Item 1. Reports to Stockholders
Annual report
Delaware
Tax-Free Pennsylvania Fund
August
31, 2013
Fixed income mutual fund
|
Carefully consider the Funds
investment objectives, risk factors, charges, and expenses before
investing. This and other information can be found in the Funds
prospectus and, if available, its summary prospectus, which may be
obtained by visiting delawareinvestments.com or calling 800 523-1918.
Investors should read the prospectus and, if available, the summary
prospectus carefully before investing.
|
You can obtain shareholder
reports and prospectuses online instead of in the mail.
Visit
delawareinvestments.com/edelivery.
|
Experience Delaware Investments
Delaware Investments is committed to the
pursuit of consistently superior asset management and unparalleled client
service. We believe in our investment processes, which seek to deliver
consistent results, and in convenient services that help add value for our
clients.
If you are interested in learning more
about creating an investment plan, contact your financial advisor.
You can learn more about Delaware
Investments or obtain a prospectus for Delaware Tax-Free Pennsylvania Fund at
delawareinvestments.com.
Manage your investments
online
-
24-hour access to your account information
-
Obtain share prices
-
Check your account balance and recent
transactions
-
Request statements or literature
-
Make purchases and redemptions
Delaware Management Holdings, Inc. and its
subsidiaries (collectively known by the marketing name of Delaware Investments)
are wholly owned subsidiaries of Macquarie Group Limited, a global provider of
banking, financial, advisory, investment and funds management
services.
Investments in Delaware Tax-Free
Pennsylvania Fund are not and will not be deposits with or liabilities of
Macquarie Bank Limited ABN 46 008 583 542 and its holding companies, including
their subsidiaries or related companies (Macquarie Group), and are subject to
investment risk, including possible delays in repayment and loss of income and
capital invested. No Macquarie Group company guarantees or will guarantee the
performance of the Fund, the repayment of capital from the Fund, or any
particular rate of return.
Table of
contents
|
|
Portfolio management
review
|
1
|
Performance summary
|
4
|
Disclosure of Fund
expenses
|
8
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Security type/sector
allocation
|
10
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Schedule of
investments
|
11
|
Statement of assets and
liabilities
|
22
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Statements of
operations
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24
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Statements of changes in net
assets
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26
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Financial
highlights
|
28
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Notes to financial statements
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34
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Report of independent
registered
|
|
public accounting
firm
|
43
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Other Fund information
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44
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Board of
trustees/directors and
|
|
officers
addendum
|
48
|
About the organization
|
56
|
Unless otherwise noted, views expressed
herein are current as of Aug. 31, 2013, and subject to change.
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. Delaware Investments, a member of
Macquarie Group, refers to Delaware Management Holdings, Inc. and its
subsidiaries, including the Funds distributor,
Delaware Distributors, L.P.
Macquarie
Group refers to Macquarie Group Limited and its subsidiaries and affiliates
worldwide.
© 2013 Delaware Management Holdings, Inc.
All third-party marks cited are the
property of their respective owners.
Portfolio management review
|
|
Delaware Tax-Free Pennsylvania
Fund
|
September 10,
2013
|
Performance preview (for the six-month period from March 1,
2013,
|
through August 31,
2013)
|
Delaware Tax-Free Pennsylvania Fund
(Class A shares)
|
|
six-month return
|
|
-7.94
|
%
|
Barclays Municipal Bond Index (benchmark)
|
|
six-month return
|
|
-5.60
|
%
|
Lipper Pennsylvania Municipal Debt
Funds Average
|
|
six-month return
|
|
-7.59
|
%
|
Past performance
does not guarantee future results.
For complete, annualized performance for Delaware Tax-Free
Pennsylvania Fund, please see the table on page 4.
The performance of
Class A shares excludes the applicable sales charge and reflects the
reinvestment of all distributions.
The
Lipper Pennsylvania Municipal Debt Funds Average compares funds that limit
assets to those securities that are exempt from taxation in Pennsylvania
(double tax-exempt) or a city in Pennsylvania (triple
tax-exempt).
Index performance returns
do not reflect any management fees, transaction costs, or expenses.
Indices are unmanaged and one cannot invest directly in an
index.
|
On May 23, 2013, the Board approved
changing the Funds fiscal year from Feb. 28/29 to Aug. 31. This change will be
effective for the period ended Aug. 31, 2013. Therefore, the managers
commentary below applies to the partial year between March 1, 2013 and Aug. 31,
2013. In future editions of the Funds annual report, the managers commentary
will once again report on the Funds entire fiscal year.
A cautious approach amid economic
turbulence
As the reporting period got under way in
March, we were closely watching developments across a range of fronts,
including: the fiscal negotiations that were supposed to be happening in
Washington, D.C.; U.S. economic growth; developments in Europe and other
economies around the world; and bond-specific developments in Puerto Rico
issues, which were coming under tremendous pressure.
In light of such
macroeconomic turbulence, we generally took a cautious approach
throughout the reporting period, allowing our security
selection process and our focus on income to guide our investment decisions.
As
we moved into the summer months of 2013, it appeared that investors were
increasingly concerned about when (and by how much) the U.S. Federal Reserve
would begin to wind down its $85 billion-per-month bond-buying program (the
so-called quantitative easing program). Although the winding down did not yet
commence, the markets fears were realized when three Fed communications two
in May and one in June led to a market selloff that resulted in significant
negative returns for fixed income instruments.
Concerns about rising rates pull
markets lower
The string of Fed communications mentioned
above led many investors to worry about the possibility of rising interest
rates, causing what could be described as widespread panic in the market.
Municipal bond mutual funds began suffering heavy outflows. In order to meet
redemption orders, many mutual
1
Portfolio management
review
Delaware Tax-Free
Pennsylvania Fund
fund managers were forced to sell bonds
into an environment of weak demand, driving prices down even further. Certainly,
the municipal market was not alone in being affected by this negative feedback
loop; but we believe the relatively smaller audience for municipal bonds caused
prices to fall harder and faster than other types of securities.
In addition to the distress mentioned
above, municipal markets were weakened further by the city of Detroits
bankruptcy filing in July. Investors appeared to believe that the problems
facing Detroits finances could be germane to the municipal bond market as a
whole. As such, investors and prognosticators painted a broadly negative
picture, despite the fact that, in our assessment, credit quality generally
remained strong throughout municipal markets.
Pennsylvanias economic
environment
The unemployment rate in Pennsylvania was
7.5% in July, unchanged for the third consecutive month (data: Pennsylvania
Department of Labor and Industry). While this is relatively encouraging,
especially in light of the headwinds that the economy has faced since the
national recession, there is a way to go before the state is back to full
economic health. All the same, the state continues to support a diverse economy,
with notable activity in sectors that include healthcare, education, financial
services, transportation, trade, and manufacturing.
Pennsylvania Governor Tom Corbett signed
the states budget for fiscal 2014 on June 30, 2013. The $28.4 billion budget
calls for an increase in total government spending, with an emphasis on areas
such as education, care for older Pennsylvanians, and public safety.
Within the Fund
For the six-month period between March 1,
2013 and Aug. 31, 2013, Delaware Tax-Free Pennsylvania Fund (Class A shares at
net asset value, with all distributions reinvested) returned -7.94%. The Funds
benchmark, the Barclays Municipal Bond Index, returned -5.60% during the same
period. For complete, annualized performance of Delaware Tax-Free Pennsylvania
Fund, please see the table on page 4.
Factors behind the Funds underperformance
included its relative overweight allocation to securities of marginally lower
quality (in particular those rated on the lower end of the investment grade
spectrum), which tended to lag the performance of bonds at the higher end of the
ratings spectrum.
At the sector level, the Funds
performance versus the benchmark was hampered by a relative overweight to the
healthcare sector; collectively, healthcare bonds within the index trailed the
return posted by the broader index. Relative underweights to general obligation
bonds (often referred to as GOs) likewise had negative effects on the Funds
performance versus the benchmark, as GOs within the index collectively
outperformed the broader index.
The negative effects described above were
offset somewhat by positive effects from sources such as the Funds underweight
allocation to transportation bonds; index constituents within the transportation
sector trailed the broader index, and the Funds relatively milder emphasis on
the sector was therefore beneficial.
2
On an individual bond basis, Puerto Rico
bonds ended the period among the weakest holdings within the Fund. They were
handcuffed by the environment of risk aversion mentioned above, and at least two
of the Funds Puerto Rico bonds suffered a decline of more than 20%. The two
bonds were issued by the Puerto Rico Sales Tax Financing Corporation. The first,
issued as a general purpose bond, is backed by a dedicated sales tax; its coupon
rate is 5.5% and it matures on Aug. 1, 2042. The second bond, likewise issued to
raise funds for general purposes and backed by a dedicated sales tax, is a
zero-coupon bond with a maturity date of Aug. 1, 2032.
Still at the individual bond level, the
effects of the declines above were offset mildly by bonds that included an issue
by the Pennsylvania Economic Development Financial Authority to support the Dr.
Gertrude A. Barber Center (a facility that provides educational services to
people with developmental disabilities). The issue has a coupon rate of 5.9% and
matures on Dec. 1, 2030. Another positive contributor was issued by the
Lehigh-Northampton Airport Authority, with a coupon of 6.0% and a maturity date
of May 15, 2025. The bonds proceeds are being used to fund general operations
at the Lehigh Valley International Airport.
3
Performance summary
|
|
Delaware Tax-Free Pennsylvania
Fund
|
August 31,
2013
|
The performance data quoted represent
past performance; past performance does not guarantee future results. Investment
return and principal value will fluctuate so your shares, when redeemed, may be
worth more or less than their original cost. Please obtain the performance data
current for the most recent month end by calling 800 523-1918 or visiting our
website at delawareinvestments.com/performance. Current performance may be lower
or higher than the performance data quoted.
Fund and benchmark
performance
1,2
|
Average annual total returns through August 31,
2013
|
|
|
6 months
|
|
1 year
|
|
5 years
|
|
10 years
|
|
Class A (Est. March
23, 1977)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding sales charge
|
|
-7.94
|
%
|
|
-6.03
|
%
|
|
+4.19
|
%
|
|
+4.12
|
%
|
|
Including sales charge
|
|
-12.12
|
%
|
|
-10.31
|
%
|
|
+3.23
|
%
|
|
+3.64
|
%
|
|
Class B (Est. May 2, 1994)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding sales
charge
|
|
-8.07
|
%
|
|
-6.63
|
%
|
|
+3.46
|
%
|
|
+3.47
|
%
|
|
Including sales charge
|
|
-11.69
|
%
|
|
-10.25
|
%
|
|
+3.20
|
%
|
|
+3.47
|
%
|
|
Class C (Est. Nov.
29, 1995)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding sales charge
|
|
-8.29
|
%
|
|
-6.74
|
%
|
|
+3.40
|
%
|
|
+3.32
|
%
|
|
Including sales charge
|
|
-9.19
|
%
|
|
-7.65
|
%
|
|
+3.40
|
%
|
|
+3.32
|
%
|
|
Barclays Municipal Bond Index
|
|
-5.60
|
%
|
|
-3.70
|
%
|
|
+4.52
|
%
|
|
+4.48
|
%
|
|
1
Returns reflect the
reinvestment of all distributions and are presented both with and without the
applicable sales charges described below. Returns do not reflect the deduction
of taxes the shareholder would pay on Fund distributions or redemptions of Fund
shares.
Expense limitations were in effect for
certain classes during some or all of the periods shown in the Fund
performance chart. Expenses for each class are listed on the Fund expense
ratios table on page 5. Performance would have been lower had expense
limitations not been in effect.
Class A shares are sold with a maximum
front-end sales charge of 4.50%, and have an annual distribution and service fee
of 0.30% of average daily net assets. This fee has been contractually limited to 0.25% of average daily
net assets through Dec. 29, 2014. Furthermore, the Board has adopted a
formula for calculating 12b-1 plan fees for the Funds Class A shares that went
into effect on June 1, 1992. The Funds Class A shares are currently subject to
a
blended 12b-1 fee equal to the sum of:
(i) 0.10% of average daily net assets representing shares acquired prior to June
1, 1992, and (ii) 0.30% (currently limited to 0.25%) of average daily net assets representing shares acquired
on or after June 1, 1992. All Class A shares currently bear 12b-1 fees at the
same rate, the blended rate, currently 0.24% of average daily net assets, based
on the formula described above. This method of calculating Class A 12b-1 fees
may be discontinued at the sole discretion of the Board. Performance for Class A
shares, excluding sales charges, assumes that no front-end sales charge applied.
Class B shares may be purchased only
through dividend reinvestment and certain permitted exchanges as described in
the prospectus. Please see the prospectus for additional information on Class B
shares. Class B shares
4
have a contingent deferred sales charge that declines
from 4.00% to zero depending on the period of time the shares are held. They are also subject to an annual distribution
and service fee of 1.00% of average daily net assets. This fee has been contractually limited to 0.25% of average daily net assets from July 1, 2013 through Dec. 29, 2014. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately eight
years after purchase. Ten-year performance figures for Class B shares reflect
conversion to Class A shares after approximately eight years.
Class C shares are sold with a contingent
deferred sales charge of 1.00% if redeemed during the first 12 months. They are
also subject to an annual distribution and service fee of 1.00% of average daily
net assets.
Performance for Class B and C shares,
excluding sales charges, assumes either that contingent deferred sales charges
did not apply or that the investment was not redeemed.
The Fund performance table and the
Performance of a $10,000 investment graph do not reflect the deduction of
taxes the shareholder would pay on Fund distributions or redemptions of Fund
shares.
Fixed income securities and bond funds can
lose value, and investors can lose principal, as interest rates rise. They also
may be affected by economic conditions that hinder an issuers ability to make
interest and principal payments on its debt.
The Fund may also be subject to prepayment
risk, the risk that the principal of a fixed income security that is held by the
Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest
that money at a lower interest rate.
Substantially all dividend income derived
from tax-free funds is exempt from federal income tax. Some income may be
subject to the federal alternative minimum tax (AMT) that applies to certain
investors. Capital gains, if any, are taxable.
Funds that invest primarily in one state
may be more susceptible to the economic, regulatory, and other factors of that
state than funds that invest more broadly.
Bond ratings are determined by a
nationally recognized statistical rating organization.
2
The Funds expense ratios, as
described in the most recent prospectus, are disclosed in the following Fund
expense ratios table. Delaware Management Company has agreed to reimburse
certain expenses and/or waive certain fees (excluding certain fees and expenses)
in order to prevent total annual fund operating expenses from exceeding 0.64% of
the Funds average daily net assets from June 28, 2013, through Dec. 29, 2014.
Please see the most recent prospectus and any applicable supplement(s) for
additional information on these fee waivers and/or reimbursements.
Fund expense ratios
|
|
Class A
|
|
Class B
|
|
Class C
|
Total annual
operating expenses
|
|
0.98%
|
|
1.69%
|
|
1.69%
|
(without fee
waivers)
|
|
|
|
|
|
|
Net expenses
|
|
0.88%
|
|
1.64%
|
|
1.64%
|
(including fee waivers, if
any)
|
|
|
|
|
|
|
Type of waiver
|
|
Contractual
|
|
Contractual
|
|
Contractual
|
5
Performance
summary
Delaware Tax-Free
Pennsylvania Fund
Performance of a $10,000
investment
1
Average annual
total returns from Aug. 31, 2003, through Aug. 31, 2013
For period beginning Aug. 31, 2003, through Aug. 31,
2013
|
|
Starting
value
|
|
Ending
value
|
|
|
Barclays Municipal Bond Index
|
|
$10,000
|
|
$15,496
|
|
|
Delaware Tax-Free Pennsylvania Fund Class A
shares
|
|
$9,550
|
|
$14,280
|
1
The Performance of a $10,000
investment graph assumes $10,000 invested in Class A shares of the Fund on Aug.
