-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DTW8tblP/OUtI9ggd+PIhHauYMOP2XMwLPHfnGXniD8rENl4808ZPJLJ1Q9XAnXo s8Ibmf6ZwRHCaeR1S5wXog== /in/edgar/work/0000950116-00-002610/0000950116-00-002610.txt : 20001031 0000950116-00-002610.hdr.sgml : 20001031 ACCESSION NUMBER: 0000950116-00-002610 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000831 FILED AS OF DATE: 20001030 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOYAGEUR INVESTMENT TRUST CENTRAL INDEX KEY: 0000879342 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06411 FILM NUMBER: 748728 BUSINESS ADDRESS: STREET 1: 90 SOUTH SEVENTH ST STREET 2: STE 4400 CITY: MINNEAPOLIS STATE: MN ZIP: 44502-4115 BUSINESS PHONE: 2152552127 MAIL ADDRESS: STREET 1: 90 SOUTH SEVENTH ST STREET 2: STE 4400 CITY: MINNEAPOLIS STATE: MN ZIP: 44502-4115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOYAGEUR TAX FREE FUNDS CENTRAL INDEX KEY: 0000733362 STANDARD INDUSTRIAL CLASSIFICATION: [ ] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-03910 FILM NUMBER: 748729 BUSINESS ADDRESS: STREET 1: 90 SOUTH SEVENTH STREET STREET 2: SUITE 4400 CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 2152552127 MAIL ADDRESS: STREET 1: 90 SOUTH SEVENTH STREET STREET 2: SUITE 4400 CITY: MINNEAPOLIS STATE: MN ZIP: 55402 FORMER COMPANY: FORMER CONFORMED NAME: VOYAGEUR TAX FREE FUNDS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: VOYAGEUR MINNESOTA TAX FREE FUNDS INC DATE OF NAME CHANGE: 19910226 FORMER COMPANY: FORMER CONFORMED NAME: DOUBLE EXEMPT FLEX FUND INC DATE OF NAME CHANGE: 19900131 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOYAGEUR MUTUAL FUNDS CENTRAL INDEX KEY: 0000906236 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] IRS NUMBER: 411756458 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07742 FILM NUMBER: 748730 BUSINESS ADDRESS: STREET 1: 90 SOUTH SEVENTH ST STREET 2: STE 4400 CITY: MINNEAPOLIS STATE: MN ZIP: 55402-4115 BUSINESS PHONE: 2152552127 MAIL ADDRESS: STREET 1: 90 SOUTH SEVENTH ST STREET 2: STE 4400 CITY: MINNEAPOLIS STATE: MN ZIP: 55402-4115 FORMER COMPANY: FORMER CONFORMED NAME: VOYAGEUR MUTUAL FUNDS INC DATE OF NAME CHANGE: 19930714 N-30D 1 0001.txt DELAWARE(SM) INVESTMENTS - ----------- Delaware Tax-Free Idaho Fund Delaware Tax-Free Iowa Fund Delaware Tax-Free Kansas Fund Delaware Tax-Free Missouri Insured Fund Delaware Montana Municipal Bond Fund Delaware Tax-Free North Dakota Fund Delaware Tax-Free Oregon Insured Fund Delaware Tax-Free Wisconsin Fund Tax-Exempt Income 2000 ANNUAL REPORT (Tax-Exempt Income Artwork) TABLE OF CONTENTS ----------------- Letter to Shareholders 1 Portfolio Management Review 4 Performance Summary Delaware Tax-Free Idaho Fund 9 Delaware Tax-Free Iowa Fund 10 Delaware Tax-Free Kansas Fund 11 Delaware Tax-Free Missouri Insured Fund 12 Delaware Montana Municipal Bond Fund 13 Delaware Tax-Free North Dakota Fund 14 Delaware Tax-Free Oregon Insured Fund 15 Delaware Tax-Free Wisconsin Fund 16 Financial Statements Statements of Net Assets 17 Statements of Operations 34 Statements of Changes in Net Assets 35 Financial Highlights 37 Notes to Financial Statements 59 A TRADITION OF SOUND INVESTING SINCE 1929 ----------------------------------------- A Commitment To Our Investors Experienced [ ] Our seasoned investment professionals average more than 15 years' experience. [ ] We began managing investments in 1929 and opened our first mutual fund in 1938. Over the past 70 years, we have weathered a full range of economic and market environments. Disciplined [ ] We follow strict investment policies and clear buy/sell guidelines. [ ] We strive to balance risk and reward in order to provide sound investment alternatives within any given asset class. Consistent [ ] We clearly articulate our investment policies and follow them consistently. [ ] Our commitment to consistency has earned us the confidence of discriminating institutional and individual investors to manage more than $44 billion in assets as of September 30, 2000. Comprehensive [ ] We offer more than 70 mutual funds in these asset classes. o Large-cap equity o High-yield bonds o Mid-cap equity o Investment grade bonds o Small-cap equity o Municipal bonds (23 single-state funds) o International equity o International fixed-income o Balanced [ ] Our funds are available through financial advisers who can offer you individualized attention and valuable investment advice. Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested. (C)Delaware Distributors, L.P. "WE BELIEVE RISING TREASURY PRICES LEFT MUNICIPAL BONDS IN A POSITION OF RELATIVE VALUE." Dear Shareholder October 9, 2000 Recap of Events - Throughout most of the Funds' fiscal year ended August 31, 2000, the Federal Reserve Board focused on tightening the U.S. money supply, conducting a prolonged series of interest rate hikes. A strong U.S. economy and threatening inflation prompted the Fed to bump up short-term interest rates four times during the period, with the last increase coming on May 16, 2000. During the fall of 1999, many bond buyers seemed to be ignoring municipal bonds in favor of the higher-yielding corporate bonds that were flooding the market. That scenario changed later in our fiscal year when interest rate hikes in February and March, coupled with the U.S. Treasury buyback and turmoil in the U.S. stock market in April, led to a marked increase in demand for the safety of U.S. Treasury securities. We believe rising Treasury prices left municipal bonds in a position of relative value. Investors began to recognize this value as Treasury yields dropped and AAA-rated municipal bond yields exceeded 6% in March (Source: Bloomberg). Since then, we have generally seen demand for municipal bonds on the upswing.* Increased tax revenue resulting from the strong economy and higher borrowing costs resulting from rising interest rates caused many state and local governments to reduce the number of municipal bonds they issued during our fiscal year. This caused demand to exceed supply as we ended our year (Source: Moody's Investors Service Inc.). Total Return For Period Ended August 31, 2000 One Year - -------------------------------------------------------------------------------- Delaware Tax-Free Idaho Fund Class A +3.25% - -------------------------------------------------------------------------------- Delaware Tax-Free Iowa Fund Class A +5.35% - -------------------------------------------------------------------------------- Delaware Montana Municipal Bond Fund Class A +6.10%** - -------------------------------------------------------------------------------- Delaware Tax-Free North Dakota Fund Class A +3.58% - -------------------------------------------------------------------------------- Delaware Tax-Free Wisconsin Fund Class A +4.62% - -------------------------------------------------------------------------------- Lipper Other States Municipal Debt Funds Average (77 funds) +4.54% - -------------------------------------------------------------------------------- Delaware Tax-Free Kansas Fund Class A +4.14% - -------------------------------------------------------------------------------- Lipper Kansas Municipal Debt Funds Average (13 funds) +4.44% - -------------------------------------------------------------------------------- Delaware Tax-Free Missouri Insured Fund Class A +4.99% - -------------------------------------------------------------------------------- Lipper Missouri Municipal Debt Funds Average (20 funds) +4.91% - -------------------------------------------------------------------------------- Delaware Tax-Free Oregon Insured Fund Class A +6.04% - -------------------------------------------------------------------------------- Lipper Oregon Municipal Debt Funds Average (25 funds) +5.20% - -------------------------------------------------------------------------------- Lehman Brothers Municipal Bond Index +6.77% Lehman Brothers Insured Municipal Bond Index +7.40% - -------------------------------------------------------------------------------- All performance shown above is at net asset value without the effect of sales charges and assumes reinvestment of dividends and capital gains. Performance for all Fund classes can be found on pages 9 through 16. The Lipper categories represent the average returns of municipal bond funds with similar investment objectives tracked by Lipper (Source: Lipper, Inc.). The unmanaged Lehman Brothers Indexes are composed of bonds with a variety of quality ratings from many states. You cannot invest directly in an index. Past performance does not guarantee future results. *The U.S. Government does not guarantee principal and interest of municipal bonds, unlike Treasuries. **Since Fund's inception on November 2, 1999. 1 "WE ARE ENCOURAGED BY THE CURRENT MARKET ENVIRONMENT." The flip-flop between supply and demand in the municipal markets happened gradually throughout 2000. The Fed's latest interest rate hike in May supported that trend. By the end of our fiscal year, demand for municipal bonds remained high while municipal bond issuance for 2000 declined by about 19%, a reduction of about $33 billion from the same period one year prior (Source: Thomson Financial). Long-term interest rates began to decline during the summer months, with the 30-year mortgage rate at 7.64% on August 31, 2000, about three quarters of a percentage point off its spring 2000 high for the year. The average yield on 30-year AAA-rated municipal bonds, which rarely is more than the yield for the 30-year Treasury bond, stood at 5.68% on August 31, 2000. By comparison, the 30-year Treasury bond was yielding 5.66% and two-year Treasury notes 6.16% on August 31, 2000 (Source: Bloomberg).* For municipal bond tax-equivalent yields, see the chart on page 8. Delaware's Municipal Bond Funds for Idaho, Iowa, Kansas, Missouri, Montana, North Dakota, Oregon, and Wisconsin struggled during the first half of the fiscal year, but then rode the municipal market rally to solid overall returns as of August 31, 2000. The Funds' portfolios are managed with a long-term perspective. Therefore, relatively few significant changes were made to the Funds during the fiscal year. This long-term investment approach can minimize trading costs and limit capital gains. As a result, investors may get to keep more of what they earn. While there was a relatively small supply of bonds in some states, the scant supply of new bonds often helped improve the value of the bonds we held. *The U.S. Government does not guarantee principal and interest of municipal bonds, unlike Treasuries. (Tax-Exempt Income Artwork) 2 Market Outlook - We are encouraged by the current market environment. As of this writing, the predominant opinion on Wall Street is that the Fed is firmly in a holding pattern with regard to its actions on interest rates. Evident slowing in the U.S. economy, which has prompted the Fed to leave rates untouched at its last three meetings, could eventually lead to lesser revenues for states and municipalities. In our opinion, this would likely lead to a general increase in the issuance of municipal bonds. We believe that municipal bonds will continue to play a role in well-diversified portfolios. In addition, we believe that in an environment where interest rates trend downward, investing in municipal bond funds could prove to be more attractive to investors than buying individual bonds. In such an environment, municipal bond funds, like Delaware's, are holding slightly older bonds -- many of which were issued at more attractive rates than most new issues coming to market. Thank you for your continued confidence and your commitment to Delaware Investments. Sincerely, /s/Wayne A. Stork /s/David K. Downes Wayne A. Stork David K. Downes Chairman, President and Chief Executive Officer, Delaware Investments Family of Funds Delaware Investments Family of Funds 3 Elizabeth H. Howell Senior Portfolio Manager October 9, 2000 Delaware Tax-Free Idaho Fund Sector Allocation As of August 31, 2000 Pre-Refunded 6.67% General Obligation 4.34% Industrial Development 3.14% Higher Education 2.82% Certificates of Participation 2.07% Miscellaneous 22.17% [graphic omitted] Housing 14.71% Hospitals 21.97% Pollution Control 22.11% PORTFOLIO MANAGEMENT REVIEW - --------------------------- The Funds' Results During the year ended August 31, 2000, we began to see strong performance in municipal markets despite changing interest rates. While municipal bond fund cash flows are negative year-to-date, July 2000 brought positive numbers that we hope to see continue, with investors pouring a net $850 million dollars into municipal bond funds (Source: Investment Company Institute). The year was characterized by a continued diminishing of municipal bond supply, as states, counties, and municipalities issued fewer bonds, likely due to strong local economies and tax bases, as well as the dramatic decline in bond refunding. Although healthcare bonds were weak during the period, bond issues for public projects such as transportation and higher education often exhibited strength. Credit upgrades for bonds were also substantial -- especially among tax-backed bonds (Source: Moody's Investors Service). State and local municipalities in the Midwest and Pacific Northwest continued to enjoy fiscal prosperity during the year. We believe the credit quality of most states in these two regions is relatively high, and we anticipate that the credit ratings of the bonds we hold will generally remain solid. During July and August, widespread forest fires affected many Northwestern states. Although the clean-up and rebuilding that takes place afterwards will be costly, we think that fire-related expenses will ultimately not affect local economies in a profound way. These states had strong bases prior to the fires, and are likely to receive a significant amount of federal aid afterward. The fluctuating interest rate environment, meanwhile, dictated the need throughout our fiscal year for managing portfolio duration -- a key statistic that indicates a bond fund's sensitivity to interest rate movement. Delaware Tax-Free Idaho Fund Delaware Tax-Free Idaho Fund had a total return of +3.25% (for Class A shares at net asset value with distributions reinvested) for the year ended August 31, 2000. The Fund did not perform as well as other funds in its peer group, the Lipper Other States Municipal Debt Funds, which returned +4.54% for the same period. We held a modest percentage of the Fund's assets in Industrial Development Revenue bonds (IDRs). The Fund's performance was mildly hampered at times by these holdings as prices for IDRs declined during the period, which occurred in response to weakness in the corporate bond market in relation to U.S. Treasuries. We continue to hold IDRs as we believe this is a temporary situation. While issuance of double tax-exempt bonds was generally sparse during the period, we found supply to be adequate. The Fund was fully invested during the period, and more than 20% of the bonds in the portfolio were non-rated. Non-rated bonds are typically issued by small municipalities looking to avoid the expense of obtaining a credit rating from a major agency like Moody's or Standard & Poor's. We rigorously research non-rated bond issues before adding them to the portfolio, and once the bonds are part of our portfolio we monitor their credit quality on a regular basis. We maintained duration in the mid-range, which is in line with our peers. We generally held bonds with higher credit ratings than our peers, which helped the Fund's performance. Idaho was one of the states affected by forest fires during the summer. The fires generated an increase in unemployment benefit payouts, and also affected the state's tourism and recreation industry. Idaho ended fiscal 1999 with an operating surplus, and its general fund revenues grew by 9.6%, which was larger than expected (Source: Standard & Poor's). We believe that the cost of the fires will have a relatively small effect on Idaho's overall economy. Because the economic and financial condition of the state has improved in recent years, our general outlook for Idaho is favorable. 4 Delaware Tax-Free Iowa Fund Sector Allocation As of August 31, 2000 Transportation 8.55% Power Authority 8.49% Hospitals 3.08% Higher Education 7.43% Miscellaneous 27.85% (graphic omitted) Water & Sewer 11.42% Industrial Development 16.21% Pre-Refunded/Escrowed to Maturity 16.97% Delaware Tax-Free Kansas Fund Sector Allocation As of August 31, 2000 Hospitals 9.84% Housing 9.36% Industrial Development 7.93% Power Authority 6.29% Miscellaneous 4.76% Pre-Refunded 20.15% (graphic omitted) Water & Sewer 12.41% Higher Education 14.51% General Obligation 14.75% Delaware Tax-Free Iowa Fund Delaware Tax-Free Iowa Fund had a total return of +5.35% (for Class A shares at net asset value with distributions reinvested) for the year ended August 31, 2000. We succeeded in preserving capital to a greater degree than the Fund's peer group, which delivered a 4.54% return for the same period. The Fund seeks to invest exclusively in bonds that are exempt from both federal and state income tax. During the fiscal year, there were relatively few new issues of double tax-exempt bonds in Iowa. Nevertheless, the Fund was fully invested. During the year, we kept the Fund's duration at a point that we considered to be modestly long. This approach benefited the Fund when long interest rates began to decline in May 2000. In addition, the Fund benefited from strong credit selection in a state that is currently enjoying a sound economy. While Iowa continues to be largely dependent on agriculture, its broad economy has become more diversified in recent years, and the state has reaped the rewards of that diversity. Revenues generated by the services and finances sectors, as well as the insurance and real estate sectors, have contributed to Iowa's general fund balance. In the past fiscal year, the state has also benefited from increased revenues derived from legalized gambling. Delaware Tax-Free Kansas Fund Delaware Tax-Free Kansas Fund had a total return of +4.14% (for Class A shares at net asset value with distributions reinvested) for the year ended August 31, 2000. The Fund's performance fell slightly below that of its peers, as measured by the Lipper Kansas Municipal Debt Funds Average, which returned +4.44% for the same period. More than 30% of the portfolio was invested in BBB and non-rated bonds, and these lower-rated investment grade issues helped increase the Fund's dividend, but didn't rally as strong as AA and AAA high-grade bonds over the time period. Kansas continues to benefit from a broad and diverse economy that continues to provide growth in income and employment. Growth in services, trade, construction and manufacturing has increased economic diversity in the state and has lessened the state's dependence on the more cyclical agricultural sector. 5 Delaware Tax-Free Missouri Insured Fund Sector Allocation As of August 31, 2000 Miscellaneous 12.57% Industrial Development 2.15% Water & Sewer 5.58% General Obligation 5.16% Utilities 4.72% Power Authority 4.38% Pre-Refunded/ Escrowed to Maturity 27.31% (graphic omitted) Housing 13.90% Hospitals 24.23% Delaware Montana Municipal Bond Fund Sector Allocation As of August 31, 2000 Pollution Control 9.75% Transportation 6.49% Miscellaneous 5.13% Power Authority 3.99% Housing 2.85% Hospitals 2.82% Higher Education 36.79% (graphic omitted) General Obligation 16.00% Continuing Care/ Retirement 16.18% Delaware Tax-Free Missouri Insured Fund Delaware Tax-Free Missouri Insured Fund had a total return of +4.99% (for Class A shares at net asset value with distributions reinvested) for the year ended August 31, 2000, outperforming other funds in its peer group, as measured by the Lipper Missouri Municipal Debt Funds Average, which posted a +4.91% return for the same period. The Fund was invested exclusively in insured bonds rated AAA by Standard & Poor's -- the highest credit rating available. About 27% of the Fund's holdings were in pre-refunded bonds. Issuers often pre-refund their outstanding bonds when interest rates decline in order to reduce their interest costs. As the year progressed and long-term interest rates declined, some bonds in the portfolio were pre-refunded. In most cases, we continue to hold bonds once they have been pre-refunded. Pre-refunded bonds often help a Fund because: [ ] Pre-refunded bonds are backed by investments in U.S. government bonds, which are held in a separate escrow account. [ ] The price and credit quality increases because the bond will be paid off at the first call date. [ ] In general, prices for these bonds are less sensitive to interest rate fluctuations. Rapid growth in many Missouri cities has led to increased housing and commercial real estate development. Such growth has boosted property values and tax revenues. We believe Missouri's municipalities should continue to benefit from this positive development. In addition, with the recovery of the Asian markets, the state's exports have rebounded from a slump over the past two years. Delaware Montana Municipal Bond Fund Delaware Montana Municipal Bond Fund had a total return of +6.10% (for Class A shares at net asset value with distributions reinvested) since the Fund's inception on November 2, 1999 through August 31, 2000. The Fund slightly underperformed the average of its peers in the Lipper Other States Municipal Debt Funds Average, which returned +6.38% for the same period. During the fiscal year, the supply of bonds exempt from both federal and state income tax was very sparse, but adequate for our needs, and the Fund was fully invested in investment-grade issues. It is estimated that the Montana wildfires will cost the state approximately $60 million in fire-related expenses, unemployment compensation and small business loans (Source: Standard & Poor's). While the state expects to receive considerable federal assistance with fire-related costs, a significant contribution from the state's general fund will likely be necessary. Current estimates indicate that the state will have to spend approximately $12 million, or about 9.2% of its fiscal year-end 1999 general fund balance for fire-related expenses. However, recent reports estimate that Montana's general fund balance for fiscal year-end 2000 is encouraging, even surpassing earlier projections (Source: Standard & Poor's). So far, the state has been able to absorb the fire fighting expenses, and the fires have had no immediate effect on Montana's credit rating, according to Standard & Poor's. Because the economic and financial condition of the state has improved in recent years, our general outlook for Montana is favorable. 6 Delaware Tax-Free North Dakota Fund Sector Allocation As of August 31, 2000 Miscellaneous 8.89% Higher Education 7.30% Transportation 6.24% Pre-Refunded 4.08% Industrial Development 2.15% Hospitals 31.96% (graphic omitted) Power Authority 11.21% Housing 28.17% Delaware Tax-Free Oregon Insured Fund Sector Allocation As of August 31, 2000 Higher Education 13.83% Certificates of Participation 5.32% Transportation 4.70% Power Authority 3.51% Housing 3.50% Hospitals 3.31% Miscellaneous 1.69% Pre-Refunded 25.02% (graphic omitted) Water & Sewer 14.91% General Obligation 24.21% Delaware Tax-Free North Dakota Fund Delaware Tax-Free North Dakota Fund had a total return of +3.58% (for Class A shares at net asset value with distributions reinvested) for the year ended August 31, 2000. The Fund's return lagged that of the average fund in its peer group, as measured by the Lipper Other States Municipal Debt Funds Average, which returned +4.54% for the same period. Despite its reliance on agriculture and oil production, North Dakota's economic base has remained stable. With access to Canadian markets, North Dakota is a regional distribution hub for surrounding states. Financial services growth has benefited from the state's proximity to Minnesota, as Minnesota-based financial services companies have frequently been relocating back-office operations to the low tax environment of North Dakota. Delaware Tax-Free Oregon Insured Fund Delaware Tax-Free Oregon Insured Fund had a total return of +6.04% (for Class A shares at net asset value with distributions reinvested) for the year ended August 31, 2000. The Fund outperformed its peers in the Lipper Oregon Municipal Debt Fund Average, which returned +5.20% for the same period. The Fund was invested exclusively in insured bonds rated AAA by Standard & Poor's. Much of the Fund's relatively strong performance can be attributed to discount bonds that were purchased several years ago. As long-term interest rates declined, prices on these bonds often rose significantly. In recent years, Oregon has benefited from a growing economy, an expanding population and a growing labor force. The state has moved away from its heavy reliance on timber and agriculture, and now enjoys a broader mix of high technology, service and international trade businesses. The state's current economic forecast suggests that its economy may grow at a slightly greater rate than that of the national economy in fiscal 2000 and 2001(Source: Standard & Poor's). 7 Delaware Tax-Free Wisconsin Fund Sector Allocation As of August 31, 2000 Lease/Certificates of Participation 16.24% Industrial Development 15.31% Power Authority 7.32% Higher Education 2.44% Housing 25.52% (graphic omitted) Pre-Refunded/ Escrowed to Maturity 16.32% Miscellaneous 16.85% Delaware Tax-Free Wisconsin Fund Delaware Tax-Free Wisconsin Fund had a total return of +4.62% (for Class A shares at net asset value with distributions reinvested) for the year ended August 31, 2000. The Fund outperformed the average fund in its peer group, the Lipper Other States Municipal Debt Funds Average, which posted +4.54% for the same period. The Fund was fully invested in high-quality issues, which contributed to the Fund's strong return. While there are many municipal issuers in the state, relatively few issue double tax-exempt bonds. Because supply was low during the period, we continued to supplement the Fund's investments with double tax-exempt bonds issued by Puerto Rico and the Virgin Islands. A trend of strong economic and employment growth continued to benefit Wisconsin during the period. Wisconsin ranks second in the nation, behind Michigan, in manufacturing jobs. However, most of Wisconsin's employment growth has been in the service and trade sectors of the economy. Over the next few years, economic growth is expected to be positive but is not expected to outpace that of the nation (Source: Standard & Poor's). Outlook In the months ahead, we anticipate a positive environment for municipal bonds. We think it is possible that the strong performance seen in the first half of 2000 could continue through the fall. As always with municipal bonds, this depends largely on interest rate trends, as well as supply and demand in the municipal markets. As of this writing, long-term interest rates have been trending downward. And while the Federal Reserve Board has promised to remain vigilant about keeping inflation under control, many analysts and investors seem to agree that short-term rate increases may be finished for this year. We feel that a non-inflationary U.S. economy that has less-robust growth is likely to boost the demand for capital funding. This would be a positive for municipal bonds and for the Funds. In our opinion, municipal bond funds will continue to be an important investment vehicle -- which can provide diversification to an investor's overall portfolio, as well as providing individual investors with a vehicle that strives to preserve capital and generate non-taxable income.