS AND INCLUDE THE REINVESTMENT OF ALL DISTRIBUTIONS, ARE: 1 YEAR:
- -1.51 PERCENT, 5 YEARS: 1.77 PERCENT, AND 10 YEARS: 9.38 PERCENT. Class A shares
purchased with a front-end sales charge have no contingent deferred sales charge
(CDSC). However, certain purchases of Class A shares made without a front-end
sales charge may be subject to a CDSC. Please see section "Your
Investment-Purchases" in the prospectus for more information on redemptions that
may be subject to a CDSC.
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: The largest detractor to fund performance relative to its benchmark for the
fiscal year ended November 30, 2005, was stock selection in the producer
durables sector, which includes capital goods and industrials. Deere & Company,
a manufacturer of agricultural forestry and construction equipment, as well as a
supplier of equipment used in lawn, grounds and turf care, underperformed. The
company reported disappointing third quarter earnings, driven by drought
conditions in Europe and Brazil. In addition, Xerox Corp., a technology and
business services company, was hurt by lower than expected equipment sales
throughout first quarter 2005.
2
<Page>
- --------------------------------------------------------------------------------
Stock selection in the utilities sector also took away from fund
performance relative to its benchmark. A regional Bell holding, Verizon
Communications, Inc., underperformed during the fiscal year ended November 30,
2005. In addition, Comcast Corp., a provider of cable, entertainment, and
communications products and services, disappointed for the fiscal year ended
November 30, 2005.
The greatest contributor to fund performance relative to its benchmark for
the fiscal year ended November 30, 2005, was stock selection in the technology
sector, including Motorola, Inc., a communications technology and electronics
company, and Hewlett-Packard, Co., a provider of personal computers, printers,
and related products. Also contributing to performance was Corning Inc., a
diversified technology company with expertise in specialty glass, ceramic, and
other materials, reported good returns, driven in part by the company's
increased participation into the LCD television market.
Selection of stocks in the auto and transportation sector also helped fund
performance relative to its benchmark. Two railroad holdings, Union Pacific
Corp. and Canadian National Railway Co., outperformed, as volume and pricing in
the railroad industry remained strong.
THE FUND'S PORTFOLIO IS ACTIVELY MANAGED AND, THEREFORE, ITS HOLDINGS AND
THE WEIGHTINGS OF A PARTICULAR ISSUER OR PARTICULAR SECTOR AS A PERCENTAGE OF
PORTFOLIO ASSETS ARE SUBJECT TO CHANGE. SECTORS MAY INCLUDE MANY INDUSTRIES.
LORD ABBETT SMALL-CAP VALUE FUND
Q: HOW DID THE FUND PERFORM OVER THE FISCAL YEAR ENDED NOVEMBER 30, 2005?
A: The fund returned 16.8 percent, reflecting performance at the net asset value
(NAV) of Class A shares with all distributions reinvested, compared to its
benchmark, the Russell 2000(R) Value Index,(3) which returned 8.0 percent over
the same period. STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS, WHICH REFLECT
PERFORMANCE AT THE MAXIMUM 5.75 PERCENT SALES CHARGE APPLICABLE TO CLASS A SHARE
INVESTMENTS AND INCLUDE THE REINVESTMENT OF ALL DISTRIBUTIONS, ARE: 1 YEAR:
10.07 PERCENT, 5 YEARS: 15.50 PERCENT, AND SINCE INCEPTION (DECEMBER 13, 1995):
15.97 PERCENT. Class A shares purchased with a front-end sales charge have no
contingent deferred sales charge (CDSC). However, certain purchases of Class A
shares made without a front-end sales charge may be subject to a CDSC. Please
see section "Your Investment-Purchases" in the prospectus for more information
on redemptions that may be subject to a CDSC.
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
3
<Page>
- --------------------------------------------------------------------------------
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: The greatest contributors to fund performance relative to its benchmark for
the fiscal year ended November 30, 2005, were stock selection and an overweight
position in the materials and processing sector. Quanex Corp., a manufacturer of
value-added engineered materials and components for the vehicular products and
building products markets, outperformed due to solid management of its two
businesses, healthy homebuilding and remodeling demand, and successful
acquisitions. Shaw Group, Inc., a global provider of engineering and
construction services, procurement, and facilities management services for
government and private sector clients, reported strong performance, driven by
the company's breadth of capability, the addition of new projects, and continued
opportunities in the energy industry. Shaw's returns also were helped because of
its work with environmental cleanup, as well as levee and dam repairs following
the recent hurricanes.
Stock selection in the other energy sector also helped fund performance
relative to its benchmark for the fiscal year ended November 30, 2005.
Outperformance was primarily driven by solid returns from Grant Prideco, Inc.,
an oil services company, and Range Resources Corp., an independent oil and gas
company operating in the Southwestern, Appalachian, and Gulf Coast regions of
the United States. Increases in oil and gas drilling and production helped both
of these holdings.
The largest detractor to fund performance relative to its benchmark, was
its underweight position in the utilities sector. While this sector produced
strong returns for the fiscal year ended November 30, 2005, the fact that
utility holdings were underrepresented worked against fund performance relative
to its benchmark. Few utility stocks met the fund's valuation criteria during
the fiscal year ended November 30, 2005.
Stock selection within the consumer staples sector also hurt fund
performance relative to its benchmark. Consumer staples companies are generally
suppliers of food and personal care products. American Italian Pasta Co., the
biggest maker of dry pasta in North America, reported poor performance. The
company was hurt by the low-carbohydrate diet trend and by accounting
inconsistencies. The fund sold the holding before the end of the fiscal year
ended November 30, 2005. Another consumer staples holding affected by the trend
toward low-carbohydrate diets was John B. Sanfilippo & Son, Inc., a processor,
4
<Page>
- --------------------------------------------------------------------------------
packager, marketer, and distributor of nuts and extruded snacks. High nut prices
and management problems took a toll on performance.
THE FUND'S PORTFOLIO IS ACTIVELY MANAGED AND, THEREFORE, ITS HOLDINGS AND
THE WEIGHTINGS OF A PARTICULAR ISSUER OR PARTICULAR SECTOR AS A PERCENTAGE OF
PORTFOLIO ASSETS ARE SUBJECT TO CHANGE. SECTORS MAY INCLUDE MANY INDUSTRIES.
A PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT A FUND, INCLUDING ITS
INVESTMENT OBJECTIVE, RISKS, CHARGES, AND ONGOING EXPENSES, WHICH AN INVESTOR
SHOULD CAREFULLY CONSIDER BEFORE INVESTING. TO OBTAIN A PROSPECTUS ON ANY LORD
ABBETT MUTUAL FUND, PLEASE CONTACT YOUR INVESTMENT PROFESSIONAL OR LORD ABBETT
DISTRIBUTOR LLC AT 800-874-3733 OR VISIT OUR WEBSITE AT www.LordAbbett.com. READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
(1) The S&P 500(R) Index is widely regarded as the standard for measuring
large-cap U.S. stock market performance; this popular index includes a
representative sample of leading companies in leading industries.
(2) The Russell 1000(R) Index measures the performance of the 1,000 largest
companies in the Russell 3000(R) Index, which represents approximately 92
percent of the total market capitalization of the Russell 3000 Index.
(3) The Russell 2000(R) Value Index measures the performance of those Russell
2000 companies with lower price-to-book ratios and lower forecasted growth
values.
Indexes 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 each fund's management and the portfolio holdings described in this
report are as of November 30, 2005; these views and portfolio holdings may have
changed subsequent to this date, and they do not guarantee the future
performance of the markets or each 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 funds, please see the funds' prospectus.
PERFORMANCE: BECAUSE OF ONGOING MARKET VOLATILITY, A FUND'S 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. Each fund offers additional classes of
shares with distinct pricing options. For a full description of the differences
in pricing alternatives, please see the 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.
5
<Page>
LARGE-CAP CORE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares with the same
investment in the S&P 500(R) Index, the S&P 500/Barra Value Index and the
Russell 1000(R) Index, assuming reinvestment of all dividends and distributions.
The Fund believes that the Russell 1000(R) Index is a somewhat more appropriate
measure of investing in large-cap core securities and therefore will remove in
the next Annual Report the S&P 500/Barra Value Index as an additional broad
based index. 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) S&P 500(R) RUSSELL 1000(R) S&P 500/BARRA
AT NET ASSET VALUE AT MAXIMUM OFFERING PRICE(1) INDEX(2) INDEX(2) VALUE INDEX(2)
12/1/1995 $ 10,000 $ 9,425 $ 10,000 $ 10,000 $ 10,000
11/30/1996 $ 12,625 $ 11,899 $ 12,785 $ 12,636 $ 12,746
11/30/1997 $ 15,134 $ 14,263 $ 16,429 $ 16,187 $ 15,943
11/30/1998 $ 17,169 $ 16,182 $ 20,319 $ 19,722 $ 18,054
11/30/1999 $ 20,086 $ 18,931 $ 24,564 $ 23,923 $ 20,303
11/30/2000 $ 22,448 $ 21,157 $ 23,525 $ 23,109 $ 21,253
11/30/2001 $ 21,492 $ 20,256 $ 20,652 $ 20,260 $ 19,434
11/30/2002 $ 18,586 $ 17,517 $ 17,243 $ 17,004 $ 16,470
11/30/2003 $ 21,740 $ 20,490 $ 19,843 $ 19,885 $ 19,382
11/30/2004 $ 24,888 $ 23,457 $ 22,393 $ 22,402 $ 23,061
11/30/2005 $ 26,006 $ 24,510 $ 24,283 $ 24,636 $ 25,129
</Table>
AVERAGE ANNUAL TOTAL RETURN AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED NOVEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
CLASS A(3) -1.51% 1.77% 9.38% --
CLASS B(4) -0.22% 2.15% -- 9.31%
CLASS C(5) 3.81% 2.38% -- 7.92%
CLASS P(6) 4.38% 2.98% -- 5.09%
CLASS Y(7) 4.83% 3.31% -- 4.19%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 5.75%
(2) Performance for each unmanaged index does not reflect transaction costs,
management fees or sales charges. The performance of each index is not
necessarily representative of the Fund's performance.
(3) Total return, which is the percentage change in net asset value, after
deduction of the maximum initial sales charge of 5.75% applicable to Class A
shares, with all dividends and distributions reinvested for the periods shown
ended November 30, 2005, is calculated using the SEC-required uniform method to
compute such return.
(4) Class B shares commenced operations on August 1, 1996. Performance reflects
the deduction of a CDSC of 4% for 1 year, 1% for 5 years and 0% for the life of
the class.
(5) Class C shares commenced operations on April 1, 1997. The 1% CDSC for Class
C shares normally applies before the first anniversary of the purchase date.
Performance is at net asset value.
(6) Class P shares commenced operations on April 5, 1999. Performance is at net
asset value.
(7) Class Y shares commenced operations on May 3, 1999. Performance is at net
asset value.