31, 2003, and includes the effect of a 4.50% front-end sales charge and the
reinvestment of all distributions. The graph does not reflect the deduction of
taxes the shareholders would pay on Fund distributions or redemptions of Fund
shares. Expense limitations were in effect for some or all of the periods shown.
Performance would have been lower had expense limitations not been in effect.
Expenses are listed in the Fund expense ratios table on page 5. Please note
additional details on pages 4 through 6.
The chart also assumes $10,000 invested in
the Barclays Municipal Bond Index as of Aug. 31, 2003. The Barclays Municipal
Bond Index measures the total return performance of the long-term, investment
grade tax-exempt bond market.
Index performance returns do not reflect
any management fees, transaction costs, or expenses. Indices are unmanaged and
one cannot invest directly in an index. Past performance is not a guarantee of
future results.
Performance of other Fund classes will
vary due to different charges and expenses.
|
|
Nasdaq
symbols
|
|
CUSIPs
|
|
Class A
|
|
|
DELIX
|
|
|
233216100
|
|
Class B
|
|
|
DPTBX
|
|
|
233216209
|
|
Class C
|
|
|
DPTCX
|
|
|
233216308
|
|
6
Disclosure of Fund
expenses
For the six-month period from March
1, 2013 to August 31, 2013 (Unaudited)
As a shareholder of the Fund, you incur
two types of costs: (1) transaction costs, including sales charges (loads) on
purchase payments, reinvested dividends, or other distributions; redemption
fees; and exchange fees; and (2) ongoing costs, including management fees;
distribution and/or service (12b-1) fees; and other Fund expenses. This example
is intended to help you understand your ongoing costs (in dollars) of investing
in the Fund and to compare these costs with the ongoing costs of investing in
other mutual funds.
The example is based on an investment of
$1,000 invested at the beginning of the period and held for the entire six-month
period from March 1, 2013 to Aug. 31, 2013.
Actual expenses
The first section of the table shown,
Actual Fund return, provides information about actual account values and
actual expenses. You may use the information in this section of the table,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first section under the heading entitled Expenses Paid During
Period to estimate the expenses you paid on your account during this
period.
Hypothetical example for comparison
purposes
The second section of the table shown,
Hypothetical 5% return, provides information about hypothetical account values
and hypothetical expenses based on the Funds actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Funds
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the
table are meant to highlight your ongoing costs only and do not reflect any
transactional costs, such as sales charges (loads), redemption fees, or exchange
fees. Therefore, the second section of the table is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher. The Funds expenses shown in the table reflect fee
waivers in effect. The expenses shown in the table assume reinvestment of all
dividends and distributions.
8
Delaware Tax-Free Pennsylvania Fund
Expense analysis of an investment of $1,000
|
|
Beginning
|
|
Ending
|
|
|
|
|
|
|
Expenses
|
|
|
Account Value
|
|
Account Value
|
|
Annualized
|
|
Paid During Period
|
|
|
3/1/13
|
|
8/31/13
|
|
Expense Ratio
|
|
3/1/13 to 8/31/13*
|
Actual Fund return
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
$
|
1,000.00
|
|
|
|
$
|
920.60
|
|
|
|
0.88
|
%
|
|
|
|
$
|
4.26
|
|
Class B
|
|
|
|
1,000.00
|
|
|
|
|
919.30
|
|
|
|
1.42
|
%
|
|
|
|
|
6.87
|
|
Class C
|
|
|
|
1,000.00
|
|
|
|
|
917.10
|
|
|
|
1.64
|
%
|
|
|
|
|
7.92
|
|
Hypothetical 5% return
(5% return before
expenses)
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
$
|
1,000.00
|
|
|
|
$
|
1,020.77
|
|
|
|
0.88
|
%
|
|
|
|
$
|
4.48
|
|
Class B
|
|
|
|
1,000.00
|
|
|
|
|
1,018.05
|
|
|
|
1.42
|
%
|
|
|
|
|
7.22
|
|
Class C
|
|
|
|
1,000.00
|
|
|
|
|
1,016.94
|
|
|
|
1.64
|
%
|
|
|
|
|
8.34
|
|
*
Expenses Paid During Period are equal
to the Funds annualized expense ratio, multiplied by the average account value
over the period, multiplied by 184/365 (to reflect the one-half year period).
Because actual returns reflect only the most recent six-month
period, the returns shown may differ significantly from fiscal year
returns.
9
Security type/sector allocation
|
|
Delaware Tax-Free Pennsylvania
Fund
|
As of August 31, 2013
(Unaudited)
|
Sector designations may be different than
the sector designations presented in other Fund materials.
Security
type/sector
|
Percentage of net assets
|
Municipal
Bonds
|
97.86
|
%
|
Corporate Revenue Bonds
|
5.28
|
%
|
Education Revenue Bonds
|
25.51
|
%
|
Electric Revenue Bonds
|
1.25
|
%
|
Healthcare Revenue Bonds
|
24.29
|
%
|
Housing Revenue Bonds
|
2.84
|
%
|
Lease Revenue Bonds
|
5.61
|
%
|
Local General Obligation Bonds
|
6.79
|
%
|
Pre-Refunded/Escrowed to Maturity
Bonds
|
6.00
|
%
|
Resource Recovery Revenue Bond
|
0.63
|
%
|
Special Tax Revenue Bonds
|
4.88
|
%
|
State General Obligation Bonds
|
5.69
|
%
|
Transportation Revenue Bonds
|
7.26
|
%
|
Water & Sewer
Revenue Bonds
|
1.83
|
%
|
Short-Term Investment
|
0.18
|
%
|
Total
Value of Securities
|
98.04
|
%
|
Receivables and Other Assets Net of
Liabilities
|
1.96
|
%
|
Total
Net Assets
|
100.00
|
%
|
10
Schedule of
investments
Delaware Tax-Free Pennsylvania Fund
|
August 31,
2013
|
|
|
Principal amount
|
|
Value
|
Municipal Bonds 97.86%
|
|
|
|
|
|
Corporate Revenue Bonds 5.28%
|
|
|
|
|
|
|
Allegheny County
Industrial Development Authority
|
|
|
|
|
|
|
Environmental
Improvement Revenue
|
|
|
|
|
|
|
(U.S.
Steel Corp.) 6.75% 11/1/24
|
$
|
2,475,000
|
|
$
|
2,558,977
|
|
Dauphin County Industrial Development
Authority
|
|
|
|
|
|
|
Water
Revenue (Dauphin Consolidated
|
|
|
|
|
|
|
Water
Supply Project) Series B 6.70% 6/1/17
|
|
1,750,000
|
|
|
2,021,268
|
|
Pennsylvania Economic
Development Financing
|
|
|
|
|
|
|
Authority
Exempt Facilities Revenue
|
|
|
|
|
|
|
(Allegheny
Energy Supply) 7.00% 7/15/39
|
|
4,140,000
|
|
|
4,183,470
|
|
Pennsylvania Economic Development
Financing
|
|
|
|
|
|
|
Authority
Solid Waste Disposal Revenue
|
|
|
|
|
|
|
(Proctor
& Gamble Paper Project) 5.375% 3/1/31 (AMT)
|
|
11,000,000
|
|
|
11,444,729
|
|
Pennsylvania Economic
Development Financing
|
|
|
|
|
|
|
Authority
Water Facility Revenue
|
|
|
|
|
|
|
(Pennsylvania-American
Water Project) 6.20% 4/1/39
|
|
2,850,000
|
|
|
3,052,550
|
|
Pennsylvania Economic
Development Financing Authority
|
|
|
|
|
|
|
(Shipping
Port) Series A 2.55% 11/1/41
|
|
2,500,000
|
|
|
2,439,050
|
|
|
|
|
|
|
25,700,044
|
Education Revenue Bonds 25.51%
|
|
|
|
|
|
|
Allegheny County
Higher Education Building
|
|
|
|
|
|
|
Authority
Revenue
|
|
|
|
|
|
|
(Carlow
University Project)
|
|
|
|
|
|
|
6.75%
11/1/31
|
|
750,000
|
|
|
774,833
|
|
7.00%
11/1/40
|
|
1,000,000
|
|
|
1,041,460
|
|
(Carnegie
Mellon University Project)
|
|
|
|
|
|
|
5.00%
3/1/28
|
|
3,000,000
|
|
|
3,152,850
|
|
Series
A 5.00% 3/1/24
|
|
1,500,000
|
|
|
1,655,565
|
|
(Chatham
University Project) Series A
|
|
|
|
|
|
|
5.00%
9/1/30
|
|
1,500,000
|
|
|
1,454,880
|
|
5.00%
9/1/35
|
|
1,000,000
|
|
|
930,610
|
|
(Duquesne
University) Series A 5.00% 3/1/33
|
|
600,000
|
|
|
609,072
|
|
(Robert
Morris University Project) Series A
|
|
|
|
|
|
|
5.50%
10/15/30
|
|
1,275,000
|
|
|
1,237,770
|
|
5.75%
10/15/40
|
|
2,200,000
|
|
|
2,118,050
|
|
Bucks County Industrial Development
Authority Revenue
|
|
|
|
|
|
|
(George
School Project) 5.00% 9/15/36
|
|
4,455,000
|
|
|
4,549,534
|
11
Schedule of
investments
Delaware Tax-Free
Pennsylvania Fund
|
|
Principal amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
Education Revenue Bonds
(continued)
|
|
|
|
|
|
|
Chester County
Industrial Development
|
|
|
|
|
|
|
Authority
Student Housing Revenue
|
|
|
|
|
|
|
(West
Chester University Project) Series A
|
|
|
|
|
|
|
5.00%
8/1/30
|
$
|
1,100,000
|
|
$
|
1,011,450
|
|
5.00%
8/1/45
|
|
1,250,000
|
|
|
1,053,050
|
|
Delaware County Authority
|
|
|
|
|
|
|
(Eastern
University) 5.25% 10/1/32
|
|
3,000,000
|
|
|
2,791,260
|
|
(Villanova
University) 5.00% 8/1/21
|
|
1,745,000
|
|
|
1,959,722
|
|
East Hempfield
Township Industrial Development Authority
|
|
|
|
|
|
|
(Student
Services Income Student Housing Project)
|
|
|
|
|
|
|
5.00%
7/1/30
|
|
1,000,000
|
|
|
956,060
|
|
5.00%
7/1/35
|
|
1,000,000
|
|
|
924,860
|
|
5.00%
7/1/45
|
|
2,500,000
|
|
|
2,224,050
|
|
Huntingdon County General Authority
Revenue
|
|
|
|
|
|
|
(Juniata
College) Series A 5.00% 5/1/30
|
|
2,650,000
|
|
|
2,667,278
|
|
Lehigh County General
Purpose Authority Revenue
|
|
|
|
|
|
|
(Muhlenberg
College Project)
|
|
|
|
|
|
|
5.00%
2/1/29
|
|
740,000
|
|
|
758,663
|
|
5.25%
2/1/34
|
|
1,000,000
|
|
|
1,020,730
|
|
5.25%
2/1/39
|
|
2,750,000
|
|
|
2,783,468
|
|
Montgomery County Higher Education
& Health
|
|
|
|
|
|
|
Authority
Revenue (Arcadia University)
|
|
|
|
|
|
|
5.625%
4/1/40
|
|
2,375,000
|
|
|
2,391,079
|
|
Northampton County
General Purpose Authority Revenue
|
|
|
|
|
|
|
(Higher
Education-Lehigh University)
|
|
|
|
|
|
|
5.00%
11/15/39
|
|
4,000,000
|
|
|
4,041,240
|
|
Northeastern Pennsylvania Hospital
& Education Authority
|
|
|
|
|
|
|
(Wilkes
University Project)
|
|
|
|
|
|
|
Series
A 5.25% 3/1/42
|
|
1,000,000
|
|
|
955,920
|
|
Pennsylvania Higher
Educational Facilities Authority
|
|
|
|
|
|
|
College
& University Revenue
|
|
|
|
|
|
|
5.00%
6/1/32
|
|
2,000,000
|
|
|
1,908,500
|
|
(Delaware
Valley College) 5.00% 11/1/27
|
|
1,250,000
|
|
|
1,210,450
|
|
(Drexel
University Project)
|
|
|
|
|
|
|
5.00%
5/1/18
|
|
500,000
|
|
|
567,680
|
|
5.00%
5/1/20
|
|
250,000
|
|
|
282,110
|
12
|
|
Principal amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
Education Revenue Bonds
(continued)
|
|
|
|
|
|
|
Pennsylvania Higher
Educational Facilities Authority
|
|
|
|
|
|
|
College
& University Revenue
(continued)
|
|
|
|
|
|
|
(Edinboro
University Foundation)
|
|
|
|
|
|
|
5.875%
7/1/38
|
$
|
3,500,000
|
|
$
|
3,326,750
|
|
6.00%
7/1/43
|
|
1,000,000
|
|
|
957,170
|
|
(Edinboro
University - Student Housing)
|
|
|
|
|
|
|
6.00%
7/1/42
|
|
1,400,000
|
|
|
1,340,752
|
|
(Gwynedd
Mercy College Project)
|
|
|
|
|
|
|
Series
KK1 5.375% 5/1/42
|
|
1,300,000
|
|
|
1,197,842
|
|
(Indiana
University - Student Housing Project) Series A
|
|
|
|
|
|
|
5.00%
7/1/27
|
|
1,740,000
|
|
|
1,749,761
|
|
5.00%
7/1/41
|
|
1,500,000
|
|
|
1,347,480
|
|
(Philadelphia
University Project) 5.00% 6/1/35
|
|
1,665,000
|
|
|
1,545,053
|
|
(Shippensburg
University)
|
|
|
|
|
|
|
5.00%
10/1/35
|
|
305,000
|
|
|
275,168
|
|
5.00%
10/1/44
|
|
1,500,000
|
|
|
1,295,355
|
|
6.25%
10/1/43
|
|
2,000,000
|
|
|
2,051,580
|
|
(Slippery
Rock University Foundation)
|
|
|
|
|
|
|
Series
A 5.00% 7/1/39 (SGI)
|
|
4,000,000
|
|
|
3,733,400
|
|
(St
Francis University)
|
|
|
|
|
|
|
Series
JJ2 6.25% 11/1/41
|
|
2,355,000
|
|
|
2,371,202
|
|
(Temple
University) First Series
|
|
|
|
|
|
|
5.00%
4/1/21
|
|
500,000
|
|
|
565,955
|
|
5.00%
4/1/22
|
|
1,200,000
|
|
|
1,353,372
|
|
(Thomas
Jefferson University Project)
