<PAGE>
DELAWARE(SM)
INVESTMENTS Delaware Group Dividend and Income Fund
------------
Closed-End Income
[GRAPHIC OMITTED]
2000 SEMI-ANNUAL REPORT
[Closed-End Income Artwork]
<PAGE>
Table of Contents
-----------------
Letter to Shareholders 1
Portfolio Management
Review 2
Performance Summary 3
Financial Statements
Statement of Net Assets 4
Statement of Operations 8
Statements of Changes in
Net Assets 9
Statement of Cash Flows 10
Financial Highlights 11
Notes to Financial
Statements 12
Delaware Group
Dividend and Income
Fund's Objective
To provide high high current
income, and secondarily, capital
appreciation from U.S. stocks and
high-yield bonds. Asset class
concentration depends on the
portfolio managers' assessment of
each market's relative risks and rewards.
<PAGE>
A TRADITION OF SOUND INVESTING SINCE 1929
-----------------------------------------
A Commitment To Our Investors
Experienced
o Our seasoned investment professionals average more than 15 years' experience.
o We began managing investments in 1929 and opened our first mutual fund in
1938. For over the past 70 years, we have weathered a full range of economic
and market environments.
Disciplined
o We follow strict investment policies and clear buy/sell guidelines.
o We strive to balance risk and reward in order to provide sound investment
alternatives within any given asset class.
Consistent
o We clearly articulate our investment policies and follow them consistently.
o Our commitment to consistency has earned us the confidence of discriminating
institutional and individual investors to manage approximately $45 billion in
assets as of June 30, 2000.
Your Fund's Investment Strategies
U.S. Common Stocks with Above-Average Yields
The Fund's management focuses on stocks that pay high dividends relative to
their share price. Such high yields can point the Fund to strong companies whose
stocks have capital appreciation potential. The dividend income from these
stocks has the potential to add to total return.
Convertible Preferred Stocks and Bonds
The Fund invests in both convertible preferred stock and convertible bonds. Both
pay fixed rates of income, but because they can be converted into common stock,
they are indirectly tied to the common stock's performance. As a result,
convertible securities generally offer higher income than common stocks and an
opportunity for price appreciation when the value of the underlying security
rises. The Fund may buy convertibles when the underlying common stock offers
strong growth potential but a low yield.
High-Yield Corporate Bonds
High-yield bonds, those rated BB or lower, have greater default risk than bonds
with higher quality ratings, but provide a greater level of income to compensate
investors for the additional risks. Prices of high-yield bonds tend to be less
sensitive to changes in interest rates than higher rated bonds.
Leveraging
About $55 million (31%) of your Fund's assets were leveraged as of May 31, 2000.
Leveraging is a tool that is generally not available to open-end mutual funds
and one that can be an important contributor to your Fund's income and capital
appreciation. Of course, there is no guarantee that the Fund will achieve its
objective by using leveraging. Leveraging could result in a higher degree of
volatility because the Fund's net asset value could be more sensitive to
fluctuations in short-term interest rates and equity prices. We believe this
risk is reasonable given the potential benefits of higher income.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the
principal amount invested.
(C)Delaware Distributors, L.P.
<PAGE>
"YOUR FUND
OUTPERFORMED BOTH
THE S&P 500 Index
AND THE MERRILL
LYNCH HIGH-YIELD
BOND INDEX."
Dear Shareholder
July 10, 2000
Recap of Events - Over the past six months, record volatility dominated the U.S.
financial markets. As we started our fiscal period on December 1, 1999, market
performance was momentum-driven, with technology stocks providing the bulk of
performance. Technology stock euphoria pushed the Nasdaq Composite Index to a
string of record high closes. On December 29, the Nasdaq topped 4000 for the
first time. The same day, the Dow Jones Industrial Average and the Standard &
Poor's 500 Index also hit record highs.
Volatility was rampant during the first five months of 2000. Days of record
gains and losses, along with three Federal Reserve Board interest rate hikes,
left investors breathless. For much of the time, performance was dominated by a
narrow group of technology stocks, with the broader market, value investors and
bonds sitting on the sidelines. Growth was the order of the day.
Dividend-producing stocks and high-yield bonds were out of favor (Source:
Bloomberg).
In late March, the investment environment changed. Rising interest rates and
uncertainty as to whether the valuations of technology stocks were sustainable
triggered a sell-off in the technology area of the market. This, in turn, led to
a broadening of the market, as investors seemed to recognize the value in
so-called "old economy" stocks. However, this emphasis on "old economy" stocks
was short-lived. In April and May, investors rotated in and out of various
market sectors, and no single sector maintained leadership for very long.
Delaware Group Dividend and Income Fund produced solid performance over the
six-month period ended May 31, 2000, despite this unstable environment. The Fund
generated a 2.96% total return (shares at net asset value with distributions
reinvested) and continued to provide a very attractive level of income. Your
Fund outperformed both the Standard & Poor's 500 Index, which returned 2.90%,
and the Merrill Lynch High-Yield Bond Index, which posted a -2.07% return.
Market Outlook - As of this writing, the Fed's efforts to moderate economic
growth and cool the financial markets are showing signs of success. We believe
that as the economy slows, investors will place more emphasis on quality and
value, and will rediscover the attractive valuations that can be found in the
broader spectrum of exceptional companies. In our opinion, this should benefit
Delaware Group Dividend and Income Fund in the months ahead.
Sincerely,
/s/ Wayne A. Stork /s/ David K. Downes
------------------------------------ --------------------------------------
Wayne A. Stork David K. Downes
Chairman, President and Chief Executive Officer,
Delaware Investments Family of Funds Delaware Investments Family of Funds
Average Annual Total Return
<TABLE>
<CAPTION>
For Periods Ended May 31, 2000 Six Months Premium (+) / Discount (-)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Delaware Group Dividend and Income Fund +2.96% -7.22%
-------------------------------------------------------------------------------------------------------------------
Lipper Closed-End Income and Preferred Stock Funds Average (11 funds) -0.46%
Standard & Poor's 500 Index +2.90%
Merrill Lynch High-Yield Bond Index -2.07%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
All performance shown above is at net asset value and assumes reinvestment of
dividends and capital gains. Performance information for the Fund can be found
on page 3. The Lipper category represents the average returns of closed-end
income and preferred stock mutual funds tracked by Lipper Analytical (Source:
Lipper Analytical Services, Inc.). The S&P 500 Index is an unmanaged composite
of mostly large-capitalization U.S. companies. The Merrill Lynch High-Yield Bond
Index consists of domestic high-yield bonds with a quality range less than BBB.
