MUNIYIELD
FLORIDA FUND
FUND LOGO
Annual Report
October 31, 2000
MuniYield Florida Fund seeks to provide shareholders with as high a
level of current income exempt from Federal income taxes as is
consistent with its investment policies and prudent investment
management by investing primarily in a portfolio of long-term
municipal obligations the interest on which, in the opinion of bond
counsel to the issuer, is exempt from Federal income taxes and which
enables shares of the Fund to be exempt from Florida intangible
personal property taxes.
This report, including the financial information herein, is
transmitted to shareholders of MuniYield Florida Fund for their
information. It is not a prospectus. Past performance results shown
in this report should not be considered a representation of future
performance. The Fund has leveraged its Common Shares by issuing
Preferred Shares to provide the Common Shareholders with a
potentially higher rate of return. Leverage creates risks for Common
Shareholders, including the likelihood of greater volatility of net
asset value and market price of shares of the Common Shares, and the
risk that fluctuations in the short-term dividend rates of the
Preferred Shares may affect the yield to Common Shareholders.
Statements and other information herein are as dated and are subject
to change.
MuniYield
Florida Fund
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MUNIYIELD FLORIDA FUND
The Benefits and
Risks of
Leveraging
MuniYield Florida Fund utilizes leveraging to seek to enhance the
yield and net asset value of its Common Shares. However, these
objectives cannot be achieved in all interest rate environments. To
leverage, the Fund issues Preferred Shares, which pay dividends at
prevailing short-term interest rates, and invests the proceeds in
long-term municipal bonds. The interest earned on these investments
is paid to Common Shareholders in the form of dividends, and the
value of these portfolio holdings is reflected in the per share net
asset value of the Fund's Common Shares. However, in order to
benefit Common Shareholders, the yield curve must be positively
sloped; that is, short-term interest rates must be lower than long-
term interest rates. At the same time, a period of generally
declining interest rates will benefit Common Shareholders. If either
of these conditions change, then the risks of leveraging will begin
to outweigh the benefits.
To illustrate these concepts, assume a fund's Common Share
capitalization of $100 million and the issuance of Preferred Shares
for an additional $50 million, creating a total value of $150
million available for investment in long-term municipal bonds. If
prevailing short-term interest rates are approximately 3% and long-
term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million
of Preferred Shares based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends on the Common Shares.
In this case, the dividends paid to Preferred Shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the
Common Shares will be reduced or eliminated completely. At the same
time, the market value of the fund's Common Shares (that is, its
price as listed on the New York Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Shares' net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Shares does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Shares may
also decline.
As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to
changes in a floating interest rate ("inverse floaters"). In
general, income on inverse floaters will decrease when short-term
interest rates increase and increase when short-term interest rates
decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of
providing investment leverage and, as a result, the market value of
such securities will generally be more volatile than that of fixed-
rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the
net asset value of the Fund's shares may also be more volatile than
if the Fund did not invest in such securities.
MuniYield Florida Fund, October 31, 2000
DEAR SHAREHOLDER
For the year ended October 31, 2000, the Common Shares of MuniYield
Florida Fund earned $0.752 per share income dividends, which
included earned and unpaid dividends of $0.064. This represents a
net annualized yield of 5.46%, based on a month-end net asset value
of $13.78 per share. During the same period, the total investment
return on the Fund's Common Shares was +10.90%, based on a change in
per share net asset value from $13.27 to $13.78, and assuming
reinvestment of $0.753 per share income dividends.
For the six-month period ended October 31, 2000, the total
investment return on the Fund's Common Shares was +7.47%, based on a
change in per share net asset value from $13.25 to $13.78, and
assuming reinvestment of $0.375 per share income dividends.
For the six-month period ended October 31, 2000, the Fund's Auction
Market Preferred Shares had an average yield of 4.39% for Series A
and 4.16% for Series B.
The Municipal Market Environment
During the six months ended October 31, 2000, long-term US Treasury
bond yields generally drifted lower. A number of economic
indicators, particularly employment, new home sales and consumer
spending, have suggested that US economic growth, while still
strong, has moderated from 1999's robust levels. Preliminary
estimates for third-quarter 2000 US gross domestic product growth
were recently released at 2.7%, well below the first-quarter 2000
rate of 4.8% and the second-quarter 2000 rate of 5.6%. This decline
in economic growth suggests to some analysts that the Federal
Reserve Board has finished raising interest rates for its current
interest rate cycle. The Federal Reserve Board increased short-term
interest rates at its May meeting and has since kept monetary policy
steady at its subsequent meetings. Given the potential for stable
short-term interest rates in the coming months, investor emphasis
focused on the continuing US Treasury debt reduction program and
forecasts of sizeable Federal budgetary surpluses going forward.
