N-CSR 1 n-csr.txt N-CSR UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-3910 Exact name of registrant as specified in charter: Voyageur Tax Free Funds Address of principal executive offices: 2005 Market Street Philadelphia, PA 19103 Name and address of agent for service: Richelle S. Maestro, Esq. 2005 Market Street Philadelphia, PA 19103 Registrant's telephone number, including area code: (800) 523-1918 Date of fiscal year end: August 31 Date of reporting period: February 29, 2004 Item 1. Reports to Stockholders The Registrant's shareholder reports are combined with the shareholder reports of other investment company registrants. This Form N-CSR pertains to the Delaware Tax-Free Minnesota Fund of the Registrant, information on which is included in the following shareholder report. Delaware Investments(SM) -------------------------------------- A member of Lincoln Financial Group(R) FIXED INCOME Semiannual Report FEBRUARY 29, 2004 -------------------------------------------------------------------------------- DELAWARE TAX-FREE MINNESOTA FUND [LOGO] POWERED BY RESEARCH.(SM) Table OF CONTENTS ------------------------------------------------------------------- FINANCIAL STATEMENTS: Statements of Net Assets 1 Statements of Operations 5 Statements of Changes in Net Assets 6 Financial Highlights 7 Notes to Financial Statements 11 ------------------------------------------------------------------- Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested. Mutual fund advisory services provided by Delaware Management Company, a series of Delaware Management Business Trust, which is a registered investment advisor. (C) 2004 Delaware Distributors, L.P. Statements Delaware Tax-Free Minnesota Fund OF NET ASSETS February 29, 2004 (Unaudited) Principal Market Amount Value Municipal Bonds - 96.31% Airport Revenue Bonds - 2.90% Minneapolis/St. Paul Metropolitan Airports Commission Revenue Series A 5.00% 1/1/22 (AMBAC) $ 3,440,000 $ 3,634,429 Series A 5.25% 1/1/32 (FGIC) 5,000,000 5,357,450 Series C 5.25% 1/1/32 (FGIC) 2,000,000 2,142,980 ----------- 11,134,859 ----------- City General Obligation Bonds - 0.93% Minneapolis Library 5.00% 12/1/25 1,500,000 1,591,065 St. Peter's Hospital Series A 5.00% 9/1/24 (MBIA) 1,905,000 1,992,687 ----------- 3,583,752 ----------- Continuing Care / Retirement Revenue Bonds - 5.14% Bloomington Housing & Redevelopment Authority Housing Revenue (Senior Summerhouse Bloomington Project, Presbyterian Homes Housing & Assisted Living, Inc.) 6.125% 5/1/35 3,420,000 3,279,951 Minneapolis Housing Facilities Revenue (Augustana Chapel View Project) 7.00% 4/1/18 1,000,000 999,840 Minnesota Agriculture & Economic Development Board Revenue (Benedictine Health Systems) 5.75% 2/1/29 1,895,000 1,842,622 Minnetonka Housing Facilities Revenue (Beacon Hill Housing Project, Presbyterian Homes & Services) 7.70% 6/1/25 3,225,000 3,249,575 Oakdale Revenue (Oak Meadows Project, Family Resources Development, Inc.) 7.00% 4/1/27 6,800,000 6,814,280 Rochester Multifamily Revenue (Wedum Shorewood Campus) 6.60% 6/1/36 3,535,000 3,529,379 ----------- 19,715,647 ----------- Corporate-Backed Revenue Bonds - 4.54% Cloquet Pollution Control Revenue (Potlatch Corp. Projects) 5.90% 10/1/26 6,500,000 6,245,915 International Falls Pollution Control Revenue (Boise Cascade Corp. Project) 6.85% 12/1/29 (AMT) 500,000 518,475 Sartell Environmental Improvement Revenue (International Paper) Series A 5.20% 6/1/27 5,465,000 5,636,820 Seaway Port Authority of Duluth Industrial Development Dock & Wharf Revenues (Cargill, Inc. Project) Series E 6.125% 11/1/14 4,500,000 4,991,265 ----------- 17,392,475 ----------- Dedicated Tax & Fees Revenue Bonds - 1.29% +Minneapolis Community Development Agency Tax Increment Revenue 6.67% 9/1/09 (MBIA) 5,750,000 4,958,858 ----------- 4,958,858 ----------- Principal Market Amount Value Municipal Bonds (continued) Escrowed to Maturity Bonds - 0.34% Southern Minnesota Municipal Power Agency Supply System Revenue Series B 5.50% 1/1/15 (AMBAC) $ 990,000 $ 1,013,819 Western Minnesota Municipal Power Agency Supply Revenue Series A 9.75% 1/1/16 (MBIA) 185,000 292,010 ----------- 1,305,829 ----------- Higher Education Revenue Bonds - 4.70% Minnesota State Higher Education Facilities Authority Revenue (College of St. Benedict) Series 4-G 6.20% 3/1/16 1,000,000 1,037,890 (Hamline University) Series 4-I 6.00% 10/1/12 1,250,000 1,342,888 (Hamline University) Series 4-I 6.00% 10/1/16 1,790,000 1,888,396 (St. Catherine College) Series 5-N1 5.25% 10/1/22 1,500,000 1,565,805 (University of Minnesota) Series A 5.50% 7/1/21 2,000,000 2,351,860 **University of Minnesota, Inverse Floater ROLs Series II-R-29 9.92% 7/1/21 5,250,000 7,097,265 10.43% 7/1/18 1,920,000 2,753,894 ----------- 18,037,998 ----------- Hospital Revenue Bonds - 15.20% Bemidji Hospital Facilities Revenue (North County Health Services) 5.00% 9/1/24 (RADIAN) 740,000 768,305 6.05% 9/1/16 600,000 620,580 6.05% 9/1/24 1,825,000 1,869,859 Maplewood Healthcare Facility Revenue (Health East Project) 5.95% 11/15/06 2,200,000 2,201,804 Marshall Medical Center Gross Revenue (Weiner Memorial Medical Center Project) 6.00% 11/1/28 1,000,000 1,010,660 Minneapolis Health Care System Revenue Series A (Allina Health System) Series A 5.75% 11/15/32 9,500,000 10,139,445 (Fairview Health Services) 5.625% 5/15/32 11,025,000 11,714,283 Minnesota Agricultural & Economic Development Board Revenue (Fairview Hospital) Series A 6.375% 11/15/29 500,000 550,920 Rochester Health Care Facilities Revenue (Mayo Foundation) Series B 5.50% 11/15/27 700,000 762,146 **Rochester Health Care Facilities Revenue (Mayo Foundation), Inverse Floater ROLs Series II-R-28-A 9.92% 11/15/27 2,100,000 2,472,876 Series II-R-28-B 9.92% 11/15/27 8,375,000 9,862,065 St. Louis Park Health Care Facilities Revenue (Park Nicollet Health Services) Series