<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Glossary of Terms................................ 5
Performance Results.............................. 7
Portfolio of Investments......................... 8
Statement of Assets and Liabilities.............. 10
Statement of Operations.......................... 11
Statement of Changes in Net Assets............... 12
Financial Highlights............................. 13
Notes to Financial Statements.................... 14
</TABLE>
VOF SAR 6/98
<PAGE> 2
LETTER TO SHAREHOLDERS
May 21, 1998
Dear Shareholder,
The Taxpayer Relief Act of 1997,
signed into law by President Clinton
last year, was created to fill the need
for a broad variety of tax-advantaged
investments to promote asset growth. We
are pleased that you selected our Trust [PHOTO]
as a vehicle to provide the potential
for tax-free income within your
investment portfolio. As you are aware,
dividends distributed by the Trust are
generally free from federal income DENNIS J. MCDONNELL AND DON G. POWELL
taxes, and often from state and local
taxes as well. At Van Kampen American Capital, we strive not only for a high
level of current income, but total return performance as well.
ECONOMIC OVERVIEW
After nearly seven years of continuous growth, the economy remained buoyant
with few signs of accelerating inflation. Wholesale prices in the first quarter
plummeted at an annual rate of 4.2 percent, while consumer prices inched up 0.2
percent and employment costs rose just 0.7 percent. However, inflationary
pressures were eased by factors such as lower oil prices, increasing
productivity, and a pending budget surplus. The Asian financial crisis led to a
stronger dollar and a decline in the prices of Asian imports, which in turn has
discouraged price increases on competing U.S. goods.
To date, Asia's slowdown has had a modest impact on U.S. economic growth. In
the first quarter, the U.S. economy grew at a 4.2 percent annual rate, its
fastest pace in the past year. Strong consumer spending and inventory buildup by
manufacturers offset a decrease in exports to Asia. Despite the economy's
strength, the Federal Reserve Board refrained from raising interest rates, given
the lack of domestic inflationary pressure and concerns about Asia's economic
future.
In Florida, the economy benefited from booming tourism, as well as growth in
other sectors. State revenues rose sharply, but an increase in spending was
expected to reduce fund balances. Looking ahead, the state faces economic
stresses from a growing population of young people needing education, health,
and family services, and a large population of seniors living on fixed incomes.
MARKET OVERVIEW
Against the backdrop of benign inflation and no action by the Fed, U.S. bond
prices rose during the past six months, although they ended the reporting period
below the highs reached in early January.
Continued on page two
1
<PAGE> 3
The yield of the 30-year Treasury bond, which moves in the opposite
direction of its price, fell from 6.15 percent on October 31 to 5.95 percent on
April 30. Bond prices hit a record high as yields reached 5.69 percent in early
January amidst expectations that the Fed would cut interest rates, but the yield
went back to 6.00 percent in early March after the Fed chose not to act. Yields
were volatile for the rest of the reporting period, as foreign investors sold
U.S. Treasury holdings and investors began to fear that the Fed was leaning
toward a rate hike.
Municipal bond yields generally moved in unison with Treasuries but did not
gain nearly as much in price. By the end of the reporting period, the average
yield of AAA-rated, 30-year generic general obligation bonds was 5.14 percent,
two basis points above the yield posted on October 31 of last year. The
underperformance of municipal bonds can be attributed in part to heavy supply
that outpaced demand. Supply increased as state and local governments took
advantage of low interest rates by issuing bonds to refinance outstanding issues
with higher interest rates, as well as to fund new projects. In the first
quarter, long-term municipal issuance totaled $71 billion, up from $40 billion a
year earlier.
More than half of the new issue volume was AAA-rated and insured, which
significantly diminished the amount of uninsured, higher-yielding securities
available in the marketplace. The dominance of insured volume and the high
demand for uninsured paper created an imbalance that compressed the yields
between higher-quality and lower-quality bonds.
