<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
A Farewell from the Chairman..................... 6
Glossary of Terms................................ 7
Performance Results.............................. 9
Portfolio of Investments......................... 10
Statement of Assets and Liabilities.............. 12
Statement of Operations.......................... 13
Statement of Changes in Net Assets............... 14
Financial Highlights............................. 15
Notes to Financial Statements.................... 16
Report of Independent Accountants................ 20
Dividend Reinvestment Plan....................... 21
</TABLE>
VOF ANR 12/98
<PAGE> 2
LETTER TO SHAREHOLDERS
November 20, 1998
Dear Shareholder,
The past decade has been a
remarkable time for investors.
Together, we've witnessed one of the
greatest bull markets in investment
history, unprecedented growth in mutual [PHOTO]
fund investing, and a surge in personal
retirement planning. The coming
millennium promises to hold even more
challenges and opportunities. DENNIS J. MCDONNELL AND DON G. POWELL
To lead us into this new era of
investing, we are proud to announce
that Richard F. Powers III has joined
Van Kampen as President and Chief Executive Officer, and will assume the
additional role of Chairman of Van Kampen in 1999. He comes to us from our
parent company, Morgan Stanley Dean Witter & Co., where he served as Executive
Vice President and Director of Marketing. Dick Powers brings 27 years of
experience in the financial services industry, including vast experience in
product management, strategic planning and brand development. While at Morgan
Stanley Dean Witter, he developed many of the firm's core products and services.
You'll hear more from Dick Powers in the coming months as he becomes
increasingly involved in matters related to your Trust and joins Dennis
McDonnell in addressing shareholders in future reports. (See Don Powell's
farewell to shareholders on page 6.)
ECONOMIC OVERVIEW
After two years of solid gains, the U.S. economy began to lose some of its
luster during the reporting period. No longer immune to the global economic
turmoil, the economy retreated from a 5.5 percent annual growth rate in the
first quarter to a tepid 1.8 percent in the second quarter (as measured by gross
domestic product). By the third quarter, however, growth rebounded to a 3.3
percent annual rate.
A strong dollar was largely responsible for moderating economic growth. As
the Asian financial crisis worsened and spread to other regions, foreign
investors amassed dollar-denominated U.S. Treasury bonds. These purchases sent
the dollar sharply higher, which increased the price of U.S. exports and slashed
the price of imports--resulting in reduced demand for U.S. goods and services
abroad. In light of the reduced demand and global economic problems, corporate
earnings fell, business investment declined, and stock prices plummeted. By the
end of August, the Dow Jones Industrial Average was down 19 percent from its
record high, set in mid-July. Although the stock market has since recovered much
of its losses, consumer confidence has declined and growth in consumer spending
has slowed.
Concerns about further economic deterioration, weakness in the stock market,
and a potential credit crunch prompted the Federal Reserve Board to cut
short-term interest rates
Continued on page 2
1
<PAGE> 3
0.25 percent in late September. It was the first rate cut in almost three years
and was followed by additional cuts of 0.25 percent in October and November.
Despite these rate cuts, the Fed took care to note that inflation was well
contained.
Florida's economic climate continued to be favorable. The state ended fiscal
year 1997 with a budget surplus and reserve balances of more than $1 billion.
Florida's credit profile portrayed strong and stable credit characteristics,
reflecting solid employment growth, low unemployment, and a strong financial
position. Demand for Florida municipal bonds kept pace with the state's
increasing supply, as Florida's large retiree population tended to favor more
conservative investments such as insured bond issues, which made up a large
percentage of the state's supply.
MARKET OVERVIEW
The volatility in overseas markets and U.S. stocks was a boon to bonds.
Foreign investors bought U.S. Treasury bonds in an attempt to escape the global
turmoil, while domestic investors purchased them to avoid further losses in U.S.
stocks. Because these purchases occurred at a time when the supply of new
Treasury issues was declining, Treasury bond prices soared.
The Fed rate cuts propelled bond prices even higher. Following the Fed's
first rate cut, the yield on the 30-year Treasury bond, which moves in the
opposite direction of its price, dropped to a record low of 4.72 percent on
October 5. However, subsequent sales of Treasuries by Asian and institutional
investors dampened the rally. As of October 31, the 30-year Treasury bond had a
5.15 percent yield, down 1 percent from a year ago.
Municipal bond prices followed Treasuries higher, but, as usual, they didn't
gain nearly as much in price. The yield on a typical AAA-rated general
obligation municipal bond fell only 32 basis points to 4.80 percent as of
October 31, from 5.12 percent a year earlier. Earlier in October, municipal bond
yields topped comparable Treasury bond yields, which is a rare event. Municipal
bonds generally yield less than Treasury securities because their interest
payments are exempt from federal and sometimes state and local income taxes.
During the past year, municipal bonds were burdened by an excess of supply
relative to demand. State and local governments, taking advantage of the
market's low interest rates, issued $230.9 billion worth of long-term bonds
during the first 10 months of the year--34 percent more than they had issued
during the same period last year. Approximately 44 percent of the new issues
were refinancings of older, higher-yielding bonds. However, new issuance slowed
recently as the number of bonds eligible for refinancing shrank.
Despite an abundant supply, many investors were reluctant to purchase
municipal bonds because of their generally low yields. Compounding the situation
was the abundance of insured issues, which accounted for almost 60 percent of
the new supply. The dominance of insured bonds reduced the supply of
lower-rated, higher-yielding bonds and narrowed the yield spread between
higher-and lower-rated bonds. (The insurance relates to the timely payment of
principal and interest, when due, on the bonds. The insurance does not protect
the bonds from market risk.)
