<PAGE>
Voyageur
Closed-End
Municipal Bond Funds
FOR TAX-EXEMPT INCOME
service and guidance
(various photos demonstrating service and guidance,
professional management and goals)
professional management
1999
Annual
Report
goals
Arizona Municipal Income Fund
Florida Insured Municipal Income Fund
Colorado Insured Municipal Income Fund
Minnesota Municipal Income Funds I
Minnesota Municipal Income Funds II
Minnesota Municipal Income Funds III
DELAWARE
INVESTMENTS
- ----------------------
Philadelphia o London
<PAGE>
A TRADITION OF SOUND INVESTING
commitment
Investment Objectives
and Strategies
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 at
least 80% of its net assets in investment grade, tax-exempt municipal
obligations.
(photo of computer keyboard)
(illustration of airport)
INVESTMENT ADVISER
Delaware Management Company (Delaware Management) 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 manages more than $45 billion 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 closed-end equity funds traded on the New York Stock
Exchange.
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 the Fund's net asset value could be
more sensitive to fluctuations in short-term interest rates and equity prices.
Delaware believes this volatility risk is reasonable given the benefits of
higher income potential.
tax-exempt
income
tradition
<PAGE>
April 12, 1999
for tax-exempt
income
1
Dear Shareholder:
OUR 1999 FISCAL YEAR WAS MARKED BY momentous activity in the municipal bond
market. First there was the brisk pace at which state and local governments
issued new bonds. Second was an increase in refunding activity to pay off old
debts, driven by the attractiveness of lower interest rates.
Following very heavy activity in the early part of the year, reduced
demand in the late summer and early fall of 1998 temporarily curbed new issuance
and refunding activity. Concern about a global recession and lower U.S.
corporate earnings growth prompted foreign and domestic investors to seek the
safety and liquidity of U.S. Treasuries. As U.S. Treasury prices rose, their
yields fell. This allowed municipal bond yields to nearly catch up to
Treasuries. Unlike Treasuries, the payment of principal and interest on
municipal bonds is not guaranteed by the U.S. government.
WITH 30-YEAR TAX-EXEMPT BONDS STILL YIELDING MORE THAN THEIR HISTORIC AVERAGE OF
83% OF TREASURIES, WE BELIEVE MUNICIPAL BONDS REMAIN ATTRACTIVELY PRICED
COMPARED TO TREASURIES.
By October, 30-year AAA (the highest quality rating) general obligation
municipal bonds had a yield of 4.82%, about 98% of the yield available from
comparable maturity Treasuries. We considered this a compelling value given that
the interest on municipal bonds is exempt from federal income tax.
As we ended our 1999 fiscal year on March 31, the yield on the 30-year U.S.
Treasury had risen to 5.62%, widening the
<TABLE>
TOTAL RETURNS
- ------------------------------------------------------------------------------------------------------------------------------------
APRIL 1, 1998 TO MARCH 31, 1999
Premium (+)/
Total Return Total Return Discount (-)*
at Net Asset at Market as of ASE
Value Value March 31, 1999 Symbol
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Minnesota Municipal Income Fund I +5.88% +11.29% +7.28% VMN
Minnesota Municipal Income Fund II +6.76% +14.73% +0.75% VMM
Minnesota Municipal Income Fund III +7.28% +11.59% +1.11% VYM
Lipper Minnesota Closed-End Municipal Fund Average (6 funds) +6.07%
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona Municipal Income Fund +7.07% +8.84% -1.08% VAZ
Lipper Other States Closed-End Municipal Debt Fund Average (18 funds) +6.15%
- ------------------------------------------------------------------------------------------------------------------------------------
Florida Insured Municipal Income Fund +7.80% +8.47% -5.87% VFL
Lipper Florida Closed-End Municipal Fund Average (14 funds) +5.95%
- ------------------------------------------------------------------------------------------------------------------------------------
Colorado Insured Municipal Income Fund +7.21% +12.13% -1.86% VCF
Lipper Other States Closed-End Municipal Debt Fund Average (18 funds) +6.15%
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +6.20%
Lehman Brothers Insured Municipal Bond Index +6.43%
</TABLE>
- --------------------------------------------------------------------------------
* As of March 31, 1999.
The Funds' total returns and the returns of unmanaged indexes shown above
assume reinvestment of distributions. Past performance does not guarantee future
results. The indexes are not available for direct investment.
<PAGE>
for tax-exempt
income
2
yield gap between Treasuries and municipal bonds. However, with 30-year
tax-exempt bonds still yielding more than their historic average of 83% of
Treasuries, we believe municipal bonds remain attractively priced compared to
Treasuries. (Source: Municipal Market Data)
We are pleased with the performance of the Voyageur Closed-End Municipal
Bond Funds for the 12 months ended March 31, 1999. Five of the six funds in this
report outperformed their respective unmanaged indexes and peer group averages
for fiscal 1999, as the table on page 1 shows, with Minnesota Municipal Income
Fund I slightly underperforming.
The three Minnesota Municipal Income Funds traded at attractive premiums
to net asset value.
In the first three months of 1999, new issuance of municipal bonds was
light, down 19% from the same period in 1998, according to The Bond Buyer.
Refunding activity had also declined since many state and local governments have
already taken advantage of lower interest rates to reduce existing debt
payments.
On the pages that follow, the portfolio managers for the Voyageur
Closed-End Municipal Bond Funds review each Fund's performance and positioning
in fiscal 1999. They also share their outlook for the economies and municipal
bond markets in Minnesota, Arizona, Florida and Colorado for fiscal year 2000.
We thank you for your investment, and look forward to reporting to you
again next autumn.
Sincerely,
/S/ WAYNE A. STORK
- -------------------------------------
WAYNE A. STORK
Director of the Funds
Chairman,
Delaware Management Holdings, Inc.
/S/ DAVID K. DOWNES
- -------------------------------------
DAVID K. DOWNES
Executive Vice President
and Chief Operating Officer
Delaware Investments Family of Funds
discipline
<PAGE>
for tax-exempt
income
3
Portfolio Managers' Review
ELIZABETH H. HOWELL
Vice President/Senior Portfolio Manager
Minnesota Municipal Income Funds I, II, III
ANDREW M. MCCULLAGH, JR.
Vice President/Senior Portfolio Manager
Arizona Municipal Income Fund,
Colorado Insured Municipal Income Fund
PATRICK P. COYNE AND MITCHELL L. CONERY
Vice Presidents/Senior Portfolio Managers
Florida Insured Municipal Income Fund
April 12, 1999
Minnesota Municipal
Income Funds - I, II, III
THE VOYAGEUR MINNESOTA MUNICIPAL Income Funds II and III provided superior
returns at net asset value for the 12 months ended March 31, 1999, compared to
the unmanaged Lehman Brothers Municipal Bond Index and the average return of
funds in the Lipper Minnesota Closed End Municipal Fund Average.
Minnesota Municipal Income Fund II and III had higher returns at net asset
value than Fund I. We attribute this to the longer average effective durations
for Funds II and III, as shown in the table below.
In February 1999, we began to modestly lengthen each Fund's duration
because we think interest rates could move lower in 1999. A longer duration
would improve our total return potential if interest rates decline. We
lengthened duration without sacrificing income.
During fiscal 1999, 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. Of the
issuance we've seen, most has been nonrated issues of small rural Minnesota
nursing homes. We added some of these bonds to each Fund's holdings to take
advantage of their higher relative yields.
As of March 31, we held roughly one-fourth of each Fund's net assets in
pre-refunded bonds. During the past year, municipalities used lower interest
rates to
minnesota
Minnesota Municipal Income Funds
Bond Quality and Portfolio Highlights
- --------------------------------------------------------------------------------
MARCH 31, 1999
Fund I Fund II Fund III
- --------------------------------------------------------------------------------
AAA 40.57% 24.94% 38.60%
AA 19.72% 28.18% 10.07%
A 23.90% 31.35% 28.69%
BBB -- 1.86% 6.40%
Unrated 15.81% 13.67% 16.24%
- --------------------------------------------------------------------------------
Average Quality AA AA AA
Average Effective Maturity 6.48 years 7.10 years 7.55 years
Average Effective Duration 4.68 years 5.54 years 5.82 years
Current Yield at Market Price 5.64% 5.43% 5.32%
Amount of Leveraging (Millions) $20 million $60 million $15 million
- --------------------------------------------------------------------------------
Approximately 19.95%, 20.49% and 12.23% of the income generated by Minnesota
Municipal Income Funds - I, II and III for the 12 months ended March 31, 1999,
respectively, was subject to the federal alternative minimum tax.
<PAGE>
for tax-exempt
income
4
pay off older debt at lower costs. They do this by establishing an escrow
account funded with U.S. government securities. The bonds are then paid off at
their first call date. In most cases, once a bond is pre-refunded, we continue
to hold it. This allows the Funds to collect an attractive level of current
income and benefit from better protection of principal due to the escrow
account. Bonds often increase in value after they are pre-refunded as well.
All three Minnesota funds traded at a premium to net asset value as of
March 31 - Fund I at a +7.28% premium, Fund II at a +0.75% premium, and Fund III
at a +1.11% premium. This was the first time since Minnesota Municipal Income
Fund III's inception in 1993 that it traded at a premium. As for Minnesota
Municipal Income Fund I, we think its exceptionally large premium is the result
of investors having grown comfortable paying a premium for older funds.
Minnesota Municipal Income Fund I was introduced in April 1992.
(photo of keyboard)
OUTLOOK
We expect interest rates to move modestly lower in the coming months. We base
this on our belief that inflation will remain low and U.S. economic growth will
slow somewhat. This should prevent the Federal Reserve from having to raise
interest rates anytime soon.
Our credit outlook for Minnesota's municipal bond market remains positive.
Minnesota has one of the strongest economies in the country. The state
unemployment rate is currently half that of the nation. Minnesota's
municipalities, in our view, are in the best shape we've seen in eight years.
Going forward, we think the direction of interest rates will determine the
amount of new municipal bond issuance. If rates remain low, issuance should
increase. If rates rise, issuance is likely to slow dramatically because
refinancing activity will cease. Traditionally, state and local governments
issue a fair amount of new bonds in April and May to finance new projects, such
as park renovations and road repairs.
outlook
MINNESOTA MUNICIPAL INCOME FUNDS
ASSET MIX
- --------------------------------------------------------------------------------
MARCH 31, 1999
Fund I Fund II Fund III
- --------------------------------------------------------------------------------
Housing 22.52% 21.34% 19.15%
Pre-Refunded Bonds/Escrowed to Maturity 20.54% 21.53% 23.65%
Power Authority 16.72% 5.81% 4.68%
Hospitals 15.09% 18.82% 22.97%
General Obligation 13.12% 9.95% 4.15%
Higher Education 7.24% 9.06% 6.00%
Water & Sewer 1.76% -- 7.22%
Transportation 1.22% 3.74% 3.35%
Industrial Development -- 0.86% --
Pollution Control -- 7.90% 6.47%
Cash & Other Assets 1.79% 0.99% 2.36%
<PAGE>
for tax-exempt
income
5
Arizona Municipal
Income Fund
ARIZONA MUNICIPAL INCOME FUND
delivered an impressive total return of +7.07% at net asset value (capital
change with reinvestment of dividends) for the 12 months ended March 31, 1999,
outpacing the unmanaged Lehman Brothers Municipal Bond Index.
Over the past 12 months, we wanted to accomplish three positioning
objectives:
o Sell pre-refunded bonds that had met our performance expectations, but in a
manner that did not result in an overall taxable gain for the portfolio.
o Improve the call protection of the portfolio. Call protection is a
provision of a bond that prevents the issuer from refinancing it before a
specific date.
o Consolidate our positions wherever it made sense. This allows us to
concentrate to a greater extent on areas that we believe offer better
potential
(photo of three people in a discussion)
The Fund's average effective duration was shortened to 5.31 years during
fiscal 1999. This was due in part to a decline in interest rates and partly to
our conservative investment approach.
While Arizona has one of the strongest economies in the U.S., it
traditionally has had scarce bond issuance on a per capita basis. Therefore, we
have a very limited universe from which to choose. Most of the portfolio is made
up of securities issued by two counties: Maricopa County and Pima County.
Because of the short supply, tax-exempt bonds from Arizona tend to perform
better in a down market than states that issue more bonds because overwhelming
demand helps to support prices.
Arizona
ARIZONA MUNICIPAL INCOME FUND
PORTFOLIO HIGHLIGHTS AND ASSET MIX
- --------------------------------------------------------------------------------
MARCH 31, 1999
(Pie chart)
Industrial Development 2.89%
Higher Education 3.12%
Housing 19.71%
Hospitals 15.81%
Power Authority 2.48%
Cash & Other Assets 3.68%
Water & Sewer 12.50%
General Obligation 20.83%
Transportation 10.94%
Leases/Certificates of Participation 3.63%
Pre-refunded Bonds/Escrowed to Maturity 4.41%
Average Effective Maturity 7.39 years
Average Effective Duration 5.31 years
Average Quality AA
Current Yield at Market Price 5.11%
Amount of Leveraging $25 million
- --------------------------------------------------------------------------------
Approximately 11.49% of the income generated by Arizona Municipal Income Fund
for the 12 months ended March 31, 1999 was subject to the federal alternative
minimum tax.
<PAGE>
for tax-exempt
income
6
OUTLOOK
Arizona's economy is expected to continue its uphill growth, driven mostly by
strong consumer spending. Economists predict a 3% annual growth rate in Arizona
for 1999, despite an anticipated slowdown in Arizona's exports emanating from
financial problems in Mexico - Arizona's largest trading partner. (Source:
Economic and Research Program, The University of Arizona.)
(photo of three people on a beach)
Florida Insured Municipal Income Fund
FLORIDA INSURED MUNICIPAL INCOME
Fund had a robust total return of +7.80% at net asset value (capital change with
reinvested dividends) for the 12 months ended March 31, 1999. The Fund outpaced
the unmanaged Lehman Brothers Insured Municipal Bond Index by 1.37 percentage
points. The Fund also outperformed its Lipper peer group average, as shown on
page 1.
