<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 4
Portfolio of Investments......................... 5
Statement of Assets and Liabilities.............. 8
Statement of Operations.......................... 9
Statement of Changes in Net Assets............... 10
Financial Highlights............................. 11
Notes to Financial Statements.................... 12
</TABLE>
VFQ SAR 4/96
<PAGE> 2
LETTER TO SHAREHOLDERS
April 15, 1996
Dear Shareholder,
We are pleased to report that the
Van Kampen American Capital Florida
Quality Municipal Trust (formerly Van
Kampen Merritt Florida Quality
Municipal Trust) continued its strong [PHOTO OF DENNIS J. MCDONNELL AND
performance over the first half of its DON G. POWELL]
fiscal year, having achieved a total
return at market price of 12.24
percent(1) for the six months ended
February 29, 1996.
Additionally, the Trust offered a
tax-exempt distribution rate of 6.18
percent (3), based on the closing common stock price of $17.00 per share on
February 29, 1996. Because income from the Trust is exempt from federal income
tax and the Florida Intangibles Tax, this distribution rate represents a yield
equivalent to a taxable investment earning 9.66 percent(4) (for Florida
residents in the 36 percent federal income tax bracket ).
CUMULATIVE TOTAL RETURN
While the six-month results are attractive for investors, the return for
each period will vary according to changing market conditions. It is important,
therefore, to look at the Trust's cumulative results to see the full benefit of
its long-term investment approach.
Since beginning operations on September 27, 1991, the Trust's cumulative
total return at net asset value was 50.73 percent. The Trust's performance
demonstrates the value of experienced portfolio management, as well as the
importance of reinvesting distributions. Together, these factors reinforce our
confidence in the long-term approach we utilize in managing the Trust.
EXTENSIVE EXPERIENCE IN MUNICIPAL BONDS
This year, we will celebrate 22 years of experience in investing in
municipal bonds. Thanks to our long-term investment record, Van Kampen American
Capital Investment Advisory Corp. today manages over $12 billion in municipal
bonds. We attribute much of our success to skillful, in-depth credit analysis of
the securities in which we invest, conducted by one of the largest municipal
research departments in the industry. Over the years, careful attention to the
Trust's overall credit composition (refer to the pie chart on page 2), average
bond maturity, duration and coupon structure also have benefited the Trust's
performance.
Continued on page two
1
<PAGE> 3
MUNICIPAL MARKET OVER THE PAST SIX MONTHS
The slowdown in the economy continued through the end of 1995, reflected by
weak consumer demand and disappointing retail sales during the holiday season.
Severe winter weather in many parts of the country further dampened retail
activity and hindered distribution and manufacturing.
These conditions helped to keep inflation in check, prompting the Federal
Reserve Board to continue easing short-term interest rates. In turn, long-term
interest rates declined, causing the price of bonds to increase. Municipal bond
yields declined in concert with other interest rates, with the yield on the Bond
Buyer's 40 Municipal Bond Index dropping by 40 basis points to 5.71 percent.
At the same time, the Index increased by 3.5 percent to 118.72.
The beginning of 1996 was marked by an increase in market volatility, which
effectively ended the decline in muni yields. This volatility was triggered in
part by three factors: fiscal uncertainty caused by two unprecedented shutdowns
of the federal government, presidential primary debates about impending tax
reform, and an unexpected mixed reversal in a number of key economic indicators,
which consequently sent the market mixed signals on the direction of the
economy.
Still, due to the government shutdowns and the unusually harsh weather, the
market remained skeptical of the predictive value of economic statistics issued
for January and February. Interest rates have fluctuated as the market attempts
to determine whether the economy will remain slow throughout 1996.
[CREDIT QUALITY GRAPH]
Portfolio Composition by Credit Quality
as of February 29, 1996
<TABLE>
<S> <C>
AAA............ 77.0%
AA............. 9.9
A.............. 5.0
BBB............ 4.0
BB............. 2.2
Non-Rated...... 1.9
-----
100.0%
=====
</TABLE>
OUTLOOK FOR THE MUNICIPAL MARKET
In general, we anticipate a pickup in economic activity during the first
half of the year, with possibilities of an increase in inflation and an economic
slowdown toward the end of the year. We believe the Fed will be cautious in its
monetary policy toward short-term interest rates, as mixed economic news
continues to be reported.