Continued on page 3
2
<PAGE> 4
[CREDIT QUALITY GRAPH]
<TABLE>
<CAPTION>
Portfolio Composition by Credit Quality*
As of October 31, 1998
<S> <C>
BBB ............... 10.2%
AAA ............... 84.0%
AA ................ 4.5%
A ................. 1.3%
</TABLE>
*As a Percentage of Long-Term Investments
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's.
TRUST STRATEGY
We used the following strategies to manage the Trust during the period:
We maintained a portfolio consisting largely of high-quality bonds with a
heavy emphasis (nearly 85 percent) on AAA-rated insured securities. AAA-rated
bonds generally have performed better than lower-rated securities when interest
rates are falling, which was the case for most of the reporting period. Under
current market conditions, we also believe that the narrow yield spreads between
higher- and lower-rated bonds means that investors are not adequately
compensated for the additional credit risk associated with lower-rated
securities.
We limited our new acquisitions because current market yields were lower
than the average yields of bonds in the portfolio. However, some of the Trust's
holdings were called away by issuers who took advantage of lower interest rates
to retire or refinance their outstanding debt. We replaced these bonds with new
long-term securities and extended the call protection of the Trust. Because the
supply of replacement bonds in Florida was extremely high during the reporting
period--through the first 10 months of 1998 the state was the nation's fourth
largest issuer of debt--there were plenty of options from which to choose in
selecting new securities to add to the portfolio. Since the yields of these
bonds were lower than those of the bonds that were replaced, the Trust's income
obtained from coupon payments was reduced during the reporting period.
In making purchases, we emphasized long-term discount bonds. In an
environment of falling interest rates, these bonds have the potential to
appreciate in value faster than premium bonds because they have a longer
duration, which makes them more sensitive to changing interest rates. Discount
bonds helped offset the declining duration of the portfolio that occurred as low
interest rates caused some of our higher-coupon holdings to be prerefunded, or
priced to call dates. Housing bonds were particularly vulnerable to
prerefunding, because many homeowners sought to refinance mortgages as interest
rates continued to decline. We sold some of our prerefunded bonds and replaced
them with longer-duration bonds, hoping to slow the Trust's declining duration.
Continued on page 4
3
<PAGE> 5
As of October 31, 1998, the duration of the Trust was 7.14 years, compared
with 7.67 years for the Lehman Brothers Municipal Bond Index (Florida bonds
only). Because of the longer-term nature of the Trust, the calculation of this
index's duration has been adjusted to eliminate bonds with maturities of five
years or less. In addition, because the Trust invests primarily in Florida
bonds, we have taken the Florida bonds from the Lehman index and used them to
calculate a benchmark duration for the Trust.
TOP FIVE PORTFOLIO SECTORS AS OF OCTOBER 31, 1998*
<TABLE>
<S> <C>
Health Care................... 23.4%
Public Education.............. 20.8%
Transportation................ 11.1%
Industrial Revenue............ 7.8%
Water & Sewer................. 6.4%
</TABLE>
*As a percentage of Long-Term Investments
PERFORMANCE SUMMARY
For the 12-month period ended October 31, 1998, the Trust generated a total
return of 15.36 percent.(1) This reflects a gain in market price per common
share from $13.125 on October 31, 1997, to $14.375 on October 31, 1998, plus
reinvestment of all dividends. The Trust had a tax-exempt distribution rate of
5.09 percent,(3) based on the closing price of the Trust's common shares.
Because income from the Trust is exempt from federal income taxes, this
distribution rate is equivalent to a yield of 7.95 percent(4) on a taxable
investment (for investors in the federal income tax bracket of 36 percent).
Please refer to the chart on page 9 for additional performance numbers.
[DIVIDEND HISTORY GRAPH]
<TABLE>
<CAPTION>
Distribution per Common Share
-----------------------------
<S> <C>
Nov 1997......................................... $0.061
Dec 1997......................................... $0.061
Jan 1998......................................... $0.061
Feb 1998......................................... $0.061
Mar 1998......................................... $0.061
Apr 1998......................................... $0.061
May 1998......................................... $0.061
Jun 1998......................................... $0.061
Jul 1998......................................... $0.061
Aug 1998......................................... $0.061
Sep 1998......................................... $0.061
Oct 1998......................................... $0.061
</TABLE>
The dividend history represents past performance of the Trust and does not
predict the Trust's future.
Continued on page 5
4
<PAGE> 6
ECONOMIC OUTLOOK
We believe the economy will continue to grow at a moderate rate for the
remainder of the year, supported by low interest rates. The housing industry has
already benefited from the sharp decline in interest rates, and other sectors
could follow if consumer and business spending picks up.
Looking ahead into next year, we see the potential for stronger economic
growth as long as domestic interest rates remain low and the global financial
crisis stabilizes. We believe the current low inflationary environment in the
United States paves the way for further Fed rate cuts if the economy resumes its
slowdown.
Overseas, we see some promising signs of recovery, including Japan's new
bank reform package, which includes a willingness to let problem banks fail, and
approval of an International Monetary Fund rescue package for Brazil.
We will closely monitor these global and domestic events and their effects
on the performance of the Trust, adjusting the portfolio when appropriate. We
remain committed to the goal of providing a high level of tax-exempt income
while preserving shareholders' capital. Thank you for your continued support and
confidence in Van Kampen and the management of your Trust.
