<PAGE>
Money Market Fund
DELAWARE GROUP
Tax-Free Money Fund
1997
Semi-Annual Report
professional management
service and guidance
goals
<PAGE>
NOVEMBER 10, 1997
Dear Shareholder:
Tax Free Money Fund A and Consultant Classes provided a total return of
+1.46% for the six months ended October 31, 1997. The seven-day annualized
yield for both share classes was 2.93% while the average maturity of
securities in the Fund's portfolio was 58 days.
Over the last six months, the economy has continued to expand while
inflation remained in check. Even the market volatility at the end of
October has not seriously dampened the bullish outlook for the U.S. economy.
In fact, Federal Reserve Chairman Alan Greenspan implied this fall
that market volatility might prolong economic growth by keeping inflation
under control and the Federal Reserve Board from raising interest rates.
Uncertain times generally benefited fixed-income markets as some investors
sought to reduce their portfolios'
risk profiles.
Tax-Free Money Fund is not designed for long-term investors, but has
the potential to be a safer haven than some other investments as you and your
financial adviser formulate a long-term investment plan.
In managing the Fund, we continue to study the economy and monitor
opportunities in an effort to provide you with a competitive level of
tax-exempt income while attempting to preserve principal.
For your longer term needs, Delaware Group offers a wide range of
investment options, including a Tax-Efficient Equity Fund, single-state and
national municipal bond funds and variable annuities. With the proper
guidance, you can select those that are most suitable to help you attain your
long-term investment goals.
Thank you for investing with Delaware Group.
Sincerely,
/s/ Wayne A. Stork
- -----------------------------
Wayne A. Stork
CHAIRMAN
/s/ Jeffrey J. Nick
- -----------------------------
Jeffrey J. Nick
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AVERAGE ANNUAL TOTAL RETURN THROUGH OCTOBER 31, 1997
<TABLE>
<CAPTION>
LIFETIME TEN YEARS FIVE YEARS ONE YEAR SIX MONTHS*
<S> <C> <C> <C> <C> <C>
A Class (Est. 9/17/81) +4.10% +3.44% +2.46% +2.88% +1.46%
Consultant Class (Est. 3/15/88) +4.06% +3.39% +2.46% +2.88% +1.46%
</TABLE>
*CUMULATIVE RETURN. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. RETURN
AND YIELD FLUCTUATE. ALL PERFORMANCE REFLECTS REINVESTMENT OF DIVIDENDS. THE
FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT BUT DOES STRIVE TO
MAINTAIN A NET ASSET VALUE OF $1 A SHARE. HOWEVER, THERE IS NO GUARANTEE THAT
THE FUND WILL BE ABLE TO DO SO. COMPLETE INFORMATION ON ANY DELAWARE GROUP FUND
CAN BE FOUND IN EACH FUND'S CURRENT PROSPECTUS. PROSPECTUSES FOR ALL DELAWARE
GROUP FUNDS ARE AVAILABLE FROM YOUR FINANCIAL ADVISER. PLEASE READ THE
PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
2 1997 SEMI-ANNUAL REPORT
<PAGE>
Financial Statements
DELAWARE GROUP TAX-FREE MONEY FUND, INC. --
STATEMENT OF NET ASSETS
OCTOBER 31, 1997
(UNAUDITED)
PRINCIPAL MARKET
AMOUNT VALUE
---------- ---------
(+) VARIABLE RATE DEMAND NOTES - 78.98%
Allegheny County, Pennsylvania Hospital
Development Authority Revenue (Presbyterian
University Hospital) Series D
3.60% 11/1/97 .................................. $ 300,000 $ 300,000
Allegheny County, Pennsylvania Industrial
Development Authority-Longwood AT
Oakmont-97D 3.85% 11/1/97 ...................... 1,600,000 1,600,000
Allegheny County, Pennsylvania Presbyterian
Hospital 3.60% 11/1/97 ......................... 300,000 300,000
Allegheny County, Pennsylvania Presbyterian
Hospital 3.60% 11/1/97 ......................... 400,000 400,000
Allegheny County, Pennsylvania-Series C-41
3.70% 11/1/97 .................................. 400,000 400,000
Broward County, Florida Housing Finance
