*See note 7.
For the six months ended February 29, 2008 and the year ended August 31, 2007, the following shares and values were converted from Class B shares to Class A shares. The respective amounts are included in Class B redemptions and Class A subscriptions in the tables above and the statements of changes in net assets.
7. Fund Merger
Effective July 13, 2007, Delaware Tax-Free USA Fund (Acquiring Fund) acquired all of the assets and assumed all of the liabilities of Delaware Tax-Free Florida Insured Fund (Acquired Fund), an open-end investment company, in exchange for shares of the Acquiring Fund pursuant to a Plan and Agreement of Reorganization (Reorganization). The shareholders of the Acquired Fund received shares of the respective class of the Acquiring Fund equal to the aggregate net asset value of their share in the Acquired Fund prior to the Reorganization.
The Reorganization was treated as non-taxable events and, accordingly, Delaware Tax-Free USA Fund’s basis in the securities acquired reflected the historical cost basis as of the date of transfer. The net assets, net unrealized appreciation and accumulated net realized gain (loss) of Delaware Tax-Free Florida Insured Fund as of the close of business on July 13, 2007, were as follows:
| | | | Net Unrealized | | Accumulated Net |
| | Net Assets | | Appreciation | | Realized Gain/Loss |
| Delaware Tax-Free Florida Insured Fund | | $88,309,928 | | $2,426,693 | | $— |
The net assets of Delaware Tax-Free USA Fund prior to the Reorganization were $707,230,768. The combined net assets of Delaware Tax-Free USA Fund after merger were $795,540,696.
8. Line of Credit
Each Fund, along with certain other funds in the Delaware Investments® Family of Funds (Participants), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant’s allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Funds had no amounts outstanding as of February 29, 2008, or at any time during the period then ended.
9. Credit and Market Risk
The Funds concentrates their investments in securities issued by municipalities. The value of these investments may be adversely affected by new legislation within the states, regional or local economic conditions, and differing levels of supply and demand for municipal bonds. Many municipalities insure repayment for their obligations. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons and there is no assurance that the insurance company will meet its obligations. These securities have been identified on the statements of net assets.
Delaware National High-Yield Municipal Bond Fund invests a portion of its assets in high yield fixed income securities, which carry ratings of BB or lower by Standard & Poor's Ratings Group and/or Ba or lower by Moody’s Investors Service, Inc. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.
85
Notes to financial statements
Delaware National Tax-Free Funds
9. Credit and Market Risk (continued)
The Funds 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 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 issue's 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 of their lien on the pledged revenues or other security under the terms of the bond contract and 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 Moody’s Investors Service, Inc., Standard & Poor’s 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.
Each Fund may invest up to 15% of net total 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 each 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, each Fund’s Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of each Fund’s limitation on investments in illiquid assets. As of February 29, 2008, there were no Rule 144A securities and no securities have been determined to be illiquid under each Fund’s Liquidity Procedures.
10. Contractual Obligations
The Funds enter 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 Funds have not had prior claims or losses pursuant to these contracts. Management has reviewed each Fund’s existing contracts and expects the risk of loss to be remote.
86
About the organization
This semiannual report is for the information of Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund shareholders, but it may be used with prospective investors when preceded or accompanied by a current prospectus for Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund and the Delaware Investments® Fund profiles for the most recently completed calendar quarter. These documents are available at www.delawareinvestments.com. The prospectus sets forth details about charges, expenses, investment objectives, and operating policies of the investment company. You should read the prospectus carefully before you invest. The figures in this report represent past results that are not a guarantee of future results. The return and principal value of an investment in the investment company will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
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 John A. Fry
President
Franklin & Marshall College
Lancaster, PA Anthony D. Knerr
Founder and Managing Director
Anthony Knerr & Associates
New York, NY Lucinda S. Landreth
Former Chief Investment Officer
Assurant, Inc.
Philadelphia, PA | | Ann R. Leven
Consultant
ARL Associates
New York, NY Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN Janet L. Yeomans
Vice President and Treasurer
3M Corporation
St. Paul, MN J. Richard Zecher
Founder
Investor Analytics
Scottsdale, AZ |
88
Affiliated officers | | Contact information |
| | | |
David F. Connor
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. O’Connor
Senior 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 | | Investment manager
Delaware Management Company, a series of
Delaware Management Business Trust
Philadelphia, PA National distributor
Delaware Distributors, L.P.
Philadelphia, PA Shareholder servicing, dividend disbursing, and transfer agent
Delaware Service Company, Inc.
2005 Market Street
Philadelphia, PA 19103-7094 For shareholders
800 523-1918 For securities dealers and financial institutions representatives only
800 362-7500 Web site
www.delawareinvestments.com |
| |
|
Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries. Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. Each Fund’s Forms N-Q, as well as a description of the policies and procedures that each 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 Commission’s Web site at www.sec.gov. In addition, a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities and each Fund’s Schedule of Investments are available without charge on each Fund’s Web site at www.delawareinvestments.com. Each Fund’s Forms N-Q may be reviewed and copied at the Commission’s 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 each Fund voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through each Fund’s Web site at www.delawareinvestments.com; and (ii) on the Commission’s Web site at www.sec.gov. |
89
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SA-011 [2/08] DG3 4/08 MF-08-03-025 PO 12797 (2926) |  |
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| Semiannual report |
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| Delaware Tax-Free Arizona Fund |
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| Delaware Tax-Free California Fund |
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| Delaware Tax-Free Colorado Fund |
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| Delaware Tax-Free Idaho Fund |
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| Delaware Tax-Free New York Fund |
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| February 29, 2008 |
| Fixed income mutual funds |
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Table of contents
| Disclosure of Fund expenses | 1 |
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| Sector allocations and credit quality breakdowns | 5 |
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| Statements of net assets | 10 |
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| Statements of operations | 45 |
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| Statements of changes in net assets | 48 |
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| Financial highlights | 58 |
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| Notes to financial statements | 88 |
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| About the organization | 100 |
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.
© 2008 Delaware Distributors, L.P.
Disclosure of Fund expenses
For the period September 1, 2007 to February 29, 2008
As a shareholder of a 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. These following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period September 1, 2007 to February 29, 2008.
Actual expenses
The first section of the tables 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 tables shown, “Hypothetical 5% Return,” provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios 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 tables 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 each 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 Fund’s expenses shown in the tables reflect fee waivers in effect. The expenses shown in each table assume reinvestment of all dividends and distributions.
“Expenses Paid During Period” are equal to the Funds’ annualized expense ratios, multiplied by the average account value over the period, multiplied by the 182/366 (to reflect the one-half year period).
1
Disclosure of Fund expenses
Delaware Tax-Free Arizona Fund
Expense analysis of an investment of $1,000
| | | Beginning | | Ending | | | | Expenses |
| | Account Value | | Account Value | | Annualized | | Paid During Period |
| | 9/1/07 | | 2/29/08 | | Expense Ratio | | 9/1/07 to 2/29/08 |
| Actual Fund return | | | | | | | | | |
| Class A | | $1,000.00 | | | $979.20 | | | 0.75% | | $3.69 | |
| Class B | | 1,000.00 | | | 976.40 | | | 1.50% | | 7.37 | |
| Class C | | 1,000.00 | | | 976.50 | | | 1.50% | | 7.37 | |
| Hypothetical 5% return (5% return before expenses) |
| Class A | | $1,000.00 | | | $1,021.13 | | | 0.75% | | $3.77 | |
| Class B | | 1,000.00 | | | 1,017.40 | | | 1.50% | | 7.52 | |
| Class C | | 1,000.00 | | | 1,017.40 | | | 1.50% | | 7.52 | |
| | |
Delaware Tax-Free California Fund
Expense analysis of an investment of $1,000 |
| | | | | | | |
| | Beginning | | Ending | | | | Expenses |
| | Account Value | | Account Value | | Annualized | | Paid During Period |
| | 9/1/07 | | 2/29/08 | | Expense Ratio | | 9/1/07 to 2/29/08 |
| Actual Fund return | | | | | | | | | |
| Class A | | $1,000.00 | | | $968.10 | | | 0.88% | | $4.31 | |
| Class B | | 1,000.00 | | | 963.70 | | | 1.63% | | 7.96 | |
| Class C | | 1,000.00 | | | 964.50 | | | 1.63% | | 7.96 | |
| Hypothetical 5% return (5% return before expenses) |
| Class A | | $1,000.00 | | | $1,020.49 | | | 0.88% | | $4.42 | |
| Class B | | 1,000.00 | | | 1,016.76 | | | 1.63% | | 8.17 | |
| Class C | | 1,000.00 | | | 1,016.76 | | | 1.63% | | 8.17 | |
2
Delaware Tax-Free Colorado Fund
Expense analysis of an investment of $1,000
| | Beginning | | Ending | | | | Expenses |
| | Account Value | | Account Value | | Annualized | | Paid During Period |
| | 9/1/07 | | 2/29/08 | | Expense Ratio | | 9/1/07 to 2/29/08 |
| Actual Fund return | | | | | | | | | |
| Class A | | $1,000.00 | | | $990.60 | | | 0.93% | | $4.60 | |
| Class B | | 1,000.00 | | | 987.00 | | | 1.68% | | 8.30 | |
| Class C | | 1,000.00 | | | 986.90 | | | 1.68% | | 8.30 | |
| Hypothetical 5% return (5% return before expenses) |
| Class A | | $1,000.00 | | | $1,020.24 | | | 0.93% | | $4.67 | |
| Class B | | 1,000.00 | | | 1,016.51 | | | 1.68% | | 8.42 | |
| Class C | | 1,000.00 | | | 1,016.51 | | | 1.68% | | 8.42 | |
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| Delaware Tax-Free Idaho Fund | | | | | | | | | |
| Expense analysis of an investment of $1,000 | | | | | | |
| | | | | | | |
| | Beginning | | Ending | | | | Expenses |
| | Account Value | | Account Value | | Annualized | | Paid During Period |
| | 9/1/07 | | 2/29/08 | | Expense Ratio | | 9/1/07 to 2/29/08 |
| Actual Fund return | | | | | | | | | |
| Class A | | $1,000.00 | | | $990.40 | | | 0.85% | | $4.21 | |
| Class B | | 1,000.00 | | | 986.70 | | | 1.60% | | 7.90 | |
| Class C | | 1,000.00 | | | 987.60 | | | 1.60% | | 7.91 | |
| Hypothetical 5% return (5% return before expenses) |
| Class A | | $1,000.00 | | | $1,020.64 | | | 0.85% | | $4.27 | |
| Class B | | 1,000.00 | | | 1,016.91 | | | 1.60% | | 8.02 | |
| Class C | | 1,000.00 | | | 1,016.91 | | | 1.60% | | 8.02 | |
3
Disclosure of Fund expenses
Delaware Tax-Free New York Fund
Expense analysis of an investment of $1,000
| | Beginning | | Ending | | | | Expenses |
| | Account Value | | Account Value | | Annualized | | Paid During Period |
| | 9/1/07 | | 2/29/08 | | Expense Ratio | | 9/1/07 to 2/29/08 |
| Actual Fund return | | | | | | | | | | | |
| Class A | | $1,000.00 | | | $997.20 | | | 0.85% | | $4.22 | |
| Class B | | 1,000.00 | | | 992.50 | | | 1.60% | | 7.93 | |
| Class C | | 1,000.00 | | | 992.50 | | | 1.60% | | 7.93 | |
| Hypothetical 5% return (5% return before expenses) | | | | | | |
| Class A | | $1,000.00 | | | $1,020.64 | | | 0.85% | | $4.27 | |
| Class B | | 1,000.00 | | | 1,016.91 | | | 1.60% | | 8.02 | |
| Class C | | 1,000.00 | | | 1,016.91 | | | 1.60% | | 8.02 | |
4
| Sector allocations and credit quality breakdowns |
| | | As of February 29, 2008 |
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware Tax-Free Arizona Fund
| Sector | | Percentage of net assets |
| Municipal Bonds | | 97.13 | % |
| Corporate Revenue Bonds | | 2.03 | % |
| Education Revenue Bonds | | 5.82 | % |
| Electric Revenue Bonds | | 2.59 | % |
| Escrowed to Maturity Bonds | | 0.26 | % |
| Health Care Revenue Bonds | | 4.83 | % |
| Housing Revenue Bonds | | 1.87 | % |
| Lease Revenue Bonds | | 12.61 | % |
| Local General Obligation Bonds | | 7.43 | % |
| Pre-Refunded Bonds | | 32.06 | % |
| Special Tax Revenue Bonds | | 6.16 | % |
| State General Obligation Bonds | | 5.58 | % |
| Transportation Revenue Bonds | | 7.31 | % |
| Water & Sewer Revenue Bonds | | 8.58 | % |
| Short-Term Investment | | 1.61 | % |
| Total Value of Securities | | 98.74 | % |
| Receivables and Other Assets Net of Liabilities | | 1.26 | % |
| Total Net Assets | | 100.00 | % |
| |
| Credit quality breakdown (as a % of fixed income investments) | | | |
| AAA | | 67.85 | % |
| AA | | 15.87 | % |
| A | | 4.55 | % |
| BBB | | 11.73 | % |
| Total | | 100.00 | % |
5
| Sector allocations and credit quality breakdowns |
| | | As of February 29, 2008 |
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware Tax-Free California Fund
| Sector | | Percentage of net assets |
| Municipal Bonds | | 96.54 | % |
| Education Revenue Bonds | | 11.23 | % |
| Electric Revenue Bond | | 0.91 | % |
| Health Care Revenue Bonds | | 6.46 | % |
| Housing Revenue Bonds | | 6.34 | % |
