<PAGE>
FOR TAX-EXEMPT INCOME
VOYAGEUR
Closed-End Municipal
Bond Funds
(photo of illustration from Tax Exempt Income Brochure)
service and guidance
professional management
goals
2000
Semi-Annual
Report
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUNDS I, II, III
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND
DELAWARE(SM)
INVESTMENTS
- -----------
Philadelphia o London
<PAGE>
(various photos demonstrating service and guidance, professional management and
goals)
professional
management
professional management
MORE THAN 70 YEARS
of investment experience has taught us that disciplined strategies and prudent
risk management are a sound approach to any market environment.
goals
goals
WHATEVER YOUR GOALS,
the years ahead will be shaped by choices you make today. Delaware Investments
offers many options that can be an appropriate part of a sound investment plan.
service and guidance
service and guidance
DELAWARE INVESTMENTS BELIEVES THAT
the guidance of a professional financial adviser is vital to your long-term
success. We are committed to providing you and your adviser with the highest
quality information and service.
<PAGE>
A TRADITION OF SOUND INVESTING
Each of the six Funds in this report are closed-end management investment
companies whose shares trade on the American Stock Exchange (ASE) in New York.
Each Fund seeks 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. In addition, Florida Insured Municipal Income Fund
seeks investments that enable its shares to be exempt from Florida's intangible
personal property tax. Each Fund seeks to achieve its objective by investing
substantially all of its assets in tax-exempt municipal obligations. The
Colorado and Florida Insured Municipal Income Funds will invest substantially
all of their assets in obligations insured by insurers rated Aaa by Moody's or
AAA by S&P at the time of investment or, with respect to 20% of their assets, of
comparable quality. The Arizona and Minnesota I, II and III Municipal Income
Funds will invest substantially all of their net assets in tax-exempt
obligations rated investment grade or the equivalent at the time of purchase,
but they may each invest up to 10% of their assets in high-yield municipal bonds
rated not less than B or the equivalent at the time of purchase.
Investment Adviser
Delaware Management Company (Delaware Management), a series of Delaware
Management Business Trust, has been the Funds' investment adviser since May 1,
1997. Delaware Management is a part of Lincoln Financial Group, one of America's
largest publicly held diversified financial services companies, with global
insurance operations and more than $130 billion in assets under management.
Delaware Management currently has approximately $46 billion under management
as of September 30, 1999 for mutual fund shareholders and institutional
investors such as pension plans and foundations. In addition to the six
closed-end Funds in this report, Delaware Management also manages two closed-end
equity funds traded on the New York Stock Exchange.
Investment Objectives and Strategies
(photo of keyboard)
(photo of glasses, pen and keyboard)
Leveraging
Each of the six Funds in this report uses leveraging, a tool that is not usually
used by open-end mutual funds and one that can be an important contributor to
each Fund's income and capital appreciation potential. Of course, there is no
guarantee that leveraging will benefit any of the Funds. Leveraging could result
in a higher degree of volatility because each Fund's net asset value could be
more sensitive to fluctuations in short-term interest rates.
Delaware believes this volatility risk is reasonable given the benefits of
higher income potential.
Table of Contents
Letter to Shareholders Page 2
Portfolio Managers' Review Page 4
Minnesota Municipal Income Funds Page 5
Arizona Municipal Income Fund Page 7
Florida Insured Municipal
Income Fund Page 8
Colorado Insured Municipal
Income Fund Page 9
Statements of Net Assets Page 11
Financial Highlights Page 24
commitment
<PAGE>
for
tax-exempt OCTOBER 7, 1999
income
2
Dear Shareholder:
IT HAS BEEN A DIFFICULT SIX MONTHS for municipal bond investors as concerns
about higher interest rates, coupled with a booming stock market, left municipal
bonds struggling to stay in the ballgame.
At the opening of fiscal 2000, the U.S. economy was growing at a healthy
pace. The combination of tame inflation, a healthy U.S. economy, and overseas
economic improvements prompted investors to focus on investments with higher
growth potential like domestic stocks and foreign securities. The safe haven
that Treasuries and, to a smaller extent, municipal bonds had provided during
the turbulent markets of last autumn, was forgotten. As a result, Treasury
prices fell. Municipal bond prices fell, too, but not to the extent that
Treasuries did. Unlike Treasuries, municipal bond principal and interest
payments are not guaranteed by the U.S. government. By August 16, 1999, Treasury
yields were at a three-year high of 6.38%. Municipal yields also increased, but
not to the extent of Treasuries. As a result, long-term municipal bond yields
reached very attractive levels - with 30-year AAA municipal bonds offering 91%
of the income available from comparable maturity Treasury securities. We
considered this a compelling value, given that municipal bonds historically
offer an average of 84% of the income available from Treasuries (Source:
Municipal Market Data).
In early spring and summer, economic indicators showed strong growth in the
U.S. economy as well as a global economic recovery. Bond prices fell amid fear
that strong growth would spark inflation. To date, inflation has remained low,
despite persistent fears that tight labor markets could prompt rising wages.
As expected, the Federal Reserve Board, in an attempt to thwart potential
inflationary conditions, raised the federal funds rate (the rate banks charge
each other for overnight lending) twice, first on June 30 and then again on
August 24.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS
- -------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED SEPTEMBER 30, 1999
Based on Premium/ AMEX
Net Asset Value Discount Symbol
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund I -3.53% +7.49% VMN
Voyageur Minnesota Municipal Income Fund II -4.58% -1.32% VMM
Voyageur Minnesota Municipal Income Fund III -5.44% -0.78% VYM
Lipper Minnesota Closed-End Municipal Fund Average (6 Funds) -3.44%
- -------------------------------------------------------------------------------------------------------------------
Voyageur Arizona Municipal Income Fund -4.92% -0.69% VAZ
Lipper Other States Closed-End Municipal Debt Fund Average (19 Funds) -4.79%
- -------------------------------------------------------------------------------------------------------------------
Voyageur Florida Insured Municipal Income Fund -5.04% -9.42% VFL
Lipper Florida Closed-End Municipal Debt Fund Average (17 Funds) -6.62%
- -------------------------------------------------------------------------------------------------------------------
Voyageur Colorado Insured Municipal Income Fund -5.97% -6.29% VCF
Lipper Other States Closed-End Municipal Debt Fund Average (19 Funds) -4.79%
- -------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index -2.16%
Lehman Brothers Insured Municipal Bond Index -3.04%
</TABLE>
The results shown above are based on net asset value and assume reinvestment of
distributions. The Lehman Brothers Municipal Bond Index and Lehman Brothers
Insured Municipal Bond Index are unmanaged and include no management fees or
expenses. It is not possible to invest directly in any index. Past performance
does not guarantee future results.
<PAGE>
for
tax-exempt
income
3
Investors were reassured when fears of inflation were calmed after the second
rate increase and municipal bond prices began to rise somewhat.
Municipal bond performance has been weak over the past few months but it
looks like an upturn may be in the wings. Bond yields have generally been on the
rise, particularly in the last month of the fiscal period. This was due, in
part, to continued focus by investors on the stock market. 30-year AAA general
obligation municipal bonds were yielding 5.63% on September 30, 1999 (Source:
Municipal Market Data). As a result, retail investors have recently returned to
the market, showing a renewed interest in the municipal bond arena.
On the following pages, the senior portfolio managers for Delaware
Investments closed-end municipal bond funds discuss in further detail the
performance of each Fund over the past six months. We strongly urge you to
review their commentary.
We see the remainder of the year as a time to be cautiously optimistic.
Investors have appeared more interested in municipal bonds recently, which could
contribute to attractive municipal bond performance as we move further into
fiscal 2000. As always, we believe that municipal bonds provide solid
opportunities for tax-advantaged investing. State and locally issued bonds
provide an attractive level of current income that is exempt from both federal
and from state income taxes for residents of states where the bonds are issued.
Thank you for your continued confidence in Delaware Investments. We look
forward to reporting to you again next spring.
Sincerely,
/s/ Wayne A. Stork
WAYNE A. STORK
Chairman,
Delaware Investments Family of Funds
/s/ David K. Downes
DAVID K. DOWNES
President and Chief Executive Officer,
Delaware Investments Family of Funds
Municipal bonds typically offer about 84% of the income that is offered by
comparable Treasury Securities (Source: Municipal Market Data).
10/31/89 90%
11/30/89 87%
12/31/89 86%
1/31/90 83%
2/28/90 82%
3/31/90 83%
4/30/90 82%
5/31/90 82%
6/30/90 85%
7/31/90 83%
8/31/90 81%
9/30/90 81%
10/31/90 81%
11/30/90 82%
12/31/90 85%
1/31/91 84%
2/28/91 84%
3/31/91 84%
4/30/91 83%
5/31/91 82%
6/30/91 83%
7/31/91 82%
8/31/91 83%
9/30/91 85%
10/31/91 83%
11/30/91 83%
12/31/91 87%
<PAGE>
1/31/92 84%
2/29/92 83%
3/31/92 83%
4/30/92 81%
5/31/92 82%
6/30/92 80%
7/31/92 79%
8/31/92 82%
9/30/92 84%
10/31/92 85%
11/30/92 82%
12/31/92 83%
1/31/93 83%
2/28/93 80%
3/31/93 84%
4/30/93 82%
5/31/93 82%
6/30/93 82%
7/31/93 84%
8/31/93 87%
9/30/93 86%
10/31/93 87%
11/30/93 86%
12/31/93 82%
1/31/94 83%
2/28/94 84%
3/31/94 87%
4/30/94 84%
5/31/94 81%
6/30/94 83%
7/31/94 82%
8/31/94 82%
9/30/94 81%
10/31/94 82%
11/30/94 84%
12/31/94 84%
1/31/95 81%
2/28/95 80%
3/31/95 80%
4/30/95 82%
5/31/95 85%
6/30/95 89%
7/31/95 86%
8/31/95 88%
9/30/95 90%
10/31/95 88%
11/30/95 87%
12/31/95 88%
1/31/96 87%
2/29/96 84%
3/31/96 86%
4/30/96 84%
5/31/96 84%
6/30/96 83%
7/31/96 82%
8/31/96 81%
9/30/96 80%
10/31/96 83%
11/30/96 84%
12/31/96 82%
1/31/97 82%
2/28/97 81%
3/31/97 81%
4/28/97 81%
5/30/97 80%
6/30/97 80%
7/31/97 82%
8/29/97 81%
9/30/97 82%
10/31/97 85%
11/30/97 86%
12/31/97 85%
1/31/98 86%
2/28/98 86%
3/31/98 87%
4/30/98 87%
5/31/98 87%
6/30/98 90%
7/31/98 89%
<PAGE>
8/31/98 94%
9/30/98 97%
10/31/98 96%
11/30/98 96%
12/31/98 97%
1/31/99 95%
2/28/99 89%
3/31/99 88%
4/30/99 87%
5/31/99 86%
6/30/99 87%
7/31/99 86%
8/31/99 89%
9/30/99 91%
The above chart shows the percentage of income that the average 30-year
AAA-rated general obligation bond provided compared to a 30-year U.S. Treasury
bond. Unlike Treasuries, the U.S. government does not guarantee principal and
interest of municipal bonds. Municipal bonds have historically had annual
default rates of less than 2%. Source: Municipal Market Data.
<PAGE>
for
tax-exempt
income
4
Portfolio Managers' Review
ELIZABETH H. HOWELL
Vice President/Senior Portfolio Manager
Minnesota Municipal Income Funds I, II, III
PATRICK P. COYNE AND
MITCHELL L. CONERY
Vice Presidents/Senior Portfolio Managers
Florida Insured Municipal Income Fund
ANDREW M. MCCULLAGH, JR.
Vice President/Senior Portfolio Manager
Arizona Municipal Income Fund,
Colorado Insured Municipal Income Fund
October 7, 1999
EARLY LAST SPRING, ECONOMIC indicators hinted at inflationary conditions on the
horizon. Municipal bond yields rose and prices fell as investors sought to
preserve capital through very safe investments, like U.S. Treasuries. In an
attempt to thwart inflation, the Fed raised the federal funds rate on two
occasions - for the first time on June 30 and then once more on August 24. This
sequence of interest rate hikes pushed bond yields even higher, hampering bond
fund performance in the short term.
In our opinion, municipal bonds haven't performed as well as anticipated over
the past six months for a number of reasons.
o Municipal Bond Supply - Although municipal bond supply has dropped
dramatically so far in 1999, there remains a bond surplus in the market. In
1998, $285 billion worth of municipal bonds were issued - the second
largest annual volume in the market's history (Source: The Bond Buyer).
o The Popularity of Equities - Continuing economic expansion and falling
interest rates over the past nine years has led to attractive stock market
returns. Many investors have sought these more aggressive investments,
sometimes at the risk of not maintaining a well-diversified portfolio.
The bond market staged a small comeback toward the end of the six-month
period covered in this report, although not nearly enough to have a significant
impact on our six-month fund performance. We'd like to remind you, however, that
over the long term each Fund in this report has provided very strong
performance. Although past performance is not a guarantee of future results, we
expect the coming months to provide a more stable interest rate environment, one
that favors our current positioning.
MUNICIPAL BONDS REMAIN AN ATTRACTIVE VALUE
For most of the past six months, state and locally issued bonds offered
extremely attractive income compared to Treasuries. This means that municipal
bond investors were able to earn almost the same income as Treasury investors -
with the added benefit of federal income tax exemption. Unlike Treasuries, the
U.S. government does not guarantee principal and interest of municipal bonds.
During the first half of fiscal 2000, global economic uncertainty and foreign
credit problems caused investors to flock to the safety and liquidity of U.S.
Treasuries. As a result, Treasury prices rose, pushing bond yields to record
lows.
<PAGE>
for
tax-exempt
income
5
Municipal bond yields fell, too, but not to the extent Treasuries did.
We were able to take advantage of unique buying opportunities during the past
six months as the gap between yields on municipal bonds and yields on taxable
fixed-income securities narrowed significantly. Traditionally municipal bonds
have yielded about 84% of the income available from 30-year U.S. Treasuries. As
of September 30, 1999 municipal bonds offered 91% of the income offered from
government-issued bonds (as shown on page 2).
Because municipal bonds were selling at a considerable discount to Treasuries
for most of the period, we were able to purchase new securities at what we
considered very attractive prices, enabling us to reposition the Funds'
portfolios for the remainder of calendar 1999.
On the pages that follow we will take a closer look at the Funds in the
context of each individual state.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUNDS - I, II, III
In February 1999, we began to modestly lengthen each Voyageur Minnesota
Municipal Income Fund's duration, based on a belief that interest rates could
move lower in 1999. Duration is a common measure of a bond or bond fund's
sensitivity to interest rates. The longer the duration, the more the bond's
price will change for a given increase or decrease in interest rates. A longer
duration improved our total return in the spring of 1999, as rates did decline.