The Fed is expected to maintain its focus on growing the economy at an
annual rate of 2 to 3 percent, while striving to keep inflation at bay. Interest
rates are likely to remain within the range experienced over the past several
years, with a continuation of historically low rates.
This type of market environment (of relatively low rates) typically lends
itself to the use of an investment technique called leveraging, which involves
borrowing short-term funds to purchase long-term municipal securities. The
yields available on these long-term securities (which are typically much higher
than those on short-term securities) have enabled our portfolio management team
to cover the cost of the Trust's short-term borrowing by a substantial margin.
The additional income earned by the Trust through
Continued on page three
2
<PAGE> 4
leveraging has been reflected in its ability to maintain a highly attractive
distribution rate in relation to similar--but non-leveraged--investment
vehicles. (Conversely, a rise in interest rates may tend to produce an
unfavorable effect on the Trust's common share performance and would likely
cause the Trust to underperform a non-leveraged portfolio.)
FLORIDA MUNICIPAL BONDS
Florida's rate of economic growth, which has been among the strongest in the
southeast, is expected to continue at a slow but steady pace. Per capita income
is slightly above the national average and should continue to provide a tax base
that is fully capable of supporting a large and growing population.
With damages of approximately $1.8 billion in October 1995, Hurricane Opal
was the third-costliest tropical storm in U.S. history. However, private
insurance and federal funds limited the state's costs to $20 million, and state
sales tax revenues will be bolstered by the increase in spending which will
accompany the rebuilding process.
TOP 5 INDUSTRY HOLDINGS BY SECTOR AS OF FEBRUARY 29, 1996
Retail Electric / Gas / Telephone........................ 26.4%
Health Care.............................................. 22.0%
Water & Sewer............................................ 11.5%
Airport.................................................. 8.2%
General Purpose.......................................... 7.1%
RESEARCH AND LONG-TERM RETURNS
We believe that the cumulative return of the Trust--and the performance
achieved by many of our other municipal bond funds--demonstrates our commitment
to thorough research and a long-term, value-oriented investment approach.
Thank you for your confidence in Van Kampen American Capital and in your
Trust's management team.
Sincerely,
DON G. POWELL
Don G. Powell
Chairman
Van Kampen American Capital
Investment Advisory Corp.
DENNIS J. McDONNELL
Dennis J. McDonnell
President
Van Kampen American Capital
Investment Advisory Corp.
3
<PAGE> 5
PERFORMANCE RESULTS FOR THE PERIOD ENDED FEBRUARY 29, 1996
VAN KAMPEN AMERICAN CAPITAL FLORIDA QUALITY MUNICIPAL TRUST
(NYSE TICKER SYMBOL--VFM)
<TABLE>
<CAPTION>
COMMON SHARE TOTAL RETURNS
<S> <C>
Six-month total return based on market price(1)............. 12.24%
Six-month total return based on NAV(2)...................... 6.34%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock price(3)... 6.18%
Taxable-equivalent distribution rate as a % of closing
common stock price(4)..................................... 9.66%
SHARE VALUATIONS
Net asset value............................................. $ 17.14
Closing common stock price.................................. $17.000
Six-month high common stock price (01/23/96)................ $17.250
Six-month low common stock price (09/15/95)................. $15.625
Preferred share rate(5)..................................... 3.34%
</TABLE>
(1) Total return based on market price assumes an investment at the market
price at the beginning of the period indicated, reinvestment of all
distributions for the period in accordance with the Trust's dividend
reinvestment plan, and sale of all shares at the closing stock price at the end
of the period indicated.
(2) Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.
(3) Distribution rate represents the monthly annualized distributions of the
Trust at the end of the period and not the earnings of the Trust.
(4) The taxable-equivalent distribution rate is calculated assuming a 36%
federal tax bracket.