6
<Page>
SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares with the same
investment in both the Russell 2000(R) Index and Russell 2000(R) Value Index,
assuming reinvestment of all dividends and 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) RUSSELL 2000(R) RUSSELL 2000(R)
AT NET ASSET VALUE AT MAXIMUM OFFERING PRICE(1) INDEX(2) VALUE INDEX(2)
12/13/1995 $ 10,000 $ 9,425 $ 10,000 $ 10,000
11/30/1996 $ 12,824 $ 12,087 $ 11,494 $ 11,912
11/30/1997 $ 17,683 $ 16,666 $ 14,185 $ 15,676
11/30/1998 $ 15,612 $ 14,715 $ 13,246 $ 14,701
11/30/1999 $ 16,992 $ 16,015 $ 15,321 $ 14,491
11/30/2000 $ 21,309 $ 20,083 $ 15,232 $ 16,566
11/30/2001 $ 24,530 $ 23,120 $ 15,967 $ 19,712
11/30/2002 $ 23,863 $ 22,491 $ 14,274 $ 19,356
11/30/2003 $ 32,375 $ 30,514 $ 19,454 $ 26,113
11/30/2004 $ 39,796 $ 37,507 $ 22,812 $ 32,304
11/30/2005 $ 46,473 $ 43,801 $ 24,669 $ 34,901
</Table>
AVERAGE ANNUAL TOTAL RETURN AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED NOVEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS LIFE OF CLASS
CLASS A(3) 10.07% 15.50% 15.97%
CLASS B(4) 11.99% 16.02% 14.92%
CLASS C(5) 16.01% 16.16% 14.40%
CLASS P(6) 16.68% 16.79% 15.97%
CLASS Y(7) 17.14% 17.30% 13.30%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 5.75%.
(2) Performance for each unmanaged index does not reflect transaction costs,
management fees or sales charges. The performance of each index is not
necessarily representative of the Fund's performance. Performance for each index
began on December 13, 1995.
(3) Class A shares commenced operations on December 13, 1995. Total return,
which is the percentage change in net asset value, after deduction of the
maximum initial sales charge of 5.75% applicable to Class A shares, with all
dividends and distributions reinvested for the periods shown ended November 30,
2005, is calculated using the SEC-required uniform method to compute such
return.
(4) Class B shares commenced operations on November 15, 1996. Performance
reflects the deduction of a CDSC of 4% for 1 year, 1% for 5 years and 0% for the
life of the class.
(5) Class C shares commenced operations on April 1, 1997. The 1% CDSC for Class
C shares normally applies before the first anniversary of the purchase date.
Performance is at net asset value.
(6) Class P shares commenced operations on June 23, 1999. Performance is at net
asset value.
(7) Class Y shares commenced operations on December 30, 1997. Performance is at
net asset value.
7
<Page>
- --------------------------------------------------------------------------------
EXPENSE EXAMPLES
As a shareholder of a 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 each 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 (June 1, 2005 through November 30,
2005).
ACTUAL EXPENSES
For each class of each Fund, the first line of the applicable table on the
following pages 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 6/1/05 - 11/30/05" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
For each class of each Fund, the second line of the applicable table on the
following pages 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 each 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.
8
<Page>
LARGE-CAP CORE FUND
- --------------------------------------------------------------------------------
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 PERIOD+
----- ----- -------
6/1/05 -
6/1/05 11/30/05 11/30/05
------ -------- --------
CLASS A
Actual $ 1,000.00 $ 1,045.20 $ 6.66
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.55 $ 6.58
CLASS B
Actual $ 1,000.00 $ 1,041.60 $ 9.98
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,015.29 $ 9.85
CLASS C
Actual $ 1,000.00 $ 1,041.80 $ 9.98
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,015.29 $ 9.85
CLASS P
Actual $ 1,000.00 $ 1,044.40 $ 7.17
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.05 $ 7.08
CLASS Y
Actual $ 1,000.00 $ 1,047.00 $ 4.87
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.31 $ 4.81
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (1.30% for Class A, 1.95% for Classes B and C, 1.40%
for Class P and 0.95% for Class Y) multiplied by the average account value
over the period, multiplied by 183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY SECTOR
NOVEMBER 30, 2005
<Table>
<Caption>
SECTOR* %**
Auto & Transportation 1.19%
Consumer Discretionary 4.54%
Consumer Staples 15.81%
Financial Services 11.86%
Healthcare 23.94%
Integrated Oils 3.68%
Materials & Processing 5.62%
Other 3.84%
Other Energy 2.50%
Producer Durables 3.68%
Short-Term Investment 4.44%
Technology 12.22%
Utilities 6.68%
Total 100.00%
</Table>
* A sector may comprise several industries.
** Represents percent of total investments.
9
<Page>
SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
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 PERIOD+
----- ----- -------
6/1/05 -
6/1/05 11/30/05 11/30/05
------ -------- --------
CLASS A
Actual $ 1,000.00 $ 1,169.50 $ 7.12
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.50 $ 6.63
CLASS B
Actual $ 1,000.00 $ 1,165.30 $ 10.64
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,015.24 $ 9.90
CLASS C
Actual $ 1,000.00 $ 1,165.50 $ 10.64
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,015.24 $ 9.90
CLASS P
Actual $ 1,000.00 $ 1,168.90 $ 7.67
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.00 $ 7.13
Class Y
Actual $ 1,000.00 $ 1,171.40 $ 5.28
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.21 $ 4.91
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (1.31% for Class A, 1.96% for Classes B and C, 1.41%
for Class P and 0.97% for Class Y) multiplied by the average account value
over the period, multiplied by 183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY SECTOR
NOVEMBER 30, 2005
<Table>
<Caption>
SECTOR* %**
Auto & Transportation 14.25%
Consumer Discretionary 6.20%
Consumer Staples 1.11%
Financial Services 13.39%
Healthcare 3.28%
Integrated Oils 1.00%
Materials & Processing 25.25%
Other 4.94%
Other Energy 2.47%
Producer Durables 11.55%
Short-Term Investment 7.16%
Technology 5.78%
Utilities 3.62%
Total 100.00%
</Table>
* A sector may comprise several industries.
** Represents percent of total investments.
10
<Page>
SCHEDULE OF INVESTMENTS
LARGE-CAP CORE FUND NOVEMBER 30, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------------------
COMMON STOCKS 95.25%
AEROSPACE 0.46%
Lockheed Martin Corp. 62,700 $ 3,800
------------
AGRICULTURE, FISHING & RANCHING 1.74%
Monsanto Co. 194,609 14,259
------------
BANKS: NEW YORK CITY 1.16%
Bank of New York Co., Inc. (The) 174,600 5,657
JPMorgan Chase & Co. 100,228 3,834
------------
TOTAL 9,491
------------
BANKS: OUTSIDE NEW YORK CITY 2.31%
Bank of America Corp. 179,348 8,230
SunTrust Banks, Inc. 27,700 2,015
Wachovia Corp. 99,000 5,286
Wells Fargo & Co. 53,900 3,388
------------
TOTAL 18,919
------------
BEVERAGE: SOFT DRINKS 2.65%
Coca-Cola Co. (The) 125,800 5,371
PepsiCo, Inc. 277,000 16,398
------------
TOTAL 21,769
------------
BIOTECHNOLOGY RESEARCH & PRODUCTION 3.50%
Baxter Int'l., Inc. 319,887 12,440
Genzyme Corp.* 133,700 9,939
ImClone Systems, Inc.* 194,401 6,301
------------
TOTAL 28,680
------------
CHEMICALS 0.88%
Praxair, Inc. 138,300 7,192
------------
COMMUNICATIONS TECHNOLOGY 3.62%
Corning Inc.* 391,400 7,926
Motorola, Inc. 616,800 14,859
QUALCOMM Inc. 151,900 6,907
------------
TOTAL 29,692
------------
COMPUTER SERVICES, SOFTWARE & SYSTEMS 2.75%
Microsoft Corp. 715,300 $ 19,821
Oracle Corp.* 217,900 2,739
------------
TOTAL 22,560
------------
COMPUTER TECHNOLOGY 2.25%
Dell, Inc.* 134,200 4,048
EMC Corp.* 145,000 2,020
Hewlett-Packard Co. 280,400 8,319
Int'l. Business Machines Corp. 46,300 4,116
------------
TOTAL 18,503
------------
CONSUMER PRODUCTS 0.57%
Kimberly-Clark Corp. 79,300 4,677
------------
DIVERSIFIED FINANCIAL SERVICES 1.78%
American Express Co. 45,200 2,324
Citigroup, Inc. 167,700 8,142
Marsh & McLennan Cos., Inc. 133,600 4,127
------------
TOTAL 14,593
------------
DRUG & GROCERY STORE CHAINS 3.29%
CVS Corp. 443,600 11,986
Kroger Co. (The)* 599,200 11,660
Walgreen Co. 73,200 3,344
------------
TOTAL 26,990
------------
DRUGS & PHARMACEUTICALS 12.23%
Abbott Laboratories 291,900 11,008
Bristol-Myers Squibb Co. 318,700 6,881
Gilead Sciences, Inc.* 161,300 8,176
GlaxoSmithKline plc ADR 225,400 11,173
Johnson & Johnson 225,300 13,912
MedImmune, Inc.* 116,600 4,187
Novartis AG ADR 303,626 15,910
Pfizer, Inc. 619,700 13,138
Wyeth 383,200 15,926
------------
TOTAL 100,311
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
LARGE-CAP CORE FUND NOVEMBER 30, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT & COMPONENTS 1.16%
Emerson Electric Co. 125,767 $ 9,509
------------
ELECTRONICS: MEDICAL SYSTEMS 1.71%
Medtronic, Inc. 252,400 14,026
------------
ELECTRONICS: SEMI-CONDUCTORS/COMPONENTS 1.49%
Intel Corp. 264,500 7,057
Texas Instruments Inc. 160,400 5,210
------------
TOTAL 12,267
------------
ELECTRONICS: TECHNOLOGY 2.06%
General Dynamics Corp. 90,177 10,307
Raytheon Co. 172,800 6,639
------------
TOTAL 16,946
------------
ENGINEERING & CONTRACTING SERVICES 0.55%
Fluor Corp. 61,000 4,520
------------
ENTERTAINMENT 0.87%
Walt Disney Co. (The) 285,037 7,106
------------
FERTILIZERS 0.31%
Potash Corp. of Saskatchewan Inc.(a) 34,900 2,553
------------
FINANCIAL DATA PROCESSING SERVICES & SYSTEMS 1.55%
Automatic Data Processing, Inc. 269,900 12,685
------------
FOODS 2.99%
Campbell Soup Co. 339,495 10,256
H.J. Heinz Co. 103,200 3,583
Kraft Foods, Inc. Class A 369,800 10,702
------------
TOTAL 24,541
------------
GOLD 2.12%
Barrick Gold Corp.*(a) 197,100 5,245
Newmont Mining Corp. 263,500 12,153
------------
TOTAL 17,398
------------
HEALTH & PERSONAL CARE 2.60%
Medco Health Solutions, Inc.* 190,600 $ 10,226
WellPoint, Inc.* 144,900 11,132
------------
TOTAL 21,358
------------
HEALTHCARE MANAGEMENT SERVICES 1.56%
PacifiCare Health Systems, Inc.* 79,500 6,840
UnitedHealth Group, Inc. 99,200 5,938
------------
TOTAL 12,778
------------
IDENTIFICATION CONTROL & FILTER DEVICES 0.99%
Parker Hannifin Corp. 118,600 8,113
------------
INSURANCE: MULTI-LINE 5.03%
Aflac, Inc. 183,200 8,794
American Int'l Group, Inc. 240,092 16,120
CIGNA Corp. 53,180 5,984
Hartford Financial Services Group, Inc. (The) 118,900 10,388
------------
TOTAL 41,286
------------
MACHINERY: AGRICULTURAL 0.54%
Deere & Co. 63,900 4,431
------------
MACHINERY: CONSTRUCTION & HANDLING 0.52%
Caterpillar Inc. 74,000 4,276
------------
MACHINERY: OIL WELL EQUIPMENT & SERVICES 2.49%
Baker Hughes, Inc. 143,543 8,232
Schlumberger Ltd.(a) 127,500 12,206
------------
TOTAL 20,438
------------
MEDICAL & DENTAL INSTRUMENTS & SUPPLIES 2.27%
St. Jude Medical, Inc.* 229,300 10,954
Zimmer Holdings, Inc.* 122,700 7,689
------------
TOTAL 18,643
------------
MISCELLANEOUS CONSUMER STAPLES 1.45%
Diageo plc ADR 204,211 11,875
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
LARGE-CAP CORE FUND NOVEMBER 30, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------------------
MULTI-SECTOR COMPANIES 3.83%
General Electric Co. 765,300 $ 27,336
Honeywell Int'l., Inc. 111,900 4,089
------------
TOTAL 31,425
------------
OIL: INTEGRATED DOMESTIC 0.48%
ConocoPhillips 64,500 3,903
------------
OIL: INTEGRATED INTERNATIONAL 3.19%
Chevron Corp. 151,100 8,659
Exxon Mobil Corp. 301,615 17,503
------------
TOTAL 26,162
------------
RAILROADS 0.68%
Union Pacific Corp. 73,300 5,610
------------
RETAIL 1.93%
Wal-Mart Stores, Inc. 325,400 15,801
------------
SHOES 1.16%
NIKE, Inc. Class B 111,600 9,520
------------
SOAPS & HOUSEHOLD CHEMICALS 5.38%
Clorox Co. (The) 91,000 4,940
Colgate-Palmolive Co. 231,900 12,643
Procter & Gamble Co. (The) 464,732 26,578
------------
TOTAL 44,161
------------
TRANSPORTATION MISCELLANEOUS 0.50%
United Parcel Service, Inc. Class B 52,700 4,105
------------
UTILITIES: CABLE TV & RADIO 0.98%
Comcast Corp. Class A* 310,207 8,078
------------
UTILITIES: ELECTRICAL 2.82%
PG&E Corp. 241,117 8,868
Progress Energy, Inc. 137,200 6,144
Southern Co. 234,400 8,136
------------
TOTAL 23,148
------------
UTILITIES: TELECOMMUNICATIONS 2.85%
AT&T Inc. 340,900 $ 8,492
BellSouth Corp. 184,400 5,027
Sprint Nextel Corp. 165,790 4,151
Verizon Communications Inc. 178,400 5,705
------------
TOTAL 23,375
------------
TOTAL COMMON STOCKS
(cost $711,460,872) 781,473
============
<Caption>
PRINCIPAL
AMOUNT
(000)
------------
SHORT-TERM INVESTMENT 4.42%
REPURCHASE AGREEMENT 4.42%
Repurchase Agreement dated 11/30/2005, 3.40% due 12/1/2005
with State Street Bank & Trust Co. collateralized by
$36,940,000 of Federal National Mortgage Assoc. at 4.25% due
9/15/2007; value: $37,032,350; proceeds: $36,308,172 (cost
$36,304,743) $ 36,305 36,305
============
TOTAL INVESTMENTS IN SECURITIES 99.67%
(cost $747,765,615) 817,778
============
OTHER ASSETS IN EXCESS OF LIABILITIES 0.33% 2,671
------------
NET ASSETS 100.00% $ 820,449
============
</Table>
* Non-income producing security.