|
|
|
|
|
|
|
5.00%
3/1/24
|
|
1,115,000
|
|
|
1,204,167
|
|
Series
B 4.125% 9/1/26 (AMBAC)
|
|
1,000,000
|
|
|
981,400
|
|
(Trustees
of the University of Pennsylvania)
|
|
|
|
|
|
|
5.00%
9/1/29
|
|
1,000,000
|
|
|
1,059,300
|
|
Series
A 5.00% 9/1/29
|
|
1,000,000
|
|
|
1,054,320
|
|
Series
A 5.00% 9/1/41
|
|
5,000,000
|
|
|
5,097,099
|
|
(University
of Pennsylvania) Series B
|
|
|
|
|
|
|
5.00%
9/1/26
|
|
1,450,000
|
|
|
1,560,867
|
|
5.00%
9/1/27
|
|
1,550,000
|
|
|
1,654,145
|
|
5.00%
9/1/30
|
|
1,000,000
|
|
|
1,048,000
|
|
5.00%
9/1/31
|
|
250,000
|
|
|
260,920
|
|
5.00%
9/1/32
|
|
1,000,000
|
|
|
1,040,440
|
|
(University
of the Sciences) 5.00% 11/1/42
|
|
1,000,000
|
|
|
965,700
|
13
Schedule of
investments
Delaware Tax-Free
Pennsylvania Fund
|
|
Principal amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
Education Revenue
Bonds
(continued)
|
|
|
|
|
|
|
Pennsylvania Higher
Educational Facilities Authority
|
|
|
|
|
|
|
College
& University Revenue
(continued)
|
|
|
|
|
|
|
(Widener
University)
|
|
|
|
|
|
|
5.00%
7/15/39
|
$
|
3,000,000
|
|
$
|
2,759,190
|
|
5.375%
7/15/29
|
|
650,000
|
|
|
651,846
|
|
Pennsylvania Higher Educational
Facilities Authority
|
|
|
|
|
|
|
Student
Housing Revenue University Properties (East
|
|
|
|
|
|
|
Stroudsburg
University of Pennsylvania) 5.00% 7/1/42
|
|
1,750,000
|
|
|
1,554,893
|
|
Pennsylvania State
University Series B 5.25% 8/15/22
|
|
1,865,000
|
|
|
2,170,674
|
|
Philadelphia Authority for Industrial
Development Revenue
|
|
|
|
|
|
|
(First
Philadelphia Charter Project)
|
|
|
|
|
|
|
Series
A 5.75% 8/15/32
|
|
4,000,000
|
|
|
3,762,600
|
|
(Green
Woods Charter School) Series A
|
|
|
|
|
|
|
5.50%
6/15/22
|
|
1,165,000
|
|
|
1,103,441
|
|
5.75%
6/15/42
|
|
2,500,000
|
|
|
2,085,475
|
|
(International
Apartments Temple University) Series A
|
|
|
|
|
|
|
5.375%
6/15/30
|
|
1,500,000
|
|
|
1,450,770
|
|
5.625%
6/15/42
|
|
3,000,000
|
|
|
2,796,000
|
|
(Master
Charter School Project) 6.00% 8/1/35
|
|
1,610,000
|
|
|
1,644,583
|
|
(New
Foundation Charter School Project)
|
|
|
|
|
|
|
6.625%
12/15/41
|
|
1,000,000
|
|
|
1,004,510
|
|
#(Performing
Arts Charter School Project) 144A
|
|
|
|
|
|
|
6.75%
6/15/43
|
|
2,550,000
|
|
|
2,478,065
|
|
(Tacony
Academy Charter School Project)
|
|
|
|
|
|
|
6.75%
6/15/33
|
|
1,020,000
|
|
|
983,780
|
|
7.00%
6/15/43
|
|
1,535,000
|
|
|
1,466,616
|
|
Philadelphia
Redevelopment Authority Revenue
|
|
|
|
|
|
|
(Beech
Student Housing Complex Project) Series A
|
|
|
|
|
|
|
5.50%
7/1/35 (ACA)
|
|
1,525,000
|
|
|
1,443,367
|
|
5.625%
7/1/28 (ACA)
|
|
1,000,000
|
|
|
985,590
|
|
Swarthmore Borough Authority
Revenue
|
|
|
|
|
|
|
(Swarthmore
College Project) 5.00% 9/15/38
|
|
500,000
|
|
|
515,120
|
|
University of
Pittsburgh Commonwealth System of
|
|
|
|
|
|
|
Higher
Education (University Capital Project)
|
|
|
|
|
|
|
Series
B 5.25% 9/15/25
|
|
8,075,000
|
|
|
9,224,879
|
|
|
|
|
|
|
124,150,431
|
14
|
|
Principal amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
Electric Revenue Bonds 1.25%
|
|
|
|
|
|
|
Philadelphia Gas
Works Revenue
|
|
|
|
|
|
|
(8th-1998
General Ordinance) Series A
|
|
|
|
|
|
|
5.00%
8/1/15
|
$
|
2,640,000
|
|
$
|
2,808,802
|
|
5.00%
8/1/16
|
|
3,000,000
|
|
|
3,263,730
|
|
|
|
|
|
|
6,072,532
|
Healthcare Revenue Bonds 24.29%
|
|
|
|
|
|
|
Allegheny County Hospital Development
Authority Revenue
|
|
|
|
|
|
|
(University
of Pittsburgh Medical Center) 5.50% 8/15/34
|
|
3,980,000
|
|
|
4,137,409
|
|
Berks County
Municipal Authority Revenue
|
|
|
|
|
|
|
(Reading
Hospital & Medical Center Project)
|
|
|
|
|
|
|
Series
A-3 5.50% 11/1/31
|
|
10,000,000
|
|
|
10,757,399
|
|
Butler County Hospital Authority
Revenue
|
|
|
|
|
|
|
(Butler
Health System Project) 7.25% 7/1/39
|
|
8,000,000
|
|
|
8,924,240
|
|
Central Bradford
Progress Authority
|
|
|
|
|
|
|
(Guthrie
Healthcare System) 5.375% 12/1/41
|
|
1,000,000
|
|
|
999,190
|
|
Cumberland County Municipal Authority
Revenue
|
|
|
|
|
|
|
(Diakon
Lutheran Ministries Project)
|
|
|
|
|
|
|
5.00%
1/1/36
|
|
2,500,000
|
|
|
2,367,850
|
|
6.375%
1/1/39
|
|
5,000,000
|
|
|
5,208,850
|
|
Dauphin County
General Authority Health System Revenue
|
|
|
|
|
|
|
(Pinnacle
Health System Project) Series A 6.00% 6/1/36
|
|
5,000,000
|
|
|
5,232,850
|
|
Franklin County Industrial Development
Authority Revenue
|
|
|
|
|
|
|
(Chambersburg
Hospital Project) 5.375% 7/1/42
|
|
4,980,000
|
|
|
4,858,438
|
|
Geisinger Authority
Health System
|
|
|
|
|
|
|
Series
A-1 5.125% 6/1/41
|
|
4,000,000
|
|
|
3,990,840
|
|
Lancaster County Hospital Authority
Revenue
|
|
|
|
|
|
|
(Brethren
Village Project) Series A 6.50% 7/1/40
|
|
3,000,000
|
|
|
3,001,680
|
|
(St.
Annes Retirement Community)
|
|
|
|
|
|
|
5.00%
4/1/27
|
|
1,425,000
|
|
|
1,327,644
|
|
5.00%
4/1/33
|
|
1,830,000
|
|
|
1,607,326
|
|
Lehigh County General
Purpose Authority Revenue
|
|
|
|
|
|
|
(Bible
Fellowship Church Homes Project)
|
|
|
|
|
|
|
5.125%
7/1/32
|
|
1,000,000
|
|
|
849,610
|
|
5.25%
7/1/42
|
|
1,500,000
|
|
|
1,211,655
|
|
(Lehigh
Valley Health Network) 4.00% 7/1/33
|
|
2,500,000
|
|
|
2,146,600
|
|
Monroe County Hospital
Authority
|
|
|
|
|
|
|
(Pocono
Medical Center) Series A
|
|
|
|
|
|
|
5.00%
1/1/32
|
|
1,150,000
|
|
|
1,111,728
|
|
5.00%
1/1/41
|
|
1,500,000
|
|
|
1,379,595
|
15
Schedule of
investments
Delaware Tax-Free
Pennsylvania Fund
|
|
Principal amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
Healthcare Revenue Bonds
(continued)
|
|
|
|
|
|
|
Monroeville Finance
Authority 5.00% 2/15/25
|
$
|
1,000,000
|
|
$
|
1,056,530
|
|
Montgomery County Higher Education
& Health
|
|
|
|
|
|
|
Authority
Revenue
|
|
|
|
|
|
|
(Abington
Memorial Hospital) Series A 5.125% 6/1/33
|
|
5,000,000
|
|
|
4,981,150
|
|
(Abington
Memorial Hospital Obligation Group)
|
|
|
|
|
|
|
5.00%
6/1/31
|
|
2,000,000
|
|
|
2,001,960
|
|
Montgomery County
Industrial Development Authority
|
|
|
|
|
|
|
Retirement
Community Revenue
|
|
|
|
|
|
|
(ACTS
Retirement Life Communities)
|
|
|
|
|
|
|
5.00%
11/15/27
|
|
1,250,000
|
|
|
1,198,200
|
|
5.00%
11/15/28
|
|
1,600,000
|
|
|
1,507,920
|
|
5.00%
11/15/29
|
|
680,000
|
|
|
635,820
|
|
Series
A-1 6.25% 11/15/29
|
|
700,000
|
|
|
729,281
|
|
Series
B 5.00% 11/15/22
|
|
3,000,000
|
|
|
3,057,960
|
|
(Foulkeways
at Gwynedd Project) Series A
|
|
|
|
|
|
|
5.00%
12/1/24
|
|
1,000,000
|
|
|
1,011,190
|
|
5.00%
12/1/30
|
|
1,500,000
|
|
|
1,459,320
|
|
Montgomery County Industrial
Development
|
|
|
|
|
|
|
Authority
Revenue
|
|
|
|
|
|
|
(New
Regional Medical Center Project)
|
|
|
|
|
|
|
5.375%
8/1/38 (FHA)
|
|
1,000,000
|
|
|
1,037,050
|
|
(Whitemarsh
Continuing Care)
|
|
|
|
|
|
|
6.125%
2/1/28
|
|
3,000,000
|
|
|
2,931,150
|
|
6.25%
2/1/35
|
|
1,000,000
|
|
|
957,890
|
|
Northampton County
Industrial Development Authority
|
|
|
|
|
|
|
(Morningstar
Senior Living)
|
|
|
|
|
|
|
5.00%
7/1/27
|
|
1,400,000
|
|
|
1,334,004
|
|
5.00%
7/1/32
|
|
1,275,000
|
|
|
1,161,665
|
|
Pennsylvania Economic Development
Financing
|
|
|
|
|
|
|
Authority
Health System Revenue
|
|
|
|
|
|
|
(Albert
Einstein Healthcare) Series A 6.25% 10/15/23
|
|
5,000,000
|
|
|
5,339,850
|
|
Pennsylvania Economic
Development Financing Authority
|
|
|
|
|
|
|
Revenue
(Dr. Gertrude A. Barber Center Project)
|
|
|
|
|
|
|
5.90%
12/1/30 (RADIAN)
|
|
2,250,000
|
|
|
2,249,888
|
|
Pennsylvania Higher Educational
Facilities
|
|
|
|
|
|
|
Authority
Revenue
|
|
|
|
|
|
|
(University
of Pennsylvania Health Care System)
|
|
|
|
|
|
|
5.00%
8/15/24
|
|
4,850,000
|
|
|
5,166,657
|
|
5.25%
8/15/26
|
|
3,910,000
|
|
|
4,151,951
|
|
5.75%
8/15/23
|
|
2,500,000
|
|
|
2,831,925
|
16
|
|
Principal amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
Healthcare Revenue Bonds
(continued)
|
|
|
|
|
|
|
Philadelphia
Hospitals & Higher Education Facilities
|
|
|
|
|
|
|
Authority
Revenue (Temple University Health System)
|
|
|
|
|
|
|
Series
A 5.50% 7/1/30
|
$
|
5,000,000
|
|
$
|
4,426,900
|
|
South Fork Municipal Hospital Authority
Revenue
|
|
|
|
|
|
|
(Conemaugh
Health Systems Project)
|
|
|
|
|
|
|
5.50%
7/1/29
|
|
3,500,000
|
|
|
3,514,560
|
|
St. Mary Hospital
Authority Health System Revenue
|
|
|
|
|
|
|
(Catholic
Health East) 6.25% 11/15/34
|
|
4,875,000
|
|
|
5,138,104
|
|
Westmoreland County Industrial
Development Authority
|
|
|
|
|
|
|
Revenue
(Health System-Excela Health Project)
|
|
|
|
|
|
|
Series
A 5.125% 7/1/30
|
|
1,200,000
|
|
|
1,206,792
|
|
|
|
|
|
|
118,200,621
|
Housing Revenue Bonds 2.84%
|
|
|
|
|
|
|
Bucks County
Industrial Development Authority
|
|
|
|
|
|
|
Multi-Family
Housing Revenue Guaranteed
|
|
|
|
|
|
|
(New
Hope Manor Project) Series A
|
|
|
|
|
|
|
5.40%
3/1/22 (AMT)
|
|
1,165,000
|
|
|
1,166,130
|
|
5.50%
3/1/41 (AMT)
|
|
5,340,000
|
|
|
5,340,480
|
|
Pennsylvania Housing Finance
Agency
|
|
|
|
|
|
|
Single
Family Mortgage Revenue
|
|
|
|
|
|
|
Series
106B 4.80% 4/1/28
|
|
5,200,000
|
|
|
5,235,256
|
|
Philadelphia
Authority for Industrial Development Revenue
|
|
|
|
|
|
|
(Germantown
Senior Living Presbyterian Homes Project)
|
|
|
|
|
|
|
Series
A 5.625% 7/1/35 (HUB)
|
|
2,295,000
|
|
|
2,057,353
|
|
|
|
|
|
|
13,799,219
|
Lease Revenue Bonds 5.61%
|
|
|
|
|
|
|
Allegheny County Industrial Development
Authority Lease
|
|
|
|
|
|
|
Revenue
(Residential Resource Project)
|
|
|
|
|
|
|
5.10%
9/1/26
|
|
1,335,000
|
|
|
1,236,117
|
|
5.125%
9/1/31
|
|
1,065,000
|
|
|
936,082
|
|
Pennsylvania
Commonwealth Financing Authority Revenue
|
|
|
|
|
|
|
Series
B 5.00% 6/1/31 (ASSURED GTY)
|
|
10,000,000
|
|
|
10,088,799
|
|
Pennsylvania Economic Development
Financing Authority
|
|
|
|
|
|
|
(Unemployment
Compensation Revenue)
|
|
|
|
|
|
|
Series
B 5.00% 1/1/20
|
|
5,000,000
|
|
|
5,762,700
|
17
Schedule of
investments
Delaware Tax-Free
Pennsylvania Fund
|
|
Principal amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
Lease Revenue Bonds
(continued)
|
|
|
|
|
|
|
Pennsylvania
Industrial Development Authority
|
|
|
|
|
|
|
(Economic
Development) 5.50% 7/1/23
|
$
|
4,385,000
|
|
$
|
4,999,602
|
|
Philadelphia Municipal Authority Lease
Revenue
|
|
|
|
|
|
|
6.50%
4/1/39
|
|
4,000,000
|
|
|
4,257,040
|
|
|
|
|
|
|
27,280,340
|
Local General Obligation Bonds 6.79%
|
|
|
|
|
|
|
Allegheny
County
|
|
|
|
|
|
|
Series
C-65 5.00% 5/1/18
|
|
3,765,000
|
|
|
4,229,225
|
|
Series
C-69 5.00% 12/1/28
|
|
1,000,000
|
|
|
1,021,480
|
|
Series
C-70 5.00% 12/1/33
|
|
2,205,000
|
|
|
2,185,420
|
|
Bethel Park School District 5.10%
8/1/33
|
|
3,000,000
|
|
|
3,191,010
|
|
Central Bucks School
District Series B 5.00% 5/15/20
|
|
2,295,000
|
|
|
2,667,203
|
|
Central County Series B 4.00%
7/1/26
|
|
915,000
|
|
|
915,238
|
|
Chester
County
|
|
|
|
|
|
|
5.00%
11/15/32
|
|
5,725,000
|
|
|
6,084,815
|
|
5.00%
11/15/33
|
|
2,625,000
|
|
|
2,780,584
|
|
Series
C 5.00% 7/15/29
|
|
3,000,000
|
|
|
3,233,850
|
|
City of Pittsburgh Series B 5.00%
9/1/26 (AGM)
|
|
3,000,000
|
|
|
3,138,660
|
|
Commonwealth of
Pennsylvania 5.00% 4/1/26
|
|
1,500,000
|
|
|
1,655,820
|
|
Fox Chapel Area School District 5.00%
8/1/25
|
|
1,000,000
|
|
|
1,112,110
|
|
Mount Lebanon School
District Series A 5.00% 2/15/34
|
|
800,000
|
|
|
821,840
|
|
|
|
|
|