| Lease Revenue Bonds | | 7.23 | % |
| Local General Obligation Bonds | | 14.63 | % |
| Pre-Refunded Bonds | | 25.12 | % |
| Resource Recovery Revenue Bonds | | 4.28 | % |
| Special Tax Revenue Bonds | | 3.26 | % |
| State General Obligation Bonds | | 8.31 | % |
| Transportation Revenue Bonds | | 5.42 | % |
| Water & Sewer Revenue Bonds | | 3.35 | % |
| Short-Term Investments | | 0.62 | % |
| Money Market Instrument | | 0.51 | % |
| Variable Rate Demand Note | | 0.11 | % |
| Total Value of Securities | | 97.16 | % |
| Receivables and Other Assets Net of Liabilities | | 2.84 | % |
| Total Net Assets | | 100.00 | % |
| |
| Credit quality breakdown (as a % of fixed income investments) | | | |
| AAA | | 47.17 | % |
| AA | | 9.55 | % |
| A | | 19.37 | % |
| BBB | | 14.17 | % |
| Non Rated | | 9.74 | % |
| Total | | 100.00 | % |
6
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware Tax-Free Colorado Fund
| Sector | | Percentage of net assets |
| Municipal Bonds | | 96.66 | % |
| Education Revenue Bonds | | 13.99 | % |
| Electric Revenue Bonds | | 1.93 | % |
| Escrowed to Maturity Bonds | | 2.24 | % |
| Health Care Revenue Bonds | | 12.80 | % |
| Housing Revenue Bonds | | 1.49 | % |
| Lease Revenue Bonds | | 3.95 | % |
| Local General Obligation Bonds | | 15.98 | % |
| Pre-Refunded Bonds | | 32.95 | % |
| Special Tax Revenue Bonds | | 2.96 | % |
| State General Obligation Bonds | | 4.45 | % |
| Transportation Revenue Bonds | | 2.28 | % |
| Water & Sewer Revenue Bonds | | 1.64 | % |
| Short-Term Investment | | 0.29 | % |
| Total Value of Securities | | 96.95 | % |
| Receivables and Other Assets Net of Liabilities | | 3.05 | % |
| Total Net Assets | | 100.00 | % |
| |
| Credit quality breakdown (as a % of fixed income investments) | | | |
| AAA | | 39.80 | % |
| AA | | 20.61 | % |
| A | | 10.87 | % |
| BBB | | 17.43 | % |
| B | | 0.74 | % |
| Non Rated | | 10.55 | % |
| Total | | 100.00 | % |
7
| Sector allocations and credit quality breakdowns |
| | | As of February 29, 2008 |
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware Tax-Free Idaho Fund
| Sector | | Percentage of net assets |
| Municipal Bonds | | 96.92 | % |
| Corporate Revenue Bonds | | 7.22 | % |
| Education Revenue Bonds | | 11.91 | % |
| Escrowed to Maturity Bonds | | 2.16 | % |
| Health Care Revenue Bonds | | 4.04 | % |
| Housing Revenue Bonds | | 6.80 | % |
| Lease Revenue Bonds | | 7.35 | % |
| Local General Obligation Bonds | | 28.76 | % |
| Pre-Refunded Bonds | | 14.39 | % |
| Special Tax Revenue Bonds | | 4.93 | % |
| State General Obligation Bonds | | 3.66 | % |
| Transportation Revenue Bonds | | 3.10 | % |
| Water & Sewer Revenue Bonds | | 2.60 | % |
| Short-Term Investment | | 0.25 | % |
| Total Value of Securities | | 97.17 | % |
| Receivables and Other Assets Net of Liabilities | | 2.83 | % |
| Total Net Assets | | 100.00 | % |
| |
| Credit quality breakdown (as a % of fixed income investments) | | | |
| AAA | | 51.40 | % |
| AA | | 22.18 | % |
| A | | 4.00 | % |
| BBB | | 17.84 | % |
| BB | | 2.85 | % |
| Non Rated | | 1.73 | % |
| Total | | 100.00 | % |
8
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware Tax-Free New York Fund
| Sector | Percentage of net assets |
| Municipal Bonds | | 96.70 | % |
| Corporate Revenue Bonds | | 6.21 | % |
| Education Revenue Bonds | | 13.17 | % |
| Health Care Revenue Bonds | | 8.67 | % |
| Housing Revenue Bonds | | 1.21 | % |
| Lease Revenue Bonds | | 7.40 | % |
| Local General Obligation Bonds | | 3.43 | % |
| Pre-Refunded Bonds | | 23.46 | % |
| Special Tax Revenue Bonds | | 17.18 | % |
| State General Obligation Bonds | | 0.48 | % |
| Transportation Revenue Bonds | | 12.79 | % |
| Water & Sewer Revenue Bonds | | 2.70 | % |
| Short-Term Investment | | 1.64 | % |
| Total Value of Securities | | 98.34 | % |
| Receivables and Other Assets Net of Liabilities | | 1.66 | % |
| Total Net Assets | | 100.00 | % |
| |
| Credit quality breakdown (as a % of fixed income investments) | | | |
| AAA | | 36.89 | % |
| AA | | 29.53 | % |
| A | | 15.31 | % |
| BBB | | 13.86 | % |
| BB | | 0.68 | % |
| Non Rated | | 3.73 | % |
| Total | | 100.00 | % |
9
Statements of net assets | |
| Delaware Tax-Free Arizona Fund | February 29, 2008 (Unaudited) |
| | Principal amount | | Value |
| Municipal Bonds – 97.13% |
| Corporate Revenue Bonds – 2.03% | | | | | |
| Maricopa County Pollution Control | | | | | |
| (Palo Verde Project) Series A 5.05% 5/1/29 (AMBAC) | $ | 3,000,000 | | $ | 2,763,120 |
| | | | | | 2,763,120 |
| Education Revenue Bonds – 5.82% | | | | | |
| Arizona State Board of Regents | | | | | |
| (University of Arizona) 5.00% 6/1/21 | | 1,255,000 | | | 1,266,546 |
| Arizona State University Certificates of | | | | | |
| Participation (Research Infrastructure Project) | | | | | |
| 5.00% 9/1/30 (AMBAC) | | 3,000,000 | | | 2,844,750 |
| Glendale Industrial Development Authority Revenue | | | | | |
| (Midwestern University) 5.00% 5/15/31 | | 1,050,000 | | | 971,198 |
| Pima County Industrial Development | | | | | |
| Authority Educational Revenue | | | | | |
| (Tucson Country Day School Project) 5.00% 6/1/37 | | 1,000,000 | | | 776,250 |
| South Campus Group Student Housing Revenue | | | | | |
| (University of Arizona - South Campus Project) | | | | | |
| 5.625% 9/1/35 (MBIA) | | 1,000,000 | | | 1,000,700 |
| Tucson Industrial Development Authority | | | | | |
| (University of Arizona - Marshall Foundation) | | | | | |
| Series B 5.00% 7/15/27 (AMBAC) | | 1,000,000 | | | 959,200 |
| University of Arizona Certificates of Participation | | | | | |
| (University of Arizona Project) Series A | | | | | |
| 5.125% 6/1/21 (AMBAC) | | 85,000 | | | 85,899 |
| | | | | | 7,904,543 |
| Electric Revenue Bonds – 2.59% | | | | | |
| Energy Management Services (University of Arizona - | | | | | |
| Main Campus) 5.25% 7/1/17 (MBIA) | | 1,500,000 | | | 1,582,980 |
| Salt River Project Agricultural Improvement & | | | | | |
| Power District Electric System Revenue Series B | | | | | |
| 5.00% 1/1/31 (MBIA) | | 2,000,000 | | | 1,933,780 |
| | | | | | 3,516,760 |
| Escrowed to Maturity Bonds – 0.26% | | | | | |
| Phoenix Street & Highway User Revenue (Senior Lien) | | | | | |
| 6.50% 7/1/09 (AMBAC) | | 350,000 | | | 355,086 |
| | | | | | 355,086 |
10
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| Health Care Revenue Bonds – 4.83% | | | | | |
| Glendale Industrial Development Authority Hospital | | | | | |
| Revenue (John C. Lincoln Health) | | | | | |
| 5.00% 12/1/42 | $ | 2,500,000 | | $ | 2,049,925 |
| Maricopa County Industrial Development Authority | | | | | |
| Health Facilities Revenue (Catholic Healthcare West) | | | | | |
| Series A 5.50% 7/1/26 | | 1,000,000 | | | 990,240 |
| University Medical Center Hospital Revenue | | | | | |
| 5.00% 7/1/24 | | 800,000 | | | 722,760 |
| 5.00% 7/1/35 | | 1,000,000 | | | 845,140 |
| Yavapai County Industrial Development Authority | | | | | |
| Revenue (Yavapai Regional Medical Center) | | | | | |
| Series A 5.25% 8/1/21 (RADIAN) | | 2,000,000 | | | 1,952,880 |
| | | | | | 6,560,945 |
| Housing Revenue Bonds – 1.87% | | | | | |
| Pima County Industrial Development Authority Single | | | | | |
| Family Housing Revenue | | | | | |
| Series A-1 6.125% 11/1/33 | | | | | |
| (GNMA) (FNMA) (FHLMC) (AMT) | | 20,000 | | | 20,249 |
| Series B-1 6.10% 5/1/31 (GNMA) (AMT) | | 50,000 | | | 50,612 |
| Yuma Industrial Development Authority Multifamily | | | | | |
| Housing Revenue | | | | | |
| Series A 6.10% 9/20/19 (GNMA) (AMT) | | 2,340,000 | | | 2,469,074 |
| | | | | | 2,539,935 |
| Lease Revenue Bonds – 12.61% | | | | | |
| Arizona Game & Fish Department & Community | | | | | |
| Beneficial Interest Certificates | | | | | |
| (Administration Building Project) | | | | | |
| 5.00% 7/1/32 | | 1,300,000 | | | 1,169,870 |
| Marana Municipal Property Facilities Revenue | | | | | |
| 5.00% 7/1/28 (AMBAC) | | 575,000 | | | 555,726 |
| Maricopa County Industrial Development Authority | | | | | |
| Correctional Contract Revenue (Phoenix West Prison) | | | | | |
| Series B 5.375% 7/1/22 (ACA) | | 1,000,000 | | | 913,850 |
| Phoenix Industrial Development Authority Lease | | | | | |
| Revenue (Capitol Mall II, LLC Project) | | | | | |
| 5.00% 9/15/28 (AMBAC) | | 4,000,000 | | | 3,758,799 |
| Pinal County Certificates of Participation | | | | | |
| 5.00% 12/1/29 | | 1,300,000 | | | 1,218,009 |
| 5.125% 6/1/21 (AMBAC) | | 4,675,000 | | | 4,705,667 |
11
Statements of net assets
Delaware Tax-Free Arizona Fund
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| Lease Revenue Bonds (continued) | | | | | |
| Puerto Rico Public Buildings Authority Revenue | | | | | |
| (Guaranteed Government Facilities) | | | | | |
| Series D 5.25% 7/1/27 | $ | 470,000 | | $ | 436,536 |
| Series D 5.25% 7/1/36 | | 270,000 | | | 248,387 |
| Series I 5.25% 7/1/33 | | 495,000 | | | 459,043 |
| Salt River Project Arizona Agricultural Improvement | | | | | |
| & Power District Certificates of Participation | | | | | |
| 5.00% 12/1/18 (MBIA) | | 1,500,000 | | | 1,533,960 |
| University of Arizona Certificates of Participation | | | | | |
| Series B 5.00% 6/1/31 (AMBAC) | | 2,250,000 | | | 2,125,733 |
| | | | | | 17,125,580 |
| Local General Obligation Bonds – 7.43% | | | | | |
| Chandler 5.00% 7/1/17 | | 1,935,000 | | | 2,052,687 |
| Cochise County Unified School District #68 Sierra Vista | | | | | |
| 7.50% 7/1/10 (FGIC) | | 1,000,000 | | | 1,102,880 |
| Coconino & Yavapai Counties Joint Unified School | | | | | |
| District #9 (Sedona Oak Creek Project of 2007) | | | | | |
| Series A 4.50% 7/1/18 (FSA) | | 1,520,000 | | | 1,546,357 |
| DC Ranch Community Facilities | | | | | |
| 5.00% 7/15/27 (AMBAC) | | 1,000,000 | | | 968,580 |
| Flagstaff Aspen Place Sawmill Improvement District | | | | | |
| 5.00% 1/1/32 | | 1,350,000 | | | 1,237,383 |
| fGila County Unified School District #10 | | | | | |
| (Payson Step Coupon Project of 2006) | | | | | |
| Series A 1.00% 7/1/27 (AMBAC) | | 1,000,000 | | | 892,280 |
| Marana Tangerine Farm Road Improvement District | | | | | |
| Revenue 4.60% 1/1/26 | | 1,000,000 | | | 865,640 |
| Maricopa County Unified School District #41 (Gilbert | | | | | |
| School Improvement Projects of 2005 & 2007) | | | | | |
| 3.25% 7/1/15 | | 1,500,000 | | | 1,421,670 |
| | | | | | 10,087,477 |
| §Pre-Refunded Bonds – 32.06% | | | | | |
| Arizona State Board of Regents Certificates of | | | | | |
| Participation (University of Arizona - Main Campus) | | | | | |
| Series 2000 A-1 5.125% 6/1/25-11 (AMBAC) | | 1,250,000 | | | 1,325,038 |
| Glendale Industrial Development Authority Revenue | | | | | |
| (Midwestern University) Series A 5.875% 5/15/31-11 | | 1,000,000 | | | 1,089,830 |
12
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| §Pre-Refunded Bonds (continued) | | | | | |
| Mesa Industrial Development Authority | | | | | |
| Revenue (Discovery Health Systems) Series A | | | | | |
| 5.625% 1/1/29-10 (MBIA) | $ | 9,000,000 | | $ | 9,498,599 |
| Mohave County Community College District Revenue | | | | | |
| (State Board of Directors) 6.00% 3/1/20-10 (MBIA) | | 1,000,000 | | | 1,060,220 |
| Phoenix Industrial Development Authority | | | | | |
| Lease Revenue (Capitol Mall, LLC Project) | | | | | |
| 5.50% 9/15/27-10 (AMBAC) | | 5,000,000 | | | 5,311,249 |
| Phoenix Industrial Development Authority Multifamily | | | | | |
| Housing Revenue (Ventana Palms Apartments Project) | | | | | |
| Series A | | | | | |
| 6.15% 10/1/29-09 (MBIA) | | 510,000 | | | 546,154 |
| 6.20% 10/1/34-09 (MBIA) | | 940,000 | | | 1,007,370 |
| Phoenix Variable Purpose Series B 5.00% 7/1/27-12 | | 2,435,000 | | | 2,399,230 |
| Puerto Rico Commonwealth Highway & Transportation | | | | | |
| Authority Revenue Series K 5.00% 7/1/35-15 | | 750,000 | | | 811,373 |
| Puerto Rico Commonwealth Public Improvement Revenue | | | | | |
| 5.125% 7/1/30-11 (FSA) | | 770,000 | | | 817,678 |
| Series A 5.00% 7/1/27-12 | | 1,000,000 | | | 1,066,280 |
| Series A 5.125% 7/1/31-11 | | 1,705,000 | | | 1,810,574 |
| Puerto Rico Electric Power Authority Revenue | | | | | |
| Series NN 5.00% 7/1/32-13 (MBIA) | | 1,750,000 | | | 1,878,940 |
| Series RR 5.00% 7/1/35-15 (FGIC) | | 1,545,000 | | | 1,671,427 |
| Puerto Rico Public Buildings Authority Revenue | | | | | |
| (Guaranteed Government Facilities) | | | | | |
| Series D 5.25% 7/1/27-12 | | 1,280,000 | | | 1,366,989 |
| Series I 5.25% 7/1/33-14 | | 5,000 | | | 5,415 |
| Scottsdale Municipal Property Corporation Excise Tax | | | | | |
| Revenue 5.00% 7/1/21-16 | | 1,505,000 | | | 1,623,474 |
| Scottsdale Industrial Development Authority Hospital | | | | | |
| Revenue (Scottsdale Healthcare) 5.70% 12/1/21-11 | | 500,000 | | | 547,105 |
| Southern Arizona Capital Facilities Finance Revenue | | | | | |
| (University of Arizona Project) | | | | | |
| 5.10% 9/1/33-12 (MBIA) | | 3,250,000 | | | 3,486,307 |
| Surprise Municipal Property Excise Tax Revenue | | | | | |
| 5.70% 7/1/20-09 (FGIC) | | 3,000,000 | | | 3,140,909 |
13
Statements of net assets
Delaware Tax-Free Arizona Fund
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| §Pre-Refunded Bonds (continued) | | | | | |
| University of Arizona Certificates of Participation | | | | | |
| (University of Arizona Parking & Student Housing) | | | | | |
| 5.75% 6/1/19-09 (AMBAC) | $ | 1,000,000 | | $ | 1,035,370 |
| (University of Arizona Project) | | | | | |
| Series A 5.125% 6/1/21-12 (AMBAC) | | 915,000 | | | 976,177 |
| Series B 5.125% 6/1/22-12 (AMBAC) | | 1,000,000 | | | 1,069,310 |
| | | | | | 43,545,018 |
| Special Tax Revenue Bonds – 6.16% | | | | | |
| Arizona Tourism & Sports Authority Tax Revenue | | | | | |
| (Multipurpose Stadium Facilities) | | | | | |
| Series A 5.00% 7/1/28 (MBIA) | | 2,500,000 | | | 2,395,150 |
| Arizona State Transportation Board Excise Tax Revenue | | | | | |
| (Maricopa County Regional Area Road Foundation) | | | | | |
| 5.00% 7/1/19 | | 1,500,000 | | | 1,551,960 |
| Peoria Municipal Development Authority Transition | | | | | |
| Sales Tax (Excise Tax & State Shared Revenue Senior | | | | | |
| Lien and Sub Lien) 4.50% 1/1/16 (FGIC) | | 1,000,000 | | | 1,029,240 |
| Phoenix Civic Improvement Transition Excise Tax | | | | | |
| Revenue (Light Rail Project) 5.00% 7/1/20 (AMBAC) | | 2,270,000 | | | 2,298,126 |
| ΩPhoenix Civic Improvement Distribution Revenue | | | | | |
| (Civic Plaza) Series B 5.50% 7/1/31 (FGIC) | | 1,500,000 | | | 1,089,630 |
| | | | | | 8,364,106 |
| State General Obligation Bonds – 5.58% | | | | | |
| Puerto Rico Commonwealth Public | | | | | |
| Improvement Refunding Series A | | | | | |
| 5.50% 7/1/17 | | 1,765,000 | | | 1,829,423 |
| 5.50% 7/1/19 | | 1,300,000 | | | 1,320,735 |
| Unrefunded Balance Series A | | | | | |
| 5.125% 7/1/30 (FSA) | | 480,000 | | | 465,984 |
| 5.125% 7/1/31 | | 3,370,000 | | | 3,076,776 |
| Virgin Islands Public Finance Authority | | | | | |
| (Gross Receipts Taxes) 5.00% 10/1/31 (ACA) | | 1,000,000 | | | 891,930 |
| | | | | | 7,584,848 |
14