Our results were achieved with a portfolio exclusively invested in
AAA-rated municipal bonds - the highest quality rating available. Our quality
focus is consistent for a couple of reasons:
o The credit quality of Florida's bonds is traditionally strong - over 75% of
all bonds sold in the state are insured, more than in any other state.
Insured bonds guarantee the payment of principal and interest.
o We use leveraging to increase the Fund's income potential, which exposes
the Fund to a higher degree of interest rate risk. We don't want to
compound this risk by taking unnecessary credit risks.
Since March 1998, the Fund's average effective duration decreased by
approximately one year. As of March 31, 1999, the duration was 5.89 years. This
was not an active strategy on our part. As interest rates declined during the
course of our fiscal year, this effectively reduced our duration.
During fiscal 1999, we continued to earn strong yields from hospital
bonds, which represented 15.85% of net assets as
Florida
FLORIDA INSURED MUNICIPAL INCOME FUND
PORTFOLIO HIGHLIGHTS AND ASSET MIX
- --------------------------------------------------------------------------------
MARCH 31, 1999
(Pie chart)
Hospitals 15.85%
Pre-refunded Bonds/Escrowed to Maturity 12.32%
Housing 11.71%
Water & Sewer 11.49%
Cash & Other Assets 1.01%
Higher Education 4.99%
School District 12.62%
Utilities 2.31%
Transportation 8.62%
Other 19.08%
Average Effective Maturity 7.62 years
Average Effective Duration 5.89 years
Average Quality AAA
Current Yield at Market Price 5.14%
Amount of Leveraging $20 million
- --------------------------------------------------------------------------------
Approximately 16.61% of the income generated by Florida Insured Municipal Income
Fund for the 12 months ended March 31, 1999 was subject to the federal
alternative minimum tax.
<PAGE>
for tax-exempt
income
7
of March 31. Many hospitals have begun to trim costs and manage their facilities
more efficiently as overcapacity in the industry has raised the level of
competition between hospitals. Most of the yields on the hospital bonds we
purchased have yields higher than those of traditional AAA insured bonds.
Pre-refunded bonds accounted for 12.32% of net assets. We held onto these
bonds because they continue to generate high levels of income for the Fund. As
they approach their maturity date, we will sell them and seek to replace them
with comparable yielding bonds.
OUTLOOK
In the first three months of 1999, new municipal supply in Florida was down
13.8% from the same period a year ago, according to The Bond Buyer. The state
has dropped one position in 1999 to become the nation's sixth largest issuer of
tax-exempt bonds. We believe that issuance will pick up as municipalities issue
bonds to finance some large seasonal projects.
We also believe Florida's economy remains healthy, stimulated by a
combination of steady migration into the state - a real boon to the housing
industry - and its traditionally strong travel and tourism industry. This should
provide strong underpinnings for Florida's municipal bond market to offer
attractive investment opportunities.
Colorado Insured Municipal Income Fund
COLORADO INSURED MUNICIPAL INCOME
Fund provided a total return of +7.21% at net asset value (capital change with
reinvestment of dividends) for the 12 months ended March 31, 1999. The Fund
outperformed the Lehman Brothers Insured Municipal Bond Index.
The Fund invested exclusively in top-rated AAA insured bonds, in keeping
with the Fund's investment policies. As has been our strategy in the past, none
of the income generated by securities in the portfolio was subject to the
federal alternative minimum tax (AMT).
colorado
COLORADO INSURED MUNICIPAL INCOME FUND
PORTFOLIO HIGHLIGHTS AND ASSET MIX
- --------------------------------------------------------------------------------
MARCH 31, 1999
(Pie chart)
Higher Education 14.30%
Pollution 1.40%
Power 1.83%
Hospitals 13.11%
Water & Sewer Bonds 2.86%
Cash & Other Assets 1.21%
General Obligation 21.52%
Transportation 11.43%
Housing 8.19%
Leases/Certificates of Participation 10.02%
Pre-Refunded 11.53%
Miscellaneous & Sales Tax Revenue 2.60%
Average Effective Maturity 8.13 years
Average Effective Duration 6.54 years
Average Quality AAA
Current Yield at Market Price 4.92%
Amount of Leveraging $40 million
- --------------------------------------------------------------------------------
None of the income generated by Colorado Insured Municipal Income Fund for the
12 months ended March 31, 1999 was subject to the federal alternative minimum
tax.
<PAGE>
for tax-exempt
income
8
(photo of still-life)
With a market value of $112 million, Colorado Insured Municipal Income
Fund is the only insured closed-end fund in the state of Colorado. Our
investment selection is focused in the corridor along Interstate 25, which spans
several major cities such as Fort Collins, Greeley, Boulder, Denver, Colorado
Springs and Pueblo.
The supply and variety of Colorado municipal bonds is sufficient to satisfy our
needs.
During fiscal 1999, we sought to sell pre-refunded bonds that had met our
expectations. We did this in a manner that would not create an overall taxable
gain. We also set out to improve the call protection of the portfolio, which
protects us against early redemptions on some securities. Finally, we
consolidated our holdings to concentrate on areas of the market that we believed
offered more attractive total return potential.
OUTLOOK
The state of Colorado's economy is encouraging for municipal bond investors. Its
average unemployment rate in 1998 was a mere 3.8%, well below the national
average of 4.3%. More job gains are expected in 1999 in Colorado's
telecommunications, energy, and health care industries. (Source: State of
Colorado, Economic Chronicle Legislative Council.) A strong economy should help
sustain the solid credit quality of Colorado's municipal bond market.
As for the Fund, we expect to identify bonds for potential sale as we
begin our new fiscal year. In keeping with our investment objective, we may sell
bonds that have been contributing the least amount of income to the Fund and
reallocate those assets to bonds that offer higher current yields. In this way,
we hope to achieve as good - if not better - results for shareholders in the
coming year.
outlook
DIVIDEND REINVESTMENT PLANS
Each Fund offers an automatic dividend reinvestment program. If Fund shares are
registered in your name and you are not already reinvesting dividends but would
like to do so, contact the dividend plan agent, Norwest Bank, Minnesota, NA at
1.800.468.9716. You will be asked to put your request in writing. If you have
shares registered in "street" name, contact your financial adviser or the
broker/dealer holding the shares.
Under the Funds' current policies, all distributions of net investment
income and capital gains to common stock shareholders are automatically
reinvested in additional shares unless shareholders elect to receive all
dividends and other distributions in cash paid by check mailed directly to the
shareholders by the dividend plan agent.
After each Fund declares a dividend or determines to make a capital gains
distribution, the plan agent will, as agent for the participants, receive the
cash payment and use it to buy shares in the open market on the American Stock
Exchange. The Funds will not issue any new shares in connection with the plan.
<PAGE>
for tax-exempt income 9
Financial Statements
<TABLE>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
MARCH 31, 1999
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
<S> <C> <C>
MUNICIPAL BONDS - 98.72%
GENERAL OBLIGATION BONDS - 13.12%
Edina Recreation Facilities Series 1992-A
6.00% 1/1/09............................................... $305,000 $319,671
6.00% 1/1/10............................................... 320,000 335,309
Minneapolis, Minnesota Refunding
(Laurel Village) 6.00% 3/1/16................................ 1,600,000 1,695,568
Minneapolis (St. Paul Metro Airport Commission)
6.60% 1/1/11 (AMT)........................................... 1,500,000 1,579,710
**Minnesota State Public Facilities Authority Water
Pollution Control Revenue, Inverse Floater
6.631% 11/1/16............................................ 2,780,000 2,859,564
Rosemount Independent School District #196
5.70% 4/1/12................................................. 1,000,000 1,070,010
------------
7,859,832
------------
HIGHER EDUCATION REVENUE BONDS - 7.24%
Minnesota Higher Education Facility (St. Thomas
University) Series 3-C 6.25% 9/1/16 ......................... 1,000,000 1,034,950
Minnesota State University Board (State
University System) Series A 6.05% 6/30/18.................... 250,000 259,690
Northfield, Minnesota (St. Olaf College)
6.30% 10/1/12................................................ 1,075,000 1,157,001
6.40% 10/1/21................................................ 1,750,000 1,886,133
------------
4,337,774
------------
HOSPITAL REVENUE BONDS - 15.09%
Bloomington Health Care Facilities (Masonic
Home Care Center) 5.875% 7/1/22
(AMBAC)...................................................... 1,000,000 1,069,800
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 1,073,790
Duluth Economic Development Authority Health
Care (St. Luke's Hospital) Series 1992-B
6.40% 5/1/18 (Connie Lee).................................... 1,000,000 1,080,610
Duluth Economic Development Authority Health
Care (Duluth Clinic) Series 1992 6.30%
11/1/22 (AMBAC).............................................. 1,270,000 1,384,719
Minneapolis Hospital System (Fairview Hospital)
Series 1991-A 6.50% 1/1/11(MBIA)............................. 2,210,000 2,380,546
Minneapolis, Minnesota Health Care Facility
(Fairview Hospital) Series 1993-A 5.25%
11/15/19 (MBIA).............................................. 1,500,000 1,522,485
Minneapolis & Saint Paul, Minnesota Housing
& Redevelopment Authority Health Care
System (Health One) Series 1993-A 5.25%
11/15/19 (MBIA).............................................. 500,000 527,515
------------
9,039,465
------------
HOUSING REVENUE BONDS - 22.52%
Brooklyn Center Multifamily Housing
(Four Courts) 7.50% 6/1/25 (AMT)............................. $1,800,000 $1,885,644
Minnesota Housing Finance Agency Single Family
Mortgage Series 1991-A 6.50% 7/1/06
(AMT))....................................................... 205,000 217,052
Minnesota Housing Finance Agency Single Family
Mortgage Series 1992-G 7.45% 7/1/22
(AMT) (FHA).................................................. 1,320,000 1,389,604
Minnetonka Housing Facilities (Beacon Hill
Project) 7.70% 6/1/25 (Presbyterian
Homes Guaranteed)............................................ 2,725,000 2,927,413
New Brighton Multifamily Mortgage (Polynesian
Village Apartments) Series 1995-A 7.60%
4/1/25 (AMT)................................................. 1,400,000 1,499,484
St. Anthony Multifamily Housing Development
(Autumn Woods Project) 6.875% 7/1/22
(Asset Guaranty)............................................. 2,265,000 2,414,784
St. Paul Housing & Redevelopment Authority
Multifamily Housing (Pointe of St. Paul
Project) Series 1992 6.60% 10/1/12
(FNMA)....................................................... 2,950,000 3,158,742
------------
13,492,723
------------
POWER AUTHORITY REVENUE BONDS - 16.72%
Bass Brook, Minnesota Power & Light 6.00%
7/1/22....................................................... 2,575,000 2,700,248
Northern Minnesota Municipal Power Agency
Electric System
Series A 5.00% 1/1/21........................................ 1,500,000 1,464,900
Series B 5.50% 1/1/18 (AMBAC)................................ 1,250,000 1,293,950
Southern Minnesota Municipal Power Agency
5.00% 1/1/16 (FGIC).......................................... 580,000 579,965
5.50% 1/1/15 (AMBAC)......................................... 610,000 635,486
5.75% 1/1/11 (FGIC).......................................... 1,000,000 1,065,470
Western Minnesota Municipal Power Agency
Series A 5.50% 1/1/15 (MBIA)................................. 2,275,000 2,279,641
------------
10,019,660
------------
*PRE-REFUNDED BONDS/ESCROWED TO MATURITY - 20.54%
Dakota & Washington Counties HRA Single
Family Mortgage 8.375% 9/1/21 (AMT)
(GNMA) (Escrowed to Maturity)................................ 2,555,000 3,595,038
Duluth Economic Development Authority Health
Care (Duluth Clinic) Series 1992 6.30%
11/1/22-04 (AMBAC)........................................... 730,000 817,702
Minnesota Higher Education Facility (Macalester
College) Series 3-J 6.40% 3/1/22-02.......................... 1,000,000 1,073,620
</TABLE>
<PAGE>
10 for tax-exempt income
<TABLE>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
<S> <C> <C>
Municipal Bonds (CONTINUED)
*PRE-REFUNDED BONDS/ESCROWED TO MATURITY (CONTINUED)
Minnesota Public Facilities Authority (Water
Pollution Control) Series 1992 6.50%
3/1/14-02.................................................... $1,500,000 $1,641,495
Puerto Rico Commonwealth 6.00% 7/1/26-07....................... 2,000,000 2,287,700
St. Cloud Hospital 6.75% 7/1/15-01 (AMBAC)..................... 1,000,000 1,086,620
St. Francis Independent School District
#15 6.30% 2/1/11-06 (FSA).................................... 1,250,000 1,392,413
Southern Minnesota Municipal Power Agency
5.50% 1/1/15 (AMBAC)
(Escrowed to Maturity) ...................................... 390,000 413,455
------------
12,308,043
------------
TRANSPORTATION REVENUE BONDS - 1.22%
Puerto Rico Commonwealth Highway &
Transportation Authority 5.50% 7/1/26........................ 700,000 734,556
------------
734,556
------------
WATER & SEWER REVENUE BONDS - 1.76%
Anoka County Solid Waste Disposal National Rural
Co-op Utility 6.95% 12/1/08 (AMT)............................ 1,000,000 1,053,930
------------
1,053,930
------------
OTHER REVENUE BONDS - 0.51%
Minneapolis, Minnesota Community Development
Agency (Supported Development Limited
Tax) Common Bond Fund Series 5
5.70% 12/1/27................................................ 300,000 307,384
------------
307,384
------------
Total Municipal Bonds (cost $54,814,048)....................... 59,153,367
------------
TOTAL MARKET VALUE OF SECURITIES - 98.72%
(cost $54,814,048).......................................................... $59,153,367
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 1.28%......................................................... 765,585
------------
TOTAL NET ASSETS - 100.00%.................................................... 59,918,952
LIQUIDATION VALUE OF PREFERRED STOCK.......................................... (20,000,000)
------------
NET ASSETS APPLICABLE TO 2,594,700 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING............................................... $39,918,952
============
NET ASSET VALUE PER COMMON SHARE
($39,918,952 / 2,594,700 SHARES)............................................ $15.38
======
- ----------
* 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 March 31, 1999.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity 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 MARCH 31, 1999:
Common stock, $0.01 par value, 200 million 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........................... (62,572)
Accumulated net realized gain on investments............................... 187,168
Net unrealized appreciation of investments................................. 4,339,319
------------
Total net assets........................................................... $59,918,952
============
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 11
<TABLE>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
STATEMENT OF NET ASSETS
MARCH 31, 1999
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
<S> <C> <C>
MUNICIPAL BONDS - 99.01%
GENERAL OBLIGATION BONDS - 9.95%
Becker Refunding Tax Increment Series D
6.25% 8/1/15 (AMT)(MBIA)..................................... $3,700,000 $3,774,888
Buffalo Independent School District 6.15%
2/1/22 (FSA)................................................. 4,030,000 4,326,407
Hawley Independent School District 5.75%
2/1/17 (FSA)................................................. 1,000,000 1,081,780
**Minnesota State Public Facilities Authority Water
Pollution Control Revenue, Inverse Floater
6.63% 11/1/17................................................ 4,005,000 4,095,113
6.626% 11/1/18............................................... 1,145,000 1,165,587
Rosemount Independent School District
#196 5.70% 4/1/12............................................ 1,270,000 1,358,913
St. Paul Minnesota Tax Increment (Block 39
Project) Series A 4.75% 2/1/25............................... 1,000,000 956,920
------------
16,759,608
------------
HIGHER EDUCATION REVENUE BONDS - 9.06%
Minnesota Higher Education Facility
(Macalester College) 5.55% 3/1/16............................ 1,250,000 1,287,925
Minnesota State Higher Education Facility
(St. Thomas University)
Series 3-R2 5.60% 9/1/14..................................... 275,000 285,192
Series B 3-R1 5.60% 10/1/15.................................. 1,050,000 1,085,585
Series 4A-1 5.625% 10/1/21................................... 1,000,000 1,030,440
Minnesota State University Board (State
University System)
Series 1993-C 5.60% 6/30/16 (MBIA)........................... 3,115,000 3,268,756
Series 1993-C 5.60% 6/30/19 (MBIA)........................... 3,720,000 3,893,352
Series 1993-A 6.10% 6/30/23.................................. 1,150,000 1,194,885
University of Minnesota Series A 5.50% 7/1/21.................. 3,000,000 3,216,480
------------
15,262,615
------------
HOSPITAL REVENUE BONDS - 18.82%
Bloomington Health Care Facilities (Masonic Home
Care Center) 5.875% 7/1/22 (AMBAC)........................... 4,000,000 4,279,200
Brainerd Evangelical Lutheran Health Care Facilities
Series A 6.65% 3/1/17 (FSA).................................. 1,195,000 1,295,010
Detroit Lakes Benedictine Health Systems
(St. Mary's Hospital) 6.00% 2/15/19
(Connie Lee)................................................. 1,250,000 1,342,238
Duluth Economic Development Authority
Benedictine Health Systems (St. Mary's
Hospital) 6.00% 2/15/20 (Connie Lee)......................... 6,000,000 6,442,740
Duluth Economic Development Authority Health
Care Facilities (Duluth Clinic) 6.20%
11/1/12 (AMBAC).............................................. 720,000 780,660
Series 1992 6.30% 11/1/22 (AMBAC)............................ 3,890,000 4,241,384
Minneapolis, St. Paul (Children's Health Care)
5.50% 8/15/25 (FSA).......................................... 1,500,000 1,557,900
Minneapolis, St. Paul (HealthOne) 7.40%
8/15/11(MBIA)................................................ 2,105,000 2,236,142
Minneapolis Health Care Facility (Jones-Harrison
Residence Project) 6.00% 10/1/27............................. $2,000,000 $2,023,500
Minnesota Agricultural & Economic Development
Health Care System (Fairview Hospital)
Series A 5.75% 11/15/26 (MBIA)............................... 4,800,000 5,142,336
Rochester, Minnesota Health Care Facilities (Mayo
Foundation) Series B 5.50% 11/15/27.......................... 2,265,000 2,360,515
------------
31,701,625
------------
HOUSING REVENUE BONDS - 21.34%
Chanhassen Multifamily Housing Heritage Park
Project 6.20% 7/1/30 (AMT)(FHA).............................. 1,105,000 1,174,582
Dakota County HRA Multifamily Mortgage
(Imperial Ridge Project) Series 1993-A 6.10%
12/15/28 (GNMA).............................................. 1,870,000 1,969,073
Harmony, Minnesota Multifamily Housing
(Section 8) (Zedakah Foundation Project)
Series A 5.95% 9/1/20........................................ 1,000,000 1,044,900
Minnesota Housing Finance Agency Multifamily
Rental Housing
Series D 5.90% 2/1/14........................................ 1,115,000 1,166,257
Series D 6.00% 8/1/22........................................ 2,295,000 2,401,419
Minnesota Housing Finance Agency Single Family
Housing
7.05% 7/1/22 (AMT)........................................... 1,680,000 1,750,946
Series 1992-B 6.15% 1/1/26 (AMT)............................. 3,710,000 3,843,375
Series 1992-C2 6.15% 7/1/23 (AMT)............................ 3,760,000 3,889,156
Series 1994-F 6.30% 7/1/25................................... 1,540,000 1,624,346
Series 1994-J 6.95% 7/1/26 (AMT)............................. 3,470,000 3,693,156
Minnetonka, Minnesota Housing Facilities
(Beacon Hill Project)
7.25% 6/1/09................................................. 1,225,000 1,310,603
7.50% 6/1/14................................................. 760,000 816,810
7.55% 6/1/19................................................. 2,365,000 2,536,084
Moorhead, Minnesota Economic Development
Authority Multifamily Housing Development
(Eventide) Series B 6.00% 6/1/18............................. 1,000,000 1,001,590
New Brighton Multifamily Mortgage
(Polynesian Village Apartments) Series 1995-A
7.60% 4/1/25................................................. 3,820,000 4,091,449
St. Paul HRA Single Family Mortgage
6.40% 3/1/21 (FNMA).......................................... 1,935,000 2,044,018
Stillwater, Minnesota Multifamily Mortgage
(Stillwater Cottages) 7.25% 11/1/27 (AMT).................... 1,540,000 1,589,372
------------
35,947,136
------------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 0.86%
Burnsville, Minnesota Commercial Development
Refunding (Holiday Inn Project) 5.90%
4/1/08....................................................... 1,430,000 1,453,624
------------
1,453,624
------------
</TABLE>
<PAGE>
12 for tax-exempt income
<TABLE>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
POLLUTION CONTROL REVENUE BONDS - 7.90%
Bass Brook Minnesota Power & Light
6.00% 7/1/22................................................. $7,660,000 $8,032,582
Cloquet, Minnesota Pollution Control (Potlatch
Corporation Project) 5.90% 10/1/26........................... 5,000,000 5,270,900
------------
13,303,482
------------
POWER AUTHORITY REVENUE BONDS - 5.81%
Northern Minnesota Municipal Power Agency
Electric System Series B 5.50% 1/1/18
(AMBAC)...................................................... 5,955,000 6,164,378
Puerto Rico Electric Power Authority 5.25%
7/1/21....................................................... 2,000,000 2,016,760
Western Minnesota Municipal Power Agency
5.50% 1/1/15 (MBIA).......................................... 1,605,000 1,608,274
------------
9,789,412
------------
*PRE-REFUNDED/ESCROWED TO MATURITY - 21.53%
Dakota & Washington Counties HRA Single Family
Mortgage 8.375% 9/1/21 (AMT) (GNMA)
(Escrowed to Maturity) ...................................... 5,500,000 7,738,826
Duluth Economic Development Authority Health
Care Facilities (Duluth Clinic) 6.30%
11/1/22-04 (AMBAC)........................................... 960,000 1,075,334
Duluth Economic Development Authority Hospital
Facilities (Duluth Clinic) 6.20% 11/1/12-04
(AMBAC)...................................................... 280,000 312,248
Esko Independent School District 5.65%
4/1/12-05 (FSA).............................................. 550,000 590,315
Metropolitan Council Sports Facility Commission
(Hubert H. Humphrey Metrodome) 6.00%
10/1/09 (Escrowed to Maturity)............................... 2,360,000 2,537,330
Minnesota Public Facilities Authority Water
Pollution Control 6.25% 3/1/16-05............................ 1,000,000 1,118,330
Minnesota Public Facilities Authority Water
Pollution Control Series 1992 6.50%
3/1/14-05.................................................... 3,300,000 3,611,289
Red Wing Independent School District # 256
Series 1993-A 5.70% 2/1/12-03................................ 2,925,000 3,088,712
Series 1993-A 5.70% 2/1/13-03................................ 1,625,000 1,715,951
St. Paul Sales Tax (Civic Center)
5.55% 11/1/23 (Escrowed To Maturity)......................... 2,300,000 2,415,276
5.55% 11/1/23 (MBIA)
(Escrowed To Maturity) .................................... 4,200,000 4,456,074
Southern Minnesota Municipal Power Agency
5.75% 1/1/18-16.............................................. 3,715,000 3,980,808
Stewartville Independent School District
#534 5.75% 2/1/17- 05........................................ 1,705,000 1,830,965
Western Minnesota Municipal Power Agency
6.625% 1/1/16 (Escrowed To Maturity)......................... 1,535,000 1,806,956
------------
36,278,414
------------
TRANSPORTATION REVENUE BONDS - 3.74%
Puerto Rico Commonwealth Highway & Transportation
Authority 5.50% 7/1/26....................................... $6,000,000 $6,296,220
------------
6,296,220
------------
Total Municipal Bonds (cost $156,831,187)...................... 166,792,136
------------
TOTAL MARKET VALUE OF SECURITIES - 99.01%
(cost $156,831,187)......................................................... $166,792,136
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 0.99%......................................................... 1,663,875
------------
TOTAL NET ASSETS - 100.00%.................................................... 168,456,011
LIQUIDATION VALUE OF PREFERRED STOCK.......................................... (60,000,000)
------------
NET ASSETS APPLICABLE TO 7,252,200 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING............................................... $108,456,011
============
NET ASSET VALUE PER COMMON SHARE
($108,456,011 / 7,252,200 SHARES)........................................... $14.95
======
- ----------
* 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 March 31, 1999.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity 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 MARCH 31, 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......................................... 1,103,134
Accumulated net realized loss on investments................................ (2,318,074)
Net unrealized appreciation of investments.................................. 9,960,949
...................................................................... ------------
Total net assets............................................................ $168,456,011
============
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 13
<TABLE>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
STATEMENT OF NET ASSETS
MARCH 31, 1999
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
<S> <C> <C>
MUNICIPAL BONDS - 98.59%
GENERAL OBLIGATION BONDS - 4.15%
**Minnesota State Public Facilities Authority Water
Pollution Control Revenue, Inverse Floater
6.631% 11/1/16............................................. $1,640,000 $1,686,937
------------
1,686,937
------------
HIGHER EDUCATION REVENUE BONDS - 6.00%
Minnesota Higher Education Facilities Authority
(St. Mary's College) Series 3-Q 6.15%
10/1/23...................................................... 1,000,000 1,034,170
Minnesota Higher Education Facilities Authority
(St. Thomas University) Series 4-A1 5.625%
10/1/21...................................................... 1,010,000 1,040,744
Minnesota State Higher Educational Facilities
Authority Revenue Unrefunded Balance Series
6.375% 3/1/20................................................ 345,000 364,306
------------
2,439,220
------------
HOSPITAL REVENUE BONDS - 22.97%
Duluth Economic Development Authority Hospital
Facilities (Duluth Clinic) 6.20% 11/1/12
(AMBAC)...................................................... 1,080,000 1,170,990
Minnesota Agriculture & Economic Development
Health Care System (Benedictine Care) 5.75%
2/1/29....................................................... 1,300,000 1,254,994
Minnesota Agricultural & Economic Development
Health Care System (Fairview Hospital)
Series A 5.75% 11/15/26 (MBIA)............................... 2,000,000 2,142,640
Princeton Fairview Hospital Series 1991-C
6.25% 1/1/21 (MBIA).......................................... 2,000,000 2,149,660
Robbinsdale North Memorial Medical Center
Series 1993-B 5.50% 5/15/23 (AMBAC).......................... 1,500,000 1,544,535
St. Paul, Minnesota Housing & Redevelopment
Authority for Healtheast Hospital 5.85%
11/1/17...................................................... 250,000 243,910
Wadena County Health Care Facilities 7.75%
9/1/24....................................................... 750,000 833,130
------------
9,339,859
------------
HOUSING REVENUE BONDS - 19.15%
Brooklyn Center Multifamily Housing
(Four Courts) 7.50% 6/1/25 (AMT)............................. 1,000,000 1,047,580
Burnsville Multifamily Mortgage Series A
7.10% 1/1/30 (FSA)........................................... 2,000,000 2,219,120
Edina HRA (Edina Park Plaza) 7.70%
12/1/28 (FHA)................................................ 1,000,000 1,030,500
Minneapolis Multifamily Housing (Olson
Townhomes) 6.00% 12/1/19 (AMT)............................... 1,875,000 1,938,075
Minnesota HFA Single Family Mortgage
Series 1991-A 7.45% 7/1/22 (AMT) (FHA)....................... 1,475,000 1,552,777
------------
7,788,052
------------
POLLUTION CONTROL REVENUE BONDS - 6.47%
Bass Brook PCR Minnesota Power & Light 6.00%
7/1/22....................................................... $1,505,000 $1,578,203
Cloquet, Minnesota Pollution Control (Potlatch
Corporation Project) 5.90% 10/1/26........................... 1,000,000 1,054,180
------------
2,632,383
------------
POWER AUTHORITY REVENUE BONDS - 4.68%
Southern Minnesota Municipal Power Agency
5.75% 1/1/18 (FGIC).......................................... 1,800,000 1,904,382
------------
1,904,382
------------
*PRE-REFUNDED BONDS/ESCROWED TO MATURITY - 23.65%
Duluth Economic Development Authority Hospital
Facilities (Duluth Clinic) 6.20% 11/1/12-04
(AMBAC)...................................................... 420,000 468,371
Esko Independent School District 5.75%
4/1/17-05 (FSA).............................................. 2,145,000 2,313,468
Minnesota Higher Education Facilities Authority
(Saint Benedict) Series 3-W 6.375%
3/1/20-04.................................................... 930,000 1,030,459
Moorhead Public Utilities 6.25% 11/1/12-02
(MBIA)....................................................... 1,500,000 1,613,760