Authority 3.70% 11/1/97 ........................ 1,500,000 1,500,000
Burke County Georgia Pollution Control
Revenue 3.90% 11/1/97 .......................... 1,000,000 1,000,000
Chester County, Pennsylvania-Philadelphia
Archdiocese 3.95% 11/1/97 ...................... 1,500,000 1,500,000
GA MEAG 3.75% 11/1/97 ........................... 1,500,000 1,500,000
Harrisburg, Pennsylvania Authority Revenue-Pool
Financing Fund 3.85% 11/1/97 ................... 1,700,000 1,700,000
Lynchburg, Virginia Industrial Development
Authority (AMBAC) 3.75% 11/7/97 ................ 1,000,000 1,000,000
Massachusetts State Health & Education
Facilities-Series 85B 3.30% 11/1/97 ............ 300,000 300,000
Montgomery County, Maryland Housing
Opportunities (LOC, CG Life)
3.75% 11/7/97 .................................. 1,600,000 1,600,000
Montgomery County, Pennsylvania Industrial
Development Authority (LOC, Morgan
Guaranty Trust Company) 3.70% 11/1/97 .......... 1,400,000 1,400,000
New York City UBS 3.90% 11/15/97 ................ 1,300,000 1,300,000
New York City Water FGIC 3.90% 11/15/97 ......... 900,000 900,000
Ohio Housing Finance Agency Multifamily
Housing Revenue (LOC, Swiss Bank)
3.65% 11/1/97 .................................. 1,000,000 1,000,000
Pittsburgh, Pennsylvania Urban Development
Authority (Wood Street Commons)
4.25% 11/1/97 .................................. 1,205,000 1,205,000
Port of Seattle, Washington 97-CIBC/AMT
3.75% 11/7/97 .................................. 1,700,000 1,700,000
Red River, Texas PCR-SWPS UBS
3.65% 11/7/97 .................................. 300,000 300,000
Sayre, Pennsylvania Health Care Facilities
Authority Revenue (AMBAC)
3.70% 11/7/97 .................................. 800,000 800,000
Vermont Educational & Health Buildings
Financing Agency Revenue (VHA New England
Inc.- Series A, AMBAC) 3.75% 11/7/97 ........... 400,000 400,000
Vermont Educational & Health Buildings
Financing Agency Revenue (VHA New England
Inc.-Series B, AMBAC) 3.75% 11/7/97 ............ 500,000 500,000
Vermont Educational & Health Buildings
Financing Agency Revenue (VHA New England
Inc.-Series D, AMBAC) 3.75% 11/7/97 ............ 600,000 600,000
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ---------
VARIABLE RATE DEMAND NOTES (CONTINUED)
Washington County, Pennsylvania Eye/Ear
3.60% 11/1/97 .................................. $1,310,000 $ 1,310,000
Winston Salem (North Carolina Certificates of
Participation, LOC, Credit Suisse)
3.70% 11/1/97 .................................. 1,650,000 1,650,000
-----------
Total Variable Rate Demand Notes ................ 26,165,000
-----------
MUNICIPAL BONDS - 4.98%
Allegheny County, Pennsylvania Hospital
Development Authority (Health Center-University
of Pittsburgh-Series A) 3.90% 4/1/98 ........... 750,000 750,000
Chicago, Illinois GO-97 3.90% 1/1/98 ............ 225,000 225,000
Sparks, Nevada Redevelopment Agency-Tax
Allocation Revenue 3.90% 1/15/98 ............... 675,000 675,000
-----------
Total Municipal Bonds ........................... 1,650,000
-----------
(++) PUT BONDS - 4.83%
New Hampshire Higher Education-Dartmouth
3.90% 6/1/23 ................................... 800,000 800,000
New Hampshire Higher Educational & Health
Facilities Authority Revenue
(Dartmouth Educational) 4.10% 6/1/11 ........... 800,000 800,000
-----------
Total Put Bonds ................................. 1,600,000
-----------
COMMERCIAL PAPER - 3.02%
Independence MO WTR CP-WDL
3.70% 12/12/97 ................................. 1,000,000 1,000,000
-----------
Total Commercial Paper .......................... 1,000,000
-----------
OTHER NOTES - 7.56%
Iowa State School Cash Anticipation Program
Warrants-Series B 4.25% 1/30/98 ................ 1,500,000 1,502,138
