<PAGE> 1
<TABLE>
<S> <C>
Table of Contents
OVERVIEW
LETTER TO SHAREHOLDERS 1
ECONOMIC SNAPSHOT 2
PERFORMANCE SUMMARY
RETURN HIGHLIGHTS 3
PORTFOLIO AT A GLANCE
CREDIT QUALITY 4
SIX-MONTH DIVIDEND HISTORY 4
TOP FIVE INDUSTRIES 5
NET ASSET VALUE AND MARKET PRICE 5
Q&A WITH YOUR PORTFOLIO MANAGERS 6
GLOSSARY OF TERMS 10
BY THE NUMBERS
YOUR TRUST'S INVESTMENTS 11
FINANCIAL STATEMENTS 17
NOTES TO FINANCIAL STATEMENTS 22
TRUST OFFICERS AND IMPORTANT ADDRESSES 25
</TABLE>
It is times
like these when money- management experience may make a difference.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 2
LETTER TO SHAREHOLDERS
May 19, 2000
Dear Shareholder,
Whether you have held your Trust for years or just joined the Van Kampen family
of shareholders in the last few months, you are likely to have questions and
even some concerns about how recent market volatility has affected your
investment. I encourage you to review the following Q&A in which your portfolio
manager provides an update on how your Trust is being managed in this
environment.
It is times like these when money-management experience may make a difference.
Toward that end, you should know that Van Kampen is one of the nation's oldest
investment-management firms, with a history of money management dating back to
1926. Our portfolio managers have invested in all types of market
conditions--during bull and bear markets, periods of inflation and rising
interest rates, and now a technology revolution. We have managed money long
enough to understand short-term market volatility and the value of investing for
the long term.
As we head into the second half of 2000, count on us to
continue to draw on the wisdom of our 76 years of experience.
OVERVIEW Along those lines, Van Kampen's "Generations of Experience" is
the theme of a national advertising campaign that kicked off
this spring. The message emphasizes our depth of
investment-management history, as well as our firm belief that with the right
investments, anyone can realize life's true wealth.
Sincerely,
[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Investments
1
<PAGE> 3
ECONOMIC SNAPSHOT
ECONOMIC GROWTH
ECONOMIC GROWTH REMAINED STRONG, PRIMARILY DUE TO ACTIVE CONSUMER AND BUSINESS
SPENDING. GROSS DOMESTIC PRODUCT, THE PRIMARY MEASURE OF ECONOMIC GROWTH,
INCREASED AT AN ANNUALIZED RATE OF 5.4 PERCENT IN THE FIRST QUARTER OF 2000.
WHILE THIS FIGURE INDICATES A MODEST SLOWDOWN FROM THE PREVIOUS TWO QUARTERS, IT
NEVERTHELESS REPRESENTS A HIGH RATE OF ECONOMIC GROWTH.
CONSUMER SPENDING AND EMPLOYMENT
INFLATION FEARS CONTINUED TO MOUNT BECAUSE OF STRONG CONSUMER SPENDING AND THE
TIGHT LABOR MARKET. FOR MOST OF THE REPORTING PERIOD, RISING INTEREST RATES DID
LITTLE TO REIN IN ROBUST CONSUMER SPENDING. ALTHOUGH RETAIL SALES GROWTH
MODERATED IN APRIL, THE FACTORS UNDERPINNING CONSUMER ACTIVITY REMAINED LARGELY
UNCHANGED--RISING WAGES, LOW UNEMPLOYMENT, AND A GENERALLY FAVORABLE (THOUGH
VOLATILE) STOCK MARKET.
IN ADDITION, THE JOBLESS RATE HOVERED NEAR ITS LOWEST LEVEL IN THREE DECADES.
THE EMPLOYMENT COST INDEX ACCELERATED SHARPLY IN THE FIRST QUARTER OF 2000,
REFLECTING RISING WAGES AS EMPLOYERS VIE TO ATTRACT AND RETAIN SKILLED WORKERS.
THESE WAGE PRESSURES, IN TURN, BEGAN TO AFFECT PRICES, AS COMPANIES STARTED TO
RAISE THE COST OF GOODS AND SERVICES TO COMPENSATE FOR HIGHER LABOR COSTS.
INTEREST RATES AND INFLATION
STRONG GDP DATA, CONSUMER SPENDING, AND EMPLOYMENT PROMPTED THE FEDERAL RESERVE
BOARD TO SEEK TO SLOW THE PACE OF ECONOMIC GROWTH AND WARD OFF INFLATION. THE
FED INCREASED THE FEDERAL FUNDS RATE BY 0.25 PERCENT FIVE TIMES BETWEEN JUNE
1999 AND APRIL 2000. [EDITOR'S NOTE: THE FED RAISED RATES BY 0.50 PERCENT ON MAY
16.] DESPITE THE FED'S CONCERNS, THE CONSUMER PRICE INDEX, A MEASURE OF
INFLATION, ROSE A MODERATE 3.0 PERCENT DURING THE 12 MONTHS ENDED APRIL 30,
2000.