Sincerely,
[SIG] [SIG]
Don G. Powell Dennis J. McDonnell
Chairman President
Van Kampen Investment Advisory Corp. Van Kampen Investment Advisory Corp.
Please see footnotes on page 9
5
<PAGE> 7
A FAREWELL FROM THE CHAIRMAN
------------------ - ------------------
Dear Shareholder,
Since I became president and chief executive officer in 1987, much has
changed in our business. However, one thing has remained constant through these
years--my commitment to you, the trust shareholder. Through the many events at
Van Kampen that have marked the passage of time--including several mergers,
company name changes, and leadership changes--we have always focused on
providing superior investments and the highest level of customer service to help
you meet your investment objectives. I'm proud to say that during my tenure, Van
Kampen won eight consecutive awards for high-quality customer service--more
consecutive service awards than any other firm in the financial services
industry.(1) My successor, Dick Powers, shares this commitment to meeting your
needs and providing innovative and efficient ways to help you work with your
investment adviser to reach your financial goals.
Although my official retirement begins on January 1, 1999, I will remain
active in the industry and the community. I plan to continue my service as a
member of the board of directors of the Investment Company Institute, the
leading mutual fund industry association, and I will remain a trustee of your
Trust.
In closing, I want to say farewell to all of you. Thank you for your support
of Van Kampen over the years and for giving me the opportunity to serve you.
Best wishes,
[SIG]
Don G. Powell
------------------ - ------------------
(1)American Capital, which merged with Van Kampen in 1995, received the DALBAR
Service Award annually from 1990 to 1994. The award was called the Quality
Tested Service Seal until 1997.
6
<PAGE> 8
GLOSSARY OF TERMS
BASIS POINT: A measure used in quoting bond yields. One hundred basis points is
equal to 1 percent. For example, if a bond's yield changes from 7.00 to 6.65
percent, it is a 35 basis-point move.
CALL FEATURE: Allows the issuer to buy back a bond on specific dates at set
prices before maturity. These dates and prices are set when the bond is
issued. To compensate the bondholder for the potential loss of income and
ownership, a bond's call price is usually higher than the face value of the
bond. Bonds are usually called when interest rates drop so significantly
that the issuer can save money by issuing new bonds at lower rates.
COUPON RATE: The stated rate of interest the bond pays on an annual basis,
expressed as a percentage of the face value.
CREDIT RATING: An evaluation of an issuer's credit history and capability of
repaying obligations. Standard & Poor's and Moody's Investors Service are
two companies that assign bond ratings. Standard & Poor's ratings range from
a high of AAA to a low of D, while Moody's ratings range from a high of Aaa
to a low of C.
DISCOUNT BOND: A bond whose market price is lower than its face value (or "par
value"). Because bonds usually mature at face value, a discount bond has
more potential to appreciate in price than a par bond does.
DURATION: A measure of the sensitivity of a bond's price to changes in interest
rates, expressed in years. Each year of duration represents an expected 1
percent change in the price of a bond for every 1 percent change in interest
rates. The longer a bond's duration, the greater the effect of interest rate
movements on net asset value. Typically, funds with shorter durations are
expected to perform better in rising rate environments, while funds with
longer durations are expected to perform better when rates decline.
FEDERAL RESERVE BOARD (THE FED): The governing body of the Federal Reserve
System, which is the central bank system of the United States. Its
policy-making committee, called the Federal Open Market Committee, meets
eight times a year to establish monetary policy and monitor the economic
pulse of the United States.
INFLATION: A persistent and measurable rise in the general level of prices.
Inflation is widely measured by the Consumer Price Index, an economic
indicator that measures the change in the cost of purchased goods and
services.
INSURED BOND: A bond that is insured against default by the bond insurer. If the
issuer defaults, the insurance company will step in and take over payments
of interest and principal when due. Once a bond is insured, it typically
carries the rating of the insurer. Most insurers are rated AAA.
7
<PAGE> 9
MUNICIPAL BOND: A debt security issued by a state, municipality, or other
government entity to finance capital expenditures of public projects, such
as the construction of highways, public works, or school buildings. Interest
on public-purpose municipal bonds is exempt from federal income taxes and,
potentially, from state and local income taxes.
NET ASSET VALUE (NAV): The value of a trust share, calculated by deducting a
trust's liabilities from the total assets applicable to common shareholders
in its portfolio and dividing this amount by the number of common shares
outstanding.
PREREFUNDING: The process of issuing new bonds to refinance an outstanding
municipal bond issue prior to its maturity or call date. The proceeds from
the new bonds are generally invested in U.S. government securities.
Prerefunding typically occurs when interest rates decline and an issuer
replaces its higher-yielding bonds with current lower-yielding issues.
PREMIUM BOND: A bond whose market price is above its face value (or "par
value"). Because bonds usually mature at face value, a premium bond has less
potential to appreciate in price than a par bond does.
YIELD SPREAD: The additional yield investors can earn by either investing in
bonds with longer maturities or by investing in bonds with lower ratings.
The spread is the difference in yield between bonds with short versus long
maturities or the difference in yield between high-quality bonds and
lower-quality bonds.
ZERO COUPON BONDS: A corporate or municipal bond that is traded at a deep
discount to face value and pays no interest. It may be redeemed at maturity
for full face value.