You cannot invest directly in an index. Past performance does not guarantee
future results. The premium/discount reflects the Fund's price per share
relative to its net asset value (Source: Bloomberg).
1
<PAGE>
Michael Dugan
Senior Portfolio Manager
Delaware Management Company
Paul A. Matlack
Senior Portfolio Manager
Delaware Management Company
July 10, 2000
[GRAPHIC OMITTED]
[Closed-End Income Artwork]
PORTFOLIO MANAGEMENT REVIEW
---------------------------
The Fund's Results
Delaware Group Dividend and Income Fund continued to pursue its investment
objective of high current income by holding a mix of high dividend-paying stocks
and high-yielding corporate bonds. During the first three months of the period,
investors favored growth stocks, particularly those in the technology sector of
the market. However, a March sell-off in technology prompted many investors to
seek safe havens in market sectors that had been out of favor for some time. The
Real Estate Investment Trusts (REITs) and utility companies in the Fund
benefited from this renewed, but brief, emphasis on some of the more
value-oriented areas of the market. In April and May, investor enthusiasm for
value stocks dissipated, as strong volatility prevailed in all market sectors.
Portfolio Highlights
In the stock portion of the portfolio, we maintained our commitment to cyclical
stocks. Because cyclical stocks are economically sensitive, they tend to
underperform during periods when the Federal Reserve Board is aggressively
raising interest rates. As a result, the cyclical stocks in our portfolio held
back the Fund's total return. For example, our holdings in Alcan Aluminum, one
of the world's leading aluminum companies, and Caterpillar, the global leader of
construction and mining equipment, were disappointing for us due to the stocks'
cyclical nature. We continue to believe, however, that cyclical stocks deserve a
position in the portfolio. Our holdings in this sector have solid business
fundamentals. They are attractively priced, and we believe they have the
potential for strong gains once the Fed ends its cycle of interest rate hikes.
The Fund was well diversified among a number of economic sectors. The financial
services, telecommunications, utility, and commodity areas of the market were
well represented in the portfolio. The biggest contributions to the Fund's
positive performance came from relatively long-term portfolio holdings in REITs
and utility stocks. In the utilities sector, Dominon Resources, Duke Energy,
Southern Company and TXU produced the best results.
The orientation of the high-yield bond portion of the Fund was similar to that
of the stock portion. We emphasized high-yield securities in the industrial and
cyclical areas of the market. Unfortunately, high-yield bonds continued to be
negatively affected by reduced demand and lack of liquidity. In addition, over
the past year or so, there has been an increase in the number of defaults in the
high-yield market, as banks have begun cutting back lines of credit. Despite
these negatives, we believe there are good reasons for maintaining the Fund's
high-yield bond position. The high-yield bonds in the portfolio have provided
the Fund with an attractive level of income. In addition, we believe that once
interest rates stabilize, the low prices and high income potential of these
bonds will find favor with investors and will be advantageous for the Fund.
Outlook
Over the next several months, we believe rising interest rates may result in
continued market volatility. In our opinion, the market is looking for weaker
economic growth in the hope that the Fed will back away from its tight monetary
policy. While we expect a slowdown in the domestic economy to occur late in
2000, we believe that economic expansion in the rest of the world could produce
strong earnings surprises for many of the global companies in which the Fund
invests. A slower economy should broaden the market for value stocks and would
be positive for the high-yield sector of the bond market.
2
<PAGE>
FUND BASICS
-----------
Fund Objectives
The primary investment objective of
the Fund is to achieve high current
income. Capital appreciation is a
secondary objective.
Total Fund Assets
$179.28 million
Number of Holdings
174
Your Fund Management
Michael Dugan joined Delaware
Investments in May 1997 as a
portfolio manager. Mr. Dugan was
previously a senior portfolio
manager and research director at
Thompson, Siegel and Walmsley in
Richmond, VA.
Paul A. Matlack is a graduate of
the University of Pennsylvania and
received his MBA in Finance from
George Washington University.
Mr. Matlack is a CFA charterholder.
Fund Start Date
March 26, 1993
NASDAQ Symbol
DDF
<PAGE>
DELAWARE GROUP DIVIDEND AND INCOME
FUND PERFORMANCE
----------------
<TABLE>
<CAPTION>
Average Annual Total Returns
Through May 31, 2000 Lifetime Five Years One Year
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
At Market Price +6.28% +8.95% -16.49%
At Net Asset Value +8.08% +9.78% -9.07%
-----------------------------------------------------------------------------------------------
</TABLE>
Returns reflect reinvestment of distributions. Shares of the Fund were initially
offered with a sales charge of 6.0%. Performance since inception does not
include the sales charge or any brokerage commissions for purchases made since
inception. Past performance does not guarantee future results.
Market Price vs. Net Asset Value
November 30, 1999 to May 31, 2000
--------------------------------------------------------------------------------
Mkt Price NAV
"Nov. 99" $11.25 $13.00
"Dec. 99" $12.00 $12.94
"Jan. 00" $11.56 $12.68
"Feb. 00" $10.50 $11.81
"Mar. 00" $10.69 $12.42
"Apr. 00" $11.31 $12.53
"May 00" $11.63 $12.53
Source: Bloomberg Business News. Past performance does not guarantee future
results.
Your Fund's Buyback Program
Your Fund's Board of Directors approved a share repurchase program in 1994 that
authorizes Delaware Group Dividend and Income Fund's lead manager to purchase up
to 10% of the Fund's outstanding shares on the floor of the New York Stock
Exchange.