Temple University of The Commonwealth
System of Higher Education, Pennsylvania
(University Funding Obligations)
4.75% 5/18/98 .................................. 1,000,000 1,004,433
-----------
Total Other Notes ............................... 2,506,571
-----------
TOTAL MARKET VALUE OF SECURITIES - 99.37%
(cost $32,921,571) ............................. 32,921,571
RECEIVABLES AND OTHER ASSETS NET
OF LIABILITIES - 0.63% ......................... 208,756
-----------
NET ASSETS APPLICABLE TO 30,188,327
TAX-FREE MONEY FUND A CLASS SHARES
AND 2,942,000 CONSULTANT CLASS SHARES
OUTSTANDING; EQUIVALENT TO $1.00
PER SHARE - 100% ............................... $33,130,327
===========
- ---------------
(+) The Maturity date shown is the longer of the next interest reset date or
the date in which the principal can be recovered through demand.
(++) Put Bonds - the maturity date shown is the same as the put date.
See accompanying notes
1997 SEMI-ANNUAL REPORT 3
<PAGE>
DELAWARE GROUP
TAX-FREE MONEY FUND, INC. --
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS
ENDED OCTOBER 31, 1997
(UNAUDITED)
INVESTMENT INCOME:
Interest ............................... $651,646
EXPENSES:
Management fees ........................ $83,462
Dividend disbursing and transfer
agent fees and expenses ............... 34,115
Registration fees ...................... 9,052
Accounting fees and salaries ........... 9,046
Reports and statements to shareholders.. 4,782
Directors' fees ........................ 3,215
Taxes (other than taxes on income) ..... 1,500
Professional fees ...................... 549 145,721
--------
NET INVESTMENT INCOME .................. $505,925
========
See accompanying notes
DELAWARE GROUP
TAX-FREE MONEY FUND, INC. --
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR
SIX MONTHS ENDED ENDED
10/31/97 4/30/97
(UNAUDITED)
----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ................. $ 505,925 $ 976,478
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
Tax-Free Money Fund A Class .......... (469,624) (935,545)
Tax-Free Money Fund Consultant Class . (36,301) (40,933)
----------- -----------
(505,925) (976,478)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Tax-Free Money Fund A Class .......... 11,869,378 33,819,386
Tax-Free Money Fund Consultant Class . 2,560,434 1,911,756
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
Tax-Free Money Fund A Class .......... 371,657 898,384
Tax-Free Money Fund Consultant Class . 28,713 40,638
----------- -----------
14,830,182 36,670,164
----------- -----------
Cost of shares repurchased:
Tax-Free Money Fund A Class .......... (14,711,858) (37,537,625)
Tax-Free Money Fund Consultant Class . (1,176,478) (1,875,259)
----------- -----------
(15,888,336) (39,412,884)
----------- -----------
Decrease in net assets derived from
capital share transactions ........... (1,058,154) (2,742,720)
----------- -----------
NET DECREASE IN NET ASSETS ............ (1,058,154) (2,742,720)
NET ASSETS:
Beginning of period ................... 34,188,481 36,931,201
----------- -----------
End of period ......................... $33,130,327 $34,188,481
=========== ===========
See accompanying notes
4 1997 SEMI-ANNUAL REPORT
<PAGE>
DELAWARE GROUP TAX-FREE MONEY FUND, INC. -
FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE MONEY FUND A CLASS
-------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/97 4/30/97 4/30/96 4/30/95 4/30/94 4/30/93
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income from investment operations:
Net investment income .................................. 0.0146 0.0275 0.0293 0.0255 0.0158 0.0201
------- ------- ------- ------- ------- -------
Net increase in net assets from investment operations .. 0.0146 0.0275 0.0293 0.0255 0.0158 0.0201
