<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Economic Snapshot................................ 2
Performance Results.............................. 3
Glossary of Terms................................ 4
Portfolio Management Review...................... 5
Portfolio Highlights............................. 8
Portfolio of Investments......................... 9
Statement of Assets and Liabilities.............. 15
Statement of Operations.......................... 16
Statement of Changes in Net Assets............... 17
Financial Highlights............................. 18
Notes to Financial Statements.................... 20
Dividend Reinvestment Plan....................... 24
</TABLE>
VFM SAR 6/99
<PAGE> 2
LETTER TO SHAREHOLDERS
May 20, 1999
Dear Shareholder,
With the volatility that we've experienced in many financial markets in
recent months, some investors have sold securities because of uncertainty about
where the markets were going, only to be left rethinking whether they made the
right decision. We've witnessed this kind of market activity numerous times over
the past several years, sparked by concerns such as the impact of the Asian
economic crisis, high stock valuations, or, most recently, the stability of many
high-flying technology companies. While these fears eventually subsided,
investors who may have sold during this period were unable to reap the benefits
of the latest rally. That's partly because most of the recent big gains happened
in relatively short periods of time. This kind of volatility--and the danger of
making short-term decisions--highlights the importance of investing for the long
term, in accordance with your individual financial objectives.
Although the worst of the Asian crisis appears to be behind us, new concerns
are always emerging. In the coming months, we'll likely hear more about how the
year 2000 computer problem may affect the markets or that we're overdue for a
correction. While the markets could undoubtedly suffer as a result of these or
any number of other events, we encourage you to focus on your long-term
investment goals. Although nothing is certain, history has shown us that over
time, the markets tend to recover--and most investors want to be positioned to
take advantage of any recovery.
If you have concerns about market volatility or questions about how your
portfolio is structured to respond to these events, we encourage you to contact
your financial advisor. Your advisor can talk with you about sustaining a
long-term investment plan through a variety of market conditions. We hope that
Van Kampen Funds will play an important role as you and your advisor build a
portfolio designed to help you weather whatever the markets have in store.
Sincerely,
[SIG.]
Richard F. Powers III
Chairman
Van Kampen Investment Advisory Corp.
[SIG.]
Dennis J. McDonnell
President
Van Kampen Investment Advisory Corp.
1
<PAGE> 3
ECONOMIC SNAPSHOT
A surge in consumer confidence led to strong economic growth over the past
six months, as fears about the impact of the Asian financial crisis subsided. In
the fourth quarter, the nation's gross domestic product (GDP) rose at an
astounding 6.0 percent annual rate and remained strong at 4.5 percent through
the first quarter of 1999. This powerful level of growth is attributed to a
continued increase in consumer spending, a strong housing market, and high
retail sales--all the result of a more confident consumer given the positive
employment environment. The economy began to show signs of slowing down early in
1999, however, as corporate profits and wage growth declined.
Despite continued improvements in Asia and Latin America and the record
economic growth in the United States, inflation remained at bay in late 1998 as
commodity prices tumbled. Although rising oil prices pushed inflation up 3.3
percent on an annualized basis in the first four months of 1999, price increases
remained moderate enough overall to keep inflation-adjusted interest rates
attractive.
Our outlook for the domestic economy remains positive, although we
anticipate slower growth in the second half of the year. We look for a gradual
but steady rise in inflation throughout 1999 to more normal but certainly not
alarming levels. Internationally, low interest rates and improving financial
conditions should continue to support the economic progress we've witnessed
overseas.
INTEREST RATES AND INFLATION
April 30, 1997, through April 30, 1999
[LINE GRAPH]
<TABLE>
<CAPTION>
INTEREST RATES INFLATION
-------------- ---------
<S> <C> <C>
Apr 1997 6.0000 2.5000
5.6250 2.2000
6.5000 2.3000
Jul 1997 6.0000 2.2000
5.5000 2.2000
6.2500 2.2000
Oct 1997 5.7500 2.1000
5.6875 1.8000
6.5000 1.7000
Jan 1998 5.5625 1.6000
5.6250 1.4000
6.1250 1.4000
Apr 1998 5.6250 1.4000
5.6875 1.7000
6.0000 1.7000
Jul 1998 5.5625 1.7000
5.9375 1.6000
5.7500 1.5000
Oct 1998 5.2500 1.5000
4.8750 1.5000
4.0000 1.6000
Jan 1999 4.8125 1.7000
4.8750 1.6000
5.1250 1.7000
Apr 1999 4.9375 2.3000
</TABLE>
Interest rates are represented by the closing midline federal funds rate
on the last day of each month. Inflation is indicated by the annual
percent change of the Consumer Price Index for all urban consumers at
the end of each month.
2
<PAGE> 4
PERFORMANCE RESULTS FOR THE PERIOD ENDED APRIL 30, 1999
VAN KAMPEN FLORIDA QUALITY MUNICIPAL TRUST
(NYSE TICKER SYMBOL--VFM)
<TABLE>
<S> <C>
COMMON SHARE TOTAL RETURNS
Six-month total return based on market price(1)........... (1.53%)
Six-month total return based on NAV(2).................... 0.96%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3).................................................. 5.58%
Taxable-equivalent distribution rate as a % of closing
common stock price(4)..................................... 8.72%
SHARE VALUATIONS
Net asset value........................................... $16.90
Closing common stock price................................ $17.0000
Six-month high common stock price (01/04/99).............. $18.0000
Six-month low common stock price (01/28/99)............... $16.8125
Preferred share rate(5)................................... 3.310%
</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 common 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
income tax bracket.
(5)See "Notes to Financial Statements" footnote #5, 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.
On August 20, 1998, the Trust's Board of Trustees voted to change the Trust's
fiscal year end from August 31 to October 31, effective at the close of the
August 31, 1998 fiscal year. As a result, the fiscal year commenced on
September 1, 1998 and ended on October 31, 1998. The financial information for
the two-month transition period appears in a separate column in this April 30,
1999 semiannual report. If you would like to receive the audited financial
statements for this two-month period, please contact our Investor Services
Department at 1-800-341-2929.
3
<PAGE> 5
GLOSSARY OF TERMS
CALL FEATURE: Allows the issuer to buy back a bond on specific dates at set
prices before maturity. These dates and prices are set when the bond is
issued. To compensate the bondholder for the potential loss of income and
ownership, a bond's call price is usually higher than the face value of the
bond. Bonds are usually called when interest rates drop so significantly
that the issuer can save money by issuing new bonds at lower rates.