The Fund commenced a tender offer to purchase for cash up to 10% of its issued
and outstanding shares of common stock on June 1, 2000, which expired on June
29, 2000. The tender offer was oversubscribed and all tenders were subject to
proration (at a ratio of approximately 66.7%) in accordance with the terms of
the tender offer. Following the purchase of shares tendered, the Fund has
12,876,300 shares of common stock outstanding.
Your Reinvestment Options
Delaware Group Dividend and Income Fund offers an automatic dividend
reinvestment program. If you would like to reinvest dividends and shares are
registered in your name, contact ChaseMellon Investor Services at
1.800.851.9677. You will be asked to put your request in writing. If you have
shares registered in "street" name, contact the broker/dealer holding the shares
or your financial adviser.
3
<PAGE>
Statement of Net Assets
DELAWARE GROUP DIVIDEND AND INCOME FUND
---------------------------------------
Number of Market
May 31, 2000 (Unaudited) Shares Value
--------------------------------------------------------------------------------
Common Stock - 74.12%
Aerospace & Defense - 0.94%
Raytheon Class A .................................... 2,231 $ 52,568
*United Technologies ................................. 27,000 1,631,813
-----------
1,684,381
-----------
Automobiles & Auto Equipment - 1.72%
Dana ................................................ 50,000 1,290,625
Ford Motor .......................................... 37,000 1,796,813
-----------
3,087,438
-----------
Banking, Finance & Insurance - 11.04%
Block (H&R) ......................................... 22,000 679,250
Chase Manhattan ..................................... 16,000 1,195,000
Financial Security Assurance Holdings ............... 57,379 4,310,597
First Union ......................................... 55,000 1,935,313
Fleet Boston Financial .............................. 39,200 1,482,250
KeyCorp ............................................. 90,000 1,890,000
Mellon Financial .................................... 75,000 2,892,188
St. Paul ............................................ 60,000 2,250,000
Summit Bancorp ...................................... 55,000 1,577,813
Washington Mutual ................................... 55,045 1,582,544
-----------
19,794,955
-----------
Chemicals - 0.90%
Dow Chemical ........................................ 15,000 1,605,938
-----------
1,605,938
-----------
Computers & Technology - 1.46%
Pitney Bowes ........................................ 40,000 1,740,000
Xerox ............................................... 32,000 868,000
-----------
2,608,000
-----------
Consumer Products - 1.96%
Crown Cork & Seal ................................... 66,000 1,130,250
Eaton ............................................... 28,000 2,031,750
*Pactiv .............................................. 40,000 357,500
-----------
3,519,500
-----------
Electronics - 0.55%
Thomas & Betts ...................................... 35,000 993,125
-----------
993,125
-----------
Energy - 3.86%
Chevron ............................................. 28,000 2,588,250
Conoco Class B ...................................... 50,000 1,425,000
*EOG Resources ....................................... 50,000 1,625,000
Texaco .............................................. 22,200 1,275,113
-----------
6,913,363
-----------
Food, Beverage & Tobacco - 3.08%
Heinz (H.J.) ........................................ 40,000 1,567,500
Nabisco Group Holdings .............................. 49,000 1,068,813
Philip Morris ....................................... 40,000 1,045,000
RJ Reynolds Tobacco Holdings ........................ 66,333 1,840,741
-----------
5,522,054
-----------
<PAGE>
Number of Market
Shares Value
--------------------------------------------------------------------------------
Common Stock (continued)
Healthcare & Pharmaceuticals - 1.99%
*Abbott Labs ......................................... 50,900 $2,070,994
Bristol Myers Squibb ................................ 27,000 1,486,688
*LTC Healthcare ...................................... 2,903 2,903
----------
3,560,585
----------
Industrial Machinery - 1.88%
Caterpillar ......................................... 20,000 765,000
Deere & Co. ......................................... 45,000 1,870,313
Rockwell International .............................. 18,000 738,000
----------
3,373,313
----------
Media - 0.76%
*Gannett ............................................. 21,100 1,366,225
----------
1,366,225
----------
Metals & Mining - 2.53%
Alcoa ............................................... 25,000 1,460,938
Alcan Aluminum ...................................... 45,000 1,476,563
*Minnesota Mining & Manufacturing .................... 17,000 1,457,750
Rouge Industries Class A ............................ 30,200 135,900
----------
4,531,151
----------
Paper & Forest Products - 1.66%
Georgia-Pacific (Timber Group) ...................... 68,700 1,588,688
International Paper ................................. 40,000 1,392,500
----------
2,981,188
----------
Real Estate - 22.33%
AMB Property ........................................ 58,000 1,305,000
Apartment Investment & Management ................... 43,300 1,734,706
Arden Realty Group .................................. 45,000 1,035,000
Avalonbay Communities ............................... 37,500 1,490,625
Camden Property Trust ............................... 75,000 2,104,688
Capital Automotive .................................. 18,300 260,775
Chateau Communities ................................. 67,730 1,837,176
Duke Weeks Realty ................................... 96,000 2,070,000
Equity Office Properties Trust ...................... 55,000 1,460,938
Essex Property Trust ................................ 27,000 1,074,938
Franchise Finance ................................... 70,000 1,579,375
Golf Trust of America ............................... 56,000 913,500
Grove Property Trust ................................ 99,549 1,424,795
Health Care Property Investors ...................... 39,000 1,040,813
Healthcare Realty Trust ............................. 60,000 997,500
Liberty Property Trust .............................. 52,470 1,311,750
Macerich ............................................ 81,000 1,766,813
MeriStar Hospitality ................................ 40,000 760,000
Newhall Land & Farming .............................. 40,000 1,120,000
Pan Pacific Retail Properties ....................... 66,800 1,336,000
Pennsylvania Real Estate Investment Trust ........... 47,600 830,025
Philips International Realty ........................ 70,000 1,190,000
Prentiss Properties Trust ........................... 87,672 2,104,128