Many investors have concluded that there will be a significant
future shortage of longer-dated maturity US Treasury securities. By
late August, US Treasury bond yields declined 30 basis points
(0.30%) to 5.66%, their lowest level in more than a year.
However, for the remainder of the period, bond yields were unable to
maintain their earlier gains. Rising oil prices were the major focus
behind the decline in bond prices, as many investors feared that
higher oil prices would result in increased inflationary pressures.
Additionally, US corporations issued large amounts of taxable debt
in order to take advantage of the current low interest rate
environment. During the last three months, US corporations issued
more than $100 billion in investment-grade securities, offering
yields in the 7.25%--9% range. Many investors found these taxable
issues an attractive and more plentiful alternative to US Treasury
bonds. As the demand for US Treasury issues weakened, US bond yields
rose. Although US Treasury bond yields rose to 5.78% by the end of
October 2000, overall they declined almost 20 basis points during
the last six months.
The six-month period ended October 31, 2000 was one of the few
periods in recent years in which the tax-exempt bond market
outperformed its taxable counterpart, the US Treasury bond market.
While municipal bond yields followed the similar seesaw pattern of
Treasury bond yields, tax-exempt bond price volatility was
significantly reduced. Municipal bond yields traded in a relatively
narrow range during much of October 2000. Overall investor demand
for municipal bonds remained strong, allowing tax-exempt bond
yields, as measured by the Bond Buyer Revenue Bond Index, to decline
30 basis points to end the period at 5.75%.
In the past three months, new long-term municipal bond issuance has
continued to decline, albeit at a slower rate than earlier this
year. During this period, more than $53 billion in new long-term
municipal bonds was issued, a decline of 3% compared to the same
three-month period in 1999. During the last six months, more than
$105 billion in tax-exempt bonds was underwritten, a decline of 8%
compared to the same six-month period in 1999. Just under $200
billion in new municipal securities was marketed during the past
year, a decline of more than 16% compared to the same twelve-month
period in 1999.
The demand for municipal bonds came from a number of non-traditional
and conventional sources. Derivative/arbitrage programs and
insurance companies remained the dominant institutional buyers,
while individual retail purchases also remained strong. Traditional,
open-end tax-exempt mutual funds have continued to see significant
disintermediation. It was recently reported that thus far during the
2000 calendar year, long-term municipal bond mutual funds
experienced net cash outflows of more than $15 billion. Fortunately,
the combination of reduced new bond issuance and ongoing demand from
non-traditional sources has been able to more than offset the
decline in demand from tax-exempt mutual funds. This favorable
balance has fostered a significant decline in municipal bond yields
in recent months.
Currently, there is no reason to expect that the positive technical
position of the municipal bond market will significantly
deteriorate. The steeply positive yield curve and the relatively
high credit quality that the tax-exempt bond market offers should
continue to attract different classes of institutional buyers.
Strong state and local governmental financial conditions also
suggest that issuance should remain manageable into next year.
However, the results of the presidential election may affect the tax-
exempt bond market. Various tax and spending programs proposed by
both candidates have obvious implications for state and local
governments as well as corporate and individual taxpayers. Political
history has shown that the enactment of campaign promises, both
Republican and Democratic, has very often been a long, laborious
process. This suggests that during the next few months, US economic
factors will most likely have a greater effect on bond yields than
political considerations.
Portfolio Strategy
At the beginning of the six-month period ended October 31, 2000, we
continued to gradually restructure the Fund to have a more neutral
duration in an effort to temper portfolio volatility. In doing so,
our focus was to increase coupon income with the purchase of current
and premium-couponed issues in the 15-year - 20-year maturity range.
We initially maintained this position into the period, but because
of market appreciation the duration of the Fund was reduced below
what we considered neutral. Also, because of reduced new issuance,
we believed that it would be prudent to return duration to a
slightly higher level. We focused on maintaining and/or increasing
the amount of earned tax-exempt income, in part to offset the
heightened level of short-term interest rates experienced by our
leveraged portfolio. Despite the Fund's increased cost of borrowing,
the leveraging of the portfolio remains an important income-
generating vehicle for the Fund. (For a complete explanation of the
benefits and risks of leveraging, see page 1 of this report to
shareholders.)
Looking ahead, we anticipate that we will maintain our current fully
invested position in an effort to enhance shareholder income. We
believe that any increase in duration will likely generate
incremental yield to shareholders with limited associated increase
in price volatility.
In Conclusion
We thank you for your support of the MuniYield Florida Fund, and we
look forward to serving your investment needs in the months and
years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Trustee
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(William R. Bock)
William R. Bock
Vice President and Portfolio Manager
November 30, 2000
MuniYield Florida Fund, October 31, 2000
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute all or a portion of its
net investment income to its shareholders on a monthly basis. In
order to provide shareholders with a more consistent yield to the
current trading price of shares of Common Stock of the Fund, the
Fund may at times pay out less than the entire amount of net
investment income earned in any particular month and may at times in
any month pay out such accumulated but undistributed income in
addition to net investment income earned in that month. As a result,
the dividends paid by the Fund for any particular month may be more
or less than the amount of net investment income earned by the Fund
during such month. The Fund's current accumulated but undistributed
net investment income, if any, is disclosed in the Statement of
Assets, Liabilities and Capital, which comprises part of the
Financial Information included in this report.