B 5.25% 7/1/30 8,170,000 8,429,479 1 Statements Delaware Tax-Free Minnesota Fund OF NET ASSETS (CONTINUED) Principal Market Amount Value Municipal Bonds (continued) Hospital Revenue Bonds (continued) St. Paul Housing & Redevelopment Authority Hospital Revenue (Health East Project) Series A 5.70% 11/1/15 $ 1,300,000 $ 1,308,827 6.625% 11/1/17 5,540,000 5,627,144 Washington County Housing & Redevelopment Authority Hospital Facilities Revenue (Health East Project) 5.50% 11/15/27 1,000,000 927,200 ----------- 58,265,593 ----------- Investor Owned Utilities Revenue Bonds - 4.32% Bass Brook Pollution Control Revenue (Minnesota Power & Light Co. Project) 6.00% 7/1/22 15,500,000 15,817,750 6.00% 7/1/22 (MBIA) 750,000 760,155 ----------- 16,577,905 ----------- Miscellaneous Revenue Bonds - 2.36% Minneapolis Community Development Agency Supported Development Revenue Limited Tax (Common Bond Fund) Series 2A 7.125% 12/1/05 230,000 235,513 Minnesota Public Facilities Authority Water Pollution Control Revenue Series A 5.00% 3/1/20 3,000,000 3,237,300 Richfield Commercial Development Revenue (Richfield Shoppes Project) 8.375% 10/1/13 2,200,000 2,246,376 St. Cloud Commercial Development Revenue (Northwest Center Association Project) 7.50% 8/1/12 3,328,971 3,326,441 ----------- 9,045,630 ----------- Multi Family Housing Revenue Bonds - 11.52% Austin Housing & Redevelopment Authority Housing Gross Revenue (Courtyard Residence Project) Series A 7.25% 1/1/26 500,000 504,750 Brooklyn Center Multifamily Housing Revenue (Ponds Family Housing Project- Section 8) 5.90% 1/1/20 1,250,000 1,257,675 (Shingle Creek) 5.40% 5/20/43 (AMT) 1,000,000 1,043,760 Carver County Housing & Redevelopment Authority Multifamily Revenue (Lake Grace Apartments Project) Series A 6.00% 7/1/28 1,435,000 1,461,734 Dakota County Housing & Redevelopment Authority Multifamily Housing Revenue (Affordable Housing View Pointe Project) 6.125% 11/1/17 2,475,000 2,352,785 Eden Prairie Multifamily Housing Revenue (Tanager Creek) Series A 8.05% 6/20/31 (GNMA) 7,605,000 8,208,304 (Windslope Apartments Project) 7.10% 11/1/17 1,585,000 1,587,488 Hopkins Multifamily Housing Revenue (Hopkins Renaissance Project- Section 8) 6.375% 4/1/20 1,000,000 1,056,960 Principal Market Amount Value Municipal Bonds (continued) Multi Family Housing Revenue Bonds (continued) Hutchinson Multifamily Housing Revenue (Evergreen Apartments Project- Section 8) 5.75% 11/1/28 $ 985,000 $ 908,278 Little Canada Multifamily Housing Revenue (Housing Alternative Development Co. Project) Series A 6.10% 12/1/17 1,400,000 1,387,008 6.25% 12/1/27 2,900,000 2,829,617 Minneapolis Multifamily Housing Revenue (Grant Street Apartments Project) Series A 7.25% 11/1/29 750,000 732,833 (Seward Towers Project) 5.00% 5/20/36 (GNMA) 4,000,000 4,171,319 (Sumner Field) Series A (GNMA) (AMT) 5.50% 11/20/26 1,045,000 1,108,066 (Trinity Apartments-Section 8) Series A 6.75% 5/1/21 1,915,000 1,876,681 Park Rapids Multifamily Revenue (The Court Apartments Project- Section 8) 6.30% 2/1/20 2,990,000 2,801,630 St. Cloud Housing & Redevelopment Authority Revenue (Sterling Heights Apartments Project) 7.55% 4/1/39 (AMT) 1,000,000 992,580 St. Louis Park Multifamily Housing Revenue (Knollwood Apartments Project) 6.25% 12/1/28 (FHA) 3,855,000 4,011,899 Stillwater Multifamily Housing Revenue (Stillwater Cottages Project) Series A 7.00% 11/1/27 1,000,000 977,280 Wadena Housing & Redevelopment Authority Multifamily Housing Revenue (Humphrey Manor East Project) 6.00% 2/1/19 2,045,000 2,048,763 Washington County Housing & Redevelopment Authority Governmental Revenue (Briar Pond) Series C 7.25% 8/20/34 (GNMA) 980,000 933,822 Wells Housing & Redevelopment Authority Housing Revenue (Broadway Apartments Project) 7.00% 1/1/19 905,000 880,520 Willmar Housing & Redevelopment Authority Multifamily Housing Revenue (Highland Apartments-Section 8) 5.85% 6/1/19 1,050,000 1,051,796 ----------- 44,185,548 ----------- Municipal Lease Revenue Bonds - 1.73% St. Paul Port Authority Lease Revenue (Cedar Street Office Building Project) 5.00% 12/1/22 2,500,000 2,668,800 5.125% 12/1/27 1,000,000 1,067,030 (Robert Street Office Building Project) Series 9 5.25% 12/1/27 725,000 779,223 (Robert Street Office Building Project) 5.00% 12/1/27 2,000,000 2,110,680 ----------- 6,625,733 ----------- 2 Statements Delaware Tax-Free Minnesota Fund OF NET ASSETS (CONTINUED) Principal Market Amount Value Municipal Bonds (continued) Political Subdivision General Obligation Bonds - 1.66% Dakota County Capital Improvement Series A 4.75% 2/1/26 $ 1,000,000 $ 1,026,380 Hennepin County Regional Railroad Authority 5.00% 12/1/31 4,030,000 4,202,122 Ramsey County State Aid Series C 5.00% 2/1/28 1,060,000 1,123,695 ----------- 6,352,197 ----------- *Pre-Refunded Bonds - 5.55% Beltrami County Housing & Redevelopment Authority Revenue 6.20% 2/1/14-05 1,010,000 1,057,096 Bloomington Tax Increment Bonds 9.75% 2/1/08-05 500,000 539,965 Faribault Independent School District #656 6.10% 6/1/10-04 1,000,000 1,012,940 Kenyon Wanamingo Independent School District #2172 6.00% 2/1/18-05 (MBIA) 2,350,000 2,453,917 Minnesota Public Facilities Authority Water Pollution Control Revenue Series A 6.25% 3/1/16-05 4,400,000 4,631,880 North St. Paul Maplewood Independent School District #622 Series A 7.10% 2/1/25-05 (FSA) 10,000,000 10,560,700 Southern Minnesota Municipal Power Agency Supply System Revenue Series A 5.75% 1/1/18-16 (MBIA) 1,000,000 1,024,140 ----------- 21,280,638 ----------- Public Power Revenue Bonds - 10.20% Chaska Electric Revenue Series A 6.00% 10/1/25 1,000,000 1,073,230 Northern Minnesota Municipal Power Agency Electric System Revenue +Series A 5.85% 1/1/09 (AMBAC) 3,815,000 3,364,639 Series B 4.75% 1/1/20 (AMBAC) 2,500,000 2,613,175 Rochester Electric Utilities Revenue 5.25% 12/1/30 4,915,000 5,161,094 Shakopee