(a) Foreign security traded in U.S. dollars.
ADR American Depositary Receipt.
SEE NOTES TO FINANCIAL STATEMENTS.
13
<Page>
SCHEDULE OF INVESTMENTS
SMALL-CAP VALUE FUND NOVEMBER 30, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------------------
COMMON STOCKS 93.53%
AEROSPACE 2.03%
Curtiss-Wright Corp. 423,000 $ 24,788
Moog, Inc. Class A* 610,037 17,868
Teledyne Technologies Inc.* 481,480 15,763
------------
TOTAL 58,419
------------
AIR TRANSPORTATION 2.17%
AAR CORP.* 1,298,200 27,184
Aviall, Inc.* 711,000 21,828
Frontier Airlines, Inc.* 1,669,100 13,620
------------
TOTAL 62,632
------------
AUTO COMPONENTS 1.05%
Modine Manufacturing Co. 907,300 30,204
------------
AUTO PARTS: AFTER MARKET 2.02%
Aftermarket Technology Corp.* 757,800 15,535
Commercial Vehicle Group, Inc.*(b) 1,235,100 24,443
Keystone Automotive Industries, Inc.* 651,000 18,228
------------
TOTAL 58,206
------------
AUTO PARTS: ORIGINAL EQUIPMENT 1.55%
American Axle & Manufacturing Holding, Inc. 565,000 12,012
Tenneco Inc.* 1,880,300 32,661
------------
TOTAL 44,673
------------
BANKS: NEW YORK CITY 0.96%
Signature Bank* 960,600 27,656
------------
BANKS: OUTSIDE NEW YORK CITY 3.61%
Alabama National BanCorp 148,205 9,826
Cullen/Frost Bankers, Inc. 620,000 $ 33,393
Hancock Holding Co. 165,200 6,357
Provident Bankshares Corp. 521,600 18,590
Seacoast Banking Corp. of Florida 249,700 6,063
Texas Regional Bancshares, Inc. 729,400 21,262
United Community Banks, Inc. 294,700 8,413
------------
TOTAL 103,904
------------
BIOTECHNOLOGY RESEARCH & PRODUCTION 0.39%
Kensey Nash Corp.* 495,000 11,331
------------
BUILDING: CEMENT 0.23%
U.S. Concrete, Inc.* 804,800 6,615
------------
BUILDING: HEATING & PLUMBING 0.56%
Interline Brands, Inc.* 750,900 16,039
------------
BUILDING: MATERIALS 6.42%
Hughes Supply, Inc. 1,398,600 54,182
LSI Industries, Inc.(b) 1,220,080 21,961
NCI Building Systems, Inc.*(b) 1,174,440 51,253
Simpson Manufacturing Co., Inc. 1,404,800 57,569
------------
TOTAL 184,965
------------
COMMUNICATIONS TECHNOLOGY 2.44%
Anixter Int'l. Inc. 1,125,000 41,220
Syniverse Holdings, Inc.* 1,505,500 29,116
------------
TOTAL 70,336
------------
COMPUTER SERVICES, SOFTWARE & SYSTEMS 0.74%
Dendrite Int'l., Inc.* 1,126,000 21,214
------------
CONSTRUCTION 0.03%
Granite Construction Inc. 20,400 757
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
SMALL-CAP VALUE FUND NOVEMBER 30, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------------------
COPPER 0.76%
Mueller Industries, Inc. 805,540 $ 21,806
------------
DIVERSIFIED MANUFACTURING 1.41%
Hexcel Corp.* 2,440,000 40,577
------------
DRUG & GROCERY STORE CHAINS 0.99%
Casey's General Stores, Inc. 1,243,100 28,616
------------
ELECTRICAL EQUIPMENT & COMPONENTS 2.59%
AMETEK, Inc. 442,500 18,855
Baldor Electric Co. 1,300,000 33,397
Genlyte Group Inc. (The)* 421,216 22,198
------------
TOTAL 74,450
------------
ELECTRONICS 1.71%
II-VI Inc.*(b) 1,575,900 30,147
Vishay Intertechnology, Inc.* 1,500,000 19,245
------------
TOTAL 49,392
------------
ELECTRONICS: MEDICAL SYSTEMS 0.35%
Datascope Corp. 149,900 5,261
Possis Medical, Inc.* 484,300 4,843
------------
TOTAL 10,104
------------
ELECTRONICS: SEMI-CONDUCTORS/COMPONENTS 0.24%
SBS Technologies, Inc.* 669,900 6,900
------------
ELECTRONICS: TECHNOLOGY 0.69%
ScanSource, Inc.* 335,360 19,883
------------
ENGINEERING & CONTRACTING SERVICES 1.71%
Quanta Services, Inc.* 625,100 8,845
URS Corp.* 960,000 40,435
------------
TOTAL 49,280
------------
FINANCIAL MISCELLANEOUS 1.05%
Financial Federal Corp. 750,000 30,315
------------
FOODS 0.13%
John B. Sanfilippo & Son, Inc.* 269,730 $ 3,698
------------
FOREST PRODUCTS 1.97%
Universal Forest Products, Inc.(b) 985,074 56,602
------------
HEALTHCARE FACILITIES 0.27%
Capital Senior Living Corp.* 771,900 7,796
------------
HOUSEHOLD FURNISHINGS 1.81%
Ethan Allen Interiors Inc. 1,400,000 52,220
------------
IDENTIFICATION CONTROL & FILTER DEVICES 0.82%
IDEX Corp. 535,050 23,617
------------
INSURANCE: MULTI-LINE 1.07%
Hub Int'l. Ltd.(a) 1,274,100 30,706
------------
INSURANCE: PROPERTY-CASUALTY 2.96%
Argonaut Group, Inc.* 990,830 31,508
Navigators Group, Inc. (The)* 718,700 29,043
Odyssey Re Holdings Corp. 410,000 10,513
Selective Insurance Group, Inc. 251,800 14,093
------------
TOTAL 85,157
------------
LEISURE TIME 0.17%
Action Performance Cos., Inc. 388,400 4,913
------------
MACHINERY: INDUSTRIAL/SPECIALTY 1.84%
Middleby Corp. (The)* 251,500 19,717
Woodward Governor Co. 407,697 33,297
------------
TOTAL 53,014
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
SMALL-CAP VALUE FUND NOVEMBER 30, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------------------
MACHINERY: OIL WELL EQUIPMENT & SERVICES 1.91%
Grant Prideco, Inc.* 235,000 $ 9,022
Helmerich & Payne, Inc. 196,000 11,372
Key Energy Services, Inc.* 2,452,500 34,580
------------
TOTAL 54,974
------------
MACHINERY: SPECIALTY 0.60%
JLG Industries, Inc. 382,300 17,395
------------
MEDICAL & DENTAL INSTRUMENTS & SUPPLIES 2.29%
Molecular Devices Corp.* 690,400 18,537
PSS World Medical, Inc.* 803,400 13,232
Symmetry Medical Inc.* 404,000 7,422
West Pharmaceutical Services, Inc. 1,074,100 26,820
------------
TOTAL 66,011
------------
METAL FABRICATING 5.59%
Quanex Corp.(b) 1,604,900 99,263
Shaw Group, Inc. (The)* 1,150,000 33,223
Valmont Industries, Inc. 849,800 28,358
------------
TOTAL 160,844
------------
METALS & MINERALS MISCELLANEOUS 0.20%
Brush Engineered Materials Inc.* 354,400 5,631
------------
MISCELLANEOUS MATERIALS & PROCESSING 1.62%
Metal Management, Inc. 635,000 15,983
Rogers Corp.* 800,480 30,658
------------
TOTAL 46,641
------------
MISCELLANEOUS PRODUCER DURABLES 1.00%
BE Aerospace, Inc.* 1,474,700 25,837
Blount Int'l., Inc.* 193,500 3,009
------------
TOTAL 28,846
------------
MULTI-SECTOR COMPANIES 4.98%
Carlisle Cos., Inc. 731,500 50,181
Trinity Industries, Inc. 2,238,190 93,198
------------
TOTAL 143,379
------------
OIL: CRUDE PRODUCERS 0.58%
Grey Wolf, Inc.* 1,068,800 $ 8,027
Range Resources Corp. 230,800 8,595
------------
TOTAL 16,622
------------
OIL: INTEGRATED DOMESTIC 1.00%
KCS Energy Services, Inc.* 1,103,400 28,854
------------
POLLUTION CONTROL & ENVIRONMENTAL SERVICES 0.18%
TRC Cos., Inc.* 450,200 5,209
------------
PRODUCTION TECHNOLOGY EQUIPMENT 1.53%
ATMI, Inc.* 722,090 20,659
Electro Scientific Industries, Inc.* 935,780 23,544
------------
TOTAL 44,203
------------
PUBLISHING: MISCELLANEOUS 0.12%
Courier Corp. 97,321 3,425
------------
RAILROAD EQUIPMENT 0.71%
Wabtec Corp. 794,400 20,519
------------
RAILROADS 1.15%
Genesee & Wyoming Inc. Class A* 982,650 33,037
------------
REAL ESTATE INVESTMENT TRUSTS 2.24%
DiamondRock Hospitality Co. 2,291,400 27,497
Nationwide Health Properties, Inc. 1,625,000 36,969
------------
TOTAL 64,466
------------
RESTAURANTS 0.57%
McCormick & Schmick's Seafood Restaurants, Inc.* 620,000 14,719
Ruby Tuesday, Inc. 70,200 1,707
------------
TOTAL 16,426
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
SMALL-CAP VALUE FUND NOVEMBER 30, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------------------------------------
RETAIL 1.63%
AnnTaylor Stores Corp.* 515,400 $ 15,632
Eddie Bauer Holdings Inc.* 830,054 18,510
PETCO Animal Supplies, Inc.* 87,000 1,847
School Specialty, Inc.* 300,010 11,053
------------
TOTAL 47,042
------------
SAVINGS & LOAN 1.15%
KNBT Bancorp, Inc. 580,530 9,515
Webster Financial Corp. 495,500 23,715
------------
TOTAL 33,230
------------
SECURITIES BROKERAGE & SERVICES 0.45%
Raymond James Financial, Inc. 357,400 12,952
------------
SERVICES: COMMERCIAL 0.26%
Hudson Highland Group, Inc.* 300,000 7,575
------------
SHIPPING 1.71%
Alexander & Baldwin, Inc. 182,500 9,129
GulfMark Offshore, Inc.* 298,000 9,947
Kirby Corp.* 565,000 30,058
------------
TOTAL 49,134
------------
SHOES 0.13%
Kenneth Cole Productions, Inc. 132,200 3,712
------------
STEEL 4.96%
Carpenter Technology Corp. 470,000 30,808
Gibraltar Industries, Inc. 1,206,700 26,535
Steel Dynamics, Inc. 1,525,000 52,796
Steel Technologies Inc.(b) 1,234,000 32,689
------------
TOTAL 142,828
------------
TELECOMMUNICATIONS EQUIPMENT 1.04%
ARRIS Group, Inc.* 1,572,300 $ 15,283
C-COR, Inc.*(b) 2,600,000 14,742
------------
TOTAL 30,025
------------
TEXTILES APPAREL MANUFACTURERS 1.55%
Warnaco Group, Inc.* 1,812,360 44,530
------------
TRUCKERS 3.99%
Heartland Express, Inc. 2,140,000 45,603
Werner Enterprises, Inc. 3,389,300 69,379
------------
TOTAL 114,982
------------
UTILITIES: ELECTRICAL 2.41%
IDACORP, Inc. 1,000,000 28,560
Pike Electric Corp.* 643,900 11,648
PNM Resources, Inc. 1,119,100 29,063
------------
TOTAL 69,271
------------
UTILITIES: GAS DISTRIBUTORS 1.24%
Nicor Inc. 530,000 21,253
Piedmont Natural Gas Co., Inc. 618,500 14,529
------------
TOTAL 35,782
------------
TOTAL COMMON STOCKS
(cost $2,228,887,235) 2,693,542
============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
SMALL-CAP VALUE FUND NOVEMBER 30, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
INVESTMENTS (000) (000)
- ------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT 7.21%
REPURCHASE AGREEMENTS 7.21%
Repurchase Agreements dated 11/30/2005, 3.40% due 12/1/2005
with State Street Bank & Trust Co. collateralized by
$76,465,000 of Federal Home Loan Mortgage Corp. at 5.25% due
11/10/2010 and $136,685,000 of Federal National Mortgage
Assoc. at 4.25% due 8/15/2010; value: $211,783,150;
proceeds: $207,650,025 (cost $207,630,415) $ 207,631 $ 207,631
============
TOTAL INVESTMENTS IN SECURITIES 100.74%
(cost $2,436,517,650) 2,901,173
============
LIABILITIES IN EXCESS OF OTHER ASSETS (0.74%) (21,372)
------------
NET ASSETS 100.00% $ 2,879,801
============
</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 9).
SEE NOTES TO FINANCIAL STATEMENTS.
18
<Page>
STATEMENTS OF ASSETS AND LIABILITIES
NOVEMBER 30, 2005
<Table>
<Caption>
LARGE-CAP SMALL-CAP
CORE FUND VALUE FUND
ASSETS:
Investments in unaffiliated issuers, at cost $ 747,765,615 $ 2,198,264,761
Investments in affiliated issuers, at cost - 238,252,889
- -----------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated issuers, at value $ 817,777,722 $ 2,570,073,104
Investments in affiliated issuers, at value - 331,099,675
Receivables:
Interest and dividends 1,185,413 1,879,737