* 30-Year AAA-Rated Municipal Bonds Tax-Equivalent Yields As of Ausgust 31, 2000 Tax-Equivalent Yield Income Tax Bracket -------------------- ------------------ 6.68% 15 % 7.88% 28 % 8.23% 31 % 8.88% 36 % 9.40% 39.6% - ------------------------------------ As of August 31, 2000, the yield on 30-year AAA-rated municipal bonds nationally was 5.68% (Source: Bloomberg). The chart shows what the equivalent yield would be on a taxable investment for investors in each tax bracket.** - ------------------------------------ *A portion of the income from tax-exempt funds may be subject to the alternative minimum tax. **Principal and interest of municipal bonds, unlike U.S. Treasury securities, are not guaranteed by the U.S. government. The above illustration is not intended to represent the yield of any mutual fund from Delaware Investments. 8 FUND BASICS Fund Objective The Fund seeks as high a level of current income exempt from federal and Idaho state personal income taxes as is consistent with preservation of capital. Total Fund Assets As of August 31, 2000 $48.62 million Number of Holdings 56 Fund Start Date January 4, 1995 Your Fund Manager Elizabeth H. Howell joined Delaware Investments via its acquisition of Voyageur Fund Managers in 1997. She previously held management positions at Windsor Financial Group, Loomis Sayles and Eaton Vance Management. She holds a bachelor's degree from Skidmore College, an MBA degree from Babson College and is a member of the Twin Cities Securities Analysts Society. Nasdaq Symbols Class A VIDAX Class B DVTIX Class C DVICX DELAWARE TAX-FREE IDAHO FUND PERFORMANCE Growth of a $10,000 Investment January 4, 1995 through August 31, 2000 Lehman Brothers Delaware Tax-Free Idaho Municipal Bond Fund Class A Index Jan-95 $9,625 $10,000 Feb-95 $10,168 $10,291 Aug-95 $10,676 $10,897 Feb-96 $11,305 $11,428 Aug-96 $11,314 $11,468 Feb-97 $11,910 $12,057 Aug-97 $12,436 $12,528 Feb-98 $13,118 $13,159 Aug-98 $13,560 $13,612 Feb-99 $13,844 $13,968 Aug-99 $13,425 $13,686 Feb-00 $13,010 $13,677 Aug-00 $13,860 $14,607 Chart assumes $10,000 invested on January 4, 1995 and includes the effect of a 3.75% front-end sales charge and the reinvestment of all dividends and capital gains. Performance of other Fund classes will vary due to differing charges and expenses. Returns plotted on the chart were as of the last day of each successive month. Past performance does not guarantee future results. Average Annual Total Returns Through August 31, 2000 Lifetime Five Years One Year - -------------------------------------------------------------------------------- Class A (Est. 1/4/95) Excluding Sales Charge +6.68% +5.37% +3.25% Including Sales Charge +5.96% +4.56% -0.65% - -------------------------------------------------------------------------------- Class B (Est. 3/16/95) Excluding Sales Charge +5.03% +4.69% +2.58% Including Sales Charge +4.88% +4.35% -1.35% - -------------------------------------------------------------------------------- Class C (Est. 1/11/95) Excluding Sales Charge +5.76% +4.56% +2.58% Including Sales Charge +5.76% +4.56% +1.60% - -------------------------------------------------------------------------------- Returns reflect reinvestment of distributions and any applicable sales charges as noted below. Return and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Class B and C share results, excluding sales charges, assume either that contingent deferred sales charges did not apply or the investment was not redeemed. Past performance is not a guarantee of future results. Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee. Class B shares do not have a front-end sales charge, but are subject to a 1% annual distribution and service fee. They are also subject to a contingent deferred sales charge of up to 4% if redeemed before the end of the sixth year. Class C shares have a 1% annual distribution and service fee. If redeemed within 12 months, a 1% contingent deferred sales charge applies. An expense limitation was in effect for all classes of Delaware Tax-Free Idaho Fund during the periods shown. Performance would have been lower if the expense limitation was not in effect. Portfolio Characteristics August 31, 2000 - -------------------------------------------------------------------------------- Current 30-Day SEC Yield* +4.93% - -------------------------------------------------------------------------------- Average Effective Duration** 8.6 years - -------------------------------------------------------------------------------- Average Effective Maturity*** 13.9 years - -------------------------------------------------------------------------------- Average Credit Quality BBB - -------------------------------------------------------------------------------- * For Class A shares measured according to Securities and Exchange Commission (SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for both Class B and C shares was +4.38%. ** Duration is a common measure of a bond or bond fund's sensitivity to interest rate changes. *** Average effective maturity is the average time remaining until scheduled repayment by issuers of portfolio securities. 9 FUND BASICS Fund Objective The Fund seeks as high a level of current income exempt from federal and Iowa state personal income taxes as is consistent with preservation of capital. Total Fund Assets As of August 31, 2000 $40.86 million Number of Holdings 38 Fund Start Date September 1, 1993 Your Fund Manager Elizabeth H. Howell Nasdaq Symbols Class A VITFX Class B DVFIX Class C DVIFX DELAWARE TAX-FREE IOWA FUND PERFORMANCE Growth of a $10,000 Investment September 1, 1993 through August 31, 2000 Lehman Brothers Delaware Tax-Free Iowa Municipal Bond Fund Class A Index Sep-93 $9,625 $10,000 Aug-94 $9,367 $9,901 Aug-95 $9,956 $10,779 Aug-96 $10,433 $11,343 Aug-97 $11,485 $12,392 Aug-98 $12,424 $13,464 Aug-99 $12,390 $13,537 Aug-00 $13,054 $14,448 Chart assumes $10,000 invested on September 1, 1993 and includes the effect of a 3.75% front-end sales charge and the reinvestment of all dividends and capital gains. Performance of other Fund classes will vary due to differing charges and expenses. Returns plotted on the chart were as of the last day of each successive month. Past performance does not guarantee future results. Average Annual Total Returns Through August 31, 2000 Lifetime Five Years One Year - -------------------------------------------------------------------------------- Class A (Est. 9/1/93) Excluding Sales Charge +4.47% +5.57% +5.35% Including Sales Charge +3.90% +4.78% +1.38% - -------------------------------------------------------------------------------- Class B (Est. 3/24/95) Excluding Sales Charge +5.09% +4.79% +4.56% Including Sales Charge +4.94% +4.46% +0.56% - -------------------------------------------------------------------------------- Class C (Est. 1/4/95) Excluding Sales Charge +6.32% +4.75% +4.57% Including Sales Charge +6.32% +4.75% +3.57% - -------------------------------------------------------------------------------- Returns reflect reinvestment of distributions and any applicable sales charges as noted below. Return and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Class B and C share results, excluding sales charges, assume either that contingent deferred sales charges did not apply or the investment was not redeemed. Past performance is not a guarantee of future results. Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee. Class B shares do not have a front-end sales charge, but are subject to a 1% annual distribution and service fee. They are also subject to a contingent deferred sales charge of up to 4% if redeemed before the end of the sixth year. Class C shares have a 1% annual distribution and service fee. If redeemed within 12 months, a 1% contingent deferred sales charge applies. An expense limitation was in effect for all classes of Delaware Tax-Free Iowa Fund during the periods shown. Performance would have been lower if the expense limitation was not in effect. Portfolio Characteristics August 31, 2000 - -------------------------------------------------------------------------------- Current 30-Day SEC Yield* +4.20% - -------------------------------------------------------------------------------- Average Effective Duration** 6.6 years - -------------------------------------------------------------------------------- Average Effective Maturity*** 9.1 years - -------------------------------------------------------------------------------- Average Credit Quality BBB - -------------------------------------------------------------------------------- *For Class A shares measured according to Securities and Exchange Commission (SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for both Class B and C shares was +3.62%. **Duration is a common measure of a bond or bond fund's sensitivity to interest rate changes. ***Average effective maturity is the average time remaining until scheduled repayment by issuers of portfolio securities. 10 FUND BASICS Fund Objectives The Fund seeks as high a level of current income exempt from federal and Kansas state personal income taxes as is consistent with preservation of capital. Total Fund Assets As of August 31, 2000 $14.63 million Number of Holdings 40 Fund Start Date November 30, 1992 Your Fund Manager Elizabeth H. Howell Nasdaq Symbols Class A VKSTX Class B DVKBX Class C DVKCX DELAWARE TAX-FREE KANSAS FUND PERFORMANCE Growth of a $10,000 Investment November 30, 1992 through August 31, 2000 Lehman Brothers Delaware Tax-Free Kansas Municipal Bond Fund Class A Index Dec-92 $9,625 $10,000 Aug-93 $10,766 $10,948 Aug-94 $10,813 $10,963 Aug-95 $11,571 $11,935 Aug-96 $12,242 $12,560 Aug-97 $13,316 $13,721 Aug-98 $14,537 $14,908 Aug-99 $14,587 $14,990 Aug-00 $15,191 $15,998 Chart assumes $10,000 invested on November 30, 1992 and includes the effect of a 3.75% front-end sales charge and the reinvestment of all dividends and capital gains. Performance of other Fund classes will vary due to differing charges and expenses. Returns plotted on the chart were as of the last day of each successive month. Past performance does not guarantee future results. Average Annual Total Returns Through August 31, 2000 Lifetime Five Years One Year - -------------------------------------------------------------------------------- Class A (Est. 11/30/92) Excluding Sales Charge +6.08% +5.60% +4.14% Including Sales Charge +5.56% +4.80% +0.27% - -------------------------------------------------------------------------------- Class B (Est. 4/8/95) Excluding Sales Charge +5.01% +4.83% +3.45% Including Sales Charge +4.86% +4.50% -0.51% - -------------------------------------------------------------------------------- Class C (Est. 4/12/95) Excluding Sales Charge +4.98% +4.84% +3.46% Including Sales Charge +4.98% +4.84% +2.47% - -------------------------------------------------------------------------------- Returns reflect reinvestment of distributions and any applicable sales charges as noted below. Return and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Class B and C share results, excluding sales charges, assume either that contingent deferred sales charges did not apply or the investment was not redeemed. Past performance is not a guarantee of future results. Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee. Class B shares do not have a front-end sales charge, but are subject to a 1% annual distribution and service fee. They are also subject to a contingent deferred sales charge of up to 4% if redeemed before the end of the sixth year. Class C shares have a 1% annual distribution and service fee. If redeemed within 12 months, a 1% contingent deferred sales charge applies. An expense limitation was in effect for all classes of Delaware Tax-Free Kansas Fund during the periods shown. Performance would have been lower if the expense limitation was not in effect. Portfolio Characteristics August 31, 2000 - -------------------------------------------------------------------------------- Current 30-Day SEC Yield* +4.60% - -------------------------------------------------------------------------------- Average Effective Duration** 6.7 years - -------------------------------------------------------------------------------- Average Effective Maturity** * 9.7 years - -------------------------------------------------------------------------------- Average Credit Quality A - -------------------------------------------------------------------------------- *For Class A shares measured according to Securities and Exchange Commission (SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for both Class B and C shares was +4.03%. **Duration is a common measure of a bond or bond fund's sensitivity to interest rate changes. ***Average effective maturity is the average time remaining until scheduled repayment by issuers of portfolio securities. 11 DELAWARE TAX-FREE MISSOURI INSURED FUND PERFORMANCE - --------------------------------- Fund Basics - ----------- Fund Objective The Fund seeks as high a level of current income exempt from federal and Missouri state personal income taxes as is consistent with preservation of capital. Total Fund Assets As of August 31, 2000 $48.71 million Number of Holdings 39 Fund Start Date November 2, 1992 Your Fund Manager Elizabeth H. Howell Nasdaq Symbols Class A VMOIX Class B DVTBX Class C DVTCX Growth of a $10,000 Investment November 2, 1992 through August 31, 2000 Lehman Brothers Delaware Tax-Free Insured Municipal Missouri Insured Bond Index Fund Class A Nov-92 10,000 9,625 Feb-93 10,635 10,083 Aug-93 11,137 10,629 Feb-94 11,235 10,840 Aug-94 11,082 10,455 Feb-95 11,440 10,776 Aug-95 12,092 11,304 Feb-96 12,725 11,965 Aug-96 12,748 11,941 Feb-97 13,417 12,548 Aug-97 13,947 13,024 Feb-98 14,697 13,686 Aug-98 15,231 14,082 Feb-99 15,618 14,410 Aug-99 15,186 14,028 Feb-00 15,154 13,932 Aug-00 16,313 14,727 Chart assumes $10,000 invested on November 2, 1992 and includes the effect of a 3.75% front-end sales charge and the reinvestment of all dividends and capital gains. Performance of other Fund classes will vary due to differing charges and expenses. Returns plotted on the chart were as of the last day of each successive month. Past performance does not guarantee future results. Total Return Through August 31, 2000 Lifetime Five Years One Year - -------------------------------------------------------------------------------- Class A (Est. 11/2/92) Excluding Sales Charge +5.74% +5.44% +4.99% Including Sales Charge +5.23% +4.64% +1.08% - -------------------------------------------------------------------------------- Class B (Est. 3/12/94) Excluding Sales Charge +4.48% +4.72% +4.21% Including Sales Charge +4.48% +4.39% +0.21% - -------------------------------------------------------------------------------- Class C (Est. 11/11/95) Excluding Sales Charge +4.03% +4.20% Including Sales Charge +4.03% +3.20% - -------------------------------------------------------------------------------- Returns reflect reinvestment of distributions and any applicable sales charges as noted below. Return and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Class B and C share results, excluding sales charges, assume either that contingent deferred sales charges did not apply or the investment was not redeemed. Past performance is not a guarantee of future results. Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee. Class B shares do not have a front-end sales charge, but are subject to a 1% annual distribution and service fee. They are also subject to a contingent deferred sales charge of up to 4% if redeemed before the end of the sixth year. Class C shares have a 1% annual distribution and service fee. If redeemed within 12 months, a 1% contingent deferred sales charge applies. An expense limitation was in effect for all classes of Delaware Tax-Free Missouri Insured Fund during the periods shown. Performance would have been lower if the expense limitation was not in effect. Portfolio Characteristics August 31, 2000 - -------------------------------------------------------------------------------- Current 30-Day SEC Yield* +4.20% - -------------------------------------------------------------------------------- Average Effective Duration** 5.8 years - -------------------------------------------------------------------------------- Average Effective Maturity*** 7.1 years - -------------------------------------------------------------------------------- Average Credit Quality AAA - -------------------------------------------------------------------------------- *For Class A shares measured according to Securities and Exchange Commission (SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for both Class B and C shares was +3.61%. **Duration is a common measure of a bond or bond fund's sensitivity to interest rate changes. ***Average effective maturity is the average time remaining until scheduled repayment by issuers of portfolio securities. 12 DELAWARE MONTANA MUNICIPAL BOND FUND PERFORMANCE - ------------------------------- Fund Basics - ----------- Fund Objective The Fund seeks as high a level of current income exempt from federal and Montana state personal income taxes as is consistent with preservation of capital. Total Fund Assets As of August 31, 2000 $3.64 million Number of Holdings 21 Fund Start Date November 2, 1999 Your Fund Manager Elizabeth H. Howell Nasdaq Symbols Class A DMTAX Class B DMTBX Class C DMTCX Growth of a $10,000 Investment November 2, 1999 through August 31, 2000 Delaware Montana Municipal Bond Fund Lehman Brothers Class A Municipal Bond Index Apr-91 $9,632 $10,000 Aug-91 $9,650 $10,000 Aug-92 $9,597 $9,925 Aug-93 $9,580 $9,882 Aug-94 $9,671 $9,997 Aug-95 $9,867 $10,216 Aug-96 $9,799 $10,158 Aug-97 $9,718 $10,103 Aug-98 $9,922 $10,371 Aug-99 $10,055 $10,515 Aug-00 $10,207 $10,677 Chart assumes $10,000 invested on November 2, 1999 and includes the effect of a 3.75% front-end sales charge and the reinvestment of all dividends and capital gains. Performance of other Fund classes will vary due to differing charges and expenses. Returns plotted on the chart were as of the last day of each successive month. Past performance does not guarantee future results. Total Return Through August 31, 2000 Lifetime - -------------------------------------------------------------------------------- Class A (Est. 11/2/99) Excluding Sales Charge +6.10% Including Sales Charge +2.19% - -------------------------------------------------------------------------------- Class B (Est. 11/2/99) Excluding Sales Charge +5.65% Including Sales Charge +1.65% - -------------------------------------------------------------------------------- Class C (Est. 11/2/99) Excluding Sales Charge +5.65% Including Sales Charge +4.65% - -------------------------------------------------------------------------------- Returns reflect reinvestment of distributions and any applicable sales charges as noted below. Return and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Class B and C share results, excluding sales charges, assume either that contingent deferred sales charges did not apply or the investment was not redeemed. Past performance is not a guarantee of future results. Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee. Class B shares do not have a front-end sales charge, but are subject to a 1% annual distribution and service fee. They are also subject to a contingent deferred sales charge of up to 4% if redeemed before the end of the sixth year. Class C shares have a 1% annual distribution and service fee. If redeemed within 12 months, a 1% contingent deferred sales charge applies. An expense limitation was in effect for all classes of Delaware Montana Municipal Bond Fund during the periods shown. Performance would have been lower if the expense limitation was not in effect. Portfolio Characteristics August 31, 2000 - -------------------------------------------------------------------------------- Current 30-Day SEC Yield* +4.93% - -------------------------------------------------------------------------------- Average Effective Duration** 8.6 years - -------------------------------------------------------------------------------- Average Effective Maturity*** 13.5 years - -------------------------------------------------------------------------------- Average Credit Quality A - -------------------------------------------------------------------------------- *For Class A shares measured according to Securities and Exchange Commission (SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for both Class B and C shares was +4.42%. **Duration is a common measure of a bond or bond fund's sensitivity to interest rate changes. ***Average effective maturity is the average time remaining until scheduled repayment by issuers of portfolio securities. 13 DELAWARE TAX-FREE NORTH DAKOTA FUND PERFORMANCE - ----------------------------- Fund Basics - ----------- Fund Objective This Fund seeks as high a level of current income exempt from federal and North Dakota state personal income taxes as is consistent with preservation of capital. Total Fund Assets As of August 31, 2000 $23.97 million Number of Holdings 34 Fund Start Date April 1, 1991 Your Fund Manager Elizabeth H. Howell Nasdaq Symbols Class A VNDTX Class B DVTDX Class C DVFDX Growth of a $10,000 Investment April 1, 1991 through August 31, 2000 Delaware Tax-Free Lehman Brothers North Dakota Fund Municipal Bond Class A Index Apr-91 $9,625 $10,000 Aug-91 $10,090 $10,336 Aug-92 $11,092 $11,464 Aug-93 $12,636 $12,892 Aug-94 $12,498 $12,910 Aug-95 $13,517 $14,055 Aug-96 $14,294 $14,791 Aug-97 $15,599 $16,158 Aug-98 $16,905 $17,555 Aug-99 $16,835 $17,651 Aug-00 $17,436 $18,839 Chart assumes $10,000 invested on April 1, 1991 and includes the effect of a 3.75% front-end sales charge and the reinvestment of all dividends and capital gains. Performance of other Fund classes will vary due to differing charges and expenses. Returns plotted on the chart were as of the last day of each successive month. Past performance does not guarantee future results. Average Annual Total Returns Through August 31, 2000 Lifetime Five Years One Year - -------------------------------------------------------------------------------- Class A (Est. 4/1/91) Excluding Sales Charge +6.53% +5.24% +3.58% Including Sales Charge +6.10% +4.44% -0.29% - -------------------------------------------------------------------------------- Class B (Est. 5/10/94) Excluding Sales Charge +5.39% +4.57% +2.81% Including Sales Charge +5.39% +4.24% -1.12% - -------------------------------------------------------------------------------- Class C (Est. 7/29/95) Excluding Sales Charge +4.52% +4.35% +2.79% Including Sales Charge +4.52% +4.35% +1.81% - -------------------------------------------------------------------------------- Returns reflect reinvestment of distributions and any applicable sales charges as noted below. Return and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Class B and C share results, excluding sales charges, assume either that contingent deferred sales charges did not apply or the investment was not redeemed. Past performance is not a guarantee of future results. Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee. Class B shares do not have a front-end sales charge, but are subject to a 1% annual distribution and service fee. They are also subject to a contingent deferred sales charge of up to 4% if redeemed before the end of the sixth year. Class C shares have a 1% annual distribution and service fee. If redeemed within 12 months, a 1% contingent deferred sales charge applies. An expense limitation was in effect for all classes of Delaware Tax-Free North Dakota Fund during the periods shown. Performance would have been lower if the expense limitation was not in effect. Portfolio Characteristics August 31, 2000 - -------------------------------------------------------------------------------- Current 30-Day SEC Yield* +4.84% - -------------------------------------------------------------------------------- Average Effective Duration** 6.8 years - -------------------------------------------------------------------------------- Average Effective Maturity*** 10.6 years - -------------------------------------------------------------------------------- Average Credit Quality A - -------------------------------------------------------------------------------- *For Class A shares measured according to Securities and Exchange Commission (SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for Class B shares was +4.28%. For Class C shares, the 30-day SEC yield was +4.29%. **Duration is a common measure of a bond or bond fund's sensitivity to interest rate changes. ***Average effective maturity is the average time remaining until scheduled repayment by issuers of portfolio securities. 14 FUND BASICS - ----------- Fund Objective This Fund seeks as high a level of current income exempt from federal and Oregon state personal income taxes, as is consistent with preservation of capital. Total Fund Assets As of August 31, 2000 $31.81 million Number of Holdings 38 Fund Start Date August 1, 1993 Your Fund Manager Elizabeth H. Howell Nasdaq Symbols Class A VORIX Class B DVYBX Class C DVYCX DELAWARE TAX-FREE OREGON INSURED FUND PERFORMANCE - ------------------------------- Growth of a $10,000 Investment August 1, 1993 through August 31, 2000 Lehman Brothers Delaware Tax-Free Insured Municipal Oregon Insured Fund Bond Index Class A ----------------- ------------------- Aug-93 10,000 9,625 Feb-94 10,088 9,958 Aug-94 9,951 9,595 Feb-95 10,273 9,876 Aug-95 10,858 10,352 Feb-96 11,427 10,935 Aug-96 11,447 10,892 Feb-97 12,048 11,427 Aug-97 12,524 11,896 Feb-98 13,197 12,561 Aug-98 13,677 12,940 Feb-99 14,024 13,230 Aug-99 13,637 12,723 Feb-00 13,607 12,573 Aug-00 14,648 13,942 Chart assumes $10,000 invested on August 1, 1993 and includes the effect of a 3.75% front-end sales charge and the reinvestment of all dividends and capital gains. Performance of other Fund classes will vary due to differing charges and expenses. Returns plotted on the chart were as of the last day of each successive month. Past performance does not guarantee future results. Average Annual Total Returns Through August 31, 2000 Lifetime Five Years One Year - -------------------------------------------------------------------------------- Class A (Est. 8/1/93) Excluding Sales Charge +4.90% +5.44% +6.04% Including Sales Charge +4.33% +4.63% +2.09% - -------------------------------------------------------------------------------- Class B (Est. 3/12/94) Excluding Sales Charge +4.42% +4.74% +5.24% Including Sales Charge +4.42% +4.40% +1.24% - -------------------------------------------------------------------------------- Class C (Est. 7/7/95) Excluding Sales Charge +4.62% +4.63% +5.24% Including Sales Charge +4.62% +4.63% +4.24% - -------------------------------------------------------------------------------- Returns reflect reinvestment of distributions and any applicable sales charges as noted below. Return and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Class B and C share results, excluding sales charges, assume either that contingent deferred sales charges did not apply or the investment was not redeemed. Past performance is not a guarantee of future results. Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee. Class B shares do not have a front-end sales charge, but are subject to a 1% annual distribution and service fee. They are also subject to a contingent deferred sales charge of up to 4% if redeemed before the end of the sixth year. Class C shares have a 1% annual distribution and service fee. If redeemed within 12 months, a 1% contingent deferred sales charge applies. An expense limitation was in effect for all classes of Delaware Tax-Free Oregon Insured Fund during the periods shown. Performance would have been lower if the expense limitation was not in effect. Portfolio Characteristics August 31, 2000 - -------------------------------------------------------------------------------- Current 30-Day SEC Yield* +4.22% - -------------------------------------------------------------------------------- Average Effective Duration** 7.9 years - -------------------------------------------------------------------------------- Average Effective Maturity*** 10.4 years - -------------------------------------------------------------------------------- Average Credit Quality AAA - -------------------------------------------------------------------------------- * For Class A shares measured according to Securities and Exchange Commission (SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for both Class B and C shares was +3.64%. ** Duration is a common measure of a bond or bond fund's sensitivity to interest rate changes. *** Average effective maturity is the average time remaining until scheduled repayment by issuers of portfolio securities. 15 FUND BASICS - ----------- Fund Objective This Fund seeks as high a level of current income exempt from federal and Wisconsin state personal income taxes, as is consistent with preservation of capital. Total Fund Assets As of August 31, 2000 $33.36 million Number of Holdings 44 Fund Start Date September 1, 1993 Your Fund Manager Elizabeth H. Howell Nasdaq Symbols Class A VWIFX Class B DVTWX Class C DVFWX DELAWARE TAX-FREE WISCONSIN FUND PERFORMANCE - -------------------------- Growth of a $10,000 Investment September 1, 1993 through August 31, 2000 Delaware Tax-Free Lehman Brothers Wisconsin Fund Municipal Class A Bond Index ------------------- ----------------- Sep-93 $ 9,625 $10,000 Aug-94 $ 9,394 $ 9,901 Aug-95 $10,055 $10,779 Aug-96 $10,564 $11,343 Aug-97 $11,477 $12,392 Aug-98 $12,411 $13,464 Aug-99 $12,302 $13,537 Aug-00 $12,870 $14,448 Chart assumes $10,000 invested on September 1, 1993 and includes the effect of a 3.75% front-end sales charge and the reinvestment of all dividends and capital gains. Performance of other Fund classes will vary due to differing charges and expenses. Returns plotted on the chart were as of the last day of each successive month. Past performance does not guarantee future results. Average Annual Total Returns Through August 31, 2000 Lifetime Five Years One Year - -------------------------------------------------------------------------------- Class A (Est. 9/1/93) Excluding Sales Charge +4.25% +5.07% +4.62% Including Sales Charge +3.69% +4.26% +0.72% - -------------------------------------------------------------------------------- Class B (Est. 4/22/95) Excluding Sales Charge +4.38% +4.33% +3.84% Including Sales Charge +4.22% +3.99% -0.15% - -------------------------------------------------------------------------------- Class C (Est. 3/28/95) Excluding Sales Charge +4.47% +4.30% +3.93% Including Sales Charge +4.47% +4.30% +2.93% - -------------------------------------------------------------------------------- Returns reflect reinvestment of distributions and any applicable sales charges as noted below. Return and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Class B and C share results, excluding sales charges, assume either that contingent deferred sales charges did not apply or the investment was not redeemed. Past performance is not a guarantee of future results. Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee. Class B shares do not have a front-end sales charge, but are subject to a 1% annual distribution and service fee. They are also subject to a contingent deferred sales charge of up to 4% if redeemed before the end of the sixth year. Class C shares have a 1% annual distribution and service fee. If redeemed within 12 months, a 1% contingent deferred sales charge applies. An expense limitation was in effect for all classes of Delaware Tax-Free Wisconsin Fund during the periods shown. Performance would have been lower if the expense limitation was not in effect. Portfolio Characteristics August 31, 2000 - -------------------------------------------------------------------------------- Current 30-Day SEC Yield* +4.44% - -------------------------------------------------------------------------------- Average Effective Duration** 6.8 years - -------------------------------------------------------------------------------- Average Effective Maturity*** 9.8 years - -------------------------------------------------------------------------------- Average Credit Quality BBB - -------------------------------------------------------------------------------- * For Class A shares measured according to Securities and Exchange Commission (SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for Class B shares was +3.87%. For Class C shares, the 30-day SEC yield was +3.85%. ** Duration is a common measure of a bond or bond fund's sensitivity to interest rate changes. *** Average effective maturity is the average time remaining until scheduled repayment by issuers of portfolio securities. 16 Statements of Net Assets DELAWARE TAX-FREE IDAHO FUND Principal Market August 31, 2000 Amount Value - -------------------------------------------------------------------------------- Municipal Bonds - 97.99% General Obligation Bonds - 4.34% Ada & Canyon County School District #2 5.50% 7/30/16 ..................... $ 1,055,000 $ 1,079,708 Bonner County Local Improvement District #93-1 6.20% 4/30/05 .................. 150,000 155,082 Bonner County Local Improvement District #93-1 6.35% 4/30/06 .................. 185,000 191,482 Bonner County Local Improvement District #93-1 6.40% 4/30/07 .................. 195,000 201,827 Bonner County Local Improvement District #93-1 6.50% 4/30/08 .................. 110,000 113,843 Bonner County Local Improvement District #93-1 6.50% 4/30/10 .................. 100,000 103,244 Coeur D' Alene Local Improvement District #6 Series 1995 6.00% 7/1/09 .......... 85,000 87,677 Coeur D' Alene Local Improvement District #6 Series 1996 6.05% 7/1/10 .......... 90,000 92,705 Coeur D' Alene Local Improvement District #6 Series 1997 6.10% 7/1/12 .......... 40,000 40,979 Coeur D' Alene Local Improvement District #6 Series 1998 6.10% 7/1/14 .......... 45,000 45,822 ----------- 2,112,369 ----------- Higher Education Revenue Bonds - 2.82% University of Idaho Student Fee Telecommunications (FSA) 5.85% 4/1/11 ......... 1,300,000 1,369,355 ----------- 1,369,355 ----------- Hospital Revenue Bonds - 21.97% Idaho Health Facilities Authority Hospital Revenue Refunding and Improvement - Elks Rehabilitation Hospital 5.45% 7/15/23 ......... 2,000,000 1,614,000 Idaho Health Facilities Authority Revenue - Bannock Regional Medical Project 5.25% 5/1/14 .................................. 1,500,000 1,332,315 Idaho Health Facilities Authority Revenue - Bannock Regional Medical Center 6.125% 5/1/25 ................................. 1,500,000 1,386,300 Idaho Health Facilities Authority Revenue - Bannock Regional Medical Center 6.375% 5/1/17 ................................. 1,695,000 1,673,457 Idaho Health Facilities Authority Revenue - Bingham Memorial Hospital 6.00% 3/1/29 .................................. 2,000,000 1,643,080 Idaho Health Facilities Authority Revenue - Bonner General Hospital 6.50% 10/1/28 ................................. 1,500,000 1,329,975 Idaho Health Facilities Authority Revenue - Saint Luke's Regional Medical Center 4.30% 5/1/22 ................... 1,700,000 1,700,000 ----------- 10,679,127 ----------- Principal Market Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Housing Revenue Bonds - 14.71% Idaho Health Facilities Authority Revenue - Valley Vista Care Series A 7.875% 11/15/22 ...................... $ 3,000,000 $ 2,970,000 Idaho State Housing Agency Multi-Family Park Place Project (FHA) 6.50% 12/1/36 ................................. 990,000 1,034,303 Idaho State Housing Finance Authority Single Family Series A (AMBAC) 6.05% 7/1/13 .......... 345,000 357,748 Idaho State Housing Finance Authority Single Family Series A (FHA) 6.10% 7/1/16 ............ 360,000 369,785 Idaho State Housing Finance Authority Single Family Series A-1 6.85% 7/1/12 ................ 65,000 68,156 Idaho State Housing Finance Authority Single Family Series B (FHA) 6.45% 7/1/15 ............ 170,000 177,035 Idaho State Housing Finance Authority Single Family Series C-2 6.35% 7/1/15 ................ 225,000 233,456 Idaho State Housing Finance Authority Single Family Series E 6.60% 7/1/11 .................. 95,000 100,293 Idaho State Housing Finance Authority Single Family Series E (FHA) 6.35% 7/1/15 ............ 325,000 339,190 Idaho State Housing Finance Authority Single Family Series G-2 (FHA) 6.15% 7/1/15 .......... 1,455,000 1,501,371 ----------- 7,151,337 ----------- Industrial Development Revenue Bonds - 3.14% Idaho State Water Resource Boise Water Corporation 7.25% 12/1/21 ............... 100,000 104,081 Meridan Economic Development Corporate Revenue EDA for Hi-Micro 5.85% 8/15/11 ........ 1,250,000 1,266,813 Puerto Rico Industrial Medical Environmental Revenue - PepsiCo Project 6.25% 11/15/13 ................................ 150,000 156,879 ----------- 1,527,773 ----------- Lease/Certificates of Participation - 2.07% North Idaho College Dormitory Housing - Certificates of Participation 6.45% 10/1/16 ................................. 1,000,000 1,006,250 ----------- 1,006,250 ----------- Pollution Control Revenue Bonds - 22.11% Nez Perce County, Idaho Pollution Control Revenue Refunding - Potlatch Project 6.00% 10/1/24 ................................. 5,500,000 5,296,665 Power County Idaho Pollution Control Revenue - FMC Corporation Project 5.625% 10/1/14 ................................ 5,570,000 5,450,691 ----------- 10,747,356 ----------- 17 Statements of Net Assets (continued) Principal Market Delaware Tax-Free Idaho Fund Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Power Authority Revenue Bonds - 2.05% +Puerto Rico Electric Power Authority Inverse Floater ROLS (FSA) 4.79% 7/1/19 ......... $1,100,000 $ 888,998 Puerto Rico Electric Power Authority (FSA) 6.00% 7/1/16 .................................... 100,000 105,245 ---------- 994,243 ---------- *Pre-Refunded Bonds - 6.67% Ada & Canyon County School District #2 5.60% 7/30/12-05 ................................ 1,325,000 1,397,849 Ammon, Idaho Urban Renewal Agency Sub Lien Tax Increment Revenue Series B 6.25% 8/1/18-06 ................................. 445,000 483,034 Ammon, Idaho Urban Renewal Tax Increment Revenue 5.875% 8/1/17-04 ........................ 350,000 373,048 Canyon County Independent School District #131 (MBIA) 5.50% 7/30/12-03 ......................... 100,000 102,167 Gooding and Lincoln Counties Independent School District #231(FSA) 6.30% 2/1/14-04 ....... 100,000 105,809 Idaho Holy Cross - St. Alphonsus Regional Medical Center 6.25% 12/1/22-02 ................. 590,000 623,530 Puerto Rico Telephone Authority Revenue Series N 5.50% 1/1/22-03 ........................ 150,000 156,810 ---------- 3,242,247 ---------- Transportation Revenue Bonds - 0.70% Guam Highway (FSA) 6.30% 5/1/12 ................... 150,000 156,981 Puerto Rico Highway Revenue Series W 5.50% 7/1/15 .................................... 175,000 182,019 ---------- 339,000 ---------- Water & Sewer Revenue Bonds - 0.56% Chubbuck Water Revenue 6.35% 4/1/08 ............... 125,000 131,188 Chubbuck Water Revenue 6.40% 4/1/10 ............... 135,000 141,340 ---------- 272,528 ---------- Other Revenue Bonds - 16.85% Boise Urban Renewal Agency Tax Increment Revenue - Series A 6.125% 9/1/15 ................ 2,500,000 2,543,350 Boise Urban Renewal Agency Tax Increment Revenue - Series B 6.125% 9/1/15 ................ 2,040,000 2,075,374 Hayden Local Improvement District 95-1 - Special Assessment 6.30% 5/1/12 .................................... 115,000 115,182 Hayden Local Improvement District 95-1 - Special Assessment 6.35% 5/1/13 .................................... 120,000 120,190 Hayden Local Improvement District 95-1 - Special Assessment 6.40% 5/1/14 .................................... 125,000 125,176 Idaho State Building Authority Building Revenue Series A 4.75% 9/1/25 ........................... 500,000 448,140 Principal Market Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Other Revenue Bonds (continued) Pocatello Development Authority Tax Increment Revenue 7.25% 12/1/08 ....................... $1,585,000 $ 1,594,906 Puerto Rico Public Building Authority Revenue Series M 5.50% 7/1/21 ............... 1,175,000 1,170,570 ----------- 8,192,888 ----------- Total Municipal Bonds (cost $48,527,181) .......................... 47,634,473 ----------- Number of Shares Short-Term Investments - 0.00% Wells Fargo National Tax-Free Money Market Fund ........................... 2,068 2,068 ----------- Total Short-Term Investments (cost $2,068) ............................... 2,068 ----------- Total Market Value of Securities - 97.99% (cost $48,529,249) .......................... 47,636,541 Receivables and Other Assets Net of Liabilities - 2.01% .................. 978,944 ----------- Net Assets Applicable to 4,532,995 Shares Oustanding - 100.00% ................. $48,615,485 =========== Net Asset Value - Delaware Tax-Free Idaho Fund A Class ($34,674,645 / 3,232,212 Shares) ............ $ 10.73 ----------- Net Asset Value - Delaware Tax-Free Idaho Fund B Class ($10,320,025 / 962,934 Shares) .............. $ 10.72 ----------- Net Asset Value - Delaware Tax-Free Idaho Fund C Class ($3,620,815 / 337,849 Shares) ............... $ 10.72 ----------- 18 Statements of Net Assets (continued) Delaware Tax-Free Idaho Fund - -------------------------------------------------------------------------------- Components of Net Assets at August 31, 2000: Shares of beneficial interest (unlimited authorization - no par) ........... $50,245,043 Accumulated net realized loss on investments .......................... (736,850) Net unrealized depreciation of investments ..... (892,708) ----------- Total net assets ............................... $48,615,485 =========== - ---------- * For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. + Inverse Floater represents a security that pays interest at a rate that increases (decreases) with a decrease (increase) in a specific index. Interest rate disclosed is in effect as of August 31, 2000. Summary of Abbreviations: AMBAC - Insured by the AMBAC Indemnity Corporation FHA - Insured by the Federal Housing Authority FSA - Insured by Financial Security Assurance MBIA - Insured by the Municipal Bond Insurance Association Net Asset Value and Offering Price per Share - Delaware Tax-Free Idaho Fund Net asset value A Class (A) ....................... $10.73 Sales charge (3.75% of offering price, or 3.91% of amount invested per share) (B) ........ 0.42 ------ Offering price .................................... $11.15 ====== - ------------- (A) Net asset value per share, as illustrated, is the estimated amount which would be paid upon redemption or repurchase of shares. (B) See the current prospectus for purchases of $100,000 or more. See accompanying notes 19 Statements of Net Assets (continued) DELAWARE TAX-FREE IOWA FUND Principal Market August 31, 2000 Amount Value - -------------------------------------------------------------------------------- Municipal Bonds - 98.20% Higher Education Revenue Bonds - 7.43% Iowa Center Community College Dormitory - Merged Area V 5.45% 6/1/18 ...................................... $ 545,000 $ 515,112 Iowa Finance Authority - Student Housing Dormitory Revenues for Iowa Valley Community College 5.85% 5/1/19 .................... 855,000 834,087 Puerto Rico Educational Facility Revenue - Polytechnic University 6.50% 8/1/24 ...................................... 630,000 658,766 University Of Puerto Rico Revenue (MBIA) 5.50% 6/1/15 ...................................... 1,000,000 1,028,790 ---------- 3,036,755 ---------- Hospital Revenue Bonds - 3.08% Puerto Rico Hospital Revenue - Hospital Auxilio Mutuo Obligated Group (MBIA) 6.25% 7/1/24 ...................................... 1,200,000 1,259,772 ---------- 1,259,772 ---------- Housing Revenue Bonds - 1.66% Puerto Rico Housing Bank & Finance Agency Single Family Mortgage Revenue (GNMA) 6.25% 4/1/29 ...................................... 655,000 677,735 ---------- 677,735 ---------- Industrial Development Revenue Bonds - 16.21% Iowa Finance Authority - Underground Storage Tank Revenue 5.125% 7/1/14 ........................ 3,800,000 3,808,246 Lee County Urban Renewal Revenue - Keokuk Waste Treatment 6.40% 6/1/07 ...................... 500,000 514,960 Puerto Rico Commonwealth Industrial Development General Purpose Revenue Series B 5.375% 7/1/16 ............................ 1,000,000 1,005,150 Puerto Rico Port Authority Revenue - Special Facility - American Airlines (AMT) 6.25% 6/1/26 ...................................... 1,275,000 1,294,355 ---------- 6,622,711 ---------- Power Authority Revenue Bonds - 8.49% +Puerto Rico Electric Power Authority Revenue Series DD Inverse Floater ROLS (FSA) 4.79% 7/1/19 ...................................... 1,000,000 808,180 Puerto Rico Electric Power Authority Revenue Series EE 4.75% 7/1/24 ............................ 600,000 535,494 Puerto Rico Electric Power Authority Revenue Series U 6.00% 7/1/14 ............................. 1,100,000 1,155,990 Virgin Islands Water & Power Authority Electric System Revenue 5.30% 7/1/18 ....................... 1,000,000 968,560 ---------- 3,468,224 ---------- Principal Market Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) *Pre-Refunded/Escrowed to Maturity Bonds - 16.97% Puerto Rico Electric Power Authority Revenue 6.25% 7/1/17-02 ........................... $1,000,000 $1,051,550 Puerto Rico Municipal Finance Authority (FSA) 6.00% 7/1/14-04 ............................. 1,700,000 1,836,102 Puerto Rico Telephone Revenue Authority 5.50% 1/1/22-03 ................................... 2,120,000 2,216,248 Virgin Islands Public Finance Authority 7.30% 10/1/18 (Escrowed to Maturity) .............. 1,500,000 1,829,100 ---------- 6,933,000 ---------- Transportation Revenue Bonds - 8.55% Guam Highway (FSA) 6.30% 5/1/12 ..................... 1,950,000 2,040,753 Puerto Rico Commonwealth Highway & Transportation Revenue 5.25% 7/1/21 ............... 1,500,000 1,451,925 ---------- 3,492,678 ---------- Water & Sewer Revenue Bonds - 11.42% Iowa Finance Authority - State Revolving Fund Revenue 5.20% 5/1/23 ......................... 2,445,000 2,362,750 Iowa Finance Authority - State Revolving Fund Revenue 6.25% 5/1/24 ......................... 1,750,000 1,827,753 Virgin Islands Water & Power Authority Water System Revenue 5.50% 7/1/17 ................. 510,000 476,911 ---------- 4,667,414 ---------- Other Revenue Bonds - 24.39% Bettendorf, Iowa Urban Renewal Tax Increment Revenue Series A 5.10% 6/1/01 ..................... 315,000 315,000 Bettendorf, Iowa Urban Renewal Tax Increment Revenue Series A 5.20% 6/1/02 ..................... 330,000 330,000 Bettendorf, Iowa Urban Renewal Tax Increment Revenue Series A 5.30% 6/1/03 ..................... 345,000 344,569 Bettendorf, Iowa Urban Renewal Tax Increment Revenue Series A 5.40% 6/1/04 ..................... 365,000 364,544 Bettendorf, Iowa Urban Renewal Tax Increment Revenue Series A 5.50% 6/1/05 ..................... 385,000 384,519 Bettendorf, Iowa Urban Renewal Tax Increment Revenue Series A 5.60% 6/1/06 ..................... 405,000 404,494 Bettendorf, Iowa Urban Renewal Tax Increment Revenue Series A 5.70% 6/1/07 ..................... 425,000 424,469 Bettendorf, Iowa Urban Renewal Tax Increment Revenue Series A 5.80% 6/1/08 ..................... 450,000 448,875 Bettendorf, Iowa Urban Renewal Tax Increment Revenue Series A 5.90% 6/1/09 ..................... 800,000 798,000 Iowa Finance Authority Revenue - Correctional Facility Program 5.70% 6/15/14 .................... 2,000,000 2,064,640 Puerto Rico Public Building Authority Revenue Series L 5.75% 7/1/16 ............................. 1,000,000 1,019,260 Puerto Rico Public Building Authority Revenue Series M 5.50% 7/1/21 ............................. 1,100,000 1,095,853 20 Statements of Net Assets (continued) Principal Market Delaware Tax-Free Iowa Fund Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Other Revenue Bonds (continued) Puerto Rico Public Building Authority Revenue Series M 5.75% 7/1/15 ....................... $ 1,000,000 $ 1,022,240 Virgin Islands Public Finance Authority Revenue - Sub Lien Funded Loan Notes Series E 5.875% 10/1/18 ..................... 1,000,000 949,320 ----------- 9,965,783 ----------- Total Municipal Bonds (cost $38,705,502) .......................... 40,124,072 ----------- Number of Shares Short-Term Investments - 0.06% Wells Fargo National Tax-Free Money Market Fund ................................. 23,866 23,866 ----------- Total Short-Term Investments (cost $23,866) .............................. 23,866 ----------- Total Market Value of Securities - 98.26% (cost $38,729,368) .......................... 40,147,938 Receivables and Other Assets Net of Liabilities - 1.74% .................. 711,425 ----------- Net Assets Applicable to 4,189,802 Shares Outstanding - 100.00% ................ $40,859,363 =========== Net Asset Value - Delaware Tax-Free Iowa Fund A Class ($36,136,041 / 3,705,512 Shares) ............ $ 9.75 ----------- Net Asset Value - Delaware Tax-Free Iowa Fund B Class ($3,616,463 / 370,767 Shares) ............... $ 9.75 ----------- Net Asset Value - Delaware Tax-Free Iowa Fund C Class ($1,106,859 / 113,523 Shares) ............... $ 9.75 ----------- - -------------------------------------------------------------------------------- Components of Net Assets at August 31, 2000: Shares of beneficial interest (unlimited authorization - no par) ..................... $ 41,281,259 Accumulated net realized loss on investments .................................... (1,840,466) Net unrealized appreciation of investments ................ 1,418,570 ------------ Total net assets .......................................... $ 40,859,363 ============ - ---------- *For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. +Inverse Floater represents a security that pays interest at a rate that increases (decreases) with a decrease (increase) in a specific index. Interest rate disclosed is in effect as of August 31, 2000. Summary of Abbreviations: AMT - Subject to Alternative Minimum Tax FSA - Insured by Financial Security Assurance GNMA - Insured by the Government National Mortgage Association MBIA - Insured by the Municipal Bond Insurance Association Net Asset Value and Offering Price per Share - Delaware Tax-Free Iowa Fund Net asset value A Class (A) ..................................... $ 9.75 Sales charge (3.75% of offering price or 3.90% of amount invested per share) (B) ............................ 0.38 ------ Offering price .................................................. $10.13 ====== - ---------- (A) Net asset value per share, as illustrated, is the estimated amount which would be paid upon the redemption or repurchase of shares. (B) See the current prospectus for purchases of $100,000 or more. See accompanying notes 21 Statements of Net Assets (continued) DELAWARE TAX-FREE KANSAS FUND - ----------------------------- Principal Market August 31, 2000 Amount Value - -------------------------------------------------------------------------------- Municipal Bonds - 98.23% Certificate of Participation - 2.30% Linn County, Kansas for America One, LLC 7.25% 3/1/13 ................................. $ 350,000 $ 336,151 ---------- 336,151 ---------- General Obligation Bonds - 14.75% Allen County Unified School District #258 (AMBAC) 6.875% 9/1/10 ............................ 240,000 279,763 Ellsworth County Series 1 5.75% 9/1/17 ............. 250,000 256,348 Johnson County General Obligation 6.125% 9/1/12 .................................... 340,000 351,203 Linn County Unified School District 5.70% 11/1/16 .................................... 500,000 506,420 Sumner County Unified School District #356 (MBIA) 5.75% 9/1/11 ......................... 250,000 259,857 Wyandotte County School District 204 5.60% 9/1/20 ..................................... 500,000 504,180 ---------- 2,157,771 ---------- Higher Education Revenue Bonds - 14.51% Kansas Development Finance Authority - Kansas Board of Regents - Wichita State University (AMBAC) 5.875% 6/1/17 ............................ 300,000 306,987 Puerto Rico Educational Facility Revenue - Polytechnic University 6.50% 8/1/24 ..................................... 1,125,000 1,176,367 Winfield Kansas Educational Facilities Revenue Refunding and Improvement 5.75% 4/1/22 ........... 680,000 639,220 ---------- 2,122,574 ---------- Hospital Revenue Bonds - 9.84% Kansas State Development Finance Authority Health Facilities Revenue Stormont-Vail Healthcare - M 4.35% 11/15/23 .................... 100,000 100,000 Olathe, Kansas Health Facility Revenue for Evangelical Lutheran Good Samaritan Project (AMBAC) 6.00% 5/1/19 ............................. 250,000 257,570 Olathe, Kansas Health Facility Revenue for Olathe Medical Center Series 94A (AMBAC) 5.875% 9/1/16 ................. 100,000 101,126 Shawnee County Sisters Of Charity Leavenworth Hospital (FSA) 5.00% 12/1/23 ..................... 250,000 221,095 Wichita Kansas Hospital Revenue 6.25% 11/15/24 ................................... 