CREDIT RATING: An evaluation of an issuer's credit history and capability of
repaying obligations. Standard & Poor's and Moody's Investors Service are
two companies that assign bond ratings. Standard & Poor's ratings range from
a high of AAA to a low of D, while Moody's ratings range from a high of Aaa
to a low of C.
DISCOUNT BOND: A bond whose market price is lower than its face value (or "par
value"). Because bonds usually mature at face value, a discount bond has
more potential to appreciate in price than a par bond does.
INSURED BOND: A bond that is insured against default by the bond insurer. If the
issuer defaults, the insurance company will step in and take over payments
of interest and principal when due. Once a bond is insured, it typically
carries the rating of the insurer. Most insurers are rated AAA.
INVESTMENT-GRADE BONDS: Securities rated BBB and above by Standard & Poor's or
Baa and above by Moody's Investors Service. Bonds rated below BBB or Baa are
noninvestment grade.
MATURITY LENGTH: The time it takes for a bond to mature. A bond issued in 1998
and maturing in 2008 is a 10-year bond.
MUNICIPAL BOND: A debt security issued by a state, municipality, or other
government entity to finance capital expenditures of public projects, such
as the construction of highways, public works, or school buildings. Interest
on public-purpose municipal bonds is exempt from federal income taxes and,
in some states, from state and local income taxes.
PREMIUM BOND: A bond whose market price is above its face value (or "par
value"). Because bonds usually mature at face value, a premium bond has less
potential to appreciate in price than a par bond does.
REFUNDING: Retiring an outstanding bond issue at maturity using money from the
sale of a new offering.
YIELD: The annual rate of return on an investment, expressed as a percentage.
YIELD SPREAD: The additional yield investors can earn by either investing in
bonds with longer maturities or by investing in bonds with lower ratings.
The spread is the difference in yield between bonds with short versus long
maturities or the difference in yield between high-quality bonds and
lower-quality bonds.
4
<PAGE> 6
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN FLORIDA QUALITY MUNICIPAL TRUST
We recently spoke with the management team of the Van Kampen Florida Quality
Municipal Trust about the key events and economic forces that shaped the markets
during the reporting period. The team includes Thomas M. Byron, portfolio
manager, and Peter W. Hegel, chief investment officer for fixed-income
investments. The following comments reflect their views on the Trust's
performance during the six months ended April 30, 1999.
Q HOW WOULD YOU DESCRIBE THE CONDITIONS IN THE MUNICIPAL MARKET DURING THE
PAST SIX MONTHS?
A Although most of the financial markets experienced volatility during the
period, the municipal market remained relatively stable. For the majority
of the six months, long-term municipal bond yields remained within a range
of about 5.1 to 5.3 percent, even as the Federal Reserve cut interest rates.
Much of the stability in the municipal market can be attributed to its isolation
from turbulence abroad. Concerns about the financial conditions in Asia and
Latin America hurt the stock and high-yield bond markets last fall, but had
little effect on municipals.
The positive economic and market conditions encouraged more municipalities
to take advantage of low interest rates and issue new bonds. Although the amount
of municipal debt increased, the credit quality of many issuers was not
compromised--in fact, it improved as the positive economic environment led to
stronger balance sheets. As a result, we saw more issuers using municipal bonds
to finance special growth and expansion projects, as opposed to financing their
regular operations.
The proportion of higher-yielding municipal bonds also increased during the
period as the number of insured bonds declined. Because bond insurers tightened
their underwriting criteria, more issuers came to market without insurance and
offered higher yields to compensate bondholders for the increased credit risk.
This benefited the Trust because it allowed our experienced research staff to
seek out those higher-yielding bonds that we felt had strong underlying quality.
Q WHY WERE MUNICIPAL BONDS SO ATTRACTIVE RELATIVE TO COMPARABLE TREASURY
BONDS?
A Toward the end of 1998, the yields on 30-year insured municipal bonds and
comparable U.S. Treasury bonds reached equivalent levels, which is a rare
occurrence. Typically, investment-grade municipal bonds have offered about 85 to
90 percent as much yield as comparable Treasury bonds because their interest
payments are exempt from federal income taxes. However, as Treasury yields fell
and municipal yields remained stable, the yield difference between the two types
of bonds shrank. Early in 1999, investors recognized the tremendous
opportunities available in the municipal market, and demand for municipals began
to increase. In conjunction with a recent
5
<PAGE> 7
slowdown in supply, this boost in municipal demand pushed the
municipal-to-Treasury yield ratio back to more traditional but still attractive
levels.
Q WHAT STRATEGIES DID YOU USE TO MANAGE THE TRUST?
A Our focus was on supporting the Trust's income stream while monitoring its
risk level and price volatility. As a result, we found value in bonds with
15- to 20-year maturities, as the intermediate range of the yield curve
offered almost as much yield as comparable 30-year bonds but is potentially less
volatile.
Due to increasing financial pressures on the hospital and health-care
industry, we reduced the Trust's holdings in this sector. Although many
health-care bonds remain attractive, the challenges imposed by managed care and
changing Medicare reimbursement policies have led us to look to other sectors in
recent months. We sold some of our health-care issues and replaced them with
longer-maturity discount bonds.
Although the values available in the health-care sector were limited, we did
find a range of attractive securities in a related industry: long-term care.
These long-term health-care and nursing facilities have seen strong growth in
Florida, reflecting the needs of the state's aging population. Because of its
recent growth and financial strength, the long-term care sector provided quality
securities at attractive prices. For additional portfolio highlights, please
refer to page 8.
Q HOW DID THE TRUST PERFORM DURING THE PERIOD?
A During the past six months, the Trust generated a total return of -1.53
percent(1) based on market price. This reflects a decrease in market price
from $17.75 per share on October 31, 1998, to $17.00 on April 30, 1999. In
addition, the Trust provided a distribution rate of 5.58 percent(3) based on its
closing common stock price on April 30, 1999. Because the Trust is exempt from
federal income taxes, this distribution rate is equivalent to a yield of 8.72
percent(4) on a taxable investment for shareholders in the 36 percent federal
income tax bracket. The Trust's monthly dividend of $.0790 per share was
unchanged during the reporting period. Past performance does not guarantee
future results. Please refer to the footnotes and chart on page 3 for additional
Trust performance results.
