<PAGE> 1
1995
Annual
Report
- -------
DELAWARE GROUP
DECATUR FUND
DECATUR INCOME FUND
DECATUR TOTAL RETURN FUND
- -------
[PHOTO OF CITY OF PHILADELPHIA AND LIBERTY BELL]
A Tradition of Sound Investing Since 1929
DELAWARE
GROUP
- ---------------------
Philadelphia - London
<PAGE> 2
FUND INVESTMENT
- --------------------
OBJECTIVES
- --------------------
DECATUR INCOME FUND
To achieve the highest possible current income by investing primarily in common
stocks that provide the potential for income and capital appreciation without
undue risk to principal.
DECATUR TOTAL RETURN FUND
To achieve long-term growth by investing primarily in securities that provide
the potential for income and capital appreciation without undue risk to
principal.
[PHOTO OF CITY OF PHILADELPHIA]
ABOUT OUR COVER
- --------------------
Headquartered in Philadelphia, Pennsylvania, Delaware Group shares in the
tradition of a city built on the vision of opportunity. Amidst the city's
historic sites, symbolic of our nation's freedom and prosperity, Delaware Group
provides both individual and institutional investors with a conservative,
disciplined approach to money management.
DELAWARE GROUP
- --------------------
A TRADITION OF
- --------------------
SOUND INVESTING
- --------------------
Delaware Management Company's investment experience dates back to 1929. Our
first mutual fund was established in 1938. Headquartered in Philadelphia with
an affiliate in London, Delaware provides a full range of mutual fund
investments, annuities and retirement plan services. Delaware International
Advisers Ltd., our London-based international affiliate, was established in
1990.
Delaware Group manages mutual funds with the same time-tested, disciplined
strategies demanded by the large public and private pension plans, foundations
and endowments that are among our clients. With over 60 years of experience, we
have demonstrated our commitment to quality investment management and service.
Today, Delaware manages some $28 billion in mutual funds and institutional
investment advisory accounts. We measure our success by the financial success
and satisfaction of our nearly 500,000 shareholders.
<PAGE> 3
DECEMBER 29, 1995
DEAR
- -----------------------------
SHAREHOLDER:
- -----------------------------
During the fiscal year ended November 30, 1995, the U.S. stock and bond markets
enjoyed strong rallies that marked a sharp turnaround from the relatively weak
performance of a year earlier.
On November 21, the Dow Jones Industrial Average - an unmanaged portfolio of
30 industrial stocks - closed above the 5000 point milestone for the first
time, a nearly 1,300 point increase from where it stood at 3739 on November 30,
1994. Other broad equity market measures also rose to record levels during
1995's bull market.
Decatur Total Return Fund achieved its highest fiscal year return since the
Fund began operating in 1986, while Decatur Income Fund's total return was one
of the strongest in the Fund's 38-year history. (For both Funds, results are
based on Class A net asset value with dividends and capital gains reinvested.)
Both funds also outperformed the average of their 122 equity income fund
peers, as defined by Lipper Analytical Services, by a wide margin. These
results are seen in the table above and are compared to the change in the
unmanaged Standard & Poor's 500 Index during fiscal 1995.
Although the U.S. economy's growth rate has been slowing, we believe
long-term prospects for continued U.S. economic growth remain strong.
Long-term interest rates fell sharply in the past year and short-term rates
appear to have stabilized amid reports of low inflation. The earnings outlook
for most industrial and financial businesses is positive, as many companies
anticipate higher exports, modestly greater domestic demand and cost savings
from events such as mergers and from lower interest costs on money borrowed for
expansion.
You may recall that the yield (price divided by income) on the benchmark
30-year U.S. Treasury bond reached a high of 8.21% in November 1994 as the
Federal Reserve Board sought to fight anticipated inflation by raising the cost
of credit. Amid a reversal of Fed policy and renewed optimism about bonds,
30-year Treasuries yielded just 5.95% as of December 29, 1995.
===============================================================================
<TABLE>
<CAPTION>
TOTAL RETURN
-----------------
12 Months Ended
November 30, 1995
<S> <C>
Decatur Income Fund A Class +31.02%
Decatur Total Return Fund A Class +34.68%
- --------------------------------------------------------------------------------
Lipper Equity Income Fund Average +27.94%
Standard & Poor's 500 Index +36.93%
- --------------------------------------------------------------------------------
</TABLE>
The Decatur Funds' performance as well as that of the Lipper Equity Income Fund
Average is based on net asset value without the effect of sales charges. All
performance quoted above assumes reinvestment of dividends and capital gains.
Performance information for all Classes of both Funds can be found on pages 10
and 11.
===============================================================================
The two Decatur Funds achieved exceptionally strong results by maintaining
a consistent, long-term investment focus on stocks with above-average dividend
yields. Moreover, the Funds' results were accomplished without exposure to this
past year's volatile "hot sector" - technology stocks.
Our dividend-driven investment guidelines led us to finance, chemical and
consumer growth stocks that performed well. Overall, many industries posted
higher profits amid strong productivity growth and a decline in the value of
the U.S. dollar, which helped exporters by making products cheaper for
foreigners to buy.
1
<PAGE> 4
In the pages that follow, John B. Fields, the senior portfolio manager of
Decatur Income Fund and Decatur Total Return Fund, discusses the strategy that
helped the Funds outperform similar funds this past year. He also provides his
outlook for the coming months.
This past year's market gains are cause for celebration. Nevertheless, we
urge caution in thinking that the capital appreciation bonanza of 1995 can
continue without pause for the remaining years of the 20th Century.
In our opinion, the sharp price gains of 1995 may be a signal of increased
market risks. However, we believe it is in such an environment that the
benefits of the Decatur style - a strategy for all seasons - becomes clear.
If stock price appreciation becomes harder to come by, dividends could
take on a much greater role in generating total return for stock investments.
We believe the Decatur Funds are well positioned for such an environment
because of their strict adherence to a time-tested strategy that emphasizes the
compounding power of dividends.
While history doesn't always repeat itself, the stock market's behavior
during the past two years illustrates what has been true since the 1920s - that
a period of below-average market performance has generally been followed by a
period of above-average performance. The Decatur strategy recognizes that the
lessons of history should be kept in mind when investing.
Sincerely,
/s/ WAYNE A. STORK
- ------------------
Wayne A. Stork
Chairman
PORTFOLIO
- -------------------------------
MANAGER'S
- -------------------------------
REVIEW
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Decatur Income Fund and Decatur Total Return Fund both achieved very strong
annual returns, as higher earnings, corporate merger activity and rapidly
falling long-term interest rates boosted stock prices throughout 1995. We
believe the robust capital appreciation was the result of fundamental economic
forces rather than mere speculative excess.
LOWER INTEREST RATES,
HIGHER EARNINGS
Your Funds participated in a broad rally that favored large, U.S.-based
industrial companies with global operations. Higher corporate profits, a more
than two percentage point drop in long-term interest rates and low inflation
were the solid foundation of this year's market strength. At the start of the
fiscal year, our combined earnings estimate for companies in the Standard &
Poor's 500 Index was about $31 a share. By year's end, this estimate had
increased to $37 a share.
In 1995, more U.S. companies were well positioned to compete around the
world. After years of often painful but necessary cost restructuring, a broad
spectrum of American industry has delivered extremely strong profits to
shareholders in a moderate-growth economy.
A little more than a year ago, in the fall of 1994, as the Federal Reserve
Board was still raising interest rates to fight anticipated inflation, the
Decatur Funds purchased stocks of banks and capital goods companies whose
prices we believed to be unjustifiably depressed. These
2
<PAGE> 5
[PHOTO OF JOHN B. FIELDS]
JOHN B. FIELDS IS SENIOR PORTFOLIO MANAGER OF DECATUR INCOME FUND AND DECATUR
TOTAL RETURN FUND. MR. FIELDS WORKS WITH A TEAM OF INVESTMENT PROFESSIONALS WHO
IMPLEMENT THE DECATUR STRATEGY THROUGH STOCK SELECTION AND RESEARCH.
investments were especially strong performers during fiscal 1995.
In addition, we built a greater weighting than the S&P 500 in tobacco and
drug companies, two sectors that enhanced performance. Though we also had a
larger concentration than the Index in energy and chemical companies - sectors
with strong dividend yields - these stocks did not perform as well as the
overall market and this offset the Funds' better-than-average price gains in
other industries.
Even though the Funds were not able to hold positions in technology, one
of this past year's best performing industry groups, each Decatur Fund's
performance was competitive with the S&P 500. Technology companies, which
generally pay minimal dividends and did not meet our stock selection criteria,
make up about 15% of the S&P 500. If one excludes these stocks from the S&P
500's return, the Index provided a 12-month return of +30.67% as of November
30, 1995, less than both Funds.
CONTINUED COMMITMENT
TO DIVIDEND INCOME
To focus on dividends in a year when the market enjoyed such robust
appreciation may seem a little old-fashioned. However, over the years we have
found this strategy a useful way to:
- - Uncover capital appreciation potential
- - Benefit from the fact that companies in the S&P 500 have raised dividends
faster than inflation since 1975 (see page 5.)
- - Enhance long-term total return
In the past year, as stock prices have risen, the dividend yield on the
stocks comprising the S&P 500 has declined to slightly more than 2.4%, the
lowest level in many decades. At the end of the fiscal year, Decatur Income
Fund A Class yield was 3.4% - a full percentage point higher than the Index -
while Decatur Total Return Fund A Class yield was 2.2%, in line with the Index.
(Yields are based on Securities and Exchange Commission guidelines and are net
of all expenses, including sales charges.)
================================================================================
<TABLE>
<CAPTION>
PORTFOLIO HIGHLIGHTS
(As of November 30, 1995)
DECATUR INCOME FUND DECATUR TOTAL RETURN FUND
<S> <C> <C>
Median Market Capitalization $7.4 billion $7.2 billion
Number of Common and
Preferred Stocks 75 75
Average Stock
Price-To-Earnings Ratio* 12.8 13.1
Top Industry Group -
Banks, Finance and Insurance 20%** 23%**
High-Yield Bonds 10%** not applicable
</TABLE>
* Based on earnings estimates for 1996; P/E ratio for S&P 500 Index stocks
was 17.2
** Percentage of total net assets. Decatur Income Fund held 87 high-yield
bonds.
================================================================================
3
<PAGE> 6
================================================================================
<TABLE>
<CAPTION>
TOP 10 HOLDINGS
DECATUR TOTAL RETURN AND DECATUR INCOME FUNDS
(As of November 30, 1995)
<S> <C>
INDUSTRY COMPANY
Tobacco/Food Philip Morris Cos.
Banking Meridian Bancorp.*, Chase Manhattan Corp.
Retailing J.C. Penney Co.
Autos Chrysler Corp.**
Oil/Oil-Related Exxon Corp.
Chemicals DuPont De Nemours & Co., Monsanto Corp.
Business Services McGraw-Hill Cos.
Capital Goods General Electric Co.
Drugs American Home Products
</TABLE>
* Top 10 holding only for Decatur Income Fund
** Top 10 holding only for Decatur Total Return Fund
================================================================================
HIGH-YIELD BONDS ADD INCOME TO DECATUR INCOME FUND
Decatur Income Fund seeks to maintain a higher yield than the S&P 500 through a
combination of stock selection and the effective use of a small complement of
high-yield, higher risk bonds. This strategy was in effect during the past
fiscal year and served income-oriented shareholders well.
The high-yield bonds, 10% of the Fund's net assets at fiscal year-end, are
managed by Paul Matlack, senior manager of fixed-income portfolios. Our
high-yield bond managers generally follow a "quality first" philosophy and
focus on bonds rated BB and B, the top two tiers of high-yield credit ratings.
Delaware has been managing high-yield bonds since the 1950s, and we
believe that including these bonds in Decatur Income Fund helps us enhance its
level of monthly income. High-yield bonds also add an extra measure of
diversification. High-yield bonds are issued by companies whose ability to pay
interest and repay principal is not as strong as companies with
"investment-grade" ratings.
Though the high-yield component limited the Fund's ability to participate
fully in this past year's equity market, the converse could also be true should
the stock market change direction. We believe the high income generated by such
bonds will help the Fund's overall results in the long term.
INVESTMENT OUTLOOK
Although worldwide economic growth is slowing, we believe the global expansion
that has helped U.S. industry will continue. We are encouraged by the prospect
that foreign central banks seem poised to lower interest rates, a trend that we
believe will also prompt the Federal Reserve Board to continue to reduce the
cost of credit. This could be particularly good for U.S. financial stocks, a
sector where both Funds have higher concentrations of assets than the S&P 500
Index.
We are also finding potential investments for both Funds among cyclical
companies whose earnings depend on the strength of the U.S. economy. These
stocks generally have above-average dividend yields and, in our opinion, have
potential for positive earnings surprises in 1996 and 1997.
While it is possible that the stock market's very strong recent
performance may continue, a more likely scenario is a return to a historical
performance norm. We anticipate that 1996 will see much more normal levels of
volatility - that is, short-term fluctuations of more than 10%.
4
<PAGE> 7
THE POWER OF DIVIDENDS
Dividends have provided 47% of the S&P-500 Index's total return since 1926
(Ibbotson Associates), and we believe that this long-term pattern remains
intact. In addition, dividends have been a more reliable component of total
return than capital appreciation, which has ranged from an annual high of +46%
to a low of -47% since 1926.
However, the amount of dividends paid out to shareholders has grown an
average of 4.7% a year since the 1920s while consumer prices have risen just
3.1% a year.
Think about that for a minute. Interest rates on bonds and the income paid
as interest can move up and down substantially with each change in the economic
cycle or shift in Federal Reserve policy - something that's been very apparent
for the past two years. Meanwhile, the dollar amount paid as dividends by
companies in the S&P 500 Index has not only stayed relatively stable but risen
since the mid-1980s at a rate much higher than inflation. In fact, according to
Standard & Poor's, more companies raised dividends in 1995 than in any year
since 1981.
Obviously, companies can cut dividends if profits fall, and there's no
guarantee that dividends will rise in the future. However, companies in the S&P
500 were paying only about 37.5% of profits as
================================================================================
<TABLE>
<CAPTION>
Change From
November 30, 1985
to November 30, 1995
<S> <C>
Corporate Profits
(Earnings Per Share)* +153.3%
Dividends Paid by
Companies in the
S&P 500 Index +74.1%
Consumer Price Index
(Inflation) +41.0%
</TABLE>
* Calculation based on estimated 1995 earnings. This illustration does not
represent the earnings or dividend history of any Delaware Group Fund.