[CREDIT QUALITY GRAPH]
Portfolio Composition by Credit Quality
as of April 30, 1998*
<TABLE>
<S> <C>
AAA...................... 82.2%
AA....................... 5.5%
A........................ 1.3%
BBB...................... 11.0%
</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 primarily of high-quality bonds with a
heavy emphasis on AAA-rated insured securities. Under current market conditions,
we believe the yield spread between higher-rated and lower-rated securities does
not adequately compensate the investor for the additional credit risk on the
lower-rated securities. Also,
Continued on page three
2
<PAGE> 4
high-quality bonds generally have performed better than lower-quality holdings
when interest rates are falling, which was the case for most of the reporting
period.
Overall, we limited the number of purchases during the period because
current market yields were lower than the average yield of bonds in the Trust.
During the reporting period, the Trust had notable reinvestment exposure, due to
prerefunded securities and other holdings priced to call dates in the next few
years. In an effort to reduce this exposure, we sold several of these positions
at a premium and purchased long-term discount securities, which extended the
call protection of the Trust. We had little trouble finding replacement bonds,
given the surplus of new securities from which to choose.
In making purchases, we emphasized long-term discount bonds. In a falling
interest rate environment, these bonds have the potential to appreciate in value
faster than premium bonds as they move closer to maturity. In addition, they
tend to have a longer duration, so they are more sensitive to changing interest
rates. Discount bonds helped offset the declining duration of the portfolio that
occurred as bonds were repriced to their call date. As of April 30, the duration
of the Trust was 6.68 years, compared with 7.72 years for the Lehman Brothers
Florida Municipal Bond Index. 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.
Top 5 Portfolio Sectors as of April 30, 1998*
Public Education............................... 21.5%
Health Care.................................... 18.8%
Transportation................................. 11.7%
Industrial Revenue............................. 8.5%
Single-Family Housing.......................... 6.9%
*As a Percentage of Long-Term
Investments
PERFORMANCE SUMMARY
For the six-month period ended April 30, 1998, the Trust generated a total
return of 7.04 percent(1). This reflects a gain in market price per common share
from $13.1250 on October 31, 1997, to $13.6875 on April 30, 1998, plus
reinvestment of all dividends. The Trust had a tax-exempt distribution rate of
5.35 percent(3), based on the closing price of its common shares. Because income
from the Trust is exempt from federal income taxes, this distribution rate is
equivalent to a yield of 8.36 percent(4) on a taxable investment for investors
in the 36 percent federal income tax bracket. Please refer to the chart on page
seven for additional performance numbers.
Continued on page four
3
<PAGE> 5
[DIVIDEND HISTORY GRAPH]
Six-month Dividend History
For the Period Ended April 30, 1998
<TABLE>
<CAPTION>
Distribution per Common Share
<S> <C>
Nov 1997...................... $0.0610
Dec 1997...................... $0.0610
Jan 1998...................... $0.0610
Feb 1998...................... $0.0610
Mar 1998...................... $0.0610
Apr 1998...................... $0.0610
</TABLE>
The dividend history represents past performance of the Trust and does not
predict the Trust's future distributions.
ECONOMIC OUTLOOK
We expect the economy to slow from its brisk first-quarter pace, although
the extent of the slowdown depends on the continued effects of Asia's crisis and
on Fed policy. We believe the Fed is biased toward raising rates, given concerns
about the economy's increasing strength. If economic strength ignites
inflationary pressures, then we believe the Fed will raise interest rates later
this year. As a result, the yield of the 30-year Treasury bond could top 6.25
percent.
We will continue to track market developments and their effects on the
Trust. When appropriate, we will make adjustments to the portfolio. As we
mentioned earlier, our goal remains a high level of current income for
investors, plus gains in total return. Thank you for your continued support and
confidence in Van Kampen American Capital and the management of your Trust.
Sincerely,
[SIG]
Don G. Powell
Chairman
Van Kampen American Capital
Investment Advisory Corp.
[SIG]
Dennis J. McDonnell
President
Van Kampen American Capital
Investment Advisory Corp.
Please see footnotes on page seven
4
<PAGE> 6
GLOSSARY OF TERMS
BASIS POINT: A measure used in quoting bond yields. One hundred basis points is
equal to one 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 call dates before
maturity. Call dates and prices are set when the bond is issued. To compensate
the bond holder for loss of income and ownership, the 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.