Investment securities sold - 6,128,634
Capital shares sold 3,120,422 6,412,709
From advisor 110,379 -
Prepaid expenses and other assets 48,806 246,935
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 822,242,742 2,915,840,794
- -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased - 30,421,408
Capital shares reacquired 768,827 2,450,909
Management fees 455,038 1,671,624
12b-1 distribution fees 269,494 695,474
Fund administration 25,992 89,043
Directors' fees 41,434 125,802
To affiliates 45,450 18,279
Accrued expenses and other liabilities 187,838 567,286
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,794,073 36,039,825
=============================================================================================================================
NET ASSETS $ 820,448,669 $ 2,879,800,969
=============================================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 716,863,930 $ 2,149,873,173
Undistributed (distributions in excess of) net investment income 2,489,676 (125,802)
Accumulated net realized gain on investments 31,082,956 265,398,469
Net unrealized appreciation on investments 70,012,107 464,655,129
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 820,448,669 $ 2,879,800,969
=============================================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 523,322,100 $ 1,714,898,446
Class B Shares $ 81,373,485 $ 113,208,148
Class C Shares $ 73,328,023 $ 91,195,086
Class P Shares $ 6,748,503 $ 328,055,462
Class Y Shares $ 135,676,558 $ 632,443,827
OUTSTANDING SHARES BY CLASS:
Class A Shares (20 million and 200 million shares of common stock authorized,
respectively, $.001 par value) 18,258,326 54,614,448
Class B Shares (30 million shares of common stock authorized per Fund, $.001 par value) 2,952,216 3,870,395
Class C Shares (20 million shares of common stock authorized per Fund, $.001 par value) 2,651,220 3,113,793
Class P Shares (20 million shares of common stock authorized per Fund, $.001 par value) 235,113 10,488,080
Class Y Shares (30 million and 200 million shares of common stock authorized,
respectively, $.001 par value) 4,720,036 19,480,859
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(NET ASSETS DIVIDED BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 28.66 $ 31.40
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 5.75%) $ 30.41 $ 33.32
Class B Shares-Net asset value $ 27.56 $ 29.25
Class C Shares-Net asset value $ 27.66 $ 29.29
Class P Shares-Net asset value $ 28.70 $ 31.28
Class Y Shares-Net asset value $ 28.74 $ 32.46
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<Page>
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 2005
<Table>
<Caption>
LARGE-CAP SMALL-CAP
CORE FUND VALUE FUND
INVESTMENT INCOME:
Dividends from unaffiliated issuers $ 10,648,562 $ 16,847,136
Dividends from affiliated issuers - 1,718,984
Interest 685,134 3,724,463
Securities lending-net - 24,103
Foreign withholding tax (50,258) (24,461)
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 11,283,438 22,290,225
- -----------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 4,315,452 16,738,185
12b-1 distribution plan-Class A 1,440,319 4,537,601
12b-1 distribution plan-Class B 805,102 1,608,060
12b-1 distribution plan-Class C 520,310 864,981
12b-1 distribution plan-Class P 16,626 1,038,967
Shareholder servicing 1,002,620 2,850,490
Professional 52,490 79,214
Reports to shareholders 62,277 332,941
Fund administration 246,597 892,703
Custody 42,692 119,182
Directors' fees 36,438 109,411
Registration 72,961 117,711
Subsidy (See Note 3) 170,287 170,400
Other 13,701 48,075
- -----------------------------------------------------------------------------------------------------------------------------
Gross expenses 8,797,872 29,507,921
Expense reductions (See Note 7) (10,715) (57,674)
Expenses assumed by advisor (See Note 3) (147,283) -
- -----------------------------------------------------------------------------------------------------------------------------
NET EXPENSES 8,639,874 29,450,247
- -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 2,643,564 (7,160,022)
- -----------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments in unaffiliated issuers 33,463,546 235,018,736
Net realized gain (loss) on investments in affiliated issuers - 37,916,606
Net change in unrealized appreciation (depreciation) on investments (5,174,263) 112,962,890
=============================================================================================================================
NET REALIZED AND UNREALIZED GAIN 28,289,283 385,898,232
=============================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 30,932,847 $ 378,738,210
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED NOVEMBER 30, 2005
<Table>
<Caption>
LARGE-CAP SMALL-CAP
INCREASE IN NET ASSETS CORE FUND VALUE FUND
OPERATIONS:
Net investment income (loss) $ 2,643,564 $ (7,160,022)
Net realized gain (loss) on investments 33,463,546 272,935,342
Net change in unrealized appreciation (depreciation) on investments (5,174,263) 112,962,890
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 30,932,847 378,738,210
=============================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (1,973,610) -
Class B (2,424) -
Class C (1,890) -
Class P (1,918) -
Class Y (122,005) -
Net realized gain
Class A (9,617,715) (86,416,845)
Class B (2,540,980) (18,208,202)
Class C (1,211,051) (8,440,410)
Class P (8,745) (12,919,161)
Class Y (383,255) (27,676,191)
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (15,863,593) (153,660,809)
=============================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 422,573,725 1,367,850,443
Reinvestment of distributions 14,513,229 127,382,745
Cost of shares reacquired (92,183,858) (508,066,959)
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS 344,903,096 987,166,229
=============================================================================================================================
NET INCREASE IN NET ASSETS 359,972,350 1,212,243,630
=============================================================================================================================
NET ASSETS:
Beginning of year 460,476,319 1,667,557,339
- -----------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 820,448,669 $ 2,879,800,969
=============================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME $ 2,489,676 $ (125,802)
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED NOVEMBER 30, 2004
<Table>
<Caption>
LARGE-CAP SMALL-CAP
INCREASE IN NET ASSETS CORE FUND VALUE FUND
OPERATIONS:
Net investment income (loss) $ 2,078,705 $ (1,140,225)
Net realized gain on investments 22,609,757 154,076,122
Net change in unrealized appreciation (depreciation) on investments 31,231,873 116,357,254
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 55,920,335 269,293,151
=============================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (599,177) -
Class B - -
Class C - -
Class P (597) -
Class Y (379) -
Net realized gain
Class A - (33,408,285)
Class B - (12,214,825)
Class C - (5,477,260)
Class P - (3,229,201)
Class Y - (9,460,860)
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (600,153) (63,790,431)
=============================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 95,114,915 703,623,177
Reinvestment of distributions 569,491 48,589,693
Cost of shares reacquired (69,306,028) (262,078,621)
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS 26,378,378 490,134,249
=============================================================================================================================
NET INCREASE IN NET ASSETS 81,698,560 695,636,969
=============================================================================================================================
NET ASSETS:
Beginning of year 378,777,759 971,920,370
- -----------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 460,476,319 $ 1,667,557,339
=============================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME $ 1,947,790 $ (36,758)
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<Page>
FINANCIAL HIGHLIGHTS
LARGE-CAP CORE FUND
<Table>
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 28.42 $ 24.88 $ 21.27 $ 24.75 $ 26.83
========== ========== ========== ========== ==========
Investment operations:
Net investment income(a) .15 .18 .08 .04 .06
Net realized and unrealized gain (loss) 1.10 3.42 3.53 (3.37) (1.14)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.25 3.60 3.61 (3.33) (1.08)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.17) (.06) - - (.09)
Net realized gain (.84) - - (.15) (.91)
---------- ---------- ---------- ---------- ----------
Total distributions (1.01) (.06) - (.15) (1.00)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 28.66 $ 28.42 $ 24.88 $ 21.27 $ 24.75
========== ========== ========== ========== ==========
Total Return(b) 4.49% 14.48% 16.97% (13.52)% (4.26)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions
and expenses assumed 1.30% 1.39% 1.46% 1.45% 1.45%
Expenses, excluding expense reductions
and expenses assumed 1.32% 1.41% 1.46% 1.45% 1.45%
Net investment income .53% .67% .36% .16% .22%
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 523,322 $ 324,690 $ 261,231 $ 201,315 $ 234,533
Portfolio turnover rate 44.86% 47.14% 34.98% 74.76% 81.79%
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
LARGE-CAP CORE FUND
<Table>
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 27.38 $ 24.07 $ 20.70 $ 24.25 $ 26.37
========== ========== ========== ========== ==========
Investment operations:
Net investment income (loss)(a) (.03) -(c) (.06) (.10) (.10)
Net realized and unrealized gain (loss) 1.05 3.31 3.43 (3.30) (1.11)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.02 3.31 3.37 (3.40) (1.21)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income -(c) - - - -
Net realized gain (.84) - - (.15) (.91)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 27.56 $ 27.38 $ 24.07 $ 20.70 $ 24.25
========== ========== ========== ========== ==========
Total Return(b) 3.78% 13.75% 16.28% (14.10)% (4.81)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions
and expenses assumed 1.95% 2.03% 2.10% 2.06% 2.07%