QUALITY PROFILE
The quality ratings of securities in the Fund as of October 31, 2000
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 80.0%
AA/Aa 7.5
A/A 5.9
BBB/Baa 4.1
Other* 2.2
*Temporary investments in short-term municipal securities.
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
Florida--96.7% AAA Aaa $ 7,650 Brevard County, Florida, IDR (NUI Corporation
Project), AMT, 6.40% due 10/01/2024 (a) $ 8,059
AAA NR* 925 Broward County, Florida, HFA, Revenue Refunding
Bonds (Home Mortgage), AMT, Series A, 7.35% due
3/01/2023(d)(i) 947
A1+ Aaa 700 Capital Projects Finance Authority, Florida, Revenue Bonds
(Florida Hospital Association--Capital Projects Loan),
VRDN, Series A, 4.35% due 6/01/2028 (e)(g) 700
Citrus County, Florida, PCR, Refunding (Florida
Power Company--Crystal River):
A+ A1 13,700 Series A, 6.625% due 1/01/2027 14,221
AAA Aaa 8,200 Series B, 6.35% due 2/01/2022 (b) 8,490
Dade County, Florida, Aviation Revenue Bonds, AMT,
Series B (b):
AAA Aaa 1,000 6.55% due 10/01/2013 1,048
AAA Aaa 5,000 6.60% due 10/01/2022 5,230
A1+ VMIG1++ 200 Dade County, Florida, IDA, Exempt Facilities Revenue
Refunding Bonds (Florida Power and Light Co.),
VRDN, 4.60% due 6/01/2021 (g) 200
AA- Aa3 2,250 Dade County, Florida, IDA, Solid Waste Disposal
Revenue Bonds (Florida Power and Light Company Project),
AMT, 7.15% due 2/01/2023 2,306
A1+ VMIG1++ 200 Dade County, Florida, Water and Sewer System Revenue
Bonds, VRDN, 4.25% due 10/05/2022 (c)(g) 200
NR* Aaa 2,700 Duval County, Florida, HFA, S/F Mortgage Revenue
Refunding Bonds, AMT, 6.20% due 4/01/2020 (b)(d)(i) 2,797
NR* Aaa 1,270 Escambia County, Florida, HFA, S/F Mortgage Revenue
Bonds (Multi-County Program), AMT, Series A, 6.90%
due 4/01/2020 (d) 1,309
Escambia County, Florida, HFA, S/F Mortgage Revenue
Refunding Bonds, AMT (d):
AAA Aaa 5,805 7% due 4/01/2028 (i) 6,135
NR* Aaa 3,925 Series A, 7.40% due 10/01/2023 (h) 4,021
NR* Aaa 9,000 Escambia County, Florida, Health Facilities Authority,
Health Facility Revenue Bonds (Florida Health Care
Facility Loan), 5.95% due 7/01/2020 (a) 9,356
BBB+ Baa1 8,295 Escambia County, Florida, PCR (Champion International
Corporation Project), AMT, 6.90% due 8/01/2022 8,551
AAA Aaa 1,650 Florida Housing Finance Corporation, Homeowner Mortgage
Revenue Refunding Bonds, AMT, Series 4, 6.25% due
7/01/2022 (e) 1,709
</TABLE>
Portfolio
Abbreviations
To simplify the listings of MuniYield Florida Fund's portfolio
holdings in the Schedule of Investments, we have abbreviated the
names of many of the securities according to the list at right.
