VOYAGEUR
MINNESOTA MUNICIPAL INCOME FUND, INC.
MINNESOTA MUNICIPAL INCOME FUND II, INC.
MINNESOTA MUNICIPAL INCOME FUND III, INC.
ARIZONA MUNICIPAL INCOME FUND, INC.
FLORIDA INSURED MUNICIPAL INCOME FUND
COLORADO INSURED MUNICIPAL INCOME FUND, INC.
ANNUAL REPORT
Dated March 31, 1996
THE VOYAGEUR FUNDS
GENERAL INFORMATION
- --------------------------------------------------------------------------------
THE FUNDS
Voyageur Minnesota Municipal Income Fund, Inc., Voyageur Minnesota
Municipal Income Fund II, Inc., Voyageur Minnesota Municipal Income Fund III,
Inc., Voyageur Arizona Municipal Income Fund, Inc., Voyageur Florida Insured
Municipal Income Fund and Voyageur Colorado Insured Municipal Income Fund, Inc.
(the "Funds") are diversified, closed-end management investment companies
(except Voyageur Minnesota Municipal Income Fund, Inc., Voyageur Minnesota
Municipal Income Fund III, Inc., and Voyageur Colorado Insured Municipal Income
Fund, Inc. which are non-diversified management investment companies) whose
shares trade on the American Stock Exchange ("ASE") under the symbols VMN, VMM,
VYM, VAZ, VFL and VCF, respectively. The investment objective of each Fund is to
provide high current income exempt from federal income tax and from the personal
income tax of its state, if any, consistent with the preservation of capital.
Voyageur Florida Insured Municipal Income Fund will generally seek investments
that will enable its shares to be exempt from Florida's intangible personal
property tax. Each Fund will seek to achieve its investment objective by
investing substantially all (at least 80%) of its net assets in investment
grade, tax-exempt municipal obligations.
INVESTMENT ADVISER
Voyageur Fund Managers, Inc. (the "Adviser") acts as the Funds' investment
adviser. As of March 31, 1996, the Adviser acted as the investment adviser to
six closed-end investment companies and ten open-end investment companies
(comprising thirty-two separate investment portfolios) and numerous private
accounts with combined total assets of approximately $7.0 billion.
SHAREHOLDER INFORMATION
Weekly net asset value and market price information for the Funds are
published each Monday in The Wall Street Journal and The New York Times and each
Saturday in Barron's, as well as numerous other newspapers.
DISTRIBUTIONS AND DIVIDEND REINVESTMENT PLAN
Under the Funds' current policies, shareholders may elect to receive all
dividends and other distributions in cash paid by check mailed directly to the
shareholders by the dividend paying agent, Norwest Bank Minnesota, N.A., (the
"Plan Agent"). Under each Fund's Dividend Reinvestment Plan, (collectively the
"Plans"), common shareholders not making such election will be automatically
enrolled in the Funds' Plans. Under the Plans, all distributions to common
shareholders of net investment income and capital gains will be automatically
reinvested in additional shares of the Funds' common shares. The Plan Agent
serves as agent for the common shareholders in administering the Plans. After
each Fund declares a dividend or determines to make a capital gains
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy shares of each Fund's common shares in the open
market, on the ASE or elsewhere, for the participants' accounts. The Funds will
not issue any new shares in connection with the Plans. A participant may
withdraw from a plan at any time by advising the Plan Agent in writing (see
address on back page under "Shareholder Servicing Agent"). Shares held in
nominee name at brokerage firm may not be eligible for automatic dividend
reinvestment. You should contact your financial adviser to determin such firm's
policies. The automatic reinvestment of dividends and capital gains
distrubutions does not relieve you of any income tax which may be otherwise
payable on dividends or distributions.
STATE OR MUNICIPAL LEASE OBLIGATIONS
Pursuant to Board of Directors or Trustees resolutions, the Funds may
invest without limit in state or municipal leases and participation interests
therein. Municipal leases are obligations issued by state and local governments
or authorities to finance the acquisition of equipment and facilities such as
fire, sanitation or police vehicles or telecommunications equipment, buildings
or other capital assets.
Municipal lease obligations, except in certain circumstances, are
considered illiquid by the staff of the Securities and Exchange Commission.
Municipal lease obligations held by the Funds will be treated as illiquid unless
they are determined to be liquid pursuant to guidelines established by the
Funds' Board of Directors or Trustees. Under these guidelines, the Adviser will
consider factors including, but not limited to (1) whether the lease can be
cancelled, (2) what assurance there is that the assets represented by the lease
can be sold, (3) the municipality's general credit strength (e.g., its debt,
administrative, economic and financial characteristics), (4) the likelihood that
the municipality will discontinue appropriating funding for the leased property
because the property is no longer deemed essential to the operations of the
municipality (e.g., the potential for an "event of nonappropriation"), and (5)
the legal recourse in the event of failure to appropriate. Additionally, the
lack of an established trading market for municipal lease obligations may make
the determination of fair market value more difficult. Although each Fund may
invest up to 15% of its total assets in illiquid securities, the Funds have no
intention of investing more than 5% of its total assets in such securities,
including illiquid municipal lease obligations.
OTHER INFORMATION
Since March 31, 1995, except as stated above, there have been (I) no
material changes in the Funds' investment objectives or policies, (ii) no
changes to the Funds' charters or by-laws, (iii) no material changes in the
principal risk factors associated with investment in the Funds, and (iv) no
changes in persons who are primarily responsible for the day-to-day management
of the Funds' portfolios.
Dear Shareholders:
Since our last annual report dated March 31, 1995, the bond market continued to
rebound from its disappointing performance of 1994. As we anticipated, interest
rates declined and bond prices rose, and our closed-end funds -- which were
positioned to take advantage of this movement -- benefitted during their fiscal
year ended March 31, 1996.
Also contributing to the Funds' performance was our commitment to purchasing
municipal bonds with high credit ratings and our emphasis on general obligation
and essential service revenue bonds. (For more detailed information about how
economic conditions during this reporting period affected Fund performance,
please read the "Factors Affecting the Funds" section on page 6 of this annual
report.)
The chart below shows the Funds' distributions for the year ended March 31, 1996
and the net asset value, market price and comparative premium/discount of market
price to net asset value for common shares as of March 31, 1996.
<TABLE>
<CAPTION>
Net Investment
Income Net
Distribution Asset Market Premium/
Voyageur Fund (Cents/Share) Value Price (Discount)
- ------------- --------------- ------- --------- ----------
<S> <C> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund, Inc. $.93 $14.43 $15.00 3.95%
Voyageur Minnesota Municipal Income Fund II, Inc. .80 13.48 13.25 (1.71)
Voyageur Minnesota Municipal Income Fund III, Inc. .72 12.54 12.00 (4.31)
Voyageur Arizona Municipal Income Fund, Inc. .73 13.74 12.75 (7.21)
Voyageur Florida Insured Municipal Income Fund .72 13.71 12.75 (7.00)
Voyageur Colorado Insured Municipal Income Fund, Inc. .70 13.61 12.63 (7.20)
</TABLE>
As you know, the Voyageur closed-end Funds are leveraged funds -- funds that
issue preferred shares in addition to common shares in order to enhance
shareholder income. Leveraged funds typically perform well in a stable to
declining interest rate environment, although the Funds' net asset values (NAVs)
are more volatile due to leveraging. In a leveraged fund, proceeds from the sale
of common and preferred shares are invested at fixed interest rates. The
preferred shares -which are typically sold in large blocks of $50,000 or more to
high net worth and institutional investors -- carry a floating interest rate.
Historically, this preferred stock rate has been lower than the yield on the
fund's portfolio. Common shareholders receive the difference between the yield
on the fund's portfolio and the interest rate on the preferred stock (less fund
expenses). As interest rates fall, so does the interest rate on the preferred
stock, thereby increasing the amount available to pay common shareholders. The
opposite is true when interest rates rise.
Our outlook for the bond market continues to be favorable. Inflation should
remain under control, and we're expecting economic growth to be slow with
interest rates declining slightly over the course of the year. At Voyageur, we
continue to emphasize a long-term, high credit quality style of management in
our closed-end municipal bond funds. Over the long term, we believe our
shareholders should be pleased with the overall results of this approach -- an
approach that keeps what's best for our shareholders foremost in our mind.
Sincerely,
/s/ John G. Taft
John G. Taft
President
Voyageur Minnesota Municipal Income Fund, Inc.
Voyageur Minnesota Municipal Income Fund II, Inc.
Voyageur Minnesota Municipal Income Fund III, Inc.
Voyageur Arizona Municipal Income Fund, Inc.
Voyageur Florida Insured Municipal Income Fund
Voyageur Colorado Insured Municipal Income Fund, Inc.
FACTORS AFFECTING THE FUNDS
During their fiscal year ended March 31, 1996, our closed-end Funds benefitted
from our positioning them to take advantage of a falling interest rate
environment. In anticipation of this market move, we purchased bonds with
discount coupons and long maturities and extended the Funds' call protection in
order to enhance our shareholders' returns.
In spite of the bond market rebound in 1995, the tax reform debate rocked the
municipal market for much of the year, causing it to lag behind its taxable
counterpart. More than once during the year, municipal bond yields, as a
percentage of treasury yields, rose to 95%, a level that has historically proven
to be an opportune time to purchase municipal bonds.
We remained committed to high-quality bonds and did not make any material
changes with respect to credit quality. After a weak showing in 1994,
high-quality bonds performed very well in 1995, with insured bonds especially
strong. General obligation and essential service revenue bonds, such as water
and sewer, continue to account for a significant portion of the Funds' holdings.
In all, owning high-quality bonds contributed to the excellent performance of
our closed-end Funds for their fiscal year ended March 31, 1996.
OUTLOOK
Our outlook for the economy is positive for municipal bonds. Now that the fears
of a drastic tax reform have been dampened, we expect to see municipal bonds
trade at more traditional levels in relation to Treasuries during the Funds'
next fiscal year.
For the remainder of 1996, we are forecasting moderate growth with low inflation
and expect interest rates to remain stable or decline slightly. Given our
outlook, we will continue to position the Funds to benefit from this economic
environment. Also, we expect the municipal bond supply to continue to decrease
as new issuer supply diminishes, making bonds more attractive to an increasing
pool of investors searching for high-quality municipal bonds.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
ANDREW M. MCCULLAGH, JR., SENIOR MUNICIPAL BOND PORTFOLIO MANAGER
During the fiscal year ended March 31, 1996, the Voyageur Arizona Municipal
Income Fund generated above-average total returns due to the Fund being
positioned to take advantage of a declining interest rate environment.
Both individuals and industries continued their exodus from the West Coast into
Arizona, adding to the state's robust economic growth and diversity. The Fund's
average rating remains AA, and we expect to maintain the Fund's high-quality
credit criteria. During the year, we continued to search for opportunities in
the market to enhance the Fund's yield by adding A-rated municipal bond issues
and extending the Fund's call protection.
During the fiscal year ended March 31, 1996, the Fund's performance benefitted,
in part, from its emphasis in general obligation bonds. Pima and Maricopa
counties remain the main sources of Arizona's municipal bond issues. This
twocounty concentration has caused the supply of Arizona municipal bonds to be
highly limited and inconsistent in comparison to other states. Because revenue
bonds have traded closely in relationship to general obligation bonds due to
lack of supply, there are limited opportunities available in investing in
revenue bonds versus general obligation issues. Therefore, the Fund remains
heavily weighted in general obligation bonds.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
ANDREW M. MCCULLAGH, JR., SENIOR MUNICIPAL BOND PORTFOLIO MANAGER
During the fiscal year ended March 31, 1996, the Voyageur Colorado Insured
Municipal Income Fund benefitted from being positioned to take advantage of a
declining interest rate environment. During the year, we continued to search for
opportunities in the market to enhance the Fund's yield by extending the Fund's
call protection when appropriate.
Colorado remains one of the fastest growing areas in the country, as industries
and individuals from the West Coast continue to move to Colorado. Although we
expect this growth to slow slightly, Colorado will continue to benefit from the
diverse economy that has resulted from this population and industrial boom.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC., VOYAGEUR MINNESOTA MUNICIPAL
FUND II, INC., AND VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
ELIZABETH H. HOWELL, SENIOR MUNICIPAL BOND PORTFOLIO MANAGER
During the fiscal year ended March 31, 1996, the Voyageur Minnesota Municipal
Income Funds benefitted from being positioned to take advantage of a declining
interest rate environment.
The Minnesota economy continues to be strong. The economy is well diversified
and considerably less cyclical than the coasts. As a result, all of our
municipal bonds in Minnesota performed well from a credit perspective.
General obligation and essential service revenue bonds still account for a
majority of the Funds' holdings. These sectors proved to be good performers
during the year ended March 31, 1996 and contributed in part to the Funds'
excellent performance.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
STEVEN P. ELDREDGE, SENIOR MUNICIPAL BOND PORTFOLIO MANAGER
During the fiscal year ended March 31, 1996, the Voyageur Florida Insured
Municipal Income Fund generated above-average total returns due to our
positioning the Fund to take advantage of a declining interest rate environment.