A callable bond is "priced to call" when it is selling at a premium, because it
is assumed that the issuer will redeem the bond at its call date, rather than at
maturity.
COUPON RATE: The stated rate of interest a bond pays until maturity, expressed
as a percentage of its face value.
CREDIT RATING: An evaluation of an issuer's credit history and capability of
repaying obligations. Standard & Poor's and Moody's Investor Services are two
companies that assign bond ratings. Standard & Poor's ratings range from a high
of AAA to a low of D; Moody's ratings range from a high of Aaa to a low of D.
CREDIT SPREAD: The difference in yield between higher-quality issues and
lower-quality issues. Normally, lower-quality issues provide higher yields than
higher-quality issues in order to compensate investors for the additional credit
risk.
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.
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
one-percent change in the price of the bond for every one-percent change in
interest rates. The longer a fund's duration, the greater the effect of interest
rate movements on net asset value. Typically, funds with shorter durations have
performed better in rising rate environments, while funds with longer durations
have performed better when rates decline.
FEDERAL RESERVE BOARD (THE FED): A group that meets eight times a year to
establish monetary policy and monitor the economic pulse of the United States.
GENERAL OBLIGATION BONDS: Bonds backed by the full faith and credit (taxing
authority) of the issuer for timely payment of interest and principal. These
bonds are issued to finance essential government projects, such as highways and
schools.
5
<PAGE> 7
INFLATION: An economic situation in which money supply and business activity
dramatically increase, accompanied by sharply rising 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 municipal bond
insurer. If the issuer defaults, the insurance company will step in and take
over payments of interest and principal. As a result of this protection against
credit risk, most municipal bonds are AAA-rated. Insurance on the bonds does not
relate to mutual fund shares which will fluctuate in price.
INVESTMENT GRADE BONDS: Securities rated BBB and above by Standard & Poor's or
Baa and above by Moody's Investor Services. Bonds rated below BBB or Baa are
noninvestment grade.
MARKET PRICE: The price of a share of a closed-end fund trading on a stock
exchange. When the price is less than a fund's NAV, the fund is trading at a
discount. When the price is more than the NAV, the fund is trading at a premium.
MUNICIPAL BOND: A debt security issued by a state, municipality, or other
governmental entity to finance capital expenditures such as the construction of
highways or public works.
NET ASSET VALUE (NAV): The value of a fund share, calculated by deducting a
fund's liabilities from its total assets and dividing this amount by the number
of shares outstanding.
PREREFUNDING: A process whereby new bonds are issued to refinance an outstanding
bond issue. This 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.
YIELD SPREAD: The difference between the yields of distinct bonds, due to
variant credit ratings or maturities. When yield spreads between bonds of
different credit quality are narrow, there is less incentive to own the
lower-quality bond. When yield spreads between bonds of different maturities are
narrow, there is less incentive to own the bond with the longer maturity. In
both cases, the investor is not being compensated for the additional risk.
ZERO COUPON BONDS: A corporate or municipal debt security that trades at a deep
discount to face value and pays no interest. It may be redeemed at maturity for
full face value.
6
<PAGE> 8
PERFORMANCE RESULTS FOR THE PERIOD ENDED APRIL 30, 1998
VAN KAMPEN AMERICAN CAPITAL FLORIDA MUNICIPAL
OPPORTUNITY TRUST
(AMEX TICKER SYMBOL--VOF)
<TABLE>
<CAPTION>
COMMON SHARE TOTAL RETURNS
<S> <C>
Six-month total return based on market price(1)............ 7.04%
Six-month total return based on NAV(2)..................... 2.26%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3)................................................. 5.35%
Taxable-equivalent distribution rate as a % of closing
common stock price(4)...................................... 8.36%
SHARE VALUATIONS
Net asset value........................................... $14.73
Closing common stock price................................ $13.6875
Six-month high common stock price (01/29/98).............. $14.625
Six-month low common stock price (11/14/97)............... $13.000
Preferred share rate(5)................................... 3.332%
</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.