750,000 759,555 ---------- 1,439,346 ---------- Housing Revenue Bonds - 9.36% Kansas Development Finance Authority for Martin Creek Multifamily Housing Project (FHA) 6.50% 8/1/24 ............................... 50,000 51,731 Principal Market Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Housing Revenue Bonds (continued) Olathe, Kansas Multifamily Housing - Deerfield Apartments Series 1994A (FNMA) 6.45% 6/1/19 ............................. $ 250,000 $ 260,898 Olathe, Kansas Multifamily Housing - Jefferson Place Apartments Project - Series B 6.10% 7/1/22 ........................... 300,000 303,312 Olathe Senior Living Facilities Revenue - Averdeen Village-Series A 8.00% 5/15/30 ................................... 750,000 753,472 ---------- 1,369,413 ---------- Industrial Development Revenue Bonds - 7.93% Columbus, Kansas Industrial Revenue Ace Electrical Acquisition 7.00% 8/1/17 ............. 800,000 765,632 Manhattan, Kansas Industrial Revenue Farrar Project 7.00% 8/1/14 ..................... 400,000 394,384 ---------- 1,160,016 ---------- Power Authority Revenue Bonds - 6.29% +Puerto Rico Electric Power Authority Revenue Series DD Inverse Floater ROLS (FSA) 4.79% 7/1/19 .................................... 600,000 484,908 Puerto Rico Electric Power Authority Series Z 5.25% 7/1/21 ........................... 450,000 435,577 ---------- 920,485 ---------- *Pre-Refunded Bonds - 20.15% Douglas County Lawrence Unified School District #497 6.00% 9/1/15-03 ............................ 250,000 258,743 Jefferson County Unified School District #340 (FSA) 6.35% 9/1/15-04 ........................... 250,000 267,268 Johnson County General Obligation 6.125% 9/1/12-02 ................................ 260,000 271,024 Kansas City Community College Student Center (MBIA) 6.25% 5/15/20-02 ......................... 300,000 309,126 Kansas City Utility System Revenue (FGIC) 6.375% 9/1/23-04 ................................ 295,000 320,594 Kansas Development Finance Authority Water Pollution Control Sewer Revenue 6.00% 11/1/14-03 ................................ 250,000 265,693 Sedgwick County Unified School District #265 (FSA) 5.50% 10/1/13-04 .......................... 250,000 259,757 Maize Unified School District #266 Series 1994 (FSA) 5.875% 9/1/12-03 .......................... 250,000 260,282 Sedgwick County Unified School District #267 6.15% 11/1/09-05 ................................ 250,000 269,122 Shawnee County Unified School District #345 (MBIA) 5.75% 9/1/11-04 .......................... 250,000 261,842 Shawnee County Unified School District #501 (FGIC) 5.75% 2/1/11-03 .......................... 200,000 205,900 ---------- 2,949,351 ---------- 22 Statements of Net Assets (continued) Principal Market Delaware Tax-Free Kansas Fund Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Transportation Revenue Bonds - 0.69% Kansas Department of Transportation 5.375% 3/1/13 ............................... $ 100,000 $ 101,369 ----------- 101,369 ----------- Water & Sewer Revenue Bonds - 12.41% Haysville Water & Sewer (FSA) 5.80% 10/1/16 ............................... 250,000 257,710 Johnson County Water Revenue 5.25% 12/1/15 ............................... 175,000 175,037 Kansas City Utility System Revenue (FGIC) 6.375% 9/1/23 ........................ 605,000 635,456 Kansas State Development Finance Authority Revenue 5.50% 4/1/21 ........................ 750,000 748,133 ----------- 1,816,336 ----------- Total Municipal Bonds (cost $13,918,736) ............................. 14,372,812 ----------- Number of Shares Short-Term Investments - 0.32% Wells Fargo National Tax-Free Money Market Fund ............................ 47,067 47,067 ----------- Total Short-Term Investments (cost $47,067) ............................... 47,067 ----------- Total Market Value of Securities - 98.55% (cost $13,965,803) ........................... 14,419,879 Receivables and Other Assets Net of Liabilities - 1.45% ................... 212,885 ----------- Net Assets Applicable to 1,389,935 Shares Outstanding - 100.00% ................. $14,632,764 =========== Net Asset Value - Delaware Tax-Free Kansas Fund A Class ($10,391,363 / 987,513 Shares) ............... $10.52 ------ Net Asset Value - Delaware Tax-Free Kansas Fund B Class ($3,879,183 / 368,008 Shares) ................ $10.54 ------ Net Asset Value - Delaware Tax-Free Kansas Fund C Class ($362,218 / 34,414 Shares) ................... $10.53 ------ - -------------------------------------------------------------------------------- Components of Net Assets at August 31, 2000: Shares of beneficial interest (unlimited authorization - no par) .................... $ 14,525,674 Accumulated net realized loss on investments ................................... (346,986) Net unrealized appreciation of investments .............. 454,076 ------------ Total net assets ........................................ $ 14,632,764 ============ - ------------ *For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. +Inverse Floater represents a security that pays interest at a rate that increases (decreases) with a decrease (increase) in a specific index. Interest rate disclosed is in effect as of August 31, 2000. Summary of Abbreviations: AMBAC - Insured by the AMBAC Indemnity Corporation FGIC - Insured by the Financial Guaranty Insurance Company FHA - Insured by the Federal Housing Authority FNMA - Insured by the Federal National Mortgage Association FSA - Insured by the Financial Security Assurance MBIA - Insured by the Municipal Bond Insurance Association Net Asset Value and Offering Price per Share - Delaware Tax-Free Kansas Fund Net asset value A Class (A) ..................................... $10.52 Sales charge (3.75% of offering price or 3.90% of amount invested per share) (B) ........................ 0.41 ------ Offering price .................................................. $10.93 ====== - ------------ (A) Net asset value per share, as illustrated, is the estimated amount which would be paid upon the redemption or repurchase of shares. (B) See the current prospectus for purchases of $100,000 or more. See accompanying notes 23 Statements of Net Assets (continued) DELAWARE TAX-FREE MISSOURI INSURED FUND - --------------------------------------- Principal Market August 31, 2000 Amount Value - -------------------------------------------------------------------------------- Municipal Bonds - 98.42% General Obligation Bonds - 5.16% St. Charles (FSA) 5.75% 3/1/15 ................... $1,000,000 $1,030,280 **St. Charles County Missouri Francis Howell School District Capital Appreciation (FGIC) 5.445% 3/1/16 ........................... 2,000,000 869,740 **St. Charles County Missouri Francis Howell School District Capital Appreciation (FGIC) 5.495% 3/1/17 ........................... 1,500,000 613,230 ---------- 2,513,250 ---------- Higher Education Revenue Bonds - 2.07% Missouri State Health & Education Facility - Central Missouri State University (AMBAC) 5.75% 10/1/25 .......................... 1,000,000 1,006,490 ---------- 1,006,490 ---------- Hospital Revenue Bonds - 24.23% Cape Girardeau South East Missouri Hospital (MBIA) 5.25% 6/1/16 ............................ 1,000,000 994,620 Hannibal Health Facilities Series A (Hannibal Regional Hospital) (FSA) 5.625% 3/1/12 ............................ 2,000,000 2,079,780 Hannibal Health Facilities Series A (Hannibal Regional Hospital) (FSA) 5.75% 3/1/22 ............................. 1,000,000 1,008,450 Jackson County St. Joseph's Hospital (MBIA) 6.50% 7/1/12 ............................ 1,795,000 1,883,870 Jackson County St. Mary's Hospital (MBIA) 5.75% 7/1/24 ............................ 2,000,000 2,010,600 Missouri State Health & Education Facility (Heartland Health Systems) (AMBAC) 6.35% 11/15/17 ......................... 1,250,000 1,299,113 Missouri State Health & Education Facility (Health Midwest) (MBIA) 6.25% 2/15/22 .................................. 1,000,000 1,024,130 Missouri State Health & Education Facility (SSM Health Care) (MBIA) 6.40% 6/1/10 ................................... 500,000 557,065 Missouri State Health & Education Facility (St. Luke's Health Systems) (MBIA) 5.125% 11/15/19 ......................... 1,000,000 947,860 ---------- 11,805,488 ---------- Housing Revenue Bonds - 13.90% Missouri Single Family Housing (FNMA/GNMA) 7.20% 9/1/26 ....................... 1,445,000 1,537,726 Missouri Single Family Housing (FNMA/GNMA) 7.25% 9/1/26 ....................... 1,715,000 1,869,982 Missouri Single Family Housing (FNMA/GNMA) 7.45% 9/1/27 ....................... 1,380,000 1,516,606 Missouri Single Family Housing (FNMA/GNMA) 7.55% 9/1/27 ....................... 1,270,000 1,372,324 Principal Market August 31, 2000 Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Housing Revenue Bonds (continued) Missouri Single Family Housing (GNMA) 7.20% 12/1/17 ........................... $ 145,000 $ 154,505 Missouri Single Family Housing (GNMA) 7.25% 12/1/20 ........................... 300,000 319,173 ----------- 6,770,316 ----------- Industrial Development Revenue Bonds - 2.15% St. Louis Municipal Finance Corporation City Lease Revenue-City Justice Center Series A (AMBAC) 5.95% 2/15/16 ................. 1,000,000 1,046,380 ----------- 1,046,380 ----------- Municipal Lease Bonds - 2.13% Kansas City Muehlebach Hotel (FSA) 5.90% 12/1/18 ............................ 1,000,000 1,036,630 ----------- 1,036,630 ----------- Power Authority Revenue Bonds - 4.38% +Puerto Rico Electric Power Authority Inverse Floater ROLS (FSA) 5.38% 7/1/19 ........ 1,275,000 1,030,430 Sikeston Electric Revenue (MBIA) 6.00% 6/1/13 ............................ 1,000,000 1,101,220 ----------- 2,131,650 ----------- *Pre-Refunded/Escrowed to Maturity Bonds - 27.31% Clark County School District (FSA) 5.75% 3/1/15-05 .......................... 1,775,000 1,840,870 **Greene County Single Family Mortgage Revenue - (Private Mortgage Insurance) (Escrowed to Maturity) 5.715 % 3/1/16 .......... 1,225,000 511,487 Kansas City Airport Revenue (FSA) 6.875% 9/1/14-04 ......................... 1,675,000 1,836,554 Sikeston Electric Revenue (MBIA) 6.25% 6/1/12-02 ......................... 2,000,000 2,099,500 St. Charles School District (FGIC) 6.50% 2/1/14-06 ......................... 1,250,000 1,366,775 St. Louis County School District #8 (MBIA) 5.60% 2/15/15-05 ........................ 1,490,000 1,557,110 St. Louis Municipal Finance Corporation Leasehold Revenue (FGIC) 6.25% 2/15/12-05 ........................ 1,850,000 1,981,276 Troy School District #3 Lincoln County (MBIA) 6.10% 3/1/14-05 ......................... 1,235,000 1,316,004 West Platte School District (MBIA) 5.85% 3/1/15-05 ......................... 750,000 791,648 ----------- 13,301,224 ----------- Utility Revenue Bonds - 4.72% Missouri Environmental Pollution Control Revenue - St. Joseph's Light and Power Co. (AMBAC) 5.85% 2/1/13 ................. 2,200,000 2,299,528 ----------- 2,299,528 ----------- 24 Statements of Net Assets (continued) Principal Delaware Tax-Free Missouri Insured Fund Amount - -------------------------------------------------------------------------------- Municipal Bonds (continued) Water & Sewer Revenue Bonds - 5.58% Liberty Sewer (MBIA) 6.00% 2/1/08 ................ $ 600,000 $ 647,874 Liberty Sewer (MBIA) 6.15% 2/1/15 ................ 1,500,000 1,598,025 St. Charles County Public Water Supply Dist No 2 (MBIA) 5.10% 12/1/25 ................. 500,000 471,540 ----------- 2,717,439 ----------- Other Revenue Bonds - 6.79% Kansas City Municipal Assistance Bartle Hall Convention Center (MBIA) 5.60% 4/15/16 ........................... 940,000 952,878 Missouri State Environmental - State Revolving Fund - Branson (FSA) 6.05% 7/1/16 ............................. 2,265,000 2,356,959 ----------- 3,309,837 ----------- Total Municipal Bonds (cost $46,098,197) ............................. 47,938,232 ----------- Number of Shares Short-Term Investments - 0.30% Wells Fargo National Tax-Free Money Market Fund ............................ 146,586 146,586 ----------- Total Short-Term Investments (cost $146,586) .............................. 146,586 ----------- Total Market Value of Securities - 98.72% (cost $46,244,783) ........................... 48,084,818 Receivables and Other Assets Net of Liabilities - 1.28% ................... 625,381 ----------- Net Assets Applicable to 4,710,651 Shares Outstanding - 100.00% ................. $48,710,199 =========== Net Asset Value - Delaware Tax-Free Missouri Insured Fund A Class ($38,313,837 / 3,705,101 Shares) ............. $10.34 ------ Net Asset Value - Delaware Tax-Free Missouri Insured Fund B Class ($10,052,976 / 972,361 Shares) ............... $10.34 ------ Net Asset Value -Delaware Tax-Free Missouri Insured Fund C Class ($343,386 / 33,189 Shares) ................... $10.35 ------ - -------------------------------------------------------------------------------- Components of Net Assets at August 31, 2000: Shares of beneficial interest (unlimited authorization - no par) .................... $ 47,803,108 Accumulated net realized loss on investments ................................... (932,944) Net unrealized appreciation on investments ........................................ 1,840,035 ------------ Total net assets ........................................ $ 48,710,199 ============ - -------------- *For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. **Zero coupon bond - The interest rate shown is the effective yield as of August 31, 2000. +Inverse Floater represents a security that pays interest at a rate that increases (decreases) with a decrease (increase) in a specific index. Interest rate disclosed is in effect as of August 31, 2000. Summary of Abbreviations: AMBAC - Insured by the Ambac Indemnity Corporation FGIC - Insured by the Financial Guaranty Insurance Company FNMA - Insured by the Federal National Mortgage Association FSA - Insured by Financial Security Assurance GNMA - Insured by the Government National Mortgage Association MBIA- Insured by the Municipal Bond Insurance Association Net Asset Value and Offering Price per Share - Delaware Tax-Free Missouri Insured Fund Net asset value A Class (A) ...................................... $10.34 Sales charge (3.75% of offering price or 3.87% of amount invested per share) (B) ................................. 0.40 ------ Offering price ................................................... $10.74 ====== - ------------- (A) Net asset value per share, as illustrated, is the estimated amount which would be paid upon redemption or repurchase of shares. (B) See the current prospectus for purchases of $100,000 or more. See accompanying notes 25 Statements of Net Assets (continued) DELAWARE MONTANA MUNICIPAL BOND FUND - ------------------------------------ Principal Market August 31, 2000 Amount Value - -------------------------------------------------------------------------------- Municipal Bonds - 97.47% Continuing Care / Retirement Revenue Bonds - 16.18% Montana State Health Facilities Authority Revenue Hillcrest Senior Living Project 7.35% 6/1/20 ........................ $100,000 $ 100,530 Montana State Health Facilities Authority Revenue Hillcrest Senior Living Project 7.375% 6/1/30 ....................... 500,000 489,025 --------- 589,555 --------- General Obligation Bonds - 16.00% Cascade County High School B School Building (FGIC) 5.60% 7/1/20 ................................ 165,000 169,175 Flathead County School District #6 Columbia Falls (FSA) 5.65% 7/1/19 ................................. 115,000 116,896 Missoula County High School District #1 Building 5.50% 7/1/20 ........................... 150,000 151,347 Montana State Long Range Building Program Series C 5.00% 8/1/17 .............................. 100,000 96,240 Puerto Rico Commonwealth 5.375% 7/1/25 ............... 50,000 49,155 --------- 582,813 --------- Higher Education Revenue Bonds - 36.79% Montana State Board of Regents - University of Montana Series F (MBIA) 5.75% 5/15/24 .............. 400,000 409,196 Montana State Higher Education Student Assistance Corporation - Student Loan - Series B 6.40% 12/1/32 ............................. 600,000 612,072 Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities - Ana G. Mendez University System Project 5.375% 2/1/19 ...................................... 150,000 143,820 University of Puerto Rico Revenue Series O 5.375% 6/1/20 ...................................... 175,000 175,182 --------- 1,340,270 --------- Hospital Revenue Bonds - 2.82% Montana State Health Facilities Authority Health Care Master Loan Program (Marcus Daly) Series A 6.00% 8/1/20 .............................. 100,000 102,620 --------- 102,620 --------- Housing Revenue Bonds - 2.85% Montana State Board of Housing - Single Family Mortgage - Series A1 6.00% 6/1/16 .................. 100,000 103,793 --------- 103,793 --------- Pollution Control Revenue Bonds - 9.75% Forsyth Pollution Control Revenue Pacificorp Project 4.30% 1/1/18 .................... 150,000 150,000 Forsyth Pollution Control (Montana Power Company) Series A (AMBAC) 6.125% 5/1/23 ...................................... 100,000 103,688 Principal Market Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Pollution Control Revenue Bonds (continued) Montana State Water Pollution Control Series B 5.60% 7/15/20 ............................. $ 100,000 $ 101,653 ---------- 355,341 ---------- Power Authority Revenue Bonds - 3.99% Puerto Rico Electric Power Authority Series Z 5.25% 7/1/21 ....................................... 150,000 145,193 ---------- 145,193 ---------- Transportation Revenue Bonds - 6.49% Billings Airport Revenue (MBIA) 5.55% 7/1/09 ................................ 125,000 130,026 Puerto Rico Commonwealth Highway & Transportation Authority Highway Revenue (MBIA) 5.50% 7/1/15 ................................ 100,000 106,479 ---------- 236,505 ---------- Other Revenue Bonds - 2.60% Virgin Islands Public Finance Authority Revenue Sub Lien Funded Loan Notes Series E 5.875% 10/1/18 ............................ 100,000 94,932 ---------- 94,932 ---------- Total Municipal Bonds (cost $3,456,680) .................................. 3,551,022 ---------- Total Market Value of Securities - 97.47% (cost $3,456,680) .................................. 3,551,022 Receivables and Other Assets Net of Liabilities - 2.53% ......................... 92,335 ---------- Net Assets Applicable to 644,331 Shares Outstanding - 100.00% ....................... $3,643,357 ========== Net Asset Value - Delaware Montana Municipal Bond Fund A Class ($1,961,498 / 346,849 Shares) ...................... $5.66 ----- Net Asset Value - Delaware Montana Municipal Bond Fund B Class ($1,338,236 / 236,703 Shares) ...................... $5.65 ----- Net Asset Value - Delaware Montana Municipal Bond Fund C Class ($343,623 / 60,779 Shares) ......................... $5.65 ===== 26 Statements of Net Assets (continued) Delaware Montana Municipal Bond Fund - -------------------------------------------------------------------------------- Components of Net Assets at August 31, 2000: Shares of beneficial interest (unlimited authorization - no par) ....................... $ 3,543,395 Distributions in excess of net investment income .................................... (1,924) Accumulated net realized gain on investments ...................................... 7,544 Net unrealized appreciation of investments ................. 94,342 ----------- Total net assets ........................................... $ 3,643,357 =========== Summary of Abbreviations: AMBAC - Insured by the AMBAC Indemnity Corporation FGIC - Insured by the Financial Guaranty Insurance Company FSA - Insured by Financial Security Assurance MBIA - Insured by the Municipal Bond Insurance Association Net Asset Value and Offering Price per Share - Delaware Montana Municipal Bond Fund Net asset value A Class (A) ........................................ $5.66 Sales charge (3.75% of offering price or 3.89% of amount invested per share) (B) ................................... 0.22 ----- Offering price ..................................................... $5.88 ===== - ------------ (A) Net asset value per share, as illustrated, is the estimated amount which would be paid upon redemption or repurchase of shares. (B) See the current prospectus for purchases of $100,000 or more. See accompanying notes 27 Statements of Net Assets (continued) DELAWARE TAX-FREE NORTH DAKOTA FUND - ----------------------------------- Principal Market August 31, 2000 Amount Value - -------------------------------------------------------------------------------- Municipal Bonds - 98.79% General Obligation Bonds - 1.14% Grand Forks Sewer Reserve 6.70% 6/1/07 ........... $270,000 $ 274,347 --------- 274,347 --------- Higher Education Revenue Bonds - 7.30% Burleigh County North Dakota University Facility Revenue University of Mary Project 5.625% 12/1/15 .................................. 1,000,000 972,510 North Dakota State University Housing and Auxiliary Facility 6.30% 4/1/07 ................. 250,000 259,138 North Dakota State University Housing and Auxiliary Facility 6.50% 4/1/12 ................. 500,000 517,485 --------- 1,749,133 --------- Hospital Revenue Bonds - 31.96% Cando, North Dakota Nursing Facility Revenue - Towner County Medical Center Project 7.125% 8/1/22 ................................... 1,000,000 996,060 Carrington, North Dakota Health Facility Revenue for Carrington Health Center 6.25% 11/15/15 .................................. 500,000 509,515 Cass County, North Dakota Health Facility Revenue for Catholic Health - Villa Nazareth Project 6.25% 11/15/14 .......................... 1,000,000 1,020,520 Fargo Hospital Facility St. Luke's Hospital Series 1992 6.50% 6/1/15 ........................ 1,000,000 1,041,510 Grand Forks Health Care System Revenue - Altru Health System Obligated Group 7.125% 8/15/24 .................................. 1,005,000 1,024,427 Grand Forks, North Dakota Senior Housing Revenue 4000 Valley Square Project 6.25% 12/1/34 ................................... 2,000,000 1,500,000 Grand Forks, United Hospital Obligated Group (MBIA) 6.125% 12/1/14 ........................... 225,000 235,820 Grand Forks, United Hospital Obligated Group (MBIA) 6.25% 12/1/19 ............................ 250,000 260,295 Killdeer, North Dakota Nursing Care Revenue - Hill Top Home of Comfort 6.00% 11/1/12 .......... 780,000 770,671 Valley City, North Dakota Congregate Housing Revenue - Bridgeview Estates Project 7.25% 8/1/22 .................................... 300,000 301,251 --------- 7,660,069 --------- Principal Market Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Housing Revenue Bonds - 28.17% Minot Single Family Mortgage 7.70% 8/1/10 ...................................... $105,000 $ 108,698 North Dakota Housing Finance Authority Single Family Mortgage Series A 6.30% 7/1/16 ............. 1,665,000 1,734,614 North Dakota Housing Finance Authority Single Family Mortgage 6.25% 1/1/17 ...................... 1,975,000 2,042,012 North Dakota Single Housing Finance Agency Single Family Mortgage Series A (FHA) 6.75% 7/1/12 ...................................... 130,000 134,904 North Dakota State Housing Finance Agency Revenue Multifamily (FNMA) 6.125% 12/1/15 .................................... 500,000 522,035 North Dakota State Housing Finance Agency Revenue Multifamily (FNMA) 6.15% 12/1/17 ..................................... 1,300,000 1,351,324 North Dakota State Housing Finance Authority Single Family Mortgage Series A 6.95% 7/1/12 ...................................... 220,000 228,708 North Dakota State Housing Finance Agency Single Family Mortgage Series E (FNMA) 6.30% 1/1/15 ...................................... 605,000 629,684 --------- 6,751,979 --------- Industrial Development Revenue Bonds - 2.15% Mercer County Pollution Control Otter Tail Power Company Project 6.90% 2/1/19 ................. 500,000 514,510 --------- 514,510 --------- Power Authority Revenue Bonds - 11.21% Mercer County Pollution Control Revenue Montana - Dakota Utilities Company Project (FGIC) 6.65% 6/1/22 ............................... 500,000 524,820 Mercer County Pollution Control Revenue For Basin Electric Revenue 6.05% 1/1/19 ............... 1,000,000 1,033,780 +Puerto Rico Electric Power Authority Revenue Inverse Floater ROLS Series DD (FSA) 4.79% 7/1/19 ...................................... 900,000 727,362 Puerto Rico Electric Power Authority Series EE 4.75% 7/1/24 ...................................... 450,000 401,621 --------- 2,687,583 --------- *Pre-Refunded Bonds - 4.08% Bismarck Hospital Alexius Medical Center (AMBAC) 6.90% 5/1/06-01 ............................ 500,000 518,065 Burleigh County University Facilities University of Mary Project 7.125% 12/1/11-01 .................. 250,000 260,455 Fargo Park District Revenue 7.25% 11/1/11-00 ................................... 200,000 200,840 --------- 979,360 --------- 28 Statements of Net Assets (continued) Principal Market Delaware Tax-Free North Dakota Fund Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Transportation Revenue Bond - 6.24% Puerto Rico Commonwealth Highway & Transportation Authority Series Y 5.50% 7/1/26 .................................... $1,500,000 $ 1,495,768 ----------- 1,495,768 ----------- Other Revenue Bonds - 6.54% North Dakota Building Authority Revenue (FSA) 6.10% 12/1/16 ................................... 1,480,000 1,525,954 North Dakota State Student Loan (AMBAC) 7.00% 7/1/05 ............................ 40,000 40,714 --------- 1,566,668 --------- Total Municipal Bonds (cost $23,554,559) .............................. 23,679,417 ---------- Number of Shares Short-Term Investments - 0.48% Wells Fargo National Tax-Free Money Market Fund ............................... 116,182 116,182 ---------- Total Short-Term Investments (cost $116,182) ................................. 116,182 ---------- Total Market Value of Securities - 99.27% (cost $23,670,741) ............................... 23,795,599 Receivables and Other Assets Net of Liabilities - 0.73% ...................... 174,198 ----------- Net Assets Applicable to 2,253,653 Shares Outstanding 100.00% ...................... $23,969,797 =========== Net Asset Value - Delaware Tax-Free North Dakota Fund A Class ($22,733,245 / 2,137,380 Shares) ................ $10.64 ------ Net Asset Value - Delaware Tax-Free North Dakota Fund B Class ($909,963 / 85,556 Shares) ...................... $10.64 ------ Net Asset Value - Delaware Tax-Free North Dakota Fund C Class ($326,589 / 30,717 Shares) ...................... $10.63 ------ - -------------------------------------------------------------------------------- Components of Net Assets at August 31, 2000: Shares of beneficial interest (unlimited authorization - no par) ........................ $23,924,695 Accumulated net realized loss on investments ....................................... (79,756) Net unrealized appreciation of investments ................. 