Q WHAT DO YOU SEE AHEAD FOR THE MUNICIPAL MARKET?
A Strong economic performance should continue to bolster the credit
conditions of municipal issuers. In addition, we expect that this economic
strength will continue to make municipalities more likely to issue debt
for special projects rather than for general operating financing.
Although insured debt has been increasing in recent years, we have started
to see a reversal of this trend in the last few months, as municipal bond
insurers have become
6
<PAGE> 8
more cautious. If this caution continues, credit spreads may widen as the
proportion of higher-yielding uninsured bonds increases.
We will carefully monitor the reaction of the Florida municipal market if
the state's intangibles tax is repealed. Phasing out the tax over four years is
part of a $1 billion tax cut that has been approved by the state House and
Senate, and is in the hands of Governor Bush.
Finally, we see the potential for changes in traditional economic activity
toward the end of the year because of investor concerns about the year 2000
computer problem. These temporary concerns, however, may result in attractive
investment opportunities that our research staff can explore to uncover
potential value.
[SIG.]
Thomas M. Byron
Portfolio Manager
[SIG.]
Peter W. Hegel
Chief Investment Officer
Fixed Income Investments
7
<PAGE> 9
PORTFOLIO HIGHLIGHTS
VAN KAMPEN FLORIDA QUALITY MUNICIPAL TRUST
TOP FIVE PORTFOLIO SECTORS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
AS OF APRIL 30, 1999
<S> <C>
Water & Sewer............... 21.0%
Health Care................. 20.9%
General Purpose............. 12.3%
Retail
Electric/Gas/Telephone.... 10.7%
Public Education............ 8.2%
</TABLE>
<TABLE>
<CAPTION>
AS OF OCTOBER 31, 1998
<S> <C>
Health Care................. 23.1%
Water & Sewer............... 20.3%
General Purpose............. 11.8%
Retail
Electric/Gas/Telephone.... 10.7%
Airport..................... 7.2%
</TABLE>
PORTFOLIO COMPOSITION BY CREDIT QUALITY AS A PERCENTAGE OF LONG-TERM INVESTMENTS
AS OF APRIL 30, 1999
<TABLE>
<CAPTION>
AAA/aa AA/Aa A/A BBB/Baa NON-RATED
------ ----- --- ------- ---------
<S> <C> <C> <C> <C> <C>
79.8% 3.0% 4.7% 10.5% 2.0%
</TABLE>
[PIE CHART]
AS OF OCTOBER 31, 1998
<TABLE>
<CAPTION>
AAA/Aaa AA/Aa A/A BBB/Baa NON-RATED
------- ----- --- ------- ---------
<S> <C> <C> <C> <C> <C>
80.4% 2.3% 4.8% 10.4% 2.1%
</TABLE>
[PIE CHART]
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's, respectively.
DIVIDEND HISTORY
FOR THE PERIOD ENDED APRIL 30, 1999
[BAR GRAPH]
<TABLE>
<CAPTION>
DISTRIBUTIONS PER
COMMON SHARE
-----------------
<S> <C>
Nov 1998 $ 0.079
Dec 1998 $ 0.079
Jan 1999 $ 0.079
Feb 1999 $ 0.079
Mar 1999 $ 0.079
Apr 1999 $ 0.079
</TABLE>
The dividend history represents past performance of the Trust and does not
predict the Trust's future distributions.
8
<PAGE> 10
PORTFOLIO OF INVESTMENTS
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS 103.7%
FLORIDA 99.3%
$ 1,000 Bay Cnty, FL Sch Brd Ctfs Partn
(Prerefunded @ 07/01/04) (AMBAC
Insd)................................ 6.750% 07/01/12 $ 1,150,860
190 Broward Cnty, FL Hsg Fin Auth Single
Family Mtg Rev Ser A Rfdg (GNMA
Collateralized)...................... 6.200 04/01/30 201,995
1,450 Cape Canaveral, FL Hosp Dist Rev Ctfs
(Prerefunded @ 01/01/01) (AMBAC
Insd)................................ 6.875 01/01/21 1,554,357
1,500 Cape Canaveral, FL Hosp Dist Rev Ctfs
Rfdg................................. 5.250 01/01/28 1,435,680
1,135 Cape Coral, FL Wtr & Swr Rev
(Prerefunded @ 10/01/01) (MBIA
Insd)................................ * 10/01/13 463,784
3,205 Cape Coral, FL Wtr & Swr Rev
(Prerefunded @ 10/01/01) (MBIA
Insd)................................ * 10/01/14 1,221,393
4,005 Cape Coral, FL Wtr & Swr Rev
(Prerefunded @ 10/01/01) (MBIA
Insd)................................ * 10/01/15 1,423,377
4,005 Cape Coral, FL Wtr & Swr Rev
(Prerefunded @ 10/01/01) (MBIA
Insd)................................ * 10/01/16 1,327,457
2,000 Cape Coral, FL Wtr & Swr Rev
(Prerefunded @ 10/01/01) (MBIA
Insd)................................ * 10/01/17 618,220
1,960 Cape Coral, FL Wtr & Swr Rev
(Prerefunded @ 10/01/01) (MBIA
Insd)................................ * 10/01/18 565,029
1,000 Charlotte Cnty, FL Util Rev
(Prerefunded @ 10/01/01) (FGIC
Insd)................................ 6.875 10/01/21 1,095,140
725 Clay Cnty, FL Hsg Fin Auth Rev Single
Family Mtg (GNMA Collateralized)..... 6.500 09/01/21 773,901
750 Cocoa, FL Wtr & Swr Rev Impt (FGIC
Insd)................................ 5.875 10/01/26 846,135
1,000 County Wtr Swr Dist Collier Cnty FL
Wtr Rev Ser B Rfdg (FGIC Insd)....... 5.125 07/01/15 1,028,390
750 Dade Cnty, FL Edl Fac Auth Rev Univ
of Miami Ser B (MBIA Insd)........... 5.750 04/01/20 801,563