However, the Federal Reserve Board raised its federal funds target twice this
past summer to quell inflationary fears. As rates inched higher throughout the
summer, the bond market suffered in general and the total returns of our three
Funds declined.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUNDS
BOND QUALITY AND PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1999
Fund I Fund II Fund III
- --------------------------------------------------------------------------------
AAA 55.77% 48.91% 60.14%
AA 12.37% 17.92% 5.27%
A 16.21% 17.53% 21.73%
BBB 0.92% 4.39% 4.18%
Unrated 14.73% 11.25% 8.68%
Average Effective Maturity 8.01 years 12.47 years 12.53 years
Average Effective Duration 5.77 years 7.61 years 7.87 years
Average Quality AA AA AA
Average Coupon 6.21% 6.03% 5.92%
Number of Securities 44 68 29
AMT Income 19.42% 20.04% 11.46%
Amount of Leveraging $20 million $60 million $15 million
<PAGE>
for
tax-exempt
income
6
The Voyageur Minnesota Municipal Income Funds I, II and III performed less
favorably than both the unmanaged Lehman Brothers Municipal Bond Index and the
average return of funds in the Lipper Minnesota Closed-End Municipal Fund
Average (as shown on page 2). The returns for all three closed-end Funds are
shown at net asset value, for the six months ended September 30, 1999.
During the first half of fiscal 2000, Minnesota municipalities issued new
bonds at a rate consistent with the national market average. As issuance around
the country has slowed in recent months, Minnesota's supply has declined as well
(Source: Bloomberg Business News). The Funds have selectively added bonds to
improve portfolio composition.
As of September 30, 1999, we held roughly one-fourth of each Fund's net
assets in pre-refunded bonds. Pre-refunded bonds are issued by municipalities to
refinance existing debt at low interest rates, are generally rated AAA and are
backed by the safety of the U.S. government. During the last six months,
municipalities used the lower interest rate environment to pay off older debt
with higher coupon rates. In most cases, once a bond is pre-refunded, we
continue to hold it. Bonds generally increase in value after they are
pre-refunded. This allows each Fund to collect an attractive level of current
income and benefit from better protection of principal due to the escrow
account.
Minnesota Municipal Income Fund I traded at a premium to net asset value as
of September 30, 1999. We think its large premium may be the result of investors
having grown somewhat comfortable paying a premium for older funds. This Fund
was introduced in April 1992.
Our credit outlook for Minnesota's municipal bond market remains positive.
Minnesota has one of the strongest economies in the country. The state
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUNDS
ASSET MIX
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1999
Fund I Fund II Fund III
- --------------------------------------------------------------------------------
General Obligation Bonds 7.3% 4.0% --
Higher Education Revenue Bonds 7.4% 9.0% 6.0%
Hospital Revenue Bonds 13.7% 13.7% 17.8%
Housing Revenue Bonds 21.7% 20.9% 18.2%
Industrial Development Revenue Bonds -- 0.9% --
Pollution Control Revenue Bonds -- 7.8% 9.7%
Power Authority Revenue Bonds 16.8% 5.8% 4.7%
Pre-Refunded/Escrowed to Maturity 24.1% 30.1% 26.8%
Transportation Revenue Bonds 1.2% 3.6% 5.6%
Water & Sewer Revenue Bonds 5.5% 2.1% 7.2%
Other Revenue Bonds 0.5% -- 0.9%
Cash & Other Assets 1.8% 2.1% 3.1%
<PAGE>
for
tax-exempt
income
7
unemployment rate is currently half that of the nation. Minnesota's
municipalities, in our view, are in the best shape we've seen in many years
(Source: Bloomberg Business News).
Going forward, we continue to manage the Voyageur Minnesota Municipal Income
Funds for the long term. We remain committed to purchasing high quality bonds
and striving to achieve superior long-term total returns.
VOYAGEUR ARIZONA MUNICIPAL
INCOME FUND
The Arizona economy continued to grow throughout the past year and it is
projected to remain the second fastest-growing state in the nation through 2003
(Source: Arizona's Economy-Eller Graduate School of Management). The state
boasts a diverse and expanding economy with rapid population and employment
growth, a strong credit rating and moderately low debt.
Unemployment was at a scant 3.9% at the end of 1998 - well below the national
average. Job growth was at the highest rate in the nation. It increased by 4.7%
in 1998. We believe this economic expansion - along with an increased need for
schools, roads and housing - sets an attractive stage for Arizona municipal bond
investors as we move into the latter part of calendar 1999 (Source: Standard &
Poor's).
Hospital revenue bonds have been a strong focus for this Fund over the past
few years. Historically, hospital and other medical bonds tend to perform well
during a healthy economy. Recently, however, this has not been the case. As the
U.S. government scales back funding for medical programs, hospital revenues have
begun to decline. For this reason, over the past few months we have begun to
reduce our exposure to these. As of September 30, 1999 hospital revenue bonds
accounted for 16% of Arizona Municipal Income Fund's portfolio.
Despite Arizona's healthy economy, the state's municipal bond performance
suffered along with the rest of the nation over the past six months as the
threat of inflation loomed on the horizon. As a result of our holdings in
hospital revenue bonds and our use of leveraging, the Fund slightly
underperformed the average of similar closed-end funds in the Other States
Municipal Debt Funds category (Source: Lipper Analytical). While
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND
PORTFOLIO HIGHLIGHTS AND ASSET MIX
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1999
(PIE CHART GRAPHIC)
Higher Education
Revenue Bonds 3.2%
General Obligation
Bonds 17.7%
Cash and Other Assets 1.2%
Other Revenue Bonds 4.8%
Water & Sewer
Revenue Bonds 11.1%
Transportation Revenue
Bonds 9.3%
Pre-Refunded/Escrowed
to Maturity 2.4%
Hospital Revenue
Bonds 16.0%
Housing Revenue
Bonds 19.9%
Industrial Development
Revenue Bonds 2.9%
Leases/Certificate of
Participation 9.0%
Power Authority
Revenue Bonds 2.5%
Average Effective Maturity 13.64 years
Average Effective Duration 7.75 years
Average Quality AA
Average Coupon 5.76%
Number of Securities 43
AMT Income 11.59%
Amount of Leveraging $25 million
<PAGE>
for
tax-exempt
income
8
leveraging increases a mutual fund's income potential, it also exposes it to a
higher degree of interest rate risk. For this reason, when interest rates rose
these past few months, the Fund was affected more than Funds that rely less on
leveraging.
Because municipal bonds were selling at a considerable discount to Treasuries
during most of the past six months, we were able to purchase new securities at
what we considered to be very attractive prices. This enabled us to reposition
the Fund's portfolio for the remainder of fiscal 2000. We chose to focus on
municipal bonds with the following features:
o Longer duration - We expect that over the next few months interest rates
will either remain stable or increase only slightly. Although bonds with
longer durations can be more volatile in the short term, they do have the
potential to provide higher returns over the long haul.
o Call protection - This provision ensures that the issuer of the bond cannot
redeem the bond until a specified time. This means a bond purchaser, like
ourselves, can collect the stated interest rate on the bond until we choose
to sell the bond or the call date occurs.
As always, we strive to seek a high level of current income free of federal
and state income taxes for residents of the state where the bond is issued. We
utilize the following strategies for the Fund:
o A bottom-up research-intensive strategy - We start by evaluating specific
bonds rather than focusing on bond sectors, and
o A value-oriented focus - We strive to select specific bonds that we believe
are selling below fair market value and that we anticipate will increase in
credit quality.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
Demand for insured municipal bonds, which guarantee the payment of principal and
interest, remained strong in Florida over the past six months. Approximately 70%
of all new municipal bonds issued in Florida are insured, more than in most
states (Source: The Bond Buyer). This provides us with a large pool of
securities from which to select your Fund's issues.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
PORTFOLIO HIGHLIGHTS AND ASSET MIX
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1999
(PIE CHART GRAPHIC)
Hospital Revenue
Bonds 11.0%
Higher Education
Revenue Bonds 5.0%
Cash & Other Assets 1.4%
Other Revenue Bonds 14.4%
Water & Sewer
Revenue Bonds 11.1%
Housing Revenue
Bonds 11.8%
Pre-Refunded/
Escrowed to Maturity 24.0%
School District
Revenue Bonds 10.5%
Transportation Revenue
Bonds 8.5%
Utilities Revenue Bonds 2.3%
Average Effective Maturity 14.32 years
Average Effective Duration 8.44 years
Average Quality AAA
Average Coupon 5.75%
Number of Securities 36
AMT Income 16.56%
Amount of Leveraging $20 million
<PAGE>
for
tax-exempt
income
9
As mandated by the Fund's investment policies, Florida Insured Municipal
Income Fund continues to invest exclusively in insured municipal bonds rated AAA
by Moody's or Standard & Poor's, the highest credit quality available.
Rising interest rates and fears about potential inflation have hurt municipal
bond performance in general over the past six months. However, as a result of
the Fund's focus on very safe securities, over the past six months Florida
Insured Municipal Income Fund was able to preserve capital to a greater extent
than the average of its peers in the Florida Municipal Debt Funds category
(Source: Lipper Analytical). In order to increase the income potential of the
Fund, we slightly increased the average effective duration over the past six
months. Duration is a common measure of a bond or bond fund's sensitivity to
interest rates. The longer the duration, the more the bond's price will change
for a given increase or decrease in interest rates. We also continue to leverage
this Fund. Although leveraging exposes the Fund to a higher degree of interest
rate risk, it also increases the Fund's income potential when interest rates
remain relatively stable. We expect interest rates to remain steady or increase
only slightly over the coming months. This trend should, in our opinion, create
a positive performance scenario for the Fund during the remainder of fiscal
2000.
We believe Florida's economy remains strong and its population continues to
grow. Steady migration into the state has led to a healthy housing industry. In
order to capitalize on this trend, housing revenue bonds accounted for 11.8% of
the Florida Insured Municipal Income Fund's holdings as of September 30, 1999.
We also continue to hold a large portion of the Fund's assets in pre-refunded
bonds. Pre-refunded bonds, which are issued by municipalities to refinance
existing debt at lower interest rates, are generally rated AAA and are backed by
U.S. government bonds held in escrow. These issues continue to generate high
levels of income for the Fund. As they approach their maturity date, we will
sell them and attempt to replace them with comparable yielding bonds. As of
September 30, 1999, approximately 24% of the Fund's portfolio was invested in
pre-refunded issues.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND
Colorado's robust economy helped fuel a growth rate that was twice the national
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND
PORTFOLIO HIGHLIGHTS AND ASSET MIX
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1999
(PIE CHART GRAPHIC)
Higher Education
Revenue Bonds 16.6%
General Obligation
Bonds 14.9%
Cash & Other Assets 3.2%
Water & Sewer
Revenue Bonds 2.9%
Utilities Revenue Bonds 1.8%
Transportation Revenue
Bonds 15.2%
Hospital Revenue
Bonds 13.1
Housing Revenue
Bonds 8.3%
Leases/Certificates of
Participation 8.1%
Sales Tax Revenue
Bonds 2.6%
Pollution Control
Revenue Bonds 1.4%
Pre-Refunded/
Escrowed to Maturity 11.9%
Average Effective Maturity 14.84 years
Average Effective Duration 8.38 years
Average Quality AAA
Average Coupon 5.70%
Number of Securities 43
AMT Income 0%
Amount of Leveraging $40 million
<PAGE>
for
tax-exempt
income
10
rate as of December 31, 1998. The third fastest growing state in the nation,
Colorado exhibits strong personal income growth, large job gains and healthy
residential construction (Source: Colorado Economic Chronicle).
Hospital revenue bonds have been a strong focus for this Fund over the past
few years. Historically, hospital and other medical bonds tend to perform well
during a healthy economy. Recently, however, this has not been the case. As the
U.S. government scales back funding for medical programs, hospital revenues have
begun to decline. For this reason, over the past few months we have begun to
reduce our exposure to these securities.
Colorado Insured Municipal Income Fund was not able to preserve capital to
the extent of its peers in the Other States Municipal Debt Funds average for the
six-month period ended September 30, 1999 (as shown on page 2). This was a
result of lower performance in the high-quality bond arena and our positioning
in healthcare revenue bonds. We plan to decrease our exposure to healthcare
issues even further over the next few months, a move we expect will boost the
Fund's performance as we further diversify the Fund's portfolio.
As always, we strive to seek a high level of current income free of federal
and state income taxes for residents of the state where the bond is issued.
Also, none of the income generated by securities in this portfolio over the past
six months was subject to the federal alternative minimum tax (AMT). Consistent
with its investment strategy, the Fund invests exclusively in Colorado insured
municipal bonds rated AAA by Moody's or Standard & Poor's, the highest credit
quality available.
When selecting new securities, we utilize the following strategies for the
Fund:
o A bottom-up research-intensive strategy - We start by evaluating specific
bonds rather than focusing on bond sectors, and
o A value-oriented focus - We strive to select specific bonds that are
selling below fair market value.
OUTLOOK
Over the next few months we expect conditions for municipal bond investors to
improve as recent interest rate increases might slow economic growth and stem
inflation. Stock market volatility has caused some investors to take another
look at the potential benefits of bonds, including closed-end municipal bond
funds.
Lower municipal bond supply in 1999 has enabled the market to better absorb
the high volume of bonds issued in 1998. This should, in our opinion, allow for
greater capital appreciation potential if supply remains steady or declines
further in the future.
We think there is some risk of inflation in the near future, but we believe
that interest rates should remain relatively stable or increase only slightly.
We believe fixed-income securities, including municipal bonds, should perform
well in such an environment.