|
33,037,255
|
§Pre-Refunded/Escrowed to Maturity Bonds
6.00%
|
|
|
|
|
|
|
Delaware County Authority Health
Facilities Revenue
|
|
|
|
|
|
|
(Mercy
Health Project) 6.00% 12/15/26
|
|
3,500,000
|
|
|
3,809,715
|
|
Pennsylvania Higher
Educational Facilities Authority
|
|
|
|
|
|
|
Revenue
(University of the Arts Project)
|
|
|
|
|
|
|
5.20%
3/15/25 (RADIAN)
|
|
4,490,000
|
|
|
5,067,010
|
|
Pennsylvania Industrial Development
Authority Revenue
|
|
|
|
|
|
|
(Economic
Development) 5.50% 7/1/23-18
|
|
615,000
|
|
|
729,027
|
|
Philadelphia
Hospitals & Higher Education Facilities Authority
|
|
|
|
|
|
|
Revenue
(Presbyterian Medical Center Project)
|
|
|
|
|
|
|
6.65%
12/1/19
|
|
11,730,000
|
|
|
13,819,817
|
|
Pittsburgh Water & Sewer Authority
Revenue
|
|
|
|
|
|
|
7.25%
9/1/14 (FGIC)
|
|
1,205,000
|
|
|
1,244,066
|
|
Puerto Rico Highway
& Transportation Authority Revenue
|
|
|
|
|
|
|
Pre-Refunded
Series AA 5.50% 7/1/18 (NATL-RE)
|
|
3,835,000
|
|
|
4,555,903
|
|
|
|
|
|
|
29,225,538
|
18
|
|
Principal amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
Resource Recovery Revenue Bond 0.63%
|
|
|
|
|
|
|
Pennsylvania Economic
Development Financing
|
|
|
|
|
|
|
Authority
(Colver Project)
|
|
|
|
|
|
|
Series
F 4.625% 12/1/18 (AMBAC) (AMT)
|
$
|
3,135,000
|
|
$
|
3,075,372
|
|
|
|
|
|
|
3,075,372
|
Special Tax Revenue Bonds 4.88%
|
|
|
|
|
|
|
Allentown Neighborhood Improvement
Zone
|
|
|
|
|
|
|
Development
Authority Series A 5.00% 5/1/42
|
|
3,500,000
|
|
|
3,167,115
|
|
Guam Government
Limited Obligation Revenue
|
|
|
|
|
|
|
(Section
30) Series A
|
|
|
|
|
|
|
5.625%
12/1/29
|
|
90,000
|
|
|
92,204
|
|
5.75%
12/1/34
|
|
3,050,000
|
|
|
3,118,717
|
|
Pennsylvania Intergovernmental
Cooperation Authority
|
|
|
|
|
|
|
(Philadelphia
Funding Program) 5.00% 6/15/21
|
|
2,000,000
|
|
|
2,260,880
|
|
Pittsburgh &
Allegheny County Sports & Exhibition
|
|
|
|
|
|
|
Authority
5.00% 2/1/35 (AGM)
|
|
3,000,000
|
|
|
2,926,680
|
|
Puerto Rico Sales Tax Financing Revenue
First Subordinate
|
|
|
|
|
|
|
Series
A 5.50% 8/1/42
|
|
5,080,000
|
|
|
4,139,946
|
|
Series
A 6.50% 8/1/44
|
|
2,000,000
|
|
|
1,893,280
|
|
Series
C 5.25% 8/1/40
|
|
2,915,000
|
|
|
2,527,247
|
|
Ω
(Convertible Capital
Appreciation Bond)
|
|
|
|
|
|
|
Series
A 6.75% 8/1/32
|
|
3,275,000
|
|
|
2,711,012
|
|
Washington County
Redevelopment Authority Revenue
|
|
|
|
|
|
|
(Victory
Centre Project-Tanger)
|
|
|
|
|
|
|
Series
A 5.45% 7/1/35
|
|
1,000,000
|
|
|
931,160
|
|
|
|
|
|
|
23,768,241
|
State General Obligation Bonds 5.69%
|
|
|
|
|
|
|
Pennsylvania
|
|
|
|
|
|
|
First
Series
|
|
|
|
|
|
|
5.00%
3/15/28
|
|
5,000,000
|
|
|
5,462,650
|
|
5.00%
11/15/29
|
|
6,000,000
|
|
|
6,338,520
|
|
Second
Series
|
|
|
|
|
|
|
5.00%
4/15/18
|
|
4,335,000
|
|
|
4,994,527
|
|
5.00%
1/1/22
|
|
10,000,000
|
|
|
10,913,900
|
|
|
|
|
|
|
27,709,597
|
19
Schedule of
investments
Delaware Tax-Free
Pennsylvania Fund
|
|
Principal amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
Transportation Revenue Bonds 7.26%
|
|
|
|
|
|
|
Allegheny County
Airport Revenue
|
|
|
|
|
|
|
(Pittsburgh
International Airport Project)
|
|
|
|
|
|
|
Series
A 5.75% 1/1/14 (NATL-RE) (AMT)
|
$
|
5,910,000
|
|
$
|
6,011,887
|
|
Lehigh Northampton Airport Authority
Revenue Series A
|
|
|
|
|
|
|
6.00%
5/15/25 (NATL-RE) (AMT)
|
|
1,525,000
|
|
|
1,525,824
|
|
6.00%
5/15/30 (NATL-RE) (AMT)
|
|
2,700,000
|
|
|
2,595,186
|
|
Pennsylvania Economic
Development Financing
|
|
|
|
|
|
|
Authority
Exempt Facilities Revenue
|
|
|
|
|
|
|
(Amtrak
Project) Series A
|
|
|
|
|
|
|
5.00%
11/1/32 (AMT)
|
|
3,500,000
|
|
|
3,407,180
|
|
5.00%
11/1/41 (AMT)
|
|
5,000,000
|
|
|
4,670,750
|
|
Pennsylvania Turnpike Commission
Revenue
|
|
|
|
|
|
|
Series
A 5.00% 12/1/22
|
|
2,550,000
|
|
|
2,878,619
|
|
Series
A 5.00% 12/1/23
|
|
2,450,000
|
|
|
2,746,205
|
|
Series
E 5.00% 12/1/29
|
|
5,000,000
|
|
|
5,132,250
|
|
Series
E 5.00% 12/1/30
|
|
2,000,000
|
|
|
2,036,400
|
|
Philadelphia Airport
Revenue Series A
|
|
|
|
|
|
|
5.375%
6/15/29 (ASSURED GTY)
|
|
4,030,000
|
|
|
4,339,706
|
|
|
|
|
|
|
35,344,007
|
Water & Sewer Revenue Bonds 1.83%
|
|
|
|
|
|
|
Cambridge Area Joint Authority
Guaranteed Sewer Revenue
|
|
|
|
|
|
|
5.625%
12/1/28
|
|
1,150,000
|
|
|
1,186,846
|
|
6.00%
12/1/37
|
|
1,000,000
|
|
|
1,031,510
|
|
Delaware County
Regional Water Quality Control Authority
|
|
|
|
|
|
|
5.00%
5/1/32
|
|
2,000,000
|
|
|
2,030,520
|
|
Philadelphia Water & Waste
Revenue
|
|
|
|
|
|
|
5.00%
11/1/28
|
|
4,500,000
|
|
|
4,653,585
|
|
|
|
|
|
|
8,902,461
|
Total Municipal Bonds
(cost
$476,635,988)
|
|
|
|
|
476,265,658
|
|
|
Short-Term Investment 0.18%
|
|
|
|
|
|
¤
Variable Rate Demand Note
0.18%
|
|
|
|
|
|
|
Lancaster County
Hospital Authority Revenue
|
|
|
|
|
|
|
(Masonic
Homes Project) Series D 0.04% 7/1/34
|
|
|
|
|
|
|
(LOC
- JP Morgan Chase Bank N. A.)
|
|
875,000
|
|
|
875,000
|
Total Short-Term Investment
(cost $875,000)
|
|
|
|
|
875,000
|
20
Total Value of Securities
98.04%
|
|
(cost
$477,510,988)
|
$477,140,658
|
Receivables and Other Assets
|
|
Net
of Liabilities 1.96%
|
9,537,952
|
Net Assets 100.00%
|
$486,678,610
|
|
Variable rate security. The rate
shown is the rate as of Aug. 31, 2013. Interest rates reset
periodically.
|
§
|
Pre-refunded bonds. Municipal
bonds that are generally backed or secured by U.S. Treasury bonds. For
pre-refunded bonds, the stated maturity is followed by the year in which
the bond is pre-refunded. See Note 8 in Notes to financial
statements.
|
Ω
|
Step coupon bond. Indicates security
that has a zero coupon that remains in effect until a predetermined date
at which time the stated interest rate becomes effective.
|
#
|
Security exempt from registration
under Rule 144A of the Securities Act of 1933, as amended. At Aug. 31,
2013, the aggregate value of Rule 144A securities was $2,478,065, which
represented 0.51% of the Funds net assets. See Note 8 in Notes to
financial statements.
|
¤
|
Tax-exempt obligations that contain
a floating or variable interest rate adjustment formula and an
unconditional right of demand to receive payment of the unpaid principal
balance plus accrued interest upon a short notice period (generally up to
30 days) prior to specified dates either from the issuer or by drawing on
a bank letter of credit, a guarantee or insurance issued with respect to
such instrument. The rate shown is the rate as of Aug. 31,
2013.
|
Summary of
abbreviations:
ACA Insured by American
Capital Access
AGM Insured by Assured
Guaranty Municipal Corporation
AMBAC Insured by AMBAC Assurance
Corporation
AMT Subject to Alternative Minimum Tax
ASSURED GTY Insured
by Assured Guaranty Corporation
FGIC Insured by Financial Guaranty
Insurance Company
FHA Federal Housing Administration
HUB Housing and
Urban Development Section 8
LOC Letter of Credit
NATL-RE Insured by National Public Finance Guarantee
Corporation
RADIAN Insured by Radian Asset Assurance
SGI Insured by
Syncora Guarantee Inc.
See accompanying notes, which are an
integral part of the financial statements.
21
Statement of assets and
liabilities
|
|
Delaware Tax-Free Pennsylvania
Fund
|
August 31,
2013
|
Assets:
|
|
|
|
Investments, at value
|
$
|
476,265,658
|
|
Short-term
investments, at value
|
|
875,000
|
|
Cash
|
|
1,417,276
|
|
Interest
receivable
|
|
6,611,603
|
|
Receivable for securities sold
|
|
2,132,958
|
|
Receivable for
fund shares sold
|
|
1,294,657
|
|
Total assets
|
|
488,597,152
|
|
|
Liabilities:
|
|
|
|
Income distributions payable
|
|
467,088
|
|
Payable for
fund shares redeemed
|
|
1,031,656
|
|
Investment management fees payable
|
|
190,373
|
|
Distribution
fees payable
|
|
122,783
|
|
Trustees fees payable
|
|
2,978
|
|
Other
affiliates payable
|
|
19,718
|
|
Other accrued expenses
|
|
83,946
|
|
Total
liabilities
|
|
1,918,542
|
|
|
Total Net Assets
|
$
|
486,678,610
|
|
|
Net Assets Consist of:
|
|
|
|
Paid-in capital
|
|
488,563,647
|
|
Distributions
in excess of net investment income
|
|
(108,966
|
)
|
Accumulated net realized loss on investments
|
|
(1,405,741
|
)
|
Net unrealized
depreciation of investments
|
|
(370,330
|
)
|
Total Net
Assets
|
$
|
486,678,610
|
|
|
Investments, at
cost
|
$
|
476,635,988
|
|
Short-term investments, at cost
|
|
875,000
|
|
22
Net Asset Value
|
|
|
|
Class A
|
|
|
Net assets
|
$
|
453,450,864
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
59,740,750
|
Net asset value per share
|
$
|
7.59
|
Offering price per
share, equal to net asset value per share/(1 - 4.50%)
|
$
|
7.95
|
|
Class B
|
|
|
Net assets
|
$
|
610,380
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
80,442
|
Net asset value and offering price per
share
|
$
|
7.59
|
|
Class C
|
|
|
Net assets
|
$
|
32,617,366
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
4,295,276
|
Net asset value and offering price per
share
|
$
|
7.59
|
See accompanying notes, which are an
integral part of the financial statements.
23
Statements of operations
Delaware Tax-Free Pennsylvania Fund
|
3/1/13
|
|
Year
|
|
to
|
|
Ended
|
|
8/31/13
*
|
|
2/28/13
|
Investment Income:
|
|
|
|
|
|
|
|
Interest
|
$
|
12,258,989
|
|
|
$
|
25,735,272
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Management fees
|
|
1,482,827
|
|
|
|
3,015,478
|
|
Distribution
expenses Class A
|
|
722,857
|
|
|
|
1,480,626
|
|
Distribution expenses Class B
|
|
3,793
|
|
|
|
11,820
|
|
Distribution
expenses Class C
|
|
189,156
|
|
|
|
336,395
|
|
Dividend disbursing and transfer agent fees and expenses
|
|
193,548
|
|
|
|
334,028
|
|
Accounting and
administration expenses
|
|
105,157
|
|
|
|
215,069
|
|
Legal fees
|
|
34,609
|
|
|
|
59,162
|
|
Audit and
tax
|
|
25,451
|
|
|
|
34,490
|
|
Reports and statements to shareholders
|
|
20,259
|
|
|
|
42,664
|
|
Trustees
fees
|
|
12,928
|
|
|
|
24,565
|
|
Registration fees
|
|
12,461
|
|
|
|
20,473
|
|
Pricing
fees
|
|
10,560
|
|
|
|
16,104
|
|
Insurance
|
|
4,966
|
|
|
|
10,208
|
|
Custodian
fees
|
|
4,766
|
|
|
|
10,491
|
|
Dues and services
|
|
2,292
|
|
|
|
4,206
|
|
Trustees
expenses
|
|
2,222
|
|
|
|
1,672
|
|
Consulting fees
|
|
2,180
|
|
|
|
5,714
|
|
|
|
2,830,032
|
|
|
|
5,623,165
|
|
Less expenses absorbed or waived
|
|
(173,837
|
)
|
|
|
(252,056
|
)
|
Less waived
distribution expenses Class A
|
|
(117,666
|
)
|
|
|
(240,717
|
)
|
Less waived distribution expenses Class B
|
|
(829
|
)
|
|
|
|
|
Less expense
paid indirectly
|
|
(131
|
)
|
|
|
(292
|
)
|
Total operating expenses
|
|
2,537,569
|
|
|
|
5,130,100
|
|
Net Investment Income
|
|
9,721,420
|
|
|
|
20,605,172
|
|
24
|
3/1/13
|
|
Year
|
|
to
|
|
Ended
|
|
8/31/13
*
|
|
2/28/13
|
Net Realized and Unrealized Gain
(Loss):
|
|
|
|
|
|
|
Net realized gain (loss) on investments
|
$
|
(1,405,741
|
)
|
|
$
|
1,982,504
|
Net change in unrealized
appreciation (depreciation)
|
|
|
|
|
|
|
of investments
|
|
(51,793,222
|
)
|
|
|
7,615,771
|
Net Realized and
Unrealized Gain (Loss)
|
|
(53,198,963
|
)
|
|
|
9,598,275
|
|
Net Increase (Decrease) in Net Assets
Resulting
|
|
|
|
|
|
|
from
Operations
|
$
|
(43,477,543
|
)
|
|
$
|
30,203,447
|
*During the period ended Aug. 31, 2013,
the Fund changed its fiscal year end from February to August.
