UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-2715
Exact name of registrant as specified in charter: Delaware Group State Tax-Free Income Trust
Address of principal executive offices: 2005 Market Street
Philadelphia, PA 19103
Name and address of agent for service: Richelle S. Maestro, Esq.
2005 Market Street
Philadelphia, PA 19103
Registrant's telephone number, including area code: (800) 523-1918
Date of fiscal year end: February 28
Date of reporting period: August 31, 2003
Item 1. Reports to Stockholders
Delaware Tax-Free Pennsylvania Fund
Delaware
Investments(SM)
--------------------------------------
A member of Lincoln Financial Group(R)
FIXED INCOME
Semiannual Report 2004
- --------------------------------------------------------------------------------
DELAWARE TAX-FREE PENNSYLVANIA FUND
[Graphic Omitted]
POWERED BY RESEARCH.(SM)
Table
OF CONTENTS
- ---------------------------------------------------------
FINANCIAL STATEMENTS:
Statement of Net Assets 1
Statement of Operations 6
Statements of Changes in Net Assets 7
Financial Highlights 8
Notes to Financial Statements 11
- ---------------------------------------------------------
Funds are not FDIC insured and are not guaranteed. It is possible to lose
the principal amount invested.
Mutual fund advisory services provided by Delaware Management Company, a
series of Delaware Management Business Trust, which is a registered
investment advisor.
(C) 2003 Delaware Distributors, L.P.
Statement Delaware Tax-Free Pennsylvania Fund
OF NET ASSETS August 31, 2003 (Unaudited)
Principal Market
Amount Value
Municipal Bonds- 98.64%
Airport Revenue Bonds - 2.15%
Allegheny County Airport Revenue
(Pittsburgh International Airport Project)
Series A 5.75% 1/1/14 (MBIA) (AMT) $ 6,910,000 $ 7,465,909
Lehigh Northampton Airport
Authority Revenue
(Lehigh Valley Airport Project) Series A
6.00% 5/15/25 (MBIA) (AMT) 1,525,000 1,606,908
6.00% 5/15/30 (MBIA) (AMT) 2,700,000 2,840,319
Philadelphia Authority for Industrial
Development Revenue
(Sub-Air Cargo Project)
Series A 7.50% 1/1/25 (AMT) 2,500,000 2,522,125
-----------
14,435,261
-----------
Continuing Care/Retirement Revenue Bonds - 2.63%
Allegheny County Residential Finance
Authority Health Care Facilities Revenue
(Lemington Home for Aged Project)
Series A 5.75% 5/20/37 1,000,000 1,013,730
Bucks County Industrial Development
Authority Multi-Family
County-Guaranteed
(New Hope Manor Project) Series A
5.40% 3/1/22 (AMT) 1,265,000 1,283,924
5.50% 3/1/41 (AMT) 5,340,000 5,412,998
+Delaware County Authority Revenue
(Main Line & Haverford Nursing
and Rehabilitation Center)
9.00% 8/1/22 1,865,000 1,117,974
Lancaster County Hospital Authority
Revenue Health Center
(Willow Valley Retirement Project)
5.875% 6/1/31 2,100,000 2,115,477
Lancaster Authority for Industrial
Development Revenue
(Garden Spot Village Project)
Series A 7.625% 5/1/31 1,650,000 1,700,127
Philadelphia Authority for Industrial
Development Revenue (Stapeley
Hall Germantown Continuing Care
Community Project)
6.60% 1/1/16 5,250,000 5,015,220
-----------
17,659,450
-----------
Corporate Backed Revenue Bonds - 4.36%
Allegheny County Industrial Development
Authority Environmental
Improvement Revenue Refunding
(USX Corporation Project)
5.50% 12/1/29 13,000,000 12,242,880
Beaver County Industrial Development
Authority Pollution Control
Revenue Refunding
(Atlantic Richfield Company Project)
5.95% 7/1/21 5,100,000 5,273,502
Principal Market
Amount Value
Municipal Bonds (continued)
Corporate Backed Revenue Bonds (continued)
+++Bucks County Industrial Development
Authority Environmental Improvement
Revenue (USX Corp. Project)
5.40% 11/1/17 $ 2,250,000 $ 2,404,148
Pennsylvania Economic Development
Financing Authority Solid Waste
Disposal Revenue (Proctor & Gamble
Company Project) 5.375% 3/1/31 (AMT) 9,200,000 9,289,976
-----------
29,210,506
-----------
Dedicated Tax & Fees Revenue Bonds - 0.74%
Pittsburgh and Allegheny County Public
Auditorium Regional Asset District
Sales Tax
5.00% 2/1/29 (AMBAC) 5,000,000 4,953,600
-----------
4,953,600
-----------
Escrowed to Maturity Bonds - 6.02%
Delaware County Authority
Revenue Health Facilities
(Mercy Health Corporation Project)
6.00% 12/15/26 3,500,000 3,889,445
Pennsylvania State Higher Educational
Facilities Authority College and
University Revenue
(University of the Arts Project)
5.20% 3/15/25 (RADIAN) 4,490,000 4,598,523
Philadelphia Authority for Industrial
Development Commercial Revenue
(Girard Estates Facilities Leasing Project)
5.00% 5/15/27 4,500,000 4,447,305
Philadelphia Hospitals and Higher
