MUNIYIELD
FLORIDA
INSURED FUND
FUND LOGO
Annual Report
October 31, 1999
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield Florida Insured Fund
for their information. It is not a prospectus, circular or
representation intended for use in the purchase of shares of the
Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a
representation of future performance. The Fund has leveraged its
Common Shares by issuing Preferred Shares to provide the Common
Shareholders with a potentially higher rate of return. Leverage
creates risks for Common Shareholders, including the likelihood of
greater volatility of net asset value and market price of the Common
Shares, and the risk that fluctuations in the short-term dividend
rates of the Preferred Shares may affect the yield to Common
Shareholders. Statements and other information herein are as dated
and are subject to change.
MuniYield Florida
Insured Fund
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MuniYield Florida Insured Fund
TO OUR SHAREHOLDERS
For the year ended October 31, 1999, the Common Shares of MuniYield
Florida Insured Fund earned $0.847 per share income dividends, which
included earned and unpaid dividends of $0.062. This represents a
net annualized yield of 6.36%, based on a month-end net asset value
of $13.30 per share. Over the same period, the total investment
return on the Fund's Common Shares was -8.20%, based on a change in
per share net asset value from $15.79 to $13.30, and assuming
reinvestment of $0.939 per share ordinary income dividends and
$0.349 per share capital gains distributions.
For the six-month period ended October 31, 1999, the total
investment return on the Fund's Common Shares was -8.44%, based on a
change in per share net asset value from $14.97 to $13.30, and
assuming reinvestment of $0.402 per share income dividends.
For the six-month period ended October 31, 1999, the Fund's Auction
Market Preferred Shares had an average yield of 3.34%.
The Municipal Market Environment
The combination of steady strong domestic economic growth,
improvement in foreign economies (most notably in Japan) and
increasing investor concerns regarding potential increases in US
inflation put upward pressure on bond yields throughout the 12-month
period ended October 31, 1999. Continued strong US employment
growth, particularly the decline in the US unemployment rate to 4.2%
in early June, was among the reasons the Federal Reserve Board cited
for raising short-term interest rates in late June and again in late
August. US Treasury bond yields reacted by climbing above 6.375% by
late October. However, by October 31, 1999, economic indicators were
released suggesting that despite strong economic and employment
growth in the third fiscal quarter of 1999, inflationary pressures
have remained extremely well-contained. This resulted in a
significant rally in the US Treasury bond market, pushing US
Treasury bond yields downward to approximately 6.15% by October 31,
1999. During the last six months, yields on 30-year US Treasury
bonds increased more than 50 basis points (0.50%).
Long-term tax-exempt bond yields also rose during the six months
ended October 31, 1999. Until early May, the municipal bond market
was able to withstand much of the upward pressure on bond yields.
However, investor concerns of additional moves by the Federal
Reserve Board to moderate US economic growth and, more importantly,
the loss of the strong technical support that the tax-exempt market
enjoyed in early 1999 helped push municipal bond yields
significantly higher for the remainder of the period. The yields on
long-term tax-exempt revenue bonds rose almost 90 basis points to
6.18% by October 31, 1999, as measured by the Bond Buyer Revenue
Bond Index.
In recent months, the significant decline in new tax-exempt bond
issuance has remained a positive factor within the municipal bond
market, as it had been for much of the past year. During the last
six months, more than $110 billion in long-term municipal bonds was
issued, a decline of almost 20% compared to the same period a year
ago. During the past three months,$55 billion in municipal bonds was
underwritten, representing a decline of nearly 10% compared to the
corresponding period in 1998. Additionally, in June and July,
investors received more than $40 billion in coupon income and
proceeds from bond maturities and early bond redemptions. These
proceeds have generated considerable retail investor interest, which
has helped absorb the recent diminished supply.
Although tax-exempt bond yields are at their highest level in over
two years and have attracted significant retail investor interest,
institutional demand has declined sharply. Long-term municipal
mutual funds have seen consistent outflows in recent months as the
yields of individual securities have risen faster than those of
larger, more diverse mutual funds. In addition, the demand from
property/casualty insurance companies has weakened as a result of
the losses, and anticipated losses, incurred as a result of the
series of damaging storms across much of the eastern United States.
Additionally, many institutional investors who were attracted to the
municipal bond market in recent years by historically attractive tax-
exempt bond yield ratios of over 90% have found other asset classes
even more attractive. Even with a reduced supply position, tax-
exempt issuers have been forced to repeatedly raise municipal bond
yields in the attempt to attract adequate demand.
