N-CSR 1 pafinal.htm pafinal.htm - Generated by SEC Publisher for SEC Filing

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number:   811-4571 
Name of Registrant:   Vanguard Pennsylvania Tax-Free Funds 
Address of Registrant: P.O. Box 2600   
                                  Valley Forge, PA 19482
Name and address of agent for service:   Heidi Stam, Esquire
                                                               P.O. Box 876
                                                               Valley Forge, PA 19482
Registrant’s telephone number, including area code:   (610) 669-1000 
Date of fiscal year end:   November 30   
Date of reporting period:   December 1, 2008 – November 30, 2009 


Vanguard Pennsylvania Tax-Exempt 
Funds Annual Report 
November 30, 2009 

Vanguard Pennsylvania Tax-Exempt Money Market Fund 
Vanguard Pennsylvania Long-Term Tax-Exempt Fund 


> Vanguard Pennsylvania Tax-Exempt Money Market Fund returned 0.50% for the

fiscal year ended November 30, 2009, a record low for the fund that nevertheless

exceeded the average return of peer funds.

> The Investor Shares of Vanguard Pennsylvania Long-Term Tax-Exempt Fund

returned 12.32%, in line with the index’s return but a few steps behind the

average return of peers.

> The long-term municipal bond market roared back from a loss in fiscal 2008 to

a double-digit gain in fiscal 2009.

Contents   
 
Your Fund’s Total Returns  1 
President’s Letter  2 
Advisor’s Report  9 
Results of Proxy Voting  12 
Pennsylvania Tax-Exempt Money Market Fund  14 
Pennsylvania Long-Term Tax-Exempt Fund  31 
About Your Fund’s Expenses  56 
Glossary  58 

Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promises or advice. Also, please keep in mind that the information and opinions cover the period through the date on the front of this report. Of course, the risks of investing in your fund are spelled out in the prospectus.

Cover photograph: Veronica Coia.


Your Fund’s Total Returns

Fiscal Year Ended November 30, 2009     
  Ticker  Total 
  Symbol  Returns 
Vanguard Pennsylvania Tax-Exempt Money Market Fund  VPTXX  0.50% 
7-Day SEC Yield: 0.13%     
Taxable-Equivalent Yield: 0.21%1     
Pennsylvania Tax-Exempt Money Market Funds Average2    0.22 
 
Vanguard Pennsylvania Long-Term Tax-Exempt Fund     
Investor Shares  VPAIX  12.32% 
30-Day SEC Yield: 3.47%     
Taxable-Equivalent Yield: 5.51%1     
Admiral™ Shares3  VPALX  12.41 
30-Day SEC Yield: 3.55%     
Taxable-Equivalent Yield: 5.63%1     
Barclays Capital 10 Year Municipal Bond Index    12.67 
Pennsylvania Municipal Debt Funds Average2    16.04 

Your Fund’s Performance at a Glance         
November 30, 2008–November 30, 2009         
      Distributions Per Share 
  Starting  Ending  Income  Capital 
  Share Price  Share Price  Dividends  Gains 
Vanguard Pennsylvania Tax-Exempt Fund         
Money Market  $1.00  $1.00  $0.005  $0.000 
Long-Term         
Investor Shares  $10.19  $10.97  $0.456  $0.000 
Admiral Shares  10.19  10.97  0.464  0.000 

1 This calculation, which assumes a typical itemized tax return, is based on the maximum federal tax rate of 35% and the maximum
commonwealth of Pennsylvania income tax rate. Local taxes were not considered. Please see the prospectus for a detailed explanation
of the calculation.
2 Derived from data provided by Lipper Inc.
3 A lower-cost class of shares available to many longtime shareholders and to those with significant investments in the fund.

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President’s Letter

Dear Shareholder,

The Vanguard Pennsylvania Tax-Exempt Funds performed very well in fiscal-year 2009. The period began amid fears about the viability of the nation’s financial institutions and a related plunge in municipal bond prices. As the year progressed, government rescue programs began to take hold, accompanied by a strong rally in municipal bonds.

Simultaneously, Pennsylvania and other states grappled with the disruption in revenues brought about by the worst economic slump since the Great Depression. Pennsylvania’s unemployment rate climbed to almost 9%—below the national average, which exceeded 10%. Fears of defaults were in the air (generally unwarranted in our view).

Vanguard Pennsylvania Long-Term Tax-Exempt Fund fully participated in the national muni bond market rally. The fund returned 12.32% for Investor Shares (12.41% for Admiral Shares). Rising bond prices go hand-in-hand with declining yields: As of November 30, 2009, the fund’s yield was 3.47% for Investor Shares, down from 4.50% a year earlier.

Money market funds faced a different dynamic, including aggressive actions by the Federal Reserve that drove down short-term interest rates. Vanguard Pennsylvania Tax-Exempt Money Market Fund returned 0.50% for the fiscal year, a

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record low. The fund’s ending yield was a barely perceptible 0.13%, down from 1.23% a year earlier.

On a taxable-equivalent basis, the yield of each fund was higher, as shown on page 1. Note: The funds are permitted to invest in securities whose income is subject to the alternative minimum tax (AMT). As of November 30, the Long-Term Fund owned no securities that would generate income distributions subject to the AMT, but the Money Market Fund did.

For bonds, a period of panic was followed by robust returns

Volatility was a theme in the fixed income market over the 12 months ended November 30. At the peak of the credit crisis in late 2008, investors shunned

just about any security not issued by the U.S. Treasury. This stampede to quality led to the widest gap between the very low yields of Treasuries and the much higher yields of corporate bonds since the Great Depression. The crisis also rattled the municipal bond market, propelling muni bond yields above those of Treasury bonds—a reversal of the typical relationship.

In early spring, “green shoots” began to emerge—signs that aggressive fiscal and monetary policies were getting the global economy back on its feet. Investors’ appetite for risk returned, and then some: Not only did they propel the stock market to an amazingly strong bounceback, but many sought out some of the riskiest bonds. For the 12 months ended

Market Barometer       
  Average Annual Total Returns 
  Periods Ended November 30, 2009 
  One Year  Three Years  Five Years 
Bonds       
Barclays Capital U.S. Aggregate Bond Index       
(Broad taxable market)  11.63%  6.40%  5.49% 
Barclays Capital Municipal Bond Index  14.17  4.17  4.50 
Citigroup 3-Month Treasury Bill Index  0.20  2.36  2.91 
 
Stocks       
Russell 1000 Index (Large-caps)  27.38%  –5.71%  1.02% 
Russell 2000 Index (Small-caps)  24.53  –8.36  –0.46 
Dow Jones U.S. Total Stock Market Index  28.06  –5.55  1.24 
MSCI All Country World Index ex USA (International)  47.13  –2.73  6.75 
 
CPI       
Consumer Price Index  1.84%  2.40%  2.52% 

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November 30, taxable and municipal bonds each notched double-digit results, returning about 12% and 14%, respectively.

Shorter-term savings vehicles, including money market funds, didn’t fare as well. They became casualties of the Fed’s dramatic cuts in short-term interest rates and other policies that pumped up the money supply, all intended to nurse the economy, markets, and banks back to health. In December 2008, the Fed reduced its target for the federal funds rate, a benchmark for the interest rates paid by money market instruments and other very short-term securities, to between 0% and 0.25%. The target has stayed there ever since. After its meeting

in early November, the Fed said it expected to maintain the target at this level “for an extended period.”

Stock markets worldwide produced double-digit returns

U.S. stocks posted unusually large gains as the steep losses suffered during the first few months of the fiscal year were more than erased by the rally that began in March. The stock market’s rebound seemed to anticipate an improvement in the broader economy, which began to show signs of growth in the second half of the period.

The story was similar in many international markets: They collapsed in late 2008 and early 2009, then rebounded at a startling

Expense Ratios1       
Your Fund Compared With Its Peer Group       
  Investor  Admiral  Peer 
Pennsylvania Tax-Exempt Fund  Shares  Shares  Group 
Money Market  0.17%  —  0.61% 
Long-Term  0.20  0.12%  1.16 

1 The fund expense ratios shown are from the prospectus dated March 27, 2009, and represent estimated costs for the current fiscal year based on the funds’ net assets as of the prospectus date. For the fiscal year ended November 30, 2009, the Pennsylvania Tax-Exempt Money Market Fund’s expense ratio was 0.17%. The Pennsylvania Long-Term Tax-Exempt Fund’s expense ratios were 0.20% for Investor Shares and 0.12% for Admiral Shares. Peer groups are: for the Pennsylvania Tax-Exempt Money Market Fund, Pennsylvania Tax-Exempt Money Market Funds; and for the Pennsylvania Long-Term Tax-Exempt Fund, Pennsylvania Municipal Debt Funds. Peer-group expense ratios are derived from data provided by Lipper Inc. and capture information through year-end 2008.

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rate. The recovery was especially swift and powerful in emerging markets, many of which came out of the financial crisis in relatively better fiscal and economic shape than their developed-market counterparts.

Despite the strong performance seen since March, the longer-term returns of most stock market indexes bear witness to the trials suffered by many investors in the not-so-distant past. Over the past three years, for example, both U.S. and international stock indexes have declined. Five-year annualized returns for U.S. stocks as of November 30 were mostly positive, but far from impressive. Stock markets abroad fared better over this longer period, posting average annual returns of almost 7%.

Fear, the Fed, and a rally put a squeeze on yields

Fiscal 2009 was a period of falling tax-exempt yields. However, the primary factors behind the slide in short-term yields differed from those affecting longer-term tax-exempt bonds.

Because money market investments are extremely sensitive to changes in short-term interest rates, the Pennsylvania Tax-Exempt Money Market Fund’s yield dwindled in an almost unbroken trend over the period in response to the Fed’s rate-cutting policy. Further promoting the decline was strong investor demand for low-risk, liquid assets at the height of the financial panic.

Total Returns     
Ten Years Ended November 30, 2009     
  Average Annual Return 
    Competing 
  Vanguard  Funds 
Pennsylvania Tax-Exempt Fund  Fund  Average1 
Money Market  2.21%  1.80% 
Long-Term Investor Shares  5.34  4.47 

The figures shown represent past performance, which is not a guarantee of future results. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost.

1 Peer groups are: for the Pennsylvania Tax-Exempt Money Market Fund, Pennsylvania Tax-Exempt Money Market Funds; and for the
Pennsylvania Long-Term Tax-Exempt Fund, Pennsylvania Municipal Debt Funds. Peer-group returns are derived from data provided by
Lipper Inc.

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Investment insight 
A historical yield pattern 
has reasserted itself 
Atypical times can upend typical 
relationships. At the start of the fiscal 
year, municipal securities generally 
offered higher pre-tax yields than 
taxable Treasuries—an inversion of 
the historical relationship. A variety 
of investor fears about the financial 
outlook drove demand for Treasuries 
up and their yields down, while 
market turmoil was doing the 
opposite for municipal bonds. 
Munis have usually yielded less 
than Treasuries, because their 
interest income is generally exempt 
from federal taxes. As the period 
progressed, Treasury yields rose and 
muni yields declined—returning to the 
more usual relationship in the spring. 
 
Comparing Treasury and Municipal Yields 

By November 30, the Money Market Fund’s yield was down to 0.13%, more than a full percentage point below its year-ago level. This translated into a fiscal-year return of 0.50%, its lowest return since its inception in 1988. The good news—on a relative basis, to be sure—is that the fund’s return was more than double that of its peers, a consequence primarily of the fund’s low expense ratio.

In the longer-term tax-exempt market, yields declined because of a rally that took hold early in the year and didn’t let up. The Pennsylvania Long-Term Tax-Exempt Fund’s yield fell to 3.47% (for Investor Shares) as of November 30, also more than a percentage point below its level a year ago.

The rally got its start early in the fiscal year when the credit-market crisis put extreme pressure on certain institutional investors to raise capital in a hurry. The resulting forced sales of muni bonds drove prices down to levels that would soon prove attractive to investors. Yields on munis rose accordingly, even climbing above those of Treasuries (see the chart on this page). As investors’ appetite for risk rekindled, the combination of relatively low prices and high yields contributed to strong muni demand.

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Also helping to boost muni bond prices was a decline in tax-exempt supply. Issuance of tax-exempt bonds dropped as states and municipalities took advantage of the newly created Build America Bonds (BABs). In Pennsylvania, for example, BABs were issued by the State Turnpike Commission and some school districts. The new BABs, which are taxable, are one element of the federal economic stimulus package and were designed to subsidize states’ and local governments’ borrowing costs. (The stimulus program also included direct payments to states and local governments, another factor that reduced tax-exempt bond supply.)

In this environment, the Pennsylvania Long-Term Tax-Exempt Fund returned more than 12%, one of its highest fiscal-year returns since its inception in 1986. The fund’s return was in line with that of its benchmark index, but the fund’s higher-quality orientation held back performance compared with the average return of the peer group.

Diligent analysis and low costs support long-term returns

Even though the economic signals seem to point to renewed growth for the U.S. economy as a whole, the finances of states and municipalities are likely to be strained for a while longer—if experience is any guide. This means that close monitoring of the finances of Pennsylvania and other municipal bond issuers will continue to be of paramount importance to investors.

Vanguard Fixed Income Group’s seasoned credit analysts bring an informed skeptic’s view to the monitoring task. They perform rigorous, thorough, and independent analysis not only of issues being considered for purchase but also of those already in the portfolios. The advisor believes that concerns about the potential defaults of Pennsylvania tax-exempt securities, and of those of other states represented in Vanguard’s array of tax-exempt portfolios, are generally unwarranted. In fact, we have not witnessed a surge in municipal defaults across the country in 2009, despite the fiscal squeeze.

Investors have been well-served by the advisor’s diligent credit analysis, as well as by the strategy of maintaining low-cost portfolios of high-quality, liquid assets with tightly controlled exposure to interest rate risk. For the decade ended November 30, 2009, the average annual returns of both the Pennsylvania Tax-Exempt Money Market Fund and the Pennsylvania Long-Term Tax-Exempt Fund exceeded the average returns of their peer groups.

The importance of low costs should not be underestimated in fixed income investing, because bond returns fall within a narrower range than stock returns. This simple fact provides two interrelated advantages for the skilled bond fund manager who has low costs. He or she has a lower hurdle to overcome in seeking to produce competitive returns, because expenses are deducted directly from returns. And the manager needn’t pursue higher-risk strategies in an effort to overcome the

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drag from higher costs. As you can see in the expense ratio table in this letter, the Vanguard funds’ costs are far below the norm for their peers.

Diversification and low costs stand the test of time

As the financial crisis unfolded and the economy fell into recession, risk-averse investors sought refuge in the relative safety of Treasury securities. This made Treasuries the star performers in fiscal year 2008, when virtually all other asset classes suffered double-digit losses. In 2009, however, as the outlook for credit markets and the economy brightened, investors returned to embracing other investments, including municipal securities. The double-digit returns of many long-term municipal bond funds were several steps ahead of the returns of intermediate- and long-term Treasury bonds.

Because asset classes rotate in and out of favor over time, we recommend that you diversify your portfolio among, and within, different asset classes based on your goals, time horizon, and tolerance for risk. And always pay attention to costs, an important factor in any fund’s performance and especially critical in fixed income investing.

Within a balanced and well-diversified portfolio, both the Pennsylvania Tax-Exempt Money Market Fund and the Pennsylvania Long-Term Tax-Exempt Fund can play important roles, particularly for investors in higher tax brackets. And

the funds’ low expenses also help you to keep more of the returns, a benefit that compounds over time.

On another matter, I would like to inform you that on January 1, 2010, we will complete a leadership transition that began in March 2008. I will succeed Jack Brennan as chairman of Vanguard’s board of directors and of the fund boards. Jack has agreed to serve as chairman emeritus and senior advisor.

Under Jack’s leadership, Vanguard has grown to become a preeminent firm in the mutual fund industry. Jack’s energy, his relentless pursuit of perfection, and his unwavering focus on always doing the right thing for our clients are evident in every facet of Vanguard policy today.

Thank you for entrusting your assets to Vanguard.

Sincerely,


F. William McNabb III
President and Chief Executive Officer
December 14, 2009

8


Advisor’s Report

For the fiscal year ended November 30, 2009, Vanguard Pennsylvania Tax-Exempt Money Market Fund returned 0.50%, ahead of the average return of its peer group. The Pennsylvania Long-Term Tax-Exempt Fund returned 12.32% for Investor Shares and 12.41% for Admiral Shares—showing just how far and fast the bond market recovered from the dark days of 2008 and early 2009 when credit was essentially frozen. The long-term fund’s return was near that of its diversified Barclays Capital index benchmark but behind the average return of competing funds.

The investment environment

In the past 12 months we have seen a significant rebound in the municipal bond market. The fiscal year began in December amid a seemingly desperate crisis: Major

financial firms had imploded; the credit markets were frozen; hedge funds and closed-end funds were unloading high-quality assets, including municipal bonds, at fire-sale prices to meet collateral requirements; and investors were fleeing securities with any hint of risk for the perceived safety of U.S. Treasury securities.

By early 2009, federal government and Federal Reserve initiatives aimed at combating the financial crisis and the intertwined economic slump started gaining some traction. The banks and brokerage firms that underwrite municipal issues and facilitate liquidity began to operate normally once again, helping to stabilize the muni market. And munis’ depressed prices began to attract buyers, helping to fuel a rally that continued for

Yields of Municipal Securities     
(AAA-Rated General-Obligation Issues)     
  November 30,  November 30, 
Maturity  2008  2009 
2 years  2.13%  0.61% 
5 years  2.93  1.50 
10 years  4.02  2.78 
30 years  5.38  4.28 

Source: Vanguard.

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the remainder of the year. Toward the end of the fiscal year, tax-free bond yields had fallen (and prices risen) to levels not seen for four decades.

Prices also got a boost from the shortage of traditional tax-exempt securities. After the yields demanded by muni investors became exceptionally high in early 2009, many municipal borrowers began shifting a significant portion of their issuance to a new and lower-cost type of municipal bond—the subsidized and taxable Build America Bond. These bonds were created as part of the federal government’s stimulus package (signed into law in February). They are intended to encourage investment in public infrastructure and to help state and local governments, as well as other municipal issuers, meet their financing needs.

Although Build America Bonds may not have become a household name yet, these bonds’ impact on the municipal bond market should not be underestimated. From April—when the first such bond was issued—through November 2009, more than $55 billion in taxable Build America Bonds was issued nationwide. In October alone, about one-third of all new municipal bond issues were taxable, and most of those were Build America Bonds. Because these bonds siphoned off some of the potential supply of new tax-exempt bonds, investors seeking traditional munis found their prices being bid up.

Still, tax-exempt bonds represented close to 80% of the $373 billion of muni issues marketed nationwide in 2009 through November. And the total value of new

municipal issues—including taxable bonds—appeared on track to exceed $400 billion in calendar year 2009, which would join 2005 and 2007 in the $400 billion-plus record book. In Pennsylvania, for the fiscal year, a total of $18.5 billion of municipal bonds was issued (including $1.3 billion of Build America Bonds), up from a total of $17.4 billion last year but still down from $20.1 billion in fiscal 2007.