Source: Bloomberg Business News
================================================================================
dividends in 1995, a historically low level that may indicate payments can at
least continue at current levels. We also believe this bodes well for future
dividend increases.
For nearly 39 years, we have found that our yield-oriented Decatur
strategy, described in detail on page 6, has been an effective means of
uncovering value for investors in all types of economic environments. We
believe it will continue to offer an effective way to help investors achieve
their goals.
/s/ JOHN B. FIELDS
- ------------------
JOHN B. FIELDS
VICE PRESIDENT, SENIOR PORTFOLIO MANAGER
THE S&P BARRA VALUE INDEX
ANOTHER WAY TO MEASURE THE DECATUR STRATEGY
This past year Decatur Total Return Fund also matched the +34.61% return of the
unmanaged Standard & Poor's BARRA Value Index. The Value Index, and its
complement, the S&P BARRA Growth Index, were created in 1992 by Standard &
Poor's and BARRA International, an information services company in Berkeley,
Calif. Each Index makes up 50% of the total value of the S&P 500 Stock
Composite Price Index.
The BARRA Value Index tracks stocks that are considered "value" stocks,
the kind of stocks followed by the Decatur Funds. Generally, a "value" stock is
one whose price is at a historical discount relative to some financial measure
while a "growth" stock is one whose price relative to the same measure may be
higher than the market overall. We believe the BARRA Value Index is a more
representative way to measure the Decatur strategy than the broader unmanaged
market yardstick of the S&P 500 Index.
5
<PAGE> 8
THE DECATUR STRATEGY
The Decatur Funds follow a very clear buy/sell discipline that targets stocks
with above-average dividend yields and capital gains potential. To be eligible
for purchase or holding by the Funds, stocks must have a current dividend yield
greater than that of the Standard & Poor's 500 Stock Index.
We are most attracted to stocks whose yield is "high" relative to the S&P
500 but not necessarily the "highest" yield available. As shown in the chart
below, this "high" category of stocks has historically generated the greatest
level of total return by providing above-average dividend income without giving
up potential for capital appreciation.
THE IMPORTANCE OF A SELL DISCIPLINE
In an equity market as robust as this past fiscal year's, it is tempting, even
for investment professionals, to "fall in love" with companies whose stocks
have enjoyed rapid and unabated capital appreciation. It is important to
remember, however, that waiting too long to sell a particular stock can mean a
lower total return if and when the market's infatuation wanes.
When a stock's yield falls below the average of the S&P 500, we view that
as a signal that the stock has become fairly priced and that future
appreciation potential - even though it may still be very strong - is no longer
attractive relative to possible risks. Sometimes we sell a stock whose yield is
still above that of the S&P 500 average if management finds what it believes is
a more attractive investment opportunity or when a company's earnings or
business operations have not met our expectations.
The Decatur Funds' strict sell discipline can be especially valuable for
today's heady market environment because it helps the Funds avoid stocks with
limited capital appreciation potential. It literally forces the portfolio
manager to make tough sell decisions involving "good companies".
LONG-TERM RETURNS OF DIVIDEND-PAYING STOCKS, 1928 THROUGH 1995
<TABLE>
<CAPTION>
Capital Gains Dividends Reinvested
<S> <C> <C>
Lowest 7.1 2.9
Low 6.5 4.2
Mid 6.7 5.1
High 7.1 6.1
Highest 3.1 7.7
</TABLE>
THE DECATUR STRATEGY OF INVESTING IN STOCKS YIELDING MORE THAN THE AVERAGE OF
THE S&P 500 AND SELLING STOCKS WHEN THEIR YIELD FALLS BELOW THE S&P 500 LEADS
US PRIMARILY TO STOCKS IN THE "HIGH" CATEGORY, HIGHLIGHTED IN THE CHART TO THE
LEFT. THIS CATEGORY HAS PROVIDED THE HIGHEST TOTAL RETURN SINCE 1929 BY
PROVIDING GREATER DIVIDEND INCOME WITHOUT GIVING UP POTENTIAL FOR CAPITAL
APPRECIATION.
Source: Case Studies.
6
<PAGE> 9
THE DIVIDEND-ORIENTED BUY/SELL DISCIPLINE AT WORK
OUR THOUGHTS ON J.C. PENNEY CO.
You may have J.C. Penney Co.'s clothes in your closets at home. Maybe you shop
at the Dallas-based retail chain's stores for housewares or linens. Decatur's
management first viewed Penney's stock as a "bargain" in 1990 when its dividend
yield began to rise above the average yield on the S&P 500 Index, highlighted
in the chart below. We embarked on a careful fundamental analysis of the
company and decided that Penney was a well-managed company whose stock had been
excessively depressed by the 1990-1991 recession.
In 1992, as the economy slowly began to recover, Penney's dividend yield
relative to the S&P 500 fell as its stock price rose (yield = dividends/price).
We subsequently sold our position as the stock yield fell below that of the S&P
500.
Two years later, in 1994, Penney's stock went "on sale" again, based on
the Funds' yield-oriented investment criteria. We purchased the stock after
another review of the company's management and long-term prospects and bought
even more shares in 1995 after negative news about the retail industry caused
the price to drop further.
As of this writing, the stock market's consensus about retailing was that
consumers were less than enthusiastic about shopping for the 1995 Christmas
season, although some after-Christmas "bargain hunting" was evident. The
industry's short-term earnings prospects, especially fashion-oriented
companies, were viewed as limited because of tough competition and a long-term
change in consumer's buying habits toward more casual and lower priced
clothing.
As of November 30, 1995, we believed that the market had overreacted, and
found Penney to be a well-positioned company. J.C. Penney was yielding more
than 4% at the time. As with all our portfolio holdings, we continually
reevaluate our J.C. Penney holdings as warranted by company fundamentals,
industry changes and market conditions.
J.C. PENNEY CO. STOCK PRICE AND YIELD RELATIVE TO THE S&P 500 INDEX
<TABLE>
<CAPTION>
Yield Relative
Stock Price Stock Price to S&P 500 Average
<S> <C> <C> <C> <C>
Jan-86 14.94 13.19 1.55
Feb-86 16.19 14.5 1.54
Mar-86 17.31 16 1.52
Apr-86 18.06 16.37 1.46
May-86 20.94 16.69 1.32
Jun-86 21.69 19.31 1.28
Jul-86 21.62 18.06 1.38
Aug-86 20.19 18.75 1.41
Sep-86 19.94 17.25 1.45
Oct-86 19.15 17.44 1.36
Nov-86 22.12 19.56 1.32
Dec-86 21.19 17.87 1.46
Jan-87 20.5 17.81 1.49
Feb-87 24.37 20.86 1.3
Mar-87 25.37 23.5 1.29
Apr-87 26.25 22.56 1.29
May-87 26.06 21.62 1.23
Jun-87 29.12 24.87 1.26
Jul-87 30 25.81 1.16
Aug-87 33 28.94 1.15
Sep-87 31.69 26.25 1.21
Oct-87 29.94 18.25 1.26
Nov-87 24.25 19.75 1.2
Dec-87 23.25 19.81 1.24
Jan-88 24 19 1.3
Feb-88 24.44 16.87 1.2
Mar-88 25 22.19 1.16
Apr-88 25.62 23.06 1.19
May-88 24.19 21.75 1.22
Jun-88 25.75 23.62 1.23
Jul-88 24.94 22.56 1.27
Aug-88 24.75 22.87 1.23
Sep-88 25.87 22.44 1.18
Oct-88 27.87 24.75 1.12
Nov-88 27.25 25.31 1.12
Dec-88 27.19 25.25 1.28
Jan-89 27.5 25.19 1.19
Feb-89 27.87 25.37 1.22
Mar-89 27.12 25.5 1.18
Apr-89 28.25 26.06 1.21
May-89 30.06 27.75 1.21
Jun-89 28.94 27.56 1.25
Jul-89 30.37 27.44 1.25
Aug-89 34.38 29.56 1.12
Sep-89 34.31 32.31 1.13
Oct-89 34.38 31.56 1.15
Nov-89 34.13 32.31 1.13
Dec-89 36.63 33.31 1.06
Jan-90 37.81 32.81 1.07
Feb-90 35 31.06 1.1
Mar-90 35.44 32.5 1.08
Apr-90 35.06 31.5 1.13
May-90 33.69 31 1.28
Jun-90 34 29.31 1.29
Jul-90 30.69 28.58 1.35
Aug-90 28.75 21.75 1.48
Sep-90 23.81 20.5 1.61 Yield is High Signals Buy Opportunity
Oct-90 22.75 18.69 1.65
Nov-90 22.12 19.69 1.6
Dec-90 22.81 21.19 1.63
Jan-91 25.69 21.25 1.47
Feb-91 27.5 25.06 1.5
Mar-91 28.5 25.62 1.52
Apr-91 28.37 24.75 1.62
May-91 29.12 25.25 1.46
Jun-91 29 26.25 1.52
Jul-91 28.06 23.69 1.72
Aug-91 27.12 23.56 1.66
Sep-91 26.12 23.87 1.63
Oct-91 26.25 24 1.69
Nov-91 27.86 24.12 1.66
Dec-91 27.81 23.62 1.64
Jan-92 28.69 25.37 1.62
Feb-92 32.94 27.06 1.45
Mar-92 33.88 29.87 1.35
Apr-92 33.94 30.75 1.34
May-92 34.69 32.06 1.35
Jun-92 35.75 32.56 1.24
Jul-92 36.5 34.56 1.26
Aug-92 36.75 32.5 1.29
Sep-92 35.75 33.5 1.26
Oct-92 39 33.75 1.18
Nov-92 40.19 37.5 1.16
Dec-92 39.56 36.63 1.2
Jan-93 39.69 35.38 1.31
Feb-93 40.63 36 1.17
Mar-93 45.06 40.19 1.08
Apr-93 44.75 39.94 1.11
May-93 49.13 42.63 1.02
Jun-93 49.13 43.5 1.08
Jul-93 46.13 41.25 1.09
Aug-93 46.5 43.13 1.17
Sep-93 48.38 39.63 1.08
Oct-93 52.63 45.75 1.01
Nov-93 55 49 0.97 Yield is Low Signals Sell
Dec-93 56.38 51.38 0.99
Jan-94 54.25 50 1.05
Feb-94 56.13 50.88 0.98
Mar-94 59 51.5 0.96
Apr-94 57.25 51.38 0.98
May-94 54.75 50 1.05
Jun-94 54.25 47.75 0.96
Jul-94 53.5 47.5 1.12
Aug-94 52.88 47 1.1
Sep-94 54.25 49.75 1.08
Oct-94 52.88 48.63 1.17
Nov-94 52 45.75 1.24
Dec-94 45.38 41.13 1.26
Jan-95 44.63 39.88 1.44
Feb-95 44.25 41.58 1.45
Mar-95 46.58 41.13 1.42
Apr-95 45.38 42 1.55
May-95 47.38 42.63 1.49
Jun-95 49 46.5 1.48
Jul-95 58 46.75 1.56
Aug-95 48.58 44.88 1.67
Sep-95 49.75 45 1.56
Oct-95 49.63 42 1.89
Nov-95 48 42.63 1.76
Dec-95 48.83 46.75 1.83
</TABLE>
7
<PAGE> 10
FUNDS FOR ALL SEASONS
- -------------------------------------------------------------------------------
ONE TIME-TESTED STRATEGY;
TWO FUNDS TO MEET A LIFETIME OF INVESTING NEEDS
The Decatur style of investing - a focus on dividend-paying stocks of large
well-established companies - dates back to 1957 when Decatur Income Fund was
established. This investment approach is the foundation of both Decatur Income
and Decatur Total Return Funds. Both strive to provide a combination of
dividends and capital appreciation for strong long-term total return.
However, not everyone looks for the same benefits from an investment. For
some people, a high level of income is desirable to help meet current living
expenses. For others who hope to accumulate wealth for a long-term goal, growth
of capital may be more important than income. Still, even people whose goal is
growth often recognize the powerful role that reinvested dividends can play in
the appreciation potential of an equity investment.
DECATUR HIGHLIGHTS
DECATUR INCOME FUND
- Established 1957
- Dividends paid monthly
- Selects stocks with high dividends and capital appreciation potential
- Strives for a yield one percentage point higher than Decatur Total Return
Fund and S&P 500 Index
- Uses a complement (typically 10%) of high-yield bonds to provide more
income
DECATUR TOTAL RETURN FUND
- Established 1986
- Dividends paid quarterly
- Selects stocks with high dividends and capital appreciation potential
- Designed for investors whose primary goal is long-term wealth building
- Fully invested in stocks, therefore provides slightly more potential for
price appreciation than Decatur Income Fund when the market rises
8
<PAGE> 11
DECATUR INCOME FUND A CLASS
DIVIDEND HISTORY 1975-1995
INITIAL INVESTMENT $100,000
ENDING VALUE $499,665
<TABLE>
<CAPTION>
ANNUAL DIVIDENDS
PAID IN CASH
(CAPITAL GAINS
REINVESTED)
<S> <C>
Nov. '76 $ 6,323.48
Nov. '77 7,026.09
Nov. '78 7,527.96
Nov. '79 7,628.33
Nov. '80 9,466.69
Nov. '81 12,429.74
Nov. '82 14,198.09
Nov. '83 9,803.44
Nov. '84 12,126.06
Nov. '85 13,111.65
Nov. '86 12,686.03
Nov. '87 14,150.14
Nov. '88 14,375.58
Nov. '89 16,283.28
Nov. '90 22,239.98
Nov. '91 21,271.10
Nov. '92 17,762.46
Nov. '93 15,467.13
Nov. '94 21,432.86
Nov. '95 18,128.93
</TABLE>
IF A SHAREHOLDER INVESTED $100,000 IN DECATUR INCOME FUND CLASS A SHARES ON
NOVEMBER 30, 1975, AND RECEIVED ANNUAL DIVIDENDS IN CASH WHILE REINVESTING
CAPITAL GAINS, ANNUAL DIVIDENDS WOULD HAVE GROWN FROM $6,323 A YEAR TO $18,127
A YEAR, A +187% INCREASE. THE PORTFOLIO WOULD BE WORTH $499,665 AS OF NOVEMBER
30, 1995.