Florida's economy is in full swing, and the state's municipalities continue to
have a strong need to issue municipal bonds. After two disappointing years,
tourism -- one of the main sources of income for the state -- is on the rebound,
boosted in part by an increased influx of visitors from outside of the United
States.
The revenue bonds in the Fund contributed, in part, to the Fund's overall
performance. Within the revenue sector, hospital bonds as well as water and
sewer bonds -- two sectors that account for a majority of the Fund's holdings --
were the two best performing sectors during the past few months. Hospital issues
continued their strong recovery after a past bout of negative press and investor
fears that were generated by the health care reform proposal. Due to a dwindling
supply in the past, water and sewer bonds have benefitted from an increase in
new issues.
Mr. Eldredge has had day to day portfolio management responsibility for the Fund
since July, 1995. Prior to that time this Fund was managed by Mr. McCullagh. Mr.
Eldredge is a senior tax exempt portfolio manager for Voyageur where he has been
employed since 1995. Prior to joining Voyageur, Mr. Eldredge was a portfolio
manager for ABT Mutual Funds from 1989 through 1995. Mr. Eldredge has over 18
years of experience in portfolio management.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND
[LINE GRAPH]
Market Price/NAV Fluctuation from 4/1/95 through 3/31/96
[PIE CHART]
Sector Weightings/Credit Quality as of 3/31/96
(as a percentage of long-term securities)
Pre-Refunded/Escrowed 10%
Utility 14%
Education 9%
General Obligation 18%
Health Care 15%
Housing 25%
Industrial 9%
Aaa/AAA Aa/AA A/A NR/NR
56% 15% 18% 11%
Portfolio Statistics as of 3/31/96
(excluding short-term securities)
Average Effective Maturity 20.8 Years
Duration 8.2 Years
% AMT 19.5%
Total Market Value $56.5 Million
Average Coupon 6.5%
Average Annual Fund Performance:
Market Value*
One year 10.31%
Since Inception (5/1/92) 8.45%
Net Asset Value**
One Year 8.20%
Since Inception (5/1/92) 7.72%
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II
[LINE GRAPH]
Market Price/NAV Fluctuation from 4/1/95 through 3/31/96
[PIE CHART]
Sector Weightings/Credit Quality as of 3/31/96
(as a percentage of long-term securities)
Pre-Refunded/Escrowed 9%
Utility 8%
Other Revenue 2%
Education 9%
General Obligation 20%
Health Care 19%
Housing 22%
Industrial 11%
Aaa/AAA Aa/AA A/A NR/NR
61% 13% 20% 6%
Portfolio Statistics as of 3/31/96
(excluding short-term securities)
Average Effective Maturity 22.2 Years
Duration 9.8 Years
% AMT 19.6%
Total Market Value $155.6 Million
Average Coupon 6.1%
Average Annual Fund Performance:
Market Value*
One year 14.16%
Since Inception (2/26/93) 4.28%
Net Asset Value**
One Year 8.88%
Since Inception (2/26/93) 4.79%
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III
[LINE GRAPH]
Market Price/NAV Fluctuation from 4/1/95 through 3/31/96
[PIE CHART]
Sector Weightings/Credit Quality as of 3/31/96
(as a percentage of long-term securities)
Pre-Refunded/Escrowed 10%
Utility 9%
Other Revenue 2%
Education 9%
General Obligation 15%
Health Care 20%
Housing 25%
Industrial 10%
Aaa/AAA Aa/AA A/A NR/NR
44% 18% 33% 5%
Portfolio Statistics as of 3/31/96
(excluding short-term securities)
Average Effective Maturity 22.8 Years
Duration 9.4 Years
% AMT 16.2%
Total Market Value $37.4 Million
Average Coupon 6.3%
Average Annual Fund Performance:
Market Value*
One year 13.51%
Since Inception (10/29/93) (0.50)%
Net Asset Value**
One Year 8.79%
Since Inception (10/29/93) 1.10%
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND
[LINE GRAPH]
Market Price/NAV Fluctuation from 4/1/95 through 3/31/96
[PIE CHART]
Sector Weightings/Credit Quality as of 3/31/96
(as a percentage of long-term securities)
Transportation 11%
Education 3%
General Obligation 29%
Health Care 15%
Housing 6%
Industrial 4%
Other Revenue 6%
Utility 26%
Aaa/AAA Aa/AA A/A Baa/BBB
71% 16% 11% 2%
Portfolio Statistics as of 3/31/96
(excluding short-term securities)
Average Effective Maturity 19.0 Years
Duration 9.7 Years
% AMT 0.0%
Total Market Value $65.4 Million
Average Coupon 5.7%
Average Annual Fund Performance:
Market Value*
One year 11.52%
Since Inception (2/26/93) 3.10%
Net Asset Value**
One Year 9.55%
Since Inception (2/26/93) 5.43%
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
[LINE GRAPH]
Market Price/NAV Fluctuation from 4/1/95 through 3/31/96
[PIE CHART]
Sector Weightings/Credit Quality as of 3/31/96
(as a percentage of long-term securities)
Utility 34%
Transportation 11%
Pre-Refunded/Escrowed 5%
Education 2%
General Obligation 8%
Health Care 20%
Other Revenue 20%
Aaa/AAA
100%
Portfolio Statistics as of 3/31/96
(excluding short-term securities)
Average Effective Maturity 22.1 Years
Duration 10.9 Years
% AMT 0.0%
Total Market Value $52.2 Million
Average Coupon 5.6%
Average Annual Fund Performance:
Market Value*
One year 10.39%
Since Inception (2/26/93) 2.59%
Net Asset Value**
One Year 9.66%
Since Inception (2/26/93) 4.73%
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND
[LINE GRAPH]
Market Price/NAV Fluctuation from 4/1/95 through 3/31/96
[PIE CHART]
Sector Weightings/Credit Quality as of 3/31/96
(as a percentage of long-term securities)
Health Care 24%
Housing 3%
Industrial 10%
Other Revenue 5%
Utility 1%
Transportation 13%
Lease/COP 2%
Education 10%
General Obligation 32%
Aaa/AAA
100%
Portfolio Statistics as of 3/31/96
(excluding short-term securities)
Average Effective Maturity 19.7 Years
Duration 8.3 Years
% AMT 0.0%
Total Market Value $104.1 Million
Average Coupon 5.9%
Average Annual Fund Performance:
Market Value*
One year 8.99%
Since Inception (7/29/93) 1.28%
Net Asset Value**
One Year 8.55%
Since Inception (7/29/93) 4.03%
Past performance is no guarantee of future results.
* Assumes purchase of common shares at market price on the first day and
sale on the last day of the period and reinvestment of dividends at
market price, if any. Performance does not reflect initial sales charge
or brokerage commissions.
** Assumes purchase of common shares at net asset value on the first day
and sale on the last day of the period and reinvestment of dividends at
net asset value, if any.
INDEPENDENT AUDITORS' REPORT
The Board of Directors or Trustees and Shareholders
Voyageur Minnesota Municipal Income Fund, Inc.
Voyageur Minnesota Municipal Income Fund II, Inc.
Voyageur Minnesota Municipal Income Fund III, Inc.
Voyageur Arizona Municipal Income Fund, Inc.
Voyageur Florida Insured Municipal Income Fund
Voyageur Colorado Insured Municipal Income Fund, Inc.:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments in securities of Voyageur Minnesota
Municipal Income Fund, Inc., Voyageur Minnesota Municipal Income Fund II, Inc.,
Voyageur Minnesota Municipal Income Fund III, Inc., Voyageur Arizona Municipal
Income Fund, Inc., Voyageur Florida Insured Municipal Income Fund and Voyageur
Colorado Insured Municipal Income Fund, Inc. (the Funds) as of March 31, 1996
and the related statements of operations for the year then ended and the
statements of changes in net assets for each of the years in the two-year period
ended March 31, 1996 and the financial highlights for each of the periods
presented. These financial statements and the financial highlights are the
responsibility of the Funds' 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 generally accepted auditing
standards. 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 and the financial highlights. Investment securities held in custody
are confirmed to us by the custodian. As to securities purchased and sold, but
not received or delivered, we request confirmations from brokers, and where
replies are not received, we carry out other appropriate auditing procedures. 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, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of Voyageur Minnesota Municipal Income Fund, Inc., Voyageur Minnesota
Municipal Income Fund II, Inc., Voyageur Minnesota Municipal Income Fund III,
Inc., Voyageur Arizona Municipal Income Fund, Inc., Voyageur Florida Insured
Municipal Income Fund and Voyageur Colorado Insured Municipal Income Fund, Inc.
as of March 31, 1996 and the results of their operations, changes in their net
assets and the financial highlights for the periods stated in the first
paragraph above, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
May 3, 1996
(This page has been left blank intentionally.)
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
- ----------------------------------------------------------------------------------------------------------------
VOYAGEUR
MINNESOTA
MUNICIPAL
INCOME
FUND, INC.
------------
<S> <C>
ASSETS
Investments in securities (note 2) (identified cost:
$54,866,138, $155,540,794, $37,377,574, $64,801,945,
$52,066,757 and $105,714,285, respectively)............................................. $56,488,058
Cash in bank on demand deposit............................................................ 671
Receivable for investment securities sold ................................................ --
Accrued interest receivable............................................................... 1,055,318
-------------
Total assets............................................................................ 57,544,047
------------
LIABILITIES
Bank overdraft............................................................................ --
Payable for investment securities purchased............................................... --
Dividends payable to preferred shareholders............................................... 53,084
Administration fee payable................................................................ 8,333
Advisor fee payable....................................................................... --
Other accrued expenses.................................................................... 53,302
---------------
Total liabilities....................................................................... 114,719
--------------
NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL SHARES..................................... $57,429,328
===========
Represented by:
Preferred shares (note 5)............................................................... $20,000,000
Common shares:
Par value............................................................................. 25,947
Additional paid-in capital............................................................ 35,452,118
------------
55,478,065
Undistributed net investment income..................................................... 357,764
Accumulated net realized loss from investments.......................................... (28,421)
Unrealized net appreciation (depreciation) of investments............................... 1,621,920
-------------
TOTAL REPRESENTING NET ASSETS APPLICABLE TO OUTSTANDING
CAPITAL SHARES...................................................................... $57,429,328
===========
TOTAL REPRESENTING NET ASSETS APPLICABLE TO OUTSTANDING
COMMON SHARES....................................................................... $37,429,328
===========
NET ASSET VALUE PER COMMON SHARE:
(2,594,700, 7,252,200, 1,837,200, 2,982,200, 2,422,200 and
4,837,100 common shares issued and outstanding, respectively)........................... $14.43
======
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
MARCH 31, 1996
- ------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR
VOYAGEUR VOYAGEUR VOYAGEUR FLORIDA COLORADO
MINNESOTA MINNESOTA ARIZONA INSURED INSURED
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
INCOME INCOME INCOME INCOME INCOME
FUND II, INC. FUND III, INC. FUND, INC. FUND FUND, INC.
--------------- -------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
$155,645,982 $37,432,947 $65,405,801 $52,213,637 $104,134,637
689 -- 812,410 14,015 25,144
-- 92,176 -- 1,485,245 --
2,468,913 653,790 961,353 1,055,610 1,892,967
------------- ----------- ----------- ----------- -------------
158,115,584 38,178,913 67,179,564 54,768,507 106,052,748
------------- ----------- ----------- ----------- -------------
-- 77,971 -- -- --
-- -- 1,051,457 1,448,232 --
156,990 -- 66,165 53,470 107,400
20,060 4,833 8,395 6,772 13,478
46,809 11,278 -- -- 32,483
136,732 38,528 63,903 53,083 56,427
------------- ----------- ----------- ----------- -------------
360,591 132,610 1,189,920 1,561,557 209,788
------------- ----------- ----------- ----------- -------------
$157,754,993 $38,046,303 $65,989,644 $53,206,950 $105,842,960
============= =========== =========== ----------- ============
$ 60,000,000 $15,000,000 $25,000,000 $20,000,000 $ 40,000,000
72,522 18,372 29,822 24,222 48,371
99,637,602 25,228,358 40,809,143 33,337,167 67,189,739
------------- ----------- ----------- ----------- -------------
159,710,124 40,246,730 65,838,965 53,361,389 107,238,110
468,671 148,042 273,140 221,731 398,026
(2,528,990) (2,403,842) (726,317) (523,050) (213,528)
105,188 55,373 603,856 146,880 (1,579,648)
------------- ----------- ----------- ----------- --------------
$157,754,993 $38,046,303 $65,989,644 $53,206,950 $105,842,960
============= =========== =========== =========== ============
$ 97,754,993 $23,046,303 $40,989,644 $33,206,950 $ 65,842,960
============= =========== =========== =========== =============
$13.48 $12.54 $13.74 $13.71 $13.61
====== ====== ====== ====== ======
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF OPERATIONS
- -----------------------------------------------------------------------------------------------------------------
VOYAGEUR
MINNESOTA
MUNICIPAL
INCOME
FUND, INC.