INTEREST RATES AND INFLATION
(April 30, 1998 - April 30, 2000)
[LINE GRAPH]
<TABLE>
<CAPTION>
INTEREST RATES INFLATION
-------------- ---------
<S> <C> <C>
Apr 98 5.50 1.40
5.50 1.70
5.50 1.70
Jul 98 5.50 1.70
5.50 1.60
5.25 1.50
Oct 98 5.00 1.50
4.75 1.50
4.75 1.60
Jan 99 4.75 1.70
4.75 1.60
4.75 1.70
Apr 99 4.75 2.30
4.75 2.10
5.00 2.00
Jul 99 5.00 2.10
5.25 2.30
5.25 2.60
Oct 99 5.25 2.60
5.50 2.60
5.50 2.70
Jan 00 5.50 2.70
5.75 3.20
6.00 3.70
Apr 00 6.00 3.00
</TABLE>
Interest rates are represented by the closing midline federal funds target 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 SUMMARY
RETURN HIGHLIGHTS
(as of April 30, 2000)
<TABLE>
<S> <C>
------------------------------------------------------------------------
NYSE Ticker Symbol VFM
------------------------------------------------------------------------
Six-month total return based on market price(1) .23%
------------------------------------------------------------------------
Six-month total return based on NAV(2) 1.79%
------------------------------------------------------------------------
Distribution rate as a % of closing common stock
price(3) 7.12%
------------------------------------------------------------------------
Taxable-equivalent distribution rate as a % of closing
common stock price(4) 11.13%
------------------------------------------------------------------------
Net asset value $15.43
------------------------------------------------------------------------
Closing common stock price $13.3125
------------------------------------------------------------------------
Six-month high common stock price (11/05/99) $14.1250
------------------------------------------------------------------------
Six-month low common stock price (12/01/99) $13.1250
------------------------------------------------------------------------
Preferred share rate(5) 3.950%
------------------------------------------------------------------------
</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 rate.
(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 is no guarantee of 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.
3
<PAGE> 5
PORTFOLIO AT A GLANCE
CREDIT QUALITY
(as a percentage of long-term investments)
<TABLE>
<CAPTION>
As of April 30, 2000
<S> <C>
- AAA/Aaa............ 74.9%
- AA/Aa.............. 10.2%
- A/A................ 5.1%
- BBB/Baa............ 6.6%
- Non-Rated.......... 3.2%
[PIE CHART]
<CAPTION>
As of October 31, 1999
<S> <C>
- AAA/Aaa............ 70.7%
- AA/Aa.............. 10.7%
- A/A................ 6.6%
- BBB/Baa............ 9.3%
- Non-Rated.......... 2.7%
[PIE CHART]
</TABLE>
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's, respectively.
SIX-MONTH DIVIDEND HISTORY
(for the six months ending April 30, 2000, for common shares)
[BAR GRAPH]
<TABLE>
<CAPTION>
DIVIDENDS
---------
<S> <C>
11/99 0.079
12/99 0.079
1/00 0.079
2/00 0.079
3/00 0.079
4/00 0.079
</TABLE>
The dividend history represents past performance of the Trust and is no
guarantee of the Trust's future dividends.
4
<PAGE> 6
TOP FIVE INDUSTRIES
(as a percentage of long-term investments)
[BAR GRAPH]
<TABLE>
<CAPTION>
APRIL 30, 2000 OCTOBER 31, 1999
-------------- ----------------
<S> <C> <C>
Health Care 14.40 22.90
Public Education 12.60 12.60
Airport 12.40 6.70
Water & Sewer 11.50 19.20
General Purpose 9.70 10.80
</TABLE>
NET ASSET VALUE AND MARKET PRICE
(based upon quarter-end values--September 1991 through April 2000)
[LINE GRAPH]
<TABLE>
<CAPTION>
NET ASSET VALUE MARKET PRICE
--------------- ------------
<S> <C> <C>
9/91 15.0000 14.8100
15.2300 15.1250
15.1000 14.8750
15.6500 15.5000
9/92 16.0000 15.1250
16.0600 15.6250
16.7900 16.3750
17.0300 16.6250
9/93 17.6100 17.6250
17.5500 17.6250
16.2600 15.7500
16.1500 16.1250
9/94 15.9400 14.3750
15.3000 14.5000
16.2700 15.5000
16.5100 16.1250
9/95 16.6900 16.1250
17.2800 17.0000
16.6300 16.7500
16.4000 16.0000
9/96 16.5500 16.6250
16.8000 17.0000
16.4500 16.7500
16.7200 17.2500
9/97 16.9400 16.8750
17.1300 17.0000
17.0400 16.5625
17.0400 17.0000
9/98 17.2900 17.1875
17.1100 18.0000
16.9400 17.0000
16.3300 16.1875
9/99 15.9400 14.3125
15.3700 13.5625
15.6600 13.4375
4/00 15.4300 13.3125
</TABLE>
The solid line above represents the Trust's net asset value (NAV), which
indicates overall changes in value among the Trust's underlying securities. The
Trust's market price is represented by the dashed line, which indicates the
price the market is willing to pay for shares of the Trust at a given time.
Market price is influenced by a range of factors, including supply and demand
and market conditions.
5
<PAGE> 7
Q&A WITH YOUR PORTFOLIO MANAGERS
WE RECENTLY SPOKE WITH REPRESENTATIVES OF THE ADVISER OF THE VAN KAMPEN FLORIDA
QUALITY MUNICIPAL TRUST ABOUT THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED THE
MARKETS DURING THE PAST SIX MONTHS. THE REPRESENTATIVES INCLUDE THOMAS M. BYRON,
PORTFOLIO MANAGER, WHO HAS MANAGED THE TRUST SINCE 1997 AND WORKED IN THE
INVESTMENT INDUSTRY SINCE 1981. THE FOLLOWING COMMENTS REFLECT THE
REPRESENTATIVES' VIEWS ON THE TRUST'S PERFORMANCE DURING THE SIX MONTHS ENDED
APRIL 30, 2000.
Q WHAT WERE THE MOST IMPORTANT
DEVELOPMENTS IN THE FIXED-INCOME MARKETS DURING THE REPORTING PERIOD?
A Generally higher interest rates,
sparked by inflation worries, set the tone for the fixed-income markets during
the past six months. As the economy continued its strong advance, the markets
reacted warily to signs of potential inflationary pressures--such as rising
employment costs, healthy job growth, strong consumer spending, and spikes in
commodities prices, especially oil. These concerns fueled a steady sell-off
through the fourth quarter of 1999 and into January 2000.
To slow the economy and keep prices from rising, the Federal Reserve Board
gradually pushed short-term interest rates higher, raising the fed funds rate (a
key short-term lending rate) three times between November 1999 and April 2000.