MuniYield Florida Insured Fund
October 31, 1999
The recent relative underperformance of the municipal bond market
has resulted in an opportunity for long-term investors to purchase
tax-exempt issues whose yields are nearly identical to taxable US
Treasury securities. At October 31, 1999, long-term uninsured
municipal revenue bond yields were 100% of comparable US Treasury
securities. In recent months, many taxable asset classes, such as
corporate bonds, mortgage-backed securities and US agency debt, have
all accelerated debt issuance. This acceleration was initiated
largely to avoid issuing securities at year-end and to minimize any
associated Year 2000 (Y2K) problems that may develop. However, this
increased issuance has also resulted in higher yield levels in the
various asset classes as lower bond prices became necessary to
attract sufficient investor demand. Going forward, it is believed
that the pace of non-US Government debt issuance is likely to slow
significantly. As the supply of this debt declines, we would expect
many institutional investors to return to the municipal bond market
and the attractive yield ratios available.
Looking ahead, it appears to us that long-term municipal bond yields
will remain under pressure, trading in a broad range centered near
current levels. Investors are likely to remain concerned about
future action by the Federal Reserve Board. Y2K considerations may
prohibit any further Federal Reserve Board moves through the end of
the year and the beginning of 2000. Any improvement in bond prices
will probably be contingent upon weakening in both US employment
growth and consumer spending. The 100 basis point rise in US
Treasury bond yields seen thus far this year may negatively affect
US economic growth. The US housing market will be among the first
sectors likely to be affected, as some declines have already been
evidenced in response to higher mortgage rates. We believe that it
is also unrealistic to expect double-digit returns in US equity
markets to continue indefinitely. Much of the US consumer's wealth
is tied to recent stock market appreciation. Any slowing in these
incredible growth rates is likely to reduce consumer spending. We
believe that these factors suggest that the worst of the recent
increase in bond yields has passed and stable, if not slightly
improving, bond prices may be expected.
Portfolio Strategy
At the start of the fiscal year ended October 31, 1999, we had a
positive investment outlook toward the municipal bond market, and we
expected that interest rates would remain stable going forward.
Therefore, we remained fully invested and continued this strategy
for the early part of the October period. However, during the last
six months of the fiscal year, the municipal bond market
underperformed the US Treasury market. This sub-par performance can
be attributed to a lack of institutional demand and a large increase
of corporate and agency issues resulting in a wider yield spread to
US Treasury issues and certain allocations away from municipal
bonds. Given the robust economic environment, early in the fiscal
year, it did not seem likely that long-term interest rates would
decline. Accordingly, we maintained our strategy of focusing on
income-producing securities. We believed that coupon income could
potentially be a more significant segment of the Fund's annual total
return performance should the tax-exempt bond market perform as
anticipated in the ensuing months. (For a complete explanation of
the benefits and risks of leveraging, see page 4 of this report to
shareholders.) Keeping shareholder income as a priority, MuniYield
Florida Insured Fund was fully invested for most of the past several
months, and we expect to maintain this position going forward.
In Conclusion
We appreciate your ongoing interest in MuniYield Florida Insured
Fund, and we look forward to assisting you with your financial needs
in the months and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(William R. Bock)
William R. Bock
Vice President and Portfolio Manager
December 6, 1999
MuniYield Florida Insured Fund
October 31, 1999
<TABLE>
PROXY RESULTS
<CAPTION>
During the six-month period ended October 31, 1999, MuniYield
Florida Insured Fund's Common Shareholders voted on the following
proposal. Proposal 1 was approved at a shareholders' meeting on May
27, 1999. A description of the proposal and number of shares voted
are as follows:
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <C> <C> <C>
1. To approve an amendment to the Certificate of Designation of the Fund. 4,642,173 213,504 267,597
During the six-month period ended October 31, 1999, MuniYield
Florida Insured Fund's Preferred Shareholders voted on the following
proposal. Proposal 1 was approved at a shareholders' meeting on May
27, 1999. A description of the proposal and number of shares voted
are as follows:
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <C> <C> <C>
1. To approve an amendment to the Certificate of Designation of the Fund. 1,776 396 2
</TABLE>
YEAR 2000 ISSUES
Many computer systems were designed using only two digits to
designate years. These systems may not be able to distinguish the
Year 2000 from the Year 1900 (commonly known as the "Year 2000
Problem"). The Fund could be adversely affected if the computer
systems used by the Fund's management or other Fund service
providers do not properly address this problem before January 1,
2000. The Fund's management expects to have addressed this problem
before then, and does not anticipate that the services it provides
will be adversely affected. The Fund's other service providers have
told the Fund's management that they also expect to resolve the Year
2000 Problem, and the Fund's management will continue to monitor the
situation as the Year 2000 approaches. However, if the problem has
not been fully addressed, the Fund could be negatively affected. The
Year 2000 Problem could also have a negative impact on the
securities in which the Fund invests, and this could hurt the Fund's
investment returns.