Expenses, excluding expense reductions
and expenses assumed 1.97% 2.05% 2.10% 2.06% 2.07%
Net investment income (loss) (.11)% .03% (.28)% (.45)% (.39)%
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 81,373 $ 82,876 $ 80,542 $ 70,636 $ 85,011
Portfolio turnover rate 44.86% 47.14% 34.98% 74.76% 81.79%
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
LARGE-CAP CORE FUND
<Table>
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 27.47 $ 24.15 $ 20.77 $ 24.27 $ 26.41
========== ========== ========== ========== ==========
Investment operations:
Net investment income (loss)(a) (.03) -(c) (.06) (.06) (.11)
Net realized and unrealized gain (loss) 1.06 3.32 3.44 (3.29) (1.12)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.03 3.32 3.38 (3.35) (1.23)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income -(c) - - - -
Net realized gain (.84) - - (.15) (.91)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 27.66 $ 27.47 $ 24.15 $ 20.77 $ 24.27
========== ========== ========== ========== ==========
Total Return(b) 3.81% 13.75% 16.27% (13.88)% (4.88)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions
and expenses assumed 1.95% 2.03% 2.10% 1.87% 2.10%
Expenses, excluding expense reductions
and expenses assumed 1.97% 2.05% 2.10% 1.87% 2.10%
Net investment income (loss) (.12)% .03% (.28)% (.26)% (.43)%
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 73,328 $ 39,625 $ 36,778 $ 32,109 $ 37,149
Portfolio turnover rate 44.86% 47.14% 34.98% 74.76% 81.79%
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
LARGE-CAP CORE FUND
<Table>
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 28.50 $ 25.01 $ 21.37 $ 24.87 $ 26.92
========== ========== ========== ========== ==========
Investment operations:
Net investment income(a) .10 .17 .02 .02 .07
Net realized and unrealized gain (loss) 1.12 3.42 3.62 (3.37) (1.13)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.22 3.59 3.64 (3.35) (1.06)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.18) (.10) - - (.08)
Net realized gain (.84) - - (.15) (.91)
---------- ---------- ---------- ---------- ----------
Total distributions (1.02) (.10) - (.15) (.99)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 28.70 $ 28.50 $ 25.01 $ 21.37 $ 24.87
========== ========== ========== ========== ==========
Total Return(b) 4.38% 14.39% 17.03% (13.54)% (4.16)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions
and expenses assumed 1.40% 1.48% 1.55%+ 1.51% 1.52%
Expenses, excluding expense reductions
and expenses assumed 1.43% 1.50% 1.55%+ 1.51% 1.52%
Net investment income .37% .58% .27%+ .10% .27%
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 6,749 $ 294 $ 152 $ 1 $ 1
Portfolio turnover rate 44.86% 47.14% 34.98% 74.76% 81.79%
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
LARGE-CAP CORE FUND
<Table>
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS Y SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 28.50 $ 24.93 $ 21.23 $ 24.61 $ 26.74
========== ========== ========== ========== ==========
Investment operations:
Net investment income(a) .24 .93 .16 .13 .08
Net realized and unrealized gain (loss) 1.11 2.77 3.54 (3.36) (1.12)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.35 3.70 3.70 (3.23) (1.04)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.27) (.13) - - (.18)
Net realized gain (.84) - - (.15) (.91)
---------- ---------- ---------- ---------- ----------
Total distributions (1.11) (.13) - (.15) (1.09)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 28.74 $ 28.50 $ 24.93 $ 21.23 $ 24.61
========== ========== ========== ========== ==========
Total Return(b) 4.83% 14.89% 17.43% (13.19)% (4.14)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions
and expenses assumed .95% .93% 1.10% 1.06% 1.07%
Expenses, excluding expense reductions
and expenses assumed .98% 1.07% 1.10% 1.06% 1.07%
Net investment income .84% 3.35% .72% .55% .32%
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 135,677 $ 12,991 $ 75 $ 54 $ 1
Portfolio turnover rate 44.86% 47.14% 34.98% 74.76% 81.79%
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
+ The ratios have been determined on a Fund basis.
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Amount is less than $.01.
SEE NOTES TO FINANCIAL STATEMENTS.
27
<Page>
FINANCIAL HIGHLIGHTS
SMALL-CAP VALUE FUND
<Table>
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 29.54 $ 25.66 $ 20.29 $ 22.02 $ 19.60
========== ========== ========== ========== ==========
Investment operations:
Net investment loss(a) (.09) -(c) (.10) (.07) (.13)
Net realized and unrealized gain (loss) 4.60 5.52 6.81 (.48) 3.04
---------- ---------- ---------- ---------- ----------
Total from investment operations 4.51 5.52 6.71 (.55) 2.91
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net realized gain (2.65) (1.64) (1.34) (1.18) (.49)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 31.40 $ 29.54 $ 25.66 $ 20.29 $ 22.02
========== ========== ========== ========== ==========
Total Return(b) 16.78% 22.92% 35.67% (2.72)% 15.12%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions 1.31% 1.39% 1.45% 1.41% 1.43%
Expenses, excluding expense reductions 1.31% 1.39% 1.45% 1.41% 1.44%
Net investment loss (.31)% (.03)% (.50)% (.34)% (.60)%
<Caption>
YEAR ENDED 11/30
----------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 1,714,898 $ 939,899 $ 510,582 $ 321,243 $ 394,443
Portfolio turnover rate 71.25% 67.04% 66.11% 77.12% 64.76%
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
SMALL-CAP VALUE FUND
<Table>
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 27.87 $ 24.44 $ 19.50 $ 21.33 $ 19.13
========== ========== ========== ========== ==========
Investment operations:
Net investment loss(a) (.27) (.18) (.22) (.20) (.26)
Net realized and unrealized gain (loss) 4.30 5.25 6.50 (.45) 2.95
---------- ---------- ---------- ---------- ----------
Total from investment operations 4.03 5.07 6.28 (.65) 2.69
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net realized gain (2.65) (1.64) (1.34) (1.18) (.49)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 29.25 $ 27.87 $ 24.44 $ 19.50 $ 21.33
========== ========== ========== ========== ==========
Total Return(b) 15.99% 22.17% 34.78% (3.25)% 14.33%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions 1.95% 2.00% 2.07% 2.04% 2.05%
Expenses, excluding expense reductions 1.95% 2.00% 2.07% 2.04% 2.06%
Net investment loss (1.03)% (.74)% (1.12)% (.97)% (1.22)%
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 113,208 $ 192,098 $ 182,437 $ 153,101 $ 182,555
Portfolio turnover rate 71.25% 67.04% 66.11% 77.12% 64.76%
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
SMALL-CAP VALUE FUND
<Table>
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 27.90 $ 24.46 $ 19.52 $ 21.31 $ 19.13
========== ========== ========== ========== ==========
Investment operations:
Net investment loss(a) (.26) (.18) (.22) (.17) (.28)
Net realized and unrealized gain (loss) 4.30 5.26 6.50 (.44) 2.95
---------- ---------- ---------- ---------- ----------
Total from investment operations 4.04 5.08 6.28 (.61) 2.67
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net realized gain (2.65) (1.64) (1.34) (1.18) (.49)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 29.29 $ 27.90 $ 24.46 $ 19.52 $ 21.31
========== ========== ========== ========== ==========
Total Return(b) 16.01% 22.19% 34.74% (3.07)% 14.22%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions 1.95% 2.00% 2.07% 1.90% 2.16%
Expenses, excluding expense reductions 1.96% 2.00% 2.07% 1.90% 2.17%
Net investment loss (.99)% (.74)% (1.12)% (.83)% (1.32)%
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 91,195 $ 89,408 $ 81,967 $ 69,121 $ 81,396
Portfolio turnover rate 71.25% 67.04% 66.11% 77.12% 64.76%
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
SMALL-CAP VALUE FUND
<Table>
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 29.47 $ 25.61 $ 20.27 $ 22.01 $ 19.61
========== ========== ========== ========== ==========
Investment operations:
Net investment income (loss)(a) (.11) .01 (.12) (.08) (.14)
Net realized and unrealized gain (loss) 4.57 5.49 6.80 (.48) 3.03
---------- ---------- ---------- ---------- ----------
Total from investment operations 4.46 5.50 6.68 (.56) 2.89
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net realized gain (2.65) (1.64) (1.34) (1.18) (.49)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 31.28 $ 29.47 $ 25.61 $ 20.27 $ 22.01
========== ========== ========== ========== ==========
Total Return(b) 16.68% 22.84% 35.48% (2.72)% 15.01%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions 1.41% 1.45% 1.52% 1.49% 1.50%
Expenses, excluding expense reductions 1.41% 1.45% 1.52% 1.49% 1.51%
Net investment income (loss) (.39)% .03% (.57)% (.42)% (.66)%
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 328,055 $ 141,389 $ 47,471 $ 14,005 $ 4,150
Portfolio turnover rate 71.25% 67.04% 66.11% 77.12% 64.76%
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
SMALL-CAP VALUE FUND
<Table>
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS Y SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 30.36 $ 26.23 $ 20.64 $ 22.30 $ 19.77
========== ========== ========== ========== ==========
Investment operations:
Net investment income (loss)(a) .02 .10 (.02) .01 (.05)
Net realized and unrealized gain (loss) 4.73 5.67 6.95 (.49) 3.07
---------- ---------- ---------- ---------- ----------
Total from investment operations 4.75 5.77 6.93 (.48) 3.02
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net realized gain (2.65) (1.64) (1.34) (1.18) (.49)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 32.46 $ 30.36 $ 26.23 $ 20.64 $ 22.30
========== ========== ========== ========== ==========
Total Return(b) 17.14% 23.40% 36.10% (2.31)% 15.56%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions .96% 1.00% 1.07% 1.04% 1.05%
Expenses, excluding expense reductions .96% 1.00% 1.07% 1.04% 1.06%
Net investment income (loss) .05% .38% (.12)% .03% (.24)%
<Caption>
YEAR ENDED 11/30
---------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 632,444 $ 304,763 $ 149,463 $ 87,570 $ 75,402
Portfolio turnover rate 71.25% 67.04% 66.11% 77.12% 64.76%
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Amount is less than $.01.