DECATUR TOTAL RETURN FUND A CLASS
DIVIDEND AND CAPITAL GAINS HISTORY 1986-1995
INITIAL INVESTMENT $100,000
ENDING VALUE $278,639
<TABLE>
<CAPTION>
ANNUAL DIVIDENDS AND
CAPITAL GAINS REINVESTED
<S> <C>
Nov. '87 $ 2,590.20
Nov. '88 3,779.22
Nov. '89 5,220.37
Nov. '90 11,903.27
Nov. '91 6,985.95
Nov. '92 6,546.63
Nov. '93 19,742.84
Nov. '94 30,723.57
Nov. '95 13,317.33
</TABLE>
IF A SHAREHOLDER INVESTED $100,000 IN DECATUR TOTAL RETURN CLASS A SHARES ON
AUGUST 27, 1986, AND REINVESTED CAPITAL GAINS AND DIVIDENDS, THE PORTFOLIO
WOULD BE WORTH $278,639 AS OF NOVEMBER 30, 1995. NEARLY HALF OF THE TOTAL
RETURN WOULD HAVE COME FROM REINVESTING THE CAPITAL GAINS AND DIVIDENDS EARNED.
RETURN AND SHARE VALUE FLUCTUATE. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE
RESULTS. PERFORMANCE ABOVE INCLUDES THE IMPACT OF THE MAXIMUM 5.75% SALES
CHARGE THAT APPLIES TO CLASS A SHARES.
Complete performance information can be found on pages 10 and 11.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are subject to a deferred sales
charge if redeemed before the end of the sixth year. Class B was initially
offered on September 6, 1994. As of November 29,1995, both Funds also offer
Class C shares, which have a 1% annual distribution and service fee and a 1%
contingent deferred sales charge if redeemed within 12 months. Performance of
these shares will differ from the performance shown above.
9
<PAGE> 12
FUND PERFORMANCE
- -----------------------
DECATUR TOTAL RETURN'S
LIFETIME PERFORMANCE
This past fiscal year was the best one for Decatur Total Return Fund since the
Fund began operating on August 27, 1986. As you can see below, A-Class shares
provided a total annual return of +26.96% after deducting the effect of sales
charges. An investor who bought $10,000 worth of Decatur Total Return Fund A
Class shares nine years ago and reinvested all capital gains and dividends
would have had holdings worth $27,864 as of November 30, 1995.
DECATUR TOTAL RETURN'S LIFETIME PERFORMANCE
GROWTH OF A $10,000 INVESTMENT,
TOTAL RETURN AS OF NOVEMBER 30, 1995
<TABLE>
<CAPTION>
DECATUR TOTAL
RETURN FUND STANDARD & POOR'S LIPPER EQUITY
A CLASS 500 INDEX INCOME FUND AVERAGE
<S> <C> <C> <C>
Aug. '86 $ 9,426 $10,000 $10,000
Nov. '86 10,178 9,729 9,928
Nov. '87 9,152 10,233 9,981
Nov. '88 12,036 11,921 11,682
Nov. '89 14,892 15,687 14,330
Nov. '90 13,874 15,198 13,595
Nov. '91 15,808 19,809 17,208
Nov. '92 18,040 21,316 18,886
Nov. '93 20,698 23,455 21,690
Nov. '94 20,689 23,773 21,494
Nov. '95 27,864 31,931 27,218
</TABLE>
The front-end sales charge on A Class was lowered to 4.75% on
November 29, 1995. A $10,000 investment at inception would have grown to
$28,142 as of November-30,-1995, assuming a 4.75% sales charge and reinvestment
of dividends and capital gains.
YOUR FUND'S PERFORMANCE IS COMPARED TO THAT OF THE S&P-500 INDEX AND THE LIPPER
EQUITY INCOME FUND AVERAGE.
Chart assumes $10,000 invested on August 27, 1986, and includes the effect of a
front-end 5.75% sales charge and the reinvestment of all dividends and capital
gains. Performance of other classes of Decatur Total Return Fund will vary due
to differing charges and expenses.
<TABLE>
<CAPTION>
DECATUR TOTAL RETURN FUND PERFORMANCE
Total Return through November 30, 1995
CLASS A (EST. 1986)*
Average Annual Total Returns
Sales Charge
-------------------
5.75% 4.75%
------- -------
<S> <C> <C>
Lifetime +11.70% +11.82%
Five Years +13.62% +13.86%
One Year +26.96% +28.33%
</TABLE>
<TABLE>
<CAPTION>
CLASS B (EST. 1994)**
Average Annual Total Returns
Lifetime
<S> <C>
+21.03% Excluding Sales Charge
+17.93% Including Sales Charge
One Year
+33.79% Excluding Sales Charge
+29.79% Including Sales Charge
</TABLE>
DECATUR INCOME FUND'S
10-YEAR PERFORMANCE
An investor who bought $10,000 worth of Decatur Income Fund A Class shares on
December 1, 1985, and reinvested all capital gains and dividends would have had
holdings worth $30,655 as of November 30, 1995, as you can see on the opposite
page.
During the past 10 years, Decatur Income Fund has generally kept pace with
the performance of the average of similar mutual funds, as measured by the
Lipper Equity Income Fund Average. The Fund's peers provided a total 10-year
return of $31,691 as of November 30.
10
<PAGE> 13
DECATUR INCOME FUND'S 10-YEAR PERFORMANCE
GROWTH OF A $10,000 INVESTMENT,
TOTAL RETURN AS NOVEMBER 30, 1995
<TABLE>
<CAPTION>
DECATUR
INCOME FUND STANDARD & POOR'S LIPPER EQUITY
A CLASS 500 INDEX INCOME FUND AVERAGE
<S> <C> <C> <C>
Nov. '85 $ 9,524 $10,000 $10,000
Nov. '86 12,184 12,767 12,380
Nov. '87 11,638 12,170 11,478
Nov. '88 14,571 15,005 13,882
Nov. '89 17,462 19,624 16,910
Nov. '90 15,359 18,945 15,635
Nov. '91 17,733 22,788 18,792
Nov. '92 20,313 26,992 21,901
Nov. '93 23,532 29,715 25,085
Nov. '94 23,397 30,024 24,837
Nov. '95 30,655 41,107 31,691
</TABLE>
The front-end sales charge on A Class was lowered to 4.75% on
November 29, 1995. A $10,000 investment at inception would have grown to
$30,977 as of November-30,-1995, assuming a 4.75% sales charge and reinvestment
of dividends and capital gains.
YOUR FUND'S PERFORMANCE IS COMPARED TO THAT OF THE S&P-500 INDEX AND THE LIPPER
EQUITY INCOME FUND AVERAGE.
Chart assumes $10,000 invested on December 1, 1985, and includes the effect of
a front-end 5.75% sales charge and the reinvestment of all dividends and
capital gains. Performance of other classes of Decatur Income Fund will vary
due to differing charges and expenses.
<TABLE>
<CAPTION>
DECATUR INCOME FUND PERFORMANCE
Total Return through November 30, 1995
CLASS A (EST. 1957)*
Average Annual Total Returns
Sales Charge
-------------------
5.75% 4.75%
------- -------
<S> <C> <C>
10 Years +11.85% +11.97%
Five Years +13.47% +13.72%
One Year +23.49% +24.77%
</TABLE>
<TABLE>
<CAPTION>
CLASS B (EST. 1994)**
Average Annual Total Returns
<S> <C>
Lifetime
+18.23% Excluding Sales Charge
+15.11% Including Sales Charge
One Year
+29.85% Excluding Sales Charge
+25.85% Including Sales Charge
</TABLE>
RETURN AND SHARE VALUE OF DECATUR TOTAL RETURN FUND AND DECATUR INCOME FUND
FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS.
* Class A returns for both Funds reflect the effect of a front-end 5.75%
maximum sales charge and reinvestment of all distributions. Returns
reflect the effect of a 12b-1 fee for Decatur Total Return Fund since
inception and the effect of a 12b-1 fee for Decatur Income Fund since May
1, 1994. The front-end sales charge was lowered to 4.75% on November 29,
1995.
** Class B performance for both Funds reflects the reinvestment of all
distributions. Class B shares do not carry a front-end sales charge, but
are subject to a 1% annual distribution and service fee. They are subject
to a maximum deferred sales charge of 4% if redeemed before the end of the
sixth year. Lifetime performance "excluding sales charge" assumes the
investment was not redeemed. Class B was initially offered on September 6,
1994.
The average annual returns for Decatur Total Return Fund Institutional
Class for the lifetime, five-year and one-year periods ending November 30,
1995, were, respectively, +12.50%, +15.13% and +35.13%. For Decatur Income
Fund Institutional Class, the average annual returns for the 10-, five-
and one-year periods ending November 30, 1995, were, respectively,
+12.54%, +14.87% and +31.14%. Performance for the Institutional Class of
both Funds for periods prior to January 13, 1994, is based on Class A
performance, excluding sales charge. The Institutional Class of both Funds
is available without sales or asset-based distribution charges only to
certain eligible institutional accounts. Decatur Total Return Fund's total
return for periods prior to January 13, 1994, has not been adjusted to
eliminate the effect of the 12b-1 fee that applies to A Class shares.
As of November 29, 1995, both Funds also offer Class C shares, which have
a 1% annual distribution and service fee and a 1% contingent deferred
sales charge if redeemed within 12 months. Performance of these shares
will differ from the performance shown above.
11
<PAGE> 14
THE DECATUR STRATEGY
38 YEARS OF HARNESSING THE POWER OF DIVIDENDS
TOTAL RETURN SINCE MARCH 18, 1957
<TABLE>
<CAPTION>
<S> <C>
Mar. '57 Decatur Income Fund first
offered on March 18, 1957
Dec. '60 Dow Jones Industrial Average
at 597
Dec. '61 Berlin Wall Built
Dec. '63 Kennedy Assassinated
Dec. '66 Vietnam War Escalates
Dec. '69 First Man on the Moon
Dec. '71 Wage and Price Controls
Dec. '74 Steepest Market Decline in Four Decades
Watergate Forces Presidential Resignation
</TABLE>
<TABLE>
<CAPTION>
DECATURE INCOME
DECATUR INCOME FUND A ORIGINAL
FUND A RETURN FROM INVESTMENT PLUS
DIVIDENDS CAPITAL GAINS S&P 500
<S> <C> <C> <C>
Mar. '57 $ 9,525 $ 9,525 $ 10,000
Dec. '57 8,168 7,905 9,502
Dec. '58 11,634 11,656 13,603
Dec. '59 13,049 11,485 15,228
Dec. '60 13,151 11,097 15,297
Dec. '61 15,759 12,807 19,409
Dec. '62 15,435 11,938 17,728
Dec. '63 17,704 13,212 21,763
Dec. '64 21,572 15,610 25,339
Dec. '65 25,816 18,239 28,497
Dec. '66 24,181 16,705 25,641
Dec. '67 32,294 22,431 31,776
Dec. '68 40,575 28,078 35,273
Dec. '69 35,115 24,235 32,308
Dec. '70 38,137 25,018 33,567
Dec. '71 44,570 28,503 38,341
Dec. '72 47,423 29,621 45,610
Dec. '73 40,661 23,924 38,920
Dec. '74 35,898 19,567 28,681
Dec. '75 48,214 24,543 39,333
</TABLE>
Results include the effect of a 5.75% front-end sales charge. Results after May
1, 1994, include the impact of a 12b-1 fee. The front-end sales charge on A
Class was lowered to 4.75% on November 29, 1995. A $10,000 investment at
inception on March 18, 1957, would have grown to $770,966 as of November 30
assuming a 4.75% sales charge and reinvestment of dividends and capital gains.
12
<PAGE> 15
THE DECATUR STRATEGY
38 YEARS OF HARNESSING THE POWER OF DIVIDENDS
TOTAL RETURN SINCE MARCH 18, 1957
<TABLE>
<CAPTION>
<S> <C>
Dec. '80 Dow at 93
Interest Rates at All-Time Highs
Dec. '82 Worst Recession in 40 Years
Start of Great Bull Market of the 80s
Dec. '86 Dow Nears 2000
Dec. '87 Sharpest One-Day Decline in Market History
Dec. '90 Persian Gulf Crisis
Worldwide Recession
Dec. '94 Fed Begins Raising Short-Term Interest Rates
Nov. '95 Dow at 5,000
$722,594 with dividends reinvested
$342,197 = The Power of Dividend Reinvestment
$380,397 account value with dividends taken in cash
</TABLE>
<TABLE>
<CAPTION>
DECATUR INCOME
DECATUR INCOME FUND A ORIGINAL
FUND A RETURN FROM INVESTMENT PLUS
DIVIDENDS CAPITAL GAINS S&P 500
<S> <C> <C> <C>
Dec. '76 66,326 31,916 48,698
Dec. '77 67,240 30,523 45,198
Dec. '78 69,015 29,363 48,146
Dec. '79 86,805 35,420 57,028
Dec. '80 108,002 45,739 75,531
Dec. '81 113,714 49,823 71,845
Dec. '82 142,905 60,260 87,293
Dec. '83 175,759 79,982 106,898
Dec. '84 192,522 89,699 113,547
Dec. '85 245,614 120,787 149,477
Dec. '86 298,893 156,944 177,304
Dec. '87 308,657 170,760 186,487
Dec. '88 370,039 197,498 217,252
Dec. '89 449,588 243,899 285,880
Dec. '90 394,024 200,858 276,976
Dec. '91 479,836 232,755 360,999
Dec. '92 522,072 255,409 388,463
Dec. '93 602,225 312,499 427,443
Dec. '94 597,672 304,996 433,245
Nov. '95 772,594 380,397 581,910
</TABLE>
DECATUR INCOME FUND'S RETURN AND SHARE VALUE FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE
IS NOT A GUARANTEE OF FUTURE RESULTS.
Performance of other Classes of Decatur Income Fund differs from the above due
to differing charges and expenses. See pages 10 and 11 for complete performance
information.