As economic conditions improved during the year, investors sought out higher yields—by moving out of money market securities into longer-term bonds and by taking on more credit risk. Indeed, with state and local finances remaining shaky throughout the period, it was the market’s shift toward risk that led to a narrowing of the yield gap between lower-quality municipals and U.S. Treasuries. In this environment, lower-quality bonds performed best in both the taxable and municipal markets—generally creating headwinds for Vanguard funds because of our focus on quality.

Management of the funds

The economic slump and high unemployment at the national level have translated into historic budget challenges for states and municipalities, leading them to resort to a variety of measures—cutting spending, increasing taxes and fees, and tapping into reserves—to help meet their fiscal needs. Federal stimulus payments also helped bridge budget gaps. The give-and-take inherent in this process helped make Pennsylvania the last state to pass a budget for fiscal year 2010.

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In anticipation of the market’s recovery, we increased the funds’ exposure to lower-quality securities, while maintaining our overall emphasis on securities with high credit quality. Indeed, compared with the funds’ peer groups, our allocations to lower-rated issues remain quite modest.

The funds’ interest rate positioning, as measured by their average weighted durations, had no meaningful impact on performance relative to benchmark indexes.

Outlook

We expect slow and stable economic growth to continue. Although the ultimate strength and pace of the recovery are open to question, the muni market has clearly priced out depression and priced in recovery. And, while we expect the Federal Reserve to keep interest rates low, we will be closely watching for any serious uptick in inflation. If inflation becomes a concern, we are prepared to act quickly. As the economic expansion proceeds, yield spreads between lower-risk and higher-risk bonds should continue to tighten, albeit at a more moderate pace.

At the state and local levels, we do not expect any immediate respite from financial stress. If the historical pattern holds, fiscal pressure on state and local governments will continue for the next few years. Changes in the financial picture of municipal bond issuers tend to lag the broader economic cycle by one to two years. As we usually do, we will continue to independently monitor developments in Pennsylvania and nationally and closely analyze the finances of the muni issuers. We strive to make sure that any financial pressure or problems of issuers won’t become the problems of the shareholders in our funds.

Kathryn T. Allen, Principal,
Portfolio Manager

Marlin G. Brown, Portfolio Manager

Christopher W. Alwine, CFA,
Principal and Head of Municipal Money
Market and Municipal Bond Groups

Vanguard Fixed Income Group

December 18, 2009

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Results of Proxy Voting

At a special meeting of shareholders on July 2, 2009, fund shareholders approved the following two proposals:

Proposal 1—Elect trustees for each fund.*

The individuals listed in the table below were elected as trustees for each fund. All trustees with the exception of Messrs. McNabb and Volanakis (both of whom already served as directors of The Vanguard Group, Inc.) served as trustees to the funds prior to the shareholder meeting.

      Percentage 
Trustee  For  Withheld  For 
John J. Brennan  2,387,446,842  95,730,031  96.1% 
Charles D. Ellis  2,362,492,971  120,683,903  95.1% 
Emerson U. Fullwood  2,368,099,016  115,077,858  95.4% 
Rajiv L. Gupta  2,349,078,646  134,098,228  94.6% 
Amy Gutmann  2,346,016,995  137,159,879  94.5% 
JoAnn Heffernan Heisen  2,359,232,030  123,944,844  95.0% 
F. William McNabb III  2,381,841,651  101,335,223  95.9% 
André F. Perold  2,350,045,755  133,131,119  94.6% 
Alfred M. Rankin, Jr.  2,376,371,860  106,805,014  95.7% 
Peter F. Volanakis  2,383,288,994  99,887,880  96.0% 
* Results are for all funds within the same trust.       

Proposal 2—Update and standardize the funds’ fundamental policies regarding:
(a) Purchasing and selling real estate.
(b) Issuing senior securities.
(c) Borrowing money.
(d) Making loans.
(e) Purchasing and selling commodities.
(f) Concentrating investments in a particular industry or group of industries.
(g) Eliminating outdated fundamental investment policies not required by law.

The revised fundamental policies are clearly stated and simple, yet comprehensive, making oversight and compliance more efficient than under the former policies. The revised fundamental policies will allow the funds to respond more quickly to regulatory and market changes, while avoiding the costs and delays associated with successive shareholder meetings.

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        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
Pennsylvania Tax-Exempt Money Market Fund         
2a  2,043,848,404  32,970,398  200,531,177  34,520,336  88.4% 
2b  2,052,561,465  37,413,953  187,374,560  34,520,337  88.8% 
2c  2,031,433,094  33,091,695  212,825,189  34,520,337  87.9% 
2d  2,030,126,941  33,684,509  213,538,528  34,520,337  87.8% 
2e  2,027,224,961  31,144,881  218,980,137  34,520,336  87.7% 
2f  2,041,912,238  38,044,954  197,392,787  34,520,336  88.3% 
2g  2,095,211,059  42,836,452  139,302,467  34,520,336  90.6% 
Pennsylvania Long-Term Tax-Exempt Fund         
2a  151,085,252  2,703,044  9,776,624  7,741,638  88.2% 
2b  151,297,972  3,728,542  8,538,408  7,741,637  88.3% 
2c  149,013,890  3,249,851  11,301,181  7,741,637  87.0% 
2d  148,646,759  3,431,917  11,486,244  7,741,638  86.8% 
2e  148,275,141  3,504,676  11,785,104  7,741,637  86.6% 
2f  150,225,917  3,333,947  10,005,056  7,741,639  87.7% 
2g  153,256,928  3,184,612  7,123,381  7,741,638  89.5% 

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Pennsylvania Tax-Exempt Money Market Fund

Fund Profile

As of November 30, 2009

Financial Attributes   
 
Yield1  0.1% 
Average Weighted Maturity  27 days 
Average Quality2  MIG-1 
Expense Ratio3  0.17% 

Distribution by Credit Quality4 (% of portfolio) 
 
MIG-1/A-1+/SP-1+/F-1+  83.0% 
P-1/A-1/SP-1/F-1  17.0 

1 7-day SEC yield. See the Glossary.
2 Moody’s Investors Service.
3 The expense ratio shown is from the prospectus dated March 27, 2009, and represents estimated costs for the current fiscal year based
on the fund’s net assets as of the prospectus date. For the fiscal year ended November 30, 2009, the expense ratio was 0.17%.
4 Ratings: Moody’s Investors Service, Standard & Poor’s, Fitch.

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Pennsylvania Tax-Exempt Money Market Fund

Performance Summary

Investment returns will fluctuate. All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) The returns shown do not reflect taxes that a shareholder would pay on fund distributions. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the fund. The fund’s 7-day SEC yield reflects its current earnings more closely than do the average annual returns.

Cumulative Performance: November 30, 1999–November 30, 2009
Initial Investment of $10,000

 

  Average Annual Total Returns  Final Value 
  Periods Ended November 30, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
Pennsylvania Tax-Exempt Money Market Fund1  0.50%  2.41%  2.21%  $12,441 
Pennsylvania Tax-Exempt         
Money Market Funds Average2  0.22  1.97  1.80  11,957 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Returns for the Pennsylvania Tax-Exempt Money Market Funds Average are derived from data provided by Lipper Inc.
See Financial Highlights for dividend information.

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Pennsylvania Tax-Exempt Money Market Fund

Fiscal-Year Total Returns (%): November 30, 1999–November 30, 2009

    Average1 
Fiscal  Total  Total 
Year  Return  Return 
2000  3.9%  3.6% 
2001  2.9  2.5 
2002  1.3  1.0 
2003  0.9  0.6 
2004  1.0  0.6 
2005  2.2  1.7 
2006  3.3  2.8 
2007  3.6  3.1 
2008  2.4  1.9 
2009  0.5  0.2 
7-day SEC yield (11/30/2009): 0.13%     

Average Annual Total Returns: Periods Ended September 30, 2009

This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

  Inception Date  One Year  Five Years  Ten Years 
Pennsylvania Tax-Exempt Money Market Fund2  6/13/1988  0.88%  2.46%  2.26% 

1 Returns for Pennsylvania Tax-Exempt Money Market Funds Average are derived from data provided by Lipper Inc.
2 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.

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Pennsylvania Tax-Exempt Money Market Fund

Financial Statements

Statement of Net Assets
As of November 30, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information). In addition, the fund publishes its holdings on a monthly basis at www.vanguard.com.

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Tax-Exempt Municipal Bonds (100.3%)         
Pennsylvania (95.8%)         
1 Abington PA School Dist. TOB VRDO  0.250%  12/7/09 LOC  14,925  14,925 
Adams County PA IDA (Gettysburg College) VRDO  0.240%  12/7/09 LOC  5,750  5,750 
Allegheny County PA GO VRDO  0.250%  12/7/09 LOC  37,300  37,300 
Allegheny County PA GO VRDO  0.250%  12/7/09 LOC  14,455  14,455 
Allegheny County PA Higher Educ. Building Auth.         
(Carnegie Mellon Univ.) VRDO  0.210%  12/1/09  51,555  51,555 
Allegheny County PA Higher Educ. Building Auth.         
(Point Park Univ.) VRDO  0.240%  12/7/09 LOC  15,455  15,455 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Presbyterian Univ. Health System) VRDO  0.200%  12/7/09 LOC  8,400  8,400 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Presbyterian Univ. Health System) VRDO  0.200%  12/7/09 LOC  4,935  4,935 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Presbyterian Univ. Health System) VRDO  0.230%  12/7/09 LOC  17,000  17,000 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Presbyterian Univ. Health System) VRDO  0.230%  12/7/09 LOC  17,200  17,200 
1 Allegheny County PA Hosp. Dev. Auth. Rev.         
(Univ of Pittsburgh Medical Center) TOB VRDO  0.300%  12/7/09 LOC  54,990  54,990 
1 Allegheny County PA Hosp. Dev. Auth. Rev.         
(Univ of Pittsburgh Medical Center) TOB VRDO  0.300%  12/7/09 LOC  51,930  51,930 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(West Penn Allegheny Health System)  9.250%  11/15/10 (Prere.)  29,580  32,649 
Allegheny County PA IDA Health Care Rev.         
(Vincentian Collaborative) VRDO  0.240%  12/7/09 LOC  7,725  7,725 
Allegheny County PA IDA Rev.         
(Western PA School for Blind Children) PUT  1.300%  7/1/10  14,200  14,200 
Beaver County PA IDA PCR (FirstEnergy) VRDO  0.210%  12/1/09 LOC  9,600  9,600 
Beaver County PA IDA PCR (FirstEnergy) VRDO  0.220%  12/1/09 LOC  30,100  30,100 
Beaver County PA IDA PCR (FirstEnergy) VRDO  0.210%  12/7/09 LOC  62,600  62,600 
Beaver County PA IDA PCR (FirstEnergy) VRDO  0.230%  12/7/09 LOC  23,200  23,200 
Beaver County PA IDA PCR (FirstEnergy) VRDO  0.250%  12/7/09 LOC  52,250  52,250 
Beaver County PA IDA PCR (FirstEnergy) VRDO  0.250%  12/7/09 LOC  60,500  60,500 
Beaver County PA IDA PCR (Met Edison Co.) VRDO   0.250% 12/7/09 LOC  10,000  10,000 
Beaver County PA IDA PCR         
(Pennsylvania Electric Co. Project) VRDO  0.350%  12/7/09 LOC  9,000  9,000 

17


Pennsylvania Tax-Exempt Money Market Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Beaver County PA IDA PCR VRDO  0.530%  12/7/09  8,300  8,300 
Berks County PA Hosp. Rev.         
(Reading Hosp. & Medical Center) PUT  0.540%  1/14/10  11,000  11,000 
Berks County PA Hosp. Rev.         
(Reading Hosp. & Medical Center) VRDO  0.220%  12/7/09  45,000  45,000 
Berks County PA Hosp. Rev.         
(Reading Hosp. & Medical Center) VRDO  0.250%  12/7/09  15,000  15,000 
Berks County PA Hosp. Rev.         
(Reading Hosp. & Medical Center) VRDO  0.260%  12/7/09  35,105  35,105 
1 Berks County PA Hosp. Rev. TOB VRDO  0.260%  12/7/09  9,750  9,750 
Berks County PA IDA (Kutztown Univ.) VRDO  0.240%  12/7/09 LOC  14,115  14,115 
Berks County PA Muni Auth. Incremental         
Draw Rev. (Albright College) VRDO  0.240%  12/7/09 LOC  25,500  25,500 
Bucks County PA IDA (Grand View Hosp.) VRDO  0.190%  12/7/09 LOC  30,400  30,400 
Bucks County PA IDA (Grand View Hosp.) VRDO  0.210%  12/7/09 LOC  8,650  8,650 
Bucks County PA IDA         
(Pennswood Village Project) VRDO  0.310%  12/7/09 LOC  8,400  8,400 
Bucks County PA IDA         
(Pennswood Village Project) VRDO  0.310%  12/7/09 LOC  8,375  8,375 
Bucks County PA IDA Econ. Dev. Rev.         
(Law School Admission Council) VRDO  0.300%  12/7/09 LOC  15,300  15,300 
Butler County PA General Auth. Rev.         
(Hampton Township) VRDO  0.290%  12/7/09 (4)  7,065  7,065 
Butler County PA General Auth. Rev.         
(Hampton Township) VRDO  0.290%  12/7/09 (4)  21,480  21,480 
Butler County PA Hosp. Auth. Rev.         
(Butler Health System Project) VRDO  0.260%  12/7/09 LOC  18,500  18,500 
Cambria County PA IDA Rev.         
(American National Red Cross) VRDO  0.240%  12/7/09 LOC  4,500  4,500 
Chambersburg PA Auth. Rev.         
(Wilson College Project) VRDO  0.300%  12/7/09 LOC  31,180  31,180 
Chester County PA Health & Educ. Fac.         
Auth. Rev. (Jefferson Health System) VRDO  0.220%  12/7/09  32,565  32,565 
Chester County PA Health & Educ. Fac.         
Auth. Rev. (Jefferson Health System) VRDO  0.250%  12/7/09  13,255  13,255 
Chester County PA IDA         
(Archdiocese of Philadelphia) VRDO  0.250%  12/1/09 LOC  1,450  1,450 
1 Chester County PA IDA Water Fac.         
Rev. TOB VRDO  0.300%  12/7/09 (13)  15,935  15,935 
Dallastown Area School Dist. VRDO  0.340%  12/7/09 (4)  7,000  7,000 
Dauphin County PA General Auth. Hosp. Rev.         
(Reading Hosp. & Medical Center) VRDO  0.250%  12/7/09  7,080  7,080 
Delaware County PA Auth. Rev.         
(Haverford College) VRDO  0.210%  12/7/09  47,345  47,345 
Delaware County PA Auth. Univ. Rev.         
(Villanova Univ.) VRDO  0.240%  12/7/09 LOC  12,525  12,525 
Delaware County PA Auth. Univ. Rev.         
(Villanova Univ.) VRDO  0.240%  12/7/09 LOC  7,525  7,525 
Delaware County PA IDA Airport Fac.         
(United Parcel Service) VRDO  0.200%  12/1/09  22,600  22,600 
Delaware County PA IDA PCR         
(BP Exploration & Oil) VRDO  0.190%  12/1/09  27,450  27,450 
Delaware County PA IDA PCR (PECO) CP  0.300%  2/4/10  12,000  12,000 
Delaware County PA IDA Refunding         
Resource Recovery Fac.         
(General Electric Capital Corp.) VRDO  0.230%  12/7/09  44,100  44,100 

18


Pennsylvania Tax-Exempt Money Market Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Delaware County PA IDA Refunding         
Resource Recovery Fac.         
(General Electric Capital Corp.) VRDO  0.230%  12/7/09  8,595  8,595 
1 Delaware County PA IDA Rev.         
(Aqua PA Inc.) TOB VRDO  0.300%  12/7/09 (13)  9,915  9,915 
Delaware County PA IDA Solid Waste Rev.         
(Scott Paper Co.) VRDO  0.300%  12/7/09  14,900  14,900 
Delaware County PA IDA Solid Waste Rev.         
(Scott Paper Co.) VRDO  0.300%  12/7/09  17,000  17,000 
Delaware County PA IDA Solid Waste Rev.         
(Scott Paper Co.) VRDO  0.300%  12/7/09  21,675  21,675 
Delaware River Port Auth. Pennsylvania &         
New Jersey Rev. VRDO  0.190%  12/7/09 LOC  22,700  22,700 
Delaware River Port Auth. Pennsylvania &         
New Jersey Rev. VRDO  0.250%  12/7/09 LOC  4,700  4,700 
Doylestown PA Hosp. Auth. Hosp. Rev. VRDO  0.210%  12/7/09 LOC  18,700  18,700 
Emmaus PA General Auth. Rev. VRDO  0.240%  12/7/09 LOC  8,500  8,500 
Emmaus PA General Auth. Rev. VRDO  0.280%  12/7/09 LOC  4,800  4,800 
Emmaus PA General Auth. Rev. VRDO  0.280%  12/7/09 LOC  2,200  2,200 
Emmaus PA General Auth. Rev. VRDO  0.280%  12/7/09 LOC  1,200  1,200 
Emmaus PA General Auth. Rev. VRDO  0.280%  12/7/09 LOC  9,600  9,600 
Fayette County PA Hosp. Auth. Rev.         
(Fayette Regional Health System) VRDO  0.210%  12/7/09 LOC  14,800  14,800 
Franklin County PA IDA Rev.         
(Menno Haven Inc. Project) VRDO  0.250%  12/7/09 LOC  6,380  6,380 
Geisinger Health System Auth. of Pennsylvania Rev.         
(Penn State Geisinger Health System) VRDO  0.190%  12/1/09  5,650  5,650 
Geisinger Health System Auth. of Pennsylvania Rev.         
(Penn State Geisinger Health System) VRDO  0.190%  12/1/09  11,315  11,315 
Geisinger Health System Auth. of Pennsylvania Rev.         
(Penn State Geisinger Health System) VRDO  0.220%  12/1/09  11,725  11,725 
1 Geisinger Health System Auth. of Pennsylvania Rev.         
TOB VRDO  0.300%  12/7/09  11,250  11,250 
Geisinger Health System Auth. of Pennsylvania Rev.         
VRDO  0.170%  12/1/09  10,000  10,000 
Geisinger Health System Auth. of Pennsylvania Rev.         
VRDO  0.170%  12/1/09  1,000  1,000 
Governor Mifflin PA School Dist. BAN  1.250%  5/15/10  3,000  3,007 
Haverford Township PA School Dist. VRDO  0.250%  12/7/09 LOC  5,000  5,000 
Lancaster County PA Convention Center Auth.         
Rev. (Hotel Room) VRDO  0.240%  12/7/09 LOC  10,600  10,600 
Lancaster County PA Convention Center Auth.         
Rev. (Hotel Room) VRDO  0.240%  12/7/09 LOC  39,695  39,695 
Latrobe PA IDA Rev. (Greensburg Diocese) VRDO  0.850%  12/7/09 LOC  4,610  4,610 
Lehigh County PA General Purpose Hosp. Auth.         
Rev. (Lehigh Valley Health Network) VRDO  0.200%  12/1/09 (12)  4,900  4,900 
Lehigh County PA General Purpose Hosp. Auth.         
Rev. (Lehigh Valley Health Network) VRDO  0.230%  12/1/09 LOC  3,670  3,670 
Lehigh County PA General Purpose Hosp. Auth.         
Rev. (Muhlenberg College) VRDO  0.250%  12/7/09 LOC  7,330  7,330 
Lower Merion PA School Dist. GO VRDO  0.240%  12/7/09 LOC  5,250  5,250 
1 Luzerne County PA IDA (Water Facility) TOB VRDO  0.300%  12/7/09 (13)  5,000  5,000 
Manheim Township PA School Dist. VRDO  0.290%  12/7/09 (4)  11,925  11,925 
Marple Newtown School Dist. TRAN  2.250%  6/30/10  5,415  5,470 