8
<PAGE> 10
PERFORMANCE RESULTS FOR THE PERIOD ENDED OCTOBER 31, 1998
VAN KAMPEN FLORIDA MUNICIPAL OPPORTUNITY TRUST
(AMEX TICKER SYMBOL--VOF)
<TABLE>
<CAPTION>
COMMON SHARE TOTAL RETURNS
<S> <C>
One-year total return based on market price(1)............. 15.36%
One-year total return based on NAV(2)...................... 8.04%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3)................................................. 5.09%
Taxable-equivalent distribution rate as a % of closing
common stock price(4)...................................... 7.95%
SHARE VALUATIONS
Net asset value........................................... $15.19
Closing common stock price................................ $14.375
One-year high common stock price (01/29/98)............... $14.625
One-year low common stock price (11/14/97)................ $13.000
Preferred share rate(5)................................... 2.990%
</TABLE>
(1) Total return based on market price assumes an investment at the market price
at the beginning of the period indicated, reinvestment of all distributions for
the period in accordance with the Trust's dividend reinvestment plan, and sale
of all shares at the closing common stock price at the end of the period
indicated.
(2) Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.
(3) Distribution rate represents the monthly annualized distributions of the
Trust at the end of the period and not the earnings of the Trust.
(4) The taxable-equivalent distribution rate is calculated assuming a 36%
federal income tax bracket.
(5) See "Notes to Financial Statements" footnote #4, for more information
concerning Preferred Share reset periods.
A portion of the interest income may be taxable for those investors subject to
the federal alternative minimum tax (AMT).
Past performance does not guarantee future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS 104.6%
FLORIDA 100.4%
$1,000 Altamonte Springs, FL Hlth Fac Auth Hosp Rev
Adventist Hlth Sunbelt Ser B (AMBAC Insd)........ 5.375% 11/15/23 $ 1,019,920
1,000 Bay Cnty, FL Sch Brd Ctfs Partn (Prerefunded @
07/01/04) (AMBAC Insd) (b)....................... 6.750 07/01/12 1,162,210
1,750 Broward Cnty, FL Edl Fac Auth Rev Nova Southeastn
Univ Proj (Connie Lee Insd)...................... 5.875 04/01/07 1,921,762
545 Clay Cnty, FL Hsg Fin Auth Rev Single Family Mtg
(GNMA Collateralized)............................ 6.500 09/01/21 584,840
1,000 Dade Cnty, FL Aviation Rev Ser C (MBIA Insd)..... 5.500 10/01/04 1,081,890
1,750 Dade Cnty, FL Sch Brd Ctfs Partn Ser A
(Prerefunded @ 05/01/04) (MBIA Insd)............. 5.750 05/01/08 1,927,205
1,000 Escambia Cnty, FL Pollutn Ctl Rev Champion Intl
Corp Proj........................................ 6.900 08/01/22 1,100,210
300 Florida Hsg Fin Agy Homeowner Mtg Ser 2 (MBIA
Insd)............................................ 5.900 07/01/29 317,007
750 Florida Hsg Fin Agy Homeowner Mtg Ser 3 (FHA
Gtd)............................................. 6.350 07/01/28 807,562
235 Florida Hsg Fin Agy Hsg Brittany Rosemont Ser G1
(AMBAC Insd)..................................... 6.150 07/01/25 251,629
350 Florida Hsg Fin Agy Hsg Brittany Rosemont Ser G1
(AMBAC Insd)..................................... 6.250 07/01/35 375,974
900 Florida Ports Fin Comm Rev Tran Trust Fund (MBIA
Insd)............................................ 5.375 06/01/27 918,900
1,300 Florida St Brd Edl Cap Outlay Pub Edl Ser C
(Prerefunded @ 06/01/02)......................... 6.625 06/01/22 1,440,959
300 Florida St Brd Regt Univ Sys Impt Rev (MBIA
Insd)............................................ 5.625 07/01/19 320,022
500 Gainesville, FL Utils Sys Rev.................... 8.125 10/01/14 567,655
2,000 Hillsborough Cnty, FL Cap Impt Pgm Rev Criminal
Justice Fac Rfdg (FGIC Insd)..................... 5.250 08/01/16 2,043,100
1,650 Hillsborough Cnty, FL Hosp Auth Hosp Rev Tampa
Genl Hosp Proj Rfdg (FSA Insd)................... 6.375 10/01/13 1,812,096
1,750 Hillsborough Cnty, FL Indl Dev Auth Indl Dev Rev
Univ Cmnty Hosp (MBIA Insd)...................... 5.750 08/15/14 1,907,517
1,500 Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl
Rev Tampa Elec Co Proj Rfdg (MBIA Insd).......... 6.250 12/01/34 1,670,985
1,000 Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl
Rev Tampa Elec Co Proj Ser 92 Rfdg............... 8.000 05/01/22 1,152,970
1,750... Hillsborough Cnty, FL Indl Dev Auth Rev Allegany
Hlth Sys J Knox Village (Prerefunded @ 12/01/03)
(MBIA Insd)...................................... 6.000 12/01/06 1,891,102
1,740 Hillsborough Cnty, FL Sch Brd Ctfs Partn
(Prerefunded @ 07/01/04) (MBIA Insd)............. 6.000 07/01/12 1,956,369
1,000 Jacksonville, FL Hosp Rev Univ Med Cent Inc Proj
(Connie Lee Insd)................................ 6.500 02/01/11 1,090,700
1,000 Martin Cnty, FL Indl Dev Auth Indl Dev Rev
Indiantown Cogeneration Proj Ser A Rfdg.......... 7.875 12/15/25 1,156,440
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
PORTFOLIO OF INVESTMENTS (CONTINUED)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$ 250 Miami Dade Cnty, FL Sch Brd Ctfs Partn Ser B
(AMBAC Insd)..................................... 4.875% 08/01/27 $ 241,910
1,000 Miami Dade Cnty, FL Spl Oblig Ser B (MBIA
Insd)............................................ * 10/01/32 161,980
1,000 Miami Dade Cnty, FL Spl Oblig Ser B (MBIA
Insd)............................................ * 10/01/33 153,190
1,000 Okeechobee, FL Wtr & Swr Rev Ser A (Prerefunded @
01/01/03) (MBIA Insd)............................ 6.500 01/01/17 1,123,750
775 Orange Cnty, FL Hsg Fin Auth Single Family Mtg
Rev (GNMA Collateralized)........................ 6.550 10/01/21 832,466
1,000 Orange Cnty, FL Tourist Dev Tax Rev Ser B
(Prerefunded @ 10/01/02) (AMBAC Insd)............ 6.500 10/01/19 1,120,920
1,000 Palm Beach Cnty, FL Sch Brd Ctfs Partn Ser A
(Prerefunded @ 08/01/04) (AMBAC Insd)............ 6.000 08/01/06 1,117,690
1,200 Polk Cnty, FL Sch Brd Ctfs Partn (FSA Insd)...... 5.000 01/01/14 1,219,788