13
<PAGE> 16
FINANCIAL
- -----------------
STATEMENTS
- -----------------
DELAWARE GROUP DECATUR FUND, INC. -
DECATUR INCOME FUND
STATEMENT OF NET ASSETS
NOVEMBER 30, 1995
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
<S> <C> <C>
COMMON STOCK - 83.94%
AEROSPACE & DEFENSE - 1.46%
General Dynamics . . . . . . . . . . . . . . . . . . . . . . 394,800 $ 23,539,950
------------
23,539,950
------------
AUTOMOTIVES & AUTOMOTIVE PARTS - 2.95%
Chrysler . . . . . . . . . . . . . . . . . . . . . . . . . . 520,812 27,017,123
Ford Motor . . . . . . . . . . . . . . . . . . . . . . . . . 729,400 20,605,550
------------
47,622,673
------------
BANKING, FINANCE & INSURANCE - 20.36%
American General . . . . . . . . . . . . . . . . . . . . . . 573,200 19,417,150
AmSouth Bancorp . . . . . . . . . . . . . . . . . . . . . . 180,300 7,144,388
Aon . . . . . . . . . . . . . . . . . . . . . . . . . . 492,800 23,223,200
Bank of Boston . . . . . . . . . . . . . . . . . . . . . . . 421,100 19,528,513
Bank of New York . . . . . . . . . . . . . . . . . . . . . . 52,000 2,450,500
Beneficial . . . . . . . . . . . . . . . . . . . . . . . . . 360,100 18,275,075
Block (H&R) . . . . . . . . . . . . . . . . . . . . . . . . 187,300 8,334,850
Chase Manhattan . . . . . . . . . . . . . . . . . . . . . . 479,700 29,201,738
CIGNA . . . . . . . . . . . . . . . . . . . . . . . . . . 174,800 19,228,000
CoreStates Financial . . . . . . . . . . . . . . . . . . . . 200,000 7,750,000
Crestar Financial . . . . . . . . . . . . . . . . . . . . . 307,200 18,739,200
First Chicago . . . . . . . . . . . . . . . . . . . . . . . 35,300 2,453,350
Fleet Financial Group . . . . . . . . . . . . . . . . . . . 498,400 20,808,200
Integra Financial . . . . . . . . . . . . . . . . . . . . . 4,000 247,500
Marsh & McLennan . . . . . . . . . . . . . . . . . . . . . . 81,200 7,044,100
Mellon Bank . . . . . . . . . . . . . . . . . . . . . . . . 352,700 18,869,450
Meridian Bancorp . . . . . . . . . . . . . . . . . . . . . . 770,200 35,477,338
NBD Bancorp . . . . . . . . . . . . . . . . . . . . . . . . 108,600 4,167,525
St. Paul . . . . . . . . . . . . . . . . . . . . . . . . . . 374,300 20,960,800
UJB Financial . . . . . . . . . . . . . . . . . . . . . . . 614,400 20,582,400
U.S. Bancorp . . . . . . . . . . . . . . . . . . . . . . . . 724,500 24,587,719
------------
328,490,996
------------
CABLE, MEDIA & PUBLISHING - 2.03%
McGraw-Hill . . . . . . . . . . . . . . . . . . . . . . . . 391,700 32,804,875
------------
32,804,875
------------
CHEMICALS - 8.92%
Dow Chemical . . . . . . . . . . . . . . . . . . . . . . . . 320,400 22,708,350
DuPont (E.I.) deNemours . . . . . . . . . . . . . . . . . . 567,500 37,738,750
Imperial Chemical ADR . . . . . . . . . . . . . . . . . . . 416,400 19,466,700
Monsanto . . . . . . . . . . . . . . . . . . . . . . . . . . 310,900 35,598,050
Witco . . . . . . . . . . . . . . . . . . . . . . . . . . 924,300 28,422,225
------------
143,934,075
------------
CONSUMER PRODUCTS - 0.32%
UST . . . . . . . . . . . . . . . . . . . . . . . . . . 156,500 5,105,813
------------
5,105,813
------------
ELECTRONICS & ELECTRICAL - 2.55%
General Electric . . . . . . . . . . . . . . . . . . . . . . 438,800 29,509,300
Pitney Bowes . . . . . . . . . . . . . . . . . . . . . . . . 260,000 11,635,000
------------
41,144,300
------------
ENERGY - 12.16%
Amoco . . . . . . . . . . . . . . . . . . . . . . . . . . 320,500 21,713,875
Atlantic Richfield . . . . . . . . . . . . . . . . . . . . . 139,400 15,107,475
Consolidated Natural Gas . . . . . . . . . . . . . . . . . . 12,500 554,688
Dresser Industries . . . . . . . . . . . . . . . . . . . . . 579,000 13,678,875
Exxon . . . . . . . . . . . . . . . . . . . . . . . . . . 413,100 31,963,613
Imperial Oil Limited . . . . . . . . . . . . . . . . . . . . 457,900 15,969,263
McDermott International . . . . . . . . . . . . . . . . . . 792,400 14,362,250
Occidental Petroleum . . . . . . . . . . . . . . . . . . . . 705,100 15,600,338
Sonat . . . . . . . . . . . . . . . . . . . . . . . . . . 656,900 21,185,025
Tenneco . . . . . . . . . . . . . . . . . . . . . . . . . . 498,700 23,937,600
Ultramar . . . . . . . . . . . . . . . . . . . . . . . . . . 874,900 22,091,225
------------
196,164,227
------------
FOOD, BEVERAGE & TOBACCO - 5.77%
General Mills . . . . . . . . . . . . . . . . . . . . . . . 279,000 15,379,875
Heinz (H.J.) . . . . . . . . . . . . . . . . . . . . . . . . 825,950 26,327,156
Philip Morris . . . . . . . . . . . . . . . . . . . . . . . 427,200 37,486,800
RJR Nabisco Holdings . . . . . . . . . . . . . . . . . . . . 477,840 13,917,090
------------
93,110,921
------------
HEALTHCARE & PHARMACEUTICALS - 7.39%
American Home Products . . . . . . . . . . . . . . . . . . . 316,000 28,835,000
Bristol-Myers Squibb . . . . . . . . . . . . . . . . . . . . 292,200 23,449,050
Glaxo Wellcome PLC-ADR . . . . . . . . . . . . . . . . . . . 570,000 15,247,500
SmithKline Beecham PLC-ADR Unit . . . . . . . . . . . . . . 505,700 26,928,525
Warner-Lambert . . . . . . . . . . . . . . . . . . . . . . . 277,700 24,784,725
------------
119,244,800
------------
INDUSTRIAL MACHINERY - 2.94%
Cooper Industries . . . . . . . . . . . . . . . . . . . . . 691,900 25,254,350
Minnesota Mining & Manufacturing . . . . . . . . . . . . . . 339,700 22,250,350
------------
47,504,700
------------
PAPER & FOREST PRODUCTS - 2.94%
Federal Paper Board . . . . . . . . . . . . . . . . . . . . 352,000 18,304,000
Kimberly-Clark . . . . . . . . . . . . . . . . . . . . . . . 187,200 14,391,000
Union Camp . . . . . . . . . . . . . . . . . . . . . . . . . 300,200 14,747,325
------------
47,442,325
------------
REAL ESTATE - 3.18%
DeBartolo Realty . . . . . . . . . . . . . . . . . . . . . . 989,300 12,737,238
Liberty Property Trust . . . . . . . . . . . . . . . . . . . 818,300 15,956,850
Simon Property Group . . . . . . . . . . . . . . . . . . . . 973,400 22,631,550
------------
51,325,638
------------
RETAIL - 2.79%
May Department Stores . . . . . . . . . . . . . . . . . . . 165,000 7,198,125
Penney (J.C.) . . . . . . . . . . . . . . . . . . . . . . . 808,700 37,907,813
------------
45,105,938
------------
</TABLE>
14
<PAGE> 17
DECATUR INCOME FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
<S> <C> <C>
COMMON STOCK (CONTINUED)
TRANSPORTATION & SHIPPING - 1.20%
Norfolk Southern . . . . . . . . . . . . . . . . . . . . . . 32,100 $ 2,527,875
Union Pacific . . . . . . . . . . . . . . . . . . . . . . . 249,400 16,896,850
--------------
19,424,725
--------------
UTILITIES - 6.98%
ALLTEL . . . . . . . . . . . . . . . . . . . . . . . . . . 515,000 15,192,500
BellSouth . . . . . . . . . . . . . . . . . . . . . . . . . 220,000 8,552,500
Frontier . . . . . . . . . . . . . . . . . . . . . . . . . . 571,500 14,787,563
GTE . . . . . . . . . . . . . . . . . . . . . . . . . . 379,400 16,171,925
Houston Industries . . . . . . . . . . . . . . . . . . . . . 479,100 21,918,825
NYNEX . . . . . . . . . . . . . . . . . . . . . . . . . . 370,300 18,376,138
Royal PTT Nederland-SP ADR . . . . . . . . . . . . . . . . . 500,000 17,687,500
--------------
112,686,951
--------------
TOTAL COMMON STOCK
(COST $1,176,006,611) . . . . . . . . . . . . . . . . . 1,354,652,907
--------------
PREFERRED STOCKS - 3.23%
AUTOMOTIVES & AUTOMOTIVE PARTS - 1.04%
General Motors $3.25 pfd cv "C" . . . . . . . . . . . . . . 234,200 16,803,850
--------------
16,803,850
--------------
BANKING, FINANCE & INSURANCE - 1.10%
American Express 6.25% pfd cv . . . . . . . . . . . . . . . 306,400 17,771,200
--------------
17,771,200
--------------
METALS & MINING - 1.09%
Freeport McMoRan Copper & Gold
7.0% pfd cv . . . . . . . . . . . . . . . . . . . . . . 620,900 17,540,425
--------------
17,540,425
--------------
TOTAL PREFERRED STOCKS
(cost of $42,872,250) . . . . . . . . . . . . . . . . . 52,115,475
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
CORPORATE BONDS - 10.03%
AEROSPACE & DEFENSE - 0.33%
BE Aerospace 9.75% sr nts 2003 . . . . . . . . . . . . . . . $1,960,000 1,960,000
Fairchild 12.25% sr sec nts 1999 . . . . . . . . . . . . . . 1,500,000 1,575,000
Sequa 9.375% sr sub nts 2003 . . . . . . . . . . . . . . . . 2,000,000 1,802,500
-----------
5,337,500
-----------
AUTOMOBILES & AUTOMOTIVE PARTS - 0.42%
Exide 10.00% sr nts 2005 . . . . . . . . . . . . . . . . . . 2,000,000 2,150,000
JPS Automotive Products
11.125% sr nts 2001 . . . . . . . . . . . . . . . . . . 2,000,000 2,020,000
SPX 11.75% sr sub nts 2002 . . . . . . . . . . . . . . . . . 2,500,000 2,681,250
-----------
6,851,250
-----------
BANKING, FINANCE & INSURANCE - 0.29%
AIM Management Group
9.00% sr sec nts 2003 . . . . . . . . . . . . . . . . . 1,100,000 1,116,500
UCC Investors 11.00% sr sub nts 2003 . . . . . . . . . . . . 2,500,000 2,565,625
U.S. Banknote 11.625% sr nts 2002 . . . . . . . . . . . . . 1,500,000 930,000
-----------
4,612,125
-----------
BUILDING & MATERIALS - 0.27%
American Standard 10.875% sr nts 1999 . . . . . . . . . . . 2,750,000 3,025,000
USG 8.50% sr nts 2005 . . . . . . . . . . . . . . . . . . . 1,250,000 1,284,375
-----------
4,309,375
-----------
CABLE, MEDIA & PUBLISHING - 1.80%
Cablevision Systems
10.75% sr sub debs 2004 . . . . . . . . . . . . . . . . 1,500,000 1,582,500
Century Communications
11.875% sr sub debs 2003 . . . . . . . . . . . . . . . . 1,500,000 1,608,750
Comcast Cellular 0.00% sr part nts 2000 . . . . . . . . . . 2,000,000 1,535,000
Continental Cablevision
9.00% sr deb 2008 . . . . . . . . . . . . . . . . . . . 1,000,000 1,042,500
Continental Cablevision
11.00% sr sub debs 2007 . . . . . . . . . . . . . . . . 2,600,000 2,892,500
Galaxy Telecom 12.375% sr sub nts 2005 . . . . . . . . . . . 1,000,000 986,250
IXC Communications 13.00% sr nts 2005 . . . . . . . . . . . 1,500,000 1,575,000
Jones Intercable 9.625% sr nts 2002 . . . . . . . . . . . . 2,500,000 2,675,000
K-III Communications
10.625% sr sec nts 2002 . . . . . . . . . . . . . . . . 2,500,000 2,650,000
Lamar Advertising
11.00% sr sec nts 2003 . . . . . . . . . . . . . . . . . 1,495,000 1,526,769
Paging Network
10.125% sr sub nts 2007 . . . . . . . . . . . . . . . . 1,000,000 1,067,500
Rogers Cablesystems
10.00% sr sec nts 2005 . . . . . . . . . . . . . . . . . 2,500,000 2,612,500
Rogers Cablesystems
10.00% sr sec debs 2007 . . . . . . . . . . . . . . . . 1,350,000 1,397,250
Rogers Cablesystems
11.00% sr sub debs 2015 . . . . . . . . . . . . . . . . 840,000 869,400
*Sullivan Graphics
12.75% sr sub nts 2005 . . . . . . . . . . . . . . . . . 2,000,000 2,002,500
Telewest Communications PLC
9.625% sr debs 2006 . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
-----------
29,023,419
-----------
CHEMICALS - 0.66%
Carbide/Graphite Group
11.50% sr nts 2003 . . . . . . . . . . . . . . . . . . . 1,818,000 1,958,895
Huntsman 11.00% 1st mtg nts 2004 . . . . . . . . . . . . . . 2,500,000 2,790,625
Interlakes 12.00% sr nts 2001 . . . . . . . . . . . . . . . 1,500,000 1,485,000