<PAGE>
for tax-exempt income 11
Financial Statements
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS - 98.19%
GENERAL OBLIGATION BONDS - 7.34%
Minneapolis Refunding (Laurel Village)
6.00% 3/1/16 ...................................... $1,600,000 $1,633,152
Minneapolis St. Paul Metro Airport Commission
6.60% 1/1/11 (AMT) ................................ 1,500,000 1,552,980
Rosemount Independent School District #196
5.70% 4/1/12 ...................................... 1,000,000 1,030,010
----------
4,216,142
----------
HIGHER EDUCATION REVENUE BONDS - 7.38%
Minnesota Higher Education Facility (St. Thomas
University) Series 3-C 6.25% 9/1/16 ............... 1,000,000 1,020,170
Minnesota State University Board (State
University System) Series A 6.05% 6/30/18 ......... 250,000 253,803
Northfield, Minnesota (St. Olaf College)
6.30% 10/1/12 ..................................... 1,075,000 1,126,697
6.40% 10/1/21 ..................................... 1,750,000 1,836,957
----------
4,237,627
----------
HOSPITAL REVENUE BONDS - 13.68%
Bloomington Health Care Facilities (Masonic Home
Care Center) 5.875% 7/1/22 (AMBAC) ................ 1,000,000 1,003,790
Duluth Economic Development Authority
Health Care (Benedictine Health System
St. Mary's Hospital) Series 1993-C
6.00% 2/15/20 (Connie Lee) ........................ 1,000,000 1,011,770
Duluth Economic Development Authority Health Care
(St. Luke's Hospital) Series 1992-B
6.40% 5/1/18 (Connie Lee) ......................... 1,000,000 1,047,500
Minneapolis Hospital System (Fairview Hospital)
Series 1991-A 6.50% 1/1/11(MBIA) .................. 2,210,000 2,327,904
Minneapolis Health Care Facility
(Fairview Hospital) Series 1993-A
5.25% 11/15/19 (MBIA) ............................. 1,500,000 1,418,010
Minneapolis & Saint Paul Housing &
Redevelopment Authority Health Care System
(Health One) Series 1993-A
5.25% 11/15/19 (MBIA) ............................. 500,000 521,940
Saint Paul Housing & Redevelopment
Authority Health Care Facility (Regions Hospital
Project) 5.30% 05/15/28 ........................... 600,000 522,288
----------
7,853,202
----------
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS - 21.70%
Brooklyn Center Multifamily Housing
(Four Courts) 7.50% 6/1/25 (AMT) ............... $1,800,000 $1,828,998
Minnesota Housing Finance Agency Single
Family Mortgage Series 1992-G
7.45% 7/1/22 (AMT) (FHA) ....................... 820,000 847,331
Minnetonka Housing Facilities (Beacon Hill
Project) 7.70% 6/1/25 (Presbyterian
Homes Guaranteed) .............................. 2,725,000 2,866,073
New Brighton Multifamily Mortgage (Polynesian
Village Apartments) Series 1995-A
7.60% 4/1/25 (AMT) ............................. 1,400,000 1,454,894
St. Anthony Multifamily Housing Development
(Autumn Woods Project) 6.875%
7/1/22 (Asset Guaranty) ........................ 2,265,000 2,368,012
St. Paul Housing and Redevelopment Authority
Multifamily Housing (Pointe of St. Paul Project)
Series 1992 6.60% 10/1/12 (FNMA) ............... 2,950,000 3,095,376
-----------
12,460,684
-----------
POWER AUTHORITY REVENUE BONDS - 16.76%
Bass Brook, Minnesota Power & Light
6.00% 7/1/22 ................................... 2,575,000 2,595,806
Northern Minnesota Municipal Power
Agency Electric System
Series A 5.00% 1/1/21 .......................... 1,500,000 1,339,260
Series B 5.50% 1/1/18 (AMBAC) .................. 1,250,000 1,230,100
Southern Minnesota Municipal Power Agency
5.00% 1/1/16 (FGIC) ............................ 580,000 541,975
5.50% 1/1/15 (AMBAC) ........................... 610,000 609,317
5.75% 1/1/11 (FGIC) ............................ 1,000,000 1,033,640
Western Minnesota Municipal Power Agency
Series A 5.50% 1/1/15 (MBIA) ................... 2,275,000 2,272,452
-----------
9,622,550
-----------
<PAGE>
12 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO MATURITY - 24.10%
Dakota & Washington Counties HRA Single
Family Mortgage 8.375% 9/1/21(AMT)
(Escrowed to Maturity) (GNMA) .............. $ 2,555,000 $ 3,388,134
Duluth Economic Development Authority Health
Care (Duluth Clinic) Series 1992
6.30% 11/1/22-02 (AMBAC) ................... 1,270,000 1,365,377
Duluth Economic Development Authority
Health Care (Duluth Clinic) Series 1992
6.30% 11/1/22-04 (AMBAC) ................... 730,000 788,626
Edina Recreation Facilities Series 1992-A
6.00% 1/1/09-02 ............................ 305,000 314,617
6.00% 1/1/10-02 ............................ 320,000 330,090
Minnesota Higher Education Facility
(Macalester College) Series 3-J
6.40% 3/1/22-02 ............................ 1,000,000 1,045,590
Minnesota Public Facilities Authority
(Water Pollution Control) Series 1992
6.50% 3/1/14-02 ............................ 1,500,000 1,602,375
Puerto Rico Commonwealth
6.00% 7/1/26-07 ............................ 2,000,000 2,197,400
St. Cloud Hospital 6.75% 7/1/15-01 (AMBAC) ... 1,000,000 1,062,070
St. Francis Independent School District #15
6.30% 2/1/11-06 (FSA) ...................... 1,250,000 1,342,650
Southern Minnesota Municipal Power Agency
5.50% 1/1/15 (Escrowed to
Maturity) (AMBAC) .......................... 390,000 394,559
-----------
13,831,488
-----------
TRANSPORTATION REVENUE BONDS - 1.17%
Puerto Rico Commonwealth Highway &
Transportation Authority
5.50% 7/1/26 ............................... 700,000 672,490
-----------
672,490
-----------
WATER & SEWER REVENUE BONDS - 5.56%
Anoka County Solid Waste Disposal National
Rural Co-op Utility 6.95%
12/1/08 (AMT) .............................. 1,000,000 1,035,460
Minnesota Public Facilities Authority Water
Pollution Control ROLS II
5.10% 3/1/16 ............................... 1,000,000 755,240
5.25% 3/1/17 ............................... 1,855,000 1,400,190
-----------
3,190,890
-----------
OTHER REVENUE BONDS - 0.50%
Minneapolis Community Development Agency
(Supported Development Limited Tax)
Common Bond Fund Series 5
5.70% 12/1/27 .............................. 300,000 288,600
-----------
288,600
-----------
TOTAL MUNICIPAL BONDS (COST $54,210,597) ..... 56,373,673
-----------
<PAGE>
- --------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
-----------------------------------
SHORT TERM INVESTMENTS - 0.60%
Federated Minnesota Municipal
Cash Trust ................................... 343,119 $ 343,119
------------
Total Short Term Investments
(cost $343,119) .............................. 343,119
------------
TOTAL MARKET VALUE OF SECURITIES - 98.79%
(COST $54,553,716) .......................................... $ 56,716,792
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.21% .................................. 695,480
------------
TOTAL NET ASSETS - 100.00% ..................................... 57,412,272
LIQUIDATION VALUE OF PREFERRED STOCK ........................... (20,000,000)
------------
NET ASSETS APPLICABLE TO 2,594,700 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING ............................... $ 37,412,272
============
NET ASSET VALUE PER COMMON SHARE
($37,412,272 / 2,594,700 SHARES) ............................ $14.42
======
- -------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
** Inverse Floaters represent a security that pays interest at rates that
increase (decrease) with a decrease (increase) in a specific index. Interest
rates disclosed are in effect at September 30, 1999.
Summary of Abbreviations:
AMBAC - Insured by the American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
Asset Guaranty - Insured by the Asset Guaranty Insurance Company
Connie Lee - Insured by the College Construction Insurance Association
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT SEPTEMBER 30, 1999:
Common Stock, $0.01 par value unlimited shares
authorized to the Fund .................................. $35,455,037
Preferred stock, $0.01 par value, 1 million
shares authorized to the Fund ........................... 20,000,000
Distributions in excess of net investment income ........... (127,898)
Accumulated net realized loss on investments ............... (77,943)
Net unrealized appreciation of investments ................. 2,163,076
-----------
Total net assets ........................................... $57,412,272
===========
See accompanying notes
<PAGE>
for tax-exempt income 13
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS - 97.93%
GENERAL OBLIGATION BONDS - 3.99%
Becker Refunding Tax Increment Series D
6.25% 8/1/15 (AMT)(MBIA) ...................... $ 3,700,000 $ 3,779,698
**Minnesota State Public Facilities Authority
Water Pollution Control Revenue
6.63% 11/1/17 ................................. 570,000 485,503
Rosemount Independent School District #196
5.70% 4/1/12 .................................. 1,270,000 1,308,113
St. Paul Minnesota Tax Increment
(Block 39 Project) Series A
4.75% 2/1/25 .................................. 1,000,000 839,350
-----------
6,412,664
-----------
HIGHER EDUCATION REVENUE BONDS - 9.02%
Minnesota Higher Education Facility
(Macalester College) 5.55% 3/1/16 ............. 1,250,000 1,245,925
Minnesota State Higher Education Facility
(St. Thomas University)
Series 3-R2 5.60% 9/1/14 ...................... 275,000 276,906
Series B 3-R1 5.60% 10/1/15 ................... 1,050,000 1,051,575
Series 4A-1 5.625% 10/1/21 .................... 1,000,000 975,980
Minnesota State University Board
(State University System)
Series 1993-C 5.60% 6/30/16 (MBIA) ............ 3,115,000 3,121,978
Series 1993-C 5.60% 6/30/19 (MBIA) ............ 3,720,000 3,693,328
Series 1993-A 6.10% 6/30/23 ................... 1,150,000 1,165,157
University of Minnesota Series A
5.50% 7/1/21 .................................. 3,000,000 2,954,850
-----------
14,485,699
-----------
HOSPITAL REVENUE BONDS - 13.67%
Bloomington Health Care Facilities
(Masonic Home Care Center)
5.875% 7/1/22 (AMBAC) ......................... 4,000,000 4,015,160
Brainerd Evangelical Lutheran Health Care
Facilities Series A 6.65% 3/1/17 (FSA) ........ 1,195,000 1,260,044
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Duluth Economic Development Authority
Benedictine Health Systems (St. Mary's
Hospital) 6.00% 2/15/20
(Connie Lee) .................................. $ 6,000,000 $ 6,070,620
Minneapolis Health Care Facility
(Jones-Harrison Residence Project)
6.00% 10/1/27 ................................. 2,000,000 1,896,420
Minneapolis, St. Paul Housing & Redevelopment
Authority (Childrens Health Care)
5.50% 8/15/25 (FSA) ........................... 1,500,000 1,438,050
Minnesota Agricultural & Economic Development
Health Care System (Fairview Hospital)
Series A 5.75% 11/15/26 (MBIA) ................ 4,800,000 4,728,384
Rochester, Minnesota Health Care Facilities
(Mayo Foundation) Series B
5.50% 11/15/27 ................................ 2,265,000 2,189,440
St. Paul Housing & Redevelopment Authority
(Health Care Facility Revenue Regions
Hospital Project) 5.30% 5/15/28 ............... 400,000 348,192
-----------
21,946,310
-----------
HOUSING REVENUE BONDS - 20.88%
Chanhassen Multifamily Housing Heritage Park
Project 6.20% 7/1/30 (AMT)(FHA) ............... 1,105,000 1,125,862
Dakota County Housing & Redevelopment
Authority Multifamily Mortgage
(Imperial Ridge Project) Series 1993-A
6.10% 12/15/28 (GNMA) ......................... 1,870,000 1,910,392
Harmony, Minnesota Multifamily Housing
(Section 8) (Zedakah Foundation Project)
Series A 5.95% 9/1/20 ......................... 1,000,000 998,750
Minnesota Housing Finance Agency
Multifamily Rental Housing
Series D 5.90% 2/1/14 ......................... 1,115,000 1,132,483
Series D 6.00% 8/1/22 ......................... 2,295,000 2,328,484
<PAGE>
14 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Minnesota Housing Finance Agency Single
Family Housing
Series 1991-A 7.05% 7/1/22 (AMT) ................ $ 1,275,000 $ 1,314,474
Series 1992-B 6.15% 1/1/26 (AMT) ................ 3,615,000 3,645,836
Series 1992-C 6.15% 7/1/23 (AMT) ................ 3,660,000 3,691,220
Series 1994-F 6.30% 7/1/25 ...................... 1,500,000 1,537,845
Series 1994-J 6.95% 7/1/26 (AMT) ................ 2,965,000 3,086,002
Minnetonka, Minnesota Housing Facilities
(Beacon Hill Project)
7.25% 6/1/09 .................................... 1,225,000 1,271,305
7.50% 6/1/14 .................................... 760,000 799,604
7.55% 6/1/19 .................................... 2,365,000 2,481,547
Moorhead, Minnesota Economic Development
Authority Multifamily Housing Development
(Eventide) Series B 6.00% 6/1/18 ................ 1,000,000 950,440
New Brighton Multifamily Mortgage (Polynesian
Village Apartments) Series 1995-A
7.60% 4/1/25 .................................... 3,820,000 3,969,782
St. Paul Housing & Redevelopment Authority
Single Family Mortgage
6.40% 3/1/21 (FNMA) ............................. 1,705,000 1,754,411
Stillwater, Minnesota Multifamily Mortgage
(Stillwater Cottages) 7.25%
11/1/27 (AMT) ................................... 1,540,000 1,534,379
-----------
33,532,816
-----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 0.88%
Burnsville, Minnesota Commercial Development
Refunding (Holiday Inn Project)
5.90% 4/1/08 .................................... 1,430,000 1,409,394
-----------
1,409,394
-----------
POLLUTION CONTROL REVENUE BONDS - 7.84%
Bass Brook, Minnesota Pollution Control
Power & Light 6.00% 7/1/22 ...................... 7,660,000 7,721,893
Cloquet, Minnesota Pollution Control
(Potlatch Corporation Project)
5.90% 10/1/26 ................................... 5,000,000 4,868,400
-----------
12,590,293
-----------
POWER AUTHORITY REVENUE BONDS - 5.81%
Northern Minnesota Municipal Power
Agency Electric System Series B
5.50% 1/1/18 (AMBAC) ............................ 5,955,000 5,860,196
Puerto Rico Electric Power Authority
5.25% 7/1/21 .................................... 2,000,000 1,867,220
Western Minnesota Municipal Power Agency
5.50% 1/1/15 (MBIA) ............................. 1,605,000 1,603,202
-----------
9,330,618
-----------
*PRE-REFUNDED/ESCROWED TO MATURITY - 30.15%
Buffalo Independent School District
6.15% 2/1/22-03 (FSA) ........................... 4,030,000 4,215,058
Dakota & Washington Counties Housing and
Redevelopment Authority Single
Family Mortgage 8.375% 9/1/21
(AMT)(GNMA) (Escrowed to Maturity) .............. 5,500,000 7,293,440
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO MATURITY (CONTINUED)
Detroit Lakes Benedictine Health Systems
(St. Mary's Hospital) 6.00% 2/15/19-03
(Connie Lee) .................................. $ 1,250,000 $ 1,333,375
Duluth Economic Development Authority Health
Care Facilities (Duluth Clinic)
6.20% 11/1/12-02 (AMBAC) ...................... 720,000 772,020
Series 1992 6.30% 11/1/22-02 (AMBAC) .......... 3,890,000 4,182,139
Duluth Economic Development Authority Health
Care Facilities (Duluth Clinic)
6.20% 11/1/12-04 (AMBAC) ...................... 280,000 301,230
6.30% 11/1/22-04 (AMBAC) ...................... 960,000 1,037,098
Esko Independent School District
5.65% 4/1/12-05 (FSA) ......................... 550,000 571,786
Hawley Independent School District
5.75% 2/1/17-06 (FSA) ......................... 1,000,000 1,044,550
Metropolitan Council Sports Facility Commission
(Hubert H. Humphrey Metrodome)
6.00% 10/1/09 (Escrowed to Maturity) .......... 2,360,000 2,473,610
Minneapolis, St. Paul Housing & Redevelopment
Authority (HealthOne)
7.40% 8/15/11-00 (MBIA) ....................... 2,105,000 2,208,840
Minnesota Public Facilities Authority Water
Pollution Control 6.25% 3/1/16-05 ............. 1,000,000 1,076,640
Series 1992 6.50% 3/1/14-05 ................... 3,300,000 3,525,225
Red Wing Independent School District #256
Series 1993-A 5.70% 2/1/12-03 ................. 2,925,000 3,016,494
Series 1993-A 5.70% 2/1/13-03 ................. 1,625,000 1,675,830
St. Paul Housing and Redevelopment Authority
Sales Tax (Civic Center) 5.55% 11/1/23
(Escrowed To Maturity) ........................ 2,300,000 2,272,814
5.55% 11/1/23 (MBIA)
(Escrowed To Maturity) ........................ 4,200,000 4,177,694
Southern Minnesota Municipal Power Agency
5.75% 1/1/18-16 ............................... 3,715,000 3,761,029
Stewartville Independent School District #534
5.75% 2/1/17-05 ............................... 1,705,000 1,774,479
Western Minnesota Municipal Power Agency
6.625% 1/1/16 (Escrowed To Maturity) .......... 1,535,000 1,689,083
------------
48,402,434
------------
TRANSPORTATION REVENUE BONDS - 3.59%
Puerto Rico Commonwealth Highway &
Transportation Authority 5.50% 7/1/26 ......... 6,000,000 5,764,200
------------
5,764,200
------------
WATER & SEWER REVENUE BONDS - 2.10%
Minnesota Public Facilities Authority Water
Pollution Control Revenue
5.84% 3/1/17 .................................. 1,145,000 864,269
5.94% 3/1/18 .................................. 1,360,000 1,025,386
5.94% 3/1/19 .................................. 2,000,000 1,484,040
------------
3,373,695
------------
TOTAL MUNICIPAL BONDS (COST $154,942,704) ..... 157,248,123
------------
<PAGE>
for tax-exempt income 15
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
-----------------------------------
SHORT-TERM INVESTMENTS - 0.88%
Federated Municipal Money Market Fund .............. 1,419,039 $ 1,419,039
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,419,039) ............................... 1,419,039
------------
TOTAL MARKET VALUE OF SECURITIES - 98.81%
(COST $156,361,743) .......................................... $158,667,162
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.19%.......... 1,917,977
------------
TOTAL NET ASSETS - 100.00% ...................................... 160,585,139
LIQUIDATION VALUE OF PREFERRED STOCK ............................ (60,000,000)
------------
NET ASSETS APPLICABLE TO 7,252,200 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING ................................ $100,585,139
============
NET ASSET VALUE PER COMMON SHARE
($100,585,139/7,252,200 SHARES) .............................. $13.87
======
- ---------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
** Inverse Floaters represent a security that pays interest at rates that
increase (decrease) with a decrease (increase) in a specific index. Interest
rates disclosed are in effect at September 30, 1999.
