N-Q 1 c75088_nq.htm QUARTERLY REPORT

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act File Number: 811-00005

 

LORD ABBETT AFFILIATED FUND, INC.

(Exact name of Registrant as specified in charter)

 

90 Hudson Street, Jersey City, NJ 07302

(Address of principal executive offices) (Zip code)

 

Thomas R. Phillips, Esq., 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: 10/31

 

Date of reporting period: 7/31/2013

 
Item 1:Schedule of Investments.
 

Schedule of Investments (unaudited)

LORD ABBETT AFFILIATED FUND, INC. July 31, 2013

 

Investments  Shares  Fair
Value
(000)
 
COMMON STOCKS 99.70%         
          
Aerospace & Defense 3.26%         
          
Boeing Co. (The)   379,800  $39,917 
Honeywell International, Inc.   1,043,800   86,614 
Lockheed Martin Corp.   335,600   40,312 
Raytheon Co.   210,300   15,108 
Rockwell Collins, Inc.   121,900   8,676 
United Technologies Corp.   373,600   39,441 
Total       230,068 
          
Air Freight & Logistics 0.80%         
          
United Parcel Service, Inc. Class B   646,100   56,082 
          
Automobiles 1.07%         
          
Ford Motor Co.   4,459,954   75,284 
          
Beverages 1.04%         
          
Coca-Cola Co. (The)   791,200   31,711 
Dr. Pepper Snapple Group, Inc.   226,600   10,591 
PepsiCo, Inc.   367,700   30,718 
Total       73,020 
          
Capital Markets 1.32%         
          
Ares Capital Corp.   381,000   6,778 
BlackRock, Inc.   13,750   3,877 
Goldman Sachs Group, Inc. (The)   328,475   53,880 
Invesco Ltd.   165,700   5,334 
Lazard Ltd. Class A   28,800   1,047 
Morgan Stanley   430,288   11,708 
State Street Corp.   63,282   4,409 
Waddell & Reed Financial, Inc. Class A   123,200   6,290 
Total       93,323 
          
Chemicals 2.48%         
          
Airgas, Inc.   66,500   6,864 
Dow Chemical Co. (The)   1,472,859   51,609 
E.I. du Pont de Nemours & Co.   1,147,000   66,170 
Eastman Chemical Co.   275,200   22,134 
Huntsman Corp.   522,800   9,421 
International Flavors & Fragrances, Inc.   56,900   4,591 

 

See Notes to Schedule of Investments.

 

Schedule of Investments (unaudited)(continued)

LORD ABBETT AFFILIATED FUND, INC. July 31, 2013

 

Investments  Shares  Fair
Value
(000)
 
Chemicals (continued)         
          
Monsanto Co.   63,200  $6,243 
Mosaic Co. (The)   200,300   8,230 
Total       175,262 
          
Commercial Banks 6.36%         
          
BB&T Corp.   1,079,549   38,529 
Comerica, Inc.   543,155  23,106 
Fifth Third Bancorp   4,293,670   82,567 
PNC Financial Services Group, Inc. (The)   269,779   20,517 
Regions Financial Corp.   1,489,600   14,911 
SunTrust Banks, Inc.   1,272,304   44,263 
U.S. Bancorp   1,810,100   67,553 
Wells Fargo & Co.   3,611,453   157,098 
Total       448,544 
          
Commercial Services & Supplies 0.34%         
          
Pitney Bowes, Inc.   1,454,400   24,012 
          
Communications Equipment 2.94%         
          
Cisco Systems, Inc.   3,607,100   92,162 
QUALCOMM, Inc.   1,785,800   115,273 
Total       207,435 
          
Computers & Peripherals 4.57%         
          
Apple, Inc.   503,500   227,834 
Hewlett-Packard Co.   3,684,031   94,606 
Total       322,440 
          
Construction & Engineering 0.42%         
          
Fluor Corp.   379,700   23,754 
KBR, Inc.   195,400   6,112 
Total       29,866 
          
Consumer Finance 1.92%         
          
Capital One Financial Corp.   1,963,400   135,514 
          
Containers & Packaging 0.09%         
          
Packaging Corp. of America   121,900   6,557 

 

See Notes to Schedule of Investments.