NL Industries 11.75% sr sec nts 2003 . . . . . . . . . . . . 1,290,000 1,378,688
Polymer Group 12.25% sr nts 2002 . . . . . . . . . . . . . . 2,000,000 2,062,500
Scotts 9.875% sr sub nts 2004 . . . . . . . . . . . . . . . 950,000 1,017,688
-----------
10,693,396
-----------
COMPUTERS & TECHNOLOGY - 0.15%
Unisys 13.50% credit-sensitive nts1997 . . . . . . . . . . . 2,500,000 2,437,500
-----------
2,437,500
-----------
CONSUMER PRODUCTS - 0.16%
American Safety Razor
9.875% sr nts 2005 . . . . . . . . . . . . . . . . . . . 1,000,000 995,000
Revlon 9.50% sr nts 1999 . . . . . . . . . . . . . . . . . . 1,500,000 1,515,000
-----------
2,510,000
-----------
</TABLE>
15
<PAGE> 18
DECATUR INCOME FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
CORPORATE BONDS (CONTINUED)
ELECTRONICS & ELECTRICAL - 0.41%
CAI Wireless Systems 12.25% sr nts 2002 . . . . . . . . . . $1,500,000 $ 1,576,875
Essex Group 10.00% sr nts 2003 . . . . . . . . . . . . . . . 1,450,000 1,421,000
IMO Industries 12.00% sr sub debs 2001 . . . . . . . . . . . 2,000,000 2,047,500
Mark IV Industries 8.75% sub debs 2003 . . . . . . . . . . . 1,500,000 1,560,000
-----------
6,605,375
-----------
ENERGY - 0.19%
California Energy 9.875% sr sec nts 2003 . . . . . . . . . . 1,500,000 1,556,250
Gulf Canada Resources
9.25% sr sub debs 2004 . . . . . . . . . . . . . . . . . 1,500,000 1,511,250
-----------
3,067,500
-----------
ENVIRONMENTAL SERVICES - 0.24%
Allied Waste Industrial
12.00% sr sub nts 2004 . . . . . . . . . . . . . . . . . 1,500,000 1,620,000
Global Marine 12.75% sr sec nts 1999 . . . . . . . . . . . . 2,000,000 2,210,000
-----------
3,830,000
-----------
FOOD, BEVERAGE & TOBACCO - 0.57%
Chiquita Brands 11.50% sub nts 2001 . . . . . . . . . . . . 2,250,000 2,385,000
Mafco 11.875% sr sub nts 2002 . . . . . . . . . . . . . . . 2,800,000 2,863,000
PMI Acquisition 10.25% sr sub nts 2003 . . . . . . . . . . . 3,000,000 3,075,000
Specialty Foods 11.125% sr nts 2002 . . . . . . . . . . . . 850,000 807,500
-----------
9,130,500
-----------
HEALTHCARE & PHARMACEUTICALS - 0.59%
Columbia/HCA Healthcare
6.41% nts 2000 . . . . . . . . . . . . . . . . . . . . . 1,500,000 1,522,500
Columbia/HCA Healthcare
6.91% nts 2005 . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,045,000
HEALTHSOUTH Rehabilitation
9.50% sr sub nts 2001 . . . . . . . . . . . . . . . . . 2,500,000 2,665,625
Tenet Healthcare
10.125% sr sub nts 2005 . . . . . . . . . . . . . . . . 2,980,000 3,244,475
-----------
9,477,600
-----------
LEISURE, LODGING & ENTERTAINMENT - 0.96%
ACT III Theatres 11.875% sr sub nts 2003 . . . . . . . . . . 2,150,000 2,311,250
AMC Entertainment
11.875% sr sub nts 2000 . . . . . . . . . . . . . . . . 3,000,000 3,360,000
Aztar 11.00% sr sub nts 2002 . . . . . . . . . . . . . . . . 2,500,000 2,493,750
Bally's Grand 10.375% 1st mtg 2003 . . . . . . . . . . . . . 2,000,000 2,015,000
*Calmar 11.50% sr sub nts 2005 . . . . . . . . . . . . . . . 1,000,000 1,010,000
Cinemark U.S.A. 12.00% sr nts 2002 . . . . . . . . . . . . . 2,000,000 2,180,000
MGM Grand Hotel Finance
12.00% 1st mtg nts 2002 . . . . . . . . . . . . . . . . 2,000,000 2,202,500
-----------
15,572,500
-----------
METALS & MINING - 0.72%
AK Steel 10.75% sr nts 2004 . . . . . . . . . . . . . . . . 3,300,000 3,638,250
Armco 11.375% sr nts 1999 . . . . . . . . . . . . . . . . . 1,250,000 1,303,125
G.S. Technologies 12.25% sr nts 2005 . . . . . . . . . . . . 3,000,000 3,007,500
Magma Copper 8.70% sr sub nts 2005 . . . . . . . . . . . . . 1,500,000 1,503,750
U.S. Can 13.50% sr sub nts 2002 . . . . . . . . . . . . . . 2,000,000 2,190,000
-----------
11,642,625
-----------
PACKAGING & CONTAINERS - 0.34%
Container Corporation of America
11.25% sr nts 2004 . . . . . . . . . . . . . . . . . . . 2,000,000 2,080,000
Gaylord Container 11.50% sr nts 2001 . . . . . . . . . . . . 1,500,000 1,545,000
Stone Container 12.625% sr nts 1998 . . . . . . . . . . . . 1,000,000 1,085,000
Stone Container
10.75% 1st mtg nts 2002 . . . . . . . . . . . . . . . . 785,000 806,588
-------------
5,516,588
-------------
PAPER & FOREST PRODUCTS - 0.75%
Doman Industries Limited
8.75% sr nts 2004 . . . . . . . . . . . . . . . . . . . 3,000,000 2,887,500
Domtar 11.75% sr nts 1999 . . . . . . . . . . . . . . . . . 1,000,000 1,110,000
Ivex Packaging 12.50% sr sub nts 2002 . . . . . . . . . . . 1,330,000 1,409,800
Owens-Illinois
11.00% sr amortizing debs 2003 . . . . . . . . . . . . . 2,000,000 2,235,000
Pacific Lumber 10.50% sr nts 2003 . . . . . . . . . . . . . 2,000,000 1,900,000
Repapa New Brunswick
10.625% sr sec nts 2005 . . . . . . . . . . . . . . . . 2,000,000 2,000,000
Repapa Wisconsin 9.25% sr nts 2002 . . . . . . . . . . . . . 625,000 603,125
-------------
12,145,425
-------------
RETAIL - 0.49%
Cort Furniture Rental 12.00% sr nts 2000 . . . . . . . . . . 1,679,000 1,813,320
Fleming 10.625% sr nts 2001 . . . . . . . . . . . . . . . . 2,000,000 2,115,000
Grand Union 12.00% sr nts 2004 . . . . . . . . . . . . . . . 660,000 582,450
Penn Traffic 10.25% sr nts 2002 . . . . . . . . . . . . . . 1,500,000 1,391,250
Ralph's Grocery 10.45% sr nts 2004 . . . . . . . . . . . . . 2,000,000 1,965,000
-------------
7,867,020
-------------
TEXTILES & FURNITURE - 0.16%
Westpoint Stevens
9.375% sr sub deb 2005 . . . . . . . . . . . . . . . . . 2,500,000 2,525,000
-------------
2,525,000
-------------
TRANSPORTATION & SHIPPING - 0.21%
Trans Ocean Container
12.25% sr sub nts 2004 . . . . . . . . . . . . . . . . . 600,000 624,000
Viking Star Shipping
9.625% 1st pfd ship mgt nts 2003 . . . . . . . . . . . . 2,625,000 2,710,313
-------------
3,334,313
-------------
UTILITIES - 0.23%
Midland Funding II 11.75% debs 2005 . . . . . . . . . . . . 2,000,000 2,107,500
Pronet 11.875% sr sub nts 2005 . . . . . . . . . . . . . . . 1,000,000 1,082,500
Rogers Cantel Mobile Communications
11.125% sr sub nts 2002 . . . . . . . . . . . . . . . . 550,000 584,375
-------------
3,774,375
-------------
MISCELLANEOUS - 0.09%
Graphic Controls 12.00% sr sub nts 2005 . . . . . . . . . . 1,500,000 1,531,875
-------------
1,531,875
-------------
TOTAL CORPORATE BONDS
(COST $157,920,341) . . . . . . . . . . . . . . . . . . 161,795,261
-------------
</TABLE>
16
<PAGE> 19
DECATUR INCOME FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENTS - 2.13%
With Chase Manhattan 5.875% 12/1/95
(dated 11/30/95, collateralized by
$12,136,000 U.S. Treasury Notes
6.125% due 5/31/97, market value
$12,253,591 . . . . . . . . . . . . . . . . . . . . . . . $11,943,000 $ 11,943,000
With Morgan (J.P.) 5.875% 12/1/95
(dated 11/30/95, collateralized by
$11,254,000 U.S. Treasury Notes
6.50% due 4/30/97, market
value $11,479,592 . . . . . . . . . . . . . . . . . . . 11,240,000 11,240,000
With PaineWebber 5.85% 12/1/95
(dated 11/30/95, collateralized by
$11,444,000 U.S. Treasury Notes
5.625% due 11/30/00, market
value $11,490,113 . . . . . . . . . . . . . . . . . . . 11,240,000 11,240,000
--------------
TOTAL REPURCHASE AGREEMENTS
(COST $34,423,000) . . . . . . . . . . . . . . . . . . . 34,423,000
--------------
TOTAL MARKET VALUE OF SECURITIES
OWNED - 99.33% (COST $1,411,222,202) . . . . . . . . . . 1,602,986,643
RECEIVABLE AND OTHER ASSETS
NET OF LIABILITIES - 0.67% . . . . . . . . . . . . . . . 10,784,950
--------------
NET ASSETS APPLICABLE TO 84,613,952
SHARES ($1 PAR VALUE) OUTSTANDING;
PER SHARE - 100.00% . . . . . . . . . . . . . . . . . . $1,613,771,593
==============
NET ASSETS VALUE -
DECATUR INCOME FUND A CLASS
($1,382,692,713 / 72,488,322 SHARES) . . . . . . . . . . $19.07
======
NET ASSETS VALUE -
DECATUR INCOME FUND B CLASS
($19,664,856 / 1,033,579 SHARES) . . . . . . . . . . . . $19.03
======
NET ASSETS VALUE -
DECATUR INCOME FUND C CLASS
($5,019 / 263 SHARES) . . . . . . . . . . . . . . . . . $19.08
======
NET ASSETS VALUE -
DECATUR INCOME FUND INSTITUTIONAL CLASS
($211,409,005 / 11,091,788 SHARES) . . . . . . . . . . . $19.06
======
</TABLE>
- ------------------
* These securities are exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers.
At November 30, 1995, these securities amounted to $3,012,500 or 0.19%
of net assets.
SUMMARY OF ABBREVIATIONS:
cv - convertible part - participation
deb - debenture pfd - preferred
disc - discount sec - secured
mtg - mortgage sr - senior
nts - notes sub - subordinated
<TABLE>
<S> <C>
COMPONENTS OF NET ASSETS AT NOVEMBER 30, 1995:
Common stock, $1 par value, 500,000,000 shares
authorized to the Fund with 350,000,000 shares
allocated to Decatur Income Fund A Class,
50,000,000 shares allocated to Decatur Income
Fund B Class, 50,000,000 shares allocated to
Decatur Income Fund C Class and 50,000,000
shares allocated to Decatur Income Fund
Institutional Class . . . . . . . . . . . . . . . . . . $1,310,001,894
Accumulated undistributed income:
Net investment income . . . . . . . . . . . . . . . . 3,740,547
Net realized gain on investments . . . . . . . . . . . 108,264,711
Net unrealized appreciation of investments . . . . . . 191,764,441
--------------
Total net assets . . . . . . . . . . . . . . . . . . . . $1,613,771,593
==============
</TABLE>
See accompanying notes
DELAWARE GROUP DECATUR FUND, INC. -
DECATUR TOTAL RETURN FUND
STATEMENT OF NET ASSETS
NOVEMBER 30, 1995
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
<S> <C> <C>
COMMON STOCK - 96.44%
AEROSPACE & DEFENSE - 1.44%
General Dynamics . . . . . . . . . . . . . . . . . . . . . . 135,300 8,067,263
---------------
8,067,263
---------------
AUTOMOTIVES & AUTOMOTIVE PARTS - 4.49%
Chrysler . . . . . . . . . . . . . . . . . . . . . . . . . . 234,516 12,165,518
Ford Motor . . . . . . . . . . . . . . . . . . . . . . . . . 220,000 6,215,000
Genuine Parts . . . . . . . . . . . . . . . . . . . . . . . 167,645 6,768,667
---------------
25,149,185
---------------
BANKING, FINANCE & INSURANCE - 22.56%
American General . . . . . . . . . . . . . . . . . . . . . . 219,900 7,449,113
AmSouth Bancorporation . . . . . . . . . . . . . . . . . . . 96,300 3,815,888
Aon . . . . . . . . . . . . . . . . . . . . . . . . . . 167,200 7,879,300
Bank of Boston . . . . . . . . . . . . . . . . . . . . . . . 164,100 7,610,138
Bank of New York . . . . . . . . . . . . . . . . . . . . . . 20,500 966,063
Beneficial . . . . . . . . . . . . . . . . . . . . . . . . . 127,500 6,470,625
Block (H. & R.) . . . . . . . . . . . . . . . . . . . . . . 71,300 3,172,850
Chase Manhattan . . . . . . . . . . . . . . . . . . . . . . 173,700 10,573,988
CIGNA . . . . . . . . . . . . . . . . . . . . . . . . . . 65,900 7,249,000
CoreStates Financial . . . . . . . . . . . . . . . . . . . . 108,000 4,185,000
Crestar Financial . . . . . . . . . . . . . . . . . . . . . 125,400 7,649,400
First Chicago . . . . . . . . . . . . . . . . . . . . . . . 13,600 945,200
Fleet Financial Group . . . . . . . . . . . . . . . . . . . 191,400 7,990,950
Integra Financial . . . . . . . . . . . . . . . . . . . . . 1,200 74,250
Marsh & McLennan . . . . . . . . . . . . . . . . . . . . . . 79,600 6,905,300
