0000930413-15-001607.txt : 20150402 0000930413-15-001607.hdr.sgml : 20150402 20150402141713 ACCESSION NUMBER: 0000930413-15-001607 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20150131 FILED AS OF DATE: 20150402 DATE AS OF CHANGE: 20150402 EFFECTIVENESS DATE: 20150402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LORD ABBETT DEVELOPING GROWTH FUND, INC. CENTRAL INDEX KEY: 0000276914 IRS NUMBER: 132958970 STATE OF INCORPORATION: MD FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-02871 FILM NUMBER: 15746741 BUSINESS ADDRESS: STREET 1: 90 HUDSON ST. CITY: JERSEY CITY STATE: NJ ZIP: 07302 BUSINESS PHONE: 201-827-2000 MAIL ADDRESS: STREET 1: 90 HUDSON ST. CITY: JERSEY CITY STATE: NJ ZIP: 07302 FORMER COMPANY: FORMER CONFORMED NAME: LORD ABBETT DEVELOPING GROWTH FUND INC /NEW/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DEVELOPING GROWTH SHARES INC DATE OF NAME CHANGE: 19600201 0000276914 S000006834 LORD ABBETT DEVELOPING GROWTH FUND INC C000018473 Class A LAGWX C000018474 Class B LADBX C000018475 Class C LADCX C000018476 Class P LADPX C000018477 Class I LADYX C000054855 Class F LADFX C000054856 Class R2 LADQX C000054857 Class R3 LADRX C000151972 Class R4 LADSX C000151973 Class R5 LADTX C000151974 Class R6 LADVX N-CSRS 1 c80543_ncsrs.htm CERTIFIED SEMI-ANNUAL SHAREHOLDER REPORT

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: 811-02871

 

lord abbett developing growth fund, inc.

(Exact name of Registrant as specified in charter)

 

90 Hudson Street, Jersey City, NJ 07302

(Address of principal executive offices) (Zip code)

 

Brooke A. Fapohunda, 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: 7/31

 

Date of reporting period: 1/31/2015

 
Item 1: Report(s) to Shareholders.
 

 

2015 LORD ABBETT
SEMIANNUAL REPORT

 

Lord Abbett
Developing Growth Fund

 

For the six-month period ended January 31, 2015

 

Table of Contents

 

 

1   A Letter to Shareholders
     
2   Information About Your Fund’s Expenses and Holdings Presented by Sector
     
4   Schedule of Investments
     
8   Statement of Assets and Liabilities
     
10   Statement of Operations
     
11   Statements of Changes in Net Assets
     
12   Financial Highlights
     
20   Notes to Financial Statements
     
29   Supplemental Information to Shareholders
 

 

 

Lord Abbett Developing Growth Fund
Semiannual Report

For the six-month period ended January 31, 2015

 

 

Daria L. Foster, Director, President and Chief Executive Officer of the Lord Abbett Funds, and E. Thayer Bigelow, Independent Chairman of the Lord Abbett Funds.

Dear Shareholders: We are pleased to provide you with this semiannual report for Lord Abbett Developing Growth Fund for the six-month period ended January 31, 2015. For additional information about the Fund, please visit our website at www.lordabbett.com, where you can access the quarterly commentaries by the Fund’s portfolio managers. General information about Lord Abbett mutual funds, as well as in-depth discussions of market trends and investment strategies, is also provided in Lord Abbett Insights, a quarterly newsletter available on our website.

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,

 

 

Daria L. Foster

Director, President and Chief Executive Officer


 

 

1

 

 

 

Expense Example

 

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) 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 (August 1, 2014 through January 31, 2015).

 

Actual Expenses

 

For each class of the Fund, the first line of the table on the following page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period 8/1/14 – 1/31/15” to estimate the expenses you paid on your account during this period.

 

Hypothetical Example for Comparison Purposes

 

For each class of the Fund, the second line of the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

 

2

 

 

 

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 (loads). 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.

 

   Beginning  Ending  Expenses  
   Account  Account  Paid During  
   Value  Value  Period  
         8/1/14 -  
   8/1/14  1/31/15  1/31/15  
Class A*                 
Actual  $1,000.00   $1,063.30    $5.36   
Hypothetical (5% Return Before Expenses)  $1,000.00   $1,020.01    $5.24   
Class B                 
Actual  $1,000.00   $1,059.60    $9.08   
Hypothetical (5% Return Before Expenses)  $1,000.00   $1,016.38    $8.89   
Class C                 
Actual  $1,000.00   $1,059.50    $9.08   
Hypothetical (5% Return Before Expenses)  $1,000.00   $1,016.38    $8.89   
Class F                 
Actual  $1,000.00   $1,064.40    $4.37   
Hypothetical (5% Return Before Expenses)  $1,000.00   $1,020.97    $4.28   
Class I                 
Actual  $1,000.00   $1,064.60    $3.85   
Hypothetical (5% Return Before Expenses)  $1,000.00   $1,021.48    $3.77   
Class P                 
Actual  $1,000.00   $1,063.50    $5.20   
Hypothetical (5% Return Before Expenses)  $1,000.00   $1,020.16    $5.09   
Class R2                 
Actual  $1,000.00   $1,061.70    $7.02   
Hypothetical (5% Return Before Expenses)  $1,000.00   $1,018.40    $6.87   
Class R3                 
Actual  $1,000.00   $1,062.00    $6.44   
Hypothetical (5% Return Before Expenses)  $1,000.00   $1,018.95    $6.31   
   
For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (1.03% for Class A, 1.75% for Classes B and C, 0.84% for Class F, 0.74% for Class I, 1.00% for Class P, 1.35% for Class R2 and 1.24% for Class R3) multiplied by the average account value over the period, multiplied by 184/365 (to reflect one-half year period).
* The annualized expenses for Class A have been updated to 1.00%. Had the updated expense ratio been in place throughout the most recent fiscal half-year, expenses paid during the period would have been:

 

        Hypothetical
        (5% Return
    Actual   Before Expenses)
Class A   $5.20   $5.09

 

Portfolio Holdings Presented by Sector

January 31, 2015

 

Sector* %**
Consumer Discretionary 15.97%  
Consumer Staples 4.13%  
Energy 0.51%  
Financials 8.24%  
Health Care 25.07%  
Sector* %**
Industrials 11.79%  
Information Technology 31.64%  
Materials 0.50%  
Repurchase Agreement 2.15%  
Total 100.00%  


 

*   A sector may comprise several industries.
**   Represents percent of total investments.

 

3

 

Schedule of Investments (unaudited)

January 31, 2015

 

Investments  Shares   Fair
Value
(000)
 
COMMON STOCKS 97.00%          
           
Aerospace & Defense 2.48%          
Astronics Corp.*   680,195   $37,880 
Hexcel Corp.   603,726    26,703 
TASER International, Inc.*   600,264    16,213 
Total        80,796 
           
Airlines 1.16%          
JetBlue Airways Corp.*   2,245,579    37,703 
           
Banks 1.19%          
PrivateBancorp, Inc.   404,408    12,270 
SVB Financial Group*   119,395    13,479 
Western Alliance Bancorp*   498,906    12,827 
Total        38,576 
           
Beverages 0.46%          
Boston Beer Co., Inc. (The) Class A*   47,503    14,941 
           
Biotechnology 12.88%          
ACADIA Pharmaceuticals, Inc.*   1,017,854    30,973 
Acceleron Pharma, Inc.*   218,079    8,608 
Agios Pharmaceuticals, Inc.*   301,350    34,932 
Alnylam Pharmaceuticals, Inc.*   328,557    30,829 
Avalanche Biotechnologies, Inc.*   131,683    5,225 
Bluebird Bio, Inc.*   252,518    23,461 
Celldex Therapeutics, Inc.*   1,874,719    40,156 
Cepheid, Inc.*   275,326    15,559 
Clovis Oncology, Inc.*   445,155    29,020 
Exact Sciences Corp.*   670,041    18,232 
Foundation Medicine, Inc.*   549,071    26,169 
Juno Therapeutics, Inc.*   356,771    15,252 
Neurocrine Biosciences, Inc.*   1,114,689    37,520 
Receptos, Inc.*   267,406    29,460 
Sage Therapeutics, Inc.*   4,394    177 
Synageva BioPharma Corp.*   387,056    44,597 
Investments  Shares   Fair
Value
(000)
 