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute substantially all of its
net investment income to its shareholders on a monthly basis.
However, in order to provide shareholders with a more consistent
yield to the current trading price of Common Shares of the Fund, the
Fund may at times pay out less than the entire amount of net
investment income earned in any particular month and may at times in
any month pay out such accumulated but undistributed income in
addition to net investment income earned in that month. As a result,
the dividends paid by the Fund for any particular month may be more
or less than the amount of net investment income earned by the Fund
during such month. The Fund's current accumulated but undistributed
net investment income, if any, is disclosed in the Statement of
Assets, Liabilities and Capital, which comprises part of the
Financial Information included in this report.
MuniYield Florida Insured Fund
October 31, 1999
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield Florida Insured Fund utilizes leveraging to seek to
enhance the yield and net asset value of its Common Shares. However,
these objectives cannot be achieved in all interest rate
environments. To leverage, the Fund issues Preferred Shares, which
pay dividends at prevailing short-term interest rates and invests
the proceeds in long-term municipal bonds. The interest earned on
these investments is paid to Common Shareholders in the form of
dividends, and the value of these portfolio holdings is reflected in
the per share net asset value of the Fund's Common Shares. However,
in order to benefit Common Shareholders, the yield curve must be
positively sloped; that is, short-term interest rates must be lower
than long-term interest rates. At the same time, a period of
generally declining interest rates will benefit Common Shareholders.
If either of these conditions change, then the risks of leveraging
will begin to outweigh the benefits.
To illustrate these concepts, assume a fund's Common Shares
capitalization of $100 million and the issuance of Preferred Shares
for an additional $50 million, creating a total value of $150
million available for investment in long-term municipal bonds. If
prevailing short-term interest rates are approximately 3% and long-
term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million
of Preferred Shares based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends on the Common Shares.
In this case, the dividends paid to Preferred Shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the
Common Shares will be reduced or eliminated completely. At the same
time, the market value of the fund's Common Shares (that is, its
price as listed on the New York Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Shares' net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Shares does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Shares may
also decline.
As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to
changes in a floating interest rate ("inverse floaters"). In
general, income rates on inverse floaters will decrease when short-
term interest rates increase and increase when short-term interest
rates decrease. Investments in inverse floaters may be characterized
as derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of
providing investment leverage and, as a result, the market value of
such securities will generally be more volatile than that of fixed-
rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the
net asset value of the Fund's shares may also be more volatile than
if the Fund did not invest in such securities.
MuniYield Florida Insured Fund
October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida--98.9%
<S> <S> <C> <S> <C>
AAA Aaa $ 5,585 Auburndale, Florida, Water and Sewer Revenue Bonds, 5.25% due 12/01/2025 (a) $ 5,043
NR* Aaa 2,375 Bay County, Florida, School Board, COP, 5% due 7/01/2023 (a) 2,068
Boynton Beach, Florida, Utility System Revenue Refunding Bonds (b):
AAA Aaa 700 6.25% due 11/01/2020 (h) 736