124,858 ------------ Total net assets ........................................... $23,969,797 ============ - ------------ * For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. + Inverse Floater represents a security that pays interest at a rate that increases (decreases) with a decrease (increase) in a specific index. Interest rate disclosed is in effect as of August 31, 2000. Summary of Abbreviations: AMBAC - Insured by the AMBAC Indemnity Corporation FGIC - Insured by the Financial Guaranty Insurance Company FHA - Insured by the Federal Housing Authority FNMA - Insured by the Federal National Mortgage Association FSA - Insured by the Financial Security Assurance MBIA - Insured by the Municipal Bond Insurance Association Net Asset Value and Offering Price per Share - Delaware Tax-Free North Dakota Fund Net asset value A Class (A) ......................................... $10.64 Sales charge (3.75% of offering price, or 3.85% of amount invested per share) (B) .......................... 0.41 -------- Offering price ...................................................... $11.05 ======== - ------------ (A) Net asset value per share, as illustrated, is the estimated amount which would be paid upon redemption or repurchase of shares. (B) See the current prospectus for purchases of $100,000 or more. See accompanying notes 29 Statements of Net Assets (continued) DELAWARE TAX-FREE OREGON INSURED FUND - ------------------------------------- Principal Market August 31, 2000 Amount Value - -------------------------------------------------------------------------------- Municipal Bonds - 98.31% Certificates of Participation - 5.32% Oregon State Department Administrative Services Certificates of Participation - Series A (AMBAC) 5.00% 5/1/24 ..................................... $1,800,000 $ 1,690,632 ----------- 1,690,632 ----------- General Obligation Bonds - 24.21% Clackamas County Oregon School District (FGIC) 4.80% 6/1/18 .............................. 1,200,000 1,106,376 ** Columbia County Oregon School District (FGIC) 5.495% 6/1/17 .............................. 1,000,000 403,310 Hermiston General Obligation Water Bonds (AMBAC) 6.20% 8/1/24 ............................. 500,000 513,170 Josephine County Oregon (AMBAC) 4.875% 6/1/18 ............................ 1,000,000 931,250 Lane County School District #19 (Springfield) (FGIC) 6.00% 10/15/14 ............................ 500,000 549,615 Lincoln County School District (FGIC) 5.25% 6/15/12 ............................. 1,450,000 1,484,699 Malheur County Jail (MBIA) 6.30% 12/1/12 .................................... 500,000 532,175 Multnomah County School District #3 Park Rose (FGIC) 5.50% 12/1/11 ................... 500,000 513,715 North Unit Irrigation District (MBIA) 5.75% 6/1/16 .............................. 1,000,000 1,026,890 Portland (MBIA) 5.75% 6/1/15 ...................... 500,000 512,845 ** Umatilla County Oregon School District #6R Umatilla (AMBAC) 5.666% 12/15/22 ................. 200,000 57,564 Washington County School District (Sherwood) (FSA) #88J 6.10% 6/1/12 .......................... 65,000 68,284 --------- 7,699,893 --------- Higher Education Revenue Bonds - 13.83% Central Oregon Community College District (FGIC) 5.90% 6/1/09 ............................... 750,000 780,705 Oregon Health and Education Authority for Lewis & Clark College (MBIA) 6.125% 10/1/24 .................................... 1,055,000 1,091,883 Oregon Health and Education Authority for Reed College (MBIA) 5.375% 7/1/25 ................. 500,000 492,880 ** Oregon Health Sciences University Revenue (MBIA) 5.656% 7/1/21 .............................. 6,500,000 2,033,590 --------- 4,399,058 --------- Hospital Revenue Bonds - 3.31% Western Lane Hospital District for Sisters of St. Joseph Peace Hospital (MBIA) 5.875% 8/1/12 ..................................... 1,000,000 1,053,590 --------- 1,053,590 --------- Principal Market Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Housing Revenue Bonds - 3.50% Oregon Health, Housing, Educational and Cultural Facilities Authority for Pier Park Project (GNMA) 6.05% 4/1/18 ...................... $1,095,000 $ 1,114,064 ----------- 1,114,064 ----------- Power Authority Revenue Bonds - 3.51 % Central Lincoln Peoples Utility District (AMBAC) 5.75% 1/1/15 ............................. 500,000 511,100 +Puerto Rico Electric Power Authority Revenue Series DD Inverse Floater ROLS (FSA) 4.79% 7/1/19 ..................................... 750,000 606,135 --------- 1,117,235 --------- *Pre-Refunded Bonds - 25.02% Chemeketa Community College (FGIC) 5.80% 6/1/12-06 .................................. 1,500,000 1,595,160 Eugene Electric Revenue Series C (MBIA) 5.80% 8/1/22-04 .................................. 1,250,000 1,320,775 Lane County School District #19 (Springfield) (MBIA) 6.30% 10/15/14-04 ......................... 500,000 538,720 Multnomah County School District #39 Corbett (MBIA) 6.00% 12/1/13-04 .......................... 500,000 528,790 Oregon State Department Administrative Services Certificates of Participation - Series A (AMBAC) 5.80% 5/1/24-07 .......................... 1,000,000 1,076,020 Portland Sewer System Revenue (FSA) 6.25% 6/1/15-04 .................................. 1,000,000 1,070,090 Tillamook County (FGIC) 6.25% 1/1/14-05 ........... 250,000 269,350 Umatilla Pendleton School District (AMBAC) #016R 6.00% 7/1/14-04 ............................ 500,000 531,315 Washington County Education Service (MBIA) 7.10% 6/1/25-05 .................................. 700,000 777,735 Washington County School District (Sherwood) (FSA) #88J 6.10% 6/1/12-05 ....................... 235,000 251,168 --------- 7,959,123 --------- Transportation Revenue Bonds - 4.70% Port of Portland Airport Revenue for Portland International Airport (FGIC) 5.625% 7/1/26 .................................... 1,500,000 1,494,795 --------- 1,494,795 --------- 30 Statements of Net Assets (continued) Principal Market Delaware Tax-Free Oregon Insured Fund Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Water & Sewer Revenue Bonds - 14.91% Beaverton Water Revenue (FSA) 6.125% 6/1/14 ..................................... $500,000 $ 522,720 Klamath Falls Water Revenue (FSA) 6.10% 6/1/14 ...................................... 500,000 522,295 Portland Oregon Sewer System Revenue (MBIA) 4.50% 6/1/18 ............................... 1,855,000 1,656,812 Salem Water & Sewer Revenue (MBIA) 5.50% 6/1/14 ...................................... 1,000,000 1,021,590 Salem Water & Sewer Revenue (MBIA) 5.625% 6/1/16 ..................................... 1,000,000 1,018,279 ---------- 4,741,696 ---------- Total Municipal Bonds (cost $30,597,013) 31,270,086 ---------- Number of Shares Short-Term Investments - 0.36% Wells Fargo National Tax-Free Money Market Fund ................................. 113,135 113,135 ------- Total Short-Term Investments (cost $113,135) ................................... 113,135 ------- Total Market Value of Securities - 98.67% (cost $30,710,148) ................................ 31,383,221 Receivables and Other Assets Net of Liabilities - 1.33% ........................ 421,999 ----------- Net Assets Applicable to 3,210,275 Shares Outstanding - 100.00% ...................... $31,805,220 =========== Net Asset Value - Delaware Tax-Free Oregon Insured Fund A Class ($22,711,786 / 2,292,806 Shares) $9.91 ...................................................... ----- Net Asset Value - Delaware Tax-Free Oregon Insured Fund B Class ($7,484,716 / 755,283 Shares) ..................... $9.91 ----- Net Asset Value - Delaware Tax-Free Oregon Insured Fund C Class ($1,608,718 / 162,186 Shares) ..................... $9.92 ----- - -------------------------------------------------------------------------------- Components of Net Assets at August 31, 2000 : Shares of beneficial interest (unlimited authorization - no par) ................. $31,964,274 Accumulated net realized loss on investments ................................ (832,127) Net unrealized appreciation of investments ..................................... 673,073 ----------- Total net assets ................................... $31,805,220 =========== - ------------ *For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. ** Zero Coupon Bond - The interest rate shown is the effective yield as of August 31, 2000. +Inverse Floater represents a security that pays interest at a rate that increases (decreases) with a decrease (increase) in a specific index. Interest rate disclosed is in effect as of August 31, 2000. Summary of Abbreviations: AMBAC - Insured by the AMBAC Indemnity Corporation FGIC - Insured by the Financial Guaranty Insurance Company FSA - Insured by the Financial Security Assurance GNMA - Insured by the Government National Mortgage Association MBIA - Insured by the Municipal Bond Insurance Association Net Asset Value and Offering Price per Share - Delaware Tax-Free Oregon Insured Fund Net asset value A Class (A) ........................... $9.91 Sales charge (3.75% of offering price, or 3.94% of amount invested per share) (B) ............ 0.39 ------ Offering price ........................................ $10.30 ====== (A) Net asset value per share, as illustrated, is the estimated amount which would be paid upon redemption or repurchase of shares. (B) See the current prospectus for purchases of $100,000 or more. See accompanying notes 31 Statements of Net Assets (continued) DELAWARE TAX-FREE WISCONSIN FUND - -------------------------------- Principal Market August 31, 2000 Amount Value - -------------------------------------------------------------------------------- Municipal Bonds - 98.28% Higher Education Revenue Bonds - 2.44% Madison Community Development Authority Revenue - Edgewood College 6.25% 4/1/14 ....................................... $500,000 $520,345 Puerto Rico Educational Facility Revenue - Polytechnic University 6.50% 8/1/24 ................ 280,000 292,785 -------- 813,130 -------- Hospital Revenue Bonds - 0.59% Kaukauna Housing Authority Revenue - St. Paul Home Inc. 6.10% 9/1/07 .................... 200,000 195,562 -------- 195,562 -------- Housing Revenue Bonds - 25.52% Dane County Multifamily Housing Revenue - Forest Harbor Apartment Project 5.85% 7/1/11 ....................................... 125,000 126,435 Dane County Multifamily Housing Revenue - Forest Harbor Apartment Project 5.90% 7/1/12 ....................................... 125,000 125,878 Grant County Housing Authority Revenue Refunding - Orchard Manor 5.35% 7/1/26 ....................................... 350,000 331,254 Green Bay Housing Authority Multifamily Housing Revenue - Moraine Limited - Series A (FHA) 6.15% 12/1/30 ................................ 1,000,000 1,033,500 La Crosse Housing Authority Washburn Project 6.375% 10/1/16 ..................................... 100,000 95,878 La Crosse Housing Authority Washburn Project 6.50% 10/1/26 ...................................... 250,000 235,950 Milwaukee Redevelopment Authority Multifamily Housing 6.30% 8/1/38 ............................... 1,455,000 1,481,656 New Berlin Multifamily Housing Authority Revenue - Pinewood Creek Project 7.125% 5/1/24 ...................................... 500,000 512,865 Puerto Rico Housing Authority Single Family Mortgage Revenue 6.85% 10/15/23 .................... 625,000 645,038 Puerto Rico Housing Bank & Finance Agency Single Family Mortgage Revenue (GNMA) 6.25% 4/1/29 ....................................... 650,000 672,562 Waukesha Housing Westgrove Wood Project (GNMA) 6.00% 12/1/31 ............................... 1,500,000 1,514,385 Waukesha Wisconsin Redevelopment Authority Housing Revenue- Senior Housing Presbyterian Homes 7.50% 6/1/25 .................... 1,250,000 1,258,350 Wauwatosa Multifamily Housing Revenue - Harwood Place, Inc. 5.75% 12/1/08 .................. 480,000 480,653 --------- 8,514,404 --------- Principal Market Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) Industrial Development Revenue Bonds - 15.31% Hartford Community Development Authority Lease Revenue 6.15% 12/1/09 ........................ $240,000 $ 253,205 Milwaukee Redevelopment Authority Revenue - Goodwill Industries, Inc. 6.35% 10/1/09 ...................................... 2,000,000 2,053,440 Omro Community Development Authority 5.875% 12/1/11 ..................................... 300,000 311,970 Puerto Rico Industrial Medical Environmental Revenue - PepsiCo Project 6.25% 11/15/13 ..................................... 1,100,000 1,150,446 Two Rivers Community Development Authority Revenue Architectural Forest Products 6.35% 12/15/12 ..................................... 250,000 244,355 West Allis Community Development Authority Revenue - Poblocki Investments, Ltd. 5.90% 5/1/03 (LOC: Firstar Bank Milwaukee, AMT) .................................... 1,080,000 1,095,217 --------- 5,108,633 --------- Lease/Certificates of Participation - 16.24 Cudahy Community Development Authority Revenue 6.00% 6/1/11 ............................... 1,000,000 1,044,180 De Forest Redevelopment Lease Revenue 6.25% 2/1/18 ....................................... 1,000,000 1,031,670 Little Chute Community Development Lease Revenue 5.625% 3/1/19 .............................. 680,000 678,830 Madison Community Development Authority, Monona Terrace Community Project 5.80% 3/1/05 ....................................... 125,000 131,638 Madison Community Development Authority, Monona Terrace Community Project 5.90% 3/1/06 ....................................... 365,000 385,852 Madison Community Development Authority, Monona Terrace Community Project 6.10% 3/1/10 ....................................... 1,500,000 1,579,710 Redgranite Wisconsin Community Development Authority Revenue 5.85% 3/1/18 ..................... 605,000 564,858 --------- 5,416,738 --------- Power Authority Revenue Bonds - 7.32% Guam Power Authority Revenue Bonds, 99A 5.125% 10/1/29 ................................. 1,000,000 916,130 Puerto Rico Electric Power Authority Revenue Series U 6.00% 7/1/14 .............................. 1,450,000 1,523,805 --------- 2,439,935 --------- *Pre-Refunded/Escrowed to Maturity Bonds - 16.32% Puerto Rico Municipal Finance Authority (FSA) 6.00% 7/1/14-04 .............................. 1,800,000 1,944,108 Puerto Rico Telephone Authority Revenue 5.75% 1/1/11-02 .................................... 285,000 293,738 32 Statements of Net Assets (continued) Principal Market Delaware Tax-Free Wisconsin Fund Amount Value - -------------------------------------------------------------------------------- Municipal Bonds (continued) *Pre-Refunded/Escrowed to Maturity Bonds (continued) Southeast Wisconsin Professional Baseball Park District Sales Tax Revenue (MBIA) 5.80% 12/15/26-07 .................................. $1,000,000 $ 1,076,740 Superior Redevelopment Authority Revenue - Superior Memorial Hospital (FHA) 5.80% 5/1/10-02 .................................... 250,000 260,240 Virgin Islands Public Finance Authority (Escrowed to Maturity) 7.30% 10/1/18 ............... 700,000 853,580 Wisconsin Housing Finance Authority (FHA) 6.10% 6/1/21-17 .............................. 960,000 1,015,496 --------- 5,443,902 --------- Other Revenue Bonds - 14.54% ** Southeast Wisconsin Professional Baseball Park District Lease Certificates (MBIA) 5.544% 12/15/15 .................................... 1,000,000 434,640 ** Southeast Wisconsin Professional Baseball Park District Lease Certificates (MBIA) 5.628% 12/15/16 .................................... 1,115,000 453,838 ** Southeast Wisconsin Professional Baseball Park District Sales Tax Revenue (MBIA) 5.873% 12/15/24 .................................... 1,500,000 372,630 ** Southeast Wisconsin Professional Baseball Park District Sales Tax Revenue (MBIA) 5.886% 12/15/25 .................................... 1,250,000 292,488 Virgin Islands Public Finance Authority Revenue Sub Lien Funded Loan Notes Series E 5.875% 10/1/18 ............................ 1,400,000 1,329,048 Wisconsin Central District Tax Revenue - Insured Jr. Dedicated Tax Revenue Bonds, 98 A (FSA) 5.25% 12/15/23 .......................... 2,000,000 1,965,540 ---------- 4,848,184 ---------- Total Municipal Bonds (cost $32,096,686) 32,780,488 ---------- Number of Shares Short-Term Investments - 0.48% Wells Fargo National Tax-Free Money Market Fund .................................. 161,041 161,041 ----------- Total Short-Term Investments (cost $161,041) .................................... 161,041 ----------- Total Market Value of Securities - 98.76% (cost $32,257,727) ................................. 32,941,529 Receivables and Other Assets Net of Liabilities - 1.24% ......................... 413,543 ----------- Net Assets Applicable to 3,508,469 Shares Outstanding - 100.00% .............................. $33,355,072 =========== - -------------------------------------------------------------------------------- Net Asset Value - Delaware Tax-Free Wisconsin Fund A Class ($28,736,973 / 3,022,883 Shares ) .................. $9.51 ----- Net Asset Value - Delaware Tax-Free Wisconsin Fund B Class ($3,243,281 / 341,411 Shares ) ..................... $9.50 ----- Net Asset Value - Delaware Tax-Free Wisconsin Fund C Class ($1,374,818 / 144,175 Shares ) ..................... $9.54 ----- Components of Net Assets at August 31, 2000: Shares of beneficial interest (unlimited authorization - no par ) ................ $33,924,495 Accumulated net realized loss on investments ................................ (1,253,225) Net unrealized appreciation of investments ..................................... 683,802 ----------- Total net assets .................................... $33,355,072 =========== - ------------ * For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. **Zero Coupon Bond - The interest rate shown is the effective yield as of August 31, 2000. Summary of Abbreviations: AMT - Subject to Alternative Minimum Tax FHA - Insured by the Federal Housing Authority FSA - Insured by Financial Security Assurance GNMA - Insured by the Government National Mortgage Association LOC - Letter of Credit MBIA - Insured by the Municipal Bond Insurance Association Net Asset Value and Offering Price per Share - Delaware Tax-Free Wisconsin Fund Net asset value A class (A) ......................... $9.51 Sales charge (3.75% of offering price or 3.89% of amount invested per share) (B) ..................................... 0.37 ----- Offering price ...................................... $9.88 ===== (A) Net asset value per share, as illustrated, is the estimated amount which would be paid upon the redemption or repurchase of shares. (B) See the current prospectus for purchases of $100,000 or more. See accompanying notes 33 Statements of Operations
Delaware Delaware Delaware Delaware Tax-Free Tax-Free Tax-Free Tax-Free Missouri Idaho Iowa Kansas Insured Fund Fund Fund Fund - ---------------------------------------------------------------------------------------------- Year Ended 8/31/00 8/31/00 8/31/00 8/31/00 Investment Income: Interest ....................... $ 3,136,544 $ 2,375,574 $ 924,587 $ 2,948,783 ----------- ----------- ----------- ----------- Expenses: Management fees ................ 281,064 228,703 82,143 249,477 Distribution expense ........... 230,429 145,634 71,448 202,723 Dividend disbursing and transfer agent fees and expenses ..... 40,638 52,204 22,983 51,201 Accounting and administration .. 24,829 18,189 5,767 20,534 Reports and statements to shareholders ............. 31,247 26,694 15,139 10,950 Professional fees .............. 30,222 30,394 6,138 30,162 Registration fees .............. 2,000 5,200 2,600 1,682 Custodian fees ................. 11,230 3,824 3,001 6,847 Taxes (other than taxes on income) .................. 4,050 6,064 1,325 675 Trustees' fees ................. 964 1,456 1,128 1,561 Other .......................... 1,968 1,346 8,823 4,369 ----------- ----------- ----------- ----------- 658,641 519,708 220,495 580,181 Less expenses absorbed or waived ................... (45,123) (62,226) (35,858) -- Less expenses paid indirectly .. (1,177) (956) (346) (1,148) ----------- ----------- ----------- ----------- Total operating expenses ....... 612,341 456,526 184,291 579,033 Interest expense ............... -- 3,801 850 14,744 ----------- ----------- ----------- ----------- Total expenses ................. 612,341 460,327 185,141 593,777 ----------- ----------- ----------- ----------- Net Investment Income .......... 2,524,203 1,915,247 739,446 2,355,006 ----------- ----------- ----------- ----------- Net Realized and Unrealized Gain (Loss) on Investments: Net realized gain (loss) on investments .............. (692,218) (216,374) (296,860) (87,531) Net change in unrealized appreciation/depreciation of investments ................. (716,378) 399,990 89,369 10,088 ----------- ----------- ----------- ----------- Net Realized and Unrealized Gain (Loss) on Investments ................. (1,408,596) 183,616 (207,491) (77,443) ----------- ----------- ----------- ----------- Net Increase in Net Assets Resulting from Operations ............. $ 1,115,607 $ 2,098,863 $ 531,955 $ 2,277,563 =========== =========== =========== ===========
[RESTUBBED]
Delaware Delaware Delaware Montana Tax-Free Tax-Free Delaware Municipal North Oregon Tax-Free Bond Dakota Insured Wisconsin Fund Fund Fund Fund - ---------------------------------------------------------------------------------------------- 11/2/99* to Year Ended 8/31/00 8/31/00 8/31/00 8/31/00 Investment Income: Interest ....................... $ 103,532 $ 1,604,025 $ 1,907,886 $ 2,034,237 ----------- ----------- ----------- ----------- Expenses: Management fees ................ 11,293 141,575 167,234 187,729 Distribution expense ........... 11,467 75,243 155,162 118,713 Dividend disbursing and transfer agent fees and expenses ..... 3,784 21,832 29,514 40,050 Accounting and administration .. 829 10,429 13,565 13,771 Reports and statements to shareholders ............. 1,050 5,216 14,668 22,665 Professional fees .............. 1,554 10,465 15,802 16,205 Registration fees .............. 1,775 1,750 200 7,750 Custodian fees ................. 383 3,724 5,883 4,917 Taxes (other than taxes on income) .................. 467 698 139 4,225 Trustees' fees ................. 319 2,133 1,283 1,839 Other .......................... 718 4,238 4,404 3,620 ----------- ----------- ----------- ----------- 33,639 277,303 407,854 421,484 Less expenses absorbed or waived ................... (11,814) -- (52,159) (45,838) Less expenses paid indirectly .. (216) (592) (769) (785) ----------- ----------- ----------- ----------- Total operating expenses ....... 21,609 276,711 354,926 374,861 Interest expense ............... -- -- -- 7,047 ----------- ----------- ----------- ----------- Total expenses ................. 21,609 276,711 354,926 381,908 ----------- ----------- ----------- ----------- Net Investment Income .......... 81,923 1,327,314 1,552,960 1,652,329 ----------- ----------- ----------- ----------- Net Realized and Unrealized Gain (Loss) on Investments: Net realized gain (loss) on investments .............. 7,544 (33,235) (239,493) (745,668) Net change in unrealized appreciation/depreciation of investments ................. 94,342 (490,273) 429,851 514,555 ----------- ----------- ----------- ----------- Net Realized and Unrealized Gain (Loss) on Investments ................. 101,886 (523,508) 190,358 (231,113) ----------- ----------- ----------- ----------- Net Increase in Net Assets Resulting from Operations ............. $ 183,809 $ 803,806 $ 1,743,318 $ 1,421,216 =========== =========== =========== ===========
- ---------- *Date of commencement of operations. See accompanying notes 34 Statements of Changes in Net Assets
Delaware Tax-Free Delaware Tax-Free Idaho Fund Iowa Fund - --------------------------------------------------------------------------------------------------- Year Year Ended Ended 8/31/00 8/31/99 8/31/00 8/31/99 Increase (Decrease) in Net Assets from Operations: Net investment income ............... $ 2,524,203 $ 2,362,432 $ 1,915,247 $ 1,928,680 Net realized gain (loss) on investments ................... (692,218) 3,735 (216,374) 4,469 Net change in unrealized appreciation/depreciation of investments ................... (716,378) (3,206,434) 399,990 (2,113,084) ------------ ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations . 1,115,607 (840,267) 2,098,863 (179,935) ------------ ----------- ----------- ----------- Distributions to Shareholders from: Net investment income: A Class .......................... (1,939,836) (1,935,872) (1,696,047) (1,719,461) B Class .......................... (431,046) (335,490) (173,059) (162,016) C Class .......................... (153,321) (87,683) (46,141) (47,203) Net realized gain on investments: A Class .......................... -- -- -- -- B Class .......................... -- -- -- -- C Class .......................... -- -- -- -- ------------ ----------- ----------- ----------- (2,524,203) (2,359,045) (1,915,247) (1,928,680) ------------ ----------- ----------- ----------- Capital Share Transactions: Proceeds from shares sold: A Class .......................... 5,863,998 9,856,564 2,070,371 3,458,664 B Class .......................... 1,446,362 4,177,758 353,088 1,357,796 C Class .......................... 1,379,931 2,255,562 184,552 552,911 Net asset value of shares issued upon reinvestment of distributions from net investment income and net realized gain on investments: A Class .......................... 1,278,316 1,311,933 1,031,221 1,076,296 B Class .......................... 299,810 223,743 116,259 107,503 C Class .......................... 128,899 71,289 30,753 31,942 ------------ ----------- ----------- ----------- 10,397,316 17,896,849 3,786,244 6,585,112 ------------ ----------- ----------- ----------- Cost of shares repurchased: A Class .......................... (15,599,767) (4,222,098) (4,942,722) (4,250,442) B Class .......................... (1,438,763) (1,125,972) (1,468,301) (557,678) C Class .......................... (1,244,581) (475,466) (402,596) (444,977) ------------ ----------- ----------- ----------- (18,283,111) (5,823,536) (6,813,619) (5,253,097) ------------ ----------- ----------- ----------- Increase (decrease) in net assets derived from capital share transactions ..................... (7,885,795) 12,073,313 (3,027,375) 1,332,015 ------------ ----------- ----------- ----------- Net Increase (Decrease) in Net Assets ....................... (9,294,391) 8,874,001 (2,843,759) (776,600) Net Assets: Beginning of period ................. 57,909,876 49,035,875 43,703,122 44,479,722 ------------ ----------- ----------- ----------- End of period ....................... $ 48,615,485 $57,909,876 $40,859,363 $43,703,122 ============ =========== =========== ===========
[RESTUBBED]