<S> <C>
Investment income:
Interest . ............................................................................. $3,533,729
----------
Expenses (note 4):
Investment advisory and management fees................................................. 232,200
Administration fees..................................................................... 100,000
Remarketing agent fees.................................................................. 50,000
Custodian and transfer agent fees....................................................... 24,969
Audit and legal fees.................................................................... 20,382
Other expenses.......................................................................... 47,854
----------
Total expenses....................................................................... 475,405
Less: Earnings credits on uninvested cash.............................................. (2,707)
-----------
Total net expenses................................................................... 472,698
----------
Investment income - net........................................................... 3,061,031
----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) on investments - net (note 3)...................................... 131,577
Change in unrealized appreciation or depreciation of investments - net.................. 536,027
----------
Net gain on investments.............................................................. 667,604
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............................. $3,728,635
==========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31, 1996
- -------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR
VOYAGEUR VOYAGEUR VOYAGEUR FLORIDA COLORADO
MINNESOTA MINNESOTA ARIZONA INSURED INSURED
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
INCOME INCOME INCOME INCOME INCOME
FUND II, INC. FUND III, INC. FUND, INC. FUND FUND, INC.
------------- -------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
$ 9,221,547 $2,241,754 $3,741,971 $3,004,419 $5,771,153
------------ ---------- ---------- ---------- ----------
637,469 153,541 265,763 214,520 427,133
239,049 57,578 99,661 80,445 160,172
150,000 37,500 62,500 50,000 100,000
58,659 16,654 28,675 22,459 32,555
42,686 15,596 22,836 18,606 31,281
90,442 29,708 41,328 41,025 53,891
------------ ---------- ---------- ---------- ----------
1,218,305 310,577 520,763 427,055 805,032
(7,131) (3,039) (17,997) (2,192) (20,912)
------------ ---------- ---------- ---------- ----------
1,211,174 307,538 502,766 424,863 784,120
------------ ---------- ---------- ---------- ----------
8,010,373 1,934,216 3,239,205 2,579,556 4,987,033
------------ ---------- ---------- ---------- ----------
4,015 (431,936) 125,368 (45,483) 92,188
2,666,757 1,031,280 1,304,899 1,282,076 1,902,659
------------ ---------- ---------- ---------- ----------
2,670,772 599,344 1,430,267 1,236,593 1,994,847
------------ ---------- ---------- ---------- ----------
$10,681,145 $2,533,560 $4,669,472 $3,816,149 $6,981,880
=========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR
MINNESOTA MINNESOTA
MUNICIPAL MUNICIPAL
INCOME INCOME
FUND, INC. FUND II, INC.
------------------------- ---------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1996 1995 1996 1995
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Investment income - net............................ $ 3,061,031 $ 3,134,823 $ 8,010,373 $ 8,065,161
Realized gain (loss) on investments - net.......... 131,577 (84,971) 4,015 (2,497,147)
Change in unrealized appreciation or
depreciation of investments - net................ 536,027 967,947 2,666,757 5,289,520
----------- ----------- ------------ ------------
Net increase in net assets resulting
from operations.................................. 3,728,635 4,017,799 10,681,145 10,857,534
----------- ----------- ------------ ------------
DISTRIBUTIONS TO:
Common shareholders from investment income - net .. (2,413,073) (2,413,073) (5,765,503) (5,983,068)
Preferred shareholders from investment income - net (766,760) (684,186) (2,299,902) (2,061,072)
Common shareholders from realized capital gains - net -- (61,368) -- --
Preferred shareholders from realized capital gains - net -- (12,894) -- --
----------- ----------- ------------ ------------
Total distributions........................... (3,179,833) (3,171,521) (8,065,405) (8,044,140)
----------- ----------- ------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 5):
Final adjustment of offering costs
relating to initial public offering.............. -- -- -- --
----------- ----------- ------------ ------------
Total increase in net assets.................. 548,802 846,278 2,615,740 2,813,394
Net assets at beginning of year.................... 56,880,526 56,034,248 155,139,253 152,325,859
----------- ----------- ------------ ------------
Net assets at end of year (including undistributed net
investment income of $357,764 and $476,566,
$468,671 and $523,703, $148,042 and $119,531,
$273,140 and $152,133, $221,731 and $142,773,
and $398,026 and $331,186, respectively)......... $57,429,328 $56,880,526 $157,754,993 $155,139,253
=========== =========== ============ ============
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR
VOYAGEUR VOYAGEUR FLORIDA COLORADO
MINNESOTA ARIZONA INSURED INSURED
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
INCOME INCOME INCOME INCOME
FUND III, INC. FUND, INC. FUND FUND, INC.
- ------------------------------ ------------------------------- ------------------------------- ------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1996 1995 1996 1995 1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
$ 1,934,216 $ 1,939,177 $ 3,239,205 $ 3,215,680 $ 2,579,556 $ 2,587,318 $ 4,987,033 $ 4,914,890
(431,936) (1,952,146) 125,368 (792,377) (45,483) (397,089) 92,188 (305,716)
1,031,280 2,459,010 1,304,899 2,483,456 1,282,076 2,076,303 1,902,659 2,419,647
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
2,533,560 2,446,041 4,669,472 4,906,759 3,816,149 4,266,532 6,981,880 7,028,821
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
(1,327,377) (1,331,970) (2,180,735) (2,329,844) (1,750,040) (1,871,152) (3,385,973) (3,658,059)
(578,328) (505,500) (937,463) (841,962) (750,558) (693,328) (1,534,220) (1,345,648)
-- -- -- (140,052) -- -- -- (128,941)
-- -- -- (37,501) -- -- -- (37,780)
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
(1,905,705) (1,837,470) (3,118,198) (3,349,359) (2,500,598) (2,564,480) (4,920,193) (5,170,428)
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
-- 25,000 -- -- -- -- -- --
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
627,855 633,571 1,551,274 1,557,400 1,315,551 1,702,052 2,061,687 1,858,393
37,418,448 36,784,877 64,438,370 62,880,970 51,891,399 50,189,347 103,781,273 101,922,880
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 38,046,303 $ 37,418,448 $ 65,989,644 $ 64,438,370 $ 53,206,950 $ 51,891,399 $ 105,842,960 $ 103,781,273
============= ============= ============= ============= ============= ============= ============= =============
</TABLE>
See accompanying notes to financial statements.
THE VOYAGEUR FUNDS
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Voyageur Minnesota Municipal Income Fund, Inc. ("Minnesota Municipal");
Voyageur Minnesota Municipal Income Fund II, Inc. ("Minnesota Municipal II");
Voyageur Minnesota Municipal Income Fund III, Inc. ("Minnesota Municipal III");
Voyageur Arizona Municipal Income Fund, Inc. ("Arizona Municipal"); Voyageur
Florida Insured Municipal Income Fund ("Florida Insured Municipal"); and
Voyageur Colorado Insured Municipal Income Fund, Inc. ("Colorado Insured
Municipal") (collectively the "Funds") are registered under the Investment
Company Act of 1940 ("1940 Act") (as amended) as closed-end, diversified
management investment companies (except Minnesota Municipal, Minnesota Municipal
III and Colorado Insured Municipal, which are non-diversified management
investment companies). Shares of the Funds are listed on the American Stock
Exchange.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Funds are as follows:
USE OF ESTIMATES
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 net increases (decreases) in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
INVESTMENTS IN SECURITIES
The values of fixed-income securities are determined using pricing services
or prices quoted by independent brokers. When market quotations are not readily
available, securities are valued at fair value according to methods selected in
good faith by the Board of Directors or Trustees. Short-term securities with
maturities less than 60 days when acquired, or which subsequently are within 60
days of maturity, are valued at amortized cost which approximates market value.
Security transactions are accounted for on the date securities are
purchased or sold. Realized gains and losses are calculated on the identified
cost basis. Interest income, including level-yield amortization of premium and
original issue discount, is accrued daily.
The Funds concentrate their investments in their respective states.
Therefore, there may be more credit risk related to the economic conditions of a
particular state than a portfolio with broader geographical diversification.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS
Delivery and payment for securities which have been purchased by the Funds
on a forward commitment or when-issued basis can take place up to a month or
more after the transaction date. During this period, such securities are subject
to market fluctuations and the portfolio maintains, in a segregated account with
its custodian, assets with a market value equal to or greater than the amount of
its purchase commitments.
FEDERAL TAXES
The Funds intend to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of their taxable net investment income and net realized
capital gains, if any, to shareholders in amounts that will avoid or minimize
federal income or excise taxes. Net investment income and net realized gains
(losses) may differ for financial statement and tax purposes primarily because
of losses deferred for tax purposes due to "wash sale" transactions. The
character of distributions made during the year from net investment income or
net realized gains may differ from their ultimate characterization for federal
income tax purposes. Furthermore, due to the timing of dividend distributions,
the fiscal year in which amounts are distributed may differ from the year that
the income or realized gains (losses) were recorded by the Funds.
DISTRIBUTIONS TO SHAREHOLDERS
The Funds intend to pay monthly dividends from net investment income. Net
realized capital gains, if any, will be distributed on an annual basis. These
distributions are recorded as of the close of business on the ex-dividend date.
Such distributions are payable in cash or, pursuant to the Funds' Dividend
Reinvestment Plans, reinvested in additional common shares of the Funds. Under
the Plans, shares of the Funds will be purchased in the open market.
(3) INVESTMENT SECURITIES TRANSACTIONS
Purchases of securities and proceeds from sales, other than investments in
short-term securities, for Minnesota Municipal, Minnesota Municipal II,
Minnesota Municipal III, Arizona Municipal, Florida Insured Municipal and
Colorado Insured Municipal were $4,119,637 and $4,349,640, $17,363,686 and
$17,493,669, $12,945,515 and $13,024,132, $20,297,413 and $19,438,055,
$11,517,115 and $11,692,788, and $42,199,918 and $41,401,361, respectively, for
the year ended March 31, 1996.
(4) FEES AND EXPENSES
The Funds have entered into the following agreements with Voyager Fund
Managers, Inc. (the "Adviser") and with Mitchell Hutchins Asset Management Inc.
(Princeton Administrators, L.P. on Colorado Insured Municipal only) (the
"Administrators").
The investment advisory agreements provide the Adviser with a monthly
investment management fee computed at an annual rate of .40% of each Fund's
average daily net assets, including assets attributable to any preferred stock
that may be outstanding. For its fee, the Adviser provides investment advice
and, in general, conducts the management and investments of the Funds.
The administration agreements provide the Administrators with a monthly fee
computed at an annual rate of .15% of each Fund's average daily net assets,
including assets attributable to any preferred stock that may be outstanding.
Certain Funds have minimum annual fees payable to the Administrators. Minnesota
Municipal paid the minimum fee for the year ended March 31, 1996. For their
fees, the Administrators provide certain administrative, clerical and
recordkeeping services to the Funds.
In addition to advisory and administrative fees, the Funds are responsible
for paying most of the other operating expenses, including outside directors' or
trustees' fees and expenses, custodian fees, registration fees, printing of
shareholder reports, transfer agent fees and expenses, legal, auditing and
accounting services, insurance, interest and other miscellaneous expenses.
During the year ended March 31, 1996 Minnesota Municipal earned $2,707,
Minnesota Municipal II earned $7,131, Minnesota Municipal III earned $3,039,
Arizona Municipal earned $17,997, Florida Municipal earned $2,192 and Colorado
Municipal earned $20,912 in credits on uninvested cash balances held by each
Fund at the custodian. These credits were used to reduce various custodial
services provided by the custodial bank.
(5) CAPITAL SHARE TRANSACTIONS
Pursuant to their articles of incorporation, Minnesota Municipal, Minnesota
Municipal II, Minnesota Municipal III, Arizona Municipal and Colorado Insured
Municipal each have 200 million shares of $0.01 par value common shares
authorized. Florida Insured Municipal has been authorized to issue an unlimited
amount of $0.01 par value common shares. The common shares outstanding at March
31, 1996 were 2,594,700 for Minnesota Municipal, 7,252,200 for Minnesota
Municipal II, 1,837,200 for Minnesota Municipal III, 2,982,200 for Arizona
Municipal, 2,422,200 for Florida Insured Municipal and 4,837,100 for Colorado
Insured Municipal.
For the years ended March 31, 1996 and March 31, 1995, there were no
transactions in common shares for the Funds.
The Funds each have 1 million shares of $0.01 par value preferred shares
authorized, except for Florida Insured Municipal which has an unlimited amount
of $0.01 par value preferred shares authorized. Under resolutions adopted by the
Board of Directors or Trustees, Minnesota Municipal is allowed to issue up to
400 preferred shares, of which the entire amount was issued on August 6, 1992.
On May 14, 1993, Minnesota Municipal II, Arizona Municipal and Florida Insured
Municipal issued 1,200, 500 and 400 preferred shares, respectively. On December
10, 1993, Minnesota Municipal III issued 300 preferred shares and on September
23, 1993, Colorado Insured Municipal issued 800 preferred shares. The preferred
shares have a liquidation preference of $50,000 per share plus an amount equal
to accumulated but unpaid dividends.