19

 

Pennsylvania Tax-Exempt Money Market Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Monroe County PA Hosp. Auth. Rev.         
(Pocono Medical Center) VRDO  0.250%  12/7/09 LOC  21,360  21,360 
Montgomery County PA IDA Rev.         
(Archdiocese Philadelphia) VRDO  0.210%  12/7/09 LOC  13,500  13,500 
Montgomery County PA IDA Rev.         
(Northwestern Human Services) VRDO  0.260%  12/7/09 LOC  11,880  11,880 
Montgomery County PA IDA Rev.         
(The Shipley School) VRDO  0.240%  12/7/09 LOC  14,500  14,500 
North Penn PA School Dist. BAN  1.750%  4/15/10  22,000  22,087 
Northampton County PA General Purpose Auth.         
Univ. Rev. (Lafayette College) VRDO  0.240%  12/7/09  3,120  3,120 
Northampton County PA General Purpose Auth.         
Univ. Rev. (Lafayette College) VRDO  0.240%  12/7/09  18,000  18,000 
Northampton County PA General Purpose Auth.         
Univ. Rev. (Lafayette College) VRDO  0.240%  12/7/09  12,850  12,850 
1 Northampton County PA General Purpose Auth.         
Univ. Rev. (Lehigh Univ.) TOB VRDO  0.300%  12/7/09 LOC  21,375  21,375 
Northampton County PA General Purpose Auth.         
Univ. Rev. (Lehigh Univ.) VRDO  0.200%  12/7/09  20,245  20,245 
Northampton County PA General Purpose Auth.         
Univ. Rev. (Lehigh Univ.) VRDO  0.200%  12/7/09  11,740  11,740 
Northampton County PA Higher Educ. Auth. Rev.         
(Lehigh Univ.) VRDO  0.200%  12/7/09  8,600  8,600 
Northeastern PA Hosp. & Educational Auth. Rev.         
(Commonwealth Medical College Project) VRDO  0.210%  12/7/09 LOC  5,700  5,700 
Norwin PA School Dist. GO  5.000%  4/1/10 (Prere.)  6,390  6,485 
Pennsylvania Econ. Dev. Financing Auth. Fac.         
Rev. (PPL Energy Supply LLC Project)  0.500%  4/1/10 LOC  7,000  7,000 
Pennsylvania Econ. Dev. Financing Auth. Fac.         
Rev. (PSEG Power) VRDO  0.350%  12/7/09 LOC  11,000  11,000 
1 Pennsylvania Econ. Dev. Financing Auth. Fac.         
Rev. (Wenger’s Feed Mill) VRDO  0.490%  12/7/09 LOC  6,100  6,100 
Pennsylvania Econ. Dev. Financing Auth. Fac.         
Rev. (Wenger’s Feed Mill) VRDO  0.490%  12/7/09 LOC  5,655  5,655 
Pennsylvania Econ. Dev. Financing Auth. Fac.         
Rev. (York Water Co. Project) VRDO  0.290%  12/7/09 LOC  5,000  5,000 
Pennsylvania Econ. Dev. Financing Auth. VRDO  0.250%  12/7/09 LOC  48,570  48,570 
Pennsylvania Econ. Dev. Financing Auth.         
Wastewater Treatment Rev. (Sunoco Inc.) VRDO  0.240%  12/7/09 LOC  12,875  12,875 
Pennsylvania GO  5.000%  1/1/10  5,000  5,020 
Pennsylvania GO  5.000%  1/15/10  1,405  1,413 
Pennsylvania GO  6.000%  1/15/10 (Prere.)  5,000  5,084 
Pennsylvania GO  5.250%  2/1/10  19,045  19,191 
Pennsylvania GO  5.000%  3/1/10  10,000  10,109 
Pennsylvania GO  2.000%  3/15/10  9,225  9,263 
Pennsylvania GO  2.000%  4/15/10  16,830  16,930 
Pennsylvania GO  5.000%  7/1/10  22,120  22,709 
Pennsylvania GO  5.000%  8/1/10  3,000  3,091 
Pennsylvania GO  5.000%  9/15/10  9,580  9,924 
Pennsylvania GO  5.250%  10/15/10 (Prere.)  11,200  11,778 
1 Pennsylvania GO TOB VRDO  0.240%  12/7/09  10,055  10,055 
1 Pennsylvania GO TOB VRDO  0.250%  12/7/09  4,200  4,200 
1 Pennsylvania GO TOB VRDO  0.280%  12/7/09  11,525  11,525 
1 Pennsylvania GO TOB VRDO  0.300%  12/7/09  3,000  3,000 

20


Pennsylvania Tax-Exempt Money Market Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Pennsylvania Higher Educ. Fac. Auth. Rev.  2.000%  6/15/10  2,825  2,848 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Bryn Mawr College) PUT  0.750%  2/10/10  10,000  10,000 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Drexel Univ.) VRDO  0.200%  12/1/09 LOC  30,325  30,325 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Drexel Univ.) VRDO  0.240%  12/7/09 LOC  30,000  30,000 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Drexel Univ.) VRDO  0.320%  12/7/09 LOC  18,835  18,835 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Drexel Univ.) VRDO  0.320%  12/7/09 LOC  22,500  22,500 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Gwynedd Mercy College) VRDO  0.210%  12/7/09 LOC  10,950  10,950 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Kings College) VRDO  0.240%  12/7/09 LOC  5,750  5,750 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(St. Joseph’s Univ.) VRDO  0.250%  12/7/09 LOC  7,595  7,595 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(St. Joseph’s Univ.) VRDO  0.270%  12/7/09 LOC  21,925  21,925 
1 Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Trustees of the Univ. of Pennsylvania) TOB VRDO  0.300%  12/7/09  8,240  8,240 
1 Pennsylvania Housing and Finance Agency         
TOB VRDO  0.300%  12/7/09  4,940  4,940 
1 Pennsylvania Housing Finance Agency Rev.         
(Single Family Mortgage) TOB VRDO  0.300%  12/7/09  33,325  33,325 
Pennsylvania Housing Finance Agency Rev.         
(Single Family Mortgage) VRDO  0.280%  12/7/09 LOC  4,950  4,950 
Pennsylvania Housing Finance Agency Rev.         
(Single Family Mortgage) VRDO  0.400%  12/7/09  25,105  25,105 
Pennsylvania Housing Finance Agency Rev.         
(Single Family Mortgage) VRDO  0.400%  12/7/09  10,000  10,000 
Pennsylvania Housing Finance Agency Rev.         
(Single Family Mortgage) VRDO  0.450%  12/7/09  30,000  30,000 
Pennsylvania Housing Finance Agency Rev. VRDO  0.300%  12/7/09  24,475  24,475 
Pennsylvania Housing Finance Agency Rev. VRDO  0.300%  12/7/09  18,950  18,950 
Pennsylvania Housing Finance Agency Rev. VRDO  0.320%  12/7/09  24,135  24,135 
Pennsylvania Housing Finance Agency Rev. VRDO  0.320%  12/7/09  10,020  10,020 
Pennsylvania Housing Finance Agency Rev. VRDO  0.400%  12/7/09  14,975  14,975 
1 Pennsylvania Housing Finance Agency TOB VRDO  0.420%  12/7/09  3,875  3,875 
1 Pennsylvania Intergovernmental Cooperation         
Auth. Rev. TOB VRDO  0.300%  12/7/09  5,050  5,050 
Pennsylvania Intergovernmental Cooperation         
Auth. Rev. VRDO  0.300%  12/7/09 (4)  12,655  12,655 
Pennsylvania Intergovernmental Cooperation Auth.         
Special Tax Rev. (Philadelphia Funding Program)  2.000%  6/15/10  27,940  28,185 
1 Pennsylvania State Higher Eucational Fac Auth the         
Trustees of the Univ. of Pennsylvania TOB VRDO  0.300%  12/7/09  5,810  5,810 
Pennsylvania State Univ. Rev.  2.000%  3/1/10  6,600  6,626 
Pennsylvania State Univ. Rev. PUT  1.500%  6/1/10  14,800  14,877 
1 Pennsylvania State Univ. Rev. TOB VRDO  0.270%  12/7/09  5,375  5,375 
1 Pennsylvania State Univ. Rev. TOB VRDO  0.300%  12/7/09  6,095  6,095 
1 Pennsylvania State Univ. TOB VRDO  0.250%  12/7/09 LOC  45,410  45,410 
Pennsylvania Turnpike Comm. Registration Fee         
Rev. VRDO  0.280%  12/7/09 (4)  8,475  8,475 
1 Pennsylvania Turnpike Comm. Rev. TOB VRDO  0.570%  12/7/09 (12)  4,325  4,325 

21


Pennsylvania Tax-Exempt Money Market Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Pennsylvania Turnpike Comm. Rev. VRDO  0.240%  12/7/09 LOC  9,800  9,800 
Pennsylvania Turnpike Comm. Rev. VRDO  0.250%  12/7/09 LOC  58,800  58,800 
Philadelphia PA Airport Rev. VRDO  0.270%  12/7/09 LOC  25,400  25,400 
Philadelphia PA Auth. for Individual Healthcare         
Dev. Rev. VRDO  0.300%  12/7/09 LOC  8,990  8,990 
Philadelphia PA Auth. IDR         
(Girard Estate Aramark Project) VRDO  0.220%  12/7/09 LOC  13,750  13,750 
Philadelphia PA Auth. IDR         
(Philadelphia Museum of Art) VRDO  0.190%  12/1/09 LOC  1,300  1,300 
Philadelphia PA Gas Works Rev. VRDO  0.220%  12/7/09 LOC  16,400  16,400 
Philadelphia PA Hosp. & Higher Educ. Fac. Auth.         
Rev. (Children’s Hosp. of Philadelphia) VRDO  0.190%  12/1/09  5,200  5,200 
Philadelphia PA Hosp. & Higher Educ. Fac. Auth.         
Rev. (Children’s Hosp. of Philadelphia) VRDO  0.190%  12/1/09  8,000  8,000 
1 Philadelphia PA Hosp. & Higher Educ. Fac. Auth.         
Rev. (Wills Eye Hosp.) VRDO  0.250%  12/7/09 LOC  11,115  11,115 
1 Philadelphia PA IDA Rev.         
(Fox Chase Cancer Center) TOB VRDO  0.300%  12/7/09 LOC  12,000  12,000 
Philadelphia PA IDA Rev.         
(William Penn Charter) VRDO  0.240%  12/7/09 LOC  5,000  5,000 
Philadelphia PA IDA Rev. VRDO  0.220%  12/7/09 LOC  28,600  28,600 
Philadelphia PA School Dist. VRDO  0.190%  12/7/09 LOC  28,300  28,300 
Philadelphia PA School Dist. VRDO  0.190%  12/7/09 LOC  25,900  25,900 
Philadelphia PA School Dist. VRDO  0.250%  12/7/09 LOC  30,000  30,000 
1 Philadelphia PA Water & Waste Water         
Rev. TOB VRDO  0.230%  12/7/09 (4)  9,905  9,905 
1 Philadelphia PA Water & Waste Water         
Rev. TOB VRDO  0.250%  12/7/09 (13)  45,210  45,210 
Philadelphia PA Water & Waste Water Rev. VRDO  0.230%  12/7/09 LOC  33,455  33,455 
Philadelphia PA Water & Waste Water Rev. VRDO  0.240%  12/7/09 LOC  9,830  9,830 
Ridley PA School Dist. VRDO  0.250%  12/7/09 LOC  3,900  3,900 
South Fork PA Hosp. Auth. Rev.         
(Conemaugh Valley Hosp.) VRDO  0.240%  12/7/09 LOC  20,980  20,980 
1 Southcentral Pennsylvania General Auth. Rev.         
(Wellspan Health) TOB VRDO  0.250%  12/7/09  9,970  9,970 
Southeastern Pennsylvania Transp.         
Auth. Rev. VRDO  0.210%  12/7/09 LOC  14,200  14,200 
St. Mary’s Hosp. Auth. Bucks County PA Rev.         
(Catholic Health Initiatives) VRDO  0.200%  12/7/09  9,500  9,500 
St. Mary’s Hosp. Auth. Bucks County PA Rev.         
(Catholic Health Initiatives) VRDO  0.290%  12/7/09  20,900  20,900 
State Public School Building Auth. Pennsylvania         
College Rev. (North Allegheny School Dist.) VRDO  0.220%  12/7/09  18,145  18,145 
State Public School Building Auth. Pennsylvania         
School Rev. (Harrisburg Project) VRDO  0.240%  12/7/09 LOC  24,855  24,855 
Temple Univ. of the Commonwealth System RAN  1.250%  4/16/10  120,000  120,374 
Tredyffrin-Easttown PA School Dist. GO  5.000%  8/15/10 (Prere.)  5,175  5,341 
Union County PA Higher Educ. Auth. Rev.         
(Bucknell Univ.) VRDO  0.250%  12/7/09  5,630  5,630 
Univ. of Pittsburgh PA Rev. CP  0.400%  12/9/09  12,500  12,500 
1 Univ. of Pittsburgh TOB VRDO  0.210%  12/7/09  6,665  6,665 

22


Pennsylvania Tax-Exempt Money Market Fund

        Face  Market 
      Maturity  Amount  Value• 
    Coupon  Date  ($000)  ($000) 
  Upper St. Claire PA VRDO  0.350%  12/7/09 (4)  25,460  25,460 
  Westmoreland County PA IDA Rev.         
  (Excela Project) VRDO  0.240%  12/7/09 LOC  7,915  7,915 
  Westmoreland County PA IDA Rev.         
  (Excela Project) VRDO  0.240%  12/7/09 LOC  6,700  6,700 
  Westmoreland County PA IDA Rev.         
  (Retirement Redstone) VRDO  0.260%  12/7/09 LOC  9,845  9,845 
  Wilkes-Barre PA Finance Auth. Rev.         
  (King College Project) VRDO  0.240%  12/7/09 LOC  10,680  10,680 
  York County PA IDA         
  (Crescent Industries Inc.) VRDO  0.350%  12/7/09 LOC  5,000  5,000 
  York County PA IDA (PECO) CP  0.320%  12/1/09 LOC  18,440  18,440 
          3,188,721 
Puerto Rico (4.5%)         
1  Puerto Rico Aqueduct & Sewer Auth.         
  Rev. TOB VRDO  0.350%  12/7/09 (12)  5,450  5,450 
1  Puerto Rico Electric Power Auth.         
  Rev. TOB VRDO  0.200%  12/7/09 (4)  3,730  3,730 
1  Puerto Rico Highway & Transp. Auth.         
  Rev. TOB VRDO  0.320%  12/7/09 (12)  19,400  19,400 
1  Puerto Rico Ind. Medical & Environmental Fac.         
  Finance Auth. Rev. PCR (Abbott Laboratories) PUT  2.000%  3/1/10  8,280  8,280 
1  Puerto Rico Sales Tax Financing Corp.         
  Rev. TOB VRDO  0.200%  12/7/09  41,800  41,800 
1  Puerto Rico Sales Tax Financing Corp.         
  Rev. TOB VRDO  0.240%  12/7/09 LOC  7,425  7,425 
1  Puerto Rico Sales Tax Financing Corp.         
  Rev. TOB VRDO  0.240%  12/7/09 LOC  2,200  2,200 
1  Puerto Rico Sales Tax Financing Corp.         
  Rev. TOB VRDO  0.270%  12/7/09 LOC  8,720  8,720 
1  Puerto Rico Sales Tax Financing Corp.         
  Rev. TOB VRDO  0.270%  12/7/09  4,875  4,875 
1  Puerto Rico Sales Tax Financing Corp.         
  Rev. TOB VRDO  0.370%  12/7/09  46,400  46,400 
          148,280 
Total Tax-Exempt Municipal Bonds (Cost $3,337,001)        3,337,001 
Other Assets and Liabilities (–0.3%)         
Other Assets        14,036 
Liabilities        (23,024) 
          (8,988) 
Net Assets (100%)         
Applicable to 3,328,075,273 outstanding $.001 par value shares of       
beneficial interest (unlimited authorization)        3,328,013 
Net Asset Value Per Share        $1.00 

23


Pennsylvania Tax-Exempt Money Market Fund

At November 30, 2009, net assets consisted of:   
  Amount 
  ($000) 
Paid-in Capital  3,328,144 
Undistributed Net Investment Income  — 
Accumulated Net Realized Losses  (131) 
Net Assets  3,328,013 

• See Note A in Notes to Financial Statements.
1 Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. At November 30, 2009, the aggregate value of these securities was $595,540,000,
representing 17.9% of net assets.
A key to abbreviations and other references follows the Statement of Net Assets.
See accompanying Notes, which are an integral part of the Financial Statements.

24


Pennsylvania Tax-Exempt Money Market Fund

Key to Abbreviations

ARS—Auction Rate Security.
BAN—Bond Anticipation Note.
COP—Certificate of Participation.
CP—Commercial Paper.
FR—Floating Rate.
GAN—Grant Anticipation Note.
GO—General Obligation Bond.
IDA—Industrial Development Authority Bond.
IDR—Industrial Development Revenue Bond.
PCR—Pollution Control Revenue Bond.
PUT—Put Option Obligation.
RAN—Revenue Anticipation Note.
TAN—Tax Anticipation Note.
TOB—Tender Option Bond.
TRAN—Tax Revenue Anticipation Note.
UFSD—Union Free School District.
USD—United School District.
VRDO—Variable Rate Demand Obligation.
(ETM)—Escrowed to Maturity.
(Prere.)—Prerefunded.

Scheduled principal and interest payments are guaranteed by:
(1) MBIA (Municipal Bond Insurance Association).
(2) AMBAC (Ambac Assurance Corporation).
(3) FGIC (Financial Guaranty Insurance Company).
(4) FSA (Financial Security Assurance).
(5) BIGI (Bond Investors Guaranty Insurance).
(6) Connie Lee Inc.
(7) FHA (Federal Housing Authority).
(8) CapMAC (Capital Markets Assurance Corporation).
(9) American Capital Access Financial Guaranty Corporation.
(10) XL Capital Assurance Inc.
(11) CIFG (CDC IXIS Financial Guaranty).
(12) Assured Guaranty Corp.
(13) Berkshire Hathaway Assurance Corp.
(14) National Public Finance Guarantee Corp.
The insurance does not guarantee the market value of the municipal bonds.

LOC—Scheduled principal and interest payments are guaranteed by bank letter of credit.