(5) See "Notes to Financial Statements" footnote #4, for more information
concerning Preferred Share reset periods.
A portion of the interest income may be taxable for those investors subject to
the federal alternative minimum tax (AMT).
Past performance does not guarantee future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
4
<PAGE> 6
PORTFOLIO OF INVESTMENTS
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS
FLORIDA 95.0%
$ 1,000 Bay Cnty, FL Sch Brd Ctfs Partn (AMBAC
Insd)........................................ 6.750% 07/01/12 $ 1,129,470
1,450 Cape Canaveral, FL Hosp Dist Rev Ctfs (AMBAC
Insd)........................................ 6.875 01/01/21 1,601,148
1,135 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)........................ * 10/01/13 392,063
3,205 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)........................ * 10/01/14 1,032,491
4,005 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)........................ * 10/01/15 1,203,262
4,005 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)........................ * 10/01/16 1,122,201
2,000 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)........................ * 10/01/17 522,620
1,960 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)........................ * 10/01/18 477,652
1,000 Charlotte Cnty, FL Util Rev (Prerefunded @
10/01/01) (FGIC Insd)........................ 6.875 10/01/21 1,145,670
1,000 Clay Cnty, FL Hsg Fin Auth Rev Single Family
Mtg (GNMA Collateralized).................... 6.500 09/01/21 1,014,750
1,075 Coral Springs, FL Impt Dist Wtr & Swr Rfdg
(MBIA Insd).................................. 5.500 06/01/14 1,071,829
4,000 Dade Cnty, FL Aviation Rev (MBIA Insd)....... 5.750 10/01/12 4,141,880
1,280 Dade Cnty, FL Hlth Fac Auth Hosp Rev North
Shore Med Cent Proj Rfdg (AMBAC Insd)........ 6.000 08/15/10 1,344,499
4,000 Dade Cnty, FL Hlth Fac Auth Hosp Rev South
Miami Hosp Proj Ser A (AMBAC Insd)........... 6.750 10/01/20 4,570,960
130 Dade Cnty, FL Hsg Fin Auth Single Family Mtg
Rev Ser E Rfdg (FNMA/GNMA Collateralized).... 7.000 03/01/24 136,967
1,000 Dade Cnty, FL Wtr & Swr Sys Rev Rfdg (FGIC
Insd)........................................ 5.000 10/01/13 952,170
1,000 Daytona Beach, FL Wtr & Swr Rev Rfdg (AMBAC
Insd)........................................ 5.750 11/15/10 1,046,960
2,000 Dunedin, FL Hosp Rev Mease Hlth Care
(Prerefunded @ 11/15/01) (MBIA Insd)......... 6.750 11/15/21 2,290,160
1,000 Escambia Cnty, FL Hlth Fac Auth Hlth Fac Rev
Baptist Hosp & Baptist Manor................. 6.750 10/01/14 1,025,080
1,000 Escambia Cnty, FL Pollutn Ctl Rev Champion
Intl Corp Proj............................... 6.900 08/01/22 1,072,940
6,895 Florida Hsg Fin Agy Home Ownership Mtg....... 8.595 11/01/18 7,534,442
1,000 Florida Hsg Fin Agy Hsg Brittany Rosemont Ser
G1 (AMBAC Insd).............................. 6.150 07/01/25 1,019,280
1,000 Florida Hsg Fin Agy Hsg Brittany Rosemont Ser
G1 (AMBAC Insd).............................. 6.250 07/01/35 1,019,170