AAA Aaa 3,375 6.25% due 11/01/2020 3,410
AAA Aaa 3,000 Brevard County, Florida, IDR (NUI Corporation Project), AMT, 6.40%
due 10/01/2024 (a) 3,074
AAA Aaa 2,700 Brevard County, Florida, School Board, COP, Refunding, Series A,
5.10% due 7/01/2007 (a) 2,719
AAA Aaa 2,500 Broward County, Florida, Airport System Revenue Bonds (Passenger Facility),
Convertible Lien, Series H-2, 4.75% due 10/01/2023 (a) 2,081
Citrus County, Florida, PCR, Refunding (Florida Power Company--Crystal River)(c):
AAA Aaa 2,100 6.625% due 1/01/2027 2,207
AAA Aaa 5,750 Series B, 6.35% due 2/01/2022 5,915
Dade County, Florida, Aviation Revenue Bonds, AMT, Series B (c):
AAA Aaa 5,000 5.75% due 10/01/2012 5,044
AAA Aaa 2,650 6.55% due 10/01/2013 2,813
AAA Aaa 12,715 6.60% due 10/01/2022 13,385
AAA Aaa 4,500 Dade County, Florida, Health Facilities Authority, Hospital Revenue Bonds
(Baptist Hospital of Miami Project), Series A, 5.75% due 5/01/2021 (c)(h) 4,453
AAA Aaa 4,000 Dade County, Florida, School District, GO, 5.50% due 8/01/2004 (c)(d) 4,179
AAA Aaa 4,000 Dade County, Florida, Seaport, GO, Refunding, 5.125% due 10/01/2026 (c) 3,530
NR* Aaa 5,000 Escambia County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds,
AMT, 7% due 4/01/2028 (f)(g) 5,286
AAA Aaa 3,000 First Florida Governmental Financing Commission Revenue Bonds, 5.70%
due 7/01/2017 (c) 2,972
NR* Aaa 985 Florida HFA, Home Ownership Revenue Refunding Bonds, AMT, 7.90% due 3/01/2022 (g) 1,019
AAA Aaa 1,150 Florida HFA, Housing Revenue Bonds (Brittany Rosemont Apartments), AMT,
Series C-1, 6.75% due 8/01/2014 (a) 1,217
AAA Aaa 3,800 Florida Ports Financing Commission Revenue Bonds, State Transportation
Trust Fund (Intermodal Program), AMT, 5.50% due 10/01/2029 (b) 3,522
Florida State Board of Education, Capital Outlay, GO
(Public Education), Series B:
AA+ Aa2 1,750 5.875% due 6/01/2020 1,747
AA+ Aa2 2,650 5.875% due 6/01/2024 2,628
AA+ Aa2 3,000 Florida State Board of Education, Capital Outlay, GO, Refunding,
Series A, 7.25% due 6/01/2023 3,105
</TABLE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of MuniYield Florida Insured Fund's
portfolio holdings in the Schedule of Investments, we have
abbreviated the names of many of the securities according to the
list below and at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DATES Daily Adjustable Tax-Exempt Securities
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
VRDN Variable Rate Demand Notes
MuniYield Florida Insured Fund
October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida (continued)
<S> <S> <C> <S> <C>
AAA Aaa $ 1,000 Hillsborough County, Florida, IDA, Revenue Refunding Bonds (Allegany
Health System--J. Knox Village), 6.375% due 12/01/2003 (c)(d) $ 1,056
NR* Aaa 8,250 Indian Trace, Community Development District, Florida, Water Management,
Special Benefit Assessment, 5% due 5/01/2027 (c) 7,135
NR* VMIG1++ 5,050 Jacksonville, Florida, Health Facilities Authority, Hospital Revenue Refunding
Bonds (Genesis Rehabilitation Hospital), VRDN, 3.50% due 5/01/2021 (e) 5,050
AAA Aaa 3,000 Lakeland, Florida, Electric and Water Revenue Refunding Bonds, First Lien,
Series C, 6.05% due 10/01/2010 (i) 3,197
AAA Aaa 2,000 Lakeland, Florida, Hospital System Revenue Bonds (Lakeland Regional Health System),
Series A, 5.50% due 11/15/2026 (c) 1,864
AAA NR* 1,905 Lee County, Florida, HFA, S/F Mortgage Revenue Bonds (Multi-County Program), AMT,
Series A, SubSeries 3, 7.45% due 9/01/2027 (f)(g)(k) 2,115
A1+ VMIG1++ 3,500 Martin County, Florida, PCR, Refunding (Florida Power and Light Co. Project),
VRDN, 3.50% due 9/01/2024 (e) 3,500
AAA Aaa 2,515 North Miami Beach, Florida, GO, 6.30% due 2/01/2024 (b) 2,570
AAA Aaa 1,210 Okaloosa County, Florida, Gas District Revenue Refunding Bonds (Gas System),
Series A, 5.20% due 10/01/2017 (c) 1,120
NR* Aaa 6,500 Orange County, Florida, School Board, COP, Series A, 5.25% due 8/01/2023 (c) 5,879
Orange County, Florida, Tourist Development Tax Revenue Refunding Bonds,
Series A (a):
AAA Aaa 1,000 6.50% due 10/01/2010 1,069
AAA Aaa 5,000 4.75% due 10/01/2024 4,163