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| Transportation Revenue Bonds – 7.31% | | | | | |
| Arizona State Transportation Board Highway Revenue | | | | | |
| Series A 5.00% 7/1/23 | $ | 1,000,000 | | $ | 1,003,170 |
| Arizona State Transportation Board Grant Anticipation | | | | | |
| Notes 5.00% 7/1/14 | | 500,000 | | | 538,745 |
| Phoenix Civic Improvement Airport Revenue Series B | | | | | |
| 5.25% 7/1/27 (FGIC) (AMT) | | 1,000,000 | | | 941,460 |
| 5.25% 7/1/32 (FGIC) (AMT) | | 3,000,000 | | | 2,786,010 |
| Tucson Airport Authority Revenue (Senior Lien) | | | | | |
| Series 2001 5.35% 6/1/31 (AMBAC) (AMT) | | 5,000,000 | | | 4,654,000 |
| | | | | | 9,923,385 |
| Water & Sewer Revenue Bonds – 8.58% | | | | | |
| Glendale Water & Sewer Revenue (Senior Lien) | | | | | |
| 5.00% 7/1/28 (AMBAC) | | 2,000,000 | | | 1,923,320 |
| Phoenix Civic Improvement Corporation | | | | | |
| Wastewater Systems Revenue | | | | | |
| 5.00% 7/1/19 | | 2,750,000 | | | 2,836,790 |
| (Junior Lien) | | | | | |
| 5.00% 7/1/24 (FGIC) | | 1,000,000 | | | 988,930 |
| 5.00% 7/1/26 (FGIC) | | 3,750,000 | | | 3,648,788 |
| Scottsdale Water & Sewer Revenue | | | | | |
| 4.00% 7/1/14 | | 175,000 | | | 179,428 |
| 4.00% 7/1/15 | | 500,000 | | | 508,580 |
| 4.00% 7/1/16 | | 375,000 | | | 377,366 |
| 5.25% 7/1/22 | | 1,150,000 | | | 1,197,058 |
| | | | | | 11,660,260 |
| Total Municipal Bonds (cost $134,303,874) | | | | | 131,931,063 |
| |
| | Number of shares | | | |
| Short-Term Investment – 1.61% |
| Money Market Instrument – 1.61% | | | | | |
| Federated Arizona Municipal Cash Trust | | 2,181,543 | | | 2,181,543 |
| Total Short-Term Investment (cost $2,181,543) | | | | | 2,181,543 |
15
Statements of net assets
Delaware Tax-Free Arizona Fund
| | |
| Total Value of Securities – 98.74% (cost $136,485,417) | $ | 134,112,606 | |
| Receivables and Other Assets | | | |
| Net of Liabilities – 1.26% | | 1,718,431 | |
| Net Assets Applicable to 12,783,763 | | | |
| Shares Outstanding – 100.00% | $ | 135,831,037 | |
| |
| Net Asset Value – Delaware Tax-Free Arizona Fund | | | |
| Class A ($117,640,712 / 11,073,934 Shares) | | | $10.62 | |
| Net Asset Value – Delaware Tax-Free Arizona Fund | | | |
| Class B ($10,462,309 / 984,159 Shares) | | | $10.63 | |
| Net Asset Value – Delaware Tax-Free Arizona Fund | | | |
| Class C ($7,728,016 / 725,670 Shares) | | | $10.65 | |
| |
| Components of Net Assets at February 29, 2008: | | | |
| Shares of beneficial interest | | | |
| (unlimited authorization – no par) | $ | 140,397,883 | |
| Accumulated net realized loss on investments | | (2,194,035 | ) |
| Net unrealized depreciation of investments | | (2,372,811 | ) |
| Total net assets | $ | 135,831,037 | |
| f | Step coupon bond. Coupon increases periodically based on a predetermined schedule. Stated rate in effect at February 29, 2008. |
| § | Pre-Refunded Bonds. Municipals 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. |
16
| |
Summary of abbreviations:
ACA — Insured by American Capital Access
AMBAC — Insured by the AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
FGIC — Insured by the Financial Guaranty Insurance Company
FHLMC — Insured by the Federal Home Loan Mortgage Corporation
FNMA — Insured by Federal National Mortgage Association
FSA — Insured by Financial Security Assurance
GNMA — Insured by Government National Mortgage Association
MBIA — Insured by the Municipal Bond Insurance Association
RADIAN — Insured by Radian Asset Assurance |
| Net Asset Value and Offering Price Per Share – | | |
| Delaware Tax-Free Arizona Fund | | |
| Net asset value Class A (A) | $ | 10.62 |
| Sales charge (4.50% of offering price) (B) | | 0.50 |
| Offering price | $ | 11.12 |
| (A) | | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. |
| |
| (B) | | See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
17
| Statements of net assets | |
| Delaware Tax-Free California Fund | February 29, 2008 (unaudited) |
| | Principal amount | | Value |
| Municipal Bonds – 96.54% |
| Education Revenue Bonds – 11.23% | | | | | |
| California Educational Facilities Authority Revenue | | | | | |
| (University of the Pacific) 5.25% 5/1/34 | $ | 1,000,000 | | $ | 957,440 |
| (Un-Refunded Balance) 5.75% 11/1/30 (MBIA) | | 310,000 | | | 313,329 |
| (Woodbury University) 5.00% 1/1/36 | | 1,000,000 | | | 811,860 |
| California Municipal Finance Authority Educational Revenue | | | | | |
| (American Heritage Foundation Project) | | | | | |
| Series A 5.25% 6/1/36 | | 1,000,000 | | | 820,890 |
| (University Students Co-op Association) 5.00% 4/1/37 | | 1,000,000 | | | 808,940 |
| California Statewide Communities Development | | | | | |
| Authority Revenue | | | | | |
| (California Baptist University Project) | | | | | |
| Series A 5.50% 11/1/38 | | 1,000,000 | | | 853,090 |
| (Viewpoint School Project) 5.75% 10/1/33 (ACA) | | 1,000,000 | | | 912,210 |
| (Windrush School Project) 5.50% 7/1/37 | | 1,000,000 | | | 839,460 |
| California Statewide Communities Development | | | | | |
| Authority Student Housing Revenue | | | | | |
| (East Campus Apartments, LLC) | | | | | |
| Series A 5.625% 8/1/34 (ACA) | | 1,000,000 | | | 841,700 |
| (Irvine, LLC-UCI East) 5.00% 5/15/38 | | 1,000,000 | | | 836,360 |
| San Diego County Certificates of Participation | | | | | |
| (University of San Diego) 5.375% 10/1/41 | | 1,000,000 | | | 957,320 |
| University of California Revenue Series L | | | | | |
| 5.00% 5/15/16 | | 225,000 | | | 241,776 |
| 5.00% 5/15/19 | | 850,000 | | | 887,307 |
| | | | | | 10,081,682 |
| Electric Revenue Bonds – 0.91% | | | | | |
| Chino Basin Regional Financing Authority Revenue | | | | | |
| Series A 5.00% 11/1/24 (AMBAC) | | 845,000 | | | 819,836 |
| | | | | | 819,836 |
| Health Care Revenue Bonds – 6.46% | | | | | |
| Association Bay Area Governments Finance Authority | | | | | |
| for California Nonprofit Corporations (San Diego | | | | | |
| Hospital Association) Series A 6.125% 8/15/20 | | 1,250,000 | | | 1,276,325 |
| California Health Facilities Financing Authority Revenue | | | | | |
| (Catholic Healthcare West) Series G 5.25% 7/1/23 | | 1,000,000 | | | 977,790 |
| (The Episcopal Home) Series A 5.30% 2/1/32 (RADIAN) | | 1,000,000 | | | 939,390 |
| California Infrastructure & Economic Development Bank | | | | | |
| Revenue (Kaiser Hospital Associates I, LLC) Series A | | | | | |
| 5.55% 8/1/31 | | 1,000,000 | | | 981,320 |
18
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| Health Care Revenue Bonds (continued) | | | | | |
| California Statewide Communities Development | | | | | |
| Authority Revenue Series A | | | | | |
| (Presbyterian Homes) 4.875% 11/15/36 | $ | 1,000,000 | | $ | 807,340 |
| (Valleycare Health Systems) 5.125% 7/15/31 | | 1,000,000 | | | 820,800 |
| | | | | | 5,802,965 |
| Housing Revenue Bonds – 6.34% | | | | | |
| California Statewide Communities Development | | | | | |
| Authority Multifamily Housing Revenue | | | | | |
| (Citrus Gardens Apartments) Series D-1 5.375% 7/1/32 | | 1,800,000 | | | 1,708,614 |
| (Silver Ridge Apartments) Series H 5.80% 8/1/33 | | | | | |
| (FNMA) (AMT) | | 1,000,000 | | | 1,017,690 |
| Palm Springs Mobile Home Park Revenue (Sahara | | | | | |
| Mobile Home Park) Series A 5.75% 5/15/37 | | 1,000,000 | | | 935,050 |
| Santa Clara County Multifamily Housing Authority | | | | | |
| Revenue (Rivertown Apartments Project) | | | | | |
| Series A 5.85% 8/1/31 (AMT) | | 1,000,000 | | | 1,004,180 |
| Ventura County Area Multifamily Housing Authority | | | | | |
| Revenue (Glen Oaks Apartments) | | | | | |
| Series A 6.35% 7/20/34 (GNMA) | | 976,000 | | | 1,021,413 |
| | | | | | 5,686,947 |
| Lease Revenue Bonds – 7.23% | | | | | |
| California Public Works Board Lease Revenue | | | | | |
| (Department of Corrections) | | | | | |
| Series A 5.00% 3/1/27 (AMBAC) | | 1,000,000 | | | 953,970 |
| Series C 5.25% 6/1/28 | | 1,500,000 | | | 1,429,755 |
| Franklin-McKinley School District Certificates of | | | | | |
| Participation (Financing Project) | | | | | |
| Series B 5.00% 9/1/27 (AMBAC) | | 1,060,000 | | | 998,287 |
| Puerto Rico Public Buildings Authority Revenue | | | | | |
| (Government Facilities) | | | | | |
| Series B 5.50% 7/1/35 (AMBAC) | | 700,000 | | | 731,388 |
| San Diego County Certificates of Participation | | | | | |
| 5.75% 7/1/31 (MBIA) | | 1,000,000 | | | 1,012,910 |
| San Juan Basin Authority (Ground Water Recovery | | | | | |
| Project) 5.00% 12/1/34 (AMBAC) | | 1,000,000 | | | 950,840 |
| ^San Mateo Union High School District Certificates of | | | | | |
| Participation Capital Appreciation (Partnership | | | | | |
| Phase I Projects) Series B 5.00% 12/15/43 (AMBAC) | | 1,000,000 | | | 411,220 |
| | | | | | 6,488,370 |
19
Statements of net assets
Delaware Tax-Free California Fund
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| Local General Obligation Bonds – 14.63% | | | | | |
| ^Anaheim School District Election 2002 Capital | | | | | |
| Appreciation 4.58% 8/1/25 (MBIA) | $ | 1,250,000 | | $ | 440,425 |
| Commerce Joint Powers Financing Authority Revenue | | | | | |
| Un-Refunded Balance Series A (Redevelopment | | | | | |
| Projects) 5.00% 8/1/28 (RADIAN) | | 940,000 | | | 866,473 |
| Culver City Redevelopment Agency Refunding | | | | | |
| (Tax Allocation Redevelopment Project) | | | | | |
| Series A 5.00% 11/1/25 (AMBAC) | | 1,000,000 | | | 947,330 |
| Fairfield-Suisun Unified School District Election 2002 | | | | | |
| 5.50% 8/1/28 (MBIA) | | 500,000 | | | 501,850 |
| Fremont Community Facilities District #1 | | | | | |
| (Special Tax Pacific Commons) 5.375% 9/1/36 | | 1,000,000 | | | 837,420 |
| Grossmont Union High School District Election 2004 | | | | | |
| 5.00% 8/1/23 (MBIA) | | 1,000,000 | | | 1,001,800 |
| Lake Elsinore Public Financing Authority | | | | | |
| (Tax Allocation) Series A 5.50% 9/1/30 | | 1,000,000 | | | 956,510 |
| Lammersville School District Community | | | | | |
| Facilities District #2002 (Mountain House) | | | | | |
| 5.125% 9/1/35 | | 500,000 | | | 407,255 |
| Lawndale Elementary School District | | | | | |
| Series B 5.00% 8/1/32 (FSA) | | 1,000,000 | | | 966,840 |
| Los Angeles Unified School District Refunding | | | | | |
| Series B 4.75% 7/1/19 (FSA) | | 1,000,000 | | | 1,019,610 |
| Modesto Special Tax Community Facilities District #04-1 | | | | | |
| Village 2 5.15% 9/1/36 (MBIA) | | 1,000,000 | | | 792,890 |
| Monterey Peninsula Community College District | | | | | |
| Election 2002 Series C 4.50% 8/1/19 (FSA) | | 1,000,000 | | | 1,000,280 |
| Poway Redevelopment Agency Tax Allocation | | | | | |
| Refunding 5.75% 6/15/33 (MBIA) | | 270,000 | | | 275,519 |
| Poway Unified School District Special Tax Community | | | | | |
| Facilities District #6 5.60% 9/1/33 | | 1,000,000 | | | 926,620 |
| Roseville Westpark Special Tax Public Community | | | | | |
| Facilities District #1 5.25% 9/1/37 | | 500,000 | | | 393,730 |
| San Bernardino County Special Tax Community | | | | | |
| Facilities District #2002-1 5.90% 9/1/33 | | 2,000,000 | | | 1,793,340 |
| | | | | | 13,127,892 |
20
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| §Pre-Refunded Bonds – 25.12% | | | | | |
| California Educational Facilities Authority Revenue | | | | | |
| (Pepperdine University) Series A 5.50% 8/1/32-09 | $ | 1,000,000 | | $ | 1,037,720 |
| (University of the Pacific) 5.75% 11/1/30-10 (MBIA) | | 690,000 | | | 740,405 |
| California Department of Water Resources Power Supply | | | | | |
| Revenue Series A 5.375% 5/1/21-12 | | 2,000,000 | | | 2,185,900 |
| California State | | | | | |
| 5.00% 2/1/33-14 | | 1,000,000 | | | 1,074,150 |
| 5.00% 2/1/33-14 (MBIA) | | 1,000,000 | | | 1,074,150 |
| Commerce Joint Powers Financing Authority Revenue | | | | | |
| (Redevelopment Projects) Series A | | | | | |
| 5.00% 8/1/28-13 (RADIAN) | | 60,000 | | | 64,479 |
| Golden State Tobacco Securitization Settlement | | | | | |
| Revenue (Asset-Backed Senior Notes) | | | | | |
| 5.50% 6/1/43-13 (RADIAN) | | 1,000,000 | | | 1,078,750 |
| 5.625% 6/1/33-13 | | 1,000,000 | | | 1,084,650 |
| Oakland Industrial Revenue (1800 Harrison Foundation) | | | | | |
| Series B 6.00% 1/1/29-10 (AMBAC) | | 1,300,000 | | | 1,376,999 |
| Poway Redevelopment Agency Tax Allocation | | | | | |
| 5.75% 6/15/33-10 (MBIA) | | 1,130,000 | | | 1,236,875 |
| Puerto Rico Commonwealth Highway & Transportation | | | | | |
| Authority Revenue Series K 5.00% 7/1/45-15 | | 1,500,000 | | | 1,622,745 |
| Puerto Rico Commonwealth Series B 5.00% 7/1/35-16 | | 1,000,000 | | | 1,078,720 |
| Puerto Rico Public Buildings Authority Revenue | | | | | |
| (Guaranteed Government Facilities) | | | | | |
| Series I 5.50% 7/1/23-14 | | 1,000,000 | | | 1,096,980 |
| Riverside County Redevelopment Agency Tax Allocation | | | | | |
| (Jurupa Valley Project) | | | | | |
| 5.25% 10/1/35-11 (AMBAC) | | 1,590,000 | | | 1,732,846 |
| San Diego County Certificates of Participation (The | | | | | |
| Burnham Institute) 6.25% 9/1/29-09 | | 1,000,000 | | | 1,059,420 |
| San Diego Unified School District Series E | | | | | |
| 5.00% 7/1/28-13 (FSA) | | 2,000,000 | | | 2,000,140 |
| San Francisco Bay Area Transit Financing Authority Sales | | | | | |
| Tax Revenue 5.125% 7/1/36-11 (AMBAC) | | 740,000 | | | 787,271 |
| Sequoia Union High School District Election 2001 | | | | | |
| 5.125% 7/1/31-11 (FSA) | | 1,000,000 | | | 1,081,930 |
| Southern California Logistics Airport Authority Tax | | | | | |
| Allocation 6.50% 12/1/31-11 | | 1,000,000 | | | 1,130,730 |
| | | | | | 22,544,860 |
21
Statements of net assets
Delaware Tax-Free California Fund
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| Resource Recovery Revenue Bonds – 4.28% | | | | | |
| Salinas Valley Solid Waste Authority Revenue | | | | | |
| 5.25% 8/1/27 (AMBAC) (AMT) | $ | 2,000,000 | | $ | 1,922,240 |
| 5.25% 8/1/31 (AMBAC) (AMT) | | 2,000,000 | | | 1,916,740 |
| | | | | | 3,838,980 |
| Special Tax Revenue Bonds – 3.26% | | | | | |
| Palm Drive Health Care District Parcel Tax Revenue | | | | | |
| 5.25% 4/1/30 | | 2,000,000 | | | 1,657,000 |
| Puerto Rico Commonwealth Government Development | | | | | |
| Bank Senior Notes Series B 5.00% 12/1/15 | | 1,000,000 | | | 1,015,270 |
| San Francisco Bay Area Rapid Transit Financing | | | | | |
| Authority Tax Revenue Un-Refunded Balance | | | | | |
| 5.125% 7/1/36 (AMBAC) | | 260,000 | | | 250,029 |
| | | | | | 2,922,299 |
| State General Obligation Bonds – 8.31% | | | | | |
| California State | | | | | |
| Refunding 5.00% 8/1/18 | | 1,500,000 | | | 1,533,195 |
| Refunding 5.00% 11/1/21 | | 1,500,000 | | | 1,479,735 |
| Variable Purposes 5.50% 11/1/33 | | 2,000,000 | | | 2,007,560 |
| ŸCalifornia State Veterans Series BJ 5.70% 12/1/32 (AMT) | | 640,000 | | | 628,115 |
| Puerto Rico Commonwealth Public Improvement | | | | | |
| Refunding Series A 5.25% 7/1/15 | | 1,750,000 | | | 1,807,400 |
| | | | | | 7,456,005 |
| Transportation Revenue Bonds – 5.42% | | | | | |
| Bay Area Toll Authority Bridge Revenue Series F | | | | | |
| 5.00% 4/1/22 | | 1,000,000 | | | 1,007,950 |