2,250 Florida St Brd Edl Cap Outlay Pub Edl Ser A
(Prerefunded @ 06/01/01)..................... 6.750 06/01/21 2,531,430
975 Florida St Brd Edl Cap Outlay Pub Edl Ser A
Rfdg......................................... 7.250 06/01/23 1,095,247
1,025 Florida St Brd Edl Cap Outlay Pub Edl Ser A
Rfdg (Prerefunded @ 06/01/00)................ 7.250 06/01/23 1,167,936
1,650 Florida St Muni Pwr Agy Rev Pwr Supply Rfdg
(Prerefunded @ 10/01/01) (AMBAC Insd)........ 6.250 10/01/19 1,844,783
</TABLE>
See Notes to Financial Statements
5
<PAGE> 7
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FLORIDA (CONTINUED)
$ 1,000 Florida St Tpk Auth Tpk Rev Ser A Rfdg (FGIC
Insd)........................................ 5.250% 07/01/22 $ 947,410
2,000 Halifax Hosp Med Cent FL Hosp Rev Ser A Rfdg
(Prerefunded @ 10/01/01) (MBIA Insd)......... 7.000 10/01/13 2,303,660
4,670 Hernando Cnty, FL Sch Brd Ctfs Partn (FSA
Insd)........................................ 6.500 07/01/12 5,120,235
1,000 Hillsborough Cnty, FL Cap Impt Pgm Rev (FGIC
Insd)........................................ 6.625 08/01/12 1,151,390
1,000 Hillsborough Cnty, FL Indl Dev Auth Pollutn
Ctl Rev Tampa Elec Co Proj Ser 92 Rfdg....... 8.000 05/01/22 1,190,890
2,000 Hollywood, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (FGIC Insd)........................ 6.875 10/01/21 2,291,340
7,950 Jacksonville, FL Elec Auth Rev Bulk Pwr
Supply Scherer (Prerefunded @ 10/01/00)...... 6.750 10/01/16 8,928,883
4,000 Jacksonville, FL Elec Auth Rev Saint Johns
River Issue 2 Ser 5 Rfdg..................... 6.500 10/01/14 4,263,280
3,350 Jacksonville, FL Excise Tax Rev Ser B (AMBAC
Insd)........................................ 6.500 10/01/16 3,575,421
1,665 Jacksonville, FL Gtd Entitlement Rev Ser A
Rfdg (AMBAC Insd)............................ 5.500 10/01/12 1,687,078
2,000 Jacksonville, FL Hosp Rev Univ Med Cent Inc
Proj (Connie Lee Insd)....................... 6.500 02/01/11 2,203,040
5,000 Kissimmee, FL Util Auth Elec Sys Rev Rfdg &
Impt (Prerefunded @ 10/01/01) (FGIC Insd).... 6.500 10/01/17 5,651,950
1,105 Lake City, FL Util Rev Ser A (Prerefunded @
07/01/99) (MBIA Insd)........................ 6.875 07/01/16 1,224,130
1,000 Martin Cnty, FL Indl Dev Auth Indl Dev Rev
Indiantown Cogeneration Proj A Rfdg.......... 7.875 12/15/25 1,145,860
500 Miami Beach, FL Redev Agy Tax Increment Rev
City Cent Historic Convention Vlg............ 5.875 12/01/22 479,795
4,000 Miami, FL Hlth Fac Auth Hlth Fac Rev Mercy
Hosp Proj (Prerefunded @ 08/01/01) (AMBAC
Insd)........................................ 6.750 08/01/20 4,557,920
5,000 Miramar, FL Wastewater Impt Assmt Rev (FGIC
Insd)........................................ 6.750 10/01/25 5,631,750
5,000 Orange Cnty, FL Hlth Fac Auth Rev (Inverse
Fltg) (MBIA Insd) (b)........................ 8.949 10/29/21 5,712,500
2,000 Orange Cnty, FL Hlth Fac Auth Rev Hosp
Adventist Hlth/Sunbelt Ser A (AMBAC Insd).... 6.875 11/15/15 2,234,940
1,000 Orange Cnty, FL Hsg Fin Auth Multi Family Rev
Mtg Hands Inc Proj Ser A..................... 8.000 10/01/25 1,015,730