SEE NOTES TO FINANCIAL STATEMENTS.
32
<Page>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Lord Abbett Research Fund, Inc. (the "Company") is registered under the
Investment Company Act of 1940 (the "Act") as a diversified open-end management
investment company incorporated under Maryland law on April 6, 1992. The Company
currently consists of four separate funds. This report covers the following two
funds: Large-Cap Core Fund ("Large-Cap Core Fund") and Small-Cap Value Series
("Small-Cap Value Fund") (collectively, the "Funds").
Large-Cap Core Fund's investment objective is growth of capital and growth of
income consistent with reasonable risk. Small-Cap Value Fund's investment
objective is long-term capital appreciation. Each 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 Classes 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
(12 months if shares were purchased on or after November 1, 2004) following
certain 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. Small-Cap Value
Fund is open to certain new investors on a limited basis.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
certain 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. Events occurring after the close of trading on non-U.S. exchanges
may result in adjustments to the valuation of foreign securities to more
accurately reflect their fair value as of the close of regular trading on
the New York Stock Exchange. The Fund may rely on an independent fair
valuation service in adjusting the valuations of foreign securities.
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 prices. 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 Directors. 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 (losses) are allocated to each class
of shares based upon the relative proportion of net assets at the beginning
of the day.
33
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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.
(d) FEDERAL TAXES-It is the policy of each 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 incurred by the Company that do not specifically relate to
an individual fund are generally allocated to the Funds within the Company
on a pro rata basis. 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. Classes A, B, C, and P bear all the
expenses and fees relating to their respective 12b-1 Distribution Plans.
(f) SECURITIES LENDING-Each Fund may lend securities to member banks of the
Federal Reserve System and to registered broker/dealers approved by the
Fund. The loans are collateralized at all times by cash and/or U.S.
Government securities in an amount at least equal to 102% of the market
value of the domestic securities loaned (105% in the case of foreign
securities loaned) as determined at the close of business on the preceding
business day. The dividend and interest income earned on the securities
loaned is accounted for in the same manner as other dividend and interest
income. Lending portfolio securities could result in a loss or delay in
recovering the Fund's securities if the borrower defaults. At their October
21, 2004 meeting, the Board of Directors voted to discontinue, as soon as
practicable, the Funds' securities lending program. State Street Bank &
Trust Company ("SSB") received fees of $10,330 from Small-Cap Value Fund for
the year ended November 30, 2005, which are netted against Securities
Lending Income on the Statement of Operations. As of November 30, 2005 there
were no securities on loan.
(g) REPURCHASE AGREEMENTS-Each 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. Each Fund requires at all times that the repurchase
agreement be collateralized by cash, or by securities of the U.S.
Government, its agencies, its instrumentalities, or U.S. Government
sponsored enterprises having a value equal to, or in excess of, the value of
the repurchase agreement (including accrued interest). 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 FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES
The Company 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
each Fund's investment portfolio.
34
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The management fees are based on the average daily net assets at the following
annual rates:
<Table>
Large-Cap Core Fund:
First $1 billion .70%
Next $1 billion .65%
Over $2 billion .60%
Small-Cap Value Fund .75%(1)
</Table>
(1) Effective December 1, 2005, the annual management fee rate for Small-Cap
Value Fund was changed from a flat fee rate of .75% to the following annual
rates:
.75% of the first $2 billion of average daily net assets;
.70% of average daily net assets over $2 billion.
For the fiscal year ended November 30, 2005, Lord Abbett contractually agreed to
reimburse expenses for Large-Cap Core Fund to the extent necessary so that each
class' net operating expenses did not exceed the following annual rates(1):
<Table>
<Caption>
CLASS % OF AVERAGE DAILY NET ASSETS
- ----------------------------------------------------
A 1.30%
B 1.95%
C 1.95%
P 1.40%
Y 0.95%
</Table>
(1) Lord Abbett has renewed the contractual expense cap agreement through the
fiscal year ending November 30, 2006.
Lord Abbett provides certain administrative services to each Fund pursuant to an
Administrative Services Agreement at an annual rate of .04% of each Fund's
average daily net assets.
Small-Cap Value Fund, along with certain other funds managed by Lord Abbett (the
"Underlying Funds"), has entered into a Servicing Arrangement with Lord Abbett
Alpha Strategy Fund of Lord Abbett Securities Trust ("Alpha Strategy Fund"),
pursuant to which each Underlying Fund pays a portion of the expenses (excluding
management fees and distribution and service fees) of Alpha Strategy Fund in
proportion to the average daily value of the Underlying Fund shares owned by
Alpha Strategy Fund. In addition, Large-Cap Core Fund, along with certain other
funds managed by Lord Abbett (the "Underlying Funds"), has entered into a
Servicing Arrangement with Lord Abbett Balanced Strategy Fund and Lord Abbett
World Growth & Income Strategy Fund of Lord Abbett Investment Trust ("Balanced
Strategy Fund" and "World Growth & Income Strategy Fund"), pursuant to which
each Underlying Fund pays a portion of the expenses (excluding management fees
and distribution and service fees) of Balanced Strategy Fund and World Growth &
Income Strategy Fund in proportion to the average daily value of the Underlying
Fund shares owned by Balanced Strategy Fund and World Growth & Income Strategy
Fund. Amounts paid pursuant to each Servicing Arrangement are included in
Subsidy Expense on the Statements of Operations.
12b-1 DISTRIBUTION PLANS
Each 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
35
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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)(2) .75% .75% .25%
</Table>
(1) Until October 1, 2004, each Fund paid a one-time distribution fee of up to
1.00% on certain qualifying purchases of Class A shares. Effective October
1, 2004, the Distributor commenced payment of such one-time distribution
fee. The unamortized balance of prepaid distribution fee for Small-Cap Value
Fund, as of November 30, 2005 was $111,861.
These amounts will continue to be amortized by the Fund, generally over a
two-year period.
(2) Effective October 1, 2005 the Class A Distribution Fee for Small-Cap Value
Fund was reduced from .10% of average daily net assets to .05% of average
daily net assets.
The amount of CDSC collected by each Fund during the year ended November 30,
2005 was as follows:
<Table>
<Caption>
CDSC
COLLECTED
- ----------------------------------------------------------------------------
Large-Cap Core Fund $ 5,143
Small-Cap Value Fund 7,253
</Table>
Class Y does not have a distribution plan.
COMMISSIONS
The Distributor received the following commissions on sales of shares of the
Funds, after concessions were paid to authorized dealers, for the year ended
November 30, 2005:
<Table>
<Caption>
DISTRIBUTOR DEALERS'
COMMISSIONS CONCESSIONS
- ----------------------------------------------------------------------------
Large-Cap Core Fund $ 947,482 $ 4,982,811
Small-Cap Value Fund 40,094 225,030
</Table>
Distributor received the following amount of CDSCs for the year ended November
30, 2005:
<Table>
<Caption>
CLASS A CLASS C
- ----------------------------------------------------------------------------
Large-Cap Core Fund $ 3,886 $ 4,090
Small-Cap Value Fund 3,027 394
</Table>
One Director and certain of the Funds' officers have an interest in Lord Abbett.
4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARDS
Dividends from net investment income, if any, are declared and distributed at
least semiannually for Large-Cap Core Fund and at least annually for Small-Cap
Value Fund. 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, if any, 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 earnings and profits for tax purposes, are reported
as a tax return of capital.
36
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The following distributions were declared on December 8, 2005, and paid on
December 14, 2005 to the shareholders of record on December 13, 2005:
<Table>
<Caption>
NET INVESTMENT SHORT-TERM LONG-TERM
INCOME CAPITAL GAINS CAPITAL GAINS
- ----------------------------------------------------------------------------------------------------
Large-Cap Core Fund $ 2,802,000 $ 552,000 $ 31,503,000
Small-Cap Value Fund - 69,666,000 195,291,000
</Table>
The tax character of distributions paid during the years ended November 30, 2005
and 2004 are as follows:
<Table>
<Caption>
LARGE-CAP CORE FUND SMALL-CAP VALUE FUND
- ----------------------------------------------------------------------------------------------------
11/30/2005 11/30/2004 11/30/2005 11/30/2004
- ----------------------------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 2,101,847 $ 600,153 $ 11,599,397 $ 10,184,296
Net long-term capital gains 13,761,746 - 142,061,412 53,606,135
- ----------------------------------------------------------------------------------------------------
Total distributions $ 15,863,593 $ 600,153 $ 153,660,809 $ 63,790,431
====================================================================================================
</Table>
As of November 30, 2005, the components of accumulated earnings on a tax basis
are as follows:
<Table>
<Caption>
LARGE-CAP CORE FUND SMALL-CAP VALUE FUND
- ----------------------------------------------------------------------------------------------------
Undistributed ordinary income - net $ 3,082,931 $ 69,665,367
Undistributed long-term capital gains 31,502,053 195,285,973
- ----------------------------------------------------------------------------------------------------
Total undistributed earnings $ 34,584,984 $ 264,951,340
Temporary differences (41,434) (125,802)
Unrealized gains - net 69,041,189 465,102,258
- ----------------------------------------------------------------------------------------------------
Total accumulated earning - net $ 103,584,739 $ 729,927,796
====================================================================================================
</Table>
As of November 30, 2005, the Funds' aggregate unrealized security gains and
losses based on cost for U.S. Federal income tax purposes are as follows:
<Table>
<Caption>
LARGE-CAP CORE FUND SMALL-CAP VALUE FUND
- ----------------------------------------------------------------------------------------------------
Tax cost $ 748,736,533 $ 2,436,070,521
- ----------------------------------------------------------------------------------------------------
Gross unrealized gain 85,356,039 492,015,091
Gross unrealized loss (16,314,850) (26,912,833)
- ----------------------------------------------------------------------------------------------------
Net unrealized security gain $ 69,041,189 $ 465,102,258
====================================================================================================
</Table>
The difference between book-basis and tax-basis unrealized gains is primarily
attributable to wash sales and other temporary tax adjustments.
Permanent items identified during the year ended November 30, 2005, have been
reclassified among the components of net assets based on their tax basis
treatment as follows:
<Table>
<Caption>
UNDISTRIBUTED
(DISTRIBUTIONS
IN EXCESS OF) ACCUMULATED
NET INVESTMENT NET REALIZED
INCOME GAIN
- ----------------------------------------------------------------------------------------------------
Large-Cap Core Fund $ 169 $ (169)
Small-Cap Value Fund 7,070,978 (7,070,978)
</Table>
The permanent differences are primarily attributable to the tax treatment of
currency gains and losses, and net investment losses.