Delaware Tax-Free Delaware Tax-Free Kansas Fund Missouri Insured Fund - -------------------------------------------------------------------------------------------------------- Year Year Ended Ended 8/31/00 8/31/99 8/31/00 8/31/99 Increase (Decrease) in Net Assets from Operations: Net investment income ............... $ 739,446 $ 798,618 $ 2,355,006 $ 2,502,675 Net realized gain (loss) on investments ................... (296,860) (39,464) (87,531) 71,644 Net change in unrealized appreciation/depreciation of investments ................... 89,369 (743,441) 10,088 (2,815,501) ------------ ----------- ----------- ------------ Net increase (decrease) in net assets resulting from operations . 531,955 15,713 2,277,563 (241,182) ------------ ----------- ----------- ------------ Distributions to Shareholders from: Net investment income: A Class .......................... (547,042) (605,332) (1,927,970) (2,067,634) B Class .......................... (185,735) (178,626) (417,005) (427,632) C Class .......................... (13,849) (7,598) (10,031) (7,409) Net realized gain on investments: A Class .......................... -- (38,685) -- -- B Class .......................... -- (12,054) -- -- C Class .......................... -- (373) -- -- ------------ ----------- ----------- ------------ (746,626) (842,668) (2,355,006) (2,502,675) ------------ ----------- ----------- ------------ Capital Share Transactions: Proceeds from shares sold: A Class .......................... 853,139 2,372,007 3,547,699 1,609,116 B Class .......................... 335,246 1,912,350 610,801 511,000 C Class .......................... 209,997 354,261 245,055 172,422 Net asset value of shares issued upon reinvestment of distributions from net investment income and net realized gain on investments: A Class .......................... 281,972 317,555 952,977 1,064,643 B Class .......................... 131,047 131,928 249,057 257,250 C Class .......................... 12,137 6,220 6,302 4,334 ------------ ----------- ----------- ------------ 1,823,538 5,094,321 5,611,891 3,618,765 ------------ ----------- ----------- ------------ Cost of shares repurchased: A Class .......................... (2,094,780) (3,158,135) (8,448,629) (5,087,919) B Class .......................... (1,433,535) (596,102) (1,371,685) (970,200) C Class .......................... (314,198) (15,377) (143,816) (44,506) ------------ ----------- ----------- ------------ (3,842,513) (3,769,614) (9,964,130) (6,102,625) ------------ ----------- ----------- ------------ Increase (decrease) in net assets derived from capital share transactions ..................... (2,018,975) 1,324,707 (4,352,239) (2,483,860) ------------ ----------- ----------- ------------ Net Increase (Decrease) in Net Assets ....................... (2,233,646) 497,752 (4,429,682) (5,227,717) Net Assets: Beginning of period ................. 16,866,410 16,368,658 53,139,881 58,367,598 ------------ ----------- ----------- ------------ End of period ....................... $ 14,632,764 $16,866,410 $48,710,199 $ 53,139,881 ============ =========== =========== ============
See accompanying notes 35 Statements of Changes in Net Assets (continued)
Delaware Montana Municipal Delaware Tax-Free Bond Fund North Dakota Fund - ------------------------------------------------------------------------------------ 11/2/99* Year to Ended 8/31/00 8/31/00 8/31/99 Increase (Decrease) in Net Assets from Operations: Net investment income ............... $ 81,923 $ 1,327,314 $ 1,455,799 Net realized gain (loss) on investments ................... 7,544 (33,235) 8,108 Net change in unrealized appreciation/depreciation of investments ................... 94,342 (490,273) (1,549,466) ----------- ------------ ------------ Net increase (decrease) in net assets resulting from operations .................. 183,809 803,806 (85,559) ----------- ------------ ------------ Distributions to Shareholders from: Net investment income: A Class .......................... (49,840) (1,270,341) (1,406,694) B Class .......................... (25,838) (42,773) (43,161) C Class .......................... (8,169) (14,200) (5,944) Net realized gain on investments: A Class .......................... -- -- (110,320) B Class .......................... -- -- (3,890) C Class .......................... -- -- (110) ----------- ------------ ------------ (83,847) (1,327,314) (1,570,119) ----------- ------------ ------------ Capital Share Transactions: Proceeds from shares sold: A Class .......................... 1,875,162 306,580 1,440,696 B Class .......................... 1,280,668 82,402 208,846 C Class .......................... 331,425 62 304,077 Net asset value of shares issued upon reinvestment of distributions from net investment income and net realized gain on investments: A Class .......................... 40,880 777,635 910,805 B Class .......................... 16,536 23,626 26,551 C Class .......................... 3,752 14,095 5,787 ----------- ------------ ------------ 3,548,423 1,204,400 2,896,762 ----------- ------------ ------------ Cost of shares repurchased: A Class .......................... (5,028) (4,884,665) (4,235,735) B Class .......................... -- (224,582) (107,320) C Class .......................... -- (3,990) (1,454) ----------- ------------ ------------ (5,028) (5,113,237) (4,344,509) ----------- ------------ ------------ Increase (decrease) in net assets derived from capital share transactions ..................... 3,543,395 (3,908,837) (1,447,747) ----------- ------------ ------------ Net Increase (Decrease) in Net Assets ....................... 3,643,357 (4,432,345) (3,103,425) Net Assets: Beginning of period ................. -- 28,402,142 31,505,567 ----------- ------------ ------------ End of period ....................... $ 3,643,357 $ 23,969,797 $ 28,402,142 =========== ============ ============
[RESTUBBED]
Delaware Tax-Free Delaware Tax-Free Oregon Insured Fund Wisconsin Fund - ------------------------------------------------------------------------------------------------------ Year Year Ended Ended 8/31/00 8/31/99 8/31/00 8/31/99 Increase (Decrease) in Net Assets from Operations: Net investment income ............... $ 1,552,960 $ 1,540,396 $ 1,652,329 $ 1,773,222 Net realized gain (loss) on investments ................... (239,493) 19,477 (745,668) (13,496) Net change in unrealized appreciation/depreciation of investments ................... 429,851 (2,333,795) 514,555 (2,175,827) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations .................. 1,743,318 (773,922) 1,421,216 (416,101) ------------ ------------ ------------ ------------ Distributions to Shareholders from: Net investment income: A Class .......................... (1,169,328) (1,225,917) (1,467,100) (1,605,902) B Class .......................... (313,843) (261,267) (127,770) (112,132) C Class .......................... (69,789) (53,212) (57,459) (55,188) Net realized gain on investments: A Class .......................... -- -- -- -- B Class .......................... -- -- -- -- C Class .......................... -- -- -- -- ------------ ------------ ------------ ------------ (1,552,960) (1,540,396) (1,652,329) (1,773,222) ------------ ------------ ------------ ------------ Capital Share Transactions: Proceeds from shares sold: A Class .......................... 1,386,611 7,214,292 1,712,261 4,882,591 B Class .......................... 556,822 2,756,229 654,207 1,147,384 C Class .......................... 706,434 722,342 76,538 554,885 Net asset value of shares issued upon reinvestment of distributions from net investment income and net realized gain on investments: A Class .......................... 687,158 734,060 894,596 905,575 B Class .......................... 154,432 141,931 73,331 67,376 C Class .......................... 45,010 39,399 50,306 48,880 ------------ ------------ ------------ ------------ 3,536,467 11,608,253 3,461,239 7,606,691 ------------ ------------ ------------ ------------ Cost of shares repurchased: A Class .......................... (6,993,486) (3,023,459) (7,069,217) (4,934,768) B Class .......................... (1,290,084) (441,663) (679,078) (457,430) C Class .......................... (758,470) (54,713) (251,822) (292,994) ------------ ------------ ------------ ------------ (9,042,040) (3,519,835) (8,000,117) (5,685,192) ------------ ------------ ------------ ------------ Increase (decrease) in net assets derived from capital share transactions ..................... (5,505,573) 8,088,418 (4,538,878) 1,921,499 ------------ ------------ ------------ ------------ Net Increase (Decrease) in Net Assets ....................... (5,315,215) 5,774,100 (4,769,991) (267,824) Net Assets: Beginning of period ................. 37,120,435 31,346,335 38,125,063 38,392,887 ------------ ------------ ------------ ------------ End of period ....................... $ 31,805,220 $ 37,120,435 $ 33,355,072 $ 38,125,063 ============ ============ ============ ============
- ---------- *Date of commencement of operations. See accompanying notes 36 Financial Highlights
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Idaho Fund - A Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 1/4/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period ..................... $10.940 $11.560 $11.450 $10.910 $11.020 $10.000 Income (loss) from investment operations: Net investment income .................................. 0.541 0.517 0.356 0.551 0.580 0.600 Net realized and unrealized gain (loss) on investments ................................. (0.210) (0.620) 0.115 0.552 (0.120) 1.100 ---------------------------------------------------------------------- Total from investment operations ....................... 0.331 (0.103) 0.471 1.103 0.460 1.700 ---------------------------------------------------------------------- Less dividends and distributions: Dividends from net investment income .................................... (0.541) (0.517) (0.356) (0.563) (0.570) (0.600) Distributions from net realized gain on investments .................................. - - (0.005) - - (0.080) ---------------------------------------------------------------------- Total dividends and distributions ........................ (0.541) (0.517) (0.361) (0.563) (0.570) (0.680) ---------------------------------------------------------------------- Net asset value, end of period ........................... $10.730 $10.940 $11.560 $11.450 $10.910 $11.020 ====================================================================== Total return(4) .......................................... 3.25% (0.99%) 4.19% 10.41% 4.36% 17.48% Ratios and supplemental data: Net assets, end of period (000 omitted) ........................................ $34,674 $44,299 $39,843 $33,788 $27,684 $13,540 Ratio of expenses to average net assets ................................... 1.00% 1.00% 0.95% 0.87% 0.60% 0.26% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly ............................. 1.09% 1.04% 1.02% 1.02% 1.10% 1.25% Ratio of net investment income to average net assets ................................... 5.13% 4.52% 4.65% 4.98% 5.29% 5.24% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly ......................... 5.04% 4.48% 4.58% 4.83% 4.79% 4.25% Portfolio turnover ..................................... 10% 2% 8% 19% 35% 42%
- ------------ (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 37 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Idaho Fund - B Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 3/16/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period .................... $10.920 $11.550 $11.440 $10.890 $11.010 $10.500 Income (loss) from investment operations: Net investment income ................................. 0.462 0.432 0.298 0.487 0.520 0.420 Net realized and unrealized gain (loss) on investments ................................ (0.200) (0.630) 0.117 0.560 (0.130) 0.590 ---------------------------------------------------------------------- Total from investment operations ...................... 0.262 (0.198) 0.415 1.047 0.390 1.010 ---------------------------------------------------------------------- Less dividends and distributions: Dividends from net investment income ................................... (0.462) (0.432) (0.300) (0.497) (0.510) (0.420) Distributions from net realized gain on investments ................................. - - (0.005) - - (0.080) ---------------------------------------------------------------------- Total dividends and distributions ....................... (0.462) (0.432) (0.305) (0.497) (0.510) (0.500) ---------------------------------------------------------------------- Net asset value, end of period .......................... $10.720 $10.920 $11.550 $11.440 $10.890 $11.010 ====================================================================== Total return(4) ......................................... 2.58% (1.82%) 3.68% 9.87% 3.75% 9.86% Ratios and supplemental data: Net assets, end of period (000 omitted) ....................................... $10,320 $10,199 $7,474 $6,827 $4,945 $1,977 Ratio of expenses to average net assets .................................. 1.75% 1.75% 1.70% 1.46% 1.11% 0.79% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly ............................ 1.84% 1.79% 1.77% 1.61% 1.85% 1.90% Ratio of net investment income to average net assets .................................. 4.38% 3.77% 3.90% 4.39% 4.78% 4.68% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly ........................ 4.29% 3.73% 3.83% 4.24% 4.04% 3.57% Portfolio turnover .................................... 10% 2% 8% 19% 35% 42%
- ------------ (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 38 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Idaho Fund - C Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 1/11/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period ..................... $10.920 $11.550 $11.430 $10.900 $11.020 $10.040 Income (loss) from investment operations: Net investment income .................................. 0.462 0.432 0.302 0.459 0.500 0.500 Net realized and unrealized gain (loss) on investments ................................. (0.200) (0.630) 0.123 0.549 (0.130) 1.060 ---------------------------------------------------------------------- Total from investment operations ....................... 0.262 (0.198) 0.425 1.008 0.370 1.560 ---------------------------------------------------------------------- Less dividends and distributions: Dividends from net investment income ..................................... (0.462) (0.432) (0.300) (0.478) (0.490) (0.500) Distributions from net realized gain on investments ................................... - - (0.005) - - (0.080) ---------------------------------------------------------------------- Total dividends and distributions ........................ (0.462) (0.432) (0.305) (0.478) (0.490) (0.580) ---------------------------------------------------------------------- Net asset value, end of period ........................... $10.720 $10.920 $11.550 $11.430 $10.900 $11.020 ====================================================================== Total return(4) .......................................... 2.58% (1.82%) 3.77% 9.49% 3.48% 15.81% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $3,621 $3,411 $1,719 $1,125 $822 $789 Ratio of expenses to average net assets .................................... 1.75% 1.75% 1.70% 1.62% 1.33% 1.05% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .............................. 1.84% 1.79% 1.77% 1.77% 1.82% 2.00% Ratio of net investment income to average net assets .................................... 4.38% 3.77% 3.90% 4.23% 4.57% 4.48% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 4.29% 3.73% 3.83% 4.08% 4.08% 3.53% Portfolio turnover ..................................... 10% 2% 8% 19% 35% 42%
- --------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 39 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Iowa Fund - A Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Year Ended Ended Ended Ended Ended Ended 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 Net asset value, beginning of period .................... $9.700 $10.160 $10.060 $9.620 $9.830 $8.560 Income (loss) from investment operations: Net investment income ................................. 0.447 0.440 0.294 0.449 0.440 0.450 Net realized and unrealized gain (loss) on investments ................................ 0.050 (0.460) 0.100 0.440 (0.210) 1.290 ---------------------------------------------------------------------- Total from investment operations ...................... 0.497 (0.020) 0.394 0.889 0.230 1.740 ---------------------------------------------------------------------- Less dividends: Dividends from net investment income .................................... (0.447) (0.440) (0.294) (0.449) (0.440) (0.470) ---------------------------------------------------------------------- Total dividends ....................................... (0.447) (0.440) (0.294) (0.449) (0.440) (0.470) ---------------------------------------------------------------------- Net asset value, end of period .......................... $9.750 $9.700 $10.160 $10.060 $9.620 $9.830 ====================================================================== Total return(3) ......................................... 5.35% (0.26%) 3.98% 9.49% 2.56% 20.80% Ratios and supplemental data: Net assets, end of period (000 omitted) ........................................ $36,136 $37,807 $39,345 $38,343 $40,037 $42,374 Ratio of expenses to average net assets ................................... 1.01% 1.00% 0.96% 0.91% 0.92% 0.72% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly ......................... 1.16% 1.08% 1.06% 0.97% 1.06% 1.06% Ratio of net investment income to average net assets ................................... 4.71% 4.36% 4.38% 4.62% 4.68% 4.88% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly ......................... 4.56% 4.28% 4.28% 4.56% 4.54% 4.54% Portfolio turnover .................................... 0% 2% 13% 14% 14% 21%
- ------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 40 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Iowa Fund - B Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 3/24/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period ..................... $9.700 $10.160 $10.060 $9.610 $9.830 $9.180 Income (loss) from investment operations: Net investment income .................................. 0.376 0.363 0.243 0.366 0.380 0.310 Net realized and unrealized gain (loss) on investments ................................. 0.050 (0.460) 0.100 0.457 (0.220) 0.640 ---------------------------------------------------------------------- Total from investment operations ....................... 0.426 (0.097) 0.343 0.823 0.160 0.950 ---------------------------------------------------------------------- Less dividends: Dividends from net investment income ..................................... (0.376) (0.363) (0.243) (0.373) (0.380) (0.300) ---------------------------------------------------------------------- Total dividends .......................................... (0.376) (0.363) (0.243) (0.373) (0.380) (0.300) ---------------------------------------------------------------------- Net asset value, end of period ........................... $9.750 $9.700 $10.160 $10.060 $9.610 $9.830 ====================================================================== Total return(4) .......................................... 4.56% (1.03%) 3.46% 8.75% 1.76% 10.62% Ratios and supplemental data: Net assets, end of period (000 omitted) ........................................ $3,616 $4,600 $3,910 $2,910 $1,645 $819 Ratio of expenses to average net assets ............................................ 1.76% 1.75% 1.71% 1.67% 1.61% 1.28% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .............................. 1.91% 1.83% 1.81% 1.73% 1.81% 1.65% Ratio of net investment income to average net assets .................................... 3.96% 3.61% 3.63% 3.86% 3.97% 4.06% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 3.81% 3.53% 3.53% 3.80% 3.77% 3.69% Portfolio turnover ..................................... 0% 2% 13% 14% 14% 21%
- ------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 41 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Iowa Fund - C Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 1/4/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period ..................... $9.700 $10.160 $10.060 $9.610 $9.830 $8.550 Income (loss) from investment operations: Net investment income .................................. 0.376 0.363 0.243 0.360 0.360 0.370 Net realized and unrealized gain (loss) on investments ................................. 0.050 (0.460) 0.100 0.456 (0.220) 1.280 ---------------------------------------------------------------------- Total from investment operations ....................... 0.426 (0.097) 0.343 0.816 0.140 1.650 ---------------------------------------------------------------------- Less dividends: Dividends from net investment income ................................................ (0.376) (0.363) (0.243) (0.366) (0.360) (0.370) ---------------------------------------------------------------------- Total dividends .......................................... (0.376) (0.363) (0.243) (0.366) (0.360) (0.370) ---------------------------------------------------------------------- Net asset value, end of period ........................... $9.750 $9.700 $10.160 $10.060 $9.610 $9.830 ====================================================================== Total return(4) .......................................... 4.57% (1.03%) 3.46% 8.68% 1.56% 19.66% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $1,107 $1,296 $1,225 $871 $670 $462 Ratio of expenses to average net assets ............................................ 1.76% 1.75% 1.71% 1.74% 1.75% 1.61% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .............................. 1.91% 1.83% 1.81% 1.80% 1.81% 1.72% Ratio of net investment income to average net assets .................................... 3.96% 3.61% 3.63% 3.79% 3.82% 3.74% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 3.81% 3.53% 3.53% 3.73% 3.76% 3.63% Portfolio turnover ..................................... 0% 2% 13% 14% 14% 21%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 42 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Kansas Fund - A Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Year Ended Ended Ended Ended Ended Ended 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 Net asset value, beginning of period ..................... $10.640 $11.160 $11.060 $10.560 $10.730 $ 9.500 Income (loss) from investment operations: Net investment income .................................. 0.532 0.538 0.351 0.526 0.520 0.560 Net realized and unrealized gain (loss) on investments ................................ (0.115) (0.491) 0.100 0.506 (0.170) 1.220 ---------------------------------------------------------------------- Total from investment operations ....................... 0.417 0.047 0.451 1.032 0.350 1.780 ---------------------------------------------------------------------- Less dividends and distributions: Dividends from net investment income .................................... (0.537) (0.534) (0.351) (0.532) (0.520) (0.550) Distributions from net realized gain on investments .................................. - (0.033) - - - - ---------------------------------------------------------------------- Total dividends and distributions ...................... (0.537) (0.567) (0.351) (0.532) (0.520) (0.550) ---------------------------------------------------------------------- Net asset value, end of period ........................... $10.520 $10.640 $11.160 $11.060 $10.560 $10.730 ====================================================================== Total return(3) .......................................... 4.14% 0.35% 4.14% 10.06% 3.43% 19.13% Ratios and supplemental data: Net assets, end of period (000 omitted) ........................................ $10,392 $11,498 $12,548 $10,663 $10,176 $10,677 Ratio of expenses to average net assets ........................................... 1.01% 0.98% 0.89% 0.84% 0.83% 0.37% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly ......................... 1.26% 1.06% 0.99% 1.03% 1.21% 1.11% Ratio of net investment income to average net assets ................................... 5.15% 4.86% 4.75% 4.92% 4.97% 5.32% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly ............................. 4.90% 4.78% 4.65% 4.73% 4.59% 4.58% Portfolio turnover ..................................... 24% 28% 40% 30% 56% 19%
- ----------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 43
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Kansas Fund - B Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 4/8/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period ..................... $10.650 $11.180 $11.080 $10.570 $10.740 $10.190 Income (loss) from investment operations: Net investment income .................................. 0.456 0.455 0.296 0.440 0.450 0.340 Net realized and unrealized gain (loss) on investments ................................. (0.107) (0.501) 0.099 0.516 (0.170) 0.540 ---------------------------------------------------------------------- Total from investment operations ....................... 0.349 (0.046) 0.395 0.956 0.280 0.880 ---------------------------------------------------------------------- Less dividends and distributions: Dividends from net investment income ..................................... (0.459) (0.451) (0.295) (0.446) (0.450) (0.330) Distributions from net realized gain on investments ........................................ - (0.033) - - - - ---------------------------------------------------------------------- Total dividends and distributions ...................... (0.459) (0.484) (0.295) (0.446) (0.450) (0.330) ---------------------------------------------------------------------- Net asset value, end of period ........................... $10.540 $10.650 $11.180 $11.080 $10.570 $10.740 ====================================================================== Total return(4) .......................................... 3.45% (0.49%) 3.62% 9.28% 2.69% 8.76% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $3,879 $4,910 $3,694 $3,452 $2,402 $677 Ratio of expenses to average net assets ............................................ 1.76% 1.73% 1.64% 1.61% 1.61% 0.94% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .............................. 2.01% 1.81% 1.74% 1.80% 2.00% 1.68% Ratio of net investment income to average net assets .................................... 4.40% 4.11% 4.00% 4.15% 4.16% 4.63% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 4.15% 4.03% 3.90% 3.96% 3.77% 3.89% Portfolio turnover ..................................... 24% 28% 40% 30% 56% 19%