Summary of Abbreviations:
AMBAC - Insured by the American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
Connie Lee - Insured by the College Construction Insurance Association
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT SEPTEMBER 30, 1999:
Common Stock, $0.01 par value, 200 million shares authorized
to the Fund .............................................. $ 99,710,002
Preferred Stock, $0.01 par value, 1 million shares authorized
to the Fund .............................................. 60,000,000
Undistributed net investment income ......................... 1,324,954
Accumulated net realized loss on investments ................ (2,755,236)
Net unrealized appreciation of investments .................. 2,305,419
------------
Total net assets ............................................ $160,585,139
============
See accompanying notes
<PAGE>
VOYAGEUR MINNESOTA MUNICIPAL
INCOME FUND III, INC.
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS - 96.95%
HIGHER EDUCATION REVENUE BONDS - 6.02%
Minnesota Higher Education Facilities Authority
(St. Mary's College) Series 3-Q
6.15% 10/1/23 .............................. $1,000,000 $ 985,200
Minnesota Higher Education Facilities Authority
(St. Thomas University) Series 4-A1
5.625% 10/1/21 ............................. 1,010,000 985,740
Minnesota State Higher Educational Facilities
Authority Revenue Unrefunded Balance Series
6.375% 3/1/20 .............................. 345,000 351,786
----------
2,322,726
----------
HOSPITAL REVENUE BONDS - 17.82%
Minnesota Agriculture & Economic Development
Health Care System (Benedictine Care)
5.75% 2/1/29 ............................... 1,300,000 1,169,727
Minnesota Agricultural & Economic Development
Health Care System (Fairview Hospital)
Series A 5.75% 11/15/26 (MBIA) ............. 2,000,000 1,970,160
Princeton Fairview Hospital Series 1991-C
6.25% 1/1/21 (MBIA) ........................ 2,000,000 2,070,320
Robbinsdale North Memorial Medical Center
Series 1993-B 5.50% 05/15/23 (AMBAC) ....... 1,500,000 1,444,290
St. Paul, Minnesota Housing & Redevelopment
Authority for Healtheast Hospital
5.85% 11/1/17 .............................. 250,000 226,695
----------
6,881,192
----------
HOUSING REVENUE BONDS - 18.18%
Brooklyn Center Multifamily Housing
(Four Courts) 7.50% 6/1/25 (AMT) ........... 1,000,000 1,016,110
Burnsville Multifamily Mortgage Series A
7.10% 1/1/30 (FSA) ......................... 2,000,000 2,152,200
Edina Housing Revenue Authority (Edina Park
Plaza) 7.70% 12/1/28 (FHA) ................. 1,000,000 1,021,690
Minnesota Housing Finance Agency Single
Family Mortgage Series 1991-A
7.45% 7/1/22 (AMT) (FHA) ................... 920,000 950,664
Minneapolis Multifamily Housing
(Olson Townhomes) 6.00%
12/1/19 (AMT) .............................. 1,875,000 1,880,550
----------
7,021,214
----------
<PAGE>
16 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
POLLUTION CONTROL REVENUE BONDS - 9.65%
Bass Brook, Minnesota Power & Light
6.00% 7/1/22 .................................. $ 1,505,000 $ 1,517,160
Cloquet, Minnesota Pollution Control (Potlatch
Corporation Project) 5.90% 10/1/26 ............ 1,000,000 973,680
**Minnesota State Public Facilities Authority
Water Pollution Control Revenue
(ROLS II) 5.35% 3/1/18 ........................ 1,640,000 1,236,494
-----------
3,727,334
-----------
POWER AUTHORITY REVENUE BONDS - 4.68%
Southern Minnesota Municipal Power
Agency 5.75% 1/1/18 (FGIC) .................... 1,800,000 1,808,694
-----------
1,808,694
-----------
*PRE-REFUNDED/ESCROWED TO MATURITY - 26.84%
Duluth Economic Development Authority
Hospital Facilities (Duluth Clinic)
6.20% 11/1/12-02 (AMBAC) ...................... 1,080,000 1,158,030
Duluth Economic Development Authority
Hospital Facilities (Duluth Clinic)
6.20% 11/1/12-04 (AMBAC) ...................... 420,000 451,844
Esko Independent School District
5.75% 4/1/17-05 (FSA) ......................... 2,145,000 2,240,195
Minnesota Higher Education Facilities Authority
(Saint Benedict) Series 3-W
6.375% 3/1/20-04 .............................. 930,000 996,635
Moorhead Public Utilities 6.25%
11/1/12-02 (MBIA) ............................. 1,500,000 1,573,605
North Branch Independent School District
#138 5.625% 2/1/17 (FGIC)
(Escrowed to Maturity) ........................ 1,000,000 1,037,320
University of Minnesota Hospital
6.75% 12/1/16 (Escrowed to Maturity) .......... 2,580,000 2,907,196
-----------
10,364,825
-----------
TRANSPORTATION REVENUE BONDS - 5.58%
Minneapolis & Saint Paul, Minnesota Metro
Airports Common Airport Revenue
Series A 5.125% 1/1/25 ........................ 1,000,000 906,110
Puerto Rico Commonwealth Highway &
Transportation Authority
5.50% 7/1/26 .................................. 1,300,000 1,248,910
-----------
2,155,020
-----------
WATER & SEWER REVENUE BONDS - 7.24%
Minnesota Public Facility Authority
Water Pollution Control
5.40% 3/1/15 .................................. 2,820,000 2,796,566
-----------
2,796,566
-----------
OTHER REVENUE BONDS - 0.94%
Minneapolis, Minnesota Community
Development Agency (Supported
Development Revenue Limited Common
Bond Fund) Series 5 5.70% 12/1/27 ............. 375,000 360,750
-----------
360,750
-----------
TOTAL MUNICIPAL BONDS
(cost $36,559,390) ............................ 37,438,321
-----------
<PAGE>
- --------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
-----------------------------------
SHORT-TERM INVESTMENTS - 1.66%
Federated Minnesota Municipal Cash Trust ....... 639,492 $ 639,492
------------
TOTAL SHORT-TERM INVESTMENTS (COST $639,492) ... 639,492
------------
TOTAL MARKET VALUE OF SECURITIES - 98.61%
(COST $37,198,882) ........................................ $ 38,077,813
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.39% ................................ 536,959
------------
TOTAL NET ASSETS - 100.00% ................................... 38,614,772
LIQUIDATION VALUE OF PREFERRED STOCK ......................... (15,000,000)
------------
NET ASSETS APPLICABLE TO 1,837,200 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING ............................. $ 23,614,772
============
NET ASSET VALUE PER COMMON SHARE
($23,614,772 / 1,837,200 SHARES) .......................... $12.85
======
- -------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
** Inverse Floaters represent a security that pays interest at rates that
increase (decrease) with a decrease (increase) in a specific index. Interest
rates disclosed are in effect at September 30, 1999.
Summary of Abbreviations:
AMBAC - Insured by the American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Corporation
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT SEPTEMBER 30, 1999:
Common stock, $0.01 par value, 200 million shares authorized
to the Fund .............................................. $25,246,730
Preferred stock, $0.01 par value, 1 million shares authorized
to the Fund .............................................. 15,000,000
Undistributed net investment income ......................... 209,183
Accumulated net realized loss on investments ................ (2,720,072)
Net unrealized appreciation of investments .................. 878,931
-----------
Total net assets ............................................ $38,614,772
===========
See accompanying notes
<PAGE>
for tax-exempt income 17
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS - 98.78%
GENERAL OBLIGATION BONDS - 17.71%
Eagle Mountain Community Facility District
A2 6.40% 7/1/17 ................................. $1,500,000 $ 1,571,970
Maricopa County Alhambra Elementary School District
#68 5.625% 7/1/13 (AMBAC) ....................... 2,500,000 2,540,750
Maricopa County Unified School District #11
5.50% 7/1/10 .................................... 3,000,000 3,062,310
Maricopa County Unified School District #41
6.25% 7/1/15 (FSA) .............................. 1,500,000 1,580,265
Maricopa County Washington Elementary Unified School
District #6 5.375% 7/1/14 (AMBAC) ............... 1,000,000 990,380
Mohave County Unified School District #1 5.90%
7/1/15 (FGIC) ................................... 1,500,000 1,538,955
Santa Cruz Valley Unified School District #35
5.80% 7/1/09 (AMBAC) ............................ 600,000 620,706
-----------
11,905,336
-----------
HIGHER EDUCATION REVENUE BONDS - 3.19%
University of Arizona
6.25% 6/1/11 .................................... 1,000,000 1,050,740
6.35% 6/1/14 .................................... 1,000,000 1,092,670
-----------
2,143,410
-----------
HOSPITAL REVENUE BONDS - 16.03%
Maricopa County Health Facilities (Catholic
Health Care West) Series A
5.75% 7/1/11 (MBIA) ............................. 1,750,000 1,818,828
6.00% 7/1/21 (MBIA) ............................. 1,100,000 1,124,398
Mesa, Arizona Industrial l Development Authority
5.625% 1/1/29 ................................... 3,000,000 2,922,060
Mohave County Industrial Development Authority
(Baptist Hospital) 5.50% 9/1/21 (MBIA) .......... 500,000 486,940
Phoenix Industrial Development Authority
(John C. Lincoln Hospital)
5.50% 12/1/13 (FSA) ............................. 1,100,000 1,111,000
Show Low, Arizona Industrial Development Authority
(Navapache Regional Medical Center)
Series A 5.50% 12/1/17 (ACA) .................... 1,700,000 1,648,626
University of Arizona Medical Center
6.25% 7/1/16 (MBIA) ............................. 700,000 728,665
Yavapai County, Arizona Industrial Development
Authority Residential Care Facilities
5.40% 2/20/38 (GNMA) ............................ 1,000,000 932,860
-----------
10,773,377
-----------
HOUSING REVENUE BONDS - 19.90%
Maricopa County, Arizona Industrial Development
Authority Multifamily (Camelback Apartments
Project A) 5.45% 5/1/28 (Asset Guaranty) ........ 1,250,000 1,185,900
Peoria Multifamily Housing Mortgage
7.30% 2/20/28 (GNMA) ............................ 1,230,000 1,314,882
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Phoenix Industrial Development Authority
(Chris Ridge) 6.80% 11/1/25 (FHA) ................ $ 500,000 $ 516,670
Phoenix Industrial Development Authority
Single Family Mortgage
5.30% 4/1/20 ..................................... 2,500,000 2,351,250
5.35% 6/1/20 (GNMA) .............................. 3,345,000 3,161,025
Pima County, Arizona Industrial Development
Authority (Single Family Mortgage Revenue)
Series A
5.20% 5/1/31 ..................................... 1,450,000 1,305,334
6.25% 11/1/30 .................................... 1,125,000 1,150,943
Tempe Industrial Development Authority Multifamily
Mortgage 6.125% 6/1/10 (FHA) ..................... 2,305,000 2,386,666
-----------
13,372,670
-----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 2.86%
Coconino County (Nevada Power) Pollution Control
Corporation 5.80% 11/1/32 ........................ 1,000,000 954,780
Navajo County (Arizona Public Service) Pollution
Control Corporation
5.50% 8/15/28 (AMBAC) ............................ 1,000,000 970,390
-----------
1,925,170
-----------
LEASES/CERTIFICATES OF PARTICIPATION - 9.05%
Phoenix Civic Excise Tax Revenue
5.25% 7/1/24 ..................................... 1,250,000 1,167,925
5.375% 7/1/29 .................................... 2,600,000 2,451,046
Scottsdale Municipal Property Corporation Lease
6.25% 11/1/14 (FGIC) ............................. 1,300,000 1,351,311
Tucson, Arizona Certificate of Participation
5.60% 7/1/11 ..................................... 1,100,000 1,110,890
-----------
6,081,172
-----------
POWER AUTHORITY REVENUE BONDS - 2.54%
Salt River Project Electric System Revenue
6.25% 1/1/27 ..................................... 1,635,000 1,704,782
-----------
1,704,782
-----------
*PRE-REFUNDED/ESCROWED TO MATURITY - 2.36%
Arizona Health Facility Authority Phoenix Baptist
Hospital and Medical Center 6.25% 9/1/11
(Escrowed to Maturity)(MBIA) ..................... 1,500,000 1,582,005
Pima County, Marana Unified School District #6
Series A 5.75% 7/1/12-03 ......................... 5,000 5,294
-----------
1,587,299
-----------
TRANSPORTATION REVENUE BONDS - 9.26%