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................... (0.0146) (0.0275) (0.0293) (0.0255) (0.0158) (0.0201)
------- ------- ------- ------- ------- -------
Total dividends and distributions ...................... (0.0146) (0.0275) (0.0293) (0.0255) (0.0158) (0.0201)
------- ------- ------- ------- ------- -------
Net asset value, end of period ........................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total Return(1)........................................... 1.46% 2.97% 2.97% 2.59% 1.59% 2.03%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $30,188 $32,659 $35,479 $54,444 $44,707 $43,886
Ratio of expenses to average net assets (1) ............ 0.84% 0.82% 0.90% 0.96% 0.99% 0.94%
Ratio of net investment income
to average net assets (1) ............................. 2.92% 2.75% 2.95% 2.57% 1.58% 2.03%
</TABLE>
- -------------------
(1) Ratios have been annualized and total return has not been annualized.
See accompanying notes
1997 SEMI-ANNUAL REPORT 5
<PAGE>
FINANCIALL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE MONEY FUND CONSULTANT CLASS
-------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/97 4/30/97 4/30/96 4/30/95 4/30/94 4/30/93
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income from investment operations:
Net investment income .................................. 0.0146 0.0275 0.0293 0.0255 0.0158 0.0201
------- ------- ------- ------- ------- -------
Net increase in net assets from investment operations .. 0.0146 0.0275 0.0293 0.0255 0.0158 0.0201
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................... (0.0146) (0.0275) (0.0293) (0.0255) (0.0158) (0.0201)
------- ------- ------- ------- ------- -------
Total dividends and distributions ...................... (0.0146) (0.0275) (0.0293) (0.0255) (0.0158) (0.0201)
------- ------- ------- ------- ------- -------
Net asset value, end of period ........................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total Return (1) ......................................... 1.46% 2.79% 2.97% 2.59% 1.59% 2.03%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $2,942 $1,529 $1,452 $1,614 $1,407 $1,846
Ratio of expenses to average net assets (1) ............ 0.84% 0.82% 0.90% 0.96% 0.99% 0.94%
Ratio of net investment income to average net assets (1) 2.92% 2.75% 2.95% 2.57% 1.58% 2.03%
- --------------------
(1) Ratios have been annualized and total return has not been annualized.
</TABLE>
See accompanying notes
6 1997 SEMI-ANNUAL REPORT
<PAGE>
DELAWARE GROUP TAX-FREE MONEY FUND, INC. -
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997
(UNAUDITED)
Delaware Group Tax-Free Money Fund, Inc. - ("the Fund") is registered as a
diversified open-end investment company under the Investment Company Act of
1940, as amended. The Fund is organized as a Maryland corporation and offers
two classes of shares, The Tax-Free Money Class A and The Tax-Free Money
Consultant Class. Neither class has a sales charge.
The investment objective of the Tax-Free Money Fund is to seek maximum
current income, exempt from federal income tax, while preserving principal
and maintaining liquidity consistent with prudent investment management.
Though there is no guarantee that this goal will be met, the Fund strives to
maintain a stable net asset value of $1.00.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund:
Security Valuation - Securities are valued at amortized cost which approximates
market value.
Federal Income Taxes - The 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 has been made in the
financial statements.
Class Accounting - Investment income and common expenses are allocated to the
various classes of the Fund on the basis of daily net assets of each class.