25


Pennsylvania Tax-Exempt Money Market Fund

Statement of Operations

  Year Ended 
  November 30, 2009 
  ($000) 
Investment Income   
Income   
Interest  24,900 
Total Income  24,900 
Expenses   
The Vanguard Group—Note B   
Investment Advisory Services  530 
Management and Administrative  3,055 
Marketing and Distribution  1,218 
Money Market Guarantee Program  1,267 
Custodian Fees  24 
Auditing Fees  19 
Shareholders’ Reports and Proxies  59 
Trustees’ Fees and Expenses  6 
Total Expenses  6,178 
Net Investment Income  18,722 
Realized Net Gain (Loss) on Investment Securities Sold  54 
Net Increase (Decrease) in Net Assets Resulting from Operations  18,776 

See accompanying Notes, which are an integral part of the Financial Statements.

26


Pennsylvania Tax-Exempt Money Market Fund

Statement of Changes in Net Assets

  Year Ended November 30, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  18,722  97,628 
Realized Net Gain (Loss)  54  (148) 
Net Increase (Decrease) in Net Assets Resulting from Operations  18,776  97,480 
Distributions     
Net Investment Income  (18,722)  (97,628) 
Realized Capital Gain  —  — 
Total Distributions  (18,722)  (97,628) 
Capital Share Transactions (at $1.00)     
Issued  2,221,250  3,492,107 
Issued in Lieu of Cash Distributions  18,014  93,175 
Redeemed  (2,778,001)  (3,885,604) 
Net Increase (Decrease) from Capital Share Transactions  (538,737)  (300,322) 
Total Increase (Decrease)  (538,683)  (300,470) 
Net Assets     
Beginning of Period  3,866,696  4,167,166 
End of Period  3,328,013  3,866,696 

See accompanying Notes, which are an integral part of the Financial Statements.

27


Pennsylvania Tax-Exempt Money Market Fund

Financial Highlights

For a Share Outstanding  Year Ended November 30, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $1.00  $1.00  $1.00  $1.00  $1.00 
Investment Operations           
Net Investment Income  .005  .024  .036  .033  .022 
Net Realized and Unrealized Gain (Loss)           
on Investments  —  —  —  —  — 
Total from Investment Operations  .005  .024  .036  .033  .022 
Distributions           
Dividends from Net Investment Income  (.005)  (.024)  (.036)  (.033)  (.022) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (.005)  (.024)  (.036)  (.033)  (.022) 
Net Asset Value, End of Period  $1.00  $1.00  $1.00  $1.00  $1.00 
 
Total Return1  0.50%  2.42%  3.64%  3.31%  2.19% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $3,328  $3,867  $4,167  $3,390  $2,952 
Ratio of Total Expenses to           
Average Net Assets  0.17%2  0.11%2  0.10%  0.13%  0.13% 
Ratio of Net Investment Income to           
Average Net Assets  0.51%  2.39%  3.57%  3.27%  2.18% 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Includes fees to participate in the Treasury Temporary Guarantee Program for Money Market Funds of 0.04% for 2009 and 0.01% for 2008.

See accompanying Notes, which are an integral part of the Financial Statements.

28


Pennsylvania Tax-Exempt Money Market Fund

Notes to Financial Statements

Vanguard Pennsylvania Tax-Exempt Money Market Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund invests in debt instruments of municipal issuers whose ability to meet their obligations may be affected by economic and political developments in the state.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Securities are valued at amortized cost, which approximates market value.

2. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (November 30, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

3. Distributions: Distributions from net investment income are declared daily and paid on the first business day of the following month.

4. Other: Interest income is accrued daily. Premiums and discounts on debt securities purchased are amortized and accreted, respectively, to interest income over the lives of the respective securities. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.

B. The Vanguard Group furnishes at cost investment advisory, corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At November 30, 2009, the fund had contributed capital of $712,000 to Vanguard (included in Other Assets), representing 0.02% of the fund’s net assets and 0.28% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

At November 30, 2009, 100% of the fund’s investments were valued using amortized cost, in accordance with rules under the Investment Company Act of 1940. Amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, securities valued at amortized cost are considered to be valued using Level 2 inputs.

29


Pennsylvania Tax-Exempt Money Market Fund

D. On October 7, 2008, the board of trustees approved the fund’s participation in a temporary program introduced by the U.S. Treasury to guarantee the account values of shareholders in a money market fund in the event the fund’s net asset value fell below $0.995 and the fund’s trustees decided to liquidate the fund. The program covered the lesser of a shareholder’s account value on September 19, 2008, or on the date of liquidation. To participate, the fund was required to pay a fee of 0.01% of its net assets as of September 19, 2008, for coverage through December 18, 2008. In December 2008, the U.S. Treasury extended the program through April 30, 2009, and the fund’s trustees approved the fund’s continuing participation in the program at a cost of an additional 0.015% of its net assets as of September 19, 2008. In March 2009, the U.S. Treasury extended the program through September 18, 2009, and the fund’s trustees approved the fund’s continuing participation in the program at a cost of an additional 0.015% of its net assets as of September 19, 2008.

E. In preparing the financial statements as of November 30, 2009, management considered the impact of subsequent events occurring through January 11, 2010, for potential recognition or disclosure in these financial statements.

30


Pennsylvania Long-Term Tax-Exempt Fund

Fund Profile
As of November 30, 2009

Financial Attributes     
    Comparative  Broad 
  Fund  Index1  Index2 
Number of Issues  467  8,323  46,048 
Yield3    3.6%  3.6% 
Investor Shares  3.5%     
Admiral Shares  3.6%     
Yield to Maturity  3.7%4  3.6%  3.6% 
Average Coupon  4.8%  5.0%  5.0% 
Average Effective       
Maturity  8.8 years  9.9 years  13.5 years 
Average Quality  A+  AA  AA 
Average Duration  6.9 years  7.2 years  8.4 years 
Expense Ratio5    —  — 
Investor Shares  0.20%     
Admiral Shares  0.12%     
Short-Term Reserves  3.5%  —  — 

Volatility Measures6     
  Fund Versus  Fund Versus 
  Comparative Index1  Broad Index2 
R-Squared  0.90  0.99 
Beta  0.91  0.96 

Distribution by Maturity (% of portfolio)   
 
Under 1 Year  6.7% 
1–5 Years  29.0 
5–10 Years  43.0 
10–20 Years  8.4 
20–30 Years  11.4 
Over 30 Years  1.5 

Distribution by Credit Quality (% of portfolio) 
 
AAA  14.9% 
AA  39.7 
A  31.5 
BBB  10.1 
Other  3.8 

Investment Focus


1 Barclays Capital 10 Year Municipal Bond Index.
2 Barclays Capital Municipal Bond Index.
3 30-day SEC yield for the fund; index yield assumes that all bonds are called or prepaid at the earliest possible dates. See the Glossary.
4 Before expenses.
5 The expense ratios shown are from the prospectus dated March 27, 2009, and represent estimated costs for the current fiscal year based
on the fund’s net assets as of the prospectus date. For the fiscal year ended November 30, 2009, the expense ratios were 0.20% for
Investor Shares and 0.12% for Admiral Shares.
6 For an explanation of R-squared, beta, and other terms used here, see the Glossary.

31


Pennsylvania Long-Term Tax-Exempt Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: November 30, 1999–November 30, 2009
Initial Investment of $10,000

 

  Average Annual Total Returns  Final Value 
  Periods Ended November 30, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
Pennsylvania Long-Term Tax-Exempt Fund         
Investor Shares1  12.32%  3.76%  5.34%  $16,817 
Barclays Capital Municipal Bond Index  14.17  4.50  5.64  17,302 
Barclays Capital 10 Year Municipal Bond Index  12.67  4.90  5.79  17,549 
Pennsylvania Municipal Debt Funds Average2  16.04  3.15  4.47  15,491 

        Final Value 
      Since  of a $100,000 
  One Year  Five Years  Inception3  Investment 
Pennsylvania Long-Term Tax-Exempt Fund         
Admiral Shares  12.41%  3.84%  4.78%  $149,084 
Barclays Capital Municipal Bond Index  14.17  4.50  5.13  153,361 
Barclays Capital 10 Year Municipal Bond Index  12.67  4.90  5.38  156,493 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Derived from data provided by Lipper Inc.
3 Performance for the fund’s Admiral Shares and comparative standards is calculated since the Admiral Shares’ inception: May 14, 2001.
See Financial Highlights for dividend and capital gains information.

32


Pennsylvania Long-Term Tax-Exempt Fund

Fiscal-Year Total Returns (%): November 30, 1999–November 30, 2009

  Investor Shares  Barclays1 
Fiscal  Capital  Income  Total  Total 
Year  Return  Return  Return  Return 
2000  3.1%  5.8%  8.9%  7.7% 
2001  3.5  5.3  8.8  8.2 
2002  1.5  5.0  6.5  6.7 
2003  2.7  4.6  7.3  6.9 
2004  –1.3  4.6  3.3  4.0 
2005  –1.4  4.5  3.1  3.0 
2006  1.6  4.7  6.3  6.2 
2007  –2.2  4.5  2.3  3.5 
2008  –8.7  4.2  –4.5  –0.4 
2009  7.7  4.6  12.3  12.7 

Average Annual Total Returns: Periods Ended September 30, 2009

This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

        Ten Years 
  Inception Date  One Year  Five Years  Capital  Income  Total 
Investor Shares2  4/7/1986  12.68%  4.00%  0.69%  4.81%  5.50% 
Admiral Shares  5/14/2001  12.77  4.07  0.343  4.723  5.063 

1 Barclays Capital 10 Year Municipal Bond Index.
2 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
3 Return since inception.

33


Pennsylvania Long-Term Tax-Exempt Fund

Financial Statements

Statement of Net Assets
As of November 30, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Tax-Exempt Municipal Bonds (100.4%)         
Pennsylvania (96.9%)         
Abington PA School Dist. GO  5.000%  4/1/32 (4)  6,495  6,630 
Adams County PA GO  5.300%  5/15/11 (3)(Prere.) 10,240  10,956 
Allegheny County PA GO  0.000%  4/1/10 (14)  2,000  1,993 
Allegheny County PA GO  5.250%  5/1/11 (3)(Prere.)  3,000  3,203 
Allegheny County PA GO  5.500%  5/1/11 (3)(Prere.)  445  476 
Allegheny County PA GO  5.750%  5/1/11 (3)(Prere.)  730  783 
Allegheny County PA GO  5.750%  11/1/11 (14)  995  1,057 
Allegheny County PA GO  5.375%  11/1/12 (14)(Prere.) 3,725  4,184 
Allegheny County PA GO  5.375%  11/1/12 (14)(Prere.) 2,880  3,235 
Allegheny County PA GO  5.375%  11/1/12 (14)(Prere.) 2,000  2,247 
Allegheny County PA GO  5.375%  11/1/12 (14)(Prere.) 2,645  2,971 
Allegheny County PA GO  5.500%  11/1/14 (14)  605  633 
Allegheny County PA GO  5.375%  11/1/16 (14)  4,100  4,565 
Allegheny County PA GO  5.375%  11/1/17 (14)  3,600  3,992 
Allegheny County PA GO  6.000%  7/1/23 (14)  5,745  6,324 
Allegheny County PA GO  5.000%  11/1/29  5,000  5,170 
Allegheny County PA GO  5.000%  11/1/32 (4)  3,500  3,571 
Allegheny County PA Higher Educ. Building Auth.         
(Carnegie Mellon Univ.)  5.125%  3/1/32  3,000  3,066 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Magee Women’s Hosp.)  6.000%  10/1/10 (14)  1,495  1,557 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Univ. of Pittsburgh Medical Center)  5.000%  6/15/13  2,000  2,151 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Univ. of Pittsburgh Medical Center)  5.000%  6/15/14  1,500  1,618 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Univ. of Pittsburgh Medical Center)  5.000%  9/1/14  25,000  27,048 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Univ. of Pittsburgh Medical Center)  5.000%  6/15/15  2,000  2,141 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Univ. of Pittsburgh Medical Center)  5.000%  6/15/18  7,000  7,218 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Univ. of Pittsburgh Medical Center)  5.375%  8/15/29  4,000  4,031 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Univ. of Pittsburgh Medical Center)  5.625%  8/15/39  10,800  10,730 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Univ. of Pittsburgh)  6.000%  7/1/26 (14)  4,625  5,071 
Allegheny County PA Hosp. Dev. Auth. Rev.         
(Univ. of Pittsburgh)  6.000%  7/1/27 (14)  9,325  10,211 

34


Pennsylvania Long-Term Tax-Exempt Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Allegheny County PA Port Auth. Rev.  5.375%  3/1/12 (14)  4,965  5,271 
Allegheny County PA Port Auth. Rev.  5.500%  3/1/14 (14)  2,355  2,479 
Allegheny County PA Port Auth. Rev.  5.500%  3/1/16 (14)  1,500  1,564 
Allegheny County PA Port Auth. Rev.  5.500%  3/1/17 (14)  2,750  2,858 
Allegheny County PA Sanitation Auth. Sewer Rev.  5.500%  12/1/10 (14)(Prere.)   6,880  7,253 
Allegheny County PA Sanitation Auth. Sewer Rev.  6.000%  12/1/10 (14)  1,500  1,570 
Allegheny County PA Sanitation Auth. Sewer Rev.  6.000%  12/1/11 (14)  1,490  1,570 
Allegheny County PA Sanitation Auth. Sewer Rev.  5.750%  12/1/12 (14)  1,180  1,237 
Allegheny County PA Sanitation Auth. Sewer Rev.  5.375%  12/1/16 (14)  3,545  3,714 
Allegheny County PA Sanitation Auth. Sewer Rev.  5.500%  12/1/16 (3)(ETM)  11,295  12,568 
Allegheny County PA Sanitation Auth. Sewer Rev.  5.375%  12/1/18 (14)  15,000  15,581 
Allegheny County PA Sanitation Auth. Sewer Rev.  5.000%  12/1/24 (14)  6,000  6,179 
Allegheny County PA Sanitation Auth. Sewer Rev.  5.500%  12/1/30 (14)  2,150  2,189 
Allegheny County PA Sanitation Auth. Sewer Rev.  5.000%  12/1/32 (14)  12,000  12,165 
Annville Cleona PA School Dist.  6.000%  3/1/28 (4)  1,500  1,637 
Annville Cleona PA School Dist.  6.000%  3/1/31 (4)  2,475  2,661 
Beaver County PA IDA PCR (FirstEnergy) PUT  3.000%  4/2/12  7,000  7,028 
Bensalem Township PA School Dist. GO  5.250%  6/15/24 (14)  3,700  3,929 
Berks County PA GO  0.000%  11/15/13 (14)  7,250  6,709 
Berks County PA GO  0.000%  11/15/14 (14)  8,615  7,649 
Berks County PA GO  0.000%  11/15/15 (14)  6,250  5,293 
Berks County PA Hosp. Rev.         
(Reading Hosp. & Medical Center)  5.500%  11/1/31  3,500  3,613 
Berks County PA Hosp. Rev.         
(Reading Hosp. & Medical Center)  5.750%  11/1/39  4,615  4,781 
Berks County PA Hosp. Rev. (Reading Hosp.)  5.700%  10/1/14 (14)  3,850  4,217 
Bethlehem PA Area School Dist.  5.375%  3/15/12 (3)(Prere.)  7,500  8,291 
Blair County PA Hosp. Auth. Rev. (Altoona Hosp.)  5.500%  7/1/16 (2)  4,480  4,784 
1 Blair County PA Hosp. Auth. Rev. (Altoona Hosp.)  6.000%  11/15/39  13,500  13,297 
Bristol Borough PA School Dist. GO  5.250%  9/1/15 (4)(Prere.)  3,635  4,302 
Bucks County PA IDA (Pennswood Village Project)  6.000%  10/1/12 (Prere.)  2,600  2,982 
Carlisle PA Area School Dist. GO  5.375%  3/1/12 (14)(Prere.) 1,550  1,711 
Carlisle PA Area School Dist. GO  5.375%  3/1/12 (14)(Prere.) 1,635  1,805 
Carlisle PA Area School Dist. GO  5.375%  3/1/12 (14)(Prere.) 1,725  1,904 
Carlisle PA Area School Dist. GO  5.375%  3/1/12 (14)(Prere.) 1,820  2,009 
Catholic Health East Pennsylvania         
Health Systems Rev.  5.375%  11/15/14 (Prere.)  3,000  3,523 
Catholic Health East Pennsylvania         
Health Systems Rev.  5.500%  11/15/14 (Prere.)  1,400  1,652 
Central Bucks PA School Dist.  5.500%  5/15/12 (3)(Prere.)  5,540  6,172 
Central Bucks PA School Dist.  5.500%  5/15/12 (3)(Prere.)  3,785  4,217 
Central Bucks PA School Dist.  5.500%  5/15/12 (3)(Prere.)  2,400  2,674 
Central Bucks PA School Dist.  5.500%  5/15/12 (3)(Prere.)  1,500  1,671 
Central Bucks PA School Dist.  5.000%  5/15/24  11,750  12,997 
Chambersburg PA Area School Dist. GO  5.250%  3/1/29 (14)  3,805  3,909 
Chester County PA GO  5.000%  7/15/26  4,345  4,762 
2 Chester County PA GO  5.000%  7/15/27  5,000  5,452 
Chester County PA Health & Educ. Fac. Auth. Rev.         
(Devereux Foundation)  5.000%  11/1/31  4,500  3,985 
Chester County PA Health & Educ. Fac. Auth. Rev.         
(Jefferson Health System)  5.250%  5/15/22 (2)  33,580  33,695 
Chester County PA School Auth. Rev.  5.000%  4/1/23 (2)  2,670  2,767 
Chester County PA School Auth. Rev.  5.000%  4/1/24 (2)  1,000  1,032 
Chester County PA School Auth. Rev.  5.000%  4/1/26 (2)  1,575  1,613 
Clarion County PA IDA Auth. Rev.  5.000%  7/1/32 (10)  4,980  4,324 
Clarion County PA IDA Auth. Rev.  5.000%  7/1/37 (10)  6,360  5,256 