AAA Aaa 1,500 Palm Beach County, Florida, Criminal Justice Facilities Revenue Bonds,
7.20% due 6/01/2015 (b) 1,730
AAA Aaa 2,500 Pasco County, Florida, PCR, Refunding (Florida Power--Anclote), 6.35%
due 2/01/2022 (c) 2,582
A1+ VMIG1++ 3,500 Pinellas County, Florida, Health Facilities Authority, Revenue Refunding Bonds
(Pooled Hospital Loan Program), DATES, 3.50% due 12/01/2015 (a)(e) 3,500
NR* Aaa 1,970 Saint Petersburg, Florida, Public Utilities Revenue Bonds, Series A, 5.375% due
10/01/2024 (i) 1,826
NR* Aaa 5,000 Sarasota County, Florida, Public Hospital Board Revenue Refunding Bonds, RITR,
Series 99, 7.145% due 7/01/2028 (c)(j) 4,371
NR* Aaa 5,000 Sarasota County, Florida, Stormwater Utility Revenue Refunding Bonds, 5.25% due
10/01/2019 (a) 4,622
AAA Aaa 4,920 Sarasota County, Florida, Utility System Revenue Bonds, 6.50% due 10/01/2004 (b)(d) 5,399
AAA Aaa 2,250 South Broward Hospital District, Florida, Hospital Revenue Bonds, RIB, 6.611% due
5/01/2001 (a)(d)(j) 2,472
AAA Aaa 2,275 South Florida Water Mangement District, Special Obligation Land Aquisition Revenue
Bonds, 6% due 10/01/2015 (a) 2,314
A1+ VMIG1++ 700 Saint Lucie County, Florida, PCR, Refunding (Florida Power and Light Company
Project), VRDN, 3.50% due 1/01/2026 (e) 700
AAA Aaa 4,000 Sunrise, Florida, Utility System Revenue Bonds, Series A, 5.75% due
10/01/2006 (a)(d) 4,231
</TABLE>
MuniYield Florida Insured Fund
October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida (concluded)
<S> <S> <C> <S> <C>
AAA Aaa $ 5,000 Tallahassee, Florida, Energy System Revenue Refunding Bonds, Series A,
4.75% due 10/01/2026 (i) $ 4,130
Tampa Bay, Florida, Water Utility System Revenue Bonds (b):
AAA Aaa 7,800 5.75% due 10/01/2029 7,625
AAA Aaa 2,500 Series B, 4.75% due 10/01/2027 2,059
AAA Aaa 2,000 Volusia County, Florida, School Board, COP (Master Lease Program),
5.50% due 8/01/2024 (i) 1,879
Total Investments (Cost--$173,599)--98.9% 170,311
Other Assets Less Liabilities--1.1% 1,908
--------
Net Assets--100.0% $172,219
========
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)MBIA Insured.
(d)Prerefunded.
(e)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at October 31, 1999.
(f)FNMA Collateralized.
(g)GNMA Collateralized.
(h)Escrowed to maturity.
(i)FSA Insured.
(j)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at October 31, 1999.
(k)FHLMC Collateralized.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
</TABLE>
QUALITY PROFILE
The quality ratings of securities in the Fund as of October 31, 1999
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 87.1%
AA/Aa 4.4
Other++ 7.4
[FN]
++Temporary investments in short-term municipal securities.
MuniYield Florida Insured Fund
October 31, 1999
<TABLE>
FINANCIAL INFORMATION
<CAPTION>
Statement of Assets, Liabilities and Capital as of October 31, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$173,599,140) (Note 1a) $170,311,049
Cash 55,089
Interest receivable 2,094,211
Prepaid expenses and other assets 7,157
------------
Total assets 172,467,506
------------
Liabilities: Payables:
Dividends to shareholders (Note 1e) $ 96,052
Investment adviser (Note 2) 83,125 179,177
------------
Accrued expenses and other liabilities 69,301
------------
Total liabilities 248,478
------------
Net Assets: Net assets $172,219,028
============
Capital: Capital Shares (unlimited number of shares authorized) (Note 4):
Preferred Shares, par value $.05 per share (2,400 shares of
AMPS* issued and outstanding at $25,000 per share liquidation $ 60,000,000
preference)Common Shares, par value $.10 per share (8,437,358
shares issued and outstanding) $ 843,736
Paid-in capital in excess of par 117,604,963
Undistributed investment income--net 1,450,622
Accumulated distributions in excess of realized capital gains on
investments--net (Note 1e) (4,392,202)
Unrealized depreciation on investments--net (3,288,091)
------------
Total--Equivalent to $13.30 net asset value per Common Share
(market price--$12.125) 112,219,028
------------
Total capital $172,219,028
============
<FN>
*Auction Market Preferred Shares.