Ultragenyx Pharmaceutical, Inc.*   499,020   $28,993 
Total        419,163 
           
Building Products 1.52%          
Trex Co., Inc.*   1,164,783    49,538 
           
Capital Markets 4.09%          
Evercore Partners, Inc. Class A   158,958    7,609 
Janus Capital Group, Inc.   2,964,005    51,989 
Stifel Financial Corp.*   679,294    32,029 
WisdomTree Investments, Inc.   2,386,025    41,564 
Total        133,191 
           
Chemicals 0.49%          
Flotek Industries, Inc.*   994,572    16,082 
              
Commercial Services & Supplies 0.54%             
US Ecology, Inc.   423,072    17,541 
              
Communications Equipment 2.19%             
Infinera Corp.*   3,112,383    50,172 
Ruckus Wireless, Inc.*   571,123    6,048 
Sierra Wireless, Inc. (Canada)*(a)   417,621    15,080 
Total        71,300 
           
Consumer Finance 0.59%          
Springleaf Holdings, Inc.*   610,915    19,305 
              
Diversified Consumer Services 2.16%             
2U, Inc.*   1,856,200    33,022 
LifeLock, Inc.*   2,514,700    37,343 
Total        70,365 
              
Diversified Financial Services 1.76%             
MarketAxess Holdings, Inc.   618,971    47,023 
On Deck Capital, Inc.*   685,537    10,338 
Total        57,361 
              
Electrical Equipment 1.00%             
Polypore International, Inc.*   727,052    32,514 


 

4 See Notes to Financial Statements.  
 

Schedule of Investments (unaudited)(continued)

January 31, 2015

 

Investments  Shares   Fair
Value
(000)
 
Electronic Equipment, Instruments & Components 3.17%      
Cognex Corp.*   406,256   $14,930 
FARO Technologies, Inc.*   684,718    37,899 
FLIR Systems, Inc.   534,627    16,146 
IPG Photonics Corp.*   459,746    34,315 
Total        103,290 
           
Food & Staples Retailing 2.46%          
Diplomat Pharmacy, Inc.*   568,152    13,959 
Fresh Market, Inc. (The)*   445,386    16,974 
United Natural Foods, Inc.*   636,466    49,186 
Total        80,119 
           
Food Products 1.18%          
Hain Celestial Group, Inc. (The)*   725,387    38,279 
           
Health Care Equipment & Supplies 6.48%          
ABIOMED, Inc.*   655,675    33,924 
Align Technology, Inc.*   59,657    3,165 
DexCom, Inc.*   752,861    45,006 
Insulet Corp.*   277,336    8,151 
NxStage Medical, Inc.*   1,764,455    31,566 
Spectranetics Corp. (The)*   1,244,392    40,704 
ZELTIQ Aesthetics, Inc.*   1,503,845    48,439 
Total        210,955 
           
Health Care Providers & Services 1.33%          
ExamWorks Group, Inc.*   901,432    33,317 
Team Health Holdings, Inc.*   189,636    9,804 
Total        43,121 
           
Health Care Technology 1.63%          
Castlight Health, Inc. Class B*   882,801    7,839 
Medidata Solutions, Inc.*   206,627    8,883 
Veeva Systems, Inc.          
Class A*   1,260,825    36,262 
Total        52,984 
           
Hotels, Restaurants & Leisure 5.91%          
BJ’s Restaurants, Inc.*   462,479    20,483 
Investments  Shares   Fair
Value
(000)
 
Buffalo Wild Wings, Inc.*   264,160   $47,105 
Fiesta Restaurant Group, Inc.*   589,180    34,803 
La Quinta Holdings, Inc.*   1,189,928    24,191 
Sonic Corp.   1,239,534    37,521 
Zoe’s Kitchen, Inc.*   907,467    28,077 
Total        192,180 
           
Household Durables 1.03%          
iRobot Corp.*   1,059,425    33,425 
           
Information Technology Services 3.61%          
Blackhawk Network          
Holdings, Inc.*   617,925    20,614 
EPAM Systems, Inc.*   880,303    43,073 
Euronet Worldwide, Inc.*   271,763    12,335 
Heartland Payment Systems, Inc.   364,581    18,145 
MAXIMUS, Inc.   247,428    13,787 
VeriFone Systems, Inc.*   299,001    9,386 
Total        117,340 
           
Internet & Catalog Retail 1.56%          
HSN, Inc.   460,595    35,669 
Wayfair, Inc. Class A*   779,010    15,237 
Total        50,906 
           
Internet Software & Services 9.46%          
Benefitfocus, Inc.*   717,344    17,353 
Cimpress NV (Netherlands)*(a)   430,912    34,710 
comScore, Inc.*   886,902    36,860 
CoStar Group, Inc.*   261,423    48,235 
Coupons.com, Inc.*   1,653,032    23,671 
Criteo SA ADR*   859,512    33,478 
Demandware, Inc.*   307,852    16,489 
Gogo, Inc.*   1,835,117    26,673 
GrubHub, Inc.*   969,410    33,377 
MercadoLibre, Inc. (Argentina)(a)   117,505    14,564 
TrueCar, Inc.*   1,270,565    22,336 
Total        307,746 


 

  See Notes to Financial Statements. 5
 

Schedule of Investments (unaudited)(continued)

January 31, 2015

 

Investments  Shares   Fair
 Value
(000)
 
Leisure Product 1.00%          
Brunswick Corp.   597,667   $32,441 
           
Life Sciences Tools & Services 1.73%          
Charles River Laboratories International, Inc.*   387,912    26,902 
Fluidigm Corp.*   764,115    29,441 
Total        56,343 
           
Machinery 1.32%          
Middleby Corp. (The)*   452,536    43,000 
           
Media 1.41%          
Rentrak Corp.*   596,273    45,871 
           
Oil, Gas & Consumable Fuels 0.51%          
GasLog Ltd. (Monaco)(a)   947,921    16,579 
           
Pharmaceuticals 0.81%          
Akorn, Inc.*   334,053    14,224 
Pacira Pharmaceuticals, Inc.*    111,574    11,977 
Total        26,201 
           
Professional Services 2.35%          
Paylocity Holding Corp.*   870,537    20,510 
TriNet Group, Inc.*   1,001,402    33,217 
WageWorks, Inc.*   415,119    22,848 
Total        76,575 
           
Real Estate Investment Trusts 0.53%          
BioMed Realty Trust, Inc.   708,515    17,323 
           
Road & Rail 0.79%          
Knight Transportation, Inc.   898,210    25,590 
           
Semiconductors & Semiconductor Equipment 4.86%      
Ambarella, Inc.*   668,284    36,963 
Cavium, Inc.*   737,861    43,394 
Rambus, Inc.*   1,679,331    18,892 
SunPower Corp.*   741,401    17,883 
Tessera Technologies, Inc.   1,104,594    40,958 
Total        158,090 
Investments  Shares   Fair
Value
 (000)
 
Software 6.92%          
Manhattan Associates, Inc.*   416,801   $18,606 
Materialise NV ADR*   972,668    8,530 
Paycom Software, Inc.*   817,951    21,406 
Proofpoint, Inc.*   817,731    40,887 
Qualys, Inc.*   1,182,277    44,950 
Synchronoss Technologies, Inc.*   415,187    17,633 
Tableau Software, Inc. Class A*   297,034    23,988 
Ultimate Software Group, Inc. (The)*   222,962    33,001 
Zendesk, Inc.*   668,284    16,166 
Total        225,167 
           
Specialty Retail 1.52%          
MarineMax, Inc.*   170,873    4,359 
Restoration Hardware Holdings, Inc.*   516,926    45,247 
Total        49,606 
           
Technology Hardware, Storage & Peripherals 1.16%      
Cray, Inc.*   889,553    28,902 
Nimble Storage, Inc.*   390,254    8,753 
Total        37,655 
           
Textiles, Apparel & Luxury Goods 1.24%          
Skechers U.S.A., Inc. Class A*   666,181    40,204 
           
Trading Companies & Distributors 0.52%          
Air Lease Corp.   488,941    17,084 
Total Common Stocks          
(cost $2,714,538,471)        3,156,450 


 

6 See Notes to Financial Statements.  
 

Schedule of Investments (unaudited)(concluded)

January 31, 2015

 

Investments  Principal
Amount
(000)
   Fair
 Value
 (000)
 
SHORT-TERM INVESTMENT 2.12%          
           
Repurchase Agreement          
Repurchase Agreement dated 1/30/2015, Zero Coupon due 2/2/2015 with Fixed Income Clearing Corp. collateralized by $62,860,000 of U.S. Treasury Note 3.625% due 8/15/2019; value: $70,560,350; proceeds: $69,174,987
(cost $69,174,987)
  $69,175   $69,175 
Total Investments in Securities 99.12%          
(cost $2,783,713,458)        3,225,625 
Other Assets in Excess of Liabilities 0.88%        28,571 
Net Assets 100.00%       $3,254,196 


 

ADR   American Depositary Receipt.
*   Non-income producing security.
(a)   Foreign security traded in U.S. dollars.