1,000 Orange Cnty, FL Hsg Fin Auth Single Family
Mtg Rev (FNMA/GNMA Collateralized)........... 6.550 10/01/21 1,022,540
7,500 Palm Beach Cnty, FL Arpt Sys Rev Rfdg (MBIA
Insd)........................................ 7.750 10/01/10 8,758,425
3,250 Polk Cnty, FL Indl Dev Auth Indl Dev Rev IMC
Fertilizer Inc Ser A......................... 7.525 01/01/15 3,433,008
3,500 Reedy Creek, FL Impt Dist FL Ser A........... 6.000 06/01/16 3,603,355
5,000 Reedy Creek, FL Impt Dist FL Util Rev (AMBAC
Insd)........................................ 7.250 10/01/08 5,512,300
14,000 Reedy Creek, FL Impt Dist FL Util Rev Ser
1991-1 (Prerefunded @ 10/01/01) (MBIA
Insd)........................................ 6.500 10/01/16 15,714,440
1,000 Saint Lucie Cnty, FL Sales Tax Rev
(Prerefunded @ 10/01/02) (FGIC Insd)......... 6.500 10/01/22 1,141,370
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FLORIDA (CONTINUED)
$ 1,490 Sarasota Cnty, FL Hlth Fac Auth Rev Hlthcare
Kobernick/Meadow Park (Prerefunded @
07/01/02).................................... 10.000% 07/01/22 $ 1,943,958
1,250 Tarpon Springs, FL Hlth Fac Auth Hosp Rev
Helen Ellis Mem Hosp Proj.................... 7.500 05/01/11 1,309,300
1,250 Tarpon Springs, FL Hlth Fac Auth Hosp Rev
Helen Ellis Mem Hosp Proj.................... 7.625 05/01/21 1,305,800
4,000 Volusia Cnty, FL Hlth Fac Auth Rev Hosp Fac
Mem Hlth Rfdg & Impt (AMBAC Insd)............ 5.750 11/15/20 4,033,040
------------
152,601,798
------------
PUERTO RICO 2.7%
2,000 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev
Ser W........................................ 5.500 07/01/15 1,996,300
1,000 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev
Ser X Rfdg................................... 5.500 07/01/19 962,430
1,250 Puerto Rico Elec Pwr Auth Pwr Rev Ser T...... 6.375 07/01/24 1,344,962
------------
4,303,692
------------
TOTAL LONG-TERM INVESTMENTS 97.7%
(Cost $141,497,225) (a).................................................... 156,905,490
SHORT-TERM INVESTMENTS AT AMORTIZED COST 0.7%............................... 1,100,000
OTHER ASSETS IN EXCESS OF LIABILITIES 1.6%.................................. 2,537,471
------------
NET ASSETS 100%............................................................. $160,542,961
============
*Zero coupon bond
(a) At February 29, 1996, cost for federal income tax purposes is
$141,497,225; the aggregate gross unrealized appreciation is $15,624,999
and the aggregate gross unrealized depreciation is $216,734, resulting in
net unrealized appreciation of $15,408,265.
(b) An Inverse Floating security is one where the coupon is inversely indexed
to a short-term floating interest rate multiplied by a specific factor.
As the floating rate rises, the coupon is reduced. Conversely, as the
floating rate declines, the coupon is increased. The price of these
securities may be more volatile than the price of a comparable fixed rate
security. These instruments are typically used by the Trust to enhance
the yield of the portfolio.