Dividends for the outstanding preferred shares of each Fund are cumulative
at a rate established at the initial public offering and are typically reset
every 28 days based on the results of an auction. Dividend rates (adjusted for
capital gains distributions) ranged from 3.40% to 4.35% on Minnesota Municipal,
from 3.35% to 4.25% on Minnesota Municipal II, from 3.50% to 4.25% on Minnesota
Municipal III, from 3.30% to 4.25% on Arizona Municipal, from 3.30% to 4.25% on
Florida Insured Municipal and from 3.42% to 4.25% on Colorado Insured Municipal
during the year ended March 31, 1996. Smith Barney Inc. and Merrill Lynch
Pierce, Fenner & Smith Inc. (on Colorado Insured Municipal only), as the
remarketing agents, receive an annual fee from each of the Funds of .25% of the
average amount of preferred stock outstanding.
Under the 1940 Act, the Funds may not declare dividends or make other
distributions on common shares or purchase any such shares if, at the time of
the declaration, distribution or purchase, asset coverage with respect to the
outstanding preferred stock is less than 200%.
Each of the Fund's preferred shares are redeemable at the option of the
Fund, in whole or in part, on any dividend payment date at $50,000 per share
plus any accumulated but unpaid dividends whether or not declared. The preferred
shares are also subject to mandatory redemption at $50,000 per share plus any
accumulated but unpaid dividends, whether or not declared, if certain
requirements relating to the composition of the assets and liabilities of each
Fund is not satisfied. The holders of preferred shares have voting rights equal
to the holders of common shares (one vote per share) and will vote together with
holders of common shares as a single class. However, holders of preferred shares
are also entitled to elect two of each Fund's directors or trustees. In
addition, the 1940 Act requires that along with approval by shareholders that
might otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
shares, and (b) take any action requiring a vote of security holders pursuant to
Section 13(a) of the 1940 Act, including, among other things, changes in each of
the Fund's subclassification as a closed-end investment company or changes in
their fundamental investment restrictions.
(6) CAPITAL LOSS CARRYFORWARDS
For federal income tax purposes, Minnesota Municipal, Minnesota Municipal
II, Minnesota Municipal III, Arizona Municipal, Florida Insured Municipal and
Colorado Insured Municipal had capital loss carryforwards of $28,421,
$2,489,756, $2,403,842, $726,317, $523,050 and $213,528, respectively, at March
31, 1996, that will expire in years 2002 through 2005 if not offset by
subsequent realized capital gains. It is unlikely the Board of Directors or
Trustees will authorize a distribution of any net realized capital gains until
the available capital loss carryforwards have been offset or expire.
(7) FINANCIAL HIGHLIGHTS
Per share data (rounded to the nearest cent) for a share of common stock
outstanding and selected information for each period are as follows:
<TABLE>
<CAPTION>
MINNESOTA MUNICIPAL
-------------------
PERIOD FROM
YEAR YEAR YEAR MAY 1,
ENDED ENDED ENDED 1992* TO
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
Net asset value: 1996 1995 1994 1993**
------ ------ ------ ------
<S> <C> <C> <C> <C>
Beginning of period................................. $14.21 $13.89 $14.67 $13.95
------ ------ ------ ------
Operations:
Investment income - net............................. 1.18 1.21 1.20 0.90
Realized and unrealized gain (loss) on investments - net 0.26 0.34 (0.68) 1.00
------ ------ ------ ------
Total from operations............................. 1.44 1.55 0.52 1.90
------ ------ ------ ------
Distributions to:
Common shareholders from investment income - net.... (0.93) (0.93) (0.93) (0.70)
Preferred shareholders from investment income - net. (0.29) (0.27) (0.18) (0.12)
Common shareholders from realized capital gains - net -- (0.02) (0.16) (0.06)
Preferred shareholders from realized capital gains - net -- (0.01) (0.03) (0.02)
------ ------ ------ ------
Total distributions............................... (1.22) (1.23) (1.30) (0.90)
------ ------ ------ ------
Capital share transactions:
Capital charge with respect to issuance of shares...... -- -- -- (0.28)
------ ------ ------ ------
Net asset value:
End of period....................................... $14.43 $14.21 $13.89 $14.67
====== ====== ====== ======
Market value:
End of period....................................... $15.00 $14.50 $15.63 $16.00
====== ====== ====== ======
Total investment return:
Market value (a).................................... 10.31% (0.71)% 4.28% 20.31%
Net asset value (b)................................. 8.20% 9.72% 1.63% 10.91%
Net assets applicable to outstanding capital shares
at end of period (000's omitted).................... $57,429 $56,881 $56,034 $58,075
Ratios/Supplemental Data:
Ratio of expenses to average net assets (c) (f)..... 0.82% 0.85% 0.78% 0.88%(d)
Ratio of investment income - net to
average net assets (c)............................ 5.28% 5.66% 5.22% 4.92%(d)
Portfolio turnover rate (excluding
short-term securities)............................ 7% 13% 11% 43%
Value of preferred shares outstanding (000's omitted) $20,000 $20,000 $20,000 $20,000
Net asset coverage per share of preferred
shares, end of period............................. $143,573 $142,201 $140,086 $145,188
Liquidation value per share of preferred shares (e). $50,000 $50,000 $50,000 $50,000
</TABLE>
* Commencement of investment operations
** Initial period
See accompanying notes to financial highlights on page 30.
<TABLE>
<CAPTION>
MINNESOTA MUNICIPAL II
----------------------
PERIOD FROM
YEAR YEAR YEAR FEBRUARY 26,
ENDED ENDED ENDED 1993* TO
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
Net asset value: 1996 1995 1994 1993**
------ ------ ------ ------
<S> <C> <C> <C> <C>
Beginning of period................................. $13.12 $12.73 $13.84 $13.95
------ ------ ------ ------
Operations:
Investment income - net............................. 1.10 1.11 0.98 0.03
Realized and unrealized gain (loss) on investments - net 0.38 0.39 (0.96) (0.11)
------ ------ ------ ------
Total from operations............................. 1.48 1.50 0.02 (0.08)
------ ------ ------ ------
Distributions to:
Common shareholders from investment income - net.... (0.80) (0.83) (0.76) --
Preferred shareholders from investment income - net. (0.32) (0.28) (0.18) --
Common shareholders from realized capital gains - net -- -- (0.02) --
Preferred shareholders from realized capital gains - net -- -- (0.00) --
------ ------ ------ ------
Total distributions............................... (1.12) (1.11) (0.96) --
------ ------ ------ ------
Capital share transactions:
Capital charge with respect to issuance of shares...... -- -- (0.17) (0.03)
------ ------ ------ ------
Net asset value:
End of perod........................................ $13.48 $13.12 $12.73 $13.84
====== ====== ====== ======
Market value:
End of period....................................... $13.25 $12.38 $14.63 $15.13
====== ====== ====== ======
Total investment return:
Market value (a).................................... 14.16% (9.59)% 1.71% 8.42%
Net asset value (b)................................. 8.88% 10.16% (2.93)% (0.79)%
Net assets applicable to outstanding capital shares
at end of period (000's omitted).................... $157,755 $155,139 $152,326 $100,392
Ratios/Supplemental Data:
Ratio of expenses to average net assets (c) (f)..... 0.77% 0.77% 0.76% 0.83%(d)
Ratio of investment income - net to
average net assets (c)............................ 5.03% 5.39% 4.54% 2.29%(d)
Portfolio turnover rate (excluding
short-term securities)............................ 11% 32% 27% 11%
Value of preferred shares outstanding (000's omitted) $60,000 $60,000 $60,000 --
Net asset coverage per share of preferred
shares, end of period............................. $131,462 $129,283 $126,938 --
Liquidation value per share of preferred shares (e). $50,000 $50,000 $50,000 --
</TABLE>
* Commencement of investment operations
** Initial period
See accompanying notes to financial highlights on page 30.
<TABLE>
<CAPTION>
MINNESOTA MUNICIPAL III
-----------------------
PERIOD FROM
YEAR YEAR OCTOBER 29,
ENDED ENDED 1993* TO
MARCH 31, MARCH 31, MARCH 31,
1996 1995 1994**
------ ------ ------
<S> <C> <C> <C>
Net asset value:
Beginning of period..................................... $12.20 $11.86 $14.03
------ ------ ------
Operations:
Investment income - net................................. 1.05 1.06 0.32
Realized and unrealized gain (loss) on investments - net 0.33 0.28 (1.88)
------ ------ ------
Total from operations................................. 1.38 1.34 (1.56)
------ ------ ------
Distributions to:
Common shareholders from investment income - net........ (0.72) (0.73) (0.25)
Preferred shareholders from investment income - net..... (0.32) (0.28) (0.06)
------ ------ ------
Total distributions................................. (1.04) (1.01) (0.31)
------ ------ ------
Capital share transactions:
Capital charge/adjustment with respect to issuance of shares -- 0.01 (0.30)
------ ------ ------
Net asset value:
End of period........................................... $12.54 $12.20 $11.86
====== ====== ======
Market value:
End of period........................................... $12.00 $11.25 $14.00
====== ====== ======
Total investment return:
Market value (a)........................................ 13.51% (14.27)% 1.53 %
Net asset value (b)..................................... 8.79% 9.55 % (13.85)%
Net assets applicable to outstanding capital shares
at end of period (000's omitted)........................ $38,046 $37,418 $36,785
Ratios/Supplemental Data:
Ratio of expenses to average net assets (c) (f)......... 0.81% 0.82% 0.90%(d)
Ratio of investment income - net to
average net assets (c)................................ 5.05% 5.37% 3.95%(d)
Portfolio turnover rate (excluding
short-term securities)................................ 35% 47% 21%
Value of preferred shares outstanding (000's omitted)... $15,000 $15,000 $15,000
Net asset coverage per share of preferred
shares, end of period................................. $126,821 $124,728 $122,616
Liquidation value per share of preferred shares (e)..... $50,000 $50,000 $50,000
</TABLE>
* Commencement of investment operations
** Initial period
See accompanying notes to financial highlights on page 30.
<TABLE>
<CAPTION>
ARIZONA MUNICIPAL
-----------------
PERIOD FROM
YEAR YEAR YEAR FEBRUARY 26,
ENDED ENDED ENDED 1993* TO
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1996 1995 1994 1993**
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net asset value:
Beginning of period................................... $13.22 $12.70 $13.77 $13.95
------ ------ ------ ------
Operations:
Investment income - net............................... 1.09 1.08 0.95 0.01
Realized and unrealized gain (loss) on investments - net 0.47 0.56 (0.79) (0.13)
------ ------ ------ ------
Total from operations............................... 1.56 1.64 0.16 (0.12)
------ ------ ------ ------
Distributions to:
Common shareholders from investment income - net...... (0.73) (0.78) (0.75) --
Preferred shareholders from investment income - net... (0.31) (0.28) (0.18) --
Common shareholders from realized capital gains - net -- (0.05) (0.09) --
Preferred shareholders from realized capital gains - net -- (0.01) (0.02) --
------ ------ ------ ------
Total distributions................................. (1.04) (1.12) (1.04) --
------ ------ ------ ------
Capital share transactions:
Capital charge with respect to issuance of shares....... -- -- (0.19) (0.06)
------ ------ ------ ------
Net asset value:
End of period......................................... $13.74 $13.22 $12.70 $13.77
====== ====== ====== ======
Market value:
End of period......................................... $12.75 $12.13 $13.88 $15.13
====== ====== ====== ======
Total investment return:
Market value (a)...................................... 11.52% (6.43)% (2.91)% 8.42 %
Net asset value (b)................................... 9.55% 11.29% (2.20)% (1.29)%
Net assets applicable to outstanding capital shares
at end of period (000's omitted)...................... $65,990 $64,438 $62,881 $41,063
Ratios/Supplemental Data:
Ratio of expenses to average net assets (c) (f)....... 0.78% 0.79% 0.82% 0.90%(d)
Ratio of investment income - net to
average net assets (c).............................. 4.88% 5.19% 4.41% 1.29%(d)
Portfolio turnover rate (excluding
short-term securities).............................. 30% 18% 15% 0%
Value of preferred shares outstanding (000's omitted). $25,000 $25,000 $25,000 --
Net asset coverage per share of preferred
shares, end of period............................. $131,979 $128,877 $125,762 --
Liquidation value per share of preferred shares (e)... $50,000 $50,000 $50,000 --
</TABLE>
* Commencement of investment operations
** Initial period
See accompanying notes to financial highlights on page 30.