7
<PAGE> 9
PORTFOLIO OF INVESTMENTS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS 98.7%
FLORIDA 94.6%
$1,000 Altamonte Springs, FL Hlth Fac Auth Hosp Rev
Adventist Hlth Sunbelt Ser B (AMBAC Insd)........ 5.375% 11/15/23 $ 997,910
1,000 Bay Cnty, FL Sch Brd Ctfs Partn (Prerefunded @
07/01/04) (AMBAC Insd)........................... 6.750 07/01/12 1,140,690
1,750 Broward Cnty, FL Edl Fac Auth Rev Nova Southeastn
Univ Proj (Connie Lee Insd)...................... 5.875 04/01/07 1,879,342
545 Clay Cnty, FL Hsg Fin Auth Rev Single Family Mtg
(GNMA Collateralized)............................ 6.500 09/01/21 577,602
1,000 Dade Cnty, FL Aviation Rev Ser C (MBIA Insd)..... 5.500 10/01/04 1,056,320
1,750 Dade Cnty, FL Sch Brd Ctfs Partn Ser A (MBIA
Insd)............................................ 5.750 05/01/08 1,862,157
1,000 Escambia Cnty, FL Pollutn Ctl Rev Champion Intl
Corp Proj........................................ 6.900 08/01/22 1,093,490
300 Florida Hsg Fin Agy Homeowner Mtg Ser 2 (MBIA
Insd)............................................ 5.900 07/01/29 311,412
1,000 Florida Hsg Fin Agy Homeowner Mtg Ser 3.......... 6.350 07/01/28 1,059,540
235 Florida Hsg Fin Agy Hsg Brittany Rosemont Ser G1
(AMBAC Insd)..................................... 6.150 07/01/25 247,758
350 Florida Hsg Fin Agy Hsg Brittany Rosemont Ser G1
(AMBAC Insd)..................................... 6.250 07/01/35 368,645
900 Florida Ports Fin Comm Rev Tran Trust Fund (MBIA
Insd)............................................ 5.375 06/01/27 890,163
1,300 Florida St Brd Edl Cap Outlay Pub Edl Ser C
(Prerefunded @ 06/01/02)......................... 6.625 06/01/22 1,423,630
300 Florida St Brd Regt Univ Sys Impt Rev (MBIA
Insd)............................................ 5.625 07/01/19 308,040
500 Gainesville, FL Utils Sys Rev.................... 8.125 10/01/14 591,320
2,000 Hillsborough Cnty, FL Cap Impt Pgm Rev Criminal
Justice Fac Rfdg (FGIC Insd)..................... 5.250 08/01/16 2,004,060
1,650 Hillsborough Cnty, FL Hosp Auth Hosp Rev Tampa
Genl Hosp Proj Rfdg (FSA Insd)................... 6.375 10/01/13 1,782,149
1,750 Hillsborough Cnty, FL Indl Dev Auth Indl Dev Rev
Univ Cmnty Hosp (MBIA Insd)...................... 5.750 08/15/14 1,823,588
1,500 Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl
Rev Tampa Elec Co Proj Rfdg (MBIA Insd).......... 6.250 12/01/34 1,627,470
1,000 Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl
Rev Tampa Elec Co Proj Ser 92 Rfdg............... 8.000 05/01/22 1,149,610
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 1,887,707
1,740 Hillsborough Cnty, FL Sch Brd Ctfs Partn
(Prerefunded @ 07/01/04) (MBIA Insd)............. 6.000 07/01/12 1,914,974
1,000 Jacksonville, FL Hosp Rev Univ Med Cent Inc Proj
(Connie Lee Insd)................................ 6.500 02/01/11 1,077,980
1,000 Martin Cnty, FL Indl Dev Auth Indl Dev Rev
Indiantown Cogeneration Proj A Rfdg.............. 7.875 12/15/25 1,167,180
1,000 Miami Dade Cnty, FL Spl Oblig Ser B (MBIA
Insd)............................................ * 10/01/32 150,510
1,000 Miami Dade Cnty, FL Spl Oblig Ser B (MBIA
Insd)............................................ * 10/01/33 142,310
</TABLE>
See Notes to Financial Statements
8
<PAGE> 10
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$1,000 Okeechobee, FL Wtr & Swr Rev Ser A (Prerefunded @
01/01/03) (MBIA Insd)............................ 6.500% 01/01/17 $ 1,108,270
775 Orange Cnty, FL Hsg Fin Auth Single Family Mtg
Rev (GNMA Collateralized)........................ 6.550 10/01/21 822,182
1,000 Orange Cnty, FL Tourist Dev Tax Rev Ser B
(Prerefunded @ 10/01/02) (AMBAC Insd)............ 6.500 10/01/19 1,104,220
1,000 Palm Beach Cnty, FL Sch Brd Ctfs Partn Ser A
(Prerefunded @ 08/01/04) (AMBAC Insd)............ 6.000 08/01/06 1,093,890
1,200 Polk Cnty, FL Sch Brd Ctfs Partn (FSA Insd)...... 5.000 01/01/14 1,181,988
635 Saint Petersburg, FL Excise Tax Rev (FGIC