Education Facilities Authority
Hospital Revenue
(Presbyterian Medical Center Project)
6.65% 12/1/19 13,000,000 15,810,991
Pittsburgh Water and Sewer Authority
Revenue 7.25% 9/1/14 (FGIC) 9,000,000 11,004,930
Pottsville School District
9.375% 5/1/06 (AMBAC) 540,000 598,973
-------------
40,350,167
-------------
Higher Education Revenue Bonds - 13.72%
Allegheny County Higher Education
Building Authority Revenue
(Carnegie Mellon University Project)
5.25% 3/1/32 1,900,000 1,918,544
(Chatham College Project)
Series A 5.85% 3/1/22 650,000 661,180
Series A 5.95% 3/1/32 1,000,000 1,009,750
Series B 5.75% 11/15/35 10,000,000 9,856,200
Delaware County Authority College Revenue
(Eastern College Project) Series B
5.50% 10/1/19 1,500,000 1,457,070
5.50% 10/1/24 2,850,000 2,691,968
(Haverford College Project)
5.75% 11/15/29 1,875,000 2,007,150
1
Statement Delaware Tax-Free Pennsylvania Fund
OF NET ASSETS (CONTINUED)
Principal Market
Amount Value
Municipal Bonds (continued)
Higher Education Revenue Bonds (continued)
Indiana County Industrial
Development Authority Revenue
(Indiana University Student Co-op
Association, Inc. Project) Series A
5.875% 11/1/24 (AMBAC) $ 1,000,000 $ 1,057,420
5.875% 11/1/29 (AMBAC) 1,000,000 1,055,090
Lehigh County General Purpose Authority
Revenue (Desales University Project)
5.125% 12/15/23 (RADIAN) 5,435,000 5,393,911
Lycoming County Authority College
Revenue (Pennsylvania College of
Technology Project)
5.375% 7/1/30 (AMBAC) 5,000,000 5,118,250
Montgomery County Higher Education
and Health Authority College Revenue
(Arcadia University Project)
5.85% 4/1/21 (Connie Lee) 5,465,000 5,942,477
Pennsylvania State Higher Educational
Facilities Authority College and
University Revenue
(Drexel University Project)
6.00% 5/1/29 3,000,000 3,151,620
Series A 5.20% 5/1/29 1,500,000 1,473,810
Series A 5.20% 5/1/32 1,000,000 981,220
(Gwynedd-Mercy College Project)
5.45% 11/1/26 (RADIAN) 1,000,000 1,017,920
5.50% 11/1/31 (RADIAN) 1,000,000 1,020,620
(Lafayette College Project)
6.00% 5/1/30 2,500,000 2,728,475
(Philadelphia University Project)
6.00% 6/1/29 (RADIAN) 1,800,000 1,891,854
(Thomas Jefferson University Project)
5.00% 1/1/29 5,000,000 4,883,800
(University of Pennsylvania Project)
4.75% 7/15/33 4,865,000 4,559,040
(University of Pennsylvania Project)
Series B 5.90% 9/1/15 4,205,000 4,521,510
(Ursinus College Project)
5.90% 1/1/27 1,000,000 1,037,280
Pennsylvania State Public School Authority
(Lehigh Career & Technical
Institute Project)
5.125% 10/1/28 (FGIC) 2,800,000 2,811,872
Philadelphia Hospitals and Higher
Educational Facilities Authority
College Revenue
(Chestnut Hill College Project)
6.00% 10/1/29 3,860,000 3,676,843
Swarthmore Borough Authority
College Revenue (Swarthmore
College Project)
5.00% 9/15/31 18,665,000 18,456,326
West Cornwall Township Municipal
Authority College Revenue
(Elizabethtown College Project)
6.00% 12/15/27 1,615,000 1,630,052
-----------
92,011,252
-----------
Principal Market
Amount Value
Municipal Bonds (continued)
Hospital Revenue Bonds - 16.81%
Allegheny County Hospital Development
Authority Revenue Health Center
(UPMC Health Systems Project) Series B
6.00% 7/1/23 (MBIA) $ 5,745,000 $ 6,473,868
6.00% 7/1/24 (MBIA) 5,000,000 5,631,800
6.00% 7/1/26 (MBIA) 4,750,000 5,339,760
6.00% 7/1/27 (MBIA) 9,325,000 10,499,484
Berks County Municipal Authority Revenue
(Health Care Reading Hospital
Pooled Financing Project)
5.00% 3/1/28 17,000,000 16,383,750
Chester County Health and
Educational Facilities Authority
Health System Revenue
(Jefferson Health Systems Project)
Series B 5.375% 5/15/27 14,270,000 14,080,494
Montgomery County Higher Education and
Health Authority Hospital Revenue
(Abington Memorial Hospital Project)
Series A 5.125% 6/1/32 7,000,000 6,607,930
Mount Lebanon Hospital Authority
(St. Clair Memorial Hospital Project)
Series A 5.625% 7/1/32 4,500,000 4,417,740
Pennsylvania Economic Development
Financing Authority Revenue
(Dr. Gertrude A. Barber
Center, Inc. Project)
5.90% 12/1/30 (RADIAN) 2,250,000 2,347,155
Pennsylvania State Higher Educational
Facilities Authority Revenue
(UPMC Health Systems Project)
Series A 6.00% 1/15/31 10,000,000 10,368,700
Philadelphia Hospitals and Higher
Education Facilities Authority
Hospital Revenue
(Jeanes Health System Project)
6.85% 7/1/22 10,000,000 10,044,500
(Roxboro Memorial Hospital Project)
7.25% 12/31/07 230,000 165,692
Southcentral General Authority Revenue
(Wellspan Health Obligated Project)
5.625% 5/15/26 20,000,000 20,356,199
------------
112,717,072
------------
Investor Owned Utilities Revenue Bonds - 13.67%