See accompanying notes, which are an
integral part of the financial statements.
25
Statements of changes in net
assets
Delaware Tax-Free Pennsylvania
Fund
|
3/1/13
|
|
Year
|
|
Year
|
|
to
|
|
Ended
|
|
Ended
|
|
8/31/13
*
|
|
2/28/13
|
|
2/29/12
|
Increase (Decrease) in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
from
Operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
$
|
9,721,420
|
|
|
$
|
20,605,172
|
|
|
$
|
21,132,820
|
|
Net
realized gain (loss)
|
|
(1,405,741
|
)
|
|
|
1,982,504
|
|
|
|
2,395,291
|
|
Net
change in unrealized
|
|
|
|
|
|
|
|
|
|
|
|
appreciation (depreciation)
|
|
(51,793,222
|
)
|
|
|
7,615,771
|
|
|
|
43,159,238
|
|
Net
increase (decrease) in net assets
|
|
|
|
|
|
|
|
|
|
|
|
resulting from operations
|
|
(43,477,543
|
)
|
|
|
30,203,447
|
|
|
|
66,687,349
|
|
|
Dividends and Distributions to
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income:
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
(9,167,329
|
)
|
|
|
(19,560,725
|
)
|
|
|
(20,259,534
|
)
|
Class B
|
|
(11,693
|
)
|
|
|
(35,850
|
)
|
|
|
(61,774
|
)
|
Class C
|
|
(542,398
|
)
|
|
|
(1,008,595
|
)
|
|
|
(811,512
|
)
|
|
Net
realized gain:
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
(676,463
|
)
|
|
|
|
|
|
|
|
|
Class B
|
|
(948
|
)
|
|
|
|
|
|
|
|
|
Class C
|
|
(51,845
|
)
|
|
|
|
|
|
|
|
|
|
|
(10,450,676
|
)
|
|
|
(20,605,170
|
)
|
|
|
(21,132,820
|
)
|
|
Capital Share Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares sold:
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
27,244,810
|
|
|
|
39,201,217
|
|
|
|
25,344,134
|
|
Class B
|
|
|
|
|
|
359
|
|
|
|
|
|
Class C
|
|
2,855,331
|
|
|
|
14,642,131
|
|
|
|
5,710,071
|
|
|
Net
asset value of shares issued
|
|
|
|
|
|
|
|
|
|
|
|
upon reinvestment of dividends
|
|
|
|
|
|
|
|
|
|
|
|
and distributions:
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
7,801,846
|
|
|
|
14,803,777
|
|
|
|
13,150,649
|
|
Class B
|
|
11,715
|
|
|
|
35,168
|
|
|
|
50,424
|
|
Class C
|
|
507,363
|
|
|
|
813,891
|
|
|
|
644,387
|
|
|
|
38,421,065
|
|
|
|
69,496,543
|
|
|
|
44,899,665
|
|
26
|
3/1/13
|
|
Year
|
|
Year
|
|
to
|
|
Ended
|
|
Ended
|
|
8/31/13
*
|
|
2/28/13
|
|
2/29/12
|
Capital Share Transactions
(continued):
|
|
|
|
|
|
|
|
|
|
|
|
Cost of shares redeemed:
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
$
|
(56,044,231
|
)
|
|
$
|
(47,001,370
|
)
|
|
$
|
(43,595,978
|
)
|
Class B
|
|
(209,610
|
)
|
|
|
(660,421
|
)
|
|
|
(1,266,257
|
)
|
Class C
|
|
(6,552,959
|
)
|
|
|
(3,745,426
|
)
|
|
|
(2,775,838
|
)
|
|
|
(62,806,800
|
)
|
|
|
(51,407,217
|
)
|
|
|
(47,638,073
|
)
|
Increase (decrease)
in net assets derived
|
|
|
|
|
|
|
|
|
|
|
|
from capital share
transactions
|
|
(24,385,735
|
)
|
|
|
18,089,326
|
|
|
|
(2,738,408
|
)
|
Net Increase
(Decrease) in Net Assets
|
|
(78,313,954
|
)
|
|
|
27,687,603
|
|
|
|
42,816,121
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
564,992,564
|
|
|
|
537,304,961
|
|
|
|
494,488,840
|
|
End of period (including
distributions
|
|
|
|
|
|
|
|
|
|
|
|
in excess of net investment
|
|
|
|
|
|
|
|
|
|
|
|
income of $108,966, $65,569 and
|
|
|
|
|
|
|
|
|
|
|
|
$65,571, respectively)
|
$
|
486,678,610
|
|
|
$
|
564,992,564
|
|
|
$
|
537,304,961
|
|
*During the period ended Aug. 31, 2013,
the Fund changed its fiscal year end from February to August.
See accompanying notes, which are an
integral part of the financial statements.
27
Financial highlights
Delaware Tax-Free Pennsylvania Fund Class A
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning of
period
|
|
Income (loss) from investment
operations:
|
Net investment
income
|
Net realized and
unrealized gain (loss)
|
Total from investment
operations
|
|
Less dividends and distributions
from:
|
Net investment
income
|
Net realized
gain
|
Total dividends and
distributions
|
|
Net asset value, end of period
|
|
Total return
2
|
|
Ratios and supplemental data:
|
Net assets, end of period (000
omitted)
|
Ratio of expenses to
average net assets
|
Ratio of expenses to average net
assets prior to fees waived
|
Ratio of net
investment income to average net assets
|
Ratio of net investment income
to average net assets
|
prior to fees
waived
|
Portfolio turnover
|
1
During the period ended Aug.
31, 2013, the Fund changed its fiscal year end from February to August. Ratios
have been annualized and portfolio turnover and total return have 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 dividends and distributions at net asset value and does not
reflect the impact of a sales charge. Total investment return during all of the
periods shown reflects waivers by the manager and distributor. Performance would
have been lower had the waivers not been in effect.
See accompanying notes, which are an
integral part of the financial statements.
28
|
3/1/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to
|
|
|
Year Ended
|
|
|
8/31/13
1
|
|
|
2/28/13
|
|
2/29/12
|
|
2/28/11
|
|
2/28/10
|
|
2/28/09
|
|
|
|
$8.410
|
|
|
|
$8.260
|
|
|
$7.550
|
|
|
$7.920
|
|
|
$7.410
|
|
|
$7.610
|
|
|
|
|
|
|
|
|
0.148
|
|
|
|
0.315
|
|
|
0.329
|
|
|
0.349
|
|
|
0.346
|
|
|
0.329
|
|
|
|
|
(0.809
|
)
|
|
|
0.150
|
|
|
0.710
|
|
|
(0.304
|
)
|
|
0.609
|
|
|
(0.200
|
)
|
|
|
|
(0.661
|
)
|
|
|
0.465
|
|
|
1.039
|
|
|
0.045
|
|
|
0.955
|
|
|
0.129
|
|
|
|
|
|
|
|
|
(0.148
|
)
|
|
|
(0.315
|
)
|
|
(0.329
|
)
|
|
(0.349
|
)
|
|
(0.346
|
)
|
|
(0.329
|
)
|
|
|
|
(0.011
|
)
|
|
|
|
|
|
|
|
|
(0.066
|
)
|
|
(0.099
|
)
|
|
|
|
|
|
|
(0.159
|
)
|
|
|
(0.315
|
)
|
|
(0.329
|
)
|
|
(0.415
|
)
|
|
(0.445
|
)
|
|
(0.329
|
)
|
|
|
|
|
|
$7.590
|
|
|
|
$8.410
|
|
|
$8.260
|
|
|
$7.550
|
|
|
$7.920
|
|
|
$7.410
|
|
|
|
|
|
|
(7.94%
|
)
|
|
|
5.73%
|
|
|
14.06%
|
|
|
0.48%
|
|
|
13.15%
|
|
|
1.70%
|
|
|
|
|
|
|
|
|
$453,451
|
|
|
|
$524,539
|
|
|
$508,505
|
|
|
$470,369
|
|
|
$503,534
|
|
|
$468,737
|
|
|
|
|
0.88%
|
|
|
|
0.88%
|
|
|
0.88%
|
|
|
0.90%
|
|
|
0.93%
|
|
|
0.90%
|
|
|
|
|
1.00%
|
|
|
|
0.98%
|
|
|
0.98%
|
|
|
0.98%
|
|
|
0.98%
|
|
|
0.96%
|
|
|
|
|
3.64%
|
|
|
|
3.77%
|
|
|
4.19%
|
|
|
4.42%
|
|
|
4.46%
|
|
|
4.34%
|
|
|
|
|
|
|
3.52%
|
|
|
|
3.67%
|
|
|
4.09%
|
|
|
4.34%
|
|
|
4.41%
|
|
|
4.28%
|
|
|
|
|
5%
|
|
|
|
20%
|
|
|
21%
|
|
|
31%
|
|
|
43%
|
|
|
24%
|
|
|
29
Financial
highlights
Delaware Tax-Free
Pennsylvania Fund Class B
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning of
period
|
|
Income (loss) from investment
operations:
|
Net investment
income
|
Net realized and
unrealized gain (loss)
|
Total from investment
operations
|
|
Less dividends and distributions
from:
|
Net investment
income
|
Net realized
gain
|
Total dividends and
distributions
|
|
Net asset value, end of period
|
|
Total return
2
|
|
Ratios and supplemental data:
|
Net assets, end of period (000
omitted)
|
Ratio of expenses to
average net assets
|
Ratio of expenses to average net
assets prior to fees waived
|
Ratio of net
investment income to average net assets
|
Ratio of net investment income
to average net assets
|
prior to fees
waived
|
Portfolio turnover
|
1
During the period ended Aug. 31, 2013, the Fund changed its
fiscal year end from February to August. Ratios have been annualized and
portfolio turnover and total return have 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 dividends and
distributions at net asset value and does not reflect the impact of a sales
charge. Total investment return during all of the periods shown reflects a
waiver by the manager. Performance would have been lower had the waiver not been
in effect.
See accompanying notes, which are an
integral part of the financial statements.
30
|
3/1/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to
|
|
|
Year Ended
|
|
|
8/31/13
1
|
|
|
2/28/13
|
|
2/29/12
|
|
2/28/11
|
|
2/28/10
|
|
2/28/09
|
|
|
|
$8.400
|
|
|
|
$8.260
|
|
|
$7.550
|
|
|
$7.910
|
|
|
$7.410
|
|
|
$7.610
|
|
|
|
|
|
|
|
|
|
|
0.126
|
|
|
|
0.252
|
|
|
0.269
|
|
|
0.289
|
|
|
0.287
|
|
|
0.271
|
|
|
|
|
(0.799
|
)
|
|
|
0.140
|
|
|
0.710
|
|
|
(0.294
|
)
|
|
0.598
|
|
|
(0.200
|
)
|
|
|
|
(0.673
|
)
|
|
|
0.392
|
|
|
0.979
|
|
|
(0.005
|
)
|
|
0.885
|
|
|
0.071
|
|
|
|
|
|
|
|
|
|
|
(0.126
|
)
|
|
|
(0.252
|
)
|
|
(0.269
|
)
|
|
(0.289
|
)
|
|
(0.286
|
)
|
|
(0.271
|
)
|
|
|
|
(0.011
|
)
|
|
|
|
|
|
|
|
|
(0.066
|
)
|
|
(0.099
|
)
|
|
|
|
|
|
|
(0.137
|
)
|
|
|
(0.252
|
)
|
|
(0.269
|
)
|
|
(0.355
|
)
|
|
(0.385
|
)
|
|
(0.271
|
)
|
|
|
|
|
|
|
$7.590
|
|
|
|
$8.400
|
|
|
$8.260
|
|
|
$7.550
|
|
|
$7.910
|
|
|
$7.410
|
|
|
|
|
|
|
|
(8.07%
|
)
|
|
|
4.81%
|
|
|
13.20%
|
|
|
(0.16%
|
)
|
|
12.15%
|
|
|
0.92%
|
|
|
|
|
|
|
|
|
|
|
$611
|
|
|
|
$882
|
|
|
$1,489
|
|
|
$2,549
|
|
|
$4,259
|
|
|
$5,543
|
|
|
|
|
1.42%
|
|
|
|
1.64%
|
|
|
1.64%
|
|
|
1.66%
|
|
|
1.69%
|
|
|
1.67%
|
|
|
|
|
1.71%
|
|
|
|
1.69%
|
|
|
1.69%
|
|
|
1.69%
|
|
|
1.70%
|
|
|
1.69%
|
|
|
|
|
3.09%
|
|
|
|
3.01%
|
|
|
3.43%
|
|
|
3.66%
|
|
|
3.70%
|
|
|
3.57%
|
|
|
|
|
|
|
|
2.80%
|
|
|
|
2.96%
|
|
|
3.38%
|
|
|
3.63%
|
|
|
3.69%
|
|
|
3.55%
|
|
|
|
|
5%
|
|
|
|
20%
|
|
|
21%
|
|
|
31%
|
|
|
43%
|
|
|
24%
|
|
|
31
Financial
highlights
Delaware Tax-Free
Pennsylvania Fund Class C
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning of
period
|
|
Income (loss) from investment
operations:
|
Net investment
income
|
Net realized and
unrealized gain (loss)
|
Total from investment
operations
|
|
Less dividends and distributions
from:
|
Net investment
income
|
Net realized
gain
|
Total dividends and
distributions
|
|
Net asset value, end of period
|
|
Total return
2
|
|
Ratios and supplemental data:
|
Net assets, end of period (000
omitted)
|
Ratio of expenses to
average net assets
|
Ratio of expenses to average net
assets prior to fees waived
|
Ratio of net
investment income to average net assets
|
Ratio of net investment income
to average net assets
|
prior to fees
waived
|
Portfolio turnover
|
1
During the period ended Aug. 31, 2013, the Fund changed its
fiscal year end from February to August. Ratios have been annualized and
portfolio turnover and total return have 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 dividends and
distributions at net asset value and does not reflect the impact of a sales
charge. Total investment return during all of the periods shown reflects a
waiver by the manager. Performance would have been lower had the waiver not been
in effect.
See accompanying notes, which are an
integral part of the financial statements.
