<PAGE>
Delaware Group
U.S. Government
Money Fund
Money-Market Fund
1997 Semi-Annual Report
professional management
service and guidance
goals
DELAWARE
GROUP
- --------
<PAGE>
- --------------------------------------------------------------------------------
July 11, 1997
Dear Shareholder:
U.S. Government Money Fund A Class and Consultant Class provided a total return
of +2.39% with dividends reinvested for the six months ended June 30, 1997. The
seven-day annualized SEC yield for both classes was 4.96% while the average
effective maturity of securities in the Fund's portfolio was 32 days.
Solid economic growth, low unemployment, corporate growth and rising
consumer confidence have characterized this year's first half. Despite these
signs of a booming economy, inflation has remained surprisingly quiescent.
Money funds, such as U.S. Government Money Fund, are among the few
types of investments that stand to benefit from a rising rate environment
because their yields can increase with a step-up in short-term rates. We
believe your Fund is well-positioned to maintain high-liquidity and
capitalize on any potential rise in interest rates.
With moderate economic growth, the Fund will pursue a slightly longer
average maturity in an effort to improve yield. If economic growth appears
toaccelerate, management will favor securities with shorter maturities. This
will allow the Fund to offer the higher yields associated with an expanding
economy.
U.S. Government Money Fund is not designed for long-term growth. It
can, however, be a sensible place to hold money for your short-term reserves.
Delaware Group does offer a wide range of mutual funds to help you meet your
long-range investment objectives. Your financial adviser can help you
determine which of these may be best suited to help you attain your long-term
goals.
Thank you for investing with Delaware Group.
Sincerely,
/s/ Wayne A. Stork
- -----------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
As of June 30, 1997, the average annual rates of return for the lifetime, 10-,
five-, and one-year periods and six-month aggregate return for U.S. Government
Money Fund A Class were +5.94%, +4.95%, +3.59%, +4.84% and +2.39%, respectively,
with distributions reinvested. Returns for the Consultant Class were +5.93%,
+4.89%, +3.59%, +4.84% and +2.39%, respectively, with distributions reinvested.
An expense limitation of 0.70% has been in effect since January 1996. Returns
would have been lower had the expense limitation not been in effect.
2 1 9 9 7 s e m i - a n n u a l r e p o r t
<PAGE>
Fiancial Statements
Delaware Group Limited-Term Government Fund, Inc. -
U.S. Government Money Fund
Statement of Net Assets -
June 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
Principal
Amount Value
---------------------------
FEDERAL AGENCY
DISCOUNT NOTES - 77.82%
Federal Farm Credit Bank
5.43% 09/18/97 ................................ $ 80,000 $ 79,047
Federal Home Loan Bank
5.50% 07/14/97 ................................ 525,000 523,948
Federal Home Loan Bank
5.54% 08/07/97 ................................ 1,500,000 1,491,467
Federal Home Loan Bank
5.52% 10/10/97 ................................ 500,000 492,257
Federal Home Loan Bank
5.56% 08/25/97 ................................ 715,000 708,926
Federal Home Loan Mortgage Corporation
5.52% 07/18/97 ................................ 265,000 264,309
Federal Home Loan Mortgage Corporation
5.44% 9/16/97 ................................. 500,000 494,182
Federal National Mortgage Association
5.53% 07/02/97 ................................ 510,000 509,922
Federal National Mortgage Association
5.53% 07/09/97 ................................ 520,000 519,361
Federal National Mortgage Association
5.49% 07/10/97 ................................ 1,000,000 998,628
Federal National Mortgage Association
5.48% 07/17/97 ................................ 1,000,000 997,564
Federal National Mortgage Association
5.51% 07/18/97 ................................ 2,175,000 2,169,350
Federal National Mortgage Association
5.49% 07/22/97 ................................ 1,380,000 1,375,581
Federal National Mortgage Association
5.26% 07/28/97 ................................ 870,000 866,568
Federal National Mortgage Association
5.53% 08/13/97 ................................ 1,000,000 993,395
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Total Federal Agency Discount Notes 12,484,505
-----------
*FLOATING RATE NOTES - 14.02%
Federal Farm Credit Bank
5.55% 08/20/97 ................................ 1,000,000 999,625
Student Loan Marketing Association
5.32% 08/04/97 ................................ 500,000 499,813
Student Loan Marketing Association
5.28% 10/03/97 ................................ 750,000 749,888
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Total Floating Rate Notes 2,249,326
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<PAGE>
Fiancial Statements
Delaware Group Limited-Term Government Fund, Inc. -
U.S. Government Money Fund
Statement of Net Assets -
June 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
Principal
Amount Value
---------------------------
REPURCHASE AGREEMENTS - 7.33%
With Chase Manhattan 5.80% 7/1/97
(dated 6/30/97, collaterized by
$243,000 U.S. Treasury Notes
5.375% due 11/30/97, market value
$244,262 and $170,000 U.S. Treasury Notes
5.375% due 11/30/97, market value
$170,886) ..................................... $406,000 $ 406,000
With Morgan, (J.P.) Securities 5.95% 7/1/97
(dated 6/30/97, collaterized by
$243,000 U.S. Treasury Notes
5.125% due 4/30/98, market value
$244,345 and $148,000 U.S.