Beaver County Industrial Development
Authority Pollution Control Revenue
Refunding (Cleveland Electric
Illuminating Project)
7.625% 5/1/25 8,500,000 9,048,845
Series A 7.75% 7/15/25 10,000,000 10,780,300
Cambria County Industrial Development
Authority Pollution Control Revenue
Refunding (Pennsylvania Electric
Company Project)
Series A 5.80% 11/1/20 (MBIA) 4,000,000 4,358,680
Series B 6.05% 11/1/25 (MBIA) (AMT) 9,700,000 10,434,096
2
Statement Delaware Tax-Free Pennsylvania Fund
OF NET ASSETS (CONTINUED)
Principal Market
Amount Value
Municipal Bonds (continued)
Investor Owned Utilities Revenue Bonds (continued)
Carbon County Industrial
Development Authority
(Panther Creek Partners Project)
6.65% 5/1/10 (AMT) $ 9,395,000 $ 9,990,737
Delaware County Industrial
Development Authority
(PECO Energy Company Project)
Series A 5.20% 4/1/21 15,500,000 16,023,900
Indiana County Industrial Development
Authority Pollution Control Revenue
Refunding (PSE&G Power Project)
5.85% 6/1/27 (AMT) 3,000,000 2,900,760
Lehigh County Industrial Development
Authority Pollution Control Revenue
Refunding (Pennsylvania Power and
Light Company Project)
Series B 6.40% 9/1/29 (MBIA) 15,000,000 15,960,300
Montgomery County Industrial
Development Authority Pollution
Control Revenue
(PECO Energy Company Project)
Series A 5.20% 10/1/30 9,500,000 9,821,100
Schuylkill County Industrial
Development Authority Resource
Recovery Revenue (Schuylkill Energy
Resources, Inc. Project)
6.50% 1/1/10 (AMT) 2,315,000 2,321,088
-----------
91,639,806
-----------
Miscellaneous Revenue Bonds - 9.67%
Delaware Valley Regional Finance
Authority Local Government Revenue
Series A 5.50% 8/1/28 (AMBAC) 10,000,000 10,679,300
**First Albany Corporation Municipal Trust,
Inverse Floater
6.33% 12/15/14 (AMBAC) 46,500,000 52,405,500
++Philadelphia Gas Works Revenue
Capital Appreciation Series C
6.54% 1/1/12 (AMBAC) 2,500,000 1,753,325
-----------
64,838,125
-----------
Municipal Lease Revenue Bonds - 1.78%
Dauphin County General Authority
Office and Parking (Forum Place
Project) Series A 6.00% 1/15/25 9,210,000 4,377,421
Philadelphia Authority for Industrial
Development Lease Revenue
Series B 5.25% 10/1/30 (FSA) 4,510,000 4,586,399
State Public School Building Authority
(Daniel Boone School District Project)
5.00% 4/1/28 (MBIA) 3,000,000 2,977,200
-----------
11,941,020
-----------
Parking Revenue Bonds - 0.77%
Pennsylvania Economic Development
Financing Authority Revenue
(30th Street Station Garage Project)
5.875% 6/1/33 (ACA) 4,500,000 4,600,350
Philadelphia Parking Authority Parking
Revenue 5.00% 2/1/27 (AMBAC) 590,000 587,074
-----------
5,187,424
-----------
Principal Market
Amount Value
Municipal Bonds (continued)
Political Subdivision General Obligation Bonds - 0.30%
Lancaster County Series A
5.00% 11/1/27 (FGIC) $ 2,000,000 $ 1,989,580
-----------
1,989,580
-----------
Ports & Harbors Revenue Bonds - 1.89%
Allegheny County Port Authority
Special Revenue Refunding
5.00% 3/1/29 (FGIC) 2,000,000 1,981,500
Delaware River Port Authority
(Pennsylvania and New Jersey
Port District Project)
Series B 5.70% 1/1/21 (FSA) 8,560,000 9,252,248
Erie Western Pennsylvania
Port Authority General Revenue
6.25% 6/15/10 (AMT) 1,365,000 1,448,838
-----------
12,682,586
-----------
*Pre-Refunded Bonds - 7.56%
Abington School District
6.00% 5/15/26-06 (FGIC) 6,000,000 6,664,680
Chester Guaranteed
Host Community Resource Recovery
7.25% 12/1/05-03 1,955,000 2,181,682
Dauphin County
General Authority College Revenue
(Holy Family College Project)
7.50% 12/1/19 -04 3,025,000 3,238,142
Harrisburg Authority Office and
Parking Revenue Series A
6.00% 5/1/19-08 7,500,000 8,602,350
Norwin School District
6.00% 4/1/30-10 (FGIC) 2,000,000 2,309,040
Pennsylvania State Higher Education
Agency Assistance Capital Acquisition
5.875% 12/15/30-10 (MBIA) 7,385,000 8,555,079
Pennsylvania State
Higher Educational Facilities
Authority Revenue
Series M 5.75% 6/15/20-05 (AMBAC) 17,730,000 19,118,614
-----------
50,669,587
-----------
School District General Obligation Bonds - 3.57%
Canon Mcmillan School District Series B
5.25% 12/1/34 (FGIC) 3,580,000 3,631,087
East Allegheny School District Refunding
5.00% 4/1/32 (FGIC) 2,000,000 1,980,380
Gateway School District
5.00% 10/15/32 2,500,000 2,468,500
Greater Johnstown School District Series C
5.125% 8/1/25 (MBIA) 7,500,000 7,556,849
McGuffey School District
5.125% 8/1/31 (FGIC) 2,000,000 2,015,460
Moshannon Valley School District
5.00% 12/1/22 (FGIC) 3,005,000 3,039,648
5.00% 12/1/31 (FGIC) 1,000,000 991,700
Pennridge School District