635 Saint Petersburg, FL Excise Tax Rev (FGIC
Insd)............................................ 5.000 10/01/16 639,661
365 Saint Petersburg, FL Excise Tax Rev (Escrowed to
Maturity) (FGIC Insd)............................ 5.000 10/01/16 365,117
2,000 Santa Rosa Bay Brdg Auth FL Rev.................. 6.250 07/01/28 2,184,180
2,500 South Miami, FL Hlth Facs Baptist Hlth Sys Oblig
Group (MBIA Insd) (a)............................ 5.000 11/15/28 2,467,400
455 Titusville, FL Wtr & Swr Rev (MBIA Insd)......... 5.800 10/01/08 504,973
1,000 Village Cent Cmnty Dev Dist FL Util Rev (FGIC
Insd)............................................ 6.000 11/01/18 1,148,400
-----------
41,760,449
-----------
PUERTO RICO 4.2%
500 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev Ser V
Rfdg............................................. 6.375 07/01/08 545,170
1,000 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev Ser Y
Rfdg (Embedded Cap) (FSA Insd) (c)............... 5.730 07/01/21 1,190,180
-----------
1,735,350
-----------
TOTAL INVESTMENTS 104.6%
(Cost $39,702,355).......................................................... 43,495,799
LIABILITIES IN EXCESS OF OTHER ASSETS (4.6%)................................. (1,923,748)
-----------
NET ASSETS 100.0%............................................................ $41,572,051
===========
</TABLE>
* Zero coupon bond
(a) Securities purchased on a when issued or delayed delivery basis.
(b) Assets segregated as collateral for when issued or delayed delivery purchase
commitments.
(c) An Embedded Cap security includes a cap strike level such that the coupon
payment may be supplemented by cap payments if the floating rate index upon
which the cap is based rises above the strike level. The price of these
securities may be more volatile than the price of a comparable fixed rate
security. The Trust invests in these instruments as a hedge against a rise
in the short-term interest rates which it pays on its preferred shares.
These derivative instruments are marked to market each day with the change
in value reflected in unrealized appreciation/depreciation. Upon
disposition, a realized gain or loss is recognized accordingly.
See Notes to Financial Statements
11
<PAGE> 13
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $39,702,355)........................ $43,495,799
Cash........................................................ 102,406
Interest Receivable......................................... 685,702
Other....................................................... 613
----------
Total Assets.......................................... 44,284,520
----------
LIABILITIES:
Payables:
Investments Purchased..................................... 2,475,292
Investment Advisory Fee................................... 23,034
Income Distributions -- Common and Preferred Shares....... 9,887
Administrative Fee........................................ 7,088
Affiliates................................................ 6,259
Accrued Expenses............................................ 104,906
Trustees' Deferred Compensation and Retirement Plans........ 86,003
-----------
Total Liabilities..................................... 2,712,469
-----------
NET ASSETS.................................................. $41,572,051
===========
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 320 issued with liquidation preference of $50,000
per share)................................................ $16,000,000
-----------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 1,683,270 shares issued and
outstanding).............................................. 16,833
Paid in Surplus............................................. 24,681,474
Net Unrealized Appreciation................................. 3,793,444
Accumulated Undistributed Net Investment Income............. 151,509
Accumulated Net Realized Loss............................... (3,071,209)
-----------
Net Assets Applicable to Common Shares................ 25,572,051
-----------
NET ASSETS.................................................. $41,572,051
===========
NET ASSET VALUE PER COMMON SHARE ($25,572,051 divided
by 1,683,270 shares outstanding).......................... $ 15.19
===========
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $2,282,820
----------
EXPENSES:
Investment Advisory Fee..................................... 268,142
Administrative Fee.......................................... 82,505
Preferred Share Maintenance................................. 62,311
Accounting Services......................................... 40,084
Trustees' Fees and Expenses................................. 17,399
Legal....................................................... 3,924
Amortization of Organizational Costs........................ 3,712
Custodian Fees.............................................. 1,072
Other....................................................... 71,423
----------
Total Expenses.......................................... 550,572
----------
NET INVESTMENT INCOME....................................... $1,732,248
==========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 50,305
----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 3,090,206
End of the Period......................................... 3,793,444
----------
Net Unrealized Appreciation During the Period............... 703,238
----------
NET REALIZED AND UNREALIZED GAIN............................ $ 753,543
==========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $2,485,791
==========
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended October 31, 1998 and 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1998 October 31, 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 1,732,248 $ 1,751,274
Net Realized Gain/Loss.................................. 50,305 (238)
Net Unrealized Appreciation During the Period........... 703,238 1,190,926
------------ ------------