37
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the year ended November 30, 2005 are as follows:
<Table>
<Caption>
PURCHASES SALES
- -------------------------------------------------------------------
Large-Cap Core Fund $ 576,913,493 $ 267,325,794
Small-Cap Value Fund 2,218,569,041 1,485,762,642
</Table>
There were no purchases or sales of U.S. Government securities for the year
ended November 30, 2005.
6. DIRECTORS' REMUNERATION
The Company's officers and the one Director who are associated with Lord Abbett
do not receive any compensation from the Company for serving in such capacities.
Outside Directors' 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 Directors under which outside Directors must defer receipt of a
portion of, and may elect to defer receipt of an additional portion of
Directors' 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 Directors' Fees on the Statements of
Operations and in Directors' Fees Payable on the Statements of Assets and
Liabilities and are not deductible for U.S. Federal income tax purposes until
such amounts are paid.
7. EXPENSE REDUCTIONS
The Company 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 each Fund's expenses.
8. LINE OF CREDIT
Each 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. For the period December 1, 2004 to December 9, 2004,
the fee for this Facility was at an annual rate of .09%. Effective December 10,
2004, the fee for this Facility was renewed at an annual rate of .08%. At
November 30, 2005, there were no loans outstanding pursuant to this Facility nor
was the Facility utilized at any time during the fiscal year ended November 30,
2005.
Effective December 9, 2005, the Facility for the Funds along with certain other
funds managed by Lord Abbett, was increased from $200,000,000 to $250,000,000.
The fee for this Facility remains at an annual rate of .08%.
38
<Page>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
9. TRANSACTIONS WITH AFFILIATED ISSUERS
An affiliated issuer is one in which a Fund had ownership of at least 5% of the
oustanding voting securities of the underlying issuer at any point during the
fiscal year. Small-Cap Value Fund had the following transactions with affiliated
issuers during the year ended November 30, 2005:
<Table>
<Caption>
NET REALIZED
BALANCE OF BALANCE OF VALUE GAIN (LOSS) INCOME
SHARES HELD GROSS GROSS SHARES HELD AT 12/1/2004 12/1/2004
AFFILIATED ISSUER AT 11/30/2004 ADDITIONS SALES AT 11/30/2005 11/30/2005 TO 11/30/2005 TO 11/30/2005
- ------------------------------------------------------------------------------------------------------------------------------------
Brookstone, Inc.(a) 840,000 280,700 (1,120,700) - $ - $ 3,264,346 $ -
Brush Engineered
Materials, Inc.(a) 66,100 933,900 (645,600) 354,000 5,631,416 (1,727,812) -
C-Cor, Inc. - 2,600,000 - 2,600,000 14,742,000 - -
Commercial Vehicle
Group, Inc. 660,600 574,500 - 1,235,100 24,442,629 - -
Curtiss-Wright Corp.(a) 511,000 206,500 (294,500) 423,000 24,787,800 3,555,652 271,422
Frontier Airlines,
Inc.(a) 1,119,800 1,000,200 (450,900) 1,669,100 13,619,856 159,008 -
II-VI, Inc. - 1,575,900 - 1,575,900 30,146,967 - -
Itron, Inc.(a) - 1,470,000 (1,470,000) - - 29,248,191 -
John B. Sanfilippo &
Son, Inc.(a) 97,400 709,530 (537,200) 269,730 3,697,998 (4,560,594) -
LSI Industries, Inc. - 1,220,080 - 1,220,080 21,961,440 - 202,736
McCormick & Schmick's
Seafood Restaurants,
Inc.(a) 560,900 139,100 (80,000) 620,000 14,718,800 758,799 -
NCI Building Systems,
Inc. 580,040 594,400 - 1,174,440 51,252,562 - -
Quanex Corp. 890,000 892,500(b) (177,600) 1,604,900 99,263,065 5,749,517 871,628
Steel Technologies, Inc. 590,100 753,700 (109,800) 1,234,000 32,688,660 1,469,499 284,100
Universal Forest
Products, Inc. 499,100 485,974 - 985,074 56,602,352 - 89,098
- ------------------------------------------------------------------------------------------------------------------------------------
Total $ 393,555,545 $ 37,916,606 $ 1,718,984
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
(a) No longer an affiliated issuer at November 30, 2005.
(b) 445,000 shares acquired in a 3-for-2 stock split; ex-date January 3, 2005.
10. CUSTODIAN AND ACCOUNTING AGENT
SSB is the Company's custodian and accounting agent. SSB performs custodial,
accounting and recordkeeping functions relating to portfolio transactions and
calculating each Fund's NAV.
11. INVESTMENT RISKS
Large-Cap Core Fund is subject to the general risks and considerations
associated with equity investing, as well as the particular risks associated
with value and growth stocks. This means the value of your investment will
fluctuate in response to movements in the equity securities market in general
and to the changing prospects of individual companies in which the Fund invests.
Large value and growth stocks may perform differently than the market as a whole
and differently than each other or other types of stocks, such as small company
stocks. This is because different types of stocks tend to shift in and out of
favor depending on market and economic conditions. The market may fail to
recognize the intrinsic value of particular value stocks for a long time. Growth
stocks may be more volatile than other stocks. In addition, if the Fund's
assessment of a company's value or prospects for exceeding earnings expectations
or market
39
<Page>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
conditions is wrong, the Fund could suffer losses or produce poor performance
relative to other funds, even in a rising market.
Small-Cap Value Fund is subject to the general risks and considerations
associated with equity investing, as well as the particular risks associated
with 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. Large company value stocks and
small company value stocks may perform differently than the market as a whole
and other types of stocks such as growth stocks. The market may fail to
recognize the intrinsic value of particular value stocks for a long time. In
addition, small-cap company stocks may be more volatile and less liquid than
large-cap company stocks. Also, if a Fund's assessment of a company's value or
prospects for exceeding earnings expectations or market conditions is wrong, the
Fund could suffer losses or produce poor performance relative to other funds,
even in a rising market.
These factors can affect each Fund's performance.
12. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of beneficial interest are as follows:
LARGE-CAP CORE FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 2005 NOVEMBER 30, 2004
- --------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------
CLASS A SHARES
- --------------------------------------------------------------------------------------------------------------
Shares sold 8,539,454 $ 237,321,415 2,628,672 $ 69,719,713
Reinvestment of distributions 398,099 11,154,747 22,480 568,516
Shares reacquired (2,102,862) (58,764,443) (1,726,790) (45,784,365)
- --------------------------------------------------------------------------------------------------------------
Increase 6,834,691 $ 189,711,719 924,362 $ 24,503,864
- --------------------------------------------------------------------------------------------------------------
CLASS B SHARES
- --------------------------------------------------------------------------------------------------------------
Shares sold 712,370 $ 19,130,982 312,122 $ 8,005,975
Reinvestment of distributions 75,608 2,050,475 - -
Shares reacquired (863,107) (23,175,109) (631,529) (16,175,025)
- --------------------------------------------------------------------------------------------------------------
Decrease (75,129) $ (1,993,652) (319,407) $ (8,169,050)
- --------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- --------------------------------------------------------------------------------------------------------------
Shares sold 1,513,453 $ 40,799,481 201,008 $ 5,166,992
Reinvestment of distributions 29,110 792,090 - -
Shares reacquired (333,961) (8,994,339) (281,543) (7,258,773)
- --------------------------------------------------------------------------------------------------------------
Increase (decrease) 1,208,602 $ 32,597,232 (80,535) $ (2,091,781)
- --------------------------------------------------------------------------------------------------------------
CLASS P SHARES
- --------------------------------------------------------------------------------------------------------------
Shares sold 251,221 $ 7,063,785 4,346 $ 118,598
Reinvestment of distributions 380 10,660 23 597
Shares reacquired (26,830) (753,670) (123) (3,335)
- --------------------------------------------------------------------------------------------------------------
Increase 224,771 $ 6,320,775 4,246 $ 115,860
- --------------------------------------------------------------------------------------------------------------
CLASS Y SHARES
- --------------------------------------------------------------------------------------------------------------
Shares sold 4,264,146 $ 118,258,062 455,866 $ 12,103,637
Reinvestment of distributions 18,045 505,257 15 378
Shares reacquired (18,025) (496,297) (3,010) (84,530)
- --------------------------------------------------------------------------------------------------------------
Increase 4,264,166 $ 118,267,022 452,871 $ 12,019,485
- --------------------------------------------------------------------------------------------------------------
</Table>
40
<Page>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 2005 NOVEMBER 30, 2004
- --------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------
CLASS A SHARES
- --------------------------------------------------------------------------------------------------------------
Shares sold 28,783,311 $ 809,340,873 16,482,423 $ 435,592,252
Reinvestment of distributions 2,733,321 73,389,673 1,059,544 25,672,755
Shares reacquired (8,715,538) (244,148,846) (5,629,510) (146,387,925)
- --------------------------------------------------------------------------------------------------------------
Increase 22,801,094 $ 638,581,700 11.912,457 $ 314,877,082
- --------------------------------------------------------------------------------------------------------------
CLASS B SHARES
- --------------------------------------------------------------------------------------------------------------
Shares sold 320,243 $ 8,275,530 310,245 $ 7,469,508
Reinvestment of distributions 536,865 13,512,897 384,276 8,838,348
Shares reacquired (3,879,512) (103,861,865) (1,267,786) (31,193,691)
- --------------------------------------------------------------------------------------------------------------
Decrease (3,022,404) $ (82,073,438) (573,265) $ (14,885,835)
- --------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- --------------------------------------------------------------------------------------------------------------
Shares sold 291,459 $ 7,519,721 228,182 $ 5,453,445
Reinvestment of distributions 174,580 4,399,410 121,312 2,792,598
Shares reacquired (556,908) (14,632,211) (495,891) (12,206,574)
- --------------------------------------------------------------------------------------------------------------
Decrease (90,869) $ (2,713,080) (146,397) $ (3,960,531)
- --------------------------------------------------------------------------------------------------------------
CLASS P SHARES
- --------------------------------------------------------------------------------------------------------------
Shares sold 8,503,486 $ 237,770,898 4,140,611 $ 108,853,556
Reinvestment of distributions 316,873 8,482,694 77,299 1,869,083
Shares reacquired (3,130,597) (88,475,121) (1,273,478) (33,218,315)
- --------------------------------------------------------------------------------------------------------------
Increase 5,689,762 $ 157,778,471 2,944,432 $ 77,504,324
- --------------------------------------------------------------------------------------------------------------
CLASS Y SHARES
- --------------------------------------------------------------------------------------------------------------
Shares sold 10,406,969 $ 304,943,421 5,429,820 $ 146,254,416
Reinvestment of distributions 997,401 27,598,071 379,561 9,416,909
Shares reacquired (1,962,109) (56,948,916) (1,469,872) (39,072,116)
- --------------------------------------------------------------------------------------------------------------
Increase 9,442,261 $ 275,592,576 4,339,509 $ 116,599,209
- --------------------------------------------------------------------------------------------------------------
</Table>
On January 18, 2006, the number of shares of capital stock for Lord Abbett
Research Fund, Inc. was increased from 1,040,000,000 to 1,220,000,000. The Class
A shares of Large-Cap Core Fund was increased from 20,000,000 to 200,000,000.