1,280 Dade Cnty, FL Hlth Fac Auth Hosp Rev
North Shore Med Cent Proj Rfdg
(Prerefunded @ 08/15/02) (AMBAC
Insd)................................ 6.000 08/15/10 1,372,211
4,000 Dade Cnty, FL Hlth Fac Auth Hosp Rev
South Miami Hosp Proj Ser A
(Prerefunded @ 10/01/01) (AMBAC
Insd)................................ 6.750 10/01/20 4,365,120
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FLORIDA (CONTINUED)
$ 130 Dade Cnty, FL Hsg Fin Auth Single
Family Mtg Rev Ser E Rfdg (GNMA
Collateralized)...................... 7.000% 03/01/24 $ 135,772
20,445 Dade Cnty, FL Spl Oblig Cap Apprec
Bond Ser B Rfdg (Prerefunded @
10/01/08) (AMBAC Insd)............... * 10/01/28 3,947,929
16,125 Dade Cnty, FL Spl Oblig Cap Apprec
Bond Ser B Rfdg (Prerefunded @
10/01/08) (AMBAC Insd)............... * 10/01/29 2,920,882
1,000 Dade Cnty, FL Wtr & Swr Sys Rev Rfdg
(FGIC Insd).......................... 5.000 10/01/13 1,015,040
500 Daytona Beach, FL Wtr & Swr Rev Rfdg
(AMBAC Insd)......................... 5.750 11/15/10 538,860
2,000 Dunedin, FL Hosp Rev Mease Hlthcare
(Prerefunded @ 11/15/01) (MBIA
Insd)................................ 6.750 11/15/21 2,189,480
215 Escambia Cnty, FL Hlth Facs Auth Hlth
Fac Rev.............................. 6.750 10/01/14 231,955
785 Escambia Cnty, FL Hlth Facs Auth Hlth
Fac Rev (Prerefunded @ 10/01/03)..... 6.750 10/01/14 889,248
1,000 Escambia Cnty, FL Pollutn Ctl Rev
Champion Intl Corp Proj.............. 6.900 08/01/22 1,105,090
3,405 Florida Hsg Fin Agy Home Ownership
Mtg (GNMA Collateralized)............ 8.595 11/01/18 3,807,641
1,410 Florida Hsg Fin Agy Homeowner Mtg Ser
3.................................... 6.350 07/01/28 1,507,544
1,000 Florida Hsg Fin Agy Hsg Brittany
Rosemont Ser G1 (AMBAC Insd)......... 6.150 07/01/25 1,063,380
1,000 Florida Hsg Fin Agy Hsg Brittany
Rosemont Ser G1 (AMBAC Insd)......... 6.250 07/01/35 1,066,690
500 Florida Hsg Fin Agy Hsg Riverfront
Apts Ser A (AMBAC Insd).............. 6.250 04/01/37 537,050
900 Florida St Brd Edl Cap Outlay Pub Edl
Ser C Rfdg (FSA Insd)................ 4.500 06/01/22 825,471
2,250 Florida St Brd Edl Cap Outlay Pub Edl
Ser A (Prerefunded @ 06/01/01)....... 6.750 06/01/21 2,415,060
975 Florida St Brd Edl Cap Outlay Pub Edl
Ser A Rfdg........................... 7.250 06/01/23 1,030,595
1,425 Florida St Brd Edl Cap Outlay Pub Edl
Ser D Rfdg........................... 4.500 06/01/24 1,296,251
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FLORIDA (CONTINUED)
$ 1,650 Florida St Muni Pwr Agy Rev Pwr
Supply Rfdg (Prerefunded @ 10/01/01)
(AMBAC Insd)......................... 6.250% 10/01/19 $ 1,783,270
1,000 Florida St Tpk Auth Tpk Rev Ser A
Rfdg (FGIC Insd)..................... 5.250 07/01/22 1,012,270
2,000 Halifax Hosp Med Cent FL Hosp Rev Ser
A Rfdg (Prerefunded @ 10/01/01) (MBIA
Insd)................................ 7.000 10/01/13 2,194,060
4,670 Hernando Cnty, FL Sch Brd Ctfs Partn
(Prerefunded @ 07/01/01) (FSA
Insd)................................ 6.500 07/01/12 5,042,993
2,910 Hillsborough Cnty, FL Edl Fac Univ
Tampa Proj Rfdg...................... 5.750 04/01/18 3,013,305
1,000 Hillsborough Cnty, FL Indl Dev Auth
Pollutn Ctl Rev Tampa Elec Co Proj
Ser 92 Rfdg.......................... 8.000 05/01/22 1,135,540
2,000 Hollywood, FL Wtr & Swr Rev
(Prerefunded @ 10/01/01) (FGIC
Insd)................................ 6.875 10/01/21 2,190,280
3,150 Jacksonville, FL Elec Auth Rev Bulk
Pwr Supply Scherer (Prerefunded @
10/01/00)............................ 6.750 10/01/16 3,341,299
3,350 Jacksonville, FL Excise Tax Rev Ser B
(AMBAC Insd)......................... 6.500 10/01/16 3,457,535
1,665 Jacksonville, FL Gtd Entitlement Rev
Ser A Rfdg (AMBAC Insd).............. 5.500 10/01/12 1,769,512
2,000 Jacksonville, FL Hosp Rev Univ Med
Cent Inc Proj (Connie Lee Insd)...... 6.500 02/01/11 2,161,160
5,000 Kissimmee, FL Util Auth Elec Sys Rev
Rfdg & Impt (Prerefunded @ 10/01/01)
(FGIC Insd).......................... 6.500 10/01/17 5,432,550
2,500 Lakeland, FL Elec & Wtr Rev Ser A
Rfdg (MBIA Insd) (a)................. 5.000 10/01/36 2,423,825
485 Lee Cnty, FL Hosp Brd Directors Hosp
Rev Lee Mem Hlth Sys Ser A (MBIA
Insd)................................ 5.875 04/01/24 521,186
1,260 Lee Cnty, FL Hsg Fin Auth Single
Family Mtg Rev Multi-Cnty Pgm Ser A
(GNMA Collateralized)................ 7.450 09/01/27 1,420,852
800 Lee Cnty, FL Indl Dev Auth Hlthcare
Facs Rev Shell Point Village Proj Ser
A (a)................................ 5.500 11/15/21 792,024
1,000 Lee Cnty, FL Indl Dev Auth Hlthcare
Facs Rev Shell Point Village Proj Ser
A (a)................................ 5.500 11/15/29 987,440
1,740 Leon Cnty FL Sch Dist Rfdg (AMBAC
Insd) (a)............................ 5.000 07/01/07 1,798,012