North Branch Independent School District
#138 5.625% 2/1/17 (FGIC).................................... 1,000,000 1,070,170
University of Minnesota Hospital 6.75%
12/1/16 (Escrowed to Maturity)............................... 2,580,000 3,119,478
------------
9,615,706
------------
TRANSPORTATION REVENUE BONDS - 3.35%
Puerto Rico Commonwealth Highway &
Transportation Authority 5.50% 7/1/26........................ 1,300,000 1,364,181
------------
1,364,181
------------
WATER & SEWER REVENUE BONDS - 7.22%
Minnesota Public Facility Authority Water Pollution
Control 5.40% 3/1/15......................................... 2,820,000 2,935,085
------------
2,935,085
------------
OTHER REVENUE BONDS - 0.95%
Minneapolis, Minnesota Community Development
Agency (Supported Development Revenue
Limited Common Bond Fund) Series 5 5.70%
12/1/27...................................................... 375,000 384,229
------------
384,229
------------
Total Municipal Bonds (cost $37,217,864)....................... 40,090,034
------------
NUMBER OF
SHARES
----------
SHORT TERM INVESTMENTS - 0.07%
Federated Minnesota Municipal Cash Trust....................... 29,420 29,420
------------
Total Short Term Investments (cost $29,420).................... 29,420
------------
</TABLE>
<PAGE>
14 for tax-exempt income
<TABLE>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
STATEMENT OF NET ASSETS (CONTINUED)
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 98.66%
(COST $37,247,284).......................................................... $40,119,454
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 1.34%......................................................... 545,261
------------
TOTAL NET ASSETS - 100.00%.................................................... 40,664,715
LIQUIDATION VALUE OF PREFERRED STOCK.......................................... (15,000,000)
------------
NET ASSETS APPLICABLE TO 1,837,200 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING............................................... $25,664,715
============
NET ASSET VALUE PER COMMON SHARE
($25,664,715 / 1,837,200 SHARES)............................................ $13.97
======
- ----------
* 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 March 31, 1999.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity 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 MARCH 31, 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........................................ 154,404
Accumulated net realized loss on investments............................... (2,608,589)
Net unrealized appreciation of investments................................. 2,872,170
------------
Total net assets........................................................... $40,664,715
============
</TABLE>
See accompanying notes
<TABLE>
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
MARCH 31, 1999
PRINCIPAL MARKET
AMOUNT VALUE
----------- -----------
<S> <C> <C>
MUNICIPAL BONDS - 98.92%
GENERAL OBLIGATION BONDS - 20.83%
Eagle Mountain Community Facility District A2
6.40% 7/1/17................................................. $1,500,000 $1,640,850
Maricopa County Alhambra Elementary School
District #68 5.625% 7/1/13 (AMBAC)........................... 2,500,000 2,678,675
Maricopa County Unified School District #11
5.50% 7/1/10................................................. 3,000,000 3,202,620
Maricopa County Unified School District #41
6.25% 7/1/15 (FSA)........................................... 1,500,000 1,704,975
Maricopa County Washington Elementary
Unified School District #6 5.375% 7/1/14
(AMBAC)...................................................... 1,000,000 1,042,110
Mohave County Unified School District #1 5.90%
7/1/15 (FGIC)................................................ 1,500,000 1,643,115
Pima County Unified School District #6 5.75%
7/1/12 (FGIC)................................................ 2,000,000 2,153,540
Santa Cruz Valley Unified School District #35
5.80% 7/1/09 (AMBAC)......................................... 600,000 638,280
------------
14,704,165
------------
HIGHER EDUCATION REVENUE BONDS - 3.12%
University of Arizona
6.25% 6/1/11................................................. 1,000,000 1,077,420
6.35% 6/1/14................................................. 1,000,000 1,128,190
------------
2,205,610
------------
HOSPITAL REVENUE BONDS - 15.81%
Maricopa County Health Facilities (Catholic Health
Care West) Series A 5.75% 7/1/11 (MBIA)...................... 1,750,000 1,849,715
Maricopa County Health Facilities (Catholic Health
Care West) Series A 6.00% 7/1/21 (MBIA)...................... 1,100,000 1,176,054
Maricopa County Industrial Development Authority
(Baptist Hospital) 5.50% 9/1/13 (MBIA)....................... 300,000 315,690
Maricopa County Industrial Development Revenue
5.00% 7/1/16................................................. 4,000,000 3,954,160
Mohave County Industrial Development Authority
(Baptist Hospital) 5.50% 9/1/21 (MBIA)....................... 500,000 518,925
Mohave County Industrial Development Authority
(Baptist Hospital) 5.75% 9/1/26 (MBIA)....................... 150,000 161,733
Phoenix Industrial Development Authority (John C.
Lincoln Hospital) 5.50% 12/1/13 (FSA)........................ 1,100,000 1,170,873
Show Low, Arizona Industrial Development
Authority (Navapache Regional Medical
Center) Series A 5.50% 12/1/17 (ACA)......................... 250,000 257,500
University of Arizona Medical Center 6.25%
7/1/16 (MBIA)................................................ 700,000 750,988
Yavapai County, Arizona Industrial Development
Authority Residential Care Facilities 5.40%
2/20/38 (GNMA)............................................... 1,000,000 1,004,210
------------
11,159,848
------------
HOUSING REVENUE BONDS - 19.71%
Maricopa County, Arizona Industrial Development
Authority Multifamily (Camelback Apartments
Project A) 5.45% 5/1/28 (Asset Guaranty)..................... 1,250,000 1,267,588
</TABLE>
<PAGE>
for tax-exempt income 15
<TABLE>
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
----------- -----------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Peoria Multifamily Housing Mortgage 7.30%
2/20/28 (GNMA)............................................... $1,230,000 $1,346,615
Phoenix Industrial Development Authority (Chris
Ridge) 6.80% 11/1/25 (FHA)................................... 500,000 527,225
Phoenix Industrial Development Authority Single
Family Mortgage
5.30% 4/1/20................................................. 2,500,000 2,513,450
5.35% 6/1/20 (GNMA).......................................... 3,345,000 3,384,839
Pima County, Arizona Industrial Development
Authority 5.20% 4/1/19....................................... 1,235,000 1,234,988
Pima County, Arizona Industrial Development
Authority (Single Family Mortgage Revenue)
Series A 6.25% 11/1/30....................................... 1,125,000 1,185,075
Tempe Industrial Development Authority
Multifamily Mortgage 6.125% 6/1/10 (FHA)..................... 2,305,000 2,453,742
------------
13,913,522
------------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 2.89%
Coconino County (Nevada Power) Pollution
Control Corporation 5.80% 11/1/32............................ 1,000,000 1,013,220
Navajo County (Arizona Public Service) Pollution
Control Corporation 5.50% 8/15/28 (AMBAC).................... 1,000,000 1,029,070
------------
2,042,290
------------
LEASES/CERTIFICATES OF PARTICIPATION - 3.63%
Scottsdale Municipal Property Corporation Lease
6.25% 11/1/14 (FGIC)......................................... 1,300,000 1,402,180
Tucson, Arizona Certificate of Participation 5.60%
7/1/11....................................................... 1,100,000 1,156,903
------------
2,559,083
------------
POWER AUTHORITY REVENUE BONDS - 2.48%
Salt River Project Electric System Revenue
6.25% 1/1/27................................................. 1,635,000 1,753,358
------------
1,753,358
------------
*PRE-REFUNDED BONDS/ESCROWED TO MATURITY - 4.41%
Arizona Health Facility Authority Phoenix Baptist
Hospital and Medical Center 6.25% 9/1/11
(MBIA) (Escrowed to Maturity)................................ 1,500,000 1,622,985
Phoenix Civic Improvement Corporation Water
System Junior Lien 5.60% 7/1/18-06........................... 1,000,000 1,094,340
Salt River Project Electric System Series D
6.25% 1/1/27-02.............................................. 365,000 396,087
------------
3,113,412
------------
TRANSPORTATION REVENUE BONDS - 10.94%
City of Phoenix, Arizona Street & Highway Junior
Lien 6.25% 7/1/11 (FGIC)..................................... 1,300,000 1,409,902
Phoenix, Arizona Civic Improvement Airport
Revenue Senior Lein (Series A) 5.00% 7/1/25.................. 1,000,000 988,400
Tucson Airport Authority 5.70% 6/1/13 (MBIA)................... 2,000,000 2,137,260
Tucson Street & Highway 5.50% 7/1/12 (MBIA).................... 3,000,000 3,185,550
------------
7,721,112
------------
WATER & SEWER REVENUE BONDS - 12.50%
Phoenix, Arizona Civic Improvement Wastewater
Systems Revenue 5.375% 7/1/22................................ 1,000,000 1,021,600
Phoenix Civic Improvement Corporation 5.50%
7/1/21 (AMBAC)............................................... $2,000,000 $2,067,280
Phoenix Water System 5.50% 7/1/22.............................. 2,000,000 2,043,180
Tucson Water Refunding Series A 5.75%
7/1/18 (AMBAC)............................................... 3,500,000 3,690,715
------------
8,822,775
------------
OTHER REVENUE BONDS - 2.60%
Maricopa County Stadium District 5.50%
7/1/13 (MBIA)................................................ 1,750,000 1,836,345
------------
1,836,345
------------
Total Municipal Bonds (cost $65,577,996)....................... 69,831,520
------------
NUMBER OF
SHARES
-----------
SHORT-TERM INVESTMENTS - 0.01%
Norwest Advantage Municipal Money Market Fund.................. 2,500 2,500
------------
Total Short Term Investments (cost $2,500)..................... 2,500
------------
TOTAL MARKET VALUE OF SECURITIES - 98.93%
(cost $65,580,496).......................................................... $69,834,020
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 1.07%......................................................... 752,205
------------
TOTAL NET ASSETS - 100.00%.................................................... 70,586,225
LIQUIDATION VALUE OF PREFERRED STOCK.......................................... (25,000,000)
------------
NET ASSETS APPLICABLE TO 2,982,200 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING............................................... $45,586,225
============
NET ASSET VALUE PER COMMON SHARE
($45,586,225 / 2,982,200 SHARES)............................................ $15.29
======
- ----------
* 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 AMBAC Indemnity 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 MARCH 31, 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........................................... 563,796
Accumulated net realized loss on investments.................................. (69,988)
Net unrealized appreciation of investments.................................... 4,253,524
------------
Total net assets.............................................................. $70,586,225
============
</TABLE>
See accompanying notes
<PAGE>
16 for tax-exempt income
<TABLE>
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
STATEMENT OF NET ASSETS
MARCH 31,1999
PRINCIPAL MARKET
AMOUNT VALUE
------------ ------------
<S> <C> <C>
MUNICIPAL BONDS - 98.99%
HIGHER EDUCATION REVENUE BONDS - 4.99%
Florida Agricultural & Mechanical University
(Student Apartment Facility) 5.625%
7/1/21 (MBIA)................................................ $1,250,000 $1,307,263
Volusia Education Facilities Authority (Stetson
University) 5.50% 6/1/17 (MBIA).............................. 1,500,000 1,583,760
------------
2,891,023
------------
HOSPITAL REVENUE BONDS - 15.85%
Lakeland Hospital System (Lakeland Regional
Medical Center) 5.75% 11/15/15 (FGIC)........................ 2,500,000 2,681,875
Orange County Health Facilities Authority
(Adventist Health System) 5.75%
11/15/25 (AMBAC)............................................. 1,500,000 1,608,180
Orange County Health Facilities Authority
(Orlando Regional Health) 6.25% 10/1/18
(MBIA)....................................................... 2,000,000 2,328,180
Venice Health Care (Bon Secours Health System
Project) 5.60% 8/15/16 (MBIA)................................ 2,405,000 2,569,092
------------
9,187,327
------------
HOUSING REVENUE BONDS - 11.71%
Florida Housing Finance Agency Homeowner
Mortgage Series 2 5.90% 7/1/29 (MBIA)
(AMT)........................................................ 1,240,000 1,291,113
Florida State Housing (Leigh Meadows Project)
Series N 6.30% 9/1/36 (AMBAC) (AMT).......................... 2,510,000 2,695,765
Florida State Housing (Woodbridge Project)
Series L
6.05% 12/1/16 (AMBAC) (AMT).................................. 1,120,000 1,190,570
6.25% 6/1/36 (AMBAC)......................................... 1,500,000 1,607,640
------------
6,785,088
------------
*PRE-REFUNDED BONDS/ESCROWED TO MATURITY - 12.32%
Dade County Professional Sports Franchise
Facilities 6.00% 10/1/22-02 (FGIC)........................... 1,000,000 1,087,770
Dade County Seaport 6.25% 10/1/21-01
(AMBAC)...................................................... 1,000,000 1,074,100
Hillsborough County Industrial Development
Authority Alleghany Health System (Knox
Village) (Escrowed to Maturity) 5.75%
12/1/21(MBIA)................................................ 1,000,000 1,062,010
Sunrise Utility System Series A 5.75%
10/1/26-06 (AMBAC)........................................... 2,500,000 2,785,450
Village Center Community Development
District Series A 5.85% 11/1/16-06 (MBIA).................... 1,000,000 1,128,970
------------
7,138,300
------------
SCHOOL DISTRICT REVENUE BONDS - 12.62%
Dade County School Board Lease 5.60%
8/1/17 (AMBAC)............................................... 1,000,000 1,102,720
Escambia County School Board Lease 5.50%
2/1/22 (MBIA)................................................ 5,000,000 5,194,200
St. Lucie County School Board Lease 5.375%
7/1/19 (FSA)................................................. $1,000,000 $1,018,190
------------
7,315,110
------------
TRANSPORTATION REVENUE BONDS - 8.62%
Dade County Aviation Series B 5.60% 10/1/26
(MBIA)....................................................... 1,000,000 1,051,040
Florida Ports Financing Commission 5.375%
6/1/27 (MBIA) (AMT).......................................... 2,250,000 2,269,980
Hillsborough County Aviation Authority (Tampa
International Airport) Series B 5.60%
10/1/19 (FGIC)............................................... 1,600,000 1,674,240
------------
4,995,260
------------
UTILITIES REVENUE BONDS - 2.31%
Florida State Municipal Power Agency (St. Lucie
Project) 5.70% 10/1/16 (FGIC)................................ 1,250,000 1,336,888
------------
1,336,888
------------