<TABLE>
<CAPTION>
FLORIDA INSURED MUNICIPAL
-------------------------
PERIOD FROM
YEAR YEAR YEAR FEBRUARY 26,
ENDED ENDED ENDED 1993* TO
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1996 1995 1994 1993**
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net asset value:
Beginning of period................................. $13.17 $12.46 $13.73 $14.05
------ ------ ------ ------
Operations:
Investment income - net............................. 1.06 1.07 0.96 0.01
Realized and unrealized gain (loss) on investments - net 0.51 0.69 (1.10) (0.25)
------ ------ ------ ------
Total from operations............................. 1.57 1.76 (0.14) (0.24)
------ ------ ------ ------
Distributions to:
Common shareholders from investment income - net.... (0.72) (0.77) (0.74) --
Preferred shareholders from investment income - net (0.31) (0.28) (0.19) --
------ ------ ------ ------
Total distributions............................... (1.03) (1.05) (0.93) --
------ ------ ------ ------
Capital share transactions:
Capital charge with respect to issuance of shares...... -- -- (0.20) (0.08)
------ ------ ------ ------
Net asset value:
End of period....................................... $13.71 $13.17 $12.46 $13.73
====== ====== ====== ======
Market value:
End of period....................................... $12.75 $12.25 $12.50 $15.13
====== ====== ====== ======
Total investment return:
Market value (a).................................... 10.39% 4.69% (13.04)% 7.65%
Net asset value (b)................................. 9.66% 12.56% (4.40)% (2.28)%
Net assets applicable to outstanding capital shares
at end of period (000's omitted).................... $53,207 $51,891 $50,189 $33,247
Ratios/Supplemental Data:
Ratio of expenses to average net assets (c) (f)..... 0.80% 0.81% 0.85% 0.90%(d)
Ratio of investment income - net to
average net assets (c)............................ 4.82% 5.21% 4.49% 1.24%(d)
Portfolio turnover rate (excluding
short-term securities)............................ 22% 10% 20% 0%
Value of preferred shares outstanding (000's omitted) $20,000 $20,000 $20,000 --
Net asset coverage per share of preferred
shares, end of period............................. $133,017 $129,728 $125,473 --
Liquidation value per share of preferred shares (e). $50,000 $50,000 $50,000 --
</TABLE>
* Commencement of investment operations
** Initial period
See accompanying notes to financial highlights on page 30.
<TABLE>
<CAPTION>
COLORADO INSURED MUNICIPAL
--------------------------
PERIOD FROM
YEAR YEAR JULY 29,
ENDED ENDED 1993* TO
MARCH 31, MARCH 31, MARCH 31,
1996 1995 1994**
------ ------ ------
<S> <C> <C> <C>
Net asset value:
Beginning of period..................................... $13.19 $12.80 $14.10
------ ------ ------
Operations:
Investment income - net................................. 1.03 1.02 0.59
Realized and unrealized gain (loss) on investments - net 0.41 0.44 (1.19)
------ ------ ------
Total from operations................................... 1.44 1.46 (0.60)
------ ------ ------
Distributions to:
Common shareholders from investment income - net........ (0.70) (0.76) (0.39)
Preferred shareholders from investment income - net..... (0.32) (0.27) (0.11)
Common shareholders from realized capital gains - net... -- (0.03) --
Preferred shareholders from realized capital gains - net -- (0.01) --
------ ------ ------
Total distributions..................................... (1.02) (1.07) (0.50)
------ ------ ------
Capital share transactions:
Capital charge with respect to issuance of shares.......... -- -- (0.20)
------ ------ ------
Net asset value:
End of period........................................... $13.61 $13.19 $12.80
====== ====== ======
Market value:
End of period........................................... $12.63 $12.25 $14.50
====== ====== ======
Total investment return:
Market value (a)........................................ 8.99% (10.05)% 5.52%
Net asset value (b)..................................... 8.55% 9.67% (6.66)%
Net assets applicable to outstanding capital shares
at end of period (000's omitted)........................ $105,843 $103,781 $101,923
Ratios/Supplemental Data:
Ratio of expenses to average net assets (c) (f)......... 0.75% 0.76% 0.78%(d)
Ratio of investment income - net to
average net assets (c).............................. 4.68% 4.88% 4.26%(d)
Portfolio turnover rate (excluding
short-term securities).............................. 39% 7% 3%
Value of preferred shares outstanding (000's omitted)... $40,000 $40,000 $40,000
Net asset coverage per share of preferred
shares, end of period............................... $132,304 $129,727 $127,404
Liquidation value per share of preferred shares (e)..... $50,000 $50,000 $50,000
* Commencement of investment operations
** Initial period
</TABLE>
See accompanying notes to financial highlights on page 30.
Notes to Financial Highlights
(a) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of each period reported. Underwriting discounts
and commissions are not reflected in the total investment return for the
initial period of each Fund. If underwriting discounts and commissions had
been reflected, total investment returns for the initial period would have
been 11.89%, 0.83%, (5.07)%, 0.83%, 0.83% and (0.81)% for Minnesota
Municipal, Minnesota Municipal II, Minnesota Municipal III, Arizona
Municipal, Florida Insured Municipal and Colorado Insured Municipal,
respectively. Distributions, if any, are assumed for purposes of this
calculation, to be reinvested at prices obtained under the Funds' dividend
reinvestment plans. Total investment returns for periods of less than one
year are not annualized.
(b) Total investment return is calculated assuming a purchase of common shares
at the current net asset value on the first day and a sale at the current
net asset value on the last day of each period reported. Distributions, if
any, are assumed for purposes of this calculation, to be reinvested at net
asset value as of dividend payable date. Total investment returns for
periods of less than one year are not annualized. These percentages are not
an indication of the performance of a shareholder's investment in the Fund
based on market value due to differences between the market price of the
stock and the net asset value of the Fund.
(c) Ratios calculated on the basis of expenses and net investment income
applicable to both the common and preferred shares relative to the average
net assets of common and preferred shareholders. Ratios do not reflect the
effect of dividend payments to preferred shareholders.
(d) Annualized.
(e) Excluding any accumulated but unpaid dividends.
(f) Beginning in the period ended March 31, 1996, the expense ratio reflects the
effect of gross expenses attributable to earnings credits on uninvested cash
balances received by the Funds. Prior period expense ratios have not been
adjusted.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
INVESTMENTS IN SECURITIES MARCH 31, 1996
- ---------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (A)
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS.)
MINNESOTA MUNICIPAL BONDS (150.9%):
EDUCATION REVENUE (14.1%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$1,000 Minnesota Higher Education Facilities Authority Revenue, Series 3-C,
St. Thomas University .............................................. 6.25% 09-01-16 $1,016,450
1,000 Minnesota Higher Education Facilities Authority Revenue, Series 3-J,
Macalester College.................................................. 6.40 03-01-22 1,044,400
250 Minnesota State University Board Revenue, Series A, State
University System .................................................. 6.05 06-30-18 252,170
1,075 Northfield, St. Olaf College Revenue.................................... 6.30 10-01-12 1,129,073
1,750 Northfield, St. Olaf College Revenue.................................... 6.40 10-01-21 1,824,480
----------
5,266,573
----------
GENERAL OBLIGATION (27.0%):
-------------------------------------------------------------------------------------------------------
375 Burnsville-Eagan-Savage Independent School District #191................ 5.13 02-01-17 350,602
1,000 Carver County, Series 1992-A............................................ 5.88 02-01-14 1,004,560
305 Edina Recreational Facilities Bonds, Series 1992-A...................... 6.00 01-01-09 315,901
320 Edina Recreational Facilities Bonds, Series 1992-A...................... 6.00 01-01-10 330,157
2,200 Hennepin County......................................................... 5.75 10-01-10 2,229,502
1,600 Minneapolis............................................................. 6.00 03-01-16 1,623,520
1,500 Minneapolis-St. Paul, Metro Airport Commission, AMT..................... 6.60(e) 01-01-11 1,594,725
1,000 Rosemount Independent School District #196.............................. 5.70 04-01-12 1,004,080
350 Roseville Independent School District (FSA Insured)..................... 5.30 02-01-26 328,573
1,250 St. Francis Independent School District #15 (FSA Insured)............... 6.30 02-01-11 1,335,875
----------
10,117,495
----------
HEALTH CARE REVENUE (23.0%):
-------------------------------------------------------------------------------------------------------
1,000 Bloomington Health Care Facilities, Masonic Home Care
Center (AMBAC Insured) ............................................ 5.88 07-01-22 987,380
1,270 Duluth Economic Development Authority, Health Care Facilities Revenue,
Series 1992, Duluth Clinic (AMBAC Insured)......................... 6.30 11-01-22 1,314,132
1,000 Duluth Economic Development Authority, Health Care Facilities Revenue,
Series 1993-C, St. Mary's Hospital (Connie Lee Insured)............ 6.00 02-15-20 996,150
1,000 Duluth Economic Development Authority, Hospital Facilities Revenue,
Series 1992-B, St. Luke's Hospital (Connie Lee Insured)............ 6.40 05-01-18 1,030,430
2,210 Minneapolis Hospital System Revenue, Fairview Hospital, Series 1991-A
(MBIA Insured)...................................................... 6.50 01-01-11 2,354,954
1,500 Minneapolis Hospital System Revenue, Fairview Hospital, Series 1993-A
(MBIA Insured)...................................................... 5.25 11-15-19 1,378,260
500 Minneapolis-St. Paul HRA, Health One (MBIA Insured)..................... 6.75 08-15-14 533,885
----------
8,595,191
----------
HOUSING REVENUE (37.1%):
-------------------------------------------------------------------------------------------------------
2,170 Brooklyn Center Multi-Family Housing Revenue, Four Courts, AMT.......... 7.50(e) 06-01-25 2,164,553
1,430 Minnesota HFA, Single Family Mortgage Revenue, Series 1991-A,
AMT (FHA Insured) .................................................. 7.45 07-01-22 1,488,087
----------
See accompanying notes to investments in securities on page 44.
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 605 Minnesota HFA, Single Family Mortgage Revenue, Series 1992-G............ 6.50% 07-01-06 $ 622,418
2,725 Minnetonka Senior Housing Project (Guaranteed by Presbyterian
Homes of Minnesota) ................................................ 7.70 06-01-25 2,784,241
1,400 New Brighton Multi-Family Mortgage Revenue, Polynesian Village Apartments,
Series 1995-A, AMT................................................. 7.60(e) 04-01-25 1,409,310
2,265 St. Anthony Multi-Family Housing Development (Asset Guaranty Insured)... 6.88 07-01-22 2,374,264
2,950 St. Paul HRA, Multi-Family Housing Revenue, Pointe of St. Paul Project,
Series 1992 (FNMA Backed) .......................................... 6.60 10-01-12 3,042,807
-----------
13,885,680
-----------
INDUSTRIAL REVENUE (9.4%):
-------------------------------------------------------------------------------------------------------
2,575 Bass Brook PCR, Minnesota Power and Light............................... 6.00 07-01-22 2,509,981
1,000 Metropolitan Council Sports Facilities Commission, Hubert
H. Humphrey Metrodome .............................................. 6.00 10-01-09 1,021,350
-----------
3,531,331
-----------
POLLUTION CONTROL REVENUE (4.3%):
-------------------------------------------------------------------------------------------------------
1,500 Minnesota Public Facilities Authority, Water Pollution Control Revenue,
Series 1992 ........................................................ 6.00 03-01-14 1,605,270
----------
PRE-REFUNDED/ESCROWED (14.9%):
-------------------------------------------------------------------------------------------------------
2,555 Dakota & Washington Counties HRA, Single Family Mortgage Revenue,
Bloomington, AMT (GNMA Backed)...................................... 8.38(e) 09-01-21 3,280,978
730 Duluth Economic Development Authority, Health Care Facilities Revenue, Series 1992,
Duluth Clinic (AMBAC Insured)...................................... 6.30 11-01-04 782,509
1,000 St. Cloud Hospital Revenue (AMBAC Insured).............................. 6.75 07-01-01 1,117,010
390 Southern Minnesota Municipal Power Agency (AMBAC Insured)............... 5.50 01-01-15 384,134
----------
5,564,631
-----------
UTILITY REVENUE (21.1%):
-------------------------------------------------------------------------------------------------------
1,000 Anoka County Solid Waste Disposal, National Rural Co-Op Utility, AMT.... 6.95(e) 12-01-08 1,062,510
1,500 Northern Minnesota Municipal Power Agency, Electric System, Series A.... 5.00 01-01-21 1,314,705
1,250 Northern Minnesota Municipal Power Agency, Electric System, Series B
(AMBAC Insured)..................................................... 5.50 01-01-18 1,194,938
1,000 Southern Minnesota Municipal Power Agency (FGIC Insured)................ 5.75 01-01-11 1,032,100
610 Southern Minnesota Municipal Power Agency (AMBAC Insured)............... 5.50 01-01-15 593,262
580 Southern Minnesota Municipal Power Agency (FGIC Insured)................ 5.00 01-01-16 522,023
2,275 Western Minnesota Municipal Power Agency (MBIA Insured)................. 5.50 01-01-15 2,192,349
----------
7,911,887
-----------
TOTAL MUNICIPAL BONDS (cost: $54,856,138) 56,478,058
-----------
SHORT-TERM SECURITIES (0.0%):
-------------------------------------------------------------------------------------------------------
10 Federated Minnesota Municipal Cash Trust................................3.28(c) 10,000
----------
TOTAL SHORT-TERM SECURITIES (cost: $10,000) 10,000
-----------
TOTAL INVESTMENTS IN SECURITIES (cost: $54,866,138) (d) $56,488,058
===========
</TABLE>
See accompanying notes to investments in securities on page 44.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
INVESTMENTS IN SECURITIES MARCH 31, 1996
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- -------------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS.)