City of Phoenix, Arizona Street & Highway
Junior Lien 6.25% 7/1/11 (FGIC) .................. 1,300,000 1,378,832
Tucson Airport Authority 5.70%
6/1/13 (MBIA) .................................... 1,000,000 2,046,340
Tucson Street & Highway 5.50%
7/1/12 (MBIA) .................................... 3,000,000 2,798,428
-----------
6,223,600
-----------
<PAGE>
18 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
WATER & SEWER REVENUE BONDS - 11.05%
Phoenix, Arizona Civic Improvement Wastewater
Systems Revenue 5.375% 7/1/22 ............... $ 1,000,000 $ 962,470
Phoenix Civic Improvement Corporation 5.50%
7/1/21 (AMBAC) .............................. 2,000,000 1,960,080
Phoenix Water System 5.50% 7/1/22 .............. 1,000,000 968,400
Tucson Water Refunding Series A 5.75%
7/1/18 (AMBAC) .............................. 3,500,000 3,534,265
------------
7,425,215
------------
OTHER REVENUE BONDS - 4.84%
Arizona Student Loan Revenue 5.90% 5/1/24 ...... 1,500,000 1,492,215
Maricopa County Stadium District
5.50% 7/1/13 (MBIA) ......................... 1,750,000 1,765,243
------------
3,257,458
------------
Total Municipal Bonds (cost $65,603,120) ....... 66,399,489
------------
TOTAL MARKET VALUE OF SECURITIES - 98.79%
(COST $65,603,120) .......................................... $ 66,399,489
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.21% .................................. 814,235
------------
TOTAL NET ASSETS - 100.00% ..................................... 67,213,724
LIQUIDATION VALUE OF PREFERRED STOCK ........................... (25,000,000)
------------
NET ASSETS APPLICABLE TO 2,982,200 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING ............................... $ 42,213,724
============
NET ASSET VALUE PER COMMON SHARE
($42,213,724 / 2,982,200 SHARES)............................. $14.16
======
- --------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
the bond is pre-refunded
Summary of Abbreviations:
ACA - Insured by the American Capital Access Corporation
AMBAC - Insured by the American Municipal Bond Assurance Corporation
Asset Guaranty - Insured by the Asset Guaranty Insurance Company
FGIC - Insured by the Financial Guaranty Insurance Corporation
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT SEPTEMBER 30, 1999:
Common Stock, $0.01 par value, 200 million shares authorized
to the Fund ................................................. $40,838,893
Preferred stock, $0.01 par value, 1 million shares authorized
to the Fund ................................................. 25,000,000
Undistributed net investment income ............................ 683,295
Accumulated net realized loss on investments ................... (104,833)
Net unrealized appreciation of investments ..................... 796,369
-----------
Total net assets ............................................... $67,213,724
===========
See accompanying notes
<PAGE>
VOYAGEUR FLORIDA INSURED MUNICIPAL
INCOME FUND
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS - 98.57%
HIGHER EDUCATION REVENUE BONDS - 4.95%
Florida Agricultural & Mechanical University
(Student Apartment Facility) 5.625%
7/1/21 (MBIA) ......................................$ 1,250,000 $ 1,239,813
Volusia Education Facilities Authority (Stetson
University) 5.50% 6/1/17 (MBIA) .................... 1,500,000 1,488,180
-----------
2,727,993
-----------
HOSPITAL REVENUE BONDS - 11.01%
Orange County Health Facilities Authority
(Adventist Health System) 5.75%
11/15/25 (AMBAC) ................................... 1,500,000 1,499,895
Orange County Health Facilities Authority
(Orlando Regional Health) 6.25%
10/1/18 (MBIA) ..................................... 2,000,000 2,158,120
Venice Health Care (Bon Secours Health
System Project) 5.60% 8/15/16 (MBIA) ............... 2,405,000 2,409,810
-----------
6,067,825
-----------
HOUSING REVENUE BONDS - 11.81%
Florida Housing Finance Agency Homeowner
Mortgage Series 2 5.90% 7/1/29
(MBIA) (AMT) ....................................... 1,240,000 1,229,559
Florida State Housing (Leigh Meadows Project)
Series N 6.30% 9/1/36 (AMBAC) (AMT) ................ 2,510,000 2,590,872
Florida State Housing (Woodbridge Project) Series L
6.05% 12/1/16 (AMBAC) (AMT) ........................ 1,120,000 1,144,360
6.25% 6/1/36 (AMBAC) ............................... 1,500,000 1,544,070
-----------
6,508,861
-----------
*PRE-REFUNDED/ESCROWED TO MATURITY - 23.95%
Boca Raton Community Redevelopment Tax
Increment (Mizner Park Project)
5.875% 3/1/13-02 (FGIC) ............................ 1,500,000 1,584,000
Dade County Professional Sports Franchise
Facilities 6.00% 10/1/22-02 (FGIC) ................. 1,000,000 1,063,310
Dade County School Board Lease
5.60% 8/1/17-06 (AMBAC) ............................ 1,000,000 1,062,230
Dade County Seaport 6.25%
10/1/21-01 (AMBAC) ................................. 1,000,000 1,050,860
Hillsborough County Industrial Development Authority
Alleghany Health System (Knox Village)
(Escrowed to Maturity) 5.75%
12/1/21(MBIA) ...................................... 1,000,000 991,260
Lakeland Hospital System (Lakeland
Regional Medical Center)
5.75% 11/15/15-02 (FGIC) ........................... 2,500,000 2,655,725
Orange County Sales Tax
6.125% 1/1/19-00 (FGIC) ............................ 1,000,000 1,025,700
Sunrise Utility System Series A 5.75%
10/1/26-06 (AMBAC) ................................. 2,500,000 2,680,600
Village Center Community Development District
Series A 5.85% 11/1/16-06 (MBIA) ................... 1,000,000 1,086,030
-----------
13,199,715
-----------
<PAGE>
for tax-exempt income 19
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
SCHOOL DISTRICT REVENUE BONDS - 10.55%
Escambia County School Board Lease 5.50%
2/1/22 (MBIA) ....................................$5,000,000 $4,855,750
St. Lucie County School Board Lease 5.375%
7/1/19 (FSA) ..................................... 1,000,000 961,690
----------
5,817,440
----------
TRANSPORTATION REVENUE BONDS - 8.48%
Dade County Aviation Series B 5.60%
10/1/26 (MBIA) ................................... 1,000,000 976,880
Florida Ports Financing Commission 5.375%
6/1/27 (MBIA) (AMT) .............................. 2,250,000 2,104,200
Hillsborough County Aviation Authority
(Tampa International Airport) Series B
5.60% 10/1/19 (FGIC) ............................. 1,600,000 1,590,480
----------
4,671,560
----------
UTILITIES REVENUE BONDS - 2.29%
Florida State Municipal Power Agency
(St. Lucie Project)
5.70% 10/1/16 (FGIC) ............................. 1,250,000 1,259,688
----------
1,259,688
----------
WATER & SEWER REVENUE BONDS - 11.09%
City of Panama Beach Water & Sewer 5.50%
6/1/18 (AMBAC) ................................... 1,000,000 988,430
Dade County Water & Sewer 5.50%
10/1/25 (FGIC) ................................... 1,100,000 1,066,010
Florida Keys Aqueduct Water 5.25%
9/1/21 (AMBAC) ................................... 1,700,000 1,606,908
Indian River County Water & Sewer 5.50%
9/1/16 (FGIC) .................................... 1,000,000 992,340
Sarasota County Utility System 5.50%
10/1/22 (FGIC) ................................... 1,500,000 1,456,215
----------
6,109,903
----------
OTHER REVENUE BONDS - 14.44%
Miami Beach Resort Tax 5.50%
10/1/16 (AMBAC) .................................. 1,000,000 992,370
Orange County Public Service Tax 6.00%
10/1/24 (FGIC) ................................... 3,000,000 3,084,180
Reedy Creek Improvement (Sports Complex)
5.75% 6/1/13 (MBIA) .............................. 2,300,000 2,354,325
Saint John's County Industrial Development Authority
(Pro Golf Hall of Fame) 5.50%
3/1/17 (MBIA) .................................... 250,000 246,682
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS (CONTINUED)
Tampa Utilities Tax 6.00% 10/1/15 (AMBAC) ...... $1,000,000 $ 1,020,220
Village Center Community Development District
Series A 5.50% 11/1/10 (MBIA) ............... 250,000 259,013
-----------
7,956,790
-----------
Total Municipal Bonds
(cost $52,857,152) .......................... 54,319,775
-----------
TOTAL MARKET VALUE OF SECURITIES - 98.57%
(COST $52,857,152) ......................................... $54,319,775
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.43% ................................. 788,060
-----------
TOTAL NET ASSETS - 100.00% .................................... 55,107,835
LIQUIDATION VALUE OF PREFERRED STOCK .......................... (20,000,000)
-----------
NET ASSETS APPLICABLE TO 2,422,200 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING .............................. $35,107,835
===========
NET ASSET VALUE PER COMMON SHARE
($35,107,835 / 2,422,200 SHARES) ........................... $14.49
======
- -------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
Summary of Abbreviations:
AMBAC - Insured by the American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT SEPTEMBER 30, 1999:
Common Stock, $0.01 par value unlimited shares authorized
to the Fund ................................................ $33,361,389
Preferred stock $0.01 par value unlimited shares authorized
to the Fund ................................................ 20,000,000
Undistributed net investment income ........................... 694,056
Accumulated net realized loss on investments .................. (410,233)
Net unrealized appreciation of investments .................... 1,462,623
-----------
Total net assets .............................................. $55,107,835
===========
See accompanying notes
<PAGE>
20 for tax-exempt income
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS - 96.74%
GENERAL OBLIGATION BONDS - 14.90%
Adams County School District #12 (Five Star)
5.40% 12/15/15 (FGIC) .......................... $ 1,000,000 $ 987,170
5.40% 12/15/16 (FGIC) .......................... 2,000,000 1,958,180
Archuleta & Hinsdale Counties School District #50JT
5.50% 12/1/14 (MBIA) ........................... 1,000,000 1,004,200
5.55% 12/1/20 (MBIA) ........................... 4,000,000 3,931,280
El Paso County School District #20
5.625% 12/15/16 (AMBAC) ........................ 3,000,000 3,005,880
5.625% 12/15/16 (MBIA) ......................... 1,000,000 1,001,960
Pueblo, Colorado 5.80% 6/1/11 (MBIA) .............. 1,405,000 1,450,213
Stonegate Village Metropolitan District Refunding
& Improvement Series A 5.50%
12/1/21 (FSA) .................................. 2,750,000 2,670,965
-----------
16,009,848
-----------
HIGHER EDUCATION REVENUE BONDS - 16.57%
Aurora Educational Development
6.00% 10/15/15 (Connie Lee) .................... 2,500,000 2,563,350
Colorado Mountain College Residence Hall
Authority 5.75% 6/1/23 (MBIA) .................. 1,000,000 1,001,750
Colorado Postsecondary Education Facility
Authority (University of Denver Project)
6.00% 3/1/16 (Connie Lee) ...................... 4,000,000 4,127,000
Colorado School Mines Auxiliary Facilities
5.00% 12/1/28 (MBIA) ........................... 1,700,000 1,486,021
Colorado Springs Colorado
Colorado College (MBIA) 5.375% 6/1/32 .......... 5,000,000 4,682,900
Colorado State Board Agriculture - State University
Refunding & Improvement Auxiliary Facilities
5.125% 3/1/17 (AMBAC) .......................... 1,000,000 935,950
Colorado State Colleges Board of Trustees
(Adams State College) Series A
5.75% 5/15/19 (MBIA) ........................... 2,000,000 2,012,959
University of Northern Colorado Auxiliary
Facilities System 5.60% 6/1/24 (MBIA) .......... 1,000,000 989,370
-----------
17,799,300
-----------
HOSPITAL REVENUE BONDS - 13.12%
Colorado Health Facilities Authority
(Boulder Community Hospital Project)
Series B 5.875% 10/1/23 (MBIA) ................. 2,625,000 2,651,145
Colorado Health Facilities Authority
(North Colorado Medical Center)
5.95% 5/15/12 (MBIA) ........................... 2,000,000 2,097,820
6.00% 5/15/20 (MBIA) ........................... 1,000,000 1,024,270
Colorado Springs Memorial Hospital
6.00% 12/15/24 (MBIA) .......................... 2,250,000 2,303,820
Logan County Health Care Facilities
(Western Health Network, Inc.)