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FLORIDA (CONTINUED)
$ 1,080 Manatee Cnty, FL Rev Rfdg (MBIA Insd)
(a).................................. 5.000% 04/01/09 $ 1,114,873
1,000 Martin Cnty, FL Indl Dev Auth Indl
Dev Rev Indiantown Cogeneration Proj
Ser A Rfdg........................... 7.875 12/15/25 1,068,980
2,600 Miami Beach, FL Hlth Facs Auth Hosp
Rev Mount Sinai Med Cent of FL....... 5.375 11/15/28 2,542,696
6,500 Miami Dade Cnty, FL Spl Oblig Ser B
(MBIA Insd).......................... * 10/01/33 997,620
4,000 Miami, FL Hlth Fac Auth Hlth Fac Rev
Mercy Hosp Proj (Prerefunded @
08/01/01) (AMBAC Insd)............... 6.750 08/01/20 4,346,120
5,000 Miramar, FL Wastewtr Impt Assmt Rev
(FGIC Insd).......................... 6.750 10/01/25 5,742,300
5,000 Orange Cnty, FL Hlth Fac Auth Rev
(Inverse Fltg) (MBIA Insd) (c)....... 9.151 10/29/21 5,800,000
2,000 Orange Cnty, FL Hlth Fac Auth Rev
Hosp Adventist Hlth/Sunbelt Ser A
(AMBAC Insd)......................... 6.875 11/15/15 2,177,900
1,000 Orange Cnty, FL Hsg Fin Auth
Multi-Family Rev Mtg Hands Inc Proj
Ser A................................ 8.000 10/01/25 1,107,580
775 Orange Cnty, FL Hsg Fin Auth Single
Family Mtg Rev (GNMA
Collateralized)...................... 6.550 10/01/21 828,057
7,500 Palm Beach Cnty, FL Arpt Sys Rev Rfdg
(MBIA Insd).......................... 7.750 10/01/10 8,330,025
270 Palm Beach Cnty, FL Hsg Fin Auth
Multi-Family Rev Hsg Chelsea Commons
Apts Proj (FSA Insd)................. 5.900 06/01/29 280,886
750 Palm Beach Cnty, FL Hsg Fin Auth
Multi-Family Rev Hsg Windsor Pk Apts
Proj Ser A........................... 5.850 12/01/33 782,288
1,500 Pensacola, FL Arpt Rev Ser A Rfdg
(MBIA Insd).......................... 6.000 10/01/12 1,656,045
1,565 Pensacola, FL Arpt Rev Ser A Rfdg
(MBIA Insd).......................... 6.125 10/01/18 1,722,408
3,250 Polk Cnty, FL Indl Dev Auth Indl Dev
Rev IMC Fertilizer Inc Ser A......... 7.525 01/01/15 3,435,542
475 Port Orange, FL Wtr & Swr Rev Rfdg
(AMBAC Insd)......................... 4.900 10/01/11 486,980
565 Port Orange, FL Wtr & Swr Rev Rfdg
(AMBAC Insd)......................... 5.000 10/01/12 581,588
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FLORIDA (CONTINUED)
$ 370 Reedy Creek Impt Dist FL Ser A....... 6.000% 06/01/16 $ 388,700
3,130 Reedy Creek Impt Dist FL Ser A
(Prerefunded @ 06/01/01)............. 6.000 06/01/16 3,307,001
5,000 Reedy Creek, FL Impt Dist FL Util Rev
(AMBAC Insd)......................... 7.250 10/01/08 5,172,500
14,000 Reedy Creek, FL Impt Dist FL Util Rev
Ser 1991-1 (Prerefunded @ 10/01/01)
(MBIA Insd) (b)...................... 6.500 10/01/16 15,082,620
1,000 Saint Lucie Cnty, FL Sales Tax Rev
(Prerefunded @ 10/01/02) (FGIC
Insd)................................ 6.500 10/01/22 1,109,670
1,000 Santa Rosa Bay Brdg Auth FL Rev...... 6.250 07/01/28 1,098,350
1,000 Santa Rosa Bay Brdg Auth FL Rev Cap
Apprec............................... * 07/01/21 290,770
1,445 Sarasota Cnty, FL Hlth Fac Auth Rev
Hlthcare Kobernick/Meadow Pk
(Prerefunded @ 07/01/02)............. 10.000 07/01/22 1,729,159
750 Winter Haven, FL Util Sys Rev Rfdg &
Impt (MBIA Insd)..................... 4.750 10/01/28 706,388
------------
159,132,709
------------
PUERTO RICO 4.4%
1,391 Centro de Recaudaciones de Ingresos
Muni Ctfs Partn PR................... 6.850 10/17/03 1,451,391
2,000 Puerto Rico Comwlth Hwy & Tran Auth
Hwy Rev Ser W........................ 5.500 07/01/15 2,147,880
1,000 Puerto Rico Comwlth Hwy & Tran Auth
Hwy Rev Ser X Rfdg................... 5.500 07/01/19 1,029,660
1,000 Puerto Rico Comwlth Hwy & Tran Auth
Tran Rev Ser A....................... 4.750 07/01/38 953,040
1,250 Puerto Rico Elec Pwr Auth Pwr Rev Ser
T (Prerefunded @ 07/01/04)........... 6.375 07/01/24 1,416,175
------------
6,998,146
------------
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TOTAL INVESTMENTS $103.7%
(Cost $152,473,382)................................................ $166,130,855
LIABILITIES IN EXCESS OF OTHER ASSETS (3.7%)........................ (5,936,815)
------------
NET ASSETS 100.0%................................................... $160,194,040
============
</TABLE>
* Zero coupon bond
(a) Securities purchased on a when issued or delayed delivery basis.
(b) Assets segregated as collateral for when issued or delayed delivery purchase
commitments.
(c) An Inverse Floating security is one where the coupon is inversely indexed to
a short-term floating interest rate multiplied by a specified 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.
AMBAC--AMBAC Indemnity Corporation
Connie Lee--Connie Lee Insurance Company
FGIC--Financial Guaranty Insurance Company
FSA--Financial Security Assurance Inc.
MBIA--Municipal Bond Investors Assurance Corp.