Public Storage ...................................... 74,000 1,651,125
4
<PAGE>
Statement of Net Assets (continued)
Number of Market
Delaware Group Dividend and Income Fund Shares Value
--------------------------------------------------------------------------------
Common Stock (continued)
Real Estate (continued)
Reckson Associates Realty ........................... 50,000 $ 1,096,875
Reckson Associates Realty Class B ................... 17,520 399,675
Simon Property Group ................................ 79,000 1,935,500
Spieker Properties .................................. 23,000 1,068,063
Starwood Hotels & Resorts Worldwide ................. 51,500 1,522,469
Sun Communities ..................................... 50,000 1,618,750
-----------
40,041,002
-----------
Telecommunications - 2.61%
*BellSouth ........................................... 37,000 1,727,438
GTE ................................................. 26,000 1,644,500
SBC Communications .................................. 30,000 1,310,625
-----------
4,682,563
-----------
Transportation & Shipping - 0.75%
Norfolk Southern .................................... 75,000 1,335,938
-----------
1,335,938
-----------
Utilities - 13.22%
American Electric Power ............................. 50,000 1,778,125
Central and South West .............................. 68,000 1,415,250
*Dominion Resources .................................. 25,000 1,143,750
Duke Energy ......................................... 60,000 3,495,000
General Public Utilities ............................ 60,000 1,695,000
Peco Energy ......................................... 30,000 1,318,125
RGS Energy Group .................................... 100,000 2,400,000
Reliant Energy ...................................... 100,000 2,850,000
Scottish Power ADR .................................. 22,040 706,658
Southern ............................................ 100,000 2,593,750
*TXU ................................................. 33,000 1,179,750
Unicom .............................................. 75,000 3,126,563
-----------
23,701,971
-----------
Miscellaneous - 0.88%
*Clorox .............................................. 40,000 1,585,000
-----------
1,585,000
-----------
Total Common Stock (cost $133,288,374) 132,887,690
-----------
Convertible Preferred Stocks - 11.40%
Banking, Finance & Insurance - 4.01%
National Australia Bank - Units 7.875% .............. 40,000 1,035,000
Newell Financial Trust I 5.25% ...................... 80,200 3,047,600
Salomon Smith Barney 6.25%
Series CSN "DECS" ................................. 16,500 1,864,500
Sovereign Capital Trust II 7.50% .................... 27,000 1,247,063
-----------
7,194,163
-----------
Cable, Media & Publishing - 0.60%
Metromedia Fiber Networks 7.25% ..................... 37,900 1,070,675
-----------
1,070,675
-----------
Consumer Products - 0.76%
Cendant 7.50% "PRIDES" .............................. 65,200 1,356,975
-----------
1,356,975
-----------
<PAGE>
Number of Market
Shares Value
--------------------------------------------------------------------------------
Convertible Preferred Stocks (continued)
Industrial Machinery - 0.62%
Ingersoll-Rand 6.75% "PRIDES" ....................... 49,000 $ 1,120,875
-----------
1,120,875
-----------
Paper & Forest Products - 0.91%
Georgia-Pacific PEPS Units 7.50% .................... 45,000 1,636,875
-----------
1,636,875
-----------
Real Estate - 1.96%
Crescent Real Estate 6.75% .......................... 62,600 931,175
General Growth Properties 7.25% ..................... 35,100 759,038
SL Green Realty 8.00% ............................... 70,000 1,820,000
-----------
3,510,213
-----------
Transportation & Shipping - 1.50%
Greyhound Lines 144A 8.50% .......................... 53,500 1,645,125
Union Pacific Capital Trust 144A 6.25% .............. 23,900 1,036,663
-----------
2,681,788
-----------
Utilities - 1.04%
Houston Industries 7.00% ............................ 14,300 1,859,000
-----------
1,859,000
-----------
Total Convertible Preferred Stocks
(cost $23,582,039) ................................ 20,430,564
-----------
Preferred Stocks - 2.77%
Banking, Finance & Insurance - 1.31%
Credit Lyonnais Capital 9.50% ....................... 100,000 2,350,000
-----------
2,350,000
-----------
Cable, Media & Publishing - 1.46%
Granite Broadcasting 12.75% ......................... 29,586 2,611,000
-----------
2,611,000
-----------
Energy - 0.00%
*TCR Holdings Class B ................................ 1,756 18
*TCR Holdings Class C ................................ 966 10
*TCR Holdings Class D ................................ 2,546 25
*TCR Holdings Class E ................................ 5,267 53
-----------
106
-----------
Total Preferred Stocks (cost $5,143,363) ............ 4,961,106
-----------
Principal
Amount
---------
Non-Convertible Bonds - 33.27%
Automobile & Auto Equipment - 2.10%
American Axle & Manufacturing
9.75% 3/1/09 ......................................2,500,000 2,325,000
Fleetpride 12.00% 8/1/05 ............................2,000,000 1,450,000
-----------
3,775,000
-----------
Banking, Finance & Insurance - 0.53%
Chevy Chase Bank 9.25% 12/1/05 ......................1,000,000 945,000
-----------
945,000
-----------
5
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Group Dividend and Income Fund Amount Value
--------------------------------------------------------------------------------
Non-Convertible Bonds (continued)
Building & Materials - 0.82%
Flooring America sr nts 9.25% 10/15/07 ............... $ 740,000 $ 592,925
K Hovnanian Entrepreneurs 9.125% 5/1/09 .............. 1,000,000 870,000
----------
1,462,925
----------
Cable, Media & Publishing - 2.95%
Adelphia Communications 9.375% 11/15/09 .............. 1,000,000 903,750
American Lawyer Media 9.75% 12/15/07 ................. 1,000,000 912,500
Charter Communications 8.625% 4/1/09 ................. 1,950,000 1,638,000
Granite Broadcasting 9.375% 12/1/05 .................. 2,000,000 1,830,000
----------
5,284,250
----------
Chemicals - 1.54%
Huntsman sr sub nts 144A 9.50% 7/1/07 ................ 2,000,000 1,790,000
Lyondell Chemical 10.875% 5/1/09 ..................... 1,000,000 972,500
----------
2,762,500
----------
Computers & Technology - 0.60%
Unisys sr nts 11.75% 10/15/04 ........................ 1,000,000 1,072,500
----------
1,072,500
----------
Consumer Products - 2.41%
American Safety Razor 9.875% 8/1/05 .................. 1,875,000 1,809,375
Drypers sr nts 10.25% 6/15/07 ........................ 1,000,000 675,000
Fedders North America sr sub nts
9.375% 8/15/07 .................................... 1,000,000 935,000
Matress Discounters 12.625% 7/15/07 .................. 1,000,000 905,000
----------
4,324,375
----------