 

The following is a summary of the inputs used as of January 31, 2015 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  $3,156,450   $   $   $3,156,450 
Repurchase Agreement       69,175        69,175 
Total  $3,156,450   $69,175   $   $3,225,625 

 

(1)   Refer to Note 2(g) 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 January 31, 2015.

 

  See Notes to Financial Statements. 7
 

Statement of Assets and Liabilities (unaudited)

January 31, 2015

 

ASSETS:    
     
Investments in securities, at fair value (cost $2,783,713,458)  $3,225,625,005 
Receivables:     
Investment securities sold   105,273,772 
Capital shares sold   2,784,611 
Dividends   60,373 
Prepaid expenses and other assets   82,557 
Total assets   3,333,826,318 
LIABILITIES:     
      
Payables:     
Investment securities purchased   71,432,577 
Capital shares reacquired   3,420,180 
Management fee   1,422,252 
12b-1 distribution fees   1,331,323 
Directors’ fees   571,555 
Fund administration   112,082 
To affiliates (See Note 3)   29,800 
Accrued expenses   1,310,817 
Total liabilities   79,630,586 
NET ASSETS  $3,254,195,732 
COMPOSITION OF NET ASSETS:     
      
Paid-in capital  $2,781,609,303 
Accumulated net investment loss   (13,235,910)
Accumulated net realized gain on investments   43,910,792 
Net unrealized appreciation on investments   441,911,547 
Net Assets  $3,254,195,732 
      
8 See Notes to Financial Statements.  
 

Statement of Assets and Liabilities (unaudited)(concluded)

January 31, 2015

 

Net assets by class:     
Class A Shares  $1,101,791,914 
Class B Shares  $8,597,036 
Class C Shares  $105,910,715 
Class F Shares  $255,626,616 
Class I Shares  $1,452,613,452 
Class P Shares  $35,157,912 
Class R2 Shares  $13,594,118 
Class R3 Shares  $280,903,969 
Outstanding shares by class:     
Class A Shares (875 million shares of common stock authorized, $.001 par value)   50,953,739 
Class B Shares (40 million shares of common stock authorized, $.001 par value)   510,561 
Class C Shares (25 million shares of common stock authorized, $.001 par value)   6,226,127 
Class F Shares (30 million shares of common stock authorized, $.001 par value)   11,500,432 
Class I Shares (100 million shares of common stock authorized, $.001 par value)   59,792,802 
Class P Shares (30 million shares of common stock authorized, $.001 par value)   1,672,060 
Class R2 Shares (30 million shares of common stock authorized, $.001 par value)   647,608 
Class R3 Shares (30 million shares of common stock authorized, $.001 par value)   13,225,321 
Net asset value, offering and redemption price per share
(Net assets divided by outstanding shares):
     
Class A Shares-Net asset value   $21.62 
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 5.75%)
   $22.94 
Class B Shares-Net asset value   $16.84 
Class C Shares-Net asset value   $17.01 
Class F Shares-Net asset value   $22.23 
Class I Shares-Net asset value   $24.29 
Class P Shares-Net asset value   $21.03 
Class R2 Shares-Net asset value   $20.99 
Class R3 Shares-Net asset value   $21.24 
      
  See Notes to Financial Statements. 9
 

Statement of Operations (unaudited)

For the Six Months Ended January 31, 2015

 

Investment income:     
      
Dividends (net of foreign withholding taxes of $10,709)  $3,131,173 
Total investment income   3,131,173 
Expenses:     
      
Management fee   8,602,563 
12b-1 distribution plan-Class A   1,680,368 
12b-1 distribution plan-Class B   47,789 
12b-1 distribution plan-Class C   562,467 
12b-1 distribution plan-Class F   101,939 
12b-1 distribution plan-Class P   94,981 
12b-1 distribution plan-Class R2   44,433 
12b-1 distribution plan-Class R3   735,552 
Shareholder servicing   2,633,829 
Fund administration   678,123 
Subsidy (See Note 3)   257,357 
Reports to shareholders   93,482 
Registration   64,497 
Directors’ fees   61,196 
Custody   44,824 
Professional   34,892 
Other   106,133 
Gross expenses   15,844,425 
Expense reductions (See Note 8)   (1,402)
Net expenses   15,843,023 
Net investment loss   (12,711,850)
Net realized and unrealized gain:     
      
Net realized gain on investments in unaffiliated issuers   90,841,425 
Net realized loss on investments in affiliated issuers   (2,682,607)
Net change in unrealized appreciation/depreciation on investments   135,310,966 
Net realized and unrealized gain   223,469,784 
Net Increase in Net Assets Resulting From Operations  $210,757,934 

 

10 See Notes to Financial Statements.
 

Statements of Changes in Net Assets

 

INCREASE (DECREASE) IN NET ASSETSFor the Six Months
Ended January 31, 2015
(unaudited)
 For the Year Ended
July 31, 2014
 
Operations:          
           
Net investment loss  $(12,711,850)  $(26,590,796)
Net realized gain on investments in affiliated and unaffiliated issuers   88,158,818    847,494,369 
Net change in unrealized appreciation/depreciation on investments   135,310,966    (495,793,530)
Net increase in net assets resulting from operations   210,757,934    325,110,043 
Distributions to shareholders from:          
           
Net realized gain          
Class A   (198,062,639)   (236,161,401)
Class B   (1,929,339)   (2,877,024)
Class C   (22,854,567)   (26,097,350)
Class F   (30,495,380)   (30,372,276)
Class I   (223,041,282)   (236,822,523)
Class P   (15,504,601)   (19,221,012)
Class R2   (2,522,427)   (3,213,714)
Class R3   (49,621,757)   (59,143,866)
Total distributions to shareholders   (544,031,992)   (613,909,166)
Capital share transactions (Net of share conversions) (See Note 13):              
           
Net proceeds from sales of shares   353,803,465    842,463,384 
Reinvestment of distributions   510,666,157    571,337,582 
Cost of shares reacquired   (625,546,022)   (890,492,126)
Net increase in net assets resulting from capital share transactions   238,923,600    523,308,840 
Net increase (decrease) in net assets   (94,350,458)   234,509,717 
NET ASSETS:          
           
Beginning of period  $3,348,546,190   $3,114,036,473 
End of period  $3,254,195,732   $3,348,546,190 
Accumulated net investment loss  $(13,235,910)  $(524,060)

 

  See Notes to Financial Statements. 11
 

Financial Highlights

 

   Class A Shares
   Six Months         
   Ended         
   1/31/2015  Year Ended 7/31
   (unaudited)  2014  2013  2012  2011  2010
Per Share Operating Performance                        
                         
Net asset value, beginning of period  $24.37   $26.80   $21.24   $23.11   $16.51   $13.49 
                         
Investment operations:                        
                         
Net investment loss(a)  (.10)  (.23)  (.17)  (.20)  (.21)  (.16)
                         
Net realized and unrealized gain (loss)  1.65   3.16   7.44   (.41)  6.81   3.18 
                         
Total from investment operations  1.55   2.93   7.27   (.61)  6.60   3.02 
                         
Distributions to shareholders from:                        
                         
Net realized gain  (4.30)  (5.36)  (1.71)  (1.26)      
                         
Net asset value, end of period  $21.62   $24.37   $26.80   $21.24   $23.11   $16.51 
                         
Total Return(b)  6.33%(c)  10.49%  37.40%  (2.03)%  39.98%  22.48%
                         
Ratios to Average Net Assets:                        
                         
Expenses, including expense reductions  .52%(c)  1.08%  1.11%  1.12%  1.09%  1.14%
                         
Expenses, excluding expense reductions  .52%(c)  1.08%  1.11%  1.12%  1.09%  1.14%
                         
Net investment loss  (.42)%(c)  (.87)%  (.75)%  (.96)%  (.99)%  (1.01)%
                         
Supplemental Data:                        
                         
Net assets, end of period (000)  $1,101,792   $1,205,395   $1,188,182   $983,120   $979,130   $570,044 
                         
Portfolio turnover rate  93.10%(c)  242.06%  201.80%  195.11%  136.95%  156.05%

 

(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions.
(c) Not annualized.