Public Utilities Commission Public Utilities Revenue 5.125% 2/1/26 (MBIA) 1,000,000 1,039,270 Southern Minnesota Municipal Power Agency Supply System Revenue Series A 5.00% 1/1/12 (AMBAC) 500,000 571,105 5.00% 10/1/13 (MBIA) 5,820,000 6,633,228 5.25% 1/1/15 (AMBAC) 2,160,000 2,501,734 +5.663% 1/1/19 (MBIA) 8,210,000 4,315,340 +6.136% 1/1/21 (MBIA) 3,000,000 1,408,350 **Southern Minnesota Municipal Power Agency Supply System Revenue, Inverse Floater ROLs Series II-R 189 8.93% 1/1/12 (AMBAC) 1,250,000 1,605,525 Series II-R-189 9.44% 1/1/14 (AMBAC) 2,000,000 2,641,780 Series II-R-189 9.44% 1/1/15 (AMBAC) 2,950,000 3,883,439 Series II-R-189 9.44% 1/1/16 (AMBAC) 1,750,000 2,304,558 ----------- 39,116,467 ----------- Principal Market Amount Value Municipal Bonds (continued) School District General Obligation Bonds - 6.13% Bloomington Independent School District #271 Series B 5.00% 2/1/17 $ 5,300,000 $ 5,808,587 +Farmington Independent School District #192 Capital Appreciation Series B 5.42% 2/1/20 (FSA) 1,650,000 743,804 5.34% 2/1/21 (FSA) 1,500,000 636,645 +Lakeville Independent School District #194 Capital Appreciation Series B 5.45% 2/1/19 (FSA) 8,000,000 3,773,120 +Mahtomedi Independent School District #832 Capital Appreciation Series B 5.90% 2/1/14 (MBIA) 1,540,000 1,063,616 **Rockford Independent School District #883, Inverse Floater ROLs Series II-R-30-A 10.18% 2/1/23 (FSA) 3,510,000 4,402,558 +Rosemont Independent School District #196 Capital Appreciation Series B 5.93% 4/1/11 (FSA) 2,600,000 2,085,850 5.96% 4/1/12 (FSA) 1,850,000 1,410,403 6.01% 4/1/13 (FSA) 1,915,000 1,385,962 +Sartell Independent School District #748 Capital Appreciation Series B 5.98% 2/1/13 (MBIA) 540,000 391,732 6.10% 2/1/15 (MBIA) 1,075,000 701,470 6.15% 2/1/16 (MBIA) 1,750,000 1,085,403 ----------- 23,489,150 ----------- Single Family Housing Revenue Bonds - 1.37% Minnesota State Housing Finance Agency Single Family Mortgage Series A 5.30% 7/1/19 840,000 870,576 Series B 5.35% 1/1/33 (AMT) 3,000,000 3,106,170 Series J 5.90% 7/1/28 (AMT) 920,000 968,006 St. Louis Park Residential Mortgage Revenue Series A 7.25% 4/20/23 (GNMA) 128,000 128,124 St. Paul Housing & Redevelopment Authority Single Family Mortgage Revenue Series C 6.90% 12/1/21 (FNMA) 175,000 175,154 ----------- 5,248,030 ----------- State General Obligation Bonds - 4.46% Minnesota State 5.00% 11/1/20 (FSA) 8,175,000 8,840,527 5.00% 8/1/21 2,400,000 2,595,720 **Minnesota State, Inverse Floater ROLs 9.04% 11/1/18 1,145,000 1,359,287 9.05% 11/1/16 2,420,000 2,934,661 9.05% 11/1/17 1,135,000 1,362,272 ----------- 17,092,467 ----------- Tax Increment / Special Assessment Bonds - 2.35% Minneapolis Tax Increment Series E 5.00% 3/1/13 6,265,000 6,997,441 Rochester Tax Increment 6.50% 12/1/04 1,000,000 1,014,380 St. Paul Housing & Redevelopment Authority Tax Increment (Upper Landing Project) Series A 6.80% 3/1/29 1,000,000 1,013,180 ----------- 9,025,001 ----------- 3 Statements Delaware Tax-Free Minnesota Fund OF NET ASSETS (CONTINUED) Principal Market Amount Value Municipal Bonds (continued) Territorial General Obligation Bonds - 1.29% Puerto Rico Commonwealth Public Improvement Series A 5.125% 7/1/30 (FSA) $ 1,000,000 $ 1,062,300 5.125% 7/1/31 2,000,000 2,081,760 5.50% 7/1/19 (MBIA) 1,500,000 1,793,385 ------------ 4,937,445 ------------ Territorial Revenue Bonds - 1.95% Puerto Rico Electric Power Authority Revenue Series X 5.50% 7/1/25 3,080,000 3,210,068 Puerto Rico Public Buildings Authority Guaranteed Government Facilities Revenue Series D 5.25% 7/1/36 4,000,000 4,262,120 ------------ 7,472,188 ------------ Water & Sewer Revenue Bonds - 2.14% Minnesota Public Facilities Authority Water Pollution Control Revenue Series B 4.75% 3/1/19 2,000,000 2,109,760 **Minnesota Public Facilities Authority Water Pollution Control Revenue, Inverse Floater ROLs Series II-R-31 9.42% 3/1/14 5,000,000 6,102,050 ------------ 8,211,810 ------------ ++Variable Rate Demand Notes - 4.24% Robbinsdale Health Care Facilities Revenue (North Memorial Health Care-Tranche I) 0.90% 5/15/33 (AMBAC) 5,000,000 5,000,000 Rochester Healthcare 0.93% 3/2/04 5,750,000 5,750,000 0.95% 3/1/04 5,500,000 5,500,000 ------------ 16,250,000 ------------ Total Municipal Bonds (cost $343,334,695) 369,305,220 ------------ Number of Shares Short-Term Investment - 3.26% Federated Minnesota Municipal Cash Trust 12,492,150 12,492,150 ------------ Total Short-Term Investment (cost $12,492,150) 12,492,150 ------------ Total Market Value of Securities - 99.57% (cost $355,826,845) 381,797,370 Receivables and Other Assets Net of Liabilities - 0.43% 1,634,326 ------------ Net Assets Applicable to 29,858,026 Shares Outstanding - 100.00% $383,431,696 ============ Net Asset Value - Delaware Tax-Free Minnesota Fund Class A ($356,372,153 / 27,753,514 Shares) $12.84 ------ Net Asset Value - Delaware Tax-Free Minnesota Fund Class B ($16,117,929 / 1,254,301 Shares) $12.85 ------ Net Asset Value - Delaware Tax-Free Minnesota Fund Class C ($10,941,614 / 850,211 Shares) $12.87 ------ Components of Net Assets at February 29, 2004: Shares of beneficial interest (unlimited authorization-- no par) $354,407,330 Undistributed net investment income 94,738 Accumulated net realized gain on investments 2,959,103 Net unrealized appreciation of investments 25,970,525 ------------ Total net assets $383,431,696 ============ *For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. **An inverse floater bond is a type of bond with variable or floating interest rates that move in the opposite direction of short-term interest rates. Interest rate disclosed is in effect as of February 29, 2004. +Zero Coupon Bond. The interest rate shown is the yield at the time of purchase. ++The interest rate shown is the rate as of February 29, 2004. Summary of Abbreviations: Ambac - Insured by the AMBAC Assurance