(Editor's note: On May 16, 2000, after the reporting period ended, the Fed
raised rates a fourth time.)
In times of rising interest rates, bond prices trend downward. Add to that
the lingering effects of the Year 2000 (Y2K) computer scare early in the first
quarter of 2000, and you can see why this was a challenging period for many
fixed-income investors.
Q HOW DID THE MUNICIPAL
BOND MARKET REACT TO THESE CONDITIONS?
A Not surprisingly, higher interest
rates hurt municipal bond prices, but we believe there's always opportunity in
the market. In the past few months, we've actually seen some fairly significant
price swings--both up and down--as investors tried to anticipate the Fed's next
move and the direction of interest rates. The market was weak in late 1999 and
early 2000, but we had a nice rally in February and March, which tapered off in
April.
The strong economy has bolstered the financial condition of many
municipalities across the country, so the pace of new municipal bond issuance
dropped sharply (about 40 percent) from a year ago. With their coffers full,
municipalities haven't needed to turn to the bond market for financing. Also,
6
<PAGE> 8
higher interest rates made it more difficult for issuers to refund outstanding
bond issues, which has been a source of new investment opportunities in the
past.
Q HOW WOULD YOU DESCRIBE
FLORIDA'S ECONOMIC AND MUNICIPAL MARKET ENVIRONMENT DURING THE PERIOD?
A Florida's economy continued to be
bolstered by increased international trade, tourism, and retirement-related
housing, amenities, and services. Growing population, low unemployment rates,
and a diversifying economic base helped strengthen the state's financial
condition, with budget surpluses and moderate debt levels supporting the state's
high credit rating. Several municipal-market sectors--including airports,
transportation, education, and utilities--benefited from the strength of the
state economy.
Florida had the third-highest volume of bond sales in the country during the
first quarter of 2000. Our analysts continue to monitor the impact of the recent
cut in Florida's intangibles tax, but thus far, demand for tax-exempt Florida
municipal bonds has held up, keeping pace with supply.
Q WHAT STRATEGIES DID YOU FOLLOW
IN MANAGING THE TRUST?
A Strategically, we've been moving in
a new direction since early this year. We made the decision to manage the Trust
relative to a new benchmark, rather than the Lipper peer group, which meant that
we needed to make some adjustments to the Trust's structure. The Trust's
benchmark is now the Lehman Brothers Florida Municipal Bond Index with
maturities greater than five years. Specifically, we increased the duration of
the portfolio (a measure of its sensitivity to changes in interest rates) to
more closely track the performance of the new benchmark index. The benchmark
provides the shareholder with general municipal market returns, and the
leveraged structure provides the opportunity for enhanced dividends.
Fortunately, the municipal bond market played into our hands and gave us
some excellent opportunities to implement this new strategy. Beginning in late
January, we began purchasing deeply discounted bonds. These were securities that
were issued a year or so ago with coupons between 4.50 and 5.25 percent. As
interest rates went up over time, these bonds began selling at a deep discount,
with some priced as low as 80 cents on the dollar.
At the same time, the Trust held a number of older, prerefunded issues with
higher coupons in the 6.50 to 8.00 percent range. Such prerefunded issues tend
to decrease the duration of a portfolio because they have shorter lives than
their stated maturities. But because of their attractive coupons, these bonds
were trading at a premium, presenting us with an opportunity to capture some
solid gains. Because these bonds were scheduled to be called or refunded within
the next year or two, we chose to sell them while their demand--and therefore
their market price--was high.
7
<PAGE> 9
This combination of buying deep discount bonds and selling prerefunded
issues enabled us to lengthen the duration of the portfolio without drastically
altering the Trust's income stream that the Trust will be earning over time.
While we've seen a slight decline in portfolio income in the short run, the
deeply discounted bonds enabled us to purchase more par value per dollar
invested. In some cases, for example, we were able to pick up $1 million worth
of bond par value for just $800,000.
Q WHAT AREAS OF THE MUNICIPAL
MARKET WERE MOST ATTRACTIVE TO YOU?
A Our philosophy is to seek bonds
that we feel represent the best values compared with similar offerings in the
marketplace. During the past six months, we did not specifically target one area
of the market over another, although we did maintain significant concentrations
in certain sectors, including health-care, airport, and public education bonds,
each of which represented more than 12 percent of the portfolio's long-term
investments.
From a credit-quality standpoint, we boosted the AAA rated portion of the
portfolio to roughly 75 percent of long-term investments, up from 71 percent at
the start of the reporting period. Much of this shift can be attributed to the
sale of some of the Trust's BBB rated hospital bonds, as we reduced the Trust's
holdings in the health-care sector to 14.4 percent, down from 22.9 percent six
months ago.
Many of our portfolio management decisions were based on pricing issues,
such as the availability of deep discounts, or structural issues, such as
extending duration or maintaining adequate call protection and diversification
for the portfolio. For additional portfolio highlights, please refer to page 4.
Q HOW DID THE TRUST PERFORM
DURING THE PERIOD?
A For the six-month period ended
April 30, 2000, the Trust returned 0.23 percent based on market price. At the
same time, the Trust's market price decreased from $13.7500 per share on October
31, 1999, to $13.3125 per share on April 30, 2000. By comparison, the total
return of the Trust's peer group (as represented by the Lehman Brothers Florida
Municipal Bond Index) was 2.68 percent for the same period.
The Trust's dividend remained unchanged at $0.0790 per share throughout the
reporting period. This monthly tax-exempt dividend translates to a distribution
rate of 7.12 percent based on the Trust's closing common stock price on April
30, 2000.
Because the Trust is exempt from federal income taxes, this distribution
rate is equivalent to a yield of 11.13 percent for an investor in the 36 percent
federal income-tax bracket. Please refer to the chart and footnotes on page 3
for additional performance results. Past performance is no guarantee of future
results.