 

Schedule of Investments (unaudited)(continued)

LORD ABBETT AFFILIATED FUND, INC. July 31, 2013

 

Investments  Shares  Fair
Value
(000)
 
Diversified Financial Services 5.87%         
          
Bank of America Corp.   1,747,670  $25,516 
Citigroup, Inc.   2,244,860   117,047 
JPMorgan Chase & Co.   4,874,742   271,669 
Total       414,232 
          
Diversified Telecommunication Services 2.90%         
          
AT&T, Inc.   1,826,549   64,422 
CenturyLink, Inc.   132,600   4,754 
Verizon Communications, Inc.   2,741,651   135,657 
Total       204,833 
          
Electric: Utilities 2.80%         
          
American Electric Power Co., Inc.   517,200   23,972 
Duke Energy Corp.   1,249,239   88,696 
Entergy Corp.   252,700   17,057 
Great Plains Energy, Inc.   188,100   4,550 
NextEra Energy, Inc.   110,400   9,562 
PPL Corp.   1,077,300  34,226 
Southern Co. (The)   299,000   13,407 
Westar Energy, Inc.   150,500   5,055 
Xcel Energy, Inc.   33,500   1,004 
Total       197,529 
          
Electrical Equipment 0.78%         
          
Eaton Corp. plc (Ireland)(a)   265,660   18,317 
Emerson Electric Co.   519,700   31,894 
Rockwell Automation, Inc.   52,900   5,124 
Total       55,335 
          
Electronic Equipment, Instruments & Components 0.39%         
          
Arrow Electronics, Inc.*   250,936   11,455 
Avnet, Inc.*   425,900   16,044 
Total       27,499 
          
Energy Equipment & Services 1.38%         
          
Cameron International Corp.*   333,700   19,788 
Halliburton Co.   278,971   12,607 
Schlumberger Ltd.   647,198   52,637 
Seadrill Ltd.   294,800   12,582 
Total       97,614 

 

See Notes to Schedule of Investments.

 

Schedule of Investments (unaudited)(continued)

LORD ABBETT AFFILIATED FUND, INC. July 31, 2013

 

Investments  Shares  Fair
Value
(000)
 
Food & Staples Retailing 2.77%         
          
CVS Caremark Corp.   1,013,300  $62,308 
Kroger Co. (The)   503,600   19,777 
Wal-Mart Stores, Inc.   1,458,100   113,644 
Total       195,729 
          
Food Products 1.18%         
          
General Mills, Inc.   1,500   78 
Ingredion, Inc.   168,100   11,296 
Kellogg Co.   323,100   21,402 
Kraft Foods Group, Inc.   289,211   16,364 
Mondelez International, Inc. Class A   1,087,134   33,995 
Total       83,135 
          
Health Care Equipment & Supplies 1.81%         
          
Baxter International, Inc.   857,600   62,639 
Covidien plc (Ireland)(a)   503,281   31,017 
Medtronic, Inc.   618,500   34,166 
Total       127,822 
          
Health Care Providers & Services 1.85%         
          
Cardinal Health, Inc.   490,300   24,559 
CIGNA Corp.   155,600   12,110 
HCA Holdings, Inc.   288,900   11,267 
McKesson Corp.   292,000   35,817 
UnitedHealth Group, Inc.   638,596   46,522 
Total       130,275 
          
Hotels, Restaurants & Leisure 1.63%         
          
Brinker International, Inc.   205,200   8,239 
Marriott International, Inc. Class A   331,972   13,800 
McDonald’s Corp.   861,800   84,525 
Starwood Hotels & Resorts Worldwide, Inc.   123,700   8,183 
Total       114,747 
          
Household Durables 0.12%         
          
Tupperware Brands Corp.   97,200   8,192 
          
Household Products 1.69%         
          
Colgate-Palmolive Co.   386,500   23,140 
Kimberly-Clark Corp.   421,800   41,674 
Procter & Gamble Co. (The)   678,300   54,467 
Total       119,281 

 

See Notes to Schedule of Investments.