35


Pennsylvania Long-Term Tax-Exempt Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Coatesville PA School Dist. GO  5.250%  8/15/14 (4)(Prere.)  6,645  7,789 
Commonwealth Financing Auth. Pennsylvania Rev.  5.250%  6/1/23 (14)  13,535  14,363 
Cumberland County PA Muni. Auth. College Rev.         
(Dickinson College)  5.500%  11/1/10 (2)(Prere.)  3,230  3,384 
Cumberland County PA Muni. Auth. Rev.  7.250%  1/1/13 (Prere.)  7,360  8,741 
1 Cumberland County PA Muni. Auth. Rev.  6.375%  1/1/39  2,000  1,960 
Cumberland County PA Muni. Auth. Rev.         
(Diakon Lutheran Ministries)  5.000%  1/1/27  2,700  2,438 
Cumberland County PA Muni. Auth. Rev.         
(Diakon Lutheran Ministries)  5.000%  1/1/36  6,750  5,633 
Dallas PA School Dist. GO  5.000%  4/1/29 (11)  5,820  5,920 
Danville PA Area School Dist. GO  5.000%  5/1/37 (4)  7,970  8,063 
Dauphin County PA General Auth. Health System         
Rev. (Pinnacle Health)  5.500%  8/15/28 (14)(ETM)  9,415  11,587 
Dauphin County PA General Auth. Health System         
Rev. (Pinnacle Health)  6.000%  6/1/36  15,000  15,217 
Dauphin County PA General Auth. Hosp.         
Rev. (West Pennsylvania Hosp.)  5.500%  7/1/13 (14)(ETM)  4,100  4,444 
Delaware County PA Auth. Rev.         
(Catholic Health East)  5.250%  11/15/12 (2)  3,300  3,340 
Delaware County PA Auth. Rev.         
(Catholic Health East)  5.250%  11/15/13 (2)  4,665  4,720 
Delaware County PA Auth. Univ. Rev.         
(Villanova Univ.)  5.000%  8/1/24 (14)  4,000  4,125 
Delaware County PA GO  5.000%  10/1/13  2,900  3,307 
Delaware County PA GO  5.000%  10/1/14  3,905  4,527 
Delaware County PA GO  5.000%  10/1/16  3,240  3,783 
Delaware County PA Hosp. Auth. Rev.         
(Crozer Keystone Obligated Group)  5.000%  12/15/31  10,000  7,779 
Delaware County PA Hosp. Auth. Rev.         
(Crozer-Chester Medical Center)  5.300%  12/1/27  8,905  7,596 
Delaware County PA IDA PCR (PECO Energy Co.)  4.000%  12/1/12  13,000  13,719 
Delaware County PA Regional Water         
Quality Control Auth. Rev.  5.500%  11/1/11 (3)(Prere.)  2,405  2,623 
Delaware County PA Regional Water         
Quality Control Auth. Rev.  5.500%  11/1/11 (3)(Prere.)  2,685  2,928 
Delaware River Joint Toll Bridge Comm.         
Pennsylvania & New Jersey Rev.  5.250%  7/1/19 (14)  1,645  1,805 
Delaware River Joint Toll Bridge Comm.         
Pennsylvania & New Jersey Rev.  5.500%  7/1/19 (14)  4,835  5,505 
Delaware River Joint Toll Bridge Comm.         
Pennsylvania & New Jersey Rev.  5.250%  7/1/20 (14)  1,735  1,886 
Delaware River Joint Toll Bridge Comm.         
Pennsylvania & New Jersey Rev.  5.500%  7/1/20 (14)  5,105  5,784 
Delaware River Joint Toll Bridge Comm.         
Pennsylvania & New Jersey Rev.  5.250%  7/1/21 (14)  1,825  1,965 
Delaware River Joint Toll Bridge Comm.         
Pennsylvania & New Jersey Rev.  5.250%  7/1/22 (14)  1,920  2,063 
Delaware River Joint Toll Bridge Comm.         
Pennsylvania & New Jersey Rev.  5.250%  7/1/23 (14)  2,020  2,115 
Delaware River Port Auth.         
Pennsylvania & New Jersey Rev.  5.700%  1/1/23 (4)  8,345  8,355 
Doylestown PA Hosp. Auth. Hosp. Rev.  5.000%  7/1/20 (12)  5,060  5,218 
Doylestown PA Hosp. Auth. Hosp. Rev.  5.000%  7/1/21 (12)  3,000  3,077 
Doylestown PA Hosp. Auth. Hosp. Rev.  5.000%  7/1/22 (12)  3,455  3,525 
East Stroudsburg PA Area School Dist. GO  5.000%  9/1/29 (4)  7,085  7,390 

36


Pennsylvania Long-Term Tax-Exempt Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Erie County PA GO  5.000%  9/1/15 (3)(Prere.)  5,525  6,484 
Erie County PA Hosp. Auth. Rev.         
(Hamot Health Foundation)  5.000%  11/1/35 (11)  7,000  6,236 
Erie PA School Dist. GO  0.000%  9/1/10 (4)  5,665  5,616 
Erie PA School Dist. GO  0.000%  9/1/11 (4)  5,780  5,641 
Erie PA School Dist. GO  0.000%  5/1/16 (14)(ETM)  3,175  2,642 
Erie PA School Dist. GO  0.000%  9/1/18 (4)  830  590 
Geisinger Health System Auth. of Pennsylvania         
Rev. (Penn State Geisinger Health System)  5.125%  6/1/34  5,000  5,028 
Geisinger Health System Auth. of Pennsylvania         
Rev. (Penn State Geisinger Health System)  5.250%  6/1/39  18,000  18,201 
Geisinger Health System Auth. of Pennsylvania         
Rev. (Penn State Geisinger Health System) VRDO  0.190%  12/1/09  2,600  2,600 
Geisinger Health System Auth. of Pennsylvania         
Rev. (Penn State Geisinger Health System) VRDO  0.190%  12/1/09  16,100  16,100 
Geisinger Health System Auth. of Pennsylvania         
Rev. VRDO  0.170%  12/1/09  1,800  1,800 
Hazleton PA Area School Dist. GO  5.500%  3/1/11 (14)  3,740  3,946 
Hazleton PA Area School Dist. GO  5.750%  3/1/12 (14)  1,420  1,556 
Hazleton PA Area School Dist. GO  6.000%  3/1/16 (14)  18,245  20,224 
Hazleton PA Area School Dist. GO  0.000%  3/1/17 (14)  4,425  3,309 
Hazleton PA Area School Dist. GO  0.000%  3/1/22 (14)  5,265  2,886 
Hempfield PA Area School Dist.         
(Westmoreland County) GO  5.000%  9/15/15 (Prere.)  5,030  5,905 
Lackawanna County PA GO  5.000%  9/15/29 (2)  1,975  2,026 
Lackawanna County PA GO  5.000%  9/15/29 (4)  3,745  3,889 
Lake Lehman PA School Dist. GO  0.000%  4/1/14 (14)  1,290  1,147 
Lake Lehman PA School Dist. GO  0.000%  4/1/15 (14)  1,295  1,097 
Lake Lehman PA School Dist. GO  0.000%  4/1/16 (14)  1,310  1,054 
Lake Lehman PA School Dist. GO  0.000%  4/1/17 (14)  1,315  996 
Lake Lehman PA School Dist. GO  0.000%  4/1/18 (14)  1,000  716 
Lancaster County PA GO  5.500%  11/1/16 (14)  1,025  1,128 
Lancaster County PA GO  5.500%  11/1/17 (14)  1,060  1,162 
Lancaster County PA GO  5.500%  11/1/18 (14)  1,120  1,213 
Lancaster County PA GO  5.500%  11/1/19 (14)  1,175  1,272 
Lancaster County PA Hosp. Auth. Rev.         
(Lancaster General Hosp.)  5.000%  3/15/26  9,205  9,379 
Lancaster County PA Hosp. Auth. Rev.         
(Lancaster General Hosp.)  5.000%  3/15/36  12,370  11,982 
Lancaster County PA Hosp. Auth. Rev.         
(Lancaster General Hosp.) VRDO  0.270%  12/1/09 LOC  7,300  7,300 
Lancaster County PA Hosp. Auth. Rev.         
(Willow Valley Retirement Project)  5.875%  6/1/21  1,000  1,024 
Lancaster County PA Hosp. Auth. Rev.         
(Willow Valley Retirement Project)  5.875%  6/1/31  6,000  6,065 
Lancaster PA Higher Educ. Auth. Rev.         
(Franklin & Marshall College)  5.000%  4/15/22  1,135  1,198 
Lancaster PA Higher Educ. Auth. Rev.         
(Franklin & Marshall College)  5.000%  4/15/27  2,775  2,863 
Lancaster PA Higher Educ. Auth. Rev.         
(Franklin & Marshall College)  5.000%  4/15/37  4,000  3,959 
Latrobe PA IDA (Saint Vincent College)  5.600%  5/1/21  1,635  1,660 
Latrobe PA IDA (Saint Vincent College)  5.700%  5/1/31  2,165  2,085 
Lebanon County Health Fac. Auth. Rev.         
(Good Samaritan)  6.000%  11/15/35  10,500  9,565 

37


Pennsylvania Long-Term Tax-Exempt Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Lehigh County PA General Purpose Hosp. Auth.         
Rev. (Lehigh Valley Health Network)  5.375%  7/1/14 (4)  900  945 
Lehigh County PA General Purpose Hosp. Auth.         
Rev. (Lehigh Valley Health Network)  7.000%  7/1/16 (14)  4,415  5,100 
Lehigh County PA General Purpose Hosp. Auth.         
Rev. (Lehigh Valley Health Network)  5.000%  7/1/35 (4)  10,000  9,650 
Lehigh County PA General Purpose Hosp. Auth.         
Rev. (Lehigh Valley Health Network) VRDO  0.230%  12/1/09 LOC  2,900  2,900 
Lower Merion PA School Dist. GO  5.000%  9/1/28  7,845  8,516 
Lower Merion PA School Dist. GO  5.000%  9/1/30  8,670  9,314 
Lower Merion PA School Dist. GO  5.000%  9/1/32  5,000  5,306 
Luzerne County PA GO  0.000%  11/15/12 (14)(Prere.) 2,360  1,805 
Luzerne County PA GO  0.000%  11/15/12 (14)(Prere.) 2,390  1,717 
Luzerne County PA GO  5.250%  12/15/21 (14)  5,320  5,920 
1 Luzerne County PA IDA (Amern Water Company)  5.500%  12/1/39  10,000  10,016 
Lycoming County PA Auth. College Rev.         
(PA College of Technology)  5.250%  10/1/27 (12)  5,395  5,662 
Lycoming County PA Auth. College Rev.         
(PA College of Technology)  5.500%  10/1/37 (12)  6,650  6,837 
McKeesport PA Area School Dist. GO  0.000%  10/1/10 (14)  1,840  1,822 
McKeesport PA Area School Dist. GO  0.000%  10/1/11 (14)  1,835  1,789 
McKeesport PA Area School Dist. GO  0.000%  10/1/14 (14)  2,040  1,795 
McKeesport PA Area School Dist. GO  0.000%  10/1/15 (14)  2,040  1,709 
McKeesport PA Area School Dist. GO  0.000%  10/1/16 (14)  4,655  3,701 
McKeesport PA Area School Dist. GO  0.000%  10/1/18 (2)(ETM)  425  316 
McKeesport PA Area School Dist. GO  0.000%  10/1/18 (2)  2,650  1,889 
Mercersburg Borough PA General Purpose Auth.         
(Mercersburg College) VRDO  0.400%  12/7/09 LOC  6,680  6,680 
Monroe County PA Hosp. Auth. Rev.         
(Pocono Medical Center)  5.000%  1/1/27  2,000  1,920 
Monroe County PA Hosp. Auth. Rev.         
(Pocono Medical Center)  5.125%  1/1/37  3,000  2,744 
Monroe County PA Hosp. Auth. Rev.         
(Pocono Medical Center)  5.250%  1/1/43  6,450  5,913 
Montgomery County PA GO  5.000%  10/15/28  13,235  14,312 
Montgomery County PA GO  5.000%  10/15/31  6,450  6,866 
Montgomery County PA Higher Educ. &         
Health Auth. Rev. (Abington Memorial Hosp.)  5.000%  6/1/25  5,000  4,957 
Montgomery County PA Higher Educ. &         
Health Auth. Rev. (Abington Memorial Hosp.)  5.125%  6/1/33  13,545  13,122 
Montgomery County PA Higher Educ. &         
Health Auth. Rev. (Catholic Health East)  5.375%  11/15/14 (Prere.)  2,175  2,561 
Montgomery County PA Higher Educ. &         
Health Auth. Rev. (Dickinson College)  5.000%  5/1/31 (11)  5,750  5,806 
Montgomery County PA Higher Educ. &         
Health Auth. Rev. (Holy Redeemer Health System)  5.250%  1/1/36  17,500  14,135 
Montgomery County PA IDA Rev. (Hill School)  5.000%  8/15/25 (14)  6,500  6,776 
Montgomery County PA IDA Rev. (Hill School)  5.000%  8/15/26 (14)  3,550  3,683 
Montgomery County PA IDA Rev. (Hill School)  5.000%  8/15/27 (14)  3,300  3,409 
Moon Area School Dist. PA GO  5.000%  11/15/28 (4)  5,000  5,169 
Mount Lebanon PA School Dist. GO  5.000%  2/15/13 (14)(Prere.) 9,280  10,455 
Mount Lebanon PA School Dist. GO  5.000%  2/15/34  5,500  5,684 
North Pocono PA School Dist. GO  5.000%  3/15/26 (14)  4,035  4,149 
Northampton County PA General Purpose Auth.         
Univ. Rev. (Lehigh Univ.)  5.000%  11/15/39  2,595  2,636 

38


Pennsylvania Long-Term Tax-Exempt Fund

      Face  Market 
    Maturity   Amount Value• 
  Coupon  Date  ($000)  ($000) 
Northampton County PA General Purpose         
Auth. Univ. Rev. (Lehigh Univ.) VRDO  0.200%  12/7/09  3,095  3,095 
Northampton County PA General Purpose         
Auth. Univ. Rev. (Saint Lukes Hosp. Project)  5.375%  8/15/28  5,000  4,944 
Northampton County PA General Purpose         
Auth. Univ. Rev. (Saint Lukes Hosp. Project)  5.500%  8/15/35  2,500  2,365 
Northampton County PA General Purpose         
Auth. Univ. Rev. (Saint Lukes Hosp. Project)  5.500%  8/15/40  5,000  4,684 
Owen J. Roberts School Dist. Pennsylvania GO  5.500%  8/15/17 (4)  1,495  1,653 
Owen J. Roberts School Dist. Pennsylvania GO  5.000%  5/15/31 (4)  8,000  8,244 
Owen J. Roberts School Dist. Pennsylvania GO  5.000%  5/15/35 (4)  5,000  5,085 
Parkland PA School Dist. GO  5.375%  9/1/15 (14)  3,050  3,568 
Parkland PA School Dist. GO  5.375%  9/1/16 (14)  2,000  2,347 
Pennsbury PA School Dist. GO  5.250%  8/1/24 (4)  9,135  9,813 
Pennsylvania Econ. Dev. Financing Auth. Fac.         
Rev. (Allegheny Energy Supply Company)  7.000%  7/15/39  7,000  7,471 
Pennsylvania Econ. Dev. Financing Auth. Fac.         
Rev. (American Water Company Project)  6.200%  4/1/39  5,000  5,328 
Pennsylvania Econ. Dev. Financing Auth. Fac.         
Rev. (Aqua Pennsylvania Inc.)  5.000%  10/1/39  2,500  2,478 
Pennsylvania Econ. Dev. Financing Auth. Fac.         
Rev. (Aqua Pennsylvania Inc.)  4.750%  11/15/40  2,500  2,374 
Pennsylvania Econ. Dev. Financing Auth. Fac.         
Rev. (Aqua Pennsylvania Inc.)  5.000%  11/15/40  16,475  16,311 
Pennsylvania Econ. Dev. Financing Auth. Fac.         
Rev. (Jefferson Health) VRDO  0.250%  12/7/09  24,480  24,480 
Pennsylvania GO  6.000%  1/15/10 (Prere.)  3,000  3,052 
Pennsylvania GO  5.000%  10/1/10 (14)  22,485  23,363 
Pennsylvania GO  5.000%  8/1/11  17,000  18,233 
Pennsylvania GO  5.000%  8/1/12  20,705  22,948 
Pennsylvania GO  5.000%  7/1/13 (14)  13,945  15,831 
Pennsylvania GO  5.000%  9/1/13  1,200  1,367 
Pennsylvania GO  5.500%  2/1/14 (14)  2,000  2,335 
Pennsylvania GO  5.000%  2/15/14  4,930  5,668 
Pennsylvania GO  5.000%  9/1/14 (4)  21,550  24,985 
Pennsylvania GO  5.250%  7/1/15  25,000  29,418 
Pennsylvania GO  5.000%  8/1/17  10,000  11,734 
Pennsylvania GO  5.000%  11/1/17  2,000  2,349 
Pennsylvania GO  5.375%  7/1/21  16,000  19,209 
Pennsylvania GO  5.000%  1/1/22  18,055  19,672 
Pennsylvania GO  5.000%  8/1/22  33,825  37,462 
Pennsylvania GO  5.000%  1/1/26  40,450  43,268 
Pennsylvania GO  5.000%  3/15/27  5,655  6,191 
Pennsylvania Higher Educ. Assistance Agency Rev.  6.125%  12/15/10 (14)(Prere.)   2,000  2,094 
Pennsylvania Higher Educ. Fac. Auth. Rev.  5.500%  6/15/10 (2)(Prere.)  935  961 
Pennsylvania Higher Educ. Fac. Auth. Rev.  5.625%  6/15/10 (2)(Prere.)  1,160  1,194 
Pennsylvania Higher Educ. Fac. Auth. Rev.  5.000%  6/15/30  1,595  1,668 
Pennsylvania Higher Educ. Fac. Auth. Rev.  5.000%  6/15/31  1,670  1,735 
Pennsylvania Higher Educ. Fac. Auth. Rev.  5.000%  6/15/34  5,535  5,661 
Pennsylvania Higher Educ. Fac. Auth. Rev.  5.000%  11/1/37 (12)  5,745  5,786 
Pennsylvania Higher Educ. Fac. Auth. Rev.  5.000%  6/15/39  1,270  1,290 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Bryn Mawr College)  5.250%  12/1/12 (2)  11,120  12,294 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Bryn Mawr College)  5.000%  12/1/37 (2)  14,170  14,196 

39


Pennsylvania Long-Term Tax-Exempt Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Drexel Univ.)  5.000%  5/1/32 (14)  4,950  4,910 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Drexel Univ.)  5.000%  5/1/37 (14)  2,300  2,312 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Foundation for Indiana Univ. of Pennsylvania         
Student Housing)  0.644%  7/1/17 (10)  6,220  4,482 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Foundation for Indiana Univ. of Pennsylvania         
Student Housing)  5.125%  7/1/39 (10)  17,130  13,538 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(La Salle Univ.)  5.250%  5/1/27  3,000  2,969 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(La Salle Univ.)  5.000%  5/1/37  3,250  2,920 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Philadelphia Univ.)  5.125%  6/1/25  3,500  3,340 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Philadelphia Univ.)  5.000%  11/1/25 (12)  2,285  2,427 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Philadelphia Univ.)  5.000%  11/1/27 (12)  1,800  1,887 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Philadelphia Univ.)  5.250%  6/1/32  6,350  5,795 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Slippery Rock Univ. Foundation)  5.000%  7/1/31 (10)  10,460  9,472 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Slippery Rock Univ. Foundation)  5.000%  7/1/37 (10)  3,500  3,010 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Slippery Rock Univ. Foundation)  5.000%  7/1/39 (10)  10,000  8,728 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Temple Univ.)  5.250%  4/1/11 (14)  1,225  1,236 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Temple Univ.)  5.000%  4/1/23 (14)  12,200  12,904 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Temple Univ.)  5.000%  4/1/24 (14)  12,680  13,347 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Thomas Jefferson Univ.)  5.375%  1/1/13 (Prere.)  4,435  4,989 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Thomas Jefferson Univ.)  5.000%  9/1/39 (2)  9,000  8,597 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(Univ. of Scranton)  5.000%  11/1/28 (10)  4,080  4,147 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(UPMC Health Systems)  6.250%  1/15/16  3,120  3,334 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(UPMC Health Systems)  6.000%  1/15/22  5,000  5,135 
Pennsylvania Higher Educ. Fac. Auth. Rev.         
(UPMC Health Systems)  6.000%  1/15/31  5,000  5,155 
Pennsylvania Higher Educ. Fac. Auth.         
Rev. (Widener)  5.000%  7/15/20  2,360  2,361 
Pennsylvania Higher Educ. Fac. Auth.         
Rev. (Widener)  5.000%  7/15/26  1,200  1,143 
Pennsylvania Higher Educ. Fac. Auth.         
Rev. (Widener)  5.400%  7/15/36  3,000  2,796 
Pennsylvania Higher Educ. Fac. Auth.         
Rev. (Widener)  5.000%  7/15/39  3,000  2,639 
Pennsylvania Higher Educ. Fac. Auth. Rev. PUT  5.000%  5/1/11 LOC  9,120  9,382 
Pennsylvania Housing Finance Agency Rev.  5.400%  10/1/33  25,000  25,836 