Change in Net Assets from Operations.................... 2,485,791 2,941,962
------------ ------------
Distributions from Net Investment Income:
Common Shares......................................... (1,232,067) (1,232,089)
Preferred Shares...................................... (526,616) (562,577)
------------ ------------
Total Distributions..................................... (1,758,683) (1,794,666)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES..... 727,108 1,147,296
NET ASSETS:
Beginning of the Period................................. 40,844,943 39,697,647
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $151,509 and $177,944,
respectively)......................................... $41,572,051 $40,844,943
============ ============
</TABLE>
See Notes to Financial Statements
14
<PAGE> 16
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share of
the Trust outstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
July 30, 1993
(Commencement
Year Ended October 31, of Investment
----------------------------------------------- Operations) to
1998 1997 1996 1995 1994 October 31, 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period (a)........................ $14.760 $14.078 $14.024 $11.735 $14.888 $14.628
------- ------- ------- ------- ------- -------
Net Investment Income.............. 1.029 1.041 1.078 1.163 1.050 .091
Net Realized and Unrealized
Gain/Loss......................... .448 .707 .023 2.226 (3.180) .251
------- ------- ------- ------- ------- -------
Total from Investment Operations... 1.477 1.748 1.101 3.389 (2.130) .342
------- ------- ------- ------- ------- -------
Less:
Distributions from Net Investment
Income:
Paid to Common Shareholders..... .732 .732 .732 .732 .787 .066
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders........ .313 .334 .315 .368 .236 .016
------- ------- ------- ------- ------- -------
Total Distributions................ 1.045 1.066 1.047 1.100 1.023 .082
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period............................ $15.192 $14.760 $14.078 $14.024 $11.735 $14.888
======= ======= ======= ======= ======= =======
Market Price Per Share at End of
the Period........................ $14.375 $13.125 $12.625 $12.000 $ 9.750 $14.875
Total Investment Return at Market
Price (b)......................... 15.36% 9.96% 11.57% 31.16% (30.20%) (.40%)*
Total Return at Net Asset
Value (c)......................... 8.04% 10.33% 5.80% 26.30% (16.27%) (.36%)*
Net Assets at End of the Period (In
millions)......................... $ 41.6 $ 40.8 $ 39.7 $ 39.6 $ 35.8 $ 41.0
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares(1, 2) 2.18% 2.24% 1.83% 1.37% 1.49% 2.59%
Ratio of Net Investment Income to
Average Net Assets Applicable to
Common Shares(2) (d).............. 4.77% 4.96% 5.46% 6.13% 6.06% 2.10%
Portfolio Turnover................. 15% 4% 16% 24% 101% 0%*
* Non-Annualized
(1) Ratio of Expenses to Average
Net Assets including Preferred
Shares......................... 1.33% 1.34% 1.09% .79% .87% 2.16%
(2) If certain expenses had not
been waived by the Adviser,
total return would have been
lower and the ratios would have
been as follows:
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares............................ N/A N/A 2.40% 2.49% 2.50% N/A
Ratio of Expenses to Average Net
Assets including Preferred
Shares............................ N/A N/A 1.43% 1.44% 1.46% N/A
Ratio of Net Investment Income to
Average Net Assets Applicable to
Common Shares (d)................. N/A N/A 4.89% 5.00% 5.05% N/A
</TABLE>
(a) Net Asset Value at July 30, 1993, is adjusted for common and preferred share
offering costs of $.372 per common share.
(b) Total Investment Return at Market Price reflects the change in market value
of the common shares for the period indicated with reinvestment of dividends
in accordance with the Trust's dividend reinvestment plan.
(c) Total Return at Net Asset Value (NAV) reflects the change in value of the
Trust's assets with reinvestment of dividends based on NAV.
(d) Net Investment Income is adjusted for the common share equivalent of
distributions paid to preferred shareholders.
N/A = Not Applicable
See Notes to Financial Statements
15
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS
October 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Florida Municipal Opportunity Trust, formerly known as Van Kampen
American Capital Florida Municipal Opportunity Trust, (the "Trust") is
registered as a non-diversified closed-end management investment company under
the Investment Company Act of 1940, as amended. The Trust's investment objective
is to provide a high level of current income exempt from federal income taxes
and Florida State intangible taxes, consistent with preservation of capital. The
Trust will invest in a portfolio consisting substantially of Florida municipal
obligations rated investment grade at the time of investment. The Trust
commenced investment operations on July 30, 1993.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. SECURITY VALUATION--Investments are stated at value using market quotations
or, if such valuations are not available, estimates obtained from yield data
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of 60 days or less are valued at amortized
cost.
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when issued" or "delayed delivery"
basis with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made.
C. INVESTMENT INCOME--Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the expected life of each
applicable security.
D. ORGANIZATIONAL COSTS--The Trust has reimbursed Van Kampen Funds Inc. or its
affiliates (collectively "Van Kampen") for costs incurred in connection with the
Trust's
16
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
- --------------------------------------------------------------------------------
organization in the amount of $25,000. These costs were amortized on a straight
line basis over the 60 month period ended July 29, 1998.