 

Schedule of Investments (unaudited)(continued)

LORD ABBETT AFFILIATED FUND, INC. July 31, 2013

 

Investments  Shares  Fair
Value
(000)
 
Industrial Conglomerates 1.58%         
          
3M Co.   242,000  $28,418 
General Electric Co.   3,419,500   83,333 
Total       111,751 
          
Information Technology Services 1.52%         
          
International Business Machines Corp.   551,400   107,545 
          
Insurance 6.30%         
          
ACE Ltd. (Switzerland)(a)   627,900   57,377 
Aflac, Inc.   427,700   26,381 
Allstate Corp. (The)   1,634,200   83,312 
AXIS Capital Holdings Ltd.   60,800   2,648 
Berkshire Hathaway, Inc. Class B*   299,700   34,726 
Chubb Corp. (The)   52,100   4,507 
Endurance Specialty Holdings Ltd.   53,000   2,789 
Hartford Financial Services Group, Inc.   1,336,400   41,241 
Lincoln National Corp.   558,700   23,281 
Marsh & McLennan Cos., Inc.   401,600   16,815 
MetLife, Inc.   749,857   36,308 
Protective Life Corp.   73,500   3,185 
Prudential Financial, Inc.   858,500   67,796 
Travelers Cos., Inc. (The)   322,300   26,928 
Validus Holdings Ltd.   205,700   7,288 
XL Group plc (Ireland)(a)   321,600   10,082 
Total       444,664 
          
Leisure Equipment & Products 0.09%         
          
Mattel, Inc.   142,400   5,985 
          
Machinery 1.94%         
          
Caterpillar, Inc.   1,137,607   94,319 
Cummins, Inc.   328,000   39,750 
Joy Global, Inc.   60,545   2,997 
Total       137,066 
          
Media 1.66%         
          
Cinemark Holdings, Inc.   36,900   1,074 
Comcast Corp. Class A   191,900   8,651 
Time Warner, Inc.   436,016   27,146 

 

See Notes to Schedule of Investments.

 

Schedule of Investments (unaudited)(continued)

LORD ABBETT AFFILIATED FUND, INC. July 31, 2013

 

Investments  Shares  Fair
Value
(000)
 
Media (continued)         
          
Viacom, Inc. Class B   491,600  $35,774 
Walt Disney Co. (The)   692,400   44,764 
Total       117,409 
          
Metals & Mining 0.82%         
          
Freeport-McMoRan Copper & Gold, Inc.   2,014,700   56,976 
United States Steel Corp.   41,200   715 
Total       57,691 
          
Multi-Line Retail 1.61%         
          
Kohl’s Corp.   906,486   48,026 
Macy’s, Inc.   1,047,400   50,631 
Target Corp.   208,986   14,890 
Total       113,547 
          
Multi-Utilities 0.85%         
          
CMS Energy Corp.   173,700   4,862 
PG&E Corp.   1,005,300   46,133 
SCANA Corp.   122,700   6,370 
TECO Energy, Inc.   132,100   2,334 
Total       59,699 
          
Oil, Gas & Consumable Fuels 11.12%         
          
Anadarko Petroleum Corp.   545,100   48,252 
Cenovus Energy, Inc. (Canada)(a)   25,100   743 
Chevron Corp.   1,398,532   176,061 
ConocoPhillips   814,600   52,835 
EOG Resources, Inc.   119,302   17,357 
Exxon Mobil Corp.   1,281,792   120,168 
Hess Corp.   263,629   19,630 
HollyFrontier Corp.   176,200   8,026 
Kinder Morgan, Inc.   543,003   20,504 
Marathon Oil Corp.   930,100   33,818 
Marathon Petroleum Corp.   212,500   15,583 
Occidental Petroleum Corp.   1,697,684   151,179 
Range Resources Corp.   68,939   5,453 
Suncor Energy, Inc. (Canada)(a)   745,700   23,587 
Valero Energy Corp.   2,544,650   91,022 
Total       784,218 

 

See Notes to Schedule of Investments.