MINNESOTA MUNICIPAL BONDS (159.2%):
EDUCATION REVENUE (14.0%):
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$1,250 Minnesota Higher Education Facilities Authority Revenue, Macalester College 5.55% 03-01-16 $ 1,220,513
1,000 Minnesota Higher Education Facilities Authority Revenue, Series 4A-1,
St. Thomas University............................................... 5.63 10-01-21 960,150
1,050 Minnesota Higher Education Facilities Authority Revenue, Series R1,
St. Thomas University............................................... 5.60 10-01-15 1,017,324
1,635 Minnesota Higher Education Facilities Authority Revenue, Series R2,
St. Thomas University............................................... 5.60 09-01-14 1,589,187
1,250 Minnesota State University Board Revenue, Series 1993-A, State
University System .................................................. 6.10 06-30-23 1,261,475
4,115 Minnesota State University Board Revenue, Series 1993-C, State
University System (MBIA Insured).................................... 5.60 06-30-16 4,026,857
3,720 Minnesota State University Board Revenue, Series 1993-C, State
University System (MBIA Insured).................................... 5.60 06-30-19 3,565,806
----------
13,641,312
----------
GENERAL OBLIGATION (31.2%):
----------------------------------------------------------------------------------------------------------
3,700 Becker, AMT (MBIA Insured).............................................. 6.25(e) 08-01-15 3,803,563
4,030 Buffalo Independent School District (FSA Insured)....................... 6.15 02-01-22 4,135,747
2,000 Hennepin County ........................................................ 5.75 10-01-10 2,026,820
3,225 Melrose Independent School District #740, Series A (FSA Insured)....... 5.63 02-01-13 3,216,035
1,825 Metropolitan Council.................................................... 5.13 12-01-08 1,812,115
775 Metropolitan Council.................................................... 5.13 12-01-09 763,274
500 Metropolitan Council.................................................... 5.13 12-01-10 487,090
3,400 Minneapolis Convention Center Facilities................................ 5.40 04-01-12 3,350,598
1,000 Minnesota State......................................................... 5.38 08-01-11 987,590
1,000 Prior Lake Independent School District (FGIC Insured)................... 5.25 02-01-16 945,730
2,140 Red Wing Independent School District #256, Series 1993-A................ 5.60 02-01-10 2,154,317
2,925 Red Wing Independent School District #256, Series 1993-A................ 5.70 02-01-12 2,941,848
1,625 Red Wing Independent School District #256, Series 1993-A................ 5.70 02-01-13 1,629,956
1,270 Rosemount Independent School District #196.............................. 5.70 04-01-12 1,275,182
1,000 Roseville Independent School District (FSA Insured)..................... 5.30 02-01-26 938,780
-----------
30,468,645
-----------
HEALTH CARE REVENUE (29.9%):
--------------------------------------------------------------------------------------------------------
4,000 Bloomington Health Care Facilities, Masonic Home Care Center
(AMBAC Insured) ................................................... 5.88 07-01-22 3,949,520
1,195 Brainerd Lutheran Hospital, Health Care Facilities, Series A
(FSA Insured) ..................................................... 6.65 03-01-17 1,274,336
1,250 Detroit Lakes Benedictine Health Systems (Connie Lee Insured).......... 6.00 02-15-19 1,245,275
720 Duluth Economic Development Authority, Hospital Facilities Revenue,
Duluth Clinic (AMBAC Insured)...................................... 6.20 11-01-12 745,128
</TABLE>
See accompanying notes to investments in securities on page 44.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1996
- ---------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$3,890 Duluth Economic Development Authority, Hospital Facilities Revenue,
Series 1992, Duluth Clinic (AMBAC Insured) ......................... 6.30% 11-01-22 $ 4,025,178
6,000 Duluth Economic Development Authority, Hospital Facilities Revenue,
Series 1993-C, St. Mary's Hospital (Connie Lee Insured)............. 6.00 02-15-20 5,976,900
2,105 Minneapolis Housing and Redevelopment Authority, Health One (MBIA Insured) 7.40 08-15-11 2,315,942
1,000 Minneapolis Health Care Facilities, Series 1993-A, Fairview Hospital
(MBIA Insured) 5.75 11-15-19 918,840
6,730 Robbinsdale North Memorial Medical Center, Series 1993-B (AMBAC Insured) 5.50 05-15-23 6,358,773
1,000 Rochester Health Care Facilities, Mayo Clinic Foundation, Mayo Medical Center,
Series 1992-I....................................................... 5.75 11-15-21 981,520
1,500 St. Paul HRA, Childrens Health Care (FSA Insured )...................... 5.50 08-15-25 1,426,635
-----------
29,218,047
-----------
HOUSING REVENUE (34.9%):
-------------------------------------------------------------------------------------------------------------
1,880 Dakota County HRA, Multi-Family Mortgage Revenue, Imperial Ridge Project,
Series 1993-A (GNMA Backed)......................................... 6.10 12-15-28 1,881,109
1,300 Minneapolis Multi-Family Housing Revenue, Olson Townhomes, Section 8, AMT 6.00(e) 12-01-19 1,242,995
1,115 Minnesota HFA, Multi-Family Rental Housing, Series-D.................... 5.90 02-01-14 1,112,458
2,295 Minnesota HFA, Multi-Family Rental Housing, Series-D.................... 6.00 08-01-22 2,264,890
2,500 Minnesota HFA, Rental Housing (AMBAC Insured)........................... 5.85 08-01-11 2,509,725
1,715 Minnesota HFA, Single Family Mortgage Revenue, AMT...................... 7.05(e) 07-01-22 1,776,088
4,235 Minnesota HFA, Single Family Mortgage Revenue, Series 1992-B2, AMT...... 6.15(e) 01-01-26 4,228,775
4,280 Minnesota HFA, Single Family Mortgage Revenue, Series 1992-C2, AMT...... 6.15(e) 07-01-23 4,229,325
3,870 Minnesota HFA, Single Family Mortgage Revenue, Series 1994-J, AMT....... 6.95(e) 07-01-26 4,013,654
1,225 Minnetonka Senior Housing Project (Guaranteed by Presbyterian
Homes of Minnesota) 7.25 06-01-09 1,267,569
760 Minnetonka Senior Housing Project (Guaranteed by Presbyterian
Homes of Minnesota) 7.50 06-01-14 784,981
2,565 Minnetonka Senior Housing Project (Guaranteed by Presbyterian
Homes of Minnesota) 7.55 06-01-19 2,621,173
4,120 New Brighton Multi-Family Mortgage Revenue, Polynesian Village Apartments,
Series 1995-A, AMT.................................................. 7.60(e) 04-01-25 4,147,398
2,000 St. Paul HRA (FNMA Backed).............................................. 6.40 03-01-21 2,036,040
----------
34,116,180
----------
INDUSTRIAL REVENUE (13.4%):
-------------------------------------------------------------------------------------------------------------
7,660 Bass Brook PCR, Minnesota Power and Light............................... 6.00 07-01-22 7,466,585
5,520 Metropolitan Council Sports Facilities Commission, Hubert H.
Humphrey Metrodome 6.00 10-01-09 5,637,852
----------
13,104,437
----------
OTHER REVENUE (3.9%):
-------------------------------------------------------------------------------------------------------------
1,500 St. Paul HRA, Civic Center, Series 1993................................. 5.45 11-01-13 1,465,110
2,500 St. Paul HRA, Sales Tax Revenue, Civic Center........................... 5.55 11-01-23 2,394,475
----------
3,859,585
----------
</TABLE>
See accompanying notes to investments in securities on page 44.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1996
- ----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- ----------------------------------------------------------------------------------------------------------------------------
POLLUTION CONTROL REVENUE (4.7%):
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$3,300 Minnesota Public Facilities Authority, Water Pollution Control Revenue Bonds,
Series 1992......................................................... 6.50% 03-01-14 $ 3,531,594
1,000 Minnesota Public Facilities Authority, Water Pollution Control Revenue Bonds 6.25 03-01-16 1,042,250
-----------
4,573,844
-----------
PRE-REFUNDED/ESCROWED (13.9%):
--------------------------------------------------------------------------------------------------------------
5,500 Dakota & Washington Counties HRA, Single Family Mortgage Revenue,
Bloomington, AMT (GNMA Backed)...................................... 8.38(e) 09-01-21 7,062,770
280 Duluth Economic Development Authority, Hospital Facilities Revenue,
Duluth Clinic (AMBAC Insured)....................................... 6.20 11-01-04 305,869
1,300 Duluth Economic Development Authority, Hospital Facilities Revenue,
Series 1992, Duluth Clinic (AMBAC Insured).......................... 6.30 11-01-04 1,393,509
3,715 Southern Minnesota Municipal Power Agency Power Supply.................. 5.75 07-01-16 3,765,487
1,000 University of Minnesota Hospital........................................ 6.75 12-01-16 1,095,590
-----------
13,623,225
-----------
UTILITY REVENUE (13.3%):
--------------------------------------------------------------------------------------------------------------
7,205 Northern Minnesota Municipal Power Agency, Electric System, Series B
(AMBAC Insured)..................................................... 5.50 01-01-18 6,887,620
4,665 Southern Minnesota Municipal Power Agency (FGIC Insured)................ 5.75 01-01-18 4,579,397
1,605 Western Minnesota Municipal Power Agency (MBIA Insured)................. 5.50 01-01-15 1,546,690
-----------
13,013,707
-----------
TOTAL MUNICIPAL BONDS (cost: $155,513,794) 155,618,982
-----------
SHORT-TERM SECURITIES (0.0%):
--------------------------------------------------------------------------------------------------------------
27 Federated Minnesota Municipal Cash Trust................................ 3.28(c) 27,000
-----------
TOTAL SHORT-TERM SECURITIES (cost: $27,000) 27,000
-----------
TOTAL INVESTMENTS IN SECURITIES (cost: $155,540,794) (d) $155,645,982
============
</TABLE>
See accompanying notes to investments in securities on page 44.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
INVESTMENTS IN SECURITIES MARCH 31, 1996
- ---------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- ---------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS.)
MINNESOTA MUNICIPAL BONDS (162.4%):
EDUCATION REVENUE (14.6%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$1,010 Minnesota Higher Education Facilities Authority Revenue, Series 4A-1,
St. Thomas University............................................... 5.63% 10-01-21 $ 969,752
1,000 Minnesota Higher Education Facilities Authority Revenue, Series R1,
St. Thomas University............................................... 5.60 10-01-15 968,880
300 Minnesota Higher Education Facilities, Series 4-C, Macalester College... 5.50 03-01-12 289,203
1,075 Northfield, St. Olaf College Revenue.................................... 6.30 10-01-12 1,129,072
-----------
3,356,907
-----------
GENERAL OBLIGATION (24.6%):
-------------------------------------------------------------------------------------------------------
1,300 Burnsville-Eagan-Savage Independent School District #191................ 5.13 02-01-17 1,215,422
500 Minneapolis Special Schools District (FSA Insured)...................... 5.38 02-01-14 486,270
1,000 Prior Lake Independent School District (FGIC Insured)................... 5.25 02-01-16 945,730
1,750 Red Wing Independent School District #256, Series 1993-A................ 5.70 02-01-11 1,764,630
1,300 Waconia Independent School District #110, Series 1993-A (FSA Insured)... 5.45 02-01-15 1,252,485
-----------
5,664,537
-----------
HEALTH CARE REVENUE (32.0%):
-------------------------------------------------------------------------------------------------------
1,080 Duluth Economic Development Authority, Hospital Facilities Revenue,
Duluth Clinic (AMBAC Insured)....................................... 6.20 11-01-12 1,117,692
2,000 Princeton, Fairview Hospital Revenue, Series 1991-C (MBIA Insured)...... 6.25 01-01-21 2,051,580
1,500 Robbinsdale, North Memorial Medical Center, Series 1993-B (AMBAC Insured) 5.50 05-15-23 1,417,260
1,800 Rochester Health Care Facilities, Mayo Clinic Foundation, Mayo Clinic Center,
Series 1992-I....................................................... 5.75 11-15-21 1,766,736
1,000 Wadena County Health Care Facilities Revenue............................ 7.75 09-01-24 1,027,580
----------
7,380,848
-----------
</TABLE>
See accompanying notes to investments in securities on page 44.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1996
- --------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- --------------------------------------------------------------------------------------------------------------------
HOUSING REVENUE (40.1%):
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$1,000 Brooklyn Center Multi-Family Housing Revenue, Four Courts, AMT.......... 7.50%(e) 06-01-25 $ 997,490
2,000 Burnsville Multi-Family Mortgage Revenue, Series A (FSA Insured) ....... 7.10 01-01-30 2,101,880
1,000 Edina HRA, Edina Park Plaza............................................. 7.70 12-01-28 1,054,660
1,000 Minneapolis, Findley Place, Series 1994, AMT............................ 7.00(e) 12-01-16 1,041,050
1,675 Minneapolis Multi-Family Housing Revenue, Olson Townhomes, AMT.......... 6.00(e) 12-01-19 1,601,551
1,585 Minnesota HFA, Single Family Mortgage Revenue, Series 1991-A,
AMT (FHA Insured) .................................................. 7.45 07-01-22 1,649,383
750 Minnesota HFA, Single Family Mortgage Revenue, Series C, AMT (FHA Insured)9.00(e) 08-01-18 786,870
----------
9,232,884
----------
INDUSTRIAL REVENUE (16.0%):
------------------------------------------------------------------------------------------------------
3,780 Bass Brook PCR, Minnesota Power and Light............................... 6.00 07-01-22 3,684,555
----------
OTHER REVENUE (4.2%):
------------------------------------------------------------------------------------------------------
1,000 St. Paul HRA, Civic Center, Series 1993................................. 5.45 11-01-13 976,740
----------
PRE-REFUNDED/ESCROW (16.5%):
------------------------------------------------------------------------------------------------------
420 Duluth Economic Development Authority, Hospital Facilities Revenue,
Duluth Clinic (AMBAC Insured)....................................... 6.20 11-01-04 458,804
1,580 University of Minnesota Hospital........................................ 6.75 12-01-16 1,731,032
1,510 Western Minnesota Municipal Power Agency................................ 6.63 01-01-16 1,614,915
----------
3,804,751
UTILITY REVENUE (14.4%):
------------------------------------------------------------------------------------------------------
1,500 Moorhead Public Utilities Revenue (MBIA Insured)........................ 6.25 11-01-12 1,564,755
1,800 Southern Minnesota Municipal Power Agency (FGIC Insured)................ 5.75 01-01-18 1,766,970
----------
3,331,725
----------
TOTAL INVESTMENTS IN SECURITIES (cost: $37,377,574) (d) $37,432,947
===========
</TABLE>
See accompanying notes to investments in securities on page 44.