| Port of Oakland Revenue Series L 5.375% 11/1/27 | | | | | |
| (FGIC) (AMT) | | 1,000,000 | | | 941,490 |
| Sacramento County Airport System Revenue Series A | | | | | |
| 5.00% 7/1/32 (FSA) | | 1,000,000 | | | 963,140 |
| San Diego Redevelopment Agency (Centre City | | | | | |
| Redevelopment Project) Series A 6.40% 9/1/25 | | 1,000,000 | | | 1,003,310 |
| San Jose Airport Revenue Series A 5.00% 3/1/31 (FGIC) | | 1,000,000 | | | 948,930 |
| | | | | | 4,864,820 |
| Water & Sewer Revenue Bonds – 3.35% | | | | | |
| California Department of Water Resources Systems | | | | | |
| Revenue (Central Valley Project) | | | | | |
| Series X 5.00% 12/1/29 (FGIC) | | 1,000,000 | | | 958,960 |
| Glendale Water Revenue 4.00% 2/1/18 (FSA) | | 1,120,000 | | | 1,088,382 |
22
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| Water & Sewer Revenue Bonds (continued) | | | | | |
| Metropolitan Water District of Southern California | | | | | |
| Waterworks Authority Revenue Series B-1 | | | | | |
| 5.00% 10/1/36 (FGIC) | $ | 1,000,000 | | $ | 957,450 |
| | | | | | 3,004,792 |
| Total Municipal Bonds (cost $90,194,181) | | | | | 86,639,448 |
| |
| | Number of shares | | | |
| Short-Term Investments – 0.62% | | | | | |
| Money Market Instrument – 0.51% | | | | | |
| Federated California Municipal Cash Trust | | 456,185 | | | 456,185 |
| | | | | | 456,185 |
| |
| | Principal amount | | | |
| ŸVariable Rate Demand Note – 0.11% | | | | | |
| California State Kindergarten (University Public Project) | | | | | |
| Series A 3.00% 5/1/34 | $ | 100,000 | | | 100,000 |
| | | | | | 100,000 |
| Total Short-Term Investments (cost $556,185) | | | | | 556,185 |
| |
| Total Value of Securities – 97.16% (cost $90,750,366) | | | | | 87,195,633 |
| Receivables and Other Assets | | | | | |
| Net of Liabilities – 2.84% | | | | | 2,547,772 |
| Net Assets Applicable to 8,591,656 | | | | | |
| Shares Outstanding – 100.00% | | | | $ | 89,743,405 |
| |
| Net Asset Value – Delaware Tax-Free California Fund | | | | | |
| Class A ($68,777,431 / 6,588,237 Shares) | | | | | | $10.44 |
| Net Asset Value – Delaware Tax-Free California Fund | | | | | |
| Class B ($7,647,006 / 729,553 Shares) | | | | | | $10.48 |
| Net Asset Value – Delaware Tax-Free California Fund | | | | | |
| Class C ($13,318,968 / 1,273,866 Shares) | | | | | | $10.46 |
23
Statements of net assets
Delaware Tax-Free California Fund
| | |
| Components of Net Assets at February 29, 2008: | | | |
| Shares of beneficial interest | | | |
| (unlimited authorization – no par) | $ | 94,575,736 | |
| Undistributed net investment income | | 1,300 | |
| Accumulated net realized loss on investments | | (1,278,898 | ) |
| Net unrealized depreciation of investments | | (3,554,733 | ) |
| Total net assets | $ | 89,743,405 | |
| ^ | Zero coupon security. The rate shown is the yield at the time of purchase. |
| § | Pre-Refunded Bonds. Municipals 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.” |
| Ÿ | Variable rate security. The rate shown is the rate as of February 29, 2008. |
Summary of abbreviations:
ACA — Insured by American Capital Access
AMBAC — Insured by the AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
FGIC — Insured by the Financial Guaranty Insurance Company
FNMA — Insured by Federal National Mortgage Association
FSA — Insured by Financial Security Assurance
GNMA — Insured by Government National Mortgage Association
MBIA — Insured by the Municipal Bond Insurance Association
RADIAN — Insured by Radian Asset Assurance
| Net Asset Value and Offering Price Per Share – | | |
| Delaware Tax-Free California Fund | | |
| Net asset value Class A (A) | $ | 10.44 |
| Sales charge (4.50% of offering price) (B) | | 0.49 |
| Offering price | $ | 10.93 |
| (A) | | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. |
| |
| (B) | | See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
24
| Delaware Tax-Free Colorado Fund | February 29, 2008 (unaudited) |
| | Principal amount | | Value |
| Municipal Bonds – 96.66% |
| Education Revenue Bonds – 13.99% | | | | | |
| Boulder County Development Revenue | | | | | |
| (University Corp. for Atmospheric Research) | | | | | |
| 5.00% 9/1/33 (MBIA) | $ | 1,000,000 | | $ | 948,930 |
| 5.00% 9/1/35 (AMBAC) | | 2,000,000 | | | 1,894,280 |
| Colorado Educational & Cultural Facilities | | | | | |
| Authority Revenue | | | | | |
| (Charter School Project) 5.50% 5/1/36 (XLCA) | | 2,280,000 | | | 2,250,862 |
| (Johnson & Wales University Project) Series A | | | | | |
| 5.00% 4/1/28 (XLCA) | | 1,000,000 | | | 931,780 |
| (Liberty Common Charter School Project) | | | | | |
| 5.125% 12/1/33 (XLCA) | | 2,740,000 | | | 2,577,600 |
| (Montessori Districts Charter School Projects) | | | | | |
| 6.125% 7/15/32 | | 5,590,000 | | | 5,273,047 |
| (Pinnacle Charter School Project) 5.00% 6/1/33 (XLCA) | | 2,170,000 | | | 2,014,281 |
| (Renaissance Charter School Project) 6.75% 6/1/29 | | 2,000,000 | | | 1,786,220 |
| (University of Northern Colorado Student | | | | | |
| Housing Project) 5.125% 7/1/37 (MBIA) | | 7,500,000 | | | 7,186,874 |
| (Woodrow Wilson Charter School Project) | | | | | |
| 5.25% 12/1/34 (XLCA) | | 1,960,000 | | | 1,870,487 |
| Colorado School Mines Auxiliary Facilities Revenue | | | | | |
| 5.00% 12/1/37 (AMBAC) | | 425,000 | | | 401,132 |
| University of Colorado Enterprise System Revenue Series A | | | | | |
| 5.00% 6/1/30 (AMBAC) | | 3,155,000 | | | 3,035,899 |
| 5.375% 6/1/26 | | 1,000,000 | | | 1,003,610 |
| University of Puerto Rico Revenue Series Q 5.00% 6/1/36 | | 3,750,000 | | | 3,359,100 |
| | | | | | 34,534,102 |
| Electric Revenue Bonds – 1.93% | | | | | |
| Colorado Springs Utilities Revenue Series A | | | | | |
| 5.00% 11/15/29 | | 5,000,000 | | | 4,764,100 |
| | | | | | 4,764,100 |
| Escrowed to Maturity Bonds – 2.24% | | | | | |
| Colorado Health Facilities Authority Revenue | | | | | |
| (Catholic Health Initiatives) Series A 5.50% 3/1/32 | | 5,000,000 | | | 5,071,600 |
| Galleria Metropolitan District 7.25% 12/1/09 | | 445,000 | | | 463,761 |
| | | | | | 5,535,361 |
| Health Care Revenue Bonds – 12.80% | | | | | |
| Colorado Health Facilities Authority Revenue | | | | | |
| Ÿ(Adventist Health Project) Series D 5.25% 11/15/35 | | 2,000,000 | | | 1,842,600 |
| (Catholic Health Initiatives) Series A 4.75% 9/1/40 | | 1,000,000 | | | 866,480 |
25
Statements of net assets
Delaware Tax-Free Colorado Fund
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| Health Care Revenue Bonds (continued) | | | | | |
| Colorado Health Facilities Authority Revenue | | | | | |
| (Christian Living Community Project) Series A | | | | | |
| 5.75% 1/1/37 | $ | 1,500,000 | | $ | 1,289,325 |
| (Covenant Retirement Communities) Series A | | | | | |
| 5.50% 12/1/33 (RADIAN) | | 5,000,000 | | | 4,717,400 |
| (Evangelical Lutheran) | | | | | |
| 5.00% 6/1/35 | | 2,000,000 | | | 1,725,840 |
| Series A 5.25% 6/1/34 | | 2,750,000 | | | 2,472,113 |
| (Parkview Medical Center) 5.00% 9/1/25 | | 1,000,000 | | | 926,230 |
| (Porter Place) Series A 6.00% 1/20/36 (GNMA) | | 5,000,000 | | | 5,099,049 |
| (Vail Valley Medical Center Project) 5.80% 1/15/27 | | 3,475,000 | | | 3,382,322 |
| Delta County Memorial Hospital District Enterprise | | | | | |
| Revenue 5.35% 9/1/17 | | 4,000,000 | | | 3,967,680 |
| Denver Health & Hospital Authority Health Care Revenue | | | | | |
| Series A 4.75% 12/1/36 | | 2,500,000 | | | 1,966,000 |
| Mesa County Residential Care Facilities Mortgage | | | | | |
| Revenue (Hilltop Community Resources) | | | | | |
| Series A 5.375% 12/1/28 (RADIAN) | | 2,000,000 | | | 1,909,600 |
| University of Colorado Hospital Authority Revenue | | | | | |
| Series A 5.00% 11/15/37 | | 1,690,000 | | | 1,426,073 |
| | | | | | 31,590,712 |
| Housing Revenue Bonds – 1.49% | | | | | |
| Colorado Housing & Finance Authority | | | | | |
| (Multifamily Housing Insured Mortgage) | | | | | |
| Series A-3 6.25% 10/1/26 (FHA) | | 140,000 | | | 142,649 |
| Series C-3 6.15% 10/1/41 | | 1,590,000 | | | 1,603,674 |
| Denver City & County Multifamily Federal Housing | | | | | |
| Authority Revenue (Insured Mortgage Loan - Garden | | | | | |
| Court) 5.40% 7/1/39 (FHA) | | 2,000,000 | | | 1,932,480 |
| | | | | | 3,678,803 |
| Lease Revenue Bonds – 3.95% | | | | | |
| Colorado Educational & Cultural National Conference of | | | | | |
| State Legislatures Office Building Facilities | | | | | |
| Authority Revenue 5.25% 6/1/21 | | 2,000,000 | | | 2,001,020 |
| @Conejos & Alamosa Counties School District #11J | | | | | |
| Certificates of Participation 6.50% 4/1/11 | | 820,000 | | | 821,099 |
26
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| Lease Revenue Bonds (continued) | | | | | |
| El Paso County Certificates of Participation | | | | | |
| (Detention Facilities Project) Series B | | | | | |
| 5.00% 12/1/27 (AMBAC) | $ | 1,500,000 | | $ | 1,445,175 |
| Fremont County Certificates of Participation Refunding & | | | | | |
| Improvement Series A 5.25% 12/15/24 (MBIA) | | 3,045,000 | | | 3,067,411 |
| Puerto Rico Public Buildings Authority Revenue | | | | | |
| (Guaranteed Government Facilities) | | | | | |
| Series I 5.25% 7/1/33 | | 1,475,000 | | | 1,367,856 |
| Series M-2 5.50% 7/1/35 (AMBAC) | | 1,000,000 | | | 1,044,840 |
| | | | | | 9,747,401 |
| Local General Obligation Bonds – 15.98% | | | | | |
| Arapahoe County Water & Wastewater Public | | | | | |
| Improvement District Revenue Series A | | | | | |
| 5.125% 12/1/32 (MBIA) | | 4,500,000 | | | 4,373,595 |
| Denver City & County Justice System | | | | | |
| 5.50% 8/1/16 | | 5,000,000 | | | 5,556,200 |
| (Facilities & Zoo) 5.00% 8/1/19 | | 1,020,000 | | | 1,054,445 |
| Denver West Metropolitan District | | | | | |
| 5.00% 12/1/33 (RADIAN) | | 1,400,000 | | | 1,247,638 |
| Douglas County School District #1 (Douglas & Elbert | | | | | |
| Counties) Series B 5.125% 12/15/25 (FSA) | | 2,000,000 | | | 2,003,640 |
| El Paso County School District #2 (Harrison) | | | | | |
| 5.00% 12/1/27 (MBIA) | | 2,115,000 | | | 2,047,764 |
| Garfield County School District #2 5.00% 12/1/25 (FSA) | | 3,280,000 | | | 3,257,211 |
| Grand County School District #2 (East Grand) | | | | | |
| 5.25% 12/1/25 (FSA) | | 2,485,000 | | | 2,516,982 |
| La Plata County School District #9-R (Durango) | | | | | |
| 5.125% 11/1/24 (MBIA) | | 1,000,000 | | | 1,005,060 |
| Loveland Special Improvements District #1 7.50% 7/1/29 | | 5,540,000 | | | 6,142,587 |
| Meridian Metropolitan District Series A | | | | | |
| 5.00% 12/1/31 (RADIAN) | | 5,750,000 | | | 5,133,140 |
| North Range Metropolitan | | | | | |
| District #1 4.50% 12/15/31 (ACA) | | 1,500,000 | | | 1,069,035 |
| District #2 5.50% 12/15/37 | | 1,200,000 | | | 962,640 |
| Saddle Rock Metropolitan District | | | | | |
| 5.35% 12/1/31 (RADIAN) | | 1,580,000 | | | 1,475,293 |
27
Statements of net assets
Delaware Tax-Free Colorado Fund
| | Principal amount | | Value |
| Municipal Bonds (continued) |
| Local General Obligation Bonds (continued) | | | | | |
| Sand Creek Metropolitan District Refunding & | | | | | |
| Improvement 5.00% 12/1/31 (XLCA) | $ | 500,000 | | $ | 452,300 |
| Weld County School District #4 5.00% 12/1/19 (FSA) | | 1,085,000 | | | 1,132,783 |
| | | | | | 39,430,313 |
| §Pre-Refunded Bonds – 32.95% | | | | | |
| Aurora Certificates of Participation | | | | | |
| 5.50% 12/1/30-10 (AMBAC) | | 8,000,000 | | | 8,528,720 |
| Boulder County Hospital Revenue (Development | | | | | |
| Longmont United Hospital Project) | | | | | |
| 6.00% 12/1/30-10 (RADIAN) | | 5,000,000 | | | 5,390,600 |
| Burlingame Multifamily Housing Revenue Series A | | | | | |
| 6.00% 11/1/29-09 (MBIA) | | 1,250,000 | | | 1,326,675 |
| Colorado Educational & Cultural Facilities | | | | | |
| Authority Revenue | | | | | |
| (Core Knowledge Charter School Project) | | | | | |
| 7.00% 11/1/29-09 | | 1,000,000 | | | 1,067,160 |
| (Littleton Academy Charter School Project) | | | | | |
| 6.125% 1/15/31-12 | | 2,000,000 | | | 2,198,100 |
| (Pinnacle Charter School Project) 6.00% 12/1/21-11 | | 1,750,000 | | | 1,919,715 |
| (Stargate Charter School Project) 6.125% 5/1/33-13 | | 2,000,000 | | | 2,236,760 |
| (University of Denver Project) | | | | | |
| 5.375% 3/1/23-11 (AMBAC) | | 2,000,000 | | | 2,128,960 |
| Series A 5.00% 3/1/27-12 (MBIA) | | 5,000,000 | | | 5,310,300 |
| Colorado School Mines Auxiliary Facilities | | | | | |
| 5.00% 12/1/37-12 (AMBAC) | | 2,705,000 | | | 2,899,192 |
| Colorado Springs Revenue (Colorado College Project) | | | | | |
| 5.375% 6/1/32-09 | | 2,570,000 | | | 2,677,143 |
| Denver Health & Hospital Authority Health Care Revenue | | | | | |
| Series A 5.375% 12/1/28-08 (ACA) | | 2,770,000 | | | 2,855,510 |
| E-470 Public Highway Authority Revenue Series A | | | | | |
| 5.75% 9/1/35-10 (MBIA) | | 3,100,000 | | | 3,354,138 |
| El Paso County Certificates of Participation | | | | | |
| (Judicial Building Project) Series A | | | | | |
| 5.00% 12/1/27-12 (AMBAC) | | 2,000,000 | | | 2,130,000 |
| El Paso County School District #49 (Falcon) 5.50% | | | | | |
| 12/1/21-11 (FGIC) | | 3,580,000 | | | 3,872,307 |
| Fremont County School District #1 (Canon City) | | | | | |
| 5.00% 12/1/24-13 (MBIA) | | 1,735,000 | | | 1,876,750 |
28
| | Principal amount | | Value |
| Municipal Bonds (continued) | | | | | | |
| §Pre-Refunded Bonds (continued) | | | | | | |
| Garfield Pitkin & Eagle County School District #1 | | | | | | |
| (Roaring Fork) Series A 5.00% 12/15/27-14 (FSA) | | $ | 1,500,000 | | $ | 1,621,560 |
| Lincoln Park Metropolitan District 7.75% 12/1/26-11 | | | 2,500,000 | | | 2,551,075 |
| North Range Metropolitan District #1 7.25% 12/15/31-11 | | | 3,390,000 | | | 3,829,920 |
| Northwest Parkway Public Highway Authority Revenue | | | | | | |
| Series A 5.25% 6/15/41-11 (FSA) | | | 11,100,000 | | | 11,947,041 |
| Pueblo County Certificates of Participation | | | | | | |
| 6.50% 12/1/24-10 | | | 5,460,000 | | | 5,958,170 |
| Puerto Rico Commonwealth | | | | | | |
| Series A 5.25% 7/1/30-16 | | | 1,235,000 | | | 1,352,189 |
| Series B 5.00% 7/1/35-16 | | | 310,000 | | | 334,403 |
| Puerto Rico Public Buildings Authority Revenue | | | | | | |
| (Guaranteed Government Facilities) Series I | | | | | | |
| 5.25% 7/1/33-14 | | | 25,000 | | | 27,075 |
| University of Colorado Hospital Authority Revenue | | | | | | |
| Series A 5.60% 11/15/31-11 | | | 3,650,000 | | | 3,936,124 |
| | | | | | 81,329,587 |
| Special Tax Revenue Bonds – 2.96% | | | | | | |
| Baptist Road Rural Transportation Authority Sales & | | | | | | |
| Use Tax Revenue 5.00% 12/1/26 | | | 2,000,000 | | | 1,584,700 |
| Park Meadows Business Improvement District Shared | | | | | | |
| Sales Tax Revenue | | | | | | |
| 5.30% 12/1/27 | | | 950,000 | | | 867,911 |
| 5.35% 12/1/31 | | | 720,000 | | | 646,416 |
| Puerto Rico Commonwealth Government | | | | | | |
| Development Bank (Senior Notes) Series B | | | | | | |
| 5.00% 12/1/15 | | | 1,000,000 | | | 1,015,270 |
| Puerto Rico Commonwealth Infrastructure Financing | | | | | | |