5.90% 1/1/19 (MBIA) ............................ 2,510,000 2,538,991
University of Colorado Hospital Authority
Refunding Series A 5.20%
11/15/17 (AMBAC) ............................... 3,695,000 3,483,794
-----------
14,099,840
-----------
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS - 8.26%
Colorado Housing Finance Authority
(Single Family Housing) Series AA
5.625% 11/1/23 (MBIA) ...............................$ 5,000,000 $ 4,944,500
Denver, Colorado City & County
Multi-Family Housing Mortgage Loan
(Garden Court) 5.40% 7/1/39 (FHA) ................... 2,000,000 1,861,520
Snowmass Village Multi-Family Housing
Refunding (Essential Function Housing)
6.25% 12/15/16 (FSA) ................................ 2,000,000 2,065,140
-----------
8,871,160
-----------
LEASES/CERTIFICATES OF PARTICIPATION - 8.11%
Arapahoe County, Colorado Library District
5.70% 12/15/10 (MBIA) ............................... 2,000,000 2,071,340
Auraria, Colorado Higher Education Center
(Administrative Office Facility Project)
5.125% 5/1/28 (AMBAC) ............................... 6,000,000 5,384,040
Eagle County, Colorado Public Improvements
5.40% 12/1/18 (MBIA) ................................ 1,300,000 1,254,786
-----------
8,710,166
-----------
MISCELLANEOUS & SALES TAX REVENUE BONDS - 2.62%
Castle Rock Sales & Use Tax
5.90% 6/1/16 (FSA) .................................. 1,755,000 1,799,437
Douglas County Sales & Use Tax
5.50% 10/15/11 (MBIA) ............................... 1,000,000 1,019,810
-----------
2,819,247
-----------
POLLUTION CONTROL REVENUE BONDS - 1.43%
Adams County Pollution Control Refunding
(Public Service Company Project) Series A
5.875% 4/1/14 (MBIA) ................................ 1,500,000 1,537,650
-----------
1,537,650
-----------
*PRE-REFUNDED BONDS - 11.87%
City of Westminster County Sales & Use Tax Refunding
Series A 6.25% 12/1/12-02 (FGIC) .................... 5,000,000 5,287,500
Jefferson County School District #R-001
6.00% 12/15/12-02 (AMBAC) ........................... 1,575,000 1,668,728
6.25% 12/15/12-02 (AMBAC) ........................... 2,435,000 2,597,877
Regional Transportation District (Colorado Sales Tax)
6.25% 11/1/12-02 (FGIC) ............................. 3,000,000 3,194,670
-----------
12,748,775
-----------
TRANSPORTATION REVENUE BONDS - 15.16%
Arapahoe County Capital Improvements Highway
6.05% 8/31/15 (MBIA) ................................ 4,700,000 4,920,242
Denver, Colorado City & County Airport
Series E 5.25% 11/15/23 (MBIA) ...................... 9,100,000 8,476,195
E-470 Public Highway Authority
Series A 5.00% 9/1/21 (MBIA) ........................ 500,000 447,300
Series A 5.00% 09/01/26 (MBIA) ...................... 2,000,000 1,756,200
Regional Transportation District (Colorado
Sales Tax) 6.25% 11/1/12 (FGIC) ..................... 645,000 682,649
-----------
16,282,586
-----------
<PAGE>
for tax-exempt income 21
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
MUNICIPAL BONDS (CONTINUED)
UTILITY REVENUE BONDS - 1.81%
Platte River Power Authority (Colorado Power)
Series DD 5.375% 6/1/17 (MBIA) .............. $2,000,000 $ 1,947,600
------------
1,947,600
------------
WATER & SEWER REVENUE BONDS - 2.89%
Municipal Subdistrict of Northern Colorado Water
Conservancy District Series F
6.50% 12/1/12 (AMBAC) ....................... 2,800,000 3,107,048
------------
3,107,048
------------
Total Municipal Bonds (cost $104,210,319) ...... 103,933,220
------------
TOTAL MARKET VALUE OF SECURITIES - 96.74%
(COST $104,210,319) ......................................... $103,933,220
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 3.26% ......................................... 3,506,613
------------
TOTAL NET ASSETS - 100.00% ..................................... 107,439,833
LIQUIDATION VALUE OF PREFERRED STOCK ........................... (40,000,000)
------------
NET ASSETS APPLICABLE TO 4,837,100 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING ............................... $ 67,439,833
============
NET ASSET VALUE PER COMMON SHARE
($67,439,833 / 4,837,100 SHARES)............................. $13.94
======
- ----------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
<PAGE>
Summary of Abbreviations:
AMBAC - Insured by the American Municipal Bond Assurance Corporation
Connie Lee - Insured by the College Construction Insurance Association
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT SEPTEMBER 30, 1999:
Common stock, $0.01 par value, 200 million shares
authorized to the Fund .................................. $ 67,238,110
Preferred stock, $0.01 par value, 1 million shares
authorized to the Fund .................................. 40,000,000
Undistributed net investment income ........................ 1,122,356
Accumulated net realized loss on investments ............... (643,534)
Net unrealized depreciation of investments ................. (277,099)
------------
Total net assets ........................................... $107,439,833
============
See accompanying notes
<PAGE>
22 for tax-exempt income
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR
MINNESOTA MINNESOTA MINNESOTA ARIZONA
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
INCOME FUND, INCOME FUND II, INCOME FUND III, INCOME FUND,
INC. INC. INC. INC.
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ........................................ $1,766,040 $4,767,730 $1,145,822 $1,905,776
---------- ----------- ----------- -----------
EXPENSES:
Management fees ................................. 117,418 329,723 79,430 136,969
Transfer agent fees and expenses ................ 11,400 18,031 3,600 12,966
Registration fees ............................... 400 2,400 350 1,500
Reports and statements to shareholders .......... 5,400 15,000 3,000 3,000
Accounting and administration ................... 50,452 30,424 30,550 42,384
Remarketing agent fees .......................... 28,069 78,206 21,801 35,664
Professional fees ............................... 19,000 12,100 11,150 15,000
Custodian fees .................................. 1,400 6,800 1,200 600
Directors' fees ................................. 4,800 1,900 2,400 1,200
Rating agency fees .............................. 6,000 6,000 2,150 3,000
Taxes (other than taxes on income) .............. 2,071 4,000 2,200 1,800
Interest expense ................................ 124 338 - 378
Other ........................................... 13,052 3,787 3,092 6,764
---------- ----------- ----------- -----------
259,586 508,709 160,923 261,225
Less expenses paid indirectly ................... (676) (1,898) (457) (793)
---------- ----------- ----------- -----------
Total expenses .................................. 258,910 506,811 160,466 260,432
---------- ----------- ----------- -----------
NET INVESTMENT INCOME ........................... 1,507,130 4,260,919 985,356 1,645,344
---------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized loss on investments ................ (265,111) (437,162) (111,483) (34,845)
Net change in unrealized
appreciation / depreciation
of investments ............................... (2,176,243) (7,655,530) (1,993,239) (3,457,155)
---------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS ............................... (2,441,354) (8,092,692) (2,104,722) (3,492,000)
---------- ----------- ----------- -----------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS .............................. $ (934,224) $(3,831,773) $(1,119,366) $(1,846,656)
========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR
FLORIDA COLORADO INSURED
INSURED MUNICIPAL MUNICIPAL
INCOME INCOME FUND,
FUND INC.
------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest ........................................ $1,555,231 $3,015,328
----------- -----------
EXPENSES:
Management fees ................................. 113,045 221,051
Transfer agent fees and expenses ................ 5,658 13,350
Registration fees ............................... 2,600 -
Reports and statements to shareholders .......... 4,700 11,500
Accounting and administration ................... 45,473 43,324
Remarketing agent fees .......................... 25,069 50,677
Professional fees ............................... 25,500 13,400
Custodian fees .................................. 1,800 3,600
Directors' fees ................................. 3,000 6,000
Rating agency fees .............................. 7,000 4,000
Taxes (other than taxes on income) .............. 400 1,500
Interest expense ................................ 474 1,224
Other ........................................... 831 6,619
----------- -----------
235,550 376,245
Less expenses paid indirectly ................... (650) (1,272)
----------- -----------
Total expenses .................................. 234,900 374,973
----------- -----------
NET INVESTMENT INCOME ........................... 1,320,331 2,640,355
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized loss on investments ................ (14,289) (251,902)
Net change in unrealized
appreciation / depreciation
of investments ............................... (2,935,312) (6,108,455)
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS ............................... (2,949,601) (6,360,357)
----------- -----------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS .............................. $(1,629,270) $(3,720,002)
=========== ===========
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 23
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR VOYAGEUR
MINNESOTA MUNICIPAL MINNESOTA MUNICIPAL
INCOME FUND, INC. INCOME FUND II, INC.
-------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED 9/30/99 ENDED ENDED 9/30/99 ENDED
(UNAUDITED) 3/31/99 (UNAUDITED) 3/31/99
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .............................. $ 1,507,130 $ 3,081,482 $ 4,260,919 $ 8,367,621
Net realized gain (loss) on investments ............ (265,111) 188,073 (437,162) 432,710
Net change in unrealized appreciation/
depreciation of investments ..................... (2,176,243) (173,366) (7,655,530) 315,390
----------- ----------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations ....................... (934,224) 3,096,189 (3,831,773) 9,115,721
----------- ----------- ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO:
Common shareholders from net investment income ..... (1,206,536) (2,413,071) (2,964,337) (5,928,674)
Preferred shareholders from net investment income .. (365,920) (679,203) (1,074,762) (2,064,168)
----------- ----------- ------------ ------------
(1,572,456) (3,092,274) (4,039,099) (7,992,842)
----------- ----------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS .............. (2,506,680) 3,915 (7,870,872) 1,122,879
NET ASSETS:
Beginning of period ................................ 59,918,952 59,915,037 168,456,011 167,333,132
----------- ----------- ------------ ------------
End of period ...................................... $57,412,272 $59,918,952 $160,585,139 $168,456,011
=========== =========== ============ ============
VOYAGEUR
MINNESOTA MUNICIPAL
INCOME FUND III, INC.
---------------------------------
SIX MONTHS YEAR
ENDED 9/30/99 ENDED
(UNAUDITED) 3/31/99
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .............................. $ 985,356 $ 1,883,956
Net realized gain (loss) on investments ............ (111,483) 229,501
Net change in unrealized appreciation/
depreciation of investments ..................... (1,993,239) 171,840
----------- -----------
Net increase (decrease) in net assets
resulting from operations ....................... (1,119,366) 2,285,297
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO:
Common shareholders from net investment income ..... (695,839) (1,391,680)
Preferred shareholders from net investment income .. (234,738) (512,178)
----------- -----------
(930,577) (1,903,858)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS .............. (2,049,943) 381,439
NET ASSETS:
Beginning of period ................................ 40,664,715 40,283,276
----------- -----------
End of period ...................................... $38,614,772 $40,664,715
=========== ===========
</TABLE>
See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
VOYAGEUR VOYAGEUR
ARIZONA MUNICIPAL FLORIDA INSURED MUNICIPAL
INCOME FUND, INC. INCOME FUND
-------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED 9/30/99 ENDED ENDED 9/30/99 ENDED
(UNAUDITED) 3/31/99 (UNAUDITED) 3/31/99
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .............................. $ 1,645,344 $ 3,303,402 $1,320,331 $ 2,695,600
Net realized gain (loss) on investments ............ (34,845) 592,344 (14,289) (344)
Net change in unrealized appreciation/
depreciation of investments ..................... (3,457,155) 6,754 (2,935,312) 696,343
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations ....................... (1,846,656) 3,902,500 (1,629,270) 3,391,599
----------- ----------- ----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO:
Common shareholders from net investment income ..... (1,151,875) (2,303,751) (917,408) (1,834,817)
Preferred shareholders from net investment income .. (373,970) (825,780) (301,096) (671,783)
----------- ----------- ----------- -----------
(1,525,845) (3,129,531) (1,218,504) (2,506,600)
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS .............. (3,372,501) 772,969 (2,847,774) 884,999
NET ASSETS:
Beginning of period ................................ 70,586,225 69,813,256 57,955,609 57,070,610
----------- ----------- ----------- -----------
End of period ...................................... $67,213,724 $70,586,225 $55,107,835 $57,955,609
=========== =========== =========== ===========
VOYAGEUR
COLORADO INSURED MUNICIPAL
INCOME FUND, INC.
----------------------------------
SIX MONTHS YEAR
ENDED 9/30/99 ENDED
(UNAUDITED) 3/31/99
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .............................. $ 2,640,355 $ 5,222,755
Net realized gain (loss) on investments ............ (251,902) 243,532
Net change in unrealized appreciation/
depreciation of investments ..................... (6,108,455) 996,668
------------ ------------
Net increase (decrease) in net assets
resulting from operations ....................... (3,720,002) 6,462,955
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO:
Common shareholders from net investment income ..... (1,777,634) (3,555,269)
Preferred shareholders from net investment income .. (660,804) (1,496,328)
------------ ------------
(2,438,438) (5,051,597)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS .............. (6,158,440) 1,411,358
NET ASSETS:
Beginning of period ................................ 113,598,273 112,186,915
------------ ------------
End of period ...................................... $107,439,833 $113,598,273
============ ============
</TABLE>
See accompanying notes.
<PAGE>
24 for tax-exempt income
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for each common share of the Fund outstanding throughout each
period were as follows:
<TABLE>
<CAPTION>
Voyageur
Minnesota Municipal Income Fund, Inc.
----------------------------------------------------------------------------
Six Months Year Ended Year Ended Year Ended Year Ended Year Ended
Ended 9/30/99 3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
(Unaudited)(6)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $15.380 $15.380 $14.470 $14.430 $14.210 $13.890
Income from investment operations:
Net investment income ................................ 0.581 1.188 1.180 1.060 1.180 1.210
Net realized and unrealized gain (loss) on
investments ........................................ (0.935) 0.004 0.970 0.180 0.260 0.340
------- ------- ------- ------- ------- -------
Total from investment operations ..................... (0.354) 1.192 2.150 1.240 1.440 1.550
------- ------- ------- ------- ------- -------
Less dividends and distributions to:
Common shareholders from net investment income ....... (0.465) (0.930) (0.930) (0.930) (0.930) (0.930)
Preferred shareholders from net investment income .... (0.141) (0.262) (0.280) (0.270) (0.290) (0.270)
Common shareholders from net realized gain on
investments ........................................ - - (0.020) - - (0.020)
Preferred shareholders from net realized gain on
investments ........................................ - - (0.010) - - (0.010)
------- ------- ------- ------- ------- -------
Total dividends and distributions .................... (0.606) (1.192) (1.240) (1.200) (1.220) (1.230)
------- ------- ------- ------- ------- -------
Net asset value, end of period .......................... $14.420 $15.380 $15.380 $14.470 $14.430 $14.210
======= ======= ======= ======= ======= =======
Market value, end of period ............................. $15.500 $16.500 $15.690 $14.380 $15.000 $14.500
======= ======= ======= ======= ======= =======
Total investment return based on:(1)
Market value ......................................... (3.34%) 11.29% 16.04% 2.01% 10.31% (0.71%)
Net asset value ...................................... (3.53%) 5.88% 13.02% 6.90% 8.20% 9.72%
Ratios and supplemental data:
Net assets applicable to capital shares,
end of year (000 omitted) .......................... $57,412 $59,919 $59,915 $57,544 $57,429 $56,881
Ratio of expenses to average net assets(3) ............ 0.88% 0.81% 0.77% 0.81% 0.82% 0.85%
Ratio of expenses to average net assets
applicable to common shares ........................ 1.33% 1.21% 1.17% 1.24% 1.24% 1.33%
Ratio of net investment income to average net assets(3) 5.11% 5.13% 5.20% 4.78% 5.28% 5.66%
Ratio of net investment income to average net assets
applicable to common shares(4) ..................... 5.87% 5.99% 6.01% 5.45% 6.04% 6.93%
Portfolio turnover .................................... 5% 15% 0% 5% 7% 13%
Leverage analysis:
Value of preferred shares outstanding (000 omitted) ... $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
Net asset coverage per share of preferred shares,
end of period ...................................... $143,531 $149,797 $149,788 $143,860 $143,573 $142,201
Liquidation value per share of preferred shares(5) .... $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
</TABLE>
- ------------
(1) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day
of each period reported. Dividends and distributions, if any, are assumed
for the purposes of this calculation, to be reinvested at prices obtained
under the Fund's dividend reinvestment plan. Generally, total investment
return based on net asset value will be higher than total investment return
based on market value in periods where there is an increase in the discount
or a decrease in the premium of the market value to the net asset value
from the beginning to the end of such periods. Conversely, total investment
return based on net asset value will be lower than total investment return
based on market value in periods where there is a decrease in the discount
or an increase in the premium of the market value to the net asset value
from the beginning to the end of such periods.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Ratios were 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.
(4) Ratio reflects total net investment income less dividends paid to preferred
shareholders from net investment income divided by average net assets
applicable to common shareholders.
(5) Excluding any accumulated but unpaid dividends.
(6) Ratios have been annualized and total returns have not been annualized.
See accompanying notes
<PAGE>
for tax-exempt income 25
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each common share of the Fund outstanding throughout each
period were as follows:
<TABLE>
<CAPTION>
Voyageur
Minnesota Municipal Income Fund II, Inc.