8
<PAGE> 10
Q WHAT DO YOU SEE AHEAD
FOR THE ECONOMY AND THE MUNICIPAL MARKET?
A All eyes will be on the key
economic statistics, such as GDP growth, employment costs, and the unemployment
rate. These figures measure the economy's strength and rate of growth and may
influence whether the Fed will continue to raise short-term interest rates. We
expect that the inflation rate may increase, but it's likely to remain in a
moderate range for the near term. It's anticipated that the Fed will continue to
increase short-term rates by the end of the summer, perhaps by more than 0.50
percent. Higher interest rates will, in turn, put pressure on the municipal
market in the short run.
Increased stock-price volatility in April has increased investor skepticism,
but investors continue to see price pullbacks as opportunities to buy
aggressive-growth stocks. It may take a much deeper, more sustained decline in
these stocks to convince investors to rethink their asset allocation decisions.
If the stock market does fall sharply, we could see a flight to quality, as
investors pursue investments that typically carry less risk. Such conditions
might benefit investment-grade municipal bonds.
Low municipal-bond supply could continue throughout 2000, especially if
interest rates trend higher, as expected, throughout the first half of the year.
Overall, the lower supply of bonds should help to shore up prices, as demand
remains strong. Investors can tolerate periodic price swings if they keep
long-term perspectives and continue to value the steady stream of tax-exempt
income that municipal bonds provide. As always, we will rely on our strong
research efforts to evaluate opportunities in the marketplace and identify
securities that may offer superior investment potential and value over time.
9
<PAGE> 11
GLOSSARY OF TERMS
A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.
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.
DURATION: A measure of the sensitivity of a bond's price to changes in interest
rates, expressed in years. Each year of duration represents an expected 1
percent change in the price of a bond for every 1 percent change in interest
rates. The longer a bond's duration, the greater the effect of interest-rate
movements on its price. Typically, funds with shorter durations perform better
in rising rate environments, while funds with longer durations perform better
when rates decline.
INFLATION: A persistent and measurable rise in the general level of prices.
Inflation is widely measured by the Consumer Price Index, an economic indicator
that measures the change in the cost of purchased goods and services.
MATURITY DATE: The date a bond expires, usually at face value.
MATURITY LENGTH: The time it takes for a bond to mature. A bond issued in 1999
and maturing in 2009 is a 10-year bond.
PREREFUNDING: The process of issuing new bonds to refinance an outstanding
municipal bond issue prior to its maturity or call date. The proceeds from the
new bonds are generally invested in U.S. government securities. Prerefunding
typically occurs when interest rates decline and an issuer replaces its
higher-yielding bonds with current lower-yielding issues.
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.
10
<PAGE> 12
BY THE NUMBERS
YOUR TRUST'S INVESTMENTS
April 30, 2000 (Unaudited)
THE FOLLOWING PAGES DETAIL THE SPECIFIC HOLDINGS OF YOUR TRUST AT THE END OF THE
REPORTING PERIOD.
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS 97.9%
FLORIDA 92.2%
$1,000 Bay Cnty, FL Sch Brd Ctfs Partn (Prerefunded
@ 07/01/04) (AMBAC Insd).................... 6.750% 07/01/12 $ 1,082,770
1,000 Bay Cnty, FL Wtr Sys Rev (AMBAC Insd)....... 5.700 09/01/30 980,820
1,500 Broward Cnty, FL Hsg Fin Auth Multi-Family
Hsg Rev Pembroke Pk Apts Proj............... 5.650 10/01/28 1,351,665
1,000 Cape Canaveral, FL Hosp Dist Rev Ctfs
Rfdg........................................ 5.250 01/01/28 742,670
1,135 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)....................... * 10/01/13 473,000
3,205 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)....................... * 10/01/14 1,245,655
4,005 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)....................... * 10/01/15 1,451,652
4,005 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)....................... * 10/01/16 1,353,850
2,000 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)....................... * 10/01/17 630,500
1,960 Cape Coral, FL Wtr & Swr Rev (Prerefunded @
10/01/01) (MBIA Insd)....................... * 10/01/18 576,260
1,000 Charlotte Cnty, FL Util Rev (Prerefunded @
10/01/01) (FGIC Insd)....................... 6.875 10/01/21 1,049,940
725 Clay Cnty, FL Hsg Fin Auth Rev Single Family
Mtg (GNMA Collateralized)................... 6.500 09/01/21 743,799
750 Cocoa, FL Wtr & Swr Rev Impt (Prerefunded @
10/01/07) (FGIC Insd)....................... 5.875 10/01/26 792,345
1,650 Dade Cnty, FL Aviation Rev Miami Intl Arpt
Ser B (FSA Insd)............................ 5.125 10/01/22 1,461,157