| Authority Revenue Series B 5.00% 7/1/46 | | | 1,200,000 | | | 1,047,936 |
| Regional Transportation District Sales Tax Revenue | | | | | | |
| Series A 5.25% 11/1/18 | | | 2,000,000 | | | 2,142,540 |
| | | | | | 7,304,773 |
| State General Obligation Bonds – 4.45% | | | | | | |
| Puerto Rico Commonwealth | | | | | | |
| Series A 5.25% 7/1/30 | | | 765,000 | | | 709,912 |
| Series B 5.00% 7/1/35 | | | 190,000 | | | 170,704 |
29
Statements of net assets
Delaware Tax-Free Colorado Fund
| | Principal amount | | Value |
| Municipal Bonds (continued) | | | | | | |
| State General Obligation Bonds (continued) | | | | | | |
| Puerto Rico Commonwealth Public Improvement Series A | | | | | | |
| 5.25% 7/1/15 | | $ | 1,650,000 | | $ | 1,704,120 |
| 5.25% 7/1/21 | | | 4,000,000 | | | 3,887,640 |
| 5.50% 7/1/18 | | | 1,650,000 | | | 1,699,731 |
| Puerto Rico Government Development Bank (Senior | | | | | | |
| Notes) Series B 5.00% 12/1/14 | | | 1,000,000 | | | 1,025,210 |
| Virgin Islands Public Finance Authority Revenue | | | | | | |
| (Gross Receipts Taxes) 5.00% 10/1/31 (ACA) | | | 2,000,000 | | | 1,783,860 |
| | | | | | 10,981,177 |
| Transportation Revenue Bonds – 2.28% | | | | | | |
| Denver City & County Airport Revenue | | | | | | |
| Series A 5.00% 11/15/25 (FGIC) | | | 2,000,000 | | | 1,894,280 |
| Series B 5.00% 11/15/33 (XLCA) | | | 4,000,000 | | | 3,741,800 |
| | | | | | 5,636,080 |
| Water & Sewer Revenue Bonds – 1.64% | | | | | | |
| Pueblo Board of Waterworks Revenue 5.00% 11/1/21 (FSA) | | | 1,000,000 | | | 1,015,210 |
| Ute Utility Water Conservancy District Revenue | | | | | | |
| 5.75% 6/15/20 (MBIA) | | | 2,900,000 | | | 3,040,070 |
| | | | | | 4,055,280 |
| Total Municipal Bonds (cost $239,153,765) | | | | | | 238,587,689 |
| |
| Short-Term Investment – 0.29% | | | | | | |
| ŸVariable Rate Demand Note – 0.29% | | | | | | |
| Colorado Housing & Finance Authority Single Family | | | | | | |
| Mortgage Class I-B-2 3.25% 5/1/34 | | | 700,000 | | | 700,000 |
| Total Short-Term Investment (cost $700,000) | | | | | | 700,000 |
| |
| Total Value of Securities – 96.95% (cost $239,853,765) | | | | | | 239,287,689 |
| Receivables and Other Assets | | | | | | |
| Net of Liabilities – 3.05% | | | | | | 7,534,525 |
| Net Assets Applicable to 23,715,958 | | | | | | |
| Shares Outstanding – 100.00% | | | | | $ | 246,822,214 |
30
| | | | | |
| Net Asset Value – Delaware Tax-Free Colorado Fund | | | | |
| Class A ($232,850,853 / 22,375,733 Shares) | | | | $10.41 | |
| Net Asset Value – Delaware Tax-Free Colorado Fund | | | | |
| Class B ($4,479,337 / 430,152 Shares) | | | | $10.41 | |
| Net Asset Value – Delaware Tax-Free Colorado Fund | | | | |
| Class C ($9,492,024 / 910,073 Shares) | | | | $10.43 | |
| |
| Components of Net Assets at February 29, 2008: | | | | |
| Shares of beneficial interest (unlimited authorization - no par) | | $ | 255,312,421 | |
| Undistributed net investment income | | | 1,649 | |
| Accumulated net realized loss on investments | | | (7,925,780 | ) |
| Net unrealized depreciation of investments | | | (566,076 | ) |
| Total net assets | | $ | 246,822,214 | |
| Ÿ | Variable rate security. The rate shown is the rate as of February 29, 2008. |
| |
| @ | Illiquid security. At February 29, 2008, the aggregate amount of illiquid securities was $821,099, which represented 0.33% of the Fund's net assets. See Note 8 in “Notes to financial statements.” |
| |
| § | Pre-Refunded Bonds. Municipals 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.” |
Summary of abbreviations:
ACA — Insured by American Capital Access
AMBAC — Insured by the AMBAC Assurance Corporation
FGIC — Insured by the Financial Guaranty Insurance Company
FHA — Insured by the Federal Housing Administration
FSA — Insured by Financial Security Assurance
GNMA — Insured by Government National Mortgage Association
MBIA — Insured by the Municipal Bond Insurance Association
RADIAN — Insured by Radian Asset Assurance
XLCA — Insured by XL Capital Assurance
31
Statements of net assets
Delaware Tax-Free Colorado Fund
| | | |
| Net Asset Value and Offering Price Per Share – | | |
| Delaware Tax-Free Colorado Fund | | |
| Net asset value Class A (A) | $ | 10.41 |
| Sales charge (4.50% of offering price) (B) | | 0.49 |
| Offering price | $ | 10.90 |
| (A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. |
| |
| (B) | See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
32
| Delaware Tax-Free Idaho Fund | February 29, 2008 (unaudited) |
| | Principal amount | | Value |
| Municipal Bonds – 96.92% | | | | | | |
| Corporate Revenue Bonds – 7.22% | | | | | | |
| Meridian Economic Industrial Development Revenue | | | | | | |
| (Hi-Micro Project) 5.85% 8/15/11 (AMT) | | $ | 1,250,000 | | $ | 1,252,063 |
| Nez Perce County Pollution Control Revenue | | | | | | |
| (Potlatch Project) 6.00% 10/1/24 | | | 2,535,000 | | | 2,343,937 |
| Power County Pollution Control Revenue | | | | | | |
| (FMC Project) 5.625% 10/1/14 | | | 2,475,000 | | | 2,470,817 |
| | | | | | 6,066,817 |
| Education Revenue Bonds – 11.91% | | | | | | |
| Boise State University Revenue | | | | | | |
| 5.00% 4/1/17 (AMBAC) | | | 500,000 | | | 518,370 |
| 5.375% 4/1/22 (FGIC) | | | 15,000 | | | 15,161 |
| Series A 4.25% 4/1/32 (MBIA) | | | 1,500,000 | | | 1,289,250 |
| Series A 5.00% 4/1/18 (FGIC) | | | 1,500,000 | | | 1,536,285 |
| Idaho State University Revenue Refunding & Improvement | | | | | | |
| 5.00% 4/1/20 (FSA) | | | 1,130,000 | | | 1,147,436 |
| 5.00% 4/1/23 (FSA) | | | 2,115,000 | | | 2,120,562 |
| North Idaho College Dormitory Housing | | | | | | |
| Certificates of Participation 6.45% 10/1/16 | | | 1,000,000 | | | 1,001,180 |
| University of Idaho | | | | | | |
| (General Refunding) Series A 5.00% 4/1/21 (AMBAC) | | | 1,150,000 | | | 1,154,715 |
| Series B 4.50% 4/1/41 (FSA) | | | 1,000,000 | | | 1,001,980 |
| University of Puerto Rico Series Q 5.00% 6/1/36 | | | 250,000 | | | 223,940 |
| | | | | | 10,008,879 |
| Escrowed to Maturity Bonds – 2.16% | | | | | | |
| Puerto Rico Commonwealth Infrastructure Financing | | | | | | |
| Authority Revenue Series A 5.375% 10/1/24 | | | 1,750,000 | | | 1,811,880 |
| | | | | | 1,811,880 |
| Health Care Revenue Bonds – 4.04% | | | | | | |
| Idaho Health Facilities Authority Hospital Revenue | | | | | | |
| (Idaho Elks Rehabilitation Hospital Project) | | | | | | |
| 5.30% 7/15/18 | | | 625,000 | | | 616,144 |
| 5.45% 7/15/23 | | | 2,000,000 | | | 1,910,860 |
| Idaho Health Facilities Authority Revenue | | | | | | |
| (Portneuf Medical Center Project) | | | | | | |
| Series A 5.00% 9/1/35 (RADIAN) | | | 1,000,000 | | | 866,110 |
| | | | | | 3,393,114 |
33
Statements of net assets
Delaware Tax-Free Idaho Fund
| | Principal amount | | Value |
| Municipal Bonds (continued) | | | | | | |
| Housing Revenue Bonds – 6.80% | | | | | | |
| Idaho Housing Agency Single Family Mortgage Revenue | | | | | | |
| Series A 6.05% 7/1/13 (AMBAC) (FHA) (VA) (AMT) | | $ | 35,000 | | $ | 35,784 |
| Series A 6.10% 7/1/16 (FHA) (VA) (AMT) | | | 45,000 | | | 46,053 |
| Series A-1 6.85% 7/1/12 (AMT) | | | 5,000 | | | 5,085 |
| Series B 6.45% 7/1/15 (AMT) | | | 15,000 | | | 15,197 |
| Series C-2 6.35% 7/1/15 (AMT) | | | 15,000 | | | 15,013 |
| Series E 6.35% 7/1/15 (FHA) (AMT) | | | 40,000 | | | 40,038 |
| Series E-1 6.60% 7/1/11 | | | 5,000 | | | 5,079 |
| Series G-2 6.15% 7/1/15 (FHA) (VA) (AMT) | | | 145,000 | | | 146,775 |
| Idaho Housing & Finance Association Single Family | | | | | | |
| Mortgage Revenue | | | | | | |
| Series B Class I 5.00% 7/1/37 (AMT) | | | 1,000,000 | | | 889,050 |
| Series C Class III 5.35% 1/1/25 (AMT) | | | 300,000 | | | 283,278 |
| Series D Class III 5.45% 7/1/23 (AMT) | | | 1,075,000 | | | 1,037,031 |
| Series E Class III 4.875% 1/1/26 (AMT) | | | 1,445,000 | | | 1,309,474 |
| Series E Class III 5.00% 1/1/28 (AMT) | | | 1,000,000 | | | 945,190 |
| Series I Class I 5.45% 1/1/39 (MBIA) (AMT) | | | 1,000,000 | | | 938,350 |
| | | | | | 5,711,397 |
| Lease Revenue Bonds – 7.35% | | | | | | |
| Blaine School District #61 Certificate of Participation | | | | | | |
| 5.00% 7/30/10 (AMBAC) | | | 750,000 | | | 777,698 |
| Boise City Certificate of Participation | | | | | | |
| 5.375% 9/1/20 (FGIC) (AMT) | | | 2,100,000 | | | 2,092,818 |
| Boise City Revenue Series A 5.375% 12/1/31 (MBIA) | | | 500,000 | | | 497,630 |
| Idaho State Building Authority Revenue | | | | | | |
| Series A 5.00% 9/1/21 (MBIA) | | | 1,150,000 | | | 1,150,874 |
| Series A 5.00% 9/1/43 (XLCA) | | | 1,000,000 | | | 898,060 |
| Series B 5.00% 9/1/21 (MBIA) | | | 750,000 | | | 753,705 |
| | | | | | 6,170,785 |
| Local General Obligation Bonds – 28.76% | | | | | | |
| Ada & Canyon Counties Joint School District #2 Meridian | | | | | | |
| (School Board Guaranteed Program) | | | | | | |
| 4.75% 2/15/20 | | | 1,000,000 | | | 1,012,340 |
| 5.00% 7/30/20 | | | 2,155,000 | | | 2,184,307 |
| 5.125% 7/30/19 | | | 1,005,000 | | | 1,035,321 |
| 5.50% 7/30/16 | | | 1,305,000 | | | 1,449,137 |
| Bannock County School District #025 | | | | | | |
| (Pocatello Idaho School Board Guaranteed Program) | | | | | | |
| 5.00% 8/15/15 | | | 1,040,000 | | | 1,116,128 |
| 5.00% 8/15/16 | | | 1,100,000 | | | 1,170,114 |
34
| | Principal amount | | Value |
| Municipal Bonds (continued) | | | | | | |
| Local General Obligation Bonds (continued) | | | | | | |
| Boise City Independent School District 5.00% 8/1/24 (FSA) | | $ | 1,500,000 | | $ | 1,503,300 |
| Boise Urban Renewal Agency Parking Revenue | | | | | | |
| (Tax Increment) | | | | | | |
| Series A 6.125% 9/1/15 | | | 1,460,000 | | | 1,470,921 |
| Series B 6.125% 9/1/15 | | | 1,195,000 | | | 1,203,939 |
| Bonner County Local Improvement District #93-1 | | | | | | |
| 6.50% 4/30/08 | | | 110,000 | | | 110,485 |
| 6.50% 4/30/10 | | | 60,000 | | | 60,216 |
| Canyon County School District #132 (Caldwell) | | | | | | |
| 5.00% 7/30/15 (FGIC) | | | 2,000,000 | | | 2,137,560 |
| Series A 5.00% 9/15/22 (FSA) | | | 1,725,000 | | | 1,753,583 |
| Series A 5.00% 9/15/23 (FSA) | | | 1,810,000 | | | 1,827,032 |
| Coeur D’Alene Local Improvement District #6 | | | | | | |
| Series 1995 6.00% 7/1/09 | | | 85,000 | | | 85,813 |
| Series 1996 6.05% 7/1/10 | | | 90,000 | | | 90,787 |
| Series 1997 6.10% 7/1/12 | | | 40,000 | | | 40,294 |
| Series 1998 6.10% 7/1/14 | | | 45,000 | | | 45,281 |
| Lemhi County 5.20% 8/1/27 (FSA) | | | 2,145,000 | | | 2,139,701 |
| Nampa Idaho 5.00% 8/1/21 (FGIC) | | | 2,475,000 | | | 2,508,585 |
| Power & Cassia Counties Joint School District #381 | | | | | | |
| (American Falls) 5.00% 8/1/17 | | | 1,155,000 | | | 1,211,410 |
| | | | | | 24,156,254 |
| §Pre-Refunded Bonds – 14.39% | | | | | | |
| Boise State University Revenue Refunding & Improvement | | | | | | |
| 5.125% 4/1/31-12 (FGIC) | | | 1,000,000 | | | 1,067,860 |
| 5.375% 4/1/22-12 (FGIC) | | | 985,000 | | | 1,061,180 |
| Puerto Rico Commonwealth Highway & Transportation | | | | | | |
| Authority Revenue | | | | | | |
| Series D 5.25% 7/1/38-12 | | | 1,000,000 | | | 1,074,210 |
| Series G 5.00% 7/1/33-13 | | | 1,310,000 | | | 1,410,490 |
| Series Y 5.00% 7/1/36-16 | | | 1,250,000 | | | 1,348,400 |
| Puerto Rico Commonwealth Public Improvement Revenue | | | | | | |
| Series A 5.125% 7/1/31-11 | | | 1,010,000 | | | 1,072,539 |
| Puerto Rico Electric Power Authority Revenue | | | | | | |
| Series II 5.25% 7/1/31-12 | | | 1,000,000 | | | 1,084,960 |
| Series NN 5.125% 7/1/29-13 | | | 500,000 | | | 541,385 |
| Puerto Rico Public Buildings Authority Revenue | | | | | | |
| (Government Facilities) Series I 5.50% 7/1/23-14 | | | 1,000,000 | | | 1,096,980 |
35
Statements of net assets
Delaware Tax-Free Idaho Fund
| | Principal amount | | Value |
| Municipal Bonds (continued) | | | | | | |
| §Pre-Refunded Bonds (continued) | | | | | | |
| University of Idaho Revenue (Student Fee Housing | | | | | | |
| Improvements Project) 5.25% 4/1/31-11 (FGIC) | | $ | 2,195,000 | | $ | 2,330,607 |
| | | | | | 12,088,611 |
| Special Tax Revenue Bonds – 4.93% | | | | | | |
| Idaho Board Bank Authority Revenue Series B | | | | | | |
| 4.125% 9/15/36 (MBIA) | | | 755,000 | | | 611,731 |
| 5.00% 9/15/30 (MBIA) | | | 725,000 | | | 711,522 |
| Puerto Rico Commonwealth Highway & Transportation | | | | | | |
| Authority Revenue Series W 5.50% 7/1/15 | | | 175,000 | | | 186,184 |
| Puerto Rico Sales Tax Financing Revenue | | | | | | |
| Series A 5.25% 8/1/57 | | | 1,000,000 | | | 901,851 |
| Virgin Islands Public Finance Authority Revenue | | | | | | |
| (Senior Lien-Matching Fund Loan Note) Series A | | | | | | |
| 5.25% 10/1/20 | | | 500,000 | | | 489,835 |
| 5.25% 10/1/21 | | | 500,000 | | | 483,710 |
| 5.25% 10/1/24 | | | 800,000 | | | 755,512 |
| | | | | | 4,140,345 |
| State General Obligation Bonds – 3.66% | | | | | | |
| Puerto Rico Commonwealth Public Improvement | | | | | | |
| (Unrefunded Balance) Series A 5.125% 7/1/31 | | | 2,315,000 | | | 2,113,572 |
| Series A 5.25% 7/1/22 | | | 1,000,000 | | | 961,920 |
| | | | | | 3,075,492 |
| Transportation Revenue Bonds – 3.10% | | | | | | |
| Idaho Housing & Finance Association Highway Trust | | | | | | |
| 5.00% 7/15/24 (MBIA) | | | 2,000,000 | | | 1,982,240 |
| Puerto Rico Commonwealth Highway & Transportation | | | | | | |
| Authority Revenue Series G 5.00% 7/1/33 | | | 690,000 | | | 618,813 |
| | | | | | 2,601,053 |
| Water & Sewer Revenue Bonds – 2.60% | | | | | | |
| Moscow Sewer Revenue 5.00% 11/1/22 (FSA) | | | 2,175,000 | | | 2,187,441 |
| | | | | | 2,187,441 |
| Total Municipal Bonds (cost $82,870,398) | | | | | | 81,412,068 |
36
| | Number of shares | | Value |
| Short-Term Investment – 0.25% | | | | | | |
| Money Market Instrument – 0.25% | | | | | | |
| Dreyfus Cash Management Fund | | 214,410 | | $ | 214,410 | |
| Total Short-Term Investment (cost $214,410) | | | | | 214,410 | |
| |
| Total Value of Securities – 97.17% (cost $83,084,808) | | | | | 81,626,478 | |
| Receivables and Other Assets | | | | | | |
| Net of Liabilities – 2.83% | | | | | 2,373,704 | |
| Net Assets Applicable to 7,676,270 | | | | | | |
| Shares Outstanding – 100.00% | | | | $ | 84,000,182 | |
| |
| Net Asset Value – Delaware Tax-Free Idaho Fund | | | | | | |
| Class A ($67,741,016 / 6,189,206 Shares) | | | | | | $10.95 | |
| Net Asset Value – Delaware Tax-Free Idaho Fund | | | | | | |
| Class B ($5,323,193 / 487,214 Shares) | | | | | | $10.93 | |
| Net Asset Value – Delaware Tax-Free Idaho Fund | | | | | | |
| Class C ($10,935,973 / 999,850 Shares) | | | | | | $10.94 | |
| |
| Components of Net Assets at February 29, 2008: | | | | | | |
| Shares of beneficial interest (unlimited authorization – no par) | | | | $ | 85,773,213 | |
| Distributions in excess of net investment income | | | | | (11,301 | ) |
| Accumulated net realized loss on investments | | | | | (303,400 | ) |
| Net unrealized depreciation of investments | | | | | (1,458,330 | ) |
| Total net assets | | | | $ | 84,000,182 | |
| § | Pre-Refunded Bonds. Municipals 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.” |