Corporation AMT - Subject to Alternative Minimum Tax FGIC - Insured by the Financial Guaranty Insurance Company FHA - Insured by the Federal Housing Administration FNMA - Insured by Federal National Mortgage Association FSA - Insured by Financial Security Assurance GNMA - Insured by Government National Mortgage Association MBIA - Insured by the Municipal Bond Insurance Association RADIAN - Insured by Radian Asset Assurance ROLs - Residual Option Longs Net Asset Value and Offering Price per Share - Delaware Tax-Free Minnesota Fund Net asset value Class A (A) $12.84 Sales charge (4.50% of offering price, or 4.75% of amount invested per share) (B) 0.61 ------ Offering price $13.45 ====== (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 4 Statements Delaware Minnesota Municipal Bond Funds OF OPERATIONS Six Months Ended February 29, 2004 (Unaudited) Delaware Tax-Free Minnesota Fund Investment Income: Interest $10,675,583 ----------- Expenses: Management fees 1,023,070 Distribution expense -- Class A 431,862 Distribution expense -- Class B 81,515 Distribution expense -- Class C 51,700 Dividend disbursing and transfer agent fees and expenses 131,080 Accounting and administration expenses 72,426 Legal and professional fees 44,029 Reports and statements to shareholders 24,996 Registration fees 21,000 Custodian fees 9,990 Trustees' fees 9,600 Other 25,955 ----------- 1,927,223 ----------- Less expenses absorbed or waived -- Less waiver of distribution expenses-- Class A -- Less expenses paid indirectly (5,185) ----------- Total expenses 1,922,038 ----------- Net Investment Income 8,753,545 ----------- Net Realized and Unrealized Gain (Loss) on Investments: Net realized gain (loss) on investments 3,077,830 Net change in unrealized appreciation/depreciation of investments 13,600,257 ----------- Net Realized and Unrealized Gain on Investments 16,678,087 ----------- Net Increase in Net Assets Resulting from Operations $25,431,632 =========== See accompanying notes 5 Statements Delaware Minnesota Municipal Bond Funds OF CHANGES IN NET ASSETS
Delaware Tax-Free Minnesota Fund Six Months Year Ended Ended 2/29/04 8/31/03 (Unaudited) Increase (Decrease) in Net Assets from Operations: Net investment income $ 8,753,545 $ 8,376,638 Net realized gain on investments 3,077,830 4,703,590 Net change in unrealized appreciation/depreciation of investments 13,600,257 (9,247,345) ------------ ------------ Net increase in net assets resulting from operations 25,431,632 13,832,883 ------------ ------------ Dividends and Distributions to Shareholders from: Net investment income: Class A (8,413,351) (17,359,077) Class B (335,695) (721,989) Class C (212,413) (387,137) Net realized gain on investments: Class A (4,548,007) (252,735) Class B (220,980) (12,269) Class C (133,256) (5,766) ------------ ------------ (13,863,702) (18,738,973) ------------ ------------ Capital Share Transactions: Proceeds from shares sold: Class A 14,698,809 20,342,994 Class B 691,807 2,106,724 Class C 1,045,711 3,551,273 Net asset value of shares issued upon reinvestment of dividends and distributions: Class A 8,804,509 10,937,095 Class B 401,928 495,977 Class C 275,370 299,072 ------------ ------------ 25,918,134 37,733,135 ------------ ------------ Cost of shares repurchased: Class A (17,898,593) (43,234,963) Class B (1,875,556) (3,026,712) Class C (864,665) (1,226,713) ------------ ------------ (20,638,814) (47,488,388) ------------ ------------ Increase (decrease) in net assets derived from capital share transactions 5,279,320 (9,755,253) ------------ ------------ Net Increase (Decrease) in Net Assets 16,847,250 (14,661,343) Net Assets: Beginning of period 366,584,446 381,245,789 ------------ ------------ End of period (including undistributed (distributions in excess of) net investment income of $94,738 and ($22,418) for Delaware Tax-Free Minnesota Fund and $0 and $0 for Delaware Tax-Free Minnesota Insured Fund) $383,431,696 $366,584,446 ============ ============
See accompanying notes 6 Financial HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Minnesota Fund Class A ------------------------------------------------------------------------------------------------------------------------------------ Six Months Ended Year Ended 2/29/04(1) 8/31/03 8/31/02(2) 8/31/01 8/31/00 8/31/99 (Unaudited) Net asset value, beginning of period $12.450 $12.610 $12.570 $12.120 $12.230 $13.020 Income (loss) from investment operations: Net investment income 0.308 0.622 0.634 0.615 0.617 0.628 Net realized and unrealized gain (loss) on investments 0.558 (0.148) 0.037 0.450 (0.110) (0.752) ------- ------- ------- ------- ------- ------- Total from investment operations 0.866 0.474 0.671 1.065 0.507 (0.124) ------- ------- ------- ------- ------- ------- Less dividends and distributions from: Net investment income (0.308) (0.625) (0.631) (0.615) (0.617) (0.626) Net realized gain on investments (0.168) (0.009) -- -- -- (0.040) ------- ------- ------- ------- ------- ------- Total dividends and distributions (0.476) (0.634) (0.631) (0.615) (0.617) (0.666) ------- ------- ------- ------- ------- ------- Net asset value, end of period $12.840 $12.450 $12.610 $12.570 $12.120 $12.230 ======= ======= ======= ======= ======= ======= Total return(3) 7.06% 3.80% 5.54% 9.02% 4.39% (1.06%) Ratios and supplemental data: Net assets, end of period (000 omitted) $356,372 $340,029 $356,522 $363,033 $355,573 $394,144 Ratio of expenses to average net assets 0.98% 0.97% 0.98% 1.00% 1.01% 0.94% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly 0.98% 0.97% 0.98% 1.00% 1.06% 0.94% Ratio of net investment income to average net assets 4.93% 4.90% 5.11% 5.00% 5.20% 4.89% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly 4.93% 4.90% 5.11% 5.00% 5.15% 4.89% Portfolio turnover 23% 27% 13% 10% 35% 17%