Mellon Bank . . . . . . . . . . . . . . . . . . . . . . . . 136,000 7,276,000
Meridian Bancorp . . . . . . . . . . . . . . . . . . . . . . 216,300 9,963,319
NBD Bancorp . . . . . . . . . . . . . . . . . . . . . . . . 42,200 1,619,425
St. Paul . . . . . . . . . . . . . . . . . . . . . . . . . . 153,900 8,618,400
UJB Financial . . . . . . . . . . . . . . . . . . . . . . . 197,200 6,606,200
U.S. Bancorp . . . . . . . . . . . . . . . . . . . . . . . . 278,200 9,441,413
---------------
126,461,822
---------------
</TABLE>
17
<PAGE> 20
DECATUR INCOME FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
<S> <C> <C>
COMMON STOCK (CONTINUED)
CABLE, MEDIA & PUBLISHING - 2.43%
McGraw-Hill . . . . . . . . . . . . . . . . . . . . . . . . 162,400 $13,601,000
-----------
13,601,000
-----------
CHEMICALS - 9.43%
Dow Chemical . . . . . . . . . . . . . . . . . . . . . . . . 102,000 7,229,250
DuPont (E.I.) deNemours . . . . . . . . . . . . . . . . . . 220,200 14,643,300
Imperial Chemical PLC-ADR . . . . . . . . . . . . . . . . . 157,900 7,381,825
Monsanto . . . . . . . . . . . . . . . . . . . . . . . . . . 126,100 14,438,450
Witco . . . . . . . . . . . . . . . . . . . . . . . . . . 299,100 9,197,325
-----------
52,890,150
-----------
CONSUMER PRODUCTS - 0.45%
UST . . . . . . . . . . . . . . . . . . . . . . . . . . 77,900 2,541,488
-----------
2,541,488
-----------
ELECTRONICS & ELECTRICAL - 5.46%
General Electric . . . . . . . . . . . . . . . . . . . . . . 157,200 10,571,700
Hubbell-Class B . . . . . . . . . . . . . . . . . . . . . . 97,600 5,965,800
Pitney Bowes . . . . . . . . . . . . . . . . . . . . . . . . 175,000 7,831,250
Thomas & Betts . . . . . . . . . . . . . . . . . . . . . . . 85,200 6,251,550
-----------
30,620,300
-----------
ENERGY - 13.90%
Amoco . . . . . . . . . . . . . . . . . . . . . . . . . . 139,700 9,464,675
Atlantic Richfield . . . . . . . . . . . . . . . . . . . . . 60,000 6,502,500
Dresser Industries . . . . . . . . . . . . . . . . . . . . . 334,700 7,907,288
Exxon . . . . . . . . . . . . . . . . . . . . . . . . . . 168,500 13,037,688
Imperial Oil Limited . . . . . . . . . . . . . . . . . . . . 185,700 6,476,288
McDermott International . . . . . . . . . . . . . . . . . . 303,300 5,497,313
Mobil . . . . . . . . . . . . . . . . . . . . . . . . . . 56,300 5,876,313
Occidental Petroleum . . . . . . . . . . . . . . . . . . . . 302,800 6,699,450
Sonat . . . . . . . . . . . . . . . . . . . . . . . . . . 192,000 6,192,000
Tenneco . . . . . . . . . . . . . . . . . . . . . . . . . . 213,700 10,257,600
-----------
77,911,115
-----------
FOOD, BEVERAGE & TOBACCO - 6.07%
General Mills . . . . . . . . . . . . . . . . . . . . . . . 118,000 6,504,750
Heinz (H.J.) . . . . . . . . . . . . . . . . . . . . . . . . 318,350 10,147,406
Philip Morris . . . . . . . . . . . . . . . . . . . . . . . 131,000 11,495,250
RJR Nabisco Holdings . . . . . . . . . . . . . . . . . . . . 201,220 5,860,533
-----------
34,007,939
-----------
HEALTHCARE & PHARMACEUTICALS - 7.99%
American Home Products . . . . . . . . . . . . . . . . . . . 122,000 11,132,500
Bristol-Myers Squibb . . . . . . . . . . . . . . . . . . . . 122,000 9,790,500
Glaxo Wellcome PLC-ADR . . . . . . . . . . . . . . . . . . . 213,800 5,719,150
SmithKline Beecham PLC-ADR Unit . . . . . . . . . . . . . . 180,600 9,616,950
Warner-Lambert . . . . . . . . . . . . . . . . . . . . . . . 95,500 8,523,375
-----------
44,782,475
-----------
INDUSTRIAL MACHINERY - 2.81%
Cooper Industries . . . . . . . . . . . . . . . . . . . . . 221,600 8,088,400
Minnesota Mining & Manufacturing . . . . . . . . . . . . . . 116,600 7,637,300
-----------
15,725,700
-----------
METALS & MINING - 1.32%
Freeport-McMoRan Copper & Gold Class B . . . . . . . . . . . 272,764 7,398,723
-----------
7,398,723
-----------
PAPER & FOREST PRODUCTS - 3.96%
Federal Paper Board . . . . . . . . . . . . . . . . . . . . 140,000 7,280,000
Kimberly-Clark . . . . . . . . . . . . . . . . . . . . . . . 90,000 6,918,750
Union Camp . . . . . . . . . . . . . . . . . . . . . . . . . 163,500 8,031,938
-----------
22,230,688
-----------
RETAIL - 2.61%
May Department Stores . . . . . . . . . . . . . . . . . . . 65,000 2,835,625
Penney (J.C.) . . . . . . . . . . . . . . . . . . . . . . . 251,400 11,784,375
-----------
14,620,000
-----------
TRANSPORTATION &RELATED - 1.17%
Union Pacific . . . . . . . . . . . . . . . . . . . . . . . 97,200 6,585,300
-----------
6,585,300
-----------
UTILITIES - 10.35%
ALLTEL . . . . . . . . . . . . . . . . . . . . . . . . . . 227,800 6,720,100
BellSouth . . . . . . . . . . . . . . . . . . . . . . . . . 188,800 7,339,600
FPL Group . . . . . . . . . . . . . . . . . . . . . . . . . 62,000 2,689,250
Frontier . . . . . . . . . . . . . . . . . . . . . . . . . . 209,400 5,418,225
GTE . . . . . . . . . . . . . . . . . . . . . . . . . . 170,200 7,254,775
Houston Industries . . . . . . . . . . . . . . . . . . . . . 131,200 6,002,400
PECO Energy . . . . . . . . . . . . . . . . . . . . . . . . 95,000 2,755,000
Royal PTT Nederland-SP ADR . . . . . . . . . . . . . . . . . 200,000 7,075,000
SBC Communications . . . . . . . . . . . . . . . . . . . . . 128,000 6,912,000
Williams . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000 5,880,000
-----------
58,046,350
-----------
TOTAL COMMON STOCK
(COST 465,031,067) . . . . . . . . . . . . . . . . . . . 540,639,498
-----------
PREFERRED STOCKS - 0.83%
AUTOMOTIVES & AUTOMOTIVE PARTS - 0.83%
General Motors $3.25 pfd cv C . . . . . . . . . . . . . . . 65,000 4,663,750
-----------
TOTAL PREFERRED STOCK
(COST 3,620,271) . . . . . . . . . . . . . . . . . . . . 4,663,750
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENTS - 2.39%
With Chase Manhattan 5.875% 12/1/95
(dated 11/30/95, collateralized by
$4,720,000 U.S. Treasury Notes
6.125% due 5/31/97, market value
$4,765,798 . . . . . . . . . . . . . . . . . . . . . . . $4,645,000 4,645,000
With Morgan (J.P.) 5.875% 12/1/95
(dated 11/30/95, collateralized by
$4,376,000 U.S. Treasury Notes
6.50% due 4/30/97, market value
$4,464,172 . . . . . . . . . . . . . . . . . . . . . . . 4,371,000 4,371,000
</TABLE>
18
<PAGE> 21
DECATUR TOTAL RETURN FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
With PaineWebber 5.85% 12/1/95
(dated 11/30/95, collateralized by
$4,450,000 U.S. Treasury Notes
5.625% due 11/30/00, market
value $4,468,264 . . . . . . . . . . . . . . . . . . . . $4,371,000 $ 4,371,000
------------
TOTAL REPURCHASE AGREEMENTS
(COST $13,387,000) . . . . . . . . . . . . . . . . . . . 13,387,000
------------
TOTAL MARKET VALUE OF SECURITIES
OWNED - 99.66% (COST $482,038,338) . . . . . . . . . . . 558,690,248
RECEIVABLE AND OTHER ASSETS
NET OF LIABILITIES - 0.34% . . . . . . . . . . . . . . . 1,921,356
------------
NET ASSETS APPLICABLE TO 35,913,341
SHARES ($1 PAR VALUE) OUTSTANDING;
PER SHARE - 100.00% . . . . . . . . . . . . . . . . . . $560,611,604
============
NET ASSETS VALUE -
DECATUR TOTAL RETURN FUND A CLASS
($534,341,867 / 34,229,185 SHARES) . . . . . . . . . . . $15.61
======
NET ASSETS VALUE -
DECATUR TOTAL RETURN FUND B CLASS
($14,744,372 / 947,553 SHARES) . . . . . . . . . . . . . $15.56
======
NET ASSETS VALUE -
DECATUR TOTAL RETURN FUND C CLASS
($5,028 / 322 SHARES) . . . . . . . . . . . . . . . . . $15.61
======
NET ASSETS VALUE -
DECATUR TOTAL RETURN FUND INSTITUTIONAL CLASS
($11,520,337 / 736,281 SHARES) . . . . . . . . . . . . . $15.65
======
- ------------------
COMPONENTS OF NET ASSETS AT NOVEMBER 30, 1995:
Common stock, $1 par value, 250,000,000 shares
authorized to the Fund with 100,000,000 shares
allocated to Decatur Total Return Fund A Class,
50,000,000 shares allocated to Decatur Total
Return Fund B Class, 50,000,000 shares allocated
to Decatur Total Return Fund C Class and 50,000,000
shares allocated to Decatur Total Return Fund
Institutional Class . . . . . . . . . . . . . . . . . . $434,529,899
Accumulated undistributed income:
Net investment income . . . . . . . . . . . . . . . . . 3,462,778
Net realized gain on investments . . . . . . . . . . . . 45,967,017
Net unrealized appreciation of investments . . . . . . . 76,651,910
------------
Total net assets . . . . . . . . . . . . . . . . . . . . . . $560,611,604
============
</TABLE>
See accompanying notes
DELAWARE GROUP DECATUR FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1995
<TABLE>
<CAPTION>
DECATUR DECATUR TOTAL
INCOME FUND RETURN FUND
<S> <C> <C>
INVESTMENT INCOME:
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53,611,573 $ 17,907,081
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 18,007,218 973,447
------------ ------------
71,618,791 18,880,528
------------ ------------
EXPENSES:
Management fees . . . . . . . . . . . . . . . . . . . . . . . 7,182,707 2,859,001
Dividend disbursing and transfer agent
fees and expenses . . . . . . . . . . . . . . . . . . . 2,280,425 804,735
Distribution expenses . . . . . . . . . . . . . . . . . . . . 1,758,447 1,464,746
Reports to shareholders . . . . . . . . . . . . . . . . . . . 380,715 210,643
Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . 364,938 119,992
Taxes (other than taxes on income) . . . . . . . . . . . . . 168,025 55,925
Federal and state registration fees . . . . . . . . . . . . . 62,000 50,909
Professional fees . . . . . . . . . . . . . . . . . . . . . . 54,427 33,145
Custodian fees . . . . . . . . . . . . . . . . . . . . . . . 31,071 33,929
Directors' fees . . . . . . . . . . . . . . . . . . . . . . . 30,335 30,335
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 244,044 119,037
------------ ------------
12,557,134 5,782,397
------------ ------------
NET INVESTMENT INCOME . . . . . . . . . . . . . . . . . . . . 59,061,657 13,098,131
------------ ------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain from
security transactions . . . . . . . . . . . . . . . . . 117,113,362 47,547,702
Net unrealized appreciation of
investments during the period . . . . . . . . . . . . . 217,167,735 81,983,460
------------ ------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS . . . . . . . . . . . . . . . . . . 334,281,097 129,531,162
------------ ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $393,342,754 $142,629,293
============ ============
</TABLE>
<TABLE>
<CAPTION>
DECATUR DECATUR TOTAL
INCOME FUND RETURN FUND
A CLASS A CLASS
<S> <C> <C>
NET ASSET VALUE AND OFFERING PRICE
PER SHARE:
Net asset value per share (A) . . . . . . . . . . . . . . . . $19.07 $15.61
Sale charges (4.75% of offering price,
or 4.98% and 5.00% of amount
invested per share, respectively) (B) . . . . . . . . . 0.95 0.78
------ ------
Offering price . . . . . . . . . . . . . . . . . . . . . . . $20.02 $16.39
====== ======
</TABLE>
- ------------------
(A) Net asset value per share, as illustrated, is the estimated amount
which would be paid upon the redemption of repurchase of shares.
(B) See How to Buy Shares in the current Prospectus, for purchases of
$100,000 or more.