See Notes to Financial Statements.
</TABLE>
MuniYield Florida Insured Fund
October 31, 1999
<TABLE>
FINANCIAL INFORMATION (continued)
<CAPTION>
Statement of Operations
For the Year Ended
October 31, 1999
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 9,923,968
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 917,288
Commission fees (Note 4) 152,256
Professional fees 69,252
Transfer agent fees 69,196
Accounting services (Note 2) 67,685
Trustees' fees and expenses 27,479
Listing fees 16,264
Printing and shareholder reports 15,343
Custodian fees 13,213
Pricing fees 8,060
Other 31,072
------------
Total expenses 1,387,108
------------
Investment income--net 8,536,860
------------
Realized & Realized loss on investments--net (2,525,980)
Unrealized Change in unrealized appreciation/depreciation on investments--net (14,041,584)
Loss on ------------
Investments--Net
(Notes 1b, 1d & 3): Net Decrease in Net Assets Resulting from Operations $ (8,030,704)
============
See Notes to Financial Statements.
</TABLE>
MuniYield Florida Insured Fund
October 31, 1999
<TABLE>
FINANCIAL INFORMATION (continued)
<CAPTION>
Statements of Changes in Net Assets
For the Year Ended
October 31,
Increase (Decrease) in Net Assets: 1999 1998
<S> <S> <C> <C>
Operations: Investment income--net $ 8,536,860 $ 9,051,134
Realized gain (loss) on investments--net (2,525,980) 4,616,775
Change in unrealized appreciation/depreciation on investments--net (14,041,584) (468,727)
------------ ------------
Net increase (decrease) in net assets resulting from operations (8,030,704) 13,199,182
============ ============
Dividends & Investment income--net:
Distributions to Common Shares (7,206,263) (7,008,478)
Shareholders Preferred Shares (1,291,200) (1,895,496)
(Note 1e): Realized gain on investments--net:
Common Shares (74,077) (1,461,030)
Preferred Shares (19,622) (351,960)
In excess of realized gain on investments--net:
Common Shares (3,472,404) --
Preferred Shares (919,810) --
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (12,983,376) (10,716,964)
------------ ------------
Capital Share Value of shares issued to Common Shareholders in reinvestment
Transactions of dividends and distributions 920,154 425,744
------------ ------------
(Note 4):
Net Assets: Total increase (decrease) in net assets (20,093,926) 2,907,962
Beginning of year 192,312,954 189,404,992
------------ ------------
End of year* $172,219,028 $192,312,954
============ ============
<FN>
*Undistributed investment income--net (Note 1f) $ 1,450,622 $ 1,394,253
============ ============
See Notes to Financial Statements.
</TABLE>
MuniYield Florida Insured Fund
October 31, 1999
<TABLE>
FINANCIAL INFORMATION (concluded)
<CAPTION>
Financial Highlights
The following per share data and ratios have been derived
from information provided in the financial statements.