----------------------------------------------------------------------------
Six Months Year Ended Year Ended Year Ended Year Ended Year Ended
Ended 9/30/99 3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
(Unaudited)(6)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $14.950 $14.800 $13.590 $13.480 $13.120 $12.730
Income from investment operations:
Net investment income ................................ 0.588 1.154 1.130 1.130 1.100 1.110
Net realized and unrealized gain (loss) on
investments ........................................ (1.111) 0.099 1.200 0.080 0.380 0.390
------- ------- ------- ------- ------- -------
Total from investment operations ..................... (0.523) 1.253 2.330 1.210 1.480 1.500
------- ------- ------- ------- ------- -------
Less dividends and distributions to:
Common shareholders from net investment income ....... (0.409) (0.818) (0.820) (0.810) (0.800) (0.830)
Preferred shareholders from net investment income .... (0.148) (0.285) (0.300) (0.290) (0.320) (0.280)
------- ------- ------- ------- ------- -------
Total dividends and distributions .................... (0.557) (1.103) (1.120) (1.100) (1.120) (1.110)
------- ------- ------- ------- ------- -------
Net asset value, end of period .......................... $13.870 $14.950 $14.800 $13.590 $13.480 $13.120
======= ======= ======= ======= ======= =======
Market value, end of period ............................. $13.690 $15.060 $13.880 $12.630 $13.250 $12.380
======= ======= ======= ======= ======= =======
Total investment return based on:(1)
Market value ......................................... (7.39%) 14.73% 16.56% 1.47% 14.16% (9.59%)
Net asset value ...................................... (4.58%) 6.76% 15.51% 6.97% 8.88% 10.16%
Ratios and supplemental data:
Net assets applicable to capital shares,
end of year (000 omitted) .......................... $160,585 $168,456 $167,333 $158,572 $157,755 $155,139
Ratio of expenses to average net assets(3) ............ 0.61% 0.64% 0.76% 0.74% 0.77% 0.77%
Ratio of expenses to average net assets
applicable to common shares ........................ 0.96% 1.00% 1.19% 1.19% 1.23% 1.28%
Ratio of net investment income to average net assets(3) 5.15% 4.96% 4.98% 5.15% 5.03% 5.39%
Ratio of net investment income to average net assets
applicable to common shares(4) ..................... 6.05% 5.80% 5.73% 6.15% 5.76% 6.69%
Portfolio turnover .................................... 4% 15% 4% 20% 11% 32%
Leverage analysis:
Value of preferred shares outstanding (000 omitted) ... $60,000 $60,000 $60,000 $60,000 $60,000 $60,000
Net asset coverage per share of preferred shares,
end of period ...................................... $133,821 $140,380 $139,444 $132,143 $131,462 $129,283
Liquidation value per share of preferred shares(5) .... $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
</TABLE>
- ------------
(1) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day
of each period reported. Dividends and distributions, if any, are assumed
for the purposes of this calculation, to be reinvested at prices obtained
under the Fund's dividend reinvestment plan. Generally, total investment
return based on net asset value will be higher than total investment return
based on market value in periods where there is an increase in the discount
or a decrease in the premium of the market value to the net asset value
from the beginning to the end of such periods. Conversely, total investment
return based on net asset value will be lower than total investment return
based on market value in periods where there is a decrease in the discount
or an increase in the premium of the market value to the net asset value
from the beginning to the end of such periods.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Ratios were 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.
(4) Ratio reflects total net investment income less dividends paid to preferred
shareholders from net investment income divided by average net assets
applicable to common shareholders.
(5) Excluding any accumulated but unpaid dividends.
(6) Ratios have been annualized and total returns have not been annualized.
See accompanying notes
<PAGE>
26 for tax-exempt income
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each common share of the Fund outstanding throughout each
period were as follows:
<TABLE>
<CAPTION>
Voyageur
Minnesota Municipal Income Fund III, Inc.
----------------------------------------------------------------------------
Six Months Year Ended Year Ended Year Ended Year Ended Year Ended
Ended 9/30/99 3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
(Unaudited)(6)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $13.970 $13.760 $12.710 $12.540 $12.200 $11.860
Income from investment operations:
Net investment income ................................ 0.536 1.025 1.050 1.080 1.050 1.060
Net realized and unrealized gain (loss) on
investments ........................................ (1.149) 0.222 1.060 0.150 0.330 0.280
------- ------- ------- ------- ------- -------
Total from investment operations ..................... (0.613) 1.247 2.110 1.230 1.380 1.340
------- ------- ------- ------- ------- -------
Less dividends and distributions to:
Common shareholders from net investment income (0.379) (0.758) (0.760) (0.750) (0.720) (0.730)
Preferred shareholders from net investment income .... (0.128) (0.279) (0.300) (0.310) (0.320) (0.280)
------- ------- ------- ------- ------- -------
Total dividends and distributions .................... (0.507) (1.037) (1.060) (1.060) (1.040) (1.010)
------- ------- ------- ------- ------- -------
Capital share transactions:
Capital charge with respect to issuance of shares .... - - - - - 0.010
------- ------- ------- ------- ------- -------
Net asset value, end of period .......................... $12.850 $13.970 $13.760 $12.710 $12.540 $12.200
======= ======= ======= ======= ======= =======
Market value, end of period ............................. $12.750 $14.125 $13.380 $12.250 $12.000 $11.250
======= ======= ======= ======= ======= ========
Total investment return based on:(1)
Market value ......................................... (8.02%) 11.59% 15.80% 8.62% 13.51% (14.27%)
Net asset value ...................................... (5.44%) 7.28% 14.82% 7.50% 8.79% 9.55%
Ratios and supplemental data:
Net assets applicable to capital shares,
end of year (000 omitted) .......................... $38,615 $40,665 $40,283 $38,348 $38,046 $37,418
Ratio of expenses to average net assets(3) ............ 0.81% 0.77% 0.83% 0.81% 0.81% 0.82%
Ratio of expenses to average net assets
applicable to common shares ........................ 1.29% 1.22% 1.34% 1.33% 1.33% 1.40%
Ratio of net investment income to average net assets(3) 4.94% 4.64% 4.88% 5.17% 5.05% 5.37%
Ratio of net investment income to average net assets
applicable to common shares(4) ..................... 6.05% 5.35% 5.61% 6.05% 5.81% 6.79%
Portfolio turnover .................................... 6% 15% 9% 39% 35% 47%
Leverage analysis:
Value of preferred shares outstanding (000 omitted) .. $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Net asset coverage per share of preferred shares,
end of period ...................................... $128,716 $135,549 $134,278 $127,826 $126,821 $124,728
Liquidation value per share of preferred shares(5) ... $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
</TABLE>
- ------------
(1) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day
of each period reported. Dividends and distributions, if any, are assumed
for the purposes of this calculation, to be reinvested at prices obtained
under the Fund's dividend reinvestment plan. Generally, total investment
return based on net asset value will be higher than total investment return
based on market value in periods where there is an increase in the discount
or a decrease in the premium of the market value to the net asset value
from the beginning to the end of such periods. Conversely, total investment
return based on net asset value will be lower than total investment return
based on market value in periods where there is a decrease in the discount
or an increase in the premium of the market value to the net asset value
from the beginning to the end of such periods.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Ratios were 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.
(4) Ratio reflects total net investment income less dividends paid to preferred
shareholders from net investment income divided by average net assets
applicable to common shareholders.
(5) Excluding any accumulated but unpaid dividends.
(6) Ratios have been annualized and total returns have not been annualized.
See accompanying notes
<PAGE>
for tax-exempt income 27
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each common share of the Fund outstanding throughout each
period were as follows:
<TABLE>
<CAPTION>
Voyageur
Arizona Municipal Income Fund, Inc.
------------------------------------------------------------------------------
Six Months Year Ended Year Ended Year Ended Year Ended Year Ended
Ended 9/30/99(6) 3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $ 15.290 $ 15.030 $ 13.780 $ 13.740 $ 13.220 $ 12.700
Income from investment operations:
Net investment income ................................ 0.552 1.108 1.090 1.080 1.090 1.080
Net realized and unrealized gain (loss) on
investments ........................................ (1.170) 0.202 1.230 0.010 0.470 0.560
-------- -------- -------- -------- -------- --------
Total from investment operations ..................... (0.618) 1.310 2.320 1.090 1.560 1.640
-------- -------- -------- -------- -------- --------
Less dividends and distributions to:
Common shareholders from net investment income ....... (0.386) (0.773) (0.770) (0.760) (0.730) (0.780)
Preferred shareholders from net investment
income ............................................ (0.126) (0.277) (0.300) (0.290) (0.310) (0.280)
Common shareholders from net realized gain on
investments ........................................ - - - - - (0.050)
Preferred shareholders from net realized gain
on investments ..................................... - - - - - (0.010)
-------- -------- -------- -------- -------- --------
Total dividends and distributions .................... (0.512) (1.050) (1.070) (1.050) (1.040) (1.120)
-------- -------- -------- -------- -------- --------
Net asset value, end of period. ......................... $ 14.160 $ 15.290 $ 15.030 $ 13.780 $ 13.740 $ 13.220
======== ======== ======== ======== ======== ========
Market value, end of period. ............................ $ 14.060 $ 15.125 $ 14.630 $ 13.000 $ 12.750 $ 12.130
======== ======== ======== ======== ======== ========
Total investment return based on:(1)
Market value ......................................... (4.54%) 8.84% 18.79% 8.20% 11.52% (6.43%)
Net asset value ...................................... (4.92%) 7.07% 15.17% 5.94% 9.55% 11.29%
Ratios and supplemental data:
Net assets applicable to capital shares,
end of year (000 omitted) ......................... $ 67,214 $ 70,586 $ 69,813 $ 66,102 $ 65,990 $ 64,438
Ratio of expenses to average net assets3 ............. 0.75% 0.74% 0.80% 0.78% 0.78% 0.79%
Ratio of expenses to average net assets
applicable to common shares ....................... 1.18% 1.15% 1.26% 1.25% 1.26% 1.32%
Ratio of net investment income to average
net assets(3) ...................................... 4.76% 4.69% 4.71% 4.85% 4.88% 5.19%
Ratio of net investment income to average
net assets applicable to common shares(4) .......... 5.77% 5.46% 5.34% 5.71% 5.57% 6.42%
Portfolio turnover ................................... 18% 46% 22% 31% 30% 18%
Leverage analysis:
Value of preferred shares outstanding
(000 omitted) ...................................... $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000
Net asset coverage per share of preferred
shares, end of period .............................. $134,427 $141,172 $139,627 $132,205 $131,979 $128,877
Liquidation value per share of preferred
shares(5) .......................................... $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
</TABLE>
- ----------
(1) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
the purposes of this calculation, to be reinvested at prices obtained under
the Fund's dividend reinvestment plan. Generally, total investment return
based on net asset value will be higher than total investment return based
on market value in periods where there is an increase in the discount or a
decrease in the premium of the market value to the net asset value from the
beginning to the end of such periods. Conversely, total investment return
based on net asset value will be lower than total investment return based on
market value in periods where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such periods.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Ratios were 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.
(4) Ratio reflects total net investment income less dividends paid to preferred
shareholders from net investment income divided by average net assets
applicable to common shareholders.
(5) Excluding any accumulated but unpaid dividends.
(6) Ratios have been annualized and total returns have not been annualized.
See accompanying notes
<PAGE>
28 for tax-exempt income
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each common share of the Fund outstanding throughout each
period were as follows:
<TABLE>
<CAPTION>
Voyageur
Florida Insured Municipal Income Fund
------------------------------------------------------------------------------
Six Months Year Ended Year Ended Year Ended Year Ended Year Ended
Ended 9/30/99(6) 3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................... $ 15.670 $ 15.300 $ 13.670 $ 13.710 $ 13.170 $ 12.460
Income from investment operations:
Net investment income ............................... 0.536 1.113 1.090 1.080 1.060 1.070
Net realized and unrealized gain (loss) on
investments ....................................... (1.213) 0.292 1.600 (0.080) 0.510 0.690
-------- -------- -------- -------- -------- --------
Total from investment operations .................... (0.677) 1.405 2.690 1.000 1.570 1.760
-------- -------- -------- -------- -------- --------
Less dividends and distributions to:
Common shareholders from net investment income ...... (0.379) (0.758) (0.760) (0.750) (0.720) (0.770)
Preferred shareholders from net investment income ... (0.124) (0.277) (0.300) (0.290) (0.310) (0.280)
-------- -------- -------- -------- -------- --------
Total dividends and distributions ................... (0.503) (1.035) (1.060) (1.040) (1.030) (1.050)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ......................... $ 14.490 $ 15.670 $ 15.300 $ 13.670 $ 13.710 $ 13.170
======== ======== ======== ======== ======== ========
Market value, end of period ............................ $ 13.125 $ 14.750 $ 14.310 $ 12.500 $ 12.750 $ 12.250
======== ======== ======== ======== ======== ========
Total investment return based on:(1)
Market value ........................................ (8.62%) 8.47% 20.94% 3.94% 10.39% 4.69%
Net asset value ..................................... (5.04%) 7.80% 18.22% 5.23% 9.66% 12.56%
Ratios and supplemental data:
Net assets applicable to capital shares,
end of year (000 omitted) ........................... $ 55,108 $ 57,956 $ 57,071 $ 53,110 $ 53,207 $ 51,891
Ratio of expenses to average net assets(3)........... 0.91% 0.75% 0.80% 0.78% 0.80% 0.81%
Ratio of expenses to average net assets
applicable to common shares ......................... 1.41% 1.14% 1.25% 1.25% 1.27% 1.35%
Ratio of net investment income to average net
assets(3) ........................................... 4.58% 4.67% 4.73% 4.91% 4.82% 5.21%
Ratio of net investment income to average net assets
applicable to common shares(4)....................... 5.44% 5.73% 5.33% 5.74% 5.45% 6.37%
Portfolio turnover ................................... 0% 0% 5% 68% 22% 10%
Leverage analysis:
Value of preferred shares outstanding (000 omitted).. $20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000
Net asset coverage per share of preferred
shares, end of period ............................. $137,770 $144,889 $142,677 $132,775 $133,017 $129,728
Liquidation value per share of preferred shares(5) .. $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
</TABLE>
- ----------
(1) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
the purposes of this calculation, to be reinvested at prices obtained under
the Fund's dividend reinvestment plan. Generally, total investment return
based on net asset value will be higher than total investment return based
on market value in periods where there is an increase in the discount or a
decrease in the premium of the market value to the net asset value from the
beginning to the end of such periods. Conversely, total investment return
based on net asset value will be lower than total investment return based on
market value in periods where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such periods.
(2) Commencing May 1, 1997 Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
(3) Ratios were 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.
(4) Ratio reflects total net investment income less dividends paid to preferred
shareholders from net investment income divided by average net assets
applicable to common shareholders.
(5) Excluding any accumulated but unpaid dividends.
(6) Ratios have been annualized and total returns have not been annualized.
See accompanying notes
<PAGE>
for tax-exempt income 29
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each common share of the Fund outstanding throughout each
period were as follows:
<TABLE>
<CAPTION>
Voyageur
Colorado Insured Municipal Income Fund, Inc.