32
|
3/1/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to
|
|
|
Year Ended
|
|
|
8/31/13
1
|
|
|
2/28/13
|
|
2/29/12
|
|
2/28/11
|
|
2/28/10
|
|
2/28/09
|
|
|
$8.410
|
|
|
|
$8.260
|
|
|
$7.560
|
|
|
$7.920
|
|
|
$7.420
|
|
|
$7.610
|
|
|
|
|
|
|
|
|
|
|
|
0.117
|
|
|
|
0.252
|
|
|
0.269
|
|
|
0.289
|
|
|
0.287
|
|
|
0.271
|
|
|
|
(0.809
|
)
|
|
|
0.150
|
|
|
0.700
|
|
|
(0.294
|
)
|
|
0.598
|
|
|
(0.190
|
)
|
|
|
(0.692
|
)
|
|
|
0.402
|
|
|
0.969
|
|
|
(0.005
|
)
|
|
0.885
|
|
|
0.081
|
|
|
|
|
|
|
|
|
|
|
|
(0.117
|
)
|
|
|
(0.252
|
)
|
|
(0.269
|
)
|
|
(0.289
|
)
|
|
(0.286
|
)
|
|
(0.271
|
)
|
|
|
(0.011
|
)
|
|
|
|
|
|
|
|
|
(0.066
|
)
|
|
(0.099
|
)
|
|
|
|
|
|
(0.128
|
)
|
|
|
(0.252
|
)
|
|
(0.269
|
)
|
|
(0.355
|
)
|
|
(0.385
|
)
|
|
(0.271
|
)
|
|
|
|
|
|
|
$7.590
|
|
|
|
$8.410
|
|
|
$8.260
|
|
|
$7.560
|
|
|
$7.920
|
|
|
$7.420
|
|
|
|
|
|
|
|
(8.29%
|
)
|
|
|
4.93%
|
|
|
13.05%
|
|
|
(0.15%
|
)
|
|
12.14%
|
|
|
1.06%
|
|
|
|
|
|
|
|
|
|
|
|
$32,617
|
|
|
|
$39,572
|
|
|
$27,311
|
|
|
$21,571
|
|
|
$15,867
|
|
|
$11,632
|
|
|
|
1.64%
|
|
|
|
1.64%
|
|
|
1.64%
|
|
|
1.66%
|
|
|
1.69%
|
|
|
1.67%
|
|
|
|
1.71%
|
|
|
|
1.69%
|
|
|
1.69%
|
|
|
1.69%
|
|
|
1.70%
|
|
|
1.69%
|
|
|
|
2.87%
|
|
|
|
3.01%
|
|
|
3.43%
|
|
|
3.66%
|
|
|
3.70%
|
|
|
3.57%
|
|
|
|
|
|
|
|
2.80%
|
|
|
|
2.96%
|
|
|
3.38%
|
|
|
3.63%
|
|
|
3.69%
|
|
|
3.55%
|
|
|
|
5%
|
|
|
|
20%
|
|
|
21%
|
|
|
31%
|
|
|
43%
|
|
|
24%
|
|
|
33
Notes to financial statements
|
|
Delaware Tax-Free Pennsylvania
Fund
|
August 31,
2013
|
Delaware Group
®
State Tax-Free
Income Trust (Trust) is organized as a Delaware statutory trust and offers one
series: Delaware Tax-Free Pennsylvania Fund (Fund). The Trust is an open-end
investment company. The Fund is considered diversified under the Investment
Company Act of 1940, as amended, and offers Class A, Class B and Class C shares.
Class A shares are sold with a maximum front-end sales charge of 4.50%. Class A
share purchases of $1,000,000 or more will incur a contingent deferred sales
charge (CDSC) of 1.00% if redeemed during the first year and 0.50% during the
second year, provided that Delaware Distributors, L.P. (DDLP) paid a financial
advisor a commission on the purchase of those shares. Class B shares may be
purchased only through dividend reinvestment and certain permitted exchanges.
Prior to June 1, 2007, Class B shares were sold with a CDSC that declined from
4.00% to zero depending upon the period of time the shares were held. Class B
shares will automatically convert to Class A shares on a quarterly basis
approximately eight years after purchase. Class C shares are sold with a CDSC of
1.00%, if redeemed during the first twelve months.
The investment objective of Delaware
Tax-Free Pennsylvania Fund is to seek a high level of current interest income
exempt from federal income tax and Pennsylvania state and personal income taxes,
consistent with the preservation of capital.
In May 2013, the Funds Board of Trustees
(Board) approved changing the Funds fiscal year-end from February 28 to August
31, effective Aug. 31, 2013.
1. Significant Accounting
Policies
The following accounting policies are in
accordance with U.S. generally accepted accounting principles (U.S. GAAP) and
are consistently followed by the Fund.
Security Valuation
Debt securities are valued based upon valuations provided by
an independent pricing service or broker and reviewed by management. To the
extent current market prices are not available, the pricing service may take
into account developments related to the specific security, as well as
transactions in comparable securities. Valuations for fixed income securities
utilize matrix systems, which reflect such factors as security prices, yields,
maturities, and ratings, and are supplemented by dealer and exchange quotations.
Generally, 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 the Funds Board of Trustees (Board). In determining whether market
quotations are readily available or fair valuation will be used, various factors
will be taken into consideration, such as market closures or suspension of
trading in a security.
Federal Income Taxes
No provision for federal income taxes has been made as the
Fund intends to continue to qualify for federal income tax purposes as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended, and make the requisite distributions to shareholders. The Fund
evaluates tax positions taken or expected to be taken in the course of preparing
the Funds tax returns to determine whether the tax positions are
more-likely-than-not of being sustained by the applicable tax authority. Tax
positions not deemed to
34
meet the more-likely-than-not threshold
are recorded as a tax benefit or expense in the current year. Management has
analyzed the Funds tax positions taken for all open federal income tax years
(Feb. 28, 2010Aug. 31, 2013), and has concluded that no provision for federal
income tax is required in the Funds financial statements. The Fund changed its
fiscal year end from February to August, effective Aug. 31, 2013.
Class Accounting
Investment income and common expenses are allocated to the
various classes of the Fund on the basis of settled shares of each class in
relation to the net assets of the Fund. Realized and unrealized gain (loss) on
investments are allocated to the various classes of the Fund 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
U.S. GAAP requires management to make estimates and assumptions that affect the
fair value of investments, the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates and the
differences could be material.
Other
Expenses directly attributable to the Fund are charged directly to the
Fund. Other expenses common to various funds within the Delaware
Investments
®
Family of Funds are generally allocated among the funds on the basis of average
net assets. Management fees and some other expenses are paid monthly. Security
transactions are recorded on the date the securities are purchased or sold
(trade date) for financial reporting purposes. 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 using the effective interest method. The Fund declares
dividends daily from net investment income and pays the dividends monthly and
declares and pays distributions from net realized gain on investments, if any,
annually. The Fund may distribute more frequently, if necessary for tax
purposes. Dividends and distributions, if any, are recorded on the ex-dividend
date.
The Fund may receive earnings credits from
its custodian when positive cash balances are maintained, which are used to
offset custody fees. There were no earnings credits for the period March 1, 2013
to Aug. 31, 2013 and year ended Feb. 28, 2013.
The Fund receives earnings credits from
its transfer agent when positive cash balances are maintained, which are used to
offset transfer agent fees. If the amount earned is greater than one dollar, the
expense paid under this arrangement is included in dividend disbursing and
transfer agent fees and expenses and appears on the statement of operations with
the corresponding expense offset shown as expense paid indirectly. For the
period March 1, 2013 to Aug. 31, 2013 and year ended Feb. 28, 2013, the Fund
earned $131 and $292, respectively, under this agreement.
35
Notes to financial
statements
Delaware Tax-Free
Pennsylvania Fund
2. Investment Management,
Administration Agreements and Other Transactions with Affiliates
In accordance with the terms of its
investment management agreement, the Fund pays Delaware Management Company
(DMC), a series of Delaware Management Business Trust and the investment
manager, an annual fee which is calculated daily at the rate of 0.55% on the
first $500 million of average daily net assets of the Fund, 0.50% on the next
$500 million, 0.45% on the next $1.5 billion, and 0.425% on average daily net
assets in excess of $2.5 billion.
DMC has contractually agreed to waive that
portion, if any, of its management fee and reimburse the Fund to the extent
necessary to ensure that total annual operating expenses (excluding any 12b-1
plan expenses, taxes, interest, inverse floater program expenses, short sale and
dividend interest expenses, brokerage fees, certain insurance costs, acquired
fund fees and expenses, and nonroutine expenses or costs, including, but not
limited to, those relating to reorganizations, litigation, conducting
shareholder meetings, and liquidations (collectively, nonroutine expenses)),
from exceeding 0.64% of the Funds average daily net assets from June 28, 2013
through Dec. 29, 2014. For purposes of these waivers and reimbursement,
nonroutine expenses may also include such additional costs and expenses, as may
be agreed upon from time to time by the Funds Board and DMC. These expense
waivers and reimbursements apply only to expenses paid directly by the
Fund.
Delaware Service Company, Inc. (DSC), an
affiliate of DMC, provides fund accounting and financial administration
oversight services to the Fund. For these services, the Fund pays DSC fees based
on the aggregate daily net assets of the Delaware Investments
®
Family of Funds at the
following annual rate: 0.0050% of the first $30 billion; 0.0045% of the next
$10 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average
daily net assets in excess of $50 billion. The fees payable to DSC under the
service agreement described above are allocated among all funds in the Delaware
Investments Family of Funds on a relative net asset value basis. For the period
March 1, 2013 to Aug. 31, 2013 and year ended Feb. 28, 2013, the Fund was
charged $13,139 and $26,942, respectively, for these services.
DSC is also the transfer agent and
dividend disbursing agent of the Fund. The Fund pays DSC a monthly asset-based
fee for these services. Pursuant to a sub-transfer agency agreement between DSC
and BNY Mellon Investment Servicing (US) Inc. (BNYMIS), BNYMIS provides certain
sub-transfer agency services to the Fund. Sub-transfer agency fees are passed on
to and paid directly by the Fund.
Pursuant to a distribution agreement and
distribution plan, the Fund pays DDLP, the distributor and an affiliate of DMC,
an annual distribution and service fee not to exceed 0.30% 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. The Board has adopted a formula for calculating 12b-1
plan fees for the Funds Class A shares that went into effect on June 1, 1992.
The Funds Class A shares are currently subject to
36
a blended 12b-1 fee equal to the sum of:
(i) 0.10% of average daily net assets representing shares acquired prior to June
1, 1992, and (ii) 0.30% of average daily net assets representing shares acquired
on or after June 1, 1992. All Class A shareholders will bear 12b-1 fees at the
same rate, the blended rate, currently 0.24% of average daily net assets, based
upon the formula described above. This method of calculating Class A 12b-1 fees
may be discontinued at the sole discretion of the Board. DDLP has contracted to waive distribution and service fees of Class B shares from
exceeding 0.25% of average daily net assets from July 1, 2013 to Dec. 29, 2014.
As provided in the investment management
agreement, the Fund bears the cost of certain legal and tax services, including
internal legal and tax services provided to the Fund by DMC and/or its
affiliates employees. For the period March 1, 2013 to Aug. 31, 2013 and year
ended Feb. 28, 2013, the Fund was charged $9,036 and $14,517 for internal legal
and tax services provided by DMC and/ or its affiliates employees.
For the period March 1, 2013 to Aug. 31,
2013 and year ended Feb. 28, 2013, DDLP earned $14,173 and $76,217,
respectively, for commissions on sales of the Funds Class A shares. For the
period March 1, 2013 to Aug. 31, 2013 and year ended Feb. 28, 2013, DDLP
received gross CDSC commissions on redemption of the Funds Class A, Class B and
Class C shares, respectively, and these commissions were entirely used to offset
up-front commissions previously paid by DDLP to broker/dealers on sales of those
shares. The amounts received were as follows:
|
|
Period March 1, 2013
|
|
Year Ended
|
|
|
to Aug. 31, 2013
|
|
Feb. 28, 2013
|
Class A
|
|
|
$
|
9,083
|
|
|
|
$
|
911
|
|
Class B
|
|
|
|
0
|
|
|
|
|
0
|
|
Class C
|
|
|
|
1,305
|
|
|
|
|
1,597
|
|
Trustees fees include expenses accrued by
the Fund for each Trustees retainer and meeting fees. 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 Fund.
3. Investments
For the period March 1, 2013 to Aug. 31,
2013, the Fund made purchases of $26,891,247 and sales of $54,795,061 of
investment securities other than short-term investments.
At Aug. 31, 2013, the cost of investments
for federal income tax purposes was $477,510,988. At Aug. 31, 2013, net
unrealized depreciation was $370,330, of which $16,518,472 related to unrealized
appreciation of investments and $16,888,802 related to unrealized depreciation
of investments.
U.S. GAAP defines fair value as the price
that the Fund would receive to sell an asset or pay to transfer a liability in
an orderly transaction between market participants at the measurement date under
current market conditions. A three level hierarchy for fair value measurements
has been established based upon the transparency of inputs to the valuation of
an asset or liability. Inputs may be observable or unobservable and refer
broadly to the assumptions that market participants would use in pricing the
asset or liability. Observable inputs reflect the assumptions
37
Notes to financial
statements
Delaware Tax-Free
Pennsylvania Fund
3. Investments (continued)
market
participants would use in pricing the asset or liability based on market data
obtained from sources independent of the reporting
entity. Unobservable inputs reflect the reporting entitys own assumptions about
the assumptions that market participants would use in pricing the asset or
liability developed based on the best information available under the
circumstances. The Funds investment in its entirety is assigned a level based
upon the observability of the inputs which are significant to the overall
valuation. The three level hierarchy of inputs is summarized below.
Level 1
|
|
inputs are quoted prices
in active markets for identical investments (e.g., equity securities,
open-end investment companies, futures contracts, exchange-traded options
contracts)
|
|
|
|
Level 2
|
|
other observable inputs
(including, but not limited to: quoted prices for similar assets or
liabilities in markets that are active, quoted prices for identical or
similar assets or liabilities in markets that are not active, inputs other
than quoted prices that are observable for the assets or liabilities (such
as interest rates, yield curves, volatilities, prepayment speeds, loss
severities, credit risks and default rates) or other market-corroborated
inputs) (e.g., debt securities, government securities, swap contracts,
foreign currency exchange contracts, foreign securities utilizing
international fair value pricing, broker-quoted securities, fair valued
securities)
|
|
|
|
Level 3
|
|
inputs are significant
unobservable inputs (including the Funds own assumptions used to
determine the fair value of investments) (e.g., broker-quoted securities,
fair valued securities)
|
Level 3 investments are valued using
significant unobservable inputs. The Fund may also use an income-based valuation
approach in which the anticipated future cash flows of the investment are
discounted to calculate fair value. Discounts may also be applied due to the
nature or duration of any restrictions on the disposition of the investments.
Valuations may also be based upon current market prices of securities that are
comparable in coupon, rating, maturity and industry. The derived value of a
Level 3 investment may not represent the value which is received upon
disposition and this could impact the results of operations.
The following table summarizes the
valuation of the Funds investments by fair value hierarchy levels as of Aug.
31, 2013:
|
|
Level 2
|
Municipal
Bonds
|
|
$
|
476,265,658
|
Short-Term Investment
|
|
|
875,000
|
Total
|
|
$
|
477,140,658
|
During the period March 1, 2013 to Aug.
31, 2013, there were no transfers between Level 1 investments, Level 2
investments or Level 3 investments that had a significant impact to the Fund.
The Funds policy is to recognize transfers between levels at the beginning of
the reporting period.
38
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 U.S. GAAP. Additionally, distributions from net short-term
gains on sales of investment securities are treated as ordinary income for
federal income tax purposes. The tax character of dividends and distributions
paid during the period March 1, 2013 to Aug. 31, 2013 and year ended Feb. 28,
2013 was as follows:
|
|
3/1/13
|
|
Year
|
|
Year
|
|
|
to
|
|
Ended
|
|
Ended
|
|
|
8/31/13
|
|
2/28/13
|
|
2/29/12
|
Ordinary income
|
|
$
|
13,019
|
|
$
|
26,245
|
|
$
|
29,669
|
Tax-exempt income
|
|
|
9,751,798
|
|
|
20,578,925
|
|
|
21,103,151
|
Long-term capital gains
|
|
|
685,859
|
|
|
|
|
|
|
Total
|
|
$
|
10,450,676
|
|
$
|
20,605,170
|
|
$
|
21,132,820
|
5. Components of Net Assets on a Tax
Basis
As of Aug. 31, 2013, the components of net
assets on a tax basis were as follows:
Shares of beneficial
interest
|
|
$
|
488,563,647
|
|
Distributions payable
|
|
|
(467,088
|
)
|
Undistributed
tax-exempt Income
|
|
|
358,122
|
|
Capital loss carryforward
|
|
|
(1,405,741
|
)
|
Unrealized
depreciation
|
|
|
(370,330
|
)
|
Net assets
|
|
$
|
486,678,610
|
|
The differences between book basis and tax
basis components of net assets are primarily attributable to tax treatment of
distributions payable and market discount and premium on
debt instruments.