For theYear Ended October 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 15.79 $ 15.50 $ 15.25 $ 15.16 $ 13.70
Operating -------- -------- -------- -------- --------
Performance: Investment income--net 1.01 1.09 1.10 1.08 1.12
Realized and unrealized gain (loss) on
investments--net (1.96) .48 .52 .17 1.45
-------- -------- -------- -------- --------
Total from investment operations (.95) 1.57 1.62 1.25 2.57
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Shareholders:
Investment income--net (.86) (.84) (.85) (.84) (.84)
Realized gain on investments--net (.01) (.17) (.22) (.06) --
In excess of realized gain on investments--net (.41) -- (.02) -- --
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Shareholders (1.28) (1.01) (1.09) (.90) (.84)
-------- -------- -------- -------- --------
Effect of Preferred Share activity:
Dividends and distributions to Preferred
Shareholders:
Investment income--net (.15) (.23) (.21) (.24) (.27)
Realized gain on investments--net --++ (.04) (.07) (.02) --
In excess of realized gain on
investments--net (.11) -- --++ -- --
-------- -------- -------- -------- --------
Total effect of Preferred Share activity (.26) (.27) (.28) (.26) (.27)
-------- -------- -------- -------- --------
Net asset value, end of year $ 13.30 $ 15.79 $ 15.50 $ 15.25 $ 15.16
======== ======== ======== ======== ========
Market price per share, end of year $ 12.125 $ 15.625 $ 15.00 $ 14.125 $ 13.50
======== ======== ======== ======== ========
Total Investment Based on market price per share (15.43%) 11.21% 14.41% 11.48% 26.46%
Return:* ======== ======== ======== ======== ========
Based on net asset value per share (8.20%) 8.76% 9.50% 7.18% 17.91%
======== ======== ======== ======== ========
Ratios Based on Total expenses** 1.12% 1.04% 1.04% 1.08% 1.13%
Average Net Assets ======== ======== ======== ======== ========
Of Common Shares: Total investment income--net** 6.88% 6.94% 7.21% 7.21% 7.81%
======== ======== ======== ======== ========
Amount of dividends to Preferred Shareholders 1.04% 1.45% 1.40% 1.59% 1.86%
======== ======== ======== ======== ========
Investment income--net, to Common Shareholders 5.84% 5.49% 5.81% 5.62% 5.95%
======== ======== ======== ======== ========
Ratios Based on Total expenses .75% .71% .71% .73% .75%
Total Average Net ======== ======== ======== ======== ========
Assets:++++** Total investment income--net 4.64% 4.76% 4.92% 4.88% 5.18%
======== ======== ======== ======== ========
Ratios Based on Dividends to Preferred Shareholders 2.16% 3.16% 2.98% 3.33% 3.70%
Average Net ======== ======== ======== ======== ========
Assets Of
Preferred Shares:
Supplemental Net assets, net of Preferred Shares,
Data: end of year (in thousands) $112,219 $132,313 $129,405 $127,320 $126,557
======== ======== ======== ======== ========
Preferred Shares outstanding, end of year
(in thousands) $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 2,870 $ 3,205 $ 3,157 $ 3,122 $ 3,109
======== ======== ======== ======== ========
Dividends Per Investment income--net $ 538 $ 790 $ 746 $ 832 $ 925
Share On ======== ======== ======== ======== ========
Preferred Shares
Outstanding:
<FN>
*Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales charges.
**Do not reflect the effect of dividends to Preferred Shareholders.
++Amount is less than $.01 per share.
++++Includes Common and Preferred Shares average net assets.
See Notes to Financial Statements.
</TABLE>
MuniYield Florida Insured Fund
October 31, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield Florida Insured Fund (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. The Fund's financial statements are
prepared in accordance with generally accepted accounting
principles, which may require the use of management accruals and
estimates. The Fund determines and makes available for publication
the net asset value of its Common Shares on a weekly basis. The
Fund's Common Shares are listed on the New York Stock Exchange under
the symbol MFT. The following is a summary of significant accounting
policies followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of
such exchanges. Options written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of
options traded in the over-the-counter market, valuation is the last
asked price (options written) or the last bid price (options
purchased). Securities with remaining maturities of sixty days or
less are valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily
available are valued at their fair value as determined in good faith
by or under the direction of the Board of Trustees of the Fund,
including valuations furnished by a pricing service retained by the
Fund, which may utilize a matrix system for valuations. The
procedures of the pricing service and its valuations are reviewed by
the officers of the Fund under general supervision of the Board of
Trustees.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at
a specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal
to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
* Options--The Fund is authorized to write covered call options and
purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates. Distributions in excess of
realized capital gains are due primarily to differing tax treatments
for futures transactions.
MuniYield Florida Insured Fund
October 31, 1999
(f) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences have been
reclassified as follows: $16,981 between paid-in capital in excess
of par and undistributed net investment income; $3 between paid-in
capital in excess of par and accumulated distributions in excess of
net realized capital gains; and $9 between undistributed net
investment income and accumulated distributions in excess of net
realized capital gains. These reclassifications have no effect on
net assets or net asset value per share.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of .50% of
the Fund's average weekly net assets, including proceeds from the
issuance of Preferred Shares.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1999 were $147,283,868 and
$161,574,034, respectively.
Net realized gains (losses) for the year ended October 31, 1999 and
net unrealized losses on October 31, 1999 were as follows:
Realized Unrealized
Gains (Losses) Losses
Long-term investments $(3,065,646) $(3,288,091)
Financial futures contracts 539,666 --
----------- -----------
Total $(2,525,980) $(3,288,091)
=========== ===========
As of October 31, 1999, net unrealized depreciation for Federal
income tax purposes aggregated $3,288,091, of which $2,701,162
related to appreciated securities and $5,989,253 related to
depreciated securities. The aggregate cost of investments at October
31, 1999 for Federal income tax purposes was $173,599,140.