 

12 See Notes to Financial Statements.
 

Financial Highlights (continued)

 

   Class B Shares
   Six Months         
   Ended         
   1/31/2015  Year Ended 7/31
   (unaudited)  2014  2013  2012  2011  2010
Per Share Operating Performance                        
                         
Net asset value, beginning of period  $19.94   $22.92   $18.52   $20.46   $14.72   $12.10 
                         
Investment operations:                        
                         
Net investment loss(a)  (.15)  (.34)  (.26)  (.29)  (.30)  (.23)
                         
Net realized and unrealized gain (loss)  1.35   2.72   6.37   (.39)  6.04   2.85 
                         
Total from investment operations  1.20   2.38   6.11   (.68)  5.74   2.62 
                         
Distributions to shareholders from:                        
                         
Net realized gain  (4.30)  (5.36)  (1.71)  (1.26)      
                         
Net asset value, end of period  $16.84   $19.94   $22.92   $18.52   $20.46   $14.72 
                         
Total Return(b)  5.96%(c)  9.81%  36.44%  (2.61)%  39.09%  21.67%
                         
Ratios to Average Net Assets:                        
                         
Expenses, including expense reductions  .88%(c)  1.73%  1.76%  1.76%  1.74%  1.79%
                         
Expenses, excluding expense reductions  .88%(c)  1.73%  1.76%  1.76%  1.74%  1.79%
                         
Net investment loss  (.79)%(c)  (1.53)%  (1.39)%  (1.59)%  (1.64)%  (1.66)%
                         
Supplemental Data:                        
                         
Net assets, end of period (000)  $8,597   $9,914   $13,286   $14,273   $21,161   $21,160 
                         
Portfolio turnover rate  93.10%(c)  242.06%  201.80%  195.11%  136.95%  156.05%

 

(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions.
(c) Not annualized.

 

  See Notes to Financial Statements. 13
 

Financial Highlights (continued)

 

   Class C Shares
   Six Months         
   Ended         
   1/31/2015  Year Ended 7/31
   (unaudited)  2014  2013  2012  2011  2010
Per Share Operating Performance                        
                         
Net asset value, beginning of period  $20.10   $23.06   $18.63   $20.58   $14.80   $12.17 
                         
Investment operations:                        
                         
Net investment loss(a)  (.15)  (.34)  (.27)  (.29)  (.31)  (.23)
                         
Net realized and unrealized gain (loss)  1.36   2.74   6.41   (.40)  6.09   2.86 
                         
Total from investment operations  1.21   2.40   6.14   (.69)  5.78   2.63 
                         
Distributions to shareholders from:                        
                         
Net realized gain  (4.30)  (5.36)  (1.71)  (1.26)      
                         
Net asset value, end of period  $17.01   $20.10   $23.06   $18.63   $20.58   $14.80 
                         
Total Return(b)  5.95%(c)  9.79%  36.44%  (2.60)%  38.99%  21.71%
                         
Ratios to Average Net Assets:                        
                         
Expenses, including expense reductions  .88%(c)  1.73%  1.76%  1.77%  1.74%  1.79%
                         
Expenses, excluding expense reductions  .88%(c)  1.73%  1.76%  1.77%  1.74%  1.79%
                         
Net investment loss  (.79)%(c)  (1.53)%  (1.39)%  (1.60)%  (1.64)%  (1.66)%
                         
Supplemental Data:                        
                         
Net assets, end of period (000)  $105,911   $112,399   $115,966   $107,011   $134,684   $79,512 
                         
Portfolio turnover rate  93.10%(c)  242.06%  201.80%  195.11%  136.95%  156.05%

 

(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions.
(c) Not annualized.

 

14 See Notes to Financial Statements.
 

Financial Highlights (continued)

 

   Class F Shares
   Six Months         
   Ended         
   1/31/2015  Year Ended 7/31
   (unaudited)  2014  2013  2012  2011  2010
Per Share Operating Performance                        
                         
Net asset value, beginning of period  $24.92   $27.23   $21.50   $23.33   $16.62   $13.55 
                         
Investment operations:                        
                         
Net investment loss(a)  (.08)  (.17)  (.11)  (.15)  (.16)  (.12)
                         
Net realized and unrealized gain (loss)  1.69   3.22   7.55   (.42)  6.87   3.19 
                         
Total from investment operations  1.61   3.05   7.44   (.57)  6.71   3.07 
                         
Distributions to shareholders from:                        
                         
Net realized gain  (4.30)  (5.36)  (1.71)  (1.26)      
                         
Net asset value, end of period  $22.23   $24.92   $27.23   $21.50   $23.33   $16.62 
                         
Total Return(b)  6.44%(c)  10.80%  37.69%  (1.74)%  40.31%  22.75%
                         
Ratios to Average Net Assets:                        
                         
Expenses, including expense reductions  .42%(c)  .83%  .86%  .87%  .84%  .88%
                         
Expenses, excluding expense reductions  .42%(c)  .83%  .86%  .87%  .84%  .88%
                         
Net investment loss  (.34)%(c)  (.63)%  (.50)%  (.71)%  (.74)%  (.75)%
                         
Supplemental Data:                        
                         
Net assets, end of period (000)  $255,627   $158,298   $160,061   $141,616   $190,426   $93,269 
                         
Portfolio turnover rate  93.10%(c)  242.06%  201.80%  195.11%  136.95%  156.05%

 

(a) Calculated using average shares outstanding during the period.
(b) Total return assumes the reinvestment of all distributions.
(c) Not annualized.

 

  See Notes to Financial Statements. 15
 

Financial Highlights (continued)

 

   Class I Shares
   Six Months         
   Ended         
   1/31/2015  Year Ended 7/31
   (unaudited)  2014  2013  2012  2011  2010
Per Share Operating Performance                       
                        
Net asset value, beginning of period  $26.85   $28.95   $22.73   $24.55   $17.48   $14.23 
                         
Investment operations:                        
                         
Net investment loss(a)  (.07)  (.15)  (.10)  (.14)  (.15)  (.11)
                         
Net realized and unrealized gain (loss)  1.81   3.41   8.03   (.42)  7.22   3.36 
                         
Total from investment operations  1.74   3.26   7.93   (.56)  7.07   3.25 
                         
Distributions to shareholders from:                        
                         
Net realized gain  (4.30)  (5.36)  (1.71)  (1.26)      
                         
Net asset value, end of period  $24.29   $26.85   $28.95   $22.73   $24.55   $17.48 
                         
Total Return(b)  6.46%(c)  10.93%  37.83%  (1.69)%  40.45%  22.93%
                         
Ratios to Average Net Assets:                       
                        
Expenses, including expense reductions  .37%(c)  .74%  .76%  .77%  .75%  .79%
                         
Expenses, excluding expense reductions  .37%(c)  .74%  .76%  .77%  .75%  .79%
                         
Net investment loss  (.28)%(c)  (.53)%  (.41)%  (.61)%  (.65)%  (.66)%
                         
Supplemental Data:                        
                         
Net assets, end of period (000)  $1,452,613    $1,463,636   $1,225,883   $830,601   $601,226   $279,772 
                         
Portfolio turnover rate  93.10%(c)  242.06%  201.80%  195.11%  136.95%  156.05%

 

(a) Calculated using average shares outstanding during the period.
(b) Total return assumes the reinvestment of all distributions.
(c) Not annualized.