 

Schedule of Investments (unaudited)(continued)

LORD ABBETT AFFILIATED FUND, INC. July 31, 2013

 

Investments  Shares  Fair
Value
(000)
 
Paper & Forest Products 0.94%         
          
International Paper Co.   1,366,200  $66,001 
          
Personal Products 0.29%         
          
Herbalife Ltd.   306,600   20,082 
          
Pharmaceuticals 7.44%         
          
Bristol-Myers Squibb Co.   1,690,800   73,110 
Eli Lilly & Co.   1,760,400   93,495 
GlaxoSmithKline plc ADR   212,500   10,829 
Johnson & Johnson   664,300   62,112 
Merck & Co., Inc.   1,079,600   52,004 
Pfizer, Inc.   7,985,800   233,425 
Total       524,975 
          
Professional Services 0.01%         
          
Robert Half International, Inc.   19,600   730 
          
Real Estate Investment Trusts 2.50%         
          
Alexandria Real Estate Equities, Inc.   85,100   5,829 
American Capital Agency Corp.   307,200   6,921 
Annaly Capital Management, Inc.   679,300   8,097 
BioMed Realty Trust, Inc.   290,300   5,998 
Brandywine Realty Trust   249,700   3,481 
BRE Properties, Inc.   38,600   2,048 
Camden Property Trust   118,000   8,324 
CBL & Associates Properties, Inc.   298,400   6,795 
DDR Corp.   753,900   12,877 
Duke Realty Corp.   445,300   7,334 
General Growth Properties, Inc.   509,900   10,575 
Health Care REIT, Inc.   419,500   27,053 
Home Properties, Inc.   89,400   5,705 
Host Hotels & Resorts, Inc.   1,967,175   35,134 
Liberty Property Trust   151,700   5,796 
Mack-Cali Realty Corp.   141,600   3,407 
Piedmont Office Realty Trust, Inc. Class A   184,400   3,336 
Post Properties, Inc.   61,200   2,847 
Retail Properties of America, Inc. Class A   183,400   2,584 
Vornado Realty Trust   77,200   6,547 
Weingarten Realty Investors   175,900   5,509 
Total       176,197 

 

See Notes to Schedule of Investments.

 

Schedule of Investments (unaudited)(continued)

LORD ABBETT AFFILIATED FUND, INC. July 31, 2013

 

Investments  Shares  Fair
Value
(000)
 
Road & Rail 1.75%         
          
CSX Corp.   1,803,100  $44,735 
Hertz Global Holdings, Inc.*   2,006,092   51,376 
Union Pacific Corp.   173,500   27,515 
Total       123,626 
          
Semiconductors & Semiconductor Equipment 1.93%         
          
Broadcom Corp. Class A   1,700   47 
Intel Corp.   3,632,000   84,626 
Maxim Integrated Products, Inc.   587,000   16,788 
Microchip Technology, Inc.   365,400   14,521 
Texas Instruments, Inc.   511,500   20,051 
Total       136,033 
          
Software 2.52%         
          
Microsoft Corp.   5,589,100   177,901 
          
Specialty Retail 0.63%         
          
Home Depot, Inc. (The)   294,700   23,290 
L Brands, Inc.   364,200   20,312 
Lowe’s Cos., Inc.   18,800   838 
Total       44,440 
          
Textiles, Apparel & Luxury Goods 0.18%         
          
Coach, Inc.   238,500   12,672 
          
Tobacco 2.22%         
          
Altria Group, Inc.   581,649   20,392 
Philip Morris International, Inc.   1,524,600   135,964 
Total       156,356 
          
Wireless Telecommunication Services 0.02%         
          
Telephone & Data Systems, Inc.   41,400   1,098 
          
Total Common Stocks
(cost $5,726,376,601)
       7,033,316 
          
Total Long-Term Investments
(cost $5,726,376,601)
       7,033,316 

 

See Notes to Schedule of Investments.