Treasury Notes 5.125% due 4/30/98,
market value $148,933) ........................ 385,000 385,000
With PaineWebber 5.80% 7/1/97
(dated 6/30/97, collaterized by
$132,000 U.S. Treasury Notes
7.25% due 2/15/98, market value
$140,303 and $243,000 U.S.
Treasury Notes 9.125% due 5/15/99,
market value $252,207) ........................ 385,000 385,000
----------
Total Repurchase Agreements .................... 1,176,000
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TOTAL MARKET VALUE OF SECURITIES OWNED - 99.18%
(WHICH APPROXIMATES COST FOR FINANCIAL REPORTING
AND INCOME TAX PURPOSES) ...................... 15,909,831
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 0.82% ........................... 132,036
-----------
NET ASSETS APPLICABLE TO 15,605,139 U.S. GOVERNMENT
MONEY FUND A CLASS SHARES AND 436,728 U.S.
GOVERNMENT MONEY FUND CONSULTANT CLASS SHARES
($0.001 PAR VALUE) OUTSTANDING; 1,000,000,000
SHARES AUTHORIZED EQUIVALENT TO $1.00 PER
SHARE - 100.00% ............................... $16,041,867
===========
- -----------------
* Floating Rate Notes - The interest rate shown is the rate as of June 30, 1997
and the maturity shown is the longer of the next interest readjustment date
or the date the principal amount shown can be recovered through demand.
See accompanying notes
1 9 9 7 s e m i - a n n u a l r e p o r t 3
<PAGE>
Delaware Group
Limited Term
Government Funds, Inc. -
U.S. Government Money Fund
Statement of Operations
June 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest ....................................... $446,072
EXPENSES:
Dividend disbursing and transfer agent fees
and expenses .................................. 42,227
Management fees ($38,790) and directors
fees ($1,877) ................................. 40,667
Registration fees .............................. 17,284
Reports and statements to shareholders ......... 5,675
Professional fees .............................. 2,372
Accounting fees and salaries ................... 1,312
--------
109,537
Less expenses absorbed by
Delaware Management Company, Inc............... (52,635) 56,902
-------- --------
NET INVESTMENT INCOME .......................... $389,170
--------
See accompanying notes
<PAGE>
Delaware Group
Limited-Term
Government Funds, Inc. -
U.S. Government Money Funds
Statement of Changes In Net Assets
- --------------------------------------------------------------------------------
For the
Six Months
Ended
6/30/97 Year Ended
(Unaudited) 12/31/96
-----------------------------
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income .......................... $ 389,170 $ 745,871
------------ -----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
A Class ....................................... (371,742) (721,027)
Consultant Class .............................. (17,428) (24,844)
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(389,170) (745,871)
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CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ....................................... 21,005,640 25,564,845
Consultant Class .............................. 240,982 581,297
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class ....................................... 355,456 694,448
Consultant Class .............................. 10,189 17,385
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21,612,267 26,857,975
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Cost of shares repurchased:
A Class ....................................... (20,838,318) (24,963,369)
Consultant Class .............................. (244,919) (497,272)
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(21,083,237) (25,460,641)
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Increase in assets derived from capital
share transactions ............................ 529,030 1,397,334
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NET INCREASE IN NET ASSETS ..................... 529,030 1,397,334
NET ASSETS:
Beginning of period ............................ 15,512,837 14,115,503
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End of period .................................. $16,041,867 $15,512,837
============ ===========
See accompanying notes
4 1 9 9 7 s e m i - a n n u a l r e p o r t
<PAGE>
Delaware Group
Limited-Term Government Funds, Inc. -
U.S. Government Money Fund
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
U.S. Government Money Fund A Class
--------------------------------------------------------------------------
Six Months
Ended Year Ended
6/30/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
(Unaudited)(1)
<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 ............................ 0.0237 0.0466 0.0448 0.0289 0.0200 0.0308
------- ------- ------- ------- ------- -------
Net increase in net assets from
investment operations ........................... 0.0237 0.0466 0.0448 0.0289 0.0200 0.0308
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............. (0.0237) (0.0466) (0.0448) (0.0289) (0.0200) (0.0308)
------- ------- ------- ------- ------- -------
Total dividends and distributions ................ (0.0237) (0.0466) (0.0448) (0.0289) (0.0200) (0.0308)
------- ------- ------- ------- ------- -------
Net asset value, end of period .................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total return ...................................... 2.39% 4.76% 4.57% 2.93% 2.01% 3.13%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......... $15,605 $15,082 $13,787 $17,119 $20,919 $41,049
Ratio of expenses to average net assets(2) ....... 0.70% 0.74% 1.39% 1.26% 1.04% 0.91%
Ratio of net investment income to average
net assets(3).................................... 4.78% 4.66% 4.45% 2.91% 2.06% 3.11%
</TABLE>
- ------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Ratio of expenses to average net assets prior to expense limitation was
1.35% for the six months ended June 30, 1997, and 1.22% for the year ended
December 31, 1996.