40


Pennsylvania Long-Term Tax-Exempt Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Pennsylvania IDA Rev. (Econ. Dev.)  5.500%  7/1/12 (2)(Prere.)  575  648 
Pennsylvania IDA Rev. (Econ. Dev.)  5.500%  7/1/17 (2)  7,000  7,481 
Pennsylvania IDA Rev. (Econ. Dev.)  5.500%  7/1/18 (2)  7,630  8,121 
Pennsylvania IDA Rev. (Econ. Dev.)  5.500%  7/1/19 (2)  10,040  10,628 
Pennsylvania IDA Rev. (Econ. Dev.)  5.500%  7/1/20 (2)  4,495  4,736 
Pennsylvania IDA Rev. (Econ. Dev.)  5.500%  7/1/21 (2)  8,130  8,535 
Pennsylvania IDA Rev. (Econ. Dev.)  5.500%  7/1/23  20,000  21,887 
Pennsylvania Public School Building Auth.         
Lease Rev. (School Dist. of Philadelphia)  5.000%  6/1/27 (4)  12,880  13,001 
Pennsylvania Public School Building Auth.         
Lease Rev. (School Dist. of Philadelphia)  5.000%  6/1/31 (4)  18,305  18,068 
Pennsylvania State Univ. Rev.  5.250%  8/15/12  5,980  6,671 
Pennsylvania State Univ. Rev.  5.000%  3/1/22  1,250  1,411 
Pennsylvania State Univ. Rev.  5.000%  3/1/23  2,020  2,260 
Pennsylvania State Univ. Rev.  5.000%  9/1/24  10,625  11,263 
Pennsylvania State Univ. Rev.  5.000%  9/1/24  3,000  3,214 
Pennsylvania State Univ. Rev.  5.250%  8/15/25  5,360  6,371 
Pennsylvania State Univ. Rev.  5.000%  3/1/26  3,300  3,631 
Pennsylvania State Univ. Rev.  5.000%  3/1/28  1,000  1,086 
Pennsylvania State Univ. Rev.  5.000%  9/1/29  7,625  7,938 
Pennsylvania State Univ. Rev.  5.000%  9/1/29  2,500  2,622 
Pennsylvania State Univ. Rev.  5.000%  9/1/34  6,325  6,480 
Pennsylvania Turnpike Comm. Oil         
Franchise Tax Rev.  5.000%  12/1/13 (14)(Prere.)   6,000  6,882 
Pennsylvania Turnpike Comm. Oil         
Franchise Tax Rev.  5.000%  12/1/26 (2)  4,000  4,104 
Pennsylvania Turnpike Comm. Oil         
Franchise Tax Rev.  5.000%  12/1/27 (2)  3,000  3,064 
Pennsylvania Turnpike Comm. Rev.  3.000%  6/1/10 (12)  4,000  4,045 
Pennsylvania Turnpike Comm. Rev.  5.375%  7/15/11 (2)(Prere.)  1,505  1,636 
Pennsylvania Turnpike Comm. Rev.  5.375%  7/15/11 (2)(Prere.)  2,500  2,718 
Pennsylvania Turnpike Comm. Rev.  5.375%  7/15/11 (2)(Prere.)  1,000  1,087 
Pennsylvania Turnpike Comm. Rev.  3.000%  6/1/12 (12)  2,015  2,080 
Pennsylvania Turnpike Comm. Rev.  5.625%  6/1/12 (14)  9,000  9,697 
Pennsylvania Turnpike Comm. Rev.  3.000%  6/1/13 (12)  2,500  2,589 
Pennsylvania Turnpike Comm. Rev.  4.000%  6/1/14 (12)  1,565  1,679 
Pennsylvania Turnpike Comm. Rev.  5.250%  7/15/27 (4)  4,000  4,503 
Pennsylvania Turnpike Comm. Rev.  5.375%  6/1/28  12,785  13,357 
Pennsylvania Turnpike Comm. Rev.  5.250%  7/15/28 (4)  9,375  10,495 
Pennsylvania Turnpike Comm. Rev.  5.500%  12/1/31 (2)  17,610  18,019 
Pennsylvania Turnpike Comm. Rev.  5.250%  12/1/32 (2)  16,000  16,028 
Pennsylvania Turnpike Comm. Rev.  5.500%  6/1/33  17,920  18,484 
Pennsylvania Turnpike Comm. Rev.  5.250%  6/1/36  12,435  12,417 
Pennsylvania Turnpike Comm. Rev.  5.000%  6/1/38 (12)  6,340  6,264 
Pennsylvania Turnpike Comm. Rev.  6.250%  6/1/38 (12)  19,595  21,493 
Pennsylvania Turnpike Comm. Rev.  5.000%  6/1/39 (12)  20,000  19,745 
Pennsylvania Turnpike Comm. Rev.  5.250%  6/1/39  38,205  37,922 
Pennsylvania Turnpike Comm. Rev.  5.750%  6/1/39  22,000  22,875 
Pennsylvania Turnpike Comm. Rev.  5.300%  12/1/41  12,000  11,985 
Pennsylvania Turnpike Comm. Rev. VRDO  0.270%  12/7/09 (4)  12,400  12,400 
Philadelphia PA Airport Parking Auth.  5.000%  9/1/13  3,260  3,575 
Philadelphia PA Airport Parking Auth.  5.125%  2/15/24 (2)  1,045  1,046 
1 Philadelphia PA Airport Parking Auth.  5.250%  9/1/24  4,025  4,203 
1 Philadelphia PA Airport Parking Auth.  5.125%  9/1/29  5,975  5,992 
Philadelphia PA Airport Parking Auth.  5.250%  9/1/29 (4)  3,530  3,554 
Philadelphia PA Gas Works Rev.  5.250%  7/1/11 (4)  3,965  3,978 

41


Pennsylvania Long-Term Tax-Exempt Fund

      Face  Market 
    Maturity   Amount Value• 
  Coupon  Date  ($000)  ($000) 
Philadelphia PA Gas Works Rev.  5.250%  8/1/11 (4)(Prere.)  8,000  8,620 
Philadelphia PA Gas Works Rev.  5.375%  7/1/12 (4)  4,000  4,013 
Philadelphia PA Gas Works Rev.  5.375%  7/1/14 (4)  4,310  4,321 
Philadelphia PA Gas Works Rev.  5.375%  7/1/16 (4)  13,280  15,122 
Philadelphia PA Gas Works Rev.  5.000%  8/1/16  3,000  3,132 
Philadelphia PA Gas Works Rev.  5.250%  8/1/17  2,000  2,105 
Philadelphia PA Gas Works Rev.  5.375%  7/1/18 (4)  11,555  13,136 
Philadelphia PA Gas Works Rev.  5.000%  10/1/37 (2)  3,000  2,633 
Philadelphia PA GO  5.250%  3/15/11 (4)(Prere.)  4,775  5,069 
Philadelphia PA GO  5.250%  3/15/11 (4)(Prere.)  2,135  2,267 
Philadelphia PA GO  5.000%  12/15/17 (4)  5,555  6,151 
Philadelphia PA GO  5.000%  8/1/18 (14)  6,170  6,512 
Philadelphia PA GO  5.000%  8/1/19 (14)  7,735  8,091 
Philadelphia PA GO  5.000%  8/1/20 (14)  8,005  8,327 
Philadelphia PA GO  5.000%  8/1/21 (14)  6,235  6,450 
Philadelphia PA GO  7.125%  7/15/38 (12)  3,500  3,929 
Philadelphia PA Hosp. & Higher Educ. Fac. Auth.         
Rev. (Children’s Hosp. of Philadelphia) VRDO  0.190%  12/1/09  1,500  1,500 
Philadelphia PA Hosp. & Higher Educ. Fac. Auth.         
Rev. (Children’s Hosp. of Philadelphia) VRDO  0.190%  12/1/09  5,100  5,100 
Philadelphia PA Hosp. & Higher Educ. Fac. Auth.         
Rev. (Children’s Hosp. of Philadelphia) VRDO  0.190%  12/1/09  16,000  16,000 
Philadelphia PA Hosp. & Higher Educ. Fac. Auth.         
Rev. (Jefferson Health System)  5.125%  5/15/18 (2)  5,700  5,729 
Philadelphia PA Hosp. & Higher Educ. Fac. Auth.         
Rev. (Temple University Health System)  5.500%  7/1/30  5,000  4,236 
Philadelphia PA IDA Rev.         
(Philadelphia Airport System)  5.750%  6/15/10 (14)  4,440  4,459 
Philadelphia PA IDA Rev.         
(Philadelphia Airport System)  5.250%  6/15/15 (14)  5,695  5,707 
Philadelphia PA Muni. Auth. Rev.  6.500%  4/1/34  3,250  3,417 
Philadelphia PA Muni. Auth. Rev.  6.500%  4/1/39  9,500  9,937 
Philadelphia PA Redev. Auth. Rev.  5.500%  4/15/15 (14)  3,000  3,171 
Philadelphia PA Redev. Auth. Rev.  5.500%  4/15/17 (14)  2,255  2,356 
Philadelphia PA Redev. Auth. Rev.  5.500%  4/15/19 (14)  2,815  2,914 
Philadelphia PA Redev. Auth. Rev.  5.500%  4/15/20 (14)  2,000  2,062 
Philadelphia PA Redev. Auth. Rev.  5.500%  4/15/22 (14)  5,275  5,399 
Philadelphia PA School Dist. GO  5.250%  2/1/12 (4)  1,000  1,092 
Philadelphia PA School Dist. GO  5.500%  2/1/12 (4)(Prere.)  1,800  1,985 
Philadelphia PA School Dist. GO  5.500%  2/1/12 (4)(Prere.)  2,500  2,757 
Philadelphia PA School Dist. GO  5.500%  2/1/12 (4)(Prere.)  2,000  2,205 
Philadelphia PA School Dist. GO  5.500%  2/1/12 (4)(Prere.)  2,000  2,205 
Philadelphia PA School Dist. GO  5.500%  2/1/12 (4)(Prere.)  1,000  1,103 
Philadelphia PA School Dist. GO  5.500%  2/1/12 (4)(Prere.)  6,200  6,823 
Philadelphia PA School Dist. GO  5.625%  8/1/12 (3)(Prere.)  1,000  1,125 
Philadelphia PA School Dist. GO  5.625%  8/1/12 (3)(Prere.)  6,500  7,314 
Philadelphia PA School Dist. GO  5.625%  8/1/12 (3)(Prere.)  6,000  6,751 
Philadelphia PA School Dist. GO  5.625%  8/1/12 (3)(Prere.)  1,000  1,125 
Philadelphia PA School Dist. GO  5.625%  8/1/12 (3)(Prere.) 10,235  11,516 
Philadelphia PA School Dist. GO  5.625%  8/1/12 (3)(Prere.)  3,500  3,938 
Philadelphia PA School Dist. GO  5.000%  6/1/26 (14)  5,000  5,442 
Philadelphia PA School Dist. GO  6.000%  9/1/38  20,000  21,519 
Philadelphia PA Water & Waste Water Rev.  7.000%  6/15/11 (14)  17,685  19,165 
Philadelphia PA Water & Waste Water Rev.  6.250%  8/1/11 (14)  3,750  4,043 
Philadelphia PA Water & Waste Water Rev.  5.250%  11/1/16 (14)  5,040  5,346 
Philadelphia PA Water & Waste Water Rev.  5.250%  11/1/17 (14)  5,460  5,751 

42


Pennsylvania Long-Term Tax-Exempt Fund

      Face  Market 
    Maturity   Amount Value• 
  Coupon  Date  ($000)  ($000) 
Philadelphia PA Water & Waste Water Rev.  5.600%  8/1/18 (14)(ETM)  925  1,083 
Philadelphia PA Water & Waste Water Rev.  5.375%  11/1/19 (14)  4,155  4,471 
Philadelphia PA Water & Waste Water Rev.  5.250%  1/1/32  5,000  5,057 
Philadelphia PA Water & Waste Water Rev.  5.250%  1/1/36  3,000  2,983 
Pittsburgh PA GO  5.500%  3/1/12 (2)(Prere.)  5,330  5,890 
Pittsburgh PA GO  5.500%  3/1/12 (2)(Prere.)  2,015  2,227 
Pittsburgh PA GO  5.500%  9/1/13 (2)  5,635  5,931 
Pittsburgh PA GO  5.500%  9/1/14 (2)  10,255  11,081 
Pittsburgh PA GO  5.500%  9/1/15 (2)  2,125  2,212 
Pittsburgh PA School Dist. GO  5.375%  9/1/14 (4)  1,755  2,027 
Pittsburgh PA School Dist. GO  5.500%  9/1/16 (4)  4,000  4,707 
Pittsburgh PA School Dist. GO  5.500%  9/1/18 (4)  2,880  3,395 
Pittsburgh PA Water & Sewer Auth. Rev.  5.125%  6/1/12 (2)(Prere.)  3,000  3,322 
Pittsburgh PA Water & Sewer Auth. Rev.  7.250%  9/1/14 (3)(ETM)  14,705  16,988 
Pittsburgh PA Water & Sewer Auth. Rev.  0.000%  9/1/27 (14)  10,830  3,682 
Pittsburgh PA Water & Sewer Auth. Rev.  0.000%  9/1/27 (3)(ETM)  1,935  866 
Pittsburgh PA Water & Sewer Auth. Rev.  0.000%  9/1/28 (14)  7,600  2,399 
Pittsburgh PA Water & Sewer Auth. Rev.  0.000%  9/1/28 (3)(ETM)  1,365  579 
Pittsburgh PA Water & Sewer Auth. Rev.  0.000%  9/1/29 (14)  26,930  7,853 
Pittsburgh PA Water & Sewer Auth. Rev.  0.000%  9/1/29 (3)(ETM)  4,725  1,887 
Pocono Mountain PA School Dist. GO  5.000%  9/1/31 (4)  9,000  9,191 
Radnor Township PA School Dist.  5.000%  8/15/15 (4)(Prere.)  835  980 
Radnor Township PA School Dist.  5.000%  2/15/35 (4)  1,665  1,687 
Reading PA School Dist. GO  0.000%  1/15/15 (14)  9,260  7,278 
Reading PA School Dist. GO  0.000%  1/15/16 (14)  9,270  6,874 
Reading PA School Dist. GO  5.000%  1/15/29 (4)  6,120  6,318 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  5.750%  12/1/11 (Prere.)  2,225  2,471 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  6.250%  12/1/11 (Prere.)  1,480  1,658 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  6.250%  12/1/11 (Prere.)  1,425  1,597 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  6.250%  12/1/11 (Prere.)  1,515  1,698 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  6.250%  12/1/11 (Prere.)  2,390  2,678 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  6.250%  12/1/11 (Prere.)  1,850  2,073 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  6.250%  12/1/13  520  550 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  6.250%  12/1/14  500  527 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  6.250%  12/1/15  530  554 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  6.250%  12/1/16  835  871 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  6.250%  12/1/17  1,725  1,792 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  6.250%  12/1/18  650  675 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  5.750%  12/1/21  775  791 
Sayre PA Health Care Fac. Auth. Rev.         
(Guthrie Health Care System)  5.875%  12/1/31  2,840  2,875 
Scranton PA School Dist. GO  5.250%  6/15/27 (10)  2,750  2,890 
Scranton PA School Dist. GO  5.250%  6/15/31 (10)  2,375  2,449 

43


Pennsylvania Long-Term Tax-Exempt Fund

      Face  Market 
    Maturity  Amount  Value• 
  Coupon  Date  ($000)  ($000) 
Scranton-Lackawanna PA Health & Welfare Auth.         
Rev. (Mercy Health System)  5.625%  1/1/16 (14)  5,490  5,495 
Scranton-Lackawanna PA Health & Welfare Auth.         
Rev. (Mercy Health System)  5.700%  1/1/23 (14)  9,205  9,196 
Scranton-Lackawanna PA Health & Welfare Auth.         
Rev. (Univ. of Scranton)  5.000%  11/1/32 (10)  3,850  3,778 
Scranton-Lackawanna PA Health & Welfare Auth.         
Rev. (Univ. of Scranton)  5.000%  11/1/37 (10)  3,000  2,840 
Shamokin-Coal Township PA  5.000%  7/1/30 (4)  5,700  5,835 
Shamokin-Coal Township PA  5.000%  7/1/36 (4)  6,500  6,529 
Snyder County PA Higher Educ. Auth. Univ.         
Rev. (Susquehanna Univ. Project)  5.000%  1/1/30 (11)  5,000  5,031 
Somerset PA Area School Dist. GO  5.000%  3/15/25 (4)  7,090  7,542 
South Fork PA Hosp. Auth. Rev.         
(Conemaugh Valley Hosp.)  5.625%  7/1/10 (6)  445  450 
South Fork PA Hosp. Auth. Rev.         
(Conemaugh Valley Hosp.)  5.750%  7/1/18 (6)  7,000  7,273 
Southcentral Pennsylvania General Auth. Rev.         
(Wellspan Health)  6.000%  6/1/25  20,000  22,026 
State Public School Building Auth. Pennsylvania         
School Rev. (Daniel Boone School Dist.)  5.000%  4/1/13 (14)(Prere.) 10,000  11,239 
State Public School Building Auth. Pennsylvania         
School Rev. (Philadelphia School Dist.)  5.250%  6/1/13 (4)(Prere.)  9,280  10,608 
Swarthmore Borough Auth. PA College Rev.  5.000%  9/15/30  21,000  21,957 
Uniontown PA Area School Dist. GO  5.500%  10/1/12 (4)(Prere.)  9,950  11,220 
Unionville Chadds Ford PA School Dist.  5.000%  6/1/32  6,440  6,667 
Univ. of Pittsburgh of the Commonwealth         
System of Higher Educ. Pennsylvania         
(Univ. Capital Project)  5.500%  9/15/24  3,000  3,435 
Univ. of Pittsburgh of the Commonwealth         
System of Higher Educ. Pennsylvania         
(Univ. Capital Project)  5.250%  9/15/29  14,000  15,326 
Univ. of Pittsburgh of the Commonwealth         
System of Higher Educ. Pennsylvania         
(Univ. Capital Project)  5.250%  9/15/34  10,100  10,727 
Univ. of Pittsburgh of the Commonwealth         
System of Higher Educ. Pennsylvania         
(Univ. Capital Project)  5.000%  9/15/35  21,500  22,325 
Warwick PA School Dist. GO  5.375%  8/15/11 (3)(Prere.)  2,435  2,633 
Warwick PA School Dist. GO  5.375%  8/15/11 (3)(Prere.)  2,570  2,779 
Washington County PA Hosp. Auth. Rev.         
(Washington Hosp.)  5.250%  7/1/10 (2)  1,750  1,772 
Washington County PA Hosp. Auth. Rev.         
(Washington Hosp.)  5.125%  7/1/11 (2)(ETM)  330  353 
Washington County PA Hosp. Auth. Rev.         
(Washington Hosp.)  5.125%  7/1/11 (2)  1,510  1,599 
Washington County PA Hosp. Auth. Rev.         
(Washington Hosp.)  5.125%  7/1/12 (2)  1,935  2,011 
Washington County PA Hosp. Auth. Rev.         
(Washington Hosp.)  5.250%  7/1/13 (2)  2,035  2,124 
Washington County PA Hosp. Auth. Rev.         
(Washington Hosp.)  5.375%  7/1/14 (2)  1,640  1,727 
Washington County PA Hosp. Auth. Rev.         
(Washington Hosp.)  5.375%  7/1/15 (2)  2,250  2,370 
Washington County PA Hosp. Auth. Rev.         
(Washington Hosp.)  5.500%  7/1/16 (2)  2,375  2,497 