WATER & SEWER REVENUE BONDS - 11.49%
City of Panama Beach Water & Sewer 5.50%
6/1/18 (AMBAC)............................................... 1,000,000 1,039,410
Dade County Water & Sewer 5.50% 10/1/25
(FGIC)....................................................... 1,100,000 1,143,813
Florida Keys Aqueduct Water 5.25% 9/1/21
(AMBAC)...................................................... 1,700,000 1,715,538
Indian River County Water & Sewer 5.50%
9/1/16 (FGIC)................................................ 1,000,000 1,064,880
North Springs District Florida Water Revenue
4.75% 10/1/23 (MBIA)......................................... 125,000 119,088
Sarasota County Utility System 5.50%
10/1/22 (FGIC)............................................... 1,500,000 1,576,560
------------
6,659,289
------------
OTHER REVENUE BONDS - 19.08%
Boca Raton Community Redevelopment Tax
Increment (Mizner Park Project) 5.875%
3/1/13 (FGIC)................................................ 1,500,000 1,618,080
Miami Beach Resort Tax 5.50% 10/1/16
(AMBAC)...................................................... 1,000,000 1,061,440
Orange County Public Service Tax 6.00%
10/1/24 (FGIC)............................................... 3,000,000 3,274,350
Orange County Sales Tax 6.125% 1/1/19 (FGIC)................... 1,000,000 1,041,340
Reedy Creek Improvement (Sports Complex)
5.75% 6/1/13 (MBIA).......................................... 2,300,000 2,475,904
Saint John's County Industrial Development
Authority (Pro Golf Hall of Fame) 5.50%
3/1/17 (MBIA)................................................ 250,000 262,848
Tampa Utilities Tax 6.00% 10/1/15 (AMBAC)...................... 1,000,000 1,049,780
Village Center Community Development
District Series A 5.50% 11/1/10 (MBIA)....................... 250,000 277,113
------------
11,060,855
------------
Total Municipal Bonds (cost $52,971,205)....................... 57,369,140
------------
</TABLE>
<PAGE>
for tax-exempt income 17
<TABLE>
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 98.99%
(COST $52,971,205).......................................................... $57,369,140
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 1.01%......................................................... 586,469
------------
TOTAL NET ASSETS - 100.00%.................................................... 57,955,609
LIQUIDATION VALUE OF PREFERRED STOCK.......................................... (20,000,000)
------------
NET ASSETS APPLICABLE TO 2,422,200 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING............................................... $37,955,609
============
NET ASSET VALUE PER COMMON SHARE
($37,955,609 / 2,422,200 SHARES)............................................ $15.67
======
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity 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 MARCH 31, 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........................................ 592,229
Accumulated net realized loss on investments............................... (395,944)
Net unrealized appreciation of investments................................. 4,397,935
------------
Total net assets........................................................... $57,955,609
============
</TABLE>
See accompanying notes
<TABLE>
VOYAGEUR COLORADO INSURED
MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
MARCH 31, 1999
PRINCIPAL MARKET
AMOUNT VALUE
----------- ----------
<S> <C> <C>
Municipal Bonds - 98.79%
GENERAL OBLIGATION BONDS - 21.52%
Adams County School District #12 (Five Star)
5.40% 12/15/15 (FGIC)........................................ $1,250,000 $1,307,488
5.40% 12/15/16 (FGIC)........................................ 2,000,000 2,080,960
Archuleta & Hinsdale Counties School District #50JT
5.50% 12/1/14 (MBIA)......................................... 1,000,000 1,063,840
5.55% 12/1/20 (MBIA)......................................... 4,000,000 4,217,798
Eagle, Garfield & Routt Counties School District
#Re-50J 6.30% 12/1/12 (FGIC)................................. 1,000,000 1,118,830
El Paso County School District #20
5.625% 12/15/16 (AMBAC)...................................... 3,000,000 3,217,170
5.625% 12/15/16 (MBIA)....................................... 1,000,000 1,075,760
Larimer, Weld & Boulder Counties School District
#R-2J Thompson 5.45% 12/15/16 (FGIC)......................... $1,000,000 $1,042,150
Mesa County, Colorado Valley School District #51
(Grand Junction)
5.50% 12/1/15 (MBIA)......................................... 1,000,000 1,052,640
5.50% 12/1/16 (MBIA)......................................... 1,100,000 1,152,338
Mountain Village Metro District San Miguel County,
Colorado Refunding & Improvement 5.00%
12/1/17 (MBIA)............................................... 585,000 586,293
Piney Creek, Colorado Metropolitan District
5.65% 12/1/17 (FGIC)......................................... 2,035,000 2,163,571
Pueblo, Colorado 5.80% 6/1/11 (MBIA)........................... 1,405,000 1,508,450
Stonegate Village Metropolitan District Refunding
& Improvement Series A 5.50% 12/1/21
(FSA)........................................................ 2,750,000 2,865,885
------------
24,453,173
------------
HIGHER EDUCATION REVENUE BONDS - 14.30%
Aurora Educational Development 6.00%
10/15/15 (Connie Lee)........................................ 2,500,000 2,683,400
Colorado Educational & Cultural Facility Authority
Revenue (Auraria Foundation/University
Colorado) Series A 4.75% 9/1/28
(AMBAC)...................................................... 490,000 461,864
Colorado Mountain College Residence Hall
Authority 5.75% 6/1/23 (MBIA)................................ 1,000,000 1,061,320
Colorado Postsecondary Education Facility
Authority (University of Denver Project)
6.00% 3/1/16 (Connie Lee).................................... 4,000,000 4,272,640
Colorado Postsecondary Education Facility
Authority Refunding & Improvement
(University of Denver Project) 5.375%
3/1/18 (MBIA)................................................ 3,500,000 3,593,205
Colorado State Board Agriculture - State
University Refunding & Improvement Auxiliary
Facilities 5.125% 3/1/17 (AMBAC)............................. 1,000,000 1,012,430
Colorado State Colleges Board of Trustees (Adams
State College) Series A 5.75% 5/15/19
(MBIA)....................................................... 2,000,000 2,108,180
University of Northern Colorado Auxiliary
Facilities System 5.60% 6/1/24 (MBIA)........................ 1,000,000 1,053,380
------------
16,246,419
------------
HOSPITAL REVENUE BONDS - 13.11%
Colorado Health Facilities Authority (Boulder
Community Hospital Project) Series B
5.875% 10/1/23 (MBIA)........................................ 2,625,000 2,806,729
Colorado Health Facilities Authority (North
Colorado Medical Center)
5.95% 5/15/12 (MBIA)......................................... 2,000,000 2,151,040
6.00% 5/15/20 (MBIA)......................................... 1,000,000 1,072,690
Colorado Springs Memorial Hospital 6.00%
12/15/24 (MBIA).............................................. 2,250,000 2,475,023
</TABLE>
<PAGE>
18 for tax-exempt income
<TABLE>
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
----------- ----------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
GENERAL OBLIGATION BONDS (CONTINUED)
Logan County Health Care Facilities (Western
Health Network, Inc.) 5.90% 1/1/19
(MBIA)....................................................... $2,510,000 $2,645,239
University of Colorado Hospital Authority
Refunding Series A 5.20% 11/15/17
(AMBAC)...................................................... 3,695,000 3,739,894
------------
14,890,615
------------
HOUSING REVENUE BONDS - 8.19%
Colorado Housing Finance Authority (Single
Family Housing) Series AA 5.625%
11/1/23 (MBIA)............................................... 5,000,000 5,158,400
Denver, Colorado City & County Multi-Family
Housing Mortgage Loan (Garden Court)
5.40% 7/1/39 (FHA)........................................... 2,000,000 2,030,140
Snowmass Village Multi-Family Housing
Refunding (Essential Function Housing)
6.25% 12/15/16 (FSA)......................................... 2,000,000 2,117,880
------------
9,306,420
------------
LEASES/CERTIFICATES OF PARTICIPATION - 10.02%
Arapahoe County, Colorado Library District
5.70% 12/15/10 (MBIA)........................................ 2,000,000 2,151,740
Auraria, Colorado Higher Education Center
(Administrative Office Facility Project)
5.125% 5/1/28 (AMBAC)........................................ 6,250,000 6,245,063
Colorado Springs, Colorado School District No. 11
4.75% 12/15/18 (MBIA)........................................ 1,000,000 972,500
Fort Collins, Colorado Lease Certificates of
Participation (Civic Center Facilities Project)
5.125% 12/1/18 (MBIA)........................................ 1,000,000 1,005,610
Thorton, Colorado Certificates of Participation
5.10% 12/1/17 (AMBAC)........................................ 1,000,000 1,003,720
------------
11,378,633
------------
MISCELLANEOUS & SALES TAX REVENUE BONDS - 2.60%
Castle Rock Sales & Use Tax 5.90% 6/1/16
(FSA)........................................................ 1,755,000 1,892,610
Douglas County Sales & Use Tax 5.50%
10/15/11 (MBIA).............................................. 1,000,000 1,058,640
------------
2,951,250
------------
POLLUTION CONTROL REVENUE BONDS - 1.40%
Adams County Pollution Control Refunding (Public
Service Company Project) Series A 5.875%
4/1/14 (MBIA)................................................ 1,500,000 1,593,810
------------
1,593,810
------------
*PRE-REFUNDED BONDS - 11.53%
City of Westminster County Sales & Use Tax
Refunding Series A 6.25% 12/1/12-02
(FGIC)....................................................... 5,000,000 5,431,600
Jefferson County School District #R-001 6.00%
12/15/12-02 (AMBAC).......................................... 1,575,000 1,712,592
Jefferson County School District #R-001 6.25%
12/15/12-02 (AMBAC).......................................... 2,435,000 2,668,541
Regional Transportation District (Colorado Sales
Tax) 6.25% 11/1/12-02 (FGIC)................................. 3,000,000 3,279,840
------------
13,092,573
------------
TRANSPORTATION REVENUE BONDS - 11.43%
Arapahoe County Capital Improvements Highway
6.05% 8/31/15 (MBIA)......................................... $4,700,000 $5,196,038
Denver, Colorado City & County Airport Series E
5.25% 11/15/23 (MBIA)........................................ 2,250,000 2,280,938
Denver, Colorado City & County Airport 5.00%
11/15/25 (FSA)............................................... 1,390,000 1,373,793
E-470 Public Highway Authority Series A 5.00%
9/1/26 (MBIA)................................................ 3,500,000 3,433,255
Regional Transportation District (Colorado Sales
Tax) 6.25% 11/1/12 (FGIC).................................... 645,000 696,619
------------
12,980,643
------------
UTILITY REVENUE BONDS - 1.83%
Platte River Power Authority (Colorado Power)
Series DD 5.375% 6/1/17 (MBIA)............................... 2,000,000 2,083,260
------------
2,083,260
------------
WATER & SEWER REVENUE BONDS - 2.86%
Municipal Subdistrict of Northern Colorado
Water Conservancy District Series F 6.50%
12/1/12 (AMBAC).............................................. 2,800,000 3,244,304
------------
3,244,304
------------
Total Municipal Bonds (cost $106,389,744)...................... 112,221,100
------------
TOTAL MARKET VALUE OF SECURITIES - 98.79%
(COST $106,389,744)......................................................... $112,221,100
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.21%....................... 1,377,173
------------
TOTAL NET ASSETS - 100.00%.................................................... 113,598,273
LIQUIDATION VALUE OF PREFERRED STOCK.......................................... (40,000,000)
------------
NET ASSETS APPLICABLE TO 4,837,100 COMMON SHARES
($0.01 PAR VALUE) OUTSTANDING............................................... $73,598,273
============
NET ASSET VALUE PER COMMON SHARE
($73,598,273 / 4,837,100 SHARES)............................................ $15.22
======
- ----------
* 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
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 MARCH 31, 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........................................ 920,439
Accumulated net realized loss on investments............................... (391,632)
Net unrealized appreciation of investments................................. 5,831,356
------------
Total net assets........................................................... $113,598,273
============
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 19
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 1999
<TABLE>
VOYAGEUR VOYAGEUR VOYAGEUR
MINNESOTA MINNESOTA MINNESOTA
MUNICIPAL INCOME MUNICIPAL INCOME MUNICIPAL INCOME
FUND, INC. FUND II, INC. FUND III, INC.
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest ........................................................ $ 3,568,767 $ 9,453,201 $ 2,195,747
----------- ----------- -----------
EXPENSES:
Management fees ................................................. 240,430 674,030 161,995
Transfer agent fees and expenses ................................ 30,200 30,000 6,600
Registration fees ............................................... 6,300 4,850 4,001
Reports and statements to shareholders .......................... 17,700 18,282 5,500
Accounting and administration ................................... 73,161 125,414 48,006
Remarketing Agent fees .......................................... 56,000 156,000 43,192
Professional fees ............................................... 37,372 48,650 25,950
Custodian fees .................................................. 1,650 1,000 2,400
Directors' fees ................................................. 3,450 6,000 4,800
Rating Agency fees .............................................. 12,000 12,000 3,000
Taxes (other than taxes on income) .............................. 9,000 8,000 3,800
Interest expense ................................................ 22 1,354 145
Other ........................................................... -- -- 2,402
----------- ----------- -----------
Total expenses .................................................. 487,285 1,085,580 311,791
----------- ----------- -----------
NET INVESTMENT INCOME ........................................... 3,081,482 8,367,621 1,883,956
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments ......................... 188,073 432,710 229,501
Net change in unrealized appreciation/depreciation of investments (173,366) 315,390 171,840
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ................. 14,707 748,100 401,341
----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $ 3,096,189 $ 9,115,721 $ 2,285,297
=========== =========== ===========
VOYAGEUR VOYAGEUR
VOYAGEUR FLORIDA COLORADO
ARIZONA INSURED INSURED
MUNICIPAL INCOME MUNICIPAL MUNICIPAL INCOME
FUND, INC. INCOME FUND FUND, INC.