 

16 See Notes to Financial Statements.
 

Financial Highlights (continued)

 

   Class P Shares
   Six Months         
   Ended         
   1/31/2015  Year Ended 7/31
   (unaudited)  2014  2013  2012  2011  2010
Per Share Operating Performance                        
                         
Net asset value, beginning of period  $23.81   $26.27   $20.85   $22.71   $16.25   $13.29 
                         
Investment operations:                        
                         
Net investment loss(a)  (.09)  (.20)  (.16)  (.19)  (.22)  (.17)
                         
Net realized and unrealized gain (loss)  1.61   3.10   7.29   (.41)  6.68   3.13 
                         
Total from investment operations  1.52   2.90   7.13   (.60)  6.46   2.96 
                         
Distributions to shareholders from:                        
                         
Net realized gain  (4.30)  (5.36)  (1.71)  (1.26)      
                         
Net asset value, end of period  $21.03   $23.81   $26.27   $20.85   $22.71   $16.25 
                         
Total Return(b)  6.35%(c)  10.64%  37.37%  (2.02)%  39.75%  22.36%
                         
Ratios to Average Net Assets:                        
                         
Expenses, including expense reductions  .50%(c)  .98%  1.09%  1.12%  1.19%  1.24%
                         
Expenses, excluding expense reductions  .50%(c)  .98%  1.09%  1.12%  1.19%  1.24%
                         
Net investment loss  (.39)%(c)  (.78)%  (.74)%  (.95)%  (1.09)%  (1.11)%
                         
Supplemental Data:                        
                         
Net assets, end of period (000)  $35,158   $90,665   $110,917   $85,649   $121,589   $115,303 
                         
Portfolio turnover rate  93.10%(c)  242.06%  201.80%  195.11%  136.95%  156.05%

 

(a) Calculated using average shares outstanding during the period.
(b) Total return assumes the reinvestment of all distributions.
(c) Not annualized.

 

  See Notes to Financial Statements. 17
 

Financial Highlights (continued)

 

   Class R2 Shares
   Six Months         
   Ended         
   1/31/2015  Year Ended 7/31
   (unaudited)  2014  2013  2012  2011  2010
Per Share Operating Performance                        
                         
Net asset value, beginning of period  $23.81   $26.35   $20.96   $22.89   $16.39   $13.43 
                         
Investment operations:                        
                         
Net investment loss(a)  (.14)  (.29)  (.22)  (.25)  (.27)  (.20)
                         
Net realized and unrealized gain (loss)  1.62   3.11   7.32   (.42)  6.77   3.16 
                         
Total from investment operations  1.48   2.82   7.10   (.67)  6.50   2.96 
                         
Distributions to shareholders from:                        
                         
Net realized gain  (4.30)  (5.36)  (1.71)  (1.26)      
                         
Net asset value, end of period  $20.99   $23.81   $26.35   $20.96   $22.89   $16.39 
                         
Total Return(b)  6.17%(c)  10.22%  37.00%  (2.23)%  39.60%  22.13%
                         
Ratios to Average Net Assets:                        
                         
Expenses, including expense reductions  .68%(c)  1.33%  1.36%  1.37%  1.35%  1.39%
                         
Expenses, excluding expense reductions  .68%(c)  1.33%  1.36%  1.37%  1.35%  1.39%
                         
Net investment loss  (.58)%(c)  (1.13)%  (1.00)%  (1.21)%  (1.24)%  (1.26)%
                         
Supplemental Data:                        
                         
Net assets, end of period (000)  $13,594   $14,855   $14,740   $12,522   $11,187   $3,453 
                         
Portfolio turnover rate  93.10%(c)  242.06%  201.80%  195.11%  136.95%  156.05%

 

(a) Calculated using average shares outstanding during the period.
(b) Total return assumes the reinvestment of all distributions.
(c) Not annualized.

 

18 See Notes to Financial Statements.
 

Financial Highlights (concluded)

 

   Class R3 Shares
   Six Months         
   Ended         
   1/31/2015  Year Ended 7/31
   (unaudited)  2014  2013  2012  2011  2010
Per Share Operating Performance                        
                         
Net asset value, beginning of period  $24.03   $26.53   $21.07   $22.97   $16.44   $13.45 
                         
Investment operations:                        
                         
Net investment loss(a)  (.12)  (.27)  (.20)  (.23)  (.25)  (.18)
                         
Net realized and unrealized gain (loss)  1.63   3.13   7.37   (.41)  6.78   3.17 
                         
Total from investment operations  1.51   2.86   7.17   (.64)  6.53   2.99 
                         
Distributions to shareholders from:                        
                         
Net realized gain  (4.30)  (5.36)  (1.71)  (1.26)      
                         
Net asset value, end of period  $21.24   $24.03   $26.53   $21.07   $22.97   $16.44 
                         
Total Return(b)  6.20%(c)  10.40%  37.09%  (2.13)%  39.72%  22.32%
                         
Ratios to Average Net Assets:                        
                         
Expenses, including expense reductions  .63%(c)  1.23%  1.26%  1.27%  1.25%  1.28%
                         
Expenses, excluding expense reductions  .63%(c)  1.23%  1.26%  1.27%  1.25%  1.28%
                         
Net investment loss  (.53)%(c)  (1.02)%  (.90)%  (1.12)%  (1.15)%  (1.16)%
                         
Supplemental Data:                        
                         
Net assets, end of period (000)  $280,904   $293,384   $285,000   $224,641   $159,496   $59,661 
                         
Portfolio turnover rate  93.10%(c)  242.06%  201.80%  195.11%  136.95%  156.06%

 

(a) Calculated using average shares outstanding during the period.
(b) Total return assumes the reinvestment of all distributions.
(c) Not annualized.

 

  See Notes to Financial Statements. 19
 

Notes to Financial Statements (unaudited)

 

1. ORGANIZATION  

 

Lord Abbett Developing Growth 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 incorporated under Maryland law on August 21, 1978. The Fund’s predecessor corporation was organized on July 11, 1973.

 

The Fund’s investment objective is long-term growth of capital through a diversified and actively managed portfolio consisting of developing growth companies, many of which are traded over the counter. The Fund has eight classes of shares: Class A, B, C, F, I, P, R2 and R3, 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 Class B, C, F, I, P, R2 and R3 shares, although there may be a contingent deferred sales charge (“CDSC”) in certain cases as follows: Class A shares purchased without a sales charge and redeemed before the first day of the month in which the one-year anniversary of the purchase falls (subject to certain exceptions as set forth in the Fund’s prospectus); 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 automatically convert to Class A shares on the 25th day of the month (or, if the 25th day is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted. The Fund is not available for purchase by new investors other than certain new investors described in the Fund’s prospectus. The Fund no longer issues Class B shares for purchase. The Fund’s Class P shares are closed to substantially all investors, with certain exceptions as set forth in the Fund’s prospectus.

 

The preparation of the 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 ValuationUnder 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. 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.

 

20

 

Notes to Financial Statements (unaudited)(continued)

 

  Securities for which prices are not readily available are valued at fair value as determined by the Pricing Committee. 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 the 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 TransactionsSecurity 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 IncomeDividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis as earned. Discounts are accreted and premiums are amortized using the effective interest method and are included in Interest income on the Statement of Operations. Withholding taxes on foreign dividends have been provided for in accordance with the applicable country’s tax rules and rates. Investment income is allocated to each class of shares based upon the relative proportion of net assets at the beginning of the day.
   
(d) Income TaxesIt 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 income tax provision is required.
   
  The Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Fund’s filed U.S. federal tax returns remains open for the fiscal years ended July 31, 2011 through July 31, 2014. The statutes of limitations on the Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.
   
(e) ExpensesExpenses, 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, F, P, R2 and R3 shares bear their class-specific share of all expenses and fees relating to the Fund’s 12b-1 Distribution Plan.
   
(f) Repurchase AgreementsThe 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 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.

 

21

 

Notes to Financial Statements (unaudited)(continued)

 

(g) Fair Value MeasurementsFair 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 January 31, 2015 and, if applicable, Level 1/Level 2 transfers and Level 3 rollforwards for the six 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.