44


Pennsylvania Long-Term Tax-Exempt Fund

      Face  Market 
    Maturity   Amount Value• 
  Coupon  Date  ($000)  ($000) 
West Chester PA Area School Dist. GO  5.000%  5/15/28 (14)  7,480  7,905 
West Cornwall Township PA Muni. Auth. College         
Rev. (Elizabethtown College)  6.000%  12/15/11 (Prere.)  2,650  2,935 
West Cornwall Township PA Muni. Auth. College         
Rev. (Elizabethtown College)  6.000%  12/15/11 (Prere.)  2,000  2,215 
West Jefferson Hills PA School Dist. GO  5.200%  8/1/11 (4)(Prere.)  1,020  1,098 
West Jefferson Hills PA School Dist. GO  5.200%  8/1/11 (4)(Prere.)  1,080  1,163 
West Jefferson Hills PA School Dist. GO  5.200%  8/1/17 (4)  935  997 
West Jefferson Hills PA School Dist. GO  5.200%  8/1/18 (4)  980  1,034 
Westmoreland County PA Muni. Auth. Rev.  5.250%  8/15/15 (4)(Prere.)  3,490  4,130 
Westmoreland County PA Muni. Auth. Rev.  6.125%  7/1/17 (14)(ETM)  7,360  8,744 
Westmoreland County PA Muni. Auth. Service         
Water Rev.  0.000%  8/15/15 (3)  5,000  4,111 
Westmoreland County PA Muni. Auth. Service         
Water Rev.  0.000%  8/15/23 (14)  5,000  2,638 
Westmoreland County PA Muni. Auth. Service         
Water Rev.  0.000%  8/15/24 (14)  4,000  1,820 
Wilkes-Barre PA Finance Auth. Rev.         
(Wilkes Univ. Project)  5.000%  3/1/27  2,200  2,095 
Wilkes-Barre PA Finance Auth. Rev.         
(Wilkes Univ. Project)  5.000%  3/1/37  3,000  2,696 
Wyoming PA Area School Dist.  5.000%  9/1/26 (14)  2,000  2,081 
Wyoming PA Area School Dist.  5.000%  9/1/29 (14)  5,125  5,260 
York County PA  5.000%  6/1/33 (14)  6,000  6,106 
York County PA Solid Waste & Refuse Auth. Rev.  5.500%  12/1/13 (14)  6,750  7,694 
York County PA Solid Waste & Refuse Auth. Rev.  5.500%  12/1/14 (14)  4,050  4,671 
        2,737,144 
Puerto Rico (3.4%)         
Puerto Rico Electric Power Auth. Rev.  5.500%  7/1/20  5,300  5,666 
Puerto Rico Electric Power Auth. Rev.  5.250%  7/1/21 (14)  5,000  5,216 
Puerto Rico GO  5.500%  7/1/18 (14)  10,000  10,574 
Puerto Rico GO  5.500%  7/1/20 (3)  6,000  6,177 
Puerto Rico GO  5.500%  7/1/22 (3)  8,960  9,082 
Puerto Rico Highway & Transp. Auth. Rev.  5.500%  7/1/19 (14)  17,000  17,865 
Puerto Rico Highway & Transp. Auth. Rev.  5.500%  7/1/20 (14)  14,610  15,320 
Puerto Rico Infrastructure Financing Auth.         
Special Tax Rev.  5.500%  7/1/23 (2)  10,000  10,009 
Puerto Rico Infrastructure Financing Auth.         
Special Tax Rev.  0.000%  7/1/30 (3)  14,905  3,586 
Puerto Rico Infrastructure Financing Auth.         
Special Tax Rev.  0.000%  7/1/31 (3)  28,695  6,296 
Puerto Rico Public Buildings Auth. Govt. Fac. Rev.  5.750%  7/1/22 (ETM)  10  12 
Puerto Rico Public Buildings Auth. Govt. Fac. Rev.  5.750%  7/1/22  4,990  5,267 
        95,070 
Virgin Islands (0.1%)         
Virgin Islands Public Finance Auth. Rev.  5.000%  10/1/12  2,000  2,128 
Virgin Islands Public Finance Auth. Rev.  5.250%  10/1/20  1,750  1,786 
        3,914 
Total Tax-Exempt Municipal Bonds (Cost $2,790,802)        2,836,128 

45


Pennsylvania Long-Term Tax-Exempt Fund

  Market 
  Value• 
  ($000) 
Other Assets and Liabilities (–0.4%)   
Other Assets  45,431 
Liabilities  (57,448) 
  (12,017) 
Net Assets (100%)  2,824,111 
 
 
At November 30, 2009, net assets consisted of:   
  Amount 
  ($000) 
Paid-in Capital  2,799,358 
Undistributed Net Investment Income  — 
Accumulated Net Realized Losses  (20,452) 
Unrealized Appreciation (Depreciation)   
Investment Securities  45,326 
Futures Contracts  (121) 
Net Assets  2,824,111 
 
Investor Shares—Net Assets   
Applicable to 59,920,172 outstanding $.001 par value shares of   
beneficial interest (unlimited authorization)  657,210 
Net Asset Value Per Share—Investor Shares  $10.97 
 
Admiral Shares—Net Assets   
Applicable to 197,564,055 outstanding $.001 par value shares of   
beneficial interest (unlimited authorization)  2,166,901 
Net Asset Value Per Share—Admiral Shares  $10.97 

• See Note A in Notes to Financial Statements.
1 Security purchased on a when-issued or delayed-delivery basis for which the fund has not taken delivery as of November 30, 2009.
2 Securities with a value of $1,636,000 have been segregated as initial margin for open futures contracts.
A key to abbreviations and other references follows the Statement of Net Assets.
See accompanying Notes, which are an integral part of the Financial Statements.

46


Pennsylvania Long-Term Tax-Exempt Fund

Key to Abbreviations

ARS—Auction Rate Security.
BAN—Bond Anticipation Note.
COP—Certificate of Participation.
CP—Commercial Paper.
FR—Floating Rate.
GAN—Grant Anticipation Note.
GO—General Obligation Bond.
IDA—Industrial Development Authority Bond.
IDR—Industrial Development Revenue Bond.
PCR—Pollution Control Revenue Bond.
PUT—Put Option Obligation.
RAN—Revenue Anticipation Note.
TAN—Tax Anticipation Note.
TOB—Tender Option Bond.
TRAN—Tax Revenue Anticipation Note.
UFSD—Union Free School District.
USD—United School District.
VRDO—Variable Rate Demand Obligation.
(ETM)—Escrowed to Maturity.
(Prere.)—Prerefunded.

Scheduled principal and interest payments are guaranteed by:
(1) MBIA (Municipal Bond Insurance Association).
(2) AMBAC (Ambac Assurance Corporation).
(3) FGIC (Financial Guaranty Insurance Company).
(4) FSA (Financial Security Assurance).
(5) BIGI (Bond Investors Guaranty Insurance).
(6) Connie Lee Inc.
(7) FHA (Federal Housing Authority).
(8) CapMAC (Capital Markets Assurance Corporation).
(9) American Capital Access Financial Guaranty Corporation.
(10) XL Capital Assurance Inc.
(11) CIFG (CDC IXIS Financial Guaranty).
(12) Assured Guaranty Corp.
(13) Berkshire Hathaway Assurance Corp.
(14) National Public Finance Guarantee Corp.
The insurance does not guarantee the market value of the municipal bonds.

LOC—Scheduled principal and interest payments are guaranteed by bank letter of credit.

47


Pennsylvania Long-Term Tax-Exempt Fund

Statement of Operations

  Year Ended 
  November 30, 2009 
  ($000) 
Investment Income   
Income   
Interest  117,171 
Total Income  117,171 
Expenses   
The Vanguard Group—Note B   
Investment Advisory Services  255 
Management and Administrative—Investor Shares  980 
Management and Administrative—Admiral Shares  1,688 
Marketing and Distribution—Investor Shares  171 
Marketing and Distribution—Admiral Shares  441 
Custodian Fees  22 
Auditing Fees  24 
Shareholders’ Reports and Proxies—Investor Shares  41 
Shareholders’ Reports and Proxies—Admiral Shares  16 
Trustees’ Fees and Expenses  4 
Total Expenses  3,642 
Net Investment Income  113,529 
Realized Net Gain (Loss)   
Investment Securities Sold  6,956 
Futures Contracts  (5,756) 
Realized Net Gain (Loss)  1,200 
Change in Unrealized Appreciation (Depreciation)   
Investment Securities  184,121 
Futures Contracts  2,208 
Change in Unrealized Appreciation (Depreciation)  186,329 
Net Increase (Decrease) in Net Assets Resulting from Operations  301,058 

See accompanying Notes, which are an integral part of the Financial Statements.

48


Pennsylvania Long-Term Tax-Exempt Fund

Statement of Changes in Net Assets

  Year Ended November 30 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  113,529  112,477 
Realized Net Gain (Loss)  1,200  (18,750) 
Change in Unrealized Appreciation (Depreciation)  186,329  (208,344) 
Net Increase (Decrease) in Net Assets Resulting from Operations  301,058  (114,617) 
Distributions     
Net Investment Income     
Investor Shares  (27,069)  (28,060) 
Admiral Shares  (86,460)  (84,417) 
Realized Capital Gain     
Investor Shares  —  (1,252) 
Admiral Shares  —  (3,634) 
Total Distributions  (113,529)  (117,363) 
Capital Share Transactions     
Investor Shares  18,497  15,015 
Admiral Shares  210,421  154,590 
Net Increase (Decrease) from Capital Share Transactions  228,918  169,605 
Total Increase (Decrease)  416,447  (62,375) 
Net Assets     
Beginning of Period  2,407,664  2,470,039 
End of Period  2,824,111  2,407,664 

See accompanying Notes, which are an integral part of the Financial Statements.

49


Pennsylvania Long-Term Tax-Exempt Fund

Financial Highlights

Investor Shares           
 
For a Share Outstanding  Year Ended November 30, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $10.19  $11.18  $11.47  $11.32  $11.53 
Investment Operations           
Net Investment Income  .456  .483  .505  .513  .520 
Net Realized and Unrealized Gain (Loss)           
on Investments  .780  (.968)  (.252)  .179  (.165) 
Total from Investment Operations  1.236  (.485)  .253  .692  .355 
Distributions           
Dividends from Net Investment Income  (.456)  (.483)  (.505)  (.513)  (.520) 
Distributions from Realized Capital Gains  —  (.022)  (.038)  (.029)  (.045) 
Total Distributions  (.456)  (.505)  (.543)  (.542)  (.565) 
Net Asset Value, End of Period  $10.97  $10.19  $11.18  $11.47  $11.32 
 
Total Return1  12.32%  –4.48%  2.30%  6.30%  3.10% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $657  $593  $636  $668  $705 
Ratio of Total Expenses to           
Average Net Assets  0.20%  0.15%  0.15%  0.16%  0.16% 
Ratio of Net Investment Income to           
Average Net Assets  4.26%  4.46%  4.50%  4.55%  4.51% 
Portfolio Turnover Rate  14%  24%  14%  17%  14% 
1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.

See accompanying Notes, which are an integral part of the Financial Statements.

50


Pennsylvania Long-Term Tax-Exempt Fund

Financial Highlights

Admiral Shares           
 
For a Share Outstanding  Year Ended November 30, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $10.19  $11.18  $11.47  $11.32  $11.53 
Investment Operations           
Net Investment Income  .464  .491  .513  .522  .528 
Net Realized and Unrealized Gain (Loss)           
on Investments  .780  (.968)  (.252)  .179  (.165) 
Total from Investment Operations  1.244  (.477)  .261  .701  .363 
Distributions           
Dividends from Net Investment Income  (.464)  (.491)  (.513)  (.522)  (.528) 
Distributions from Realized Capital Gains  —  (.022)  (.038)  (.029)  (.045) 
Total Distributions  (.464)  (.513)  (.551)  (.551)  (.573) 
Net Asset Value, End of Period  $10.97  $10.19  $11.18  $11.47  $11.32 
 
Total Return  12.41%  –4.41%  2.38%  6.37%  3.18% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $2,167  $1,815  $1,834  $1,722  $1,577 
Ratio of Total Expenses to           
Average Net Assets  0.12%  0.08%  0.08%  0.09%  0.09% 
Ratio of Net Investment Income to           
Average Net Assets  4.34%  4.53%  4.57%  4.62%  4.58% 
Portfolio Turnover Rate  14%  24%  14%  17%  14% 

See accompanying Notes, which are an integral part of the Financial Statements.

51


Pennsylvania Long-Term Tax-Exempt Fund

Notes to Financial Statements

Vanguard Pennsylvania Long-Term Tax-Exempt Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund invests in debt instruments of municipal issuers whose ability to meet their obligations may be affected by economic and political developments in the state. The fund offers two classes of shares, Investor Shares and Admiral Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares are designed for investors who meet certain administrative, service, tenure, and account-size criteria.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Bonds, and temporary cash investments acquired over 60 days to maturity, are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments are valued at amortized cost, which approximates market value. Securities for which market quotations are not readily available, or whose values have been affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued by methods deemed by the board of trustees to represent fair value.

2. Futures Contracts: The fund uses futures contracts to invest in fixed income asset classes with greater efficiency and lower cost than is possible through direct investment, to add value when these instruments are attractively priced, or to adjust sensitivity to changes in interest rates. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of bonds held by the fund and the prices of futures contracts, and the possibility of an illiquid market.

Futures contracts are valued based upon their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of the contracts are recorded in the Statement of Net Assets as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized futures gains (losses).

3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (November 30, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

4. Distributions: Distributions from net investment income are declared daily and paid on the first business day of the following month. Annual distributions from realized capital gains, if any, are recorded on the ex-dividend date.

5. Other: Interest income is accrued daily. Premiums and discounts on debt securities purchased are amortized and accreted, respectively, to interest income over the lives of the respective securities. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.

Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses), shareholder reporting, and proxies. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.

52


Pennsylvania Long-Term Tax-Exempt Fund

B. The Vanguard Group furnishes at cost investment advisory, corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At November 30, 2009, the fund had contributed capital of $586,000 to Vanguard (included in Other Assets), representing 0.02% of the fund’s net assets and 0.23% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

The following table summarizes the fund’s investments as of November 30, 2009, based on the inputs used to value them:

  Level 1  Level 2  Level 3 
Investments  ($000)  ($000)  ($000) 
Tax-Exempt Municipal Bonds  —  2,836,128  — 
Futures Contracts—Liabilities1  (5)  —  — 
Total  (5)  2,836,128  — 
1 Represents variation margin on the last day of the reporting period.       

D. At November 30, 2009, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:

      ($000) 
    Number of  Aggregate  Unrealized 
    Long (Short)  Settlement  Appreciation 
Futures Contracts  Expiration  Contracts  Value  (Depreciation) 
10-Year United States Treasury Note/Bond  March 2010  (62)  7,436  (99) 
30-Year United States Treasury Note/Bond  March 2010  (9)  1,104  (22) 

Unrealized appreciation (depreciation) on open futures contracts is required to be treated as realized gain (loss) for tax purposes.

E. Capital gain distributions are determined on a tax basis and may differ from realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when gains or losses are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future.

For tax purposes, at November 30, 2009, the fund had available capital loss carryforwards totaling $16,019,000 to offset future net capital gains through November 30, 2016.

53


Pennsylvania Long-Term Tax-Exempt Fund

The fund had realized losses totaling $4,554,000 through November 30, 2009, which are deferred for tax purposes and reduce the amount of tax-basis unrealized appreciation on investment securities.

At November 30, 2009, the cost of investment securities for tax purposes was $2,795,356,000. Net unrealized appreciation of investment securities for tax purposes was $40,772,000, consisting of unrealized gains of $91,321,000 on securities that had risen in value since their purchase and $50,549,000 in unrealized losses on securities that had fallen in value since their purchase.

F. During the year ended November 30, 2009, the fund purchased $646,972,000 of investment securities and sold $352,415,000 of investment securities, other than temporary cash investments.

G. Capital share transactions for each class of shares were:

  Year Ended November 30, 
  2009  2008 
  Amount  Shares  Amount  Shares 
  ($000)  (000)  ($000)  (000) 
Investor Shares         
Issued  192,504  18,013  183,247  16,901 
Issued in Lieu of Cash Distributions  20,553  1,916  21,934  2,039 
Redeemed  (194,560)  (18,179)  (190,166)  (17,624) 
Net Increase (Decrease)—Investor Shares  18,497  1,750  15,015  1,316 
Admiral Shares         
Issued  415,326  38,761  435,275  40,293 
Issued in Lieu of Cash Distributions  58,258  5,429  60,709  5,644 
Redeemed  (263,163)  (24,736)  (341,394)  (31,816) 
Net Increase (Decrease)—Admiral Shares  210,421  19,454  154,590  14,121 

H. In preparing the financial statements as of November 30, 2009, management considered the impact of subsequent events occurring through January 11, 2010, for potential recognition or disclosure in these financial statements.

54


Report of Independent Registered
Public Accounting Firm

To the Trustees of Vanguard Pennsylvania Tax-Free Funds and the Shareholders of Vanguard Pennsylvania Tax-Exempt Money Market Fund and Vanguard Pennsylvania Long-Term Tax-Exempt Fund:

In our opinion, the accompanying statements of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Vanguard Pennsylvania Tax-Exempt Money Market Fund and Vanguard Pennsylvania Long-Term Tax-Exempt Fund (constituting Vanguard Pennsylvania Tax-Free Funds, hereafter referred to as the “Funds”) at November 30, 2009, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at November 30, 2009 by correspondence with the custodian and broker, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania

January 11, 2010


Special 2009 tax information (unaudited) for Vanguard Pennsylvania Tax-Exempt Funds

This information for the fiscal year ended November 30, 2009, is included pursuant to provisions
of the Internal Revenue Code.