Electronics - 0.60%
Geologistics sr unsec nts 9.75% 10/15/07 ............. 5,250,000 1,076,250
----------
1,076,250
----------
Energy - 0.68%
Newpark Resources unsec sr sub nts
8.625% 12/15/07 ................................... 1,425,000 1,225,500
----------
1,225,500
----------
Food, Beverage & Tobacco - 2.18%
Big V Supermarkets sr sub nts
11.00% 2/15/04 .................................... 450,000 389,250
Chiquita Brands 9.625% 1/15/04 ....................... 1,000,000 815,000
Fleming sr nts 10.625%12/15/01 ....................... 1,820,000 1,808,625
Fleming sr sub nts 10.50% 12/1/04 .................... 1,000,000 902,500
----------
3,915,375
----------
Industrial Machinery - 0.55%
Alliance Laundry 9.625% 5/1/08 ....................... 1,200,000 979,500
----------
979,500
----------
Leisure, Loding & Entertainment - 2.43%
AFC Enterprises sr sub nts 10.25% 5/15/07 ............ 1,000,000 965,000
Bally Total Fitness 9.875% 10/15/07 .................. 2,000,000 1,810,000
Cinemark USA Series C sr sub nts
9.625% 8/1/08 ..................................... 1,000,000 565,000
Hollywood Casino 11.25% 5/1/07 ....................... 1,000,000 1,015,000
----------
4,355,000
----------
<PAGE>
Principal Market
Amount Value
--------------------------------------------------------------------------------
Non-Convertible Bonds (continued)
Packaging & Containers - 2.24%
BPC Holding sr nts 12.50% 6/15/06 .................... $1,226,186 $ 1,045,324
Container Corporation of America
11.25% 5/1/04 ..................................... 1,000,000 1,013,750
Delta Beverage Group sr nts 9.75% 12/15/03 ........... 1,025,000 968,625
Pierce Leahy Command sr unsec nts
8.125% 5/15/08 .................................... 800,000 700,000
Portola Packaging sr nts 10.75% 10/1/05 .............. 350,000 288,750
-----------
4,016,449
-----------
Retail - 0.62%
Buhrman US 144A 12.25% 11/1/09 ....................... 1,000,000 1,037,500
Frank's Nursery & Crafts 10.25% 3/1/08 ............... 250,000 80,000
-----------
1,117,500
-----------
Telecommunications - 6.49%
Galaxy Telecommunication L.P. sr sub nts
12.375% 10/1/05 ................................... 2,000,000 1,730,000
Global Crossing 144A 9.50% 11/15/09 .................. 2,000,000 1,905,000
Intermedia Communication 8.60% 6/1/08 ................ 2,000,000 1,775,000
Level 3 Communications 9.125% 5/1/08 ................. 1,000,000 865,000
Level 3 Communications 6.00% 3/15/10 ................. 1,250,000 1,053,125
Metromedia Fiber Network 10.00% 11/15/08 ............. 1,000,000 955,000
Nextel Communications 9.375% 11/15/09 ................ 1,000,000 945,000
Nextlink Communications 10.75% 11/15/08 .............. 1,000,000 963,750
Rural Cellular 9.625% 5/15/08 ........................ 700,000 686,000
Teligent 11.50% 12/1/07 .............................. 1,000,000 755,000
-----------
11,632,875
-----------
Textiles - 0.91%
Norton McNaughton unsec sr nts
12.50% 6/1/05 ..................................... 1,000,000 865,000
Pillowtex 9.00% 12/15/07 ............................. 2,050,000 758,500
-----------
1,623,500
-----------
Transportation & Shipping - 3.96%
Atlantic Express sr sec nts 10.75% 2/1/04 ............ 675,000 577,125
Avis Group Holdings 11.00% 5/1/09 .................... 1,000,000 1,020,000
Eletson Holdings 9.25% 11/15/03 ...................... 2,500,000 2,312,500
Mtl 10.00% 6/15/06 ................................... 2,000,000 1,570,000
Worldwide Flight 12.25% 8/15/07 ...................... 2,400,000 1,620,000
-----------
7,099,625
-----------
Utilities - 0.82%
Midland Funding II sr sub debs
11.75% 7/23/05 .................................... 1,400,000 1,477,000
-----------
1,477,000
-----------
Miscellaneous - 0.84%
Holley Performance Products 12.25% 9/15/07 ........... 1,000,000 775,000
Loomis Fargo sr sub nts 10.00% 1/15/04 ............... 750,000 727,500
-----------
1,502,500
-----------
Total Non-Convertible Bonds
(cost $71,025,711) ................................ 59,647,624
-----------
6
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Group Dividend and Income Fund Amount Value
--------------------------------------------------------------------------------
Convertible Bonds - 6.39%
Automobiles & Auto Equipment - 0.18%
Tower Automotive 144A 5.00% 8/1/04 ................ $ 400,000 $ 324,500
------------
324,500
------------
Banking, Finance & Insurance - 0.22%
Bell Atlantic Financial Services 144A
5.75% 4/1/03 .................................... 400,000 391,000
------------
391,000
------------
Industrials - 0.71%
Thermo Fibertek 4.50% 7/15/04 ..................... 1,530,000 1,271,813
------------
1,271,813
------------
Metals & Mining - 0.78%
MascoTech sub debs 4.50% 12/15/03 ................. 1,800,000 1,392,750
------------
1,392,750
------------
Real Estate - 4.50%
Center Trust 7.50% 1/15/01 ........................ 2,270,000 2,193,388
IRT Property 7.30% 8/15/03 ........................ 2,000,000 1,830,000
LTC Properties 8.50% 1/1/01 ....................... 450,000 393,750
Malan Realty Investors 9.50% 7/15/04 .............. 2,300,000 2,104,500
MidAtlantic Realty 7.625% 9/15/03 ................. 1,500,000 1,558,125
------------
8,079,763
------------
Total Convertible Bonds
(cost $12,097,274) .............................. 11,459,826
------------
Short-Term Securities - 0.93%
**U.S. Treasury Bill 5.54% 7/6/00 ................... 1,671,000 1,661,901
------------
Total Short-Term Securities
(cost $1,661,901) ............................... 1,661,901
------------
Stock Warrants - 0.00%
Worldwide Flight 144A ............................. 2,400 2,400
------------
Total Stock Warrants (cost $23,408) ............... 2,400
------------
Total Market Value of Securities -
128.88% (cost $246,822,070) ....................... $231,051,111
***Liabilities Net of Receivables
and Other Assets - (28.88%) ..................... (51,771,528)
------------
Net Assets Applicable to 14,307,000
Shares ($0.01 par value)
Outstanding; Equivalent to
$12.53 per share - 100.00% ...................... $179,279,583
============
<PAGE>
--------------------------------------------------------------------------------
Components of Net Assets at May 31, 2000:
Common stock, $0.01 par value,
500,000,000 shares authorized to
the Fund ................................... $200,958,246
Distributions in excess of net
investment income .......................... (3,809,557)
Accumulated net realized loss
on investments ............................. (2,098,147)
Net unrealized depreciation
of investments ............................. (15,770,959)
-------------
Total net assets ............................. $179,279,583
=============
---------------
*Non-income producing security, for the period ended May 31, 2000.