 

3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES  

 

Management Fee

The Fund has a management agreement with Lord Abbett, pursuant to which Lord Abbett supplies the Fund with investment management services and executive and other personnel, 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 the following annual rate:

 

First $100 million .75%
Over $100 million .50%

 

For the six months ended January 31, 2015, the effective management fee was at an annualized rate of .51% of the Fund’s average daily net assets.

 

In addition, Lord Abbett provides certain administrative services to the Fund pursuant to an Administrative Services Agreement in return for a fee at an annual rate of .04% of the Fund’s average daily net assets.

 

22

 

Notes to Financial Statements (unaudited)(continued)

 

The Fund, along with certain other funds managed by Lord Abbett (collectively, the “Underlying Funds”), has entered into a Servicing Arrangement with certain “Fund of Funds” managed by Lord Abbett, pursuant to which each Underlying Fund pays a portion of the expenses (excluding management fees and distribution and service fees) of each Fund of Funds in proportion to the average daily value of the Underlying Fund shares owned by each Fund of Funds. Amounts paid pursuant to the Servicing Arrangement, if applicable, are included in Subsidy expense on the Fund’s Statement of Operations and Payable to affiliates on the Fund’s Statement of Assets and Liabilities.

 

As of January 31, 2015, the percentages of the Fund’s outstanding shares owned by Lord Abbett Alpha Strategy Fund and Lord Abbett Diversified Equity Strategy Fund were 7.07% and 0.38%, respectively.

 

12b-1 Distribution Plan

The Fund has adopted a distribution plan with respect to Class A, B, C, F, P, R2 and R3 shares pursuant to Rule 12b-1 under the Act, which provides for the payment of ongoing distribution and service fees to Lord Abbett Distributor LLC (the “Distributor”), an affiliate of Lord Abbett. The following maximum annual rates have been approved by the Board pursuant to the plan:

 

Fees*  Class A(1)  Class B  Class C  Class F  Class P  Class R2  Class R3
Service  .25%  .25%  .25%    .25%  .25%  .25%
Distribution    .75%  .75%  .10%  .20%  .35%  .25%

 

* The Fund may designate a portion of the aggregate fee as attributable to service activities for purposes of calculating Financial Industry Regulatory Authority, Inc. (“FINRA”) sales charge limitations.
(1) Prior to October 1, 2014, the Class A 12b-1 fee was .35% (.25% service, .10% distribution) of the Fund’s average daily net assets.

 

Class I shares do 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 six months ended January 31, 2015:

 

Distributor Dealers’
Commissions Concessions
$12,280 $69,892

 

Distributor received CDSCs of $301 and $3,965 for Class A and Class C shares, respectively, for the six months ended January 31, 2015.

 

A 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 annually. Taxable net realized gains from investment transactions, reduced by allowable 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 amounts 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;

 

23

 

Notes to Financial Statements (unaudited)(continued)

 

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 tax character of distributions paid during the six months ended January 31, 2015 and fiscal year ended July 31, 2014 was as follows:

 

   Six Months Ended
1/31/2015
(unaudited)
   Year Ended
7/31/2014
Distributions paid from:      
Ordinary income  $42,121,219  $236,981,734
Net long-term capital gains  501,910,773  376,927,432
Total distributions paid  $544,031,992  $613,909,166

 

As of January 31, 2015, the aggregate unrealized security gains and losses based on cost for U.S. federal income tax purposes were as follows:

 

Tax cost   $2,817,105,586
Gross unrealized gain   488,854,801
Gross unrealized loss   (80,335,382)
Net unrealized security gain   $408,519,419

 

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

 

5. PORTFOLIO SECURITIES TRANSACTIONS  

 

Purchases and sales of investment securities (excluding short-term investments) for the six months ended January 31, 2015 were as follows:

 

Purchases Sales
$3,071,453,785 $3,318,993,433

 

There were no purchases or sales of U.S. Government securities for the six months ended January 31, 2015.

 

6. DISCLOSURES ABOUT OFFSETTING ASSETS AND LIABILITIES  

 

The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-11 “Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). These disclosure requirements are intended to help better assess the effect or potential effect of offsetting arrangements on a fund’s financial position. In addition, FASB issued Accounting Standards Update No. 2013-01 “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities” (“ASU 2013-01”), specifying which transactions are subject to disclosures about offsetting.

 

The following tables illustrate gross and net information about recognized assets and liabilities eligible for offset in the statement of assets and liabilities; and disclose such amounts subject to an enforceable master netting agreement or similar agreement, by counterparty. A master netting agreement is an agreement between the Fund and a counterparty which provides for the net settlement of amounts owed under all contracts traded under that agreement, as well as cash collateral, through a single payment by one party to the other in the event of default on or termination of any one contract. The Fund’s accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the

 

24

 

Notes to Financial Statements (unaudited)(continued)

 

agreement, the master netting agreement does not result in an offset of reported amounts of financial assets and liabilities in the statement of assets and liabilities across transactions between the Fund and the applicable counterparty:

 

Description   Gross Amounts of
Recognized Assets
   Gross Amounts
Offset in the
Statement of Assets
and Liabilities
   Net Amounts of
Assets Presented
in the Statement of
Assets and Liabilities
 
Repurchase Agreement  $69,174,987   $–    $69,174,987 
Total  $69,174,987   $–    $69,174,987 

 

   Net Amounts
of Assets
Presented in
   Amounts Not Offset in the
Statement of Assets and Liabilities
     
   the Statement
of Assets and
   Financial   Cash
Collateral
   Securities
Collateral
   Net 
Counterparty   Liabilities   Instruments   Received(a)   Received(a)   Amount(b) 
Fixed Income Clearing Corp.  $69,174,987   $   $   $(69,174,987)  $ 
Total  $69,174,987   $   $   $(69,174,987)  $ 

 

(a) Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statement of Assets and Liabilities, for each respective counterparty.
(b) Net amount represents the amount owed to the Fund by the counterparty as of January 31, 2015.

 

7. DIRECTORS’ REMUNERATION  

 

The Fund’s officers and a Director, who are associated with Lord Abbett, do not receive any compensation from the Fund for serving in such capacities. Independent 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 Independent Directors under which Independent 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 had been invested 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.

 

8. EXPENSE REDUCTIONS  

 

The Fund has entered into an arrangement 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.

 

9. LINE OF CREDIT  

 

The Fund and certain other funds managed by Lord Abbett (collectively, the “Participating Funds”) participate in a $500 million unsecured revolving credit facility (the “Facility”) with State Street Bank and Trust Company (“SSB”). The Facility is to be used for temporary or emergency purposes as an additional source of liquidity to satisfy redemptions. The Participating Funds are subject to graduated borrowing limits of one-third of Fund assets (if Fund assets are less than $750 million), $250 million, $300 million, or $350 million based on past borrowings and likelihood of future borrowings. Each Participating Fund bears its ratable share of the $525,000 annual Facility fee based on the maximum amount the Fund can borrow under the Facility. This amount is included for the Fund in Other expenses in the Statement of Operations. Any borrowings under the Facility will incur interest at current market rates as set forth in the credit agreement.

 

During the six months ended January 31, 2015, the Fund did not utilize the Facility.

 

25

 

Notes to Financial Statements (unaudited)(continued)

 

10. TRANSACTIONS WITH AFFILIATED ISSUERS  

 

An affiliated issuer is one in which a fund has ownership of at least 5% of the outstanding voting securities of the underlying issuer at any point during the fiscal year. The Fund had the following transactions with affiliated issuers during the period ended January 31, 2015:

 

Affiliated
Issuer
  Balance of
Shares Held
at 7/31/2014
  Gross
Additions
  Gross
Sales
  Balance
of Shares
Held at
1/31/2015
  Value at
1/31/2015
   Net
Realized
Loss
8/1/2014
to
1/31/2015
(a)   Dividend Income 8/1/2014
to
1/31/2015
(a)
Blackhawk Network Holdings, Inc.(b)    709,914  (91,989)  617,925  $(c)  $19,087   $ 
Chuy’s Holdings, Inc.(b)  624,351  200,348  (824,699)     (c)   (4,021,775)    
Rentrak Corp.(b)  570,210  122,267  (96,204)  596,273   (c)   1,220,466     
Wayfair, Inc. Class A(b)    797,515  (18,505)  779,010   (c)   (291,760)    
ZELTIQ Aesthetics, Inc.  1,967,186  93,232  (556,573)  1,503,845   (c)   500,575     
zulily, Inc. Class A  968,288  444,055  (1,412,343)     (c)   (109,200)    
Total              $   $(2,682,607)  $ 

 

(a) Represents realized gains (losses) and dividend income earned only when the issuer was an affiliate of the Fund.
(b) Not an affiliated issuer as of July 31, 2014.
(c) No longer an affiliated issuer as of January 31, 2015.