5.00% 2/15/29 (MBIA) 2,300,000 2,285,211
-----------
23,968,835
-----------
3
Statement Delaware Tax-Free Pennsylvania Fund
OF NET ASSETS (CONTINUED)
Principal Market
Amount Value
Municipal Bonds (continued)
School District Revenue Bonds - 0.75%
Pennsylvania Economic Development
Financing Authority School Revenue
(Germantown Friends School Project)
5.35% 8/15/31 $ 2,820,000 $ 2,834,269
Pennsylvania State Public School
Building Authority (Lehigh Career
and Technical Institute)
5.25% 10/1/32 (FGIC) 2,140,000 2,173,898
-----------
5,008,167
-----------
Single Family Housing Revenue Bonds - 4.16%
Allegheny County Residential Finance
Authority Mortgage Revenue
Single Family
Series II-2 5.90% 11/1/32 (GNMA) (AMT) 1,040,000 1,071,616
Series KK-2 5.40% 5/1/26 (GNMA) (AMT) 2,980,000 2,996,956
Pennsylvania Housing Finance Agency
Single Family Mortgage
Series 57A 6.15% 4/1/27 (FHA) (AMT) 5,000,000 5,160,550
Series 66A 5.65% 4/1/29 (AMT) 3,950,000 3,988,355
Series 69A 6.25% 4/1/31 (FHA) (AMT) 920,000 958,171
Series 70A 5.90% 4/1/31 (AMT) 8,250,000 8,512,102
Series 72A 5.35% 10/1/31 (AMT) 5,190,000 5,196,384
-----------
27,884,134
-----------
Tax Increment/Special Assessment Bonds - 0.57%
Allegheny County Redevelopment Authority
Tax Increment Revenue
(Waterfront Project) Series B
6.00% 12/15/10 1,000,000 1,091,990
6.40% 12/15/18 2,500,000 2,697,925
-----------
3,789,915
-----------
Territorial Revenue Bonds - 1.56%
Puerto Rico Commonwealth
Highway and Transportation
Authority Revenue
Series E 5.50% 7/1/19 (FSA) 1,450,000 1,612,023
Series G 5.00% 7/1/33 2,500,000 2,422,625
Series G 5.00% 7/1/42 6,700,000 6,394,346
-----------
10,428,994
-----------
Transportation Revenue Bonds - 0.72%
Pennsylvania Economic Development
Financing Authority Facilities Revenue
(Amtrak Project)
Series A 6.375% 11/1/41 (AMT) 5,000,000 4,850,000
-----------
4,850,000
-----------
Turnpike/Toll Road Revenue Bonds - 1.25%
Delaware River Toll Bridge
5.00% 7/1/28 3,000,000 2,959,890
Pennsylvania State Turnpike Commission
5.00% 7/15/31 (AMBAC) 1,000,000 996,210
5.00% 7/15/41 (AMBAC) 2,000,000 1,964,520
Series R 5.00% 12/1/30 (AMBAC) 2,500,000 2,483,250
-----------
8,403,870
-----------
Principal Market
Amount Value
Municipal Bonds (continued)
Waste Disposal Revenue Bonds - 1.11%
Chester Guaranteed Host Community
Resource Recovery
7.25% 12/1/05 $ 3,525,000 $ 3,559,827
New Morgan Revenue Guaranteed
8.00% 11/1/05 3,775,000 3,907,276
------------
7,467,103
------------
Water & Sewer Revenue Bonds - 2.88%
Dauphin County Industrial Development
Authority Water Development Revenue
Refunding (Dauphin Consolidated
Water Supply General Waterworks
Corporation Project)
Series B 6.70% 6/1/17 1,750,000 2,087,085
Delaware County Industrial Development
Authority Water Facilities Revenue
(Philadelphia Suburban Water Project)
6.00% 6/1/29 (FGIC) (AMT) 3,000,000 3,195,210
Erie Water Authority Water Revenue
Series A 5.125% 12/1/25 (MBIA) 4,000,000 4,027,240
Pittsburgh Water and Sewer
Authority Revenue
5.125% 12/1/31 (AMBAC) 10,000,000 10,028,600
------------
19,338,135
------------
Total Municipal Bonds
(cost $631,061,155) 661,424,589
------------
Total Market Value of Securities - 98.64%
(cost $631,061,155) 661,424,589
Receivables and Other Assets
Net of Liabilities - 1.36% 9,115,190
------------
Net Assets Applicable to 84,546,829 Shares
Outstanding - 100.00% $670,539,779
============
4
Statement Delaware Tax-Free Pennsylvania Fund
OF NET ASSETS (CONTINUED)
Net Asset Value - Delaware Tax-Free
Pennsylvania Fund Class A
($633,462,274 / 79,871,769 Shares) $7.93
-----
Net Asset Value - Delaware Tax-Free
Pennsylvania Fund Class B
($31,258,227 / 3,941,326 Shares) $7.93
-----
Net Asset Value - Delaware Tax-Free
Pennsylvania Fund Class C
($5,819,278 / 733,734 Shares) $7.93
-----
Components of Net Assets at August 31, 2003:
Shares of beneficial interest
(unlimited authorization - no par) $665,682,828
Accumulated net realized loss on investments (25,506,483)
Net unrealized appreciation of investments 30,363,434
------------
Total net assets $670,539,779
============
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
the bond is pre-refunded.
** An inverse floater bond is a type of bond with variable or floating interest
rates that move in the opposite direction of short-term interest rates.
Interest rate disclosed is in effect as of August 31, 2003.
+ Non-income producing security. Security is currently in default.
++ Zero coupon bond. The interest rate shown is the yield at the time of
purchase.
+++Variable Rate Notes. The interest rate shown is the rate as of August 31,
2003.