41
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
LORD ABBETT RESEARCH FUND, INC. - LORD ABBETT LARGE-CAP CORE FUND AND
SMALL-CAP VALUE SERIES:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Lord Abbett Research Fund, Inc. - Lord Abbett
Large-Cap Core Fund and Small-Cap Value Series (the "Funds") as of November 30,
2005, and the related statements 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 five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Funds' 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. The Funds
are not required to have, nor were we engaged to perform, an audit of their
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Funds' internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of November 30, 2005 by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. 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 Research Fund, Inc. - Lord Abbett Large-Cap Core Fund and Small-Cap Value
Series as of November 30, 2005, the results of their operations for the year
then ended, the changes in their net assets for each of the two years in the
period then ended, and their financial highlights for each of the five years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
New York, New York
January 27, 2006
42
<Page>
BASIC INFORMATION ABOUT MANAGEMENT
The Board of Directors (the "Board") is responsible for the management of the
business and affairs of each Fund in accordance with the laws of the State of
Maryland. The Board appoints officers who are responsible for the day-to-day
operations of each Fund and who execute policies authorized by the Board. The
Board also approves an investment adviser to each Fund 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 Director holds office until his/her successor is elected and qualified or
until his/her earlier resignation or removal, as provided in the Fund's
organizational documents.
Lord, Abbett & Co. LLC ("Lord Abbett"), a Delaware limited liability company, is
the Fund's investment adviser.
INTERESTED DIRECTOR
The following Director 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
54 portfolios or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH FUND DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Director and Managing Partner and Chief N/A
Lord, Abbett & Co. LLC Chairman since 1996 Executive Officer of Lord
90 Hudson Street Abbett since 1996.
Jersey City, NJ 07302
(1945)
</Table>
----------------
INDEPENDENT DIRECTORS
The following independent or outside Directors are also directors or trustees of
each of the fourteen Lord Abbett-sponsored funds, which consist of 54 portfolios
or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH FUND DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------------------------
E. THAYER BIGELOW Director since 1996 Managing General Partner, Bigelow Currently serves as director
Lord, Abbett & Co. LLC Media, LLC (since 2000); Senior of Adelphia Communications,
c/o Legal Dept. Adviser, Time Warner Inc. (1998 - Inc., Crane Co., and Huttig
90 Hudson Street 2000); Acting Chief Executive Building Products Inc.
Jersey City, NJ 07302 Officer of Courtroom Television
(1941) Network (1997 - 1998); President
and Chief Executive Officer of Time
Warner Cable Programming, Inc.
(1991 - 1997).
WILLIAM H.T. BUSH Director since 1998 Co-founder and Chairman of the Currently serves as director
Lord, Abbett & Co. LLC Board of the financial advisory of WellPoint, Inc. (since
c/o Legal Dept. firm of Bush-O'Donnell & Company 2002), and Engineered Support
90 Hudson Street (since 1986). Systems, Inc. (since 2000).
Jersey City, NJ 07302
(1938)
</Table>
43
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH FUND DURING PAST FIVE YEARS DIRECTORSHIPS
- --------------------------------------------------------------------------------------------------------------------------
ROBERT B. CALHOUN, JR. Director since 1998 Managing Director of Monitor Clipper Currently serves as director of
c/o Legal Dept. Partners (since 1997) and President of Avondale, Inc. and Interstate
Lord, Abbett & Co. LLC Clipper Asset Management Corp. (since Bakeries Corp.
90 Hudson Street 1991), both private equity investment
Jersey City, NJ 07302 funds.
(1942)
JULIE A. HILL Director since 2004 Owner and CEO of the Hillsdale Companies, Currently serves as director of
Lord, Abbett & Co. LLC a business consulting firm (since 1998); WellPoint, Inc.; Resources
c/o Legal Dept. Founder, President and Owner of the Connection Inc.; and Holcim (US)
90 Hudson Street Hiram-Hill and Hillsdale Development Inc. (a subsidiary of Holcim
Jersey City, NJ 07302 Companies (1998 - 2000). Ltd.).
(1946)
FRANKLIN W. HOBBS Director since 2001 Former Chief Executive Officer of Currently serves as director of
Lord, Abbett & Co. LLC Houlihan Lokey Howard & Zukin, an Adolph Coors Company.
c/o Legal Dept. investment bank (January 2002 - April
90 Hudson Street 2003); Chairman of Warburg Dillon Read
Jersey City, NJ 07302 (1999 - 2001); Global Head of Corporate
(1947) Finance of SBC Warburg Dillon Read (1997
- 1999); Chief Executive Officer of
Dillon, Read & Co. (1994 - 1997).
C. ALAN MACDONALD Director since 1996 Retired - General Business and Governance Currently serves as director of
Lord, Abbett & Co. LLC Consulting (since 1992); formerly H.J. Baker (since 2003).
c/o Legal Dept. President and CEO of Nestle Foods.
90 Hudson Street
Jersey City, NJ 07302
(1933)
THOMAS J. NEFF Director since 1992 Chairman of Spencer Stuart (U.S.), an Currently serves as director of
Lord, Abbett & Co. LLC executive search consulting firm (since Ace, Ltd. (since 1997) and
c/o Legal Dept. 1996); President of Spencer Stuart (1979 Hewitt Associates, Inc.
90 Hudson Street - 1996).
Jersey City, NJ 07302
(1937)
</Table>
44
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
OFFICERS
None of the officers listed below have received compensation from the Company.
All the officers of the Company 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
YEAR OF BIRTH WITH COMPANY OF CURRENT POSITION DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Chief Executive Officer and Elected in 1996 Managing Partner and Chief Executive Officer
(1945) President of Lord Abbett (since 1996).
KEVIN P. FERGUSON Executive Vice President Elected in 2001 Partner and Mid Cap Growth Investment
(1964) Manager, joined Lord Abbett in 1999.
ROBERT P. FETCH Executive Vice President Elected in 1997 Partner and Small-Cap Value Senior
(1953) Investment Manager, joined
Lord Abbett in 1995.
DANIEL H. FRASCARELLI Executive Vice President Elected in 2005 Partner and Investment Manager, joined
(1954) Lord Abbett in 1990.
CHRISTOPHER J. TOWLE Executive Vice President Elected in 2001 Partner and Investment Manager, joined
(1957) Lord Abbett in 1987.
EDWARD K. VON DER LINDE Executive Vice President Elected in 2001 Partner and Investment Manager, joined
(1960) Lord Abbett in 1988.
JAMES BERNAICHE Chief Compliance Officer Elected in 2004 Chief Compliance Officer, joined Lord Abbett
(1956) in 2001; formerly Vice President and Chief
Compliance Officer with Credit Suisse Asset
Management.
JOAN A. BINSTOCK Chief Financial Officer and Elected in 1999 Partner and Chief Operations Officer, joined
(1954) Vice President Lord Abbett in 1999.
JOHN K. FORST Vice President and Elected in 2005 Deputy General Counsel, joined Lord Abbett
(1960) Assistant Secretary in 2004; prior thereto Managing Director and
Associate General Counsel at New York Life
Investment Management LLC (2002 - 2003);
formerly Attorney at Dechert LLP (2000 - 2002).
LAWRENCE H. KAPLAN Vice President and Elected in 1997 Partner and General Counsel, joined Lord
(1957) Secretary Abbett in 1997.
ROBERT G. MORRIS Vice President Elected in 1996 Partner and Chief Investment Officer, joined
(1944) Lord Abbett in 1991.
</Table>
45
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONCLUDED)
<Table>
<Caption>
NAME AND CURRENT POSITION LENGTH OF SERVICE PRINCIPAL OCCUPATION
YEAR OF BIRTH WITH COMPANY OF CURRENT POSITION DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------------------------
A. EDWARD OBERHAUS, III Vice President Elected in 1996 Partner and Manager of Equity Trading,
(1959) joined Lord Abbett in 1983.
CHRISTINA T. SIMMONS Vice President and Elected in 2000 Assistant General Counsel, joined Lord
(1957) Assistant Secretary Abbett in 1999.
PAUL J. VOLOVICH Vice President Elected in 2004 Investment Manager - Large-Cap Core
(1973) Fund, joined Lord Abbett in 1997.
BERNARD J. GRZELAK Treasurer Elected in 2003 Director of Fund Administration,
(1971) joined Lord Abbett in 2003; formerly
Vice President, Lazard Asset Management LLC
(2000 - 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 Fund's Directors. It is
available free upon request.
46
<Page>
HOUSEHOLDING
The Company has adopted a policy that allows it to send only one copy of the
Funds' Prospectus, proxy material, annual report and semiannual 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 Funds' portfolio securities, and information on how Lord
Abbett voted each Fund's proxies during the 12-month period ended June 30, 2005
are available without charge, upon request, (i) by calling 888-522-2388; (ii) on
Lord Abbett's website 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 Funds are required to file their complete schedules of portfolio holdings
with the SEC for their first and third fiscal quarters on Form N-Q. Copies of
the filings are 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 a
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
All of the ordinary income distributions paid by the Large-Cap Core Fund and
Small-Cap Research Fund during fiscal 2005 is qualifying dividend income. For
corporate shareholders, 100% of the ordinary income distributions paid by the
Large-Cap Core Fund and Small-Cap Research Fund, qualified for the dividends
received deduction.
Additionally, of the distributions paid to shareholders during the fiscal year
ended November 30, 2005, $13,761,746 and $142,061,412 represents long-term
capital gains for Large-Cap Core Fund and Small Cap Research Fund, respectively.
47
<Page>
This page is intentionally left blank.
<Page>
[LORD ABBETT(R) LOGO]
<Table>
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 Research Fund, Inc.
Large-Cap Core Fund
Lord Abbett mutual fund shares are distributed by Small-Cap Value Series LARF-2-1105
LORD ABBETT DISTRIBUTOR LLC (1/06)
</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 November 30,
2005 (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 12(a)(1) 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 Directors has determined that each of
the following independent Directors 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 November 30, 2005 and 2004
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:
<Table>
<Caption>
FISCAL YEAR ENDED:
2005 2004
Audit Fees (a) $ 136,000 $ 117,000
Audit-Related Fees (b) 668 518
---------------------------------------
Total audit and audit-related fees 136,668 117,518
---------------------------------------
</Table>
<Page>
<Table>
Tax Fees (c) 27,334 26,221
All Other Fees -0- -0-
---------------------------------------
Total Fees $ 164,002 $ 143,739
---------------------------------------
</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 November 30, 2005 and 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.
(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.
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).
<Page>
(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 November 30, 2005 and 2004 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2005 2004
All Other Fees (a) $ 105,500 $ 120,650
</Table>
- ----------
(a) Consist of fees for Independent Services Auditors' Report on Controls
Placed in Operation and Tests of Operating Effectiveness related to Lord
Abbett's Asset Management Services ("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 November
30, 2005 and 2004 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2005 2004
All Other Fees $ - 0 - $ - 0-
</Table>
- ----------
(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.
<Page>
ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8: PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11: 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 a date within 90 days
prior to the filing date of this report, 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
control over financial reporting (as defined in Rule 30a-3(d)
under the Investment Company Act of 1940) that occurred during
the second fiscal quarter of the period covered by this report
that have materially affected, or are reasonably likely to
materially affect, the Registrant's internal control over
financial reporting.
ITEM 12: EXHIBITS.
(a)(1) Amendments to Code of Ethics - Not applicable.
(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 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 RESEARCH FUND, INC.
/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: January 27, 2006
<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 RESEARCH FUND, INC.
/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: January 27, 2006