INVESTMENT INCOME:
Interest ........................................................ $ 3,823,731 $ 3,125,685 $ 6,001,281
----------- ----------- -----------
EXPENSES:
Management fees ................................................. 281,352 230,719 453,810
Transfer agent fees and expenses ................................ 11,300 14,325 9,312
Registration fees ............................................... 3,530 6,050 4,077
Reports and statements to shareholders .......................... 19,700 10,800 26,296
Accounting and administration ................................... 85,020 55,421 106,446
Remarketing Agent fees .......................................... 69,467 56,000 107,022
Professional fees ............................................... 26,100 23,650 23,400
Custodian fees .................................................. 2,772 3,700 5,300
Directors' fees ................................................. 6,600 6,000 9,586
Rating Agency fees .............................................. 7,000 12,500 6,000
Taxes (other than taxes on income) .............................. 5,200 6,000 12,200
Interest expense ................................................ 916 732 --
Other ........................................................... 1,372 4,188 15,077
----------- ----------- -----------
Total expenses .................................................. 520,329 430,085 778,526
----------- ----------- -----------
NET INVESTMENT INCOME ........................................... 3,303,402 2,695,600 5,222,755
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments ......................... 592,344 (344) 243,532
Net change in unrealized appreciation/depreciation of investments 6,754 696,343 996,668
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ................. 599,098 695,999 1,240,200
----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $ 3,902,500 $ 3,391,599 $ 6,462,955
=========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
20 for tax-exempt income
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
VOYAGEUR VOYAGEUR
MINNESOTA MINNESOTA
MUNICIPAL INCOME MUNICIPAL INCOME
FUND, INC. FUND II, INC.
------------------------------ ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/99 3/31/98 3/31/99 3/31/98
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ........................................... $ 3,081,482 $ 3,063,165 $ 8,367,621 $ 8,187,701
Net realized gain (loss) on investments ......................... 188,073 (905) 432,710 (99,452)
Net change in unrealized appreciation/depreciation of investments (173,366) 2,515,951 315,390 8,807,600
------------- ------------- ------------- -------------
Net increase in net assets resulting from operations ............ 3,096,189 5,578,211 9,115,721 16,895,849
------------- ------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO:
Common shareholders from net investment income .................. (2,413,071) (2,413,072) (5,928,674) (5,928,674)
Preferred shareholders from net investment income ............... (679,203) (720,894) (2,064,168) (2,206,092)
Common shareholders from net realized gain on investments ....... -- (56,857) -- --
Preferred shareholders from net realized gain on investments .... -- (16,542) -- --
------------- ------------- ------------- -------------
(3,092,274) (3,207,365) (7,992,842) (8,134,766)
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS ...................................... 3,915 2,370,846 1,122,879 8,761,083
NET ASSETS:
Beginning of year ............................................... 59,915,037 57,544,191 167,333,132 158,572,049
------------- ------------- ------------- -------------
End of year ..................................................... $ 59,918,952 $ 59,915,037 $ 168,456,011 $ 167,333,132
============= ============= ============= =============
VOYAGEUR
MINNESOTA
MUNICIPAL INCOME
FUND III, INC.
------------------------------
YEAR ENDED YEAR ENDED
/31/99 3/31/98
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ........................................... $ 1,883,956 $ 1,935,569
Net realized gain (loss) on investments ......................... 229,501 51,297
Net change in unrealized appreciation/depreciation of investments 171,840 1,892,300
------------- -------------
Net increase in net assets resulting from operations ............ 2,285,297 3,879,166
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO:
Common shareholders from net investment income .................. (1,391,680) (1,391,679)
Preferred shareholders from net investment income ............... (512,178) (552,111)
Common shareholders from net realized gain on investments ....... -- --
Preferred shareholders from net realized gain on investments .... -- --
------------- -------------
(1,903,858) (1,943,790)
------------- -------------
NET INCREASE IN NET ASSETS ...................................... 381,439 1,935,376
NET ASSETS:
Beginning of year ............................................... 40,283,276 38,347,900
------------- -------------
End of year ..................................................... $ 40,664,715 $ 40,283,276
============= =============
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 21
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
VOYAGEUR VOYAGEUR
ARIZONA FLORIDA INSURED
MUNICIPAL INCOME MUNICIPAL
FUND, INC. INCOME FUND
------------------------------ ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/99 3/31/98 3/31/99 3/31/98
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ........................................... $ 3,303,402 $ 3,236,581 $ 2,695,600 $ 2,634,153
Net realized gain (loss) on investments ......................... 592,344 233,414 (344) 71,462
Net change in unrealized appreciation/depreciation of investments 6,754 3,450,141 696,343 3,818,631
------------- ------------- ------------- -------------
Net increase in net assets resulting from operations ............ 3,902,500 6,920,136 3,391,599 6,524,246
------------- ------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO:
Common shareholders from net investment income .................. (2,303,751) (2,303,750) (1,834,817) (1,834,817)
Preferred shareholders from net investment income ............... (825,780) (905,587) (671,783) (728,766)
------------- ------------- ------------- -------------
(3,129,531) (3,209,337) (2,506,600) (2,563,583)
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS ...................................... 772,969 3,710,799 884,999 3,960,663
------------- ------------- ------------- -------------
NET ASSETS:
Beginning of year ............................................... 69,813,256 66,102,457 57,070,610 53,109,947
------------- ------------- ------------- -------------
End of year ..................................................... $ 70,586,225 $ 69,813,256 $ 57,955,609 $ 57,070,610
============= ============= ============= =============
VOYAGEUR
COLORADO INSURED
MUNICIPAL INCOME
FUND, INC.
------------------------------
YEAR ENDED YEAR ENDED
3/31/99 3/31/98
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ........................................... $ 5,222,755 $ 5,187,058
Net realized gain (loss) on investments ......................... 243,532 974,269
Net change in unrealized appreciation/depreciation of investments 996,668 5,313,456
------------- -------------
Net increase in net assets resulting from operations ............ 6,462,955 11,474,783
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO:
Common shareholders from net investment income .................. (3,555,269) (3,555,272)
Preferred shareholders from net investment income ............... (1,496,328) (1,419,308)
------------- -------------
(5,051,597) (4,974,580)
------------- -------------
NET INCREASE IN NET ASSETS ...................................... 1,411,358 6,500,203
------------- -------------
NET ASSETS:
Beginning of year ............................................... 112,186,915 105,686,712
------------- -------------
End of year ..................................................... $113,598,273 $ 112,186,915
============= =============
</TABLE>
See accompanying notes
<PAGE>
22 for tax-exempt income
FINANCIAL HIGHLIGHTS
Selected data for each common share of the Fund outstanding throughout each year
were as follows:
<TABLE>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
----------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year .............................. $15.380 $14.470 $14.430 $14.210 $13.890
Income from investment operations:
Net investment income ....................................... 1.188 1.180 1.060 1.180 1.210
Net realized and unrealized gain on investments ............. 0.004 0.970 0.180 0.260 0.340
-------- -------- -------- -------- --------
Total from investment operations ............................ 1.192 2.150 1.240 1.440 1.550
-------- -------- -------- -------- --------
Less dividends and distributions to:
Common shareholders from net investment income .............. (0.930) (0.930) (0.930) (0.930) (0.930)
Preferred shareholders from net investment income ........... (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 ........................... (1.192) (1.240) (1.200) (1.220) (1.230)
-------- -------- -------- -------- --------
Net asset value, end of year .................................... $15.380 $15.380 $14.470 $14.430 $14.210
======== ======== ======== ======== ========
Market value, end of year ....................................... $16.500 $15.690 $14.380 $15.000 $14.500
======== ======== ======== ======== ========
Total investment return based on:(1)
Market value ................................................ 11.29% 16.04% 2.01% 10.31% (0.71%)
Net asset value ............................................. 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) ............................... $59,919 $59,915 $57,544 $57,429 $56,881
Ratio of expenses to average net assets(3) .................. 0.81% 0.77% 0.81% 0.82% 0.85%
Ratio of expenses to average net assets applicable
to common shares ........................................ 1.21% 1.17% 1.24% 1.24% 1.33%
Ratio of net investment income to average net assets(3) ..... 5.13% 5.20% 4.78% 5.28% 5.66%
Ratio of net investment income to average net assets
applicable to common shares4 ............................ 5.99% 6.01% 5.45% 6.04% 6.93%
Portfolio turnover .......................................... 15% 0% 5% 7% 13%
Leverage analysis:
Value of preferred shares outstanding (000 omitted) ......... $20,000 $20,000 $20,000 $20,000 $20,000
Net asset coverage per share of preferred shares,
end of year.............................................. $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
</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 year 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 years 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 years. Conversely, total investment return
based on net asset value will be lower than total investment return based
on market value in years 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 years.
(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.
See accompanying notes
<PAGE>
for tax-exempt income 23
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each common share of the Fund outstanding throughout each year
were as follows:
<TABLE>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
-------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDEd YEAR ENDED YEAR ENDED
3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year .............................. $14.800 $13.590 $13.480 $13.120 $12.730
Income from investment operations:
Net investment income ....................................... 1.154 1.130 1.130 1.100 1.110
Net realized and unrealized gain on investments ............. 0.099 1.200 0.080 0.380 0.390
-------- -------- -------- -------- --------
Total from investment operations ............................ 1.253 2.330 1.210 1.480 1.500
-------- -------- -------- -------- --------
Less dividends to:
Common shareholders from net investment income .............. (0.818) (0.820) (0.810) (0.800) (0.830)
Preferred shareholders from net investment income ........... (0.285) (0.300) (0.290) (0.320) (0.280)
-------- -------- -------- -------- --------
Total dividends ............................................. (1.103) (1.120) (1.100) (1.120) (1.110)
-------- -------- -------- -------- --------
Net asset value, end of year .................................... $14.950 $14.800 $13.590 $13.480 $13.120
======== ======== ======== ======== ========
Market value, end of year ....................................... $15.060 $13.880 $12.630 $13.250 $12.380
======== ======== ======== ======== ========
Total investment return based on:(1)
Market value ................................................ 14.73% 16.56% 1.47% 14.16% (9.59%)
Net asset value ............................................. 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) ........................................... $168,456 $167,333 $158,572 $157,755 $155,139
Ratio of expenses to average net assets(3) .................. 0.64% 0.76% 0.74% 0.77% 0.77%
Ratio of expenses to average net assets applicable to
common shares ........................................... 1.00% 1.19% 1.19% 1.23% 1.28%
Ratio of net investment income to average net assets3........ 4.96% 4.98% 5.15% 5.03% 5.39%
Ratio of net investment income to average net assets
applicable to common shares(4) .......................... 5.80% 5.73% 6.15% 5.76% 6.69%
Portfolio turnover .......................................... 15% 4% 20% 11% 32%
Leverage analysis:
Value of preferred shares outstanding (000 omitted)........ . $60,000 $60,000 $60,000 $60,000 $60,000
Net asset coverage per share of preferred shares,
end of year ............................................. $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
</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 year 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 years 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 years. Conversely, total investment return
based on net asset value will be lower than total investment return based
on market value in years 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 years.
(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.
See accompanying notes
<PAGE>
24 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each common share of the Fund outstanding throughout each year
were as follows:
<TABLE>
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
--------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year............................... $13.760 $12.710 $12.540 $12.200 $11.860
Income from investment operations:
Net investment income........................................ 1.025 1.050 1.080 1.050 1.060
Net realized and unrealized gain on investments.............. 0.222 1.060 0.150 0.330 0.280
------- ------- ------- ------- -------
Total from investment operations............................. 1.247 2.110 1.230 1.380 1.340
------- ------- ------- ------- -------
Less dividends to:
Common shareholders from net investment income............... (0.758) (0.760) (0.750) (0.720) (0.730)
Preferred shareholders from net investment income............ (0.279) (0.300) (0.310) (0.320) (0.280)
------- ------- ------- ------- -------
Total dividends.............................................. (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 year..................................... $13.970 $13.760 $12.710 $12.540 $12.200
======= ======= ======= ======= =======
Market value, end of year........................................ $14.125 $13.380 $12.250 $12.000 $11.250
======= ======= ======= ======= =======
Total investment return based on:(1)
Market value................................................. 11.59% 15.80% 8.62% 13.51% (14.27%)
Net asset value.............................................. 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)............................................ $40,665 $40,283 $38,348 $38,046 $37,418
Ratio of expenses to average net assets(3)................... 0.77% 0.83% 0.81% 0.81% 0.82%
Ratio of expenses to average net assets applicable
to common shares......................................... 1.22% 1.34% 1.33% 1.33% 1.40%
Ratio of net investment income to average net assets(3)...... 4.64% 4.88% 5.17% 5.05% 5.37%
Ratio of net investment income to average net assets
applicable to common shares(4)........................... 5.35% 5.61% 6.05% 5.81% 6.79%
Portfolio turnover........................................... 15% 9% 39% 35% 47%
Leverage analysis:
Value of preferred shares outstanding (000 omitted).......... $15,000 $15,000 $15,000 $15,000 $15,000
Net asset coverage per share of preferred shares,
end of year.............................................. $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
</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 year 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 years 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 years. Conversely, total investment return
based on net asset value will be lower than total investment return based
on market value in years 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 years.
(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.