 

11. CUSTODIAN AND ACCOUNTING AGENT  

 

SSB is the Fund’s custodian and accounting agent. SSB performs custodial, accounting and recordkeeping functions relating to portfolio transactions and calculating the Fund’s NAV.

 

12. 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 equity securities 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. Different types of stocks shift in and out of favor depending on market and economic conditions. Growth stocks tend to be more volatile than other stocks. In addition, if the Fund’s assessment of a company’s potential for growth or market conditions is wrong, it could suffer losses or produce poor performance relative to other funds, even in a rising market. The Fund invests primarily in small-cap growth company stocks, which tend to be more volatile and can be less liquid than other types of stocks. Small-cap companies may also have more limited product lines, markets or financial resources, and typically experience a higher risk of failure than large-cap companies. Because the Fund may invest a portion of its assets in foreign securities and American Depositary Receipts, it may experience increased market, liquidity, currency, political, information and other risks.

 

These factors can affect the Fund’s performance.

 

26

 

Notes to Financial Statements (unaudited)(continued)

 

13. SUMMARY OF CAPITAL TRANSACTIONS  

 

Transactions in shares of beneficial interest were as follows:

 

   Six Months Ended         
   January 31, 2015       Year Ended 
       (unaudited)       July 31, 2014 
Class A Shares  Shares   Amount   Shares   Amount 
Shares sold   3,297,547   $76,515,566    9,700,983   $258,791,616 
Converted from Class B*   33,451    787,776    43,683    1,149,400 
Reinvestment of distributions   8,336,101    180,476,587    8,682,287    216,536,246 
Shares reacquired   (10,171,358)   (237,866,981)   (13,304,879)   (348,086,525)
Increase   1,495,741   $19,912,948    5,122,074   $128,390,737 
                     
Class B Shares                    
Shares sold   6,825   $118,769    18,392   $402,180 
Reinvestment of distributions   110,911    1,872,179    134,473    2,756,701 
Shares reacquired   (62,374)   (1,171,711)   (182,665)   (3,967,605)
Converted to Class A*   (42,017)   (787,776)   (52,790)   (1,149,400)
Increase (decrease)   13,345   $31,461    (82,590)  $(1,958,124)
                     
Class C Shares                    
Shares sold   313,480   $5,525,929    421,120   $9,047,734 
Reinvestment of distributions   1,060,343    18,089,454    987,632    20,404,474 
Shares reacquired   (739,604)   (13,833,643)   (845,341)   (18,652,343)
Increase   634,219   $9,781,740    563,411   $10,799,865 
                     
Class F Shares                    
Shares sold   5,212,505   $120,807,404    1,354,882   $36,269,514 
Reinvestment of distributions   1,221,648    27,181,678    1,034,882    26,348,098 
Shares reacquired   (1,286,696)   (30,410,790)   (1,914,354)   (51,696,713)
Increase   5,147,457   $117,578,292    475,410   $10,920,899 
                     
Class I Shares                    
Shares sold   4,857,488   $125,317,709    15,134,744   $443,297,257 
Reinvestment of distributions   8,892,816    216,184,364    8,205,040    224,900,148 
Shares reacquired   (8,473,452)   (223,489,711)   (11,169,857)   (319,755,075)
Increase   5,276,852   $118,012,362    12,169,927   $348,442,330 
                     
Class P Shares                    
Shares sold   118,811   $2,779,156    302,418   $7,907,110 
Reinvestment of distributions   732,357    15,423,439    785,802    19,134,280 
Shares reacquired   (2,986,946)   (64,200,493)   (1,502,890)   (40,016,624)
Decrease   (2,135,778)  $(45,997,898)   (414,670)  $(12,975,234)

 

27

 

Notes to Financial Statements (unaudited)(concluded)

 

   Six Months Ended
January 31, 2015
(unaudited)
       Year Ended
July 31, 2014
 
Class R2 Shares  Shares   Amount   Shares   Amount 
Shares sold   93,741   $2,107,352    307,643   $8,106,006 
Reinvestment of distributions   86,407    1,817,129    86,596    2,113,801 
Shares reacquired   (156,364)   (3,576,802)   (329,750)   (8,365,967)
Increase   23,784   $347,679    64,489   $1,853,840 
                     
Class R3 Shares                    
Shares sold   885,578   $20,631,580    2,939,112   $78,641,967 
Reinvestment of distributions   2,331,829    49,621,327    2,402,268    59,143,834 
Shares reacquired   (2,198,704)   (50,995,891)   (3,877,904)   (99,951,274)
Increase   1,018,703   $19,257,016    1,463,476   $37,834,527 

 

* Automatic conversion of Class B shares occurs on the 25th day of the month (or, if the 25th day is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted.

 

28

 

Supplemental Proxy Information (unaudited)

 

A joint special meeting of shareholders of the Fund was held on December 4, 2014. The joint special meeting was held for the purpose of electing members of the Fund’s Board of Directors. Shareholders elected the following nine (9) Directors at the joint special meeting:

 

  E. Thayer Bigelow
  Robert B. Calhoun, Jr.
  Eric C. Fast
  Daria L. Foster
  Evelyn E. Guernsey
  Julie A. Hill
  Franklin W. Hobbs
  James M. McTaggart
  James L.L. Tullis

 

The results of the proxy solicitation on the preceding matter were as follows:

 

Lord Abbett Developing Growth Fund, Inc.

 

Nominee Votes For   Votes Withheld
E. Thayer Bigelow 59,717,529.841   1,463,508.319
Robert B. Calhoun, Jr. 59,806,913.303   1,374,124.857
Eric C. Fast 59,738,108.040   1,442,930.120
Daria L. Foster 59,880,066.677   1,300,971.483
Evelyn E. Guernsey 59,902,912.686   1,278,125.474
Julie A. Hill 59,868,319.367   1,312,718.793
Franklin W. Hobbs 59,867,253.547   1,313,784.613
James M. McTaggart 59,784,738.343   1,396,299.817
James L.L. Tullis 59,757,274.503   1,423,763.657

 

29

 

Approval of Advisory Contract

 

The Board of Directors of the Fund, including all of the Directors who are not interested persons of the Fund or of Lord Abbett, annually considers whether to approve the continuation of the existing management agreement between the Fund and Lord Abbett. In connection with its most recent approval, the Board reviewed materials relating specifically to the management agreement, as well as numerous materials received throughout the course of the year, including information about the Fund’s investment performance compared to the performance of its benchmark. Before making its decision as to the Fund, the Board had the opportunity to ask questions and request further information, taking into account its familiarity with Lord Abbett gained through its meetings and discussions. These meetings and discussions included the examination of the portfolio management team conducted by members of the Contract Committee, the deliberations of the Contract Committee, and discussions between the Contract Committee and Lord Abbett’s management.

 

The materials received by the Board included, but were not limited to: (1) information provided by Morningstar Associates, LLC (“Morningstar”) regarding the investment performance of the Fund compared to the investment performance of a group of funds in the same Morningstar investment category (the “performance peer group”) and the investment performance of one or more appropriate benchmarks; (2) information provided by Morningstar regarding the expense ratios, contractual and effective management fee rates, and other expense components for the Fund and one or more groups of funds in the same Morningstar category, with the same share classes and operational characteristics, including asset size (the “expense peer group”); (3) certain supplemental investment performance information provided by Lord Abbett; (4) information provided by Lord Abbett on the projected expense ratios, management fee rates, and other expense components for the Fund; (5) sales and redemption information for the Fund; (6) information regarding Lord Abbett’s financial condition; (7) an analysis of the relative profitability of the management agreement to Lord Abbett; (8) information provided by Lord Abbett regarding the investment management fees Lord Abbett receives from its other advisory clients maintaining accounts with a similar investment strategy as the Fund; (9) information regarding the distribution arrangements of the Fund; and (10) information regarding the personnel and other resources devoted by Lord Abbett to managing the Fund.