AMT Alternative Minimum Tax
(subject to)
COP Certificates of Participation
DATES Daily Adjustable Tax-Exempt Securities
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
S/F Single-Family
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
Florida NR* Aaa $ 2,500 Florida Housing Finance Corporation, Housing Revenue
(continued) Bonds (Augustine Club Apartments), Series D-1, 5.75%
due 10/01/2030 (b) $ 2,475
Florida State Board of Education, Capital Outlay,
GO, Series A:
AA+ Aa2 1,220 6% due 1/01/2014 1,313
AAA Aaa 1,000 (Public Education), 6.10% due 6/01/2004 (f) 1,062
AAA Aaa 1,000 Florida State Board of Education, Lottery Revenue
Bonds, Series A, 6% due 7/01/2014 (c) 1,080
AA+ Aa2 1,800 Florida State Board of Education, Public Education, GO,
Refunding, 6.40% due 6/01/2019 1,862
AAA Aaa 9,000 Florida State Department of Environmental Protection,
Preservation Revenue Bonds, Series A, 5.75% due 7/01/2013 (c) 9,552
AA+ Aa2 5,600 Florida State, GO, Refunding (Department of
Transportation-Right of Way), Series A, 5% due 7/01/2028 5,095
AAA Aaa 4,500 Fort Myers, Florida, Improvement Revenue Refunding
Bonds, Series A, 5% due 12/01/2022 (a) 4,204
AAA Aaa 4,000 Greater Orlando Aviation Authority, Florida, Orlando
Airport Facilities Revenue Bonds, AMT, Series A, 6.50%
due 10/01/2012 (c) 4,192
AAA Aaa 8,000 Hillsborough County, Florida, Court Facilities
Revenue Bonds, 5.40% due 5/01/2030 (a) 7,803
AAA Aaa 1,000 Hillsborough County, Florida, IDA, Revenue Refunding
Bonds (Allegany Health System--J. Knox Village), 6.375%
due 12/01/2003 (b)(f) 1,037
Hillsborough County, Florida, Utility Revenue
Refunding Bonds,:
BBB+ A3 1,245 Series A, 7% due 8/01/2014 1,287
AAA Aaa 2,000 Series B, 6.50% due 8/01/2016 (e) 2,066
Jacksonville, Florida, Electric Authority, Electric
System Revenue Bonds, Series 3-C:
AA Aa2 4,000 5.50% due 10/01/2030 3,914
AA Aa2 3,500 5.625% due 10/01/2035 3,434
Jacksonville, Florida, Health Facilities Authority,
Hospital Revenue Refunding Bonds:
NR* VMIG1++ 4,400 (Genesis Rehabilitation Hospital), VRDN, 4.60%
due 5/01/2021 (g) 4,400
AA+ NR* 2,000 (Saint Luke's Hospital Association Project),
7.125% due 11/15/2020 2,081
NR* Baa2 345 Jacksonville, Florida, Health Facilities Authority,
IDR (National Benevolent--Cypress Village), Series A,
6.125% due 12/01/2016 313
AAA Aaa 3,730 Lakeland, Florida, Electric and Water Revenue
Refunding Bonds, Series A, 5% due 10/01/2028 (b) 3,396
AAA Aaa 3,500 Lakeland, Florida, Hospital System Revenue Bonds
(Lakeland Regional Health System), Series A, 5.50%
due 11/15/2026 (b) 3,429
NR* Aaa 700 Lee County, Florida, HFA, S/F Mortgage Revenue Bonds
(Multi-County Program), Series A-1, 7.125% due
3/01/2028 (d)(i) 765
AAA Aaa 4,000 Lee County, Florida, Solid Waste System Revenue Bonds,
AMT, Series A, 6.50% due 10/01/2013 (b) 4,137
AAA NR* 1,420 Leon County, Florida, HFA, S/F Mortgage Revenue Bonds
(Multi-County Program), AMT, Series B, 7.30% due
1/01/2028 (d)(j) 1,567
NR* Aaa 2,140 Manatee County, Florida, HFA, S/F Mortgage Revenue
Bonds, AMT, Sub-Series 2, 7.75% due 5/01/2026 (d)(j) 2,222
A1+ VMIG1++ 400 Martin County, Florida, PCR, Refunding (Florida Power &
Light Company Project), VRDN, 4.65% due 7/15/2022 (g) 400
AAA Aaa 3,145 Miami Beach, Florida, Stormwater Revenue Bonds, 5.375%
due 9/01/2030 3,060
AAA Aaa 3,000 Miami Beach, Florida, Water and Sewer Revenue Bonds,
5.75% due 9/01/2025 (a) 3,075
AAA Aaa 1,750 Miami-Dade County, Florida, Educational Facilities
Authority Revenue Bonds (University of Miami),
Series A, 5.75% due 4/01/2029 (a) 1,785
AAA Aaa 16,000 Miami-Dade County, Florida, Expressway Authority,
Toll System Revenue Bonds, 6.375% due 7/01/2029 (c) 17,472
NR* Aaa 2,150 Miami-Dade County, Florida, HFA, Home Ownership