See accompanying notes
<PAGE>
for tax-exempt income 25
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each common share of the Fund outstanding throughout each year
were as follows:
<TABLE>
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
--------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year............................... $15.030 $13.780 $13.740 $13.220 $12.700
Income from investment operations:
Net investment income........................................ 1.108 1.090 1.080 1.090 1.080
Net realized and unrealized gain on investments.............. 0.202 1.230 0.010 0.470 0.560
------- ------- ------- ------- -------
Total from investment operations............................. 1.310 2.320 1.090 1.560 1.640
------- ------- ------- ------- -------
Less dividends and distributions to:
Common shareholders from net investment income............... (0.773) (0.770) (0.760) (0.730) (0.780)
Preferred shareholders from net investment income............ (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............................ (1.050) (1.070) (1.050) (1.040) (1.120)
------- ------- ------- ------- -------
Net asset value, end of year..................................... $15.290 $15.030 $13.780 $13.740 $13.220
======= ======= ======= ======= =======
Market value, end of year........................................ $15.125 $14.630 $13.000 $12.750 $12.130
======= ======= ======= ======= =======
Total investment return based on:(1)
Market value................................................. 8.84% 18.79% 8.20% 11.52% (6.43%)
Net asset value.............................................. 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)............................................ $70,586 $69,813 $66,102 $65,990 $64,438
Ratio of expenses to average net assets(3)................... 0.74% 0.80% 0.78% 0.78% 0.79%
Ratio of expenses to average net assets applicable to
common shares............................................ 1.15% 1.26% 1.25% 1.26% 1.32%
Ratio of net investment income to average net assets(3)...... 4.69% 4.71% 4.85% 4.88% 5.19%
Ratio of net investment income to average net assets
applicable to common shares(4)........................... 5.46% 5.34% 5.71% 5.57% 6.42%
Portfolio turnover........................................... 46% 22% 31% 30% 18%
Leverage analysis:
Value of preferred shares outstanding (000 omitted).......... $25,000 $25,000 $25,000 $25,000 $25,000
Net asset coverage per share of preferred shares,
end of year.............................................. $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
</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 year 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 years 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 years. Conversely, total investment return
based on net asset value will be lower than total investment return based
on market value in years 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 years.
(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. See accompanying notes
<PAGE>
26 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each common share of the Fund outstanding throughout each year
were as follows:
<TABLE>
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
----------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year............................... $15.300 $13.670 $13.710 $13.170 $12.460
Income (loss) from investment operations:
Net investment income........................................ 1.113 1.090 1.080 1.060 1.070
Net realized and unrealized gain (loss) on investments....... 0.292 1.600 (0.080) 0.510 0.690
------- ------- ------- ------- -------
Total from investment operations............................. 1.405 2.690 1.000 1.570 1.760
------- ------- ------- ------- -------
Less dividends to:
Common shareholders from net investment income............... (0.758) (0.760) (0.750) (0.720) (0.770)
Preferred shareholders from net investment income............ (0.277) (0.300) (0.290) (0.310) (0.280)
------- ------- ------- ------- -------
Total dividends.............................................. (1.035) (1.060) (1.040) (1.030) (1.050)
------- ------- ------- ------- -------
Net asset value, end of year..................................... $15.670 $15.300 $13.670 $13.710 $13.170
======= ======= ======= ======= =======
Market value, end of year........................................ $14.750 $14.310 $12.500 $12.750 $12.250
======= ======= ======= ======= =======
Total investment return based on:(1)
Market value................................................. 8.47% 20.94% 3.94% 10.39% 4.69%
Net asset value.............................................. 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)............................................ $57,956 $57,071 $53,110 $53,207 $51,891
Ratio of expenses to average net assets(3)................... 0.75% 0.80% 0.78% 0.80% 0.81%
Ratio of expenses to average net assets applicable to
common shares............................................ 1.14% 1.25% 1.25% 1.27% 1.35%
Ratio of net investment income to average net assets(3)...... 4.67% 4.73% 4.91% 4.82% 5.21%
Ratio of net investment income to average net assets
applicable to common shares(4)........................... 5.37% 5.33% 5.74% 5.45% 6.37%
Portfolio turnover........................................... 0% 5% 68% 22% 10%
Leverage analysis:
Value of preferred shares outstanding (000 omitted).......... $20,000 $20,000 $20,000 $20,000 $20,000
Net asset coverage per share of preferred shares, end
of year.................................................. $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
</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 year 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 years 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 years. Conversely, total investment return
based on net asset value will be lower than total investment return based
on market value in years 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 years.
(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.
See accompanying notes
<PAGE>
for tax-exempt income 27
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each common share of the Fund outstanding throughout each year
were as follows:
<TABLE>
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
-----------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/99 3/31/98(2) 3/31/97 3/31/96 3/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year............................... $14.920 $13.580 $13.610 $13.190 $12.800
------- ------- ------- ------- -------
Income from investment operations:
Net investment income........................................ 1.080 1.070 1.050 1.030 1.020
Net realized and unrealized gain on investments.............. 0.264 1.300 (0.060) 0.410 0.440
------- ------- ------- ------- -------
Total from investment operations............................. 1.344 2.370 0.990 1.440 1.460
------- ------- ------- ------- -------
Less dividends and distributions to:
Common shareholders from net investment income............... (0.735) (0.740) (0.730) (0.700) (0.760)
Preferred shareholders from net investment income............ (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................................ (1.044) (1.030) (1.020) (1.020) (1.070)
------- ------- ------- ------- -------
Net asset value, end of year..................................... $15.220 $14.920 $13.580 $13.610 $13.190
======= ======= ======= ======= =======
Market value, end of year........................................ $14.938 $14.000 $12.500 $12.630 $12.250
======= ======= ======= ======= =======
Total investment return based on:(1)
Market value................................................. 12.13% 18.09% 4.77% 8.99% (10.05%)
Net asset value.............................................. 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)............................................ $113,598 $112,187 $105,687 $105,843 $103,781
Ratio of expenses to average net assets(3)................... 0.69% 0.75% 0.77% 0.75% 0.76%
Ratio of expenses to average net assets applicable to
common shares............................................ 1.06% 1.18% 1.23% 1.21% 1.27%
Ratio of net investment income to average net assets(3)...... 4.61% 4.72% 4.76% 4.68% 4.88%
Ratio of net investment income to average net assets
applicable to common shares(4)........................... 5.08% 5.38% 5.51% 5.18% 5.88%
Portfolio turnover........................................... 18% 39% 88% 39% 7%
Leverage analysis:
Value of preferred shares outstanding (000 omitted).......... $40,000 $40,000 $40,000 $40,000 $40,000
Net asset coverage per share of preferred shares,
end of year.............................................. $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
</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 year 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 years 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 years. Conversely, total investment return
based on net asset value will be lower than total investment return based
on market value in years 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 years.
(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.
See accompanying notes
<PAGE>
28 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
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" and
collectively as the "Funds") 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 III 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. Fund Reorganization
On April 30, 1997, Lincoln National Corporation ("LNC") acquired Voyageur Fund
Managers, Inc.'s ("Voyageur") parent, Dougherty Financial Group, Inc. ("DFG"),
pursuant to an agreement and plan of merger dated January 15, 1997, in which LNC
acquired DFG, including the mutual fund investment advisory business of DFG
conducted by Voyageur. Upon completion of the acquisition, Delaware Management
Company ("DMC") became the Investment Manager to the Funds.
2. 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.
3. Investment Management, Administration and Transactions with Affiliates
In accordance with the terms of their respective Investment Management
Agreements, each Fund pays 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.
Commencing August 1, 1998 (July 1, 1998 for Colorado Insured Municipal Fund) the
Funds have engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC, to
provide administration and accounting services. DSC's fees for these services
were as follows:
MINNESOTA MINNESOTA MINNESOTA
MUNICIPAL MUNICIPAL II MUNICIPAL III
FUND FUND FUND
--------- ------------ -------------
Accounting and administration
fees......................... $39,737 $41,521 $27,806
FLORIDA COLORADO
ARIZONA INSURED INSURED
MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND
--------- ------------ -------------
Accounting and administration
fees......................... $50,005 $26,795 $64,287
Prior to August 1, 1998 (July 1, 1998 for Colorado Insured Municipal Fund) the
Funds had Administrative Agreements with Mitchell Hutchins Asset Management Inc.
and Princeton Administrators, L.P. (Colorado Insured Municipal Fund only)(the
"Administrators").
On March 31, 1999, the Funds had payables to affiliates as follows:
MINNESOTA MINNESOTA MINNESOTA
MUNICIPAL MUNICIPAL II MUNICIPAL III
FUND FUND FUND
--------- ------------ -------------
Investment management fee
payable to DMC.............. $80,472 $226,227 $54,127
Administration fees, accounting
fees and other expenses
payable to DSC and
affiliates................... 95,339 178,471 80,034
FLORIDA COLORADO
ARIZONA INSURED INSURED
MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND
--------- ------------ -----------
Investment management fee
payable to DMC............... $94,513 $77,806 $190,308
Administration fees, accounting
fees and other expenses
payable to DSC and
affiliates................... 104,186 138,291 134,781
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 29
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. Investments
During the year ended March 31, 1999, the Funds made purchases and sales of
investment securities other than temporary cash investments as follows:
<TABLE>
FLORIDA COLORADO
MINNESOTA MINNESOTA MINNESOTA ARIZONA INSURED INSURED
MUNICIPAL MUNICIPAL II MUNICIPAL III MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND FUND FUND FUND
--------- ------------ ------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Purchases... $8,626,565 $24,615,310 $5,986,997 $32,819,989 $512,503 $19,505,848
Sales....... 8,776,961 24,210,939 6,061,368 32,364,592 130,411 18,995,778
</TABLE>
At March 31, 1999, the aggregate cost of investments and unrealized appreciation
(depreciation) of securities for federal income tax purposes for each Fund were
as follows:
<TABLE>
COST AGGREGATE AGGREGATE NET
OF UNREALIZED UNREALIZED UNREALIZED
INVESTMENTS APPRECIATION DEPRECIATION APPRECIATION
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Minnesota Municipal Fund................ $54,814,048 $4,402,875 $(63,556) $4,339,319
Minnesota Municipal Fund II............. 156,831,187 10,065,562 (104,613) 9,960,949
Minnesota Municipal Fund III............ 37,247,284 2,919,012 (46,842) 2,872,170
Arizona Municipal Fund.................. 65,580,496 4,261,195 (7,671) 4,253,524
Florida Insured Municipal Fund.......... 52,971,205 4,399,620 (1,685) 4,397,935
Colorado Insured Municipal Fund......... 106,389,744 5,831,356 -- 5,831,356
</TABLE>
For federal income tax purposes, as of March 31, 1999, the Funds had capital
loss carryforwards expiring in the following years:
<TABLE>
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 -- --
</TABLE>
<PAGE>
30 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. 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 years ended March 31, 1999 and March 31, 1998, the Funds did not have
any transactions in common shares.
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 2.90% to 3.70% on Minnesota Municipal
Fund, from 3.00% to 3.80% on Minnesota Municipal Fund II, from 3.04% to 3.80% on
Minnesota Municipal Fund III, from 2.95% to 3.70% on Arizona Municipal Fund,
from 2.55% to 3.70% on Florida Insured Municipal Fund and from 2.90% to 3.90% on
Colorado Insured Municipal Fund during the year ended March 31. 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.
6. 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.
<PAGE>
for tax-exempt income 31
The Voyageur FundsReport of Independent Auditors
To the Shareholders and Board of Directors
Voyageur Minnesota Municipal Income Fund, Inc.
Voyageur Minnesota Municipal Income Fund II, Inc.
Voyageur Minnesota Municipal Income Fund III, Inc.
Voyageur Arizona Municipal Income Fund, Inc.
Voyageur Florida Insured Municipal Income Fund
Voyageur Colorado Insured Municipal Income Fund, Inc.
We have audited the accompanying statements of net assets of Voyageur Minnesota
Municipal Income Fund, Inc., Voyageur Minnesota Municipal Income Fund II, Inc.,
Voyageur Minnesota Municipal Income Fund III, Inc., Voyageur Arizona Municipal
Income Fund, Inc., Voyageur Florida Insured Municipal Income Fund, and Voyageur
Colorado Insured Municipal Income Fund, Inc. (the "Funds") as of March 31, 1999,
and the related statements of operations for the year then ended and the
statements of changes in net assets and the financial highlights for each of the
two years in the period then ended. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights for the periods presented through
March 31, 1997 were audited by other auditors whose report dated May 9, 1997
expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of March 31, 1999, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds at March 31, 1999, the results of their operations for
the year then ended and the changes in their net assets and their financial
highlights for each of the two years in the period then ended, in conformity
with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
---------------------
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
May 3, 1999
<PAGE>
32 for tax-exempt income
PROXY RESULTS
(UNAUDITED)
For the period year ended March 31, 1999, shareholders of the Voyageur Minnesota
Municipal Income Fund, Inc., Voyageur Minnesota Municipal Income Fund II, Inc.,
Voyageur Minnesota Municipal Income Fund III, Inc., Voyageur Arizona Municipal
Income Fund, Inc., Voyageur Florida Insured Municipal Income Fund, and Voyageur
Colorado Insured Municipal Income Fund, Inc. voted on the following proposals at
the annual meeting of shareholders on December 4, 1998, as adjourned. The
description of each proposal and number of shares voted are as follows:
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- ----------------------------
1. To elect the Fund's Board of Directors/Trustees:
Voyageur Minnesota Municipal Income Fund, Inc:
<S> <C> <C> <C> <C> <C> <C>
Jeffrey J. Nick ...................................... 1,658,471 -- 113,756 -- -- --
Walter P. Babich ..................................... 1,659,290 -- 112,937 -- -- --
Anthony D. Knerr ..................................... 1,661,000 -- 111,227 -- -- --
Ann R. Leven ......................................... 1,664,425 -- 107,802 -- -- --
W. Thacher Longstreth ................................ N/A N/A N/A 398 -- 2
Thomas F. Madison .................................... N/A N/A N/A 398 -- 2
Charles E. Peck ...................................... -- 107,802 -- -- --
Wayne A. Stork ....................................... 1,656,898 -- 115,329 -- -- --
Voyageur Minnesota Municipal Income Fund II, Inc:
Jeffrey J. Nick ...................................... 4,365,956 -- 414,563 -- -- --
Walter P. Babich ..................................... 4,360,723 -- 419,796 -- -- --
Anthony D. Knerr ..................................... 4,370,849 -- 409,670 -- -- --
Ann R. Leven ......................................... 4,374,364 -- 406,155 -- -- --
W. Thacher Longstreth ................................ N/A N/A N/A 807 -- --
Thomas F. Madison .................................... N/A N/A N/A 807 -- --
Charles E. Peck ...................................... 4,382,941 -- 397,578 -- -- --
Wayne A. Stork ....................................... 4,366,336 -- 414,183 -- -- --
Voyageur Minnesota Municipal Income Fund III, Inc:
Jeffrey J. Nick ...................................... 1,043,360 -- 138,886 -- -- --
Walter P. Babich ..................................... 1,045,077 -- 137,169 -- -- --
Anthony D. Knerr ..................................... 1,048,585 -- 133,661 -- -- --
Ann R. Leven ......................................... 1,048,585 -- 133,661 -- -- --
W. Thacher Longstreth ................................ N/A N/A N/A 300 -- --
Thomas F. Madison .................................... N/A N/A N/A 300 -- --
Charles E. Peck ...................................... 1,048,585 -- 133,661 -- -- --
Wayne A. Stork ....................................... 1,043,360 -- 138,886 -- -- --
Voyageur Arizona Municipal Income Fund, Inc:
Jeffrey J. Nick ...................................... 1,764,337 -- 137,703 -- -- --
Walter P. Babich ..................................... 1,765,496 -- 136,544 -- -- --
Anthony D. Knerr ..................................... 1,765,496 -- 136,544 -- -- --
Ann R. Leven ......................................... 1,765,829 -- 136,211 -- -- --
W. Thacher Longstreth ................................ N/A N/A N/A 322 -- --
Thomas F. Madison .................................... N/A N/A N/A 322 -- --
Charles E. Peck ...................................... 1,766,829 -- 135,211 -- -- --
Wayne A. Stork ....................................... 1,763,637 -- 138,403 -- -- --
</TABLE>
<PAGE>
for tax-exempt income 33
PROXY RESULTS (CONTINUED)
1. To elect the Fund's Board of Directors/Trustees (Continued)
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Voyageur Florida Insured Municipal Income Fund:
Jeffrey J. Nick ...................................... 2,004,543 -- 106,660 -- -- --
Walter P. Babich ..................................... 2,005,658 -- 105,545 -- -- --
Anthony D. Knerr ..................................... 2,005,658 -- 105,545 -- -- --
Ann R. Leven ......................................... 2,005,658 -- 105,545 -- -- --
W. Thacher Longstreth ................................ N/A N/A N/A 213 -- --
Thomas F. Madison .................................... N/A N/A N/A 213 -- --
Charles E. Peck ...................................... 2,005,658 -- 105,545 -- -- --
Wayne A. Stork ....................................... 2,004,543 -- 106,660 -- -- --
Voyageur Colorado Insured Municipal Income Fund, Inc:
Jeffrey J. Nick ...................................... 2,981,730 -- 176,204 -- -- --
Walter P. Babich ..................................... 2,979,730 -- 174,204 -- -- --
Anthony D. Knerr ..................................... 2,983,130 -- 174,804 -- -- --
Ann R. Leven ......................................... 2,992,205 -- 165,729 -- -- --
W. Thacher Longstreth ................................ N/A N/A N/A 454 -- --
Thomas F. Madison .................................... N/A N/A N/A 454 -- --
Charles E. Peck ...................................... 2,995,855 -- 162,079 -- -- --
Wayne A. Stork ....................................... 2,981,730 -- 176,204 -- -- --
</TABLE>
2. To approve the reclassification of the Fund's investment objective from
fundamental to non-fundamental.