See Notes to Financial Statements
14
<PAGE> 16
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999 and October 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
April 30, 1999 October 31, 1998
- -------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Total Investments (Cost $152,473,382 and
$148,380,635, respectively).................. $166,130,855 $ 164,227,881
Receivables:
Interest..................................... 1,628,444 1,707,252
Investments Sold............................. 80,038 70,000
Other.......................................... 1,606 2,377
------------ --------------
Total Assets............................. 167,840,943 166,007,510
------------ --------------
LIABILITIES:
Payables:
Investments Purchased........................ 7,123,898 3,501,095
Custodian Bank............................... 207,319 69,758
Investment Advisory Fee...................... 92,292 96,536
Administrative Fee........................... 26,369 27,582
Affiliates................................... 11,565 7,735
Income Distributions-Preferred Shares........ 9,069 79,153
Trustees' Deferred Compensation and Retirement
Plans........................................ 98,305 90,228
Accrued Expenses............................... 78,086 97,421
------------ --------------
Total Liabilities........................ 7,646,903 3,969,508
------------ --------------
NET ASSETS..................................... $160,194,040 $ 162,038,002
============ ==============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized
100,000,000 shares, 2,000 issued with
liquidation preference of $25,000 per
share--See Note 5)........................... $ 50,000,000 $ 50,000,000
------------ --------------
Common Shares ($.01 par value with an unlimited
number of shares authorized)................. 65,194 65,102
Paid in Surplus................................ 96,559,267 96,401,752
Net Unrealized Appreciation.................... 13,657,473 15,847,246
Accumulated Undistributed Net Investment
Income....................................... 511,890 410,169
Accumulated Net Realized Loss.................. (599,784) (686,267)
------------ --------------
Net Assets Applicable to Common Shares... 110,194,040 112,038,002
------------ --------------
NET ASSETS..................................... $160,194,040 $ 162,038,002
============ ==============
COMMON SHARES OUTSTANDING...................... 6,519,397 6,510,151
============ ==============
NET ASSET VALUE PER COMMON SHARE............... $ 16.90 $ 17.21
============ ==============
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1999
and the Two Months Ended October 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Two Months Ended
April 30, 1999 October 31, 1998
- ------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest....................................... $ 4,838,000 $ 1,627,830
----------- -----------
EXPENSES:
Investment Advisory Fee........................ 559,636 189,564
Administrative Fee............................. 159,896 54,161
Preferred Share Maintenance.................... 64,373 23,210
Trustees' Fees and Related Expenses............ 13,575 1,329
Custody........................................ 7,160 1,792
Legal.......................................... 7,102 1,591
Other.......................................... 72,236 37,516
----------- -----------
Total Expenses............................. 883,978 309,163
----------- -----------
NET INVESTMENT INCOME.......................... $ 3,954,022 $ 1,318,667
=========== ===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain.............................. $ 86,483 $ 31,578
----------- -----------
Unrealized Appreciation/Depreciation:
Beginning of the Period...................... 15,847,246 15,739,869
End of the Period............................ 13,657,473 15,847,246
----------- -----------
Net Unrealized Appreciation/Depreciation During
the Period................................... (2,189,773) 107,377
----------- -----------
NET REALIZED AND UNREALIZED GAIN/LOSS.......... $(2,103,290) $ 138,955
=========== ===========
NET INCREASE IN NET ASSETS FROM OPERATIONS..... $ 1,850,732 $ 1,457,622
=========== ===========
</TABLE>
See Notes to Financial Statements
16
<PAGE> 18
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 1999, The Two Months Ended
October 31, 1998 and the Year Ended August 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Two Months Ended Year Ended
April 30, 1999 October 31, 1998 August 31, 1998
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................. $ 3,954,022 $ 1,318,667 $ 8,005,419
Net Realized Gain...................... 86,483 31,578 471,665
Net Unrealized
Appreciation/Depreciation During the
Period............................... (2,189,773) 107,377 1,875,754
------------ ------------ ------------
Change in Net Assets from Operations... 1,850,732 1,457,622 10,352,838
------------ ------------ ------------
Distributions from Net Investment
Income:
Common Shares........................ (3,087,415) (1,028,096) (6,231,115)
Preferred Shares..................... (764,886) (287,975) (1,781,206)
------------ ------------ ------------
Total Distributions.................... (3,852,301) (1,316,071) (8,012,321)
------------ ------------ ------------
NET CHANGE IN NET ASSETS FROM
INVESTMENT ACTIVITIES................ (2,001,569) 141,551 2,340,517
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued Through
Dividend Reinvestment................ 157,607 65,436 173,528
------------ ------------ ------------
TOTAL INCREASE/DECREASE IN NET
ASSETS............................... (1,843,962) 206,987 2,514,045
NET ASSETS:
Beginning of the Period................ 162,038,002 161,831,015 159,316,970
------------ ------------ ------------
End of the Period (Including
accumulated undistributed net
investment income of $511,890 and
$410,169 and $407,573,
respectively)........................ $160,194,040 $162,038,002 $161,831,015
============ ============ ============
</TABLE>
See Notes to Financial Statements
17
<PAGE> 19
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share
of the Trust outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Two Months
Ended Ended -------------------
April 30, 1999 October 31, 1998 1998 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period (a)......................... $17.210 $17.188 $ 16.828 $16.444
------- ------- -------- -------
Net Investment Income.............. .607 .203 1.231 1.251
Net Realized and Unrealized
Gain/Loss........................ (.324) .021 .362 .438
------- ------- -------- -------
Total from Investment Operations..... .283 .224 1.593 1.689
------- ------- -------- -------
Less:
Distributions from Net Investment
Income:
Paid to Common Shareholders...... .474 .158 .959 1.035
Common Share Equivalent of
Distributions Paid to Preferred
Shareholders................... .117 .044 .274 .270
Distributions from and in Excess of
Net Realized Gain:
Paid to Common Shareholders...... -0- -0- -0- -0-
Common Share Equivalent of
Distributions Paid to Preferred
Shareholders................... -0- -0- -0- -0-
------- ------- -------- -------
Total Distributions.................. .591 .202 1.233 1.305
------- ------- -------- -------
Net Asset Value, End of the Period... $16.902 $17.210 $ 17.188 $16.828
======= ======= ======== =======
Market Price Per Share at End of the
Period............................. $17.000 $17.750 $16.9375 $17.375
Total Investment Return at Market
Price (b).......................... (1.53%)* 5.76%* 3.13% 10.33%
Total Return at Net Asset Value
(c)................................ .96%* 1.04%* 8.04% 8.89%
Net Assets at End of the Period (In
millions).......................... $160.2 $162.0 $161.8 $159.3
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares**........................... 1.60% 1.65% 1.62% 1.64%
Ratio of Net Investment Income to
Average Net Assets Applicable to
Common Shares (d).................. 5.78% 5.51% 5.63% 5.87%
Portfolio Turnover................... 15%* 3%* 20% 9%
* Non-Annualized
** Ratio of Expenses to Average Net
Assets Including Preferred
Shares............................ 1.11% 1.14% 1.12% 1.12%
</TABLE>
(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 upon NAV.