E. FEDERAL INCOME TAXES--It is the Trust'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 provision for federal income taxes is required.
The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At October 31, 1998, the Trust had an accumulated capital loss
carryforward for tax purposes of $3,071,209 which will expire between October
31, 2002 and October 31, 2005.
At October 31, 1998, for federal income tax purposes the cost of long-term
investments is $39,702,355, the aggregate gross unrealized appreciation is
$3,833,748 and the aggregate gross unrealized depreciation is $40,304 resulting
in net unrealized appreciation on long-term investments of $3,793,444.
F. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays monthly
dividends from net investment income to common shareholders. Net realized gains,
if any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income for tax
purposes.
For the year ended October 31, 1998, 100% of the income distributions made
by the Trust were exempt from federal income taxes. In January, 1999, the Trust
will provide tax information to shareholders for the 1998 calendar year.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, Van Kampen
Investment Advisory Corp. (the "Adviser") will provide investment advice and
facilities to the Trust for an annual fee payable monthly of .65% of the average
net assets of the Trust. In addition, the Trust will pay a monthly
administrative fee to Van Kampen, the Trust's Administrator, at an annual rate
of .20% of the average net assets of the Trust. The administrative services
provided by the Administrator include record keeping and reporting
responsibilities with respect to the Trust's portfolio and preferred shares and
providing certain services to shareholders.
For the year ended October 31, 1998, the Trust recognized expenses of
approximately $1,000, representing legal services provided by Skadden, Arps,
Slate,
17
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
- --------------------------------------------------------------------------------
Meagher & Flom (Illinois), counsel to the Trust of which a trustee of the Trust
is an affiliated person.
For the year ended October 31, 1998, the Trust recognized expenses of
approximately $43,000 representing Van Kampen's cost of providing accounting and
legal services to the Trust.
Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
officers of Van Kampen.
The Trust provides deferred compensation and retirement plans for its
Trustees who are not officers of Van Kampen. Under the deferred compensation
plan, Trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable for a ten-year period
and are based upon each trustee's years of service to the Trust. The maximum
annual benefit per trustee under the plan is $2,500.
At October 31, 1998, Van Kampen owned 6,700 common shares of the Trust.
3. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales, excluding
short-term investments, were $8,537,810 and $6,105,115, respectively.
4. PREFERRED SHARES
The Trust has outstanding 320 Auction Preferred Shares ("APS"). Dividends are
cumulative and the dividend rate is currently reset every seven days through an
auction process. The rate in effect on October 31, 1998 was 2.990%. During the
year ended October 31, 1998, the rates ranged from 0.500% to 4.000%.
The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of Preferred Share Maintenance
expense.
The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $50,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests and the APS are subject to
mandatory redemption if the tests are not met.
5. YEAR 2000 COMPLIANCE (UNAUDITED)
Van Kampen utilizes a number of computer programs across its entire operation
relying on both internal software systems as well as external software systems
provided by third parties. In 1996 Van Kampen initiated a CountDown 2000 Project
to review both the internal systems and external vendor connections. The goal of
this project is to position its
18
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
- --------------------------------------------------------------------------------
business to continue unaffected as a result of the century change. At this time,
there can be no assurance that the steps taken will be sufficient to avoid any
adverse impact to the Trust, but Van Kampen does not anticipate that the move to
Year 2000 will have a material impact on its ability to continue to provide the
Trust with service at current levels. In addition, it is possible that the
securities markets in which the Trust invests may be detrimentally affected by
computer failures throughout the financial services industry beginning January
1, 2000. Improperly functioning trading systems may result in settlement
problems and liquidity issues.
19
<PAGE> 21
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Trustees and Shareholders of
Van Kampen Florida Municipal Opportunity Trust:
We have audited the accompanying statement of assets and liabilities of Van
Kampen Florida Municipal Opportunity Trust (the "Trust"), including the
portfolio of investments, as of October 31, 1998, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods presented. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and 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 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 as of
October 31, 1998, by correspondence with the custodian and broker. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of Van
Kampen Florida Municipal Opportunity Trust as of October 31, 1998, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods presented, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Chicago, Illinois
December 3, 1998
20
<PAGE> 22
DIVIDEND REINVESTMENT PLAN
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, State Street Bank and Trust
Company, as your Plan Agent, will automatically invest your dividends and
capital gains distributions in Common Shares of the Trust for your account.
HOW TO PARTICIPATE
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be re-
registered in your own name which will enable your participation in the Plan.
HOW THE PLAN WORKS
Participants in the Plan will receive the equivalent in Common Shares valued on
the valuation date, generally at the lower of market price or net asset value,
except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Trust's Common Shares,
resulting in the acquisition of fewer Common Shares than if the dividend or
distribution had been paid in Common Shares issued by the Trust. All
reinvestments are in full and fractional Common Shares and are carried to three
decimal places.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
change sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.
COSTS OF THE PLAN
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.
TAX IMPLICATIONS
You will receive tax information annually for your personal records and to help
you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA 02266-
8200. If you withdraw, you will receive, without charge, a share certificate
issued in your name for all full Common Shares credited to your account under
the Plan and a cash payment will be made for any fractional Common Share
credited to your account under the Plan. You may again elect to participate in
the Plan at any time by calling 1-800-341-2929 or writing to the Trust at:
Van Kampen Funds Inc.