1,230 Dade Cnty, FL Aviation Rev Miami Intl Arpt
Ser C....................................... 5.125 10/01/27 1,092,191
750 Dade Cnty, FL Edl Facs Auth Rev Univ of
Miami Ser B (MBIA Insd)..................... 5.750 04/01/20 750,668
1,280 Dade Cnty, FL Hlth Facs Auth Hosp Rev North
Shore Med Cent Proj Rfdg (Prerefunded @
08/15/02) (AMBAC Insd)...................... 6.000 08/15/10 1,312,512
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
YOUR TRUST'S INVESTMENTS
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$3,000 Dade Cnty, FL Hlth Facs Auth Hosp Rev South
Miami Hosp Proj Ser A (Prerefunded @
10/01/01) (AMBAC Insd) (b).................. 6.750% 10/01/20 $ 3,143,010
1,075 Dade Cnty, FL Sch Brd Ctfs Partn Ser B
(Prerefunded @ 08/01/06) (AMBAC Insd)....... 5.700 08/01/16 1,121,343
20,445 Dade Cnty, FL Spl Oblig Cap Apprec Bond Ser
B Rfdg (Prerefunded @ 10/01/08) (AMBAC
Insd)....................................... * 10/01/28 3,793,161
16,125 Dade Cnty, FL Spl Oblig Cap Apprec Bond Ser
B Rfdg (Prerefunded @ 10/01/08) (AMBAC
Insd)....................................... * 10/01/29 2,806,395
1,000 Dade Cnty, FL Wtr & Swr Sys Rev Rfdg (FGIC
Insd)....................................... 5.000 10/01/13 953,380
500 Daytona Beach, FL Wtr & Swr Rev Rfdg (AMBAC
Insd)....................................... 5.750 11/15/10 511,300
785 Escambia Cnty, FL Hlth Facs Auth Hlth Fac
Rev Baptist Hosp & Baptist Manor Rfdg
(Prerefunded @ 10/01/03).................... 6.750 10/01/14 838,537
950 Escambia Cnty, FL Hlth Facs Auth Rev
Ascension Hlth Credit Ser A-2 (AMBAC
Insd)....................................... 5.750 11/15/29 933,404
1,000 Escambia Cnty, FL Pollutn Ctl Rev Champion
Intl Corp Proj.............................. 6.900 08/01/22 1,017,600
1,500 Florida Hsg Fin Agy Hsg Willow Lake Apts Ser
J-1......................................... 5.350 07/01/27 1,358,820
2,715 Florida Hsg Fin Agy Home Ownership Mtg (GNMA
Collateralized)............................. 8.595 11/01/18 2,829,193
1,000 Florida Hsg Fin Corp Rev Homeowner Mtg Ser
4........................................... 6.250 07/01/22 1,016,580
1,345 Florida Hsg Fin Corp Rev Hsg Wentworth II
Apts Ser A (a).............................. 5.375 11/01/29 1,212,275
1,500 Florida Muni Ln Council Rev Ser B (MBIA
Insd)....................................... 5.750 11/01/29 1,482,135
500 Florida Ports Fin Comm Rev St Trans Trust
Fund Intermodal Pgm (FGIC Insd)............. 5.500 10/01/23 475,670
3,400 Florida Ports Fin Comm Rev St Trans Trust
Fund Intermodal Pgm (FGIC Insd)............. 5.500 10/01/29 3,199,706
1,500 Florida St Brd Ed Lottery Rev Ser A......... 5.250 07/01/17 1,432,080
14,000 Florida St Brd Edl Cap Outlay Pub Edl Ser
D........................................... 5.750 06/01/22 13,903,960
1,650 Florida St Brd of Regts Univ Sys Impt Rev
(AMBAC Insd)................................ 4.500 07/01/23 1,332,474
1,500 Florida St Div Bond Fin Dept Genl Svcs Revs
Env Protn Preservtn 2000-A (AMBAC Insd)..... 5.000 07/01/11 1,477,830
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
YOUR TRUST'S INVESTMENTS
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$2,000 Florida St Div Bond Fin Dept Genl Svcs Revs
Env Protn Preservtn 2000-A (FGIC Insd)...... 5.250% 07/01/12 $ 1,983,000
750 Florida St Div Bond Fin Dept Genl Svcs Revs
Env Protn Preservtn 2000-B.................. 5.500 07/01/08 770,048
1,250 Florida St Tpk Auth Tpk Rev Dept Tran Ser A
(FGIC Insd)................................. 4.500 07/01/27 996,275
1,000 Florida St Tpk Auth Tpk Rev Ser A Rfdg (FGIC
Insd)....................................... 5.250 07/01/22 927,660
1,635 Fort Myers, FL Util Rev Ser A Rfdg.......... 5.500 10/01/24 1,570,254
1,830 Gulf Breeze, FL Rev Cap Fdg Ser B
(MBIA Insd)................................. 4.500 10/01/27 1,452,727
500 Halifax Hosp Med Ctr FL Hosp Rev Ser A...... 7.250 10/01/24 472,995
1,000 Hillsborough Cnty, FL Indl Dev Auth Indl Dev
Rev Hlth Facs Proj Univ Comnty Hosp Ser A... 5.625 08/15/23 825,170
1,000 Hillsborough Cnty, FL Indl Dev Auth Pollutn
Ctl Rev Tampa Elec Proj Rfdg................ 8.000 05/01/22 1,086,930
3,000 Jacksonville, FL Cap Impt Rev Stadium Proj
Rfdg (AMBAC Insd)........................... 4.750 10/01/25 2,508,780
1,665 Jacksonville, FL Gtd Entitlement Rev Ser A
Rfdg (AMBAC Insd)........................... 5.500 10/01/12 1,667,830
2,000 Jacksonville, FL Hosp Rev Univ Med Cent Inc
Proj (Connie Lee Insd)...................... 6.500 02/01/11 2,080,860
5,000 Kissimmee, FL Util Auth Elec Sys Rev Rfdg &
Impt (Prerefunded @ 10/01/01) (FGIC Insd)... 6.500 10/01/17 5,224,150
1,685 Lee Cnty, FL Arpt Rev Ser B................. 5.750 10/01/33 1,656,658
1,025 Lee Cnty, FL Hsg Fin Auth Single Family Mtg
Rev Multi-Cnty Pgm Ser A
(GNMA Collateralized)....................... 7.450 09/01/27 1,136,489
800 Lee Cnty, FL Indl Dev Auth Hlthcare Fac Rev
Shell Pt Vlge Proj Ser A.................... 5.500 11/15/21 638,928
750 Marion Cnty, FL Hosp Dist Rev Impt Hlth Sys