Each fund designates 100% of its income dividends as exempt-interest dividends.

55


About Your Fund’s Expenses

As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund.

A fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.

The accompanying table illustrates your fund’s costs in two ways:

• Based on actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from the fund’s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.

To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading “Expenses Paid During Period.”

• Based on hypothetical 5% yearly return. This section is intended to help you compare your fund’s costs with those of other mutual funds. It assumes that the fund had a yearly return of 5% before expenses, but that the expense ratio is unchanged. In this case—because the return used is not the fund’s actual return—the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transaction costs incurred by the fund for buying and selling securities. Further, the expenses do not include the account service fee described in the prospectus. If such a fee were applied to your account, your costs would be higher. Your fund does not charge transaction fees, such as purchase or redemption fees, nor does it carry a “sales load.”

The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

You can find more information about the fund’s expenses, including annual expense ratios, in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to your fund’s current prospectus.

56


Six Months Ended November 30, 2009       
  Beginning  Ending  Expenses 
  Account Value  Account Value  Paid During 
Pennsylvania Tax-Exempt Fund  5/31/2009  11/30/2009  Period1 
Based on Actual Fund Return       
Money Market  $1,000.00  $1,001.03  $0.85 
Long-Term       
Investor Shares  1,000.00  1,040.93  1.02 
Admiral Shares  1,000.00  1,041.35  0.61 
Based on Hypothetical 5% Yearly Return       
Money Market  $1,000.00  $1,024.22  $0.86 
Long-Term       
Investor Shares  1,000.00  1,024.07  1.01 
Admiral Shares  1,000.00  1,024.47  0.61 

1 The calculations are based on expenses incurred in the most recent six-month period. The funds’ annualized expense ratios for that period
are: for the Pennsylvania Tax-Exempt Money Market Fund, 0.17%, and for the Pennsylvania Long-Term Tax-Exempt Fund, 0.20% for Investor
Shares and 0.12% for Admiral Shares. The dollar amounts shown as “Expenses Paid” are equal to the annualized expense ratio multiplied
by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by the
number of days in the most recent 12-month period.

57


Glossary

Average Coupon. The average interest rate paid on the fixed income securities held by a fund. It is expressed as a percentage of face value.

Average Duration. An estimate of how much the value of the bonds held by a fund will fluctuate in response to a change in interest rates. To see how the value could change, multiply the average duration by the change in rates. If interest rates rise by 1 percentage point, the value of the bonds in a fund with an average duration of five years would decline by about 5%. If rates decrease by a percentage point, the value would rise by 5%.

Average Effective Maturity. The average length of time until fixed income securities held by a fund reach maturity and are repaid, taking into consideration the possibility that the issuer may call the bond before its maturity date. The figure reflects the proportion of fund assets represented by each security; it also reflects any futures contracts held. In general, the longer the average effective maturity, the more a fund’s share price will fluctuate in response to changes in market interest rates.

Average Quality. An indicator of credit risk, this figure is the average of the ratings assigned to a fund’s holdings by credit-rating agencies. The agencies make their judgment after appraising an issuer’s ability to meet its obligations. Quality is graded on a scale, with AAA indicating the most creditworthy bond issuers and MIG-1, A-1+, SP-1+, and F-1+ indicating the most creditworthy issuers of money market securities.

Average Weighted Maturity. The average length of time until fixed income securities held by a fund reach maturity and are repaid. The figure reflects the proportion of fund assets represented by each security.

Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12% when the index rose or fell by 10%. For this report, beta is based on returns over the past 36 months for both the fund and the index. Note that a fund’s beta should be reviewed in conjunction with its R-squared (see definition). The lower the R-squared, the less correlation there is between the fund and the index, and the less reliable beta is as an indicator of volatility.

Expense Ratio. The percentage of a fund’s average net assets used to pay its annual administrative and advisory expenses. These expenses directly reduce returns to investors.

Inception Date. The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund’s investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is measured from the inception date.

R-Squared. A measure of how much of a fund’s past returns can be explained by the returns from the market in general, as measured by a given index. If a fund’s total returns were precisely synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no relationship to the index’s returns, its R-squared would be 0. For this report, R-squared is based on returns over the past 36 months for both the fund and the index.

58


Short-Term Reserves. The percentage of a fund invested in highly liquid, short-term securities that can be readily converted to cash.

Yield. A money market fund’s 7-day yield is calculated by annualizing its income distributions for the previous seven days, as required by the U.S. Securities and Exchange Commission. For other funds, 30-day SEC yield is derived using a formula specified by the commission. Under the formula, data related to the fund’s security holdings in the previous 30 days are used to calculate the fund’s hypothetical net income for that period, which is then annualized and divided by the fund’s estimated average net assets over the calculation period. For the purposes of this calculation, a security’s income is based on its current market yield to maturity (in the case of bonds) or its projected dividend yield (for stocks). Because the SEC yield represents hypothetical annualized income, it will differ—at times significantly—from the fund’s actual experience. As a result, the fund’s income distributions may be higher or lower than implied by the SEC yield.

Yield to Maturity. The rate of return an investor would receive if the fixed income securities held by a fund were held to their maturity dates.

59


The People Who Govern Your Fund

The trustees of your mutual fund are there to see that the fund is operated and managed in your best interests since, as a shareholder, you are a part owner of the fund. Your fund’s trustees also serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard funds and provides services to them on an at-cost basis.

A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 163 Vanguard funds.

The following table provides information for each trustee and executive officer of the fund. More information about the trustees is in the Statement of Additional Information, which can be obtained, without charge, by contacting Vanguard at 800-662-7447, or online at www.vanguard.com.

Interested Trustees1  Emerson U. Fullwood 
  Born 1948. Trustee Since January 2008. Principal 
John J. Brennan  Occupation(s) During the Past Five Years: Executive 
Born 1954. Trustee Since May 1987. Chairman of  Chief Staff and Marketing Officer for North America 
the Board. Principal Occupation(s) During the Past  and Corporate Vice President (retired 2008) of Xerox 
Five Years: Chairman of the Board and Director/Trustee  Corporation (photocopiers and printers); Director of 
of The Vanguard Group, Inc., and of each of the  SPX Corporation (multi-industry manufacturing), the 
investment companies served by The Vanguard Group;  United Way of Rochester, the Boy Scouts of America, 
Chief Executive Officer (1996–2008) and President  Amerigroup Corporation (direct health and medical 
(1989–2008) of The Vanguard Group and of each of the  insurance carriers), and Monroe Community College 
investment companies served by The Vanguard Group;  Foundation. 
Chairman of the Financial Accounting Foundation;   
Governor of the Financial Industry Regulatory Authority  Rajiv L. Gupta 
(FINRA); Director of United Way of Southeastern  Born 1945. Trustee Since December 2001.2 Principal 
Pennsylvania.  Occupation(s) During the Past Five Years: Chairman 
  and Chief Executive Officer (retired 2009) and President 
F. William McNabb III  (2006–2008) of Rohm and Haas Co. (chemicals); Board 
Born 1957. Trustee Since July 2009. Principal  Member of American Chemistry Council; Director of 
Occupation(s) During the Past Five Years: Director of  Tyco International, Ltd. (diversified manufacturing and 
The Vanguard Group, Inc., since 2008; Chief Executive  services) and Hewlett-Packard Co. (electronic computer 
Officer and President of The Vanguard Group and of  manufacturing); Trustee of The Conference Board. 
each of the investment companies served by The   
Vanguard Group since 2008; Director of Vanguard  Amy Gutmann 
Marketing Corporation; Managing Director of The  Born 1949. Trustee Since June 2006. Principal 
Vanguard Group (1995–2008).  Occupation(s) During the Past Five Years: President of 
  the University of Pennsylvania; Christopher H. Browne 
  Distinguished Professor of Political Science in the School 
Independent Trustees  of Arts and Sciences with secondary appointments 
  at the Annenberg School for Communication and the 
Charles D. Ellis  Graduate School of Education of the University of 
Born 1937. Trustee Since January 2001. Principal  Pennsylvania; Director of Carnegie Corporation of 
Occupation(s) During the Past Five Years: Applecore  New York, Schuylkill River Development Corporation, 
Partners (pro bono ventures in education); Senior  and Greater Philadelphia Chamber of Commerce; 
Advisor to Greenwich Associates (international business  Trustee of the National Constitution Center. 
strategy consulting); Successor Trustee of Yale University;   
Overseer of the Stern School of Business at New York   
University; Trustee of the Whitehead Institute for   
Biomedical Research.   


JoAnn Heffernan Heisen  Executive Officers   
Born 1950. Trustee Since July 1998. Principal     
Occupation(s) During the Past Five Years: Corporate  Thomas J. Higgins   
Vice President and Chief Global Diversity Officer since  Born 1957. Chief Financial Officer Since September 
2006 (retired 2008) and Member of the Executive  2008. Principal Occupation(s) During the Past Five 
Committee (retired 2008) of Johnson & Johnson  Years: Principal of The Vanguard Group, Inc.; Chief 
(pharmaceuticals/consumer products); Vice President  Financial Officer of each of the investment companies 
and Chief Information Officer of Johnson & Johnson  served by The Vanguard Group since 2008; Treasurer 
(1997–2005); Director of the University Medical Center  of each of the investment companies served by The 
at Princeton and Women’s Research and Education  Vanguard Group (1998–2008). 
Institute; Member of the Advisory Board of the Maxwell     
School of Citizenship and Public Affairs at Syracuse  Kathryn J. Hyatt   
University.  Born 1955. Treasurer Since November 2008. Principal 
  Occupation(s) During the Past Five Years: Principal of 
F. Joseph Loughrey  The Vanguard Group, Inc.; Treasurer of each of the 
Born 1949. Trustee Since October 2009. Principal  investment companies served by The Vanguard 
Occupation(s) During the Past Five Years: President and  Group since 2008; Assistant Treasurer of each of the 
Chief Operating Officer since 2005 (retired 2009) and  investment companies served by The Vanguard Group 
Vice Chairman of the Board (2008–2009) of Cummins  (1988–2008).   
Inc. (industrial machinery); Director of SKF AB (industrial     
machinery), Hillenbrand, Inc. (specialized consumer  Heidi Stam   
services), Sauer-Danfoss Inc. (machinery), the Lumina  Born 1956. Secretary Since July 2005. Principal 
Foundation for Education, and the Columbus Community  Occupation(s) During the Past Five Years: Managing 
Education Coalition; Chairman of the Advisory Council  Director of The Vanguard Group, Inc., since 2006; 
for the College of Arts and Letters at the University of  General Counsel of The Vanguard Group since 2005; 
Notre Dame.  Secretary of The Vanguard Group and of each of the 
  investment companies served by The Vanguard Group 
André F. Perold  since 2005; Director and Senior Vice President of 
Born 1952. Trustee Since December 2004. Principal  Vanguard Marketing Corporation since 2005; Principal 
Occupation(s) During the Past Five Years: George Gund  of The Vanguard Group (1997–2006). 
Professor of Finance and Banking, Harvard Business     
School; Chair of the Investment Committee of HighVista     
Strategies LLC (private investment firm).  Vanguard Senior Management Team 
 
Alfred M. Rankin, Jr.  R. Gregory Barton  Michael S. Miller 
Born 1941. Trustee Since January 1993. Principal  Mortimer J. Buckley  James M. Norris 
Occupation(s) During the Past Five Years: Chairman,  Kathleen C. Gubanich  Glenn W. Reed 
President, and Chief Executive Officer of NACCO  Paul A. Heller  George U. Sauter 
Industries, Inc. (forklift trucks/housewares/lignite);     
Director of Goodrich Corporation (industrial products/     
aircraft systems and services); Deputy Chairman of   
the Federal Reserve Bank of Cleveland; Trustee of  Founder    
University Hospitals of Cleveland, The Cleveland  John C. Bogle   
Museum of Art, and Case Western Reserve University.  Chairman and Chief Executive Officer, 1974–1996 
 
Peter F. Volanakis     
Born 1955. Trustee Since July 2009. Principal     
Occupation(s) During the Past Five Years: President     
since 2007 and Chief Operating Officer since 2005     
of Corning Incorporated (communications equipment);     
President of Corning Technologies (2001–2005); Director     
of Corning Incorporated and Dow Corning; Trustee of     
the Corning Incorporated Foundation and the Corning     
Museum of Glass; Overseer of the Amos Tuck School     
of Business Administration at Dartmouth College.     

1 These individuals are considered “interested persons,” as defined in the Investment Company Act of 1940, because they are officers of the
Vanguard funds.
2 December 2002 for Vanguard Equity Income Fund, Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, and the Vanguard
State Tax-Exempt Funds.


P.O. Box 2600
Valley Forge, PA 19482-2600

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  guidelines by visiting our website, www.vanguard.com, 
Text Telephone for People  and searching for “proxy voting guidelines,” or by 
With Hearing Impairment > 800-749-7273  calling Vanguard at 800-662-2739. The guidelines are 
  also available from the SEC’s website, www.sec.gov. 
  In addition, you may obtain a free report on how your 
  fund voted the proxies for securities it owned during 
the 12 months ended June 30. To get the report, visit 
This material may be used in conjunction either www.vanguard.com or www.sec.gov.
with the offering of shares of any Vanguard 
fund only if preceded or accompanied by   
the fund’s current prospectus.  You can review and copy information about your fund 
  at the SEC’s Public Reference Room in Washington, D.C. 
CFA® is a trademark owned by CFA Institute.  To find out more about this public service, call the SEC 
  at 202-551-8090. Information about your fund is also 
  available on the SEC’s website, and you can receive 
  copies of this information, for a fee, by sending a 
  request in either of two ways: via e-mail addressed to 
  publicinfo@sec.gov or via regular mail addressed to the 
  Public Reference Section, Securities and Exchange 
  Commission, Washington, DC 20549-1520. 
 
 
 
 
  © 2010 The Vanguard Group, Inc. 
  All rights reserved. 
  Vanguard Marketing Corporation, Distributor. 
  Q770 012010 


Item 2: Code of Ethics. The Registrant has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Ethics was amended during the reporting period covered by this report to make certain technical, non-material changes.

Item 3: Audit Committee Financial Expert. The following members of the Audit Committee have been determined by the Registrant’s Board of Trustees to be Audit Committee Financial Experts serving on its Audit Committee, and to be independent: Charles D. Ellis, Rajiv L. Gupta, JoAnn Heffernan Heisen, André F. Perold, and Alfred M. Rankin, Jr.

Item 4: Principal Accountant Fees and Services.

(a) Audit Fees.

Audit Fees of the Registrant

Fiscal Year Ended November 30, 2009: $43,000
Fiscal Year Ended November 30, 2008: $42,000

Aggregate Audit Fees of Registered Investment Companies in the Vanguard Group.

Fiscal Year Ended November 30, 2009: $3,354,640
Fiscal Year Ended November 30, 2008: $3,055,590

(b) Audit-Related Fees.

Fiscal Year Ended November 30, 2009: $876,210
Fiscal Year Ended November 30, 2008: $626,240

Includes fees billed in connection with assurance and related services provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group.

(c) Tax Fees.

Fiscal Year Ended November 30, 2009: $423,070
Fiscal Year Ended November 30, 2008: $230,400

Includes fees billed in connection with tax compliance, planning and advice services provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group and related to income and excise taxes.


(d) All Other Fees.

Fiscal Year Ended November 30, 2009: $0
Fiscal Year Ended November 30, 2008: $0

Includes fees billed for services related to risk management and privacy matters. Services were provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group.

(e) (1) Pre-Approval Policies. The policy of the Registrant’s Audit Committee is to consider and, if appropriate, approve before the principal accountant is engaged for such services, all specific audit and non-audit services provided to: (1) the Registrant; (2) The Vanguard Group, Inc.; (3) other entities controlled by The Vanguard Group, Inc. that provide ongoing services to the Registrant; and (4) other registered investment companies in the Vanguard Group. In making a determination, the Audit Committee considers whether the services are consistent with maintaining the principal accountant’s independence.

     In the event of a contingency situation in which the principal accountant is needed to provide services in between scheduled Audit Committee meetings, the Chairman of the Audit Committee would be called on to consider and, if appropriate, pre-approve audit or permitted non-audit services in an amount sufficient to complete services through the next Audit Committee meeting, and to determine if such services would be consistent with maintaining the accountant’s independence. At the next scheduled Audit Committee meeting, services and fees would be presented to the Audit Committee for formal consideration, and, if appropriate, approval by the entire Audit Committee. The Audit Committee would again consider whether such services and fees are consistent with maintaining the principal accountant’s independence.

     The Registrant’s Audit Committee is informed at least annually of all audit and non-audit services provided by the principal accountant to the Vanguard complex, whether such services are provided to: (1) the Registrant; (2) The Vanguard Group, Inc.; (3) other entities controlled by The Vanguard Group, Inc. that provide ongoing services to the Registrant; or (4) other registered investment companies in the Vanguard Group.

     (2) No percentage of the principal accountant’s fees or services were approved pursuant to the waiver provision of paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) For the most recent fiscal year, over 50% of the hours worked under the principal accountant’s engagement were not performed by persons other than full-time, permanent employees of the principal accountant.

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(g) Aggregate Non-Audit Fees.

Fiscal Year Ended November 30, 2009: $423,070
Fiscal Year Ended November 30, 2008: $230,400

Includes fees billed for non-audit services provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group.

(h) For the most recent fiscal year, the Audit Committee has determined that the provision of all non-audit services was consistent with maintaining the principal accountant’s independence.

Item 5: Not Applicable.

Item 6: Not Applicable.

Item 7: Not Applicable.

Item 8: Not Applicable.

Item 9: Not Applicable.

Item 10: Not Applicable.

Item 11: Controls and Procedures.

     (a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant's Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.

     (b) Internal Control Over Financial Reporting. There were no significant changes in Registrant’s Internal Control Over Financial Reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


Item 12: Exhibits.

(a) Code of Ethics.
(b) Certifications.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  VANGUARD PENNSYLVANIA TAX-FREE FUNDS 
 
BY:  /s/ F. WILLIAM MCNABB III* 
  F. WILLIAM MCNABB III 
  CHIEF EXECUTIVE OFFICER 
 
Date: January 25, 2010 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

  VANGUARD PENNSYLVANIA TAX-FREE FUNDS 
 
BY:  /s/ F. WILLIAM MCNABB III* 
  F. WILLIAM MCNABB III 
  CHIEF EXECUTIVE OFFICER 
Date: January 25, 2010 
  VANGUARD PENNSYLVANIA TAX-FREE FUNDS 
BY:  /s/ THOMAS J. HIGGINS* 
  THOMAS J. HIGGINS 
  CHIEF FINANCIAL OFFICER 
Date: January 25, 2010 

* By: /s/ Heidi Stam

Heidi Stam, pursuant to a Power of Attorney filed on July 24, 2009, see file Number
2-88373, and a Power of Attorney filed on October 16, 2009, see File Number 2-52698,
both Incorporated by Reference.