**U.S. Treasury Bills are traded on a discount basis; the interest
rate shown is the yield at the time of purchase by the Fund.
***Of this amount, $54,660,595 represents commercial paper payable
at May 31, 2000. See Note 5 in "Notes to Financial Statements."
Summary of Abbreviations:
debs - debentures
nts - notes
sec - secured
sr - senior
sub - subordinated
unsec - unsecured
ADR - American Depository Receipt
DECS - Dividend Enhanced Convertible Stock
PEPS - Premium Equity Participating Securities
PRIDES - Preferred Redeemable Increase Dividend Securities
See accompanying notes
7
<PAGE>
Statement of Operations
<TABLE>
<CAPTION>
Six Months Ended May 31, 2000 (Unaudited) Delaware Group Dividend and Income Fund
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Dividends ......................................................................... $4,466,168
Interest .......................................................................... 4,426,048 $8,892,216
----------
Expenses:
Management fees ................................................................... 640,775
Accounting and Administration ..................................................... 58,092
Custodian fees .................................................................... 6,019
Reports to shareholders ........................................................... 3,783
Transfer agent fees ............................................................... 2,900
Taxes (other than taxes on income) ................................................ 2,900
Directors' fees ................................................................... 2,824
Professional fees ................................................................. 2,308
Commercial paper fees ............................................................. 2,300
Other ............................................................................. 190
----------
Total operating expenses (before interest expense) ................................ 722,091
Interest expense .................................................................. 1,737,876
----------
Total operating expenses (after interest expense) ................................. 2,459,967
Less expenses paid indirectly ..................................................... (2,019)
----------
Total expenses .................................................................... 2,457,948
----------
Net Investment Income ............................................................. 6,434,268
----------
Net Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments .................................................. (2,202,392)
Net realized gain on options written .............................................. 83,127
----------
Net realized loss ................................................................. (2,119,265)
Net change in unrealized appreciation/depreciation of
investments and options written ................................................. (290,309)
----------
Net Realized and Unrealized Loss on Investments and Options Written ............... (2,409,574)
----------
Net Increase in Net Assets Resulting from Operations .............................. $4,024,694
==========
</TABLE>
See accompanying notes
8
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Delaware Group Dividend and Income Fund
----------------------------------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations:
Net investment income ............................................................... $ 6,434,268 $ 13,433,936
Net realized gain (loss) on investments and options written ......................... (2,119,265) 7,804,690
Net change in unrealized appreciation/depreciation of
investments and options written.................................................... (290,309) (35,259,930)
------------- -------------
Net increase (decrease) in net assets resulting from operations ..................... 4,024,694 (14,021,304)
------------- -------------
Distributions to Shareholders from:
Net investment income ............................................................... (10,243,826) (13,433,936)
Net realized gain on investments and options written ................................ (486,438) (18,828,378)
------------- -------------
(10,730,264) (32,262,314)
------------- -------------
Net Decrease in Net Assets .......................................................... (6,705,570) (46,283,618)
Net Assets:
Beginning of period ................................................................. $ 185,985,152 $ 232,268,770
------------- -------------
End of period ....................................................................... $ 179,279,583 $ 185,985,152
============= =============
</TABLE>
See accompanying notes
9
<PAGE>
Statement of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended May 31, 2000 (Unaudited) Delaware Group Dividend and Income Fund
------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net Cash Provided by Operating Activities:
Net increase in net assets resulting from operations .......................................................... $ 4,024,694
------------
Adjustments to reconcile net increase in net assets from operations to cash
provided by operating activities
Amortization of discount on securities purchased ......................................................... (219,091)
Net proceeds from investment transactions ................................................................ 4,778,852
Net realized loss from security transactions ............................................................. 2,119,265
Change in net unrealized appreciation .................................................................... 290,309
Decrease in receivable for investments sold .............................................................. 71,002
Decrease in interest and dividends receivable ............................................................ 541,256
Decrease in payable for investments purchased ............................................................ (324,800)
Increase in interest payable ............................................................................. 164,735
Decrease in accrued expenses and other liabilities ....................................................... (221,595)
------------
Total adjustments ........................................................................................ 7,199,913
------------
Net cash provided by operating activities ..................................................................... 11,224,607
------------
Cash Flows Used for Financing Activities:
Cash provided by issuance of commercial paper .............................................................. 88,965,949
Cash used to liquidate commercial paper .................................................................... (89,426,859)
Cash dividends paid ........................................................................................ (10,730,264)
------------
Net cash used for financing activities ........................................................................ (11,191,174)
------------
Net increase in cash .......................................................................................... 33,433
Cash at beginning of period ................................................................................... 103,776
------------
Cash at end of period ......................................................................................... $ 137,209
============
Cash paid for interest ........................................................................................ $ 1,573,141
============
</TABLE>
See accompanying notes
10
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Group Dividend and Income Fund