For financial reporting purposes, capital
accounts are adjusted to reflect the tax character of permanent book/tax
differences. Reclassifications are primarily due to tax treatment of
distributions and dividends and to tax treatment of market discount and premium
on debt instruments. Results of operations and net assets were not affected by
these reclassifications. For the period March 1, 2013 to Aug. 31, 2013, the Fund
recorded the following reclassifications:
Distributions in
excess of net investment income
|
|
$
|
(43,397
|
)
|
Accumulated net realized loss
|
|
|
43,397
|
|
On Dec. 22, 2010, the Regulated Investment
Company Modernization Act of 2010 (Act) was enacted, which changed various
technical rules governing the tax treatment of regulated investment companies.
The changes were generally effective for taxable years beginning after the date
of enactment. Under the Act, the Fund is permitted to carry forward capital
losses incurred in taxable years beginning after the date of enactment for an
unlimited period. Additionally, post-enactment capital loss carryforwards will
retain their character as either short-term or long-term capital
losses.
39
Notes to financial
statements
Delaware Tax-Free
Pennsylvania Fund
5. Components of Net Assets on a Tax
Basis (continued)
Losses incurred that will be carried
forward under the Act are as follows:
|
Loss Carryforward Character
|
|
Short-Term
|
|
Long-Term
|
|
$
|
1,051,189
|
|
$
|
354,552
|
6. Capital Shares
Transactions in capital shares were as
follows:
|
|
3/1/13
|
|
Year
|
|
Year
|
|
|
to
|
|
Ended
|
|
Ended
|
|
|
8/31/13
|
|
2/28/13
|
|
2/29/12
|
Shares
sold:
|
|
|
|
|
|
|
|
|
|
Class A
|
|
3,406,985
|
|
|
4,692,415
|
|
|
3,219,090
|
|
Class
B
|
|
|
|
|
44
|
|
|
|
|
Class C
|
|
350,916
|
|
|
1,751,148
|
|
|
724,829
|
|
|
Shares issued upon
reinvestment of dividends
|
|
|
|
|
|
|
|
|
|
and
distributions:
|
|
|
|
|
|
|
|
|
|
Class A
|
|
972,284
|
|
|
1,773,723
|
|
|
1,667,648
|
|
Class
B
|
|
1,464
|
|
|
4,222
|
|
|
6,419
|
|
Class C
|
|
63,311
|
|
|
97,444
|
|
|
81,642
|
|
|
|
4,794,960
|
|
|
8,318,996
|
|
|
5,699,628
|
|
|
Shares
redeemed:
|
|
|
|
|
|
|
|
|
|
Class A
|
|
(7,045,470
|
)
|
|
(5,630,266
|
)
|
|
(5,580,614
|
)
|
Class
B
|
|
(25,971
|
)
|
|
(79,640
|
)
|
|
(163,646
|
)
|
Class C
|
|
(824,988
|
)
|
|
(448,225
|
)
|
|
(355,099
|
)
|
|
|
(7,896,429
|
)
|
|
(6,158,131
|
)
|
|
(6,099,359
|
)
|
Net increase (decrease)
|
|
(3,101,469
|
)
|
|
2,160,865
|
|
|
(399,731
|
)
|
For the period March 1, 2013 to Aug. 31,
2013 and years ended Feb. 28, 2013 and Feb. 29, 2012, 36,324 Class B shares were
converted to 36,343 Class A shares valued at $301,169 and 36,337 Class B shares
were converted to 36,353 Class A shares valued at $300,751, and 72,586 Class B
shares were converted to 72,613 Class A shares valued at $563,077, respectively.
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.
7. Line of Credit
The Fund, along with certain other funds
in the Delaware Investments
®
Family of Funds (Participants), was a participant in a
$125,000,000 revolving line of credit to be used for temporary or emergency
purposes as an additional source of liquidity to fund redemptions of investor
shares.
40
Under the agreement, the Participants were
charged an annual commitment fee, which was allocated across the Participants on
the basis of each Participants allocation of the entire facility. The
Participants were permitted to borrow up to a maximum of one third of their net
assets under the agreement. Each Participant was individually, and not jointly,
liable for its particular advances, if any, under the line of credit. The line
of credit under the agreement expired on Nov. 13, 2012.
On Nov. 13, 2012, the
Fund, along with the other Participants, entered into an amendment to the
agreement for a $125,000,000 revolving line of credit. The line of credit is to
be used as described above and operates in substantially the same manner as the
original agreement. The line of credit available under the agreement expires on
Nov. 12, 2013. The Fund had no amounts outstanding as of Aug. 31, 2013 or at any
time during the period then ended.
8. Geographic, Credit, and Market
Risk
The Fund concentrates its investments in
securities issued by municipalities mainly in Pennsylvania, and may be subject
to geographic concentration risk. In addition, the Fund has the flexibility to
invest in issuers in Puerto Rico and the U.S. Virgin Islands whose bonds are
also generally free from Pennsylvania state personal income tax.
The value of the Funds investments may be
adversely affected by new legislation within the state, U.S. territories,
regional or local economic conditions, as applicable, 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 value may
fluctuate for other reasons and there is no assurance that the insurance company
will meet its obligations. A real or perceived decline in creditworthiness of a
bond insurer can have an adverse impact on the value of insured bonds held in
the Fund. At Aug. 31, 2013, 11.08% of the Funds net assets were insured by bond
insurers. These securities have been identified in the schedule of
investments.
The Fund invests in certain obligations
that may have liquidity protection to ensure that the receipt of payments due on
the underlying security is timely. Such protection may be provided through
guarantees, insurance policies or letters of credit obtained by the issuer or
sponsor through third parties, through various means of structuring the
transaction or through a combination of such approaches. The Fund will not pay
any additional fees for such credit support, although the existence of credit
support may increase the price of a security.
The Fund may invest in advanced refunded
bonds, escrow secured bonds or defeased bonds. Under current federal tax laws
and regulations, state and local government borrowers are permitted to refinance
outstanding bonds by issuing new bonds. The issuer refinances the outstanding
debt to either reduce interest costs or to remove or alter restrictive covenants
imposed by the bonds being refinanced. A refunding transaction where the
municipal securities are being refunded within 90 days from the issuance of the
refunding issue is known as a current refunding. Advance refunded bonds are
bonds in which the refunded bond issue remains outstanding for more than 90 days
following the issuance of the refunding issue. In an advance
41
Notes to financial
statements
Delaware Tax-Free Pennsylvania Fund
8. Geographic, Credit, and Market Risk
(continued)
refunding, the issuer will use the
proceeds of a new bond issue to purchase high grade interest bearing debt
securities which are then deposited in an irrevocable escrow account held by an
escrow agent to secure all future payments of principal and interest and bond
premium of the advance refunded bond. Bonds are escrowed to maturity when the
proceeds of the refunding issue are deposited in an escrow account for
investment sufficient to pay all of the principal and interest on the original
interest payment and maturity dates.
Bonds are considered pre-refunded when
the refunding issues proceeds are escrowed only until a permitted call date or
dates on the refunded issue with the refunded issue being redeemed at the time,
including any required premium. Bonds become defeased when the rights and
interests of the bondholders and their lien on the pledged revenues or other
security under the terms of the bond contract are substituted with an
alternative source of revenues (the escrow securities) sufficient to meet
payments of principal and interest to maturity or to the first call dates.
Escrowed secured bonds will often receive a rating of AAA from Moodys Investors
Service, Inc., Standard & Poors Ratings Group, and/or Fitch Ratings due to
the strong credit quality of the escrow securities and the irrevocable nature of
the escrow deposit agreement.
The Fund may invest up to 15% of its net
assets in illiquid securities, which may include securities with contractual
restrictions on resale, securities exempt from registration under Rule 144A of
the Securities Act of 1933, as amended, and other securities which may not be
readily marketable. The relative illiquidity of these securities may impair the
Fund from disposing of them in a timely manner and at a fair price when it is
necessary or desirable to do so. While maintaining oversight, the Funds Board
has delegated to DMC the day-to-day functions of determining whether individual
securities are liquid for purposes of the Funds limitation on investments in
illiquid securities. Securities eligible for resale pursuant to Rule 144A, which
are determined to be liquid, are not subject to the Funds 15% limit on
investments in illiquid securities. As of Aug. 31, 2013, no securities have been
determined to be illiquid under the Funds Liquidity Procedures. Rule 144A
securities have been identified on the schedule of investments.
9. Contractual
Obligations
The Fund enters into contracts in the
normal course of business that contain a variety of indemnifications. The Funds
maximum exposure under these arrangements is unknown. However, the Fund has not
had prior claims or losses pursuant to these contracts. Management has reviewed
the Funds existing contracts and expects the risk of loss to be
remote.
10. Subsequent Events
Effective, October 1, 2013, the Fund will pay DDLP an annual distribution and service fee not to exceed 0.25% of the average daily net assets of the Class A shares.
Management has determined that no other material
events or transactions occurred subsequent to Aug. 31, 2013 that would require
recognition or disclosure in the Funds financial statements.
42
Report of independent
registered
public accounting firm
To the Board of Trustees of Delaware
Group
®
State Tax-Free Income Trust
and the Shareholders of
Delaware Tax-Free Pennsylvania Fund:
In our opinion, the accompanying statement
of assets and liabilities, including the schedule of investments, and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Delaware Tax-Free Pennsylvania Fund (constituting Delaware Group State Tax-Free
Income Trust, hereafter referred to as the Fund) at August 31, 2013, the
results of its operations for the six months ended August 31, 2013 and the year
ended February 28, 2013, the changes in its net assets for the six months ended
August 31, 2013 and each of the two years in the period ended February 28, 2013
and the financial highlights for the six months ended August 31, 2013 and the
three years in the period ended February 28, 2013, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as financial
statements) are the responsibility of the Funds management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 2013 by
correspondence with the custodian, provide a reasonable basis for our opinion.
The financial highlights for each of the two years in the period ended February
28, 2010 were audited by other independent accountants whose report dated April
21, 2010 expressed an unqualified opinion on those statements.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
October 18, 2013
43
Other Fund information
(Unaudited)
Delaware
Tax-Free Pennsylvania Fund
Board consideration of Delaware
Tax-Free Pennsylvania Fund investment advisory agreement
At a meeting held on August 20-22, 2013
(the Annual Meeting), the Board of Trustees (the Board), including a
majority of disinterested or independent Trustees, approved the renewal of the
Investment Advisory Agreement for Delaware Tax-Free Pennsylvania Fund (the
Fund). In making its decision, the Board considered information furnished at
regular quarterly Board meetings, including reports detailing Fund performance,
investment strategies and expenses, as well as information prepared specifically
in connection with the renewal of the investment advisory and sub-advisory
contracts. Information furnished specifically in connection with the renewal of
the Investment Advisory Agreement with Delaware Management Company (DMC)
included materials provided by DMC and its affiliates (Delaware Investments)
concerning, among other things, the nature, extent and quality of services
provided to the Fund, the costs of such services to the Fund, economies of scale
and the financial condition and profitability of Delaware Investments. In
addition, in connection with the Annual Meeting, reports were provided to the
Trustees in May 2013 and included reports provided by Lipper, Inc., an
independent statistical compilation organization (Lipper). The Lipper reports
compared the Funds investment performance and expenses with those of other
comparable mutual funds. The Independent Trustees reviewed and discussed the
Lipper reports with independent legal counsel to the Independent Trustees. The
Board requested and received information regarding DMCs policy with respect to
advisory fee levels and its breakpoint philosophy; the structure of portfolio
manager compensation; the investment managers profitability; comparative client
fee information; and any constraints or limitations on the availability of
securities for certain investment styles, which had in the past year inhibited,
or which were likely in the future to inhibit, DMCs ability to invest fully in
accordance with Fund policies.
In considering information relating to the
approval of the Funds advisory agreement, the Independent Trustees received
assistance and advice from and met separately with independent legal counsel to
the Independent Trustees. Although the Board gave attention to all information
furnished, the following discussion identifies, under separate headings, the
primary factors taken into account by the Board during its contract renewal
considerations.
Nature, Extent and Quality of
Service.
The Board considered the services
provided by Delaware Investments to the Fund and its shareholders. In reviewing
the nature, extent and quality of services, the Board considered reports
furnished to it throughout the year, which covered matters such as the relative
performance of the Fund, compliance of portfolio managers with the investment
policies, strategies and restrictions for the Fund, compliance by DMC and
Delaware Distributors, L.P. (together, Management) personnel with the Code of
Ethics adopted throughout the Delaware Investments Family of Funds complex and
adherence to fair value pricing procedures as established by the Board. The
Board was pleased with the current staffing of the Funds investment advisor and
the emphasis placed on research in the investment process. The Board recognized
DMCs recent receipt of several industry distinctions. The Board gave favorable
consideration to DMCs efforts to control expenditures while maintaining service
levels committed
44
to fund matters. The Board noted that in
July 2011 Management implemented measures to reduce overall costs and improve
transfer agent and shareholder servicing functions through outsourcing. The
Board noted the benefits provided to Fund shareholders through each
shareholders ability to exchange an investment in one Delaware Investments fund
for the same class of shares in another Delaware Investments fund without a
sales charge, to reinvest Fund dividends into additional shares of the Fund or
into additional shares of other Delaware Investments funds and the privilege to
combine holdings in other Delaware Investments funds to obtain a reduced sales
charge. The Board was satisfied with the nature, extent and quality of the
overall services provided by Delaware Investments.
Investment Performance.
The Board placed significant emphasis on the investment
performance of the Fund in view of the importance of investment performance to
shareholders. Although the Board gave appropriate consideration to performance
reports and discussions with portfolio managers at Investment Committee meetings
throughout the year, the Board gave particular weight to the Lipper reports
furnished for the Annual Meeting. The Lipper reports prepared for the Fund
showed the investment performance of its Class A shares in comparison to a group
of similar funds as selected by Lipper (the Performance Universe). A fund with
the best performance ranked first, and a fund with the poorest performance
ranked last. The highest/best performing 25% of funds in the Performance
Universe make up the first quartile; the next 25%, the second quartile; the next
25%, the third quartile; and the poorest/worst performing 25% of funds in the
Performance Universe make up the fourth quartile. Comparative annualized
performance for the Fund was shown for the past one-, three-, five- and ten-year
periods ended March 31, 2013. The Boards objective is that the Funds
performance for the periods considered be at or above the median of its
Performance Universe. The following paragraph summarizes the performance results
for the Fund and the Boards view of such performance.
The Performance Universe for the Fund
consisted of the Fund and all retail and institutional Pennsylvania municipal
debt funds as selected by Lipper. The Lipper report comparison showed that the
Funds total return for the one- and three-year periods was in the second
quartile of its Performance Universe. The report further showed that the Funds
total return for the five- and ten-year periods was in the first quartile of its
Performance Universe. The Board was satisfied with performance.
Comparative Expenses.
The Board considered expense comparison data for the
Delaware Investments Family of Funds. Management
provided the Board with information on pricing levels and fee structures for the
Fund as of its most recently completed fiscal year. The Board also focused on
the comparative analysis of effective management fees and total expense ratios
of the Fund versus effective management fees and expense ratios of a group of
similar funds as selected by Lipper (the Expense Group). In reviewing
comparative costs, the Funds contractual management fee and the actual
management fee incurred by the Fund were compared with the contractual
management fees (assuming all funds in the Expense Group were similar in size to
the Fund) and actual management fees (as reported by each fund) within the
Expense
45
Other Fund information
(Unaudited)
Delaware
Tax-Free Pennsylvania Fund
Board consideration of Delaware
Tax-Free Pennsylvania Fund investment advisory agreement
(continued)
Group, taking into account any applicable
breakpoints and fee waivers. The Funds total expenses were also compared with
those of its Expense Group. The Lipper total expenses, for comparative
consistency, were shown by Lipper for Class A shares and comparative total
expenses including 12b-1 and non 12b-1 service fees. The Board considered fees
paid to Delaware Investments for non-management services. The Boards objective
is to limit the Funds total expense ratio to be competitive with that of the
Expense Group. The following paragraph summarizes the expense results for the
Fund and the Boards view of such expenses.