Summary of Abbreviations:
ACA -- Insured by American Capital Access
AMBAC -- Insured by the AMBAC Indemnity Corporation
AMT -- Subject to Alternative Minimum Tax
Connie Lee -- Insured by the College Construction Insurance Association
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
Net Asset Value and Offering Price per Share -
Delaware Tax-Free Pennsylvania Fund
Net asset value Class A (A) $7.93
Sales charge (4.50% of offering price, or 4.67% of
amount invested per share) (B) 0.37
-----
Offering price $8.30
=====
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
5
Statement Delaware Tax-Free Pennsylvania Fund
OF OPERATIONS Six Months Ended August 31,2003 (Unaudited)
Investment Income:
Interest $19,016,851
-----------
Expenses:
Management fees 1,897,411
Distribution expenses - Class A 868,457
Distribution expenses - Class B 167,613
Distribution expenses - Class C 28,625
Dividend disbursing and transfer agent fees and expenses 198,149
Accounting and administration expenses 152,246
Reports and statements to shareholders 38,100
Custodian fees 32,205
Registration fees 28,334
Trustees' fees 14,848
Professional fees 14,825
Other 97,831
---------
3,538,644
Less waived distribution expenses - Class A (133,269)
Less expenses paid indirectly (25,532)
-----------
Total expenses 3,379,843
-----------
Net Investment Income 15,637,008
-----------
Net Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments 590,453
Net change in unrealized appreciation/depreciation of investments (18,558,496)
-----------
Net Realized and Unrealized Loss on Investments (17,968,043)
-----------
Net Decrease in Net Assets Resulting from Operations ($2,331,035)
===========
See accompanying notes
6
Statements Delaware Tax-Free Pennsylvania Fund
OF CHANGES IN NET ASSETS
Six Months Year
Ended Ended
8/31/03 2/28/03
(Unaudited)
Increase (Decrease) in Net Assets from Operations:
Net investment income $ 15,637,008 $ 32,924,902
Net realized gain on investments 590,453 3,685,273
Net change in unrealized appreciation/depreciation
of investments (18,558,496) 13,192,645
------------ ------------
Net increase (decrease) in net assets resulting
from operations (2,331,035) 49,802,820
------------ ------------
Dividends and Distributions to Shareholders from:
Net investment income:
Class A (14,973,398) (31,268,301)
Class B (619,021) (1,405,335)
Class C (105,748) (190,107)
------------ ------------
(15,698,167) (32,863,743)
------------ ------------
Capital Share Transactions:
Proceeds from shares sold:
Class A 12,374,468 22,550,093
Class B 1,051,325 2,879,696
Class C 1,006,933 1,135,289
Net asset value of shares issued upon reinvestment
of dividends and distributions:
Class A 8,557,846 18,247,357
Class B 310,376 776,667
Class C 68,018 124,928
------------ ------------
23,368,966 45,714,030
------------ ------------
Cost of shares repurchased:
Class A (39,450,594) (69,727,930)
Class B (4,205,613) (7,146,477)
Class C (296,923) (701,092)
------------ ------------
(43,953,130) (77,575,499)
------------ ------------
Decrease in net assets derived from capital share
transactions (20,584,164) (31,861,469)
------------ ------------
Net Decrease in Net Assets (38,613,366) (14,922,392)
Net Assets:
Beginning of period 709,153,145 724,075,537
------------ ------------
End of period $670,539,779 $709,153,145
============ ============
See accompanying notes
7
Financial
HIGHLIGHTS
Selected data for each share of the Fund outstanding
throughout each period were as follows:
-----------------------------------------------------------
Delaware Tax-Free Pennsylvania Fund Class A
-----------------------------------------------------------
Six
Months Year
Ended Ended
8/31/03(1) 2/28/03 2/28/02 2/28/01 2/28/00 2/28/99
(Unaudited)
Net asset value, beginning of period $8.140 $7.950 $7.820 $7.460 $8.290 $8.420
Income (loss) from investment operations:
Net investment income 0.183 0.374 0.387 0.402 0.410 0.415
Net realized and unrealized gain (loss) on
investments (0.209) 0.189 0.130 0.360 (0.830) (0.034)
------ ------ ------ ------ ------ ------
Total from investment operations (0.026) 0.563 0.517 0.762 (0.420) 0.381
------ ------ ------ ------ ------ ------
Less dividends and distributions from:
Net investment income (0.184) (0.373) (0.387) (0.402) (0.410) (0.415)
Net realized gain on investments -- -- -- -- -- (0.096)
------ ------ ------ ------ ------ ------
Total dividends and distributions (0.184) (0.373) (0.387) (0.402) (0.410) (0.511)
------ ------ ------ ------ ------ ------
Net asset value, end of period $7.930 $8.140 $7.950 $7.820 $7.460 $8.290
====== ====== ====== ====== ====== ======
Total return(2) (0.35%) 7.29% 6.78% 10.47% (5.18%) 4.64%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $633,462 $669,042 $682,030 $695,329 $716,646 $871,740
Ratio of expenses to average net assets 0.91% 0.92% 0.89% 0.92% 0.92% 0.95%
Ratio of expenses to average net assets
prior to expense limitation and expenses
paid indirectly 0.95% 0.92% 0.89% 0.92% 0.92% 0.95%
Ratio of net investment income to average net
assets 4.45% 4.69% 4.92% 5.26% 5.21% 4.96%
Ratio of net investment income to average net
assets prior to expense limitation and
expenses paid indirectly 4.41% 4.69% 4.92% 5.26% 5.21% 4.96%
Portfolio turnover 12% 18% 38% 23% 38% 41%
(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 payment of fees by the distributor. Performance
would have been lower had the expense limitation not been in effect.