Munroe Reg Rfdg............................. 5.500 10/01/29 649,950
1,000 Miami-Dade Cnty, FL Aviation Rev Miami Intl
Arpt Ser B.................................. 5.500 10/01/16 990,890
2,000 Miami-Dade Cnty, FL Aviation Rev Miami Intl
Arpt Ser B.................................. 5.750 10/01/29 1,973,360
2,000 Miami-Dade Cnty, FL Edl Facs Auth Rev Ser A
(AMBAC Insd)................................ 5.750 04/01/29 1,976,280
680 Miami-Dade Cnty, FL Spl Oblig Ser B (MBIA
Insd)....................................... * 10/01/33 84,558
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
YOUR TRUST'S INVESTMENTS
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$4,420 Miami-Dade Cnty, FL Spl Oblig Ser B (MBIA
Insd)....................................... 5.000% 10/01/37 $ 3,756,249
3,770 Miami-Dade Cnty, FL Spl Oblig Sub Ser A Rfdg
(MBIA Insd)................................. * 10/01/26 731,041
5,000 Miramar, FL Wastewtr Impt Assmt Rev
(Prerefunded @ 10/01/04) (FGIC Insd)........ 6.750 10/01/25 5,380,350
5,000 Orange Cnty, FL Hlth Fac Auth Rev
(Inverse Fltg) (MBIA Insd) (c).............. 8.502 10/29/21 5,443,750
2,000 Orange Cnty, FL Hlth Fac Auth Rev Hosp
Adventist Hlth/Sunbelt Ser A (AMBAC Insd)... 6.875 11/15/15 2,096,500
1,000 Orange Cnty, FL Hlth Facs Auth Rev Hosp Regl
Hlthcare Sys Ser E.......................... 6.000 10/01/26 945,020
1,000 Orange Cnty, FL Hsg Fin Auth Multi-Family
Rev Mtg Hands Inc Proj Ser A................ 8.000 10/01/25 1,056,470
775 Orange Cnty, FL Hsg Fin Auth Single Family
Mtg Rev (GNMA Collateralized)............... 6.550 10/01/21 797,491
7,500 Palm Beach Cnty, FL Arpt Sys Rev Rfdg (MBIA
Insd)....................................... 7.750 10/01/10 7,932,975
750 Palm Beach Cnty, FL Hsg Fin Auth
Multi-Family Rev Hsg Windsor Pk Apts Proj
Ser A....................................... 5.850 12/01/33 687,495
1,000 Palm Beach Cnty, FL Sch Brd Ctfs Partn Ser
A........................................... 5.875 08/01/21 1,006,440
1,500 Pensacola, FL Arpt Rev Ser A Rfdg (MBIA
Insd)....................................... 6.000 10/01/12 1,560,645
1,565 Pensacola, FL Arpt Rev Ser A Rfdg (MBIA
Insd)....................................... 6.125 10/01/18 1,602,450
3,250 Polk Cnty, FL Indl Dev Auth Indl Dev Rev IMC
Fertilizer Inc Ser A........................ 7.525 01/01/15 3,335,410
2,640 Port Saint Lucie, FL Util Rev Impt Ser A
Rfdg (MBIA Insd)............................ 5.125 09/01/27 2,344,822
370 Reedy Creek Impt Dist FL Ser A.............. 6.000 06/01/16 372,609
1,000 Saint Lucie Cnty, FL Sales Tax Rev
(Prerefunded @ 10/01/02) (FGIC Insd)........ 6.500 10/01/22 1,056,610
1,430 Sarasota Cnty, FL Hlth Fac Auth Rev Hlthcare
Kobernick/Meadow Pk
(Prerefunded @ 07/01/02).................... 10.000 07/01/22 1,596,695
2,000 Tampa, FL Hosp Rev Cap Impt H Lee Moffitt
Ser A....................................... 5.750 07/01/29 1,803,520
1,000 Volusia Cnty, FL Edl Fac Auth Rev Edl Facs
Embry Riddle Aero Ser A..................... 5.750 10/15/29 922,330
1,825 Winter Haven, FL Util Sys Rev Impt Rfdg
(MBIA Insd)................................. 4.750 10/01/28 1,512,523
</TABLE>
See Notes to Financial Statements
14
<PAGE> 16
YOUR TRUST'S INVESTMENTS
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$1,000 Winter Springs, FL Impt Rev Cap Apprec Rfdg
(AMBAC Insd)................................ * 10/01/27 $ 189,200
1,000 Winter Springs, FL Impt Rev Cap Apprec Rfdg
(AMBAC Insd)................................ * 10/01/29 167,090
------------
138,901,784
------------
GUAM 0.6%
1,000 Guam Pwr Auth Rev Ser A..................... 5.125% 10/01/29 824,550
------------
PUERTO RICO 4.1%
1,117 Centro de Recaudaciones de Ingresos
Muni Ctfs Partn PR.......................... 6.850 10/17/03 1,138,744
2,000 Puerto Rico Comwlth Hwy & Tran Auth
Hwy Rev Ser W............................... 5.500 07/01/15 1,988,640
1,000 Puerto Rico Comwlth Hwy & Tran Auth
Hwy Rev Ser X Rfdg.......................... 5.500 07/01/19 966,030
1,000 Puerto Rico Comwlth Hwy & Tran Auth
Tran Rev Ser A.............................. 4.750 07/01/38 800,320
1,250 Puerto Rico Elec Pwr Auth Pwr Rev Ser T
(Prerefunded @ 07/01/04).................... 6.375 07/01/24 1,346,550
------------
6,240,284
------------
U. S. VIRGIN ISLANDS 1.0%
1,500 Virgin Islands Pub Fin Auth Rev Gross Rcpts
Taxes Ln Nt Ser A........................... 6.375 10/01/19 1,503,525
------------
TOTAL LONG-TERM INVESTMENTS 97.9%
(Cost $143,835,416)................................................... 147,470,143
SHORT-TERM INVESTMENTS 1.5%
(Cost $2,200,000)..................................................... 2,200,000
------------
TOTAL INVESTMENTS 99.4%
(Cost $146,035,416)................................................... 149,670,143
OTHER ASSETS IN EXCESS OF LIABILITIES 0.6%............................. 933,452
------------
NET ASSETS 100.0%...................................................... $150,603,595
============
</TABLE>
* Zero coupon bond
(a) Securities purchased on a when-issued or delayed delivery basis.