Distribution expenses relating to a specific class are charged directly to
that class.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Other - Expenses common to all Funds within the Delaware 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. Original
issue discounts are accreted to interest income over the lives of the respective
securities. The Fund declares dividends daily from net investment income and
pays such dividends monthly. Realized gains, if any, will be distributed
annually.
Certain Fund expenses are paid through "soft dollar" arrangements with
brokers. The amount of these expenses is less than 0.01% of the Fund's
average daily net assets.
<PAGE>
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company, Inc. (DMC), the investment manager of the
Fund, an annual fee which is calculated daily at the rate of 0.50% on the
average daily net assets of the Fund less the fees paid to the independent
directors. At October 31, 1997, the Fund had a liability for investment
management fees and other expenses payable to DMC of $1,146.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of
DMC, to serve as dividend disbursing and transfer agent for the Fund. For the
six months ended October 31, 1997, the Fund expensed $34,115 for dividend
disbursing and transfer agent services and $6,497 for accounting services. At
October 31, 1997, the Fund had a liability for such fees and other expenses
payable to DSC for $6,441.
Pursuant to the Distribution Agreement, the Fund may pay Delaware
Distributors, L.P. (DDLP), the Distributor and an affiliate of DMC, an annual
12b-1 fee not to exceed 0.30% of the average daily net assets of the Fund.
Effective June 1, 1990, 12b-1 Plan payments to DDLP were suspended but may be
reinstated in the future.
Certain officers of DMC, DSC and DDLP are officers, directors and/or
employees of the Fund. These officers, directors and employees are paid no
compensation by the Fund.
3. Capital Stock
Transactions in capital shares of the Fund were as follows:
SIX MONTHS YEAR
ENDED ENDED
10/31/97 4/30/97
---------- ----------
Shares sold:
Tax-Free Money Fund A Class ................. 11,869,378 33,819,386
Tax-Free Money Fund Consultant Class ........ 2,560,434 1,911,756
Shares issued upon reinvestment of dividends
from net investment income:
Tax-Free Money Fund A Class ................. 371,657 898,384
Tax-Free Money Fund Consultant Class ........ 28,713 40,638
----------- -----------
14,830,182 36,670,164
----------- -----------
Shares repurchased:
Tax-Free Money Fund A Class ................. (14,711,858) (37,537,625)
Tax-Free Money Fund Consultant Class ........ (1,176,478) (1,875,259)
----------- -----------
(15,888,336) (39,412,884)
----------- -----------
Net decrease ................................. (1,058,154) (2,742,720)
----------- -----------
4. Concentration of Credit Risk
The Fund concentrates its investments in securities issued by municipalities.
The value of these investments may be adversely affected by legislation
within the states, regional or local economic conditions, and differing
levels of supply and demand for municipal bonds. Many municipalities insure
repayment of their obligations. Although bond insurance reduces the risk of
loss due to default by an issuer, such bonds remain subject to the risk that
market value may fluctuate for other reasons and there is no assurance that
the insurance company will meet its obligations.
1997 SEMI-ANNUAL REPORT 7
<PAGE>
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF DELAWARE TAX-FREE MONEY
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 THE
FUND. YOU SHOULD READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST. SUMMARY
INVESTMENT RESULTS ARE DOCUMENTED IN THE FUND'S 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 THE FUND WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
INVESTMENT MANAGER
Delaware Management Company, Inc.
Philadelphia
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
FOR SHAREHOLDERS
1.800.523.1918
FOR SECURITIES DEALERS
1.800.362.7500
FOR FINANCIAL INSTITUTIONS
REPRESENTATIVES
1.800.659.2265
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, and involve investment risk, including the possible loss of the
principal amount invested. Shares of the Fund are not bank or credit union
deposits.
Copy Rights Delaware Distributors, L.P.
DELAWARE
GROUP
- --------
Philadelphia o London
Printed in the USA on
recycled paper
(383)
SA-006 [10/97] PP12/97