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund, Inc. ......... 1,276,206 64,880 95,882 326 1 1
Voyageur Minnesota Municipal Income Fund II, Inc. ...... 3,246,140 348,035 262,296 564 -- 21
Voyageur Minnesota Municipal Income Fund III, Inc. ..... 824,311 108,952 64,480 177 --
Voyageur Arizona Municipal Income Fund, Inc. ........... 1,425,760 83,215 97,442 316 -- 1
Voyageur Florida Insured Municipal Income Fund ......... 1,321,511 88,038 100,699 205 -- 10
Voyageur Colorado Insured Municipal Income Fund, Inc. .. 2,289,199 163,287 185,274 371 71 8
</TABLE>
3. To approve a change in the Fund's fundamental policy concerning
diversification of investments.
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund II, Inc. ...... 3,275,663 325,252 255,555 564 -- 21
Voyageur Arizona Municipal Income Fund, Inc. ........... 1,434,254 74,054 98,109 316 -- 1
Voyageur Florida Insured Municipal Income Fund ......... 1,331,218 79,839 99,191 199 10 4
</TABLE>
<PAGE>
34 for tax-exempt income
PROXY RESULTS (CONTINUED)
4. To approve standardized fundamental investment restrictions for the Fund
(proposal involves separate votes on seven sub-proposals 4A-4G).
4A. To adopt a new fundamental investment restriction concerning concentration
of the Fund's investments in the same industry.
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund, Inc. ......... 1,290,613 42,382 103,973 327 -- 1
Voyageur Minnesota Municipal Income Fund II, Inc. ...... 3,321,468 273,608 261,394 582 -- 3
Voyageur Minnesota Municipal Income Fund III, Inc. ..... 840,718 77,872 79,153 177 --
Voyageur Arizona Municipal Income Fund, Inc. ........... 1,432,929 58,348 115,140 316 -- 1
Voyageur Florida Insured Municipal Income Fund ......... 1,327,315 82,196 100,737 205 10 --
Voyageur Colorado Insured Municipal Income Fund, Inc. .. 2,327,955 103,750 206,056 371 71 8
</TABLE>
4B. To adopt a new fundamental investment restriction concerning borrowing money
and issuing senior securities.
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund, Inc........... 1,271,981 56,855 108,132 325 -- 3
Voyageur Minnesota Municipal Income Fund II, Inc........ 3,267,118 322,610 266,742 585 -- --
Voyageur Minnesota Municipal Income Fund III, Inc....... 835,181 81,198 81,364 177 -- --
Voyageur Arizona Municipal Income Fund, Inc............. 1,427,275 71,566 107,576 316 -- 1
Voyageur Florida Insured Municipal Income Fund.......... 1,305,089 97,883 107,276 201 14 --
Voyageur Colorado Insured Municipal Income Fund, Inc. .. 2,306,350 121,667 209,743 371 71 8
</TABLE>
4C. To adopt a new fundamental investment restriction concerning underwriting.
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund, Inc. ......... 1,279,609 46,070 111,289 327 -- 1
Voyageur Minnesota Municipal Income Fund II, Inc. ...... 3,269,998 300,622 285,849 585 -- --
Voyageur Minnesota Municipal Income Fund III, Inc. ..... 824,889 85,302 87,551 177 -- --
Voyageur Arizona Municipal Income Fund, Inc. ........... 1,423,207 56,072 127,138 316 -- 1
Voyageur Florida Insured Municipal Income Fund ......... 1,316,437 78,451 115,360 201 14 --
Voyageur Colorado Insured Municipal Income Fund, Inc. .. 2,295,279 110,705 231,777 371 71 8
</TABLE>
4D. To adopt a new fundamental investment restriction concerning investments in
real estate.
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund, Inc. ......... 1,273,629 56,578 106,761 325 -- 3
Voyageur Minnesota Municipal Income Fund II, Inc. ...... 3,262,698 327,240 266,532 564 21 --
Voyageur Minnesota Municipal Income Fund III, Inc. ..... 830,446 82,541 84,756 177 -- --
Voyageur Arizona Municipal Income Fund, Inc. ........... 1,439,009 53,077 114,331 316 -- 1
Voyageur Florida Insured Municipal Income Fund ......... 1,314,272 85,456 110,520 205 10 --
Voyageur Colorado Insured Municipal Income Fund, Inc. .. 2,286,440 124,502 226,818 371 71 8
</TABLE>
<PAGE>
for tax-exempt income 35
PROXY RESULTS (CONTINUED)
4E. To adopt a new fundamental investment restriction concerning investments in
commodities.
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund, Inc. ......... 1,262,465 68,846 105,657 325 2 1
Voyageur Minnesota Municipal Income Fund II, Inc. ...... 3,223,069 355,517 277,884 564 21 --
Voyageur Minnesota Municipal Income Fund III, Inc. ..... 812,085 101,211 84,447 177 -- --
Voyageur Arizona Municipal Income Fund, Inc. ........... 1,408,432 79,962 118,023 316 -- 1
Voyageur Florida Insured Municipal Income Fund ......... 1,351,332 77,662 81,254 205 10 --
Voyageur Colorado Insured Municipal Income Fund, Inc. .. 2,265,080 146,001 226,679 371 71 8
</TABLE>
4F. To adopt a new fundamental investment restriction concerning lending by the
Fund.
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund, Inc. ......... 1,262,514 67,809 106,645 327 -- 1
Voyageur Minnesota Municipal Income Fund II, Inc. ...... 3,273,472 304,149 278,849 585 -- --
Voyageur Minnesota Municipal Income Fund III, Inc. ..... 830,819 81,562 85,362 177 -- --
Voyageur Arizona Municipal Income Fund, Inc. ........... 1,423,879 67,829 114,709 316 -- 1
Voyageur Florida Insured Municipal Income Fund ......... 1,315,605 91,709 102,934 211 4 --
Voyageur Colorado Insured Municipal Income Fund, Inc. .. 2,299,190 122,864 215,706 371 71 8
</TABLE>
4G. To reclassify all current fundamental investment restrictions as
non-fundamental.
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund, Inc. ......... 1,244,104 76,070 116,794 326 1 1
Voyageur Minnesota Municipal Income Fund II, Inc. ...... 3,207,481 357,645 291,344 564 -- 21
Voyageur Minnesota Municipal Income Fund III, Inc. ..... 808,232 100,637 88,873 177 -- --
Voyageur Arizona Municipal Income Fund, Inc. ........... 1,410,628 82,591 113,198 316 -- 1
Voyageur Florida Insured Municipal Income Fund ......... 1,326,507 77,952 105,789 201 14 --
Voyageur Colorado Insured Municipal Income Fund, Inc. .. 2,248,651 156,987 232,123 371 71 8
</TABLE>
5. To approve a new investment management agreement with Delaware Management
Company for the Fund.
<TABLE>
COMMON SHAREHOLDERS
SHARES SHARES SHARES
VOTED VOTED VOTED
FOR AGAINST ABSTAIN
---------------------------------
<S> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund, Inc........... 1,274,573 52,127 110,596
Voyageur Minnesota Municipal Income Fund II, Inc........ 3,256,300 330,696 269,474
Voyageur Minnesota Municipal Income Fund III, Inc....... 835,458 87,083 75,379
Voyageur Arizona Municipal Income Fund, Inc............. 1,432,025 61,737 112,655
Voyageur Florida Insured Municipal Income Fund.......... 1,307,546 101,100 101,817
Voyageur Colorado Insured Municipal Income Fund, Inc. .. 2,322,440 113,419 201,901
</TABLE>
<PAGE>
36 for tax-exempt income
PROXY RESULTS (CONTINUED)
6. To ratify the selection of Ernst & Young LLP, as the independent auditors for
the Fund.
<TABLE>
COMMON SHAREHOLDERS
SHARES SHARES SHARES
VOTED VOTED VOTED
FOR AGAINST ABSTAIN
---------------------------------
<S> <C> <C> <C>
Voyageur Minnesota Municipal Income Fund, Inc........... 1,679,596 9,919 82,712
Voyageur Minnesota Municipal Income Fund II, Inc........ 4,470,216 103,385 206,916
Voyageur Minnesota Municipal Income Fund III, Inc. ..... 1,101,125 23,187 58,234
Voyageur Arizona Municipal Income Fund, Inc............. 1,795,148 13,568 93,324
Voyageur Florida Insured Municipal Income Fund.......... 2,008,253 28,543 74,622
Voyageur Colorado Insured Municipal Income Fund, Inc.... 2,982,114 32,243 144,030
</TABLE>
7. To approve the restructuring of the Fund from a Massachusetts Business Trust
into a Maryland Corporation.*
<TABLE>
COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
SHARES SHARES SHARES SHARES SHARES SHARES
VOTED VOTED VOTED VOTED VOTED VOTED
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
--------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Voyageur Florida Insured Municipal Income Fund.......... 1,342,246 62,719 105,283 215 -- --
</TABLE>
- ----------
*The Board of Trustees of the Fund voted to abandon the reorganization at a
meeting held on April 15, 1999.
YEAR 2000 (UNAUDITED)
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 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
WALTER P. BABICH
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
JOHN H. DURHAM
Partner, Complete Care Services
Horsham, 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
Secretary/Treasurer, Enterprise Homes, Inc.
Fredericksburg, VA
WAYNE A. STORK
Chairman
Delaware Management Holdings, Inc.
Philadelphia, PA
JAN L. YEOMANS
Vice President and Treasurer
3M Corporation
St. Paul, Minnesota
Affiliated Officers
DAVID K. DOWNES
Executive Vice President, Chief Financial Officer
and Chief Operating Officer
Delaware Investments Family of Funds
Philadelphia, PA
GEORGE M. CHAMBERLAIN, JR.
Senior Vice President, Secretary
and General Counsel
Delaware Investments Family of Funds
Philadelphia, PA
BRUCE D. BARTON
President and Chief Executive Officer
Delaware Distributors, L.P.
Philadelphia, PA
(photo of globes)
directors
& officers
INVESTMENT MANAGER
Delaware Management Company
Philadelphia, Pennsylvania
INTERNATIONAL AFFILIATE
Delaware International Advisers Ltd.
London, England
PRINCIPAL OFFICE OF THE FUND
1818 Market Street
PHILADELPHIA, PA 19103-3682
INDEPENDENT AUDITORS
Ernst & Young LLP
2001 Market Street
Philadelphia, PA
<PAGE>
(photo of globes)
Registrar and
Stock Transfer Agent
Norwest Bank Minnesota, NA
P.O. Box 64851
St. Paul, MN 55164
1.800.468.9716
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
The Delaware Investments family includes open-end and closed-end funds with a
wide range of investment objectives. Stock funds, income funds, tax-exempt
funds, money market funds and closed-end funds give investors the ability to
create a portfolio that fits their personal financial goals. For a prospectus of
any open-end fund from Delaware Investments, contact your financial adviser or
call Delaware Investments at 1.800.523.1918. Read the prospectus carefully
before investing. 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.
Number of Recordholders as of March 31, 1999:
Minnesota Municipal Income Fund I 478
Minnesota Municipal Income Fund II 819
Minnesota Municipal Income Fund III 200
Arizona Municipal Income Fund 160
Florida Insured Municipal Income Fund 281
Colorado Insured Municipal Income Fund 260
DELAWARE
INVESTMENTS
- ---------------------
Philadelphia o London
Printed in the USA
on recycled paper
(1696)
VOY-CEAR[3/99]PPL5/99