</TABLE>
See Notes to Financial Statements
7
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at Market Value (Cost $141,497,225) (Note 1).............. $156,905,490
Short-Term Investments (Note 1)........................................ 1,100,000
Cash................................................................... 76,123
Receivables:
Interest............................................................. 2,855,667
Investments Sold..................................................... 5,000
Unamortized Organizational Expenses (Note 1)........................... 3,449
Other.................................................................. 2,930
------------
Total Assets..................................................... 160,948,659
------------
LIABILITIES:
Payables:
Income Distributions--Common and Preferred Shares.................... 158,963
Investment Advisory Fee (Note 2)..................................... 89,722
Administrative Fee (Note 2).......................................... 25,635
Accrued Expenses....................................................... 131,378
------------
Total Liabilities................................................ 405,698
------------
NET ASSETS............................................................. $160,542,961
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000 shares, 1,000
issued with liquidation preference of $50,000 per share) (Note 4).... $ 50,000,000
------------
Common Shares ($.01 par value with an unlimited number of shares
authorized, 6,451,214 shares issued and outstanding)................. 64,512
Paid in Surplus........................................................ 95,409,336
Net Unrealized Appreciation on Investments............................. 15,408,265
Accumulated Undistributed Net Investment Income........................ 1,085,856
Accumulated Net Realized Loss on Investments........................... (1,425,008)
------------
Net Assets Applicable to Common Shares........................... 110,542,961
------------
NET ASSETS............................................................. $160,542,961
============
NET ASSET VALUE PER COMMON SHARE ($110,542,961 divided
by 6,451,214 shares outstanding)..................................... $ 17.14
============
</TABLE>
See Notes to Financial Statements
8
<PAGE> 10
STATEMENT OF OPERATIONS
For the Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest................................................................ $ 4,906,704
-----------
EXPENSES:
Investment Advisory Fee (Note 2)........................................ 556,241
Administrative Fee (Note 2)............................................. 158,926
Preferred Share Maintenance (Note 4).................................... 69,525
Trustees Fees and Expenses (Note 2)..................................... 11,822
Legal (Note 2).......................................................... 6,600
Amortization of Organizational Expenses (Note 1)........................ 2,989
Other................................................................... 92,433
-----------
Total Expenses...................................................... 898,536
-----------
NET INVESTMENT INCOME................................................... $ 4,008,168
===========
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS:
Realized Gain/Loss on Investments:
Proceeds from Sales................................................... $ 9,521,741
Cost of Securities Sold............................................... (9,455,326)
-----------
Net Realized Gain on Investments........................................ 66,415
-----------
Unrealized Appreciation/Depreciation on Investments:
Beginning of the Period............................................... 11,856,457
End of the Period..................................................... 15,408,265
-----------
Net Unrealized Appreciation on Investments During the Period............ 3,551,808
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS......................... $ 3,618,223
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.............................. $ 7,626,391
===========
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended February 29, 1996
and the Year Ended August 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
February 29, 1996 August 31, 1995
- --------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income............................... $ 4,008,168 $ 8,169,106
Net Realized Gain/Loss on Investments............... 66,415 (770,396)
Net Unrealized Appreciation on Investments During
the Period........................................ 3,551,808 3,972,369
------------ ------------
Change in Net Assets from Operations................ 7,626,391 11,371,079
------------ ------------
Distributions from Net Investment Income:
Common Shares..................................... (3,386,773) (6,773,573)
Preferred Shares.................................. (920,652) (1,891,823)
------------ ------------
(4,307,425) (8,665,396)
------------ ------------
Distributions from and in Excess of Net Realized
Gain on Investments (Note 1):
Common Shares..................................... -0- (439,987)
Preferred Shares.................................. -0- (81,740)
------------ ------------
-0- (521,727)
------------ ------------
Total Distributions................................. (4,307,425) (9,187,123)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES........................................ 3,318,966 2,183,956
NET ASSETS:
Beginning of the Period............................. 157,223,995 155,040,039
------------ ------------
End of the Period (Including undistributed net
investment income of $1,085,856 and $1,385,113,
respectively)..................................... $160,542,961 $157,223,995
============ ============
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share of
the Trust outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 27, 1991
Six Months (Commencement
Ended Year Ended August 31 of Investment
February 29, ------------------------ Operations) to
1996 1995 1994 1993 August 31, 1992
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the Period (a)... $16.621 $16.282 $17.392 $16.013 $14.786