(1) Ratios and portfolio turnover have been annualized and total return has not been annualized. (2) As required, effective September 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies that require amortization of all premiums and discounts on debt securities. The effect of these changes for the year ended August 31, 2002 was an increase in net investment income per share of $0.003, a decrease in net realized and unrealized gain (loss) per share of $0.003, and an increase in the ratio of net investment income to average net assets of 0.03%. Per share data and ratios for periods prior to September 1, 2001 have not been restated to reflect this change in accounting. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager and distributor, as applicable. An expense limitation was in effect for all classes through August 31, 2001. Performance would have been lower had the expense limitation not been in effect. See accompanying notes 7 Financial HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Minnesota Fund Class B ------------------------------------------------------------------------------------------------------------------------------------ Six Months Ended Year Ended 2/29/04(1) 8/31/03 8/31/02(2) 8/31/01 8/31/00 8/31/99 (Unaudited) Net asset value, beginning of period $12.460 $12.620 $12.580 $12.120 $12.240 $13.020 Income (loss) from investment operations: Net investment income 0.260 0.529 0.540 0.523 0.525 0.527 Net realized and unrealized gain (loss) on investments 0.558 (0.150) 0.037 0.460 (0.120) (0.740) ------- ------- ------- ------- ------- ------- Total from investment operations 0.818 0.379 0.577 0.983 0.405 (0.213) ------- ------- ------- ------- ------- ------- Less dividends and distributions from: Net investment income (0.260) (0.530) (0.537) (0.523) (0.525) (0.527) Net realized gain on investments (0.168) (0.009) -- -- -- (0.040) ------- ------- ------- ------- ------- ------- Total dividends and distributions (0.428) (0.539) (0.537) (0.523) (0.525) (0.567) ------- ------- ------- ------- ------- ------- Net asset value, end of period $12.850 $12.460 $12.620 $12.580 $12.120 $12.240 ======= ======= ======= ======= ======= ======= Total return(3) 6.66% 3.02% 4.75% 8.29% 3.50% (1.74%) Ratios and supplemental data: Net assets, end of period (000 omitted) $16,118 $16,394 $17,043 $15,927 $13,412 $13,312 Ratio of expenses to average net assets 1.73% 1.72% 1.73% 1.75% 1.76% 1.69% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly 1.73% 1.72% 1.73% 1.75% 1.81% 1.69% Ratio of net investment income to average net assets 4.18% 4.15% 4.36% 4.25% 4.45% 4.14% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly 4.18% 4.15% 4.36% 4.25% 4.40% 4.14% Portfolio turnover 23% 27% 13% 10% 35% 17%
(1) Ratios and portfolio turnover have been annualized and total return has not been annualized. (2) As required, effective September 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies that require amortization of all premiums and discounts on debt securities. The effect of these changes for the year ended August 31, 2002 was an increase in net investment income per share of $0.003, a decrease in net realized and unrealized gain (loss) per share of $0.003, and an increase in the ratio of net investment income to average net assets of 0.03%. Per share data and ratios for periods prior to September 1, 2001 have not been restated to reflect this change in accounting. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. An expense limitation was in effect for all classes through August 31, 2001. Performance would have been lower had the expense limitation not been in effect. See accompanying notes 8 Financial HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Tax-Free Minnesota Fund Class C ------------------------------------------------------------------------------------------------------------------------------------ Six Months Ended Year Ended 2/29/04(1) 8/31/03 8/31/02(2) 8/31/01 8/31/00 8/31/99 (Unaudited) Net asset value, beginning of period $12.480 $12.640 $12.590 $12.140 $12.250 $13.040 Income (loss) from investment operations: Net investment income 0.260 0.529 0.540 0.523 0.527 0.536 Net realized and unrealized gain (loss) on investments 0.558 (0.151) 0.047 0.450 (0.110) (0.756) ------- ------- ------- ------- ------- ------- Total from investment operations 0.818 0.378 0.587 0.973 0.417 (0.220) ------- ------- ------- ------- ------- ------- Less dividends and distributions from: Net investment income (0.260) (0.529) (0.537) (0.523) (0.527) (0.530) Net realized gain on investments (0.168) (0.009) -- -- -- (0.040) ------- ------- ------- ------- ------- ------- Total dividends and distributions (0.428) (0.538) (0.537) (0.523) (0.527) (0.570) ------- ------- ------- ------- ------- ------- Net asset value, end of period $12.870 $12.480 $12.640 $12.590 $12.140 $12.250 ======= ======= ======= ======= ======= ======= Total return(3) 6.64% 3.01% 4.82% 8.20% 3.60% (1.80%) Ratios and supplemental data: Net assets, end of period (000 omitted) $10,942 $10,161 $7,682 $6,042 $6,156 $6,814 Ratio of expenses to average net assets 1.73% 1.72% 1.73% 1.75% 1.76% 1.69% Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly 1.73% 1.72% 1.73% 1.75% 1.81% 1.69% Ratio of net investment income to average net assets 4.18% 4.15% 4.36% 4.25% 4.45% 4.14% Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly 4.18% 4.15% 4.36% 4.25% 4.40% 4.14% Portfolio turnover 23% 27% 13% 10% 35% 17%