-----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $13.000 $16.230 $18.010 $15.420 $14.010 $12.690
Income (loss) from investment operations:
Net investment income ................................. 0.450 0.939 1.020 1.010 1.070 1.130
Net realized and unrealized gain (loss) on
investments and options written .................... (0.170) (1.914) (0.890) 3.080 1.840 1.340
----------------------------------------------------------------------
Total from investment operations ...................... 0.280 (0.975) 0.130 4.090 2.910 2.470
----------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income .................. (0.716) (0.939) (1.020) (1.010) (1.090) (1.150)
Distributions from net realized gains on
investments and options written .................... (0.034) (1.316) (0.890) (0.490) (0.410) --
----------------------------------------------------------------------
Total dividends and distributions ..................... (0.750) (2.255) (1.910) (1.500) (1.500) (1.150)
----------------------------------------------------------------------
Net asset value, end of period ........................... $12.530 $13.000 $16.230 $18.010 $15.420 $14.070
======================================================================
Market value, end of period .............................. $11.630 $11.250 $17.630 $18.060 $16.630 $14.010
======================================================================
Total return based on:(2)
Market value .......................................... 10.38% (26.53%) 8.30% 18.34% 30.67% 28.71%
Net asset value ....................................... 2.96% (7.80%) (0.12%) 27.22% 21.11% 20.72%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $179,280 $185,985 $232,269 $257,651 $220,566 $200,500
Ratio of total operating expenses to average
net assets ......................................... 2.75% 2.34% 2.22% 2.32% 2.59% 2.82%
Ratio of total operating expenses to adjusted average
net assets (before interest expense)(3) ............ 0.62% 0.77% 0.80% 0.82% 0.87% 0.89%
Ratio of interest expenses to adjusted average
net assets(3) ...................................... 1.49% 1.08% 1.02% 1.06% 1.17% 1.32%
Ratio of net investment income to average net assets .. 7.21% 6.34% 5.91% 6.10% 7.38% 8.49%
Ratio of net investment income to adjusted average
net assets(3) ...................................... 5.51% 5.03% 4.84% 4.93% 5.80% 6.68%
Portfolio turnover .................................... 44% 55% 46% 74% 69% 118%
Leverage analysis:
Debt outstanding at end of period (000 omitted) ....... $55,000 $55,000 $55,000 $55,000 $55,000 $55,000
Average daily balance of debt outstanding
(000 omitted) ...................................... $54,327 $54,567 $54,555 $54,631 $54,641 $52,488
Average daily balance of shares outstanding
(000 omitted) ...................................... 14,307 14,307 14,307 14,307 14,307 14,307
Average debt per share ................................ $3.797 $3.814 $3.813 $3.818 $3.820 $3.670
</TABLE>
-----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
the purposes of this calculation, to be reinvested at prices obtained under
the Fund's dividend reinvestment plan. Generally, total investment return
based on net asset value will be higher than total investment return based
on market value in periods where there is an increase in the discount or a
decrease in the premium of the market value to the net asset value from the
beginning to the end of such periods. Conversely, total investment return
based on net asset value will be lower than total investment return based on
market value in periods where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such periods.
(3) Adjusted average net assets excludes debt outstanding.
See accompanying notes
11
<PAGE>
Notes to Financial Statements
May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Delaware Group Dividend and Income Fund, Inc. (the "Fund") is registered as a
diversified closed-end management investment company under the Investment
Company Act of 1940, as amended. The Fund is organized as a Maryland
corporation. The primary investment objective is to seek high current income.
Capital appreciation is a secondary objective.
1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Fund:
Security Valuation - All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. Exchange-traded options
are valued at the last reported sale price or, if no sales are reported, at the
mean between the last reported bid and asked prices. Money market instruments
having less than 60 days to maturity are valued at amortized cost, which
approximates market value. Other securities and assets for which market
quotations are not readily available are valued at fair value as determined in
good faith by or under the direction of the Fund's Board of Directors.
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 accounting
principles generally accepted in the United States.
Distributions - In December 1995, the Fund implemented a managed distribution
policy. Under the policy, the Fund declares and pays monthly dividends at an
annual rate of not less than $1.50 per share and is managed with a goal of
generating as much of the dividend as possible from ordinary income (net
investment income and short-term capital gains). The balance of the dividend
then comes from long-term capital gains (once a year) and if necessary, a return
of capital. No dividends were designated as return of capital for the six months
ended May 31, 2000.
Borrowings - The Fund issues short-term commercial paper at a discount from par.
The discount is amortized over the life of the commercial paper using the
straight-line method (See Note 5).
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Other - 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
<PAGE>
--------------------------------------------------------------------------------
securities sold. Dividend income is recorded on the ex-dividend date and
interest income is record 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 commissions arrangements with brokers.
These transactions are done subject to best execution. The amount of these
expenses was approximately $2,019 for the six months ended May 31, 2000. The
Fund may receive earnings credits used to offset custody fees when positive
balances are maintained at the custodian. There were no credits for the six
months ended May 31, 2000. The expenses paid under the above arrangements are
included in their respective expense captions on the Statement of Operations
with the corresponding expense offset shown as "expenses paid indirectly".
2. Investment Management, Administration Agreements and
Other Transactions with Affiliates:
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company (DMC), the Investment Manager of the Fund, an
annual fee which is calculated daily at the rate of 0.55% of the adjusted
average weekly net assets. At May 31, 2000, the Fund had a liability for
Investment Management fees and other expenses payable to DMC of $122,583.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide accounting and administration services. The Fund pays DSC a monthly
fee computed at the annual rate of 0.05% of the Fund's adjusted average weekly
net assets subject to an annual minimum of $85,000. At May 31, 2000 the Fund had
a liability for such fees and other expenses payable to DSC of $34,345.
For purposes of the calculation of investment management fees and administration
fees, adjusted average weekly net assets do not include the commercial paper
liability.
Officers, directors and employees of DMC, who are also officers, directors and
employees of the Fund do not receive any compensation from the Fund.