------------------------------------------------------------------------------
Six Months Year Ended Year Ended Year Ended Year Ended Year Ended
Ended 9/30/99 3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
(Unaudited)(6)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $ 15.220 $ 14.920 $ 13.580 $ 13.610 $ 13.190 $ 12.800
Income from investment operations:
Net investment income ................................ 0.546 1.080 1.070 1.050 1.030 1.020
Net realized and unrealized gain (loss) on
investments ........................................ (1.322) 0.264 1.300 (0.060) 0.410 0.440
-------- -------- -------- -------- -------- --------
Total from investment operations ..................... (0.776) 1.344 2.370 0.990 1.440 1.460
-------- -------- -------- -------- -------- --------
Less dividends and distributions to:
Common shareholders from net investment income ....... (0.367) (0.735) (0.740) (0.730) (0.700) (0.760)
Preferred shareholders from net investment income .... (0.137) (0.309) (0.290) (0.290) (0.320) (0.270)
Common shareholders from net realized gain on
investments ........................................ - - - - - (0.030)
Preferred shareholders from net realized gain on
investments ........................................ - - - - - (0.010)
Total dividends and distributions .................... (0.504) (1.044) (1.030) (1.020) (1.020) (1.070)
-------- -------- -------- -------- -------- --------
Net asset value, end of period .......................... $ 13.940 $ 15.220 $ 14.920 $ 13.580 $ 13.610 $ 13.190
======== ======== ======== ======== ======== ========
Market value, end of period ............................. $ 13.060 $ 14.938 $ 14.000 $ 12.500 $ 12.630 $ 12.250
======== ======== ======== ======== ======== ========
Total investment return based on:(1)
Market value ......................................... (10.22%) 12.13% 18.09% 4.77% 8.99% (10.05%)
Net asset value ...................................... (5.97%) 7.21% 15.84% 5.19% 8.55% 9.67%
Ratios and supplemental data:
Net assets applicable to capital shares, end of year
(000 omitted) ...................................... $107,440 $113,598 $112,187 $105,687 $105,843 $103,781
Ratio of expenses to average net assets(3) 0.67% 0.69% 0.75% 0.77% 0.75% 0.76%
Ratio of expenses to average net assets applicable to
common shares ........................................ 1.06% 1.06% 1.18% 1.23% 1.21% 1.27%
Ratio of net investment income to average
net assets(3) ...................................... 4.77% 4.61% 4.72% 4.76% 4.68% 4.88%
Ratio of net investment income to average net
assets applicable to common shares(4) .............. 5.61% 5.08% 5.38% 5.51% 5.18% 5.88%
Portfolio turnover ................................... 17% 18% 39% 88% 39% 7%
Leverage analysis:
Value of preferred shares outstanding (000 omitted) .. $ 40,000 $ 40,000 $ 40,000 $ 40,000 $ 40,000 $ 40,000
Net asset coverage per share of preferred shares,
end of period ...................................... $134,300 $141,998 $140,234 $132,109 $132,304 $129,727
Liquidation value per share of preferred shares(5) ... $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
</TABLE>
- ----------
(1) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
the purposes of this calculation, to be reinvested at prices obtained under
the Fund's dividend reinvestment plan. Generally, total investment return
based on net asset value will be higher than total investment return based
on market value in periods where there is an increase in the discount or a
decrease in the premium of the market value to the net asset value from the
beginning to the end of such periods. Conversely, total investment return
based on net asset value will be lower than total investment return based on
market value in periods where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such periods.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Ratios were 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.
(4) Ratio reflects total net investment income less dividends paid to preferred
shareholders from net investment income divided by average net assets
applicable to common shareholders.
(5) Excluding any accumulated but unpaid dividends.
(6) Ratios have been annualized and total returns have not been annualized.
See accompanying notes
<PAGE>
30 for tax-exempt income
Notes To Financial Statements
September 30, 1999
(Unaudited)
- --------------------------------------------------------------------------------
Voyageur Minnesota Municipal Income Fund, Inc. ("Minnesota Municipal Fund");
Voyageur Minnesota Municipal Income Fund II, Inc. ("Minnesota Municipal Fund
II"); Voyageur Minnesota Municipal Income Fund III, Inc. ("Minnesota Municipal
Fund III"); Voyageur Arizona Municipal Income Fund, Inc. ("Arizona Municipal
Fund"); Voyageur Florida Insured Municipal Income Fund ("Florida Insured
Municipal Fund"); and Voyageur Colorado Insured Municipal Income Fund, Inc.
("Colorado Insured Municipal Fund") (each referred to as a "Fund") are
registered under the Investment Company Act of 1940 ("1940 Act"), as amended, as
closed-end management investment companies. The Minnesota Municipal II, Florida
Insured Municipal and Arizona Municipal Funds are registered as diversified
funds. The Minnesota Municipal, Minnesota Municipal II and Colorado Insured
Municipal Funds are registered as non-diversified funds. The Funds' shares trade
on the American Stock Exchange.
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. Florida Insured Municipal 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 of its net assets in
investment grade, tax-exempt municipal obligations of its respective state.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days to maturity are
valued at amortized cost which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Funds' Board
of Directors.
Federal Income Taxes - Each Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
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 at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Other - Expenses common to all funds are allocated amongst the funds within the
Delaware Investments Family of Funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Interest income is recorded on the accrual basis. Original issue discounts and
market premiums are amortized to interest income over the lives of the
respective securities. Each Fund intends to pay monthly dividends from net
investment income. Capital gains, if any, are distributed annually.
<PAGE>
Certain expenses of the Funds are paid through "soft dollar" arrangements with
brokers. These transactions are done subject to best price and execution. The
expenses paid under the above arrangements are included in the expense caption
in the Statement of Operations with the corresponding offset shown as "expenses
paid indirectly". The amount of these expenses for the period ended September
30, 1999 were approximately:
<TABLE>
<CAPTION>
Florida Colorado
Minnesota Minnesota Minnesota Arizona Insured Insured
Municipal Municipal Municipal Municipal Municipal Municipal
Fund Fund II Fund III Fund Fund Fund
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
"Soft Dollar" Expenses ............ $676 $1,898 $457 $793 $650 $1,272
</TABLE>
2. Investment Management, Administration and Transactions with Affiliates
In accordance with the terms of their respective Investment Management
Agreements, each Fund pays Delaware Management Company ("DMC"), the Investment
Manager, an annual fee of 0.40% which is calculated daily based upon the average
net assets of each Fund, including assets attributable to any preferred stock
that may be outstanding.
The Funds have engaged Delaware Service Company, Inc. "DSC", an affiliate of DMC
to provide administration and accounting services.
On September 30, 1999, the Funds had payables to affiliates as follows:
<TABLE>
<CAPTION>
Florida Colorado
Minnesota Minnesota Minnesota Arizona Insured Insured
Municipal Municipal Municipal Municipal Municipal Municipal
Fund Fund II Fund III Fund Fund Fund
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment management fee payable to DMC .............. $48,545 $163,277 $38,798 $67,179 $44,049 $146,925
Administration fees, accounting fees
and other expenses payable to DSC and affiliates ... 69,830 131,764 44,639 42,581 38,617 112,437
</TABLE>
Certain officers of DMC are officers, directors and/or employees of the Funds.
These officers, directors, and employees are not compensated by the Funds.
<PAGE>
for tax-exempt income 31
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
3. Investments
During the six months ended September 30, 1999, the Funds made purchases and
sales of investment securities other than U.S. government securities and
temporary cash investments as follows:
<TABLE>
<CAPTION>
Florida Colorado
Minnesota Minnesota Minnesota Arizona Insured Insured
Municipal Municipal Municipal Municipal Municipal Municipal
Fund Fund II Fund III Fund Fund Fund
--------- --------- ---------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Purchases ...................... $3,032,094 $4,293,094 $2,400,452 $12,093,152 - $16,953,391
Sales .......................... 3,371,159 5,721,867 2,937,842 12,047,923 $106,529 18,860,519
</TABLE>
The cost of investments for federal tax purposes approximates the cost for book
purposes. At September 30, 1999, the aggregate cost of investments and
unrealized appreciation (depreciation) of securities for federal income tax
purposes for each Fund were as follows:
<TABLE>
<CAPTION>
Aggregate Aggregate
Cost of Unrealized Unrealized Net Unrealized
Investments Appreciation Depreciation Appreciation
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Minnesota Municipal Fund ........................ $ 54,553,716 $2,531,925 $ 368,849 $2,163,076
Minnesota Municipal Fund II ..................... 156,361,743 3,634,138 1,328,719 2,305,419
Minnesota Municipal Fund III .................... 37,198,882 1,393,909 514,978 878,931
Arizona Municipal Fund .......................... 65,603,120 1,782,112 985,743 796,369
Florida Insured Municipal Fund .................. 52,857,152 1,532,187 69,564 1,462,623
Colorado Insured Municipal Fund ................. 104,210,319 1,555,359 1,832,458 (277,099)
</TABLE>
For federal income tax purposes, as of March 31, 1999, the Funds had capital
loss carryforwards expiring in the following years:
<TABLE>
<CAPTION>
2003 2004 2005 2006 Total
-------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Minnesota Municipal Fund II ......................... $913,206 $1,143,840 $ 89,665 $132,129 $2,278,840
Minnesota Municipal Fund III ........................ 866,889 1,279,495 455,666 6,539 2,608,589
Arizona Municipal Fund .............................. - - 47,185 - 47,185
Florida Insured Municipal Fund ...................... 212,501 183,099 - - 395,600
Colorado Insured Municipal Fund ..................... - - 391,632 - 391,632
</TABLE>
4. Capital Stock
Pursuant to their articles of incorporation, Minnesota Municipal Fund, Minnesota
Municipal Fund II, Minnesota Municipal Fund III, Arizona Municipal Fund and
Colorado Insured Municipal Fund each have 200 million shares of $0.01 par value
common shares authorized. Florida Insured Municipal Fund has been authorized to
issue an unlimited amount of $0.01 par value common shares.
For the year ended March 31, 1999 and the six months ended September 30, 1999,
the Funds did not have any transactions in common shares.
<PAGE>
32 for tax-exempt income
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
The Funds each have one million shares of $0.01 par value preferred shares
authorized, except for Florida Insured Municipal Fund which has an unlimited
amount of $0.01 par value preferred shares authorized. Under resolutions adopted
by the Board of Directors/Trustees, Minnesota Municipal Fund 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 Fund II, Arizona Municipal Fund and
Florida Insured Municipal Fund issued 1,200, 500 and 400 preferred shares,
respectively. On December 10, 1993, Minnesota Municipal Fund III issued 300
preferred shares and on September 23, 1993, Colorado Insured Municipal Fund
issued 800 preferred shares. The preferred shares of each Fund 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 any
capital gain distributions) ranged from 3.10% to 3.80% on Minnesota Municipal
Fund, from 3.20% to 3.70% on Minnesota Municipal Fund II, from 3.30% to 3.55% on
Minnesota Municipal Fund III, from 2.95% to 3.55% on Arizona Municipal Fund,
from 3.15% to 3.50% on Florida Insured Municipal Fund and from 3.47% to 3.90% on
Colorado Insured Municipal Fund during the six months ended September 30, 1999.
Salomon Smith Barney, Inc. and Merrill Lynch Pierce, Fenner & Smith Inc.
(Colorado Insured Municipal Fund only), as the remarketing agents, receive an
annual fee from each of the Funds of 0.25% 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%. The preferred shares are
redeemable at the option of the Funds, 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. 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 of 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.
5. Market and Credit Risks
The Funds concentrate their investments in securities issued by each specific
state's municipalities. The value of these investments may be adversely affected
by new legislation within the state, regional or local economic conditions, and
differing levels of supply and demand for municipal bonds. Many municipalities
insure repayment for their obligations. Although bond insurance reduces the risk
of loss due to default by an issuer, such bonds remain subject to the risk that
the market may fluctuate for other reasons and there is no assurance that the
insurance company will meet its obligations. These securities have been
identified in the Statement of Net Assets.
6. Year 2000
Like other investment companies, financial and business organizations and
individuals around the world, the Funds could be adversely affected if computer
systems used by the Investment Manager and other service providers do not
properly process and calculate date-related information and data on and after
January 1, 2000. The Funds are taking steps to obtain satisfactory assurances
that the Investment Manager and other major service providers are taking steps
reasonably designed to address the Year 2000 issue with respect to the computer
systems that such service providers use. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact to the
Funds.
<PAGE>
This Semi-Annual Report is for the information of Shareholders of Voyageur
Closed-End Municipal Bond Funds. It sets forth details about charges, expenses,
investment objectives and operating policies of each Fund. You should read it
carefully before you invest. The return and principal value of an investment in
each Fund will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost.
Board of Directors
Wayne A. Stork
Chairman
Delaware Investments Family of Funds
Philadelphia, PA
David K. Downes
President and Chief Executive Officer
Delaware Investments Family of Funds
Philadelphia, PA
Walter P. Babich
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
Anthony D. Knerr
Consultant, Anthony Knerr & Associates
New York, NY
Ann R. Leven
Treasurer, National Gallery of Art
Washington, DC
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
Charles E. Peck
Retired
Fredericksburg, VA
Jan L. Yeomans
Vice President and Treasurer
3M Corporation
St. Paul, MN
Thomas F. Madison and Jan L. Yeomans were elected by the preferred shareholders
of the Voyageur Closed-End Municipal Bond Funds.
<PAGE>
Affiliated Officers
Richard J. Flannery
Executive Vice President and General Counsel
Delaware Investments Family of Funds
Philadelphia, PA
Bruce D. Barton
President and Chief Executive Officer
Delaware Distributors, L.P.
Philadelphia, PA
Eric E. Miller
Senior Vice President, Secretary
and Deputy General Counsel
Delaware Investments Family of Funds
Philadelphia, PA
(photo of globes)
directors
& officers
- --------------------------------------------------------------------------------
Investment Manager Principal Office of the Fund
Delaware Management Company 1818 Market Street
Philadelphia, Pennsylvania Philadelphia, PA 19103-3682
International Affiliate Independent Auditors
Delaware International Advisers Ltd. Ernst & Young LLP
London, England 2001 Market Street
Philadelphia, PA
<PAGE>
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Funds included herein may from time to time
purchase shares of their common stock in the open market.
Registrar and Stock
Transfer Agent
Norwest Bank Minnesota, NA
P.O. Box 64851
St. Paul, Minnesota 55164-0854
1.800.468.9716
Number of Recordholders
As of September 30, 1999
Minnesota Municipal Income Fund I 459
Minnesota Municipal Income Fund II 778
Minnesota Municipal Income Fund III 191
Arizona Municipal Income Fund 147
Florida Insured Municipal
Income Fund 270
Colorado Insured Municipal
Income Fund 248
For Securities Dealers
1.800.362.7500
Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
(photo of globes)
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
Printed in the USA
on recycled paper
(2320)
VOY-CESA [9/99] PP11/99