 

Investment Management Services Generally. The Board considered the investment management services provided by Lord Abbett to the Fund, including investment research, portfolio management, and trading, and Lord Abbett’s commitment to compliance with all applicable legal requirements. The Board also observed that Lord Abbett was solely engaged in the investment management business and accordingly did not experience the conflicts of interest that may result from being engaged in other lines of business. The Board considered the investment advisory services provided by Lord Abbett to other clients, the fees charged for the services, and the differences in the nature of the services provided to the Fund and other Lord Abbett Funds, on the one hand, and the services provided to other clients, on the other.

 

Investment Performance. The Board reviewed the Fund’s investment performance in relation to that of the performance peer group as of various periods ended August 31, 2014. The Board observed that the Fund’s investment performance was above the median of the performance peer group for each of the periods.

 

Lord Abbett’s Personnel and Methods. The Board considered the qualifications of the personnel providing investment management services to the Fund, in light of its investment objective and discipline. Among other things, the Board considered the size, experience, and turnover of Lord Abbett’s investment management staff, Lord Abbett’s investment methodology and philosophy,

 

30

 

Approval of Advisory Contract (continued)

 

and Lord Abbett’s approach to recruiting, training, and retaining investment management personnel.

 

Nature and Quality of Other Services. The Board considered the nature, quality, costs, and extent of compliance, administrative, and other services performed by Lord Abbett and the Distributor and the nature and extent of Lord Abbett’s supervision of third party service providers, including the Fund’s transfer agent and custodian.

 

Expenses. The Board considered the expense level of the Fund and the expense levels of the expense peer group. It also considered the projected expense levels and how those levels would relate to those of the expense peer group and the amount and nature of the fees paid by shareholders. The Board observed that the overall expense level of the Fund was well below the median of the expense peer group.

 

Profitability. The Board considered the level of Lord Abbett’s profits in managing the Fund, including a review of Lord Abbett’s methodology for allocating its costs to its management of the Fund. The Board concluded that the allocation methodology had a reasonable basis and was appropriate. It considered any profits realized by Lord Abbett in connection with the operation of the Fund, including the fee that Lord Abbett receives from the Fund for providing administrative services to the Fund, and whether the amount of profit was fair for the management of the Fund. The Board also considered the profits realized from other business segments of Lord Abbett, which may benefit from or be related to the Fund’s business. The Board considered Lord Abbett’s profit margins in comparison with available industry data, both accounting for and ignoring marketing and distribution expenses, and how those profit margins could affect Lord Abbett’s ability to recruit and retain investment personnel. The Board recognized that Lord Abbett’s profitability was a factor in enabling it to attract and retain qualified investment management personnel to provide services to the Fund. The Board concluded that Lord Abbett’s profitability as to the Fund was not excessive.

 

Economies of Scale. The Board considered whether there had been any economies of scale in managing the Fund, whether the Fund had appropriately benefited from any such economies of scale, and whether there was potential for realization of any further economies of scale. The Board concluded that the existing management fee schedule, with its breakpoint or breakpoints in the level of the management fee, adequately addressed any economies of scale in managing the Fund.

 

Other Benefits to Lord Abbett. The Board considered the character and amount of fees paid by the Fund and the Fund’s shareholders to Lord Abbett and the Distributor for services other than investment advisory services. The Board also considered the revenues and profitability of Lord Abbett’s investment advisory business apart from its mutual fund business, and the intangible benefits enjoyed by Lord Abbett by virtue of its relationship with the Fund. The Board observed that the Distributor receives 12b-1 fees from certain of the Lord Abbett Funds as to shares held in accounts for which there is no other broker of record, may retain a portion of the 12b-1 fees it receives, and receives a portion of the sales charges on sales and redemptions of some classes of shares. In addition, the Board observed that Lord Abbett accrues certain benefits for its business of providing investment advice to clients other than the Lord Abbett Funds, but that business also benefits the Funds. The Board also noted that Lord Abbett, as disclosed in the prospectus of the Fund, has entered into revenue sharing arrangements with certain entities that distribute shares of the Fund. The Board also took into consideration the investment research that Lord Abbett receives as a result of Fund brokerage transactions.

 

31

 

Approval of Advisory Contract (concluded)

 

Alternative Arrangements. The Board considered whether, instead of approving continuation of the management agreement, it might be in the best interests of the Fund to implement one or more alternative arrangements, such as continuing to employ Lord Abbett, but on different terms. After considering all of the relevant factors, the Board unanimously found that continuation of the existing management agreement was in the best interests of the Fund and its shareholders and voted unanimously to approve the continuation of the management agreement. In considering whether to approve the continuation of the management agreement, the Board did not identify any single factor as paramount or controlling. This summary does not discuss in detail all matters considered.

 

32

 

Householding

 

The Fund 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 888-522-2388 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 Records

 

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 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 are available without charge, upon request on the SEC’s Website at www.sec.gov and may be available by calling Lord Abbett at 888-522-2388. You can also obtain copies of Form N-Q by 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).

 

33

 

 

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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 mutual fund shares are distributed by   LADG-3
LORD ABBETT DISTRIBUTOR LLC. Lord Abbett Developing Growth Fund, Inc. (03/15)
 
Item 2: Code of Ethics.
  Not applicable.
   
Item 3: Audit Committee Financial Expert.
  Not applicable.
   
Item 4: Principal Accountant Fees and Services.
  Not applicable.
   
Item 5: Audit Committee of Listed Registrants.
  Not applicable.
   
Item 6: Investments.
  Not applicable.
   
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 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) 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 Investment Company Act of 1940 is attached hereto as a part of EX-99.CERT.
     
  (b) 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 provided as a part of EX-99.906CERT.
 

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 DEVELOPING GROWTH FUND, INC.
         
    By: /s/ Daria L. Foster  
      Daria L. Foster  
      President and Chief Executive Officer  
         
Date: March 26, 2015        
         
    By: /s/ Joan A. Binstock  
      Joan A. Binstock  
      Chief Financial Officer and Vice President
         
Date: March 26, 2015        
 

 

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: March 26, 2015      
       
  By: /s/ Joan A. Binstock  
    Joan A. Binstock  
    Chief Financial Officer and Vice President
       
Date: March 26, 2015      
 
EX-99.CERT 2 c80543_ex99-cert.htm CERTIFICATION

EX-99.CERT

 

CERTIFICATIONS

 

Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

 

I, Daria L. Foster, certify that:

 

1.I have reviewed this report on Form N-CSR of Lord Abbett Developing Growth Fund, Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report;

 

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:

 

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
 
(d)disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

 

5.The Registrant’s other certifying officer and I have disclosed to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

 

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and

 

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

Date: March 26, 2015

 

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

CERTIFICATIONS

 

Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

 

I, Joan A. Binstock, certify that:

 

1.I have reviewed this report on Form N-CSR of Lord Abbett Developing Growth Fund, Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report;

 

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:

 

 (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
   
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
 
(d)disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

 

 5.The Registrant’s other certifying officer and I have disclosed to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

 

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and
   
 (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

Date: March 26, 2015

 

  /s/ Joan A. Binstock  
  Joan A. Binstock  
  Chief Financial Officer and Vice President  
 
EX-99.906 CERT 3 c80543_ex99-906cert.htm CERTIFICATION

EX-99.906CERT

 

CERTIFICATIONS

 

Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

 

Each of the undersigned below certifies that:

 

1.This report on Form N-CSR of Lord Abbett Developing Growth Fund, Inc. (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the issuer.

 

Date: March 26, 2015

 

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

 

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

 

A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, OR OTHER DOCUMENT AUTHENTICATING, ACKNOWLEDGING, OR OTHERWISE ADOPTING THE SIGNATURE THAT APPEARS IN TYPED FORM WITHIN THE ELECTRONIC VERSION OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO THE REGISTRANT AND WILL BE RETAINED BY THE REGISTRANT AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.

 
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