See accompanying notes
19
<PAGE> 22
DELAWARE GROUP DECATUR FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED 11/30/95
------------------------------
DECATUR DECATUR TOTAL
INCOME FUND RETURN FUND
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . . . $ 59,061,657 $ 13,098,131
Net realized gain from
security transactions . . . . . . . . . . . . . . . . . 117,113,362 47,547,702
Net appreciation
during the period . . . . . . . . . . . . . . . . . . . 217,167,735 81,983,460
-------------- ------------
Net increase in net assets
resulting from operations . . . . . . . . . . . . . . . 393,342,754 142,629,293
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
A Class . . . . . . . . . . . . . . . . . . . . . . . . (51,112,035) (12,097,109)
B Class . . . . . . . . . . . . . . . . . . . . . . . . (320,672) (114,525)
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . (7,925,823) (181,571)
Net realized gain from security transactions:
A Class . . . . . . . . . . . . . . . . . . . . . . . . (30,907,169) (13,655,359)
B Class . . . . . . . . . . . . . . . . . . . . . . . . (85,820) (70,859)
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . (4,868,512) (46,914)
-------------- ------------
(95,220,031) (26,166,337)
-------------- ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class . . . . . . . . . . . . . . . . . . . . . . . . 65,059,932 78,281,294
B Class . . . . . . . . . . . . . . . . . . . . . . . . 15,750,776 11,806,856
C Class . . . . . . . . . . . . . . . . . . . . . . . . 5,030 5,030
Institutional Class . . . . . . . . . . . . . . . . . . 43,751,896 7,957,834
Net asset value of shares issued upon
reinvestment of dividends from
net investment income and realized
securities profits:
A Class . . . . . . . . . . . . . . . . . . . . . . . . 70,989,710 24,347,338
B Class . . . . . . . . . . . . . . . . . . . . . . . . 305,545 171,844
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . 12,326,277 228,573
-------------- ------------
208,189,166 122,798,769
-------------- ------------
Cost of shares repurchased:
A Class . . . . . . . . . . . . . . . . . . . . . . . . (167,065,887) (83,705,933)
B Class . . . . . . . . . . . . . . . . . . . . . . . . (1,184,376) (616,336)
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . (63,043,722) (291,178)
-------------- ------------
(231,293,985) (84,613,447)
-------------- ------------
Increase (Decrease) in net assets
derived from capital share
transactions . . . . . . . . . . . . . . . . . . . . . . (23,104,819) 38,185,322
-------------- ------------
NET INCREASE IN NET ASSETS . . . . . . . . . . . . . . . . . 275,017,904 154,648,278
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . 1,338,753,689 405,963,326
-------------- ------------
End of period (including undistributed
net investment income of $3,740,547
and $3,462,778, respectively) . . . . . . . . . . . . $1,613,771,593 $560,611,604
============== ============
</TABLE>
See accompanying notes
DELAWARE GROUP DECATUR FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED 11/30/94
-------------------------------
DECATUR DECATUR TOTAL
INCOME FUND RETURN FUND
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . . . . $ 57,328,491 $ 12,298,767
Net realized gain from
security transactions . . . . . . . . . . . . . . . . . 36,051,478 13,432,223
Net depreciation during the period . . . . . . . . . . . . . (97,720,373) (25,513,930)
-------------- ------------
Net increase (decrease) in net assets
resulting from operations . . . . . . . . . . . . . . . (4,340,404) 217,060
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
A Class . . . . . . . . . . . . . . . . . . . . . . . . (66,582,316) (13,809,161)
B Class . . . . . . . . . . . . . . . . . . . . . . . . (15,826) (2,634)
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . (7,995,057) (39,777)
Net realized gain from
security transactions:
A Class . . . . . . . . . . . . . . . . . . . . . . . . (144,029,198) (49,579,695)
B Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . -- (105,220)
--------------- ------------
(218,622,397) (63,536,487)
--------------- ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class . . . . . . . . . . . . . . . . . . . . . . . . 56,739,570 43,830,883
B Class . . . . . . . . . . . . . . . . . . . . . . . . 2,858,350 1,802,152
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . 34,055,194 686,198
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and realized
securities profits:
A Class . . . . . . . . . . . . . . . . . . . . . . . . 187,326,243 60,129,721
B Class . . . . . . . . . . . . . . . . . . . . . . . . 10,142 2,465
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . 7,137,272 144,998
-------------- ------------
288,126,771 106,596,417
-------------- ------------
Cost of shares repurchased:
A Class . . . . . . . . . . . . . . . . . . . . . . . . (174,051,022) (69,644,135)
B Class . . . . . . . . . . . . . . . . . . . . . . . . (261) --
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . (64,552,660) (488,748)
-------------- ------------
(238,603,943) (70,132,883)
-------------- ------------
Increase in net assets derived from
capital share transactions . . . . . . . . . . . . . . . 49,522,828 36,463,534
-------------- ------------
NET DECREASE IN NET ASSETS . . . . . . . . . . . . . . . . . (173,439,973) (26,855,893)
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . 1,512,193,662 432,819,219
-------------- ------------
End of period (including undistributed
net investment income of
$4,037,420 and $2,757,852,
respectively) . . . . . . . . . . . . . . . . . . . . . $1,338,753,689 $405,963,326
============== ============
</TABLE>
See accompanying notes
20
<PAGE> 23
DELAWARE GROUP DECATUR FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1995
Delaware Group Decatur Fund, Inc. ("the Company"), is registered as a
diversified open-end investment company under the Investment Company Act of
1940. The Company is organized as a Maryland Corporation and offers two series,
the Decatur Income Fund and the Decatur Total Return Fund (the "Funds"). Each
series offers four classes of shares.
1. SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies are in accordance with general accounting
principles and are consistently followed by the Funds:
SECURITY VALUATION - Securities listed on an exchange are valued at the last
quoted sales price as of 4:00 PM on the valuation date. Securities not traded
or securities not listed on an exchange are valued at the mean of the last
quoted bid and asked prices. Long-term debt securities are valued by an
independent pricing service when such prices are believed to reflect the fair
value of such securities. Money market instruments having less than 60 days to
maturity are valued at amortized cost.
FEDERAL INCOME TAXES - Each Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes is required in the financial
statements.
REPURCHASE AGREEMENTS - Each Fund may invest in a pooled cash account along
with other members of the Delaware Group of Funds. The aggregate daily balance
of the pooled cash account is invested in repurchase agreements secured by
obligations of the U.S. government. The respective collateral is held by the
Funds' custodian bank until the maturity of the respective repurchase
agreements. Each repurchase agreement is 100% collateralized. However, in the
event of default or bankruptcy by the counterparty to the agreement,
realization of the collateral may be subject to legal proceedings.
CLASS ACCOUNTING - Investment income, common expenses and gains (losses) on
investments are allocated to the various classes of the Funds on the basis of
daily net assets of each class. Distribution expenses relating to a specific
class are charged directly to that class.
OTHER - Expenses common to all funds within the Delaware Group 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. Dividend
income is recorded on the ex-dividend date and interest income is recorded on
an accrual basis. Original issue discounts are accreted to interest income over
the lives of the respective securities. The Decatur Income Fund declares and
pays dividends from net investment income on a monthly basis and the Decatur
Total Return Fund declares and pays dividends from net investment income on a
quarterly basis.
Certain fund expenses are paid directly by brokers. The amount of these
expenses is less than 0.01% of each Fund's average net assets.
The Decatur Income Fund declared distributions from net realized gain from
security transactions in the amount of $1.34 per share and from net investment
income in the amount of $0.07, $0.045, $0.055 and $0.06 per share for the
Decatur Income Fund A Class, Decatur Income Fund B Class, Decatur Income Fund C
Class and Decatur Income Fund Institutional Class, respectively, payable on
January 4, 1996, to shareholders of record on December 26, 1995. The
ex-dividend date was December 27, 1995.
The Decatur Total Return Fund declared distributions from net realized gain
from security transactions in the amount of $1.285 per share and from net
investment income in the amount of $0.11, $0.06, $0.14 and $0.15 per share for
the Decatur Total Return Fund A Class, Decatur Total Return Fund B Class,
Decatur Total Return Fund C Class and Decatur Total Return Fund Institutional
Class, respectively, payable on January 4, 1996, to shareholders of record on
December 26, 1995. The ex-dividend date was December 27, 1995.
2. INVESTMENT MANAGEMENT AND DISTRIBUTION AGREEMENTS
In accordance with the terms of the Investment Management Agreement, the Funds
pay Delaware Management Company, Inc. (DMC), the investment manager of the
Fund, an annual fee which is calculated daily at the following rates less fees
paid to the unaffiliated directors; 0.60% on the first $100 million of average
daily net assets, 0.525% on the next $150 million, 0.50% on the next $250
million and 0.475% on the average daily net assets over $500 million for the
Decatur Income Fund, and 0.60% on the first $500 million of average daily net
assets 0.575% on the next $250 million, and 0.55% on the average daily net
assets over $750 million for the Decatur Total Return Fund. At
November 30, 1995, the Funds had liabilities for Investment Management fees and
other expenses payable to DMC for $83,495 and $70,905 for the Decatur Income
Fund and Decatur Total Return Fund, respectively.
Pursuant to the Distribution Agreement, the Funds pay 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 A Class for each Fund and
1.00% of the average daily net assets of B Class and C Class for each Fund. At
November 30, 1995, the Funds had liabilities for distribution fees and other
expenses payable to DDLP for $23,144 and $19,153 for Decatur Income Fund and
Decatur Total Return Fund, respectively. For the year ended November 30, 1995,
the Fund paid DDLP $287,570 and $220,616 for commissions earned on sales of
Decatur Income Fund A Class shares and Decatur Total Return Fund A Class
shares, respectively.
The Funds have engaged Delaware Service Company, Inc. (DSC), an affiliate of
DMC to serve as dividend disbursing and transfer agent for the Funds. For the
year ended November 30, 1995, the Decatur Income Fund and the Decatur Total
Return Fund expensed $2,280,425 and $804,735 for these services and had
liabilities for such fees and other expenses payable to DSC for $63,511 and
$23,503, respectively.
Certain officers of DMC are officers, directors and/or employees of the Funds.
These officers, directors and employees are paid no compensation by the Funds.
On April 3, 1995, Delaware Management Holdings, Inc., the indirect parent of
DMC, DDLP and DSC, through a merger transaction (the "Merger") became a
wholly-owned subsidiary of Lincoln National Corporation. Other than the
resulting change in ownership, the Merger will not materially change the manner
in which DMC, DDLP and DSC have heretofore conducted their relationships with
the Funds.
21
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENTS
During the year ended November 30, 1995, the Funds made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:
<TABLE>
<CAPTION>
DECATUR DECATUR TOTAL
INCOME FUND RETURN FUND
----------- -----------
<S> <C> <C>
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . $1,048,944,601 $395,857,178
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . $1,126,306,700 $378,551,122
</TABLE>
At November 30, 1995, unrealized appreciation for federal income tax purposes
as follows:
<TABLE>
<CAPTION>
DECATUR DECATUR TOTAL
INCOME FUND RETURN FUND
----------- -----------
<S> <C> <C>
Unrealized appreciation . . . . . . . . . . . . . . . . . . . $202,211,934 $79,937,523
Unrealized depreciation . . . . . . . . . . . . . . . . . . . 13,467,990 3,824,170
------------ -----------
Aggregated unrealized appreciation . . . . . . . . . . . . . $188,743,944 $76,113,353
============ ===========
Net realized gain for federal
income tax purposes . . . . . . . . . . . . . . . . . . $113,355,518 $46,371,695
</TABLE>
4. CAPITAL STOCK
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
DECATUR INCOME FUND
-----------------------------
YEAR ENDED YEAR ENDED
11/30/95 11/30/94
----------- -----------
<S> <C> <C>
Shares sold:
A Class . . . . . . . . . . . . . . . . . . . . . . . . 3,832,322 3,434,662
B Class . . . . . . . . . . . . . . . . . . . . . . . . 904,441 177,186
C Class . . . . . . . . . . . . . . . . . . . . . . . . 263 --
Institutional Class . . . . . . . . . . . . . . . . . . 2,480,766 15,245,137
Shares issued upon reinvestment of
dividends from net investment income
and distributions of realized gain
from security transactions:
A Class . . . . . . . . . . . . . . . . . . . . . . . . 4,341,150 11,415,889
B Class . . . . . . . . . . . . . . . . . . . . . . . . 17,920 638
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . 754,712 445,742
----------- -----------
12,331,574 30,719,254
----------- -----------
Shares repurchased:
A Class . . . . . . . . . . . . . . . . . . . . . . . . (9,773,875) (23,687,288)
B Class . . . . . . . . . . . . . . . . . . . . . . . . (66,590) (16)
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . (3,828,087) (4,006,482)
----------- -----------
(13,668,552) (27,693,786)
----------- -----------
Net increase (decrease) . . . . . . . . . . . . . . . . . (1,336,978) 3,025,468
=========== ===========
</TABLE>
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
DECATUR TOTAL RETURN FUND
----------------------------
YEAR ENDED YEAR ENDED
11/30/95 11/30/94
---------- ----------
<S> <C> <C>
Shares sold:
A Class . . . . . . . . . . . . . . . . . . . . . . . . 5,675,772 3,387,631
B Class . . . . . . . . . . . . . . . . . . . . . . . . 836,434 141,014
C Class . . . . . . . . . . . . . . . . . . . . . . . . 322 --
Institutional Class . . . . . . . . . . . . . . . . . . 628,702 53,343
Shares issued upon reinvestment of
dividends from net investment income
and distributions of realized gain
from security transactions:
A Class . . . . . . . . . . . . . . . . . . . . . . . . 1,934,048 4,694,827
B Class . . . . . . . . . . . . . . . . . . . . . . . . 13,126 191
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . 17,010 11,332
---------- ----------
9,105,414 8,288,338
---------- ----------
Shares repurchased:
A Class . . . . . . . . . . . . . . . . . . . . . . . . (6,091,530) (5,385,395)
B Class . . . . . . . . . . . . . . . . . . . . . . . . (43,212) --
C Class . . . . . . . . . . . . . . . . . . . . . . . . -- --
Institutional Class . . . . . . . . . . . . . . . . . . (20,876) (35,249)
---------- ----------
(6,155,618) (5,420,644)
---------- ----------
Net increase . . . . . . . . . . . . . . . . . . . . . . 2,949,796 2,867,694
========== ==========
</TABLE>
5. SECURITIES LENDING
The market value of securities on loan to broker/dealers at November 30, 1995,
was $202,730,486 and $42,782,050 for Decatur Income Fund and Decatur Total
Return Fund, respectively for which each Fund received cash collateral of
$206,225,840 and $43,410,000, respectively.
6. LINES OF CREDIT
The Funds have committed lines of credit of $25 million for Decatur Income Fund
and $10 million for Decatur Total Return Fund. No amount was outstanding at
November 30, 1995, or at any time during the fiscal year period.
7. CONCENTRATION OF CREDIT RISK
The Decatur Income Fund may invest in high-yield fixed-income securities which
carry ratings of BB or lower by Standard & Poor's and/or Baa or lower by
Moody's. Investments in these higher yielding securities may be 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.
The Decatur Income Fund may invest up to 10% of its total net assets in
illiquid securities which 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 some of these securities may adversely
affect the Fund's ability to dispose of such securities in a timely manner and
at a fair price when it is necessary to liquidate such securities. These
securities have been denoted in the Statement of Net Assets.
22
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. FINANCIAL HIGHLIGHTS
Selected data for each share of the Decatur Income Fund outstanding throughout
each period were as follows:
<TABLE>
<CAPTION>
DECATUR INCOME FUND A CLASS
----------------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . $15.57 $18.24 $17.20 $15.76 $14.53
Income from investment operations:
Net investment income . . . . . . . . . . . . . 0.70 0.67 0.78 0.78 0.83
Net realized and unrealized gain
(loss) from security transactions . . . . . . 3.91 (0.73) 1.79 1.47 1.37
------ ------ ------ ------ ------
Total from investment operations . . . . . . . . 4.61 (0.06) 2.57 2.25 2.20
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income . . . . . . (0.69) (0.86) (0.68) (0.81) (0.97)
Distributions from net realized gain
from security transactions . . . . . . . . . . (0.42) (1.75) (0.85) none none
------ ------ ------ ------ ------
Total distributions . . . . . . . . . . . . . . (1.11) (2.61) (1.53) (0.81) (0.97)
------ ------ ------ ------ ------
Net asset value, end of period . . . . . . . . . . . $19.07 $15.57 $18.24 $17.20 $15.76
====== ====== ====== ====== ======
Total return(1) . . . . . . . . . . . . . . . . . . 31.02% (0.57%) 15.85% 14.55% 15.46%
Ratios/supplemental data:
Net assets, end of period
(000 omitted) . . . . . . . . . . . . . . . . $1,382,693 $1,153,884 $1,512,194 $1,508,206 $1,579,521
Ratio of expenses to average
net assets . . . . . . . . . . . . . . . . . . 0.87% 0.81% 0.71% 0.72% 0.70%
Ratio of net investment income
to average net assets . . . . . . . . . . . . 4.03% 3.92% 4.34% 4.55% 5.18%
Portfolio turnover . . . . . . . . . . . . . . . 74% 92% 80% 79% 78%
</TABLE>
- ------------------
(1) Does not reflect any maximum sales charges that are or were in effect nor
the 1% limited contingent deferred sales charge that would apply in the
event of certain redemptions within 12 months of purchase.