(d) Net Investment Income is adjusted for common share equivalent of
distributions paid to preferred shareholders.
18
<PAGE> 20
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 27, 1991
(Commencement
Year Ended August 31, of Investment
------------------------------------- Operations) to
1996 1995 1994 1993 August 31, 1992
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
$16.621 $16.282 $17.392 $16.013 $14.786
------- ------- ------- ------- -------
1.232 1.266 1.275 1.346 1.049
(.081) .497 (1.100) 1.309 1.116
------- ------- ------- ------- -------
1.151 1.763 .175 2.655 2.165
------- ------- ------- ------- -------
1.050 1.050 1.050 1.007 .743
.278 .293 .202 .185 .195
-0- .068 .029 .068 -0-
-0- .013 .004 .016 -0-
------- ------- ------- ------- -------
1.328 1.424 1.285 1.276 .938
------- ------- ------- ------- -------
$16.444 $16.621 $16.282 $17.392 $16.013
======= ======= ======= ======= =======
$16.750 $15.625 $15.625 $17.125 $15.625
14.18% 7.58% (2.62%) 17.05% 9.33%*
5.30% 9.47% (.23%) 15.91% 11.96%*
$ 156.3 $ 157.2 $ 155.0 $ 161.9 $ 152.9
1.67% 1.72% 1.66% 1.63% 1.60%
5.70% 6.06% 6.33% 7.04% 6.24%
8% 17% 19% 13% 37%*
1.14% 1.16% 1.14% 1.11% 1.12%
</TABLE>
See Notes to Financial Statements
19
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen 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 Trust changed its fiscal year-end from August 31 to
October 31. As mentioned in your last report, due to the relatively short span
of time between the August 31, 1998 report and the October 31, 1998 report, the
October 31, 1998 report was not distributed but rather the October data is
included as part of this April 30, 1999 semi-annual report.
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--Municipal bonds are valued by independent pricing
services or dealers using the mean of the bid and asked prices or, in the
absence of market quotations, at fair value based upon yield data relating to
municipal bonds with similar characteristics and general market conditions.
Securities which are not valued by independent pricing services are valued at
fair value using procedures established in good faith by the Board of Trustees.
Short-term securities with remaining maturities of 60 days or less 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
20
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
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.
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. 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 October 31, 1998, the Trust had an accumulated capital loss
carryforward for tax purposes of $686,267 which will expire between October 31,
2002 and October 31, 2003.
At April 30, 1999, for federal income tax purposes the cost of long-term
investments is $152,473,382, the aggregate gross unrealized appreciation is
$13,751,406 and the aggregate gross unrealized depreciation is $93,933,
resulting in net unrealized appreciation on long-term investments of
$13,657,473.
At October 31, 1998, for federal income tax purposes, the cost of long-term
investments is $148,380,635, the aggregate gross unrealized appreciation is
$15,883,589 and the aggregate gross unrealized depreciation is $36,343,
resulting in net unrealized appreciation on long-term investments of
$15,847,246.
E. 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.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, Van Kampen
Investment Advisory Corp. (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,
21
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
the Trust will pay a monthly administrative fee to Van Kampen Funds Inc. or its
affiliates' (collectively "Van Kampen"), 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.
For the six months ended April 30, 1999 and the two months ended October 31,
1998, the Trust recognized expenses of approximately $2,100 and $500,
respectively, representing legal services provided by Skadden, Arps, Slate,
Meagher & Flom (Illinois), counsel to the Trust, of which a trustee of the Trust
is an affiliated person.
For the six months ended April 30, 1999 and the two months ended October 31,
1998, the Trust recognized expenses of approximately $29,700 and $11,600,
respectively, representing Van Kampen's cost of providing accounting and legal
services to the Trust.
Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
officers of Van Kampen.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable for a ten-year period
and are based upon each trustee's years of service to the Trust. The maximum
annual benefit under the plan is $2,500.
3. CAPITAL TRANSACTIONS
At April 30, 1999, October 31, 1998 and August 31, 1998, common share paid in
surplus aggregated $96,559,267, $96,401,752 and $96,336,354, respectively.
Transactions in common shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED TWO MONTHS ENDED YEAR ENDED
APRIL 30, 1999 OCTOBER 31, 1998 AUGUST 31, 1998
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Beginning Shares..... 6,510,151 6,506,359 6,496,170
Shares Issued Through
Dividend
Reinvestment....... 9,246 3,792 10,189
--------- --------- ---------
Ending Shares........ 6,519,397 6,510,151 6,506,359
========= ========= =========
</TABLE>
4. INVESTMENT TRANSACTIONS
For the six months ended April 30, 1999, the cost of purchases and proceeds from
sales of investments, excluding short-term investments, were $28,392,261 and
$24,730,452, respectively. For the two months ended October 31, 1998, the cost
of purchases and
22
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
proceeds from sales of investments, excluding short-term investments, were
$5,819,866 and $4,333,801, respectively.
5. PREFERRED SHARES
Effective with the close of business on April 23, 1999, the liquidation
preference on the Trust's preferred shares decreased from $50,000 to $25,000 per
share. This decrease was effected by means of a 2 for 1 stock split that doubled
the Trust's number of outstanding preferred shares. The total liquidation value
for the Trusts was unchanged.
As of April 30, 1999, the Trust has outstanding 2,000 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 April 30,
1999 was 3.310%. During the six months ended April 30, 1999, the rates ranged
from 3.000% to 3.399%.
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.
The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $25,000 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.
23
<PAGE> 25
DIVIDEND REINVESTMENT PLAN
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, State Street Bank and Trust
Company, as your Plan Agent, will automatically invest your dividends and
capital gains distributions in Common Shares of the Trust for your account.
HOW TO PARTICIPATE
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be re-
registered in your own name which will enable your participation in the Plan.
HOW THE PLAN WORKS
Participants in the Plan will receive the equivalent in Common Shares valued on
the valuation date, generally at the lower of market price or net asset value,
except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Trust's Common Shares,
resulting in the acquisition of fewer Common Shares than if the dividend or
distribution had been paid in Common Shares issued by the Trust. All
reinvestments are in full and fractional Common Shares and are carried to three
decimal places.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
changes sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.