See Notes to Financial Statements
15
<PAGE> 17
YOUR TRUST'S INVESTMENTS
April 30, 2000 (Unaudited)
(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 comparable fixed rate security. These instruments
are typically used by the Trust to enhance the yield of the portfolio. All
of the Trust's portfolio holdings, including derivative instruments, are
marked to market each day with the change in value reflected in the
unrealized appreciation/depreciation. Upon disposition a realized gain or
loss is recognized accordingly.
AMBAC--AMBAC Indemnity Corporation
Connie Lee--Connie Lee Insurance Company
FGIC--Financial Guaranty Insurance Company
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
MBIA--Municipal Bond Investors Assurance Corp.
See Notes to Financial Statements
16
<PAGE> 18
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
April 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $146,035,416)....................... $149,670,143
Cash........................................................ 56,350
Receivables:
Interest.................................................. 1,416,418
Investments Sold.......................................... 999,500
Other....................................................... 10,784
------------
Total Assets............................................ 152,153,195
============
LIABILITIES:
Payables:
Investments Purchased..................................... 1,208,926
Investment Advisory Fee................................... 87,109
Administrative Fee........................................ 24,902
Income Distributions-Common and Preferred Shares.......... 21,932
Affiliates................................................ 8,451
Trustees' Deferred Compensation and Retirement Plans........ 109,008
Accrued Expenses............................................ 89,272
------------
Total Liabilities....................................... 1,549,600
------------
NET ASSETS.................................................. $150,603,595
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 2,000 issued with liquidation preference of
$25,000 per share)........................................ $ 50,000,000
------------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 6,519,397 shares issued and
outstanding).............................................. 65,194
Paid in Surplus............................................. 96,559,267
Net Unrealized Appreciation................................. 3,634,727
Accumulated Undistributed Net Investment Income............. 299,905
Accumulated Net Realized Gain............................... 44,502
------------
Net Assets Applicable to Common Shares.................. 100,603,595
------------
NET ASSETS.................................................. $150,603,595
============
NET ASSET VALUE PER COMMON SHARE ($100,603,595 divided by
6,519,397 shares outstanding)............................. $ 15.43
============
</TABLE>
See Notes to Financial Statements
17
<PAGE> 19
Statement of Operations
For the Six Months Ended April 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 4,669,604
-----------
EXPENSES:
Investment Advisory Fee..................................... 525,318
Administrative Fee.......................................... 150,117
Preferred Share Maintenance................................. 67,705
Legal....................................................... 5,400
Trustees' Fees and Related Expenses......................... 3,716
Custody..................................................... 2,622
Other....................................................... 91,495
-----------
Total Expenses.......................................... 846,373
Less Credits Earned on Cash Balances.................... 968
-----------
Net Expenses............................................ 845,405
-----------
NET INVESTMENT INCOME....................................... $ 3,824,199
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 785,123
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 5,517,098
End of the Period......................................... 3,634,727
-----------
Net Unrealized Depreciation During the Period............... (1,882,371)
-----------
NET REALIZED AND UNREALIZED LOSS............................ $(1,097,248)
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 2,726,951
===========
</TABLE>
See Notes to Financial Statements
18
<PAGE> 20
Statement of Changes in Net Assets
For the Six Months Ended April 30, 2000 and the Year Ended
October 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 2000 OCT. 31, 1999
-----------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income............................... $ 3,824,199 $ 7,900,867
Net Realized Gain/Loss.............................. 785,123 (54,354)
Net Unrealized Depreciation During the Period....... (1,882,371) (10,330,148)
------------ ------------
Change in Net Assets from Operations................ 2,726,951 (2,483,635)
------------ ------------
Distributions from Net Investment Income:
Common Shares..................................... (3,090,194) (6,177,517)
Preferred Shares.................................. (939,609) (1,628,010)
------------ ------------
Total Distributions................................. (4,029,803) (7,805,527)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES........................................ (1,302,852) (10,289,162)
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued Through Dividend
Reinvestment...................................... -0- 157,607
------------ ------------
TOTAL DECREASE IN NET ASSETS........................ (1,302,852) (10,131,555)
NET ASSETS:
Beginning of the Period............................. 151,906,447 162,038,002
------------ ------------
End of the Period (Including accumulated
undistributed net investment income of $299,905
and $505,509, respectively)....................... $ 150,603,595 $151,906,447
============ ============
</TABLE>
See Notes to Financial Statements
19
<PAGE> 21
Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED. (UNAUDITED)
<TABLE>
<CAPTION>
SIX TWO
MONTHS YEAR MONTHS
ENDED ENDED ENDED
APRIL 30, OCT. 31, OCT. 31, --------
2000 1999 1998 1998
------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE
PERIOD (A).................................. $ 15.631 $ 17.210 $17.188 $ 16.828
-------- -------- ------- --------
Net Investment Income....................... .586 1.213 .203 1.231
Net Realized and Unrealized
Gain/Loss................................. (.168) (1.594) .021 .362
-------- -------- ------- --------
Total from Investment Operations.............. .418 (.381) .224 1.593
-------- -------- ------- --------
Less:
Distributions from Net Investment Income:
Paid to Common Shareholders............... .474 .948 .158 .959
Common Share Equivalent of Distributions
Paid to Preferred Shareholders.......... .144 .250 .044 .274
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........................... .618 1.198 .202 1.233
-------- -------- ------- --------
NET ASSET VALUE, END OF THE PERIOD............ $ 15.431 $ 15.631 $17.210 $ 17.188
======== ======== ======= ========
Market Price Per Share at End of the Period... $13.3125 $ 13.750 $17.750 $16.9375
Total Investment Return at Market Price (b)... .23%* -17.90% 5.76%* 3.13%
Total Return at Net Asset Value (c)........... 1.79%* -3.86% 1.04%* 8.04%
Net Assets at End of the Period (In
millions)................................... $ 150.6 $ 151.9 $ 162.0 $ 161.8
Ratio of Expenses to Average Net Assets
Applicable to Common Shares**............... 1.69% 1.64% 1.65% 1.62%
Ratio of Net Investment Income to Average Net
Assets Applicable to Common Shares (d)...... 5.75% 5.83% 5.51% 5.63%
Portfolio Turnover............................ 23%* 40% 3%* 20%
* Non-Annualized
** Ratio of Expenses to Average Net Assets
Including Preferred Shares................. 1.13% 1.12% 1.14% 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 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.