Mortgage Revenue Refunding Bonds, AMT, Series A-1,
6.30% due 10/01/2020 (d)(i) 2,254
AAA Aaa 2,325 Miami-Dade County, Florida, IDA, IDR (BAC Funding
Corporation Project), Series A, 5.375% due 10/01/2030 (a) 2,263
AAA Aaa 3,200 Miami-Dade County, Florida, School Board, COP,
Series A, 5.50% due 10/01/2020 (e) 3,209
BBB- Baa2 2,890 Nassau County, Florida, PCR, Refunding (ITT Rayonier
Inc. Project), 6.20% due 7/01/2015 2,786
NR* Aaa 10,500 Orange County, Florida, School Board, COP, Series A,
5.25% due 8/01/2023 (b) 10,069
AAA Aaa 2,830 Orange County, Florida, Tourist Development Tax
Revenue Bonds, Series B, 4.75% due 10/01/2024 (a) 2,483
AAA Aaa 11,000 Orlando and Orange County, Florida, Expressway
Authority, Expressway Revenue Refunding Bonds,
Junior Lien, 5% due 7/01/2021 (c) 10,306
AAA Aaa 3,390 Palm Beach County, Florida, Criminal Justice Facilities
Revenue Bonds, 7.20% due 6/01/2015 (c) 4,107
NR* Aaa 1,390 Palm Beach County, Florida, HFA, S/F Mortgage
Revenue Refunding Bonds, AMT, Series A, 6.80% due
10/01/2027 (d)(i) 1,450
AAA Aaa 6,000 Palm Beach County, Florida, School Board, COP, Series A,
6.25% due 8/01/2025 (c) 6,467
AAA NR* 1,000 Peace River/Manasota, Florida, Regional Water Supply
Authority Revenue Bonds (Peace River Option Project),
Series A, 5% due 10/01/2023 (b) 930
Pinellas County, Florida, HFA, S/F Housing Revenue
Refunding Bonds (Multi-County Program),
AMT, Series A-1 (d)(i):
NR* Aaa 2,060 6.30% due 9/01/2020 2,148
NR* Aaa 3,150 6.35% due 9/01/2025 3,280
A1+ VMIG1++ 300 Pinellas County, Florida, Health Facilities
Authority, Revenue Refunding Bonds (Pooled Hospital Loan
Program), DATES, 4.55% due 12/01/2015 (a)(g) 300
AAA Aaa 1,200 Port Everglades Authority, Florida, Port Revenue Bonds,
7.125% due 11/01/2016 (k) 1,413
AA NR* 1,000 Saint Lucie County, Florida, Special Assessment
(South Hutchinson Island), 6.20%due 11/01/2005 (f) 1,087
Saint Petersburg, Florida, Health Facilities Authority
Revenue Bonds (b)(f):
AAA Aaa 2,000 (Allegany Health System), Series A, 7% due 12/01/2001 2,088
AAA Aaa 1,550 (Allegany Health System--Saint Anthony's), 6.75%
due 12/01/2003 1,616
AAA Aaa 20,000 Sarasota County, Florida, Public Hospital Board,
Revenue Refunding Bonds (Sarasota Memorial Hospital),
Series B, 5.50% due 7/01/2028 (b) 20,012
AAA Aaa 7,145 Tallahassee, Florida, Energy System Revenue Refunding
Bonds, Series A, 4.75% due 10/01/2026 (e) 6,236
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
Florida AAA Aaa $ 5,000 Tampa Bay, Florida, Water Utility System Revenue
(concluded) Bonds, 5.75% due 10/01/2029 (c) $ 5,097
AAA Aaa 2,015 Tampa Bay, Florida, Water Utility System Revenue
Refunding Bonds, Series A, 4.75% due 10/01/2027 (c) 1,756
AAA Aaa 2,520 Village Center Community Development District,
Florida, Recreational Revenue Refunding Bonds,
Series A, 5% due 11/01/2021 (b) 2,331
AAA Aaa 5,000 Volusia County, Florida, School Board, COP (Master
Lease Program), 5.50% due 8/01/2024 (e) 4,973
Illinois--1.0% AAA Aaa 3,000 Chicago, Illinois, Skyway Toll Bridge Revenue Bonds,
5.50% due 1/01/2031 (a) 2,914
Ohio--1.6% AAA Aaa 4,870 Hamilton County, Ohio, Sales Tax Revenue Bonds
(Hamilton County Football Project) Series B, 5%
due 12/01/2027 (b) 4,444
Puerto Rico A- Baa1 1,000 Puerto Rico Electric Power Authority, Power Revenue
--0.4% Bonds, Series T, 6% due 7/01/2016 1,042
Total Investments (Cost--$273,333)--99.7% 280,818
Other Assets Less Liabilities--0.3% 959
--------
Net Assets--100.0% $281,777
========
(a)AMBAC Insured.
(b)MBIA Insured.
(c)FGIC Insured.
(d)GNMA Collateralized.
(e)FSA Insured.
(f)Prerefunded.
(g)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at October 31, 2000.
(h)FHA Insured.
(i)FNMA Collateralized.
(j)FHLMC Collateralized.