(1) Ratios and portfolio turnover have been annualized and total return has not been annualized. (2) As required, effective September 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies that require amortization of all premiums and discounts on debt securities. The effect of these changes for the year ended August 31, 2002 was an increase in net investment income per share of $0.003, a decrease in net realized and unrealized gain (loss) per share of $0.003, and an increase in the ratio of net investment income to average net assets of 0.03%. Per share data and ratios for periods prior to September 1, 2001 have not been restated to reflect this change in accounting. (3) Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. An expense limitation was in effect for all classes through August 31, 2001. Performance would have been lower had the expense limitation not been in effect. See accompanying notes 9 Notes Delaware Minnesota Municipal Bond Funds TO FINANCIAL STATEMENTS February 29, 2004 (Unaudited) Voyageur Mutual Funds is organized as a Delaware statutory trust and offers six series: Delaware Minnesota High-Yield Municipal Bond Fund, Delaware National High-Yield Municipal Bond Fund, Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund and Delaware Tax-Free New York Fund. Voyageur Insured Funds is organized as a Delaware statutory trust and offers two series: Delaware Tax-Free Arizona Insured Fund and Delaware Tax-Free Minnesota Insured Fund. Voyageur Tax Free Funds is organized as a Delaware statutory trust and offers the Delaware Tax-Free Minnesota Fund. Voyageur Intermediate Tax Free Funds is organized as a Delaware statutory trust and offers the Delaware Tax-Free Minnesota Intermediate Fund. These financial statements and related notes pertain to Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund, Delaware Tax-Free Minnesota Intermediate Fund and Delaware Minnesota High-Yield Municipal Bond Fund (each a "Fund" or, collectively, the "Funds"). The above Trusts are open-end investment companies. The Funds are considered non-diversified under the Investment Company Act of 1940, as amended, and offer Class A, Class B and Class C shares. Class A shares are sold with a front-end sales charge of up to 4.50% for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund and Delaware Minnesota High-Yield Municipal Bond Fund and with a front-end sales charge of up to 2.75% for Delaware Tax-Free Minnesota Intermediate Fund. Class B shares are sold with a contingent deferred sales charge that declines from 4% to zero for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund and Delaware Minnesota High-Yield Municipal Bond Fund and that declines from 2% to zero for Delaware Tax-Free Minnesota Intermediate Fund, depending upon the period of time the shares are held. Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund and Delaware Minnesota High-Yield Municipal Bond Fund and approximately five years after purchase for Delaware Tax-Free Minnesota Intermediate Fund. Class C shares are sold with a contingent deferred sales charge of 1%, if redeemed during the first 12 months. The investment objective of Delaware Tax-Free Minnesota Fund and Delaware Tax-Free Minnesota Insured Fund is to seek as high a level of current income exempt from federal income tax and from the Minnesota state personal income tax, as is consistent with preservation of capital. The investment objective of Delaware Tax-Free Minnesota Intermediate Fund is to seek to provide investors with preservation of capital and, secondarily, current income exempt from federal income tax and from Minnesota state personal income tax, by maintaining a dollar-weighted average effective portfolio maturity of 10 years or less. The investment objective of Delaware Minnesota High-Yield Municipal Bond Fund is to seek as high a level of current income exempt from federal income tax and from Minnesota state personal income tax, primarily through investment in medium- and lower-grade municipal obligations. 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. Short-term debt securities 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 under the direction of each Fund's Board of Trustees. Federal Income Taxes -- Each Fund intends to continue to qualify for federal income tax purposes 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. Class Accounting -- Investment income and common expenses are allocated to the classes of the Funds on the basis of "settled shares" of each class in relation to the net assets of the Funds. 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. Management fees and other expenses are paid monthly. 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. Discounts and premiums are amortized to interest income over the lives of the respective securities. Each Fund declares dividends daily from net investment income and pays such dividends monthly and declares and pays distributions from net realized gain on investments, if any, annually. Certain expenses of the Funds are paid through commission arrangements with brokers. In addition, the Funds may receive earnings credits from their custodian when positive cash balances are maintained, which are used to offset custody fees. The expenses paid under the above arrangements are included in their respective expense captions on the Statements of Operations with the corresponding expense offset shown as "expenses paid indirectly". The amounts of these expenses for the period ended February 29, 2004 were as follows: Delaware Tax-Free Minnesota Fund ----------------- Commission Reimbursements $4,467 Earnings credits 718 10 Notes Delaware Minnesota Municipal Bond Funds TO FINANCIAL STATEMENTS (CONTINUED) 2. Investment Management, Administration Agreements and Other Transactions with Affiliates In accordance with the terms of its respective investment management agreement, each Fund pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee based on each Fund's average daily net assets as follows: Delaware Tax-Free Minnesota Fund ----------------- On the first $500 million 0.550% On the next $500 million 0.500% On the next $1.5 billion 0.450% In excess of $2.5 billion 0.425% DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse each Fund to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs, and extraordinary expenses, do not exceed specified percentages of average daily net assets through October 31, 2004 as shown below: Delaware Tax-Free Minnesota Fund ----------------- The operating expense limitation as a percentage of average daily net assets (per annum) 0.75% Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Funds pay DSC a monthly fee based on average net assets subject to certain minimums for accounting and administration services. Each Fund pays DSC a monthly fee based on the number of shareholder accounts for dividend disbursing and transfer agent services. Pursuant to a distribution agreement and distribution plan, each Fund pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.25% of the average daily net assets of the Class A shares and 1.00% of the average daily net assets of the Class B and C shares for all Funds. DDLP has contracted to waive distribution fees through October 31, 2004 in order to prevent distribution fees of Class A shares from exceeding 0.15% of average daily net assets for the Delaware Tax-Free Minnesota Intermediate Fund. At February 29, 2004, each Fund had receivables from or liabilities payable to affiliates as follows: Delaware Tax-Free Minnesota Fund ----------------- Investment management fee payable to DMC $25,624 Dividend disbursing, transfer agent fees, accounting and other expenses payable to DSC 30,762 Other expenses payable to DMC and affiliates* 6,663 *DMC, as part of its administrative services, pays operating expenses on behalf of the Funds and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, professional fees, registration fees and trustees' fees. For the period ended February 29, 2004, DDLP earned commissions on sales of Class A shares for each Fund as follows: Delaware Tax-Free Minnesota Fund ----------------- $233,658 Certain officers of DMC, DSC, and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Funds. Certain internal legal expenses are allocated to the Funds. For the period ended February 29, 2004, the Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund, Delaware Tax-Free Minnesota Intermediate Fund and the Delaware Minnesota High-Yield Municipal Bond Fund had costs of $17,229, $11,931, $3,345, and $2,710, respectively. 11 Notes Delaware Minnesota Municipal Bond Funds TO FINANCIAL STATEMENTS (CONTINUED) 3. Investments For the six months ended February 29, 2004, the Funds made purchases and sales of investment securities as follows: Delaware Tax-Free Minnesota Fund ----------------- Purchases other than short-term investments $41,564,376 Sales other than short-term investments $66,204,343 At February 29, 2004, the cost of investments for federal income tax purposes has been estimated since the final tax characteristics cannot be determined until fiscal year end. At February 29, 2004, the cost of investments and unrealized appreciation (depreciation) for federal income tax purposes for each fund were as follows: Delaware Tax-Free Minnesota Fund ----------------- Cost of investments $355,579,797 ============ Aggregate unrealized appreciation $ 27,108,302 Aggregate unrealized depreciation (890,726) ------------ Net unrealized appreciation $ 26,217,576 ============ 4. Dividend and Distribution Information Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. The tax character of dividends and distributions paid during the periods ended February 29, 2004 and August 31, 2003 was as follows: Delaware Tax-Free Minnesota Fund ----------------- Period ended 2/29/04 -------------------- Tax-exempt income $ 8,961,459 Long-term capital gain 4,902,243 ----------- Total $13,863,702 =========== Year ended 8/31/03 ------------------ Tax-exempt income $18,468,203 Long-term capital gain 270,770 ----------- Total $18,738,973 =========== As of February 29, 2004, the components of net assets on a tax basis were as follows: Delaware Tax-Free Minnesota Fund ----------------- Shares of beneficial interest $354,407,330 Undistributed ordinary income 94,738 Undistributed long-term capital gain 3,283,402 Net realized capital losses on investments -- Capital loss carryforwards -- Unrealized appreciation (depreciation) of investments 25,646,226 ------------ Net assets $383,431,696 ============ 12 Notes Delaware Minnesota Municipal Bond Funds TO FINANCIAL STATEMENTS (CONTINUED) 4. Dividend and Distribution Information (continued) For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Such capital loss carryforwards expire as follows: Delaware Tax-Free Minnesota Year of Expiration Insured Fund ------------------ ----------------- 2004 $ 13,413 2005 -- 2006 -- 2007 -- 2008 589,183 2009 114,085 2010 -- 2011 -- -------- Total $716,681 ======== 5. Capital Shares Transactions in capital shares were as follows: Delaware Tax-Free Minnesota Fund ------------------------- Six Months Year Ended Ended 2/29/04 8/31/03 (Unaudited) Shares sold: Class A 1,161,007 1,598,089 Class B 54,744 165,696 Class C 82,493 279,810 Shares issued upon reinvestment of dividends and distributions: Class A 695,486 865,142 Class B 31,739 39,201 Class C 21,712 23,598 ---------- ---------- 2,047,181 2,971,536 ---------- ---------- Shares repurchased: Class A (1,413,550) (3,414,536) Class B (148,007) (239,163) Class C (68,368) (96,819) ---------- ---------- (1,629,925) (3,750,518) ---------- ---------- Net increase (decrease) 417,256 (778,982) ========== ========== 13 Notes Delaware Minnesota Municipal Bond Funds TO FINANCIAL STATEMENTS (CONTINUED) 5. Capital Shares (continued) For the periods ended February 29, 2004 and August 31, 2003, the following shares and values were converted from Class B to Class A. The respective amounts are included in Class B redemptions and Class A subscriptions in the table above and the Statements of Changes in Net Assets.