See accompanying notes
8
Financial
HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding
throughout each period were as follows:
------------------------------------------------------------------
Delaware Tax-Free Pennsylvania Fund Class B
------------------------------------------------------------------
Six
Months
Ended Year Ended
8/31/03(1) 2/28/03 2/28/02 2/28/01 2/28/00 2/28/99
(Unaudited)
Net asset value, beginning of period $8.140 $7.950 $7.820 $7.460 $8.290 $8.420
Income (loss) from investment operations:
Net investment income 0.151 0.312 0.324 0.341 0.347 0.348
Net realized and unrealized gain (loss) on
investments (0.209) 0.189 0.130 0.360 (0.830) (0.034)
------ ------ ------ ------ ------ ------
Total from investment operations (0.058) 0.501 0.454 0.701 (0.483) 0.314
------ ------ ------ ------ ------ ------
Less dividends and distributions from:
Net investment income (0.152) (0.311) (0.324) (0.34) (0.347) (0.348)
Net realized gain on investments -- -- -- -- -- (0.096)
------ ------ ------ ------ ------ ------
Total dividends and distributions (0.152) (0.311) (0.324) (0.34) (0.347) (0.444)
------ ------ ------ ------ ------ ------
Net asset value, end of period $7.930 $8.140 $7.950 $7.820 $7.460 $8.290
====== ====== ====== ====== ====== ======
Total return(2) (0.74%) 6.46% 5.93% 9.59% (5.94%) 3.81%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $31,258 34,914 $37,533 $36,350 $37,390 $42,994
Ratio of expenses to average net assets 1.69% 1.70% 1.69% 1.72% 1.72% 1.75%
Ratio of net investment income to average net
assets 3.67% 3.91% 4.12% 4.46% 4.41% 4.16%
Portfolio turnover 12% 18% 38% 23% 38% 41%
(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.
See accompanying notes
9
Financial
HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding
throughout each period were as follows:
---------------------------------------------------------------
Delaware Tax-Free Pennsylvania Fund Class C
---------------------------------------------------------------
Six Months
Ended Year Ended
8/31/03(1) 2/28/03 2/28/02 2/28/01 2/28/00 2/28/99
(Unaudited)
Net asset value, beginning of period $8.140 $7.950 $7.820 $7.460 $8.290 $8.420
Income (loss) from investment operations:
Net investment income 0.151 0.312 0.324 0.340 0.347 0.355
Net realized and unrealized gain (loss) on investments (0.209) 0.189 0.130 0.360 (0.830) (0.034)
------ ------ ------ ------ ------ ------
Total from investment operations (0.058) 0.501 0.454 0.700 (0.483) 0.321
------ ------ ------ ------ ------ ------
Less dividends and distributions from:
Net investment income (0.152) (0.311) (0.324) (0.340) (0.347) (0.355)
Net realized gain on investments -- -- -- -- -- (0.096)
------ ------ ------ ------ ------ ------
Total dividends and distributions (0.152) (0.311) (0.324) (0.340) (0.347) (0.451)
------ ------ ------ ------ ------ ------
Net asset value, end of period $7.930 $8.140 $7.950 $7.820 $7.460 $8.290
====== ====== ====== ====== ====== ======
Total return(2) (0.74%) 6.46% 5.93% 9.58% (5.94%) 3.81%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $5,819 $5,197 $4,512 $3,898 $3,909 $3,963
Ratio of expenses to average net assets 1.69% 1.70% 1.69% 1.72% 1.72% 1.75%
Ratio of net investment income to average net assets 3.67% 3.91% 4.12% 4.46% 4.41% 4.16%
Portfolio turnover 12% 18% 38% 23% 38% 41%
(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.
See accompanying notes
10
Notes Delaware Tax-Free Pennsylvania Fund
TO FINANCIAL STATEMENTS August 30, 2003 (Unaudited)
Delaware Group State Tax-Free Income Trust (the "Trust") is organized as a
Delaware business trust and offers one series: Delaware Tax-Free Pennsylvania
Fund. These financial statements and related notes pertain to Delaware Tax-Free
Pennsylvania Fund (the "Fund"). The Trust is an open-end investment company. The
Fund is considered non-diversified under the Investment Company Act of 1940, as
amended and offers Class A, Class B, and Class C shares. Class A shares are sold
with a front-end sales charge of up to 4.50%. Class B shares are sold with a
contingent deferred sales charge that declines from 4% to zero depending upon
the period of time the shares are held. Class B shares will automatically
convert to Class A shares on a quarterly basis approximately 8 years after
purchase. Class C shares are sold with a contingent deferred sales charge of 1%,
if redeemed during the first 12 months.
The investment objective of Delaware Tax-Free Pennsylvania Fund is to seek a
high level of current interest income exempt from federal income tax and certain
Pennsylvania state and local taxes, consistent with the preservation of capital.
1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Fund.
Security Valuation -- Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Short-term debt securities having less than 60 days to maturity are
valued at amortized cost, which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith under the direction of the Fund's Board of
Trustees.
Federal Income Taxes -- The Fund intends to continue to qualify for federal
income tax purposes as a regulated investment company and make the requisite
distributions to shareholders. Accordingly, no provision for federal income
taxes has been made in the financial statements.
Class Accounting -- Investment income and common expenses are allocated to the
classes of the Fund on the basis of "settled shares" of each class in relation
to the net assets of the Fund. Realized and unrealized gain (loss) on
investments are allocated to the various classes of the Fund on the basis of
daily net assets of each class. Distribution expenses relating to a specific
class are charged directly to that class.
Use of Estimates -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Other -- Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Interest income is recorded on the accrual basis. Discounts and premiums are
amortized to interest income over the lives of the respective securities. The
Fund declares dividends daily from net investment income and pays such dividends
monthly and declares and pays distributions from net realized gain on
investments, if any, annually.
Certain expenses of the Fund are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $8,507 for the period ended August 31, 2003. In
addition, the Fund receives earnings credits from its custodian when positive
cash balances are maintained, which are used to offset custody fees. The
earnings credits for the period ended August 31, 2003 were approximately
$17,025. The expenses paid under the above arrangements are included in their
respective expense captions on the Statement of Operations with the
corresponding expense offset shown as "expenses paid indirectly."
2. Investment Management, Administration Agreements and Other
Transactions with Affiliates
In accordance with the terms of its investment management agreement, the Fund
pays Delaware Management Company (DMC), a series of Delaware Management Business
Trust and the investment manager, an annual fee which is calculated daily at the
rate of 0.55% on the first $500 million of average daily net assets of the Fund,
0.50% on the next $500 million, 0.45% on the next $1.5 billion, and 0.425% on
average daily net assets in excess of $2.5 billion.
Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting,
administration, dividend disbursing and transfer agent services. The Fund pays
DSC a monthly fee based on the average net assets subject to certain minimums
for accounting and administration services. The Fund pays DSC a monthly fee
based on the number of shareholder accounts for dividend and disbursing and
transfer agent services. Prior to June 1, 2003, the monthly fee for dividend
disbursing and transfer agent services was based on the number of shareholder
accounts and shareholder transactions.
Pursuant to a distribution agreement and distribution plan, the Fund pays
Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an
annual fee not to exceed 0.30% of the average daily net assets of the Class A
shares and 1.00% of the average daily net assets of the Class B and C shares.
The distribution fee for Class A is applied at the rate of 0.10% of the average
daily net assets of Class A shares outstanding prior to June 1, 1992 and the
current maximum rate which is contractually waived by DDLP to 0.25% through
April 30, 2004, of the average daily net assets of Class A shares issued
thereafter. The current weighted average rate of the distribution fee for Class
A shares is 0.22% of the average daily net assets.
At August 31, 2003, the Fund had liabilities payable to affiliates as follows:
Investment management fee payable to DMC $21,522
Dividend disbursing, transfer agent fees,
accounting and other expenses payable to DSC 65,975
Other expenses payable to DMC and affiliates 13,913
For the period ended August 31, 2003, DDLP earned $36,397 for commissions on
sales of the Fund's Class A shares.
Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust.
These officers and trustees are paid no compensation by the Fund.
3. Investments
For the six months ended August 31, 2003, the Fund made purchases of $40,891,679
and sales of $61,164,800 of investment securities other than short-term
investments.
At August 31, 2003, the cost of investments for federal income tax purposes has
been estimated since the final tax characteristics cannot be determined until
fiscal year end. At August 31, 2003, the cost of investments was $635,756,965.
At August 31, 2003, the net unrealized appreciation was $25,667,624 of which
$31,839,042 related to unrealized appreciation of investments and ($6,171,418)
related to unrealized depreciation of investments.
11
Notes Delaware Tax-Free Pennsylvania Fund
TO FINANCIAL STATEMENTS (CONTINUED)
4. Dividend and Distribution Information
Income and long-term capital gain distributions are determined in accordance
with federal income tax regulations, which may differ from accounting principles
generally accepted in the United States. The tax character of dividends and
distributions paid during the periods ended August 31, 2003 and February 28,
2003 was as follows:
8/31/03* 2/28/03
Tax-Exempt Distributions $15,698,167 $32,863,743
*Tax information for the period ended August 31, 2003 is an estimate and the tax
character of dividends and distributions may be redesignated at fiscal year
end.
The components of net assets are estimated since final tax characteristics
cannot be determined until fiscal year end. As of August 31, 2003, the estimated
components of net assets on a tax basis were as follows:
Shares of beneficial interest $665,682,828
Undistributed net realized
capital gain on investments 590,453
Capital loss carryforwards (21,401,126)
Unrealized appreciation of investments 25,667,624
------------
Net assets $670,539,779
============
For federal income tax purposes, capital loss carryforwards may be carried
forward and applied against future capital gains. Such capital loss
carryforwards expire as follows: $11,916,168 expires in 2008, $8,323,306 expires
in 2009, and $1,161,652 expires in 2010.
5. Capital Shares
Transactions in capital shares were as follows:
Six Months Year
Ended Ended
8/31/03 2/28/03
Shares sold:
Class A 1,513,427 2,826,359
Class B 128,964 360,790
Class C 123,397 142,613
Shares issued upon reinvestment of
dividends and distributions:
Class A 1,054,026 2,292,826
Class B 38,224 97,638
Class C 8,382 15,684
---------- -----------
2,866,420 5,735,910
---------- -----------
Shares repurchased:
Class A (4,858,747) (8,759,159)
Class B (513,620) (892,520)
Class C (36,295) (87,684)
---------- -----------
(5,408,662) (9,739,363)
---------- -----------
Net decrease (2,542,242) (4,003,453)
========== ===========
For the period ended August 31, 2003 and the year ended February 28, 2003,
268,669 Class B shares were converted to 268,669 Class A shares valued at
$2,211,217, and 333,203 Class B shares were converted to 333,203 Class A shares
valued at $2,687,259, respectively. The respective amounts are included in Class
B redemptions and Class A subscriptions in the table above and the Statement of
Changes in Net Assets.
6. Line of Credit
The Fund, along with certain other funds in the Delaware Investments Family of
Funds (the "Participants"), participates in a $202,300,000 revolving line of
credit facility to be used for temporary or emergency purposes as an additional
source of liquidity to fund redemptions of investor shares. The Participants are
charged an annual commitment fee, which is allocated across the Participants on
the basis of each funds' allocation of the entire facility. The Participants may
borrow up to a maximum of one third of their net assets under the agreement. The
Fund had no amounts outstanding as of August 31, 2003, or at any time during the
period.
7. Credit and Market Risks
The Fund concentrates its investments in securities issued by Pennsylvania
municipalities. The value of these investments may be adversely affected by new
legislation within Pennsylvania, 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
the market may fluctuate for other reasons and there is no assurance that the
insurance company will meet its obligations. These securities have been
identified in the Statement of Net Assets.