- ------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 44 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Kansas Fund - C Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 4/12/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period ..................... $10.640 $11.160 $11.050 $10.550 $10.720 $10.200 Income (loss) from investment operations: Net investment income .................................. 0.456 0.453 0.296 0.439 0.430 0.320 Net realized and unrealized gain (loss) on investments ................................. (0.106) (0.490) 0.110 0.504 (0.170) 0.510 ---------------------------------------------------------------------- Total from investment operations ....................... 0.350 (0.037) 0.406 0.943 0.260 0.830 ---------------------------------------------------------------------- Less dividends and distributions: Dividends from net investment income ..................................... (0.460) (0.450) (0.296) (0.443) (0.430) (0.310) Distributions from net realized gain on investments ........................................ - (0.033) - - - - ---------------------------------------------------------------------- Total dividends and distributions ...................... (0.460) (0.483) (0.296) (0.443) (0.430) (0.310) ---------------------------------------------------------------------- Net asset value, end of period ........................... $10.530 $10.640 $11.160 $11.050 $10.550 $10.720 ====================================================================== Total return(4) .......................................... 3.46% (0.40%) 3.72% 9.17% 2.52% 8.29% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $362 $458 $127 $108 $90 $40 Ratio of expenses to average net assets ............................................ 1.76% 1.73% 1.64% 1.64% 1.77% 1.27% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .......................... 2.01% 1.81% 1.74% 1.83% 2.00% 1.79% Ratio of net investment income to average net assets .................................... 4.40% 4.11% 4.00% 4.12% 4.02% 4.21% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 4.15% 4.03% 3.90% 3.93% 3.79% 3.69% Portfolio turnover ..................................... 24% 28% 40% 30% 56% 19%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 45 Notes to Financial Statements August 31, 2000 - -------------------------------------------------------------------------------- Delaware Tax-Free Kansas Fund, Delaware Tax-Free Missouri Insured Fund, and Delaware Tax-Free Oregon Insured Fund are series of Voyageur Investment Trust which is organized as a Massachusetts business trust. Delaware Tax-Free Idaho Fund, Delaware Tax-Free Iowa Fund, Delaware Montana Municipal Bond Fund, and Delaware Tax-Free Wisconsin Fund are series of Voyageur Mutual Funds which is organized as a Delaware business trust, and Delaware Tax-Free North Dakota Fund is a series within the Voyageur Tax-Free Funds which is organized as a Delaware business trust. Each series is referred to as a "Fund" or collectively as the "Funds" and is a non-diversified, open-end management investment company under the Investment Company Act of 1940, as amended. The Funds offer three classes of shares. The A Class carries a maximum front-end sales charge of 3.75%. The B Class carries a back-end deferred sales charge and the C Class carries a level load deferred sales charge. The Delaware Tax-Free Idaho Fund, Delaware Tax-Free Iowa Fund, Delaware Montana Municipal Bond Fund, Delaware Tax-Free North Dakota Fund, and Delaware Tax-Free Wisconsin Fund seek high current income free from both federal and state income taxes by investing in investment grade municipal bonds. The Delaware Tax-Free Missouri Insured Fund and Delaware Tax-Free Oregon Insured Fund seek high current income free from both federal and state income taxes by investing in insured municipal bonds. The Delaware Tax-Free Kansas Fund seeks high current income free from both federal and state income taxes and local intangibles tax by investing in investment grade municipal bonds. 1. Significant Accounting Policies The following accounting policies are in accordance with accounting principles generally accepted in the United States and are consistently followed by the Funds. Security Valuation - Long-term debt securities are valued by an independent pricing service and such prices are believed to reflect the fair value of such securities. Money market instruments having less than 60 days to maturity are valued at amortized cost, which approximates market value. Other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of the Funds' Board of Trustees. Federal Income Taxes - Each Fund intends to qualify or to continue to qualify as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements. Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. Class Accounting - Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the various classes of the Funds on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Other - Expenses common to all funds within the Delaware Investments Family of Funds are allocated amongst the funds on the basis of average net assets. Security transactions are recorded on the date the securities are purchased or sold (trade date). Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Interest income is recorded on the accrual basis. Original issue discounts and market premium are amortized to interest income over the lives of the respective securities. The Funds declare dividends from net investment income daily and pay such dividends monthly. Capital gains, if any, are distributed annually. Certain expenses of the Funds are paid through commission arrangements with brokers. These transactions are done subject to best execution. The expenses paid under the above arrangement are included in their respective expense captions on the Statement of Operations with the corresponding expense offset shown as "expenses paid indirectly". The amount of these expenses for the period ended August 31, 2000 are as follows: Delaware Tax-Free Idaho Fund ............................ $1,177 Delaware Tax-Free Iowa Fund ............................. $ 956 Delaware Tax-Free Kansas Fund ........................... $ 346 Delaware Tax-Free Missouri Insured Fund ................. $1,148 Delaware Montana Municipal Bond Fund .................... $ 216 Delaware Tax-Free North Dakota Fund ..................... $ 592 Delaware Tax-Free Oregon Insured Fund ................... $ 769 Delaware Tax-Free Wisconsin Fund ........................ $ 785 59 Notes to Financial Statements (continued) August 31, 2000 - -------------------------------------------------------------------------------- 2. Investment Management and Other Transactions with Affiliates In accordance with the terms of the Investment Management Agreement, each Fund pays Delaware Management Company (DMC), the Investment Manager, an annual fee which is calculated daily based on the net assets of each Fund. The following are the management fees as a percentage of average daily net assets for each respective Fund:
On the first On the next On the next In excess of $500 million $500 million $1.5 billion $2.5 billion --------------------------------------------------------- Delaware Tax-Free Idaho Fund 0.55% 0.50% 0.45% 0.425% Delaware Tax-Free Iowa Fund 0.55% 0.50% 0.45% 0.425% Delaware Tax-Free Kansas Fund 0.55% 0.50% 0.45% 0.425% Delaware Tax-Free Missouri Insured Fund 0.50% 0.475% 0.45% 0.425% Delaware Montana Municipal Bond Fund 0.55% 0.50% 0.45% 0.425% Delaware Tax-Free North Dakota Fund 0.55% 0.50% 0.45% 0.425% Delaware Tax-Free Oregon Insured Fund 0.50% 0.475% 0.45% 0.425% Delaware Tax-Free Wisconsin Fund 0.55% 0.50% 0.45% 0.425%
DMC has elected to waive its fee and reimburse each Fund to the extent that annual operating expenses, exclusive of taxes, interest, brokerage commissions, extraordinary expenses and distribution expenses, exceed the following percentages of average daily net assets through October 31, 2001. The waiver rates for the period ended August 31, 2000 are as follows: Operating expense limitation as a percentage of average daily net assets (per annum) -------------------------- Delaware Tax-Free Idaho Fund 0.75% Delaware Tax-Free Iowa Fund 0.75% Delaware Tax-Free Kansas Fund 0.75% Delaware Tax-Free Missouri Insured Fund N/A Delaware Montana Municipal Bond Fund 0.50% Delaware Tax-Free North Dakota Fund N/A Delaware Tax-Free Oregon Insured Fund 0.60% Delaware Tax-Free Wisconsin Fund 0.75% The Funds have engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC, to provide dividend disbursing, transfer agent, accounting and administrative services. The Funds pay DSC a monthly fee based on number of shareholder accounts, shareholder transactions and average net assets, subject to certain minimums. At August 31, 2000, the Funds had liabilities payable to affiliates as follows:
Dividend disbursing, Investment Transfer agent, accounting Other expenses management fees fees and other expenses payable to DMC payable to DMC payable to DSC and affiliates ----------------------------------------------------------------------------------------------------------- Delaware Tax-Free Idaho Fund - $6,279 $19,498 Delaware Tax-Free Iowa Fund $9,346 6,705 16,624 Delaware Tax-Free Kansas Fund 4,552 2,550 11,505 Delaware Tax-Free Missouri Insured Fund 10,605 7,173 19,498 Delaware Montana Municipal Bond Fund - 7,439 12,063 Delaware Tax-Free North Dakota Fund 15,089 3,947 11,692 Delaware Tax-Free Oregon Insured Fund 5,487 4,772 12,906 Delaware Tax-Free Wisconsin Fund 4,741 4,889 13,686
60 Notes to Financial Statements (continued) August 31, 2000 - -------------------------------------------------------------------------------- 2. Investment Management and Other Transactions with Affiliates (continued) Pursuant to the Distribution Agreement, each Fund pays Delaware Distributors, L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to exceed 0.25% of the average daily net assets of the A Class and 1.00% of the average daily net assets of the B and C Classes. For the period ended August 31, 2000, commissions earned by DDLP on sales of each Fund's A Class shares were as follows: Delaware Tax-Free Idaho Fund ......................... $9,682 Delaware Tax-Free Iowa Fund .......................... 8,541 Delaware Tax-Free Kansas Fund ........................ 3,731 Delaware Tax-Free Missouri Insured Fund .............. 4,399 Delaware Montana Municipal Bond Fund ................. 498 Delaware Tax-Free North Dakota Fund .................. 646 Delaware Tax-Free Oregon Insured Fund ................ 4,107 Delaware Tax-Free Wisconsin Fund ..................... 7,062 Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of the Funds. These officers, trustees and employees are paid no compensation by the Funds. 3. Investments During the period ended August 31, 2000, the Funds made purchases and sales of investment securities other than temporary cash investments as follows:
Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Tax-Free Tax-Free Tax-Free Tax-Free Montana Tax-Free Tax-Free Tax-Free Idaho Iowa Kansas Missouri Municipal North Dakota Oregon Insured Wisconsin Fund Fund Fund Insured Fund Bond Fund Fund Fund Fund --------------------------------------------------------------------------------------------------------- Purchases ............ $5,145,070 $174,000 $3,482,180 $454,980 $5,872,589 $1,761,109 $ - $1,935,163 Sales ................ 10,338,182 3,984,576 4,742,867 4,845,502 2,423,887 5,130,425 4,193,538 7,696,474
At August 31, 2000, the aggregate cost of securities and unrealized appreciation (depreciation) for federal income tax purposes for each Fund were as follows:
Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Tax-Free Tax-Free Tax-Free Tax-Free Montana Tax-Free Tax-Free Tax-Free Idaho Iowa Kansas Missouri Municipal North Dakota Oregon Insured Wisconsin Fund Fund Fund Insured Fund Bond Fund Fund Fund Fund --------------------------------------------------------------------------------------------------------- Cost of Investments .......... $48,529,249 $38,729,368 $13,965,803 $46,244,783 $3,456,680 $23,670,741 $30,710,148 $32,272,352 --------------------------------------------------------------------------------------------------------- Aggregate Unrealized Appreciation ......... $780,834 $1,664,028 $590,805 $2,023,089 $94,597 $736,486 $1,235,989 $968,343 Aggregate Unrealized Depreciation ......... (1,673,542) (245,458) (136,729) (183,054) (255) (611,628) (562,916) (299,166) --------------------------------------------------------------------------------------------------------- Net Unrealized Appreciation (Depreciation) ....... $(892,708) $1,418,570 $454,076 $1,840,035 $94,342 $124,858 $673,073 $669,177 =========================================================================================================
61 Notes to Financial Statements (continued) August 31, 2000 - -------------------------------------------------------------------------------- 3. Investments (continued) For federal income tax purposes, each Fund had accumulated capital losses at August 31, 2000 as follows:
Delaware Delaware Delaware Delaware Delaware Delaware Delaware Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free Idaho Iowa Kansas Missouri North Dakota Oregon Insured Wisconsin Fund Fund Fund Insured Fund Fund Fund Fund ------------------------------------------------------------------------------------------ Year of expiration 2002 $-- $969,615 $-- $ -- $-- $215,801 $128,938 Year of expiration 2003 -- 368,235 -- 209,612 -- 158,365 64,926 Year of expiration 2004 -- 168,308 -- 525,264 -- 218,468 229,647 Year of expiration 2005 -- 117,934 -- -- -- -- -- Year of expiration 2006 44,632 -- -- -- -- -- -- Year of expiration 2007 -- -- -- -- -- -- 53,540 Year of expiration 2008 -- 133,882 49,427 187,782 16,837 -- 422,454 ------------------------------------------------------------------------------------------ Total $44,632 $1,757,974 $49,427 $922,658 $16,837 $592,634 - $899,505 =========================================================================================
4. Capital Shares Transactions in capital shares were as follows:
Delaware Delaware Delaware Delaware Tax-Free Tax-Free Tax-Free Tax-Free Missouri Idaho Fund Iowa Fund Kansas Fund Insured Fund ------------------------ ---------------------- -------------------- ---------------------- Year Year Year Year Ended Ended Ended Ended 8/31/00 8/31/99 8/31/00 8/31/99 8/31/00 8/31/99 8/31/00 8/31/99 Shares sold: A Class ..................... 552,603 859,702 217,604 341,908 82,455 213,539 349,266 149,789 B Class ..................... 136,768 366,423 37,082 134,546 32,372 172,332 60,617 47,604 C Class ..................... 131,600 198,983 19,292 54,506 20,247 32,553 24,320 15,875 Shares issued upon reinvestment of distributions from net investment income and net realized gain on investments: A Class ..................... 121,535 114,940 108,586 106,955 27,280 28,696 94,053 98,821 B Class ..................... 28,556 19,655 12,214 10,686 12,657 11,924 24,584 23,890 C Class ..................... 12,286 6,278 3,241 3,179 1,170 564 620 404 ---------- ---------- ---------- ---------- -------- ---------- -------- ---------- 983,348 1,565,981 398,019 651,780 176,181 459,608 553,460 336,383 Shares repurchased: A Class ..................... (1,492,781) (370,113) (518,863) (423,067) (203,299) (285,048) (832,478) (471,038) B Class ..................... (136,088) (99,593) (152,719) (55,825) (137,989) (53,746) (135,474) (89,897) C Class ..................... (118,333) (41,822) (42,678) (44,536) (30,090) (1,377) (14,124) (4,175) ---------- ---------- ---------- ---------- -------- ---------- -------- ---------- (1,747,202) (511,528) (714,260) (523,428) (371,378) (340,171) (982,076) (565,110) ---------- ---------- ---------- ---------- -------- ---------- -------- ---------- Net increase (decrease) ........ (763,854) 1,054,453 (316,241) 128,352 (195,197) 119,437 (428,616) (228,727) ========== ========== ========== ========== ======== ========== ======== ==========
62 Notes to Financial Statements (continued) August 31, 2000 - -------------------------------------------------------------------------------- 4. Capital Shares (continued)
Delaware Delaware Tax-Free Delaware Tax-Free Delaware Tax-Free Montana Municipal North Dakota Oregon Insured Wisconsin Bond Fund Fund Fund Fund ----------------- -------------------- --------------------- ---------------------- 11/2/99* Year Year Year to Ended Ended Ended 8/31/00 8/31/00 8/31/99 8/31/00 8/31/99 8/31/00 8/31/99 Shares sold: A Class ..................... 340,366 29,223 127,381 143,160 697,470 183,938 488,062 B Class ..................... 233,714 7,826 18,412 57,843 268,258 70,486 114,881 C Class ..................... 60,101 6 26,760 73,692 69,203 8,266 55,257 Shares issued upon reinvestment of distributions from net investment income and net realized gain on investments: A Class ..................... 7,378 74,060 80,736 71,654 71,190 96,125 90,957 B Class ..................... 2,989 2,250 2,356 16,104 13,777 7,887 6,775 C Class ..................... 678 1,343 521 4,696 3,828 5,389 4,896 ---------- -------- -------- ---------- ---------- ---------- ---------- 645,226 114,708 256,166 367,149 1,123,726 372,091 760,828 ---------- -------- -------- ---------- ---------- ---------- ---------- Shares repurchased: A Class ..................... (895) (464,951) (375,693) (728,502) (295,662) (757,125) (500,517) B Class ..................... -- (21,452) (9,548) (134,093) (42,818) (73,052) (45,854) C Class ..................... -- (376) (131) (79,480) (5,433) (27,109) (29,398) ---------- -------- -------- ---------- ---------- ---------- ---------- (895) (486,779) (385,372) (942,075) (343,913) (857,286) (575,769) ---------- -------- -------- ---------- ---------- ---------- ---------- Net increase (decrease) ........ 644,331 (372,071) (129,206) (574,926) 779,813 (485,195) 185,059 ========== ======== ======== ========== ========== ========== ==========
* Commencement of operations. 5. Lines of Credit The Funds, along with certain other funds in the Delaware Investments Family of Funds (the "Participants"), participate in a $375,400,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each fund's allocation of the entire facility. The Participants may borrow up to a maximum of one-third of their net assets under the agreement. The Funds had no amounts outstanding as of August 31, 2000, or at any time during the period. 6. Credit And Market Risk The Funds concentrate their investments in securities mainly issued by each specific states' municipalities. The value of these investments may be adversely affected by new legislation within the state, regional or local economic conditions, and differing levels of supply and demand for municipal bonds. Many municipalities insure repayment for their obligations. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that market value may fluctuate for other reasons and there is no assurance that the insurance company will meet its obligations. These securities have been identified in the Statements of Net Assets. 63 Notes to Financial Statements (continued) August 31, 2000 - -------------------------------------------------------------------------------- 7. Tax Information (Unaudited) The information set forth below is for each Fund's fiscal year as required by federal laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of a fund. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in early 2001. Please consult your tax advisor for proper treatment of this information. For the fiscal year ended August 31, 2000, each Fund designates as long-term capital gains, ordinary income and tax-exempt distributions paid during the year as follows:
Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Tax-Free Tax-Free Tax-Free Tax-Free Montana Tax-Free Tax-Free Tax-Free Idaho Iowa Kansas Missouri Municipal North Dakota Oregon Insured Wisconsin Fund Fund Fund Insured Fund Bond Fund Fund Fund Fund -------------------------------------------------------------------------------------------------------- (A) Long-Term Capital Gains Distributions (Tax Basis) ............ - - - - - - - - (B) Ordinary Income Distributions (Tax Basis) ............ - - - - - - - - (C) Tax-Exempt Distributions (Tax Basis) ............ 100% 100% 100% 100% 100% 100% 100% 100% -------------------------------------------------------------------------------------------------------- (D) Total Distributions (Tax Basis) ............ 100% 100% 100% 100% 100% 100% 100% 100% --------------------------------------------------------------------------------------------------------
(A), (B) and (C) are based on a percentage of each Fund's total distributions. 64 Report of Independent Auditors - -------------------------------------------------------------------------------- To the Shareholders and Board of Trustees Voyageur Mutual Funds - Delaware Tax-Free Idaho Fund Voyageur Mutual Funds - Delaware Tax-Free Iowa Fund Voyageur Investment Trust - Delaware Tax-Free Kansas Fund Voyageur Investment Trust - Delaware Tax-Free Missouri Insured Fund Voyageur Mutual Funds - Delaware Montana Municipal Bond Fund Voyageur Tax Free Funds - Delaware Tax-Free North Dakota Fund Voyageur Investment Trust - Delaware Tax-Free Oregon Insured Fund Voyageur Mutual Funds - Delaware Tax-Free Wisconsin Fund We have audited the accompanying statements of net assets of Delaware Tax-Free Idaho Fund, Delaware Tax-Free Iowa Fund, Delaware Tax-Free Kansas Fund, Delaware Tax-Free Missouri Insured Fund, Delaware Montana Municipal Bond Fund, Delaware Tax-Free North Dakota Fund, Delaware Tax-Free Oregon Insured Fund and Delaware Tax-Free Wisconsin Fund (the "Funds") as of August 31, 2000, and the related statements of operations and statements of changes in net assets for each of the periods indicated therein, and the financial highlights for each of the periods presented from January 1, 1997 through August 31, 2000.These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.The financial highlights for the periods presented through December 31, 1996 were audited by other auditors whose reports thereon dated February 14, 1997 expressed unqualified opinions on such financial highlights. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of August 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the above listed funds at August 31, 2000, the results of their operations and changes in their net assets for each of the periods indicated therein, and their financial highlights for each of the periods presented from January 1, 1997 through August 31, 2000, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Philadelphia, Pennsylvania October 6, 2000 DELAWARE(SM) INVESTMENTS - --------------------- Philadelphia o London For Shareholders 1.800.523.1918 For Securities Dealers 1.800.362.7500 For Financial Institutions Representatives Only 1.800.659.2265 www.delawareinvestments.com This annual report is for the information of Delaware Tax-Free Idaho Fund, Delaware Tax-Free Iowa Fund, Delaware Tax-Free Kansas Fund, Delaware Tax-Free Missouri Insured Fund, Delaware Montana Municipal Bond Fund, Delaware Tax-Free North Dakota Fund, Delaware Tax-Free Oregon Insured Fund and Delaware Tax-Free Wisconsin Fund shareholders, but it may be used with prospective investors when preceded or accompanied by a current Prospectus for these Funds and the Delaware Investments Performance Update for the most recently completed calendar quarter. The prospectus sets forth details about charges, expenses, investment objectives and operating policies of each Funds. You should read the prospectus carefully before you invest. The figures in this report represent past results which are not a guarantee of future results. The return and principal value of an investment in each Funds will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
- ------------------------------------------------------------------------------------------------------------------------------------ BOARD OF TRUSTEES Charles E. Peck Investment Manager Retired Delaware Management Company Wayne A. Stork Fredericksburg, VA Philadelphia, PA Chairman Delaware Investments Family of Funds Janet L. Yeomans International Affiliate Philadelphia, PA Vice President and Treasurer Delaware International Advisers Ltd. 3M Corporation London, England Walter P. Babich St. Paul, MN Board Chairman National Distributor Citadel Constructors, Inc. AFFILIATED OFFICERS Delaware Distributors, L.P. King of Prussia, PA Philadelphia, PA Charles E. Haldeman, Jr. David K. Downes President and Chief Executive Officer Shareholder Servicing, Dividend President and Chief Executive Officer Delaware Management Holdings, Inc. Disbursing and Transfer Agent Delaware Investments Family of Funds Philadelphia, PA Delaware Service Company, Inc. Philadelphia, PA Philadelphia, PA Richard J. Flannery John H. Durham Executive Vice President 1818 Market Street Private Investor and General Counsel Philadelphia, PA 19103-3682 Horsham, PA Delaware Investments Family of Funds Philadelphia, PA Anthony D. Knerr Consultant, Anthony Knerr & Associates Bruce D. Barton New York, NY President and Chief Executive Officer Delaware Distributors, L.P. Ann R. Leven Philadelphia, PA Former Treasurer, National Gallery of Art Washington, DC Thomas F. Madison President and Chief Executive Officer MLM Partners, Inc. Minneapolis, MN