<TABLE>
<CAPTION>
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
INVESTMENTS IN SECURITIES MARCH 31, 1996
- ----------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- ----------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS.)
ARIZONA MUNICIPAL BONDS (159.6%):
EDUCATION REVENUE (5.2%):
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$1,000 University of Arizona................................................... 6.25% 06-01-11 $ 1,047,400
1,000 University of Arizona................................................... 6.35 06-01-14 1,062,250
-----------
2,109,650
-----------
GENERAL OBLIGATION (45.6%):
--------------------------------------------------------------------------------------------------------
3,000 Maricopa County Unified School District #11 ............................ 5.50 07-01-10 2,935,950
1,500 Maricopa County Unified School District #41............................. 6.25 07-01-15 1,488,210
2,000 Maricopa County Unified School District #48............................. 5.00 07-01-10 1,911,420
1,600 Maricopa County, Alhambra Elementary School District #68 (AMBAC Insured) 5.63 07-01-13 1,586,768
1,800 Mesa General Obligation Project of 1987 (MBIA Insured).................. 5.70 07-01-08 1,851,930
2,000 Pima County/Tucson Unified School District #1, Series D (FGIC Insured).. 5.40 07-01-13 1,943,000
2,000 Pima County Unified School District #6 (FGIC Insured)................... 5.75 07-01-12 2,022,680
600 Santa Cruz Valley Unified School District #35 (AMBAC Insured)........... 5.80 07-01-09 620,160
1,000 Tempe, Series B......................................................... 6.00 07-01-12 1,026,480
1,750 Tucson.................................................................. 5.38 07-01-20 1,655,815
1,630 Yavapai County Unified School District #22 (FGIC Insured)............... 5.95 07-01-14 1,660,628
-----------
18,703,041
-----------
HEALTH CARE REVENUE (24.7%):
--------------------------------------------------------------------------------------------------------
1,500 Arizona Hospital Health Facilities Authority (MBIA Insured)............. 6.25 09-01-11 1,562,160
1,000 Arizona Hospital System Revenue, Samaritan Health System (MBIA Insured). 5.63 12-01-15 979,530
1,750 Maricopa County Health Facilities, Catholic Health Care West, Series A
(MBIA Insured) ..................................................... 7.75 07-01-11 1,760,675
1,100 Maricopa County Health Facilities, Catholic Health Care West, Series A
(MBIA Insured) ..................................................... 6.00 07-01-21 1,113,431
2,000 Scottsdale Industrial Development Authority, Scottsdale Memorial Hospital
(AMBAC Insured)..................................................... 5.25 09-01-18 1,844,040
1,360 University of Arizona Medical Center (MBIA Insured)..................... 5.00 07-01-13 1,256,191
700 University of Arizona Medical Center (MBIA Insured)..................... 6.25 07-01-16 721,280
1,000 University of Arizona Medical Center (MBIA Insured)..................... 5.00 07-01-21 896,970
----------
10,134,277
-----------
HOUSING REVENUE (9.6%):
--------------------------------------------------------------------------------------------------------
1,000 Peoria Multi-Family Housing Mortgage Revenue (GNMA Backed).............. 7.30 02-20-28 1,069,370
500 Phoenix Industrial Development Authority, Multi-Family Mortgage Revenue
(FHA Insured)....................................................... 6.80 11-01-25 516,015
2,305 Tempe Industrial Development Authority, Multi-Family Mortgage Revenue
(FHA Insured)....................................................... 6.13 06-01-10 2,349,279
-----------
3,934,664
-----------
INDUSTRIAL REVENUE (6.5%):
--------------------------------------------------------------------------------------------------------
1,750 Maricopa County Stadium District (MBIA Insured)......................... 5.50 07-01-13 1,719,252
1,000 Navajo County Pollution Control Corporation (AMBAC Insured)............. 5.50 08-15-28 946,580
-----------
2,665,832
-----------
</TABLE>
See accompanying notes to investments in securities on page 44.
<TABLE>
<CAPTION>
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1996
- ---------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (B) RATE MATURITY VALUE (A)
- ---------------------------------------------------------------------------------------------------------------------
LEASE REVENUE (6.4%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$2,500 Scottsdale Municipal Property Corporation (FGIC Insured)................ 6.25% 11-01-14 $ 2,599,525
-----------
SALES TAX REVENUE (2.5%):
-------------------------------------------------------------------------------------------------------
1,050 Oro Valley, Canada Hills Water Revenue (MBIA Insured)................... 5.55(f) 07-01-17 1,031,898
-----------
TRANSPORTATION REVENUE (17.8%):
-------------------------------------------------------------------------------------------------------
1,000 Arizona State Transportation Board...................................... 5.25 07-01-09 992,380
1,300 City of Phoenix, Junior Lien Street & Highway (FGIC Insured)............ 6.25 07-01-11 1,361,230
2,000 Tucson Airport Authority Revenue Funding (MBIA Insured)................. 5.70 06-01-13 1,977,400
3,000 Tucson Street & Highway User Revenue (MBIA Insured)..................... 5.50 07-01-12 2,961,690
-----------
7,292,700
-----------
UTILITY REVENUE (41.3%):
--------------------------------------------------------------------------------------------------------
1,750 Central Arizona Water Conservation District, Series A................... 5.50 11-01-10 1,758,628
1,050 Chandler Water & Sewer (FGIC Insured)................................... 5.00 07-01-08 1,021,787
1,150 Chandler Water & Sewer (FGIC Insured)................................... 5.00 07-01-09 1,106,760
2,800 Phoenix Civic Improvement Corporation (AMBAC Insured)................... 5.50 07-01-21 2,681,924
2,000 Phoenix Water System Revenue............................................ 5.50 07-01-22 1,888,580
2,000 Salt River Project, Electric System Revenue............................. 6.25 01-01-27 2,041,600
2,500 Tuscon Water Revenue.................................................... 5.50 07-01-14 2,460,175
4,000 Tucson Water Revenue Refunding, Series A (FGIC Insured)................. 5.75 07-01-18 3,974,760
-----------
16,934,214
-----------
TOTAL INVESTMENTS IN SECURITIES (cost: $64,801,945) (d) $65,405,801
===========
</TABLE>
See accompanying notes to investments in securities on page 44.
<TABLE>
<CAPTION>
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
INVESTMENTS IN SECURITIES MARCH 31, 1996
- ---------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- ---------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS.)
FLORIDA MUNICIPAL BONDS (157.2%):
GENERAL OBLIGATION (12.1%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$1,000 Dade County Seaport (AMBAC Insured)..................................... 6.25% 10-01-21 $ 1,089,270
2,000 Indian River County School District (FSA Insured)....................... 5.50 04-01-13 1,958,920
1,000 Miami (FGIC Insured).................................................... 5.50 12-01-13 978,910
-----------
4,027,100
-----------
EDUCATION (2.9%):
-------------------------------------------------------------------------------------------------------
1,000 State of Florida Board of Regents, University System Improvements
(AMBAC Insured) .................................................... 5.38 07-01-13 964,510
---------
HEALTH CARE REVENUE (31.5%):
-------------------------------------------------------------------------------------------------------
1,500 Cape Canaveral Hospital District (AMBAC Insured)........................ 5.25 01-01-13 1,427,625
1,000 Dade County Health Facilities Authority, Baptist Hospital Miami
(MBIA Insured) ..................................................... 5.25 05-15-21 922,680
2,000 Dade County Public Facilities Revenue, Jackson Memorial Hospital
(MBIA Insured) ..................................................... 5.25 06-01-23 1,840,060
1,000 Hillsborough County Industry Development Authority, Alleghany Health System
(MBIA Insured)...................................................... 5.75 12-01-21 975,040
2,500 Lakeland Hospital System Revenue, Lakeland Regional Medical Center
(FGIC Insured)...................................................... 5.75 11-15-15 2,470,850
1,500 Palm Beach County Health Facilities Authority Revenue, Jupiter Medical Center
Project (FSA Insured)............................................... 5.25 08-01-18 1,388,460
1,500 South Miami Health Facilities Authority Revenue, Baptist Health Systems
(MBIA Insured)...................................................... 5.50 10-01-20 1,441,515
-----------
10,466,230
-----------
MISCELLANEOUS & SALES TAX REVENUE (31.1%):
-------------------------------------------------------------------------------------------------------
1,500 Boca Raton Community Redevelopment Tax Increment, Minzer Park Project
(FGIC Insured)...................................................... 5.88 03-01-13 1,524,105
1,000 Dade County Professional Sports Franchise Facilities, Series B
(FGIC Insured) ..................................................... 6.00 10-01-22 1,008,600
1,500 Florida State Division Finance Department, Preservation 2000, Series A
(FSA Insured) ...................................................... 5.50 07-01-10 1,494,000
1,250 Hernando County Capital Improvements Revenue (MBIA Insured)............. 5.75 02-01-21 1,230,400
3,000 Orange County Public Service Tax Revenue (FGIC Insured)................. 6.00 10-01-24 3,032,280
1,000 Orange County Sales Tax Revenue (FGIC Insured).......................... 6.13 01-01-19 1,012,190
1,000 Tampa Utilities Tax (AMBAC Insured)..................................... 6.00 10-01-15 1,009,310
------------
10,310,885
-----------
</TABLE>
See accompanying notes to investments in securities on page 44.
<TABLE>
<CAPTION>
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1996
- ---------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (a) RATE MATURITY VALUE (a)
- ---------------------------------------------------------------------------------------------------------------------
PRE-REFUNDED/ESCROWED (8.1%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$2,500 Palm Beach County Health Facilities Authority Revenue (FSA Insured)..... 5.75% 12-01-03 $ 2,700,600
-----------
TRANSPORTATION REVENUE (17.5%):
-------------------------------------------------------------------------------------------------------
1,500 Dade County Florida Aviation Revenue (MBIA Insured)..................... 5.60 10-01-26 1,440,765
1,500 Florida State Turnpike Authority, Series A (FGIC Insured)............... 5.50 07-01-10 1,494,000
1,000 Florida State Turnpike Authority, Series A (FGIC Insured)............... 5.25 07-01-11 964,820
2,000 Hillsborough County Aviation Authority, Tampa International Airport, Series B
(FGIC Insured)...................................................... 5.60 10-01-19 1,924,220
-----------
5,823,805
-----------
UTILITY REVENUE (54.0%):
-------------------------------------------------------------------------------------------------------
2,500 Charlotte County Utilities (FGIC Insured)............................... 5.50 10-01-17 2,423,400
1,000 City of Panama City Beach Water & Sewer (AMBAC Insured)................. 5.50 06-01-18 949,610
2,000 City of Port Orange Water & Sewer (AMBAC Insured)....................... 5.25 10-01-21 1,849,460
2,250 Dade County Water & Sewer (FGIC Insured)................................ 5.50 10-01-25 2,161,282
1,700 Florida Keys, Aqueduct Water Revenue (AMBAC Insured).................... 5.25 09-01-21 1,570,035
1,250 Florida State Municipal Power Agency, St. Lucie Project (FGIC Insured).. 5.70 10-01-16 1,230,700
1,000 Kissimmee Utility Authority, Electrical Systems Improvement (FGIC Insured)5.50 10-01-15 970,910
1,000 Lakeland Waste Water Improvement Revenue (MBIA Insured)................. 5.50 10-01-16 956,210
2,500 Sarasota County Utility System (FGIC Insured)........................... 5.50 10-01-22 2,363,600
1,500 Seacoast Utilities Authority, Water & Sewer (FGIC Insured).............. 5.50 03-01-13 1,469,220
2,000 Seacoast Utilities Authority, Water & Sewer (FGIC Insured).............. 5.50 03-01-16 1,976,080
-----------
17,920,507
-----------
TOTAL INVESTMENTS IN SECURITIES (cost: $52,066,757) (d) $52,213,637
===========
</TABLE>
See accompanying notes to investments in securities on page 44.