(3) Ratio of net investment income to average net assets prior to expense
limitation was 4.14% for six months ended June 30, 1997, and 4.18% for the
year ended December 31, 1996.
See accompanying notes
1 9 9 7 s e m i - a n n u a l r e p o r t 5
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
U.S. Government Money Fund Consultant Class
--------------------------------------------------------------------------
Six Months
Ended Year Ended
6/30/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
(Unaudited)(1)
<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 .............................. 0.0237 0.0466 0.0448 0.0289 0.0200 0.0308
------- ------- ------- ------- ------- -------
Net increase in net assets from
investment operations ............................. 0.0237 0.0466 0.0448 0.0289 0.0200 0.0308
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.0237) (0.0466) (0.0448) (0.0289) (0.0200) (0.0308)
------- ------- ------- ------- ------- -------
Total dividends and distributions .................. (0.0237) (0.0466) (0.0448) (0.0289) (0.0200) (0.0308)
------- ------- ------- ------- ------- -------
Net asset value, end of period ...................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total return ........................................ 2.39% 4.76% 4.57% 2.93% 2.01% 3.13%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $437 $431 $329 $1,077 $555 $747
Ratio of expenses to average net assets(2) ......... 0.70% 0.74% 1.39% 1.26% 1.04% 0.91%
Ratio of net investment income to average
net assets(3) ..................................... 4.78% 4.66% 4.45% 2.91% 2.06% 3.11%
</TABLE>
- -------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Ratio of expenses to average net assets prior to expense limitation was
1.35% for the six months ended June 30, 1997, and 1.22% for the year ended
December 31, 1996.
(3) Ratio of net investment income to average net assets prior to expense
limitation was 4.14% for six months ended June 30, 1997, and 4.18% for the
year ended December 31, 1996.
See accompanying notes
6 1 9 9 7 s e m i - a n n u a l r e p o r t
<PAGE>
Delaware Group
Limited-Term Goverment Fund, Inc. -
U.S. Government Money Fund
Notes To Financial Statements -
June 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
Delaware Group Limited-Term Government Funds, Inc. - U.S. Government Money
Fund, (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 investment objective of the U.S. Government Money Fund is to seek maximum
current income, while preserving principal and maintaining liquidity.
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 - Money market instruments having less than 60 days to
maturity 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. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
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.
Repurchase Agreements - The 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 Fund's custodian bank until the maturity of the respective
repurchase agreements. Each repurchase agreement is at least 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.
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.
Interest income is recorded on the accrual basis. Original issue discounts
are accreted to interest income over the lives of the respective securities.
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.
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.
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. 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 unaffiliated directors.
<PAGE>
- --------------------------------------------------------------------------------
DMC has elected to waive that portion if any of the management fee and
reimburse the Fund to the extent that annual operating expenses exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, exceed 0.70%
of average daily net assets of the Fund through January 31, 1998. Total
expenses absorbed by DMC for the six months ended June 30, 1997 were $52,635.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of
DMC, to serve as dividend disbursing and transfer agent for the Fund. Effective
August 19, 1996, the Fund also engaged DSC to provide accounting services for
the Fund. Previously, fund personnel provided this service and the related
costs were recorded in salaries and other expense categories in the statement
of operations. For the six months ended June 30, 1997, the Fund expensed
$42,227 for dividend disbursing and transfer agent services and $2,604
for accounting services. At June 30, 1997, the Fund had a liability for such
fees and other expenses payable to DSC for $1,290.
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 Consultant Class.
Effective June1, 1990, 12b-1 Plan payments from the Consultant Class 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 stock were as follows:
Six Months Year Ended
Ended 6/30/97 12/31/96
------------- ----------
Shares sold:
A Class .................................. 21,005,640 25,564,845
Consultant Class ......................... 240,982 581,297
Shares issued upon reinvestment of
dividends from net investment income:
A Class .................................. 355,456 694,448
Consultant Class ......................... 10,189 17,385
---------- -----------
21,612,267 26,857,975
---------- -----------
Shares repurchased:
A Class .................................. (20,838,318) (24,963,369)
Consultant Class ......................... (244,919) (497,272)
----------- -----------
(21,083,237) (25,460,641)
----------- -----------
Net Increase .............................. 529,030 1,397,334
=========== ===========
1 9 9 7 s e m i - a n n u a l r e p o r t 7
<PAGE>
This Semi-Annual Report is for the information of U.S. Government Money Fund
shareholders, but it may be used with prospective investors when preceded or
accompanied by a current Prospectus for U.S. Government Money Fund, 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 which can be obtained by calling the
adjacent telephone number for shareholders. 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
Money market funds strive to maintain a net asset value of $1 a share. However,
there is no guarantee this goal will be met. Yields and return fluctuate with
market conditions. The Fund is neither insured nor guaranteed by the U.S.
Government.
DELAWARE
GROUP
- --------
Philadelphia o 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, and involve investment risk, including the possible loss of
the principal amount invested. Shares of the Fund are not bank or credit
union deposits.
(copyright) Delaware Distributors, L.P.
Printed in the USA on recycled paper
(96)
SA-005 [6/97] PP8/97