(3871) Printed in the USA AR-CORN [8/00] PPL 10/00 (J6383)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Missouri Insured Fund - A Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Year Ended Ended Ended Ended Ended Ended 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 Net asset value, beginning of period ...................... $10.340 $10.870 $10.810 $10.370 $10.540 $9.270 Income (loss) from investment operations: Net investment income ................................... 0.494 0.498 0.333 0.504 0.520 0.520 Net realized and unrealized gain (loss) on investments ................................. - (0.530) 0.060 0.446 (0.180) 1.290 --------------------------------------------------------------------- Total from investment operations ........................ 0.494 (0.032) 0.393 0.950 0.340 1.810 --------------------------------------------------------------------- Less dividends: Dividends from net investment income ..................................... (0.494) (0.498) (0.333) (0.510) (0.510) (0.540) --------------------------------------------------------------------- Total dividends ......................................... (0.494) (0.498) (0.333) (0.510) (0.510) (0.540) --------------------------------------------------------------------- Net asset value, end of period ............................ $10.340 $10.340 $10.870 $10.810 $10.370 $10.540 ===================================================================== Total return(3) ........................................... 4.99% (0.38%) 3.70% 9.43% 3.41% 19.96% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $38,314 $42,337 $46,939 $48,565 $49,301 $50,211 Ratio of expenses to average net assets ............................................ 1.03% 0.97% 0.92% 0.91% 0.71% 0.50% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .......................... 1.03% 1.02% 1.02% 0.93% 1.03% 1.07% Ratio of net investment income to average net assets .................................... 4.88% 4.62% 4.64% 4.81% 5.05% 5.25% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .............................. 4.88% 4.57% 4.54% 4.79% 4.73% 4.68% Portfolio turnover ...................................... 1% 7% 18% 12% 28% 31%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 46 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Missouri Insured Fund - B Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Year Ended Ended Ended Ended Ended Ended 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 Net asset value, beginning of period ...................... $10.340 $10.870 $10.810 $10.370 $10.540 $9.270 Income (loss) from investment operations: Net investment income ................................... 0.418 0.416 0.279 0.425 0.460 0.480 Net realized and unrealized gain (loss) on investments ................................. - (0.530) 0.060 0.451 (0.180) 1.280 --------------------------------------------------------------------- Total from investment operations ........................ 0.418 (0.114) 0.339 0.876 0.280 1.760 --------------------------------------------------------------------- Less dividends: Dividends from net investment income ..................................... (0.418) (0.416) (0.279) (0.436) (0.450) (0.490) --------------------------------------------------------------------- Total dividends ......................................... (0.418) (0.416) (0.279) (0.436) (0.450) (0.490) --------------------------------------------------------------------- Net asset value, end of period ............................ $10.340 $10.340 $10.870 $10.810 $10.370 $10.540 ===================================================================== Total return(3) ........................................... 4.21% (1.13%) 3.19% 8.66% 2.93% 19.18% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $10,053 $10,572 $11,317 $11,507 $10,432 $6,195 Ratio of expenses to average net assets ............................................ 1.78% 1.72% 1.67% 1.61% 1.29% 0.97% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .......................... 1.78% 1.77% 1.77% 1.63% 1.78% 1.81% Ratio of net investment income to average net assets ................................. 4.13% 3.87% 3.89% 4.11% 4.46% 4.70% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .............................. 4.13% 3.82% 3.79% 4.09% 3.97% 3.86% Portfolio turnover .................................... 1% 7% 18% 12% 28% 31%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 47 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Missouri Insured Fund - C Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 11/11/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period ...................... $10.350 $10.880 $10.810 $10.370 $10.540 $10.360 Income (loss) from investment operations: Net investment income ................................... 0.418 0.419 0.279 0.405 0.430 0.060 Net realized and unrealized gain (loss) on investments ................................. - (0.530) 0.070 0.455 (0.180) 0.170 --------------------------------------------------------------------- Total from investment operations ........................ 0.418 (0.111) 0.349 0.860 0.250 0.230 --------------------------------------------------------------------- Less dividends: Dividends from net investment income ..................................... (0.418) (0.419) (0.279) (0.420) (0.420) (0.050) --------------------------------------------------------------------- Total dividends ......................................... (0.418) (0.419) (0.279) (0.420) (0.420) (0.050) --------------------------------------------------------------------- Net asset value, end of period ............................ $10.350 $10.350 $10.880 $10.810 $10.370 $10.540 ===================================================================== Total return(4) ........................................... 4.20% (1.12%) 3.28% 8.49% 2.48% 2.24% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $343 $231 $112 $225 $152 $20 Ratio of expenses to average net assets ............................................ 1.78% 1.72% 1.67% 1.74% 1.62% 1.22% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .......................... 1.78% 1.77% 1.77% 1.76% 1.78% 1.55% Ratio of net investment income to average net assets .................................... 4.13% 3.87% 3.89% 3.98% 4.10% 4.09% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 4.13% 3.82% 3.79% 3.96% 3.94% 3.76% Portfolio turnover ...................................... 1% 7% 18% 12% 28% 31%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 48 Financial Highlights (continued)
Delaware Montana Delaware Montana Delaware Montana Selected data for each share of the Fund outstanding Municipal Bond Municipal Bond Municipal Bond throughout each period were as follows: Fund - A Class Fund - B Class Fund - C Class - ------------------------------------------------------------------------------------------------------------------------------------ Period Period Period 11/2/99(1) to 8/31/00 11/2/99(1) to 8/31/00 11/2/99(1) to 8/31/00 Net asset value, beginning of period ................. $5.500 $5.500 $5.500 Income from investment operations: Net investment income .............................. 0.176 0.152 0.146 Net realized and unrealized gain on investments ................................... 0.163 0.153 0.159 ------------------------------------------------------- Total from investment operations ................... 0.339 0.305 0.305 ------------------------------------------------------- Less dividends: Dividends from net investment income ............... (0.179) (0.155) (0.155) ------------------------------------------------------- Total dividends .................................... (0.179) (0.155) (0.155) ------------------------------------------------------- Net asset value, end of period ....................... $5.660 $5.650 $5.650 ======================================================= Total return(2) ...................................... 6.10% 5.65% 5.65% Ratios and supplemental data: Net assets, end of period (000 omitted) ............ $1,961 $1,338 $344 Ratio of expenses to average net assets ............ 0.75% 1.50% 1.50% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly ..................... 1.33% 2.08% 2.08% Ratio of net investment income to average net assets ............................... 4.31% 3.56% 3.56% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly ..................... 3.73% 2.98% 2.98% Portfolio turnover ................................. 24% 24% 24%
- -------------- (1) Date of commencement of operations; ratios have been annualized and total return has not been annualized. (2) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 49 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free North Dakota Fund - A Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Year Ended Ended Ended Ended Ended Ended 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 Net asset value, beginning of period ...................... $10.820 $11.440 $11.320 $10.880 $11.000 $9.850 Income (loss) from investment operations: Net investment income ................................... 0.547 0.541 0.364 0.546 0.540 0.540 Net realized and unrealized gain (loss) on investments ................................. (0.180) (0.578) 0.120 0.451 (0.130) 1.180 --------------------------------------------------------------------- Total from investment operations ........................ 0.367 (0.037) 0.484 0.997 0.410 1.720 --------------------------------------------------------------------- Less dividends and distributions: Dividends from net investment income ..................................... (0.547) (0.541) (0.364) (0.557) (0.530) (0.570) Distributions from net realized gain on investments ........................................ - (0.042) - - - - --------------------------------------------------------------------- Total dividends and distributions ....................... (0.547) (0.583) (0.364) (0.557) (0.530) (0.570) --------------------------------------------------------------------- Net asset value, end of period ............................ $10.640 $10.820 $11.440 $11.320 $10.880 $11.000 ===================================================================== Total return(3) ........................................... 3.58% (0.41%) 4.35% 9.43% 3.89% 17.81% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $22,733 $27,032 $30,496 $30,965 $33,713 $36,096 Ratio of expenses to average net assets .................................... 1.04% 1.00% 1.00% 1.00% 0.88% 0.81% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .......................... 1.04% 1.04% 1.15% 1.04% 1.08% 1.05% Ratio of net investment income to average net assets .................................... 5.19% 4.79% 4.82% 4.97% 5.01% 5.07% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 5.19% 4.75% 4.67% 4.93% 4.81% 4.83% Portfolio turnover ...................................... 7% 28% 23% 41% 58% 45%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 50 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free North Dakota Fund - B Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Year Ended Ended Ended Ended Ended Ended 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 Net asset value, beginning of period ...................... $10.820 $11.440 $11.320 $10.880 $11.000 $9.850 Income (loss) from investment operations: Net investment income ................................... 0.468 0.457 0.308 0.484 0.490 0.480 Net realized and unrealized gain (loss) on investments ................................. (0.180) (0.578) 0.119 0.451 (0.130) 1.180 --------------------------------------------------------------------- Total from investment operations ........................ 0.288 (0.121) 0.427 0.935 0.360 1.660 --------------------------------------------------------------------- Less dividends and distributions: Dividends from net investment income ..................................... (0.468) (0.457) (0.307) (0.495) (0.480) (0.510) Distributions from net realized gain on investments ........................................ - (0.042) - - - - --------------------------------------------------------------------- Total dividends and distributions ....................... (0.468) (0.499) (0.307) (0.495) (0.480) (0.510) --------------------------------------------------------------------- Net asset value, end of period ............................ $10.640 $10.820 $11.440 $11.320 $10.880 $11.000 ===================================================================== Total return(3) ........................................... 2.81% (1.14%) 3.83% 8.82% 3.39% 17.24% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $910 $1,048 $980 $889 $700 $375 Ratio of expenses to average net assets ............................................ 1.79% 1.75% 1.75% 1.55% 1.36% 1.29% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .......................... 1.79% 1.79% 1.90% 1.59% 1.83% 1.79% Ratio of net investment income to average net assets .................................... 4.44% 4.04% 4.07% 4.42% 4.52% 4.56% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 4.44% 4.00% 3.92% 4.38% 4.05% 4.06% Portfolio turnover ...................................... 7% 28% 23% 41% 58% 45%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 51 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free North Dakota Fund - C Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 7/29/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period ...................... $10.810 $11.430 $11.320 $10.870 $11.000 $10.510 Income (loss) from investment operations: Net investment income ................................... 0.466 0.456 0.307 0.441 0.440 0.170 Net realized and unrealized gain (loss) on investments ................................. (0.180) (0.578) 0.110 0.468 (0.140) 0.500 --------------------------------------------------------------------- Total from investment operations ........................ 0.286 (0.122) 0.417 0.909 0.300 0.670 --------------------------------------------------------------------- Less dividends and distributions: Dividends from net investment income ..................................... (0.466) (0.456) (0.307) (0.459) (0.430) (0.180) Distributions from net realized gain on investments ................................... - (0.042) - -- - - --------------------------------------------------------------------- Total dividends and distributions ....................... (0.466) (0.498) (0.307) (0.459) (0.430) (0.180) --------------------------------------------------------------------- Net asset value, end of period ............................ $10.630 $10.810 $11.430 $11.320 $10.870 $11.000 ===================================================================== Total return(4) ........................................... 2.79% (1.15%) 3.74% 8.57% 2.81% 6.47% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $327 $322 $30 $41 $40 $20 Ratio of expenses to average net assets .................................... 1.79% 1.75% 1.75% 1.87% 1.75% 1.73% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .......................... 1.79% 1.79% 1.90% 1.91% 1.75% 1.73% Ratio of net investment income to average net assets ............................................ 4.44% 4.04% 4.07% 4.10% 4.06% 4.00% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 4.44% 4.00% 3.92% 4.06% 4.06% 4.00% Portfolio turnover ...................................... 7% 28% 23% 41% 58% 45%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 52 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Oregon Insured Fund - A Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Year Ended Ended Ended Ended Ended Ended 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 Net asset value, beginning of period ...................... $9.810 $10.430 $10.310 $9.870 $10.050 $8.920 Income (loss) from investment operations: Net investment income ................................... 0.467 0.458 0.320 0.481 0.480 0.490 Net realized and unrealized gain (loss) on investments ................................. 0.100 (0.620) 0.120 0.444 (0.180) 1.140 --------------------------------------------------------------------- Total from investment operations ........................ 0.567 (0.162) 0.440 0.925 0.300 1.630 --------------------------------------------------------------------- Less dividends: Dividends from net investment income ..................................... (0.467) (0.458) (0.320) (0.485) (0.480) (0.500) --------------------------------------------------------------------- Total dividends ......................................... (0.467) (0.458) (0.320) (0.485) (0.480) (0.500) --------------------------------------------------------------------- Net asset value, end of period ............................ $9.910 $9.810 $10.430 $10.310 $9.870 $10.050 ===================================================================== Total return(3) ........................................... 6.04% (1.67%) 4.33% 9.66% 3.15% 18.71% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $22,712 $27,518 $24,336 $22,071 $20,913 $21,590 Ratio of expenses to average net assets ................. 0.85% 0.80% 0.71% 0.71% 0.71% 0.54% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly ....................................... 1.01% 1.02% 1.03% 0.94% 1.07% 1.11% Ratio of net investment income to average net assets .................................... 4.85% 4.44% 4.64% 4.83% 4.92% 5.12% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 4.69% 4.22% 4.32% 4.60% 4.56% 4.55% Portfolio turnover ...................................... 0% 10% 5% 5% 40% 41%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 53 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Oregon Insured Fund - B Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Year Ended Ended Ended Ended Ended Ended 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 Net asset value, beginning of period ...................... $9.810 $10.430 $10.310 $9.870 $10.050 $8.920 Income (loss) from investment operations: Net investment income ................................... 0.394 0.381 0.268 0.422 0.430 0.440 Net realized and unrealized gain (loss) on investments ................................. 0.100 (0.620) 0.120 0.434 (0.180) 1.140 -------------------------------------------------------------------- Total from investment operations ........................ 0.494 (0.239) 0.388 0.856 0.250 1.580 -------------------------------------------------------------------- Less dividends: Dividends from net investment income ................................. (0.394) (0.381) (0.268) (0.416) (0.430) (0.450) -------------------------------------------------------------------- Total dividends ......................................... (0.394) (0.381) (0.268) (0.416) (0.430) (0.450) -------------------------------------------------------------------- Net asset value, end of period ............................ $9.910 $9.810 $10.430 $10.310 $9.870 $10.050 ==================================================================== Total return(3) ........................................... 5.24% (2.41%) 3.82% 8.90% 2.61% 18.10% Ratios and supplemental data: Net assets, end of period (000 omitted) ................. $7,484 $7,999 $6,011 $6,461 $4,758 $2,786 Ratio of expenses to average net assets ............................................ 1.60% 1.55% 1.46% 1.39% 1.25% 1.04% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .......................... 1.76% 1.77% 1.78% 1.62% 1.83% 1.86% Ratio of net investment income to average net assets ............................................ 4.10% 3.69% 3.89% 4.15% 4.37% 4.57% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 3.94% 3.47% 3.57% 3.92% 3.79% 3.75% Portfolio turnover ...................................... 0% 10% 5% 5% 40% 41%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 54 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Oregon Insured Fund - C Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 7/7/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period ...................... $9.820 $10.440 $10.320 $9.880 $10.050 $9.630 Income (loss) from investment operations: Net investment income ................................... 0.394 0.380 0.268 0.411 0.400 0.190 Net realized and unrealized gain (loss) on investments ................................. 0.100 (0.620) 0.120 0.431 (0.170) 0.410 -------------------------------------------------------------------- Total from investment operations ........................ 0.494 (0.240) 0.388 0.842 0.230 0.600 -------------------------------------------------------------------- Less dividends: Dividends from net investment income ..................................... (0.394) (0.380) (0.268) (0.402) (0.400) (0.180) -------------------------------------------------------------------- Total dividends ......................................... (0.394) (0.380) (0.268) (0.402) (0.400) (0.180) -------------------------------------------------------------------- Net asset value, end of period ............................ $9.920 $9.820 $10.440 $10.320 $9.880 $10.050 ==================================================================== Total return(4) ........................................... 5.24% (2.41%) 3.81% 8.75% 2.38% 6.35% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $1,609 $1,603 $999 $532 $360 $250 Ratio of expenses to average net assets .................................... 1.60% 1.55% 1.46% 1.51% 1.55% 1.39% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .............................. 1.76% 1.77% 1.78% 1.74% 1.82% 1.74% Ratio of net investment income to average net assets .................................... 4.10% 3.69% 3.89% 4.03% 4.03% 4.00% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 3.94% 3.47% 3.57% 3.80% 3.76% 3.65% Portfolio turnover ...................................... 0% 10% 5% 5% 40% 41%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 55 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Wisconsin Fund - A Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Year Ended Ended Ended Ended Ended Ended 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 Net asset value, beginning of period ...................... $9.550 $10.080 $10.010 $9.640 $9.780 $8.740 Income (loss) from investment operations: Net investment income ................................... 0.460 0.452 0.304 0.466 0.460 0.480 Net realized and unrealized gain (loss) on investments ................................. (0.040) (0.530) 0.070 0.383 (0.140) 1.040 --------------------------------------------------------------------- Total from investment operations ........................ 0.420 (0.078) 0.374 0.849 0.320 1.520 --------------------------------------------------------------------- Less dividends: Dividends from net investment income ..................................... (0.460) (0.452) (0.304) (0.479) (0.460) (0.480) --------------------------------------------------------------------- Total dividends ......................................... (0.460) (0.452) (0.304) (0.479) (0.460) (0.480) --------------------------------------------------------------------- Net asset value, end of period ............................ $9.510 $9.550 $10.080 $10.010 $9.640 $9.780 ===================================================================== Total return(3) ........................................... 4.62% (0.87%) 3.80% 9.07% 3.49% 17.74% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $28,737 $33,410 $34,489 $30,879 $28,292 $26,449 Ratio of expenses to average net assets ............................................ 1.02% 1.00% 1.00% 0.99% 0.98% 0.88% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .............................. 1.15% 1.03% 1.04% 1.07% 1.09% 1.09% Ratio of net investment income to average net assets .................................... 4.94% 4.54% 4.56% 4.76% 4.90% 5.05% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 4.81% 4.51% 4.52% 4.68% 4.79% 4.84% Portfolio turnover ...................................... 6% 6% 16% 30% 38% 12%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 56 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Wisconsin Fund - B Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 4/22/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period ...................... $9.540 $10.070 $10.000 $9.630 $9.770 $9.390 Income (loss) from investment operations: Net investment income ................................... 0.391 0.378 0.255 0.395 0.410 0.280 Net realized and unrealized gain (loss) on investments ................................. (0.041) (0.530) 0.070 0.382 (0.140) 0.370 -------------------------------------------------------------------- Total from investment operations ........................ 0.350 (0.152) 0.325 0.777 0.270 0.650 -------------------------------------------------------------------- Less dividends: Dividends from net investment income ..................................... (0.390) (0.378) (0.255) (0.407) (0.410) (0.270) -------------------------------------------------------------------- Total dividends ......................................... (0.390) (0.378) (0.255) (0.407) (0.410) (0.270) -------------------------------------------------------------------- Net asset value, end of period ............................ $9.500 $9.540 $10.070 $10.000 $9.630 $9.770 ==================================================================== Total return(4) ........................................... 3.84% (1.60%) 3.29% 8.27% 2.84% 7.08% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $3,243 $3,206 $2,621 $1,931 $1,339 $725 Ratio of expenses to average net assets ............................................ 1.77% 1.75% 1.75% 1.72% 1.66% 1.45% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .......................... 1.90% 1.78% 1.79% 1.80% 1.85% 1.70% Ratio of net investment income to average net assets .................................... 4.19% 3.79% 3.81% 4.03% 4.37% 4.31% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 4.06% 3.76% 3.77% 3.95% 4.18% 4.06% Portfolio turnover ...................................... 6% 6% 16% 30% 38% 12%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 57 Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Wisconsin Fund - C Class - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Eight Months Year Year Period Ended Ended Ended Ended Ended 3/28/95(3) 8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95 Net asset value, beginning of period ...................... $9.570 $10.110 $10.030 $9.660 $9.790 $9.340 Income (loss) from investment operations: Net investment income ................................... 0.392 0.377 0.259 0.380 0.390 0.300 Net realized and unrealized gain (loss) on investments ................................. (0.032) (0.540) 0.075 0.390 (0.130) 0.440 -------------------------------------------------------------------- Total from investment operations ........................ 0.360 (0.163) 0.334 0.770 0.260 0.740 -------------------------------------------------------------------- Less dividends: Dividends from net investment income ..................................... (0.390) (0.377) (0.254) (0.400) (0.390) (0.290) -------------------------------------------------------------------- Total dividends ......................................... (0.390) (0.377) (0.254) (0.400) (0.390) (0.290) -------------------------------------------------------------------- Net asset value, end of period ............................ $9.540 $9.570 $10.110 $10.030 $9.660 $9.790 ==================================================================== Total return(4) ........................................... 3.93% (1.70%) 3.38% 8.16% 2.74% 8.06% Ratios and supplemental data: Net assets, end of period (000 omitted) ......................................... $1,375 $1,509 $1,283 $689 $555 $73 Ratio of expenses to average net assets ............................................ 1.77% 1.75% 1.75% 1.81% 1.75% 1.77% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly .......................... 1.90% 1.78% 1.79% 1.89% 1.83% 1.77% Ratio of net investment income to average net assets .................................... 4.19% 3.79% 3.81% 3.94% 4.12% 4.04% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly .......................... 4.06% 3.76% 3.77% 3.86% 4.04% 4.04% Portfolio turnover ...................................... 6% 6% 16% 30% 38% 12%
- -------------- (1) Ratios have been annualized and total return has not been annualized. (2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers, Inc. as the Fund's investment manager. (3) Commencement of operations; ratios have been annualized and total return has not been annualized. (4) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of distributions at net asset value and does not reflect the impact of a sales charge. See accompanying notes 58 -----END PRIVACY-ENHANCED MESSAGE-----