 

Schedule of Investments (unaudited)(concluded)

LORD ABBETT AFFILIATED FUND, INC. July 31, 2013

 

Investments  Principal
Amount
(000)
  Fair
Value
(000)
 
SHORT-TERM INVESTMENT 0.23%         
          
Repurchase Agreement         
          
Repurchase Agreement dated 7/31/2013, 0.01% due 8/1/2013 with Fixed Income Clearing Corp. collateralized by $14,020,000 of U.S. Treasury Note at 3.75% due 11/15/2018 and $1,020,000 of U.S. Treasury Note at 1.75% due 10/31/2018; value: $16,755,225; proceeds: $16,423,186
(cost $16,423,182)
  $16,423  $16,423 
          
Total Investments in Securities 99.93%
(cost $5,742,799,783)
       7,049,739 
          
Cash and Other Assets in Excess of Liabilities(b) 0.07%       5,070 
          
Net Assets 100.00%      $7,054,809 

 

 
ADR   American Depositary Receipt.
     
*   Non-income producing security.
(a)   Foreign security traded in U.S. dollars.
(b)   Cash and Other Assets in Excess of Liabilities include net unrealized appreciation on futures contracts as follows:

 

Type   Expiration   Contracts   Position   Fair Value   Unrealized
Appreciation
 
E-Mini S&P 500 Index     September 2013     200     Long   $ 16,805,000   $ 376,703  

 

See Notes to Schedule of Investments.

 

Schedule of Investments (unaudited)(concluded)

July 31, 2013

 

The following is a summary of the inputs used as of July 31, 2013 in valuing the Fund’s investments carried at fair value(1):

 

Investment Type(2)(3)  Level 1
(000)
   Level 2
(000)
   Level 3
(000)
   Total
(000)
 
Common Stocks  $7,033,316   $   $   $7,033,316 
Repurchase Agreement       16,423        16,423 
Total  $7,033,316   $16,423   $   $7,049,739 
Other Financial Instruments                    
Futures Contracts                    
Assets  $377   $   $   $377 
Liabilities                
Total  $377   $   $   $377 

 

 
(1) Refer to Note 2(f) for a description of fair value measurements and the three-tier hierarchy of inputs.
(2) See Schedule of Investments for fair values in each industry and identification of foreign issuers and/or geography.
(3) There were no level transfers during the period ended July 31, 2013.
 

Notes to Schedule of Investments (unaudited)

 

1. ORGANIZATION

 

Lord Abbett Affiliated Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. The Fund was organized in 1934 and was reincorporated under Maryland law on November 26, 1975.

 

The Fund’s investment objective is long-term growth of capital and income without excessive fluctuations in market value.

 

2. SIGNIFICANT ACCOUNTING POLICIES

 

(a) Investment Valuation-Under procedures approved by the Fund’s Board of Directors (the “Board”), Lord, Abbett & Co. LLC (“Lord Abbett”), the Fund’s investment manager, has formed a Pricing Committee to administer the pricing and valuation of portfolio investments and to ensure that prices utilized reasonably reflect fair value. Among other things, these procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
   
  Securities actively traded on any recognized U.S. or non-U.S. exchange or on The NASDAQ Stock Market LLC 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 reflect their fair value as of the close of regular trading on the New York Stock Exchange LLC. 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. Exchange traded options and futures contracts are valued at the last sale price in the market where they are principally traded. If no sale has occurred, the mean between the most recently quoted bid and asked prices is used.
   
  Securities for which prices are not readily available are valued at fair value as determined by the Pricing Committee and approved by the Board. The Pricing Committee considers a number of factors, including observable and unobservable inputs, when arriving at fair value. The Pricing Committee may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information to determine fair value of portfolio investments. The Board or a designated committee thereof regularly reviews fair value determinations made by the Pricing Committee and employs techniques such as reviewing related market activity, reviewing inputs and assumptions, and retrospectively comparing prices of subsequent purchases and sales transactions to fair value determinations made by the Pricing Committee.
   
  Short-term securities with 60 days or less remaining to maturity are valued using the amortized cost method, which approximates fair value.
   
(b) Security Transactions-Security transactions are recorded as of the date that the securities are purchased or sold (trade date).
   
(c) Foreign Transactions-The books and records of the Fund are maintained in U.S. dollars and transactions denominated in foreign currencies are recorded in the Fund’s records at the rate prevailing when earned or recorded.
   