12
Delaware
Investments(SM)
- --------------------------------------
A member of Lincoln Financial Group(R)
This semiannual report is for the information of Delaware Tax-Free Pennsylvania
Fund shareholders, but it may be used with prospective investors when preceded
or accompanied by a current prospectus for Delaware Tax-Free Pennsylvania Fund
and the Delaware Investments Performance Update for the most recently completed
calendar quarter. The prospectus sets forth details about charges, expenses,
investment objectives, and operating policies of the Fund. You should read the
prospectus carefully before you invest. The figures in this report represent
past results which are not a guarantee of future results. The return and
principal value of an investment in the Fund will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Board of Trustees Affiliated Officers Contact Information
Jude T. Driscoll Joseph H. Hastings Investment Manager
Chairman Executive Vice President and Delaware Management Company
Delaware Investments Family of Funds Chief Financial Officer Philadelphia, PA
Philadelphia, PA Delaware Investments Family of Funds
Philadelphia, PA International Affiliate
Walter P. Babich Delaware International Advisers Ltd.
Board Chairman Richelle S. Maestro London, England
Citadel Construction Corporation Senior Vice President,
King of Prussia, PA Chief Legal Officer and Secretary National Distributor
Delaware Investments Family of Funds Delaware Distributors, L.P.
John H. Durham Philadelphia, PA Philadelphia, PA
Private Investor
Gwynedd Valley, PA Michael P. Bishof Shareholder Servicing, Dividend
Senior Vice President and Treasurer Disbursing and Transfer Agent
John A. Fry Delaware Investments Family of Funds Delaware Service Company, Inc.
President Philadelphia, PA 2005 Market Street
Franklin & Marshall College Philadelphia, PA 19103-7094
Lancaster, PA
For Shareholders
Anthony D. Knerr 800 523-1918
Managing Director
Anthony Knerr & Associates For Securities Dealers and Financial
New York, NY Institutions Representatives Only
800 362-7500
Ann R. Leven
Former Treasurer/Chief Fiscal Officer Web site
National Gallery of Art www.delawareinvestments.com
Washington, DC
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
Janet L. Yeomans
Vice President/Mergers & Acquisitions
3M Corporation
St. Paul, MN
(8231) Printed in the USA
SA-007 [08/03] IVES 10/03 (J9416)EXP: 04/04
Item 2. Code of Ethics
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a
third party. A copy of the registrant's Code of Business Ethics has been posted
on Delaware Investments' internet website at www.delawareinvesments.com. Any
amendments to the Code of Business Ethics, and information on any waiver from
its provisions granted by the registrant, will also be posted on this website
within five business days of such amendment or waiver and will remain on the
website for at least 12 months.
Item 3. Audit Committee Financial Expert
The registrant's Board of Trustees/Directors has determined that each
member of the registrant's Audit Committee is an audit committee financial
expert, as defined below. For purposes of this item, an "audit committee
financial expert" is a person who has the following attributes:
a. An understanding of generally accepted accounting principles and
financial statements;
b. The ability to assess the general application of such principles in
connection with the accounting for estimates, accruals, and reserves;
c. Experience preparing, auditing, analyzing, or evaluating financial
statements that present a breadth and level of complexity of accounting issues
that are generally comparable to the breadth and complexity of issues that can
reasonably be expected to be raised by the registrant's financial statements, or
experience actively supervising one or more persons engaged in such activities;
d. An understanding of internal controls and procedures for financial
reporting; and
e. An understanding of audit committee functions.
An "audit committee financial expert" shall have acquired such attributes
through:
a. Education and experience as a principal financial officer, principal
accounting officer, controller, public accountant, or auditor or experience in
one or more positions that involve the performance of similar functions;
b. Experience actively supervising a principal financial officer,
principal accounting officer, controller, public accountant, auditor, or person
performing similar functions;
c. Experience overseeing or assessing the performance of companies or
public accountants with respect to the preparation, auditing, or evaluation of
financial statements; or
d. Other relevant experience.
The registrant's Board of Trustees/Directors has also determined that
each member of the registrant's Audit Committee is independent. In order to be
"independent" for purposes of this item, the Audit Committee member may not: (i)
other than in his or her capacity as a member of the Board of Trustees/Directors
or any committee thereof, accept directly or indirectly any consulting, advisory
or other compensatory fee from the issuer; or (ii) be an "interested person" of
the registrant as defined in Section 2(a)(19) of the Investment Company Act of
1940.
The names of the audit committee financial experts on the registrant's
Audit Committee are set forth below:
Ann R. Leven
Thomas F. Madison
Janet L. Yeomans(1)
Item 4. Principal Accountant Fees and Services
Required only for fiscal years ending after December 15, 2003.
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8. [Reserved]
- -----------------------
(1) The instructions to Form N-CSR require disclosure on the relevant experience
of persons who qualify as audit committee financial experts based on "other
relevant experience." The Board of Trustees/Directors has determined that Ms.
Yeomans qualifies as an audit committee financial expert by virtue of her
education and experience as the Treasurer of a large global corporation.
Item 9. Controls and Procedures
The registrant's principal executive officer and principal financial
officer have evaluated the registrant's disclosure controls and procedures
within 90 days of the filing of this report and have concluded that they are
effective in providing reasonable assurance that the information required to be
disclosed by the registrant in its reports or statements filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and
Exchange Commission.
There were no significant changes in the registrant's internal control
over financial reporting that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an annual
report) that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
Item 10. Exhibits
(a)(1) Code of Ethics
Not applicable.
(a)(2) Certifications of Principal Executive Officer and Principal Financial
Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940
are attached hereto as Exhibit 99.CERT.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 are furnished herewith as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf, by the undersigned, thereunto duly authorized.
Delaware Group State Tax-Free Income Trust
By: Jude T. Driscoll
---------------------------
Name: Jude T. Driscoll
Title: Chairman
Date: October 28, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: Jude T. Driscoll
---------------------------
Name: Jude T. Driscoll
Title: Chairman
Date: October 28, 2003
By: Joseph H. Hastings
-----------------------------------
Name: Joseph H. Hastings
Title: Chief Financial Officer
Date: October 28, 2003