Summary of abbreviations:
AMBAC — Insured by the AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
FGIC — Insured by the Financial Guaranty Insurance Company
FHA — Insured by the Federal Housing Administration
FSA — Insured by Financial Security Assurance
MBIA — Insured by the Municipal Bond Insurance Association
RADIAN — Insured by Radian Asset Assurance
VA — Insured by the Veterans Administration
XLCA – Insured by XL Capital Assurance
37
Statements of net assets
Delaware Tax-Free Idaho Fund
| | | |
| Net Asset Value and Offering Price Per Share – | | |
| Delaware Tax-Free Idaho Fund | | |
| Net asset value Class A (A) | $ | 10.95 |
| Sales charge (4.50% of offering price) (B) | | 0.52 |
| Offering price | $ | 11.47 |
| (A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. |
| |
| (B) | See current prospectus for purchases of $100,000 or more. |
See accompanying notes
38
| Delaware Tax-Free New York Fund | February 29, 2008 (unaudited) |
| Principal amount | | Value |
| Municipal Bonds – 96.70% | | | | | |
| Corporate Revenue Bonds – 6.21% | | | | | |
| New York City Industrial Development Agency Revenue | | | | | |
| (Brooklyn Navy Yard Cogen Partners) | | | | | |
| 5.75% 10/1/36 (AMT) | $ | 450,000 | | $ | 402,125 |
| New York Energy Research & Development Authority | | | | | |
| Pollution Control Revenue (Central Hudson Gas) | | | | | |
| Series A 5.45% 8/1/27 (AMBAC) | | 500,000 | | | 501,210 |
| Suffolk County Industrial Development Agency Revenue | | | | | |
| (Keyspan-Port Jefferson Energy Center) | | | | | |
| 5.25% 6/1/27 (AMT) | | 250,000 | | | 231,830 |
| | | | | | 1,135,165 |
| Education Revenue Bonds – 13.17% | | | | | |
| Albany Industrial Development Agency Civic Facilities | | | | | |
| Revenue (Brighter Choice Charter School) | | | | | |
| Series A 5.00% 4/1/37 | | 250,000 | | | 195,485 |
| Amherst Industrial Development Agency Civic Facilities | | | | | |
| Revenue (UBF Faculty Student Housing) | | | | | |
| Series A 5.75% 8/1/30 (AMBAC) | | 200,000 | | | 202,790 |
| Dutchess County Industrial Development | | | | | |
| Agency (Marist College) 5.00% 7/1/20 | | 500,000 | | | 501,125 |
| New York City Industrial Development Agency Civic | | | | | |
| Facilities Revenue (Vaughn College Aeronautics) | | | | | |
| Series B 5.25% 12/1/36 | | 150,000 | | | 122,157 |
| New York State Dormitory Authority Revenue | | | | | |
| (Columbia University) Series A 5.00% 7/1/23 | | 500,000 | | | 501,360 |
| DNon-State Supported Debt (University of Rochester) | | | | | |
| Series A 4.375% 7/1/20 | | 250,000 | | | 205,505 |
| (Pratt Institute) 6.00% 7/1/20 (RADIAN) | | 500,000 | | | 509,134 |
| Series B 7.50% 5/15/11 | | 155,000 | | | 169,466 |
| | | | | | 2,407,022 |
| Health Care Revenue Bonds – 8.67% | | | | | |
| East Rochester Housing Authority Revenue | | | | | |
| (Senior Living-Woodland Village Project) | | | | | |
| 5.50% 8/1/33 | | 200,000 | | | 170,122 |
39
Statements of net assets
Delaware Tax-Free New York Fund
| Principal amount | | Value |
| Municipal Bonds (continued) | | | | | |
| Health Care Revenue Bonds (continued) | | | | | |
| New York Dormitory Authority Revenue | | | | | |
| (Chapel Oaks) 5.45% 7/1/26 (LOC, Allied Irish Bank) | $ | 450,000 | | $ | 450,455 |
| (Mental Health) Series D 5.90% 2/15/12 | | 25,000 | | | 25,308 |
| (Millard Fillmore Hospital) 5.375% 2/1/32 (AMBAC) (FHA) | | 450,000 | | | 447,881 |
| (Winthrop South Nassau Hospital) Series B 5.50% 7/1/23 | | 500,000 | | | 490,324 |
| | | | | | 1,584,090 |
| Housing Revenue Bonds – 1.21% | | | | | |
| New York City Multifamily Housing | | | | | |
| Development Housing Revenue | | | | | |
| Series G-1 4.875% 11/1/39 (AMT) | | 250,000 | | | 220,560 |
| | | | | | 220,560 |
| Lease Revenue Bonds – 7.40% | | | | | |
| Battery Park City Authority Revenue | | | | | |
| Series A 5.00% 11/1/26 | | 250,000 | | | 250,473 |
| Nassau County Tobacco Settlement (Asset-Backed) | | | | | |
| Series A-3 5.125% 6/1/46 | | 125,000 | | | 110,430 |
| New York Urban Development Correctional & Youth | | | | | |
| Facilities Services Contract Revenue | | | | | |
| Series A 5.50% 1/1/17 | | 250,000 | | | 263,630 |
| Tobacco Settlement Financing Authority Revenue | | | | | |
| (Asset-Backed) Series B-1C | | | | | |
| 5.50% 6/1/20 | | 200,00 | | | 208,114 |
| 5.50% 6/1/21 | | 500,000 | | | 519,105 |
| | | | | | 1,351,752 |
| Local General Obligation Bonds – 3.43% | | | | | |
| New York City | | | | | |
| Series D 5.00% 11/1/34 | | 125,000 | | | 118,355 |
| Subordinated series C-1 5.00% 10/1/19 | | 500,000 | | | 509,325 |
| | | | | | 627,680 |
| §Pre-Refunded Bonds – 23.46% | | | | | |
| Albany Parking Authority Revenue | | | | | |
| Series A 5.625% 7/15/25-11 | | 280,000 | | | 304,475 |
| Metropolitan Transportation Authority | | | | | |
| Revenue (Dedicated Tax) | | | | | |
| Series A 6.125% 4/1/17-10 (FGIC) | | 1,000,000 | | | 1,064,979 |
| New York City Series J 5.25% 6/1/28-13 | | 310,000 | | | 337,215 |
| New York Dormitory Authority Revenue | | | | | |
| (North Shore Long Island Jewish Group Project) | | | | | |
| 5.50% 5/1/33-13 | | 500,000 | | | 548,770 |
| Series B 7.50% 5/15/11-09 | | 130,000 | | | 139,876 |
40
| Principal amount | | Value |
| Municipal Bonds (continued) | | | | | |
| §Pre-Refunded Bonds (continued) | | | | | |
| Puerto Rico Commonwealth Highway & | | | | | |
| Transportation Authority Revenue | | | | | |
| Series Y 5.50% 7/1/36-16 | $ | 475,000 | | $ | 529,169 |
| Puerto Rico Commonwealth | | | | | |
| Series B 5.25% 7/1/32-16 | | 155,000 | | | 169,708 |
| Puerto Rico Electric Power Authority Revenue | | | | | |
| Series II 5.25% 7/1/31-12 | | 500,000 | | | 542,480 |
| Series NN 5.125% 7/1/29-13 | | 600,000 | | | 649,662 |
| | | | | | 4,286,334 |
| Special Tax Revenue Bonds – 17.18% | | | | | |
| New York City Transitional Finance Authority Revenue | | | | | |
| (Subordinate Future Tax Secured) | | | | | |
| Series B 5.00% 11/1/18 | | 500,000 | | | 526,150 |
| New York Dormitory Authority State | | | | | |
| Personal Income Tax Revenue | | | | | |
| Series C 5.00% 3/15/15 | | 250,000 | | | 268,768 |
| New York Dormitory Authority State Supported Debt | | | | | |
| Revenue (Consolidated Services Contract) | | | | | |
| 5.00% 7/1/17 (FSA) | | 500,000 | | | 533,994 |
| New York Sales Tax Asset Receivables | | | | | |
| Series A 5.25% 10/15/27 (AMBAC) | | 500,000 | | | 503,585 |
| New York Urban Development State | | | | | |
| Personal Income Tax | | | | | |
| Series A-1 5.00% 12/15/22 | | 250,000 | | | 252,685 |
| Puerto Rico Commonwealth Infrastructure | | | | | |
| Financing Authority Revenue | | | | | |
| Series B 5.00% 7/1/15 | | 250,000 | | | 256,860 |
| Puerto Rico Sales Tax Financing Revenue | | | | | |
| Series A 5.25% 8/1/57 | | 325,000 | | | 293,101 |
| Schenectady Metroplex Development Authority Revenue | | | | | |
| Series A 5.375% 12/15/21 | | 500,000 | | | 504,050 |
| | | | | | 3,139,193 |
| State General Obligation Bonds – 0.48% | | | | | |
| Puerto Rico Commonwealth | | | | | |
| Series B 5.25% 7/1/32 | | 95,000 | | | 88,341 |
| | | | | | 88,341 |
41
Statements of net assets
Delaware Tax-Free New York Fund
| Principal amount | | Value |
| Municipal Bonds (continued) | | | | | |
| Transportation Revenue Bonds – 12.79% | | | | | |
| Albany Parking Authority Revenue | | | | | |
| Series A 5.625% 7/15/25 | $ | 220,000 | | $ | 219,864 |
| Metropolitan Transportation Authority Revenue | | | | | |
| Series A 5.00% 11/15/27 | | 200,000 | | | 210,140 |
| Series F 5.00% 11/15/15 | | 150,000 | | | 158,565 |
| New York City Industrial Development Agency Special | | | | | |
| Airport Facilities (JFK Airis Project) | | | | | |
| Series A 5.50% 7/1/28 (AMT) | | 500,000 | | | 437,350 |
| New York State Thruway Authority General Revenue | | | | | |
| Series H 5.00% 1/1/14 (MBIA) | | 500,000 | | | 537,090 |
| 5.00% 1/1/15 (MBIA) | | 250,000 | | | 268,530 |
| Onondaga County Industrial Development Authority | | | | | |
| Revenue (Subordinated Air Cargo Project) | | | | | |
| 7.25% 1/1/32 (AMT) | | 500,000 | | | 506,010 |
| | | | | | 2,337,549 |
| Water & Sewer Revenue Bonds – 2.70% | | | | | |
| New York City Municipal Finance Authority | | | | | |
| Water & Sewer System Revenue | | | | | |
| Series A 5.125% 6/15/34 | | 500,000 | | | 493,210 |
| | | | | | 493,210 |
| Total Municipal Bonds (cost $17,668,126) | | | | | 17,670,896 |
| |
| Short-Term Investment – 1.64% | | | | | |
| ŸVariable Rate Demand Notes – 1.64% | | | | | |
| New York City Municipal Finance Authority | | | | | |
| Water & Sewer System Revenue | | | | | |
| Series F-1 3.05% 2/1/18 | | 300,000 | | | 300,000 |
| Total Short-Term Investment (cost $300,000) | | | | | 300,000 |
| |
| Total Value of Securities – 98.34% (cost $17,968,126) | | | | | 17,970,896 |
| Receivables and Other Assets | | | | | |
| Net of Liabilities – 1.66% | | | | | 302,983 |
| Net Assets Applicable to 1,816,202 | | | | | |
| Shares Outstanding – 100.00% | | | | $ | 18,273,879 |
42
| |
| Net Asset Value – Delaware Tax-Free New York Fund | | |
| Class A ($14,459,011 / 1,436,375 Shares) | | $10.07 | |
| Net Asset Value – Delaware Tax-Free New York Fund | | |
| Class B ($1,664,909 / 165,762 Shares) | | $10.04 | |
| Net Asset Value – Delaware Tax-Free New York Fund | | |
| Class C ($2,149,959 / 214,065 Shares) | | $10.04 | |
| |
| Components of Net Assets at February 29, 2008: | | |
| Shares of beneficial interest (unlimited authorization – no par) | $18,470,970 | |
| Distributions in excess of net investment income | (1,752 | ) |
| Accumulated net realized loss on investments | (198,109 | ) |
| Net unrealized appreciation of investments | 2,770 | |
| Total net assets | $18,273,879 | |
| D | 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. |
| § | Pre-Refunded Bonds. Municipals 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.” |
| · | Variable rate security. The rate shown is the rate as of February 29, 2008. |
Summary of abbreviations:
AMBAC — Insured by the AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
FGIC — Insured by the Financial Guaranty Insurance Company
FHA — Insured by the Federal Housing Administration
FSA — Insured by Financial Security Assurance
LOC — Letter of Credit
MBIA — Insured by the Municipal Bond Insurance Association
RADIAN — Insured by Radian Asset Assurance
43
Statements of net assets
Delaware Tax-Free New York Fund
| |
| Net Asset Value and Offering Price Per Share – | | |
| Delaware Tax-Free New York Fund | | |
| Net asset value Class A (A) | | $10.07 |
| Sales charge (4.50% of offering price) (B) | | 0.47 |
| Offering price | | $10.54 |
| (A) | | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. |
| |
| (B) | | See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
44
Statements of operations
Six Months Ended February 29, 2008 (Unaudited)
| | | Delaware Tax-Free | | Delaware Tax-Free | | Delaware Tax-Free |
| | | Arizona Fund | | California Fund | | Colorado Fund |
| Investment Income: | | | | | | | | | | |
| Interest | | $ | 3,472,014 | | | $ | 2,436,100 | | | $ | 6,660,010 | |
| |
| Expenses: | | | | | | | | | | | | |
| Management fees | | | 357,330 | | | | 266,529 | | | | 717,847 | |
| Distribution expenses – Class A | | | 154,358 | | | | 93,418 | | | | 308,014 | |
| Distribution expenses – Class B | | | 58,734 | | | | 43,577 | | | | 24,499 | |
| Distribution expenses – Class C | | | 39,235 | | | | 67,897 | | | | 50,563 | |
| Dividend disbursing and transfer agent | | | | | | | | | | | | |
| fees and expenses | | | 30,815 | | | | 21,268 | | | | 66,287 | |
| Accounting and administration expenses | | | 28,579 | | | | 19,379 | | | | 52,194 | |
| Legal fees | | | 18,208 | | | | 15,132 | | | | 26,249 | |
| Registration fees | | | 9,938 | | | | 10,263 | | | | 4,080 | |
| Audit and tax | | | 8,379 | | | | 6,751 | | | | 12,171 | |
| Reports and statements to shareholders | | | 6,507 | | | | 2,656 | | | | 12,531 | |
| Trustees’ fees | | | 3,466 | | | | 2,353 | | | | 6,330 | |
| Pricing fees | | | 2,109 | | | | 2,273 | | | | 2,612 | |
| Custodian fees | | | 2,082 | | | | 2,231 | | | | 3,313 | |
| Insurance fees | | | 1,911 | | | | 1,246 | | | | 3,554 | |
| Consulting fees | | | 1,344 | | | | 941 | | | | 2,409 | |
| Trustees’ expenses | | | 607 | | | | 417 | | | | 1,140 | |
| Dues and services | | | 286 | | | | 209 | | | | 581 | |
| Taxes (other than taxes on income) | | | 69 | | | | 77 | | | | 202 | |
| | | | 723,957 | | | | 556,617 | | | | 1,294,576 | |
| Less expenses absorbed or waived | | | (112,280 | ) | | | (44,819 | ) | | | (20,040 | ) |
| Total operating expenses | | | 611,677 | | | | 511,798 | | | | 1,274,536 | |
| Net Investment Income | | | 2,860,337 | | | | 1,924,302 | | | | 5,385,474 | |
| |
| Net Realized and Unrealized Gain | | | | | | | | | | | | |
| (Loss) on Investments: | | | | | | | | | | | | |
| Net realized gain (loss) on investments | | | 61,078 | | | | (411,624 | ) | | | (49,962 | ) |
| Net change in unrealized appreciation/ | | | | | | | | | | | | |
| depreciation of investments | | | (5,688,825 | ) | | | (4,570,549 | ) | | | (7,390,517 | ) |
| Net Realized and Unrealized Loss | | | | | | | | | | | | |
| on Investments | | | (5,627,747 | ) | | | (4,982,173 | ) | | | (7,440,479 | ) |
| |
| Net Decrease in Net Assets | | | | | | | | | | | | |
| Resulting from Operations | | $ | (2,767,410 | ) | | $ | (3,057,871 | ) | | $ | (2,055,005 | ) |
See accompanying notes
45
Statements of operations
Six Months Ended February 29, 2008 (Unaudited)
| | | Delaware Tax-Free | | Delaware Tax-Free |
| | | Idaho Fund | | New York Fund |
| Investment Income: | | | | | | | | |
| Interest | | $ | 2,053,585 | | | $ | 456,321 | |
| |
| Expenses: | | | | | | | | |
| Management fees | | | 240,308 | | | | 52,129 | |
| Distribution expenses – Class A | | | 88,233 | | | | 18,486 | |
| Distribution expenses – Class B | | | 28,392 | | | | 10,082 | |
| Distribution expenses – Class C | | | 56,108 | | | | 10,887 | |
| Dividend disbursing and transfer agent | | | | | | | | |
| fees and expenses | | | 21,066 | | | | 7,141 | |
| Accounting and administration expenses | | | 17,473 | | | | 3,790 | |
| Legal fees | | | 12,648 | | | | 3,269 | |
| Audit and tax | | | 6,222 | | | | 5,423 | |
| Reports and statements to shareholders | | | 4,055 | | | | 1,078 | |
| Pricing fees | | | 2,738 | | | | 2,472 | |
| Trustees’ fees | | | 2,120 | | | | 460 | |
| Registration fees | | | 1,835 | | | | 4,330 | |
| Insurance fees | | | 1,222 | | | | 262 | |
| Custodian fees | | | 1,177 | | | | 70 | |
| Consulting fees | | | 893 | | | | 177 | |
| Trustees’ expenses | | | 378 | | | | 82 | |
| Dues and services | | | 233 | | | | 35 | |
| Taxes (other than taxes on income) | | | — | | | | 4 | |
| | | | 485,101 | | | | 120,177 | |
| Less expenses absorbed or waived | | | (48,916 | ) | | | (23,557 | ) |
| Less expense paid indirectly | | | (63 | ) | | | (27 | ) |
| Total operating expenses | | | 436,122 | | | | 96,593 | |
| Net Investment Income | | | 1,617,463 | | | | 359,728 | |