Period Ended Year Ended 2/29/04 8/31/03 ------------------------------- ------------------------------- Class B Class A Class B Class A shares shares Amount shares shares Amount Delaware Tax-Free Minnesota Fund 56,671 56,715 $718,818 33,800 33,825 $439,727
6. Line of Credit Each Fund, along with certain other funds in the Delaware Investments Family of Funds (the "Participants"), participates in a $177,300,000 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 February 29, 2004 or at any time during the period. 7. Credit and Market Risk The Funds concentrate their investments in securities issued by municipalities, mainly in Minnesota. 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. The Funds may invest in inverse floating rate securities ("inverse floaters"), a type of derivative tax-exempt obligation with floating or variable interest rates that move in the opposite direction of short-term interest rates, usually at an accelerated speed. Consequently, the market values of inverse floaters will generally be more volatile than other tax-exempt investments. Such securities are denoted on the Statements of Net Assets. 8. Contractual Obligations The Funds enter into contracts that contain a variety of indemnifications. The Funds' maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. 14 Delaware Investments(SM) -------------------------------------- A member of Lincoln Financial Group(R) This semiannual report is for the information of Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund shareholders, but it may be used with prospective investors when preceded or accompanied by a current prospectus for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund 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 for each Fund. 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 Fund will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
Board of Trustees Affiliated Officers Contact Information Walter P. Babich Jude T. Driscoll Investment Manager Board Chairman Chairman Delaware Management Company Citadel Construction Corporation Delaware Investments Family of Funds Philadelphia, PA King of Prussia, PA Philadelphia, PA International Affiliate John H. Durham Joseph H. Hastings Delaware International Advisers Ltd. Private Investor Executive Vice President and London, England Gwynedd Valley, PA Chief Financial Officer Delaware Investments Family of Funds National Distributor Anthony D. Knerr Philadelphia, PA Delaware Distributors, L.P. Managing Director Philadelphia, PA Richelle S. Maestro Anthony Knerr & Associates Senior Vice President, Shareholder Servicing, Dividend New York, NY Chief Legal Officer and Secretary Disbursing and Transfer Agent Delaware Investments Family of Funds Delaware Service Company, Inc. Ann R. Leven Philadelphia, PA 2005 Market Street Former Treasurer/Chief Fiscal Officer Philadelphia, PA 19103-7094 National Gallery of Art Michael P. Bishof Washington, DC Senior Vice President and Treasurer For Shareholders Delaware Investments Family of Funds 800 523-1918 Thomas F. Madison Philadelphia, PA President and Chief Executive Officer For Securities Dealers and Financial MLM Partners, Inc. Institutions Representatives Only Minneapolis, MN 800 362-7500 Janet L. Yeomans Web site Vice President/Mergers & Acquisitions www.delawareinvestments.com 3M Corporation St. Paul, MN -------------------------------------------------------------------------------- A description of the policies and procedures that the Fund uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800 523-1918; (ii) on the Fund's website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov.; and beginning no later than August 31, 2004, information (if any) regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge (i) through the Fund's website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov. -------------------------------------------------------------------------------- (8624) Printed in the USA SA-MNALL [2/04] IVES 4/04 J9627
Item 2. Code of Ethics Not applicable. Item 3. Audit Committee Financial Expert Not applicable. Item 4. Principal Accountant Fees and Services Not applicable. Item 5. Audit Committee of Listed Registrants Not applicable. Item 6. [Reserved] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies Not applicable. Item 8. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers Not applicable. Item 9. Submission of Matters to a Vote of Security Holders Not applicable. Item 10. Controls and Procedures The registrant's principal executive officer and principal financial officer have evaluated the registrant's disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. There were no significant changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 11. Exhibits (a) (1) Code of Ethics Not applicable. (2) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are attached hereto as Exhibit 99.CERT. (3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934. Not applicable. (b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith as Exhibit 99.906CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf, by the undersigned, thereunto duly authorized. Voyageur Tax Free Funds Jude T. Driscoll -------------------------------- By: Jude T. Driscoll Title: Chairman Date: April 27, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Jude T. Driscoll -------------------------------- By: Jude T. Driscoll Title: Chairman Date: April 27, 2004 Joseph H. Hastings -------------------------------- By: Joseph H. Hastings Title: Chief Financial Officer Date: April 27, 2004