(k)Escrowed to maturity.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Deloitte & Touche
LLP.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of October 31, 2000
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$273,333,122) $280,817,897
Cash 63,184
Receivables:
Interest $ 4,211,689
Securities sold 135,852 4,347,541
------------
Prepaid expenses and other assets 8,421
------------
Total assets 285,237,043
------------
Liabilities: Payables:
Securities purchased 3,068,466
Investment adviser 114,862
Dividends to shareholders 109,263 3,292,591
------------
Accrued expenses and other liabilities 167,322
------------
Total liabilities 3,459,913
------------
Net Assets: Net assets $281,777,130
============
Capital: Capital Shares (unlimited number of shares authorized):
Preferred Shares, par value $.05 per share
(3,800 shares of AMPS* issued and outstanding at $25,000
per share liquidation preference) $ 95,000,000
Common Shares, par value $.10 per share
(13,551,880 shares issued and outstanding) $ 1,355,188
Paid-in capital in excess of par 194,722,659
Undistributed investment income--net 1,520,146
Accumulated realized capital losses on investments--net (14,162,273)
Accumulated distributions in excess of realized capital
gains on investments--net (4,143,365)
Unrealized appreciation on investments--net 7,484,775
------------
Total--Equivalent to $13.78 net asset value per
Common Share (market price--$11.3125) 186,777,130
------------
Total capital $281,777,130
============
*Auction Market Preferred Shares.
See Notes to Financial Statements.
</TABLE>
MuniYield Florida Fund, October 31, 2000
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended October 31, 2000
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 14,112,454
Income:
Expenses: Investment advisory fees $ 1,229,708
Reorganization expenses 336,616
Commission fees 215,620
Accounting services 109,553
Transfer agent fees 69,232
Professional fees 68,190
Printing and shareholder reports 32,376
Trustees' fees and expenses 23,633
Listing fees 20,954
Custodian fees 18,562
Pricing fees 11,402
Other 16,299
------------
Total expenses 2,152,145
------------
Investment income--net 11,960,309
------------
Realized & Realized loss on investments--net (6,702,873)
Unrealized Change in unrealized appreciation/depreciation
Gain (Loss) on on investments--net 15,868,742
Investments--Net: ------------
Net Increase in Net Assets Resulting from Operations $ 21,126,178
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the
Year Ended
October 31,
Increase (Decrease) in Net Assets: 2000 1999
<S> <S> <C> <C>
Operations: Investment income--net $ 11,960,309 $ 7,875,848
Realized loss on investments--net (6,702,873) (2,918,975)
Change in unrealized appreciation/depreciation
on investments--net 15,868,742 (12,289,488)
------------ ------------
Net increase (decrease) in net assets resulting
from operations 21,126,178 (7,332,615)
------------ ------------
Dividends & Investment income--net:
Distributions to Common Shares (8,726,459) (6,647,197)
Shareholders: Preferred Shares (3,394,446) (1,292,082)
In excess of realized gain on investments--net:
Common Shares -- (3,415,385)
Preferred Shares -- (727,980)
------------ ------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (12,120,905) (12,082,644)
------------ ------------
Capital Share Proceeds from issuance of Common Shares resulting
Transactions: from reorganization 71,721,673 --
Proceeds from issuance of Preferred Shares resulting
from reorganization 40,000,000 --
Value of shares issued to Common Shareholders in reinvestment
of dividends and distributions -- 1,010,683
------------ ------------
Net increase in net assets derived from capital
share transactions 111,721,673 1,010,683
------------ ------------
Net Assets: Total increase (decrease) in net assets 120,726,946 (18,404,576)
Beginning of year 161,050,184 179,454,760
------------ ------------
End of year* $281,777,130 $161,050,184
============ ============
*Undistributed investment income--net $ 1,520,146 $ 1,344,126
============ ============
See Notes to Financial Statements.