| |
| Net Realized and Unrealized Gain | | | | | | | | |
| (Loss) on Investments: | | | | | | | | |
| Net realized gain (loss) on investments | | | 83,789 | | | | (32,681 | ) |
| Net change in unrealized appreciation/depreciation of | | | | | | | | |
| investments | | | (2,508,186 | ) | | | (382,406 | ) |
| Net Realized and Unrealized Loss | | | | | | | | |
| on Investments | | | (2,424,397 | ) | | | (415,087 | ) |
| |
| Net Decrease in Net Assets | | | | | | | | |
| Resulting from Operations | | $ | (806,934 | ) | | $ | (55,359 | ) |
See accompanying notes
46
Statements of changes in net assets
Delaware Tax-Free Arizona Fund
| | | Six Months | | | | Year | |
| | | Ended | | | | Ended | |
| | | 2/29/08 | | | | 8/31/07 | |
| | | (Unaudited) | | | | | |
| Increase (Decrease) in Net Assets from Operations: | | | | | | | |
| Net investment income | $ | 2,860,337 | | | $ | 6,056,280 | |
| Net realized gain on investments | | 61,078 | | | | 490,852 | |
| Net change in unrealized | | | | | | | |
| appreciation/depreciation of investments | | (5,688,825 | ) | | | (4,262,046 | ) |
| Net increase (decrease) in net assets resulting | | | | | | | |
| from operations | | (2,767,410 | ) | | | 2,285,086 | |
| |
| Dividends and Distributions to Shareholders from: | | | | | | | |
| Net investment income: | | | | | | | |
| Class A | | (2,532,489 | ) | | | (5,301,244 | ) |
| Class B | | (196,740 | ) | | | (493,503 | ) |
| Class C | | (131,083 | ) | | | (261,558 | ) |
| | | (2,860,312 | ) | | | (6,056,305 | ) |
| |
| Capital Share Transactions: | | | | | | | |
| Proceeds from shares sold: | | | | | | | |
| Class A | | 6,218,048 | | | | 14,817,310 | |
| Class B | | 112 | | | | 42,624 | |
| Class C | | 984,662 | | | | 1,326,619 | |
| |
| Net asset value of shares issued upon reinvestment | | | | | | | |
| of dividends and distributions: | | | | | | | |
| Class A | | 1,254,297 | | | | 2,683,432 | |
| Class B | | 103,021 | | | | 254,872 | |
| Class C | | 81,883 | | | | 151,832 | |
| | | 8,642,023 | | | | 19,276,689 | |
48
| | | Six Months | | | | Year | |
| | | Ended | | | | Ended | |
| | | 2/29/08 | | | | 8/31/07 | |
| | | (Unaudited) | | | | | |
| Capital Share Transactions (continued): | | | | | | | |
| Cost of shares repurchased: | | | | | | | |
| Class A | $ | (10,589,487 | ) | | $ | (20,096,086 | ) |
| Class B | | (1,623,946 | ) | | | (3,954,487 | ) |
| Class C | | (622,033 | ) | | | (1,800,542 | ) |
| | | (12,835,466 | ) | | | (25,851,115 | ) |
| Decrease in net assets derived from | | | | | | | |
| capital share transactions | | (4,193,443 | ) | | | (6,574,426 | ) |
| Net Decrease in Net Assets | | (9,821,165 | ) | | | (10,345,645 | ) |
| |
| Net Assets: | | | | | | | |
| Beginning of period | | 145,652,202 | | | | 155,997,847 | |
| End of period1 | $ | 135,831,037 | | | $ | 145,652,202 | |
| |
| 1Including distributions in excess of | | | | | | | |
| net investment income | $ | — | | | $ | (25 | ) |
See accompanying notes
49
Statements of changes in net assets
Delaware Tax-Free California Fund
| | | Six Months | | Year |
| | | Ended | | Ended |
| | | 2/29/08 | | 8/31/07 |
| | | (Unaudited) | | | | |
| Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
| Net investment income | | $ | 1,924,302 | | | $ | 4,052,743 | |
| Net realized loss on investments | | | (411,624 | ) | | | (115,067 | ) |
| Net change in unrealized | | | | | | | | |
| appreciation/depreciation of investments | | | (4,570,549 | ) | | | (3,513,338 | ) |
| Net increase (decrease) in net assets resulting | | | | | | | | |
| from operations | | | (3,057,871 | ) | | | 424,338 | |
| |
| Dividends and Distributions to Shareholders from: | | | | | | | | |
| Net investment income: | | | | | | | | |
| Class A | | | (1,547,489 | ) | | | (3,215,450 | ) |
| Class B | | | (147,030 | ) | | | (394,961 | ) |
| Class C | | | (229,783 | ) | | | (442,332 | ) |
| | | | (1,924,302 | ) | | | (4,052,743 | ) |
| |
| Capital Share Transactions: | | | | | | | | |
| Proceeds from shares sold: | | | | | | | | |
| Class A | | | 7,593,071 | | | | 22,710,407 | |
| Class B | | | 39,768 | | | | 156,402 | |
| Class C | | | 2,275,359 | | | | 3,562,422 | |
| |
| Net asset value of shares issued upon reinvestment | | | | | | | | |
| of dividends and distributions: | | | | | | | | |
| Class A | | | 903,819 | | | | 1,801,612 | |
| Class B | | | 103,301 | | | | 248,614 | |
| Class C | | | 173,469 | | | | 301,848 | |
| | | | 11,088,787 | | | | 28,781,305 | |
50
| | | Six Months | | Year |
| | | Ended | | Ended |
| | | 2/29/08 | | 8/31/07 |
| | | (Unaudited) | | | | |
| Capital Share Transactions (continued): | | | | | | | | |
| Cost of shares repurchased: | | | | | | | | |
| Class A | | $ | (12,436,203 | ) | | $ | (21,163,745 | ) |
| Class B | | | (1,466,114 | ) | | | (5,609,946 | ) |
| Class C | | | (1,834,683 | ) | | | (2,686,047 | ) |
| | | | (15,737,000 | ) | | | (29,459,738 | ) |
| Decrease in net assets derived from | | | | | | | | |
| capital share transactions | | | (4,648,213 | ) | | | (678,433 | ) |
| Net Decrease in Net Assets | | | (9,630,386 | ) | | | (4,306,838 | ) |
| |
| Net Assets: | | | | | | | | |
| Beginning of period | | | 99,373,791 | | | | 103,680,629 | |
| End of period1 | | $ | 89,743,405 | | | $ | 99,373,791 | |
| |
| 1Including undistributed | | | | | | | | |
| net investment income | | $ | 1,300 | | | $ | 1,300 | |
See accompanying notes
51
Statements of changes in net assets
Delaware Tax-Free Colorado Fund
| | | Six Months | | Year |
| | | Ended | | Ended |
| | | 2/29/08 | | 8/31/07 |
| | | (Unaudited) | | | | |
| Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
| Net investment income | | $ | 5,385,474 | | | $ | 11,447,349 | |
| Net realized gain (loss) on investments | | | (49,962 | ) | | | 1,009,130 | |
| Net change in unrealized | | | | | | | | |
| appreciation/depreciation of investments | | | (7,390,517 | ) | | | (8,914,311 | ) |
| Net increase (decrease) in net assets resulting | | | | | | | | |
| from operations | | | (2,055,005 | ) | | | 3,542,168 | |
| |
| Dividends and Distributions to Shareholders from: | | | | | | | | |
| Net investment income: | | | | | | | | |
| Class A | | | (5,157,193 | ) | | | (10,862,047 | ) |
| Class B | | | (84,156 | ) | | | (226,901 | ) |
| Class C | | | (173,272 | ) | | | (350,030 | ) |
| | | | (5,414,621 | ) | | | (11,438,978 | ) |
| |
| Capital Share Transactions: | | | | | | | | |
| Proceeds from shares sold: | | | | | | | | |
| Class A | | | 5,415,270 | | | | 12,562,366 | |
| Class B | | | — | | | | 21,748 | |
| Class C | | | 227,248 | | | | 1,895,269 | |
| |
| Net asset value of shares issued upon reinvestment | | | | | | | | |
| of dividends and distributions: | | | | | | | | |
| Class A | | | 3,276,693 | | | | 6,872,419 | |
| Class B | | | 40,822 | | | | 123,164 | |
| Class C | | | 120,857 | | | | 249,264 | |
| | | | 9,080,890 | | | | 21,724,230 | |
52
| | | Six Months | | Year |
| | | Ended | | Ended |
| | | 2/29/08 | | 8/31/07 |
| | | (Unaudited) | | | | |
| Capital Share Transactions (continued): | | | | | | | | |
| Cost of shares repurchased: | | | | | | | | |
| Class A | | $ | (15,480,077 | ) | | $ | (24,077,528 | ) |
| Class B | | | (759,130 | ) | | | (2,883,605 | ) |
| Class C | | | (722,648 | ) | | | (1,658,066 | ) |
| | | | (16,961,855 | ) | | | (28,619,199 | ) |
| Decrease in net assets derived from | | | | | | | | |
| capital share transactions | | | (7,880,965 | ) | | | (6,894,969 | ) |
| Net Decrease in Net Assets | | | (15,350,591 | ) | | | (14,791,779 | ) |
| |
| Net Assets: | | | | | | | | |
| Beginning of period | | | 262,172,805 | | | | 276,964,584 | |
| End of period1 | | $ | 246,822,214 | | | $ | 262,172,805 | |
| |
| 1Including undistributed (distributions in excess of) | | | | | | | | |
| net investment income | | $ | 1,649 | | | $ | (46 | ) |
See accompanying notes
53
Statements of changes in net assets
Delaware Tax-Free Idaho Fund
| | | Six Months | | Year |
| | | Ended | | Ended |
| | | 2/29/08 | | 8/31/07 |
| | | (Unaudited) | | | | |
| Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
| Net investment income | | $ | 1,617,463 | | | $ | 3,152,236 | |
| Net realized gain on investments | | | 83,789 | | | | 16,031 | |
| Net change in unrealized | | | | | | | | |
| appreciation/depreciation of investments | | | (2,508,186 | ) | | | (1,398,888 | ) |
| Net increase (decrease) in net assets resulting | | | | | | | | |
| from operations | | | (806,934 | ) | | | 1,769,379 | |
| |
| Dividends and Distributions to Shareholders from: | | | | | | | | |
| Net investment income: | | | | | | | | |
| Class A | | | (1,354,731 | ) | | | (2,530,731 | ) |
| Class B | | | (87,914 | ) | | | (228,879 | ) |
| Class C | | | (173,475 | ) | | | (389,967 | ) |
| | | | (1,616,120 | ) | | | (3,149,577 | ) |
| |
| Capital Share Transactions: | | | | | | | | |
| Proceeds from shares sold: | | | | | | | | |
| Class A | | | 2,804,455 | | | | 14,990,872 | |
| Class B | | | — | | | | 572,489 | |
| Class C | | | 743,074 | | | | 887,588 | |
| |
| Net asset value of shares issued upon reinvestment | | | | | | | | |
| of dividends and distributions: | | | | | | | | |
| Class A | | | 883,046 | | | | 1,630,892 | |
| Class B | | | 59,734 | | | | 138,424 | |
| Class C | | | 106,957 | | | | 241,640 | |
| | | | 4,597,266 | | | | 18,461,905 | |
54
| | | Six Months | | Year |
| | | Ended | | Ended |
| | | 2/29/08 | | 8/31/07 |
| | | (Unaudited) | | | | |
| Capital Share Transactions (continued): | | | | | | | | |
| Cost of shares repurchased: | | | | | | | | |
| Class A | | $ | (3,924,856 | ) | | $ | (8,413,693 | ) |
| Class B | | | (591,444 | ) | | | (2,488,934 | ) |
| Class C | | | (1,126,359 | ) | | | (2,840,485 | ) |
| | | | (5,642,659 | ) | | | (13,743,112 | ) |
| Increase (decrease) in net assets derived from | | | | | | | | |
| capital share transactions | | | (1,045,393 | ) | | | 4,718,793 | |
| Net Increase (Decrease) in Net Assets | | | (3,468,447 | ) | | | 3,338,595 | |
| |
| Net Assets: | | | | | | | | |
| Beginning of period | | | 87,468,629 | | | | 84,130,034 | |
| End of period1 | | $ | 84,000,182 | | | $ | 87,468,629 | |
| |
| 1Including distributions in excess of | | | | | | | | |
| net investment income | | $ | (11,301 | ) | | $ | (11,253 | ) |
See accompanying notes
55
Statements of changes in net assets
Delaware Tax-Free New York Fund
| | | Six Months | | Year |
| | | Ended | | Ended |
| | | 2/29/08 | | 8/31/07 |
| | | (Unaudited) | | | | |
| Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
| Net investment income | | $ | 359,728 | | | $ | 743,181 | |
| Net realized gain (loss) on investments | | | (32,681 | ) | | | 62,452 | |
| Net change in unrealized | | | | | | | | |
| appreciation/depreciation of investments | | | (382,406 | ) | | | (521,401 | ) |
| Net increase (decrease) in net assets resulting | | | | | | | | |
| from operations | | | (55,359 | ) | | | 284,232 | |
| |
| Dividends and Distributions to Shareholders from: | | | | | | | | |
| Net investment income: | | | | | | | | |
| Class A | | | (293,200 | ) | | | (590,536 | ) |
| Class B | | | (32,537 | ) | | | (85,737 | ) |
| Class C | | | (35,088 | ) | | | (66,908 | ) |
| | | | (360,825 | ) | | | (743,181 | ) |
| |
| Capital Share Transactions: | | | | | | | | |
| Proceeds from shares sold: | | | | | | | | |
| Class A | | | 655,974 | | | | 2,521,809 | |
| Class B | | | 15,685 | | | | 33,616 | |
| Class C | | | 397,848 | | | | 494,335 | |
| |
| Net asset value of shares issued upon reinvestment | | | | | | | | |
| of dividends and distributions: | | | | | | | | |
| Class A | | | 172,246 | | | | 415,794 | |
| Class B | | | 17,347 | | | | 35,753 | |
| Class C | | | 14,422 | | | | 26,806 | |
| | | | 1,273,522 | | | | 3,528,113 | |
56
| | | Six Months | | Year |
| | | Ended | | Ended |
| | | 2/29/08 | | 8/31/07 |
| | | (Unaudited) | | | | |
| Capital Share Transactions (continued): | | | | | | | | |
| Cost of shares repurchased: | | | | | | | | |
| Class A | | $ | (847,423 | ) | | $ | (1,282,643 | ) |
| Class B | | | (504,121 | ) | | | (712,045 | ) |
| Class C | | | (343,958 | ) | | | (407,314 | ) |
| | | | (1,695,502 | ) | | | (2,402,002 | ) |
| Increase (decrease) in net assets derived from | | | | | | | | |
| capital share transactions | | | (421,980 | ) | | | 1,126,111 | |
| Net Increase (Decrease) in Net Assets | | | (838,164 | ) | | | 667,162 | |
| |
| Net Assets: | | | | | | | | |
| Beginning of period | | | 19,112,043 | | | | 18,444,881 | |
| End of period1 | | $ | 18,273,879 | | | $ | 19,112,043 | |
| |
| 1Including distributions in excess of | | | | | | | | |
| net investment income | | $ | (1,752 | ) | | $ | (655 | ) |
See accompanying notes
57
Financial highlights
Delaware Tax-Free Arizona 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) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| 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 expense limitation and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to expense limitation and expense paid indirectly |
| Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager, as applicable. Performance would have been lower had the waiver not been in effect.
See accompanying notes
58
| Six Months Ended | | Year Ended |
| 2/29/081 | | 8/31/07 | | 8/31/06 | | 8/31/05 | | 8/31/04 | | 8/31/03 |
| | (Unaudited) | | | | | | | | | | | | | | | |
| | $11.070 | | | $11.350 | | | $11.560 | | | $11.410 | | | $11.160 | | | $11.530 | |
| |
| |
| 0.228 | | | 0.465 | | | 0.467 | | | 0.468 | | | 0.469 | | | 0.502 | |
| (0.450 | ) | | (0.280 | ) | | (0.210 | ) | | 0.174 | | | 0.308 | | | (0.253 | ) |
| (0.222 | ) | | 0.185 | | | 0.257 | | | 0.642 | | | 0.777 | | | 0.249 | |
| |
| |
| (0.228 | ) | | (0.465 | ) | | (0.467 | ) | | (0.468 | ) | | (0.469 | ) | | (0.502 | ) |
| — | | | — | | | — | | | (0.024 | ) | | (0.058 | ) | | (0.117 | ) |
| (0.228 | ) | | (0.465 | ) | | (0.467 | ) | | (0.492 | ) | | (0.527 | ) | | (0.619 | ) |
| |
| | $10.620 | | | $11.070 | | | $11.350 | | | $11.560 | | | $11.410 | | | $11.160 | |
| |
| (2.08% | ) | | 1.63% | | | 2.31% | | | 5.74% | | | 7.09% | | | 2.17% | |
| |
| |
| | $117,641 | | | $125,636 | | | $131,468 | | | $134,874 | | | $122,436 | | | $129,683 | |
| 0.75% | | | 0.76% | | | 0.76% | | | 0.80% | | | 0.90% | | | 0.86% | |
| |
| 0.91% | | | 0.91% | | | 0.91% | | | 0.91% | | | 0.90% | | | 0.91% | |
| 4.11% | | | 4.11% | | | 4.12% | | | 4.07% | | | 4.14% | | | 4.37% | |
| |
| 3.95% | | | 3.96% | | | 3.97% | | | 3.96% | | | 4.14% | | | 4.32% | |
| | 35% | | | 9% | | | 8% | | | 3% | | | 19% | | | 29% | |
59
Financial highlights
Delaware Tax-Free Arizona 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) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| 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 expense limitation and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to expense limitation and expense paid indirectly |
| Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager, as applicable. Performance would have been lower had the waiver not been in effect.