<TABLE>
<CAPTION>
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
INVESTMENTS IN SECURITIES MARCH 31, 1996
- ---------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- ---------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS.)
COLORADO MUNICIPAL BONDS (158.2%):
CERTIFICATES OF PARTICIPATION (2.2%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$1,450 Pueblo County School District #060 Refunding, (MBIA Insured)............ 5.38 12-01-10 $ 1,433,949
-----------
EDUCATION REVENUE (15.9%):
-------------------------------------------------------------------------------------------------------
1,490 Auraria Higher Education Center Revenue Refunding
Parking Facilities (FSA Insured).................................... 5.30 04-01-12 1,441,322
4,000 Colorado Postsecondary Education Facility Authority Revenue,
University of Denver Project (Connie Lee Insured)................... 6.00 03-01-16 4,007,960
2,500 Colorado State Board of Agriculture Revenue Refunding,
Colorado State University, Auxiliary Facilities (MBIA Insured)...... 6.40 03-01-11 2,621,375
1,250 Colorado State Board of Agriculture Revenue Refunding &
Improvement, Fort Lewis College (FGIC Insured)...................... 6.50 10-01-12 1,336,587
1,000 University of Colorado, University Revenue, Research Building
Revolving Fund (MBIA Insured)....................................... 6.13 06-01-12 1,039,540
-----------
10,446,784
-----------
GENERAL OBLIGATION (51.0%):
-------------------------------------------------------------------------------------------------------
2,190 Adams County School District #12, Thornton (FGIC Insured)............... 6.20 12-15-10 2,310,384
1,000 Animas Fire Protection District (FGIC Insured).......................... 5.20 12-01-15 944,620
3,000 Boulder Larimer & Weld Counties, St. Vrain Vy School District
Revenue Refunding, Series A (MBIA Insured).......................... 6.00 12-15-10 3,129,510
2,600 Denver City & County School District #1 Refunding,
Series A (MBIA Insured)............................................. 5.13 12-01-12 2,456,038
725 El Paso County School District #020 (FSA Insured)....................... 5.55 12-15-14 716,126
2,000 Goldsmith Metropolitan District, Revenue Refunding (MBIA Insured)...... 6.13 12-01-12 2,072,220
4,000 Highlands Ranch Metropolitan District #2 Revenue Refunding (FSA Insured) 5.00 06-15-16 3,664,840
5,825 Jefferson County School District #R-001 (AMBAC Insured )................ 6.00 12-15-12 6,023,865
2,435 Jefferson County School District #R-001 (AMBAC Insured)................. 6.25 12-15-12 2,558,601
5,000 Larimer County School District #R1, Poudre Improvement (MBIA Insured)... 6.15 12-15-16 5,180,050
1,285 Larimer & Weld Counties School District #Re-5J (AMBAC Insured).......... 5.75 11-15-20 1,268,244
1,000 Pueblo County School District #070, Series B (MBIA Insured)............. 5.30 12-01-15 943,940
2,500 Summit Country School District #Re 1 Refunding & Improvement,
Series A (FGIC Insured)............................................. 5.10 12-01-15 2,312,600
-----------
33,581,038
-----------
HEALTH CARE REVENUE (38.3%):
-------------------------------------------------------------------------------------------------------
1,000 Colorado Health Facilities Authority Revenue, Childrens Hospital Association
(MBIA Insured)...................................................... 5.25 10-01-26 917,750
6,500 Colorado Health Facilities Authority Revenue, North Colorado
Medical Center (MBIA Insured)....................................... 6.00 05-15-20 6,581,445
2,000 Colorado Health Facilities Authority Revenue, Sisters of Charity
Health Care, Series A (AMBAC Insured)............................... 6.00 05-15-22 2,019,440
4,260 Denver City & County Revenue, Childrens Hospital Association
Project (FGIC Insured).............................................. 6.00 10-01-15 4,255,144
</TABLE>
See accompanying notes to investments in securities on page 44.
<TABLE>
<CAPTION>
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1996
- ----------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$3,560 Logan County Health Care Facilities Revenue, Western Health
Network Inc. (MBIA Insured)......................................... 5.90% 01-01-19 $ 3,524,435
7,625 University of Colorado Hospital Authority, Hospital Revenue,
Series A (AMBAC Insured)............................................ 6.40 11-15-22 7,915,741
-----------
25,213,955
-----------
HOUSING REVENUE (4.6%):
--------------------------------------------------------------------------------------------------------
1,100 Colorado School of Mines, Auxiliary Facilities Revenue Refunding
(MBIA Insured)...................................................... 5.00 12-01-13 1,029,985
2,000 Snowmass Village Multi-Family Housing, Revenue Refunding
Essential Function Housing (FSA Insured)........................... 6.25 12-15-16 2,040,100
-----------
3,070,085
-----------
MISCELLANEOUS & SALES TAX REVENUE (7.9%):
--------------------------------------------------------------------------------------------------------
5,000 City of Westminister County Sales & Use Tax Refunding Revenue,
Series A (FGIC Insured)............................................. 6.25 12-01-12 5,200,950
-----------
POLLUTION CONTROL REVENUE (15.7%):
---------------------------------------------------------------------------------------------------------
5,000 Adams County Pollution Control Revenue Refunding, Public
Service Company Project, Series A (MBIA Insured).................... 5.88 04-01-14 5,055,600
5,425 Morgan County Pollution Control Revenue Refunding,
1st Meeting Public Service Company, Series A (MBIA Insured)......... 5.50 06-01-12 5,282,974
-----------
10,338,574
-----------
TRANSPORTATION REVENUE (21.1%):
--------------------------------------------------------------------------------------------------------
4,500 Arapahoe County Capital Improvements Revenue (MBIA Insured)............. 6.05 08-31-15 4,634,550
1,000 Denver City & County Airport Revenue, Series A (MBIA Insured)........... 5.50 11-15-25 948,250
1,500 Denver City & County Airport Revenue, Series A (MBIA Insured)........... 5.60 11-15-20 1,441,830
2,200 Denver City & County Airport Revenue, Series A (MBIA Insured)........... 5.70 11-15-25 2,132,592
4,500 Regional Transportation District Sales Tax Revenue Refunding
& Improvement (FGIC Insured)........................................ 6.25 11-01-12 4,715,640
-----------
13,872,862
-----------
UTILITY REVENUE (1.5%):
--------------------------------------------------------------------------------------------------------
1,000 Woodland Park Waste Water Utility Revenue (MBIA Insured)................ 5.50 12-01-15 976,440
-----------
TOTAL INVESTMENTS IN SECURITIES (cost: $105,714,285) (d) $104,134,637
============
</TABLE>
See accompanying notes to investments in securities on page 44.
THE VOYAGEUR FUNDS
NOTES TO INVESTMENTS IN SECURITIES
- --------------------------------------------------------------------------------
(a) Securities are valued by procedures described in note 2 to the
Financial Statements.
(b) Investments in bonds, by rating category (unaudited) as a percentage of
total bonds, are as follows:
<TABLE>
<CAPTION>
Aaa/AAA Aa/AA A/A Baa/BBB Unrated Total
------- ----- --- ------- ------- -----
<S> <C> <C> <C> <C> <C>
Minnesota Municipal Income Fund, Inc............... 56% 15% 18% -- 11% 100%
Minnesota Municipal Income Fund II, Inc............ 61% 13% 20% -- 6% 100%
Minnesota Municipal Income Fund III, Inc........... 44% 18% 33% -- 5% 100%
Arizona Municipal Income Fund, Inc................. 71% 16% 11% 2% -- 100%
Florida Insured Municipal Income Fund.............. 100% -- -- -- -- 100%
Colorado Insured Municipal Income Fund, Inc........ 100% -- -- -- -- 100%
</TABLE>
(c) Dividend yields change daily to reflect current market conditions. Rate
shown is the quoted yield as of March 31, 1996.
(d) The cost of securities for federal income tax purposes for Minnesota
Municipal, Minnesota Municipal II, Minnesota Municipal III, Arizona
Municipal, Florida Insured Municipal and Colorado Insured Municipal was
$54,866,138, $155,580,028, $37,377,574, $64,801,945, $52,066,757 and
$105,714,285, respectively. The aggregate gross unrealized appreciation
and depreciation of securities based on these costs were as follows:
<TABLE>
<CAPTION>
Net
Gross Gross Unrealized
Unrealized Unrealized Appreciation/
Appreciation (Depreciation) (Depreciation)
------------ -------------- --------------
<S> <C> <C> <C>
Minnesota Municipal Income Fund, Inc............. 1,866,592 (244,672) 1,621,920
Minnesota Municipal Income Fund II, Inc.......... 1,870,874 (1,804,920) 65,954
Minnesota Municipal Income Fund III, Inc......... 730,203 (674,830) 55,373
Arizona Municipal Income Fund, Inc............... 1,210,932 (607,076) 603,856
Florida Insured Municipal Income Fund............ 660,576 (513,696) 146,880
Colorado Insured Municipal Income Fund, Inc...... 674,140 (2,253,788) (1,579,648)
</TABLE>
(e) Securities represent private activity bonds issued after August 7,
1986. The interest on these securities is a tax preference item for
Alternative Minimum Tax purposes. The ratio of private activity bonds
to total investments in securities as of March 31, 1996 was as follows:
Minnesota Municipal Income Fund, Inc....................... 19.5%
Minnesota Municipal Income Fund II, Inc.................... 19.6%
Minnesota Municipal Income Fund III, Inc................... 16.2%
Arizona Municipal Income Fund, Inc......................... 0.0%
Florida Insured Municipal Income Fund...................... 0.0%
Colorado Insured Municipal Income Fund, Inc................ 0.0%
(f) At March 31, 1996, the cost of securities purchased on a when-issued
basis was $1,050,000.
VOYAGEUR FUNDS
FEDERAL INCOME TAX INFORMATION
- --------------------------------------------------------------------------------
Information for federal income tax purposes is presented as an aid to
shareholders in reporting dividend distributions for the fiscal year ended March
31, 1996 shown below. Shareholders must report distributions on a calendar year
basis for income tax purposes which may include distributions for portions of
two fiscal years. Accordingly, a notification which will reflect the amount to
be used for calendar year taxpayers will be mailed in January 1997. Shareholders
are advised to consult a tax adviser with respect to the tax consequences of
their investment in the Funds.
<TABLE>
<CAPTION>
PER SHARE
--------------------------------------------------------------------------
VOYAGEUR VOYAGEUR
VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR FLORIDA COLORADO
MINNESOTA MINNESOTA MINNESOTA ARIZONA INSURED INSURED
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
INCOME INCOME INCOME INCOME INCOME INCOME
FUND, INC. FUND II, INC. FUND III, INC.FUND, INC. FUND FUND, INC.
---------- ------------- ------------- ---------- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Distributions to
Common shareholders from:
Investment income - net (none qualifying for
for the corporate dividend received deduction): $.9300 $.7950 $.7225 $.7313 $.7225 $.7000
========= ========= ========= ========= ========= =========
Distributions to
Preferred shareholders from:
Investment income - net (none qualifying for
the corporate dividend received
deduction):
Series A......................... $1,916.90* $1,913.06 $1,927.76* $1,867.57 $1,885.21 $1,920.48
Series B......................... -- $1,920.11 -- $1,882.28 $1,867.58 $1,915.07
========= ========= ========= ========= ========= =========
</TABLE>
* Represents the single class of preferred stock outstanding.
For federal income tax purposes, 100% of the above net investment income
distributions were derived from interest on securities exempt from federal
income tax.
For state income tax purposes, the above net investment income distributions are
100% exempt from each state's respective income tax or intangibles tax as
applicable.
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INVESTMENT ADVISER AND
ACCOUNTING SERVICES AGENT
Voyageur Fund Managers, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402-4115
(612) 376-7000 / (800) 553-2143
ADMINISTRATORS
Mitchell Hutchins Asset Management Inc.
New York, New York
Princeton Administrators L.P.
Plainsboro, New Jersey
(on Colorado Insured Municipal
Income Fund, Inc. only)
CUSTODIAN
First Trust, N.A.
St. Paul, Minnesota
SHAREHOLDER SERVICING AGENT
Norwest Bank Minnesota, N.A.
161 North Concord Exchange
South St. Paul, Minnesota 55075
(612) 450-4064 / (800) 468-9716
PREFERRED SHARES
REMARKETING AGENTS
Smith Barney Inc.
New York, New York
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
New York, New York
(on Colorado Insured Municipal
Income Fund, Inc. only)
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Minneapolis, Minnesota
GENERAL COUNSEL
Dorsey & Whitney P.L.L.P
Minneapolis, Minnesota
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that from time to time the Fund may purchase at
market prices shares of its common stock in the open market.
This report, including the financial statements herein, is sent to the
shareholders of the Funds for their information. It is not a prospectus,
circular or representation intended for use in the purchase or sale of shares of
the Funds or any securities mentioned in this report.