23
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Decatur Income Fund outstanding throughout
each period were as follows:
<TABLE>
<CAPTION>
DECATUR INCOME DECATUR INCOME DECATUR INCOME
FUND B CLASS FUND C CLASS FUND INSTITUTIONAL CLASS
------------------------- -------------- --------------------------
YEAR 9/6/94(1) 11/29/95(2) YEAR 1/13/94(3)
ENDED TO TO ENDED TO
11/30/95 11/30/94 11/30/95 11/30/95 11/30/94
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . $15.55 $16.59 $19.15 $15.59 $16.72
Income from investment operations:
Net investment income . . . . . . . . . . . . . 0.56 0.15 0.04 0.71 0.59
Net realized and unrealized gain
(loss) from security transactions . . . . . . 3.89 (1.02) (0.06) 3.92 (1.10)
------ ------ ------ ------ ------
Total from investment operations . . . . . . . . 4.45 (0.87) (0.02) 4.63 (0.51)
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income . . . . . . (0.55) (0.17) (0.05) (0.74) (0.62)
Distributions from net realized gain
from security transactions . . . . . . . . . . (0.42) none none (0.42) none
------ ------ ------ ------ ------
Total distributions . . . . . . . . . . . . . . (0.97) (0.17) (0.05) (1.16) (0.62)
------ ------ ------ ------ ------
Net asset value, end of period . . . . . . . . . . . $19.03 $15.55 $19.08 $19.06 $15.59
====== ====== ====== ====== ======
Total return(4) . . . . . . . . . . . . . . . . . . 29.85% (5.27%) 5 31.14% (0.45%)
Ratios/supplemental data:
Net assets, end of period (000 omitted) . . . . $19,665 $2,765 $5 $211,409 $182,105
Ratios of expenses to average net assets . . . . 1.74% 1.70% 5 0.74% 0.70%
Ratio of net investment income to
average net assets . . . . . . . . . . . . . . 3.16% 3.03% 5 4.16% 4.03%
Portfolio turnover . . . . . . . . . . . . . . . 74% 92% 5 74% 92%
</TABLE>
- ------------------
(1) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(2) Date of initial public offering.
(3) Date of initial public offering; ratios and total return have been
annualized.
(4) Does not include the contingent deferred sales charge which varies from
1% - 4% depending upon the holding period for Decatur Income Fund B Class.
(5) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management
believes that such ratios and return for this relatively short period are
not meaningful.
24
<PAGE> 27
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. FINANCIAL HIGHLIGHTS
Selected data for each share of the Decatur Total Return Fund outstanding
throughout each period were as follows:
<TABLE>
<CAPTION>
DECATUR TOTAL RETURN FUND A CLASS
--------------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . $12.32 $14.38 $13.98 $12.73 $11.71
Income from investment operations:
Net investment income . . . . . . . . . . . . . 0.37 0.37 0.45 0.47 0.53
Net realized and unrealized gain
(loss) from security transactions . . . . . . 3.70 (0.34) 1.45 1.30 1.07
------ ------ ------ ------ ------
Total from investment operations . . . . . . . . 4.07 0.03 1.90 1.77 1.60
Less distributions:
Dividends from net investment income . . . . . . (0.36) (0.43) (0.45) (0.52) (0.58)
Distributions from net realized gain
from security transactions . . . . . . . . . . (0.42) (1.66) (1.05) none none
------ ------ ------ ------ ------
Total distributions . . . . . . . . . . . . . . (0.78) (2.09) (1.50) (0.52) (0.58)
------ ------ ------ ------ ------
Net asset value, end of period . . . . . . . . . . . $15.61 $12.32 $14.38 $13.98 $12.73
====== ====== ====== ====== ======
Total return(1) . . . . . . . . . . . . . . . . . . 34.68% (0.04%) 14.74% 14.12% 13.94%
Ratios/supplemental data
Net assets, end of period
(000 omitted) . . . . . . . . . . . . . . . . $534,342 $402,849 $431,638 $408,986 $394,338
Ratio of expenses to average
net assets . . . . . . . . . . . . . . . . . . 1.19% 1.26% 1.22% 1.23% 1.23%
Ratio of net investment income to
average net assets . . . . . . . . . . . . . . 2.72% 2.88% 3.15% 3.44% 4.20%
Portfolio turnover . . . . . . . . . . . . . . . 81% 74% 119% 98% 67%
</TABLE>
- ------------------
(1) Does not reflect any maximum sales charges that are or were in effect nor
the 1% limited contingent deferred sales charge that would apply in the
event of certain redemptions within 12 months of purchase.
25
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Decatur Total Return Fund outstanding
throughout each period were as follows:
<TABLE>
<CAPTION>
DECATUR TOTAL DECATUR TOTAL DECATUR TOTAL
RETURN FUND RETURN FUND RETURN FUND
B CLASS C CLASS INSTITUTIONAL CLASS
------------------------ ------------- -----------------------------------
YEAR 9/6/94(1) 11/29/95(2) YEAR YEAR 7/26/93(3)
ENDED TO TO ENDED ENDED TO
11/30/95 11/30/94 11/30/95 11/30/95 11/30/94 11/30/93
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. . . . . . . . $12.31 $13.11 $15.61 $12.35 $14.40 $14.10
Income from investment operations:
Net investment income . . . . . . . . . . . . 0.30 0.12 none 0.47 0.43 0.15
Net realized and unrealized gain (loss) from
security transactions . . . . . . . . . . . 3.67 (0.82) none 3.65 (0.37) 0.25
------ ------ ------ ------ ------ ------
Total from investment operations . . . . . . . 3.97 (0.70) none 4.12 0.06 0.40
Less distributions:
Dividends from net investment income . . . . . (0.30) (0.10) none (0.40) (0.45) (0.10)
Distributions from net realized gain from
security transactions . . . . . . . . . . . (0.42) none none (0.42) (1.66) none
------ ------ ------ ------ ------ ------
Total distributions . . . . . . . . . . . . . (0.72) (0.10) none (0.82) (2.11) (0.10)
------ ------ ------ ------ ------ ------
Net asset value, end of period . . . . . . . . . . $15.56 $12.31 $15.61 $15.65 $12.35 $14.40
====== ====== ====== ====== ====== ======
Total return(4) . . . . . . . . . . . . . . . . . . 33.79% (5.37%) 5 35.13% 0.19% 14.89%
Ratios/supplemental data
Net assets, end of period (000 omitted) . . . $14,745 $1,768 $5 $11,520 $1,376 $1,181
Ratio of expenses to average net assets . . . 1.89% 1.96% 5 0.89% 0.96% 0.92%
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . 2.02% 2.18% 5 3.02% 3.18% 3.45%
Portfolio turnover . . . . . . . . . . . . . 81% 74% 5 81% 74% 119%
</TABLE>
- ------------------
(1) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(2) Date of initial public offering.
(3) Date of initial public offering; ratios and total return have been
annualized.
(4) Does not include the contingent deferred sales charge which varies from
1% - 4% depending upon the holding period for Decatur Total Return Fund B
Class.
(5) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management
believes that such ratios and return for this relatively short period are
not meaningful.
26
<PAGE> 29
DELAWARE GROUP DECATUR FUND, INC.
REPORT OF INDEPENDENT AUDITORS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
DELAWARE GROUP DECATUR FUND, INC. - DECATUR INCOME FUND
DELAWARE GROUP DECATUR FUND, INC. - DECATUR TOTAL RETURN FUND
We have audited the accompanying statements of net assets of Delaware Group
Decatur Fund, Inc. - Decatur Income Fund and Delaware Group Decatur Fund, Inc.
- - Decatur Total Return Fund, as of November 30, 1995, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Group Decatur Fund, Inc. - Decatur Income Fund and Delaware Group
Decatur Fund, Inc. - Decatur Total Return Fund at November 30, 1995, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended, in conformity
with generally accepted accounting principles.
Ernst & Young LLP
Philadelphia, Pennsylvania
January 5, 1996
27
<PAGE> 30
A REPORT ON DECATUR FUND, INC.'S ANNUAL MEETING
An annual meeting of shareholders held on March 29, 1995, the following matters
were submitted for shareholder vote: the election of directors, the
ratification of the selection of Ernst & Young LLP as independent auditors of
the Fund and the approval of a new investment management agreement. The new
investment management agreement was proposed in connection with the April 3,
1995, merger of Delaware Management Holdings, Inc. (the parent of Delaware
Management Company, Inc.) and a subsidiary of Lincoln National Corporation.
Whenever there is a change in control of an investment manager, the Investment
Company Act of 1940 requires shareholders to vote on a new investment
management agreement.
Below are the names of each director elected at the meeting as well as the
results of the other matters voted on by shareholders.
<TABLE>
<CAPTION>
NUMBER OF VOTES*
----------------------------------------------------
FOR AGAINST/WITHHELD ABSTENTIONS
<S> <C> <C> <C>
Election of Directors(+):
Wayne A. Stork . . . . . . . . . . . . . . . 70,402,214 2,124,457 --
Walter P. Babich . . . . . . . . . . . . . . 70,396,277 2,130,394 --
Anthony D. Knerr . . . . . . . . . . . . . . 70,394,910 2,131,761 --
Ann R. Leven . . . . . . . . . . . . . . . . 70,405,517 2,121,154 --
W. Thacher Longstreth . . . . . . . . . . . 70,381,788 2,144,883 --
Charles E. Peck . . . . . . . . . . . . . . 70,395,020 2,131,651 --
Selection of Ernst & Young LLP
as Independent Auditors+ . . . . . . . . . . 67,759,636 644,276 4,122,758
Approval of the New Investment
Management Agreement by
Shareholders of the
Decatur Income Fund . . . . . . . . . . . . 49,488,817 1,140,296 2,564,971
Approval of the New Investment
Management Agreement
by Shareholders of the
Decatur Total Return Fund . . . . . . . . . 17,800,255 371,447 1,160,882
</TABLE>
* Please note that the results of this meeting were not audited by Ernst &
Young LLP.
+ Voted upon by all shareholders of the Company.
28
<PAGE> 31
This annual report is for the information of Decatur Income Fund and Decatur
Total Return Fund shareholders, but it may be used with prospective investors
when preceded or accompanied by a current Prospectus, which sets forth details
about charges, expenses, investment objectives and operating policies of each
Fund. Summary investment results are documented in the Funds' current Statement
of Additional Information. The figures in this report represent past results
which are not a guarantee of future results. The return and principal value of
an investment in each Fund will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
BOARD
- ------------------------------------------
MEMBERS
- ------------------------------------------
WAYNE A. STORK
Chairman, Delaware Group of Funds
Philadelphia, PA
WALTER P. BABICH
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
ANTHONY D. KNERR
Consultant, Anthony Knerr & Associates
New York, NY
ANN R. LEVEN
Treasurer, National Gallery of Art
Washington, DC
W. THACHER LONGSTRETH
Vice Chairman, Packquisition Corp.
Philadelphia, PA
CHARLES E. PECK
Secretary of Enterprise Homes, Inc.
Fredericksburg, VA
former Chairman and CEO
The Ryland Group, Inc.
Columbia, MD
AFFILIATED
- ------------------------------------------
OFFICERS
- ------------------------------------------
GEORGE M. CHAMBERLAIN, JR.
Senior Vice President and Secretary,
Delaware Group of Funds
Philadelphia, PA
KEITH E. MITCHELL
President and CEO,
Delaware Distributors, L.P.
Philadelphia, PA
DAVID K. DOWNES
Senior Vice President, Chief Financial Officer and
Chief Administrative Officer
Delaware Group of Funds
Philadelphia, PA
<PAGE> 32
DELAWARE GROUP
- ------------------------
OF FUNDS
- ------------------------
FOR GROWTH OF CAPITAL
Trend Fund
DelCap Fund
Value Fund
FOR TOTAL RETURN
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
Delaware Fund
FOR GLOBAL DIVERSIFICATION
International Equity Fund
Global Assets Fund
Global Bond Fund
FOR CURRENT INCOME
Delchester Fund
U.S. Government Fund
Limited-Term Government Fund
FOR TAX-FREE CURRENT INCOME
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
Tax-Free Pennsylvania Fund
MONEY MARKET FUNDS
Delaware Cash Reserve
U.S. Government Money Fund
Tax-Free Money Fund
CLOSED-END EQUITY/INCOME*
Dividend and Income Fund
Global Dividend and Income Fund
This report must be preceded or accompanied by a current Decatur Fund
prospectus and the Delaware Group Fund Performance Update for the most recently
completed calendar quarter. For a prospectus of any other Delaware Group fund,
contact your financial adviser or Delaware Group.
* Delaware Group Dividend and Income Fund and Delaware Group Global Dividend
and Income Fund purchases can be made through any registered broker.
DELAWARE
GROUP
- ---------------------
Philadelphia - London
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Fund are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
are not obligations of or deposits of any bank or any credit union, and involve
investment risk, including the possible loss of principal. Shares of the Fund
are not bank or credit union deposits.
INVESTMENT MANAGER
Delaware Management Company, Inc.
Philadelphia
INTERNATIONAL AFFILIATE
Delaware International Advisers Ltd.
London
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia
1818 Market Street
Philadelphia, PA 19103-3682
Nationwide (800) 523-4640
SECURITIES DEALERS ONLY
Nationwide (800) 362-7500
(C) Delaware Distributors, L.P.
[RECYCLE LOGO] Printed in the U.S.A. on recycled paper.
AR-118[11/95]TKO1/96