See accompanying notes
60
| Six Months Ended | | Year Ended |
| 2/29/081 | | 8/31/07 | | 8/31/06 | | 8/31/05 | | 8/31/04 | | 8/31/03 |
| (Unaudited) | | | | | | | | | | | | | | |
| $11.070 | | | $11.360 | | | $11.570 | | | $11.420 | | | $11.170 | | | $11.540 | |
| |
| |
| 0.187 | | | 0.380 | | | 0.382 | | | 0.382 | | | 0.384 | | | 0.416 | |
| (0.440 | ) | | (0.290 | ) | | (0.210 | ) | | 0.174 | | | 0.308 | | | (0.253 | ) |
| (0.253 | ) | | 0.090 | | | 0.172 | | | 0.556 | | | 0.692 | | | 0.163 | |
| |
| |
| (0.187 | ) | | (0.380 | ) | | (0.382 | ) | | (0.382 | ) | | (0.384 | ) | | (0.416 | ) |
| — | | | — | | | — | | | (0.024 | ) | | (0.058 | ) | | (0.117 | ) |
| (0.187 | ) | | (0.380 | ) | | (0.382 | ) | | (0.406 | ) | | (0.442 | ) | | (0.533 | ) |
| |
| $10.630 | | | $11.070 | | | $11.360 | | | $11.570 | | | $11.420 | | | $11.170 | |
| |
| (2.36% | ) | | 0.78% | | | 1.54% | | | 4.95% | | | 6.28% | | | 1.41% | |
| |
| |
| $10,462 | | | $12,407 | | | $16,413 | | | $19,005 | | | $13,355 | | | $14,666 | |
| 1.50% | | | 1.51% | | | 1.51% | | | 1.55% | | | 1.65% | | | 1.61% | |
| |
| 1.66% | | | 1.66% | | | 1.66% | | | 1.66% | | | 1.65% | | | 1.66% | |
| 3.36% | | | 3.36% | | | 3.37% | | | 3.32% | | | 3.39% | | | 3.62% | |
| |
| 3.20% | | | 3.21% | | | 3.22% | | | 3.21% | | | 3.39% | | | 3.57% | |
| 35% | | | 9% | | | 8% | | | 3% | | | 19% | | | 29% | |
61
Financial highlights
Delaware Tax-Free Arizona 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) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| 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 expense limitation and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to expense limitation and expense paid indirectly |
| Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager, as applicable. Performance would have been lower had the waiver not been in effect.
See accompanying notes
62
| Six Months Ended | | Year Ended |
| 2/29/081 | | 8/31/07 | | 8/31/06 | | 8/31/05 | | 8/31/04 | | 8/31/03 |
| (Unaudited) | | | | | | | | | | | | | | | |
| $11.090 | | | $11.380 | | | $11.580 | | | $11.430 | | | $11.180 | | | $11.550 | |
| |
| |
| 0.186 | | | 0.380 | | | 0.381 | | | 0.382 | | | 0.384 | | | 0.415 | |
| (0.440 | ) | | (0.290 | ) | | (0.200 | ) | | 0.174 | | | 0.308 | | | (0.253 | ) |
| (0.254 | ) | | 0.090 | | | 0.181 | | | 0.556 | | | 0.692 | | | 0.162 | |
| |
| |
| (0.186 | ) | | (0.380 | ) | | (0.381 | ) | | (0.382 | ) | | (0.384 | ) | | (0.415 | ) |
| — | | | — | | | — | | | (0.024 | ) | | (0.058 | ) | | (0.117 | ) |
| (0.186 | ) | | (0.380 | ) | | (0.381 | ) | | (0.406 | ) | | (0.442 | ) | | (0.532 | ) |
| |
| $10.650 | | | $11.090 | | | $11.380 | | | $11.580 | | | $11.430 | | | $11.180 | |
| |
| (2.35% | ) | | 0.77% | | | 1.63% | | | 4.94% | | | 6.27% | | | 1.40% | |
| |
| |
| $7,728 | | | $7,609 | | | $8,117 | | | $8,591 | | | $6,651 | | | $8,544 | |
| 1.50% | | | 1.51% | | | 1.51% | | | 1.55% | | | 1.65% | | | 1.61% | |
| |
| 1.66% | | | 1.66% | | | 1.66% | | | 1.66% | | | 1.65% | | | 1.66% | |
| 3.36% | | | 3.36% | | | 3.37% | | | 3.32% | | | 3.39% | | | 3.62% | |
| |
| 3.20% | | | 3.21% | | | 3.22% | | | 3.21% | | | 3.39% | | | 3.57% | |
| 35% | | | 9% | | | 8% | | | 3% | | | 19% | | | 29% | |
63
Financial highlights
Delaware Tax-Free California 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) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| 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 expense limitation and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to expense limitation and expense paid indirectly |
| Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.
See accompanying notes
64
| Six Months Ended | | Year Ended |
| 2/29/081 | | 8/31/07 | | 8/31/06 | | 8/31/05 | | 8/31/04 | | 8/31/03 |
| (Unaudited) | | | | | | | | | | | | | | | |
| $11.010 | | | $11.400 | | | $11.490 | | | $11.110 | | | $10.750 | | | $11.010 | |
| |
| |
| 0.229 | | | 0.454 | | | 0.450 | | | 0.462 | | | 0.518 | | | 0.537 | |
| (0.570 | ) | | (0.390 | ) | | (0.090 | ) | | 0.380 | | | 0.360 | | | (0.260 | ) |
| (0.341 | ) | | 0.064 | | | 0.360 | | | 0.842 | | | 0.878 | | | 0.277 | |
| |
| |
| (0.229 | ) | | (0.454 | ) | | (0.450 | ) | | (0.462 | ) | | (0.518 | ) | | (0.537 | ) |
| (0.229 | ) | | (0.454 | ) | | (0.450 | ) | | (0.462 | ) | | (0.518 | ) | | (0.537 | ) |
| |
| $10.440 | | | $11.010 | | | $11.400 | | | $11.490 | | | $11.110 | | | $10.750 | |
| |
| (3.19% | ) | | 0.51% | | | 3.24% | | | 7.72% | | | 8.34% | | | 2.51% | |
| |
| |
| $68,777 | | | $76,537 | | | $75,995 | | | $60,744 | | | $24,797 | | | $22,169 | |
| 0.88% | | | 0.89% | | | 0.88% | | | 0.84% | | | 0.50% | | | 0.50% | |
| |
| 0.98% | | | 0.97% | | | 0.97% | | | 1.06% | | | 0.96% | | | 0.93% | |
| 4.16% | | | 3.98% | | | 3.97% | | | 4.03% | | | 4.72% | | | 4.84% | |
| |
| 4.06% | | | 3.90% | | | 3.88% | | | 3.81% | | | 4.26% | | | 4.41% | |
| 42% | | | 21% | | | 14% | | | 11% | | | 48% | | | 56% | |
65
Financial highlights
Delaware Tax-Free California 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) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| 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 expense limitation and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to expense limitation and expense paid indirectly |
| Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.
See accompanying notes
66
| Six Months Ended | | Year Ended |
| 2/29/081 | | 8/31/07 | | 8/31/06 | | 8/31/05 | | 8/31/04 | | 8/31/03 |
| (Unaudited) | | | | | | | | | | | | | | | |
| $11.060 | | | $11.440 | | | $11.530 | | | $11.160 | | | $10.790 | | | $11.050 | |
| |
| |
| 0.187 | | | 0.368 | | | 0.365 | | | 0.377 | | | 0.436 | | | 0.453 | |
| (0.580 | ) | | (0.380 | ) | | (0.090 | ) | | 0.370 | | | 0.370 | | | (0.260 | ) |
| (0.393 | ) | | (0.012 | ) | | 0.275 | | | 0.747 | | | 0.806 | | | 0.193 | |
| |
| |
| (0.187 | ) | | (0.368 | ) | | (0.365 | ) | | (0.377 | ) | | (0.436 | ) | | (0.453 | ) |
| (0.187 | ) | | (0.368 | ) | | (0.365 | ) | | (0.377 | ) | | (0.436 | ) | | (0.453 | ) |
| |
| $10.480 | | | $11.060 | | | $11.440 | | | $11.530 | | | $11.160 | | | $10.790 | |
| |
| (3.63% | ) | | (0.15% | ) | | 2.46% | | | 6.80% | | | 7.60% | | | 1.73% | |
| |
| |
| $7,647 | | | $9,384 | | | $14,918 | | | $18,254 | | | $14,530 | | | $16,165 | |
| 1.63% | | | 1.64% | | | 1.63% | | | 1.59% | | | 1.25% | | | 1.25% | |
| |
| 1.73% | | | 1.72% | | | 1.72% | | | 1.81% | | | 1.71% | | | 1.68% | |
| 3.41% | | | 3.23% | | | 3.22% | | | 3.28% | | | 3.97% | | | 4.09% | |
| |
| 3.31% | | | 3.15% | | | 3.13% | | | 3.06% | | | 3.51% | | | 3.66% | |
| 42% | | | 21% | | | 14% | | | 11% | | | 48% | | | 56% | |
67
Financial highlights
Delaware Tax-Free California 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) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| 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 expense limitation and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to expense limitation and expense paid indirectly |
| Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.
See accompanying notes
68
| Six Months Ended | | Year Ended |
| 2/29/081 | | 8/31/07 | | 8/31/06 | | 8/31/05 | | 8/31/04 | | 8/31/03 |
| (Unaudited) | | | | | | | | | | | | | | | |
| $11.030 | | | $11.420 | | | $11.500 | | | $11.130 | | | $10.760 | | | $11.020 | |
| |
| |
| 0.187 | | | 0.368 | | | 0.365 | | | 0.377 | | | 0.436 | | | 0.454 | |
| (0.570 | ) | | (0.390 | ) | | (0.080 | ) | | 0.370 | | | 0.370 | | | (0.260 | ) |
| (0.383 | ) | | (0.022 | ) | | 0.285 | | | 0.747 | | | 0.806 | | | 0.194 | |
| |
| |
| (0.187 | ) | | (0.368 | ) | | (0.365 | ) | | (0.377 | ) | | (0.436 | ) | | (0.454 | ) |
| (0.187 | ) | | (0.368 | ) | | (0.365 | ) | | (0.377 | ) | | (0.436 | ) | | (0.454 | ) |
| |
| $10.460 | | | $11.030 | | | $11.420 | | | $11.500 | | | $11.130 | | | $10.760 | |
| |
| (3.55% | ) | | (0.24% | ) | | 2.56% | | | 6.81% | | | 7.62% | | | 1.74% | |
| |
| |
| $13,319 | | | $13,453 | | | $12,768 | | | $9,756 | | | $5,595 | | | $7,013 | |
| 1.63% | | | 1.64% | | | 1.63% | | | 1.59% | | | 1.25% | | | 1.25% | |
| |
| 1.73% | | | 1.72% | | | 1.72% | | | 1.81% | | | 1.71% | | | 1.68% | |
| 3.41% | | | 3.23% | | | 3.22% | | | 3.28% | | | 3.97% | | | 4.09% | |
| |
| 3.31% | | | 3.15% | | | 3.13% | | | 3.06% | | | 3.51% | | | 3.66% | |
| 42% | | | 21% | | | 14% | | | 11% | | | 48% | | | 56% | |
69
Financial highlights
Delaware Tax-Free Colorado 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) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| 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 expense limitation and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to expense limitation and expense paid indirectly |
| Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager, as applicable. Performance would have been lower had the waiver not been in effect.
See accompanying notes
70
| Six Months Ended | | Year Ended |
| 2/29/081 | | 8/31/07 | | 8/31/06 | | 8/31/05 | | 8/31/04 | | 8/31/03 |
| (Unaudited) | | | | | | | | | | | | | | | |
| | $10.730 | | | $11.040 | | | $11.200 | | | $11.070 | | | $10.830 | | | $11.080 | |
| |
| |
| 0.227 | | | 0.464 | | | 0.488 | | | 0.495 | | | 0.510 | | | 0.527 | |
| (0.319 | ) | | (0.310 | ) | | (0.160 | ) | | 0.130 | | | 0.240 | | | (0.250 | ) |
| (0.092 | ) | | 0.154 | | | 0.328 | | | 0.625 | | | 0.750 | | | 0.277 | |
| |
| |
| (0.228 | ) | | (0.464 | ) | | (0.488 | ) | | (0.495 | ) | | (0.510 | ) | | (0.527 | ) |
| (0.228 | ) | | (0.464 | ) | | (0.488 | ) | | (0.495 | ) | | (0.510 | ) | | (0.527 | ) |
| |
| | $10.410 | | | $10.730 | | | $11.040 | | | $11.200 | | | $11.070 | | | $10.830 | |
| |
| (0.94% | ) | | 1.38% | | | 3.03% | | | 5.78% | | | 7.04% | | | 2.52% | |
| |
| |
| | $232,851 | | | $246,695 | | | $258,773 | | | $270,149 | | | $276,534 | | | $299,528 | |
| 0.93% | | | 0.94% | | | 0.93% | | | 0.94% | | | 0.95% | | | 0.99% | |
| |
| 0.95% | | | 0.96% | | | 0.94% | | | 0.94% | | | 0.95% | | | 0.99% | |
| 4.18% | | | 4.22% | | | 4.43% | | | 4.46% | | | 4.63% | | | 4.76% | |
| |
| 4.16% | | | 4.20% | | | 4.42% | | | 4.46% | | | 4.63% | | | 4.76% | |
| 16% | | | 12% | | | 8% | | | 8% | | | 13% | | | 30% | |
71
Financial highlights
Delaware Tax-Free Colorado 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) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| 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 expense limitation and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to expense limitation and expense paid indirectly |
| Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager, as applicable. Performance would have been lower had the waiver not been in effect.
See accompanying notes
72
| Six Months Ended | | Year Ended |
| 2/29/081 | | 8/31/07 | | 8/31/06 | | 8/31/05 | | 8/31/04 | | 8/31/03 |
| (Unaudited) | | | | | | | | | | | | | | | |
| $10.730 | | | $11.050 | | | $11.200 | | | $11.080 | | | $10.830 | | | $11.090 | |
| | | |
| | | |
| 0.186 | | | 0.382 | | | 0.405 | | | 0.412 | | | 0.427 | | | 0.444 | |
| (0.319 | ) | | (0.320 | ) | | (0.150 | ) | | 0.120 | | | 0.250 | | | (0.260 | ) |
| (0.133 | ) | | 0.062 | | | 0.255 | | | 0.532 | | | 0.677 | | | 0.184 | |
| | | |
| | | |
| (0.187 | ) | | (0.382 | ) | | (0.405 | ) | | (0.412 | ) | | (0.427 | ) | | (0.444 | ) |
| (0.187 | ) | | (0.382 | ) | | (0.405 | ) | | (0.412 | ) | | (0.427 | ) | | (0.444 | ) |
| | | |
| $10.410 | | | $10.730 | | | $11.050 | | | $11.200 | | | $11.080 | | | $10.830 | |
| | | |
| (1.30% | ) | | 0.53% | | | 2.35% | | | 4.89% | | | 6.34% | | | 1.66% | |
| | | |
| | | |
| $4,479 | | | $5,326 | | | $8,221 | | | $10,370 | | | $12,411 | | | $13,108 | |
| 1.68% | | | 1.69% | | | 1.68% | | | 1.69% | | | 1.70% | | | 1.74% | |
| | | |
| 1.70% | | | 1.71% | | | 1.69% | | | 1.69% | | | 1.70% | | | 1.74% | |
| 3.43% | | | 3.47% | | | 3.68% | | | 3.71% | | | 3.88% | | | 4.01% | |
| | | |
| 3.41% | | | 3.45% | | | 3.67% | | | 3.71% | | | 3.88% | | | 4.01% | |
| 16% | | | 12% | | | 8% | | | 8% | | | 13% | | | 30% | |
73
Financial highlights
Delaware Tax-Free Colorado 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) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| 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 expense limitation and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to expense limitation and expense paid indirectly |
| Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager, as applicable. Performance would have been lower had the waiver not been in effect.
See accompanying notes
74
| Six Months Ended | | Year Ended |
| 2/29/081 | | 8/31/07 | | 8/31/06 | | 8/31/05 | | 8/31/04 | | 8/31/03 |
| (Unaudited) | | | | | | | | | | | | | | | |
| $10.750 | | | $11.070 | | | $11.220 | | | $11.090 | | | $10.850 | | | $11.100 | |
| | |
| | |
| 0.186 | | | 0.382 | | | 0.405 | | | 0.413 | | | 0.427 | | | 0.444 | |
| (0.319 | ) | | (0.320 | ) | | (0.150 | ) | | 0.130 | | | 0.240 | | | (0.250 | ) |
| (0.133 | ) | | 0.062 | | | 0.255 | | | 0.543 | | | 0.667 | | | 0.194 | |
| | |
| | |
| (0.187 | ) | | (0.382 | ) | | (0.405 | ) | | (0.413 | ) | | (0.427 | ) | | (0.444 | ) |
| (0.187 | ) | | (0.382 | ) | | (0.405 | ) | | (0.413 | ) | | (0.427 | ) | | (0.444 | ) |
| | |
| $10.430 | | | $10.750 | | | $11.070 | | | $11.220 | | | $11.090 | | | $10.850 | |
| | |
| (1.31% | ) | | 0.53% | | | 2.34% | | | 4.99% | | | 6.23% | | | 1.74% | |
| | |
| | |
| $9,492 | | | $10,152 | | | $9,971 | | | $9,170 | | | $9,579 | | | $8,606 | |
| 1.68% | | | 1.69% | | | 1.68% | | | 1.69% | | | 1.70% | | | 1.74% | |
| | |
| 1.70% | | | 1.71% | | | 1.69% | | | 1.69% | | | 1.70% | | | 1.74% | |
| 3.43% | | | 3.47% | | | 3.68% | | | 3.71% | | | 3.88% | | | 4.01% | |
| | |
| 3.41% | | | 3.45% | | | 3.67% | | | 3.71% | | | 3.88% | | | 4.01% | |
| 16% | | | 12% | | | 8% | | | 8% | | | 13% | | | 30% | |
75
Financial highlights
Delaware Tax-Free Idaho Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