------- ------- ------- ------- -------
Net Investment Income......... .621 1.266 1.275 1.346 1.049
Net Realized and Unrealized
Gain/Loss on Investments.... .561 .497 (1.100) 1.309 1.116
------- ------- ------- ------- -------
Total from Investment
Operations.................... 1.182 1.763 .175 2.655 2.165
------- ------- ------- ------- -------
Less:
Distributions from Net
Investment Income:
Paid to Common
Shareholders.............. .525 1.050 1.050 1.007 .743
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders.... .143 .293 .202 .185 .195
Distributions from and in
Excess of Net Realized Gain
on Investments (Note 1):
Paid to Common
Shareholders.............. -0- .068 .029 .068 -0-
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders.... -0- .013 .004 .016 -0-
------- ------- ------- ------- -------
Total Distributions............. .668 1.424 1.285 1.276 .938
------- ------- ------- ------- -------
Net Asset Value, End of the
Period........................ $17.135 $16.621 $16.282 $17.392 $16.013
======= ======= ======= ======= =======
Market Price Per Share at End of
the Period.................... $17.000 $15.625 $15.625 $17.125 $15.625
Total Investment Return at
Market Price (b).............. 12.24%* 7.58% (2.62%) 17.05% 9.33%*
Total Return at Net Asset Value
(c)........................... 6.34%* 9.47% (.23%) 15.91% 11.96%*
Net Assets at End of the Period
(In millions)................. $160.5 $157.2 $155.0 $161.9 $152.9
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares........................ 1.65% 1.72% 1.66% 1.63% 1.60%
Ratio of Expenses to Average Net
Assets........................ 1.13% 1.16% 1.14% 1.11% 1.12%
Ratio of Net Investment Income
to Average Net Assets
Applicable to Common Shares
(d)........................... 5.65% 6.06% 6.33% 7.04% 6.24%
Portfolio Turnover.............. 5.36% 16.64% 18.72% 13.28% 36.60%
</TABLE>
* Non-Annualized
(a) Net asset value at September 27, 1991, is adjusted for common and preferred
share offering costs of $.214 per common share.
(b) Total investment return at market price reflects the change in market value
of the common shares for the period indicated with reinvestment of dividends
in accordance with the Trust's dividend reinvestment plan.
(c) Total return at net asset value (NAV) reflects the change in value of the
Trust's assets with reinvestment of dividends based on NAV.
(d) Net investment income is adjusted for common share equivalent of
distributions paid to preferred shareholders.
See Notes to Financial Statements
11
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
February 29, 1996 (Unaudited)
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1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Florida Quality Municipal Trust (the "Trust") is
registered as a non-diversified closed-end management investment company under
the Investment Company Act of 1940, as amended. The Trust's investment objective
is to provide a high level of current income exempt from federal income taxes
and Florida State intangible taxes, consistent with preservation of capital. The
Trust will invest in a portfolio consisting substantially of Florida municipal
obligations rated investment grade at the time of investment, but may invest up
to 20% of its assets in unrated securities which are believed to be of
comparable quality to those rated investment grade. The Trust commenced
investment operations on September 27, 1991.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. SECURITY VALUATION--Investments are stated at value using market quotations
or, if such valuations are not available, estimates obtained from yield data
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost.
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when issued" or "delayed delivery"
basis, with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made. At February 29, 1996, there were no
when issued or delayed delivery purchase commitments.
12
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
C. INVESTMENT INCOME--Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the expected life of each
applicable security.
D. ORGANIZATIONAL EXPENSES--The Trust has reimbursed Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") for costs incurred in
connection with the Trust's organization and initial registration in the amount
of $30,000. These costs are being amortized on a straight line basis over the 60
month period ending September 26, 1996. Van Kampen American Capital Investment
Advisory Corp. (the "Adviser") has agreed that in the event any of the initial
shares of the Trust originally purchased by VKAC are redeemed during the
amortization period, the Trust will be reimbursed for any unamortized
organizational expenses in the same proportion as the number of shares redeemed
bears to the number of initial shares held at the time of redemption.
E. FEDERAL INCOME TAXES--It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.
The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At August 31, 1995, the Trust had an accumulated capital loss
carryforward for tax purposes of $912,716, which will expire on August 31, 2003.
Net realized gains or losses may differ for financial and tax reporting purposes
primarily as a result of post October 31 losses which may not be recognized for
tax purposes until the first day of the following fiscal year.
F. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays monthly
dividends from net investment income to common shareholders. Net realized gains,
if any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income for tax
purposes.
13
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Trust for an annual fee payable
monthly of .70% of the average net assets of the Trust. In addition, the Trust
will pay a monthly administrative fee to VKAC, the Trust's Administrator, at an
annual rate of .20% of the average net assets of the Trust. The administrative
services provided by the Administrator include record keeping and reporting
responsibilities with respect to the Trust's portfolio and preferred shares and
providing certain services to shareholders.
Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Trust, of which a trustee of the Trust is an affiliated person.
For the six months ended February 29, 1996, the Trust recognized expenses of
approximately $9,800 representing VKAC's cost of providing accounting and legal
services to the Trust.
Certain officers and trustees of the Trust are also officers and directors
of VKAC. The Trust does not compensate its officers or trustees who are officers
of VKAC.
The Trust has implemented deferred compensation and retirement plans for its
trustees. Under the deferred compensation plan, trustees may elect to defer all
or a portion of their compensation to a later date. The retirement plan covers
those trustees who are not officers of VKAC. The Trust's liability under the
deferred compensation and retirement plans at February 29, 1996, was
approximately $36,100.
At February 29, 1996, VKAC owned 6,700 common shares of the Trust.
3. INVESTMENT TRANSACTIONS
Aggregate purchases and cost of sales of investment securities, excluding
short-term notes, for the six months ended February 29, 1996, were $8,378,071
and $9,455,326, respectively.
4. PREFERRED SHARES
The Trust has outstanding 1,000 Auction Preferred Shares ("APS"). Dividends are
cumulative and the dividend rate is currently reset every 28 days through an
auction process. The rate in effect on February 29, 1996 was 3.34%. During the
six months ended February 29, 1996, the rates ranged from 3.34% to 3.90%.
The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of Preferred Share Maintenance
expense.
14
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $50,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests, and the APS are subject to
mandatory redemption if the tests are not met.
15
<PAGE> 17
FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL
GLOBAL AND
INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund
EQUITY
Growth
Emerging Growth Fund
Enterprise Fund
Pace Fund
Growth & Income
Balanced Fund
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund
FIXED INCOME
Corporate Bond Fund
Government Securities Fund
High Income Corporate Bond Fund
High Yield Fund
Limited Maturity Government Fund
Prime Rate Income Trust
Reserve Fund
U.S. Government Fund
U.S. Government Trust for Income
TAX-FREE
California Insured Tax Free Fund
Florida Insured Tax Free
Income Fund
High Yield Municipal Fund
Insured Tax Free Income Fund
Limited Term Municipal
Income Fund
Municipal Income Fund
New Jersey Tax Free Income Fund
New York Tax Free Income Fund
Pennsylvania Tax Free Income Fund
Tax Free High Income Fund
Tax Free Money Fund
Texas Tax Free Income Fund
THE GOVETT FUNDS
Emerging Markets Fund
Global Income Fund
International Equity Fund
Latin America Fund
Pacific Strategy Fund
Smaller Companies Fund
Ask your investment adviser for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us direct at 1-800-421-5666 weekdays
from 7:00 a.m. to 7:00 p.m. Central time.
16
<PAGE> 18
VAN KAMPEN AMERICAN CAPITAL FLORIDA QUALITY MUNICIPAL TRUST
OFFICERS AND TRUSTEES
DON G. POWELL*
Chairman and Trustee
DENNIS J. MCDONNELL*
President and Trustee
DAVID C. ARCH
Trustee
ROD DAMMEYER
Trustee
HOWARD J KERR
Trustee
THEODORE A. MYERS
Trustee
HUGO F. SONNENSCHEIN
Trustee
WAYNE W. WHALEN*
Trustee
PETER W. HEGEL*
Vice President
RONALD A. NYBERG*
Vice President and Secretary
EDWARD C. WOOD, III*
Vice President and Treasurer
SCOTT E. MARTIN*
Assistant Secretary
WESTON B. WETHERELL*
Assistant Secretary
NICHOLAS DALMASO*
Assistant Secretary
JOHN L. SULLIVAN*
Controller
STEVEN M. HILL*
Assistant Treasurer
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
CUSTODIAN AND TRANSFER AGENT
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601
* "Interested" persons of the Trust, as defined in the Investment Company Act of
1940.
(C) Van Kampen American Capital Distributors, Inc., 1996 All rights reserved.
(SM) denotes a service mark of Van Kampen American Capital Distributors, Inc.
17