Attn: Closed-End Funds
2800 Post Oak Blvd.
Houston, TX 77056
21
<PAGE> 23
VAN KAMPEN FUNDS
EQUITY FUNDS
Domestic
Aggressive Equity
Aggressive Growth
American Value
Comstock
Emerging Growth
Enterprise
Equity Growth
Equity Income
Growth
Growth and Income
Harbor
Pace
Real Estate Securities
U.S. Real Estate
Utility
Value
International/Global
Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
Global Franchise
Global Managed Assets
International Magnum
Latin American
FIXED-INCOME FUNDS
Income
Corporate Bond
Global Fixed Income
Global Government Securities
Government Securities
High Income Corporate Bond
High Yield
High Yield & Total Return
Limited Maturity Government
Short-Term Global Income
Strategic Income
U.S. Government
U.S. Government Trust for Income
Worldwide High Income
Tax Exempt Income
California Insured Tax Free
Florida Insured Tax Free Income
High Yield Municipal
Insured Tax Free Income
Intermediate Term Municipal Income
Municipal Income
New York Tax Free Income
Pennsylvania Tax Free Income
Tax Free High Income
Capital Preservation
Reserve
Tax Free Money
Senior Loan
Prime Rate Income Trust
Senior Floating Rate
To find out more about any of these funds, ask your financial adviser for a
prospectus, which contains more complete information, including sales charges,
risks, and expenses. Please read it carefully before you invest or send money.
To view a current Van Kampen fund prospectus or to receive additional fund
information, choose from one of the following:
- - visit our web site at
WWW.VANKAMPEN.COM -- to view a prospectus, select Download Prospectus
- - call us at 1-800-341-2911 weekdays from 7:00 a.m. to 7:00 p.m. Central time
(Telecommunications Device for the Deaf users, call 1-800-421-2833)
- - e-mail us by visiting
WWW.VANKAMPEN.COM and selecting Contact Us
22
<PAGE> 24
VAN KAMPEN FLORIDA MUNICIPAL OPPORTUNITY TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
DENNIS J. MCDONNELL* - Chairman
STEVEN MULLER
THEODORE A. MYERS
DON G. POWELL*
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
DENNIS J. MCDONNELL*
President
RONALD A. NYBERG*
Vice President and Secretary
JOHN L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
EDWARD C. WOOD, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN
INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
CUSTODIAN AND TRANSFER AGENT
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
KPMG PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601
* "Interested" persons of the Trust, as defined in the Investment Company Act of
1940.
(C) Van Kampen Funds Inc., 1998 All rights reserved.
(SM) denotes a service mark of Van Kampen Funds Inc.
23
<PAGE> 25
RESULTS OF SHAREHOLDER VOTES
The Annual Meeting of Shareholders of the Trust was held on July 28, 1998, where
shareholders voted on the election of trustees and the selection of independent
public accountants.
1) With regard to the election of the following trustee by the preferred
shareholders of the Trust:
<TABLE>
<CAPTION>
# OF SHARES
--------------------
IN FAVOR WITHHELD
- -------------------------------------------------------------------------
<S> <C> <C>
Rod Dammeyer........................................ 320 0
</TABLE>
2) With regard to the election of the following trustees by the common
shareholders of the Trust:
<TABLE>
<CAPTION>
# OF SHARES
---------------------
IN FAVOR WITHHELD
- ------------------------------------------------------------------------
<S> <C> <C>
Wayne W. Whalen................................... 1,535,902 14,676
Steven Muller..................................... 1,534,402 16,176
</TABLE>
The other trustees of the Trust whose terms did not expire in 1998 are David C.
Arch, Howard J Kerr, Dennis J. McDonnell, Theodore A. Myers, Don G. Powell and
Hugo F. Sonnenschein.
3) With regard to the ratification of KPMG Peat Marwick LLP as independent
public accountants for the Trust, 1,542,989 shares voted in favor of the
proposal, 170 shares voted against, and 7,739 shares abstained.
24
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> FL MUNI OPP
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 39,702,355
<INVESTMENTS-AT-VALUE> 43,495,799
<RECEIVABLES> 685,702
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 103,019
<TOTAL-ASSETS> 44,284,520
<PAYABLE-FOR-SECURITIES> 2,475,292
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 237,177
<TOTAL-LIABILITIES> 2,712,469
<SENIOR-EQUITY> 16,000,000
<PAID-IN-CAPITAL-COMMON> 24,698,307
<SHARES-COMMON-STOCK> 1,683,270
<SHARES-COMMON-PRIOR> 1,683,270
<ACCUMULATED-NII-CURRENT> 151,509
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,071,209)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,793,444
<NET-ASSETS> 41,572,051
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,282,820
<OTHER-INCOME> 0
<EXPENSES-NET> (550,572)
<NET-INVESTMENT-INCOME> 1,732,248
<REALIZED-GAINS-CURRENT> 50,305
<APPREC-INCREASE-CURRENT> 703,238
<NET-CHANGE-FROM-OPS> 2,485,791
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,758,683)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 727,108
<ACCUMULATED-NII-PRIOR> 177,944
<ACCUMULATED-GAINS-PRIOR> (3,121,514)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 268,142
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 550,572
<AVERAGE-NET-ASSETS> 41,258,117
<PER-SHARE-NAV-BEGIN> 14.760
<PER-SHARE-NII> 1.029
<PER-SHARE-GAIN-APPREC> 0.448
<PER-SHARE-DIVIDEND> (1.045)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 15.192
<EXPENSE-RATIO> 2.18
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