(d) Futures Contracts-The Fund entered into index futures contracts to manage cash, or as a substitute position for holding the underlying asset on which the instrument is based. At the time of entering into a futures transaction, an investor is required to deposit and maintain a specified amount of cash or eligible securities called “initial margin.” Subsequent payments made or received by a fund called “variation margin” are made on a daily basis as the market price of the futures contract fluctuates. The Fund will record an unrealized gain (loss) based on the amount of variation margin. When a contract is closed, a realized gain (loss) is recorded equal to the difference between the opening and closing value of the contract.
   
(e) Repurchase Agreements-The Fund may enter into repurchase agreements with respect to securities. A repurchase agreement is a transaction in which a 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
 

Notes to Schedule of Investments (unaudited)(continued)

 

  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 fair value of these securities has declined, the Fund may incur a loss upon disposition of the securities.
   
(f) Fair Value Measurements-Fair value is defined as the price that the Fund would receive upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk - for example, the risk inherent in a particular valuation technique used to measure fair value (such as a pricing model) and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below:
   
• Level 1 - unadjusted quoted prices in active markets for identical investments;
   
• Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.); and
   
• Level 3 - significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).

 

  A summary of inputs used in valuing the Fund’s investments as of July 31, 2013, and if applicable, Level 1/Level 2 transfers and Level 3 rollforwards for the nine months then ended is included in the Fund’s Schedule of Investments.
   
  Changes in valuation techniques may result in transfers into or out of an assigned level within the three-tier hierarchy. All transfers between different levels within the three-tier hierarchy are deemed to have occurred as of the beginning of the reporting period. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
   
(g) Disclosures about Derivative Instruments and Hedging Activities-The Fund entered into E-Mini S&P 500 Index futures contracts during the period ended July 31, 2013 (as described in note 2(d)) to manage cash. The Fund bears the risk that the underlying index will move unexpectedly, in which case the Fund may realize a loss. There is minimal counterparty credit risk to the Fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees futures against default. As of July 31, 2013, the Fund had an index futures contract with a cumulated unrealized appreciation of $376,703, which is included on the Schedule of Investments.

 

3. FEDERAL TAX INFORMATION

 

As of July 31, 2013, the aggregate unrealized security gains and losses based on cost for U.S. federal income tax purposes were as follows:

 

Tax cost  $5,771,533,423 
Gross unrealized gain   1,315,682,916 
Gross unrealized loss   (37,477,422)
Net unrealized security gain  $1,278,205,494 

 

The difference between book-basis and tax-basis unrealized gains (losses) is attributable to the tax treatment of certain securities and wash sales.

 

Notes to Schedule of Investments (unaudited)(concluded)

 

4. RECENT ACCOUNTING STANDARD

 

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-11 “Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This disclosure requirement is intended to help investors and other financial statement users better assess the effect or potential effect of offsetting arrangements on a fund’s financial position. ASU 2011-11 requires entities to disclose both gross and net information about both instruments and transactions eligible for offset in the statement of assets and liabilities; and disclose instruments and transactions subject to an agreement similar to a master netting agreement. In addition, in January 2013, FASB issued Accounting Standards Update No. 2013-01 “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities” (“ASU 2013-01”), specifying exactly which transactions are subject to disclosures about offsetting. ASU 2011-11 and ASU 2013-01 are effective for public entities for interim and annual periods beginning on or after January 1, 2013. Management is currently evaluating the impact of the adoption of ASU 2011-11 and ASU 2013-01 will have on the Fund’s financial statement disclosures.

 
Item 2: 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 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 Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

Item 3: Exhibits.

 

Certification of each principal executive officer and principal financial officer of the Registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 is attached hereto as a part of EX-99.CERT.
 

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 AFFILIATED FUND, INC.
     
  By: /s/ Daria L. Foster  
    Daria L. Foster
    President and Chief Executive Officer

 

Date: September 30, 2013

 

  By: /s/ Joan A. Binstock  
    Joan A. Binstock
    Chief Financial Officer and Vice President

 

Date: September 30, 2013

 

Pursuant to the requirements of the Securities 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.

 

  By: /s/ Daria L. Foster  
    Daria L. Foster
    President and Chief Executive Officer

 

Date: September 30, 2013

 

  By: /s/ Joan A. Binstock  
    Joan A. Binstock
    Chief Financial Officer and Vice President

 

Date: September 30, 2013