4. Capital Share Transactions:
The Fund is authorized to issue an unlimited number of shares of
beneficial interest, including Preferred Shares, par value $.10 per
share, all of which were initially classified as Common Shares. The
Board of Trustees is authorized, however, to reclassify any unissued
shares of beneficial interest without approval of the holders of
Common Shares.
Common Shares
Shares issued and outstanding during the years ended October 31,
1999 and October 31, 1998 increased by 59,543 and 27,352,
respectively as a result of dividend reinvestment.
Preferred Shares
Auction Market Preferred Shares ("AMPS") are Preferred Shares of the
Fund, with a par value of $.05 per share and a liquidation
preference of $25,000 per share, that entitle their holders to
receive cash dividends at an annual rate that may vary for the
successive dividend periods. The yield in effect at October 31, 1999
was 3.25%.
Shares issued and outstanding during the years ended October 31,
1999 and October 31, 1998 remained constant.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from .25% to .375%,
calculated on the proceeds of each auction. For the year ended
October 31, 1999, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, an affiliate of FAM, earned $62,538 as commissions.
5. Capital Loss Carryforward:
At October 31, 1999, the Fund had a net capital loss carryforward of
approximately $3,067,000, all of which expires in 2007. This amount
will be available to offset like amounts of any future taxable
gains.
6. Subsequent Event:
On November 8, 1999, the Fund's Board of Trustees declared an
ordinary income dividend to Common Shareholders in the amount of
$.065000 per share, payable on November 29, 1999 to shareholders of
record as of November 22, 1999.
MuniYield Florida Insured Fund
October 31, 1999
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
MuniYield Florida Insured Fund:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of MuniYield
Florida Insured Fund, as of October 31, 1999, the related statements
of operations for the year then ended and changes in net assets for
each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period
then ended. These financial statements and the financial highlights
are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at October
31, 1999 by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
MuniYield Florida Insured Fund as of October 31, 1999, the results
of its operations, the changes in its net assets, and the financial
highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 8, 1999
</AUDIT-REPORT>
<TABLE>
IMPORTANT TAX INFORMATION (unaudited)
<CAPTION>
All of the net investment income distributions paid by MuniYield
Florida Insured Fund during its taxable year ended October 31, 1999
qualify as tax-exempt interest dividends for Federal Income tax
purposes. Additionally, the following table summarizes the per share
capital gains distributions paid by the Fund during the year:
Payable Ordinary Long-Term
Date Income Capital Gains*
<S> <C> <C> <C>
Common Shareholders 12/30/98 $.083111 $.339980
Preferred Shareholders 11/10/98 $4.98 $20.07
11/17/98 $4.90 $19.76
11/24/98 $4.98 $20.07
12/01/98 $4.74 $19.08
12/08/98 $3.11 $12.55
12/15/98 $2.33 $ 9.41
12/22/98 $5.20 $21.03
12/29/98 $4.93 $20.02
01/05/99 $1.39 $ 5.67
01/12/99 $3.39 $13.84
01/19/99 $4.92 $20.06
01/26/99 $4.77 $19.44
02/02/99 $4.69 $19.19
02/09/99 $4.60 $18.88
02/16/99 $4.42 $18.28
02/23/99 $4.40 $18.30
03/02/99 $4.64 $19.41
03/09/99 $4.50 $19.48
<FN>
*All of these distributions are subject to the 20% tax rate.
Please retain this information for your records.
</TABLE>
MuniYield Florida Insured Fund
October 31, 1999
OFFICERS AND TRUSTEES
Terry K. Glenn, President and Trustee
Donald Cecil, Trustee
M. Colyer Crum, Trustee
Edward H. Meyer, Trustee
Jack B. Sunderland, Trustee
J. Thomas Touchton, Trustee
Fred G. Weiss, Trustee
Arthur Zeikel, Trustee
Vincent R. Giordano, Senior Vice President
William R. Bock, Vice President
Kenneth A. Jacob, Vice President
Donald C. Burke, Vice President and Treasurer
Alice A. Pellegrino, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agents
Common Shares:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Shares:
The Bank of New York
100 Church Street
New York, NY 10286
NYSE Symbol
MFT