The expense comparisons for the Fund
showed that its actual management fee and total expenses were in the quartile
with the second highest expenses of its Expense Group. The Board noted that the
Funds total expenses were not in line with the Boards objective. In evaluating
total expenses, the Board considered fee waivers in place through December 2014
and various initiatives implemented by Management, such as the outsourcing of
certain transfer agency services, which had created an opportunity for a further
reduction in expenses. The Board was satisfied with Managements efforts to
improve the Funds total expense ratio and to bring it in line with the Boards
objective.
Management
Profitability.
The Board considered the level
of profits realized by Delaware Investments in connection with the operation of
the Fund. In this respect, the Board reviewed the Investment Management
Profitability Analysis that addressed the overall profitability of
Delaware Investments business in providing management and other services to
each of the individual funds and the Delaware Investments Family of Funds as a
whole. Specific attention was given to the methodology followed in allocating
costs for the purpose of determining profitability. Management stated that the
level of profits of Delaware Investments, to a certain extent, reflects recent
operational cost savings and efficiencies initiated by Delaware Investments. The
Board considered Delaware Investments efforts to improve services provided to
fund shareholders and to meet additional regulatory and compliance requirements
resulting from recent industry-wide Securities and Exchange Commission
initiatives. The Board also considered the extent to which Delaware Investments
might derive ancillary benefits from fund operations, including the potential
for procuring additional business as a result of the prestige and visibility
associated with its role as service provider to the Delaware Investments Family
of Funds and the benefits from allocation of fund brokerage to improve trading
efficiencies. The Board found that the management fees were reasonable in light
of the services rendered and the level of profitability of Delaware
Investments.
Economies of Scale.
The Trustees considered whether economies of scale are
realized by Delaware Investments as the Funds assets increase and the extent to
which any economies of scale are reflected in the level of management fees
charged. The Trustees reviewed the standardized advisory fee pricing and
structure, approved by the Board and shareholders, which includes breakpoints.
Breakpoints in the advisory fee occur when the advisory fee rate is reduced on
assets in excess of specified levels. Breakpoints result in a lower advisory fee
than would otherwise be
46
the case on all assets when the asset
levels specified are exceeded. The Board noted that the fee under the Funds
management contract fell within the standard structure. The Board also noted
that the Funds assets exceeded the first breakpoint level. The Board believed
that, given the extent to which economics of scale might be realized by the
advisor and its affiliates, the schedule of fees under the Investment Advisory
Agreement provides a sharing of benefits with the Fund and its
shareholders.
Tax Information
The information set forth below is for the
Funds 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 January of each year. Please consult your tax advisor for proper
treatment of this information.
All designations are based on financial
information available as of the date of this annual report and, accordingly are
subject to change. For any and all items requiring designation, it is the
intention of the Fund to designate the maximum amount permitted under the
Internal Revenue Code and the regulations thereunder.
For the fiscal period March 1, 2013 to
Aug. 31, 2013, the Fund designates distributions paid during the period as
follows:
(A)
|
Ordinary income
distributions (Tax Basis)
|
|
0.13
|
%
|
(B)
|
Tax-Exempt Distributions (Tax
Basis)
|
|
93.31
|
%
|
(C)
|
Long-Term Capital
Gain Distributions (Tax Basis)
|
|
6.56
|
%
|
|
Total Distributions (Tax
Basis)
|
|
100.00
|
%
|
(A), (B), and (C) are based on a
percentage of the Funds total distributions.
47
Board of trustees/directors and officers
addendum
Delaware Investments
®
Family of Funds
A mutual fund is governed by a Board of
Trustees/Directors (Trustees), which has oversight responsibility for the
management of a funds business affairs. Trustees establish procedures and
oversee and review the performance of the investment manager, the distributor,
and others who perform services for the fund. The independent fund trustees, in
particular, are advocates
Name,
Address,
|
|
Position(s)
|
|
Length of
|
and
Birth Date
|
|
Held
with Fund(s)
|
|
Time
Served
|
Interested Trustees
|
|
|
|
|
Patrick P. Coyne
1
|
|
Chairman, President,
|
|
Chairman and Trustee
|
2005
Market Street
|
|
Chief
Executive Officer,
|
|
since
August 16, 2006
|
Philadelphia, PA 19103
|
|
and
Trustee
|
|
|
April
1963
|
|
|
|
President and
|
|
|
|
|
Chief
Executive Officer
|
|
|
|
|
since
August 1, 2006
|
|
Independent Trustees
|
|
|
|
|
Thomas L. Bennett
|
|
Trustee
|
|
Since
March 2005
|
2005
Market Street
|
|
|
|
|
Philadelphia, PA 19103
|
|
|
|
|
October 1947
|
|
|
|
|
Joseph W. Chow
|
|
Trustee
|
|
Since
January 2013
|
2005
Market Street
|
|
|
|
|
Philadelphia, PA 19103
|
|
|
|
|
January 1953
|
|
|
|
|
|
John
A. Fry
|
|
Trustee
|
|
Since
January 2001
|
2005
Market Street
|
|
|
|
|
Philadelphia, PA 19103
|
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May
1960
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Anthony D. Knerr
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Trustee
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Since
April 1990
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2005
Market Street
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Philadelphia, PA 19103
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December 1938
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1
Patrick P. Coyne is considered to be
an Interested Trustee because he is an executive officer of the Funds(s)
investment advisor.
48
for shareholder interests. Each trustee
has served in that capacity since he or she was elected to or appointed to the
Board of Trustees, and will continue to serve until his or her retirement or the
election of a new trustee in his or her place. The following is a list of the
Trustees and Officers with certain background and related
information.
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Number of Portfolios in
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Principal Occupation(s)
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Fund
Complex Overseen
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Other
Directorships
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During Past 5 Years
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by
Trustee or Officer
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Held
by Trustee or Officer
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Patrick P. Coyne has served in
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70
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Director and Audit
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various executive capacities
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Committee Member
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at
different times at
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Kaydon Corp.
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Delaware Investments.
2
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Board
of Governors Member
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Investment Company
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Institute (ICI)
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Private Investor
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70
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Director
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(March 2004Present)
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Bryn
Mawr Bank Corp. (BMTC)
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(20072011)
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Executive Vice President
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70
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Director and Audit Committee
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(Emerging Economies Strategies,
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Member Hercules
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Risk
and Corporate Administration)
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Technology Growth
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State
Street Corporation
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Capital, Inc.
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(July 2004March 2011)
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President
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70
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Director Hershey Trust
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Drexel University
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(August 2010Present)
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Director and Audit
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Committee Member
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President
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Community Health Systems
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Franklin & Marshall College
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(July 2002July 2010)
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Managing Director
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70
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None
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AKA
Strategy
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(Strategic Consulting)
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(1990Present)
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2
Delaware Investments is the marketing
name for Delaware Management Holdings, Inc. and its subsidiaries, including the
Funds(s) investment advisor, principal underwriter, and its transfer
agent.
49
Board of trustees/directors
and officers addendum
Delaware
Investments
®
Family of Funds
Name, Address,
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Position(s)
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Length of
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and Birth Date
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Held with Fund(s)
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Time Served
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Independent Trustees
(continued)
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Lucinda S. Landreth
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Trustee
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Since March 2005
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2005 Market Street
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Philadelphia, PA 19103
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June 1947
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Frances A. Sevilla-Sacasa
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Trustee
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Since September 2011
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2005 Market Street
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Philadelphia, PA 19103
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January 1956
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Thomas K. Whitford
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Trustee
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Since January 2013
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2005 Market Street
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Philadelphia, PA 19103
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March 1956
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50
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Number of Portfolios in
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Principal Occupation(s)
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Fund Complex Overseen
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Other Directorships
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During Past 5 Years
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by Trustee or Officer
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Held by Trustee or Officer
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Private Investor
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70
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None
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(2004Present)
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Chief Executive Officer
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70
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Trust Manager and
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Banco Itaú Europa
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Audit Committee
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International
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Member Camden
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(April 2012Present)
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Property Trust
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Executive Advisor to Dean
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(August 2011March 2012)
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and Interim Dean
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(January 2011July 2011)
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University of Miami School of
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Business Administration
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President U.S. Trust,
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Bank of America Private
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Wealth Management
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(Private Banking)
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(July 2007December
2008)
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Vice Chairman
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70
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None
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(2010April 2013)
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Chief Administrative
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Officer (20082010)
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and Executive Vice
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President and Chief
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Administrative Officer
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(20072009)
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PNC Financial
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Services Group
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51
Board of trustees/directors
and officers addendum
Delaware
Investments
®
Family of Funds
Name, Address,
|
|
Position(s)
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Length of
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and Birth Date
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Held with Fund(s)
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Time Served
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Independent Trustees
(continued)
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Janet L. Yeomans
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Trustee
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Since April 1999
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2005 Market Street
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Philadelphia, PA 19103
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July 1948
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J. Richard Zecher
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Trustee
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Since March 2005
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2005 Market Street
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Philadelphia, PA 19103
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July 1940
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52
|
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Number of Portfolios in
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Principal Occupation(s)
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Fund Complex Overseen
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Other Directorships
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During Past 5 Years
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by Trustee or Officer
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Held by Trustee or Officer
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Vice President and Treasurer
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70
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Director, Audit
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(January 2006July 2012)
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Committee Member and
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Vice President Mergers &
Acquisitions
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Investment Committee
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(January 2003January 2006), and
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Member
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Vice President and Treasurer
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Okabena Company
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(July 1995January 2003)
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3M Corporation
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Chair 3M
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Investment Management
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Company
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(20052012)
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Founder
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70
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Director and Compensation
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Investor Analytics
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Committee Member
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(Risk Management)
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Investor Analytics
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(May 1999Present)
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Director P/E Investments
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Founder
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P/E Investments
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(Hedge Fund)
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(September
1996Present)
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53
Board of trustees/directors
and officers addendum
Delaware
Investments
®
Family of Funds
Name, Address,
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Position(s)
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Length of
|
and Birth Date
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Held with Fund(s)
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Time Served
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Officers
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David F. Connor
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Senior Vice President,
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Senior Vice President,
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2005 Market Street
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Deputy General
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Deputy General Counsel
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Philadelphia, PA 19103
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Counsel, and Secretary
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since May 2013;
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December 1963
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Vice President, Deputy
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General Counsel
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September 2000
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May 2013; Secretary since
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October 2005
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Daniel V. Geatens
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Vice President
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Treasurer
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2005 Market Street
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and Treasurer
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since October 2007
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Philadelphia, PA 19103
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October 1972
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David P. OConnor
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Executive Vice President,
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Executive Vice President
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2005 Market Street
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General Counsel
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since February 2012;
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Philadelphia, PA 19103
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and Chief Legal Officer
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Senior Vice President
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February 1966
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October 2005
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February 2012;
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General Counsel and
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Chief Legal Officer
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since October
2005
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Richard Salus
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Senior Vice President
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Chief Financial Officer
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2005 Market Street
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and Chief Financial Officer
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since November 2006
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Philadelphia, PA 19103
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October 1963
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The Statement of Additional
Information for the Fund(s) includes additional information about the Trustees
and Officers and is available, without charge, upon request by calling 800
523-1918.
54
|
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Number of Portfolios in
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Principal Occupation(s)
|
|
Fund Complex Overseen
|
|
Other Directorships
|
During Past 5 Years
|
|
by Trustee or Officer
|
|
Held by Trustee or Officer
|
|
David F. Connor has served as
|
|
70
|
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None
3
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Deputy General Counsel of
|
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Delaware Investments
|
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since 2000.
|
|
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Daniel V. Geatens has served
|
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70
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None
3
|
in various capacities at
|
|
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|
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different times at
|
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Delaware
Investments.
|
|
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David P. OConnor has served in
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70
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None
3
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various executive and legal
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capacities at different times
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at Delaware Investments.
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Richard Salus has served in
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70
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None
3
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various executive capacities
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at different times at
|
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Delaware
Investments.
|
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|
3
David F. Connor, Daniel V. Geatens,
David P. OConnor, and Richard Salus serve in similar capacities for the six
portfolios of the Optimum Fund Trust, which have the same investment advisor,
principal underwriter, and transfer agent as the registrant.
55
About the
organization
Board of
trustees
|
Patrick P.
Coyne
Chairman,
President, and
Chief Executive
Officer
Delaware Investments
®
Family of
Funds
Philadelphia, PA
Thomas L.
Bennett
Private Investor
Rosemont, PA
|
Joseph W.
Chow
Former
Executive Vice
President
State Street Corporation
Brookline,
MA
John A.
Fry
President
Drexel
University
Philadelphia, PA
Anthony D. Knerr
Founder and
Managing
Director
AKA Strategy
New York, NY
|
Lucinda S.
Landreth
Former Chief
Investment
Officer
Assurant, Inc.
Philadelphia, PA
Frances A.
Sevilla-Sacasa
Chief
Executive Officer
Banco Itaú Europa
International
Miami,
FL
|
Thomas K.
Whitford
Former
Vice Chairman
PNC Financial Services Group
Pittsburgh,
PA
Janet L.
Yeomans
Former Vice
President and
Treasurer
3M Corporation
St. Paul,
MN
J. Richard
Zecher
Founder
Investor
Analytics
Scottsdale, AZ
|
|
|
|
|
Affiliated officers
|
David F.
Connor
Senior Vice
President,
Deputy General Counsel,
and Secretary
Delaware
Investments
Family of Funds
Philadelphia, PA
|
Daniel V.
Geatens
Vice President
and
Treasurer
Delaware Investments
Family of Funds
Philadelphia, PA
|
David P.
OConnor
Executive Vice
President,
General Counsel,
and Chief Legal Officer
Delaware
Investments
Family of Funds
Philadelphia, PA
|
Richard
Salus
Senior Vice
President and
Chief Financial Officer
Delaware Investments
Family of Funds
Philadelphia,
PA
|
This annual report is
for the information of Delaware Tax-Free Pennsylvania Fund shareholders,
but it may be used with prospective investors when preceded or accompanied
by the Delaware Investments Fund fact sheet for the most recently
completed calendar quarter. These documents are available at
delawareinvestments.com.
|
Delaware Investments is
the marketing name of Delaware Management Holdings, Inc. and its
subsidiaries.
The Fund files its
complete schedule of portfolio holdings with the Securities and Exchange
Commission (SEC) for the first and third quarters of each fiscal year on
Form N-Q. The Funds Forms N-Q, as well as a description of the policies
and procedures that the Fund uses to determine how to vote proxies (if
any) relating to portfolio securities are available without charge (i)
upon request, by calling 800 523-1918; and (ii) on the SECs website at
sec.gov. In addition, a description of the policies and procedures that
the Fund uses to determine how to vote proxies (if any) relating to
portfolio securities and the Funds Schedule of Investments are available
without charge on the Funds website at delawareinvestments.com. The
Funds Forms N-Q may be reviewed and copied at the SECs Public Reference
Room in Washington, D.C.; information on the operation of the Public
Reference Room may be obtained by calling 800 SEC-0330.
Information (if any)
regarding how the Fund voted proxies relating to portfolio securities
during the most recently disclosed 12-month period ended June 30 is
available without charge (i) through the Funds website at
delawareinvestments.com; and (ii) on the SECs website at
sec.gov.
|
56