3. Investments
During the six months ended May 31, 2000, the Fund made purchases of $50,049,117
and sales of $53,194,736 of investment securities other than U.S. government
securities and temporary cash investments.
The cost of investments for federal income tax purposes approximates cost for
book purposes. At May 31, 2000, the aggregate cost of securities and unrealized
appreciation (depreciation) for the Fund was as follows:
Cost of investments ............................ $246,822,070
------------
Aggregated unrealized appreciation ............. $19,051,377
Aggregated unrealized depreciation ............. (34,822,336)
------------
Net unrealized depreciation .................... ($15,770,959)
============
12
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
4. Capital Shares
There are 500,000,000 shares of $0.01 par value capital stock authorized.
The Fund did not repurchase any shares under the Share Repurchase Program during
the six months ended May 31, 2000.
Shares issuable under the Fund's dividend investment plan are purchased by the
Fund's transfer agent, ChaseMellon Shareholder Services, L.L.C., in the open
market.
5. Commercial Paper
As of May 31, 2000, $55,000,000 of commercial paper was outstanding with an
amortized cost of $54,660,595. The weighted average discount rate of commercial
paper outstanding at May 31, 2000, was 6.28%. The average daily balance of
commercial paper outstanding during the six months ended May 31, 2000, was
$54,327,663 at a weighted discount rate of 6.00%. The maximum amount of
commercial paper outstanding at any time during the period was $55,000,000. In
conjunction with the issuance of the commercial paper, the Fund entered into a
line of credit arrangement with a bank for $30,000,000. Interest on borrowings
is based on market rates in effect at the time of borrowing. The commitment fee
is computed at the rate of 0.15% per annum on the unused balance. During the six
months ended May 31, 2000, there were no borrowings under this arrangement.
6. Credit and Market Risks
The Fund may invest in high-yield fixed-income securities, which carry ratings
of BB or lower by S&P and/or Ba 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 Fund may invest up to 10% of its total assets in illiquid securities, which
may include securities with contractual restrictions on resale, securities
exempt form 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.
7. Options
During the six months ended May 31, 2000, the Fund entered into options
contracts in accordance with its investment objectives. When the Fund writes a
an option, a premium is received and a liability is recorded and is adjusted on
a daily basis to reflect the current market value of the option written.
Premiums received from writing options that expire unexercised are treated by
the Fund on the expiration date as realized gains from investments. The
difference between the premium and the amount paid on effecting a closing
purchase transaction, including brokerage commissions, is also treated as a
realized gain, or if the premium is less than the amount paid for the closing
purchase transaction, as a realized loss. If a call option is exercised, the
premium is added to the proceeds from the sale of the underlying security in
<PAGE>
determining whether the Fund has realized a gain or loss. If a put option is
exercised, the premium reduces the cost basis of the securities purchased by the
Fund. The Fund as writer of an option bears the market risk of an unfavorable
change in the price of the security underlying the written option.
Transactions in options written during the six months ended May 31, 2000 for the
Fund were as follows:
Number Premiums
Of Contracts Received
------------ --------
Options outstanding at
November 30, 1999 .................. 2 $83,127
Options written ....................... -- --
Options terminated in
closing purchase transaction ........ -- --
Options expired ....................... (2) (83,127)
---- -------
Options written outstanding at
May 31, 2000 ....................... -- --
==== =======
Exercise
Number of Expiration Net
Description Contracts Price Date Appreciation
----------- --------- ---------- ---- ------------
GTE Call
Option ........... 260 $80 December 1999 $34,966
Chevron Call
Option ........... 280 $100 December 1999 $48,158
13
<PAGE>
DELAWARE(SM) DDF
INVESTMENTS Listed
--------------------- NYSE
Philadelphia o London THE NEW YORK STOCK EXCHANGE
Registrar and Stock Transfer Agent
ChaseMellon Shareholder Services, L.L.C.
P.O. Box 590
Ridgefield Park, NJ
1.800.851.9677
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
This semi-annual report is for the information of Delaware Group Dividend and
Income Fund shareholders. It sets forth details about charges, expenses,
investment objectives and operating policies of the Fund. You should read the
prospectus carefully before you invest. The return and principal value of an
investment in the Fund will fluctuate so that shares, when resold, may be worth
more or less than their original cost.
Notice is hereby given in accordance with Section 23(c) of the Investment Act of
1940 that the Fund may from time-to-time purchase shares of its Common Stock on
the open market at market prices.
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BOARD OF DIRECTORS Charles E. Peck Joseph H. Hastings
Retired Senior Vice President/Corporate Controller
Wayne A. Stork Fredericksburg, VA Philadelphia, PA
Chairman
Delaware Investments Family of Funds Janet L. Yeomans Michael P. Bishof
Philadelphia, PA Vice President and Treasurer Senior Vice President/Treasurer
3M Corporation Philadelphia, PA
Walter P. Babich+ St. Paul, MN
Board Chairman Lisa O. Brinkley
Citadel Constructors, Inc. AFFILIATED OFFICERS Senior Vice President/Compliance Director
King of Prussia, PA Philadelphia, PA
Richard J. Flannery
David K. Downes Executive Vice President/General Counsel Investment Manager
President and Chief Executive Officer Philadelphia, PA Delaware Management Company
Delaware Investments Family of Funds Philadelphia, PA
Philadelphia, PA Richard G. Unruh, Jr.
Executive Vice President/ International Affiliate
John H. Durham Chief Investment Officer, Fixed Income Delaware International Advisers Ltd.
Private Investor Philadelphia, PA London, England
Horsham, PA
William E. Dodge Principal Office of the Fund
Anthony D. Knerr+ Executive Vice President/ 1818 Market Street
Consultant, Anthony Knerr & Associates Chief Investment Officer, Equity Philadelphia, PA 19103-3682
New York, NY Philadelphia, PA
Independent Auditors
Ann R. Leven+ Ernst & Young LLP
Former Treasurer, National Gallery of Art 2001 Market Street
Washington, DC Philadelphia, PA
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
</TABLE>
+ Audit Committee Member
(3358) Printed in the USA
SA-DDF [5/00] PP 7/00 Recordholders as of May 31, 2000: 565 (J6056)