(c) 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.
(d) Net Investment Income is adjusted for common share equivalent of
distributions paid to preferred shareholders.
20
<PAGE> 22
<TABLE>
<CAPTION>
SEPTEMBER 27, 1991
(COMMENCEMENT OF
YEAR ENDED AUGUST 31, INVESTMENT
---------------------------------------------------- OPERATIONS) TO
1997 1996 1995 1994 1993 AUGUST 31, 1992
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$16.444 $16.621 $16.282 $17.392 $16.013 $14.786
------- ------- ------- ------- ------- -------
1.251 1.232 1.266 1.275 1.346 1.049
.438 (.081) .497 (1.100) 1.309 1.116
------- ------- ------- ------- ------- -------
1.689 1.151 1.763 .175 2.655 2.165
------- ------- ------- ------- ------- -------
1.035 1.050 1.050 1.050 1.007 .743
.270 .278 .293 .202 .185 .195
-0- -0- .068 .029 .068 -0-
-0- -0- .013 .004 .016 -0-
------- ------- ------- ------- ------- -------
1.305 1.328 1.424 1.285 1.276 .938
------- ------- ------- ------- ------- -------
$16.828 $16.444 $16.621 $16.282 $17.392 $16.013
======= ======= ======= ======= ======= =======
$17.375 $16.750 $15.625 $15.625 $17.125 $15.625
10.33% 14.18% 7.58% -2.62% 17.05% 9.33%*
8.89% 5.30% 9.47% -.23% 15.91% 11.96%*
$ 159.3 $ 156.3 $ 157.2 $ 155.0 $ 161.9 $ 152.9
1.64% 1.67% 1.72% 1.66% 1.63% 1.60%
5.87% 5.70% 6.06% 6.33% 7.04% 6.24%
9% 8% 17% 19% 13% 37%*
1.12% 1.14% 1.16% 1.14% 1.11% 1.12%
</TABLE>
See Notes to Financial Statements
21
<PAGE> 23
NOTES TO
FINANCIAL STATEMENTS
April 30, 2000 (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 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, which approximates market value.
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.
C. INVESTMENT INCOME Interest income is recorded on an accrual basis. Bond
premium is amortized and original issue discount is accreted over the expected
life of each applicable security.
22
<PAGE> 24
NOTES TO
FINANCIAL STATEMENTS
April 30, 2000 (Unaudited)
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, 1999, the Trust had an accumulated capital loss
carryforward for tax purposes of $740,621 which will expire between October 31,
2002 and October 31, 2007.
At April 30, 2000, for federal income tax purposes, the cost of long- and
short-term investments is $146,035,416, the aggregate gross unrealized
appreciation is $5,235,369 and the aggregate gross unrealized depreciation is
$1,600,642, resulting in net unrealized appreciation on long- and short-term
investments of $3,634,727.
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.
F. EXPENSE REDUCTIONS During the six months ended April 30, 2000, the Trust's
custody fee was reduced by $968 as a result of credits earned on overnight cash
balances.
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, 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, 2000, the Trust recognized expenses of
approximately $1,600, 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.
23
<PAGE> 25
NOTES TO
FINANCIAL STATEMENTS
April 30, 2000 (Unaudited)
For the six months ended April 30, 2000, the Trust recognized expenses of
approximately $9,200, 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, 2000 and October 31, 1999, common share paid in surplus aggregated
$96,559,267.
Transactions in common shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, 1999
<S> <C> <C>
Beginning Shares................................... 6,519,397 6,510,151
Shares Issued Through Dividend Reinvestment........ -0- 9,246
--------- ---------
Ending Shares...................................... 6,519,397 6,519,397
========= =========
</TABLE>
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $36,293,951 and $55,273,795,
respectively.
5. PREFERRED SHARES
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, 2000 was 3.950%. During the six
months ended April 30, 2000, the rates ranged from 3.430% to 3.950%.
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.
24
<PAGE> 26
TRUST OFFICERS AND IMPORTANT ADDRESSES
VAN KAMPEN FLORIDA QUALITY
MUNICIPAL TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
THEODORE A. MYERS
RICHARD F. POWERS, III* - Chairman
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
RICHARD F. POWERS, III*
President
STEPHEN L. BOYD*
Executive Vice President and
Chief Investment Officer
A. THOMAS SMITH III*
Vice President and Secretary
JOHN L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer
RICHARD A. CICCARONE*
JOHN R. REYNOLDSON*
MICHAEL H. SANTO*
JOHN H. ZIMMERMANN, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 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(1)
DELOITTE & TOUCHE LLP
180 North Stetson Avenue
Chicago, Illinois 60601
(1) Independent accountants for the Trust perform an annual audit of the Trust's
financial statements. The Board of Trustees has engaged Deloitte & Touche LLP to
be the Trust's independent accountants.
KPMG LLP, located at 303 West Wacker Drive, Chicago, IL 60601 ("KPMG"), ceased
being the Trust's independent accountants effective April 14, 2000. The
cessation of the client- auditor relationship between the Trust and KPMG was
based solely on a possible future business relationship by KPMG with an
affiliate of the Trust's investment adviser.
* "Interested persons" of the Trust, as defined in the Investment Company Act
of 1940, as amended.
(C) Van Kampen Funds Inc., 2000. All rights reserved.
(SM) denotes a service mark of Van Kampen Funds Inc.
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