</TABLE>
MuniYield Florida Fund, October 31, 2000
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 13.27 $ 15.70 $ 15.59 $ 15.23 $ 15.07
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .95 .98 1.10 1.13 1.13
Realized and unrealized gain (loss)
on investments--net .59 (1.90) .34 .41 .17
--------- --------- --------- --------- ---------
Total from investment operations 1.54 (.92) 1.44 1.54 1.30
--------- --------- --------- --------- ---------
Less dividends and distributions to
Common Shareholders:
Investment income--net (.75) (.83) (.86) (.89) (.90)
Realized gain on investments--net -- -- (.22) (.04) --
In excess of realized gain on
investments--net -- (.43) -- -- --
--------- --------- --------- --------- ---------
Total dividends and distributions to
Common Shareholders (.75) (1.26) (1.08) (.93) (.90)
--------- --------- --------- --------- ---------
Effect of Preferred Share
activity:++++
Dividends and distributions to
Preferred Shareholders:
Investment income--net (.28) (.16) (.19) (.24) (.24)
Realized gain on investments--net -- -- (.06) (.01) --
In excess of realized gain on
investments--net -- (.09) -- -- --
--------- --------- --------- --------- ---------
Total effect of Preferred Share
activity (.28) (.25) (.25) (.25) (.24)
--------- --------- --------- --------- ---------
Net asset value, end of year $ 13.78 $ 13.27 $ 15.70 $ 15.59 $ 15.23
========= ========= ========= ========= =========
Market price per share, end of year $ 11.3125 $ 11.75 $ 16.00 $ 15.50 $ 14.50
========= ========= ========= ========= =========
Total Investment Based on market price per share 2.82% (19.96%) 10.66% 13.76% 15.29%
Return:* ========= ========= ========= ========= =========
Based on net asset value per share 10.90% (7.88%) 7.96% 8.93% 7.47%
========= ========= ========= ========= =========
Ratios Based on Total expenses, excluding
Average Net reorganization expenses** 1.12% 1.12% 1.04% 1.09% 1.08%
Assets of ========= ========= ========= ========= =========
Common Shares: Total expenses** 1.33% 1.12% 1.04% 1.09% 1.08%
========= ========= ========= ========= =========
Total investment income--net** 7.39% 6.73% 7.09% 7.32% 7.46%
========= ========= ========= ========= =========
Amount of dividends to
Preferred Shareholders 2.10% 1.10% 1.25% 1.50% 1.61%
========= ========= ========= ========= =========
Investment income--net, to
Common Shareholders 5.29% 5.63% 5.84% 5.82% 5.85%
========= ========= ========= ========= =========
Ratios Based on Total expenses, excluding
Total Average Net reorganization expenses .74% .76% .72% .75% .74%
Assets:**++ ========= ========= ========= ========= =========
Total expenses .87% .76% .72% .75% .74%
========= ========= ========= ========= =========
Total investment income--net 4.85% 4.58% 4.90% 5.04% 5.11%
========= ========= ========= ========= =========
Ratios Based on Dividends to Preferred Shareholders 4.02% 2.36% 2.78% 3.30% 3.48%
Average Net ========= ========= ========= ========= =========
Assets of
Preferred Shares:
Supplemental Net assets, net of Preferred Shares,
Data: end of year (in thousands) $186,777 $106,050 $124,455 $122,731 $119,704
========= ========= ========= ========= =========
Preferred Shares outstanding,
end of year (in thousands) $ 95,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000
========= ========= ========= ========= =========
Portfolio turnover 51.06% 97.73% 92.25% 107.09% 119.29%
========= ========= ========= ========= =========
Leverage: Asset coverage per $1,000 $ 2,966 $ 2,928 $ 3,263 $ 3,231 $ 3,176
========= ========= ========= ========= =========
Dividends Per Series A--Investment income--net $ 1,006 $ 587 $ 696 $ 826 $ 869
Share on ========= ========= ========= ========= =========
Preferred Shares Series B--Investment income--net $ 738 -- -- -- --
Outstanding:++++ ========= ========= ========= ========= =========
*Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales charges.
**Do not reflect the effect of dividends to Preferred Shareholders.
++Includes Common and Preferred Shares average net assets.
++++The Fund's Preferred Shares were issued on April 10, 1992
(Series A) and February 7, 2000 (Series B).
See Notes to Financial Statements.
</TABLE>
MuniYield Florida Fund, October 31, 2000
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield Florida Fund (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. The Fund's financial statements are
prepared in conformity with accounting principles generally accepted
in the United States of America, which may require the use of
management accruals and estimates. The Fund determines and makes
available for publication the net asset value of its Common Shares
on a weekly basis. The Fund's Common Shares are listed on the New
York Stock Exchange under the symbol MYF. The following is a summary
of significant accounting policies followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of
such exchanges. Options written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of
options traded in the over-the-counter market, valuation is the last
asked price (options written) or the last bid price (options
purchased). Securities with remaining maturities of sixty days or
less are valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily
available are valued at their fair value as determined in good faith
by or under the direction of the Board of Trustees of the Fund,
including valuations furnished by a pricing service retained by the
Fund, which may utilize a matrix system for valuations. The
procedures of the pricing service and its valuations are reviewed by
the officers of the Fund under the general supervision of the Board
of Trustees.
(b) Derivative financial instruments--The Fund may engage in various
portfolio investment strategies to increase or decrease the level of
risk to which the Fund is exposed more quickly and efficiently than
transactions in other types of instruments. Losses may arise due to
changes in the value of the contract or if the counterparty does not
perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at
a specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal
to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
* Options--The Fund is authorized to write covered call options and
purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund'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 Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates. Distributions in excess of
realized capital gains are due primarily to differing tax treatments
for futures transactions.
(f) Reclassification--Accounting principles generally accepted in
the United States of America require that certain components of net
assets be adjusted to reflect permanent differences between
financial and tax reporting. Accordingly, the current year's
permanent book/tax differences of $336,616 have been reclassified
between paid-in capital in excess of par and undistributed net
investment income and $12,202 has been reclassified between
accumulated net realized capital losses paid-in capital in excess of
par. These reclassifications have no effect on net assets or net
asset value per share.