COSTS OF THE PLAN
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.
TAX IMPLICATIONS
You will receive tax information annually for your personal records and to help
you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA 02266-
8200. If you withdraw, you will receive, without
charge, a share certificate issued in your name for all full Common Shares
credited to your account under the Plan and a cash payment will be made for any
fractional Common Share credited to your account under the Plan. You may again
elect to participate in the Plan at any time by calling 1-800-341-2929 or
writing to the Trust at:
Van Kampen Funds Inc.
Attn: Closed-End Funds
2800 Post Oak Blvd.
Houston, TX 77056
24
<PAGE> 26
VAN KAMPEN FUNDS
EQUITY FUNDS
Domestic
Aggressive Equity
Aggressive Growth
American Value
Comstock
Emerging Growth
Enterprise
Equity Growth
Equity Income
Growth
Growth and Income
Harbor
Pace
Real Estate Securities
Utility
Value
Global/International
Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
Global Franchise
Global Managed Assets
International Magnum
Latin American
FIXED-INCOME FUNDS
Income
Corporate Bond
Global Fixed Income
Global Government Securities
Government Securities
High Income Corporate Bond
High Yield
High Yield & Total Return
Limited Maturity Government
Short-Term Global Income
Strategic Income
U.S. Government
U.S. Government Trust for Income
Worldwide High Income
Tax Exempt Income
California Insured Tax Free
Florida Insured Tax Free Income
High Yield Municipal
Insured Tax Free Income
Intermediate Term Municipal Income
Municipal Income
New York Tax Free Income
Pennsylvania Tax Free Income
Tax Free High Income
Capital Preservation
Reserve
Tax Free Money
SENIOR LOAN
Prime Rate Income Trust
Senior Floating Rate
To find out more about any of these
funds, ask your financial advisor for
a prospectus, which contains more
complete information, including sales
charges, risks, and expenses. Please
read it carefully before you invest
or send money.
To view a current Van Kampen fund
prospectus or to receive additional
fund information, choose from one of
the following:
- - visit our Web site at WWW.VANKAMPEN.COM--to view a prospectus, select
Download Prospectus
- - call us at 1-800-341-2911 weekdays from 7:00 a.m. to 7:00 p.m. Central time.
Telecommunications Device for the Deaf users, call 1-800-421-2833.
- - e-mail us by visiting WWW.VANKAMPEN.COM and selecting Contact Us
25
<PAGE> 27
VAN KAMPEN FLORIDA QUALITY MUNICIPAL TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
DENNIS J. MCDONNELL*--Chairman
STEVEN MULLER
THEODORE A. MYERS
DON G. POWELL*
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
DENNIS J. MCDONNELL*
President
A. THOMAS SMITH, III*
Vice President and Secretary
JOHN L. SULLIVAN*
Vice President, Treasurer
and Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
EDWARD C. WOOD, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN
INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
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 (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
KPMG LLP
303 East Wacker Drive
Chicago, Illinois 60601
* * "Interested" persons of the Trust, as defined in the Investment Company Act
of 1940.
(C) Van Kampen Funds Inc., 1999 All rights reserved.
(SM) denotes a service mark of Van Kampen Funds Inc.
26
<PAGE> 28
YEAR 2000 READINESS DISCLOSURE
Like other mutual funds, financial and business organizations and individuals
around the world, the Trust could be adversely affected if the computer systems
used by the Trust's investment adviser and other service providers do not
properly process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Problem." The Trust's
investment adviser is taking steps that it believes are reasonably designed to
address the Year 2000 Problem with respect to computer systems that it uses and
to obtain reasonable assurances that comparable steps are being taken by the
Trust's other major service providers. At this time, there can be no assurances
that these steps will be sufficient to avoid any adverse impact to the Trust. In
addition, the Year 2000 Problem may adversely affect the markets and the issuers
of securities in which the Trust may invest that, in turn, may adversely affect
the net asset value of the Trust. Improperly functioning trading systems may
result in settlement problems and liquidity issues. In addition, corporate and
governmental data processing errors may result in production problems for
individual companies or issuers and overall economic uncertainty. Earnings of
individual issuers will be affected by remediation costs, which may be
substantial and may be reported inconsistently in U.S. and foreign financial
statements. Accordingly, the Trust's investments may be adversely affected. The
statements above are subject to the Year 2000 Information and Readiness
Disclosure Act, which may limit the legal rights regarding the use of such
statements in the case of dispute.
27
<PAGE> 29
VAN KAMPEN FUNDS
YOUR NOTES:
28
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> FL QUALITY
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> APR-30-1999
<INVESTMENTS-AT-COST> 152,473,382
<INVESTMENTS-AT-VALUE> 166,130,855
<RECEIVABLES> 1,708,482
<ASSETS-OTHER> 1,606
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 167,840,943
<PAYABLE-FOR-SECURITIES> 7,123,898
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 523,005
<TOTAL-LIABILITIES> 7,646,903
<SENIOR-EQUITY> 50,000,000
<PAID-IN-CAPITAL-COMMON> 96,624,461
<SHARES-COMMON-STOCK> 6,519,397
<SHARES-COMMON-PRIOR> 6,510,151
<ACCUMULATED-NII-CURRENT> 511,890
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (599,784)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,657,473
<NET-ASSETS> 160,194,040
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,838,000
<OTHER-INCOME> 0
<EXPENSES-NET> (883,978)
<NET-INVESTMENT-INCOME> 3,954,022
<REALIZED-GAINS-CURRENT> 86,483
<APPREC-INCREASE-CURRENT> (2,189,773)
<NET-CHANGE-FROM-OPS> 1,850,732
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,852,301)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 9,246
<NET-CHANGE-IN-ASSETS> (1,843,962)
<ACCUMULATED-NII-PRIOR> 410,169
<ACCUMULATED-GAINS-PRIOR> (686,267)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 559,636
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 883,978
<AVERAGE-NET-ASSETS> 161,216,404
<PER-SHARE-NAV-BEGIN> 17.210
<PER-SHARE-NII> 0.607
<PER-SHARE-GAIN-APPREC> (0.324)
<PER-SHARE-DIVIDEND> (0.591)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.902
<EXPENSE-RATIO> 1.60
</TABLE>