2. Investment Advisory Agreement and Transactions with
Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of .50% of
the Fund's average weekly net assets, including proceeds from the
issuance of Preferred Shares.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 2000 were $237,826,965 and
$118,172,676, respectively.
Net realized losses for the year ended October 31, 2000 and net
unrealized gains as of October 31, 2000 were as follows:
Realized Unrealized
Losses Gains
Long-term investments $ (6,333,425) $ 7,484,775
Financial futures contracts (369,448) --
------------ ------------
Total $ (6,702,873) $ 7,484,775
============ ============
As of October 31, 2000, unrealized appreciation for Federal income
tax purposes aggregated $7,484,775, of which $8,913,862 related to
appreciated securities and $1,429,087 related to depreciated
securities. The aggregate cost of investments at October 31, 2000
for Federal income tax purposes was $273,333,122.
4. Capital Share Transactions:
The Fund is authorized to issue an unlimited number of shares of
beneficial interest, including Preferred Shares, par value $.10 per
share, all of which were initially classified as Common Shares. The
Board of Trustees is authorized, however, to reclassify any unissued
shares of beneficial interest without approval of the holders of
Common Shares.
Common Shares
Shares issued and outstanding during the year ended October 31, 2000
increased by 5,558,038 as a result of issuance of Common Shares from
reorganization. Shares issued and outstanding during the year ended
October 31, 1999, increased by 65,627 as a result of dividend
reinvestment.
Preferred Shares
Auction Market Preferred Shares ("AMPS") are Preferred Shares of the
Fund, with a par value of $.05 per share and a liquidation
preference of $25,000 per share, that entitle their holders to
receive cash dividends at an annual rate that may vary for the
successive dividend periods. The yields ineffect at October 31, 2000
were as follows: Series A, 4.10% and Series B, 4.13%.
MuniYield Florida Fund, October 31, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
Shares issued and outstanding during the year ended October 31,
2000, increased by 1,600 as a result of issuance of Preferred Shares
from reorganization. Shares issued and outstanding during the year
ended October 31, 1999 remained constant.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from .25% to .375%,
calculated on the proceeds of each auction. For the year ended
October 31, 2000, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, an affiliate of FAM, earned $106,003 as commissions.
5. Capital Loss Carryforward:
At October 31, 2000, the Fund had a net capital loss carry-forward
of approximately $16,978,000,of which $472,000 expires in 2001,
$2,254,000 expires in 2002, $3,199,000 expires in 2006, $4,017,000
expires in 2007 and $7,036,000 expires in 2008. This amount will be
available to offset like amounts of any future taxable gains.
6. Reorganization Plan:
On February 7, 2000, the Fund acquired all of the net assets of
MuniVest Florida Fund pursuant to a plan of reorganization. The
acquisition was accomplished by a tax-free exchange of 5,988,782
Common Shares and 1,600 AMPS of MuniVest Florida Fund for 5,558,038
Common Shares and 1,600 AMPS of the Fund. MuniVest Florida Fund's
net assets on that date of $111,721,673, including $5,378,970 of
unrealized depreciation and $6,844,963 of accumulated net realized
capital losses, were combined with those of the Fund. The aggregate
net assets of the Fund immediately after the acquisition amounted to
$269,875,223.
7. Subsequent Event:
On November 8, 2000, the Fund's Board of Trustees declared an
ordinary income dividend to holders of Common Shares in the amount
of $.063951 per share, payable on November 29, 2000 to shareholders
of record as of November 20, 2000.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
MuniYield Florida Fund:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of MuniYield
Florida Fund as of October 31, 2000, the related statements of
operations for the year then ended and changes in net assets for
each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period
then ended. These financial statements and the financial highlights
are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned at October 31, 2000 by
correspondence with the custodian and broker. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
MuniYield Florida Fund as of October 31, 2000, the results of its
operations, the changes in its net assets, and the financial
highlights for the respective stated periods in conformity with
accounting principles generally accepted in the United States of
America.
Deloitte & Touche LLP
Princeton, New Jersey
December 4, 2000
</AUDIT-REPORT>
MuniYield Florida Fund, October 31, 2000
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid by MuniYield
Florida Fund during its taxable year ended October 31, 2000 qualify
as tax-exempt interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributions paid by the
Fund during the year.
Please retain this information for your records.
OFFICERS AND TRUSTEES
Terry K. Glenn, President and Trustee
James H. Bodurtha, Trustee
Herbert I. London, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Roberta Cooper Ramo, Trustee
Arthur Zeikel, Trustee
Vincent R. Giordano, Senior Vice President
William R. Bock, Vice President
Kenneth A. Jacob, Vice President
Donald C. Burke, Vice President and Treasurer
Alice A. Pellegrino, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agents
Common Shares:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Shares:
The Bank of New York
100Church Street
New York, NY 10286
NYSE Symbol
MYF