Insd)............................................ 5.000 10/01/16 620,770
365 Saint Petersburg, FL Excise Tax Rev (Escrowed to
Maturity) (FGIC Insd)............................ 5.000 10/01/16 361,131
2,000 Santa Rosa Bay Brdg Auth FL Rev.................. 6.250 07/01/28 2,147,720
455 Titusville, FL Wtr & Swr Rev (MBIA Insd)......... 5.800 10/01/08 490,772
1,000 Village Cent Cmnty Dev Dist FL Util Rev (FGIC
Insd)............................................ 6.000 11/01/18 1,112,270
-----------
38,578,770
-----------
PUERTO RICO 4.1%
500 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev Ser V
Rfdg............................................. 6.375 07/01/08 538,105
1,000 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev Ser Y
Rfdg (Embedded Cap) (FSA Insd) (a)............... 5.730 07/01/21 1,145,190
-----------
1,683,295
-----------
TOTAL INVESTMENTS 98.7%
(Cost $37,252,364).......................................................... 40,262,065
OTHER ASSETS IN EXCESS OF LIABILITIES 1.3%................................... 533,430
-----------
NET ASSETS 100.0%............................................................. $40,795,495
===========
</TABLE>
* Zero coupon bond
(a) 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
9
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $37,252,364)........................ $40,262,065
Cash........................................................ 76,425
Interest Receivable......................................... 667,831
Unamortized Organizational Costs............................ 1,234
Other....................................................... 559
-----------
Total Assets.......................................... 41,008,114
-----------
LIABILITIES:
Payables:
Investment Advisory Fee................................... 21,982
Income Distributions -- Common and Preferred Shares....... 7,165
Administrative Fee........................................ 6,764
Affiliates................................................ 4,796
Accrued Expenses............................................ 90,405
Trustees' Deferred Compensation and Retirement Plans........ 81,507
-----------
Total Liabilities..................................... 212,619
-----------
NET ASSETS.................................................. $40,795,495
===========
NET ASSETS CONSIST OF:
Preferred Shares ($.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................................. 3,009,701
Accumulated Undistributed Net Investment Income............. 172,677
Accumulated Net Realized Loss............................... (3,085,190)
-----------
Net Assets Applicable to Common Shares................ 24,795,495
-----------
NET ASSETS.................................................. $40,795,495
===========
NET ASSET VALUE PER COMMON SHARE ($24,795,495 divided
by 1,683,270 shares outstanding).......................... $ 14.73
===========
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $1,135,085
----------
EXPENSES:
Investment Advisory Fee..................................... 132,845
Administrative Fee.......................................... 40,876
Preferred Share Maintenance................................. 30,899
Audit....................................................... 17,557
Accounting Services......................................... 14,832
Trustees' Fees and Expenses................................. 13,138
Legal....................................................... 3,300
Amortization of Organizational Costs........................ 2,478
Other....................................................... 7,427
----------
Total Expenses.......................................... 263,352
----------
NET INVESTMENT INCOME....................................... $ 871,733
==========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 36,324
----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 3,090,206
End of the Period......................................... 3,009,701
----------
Net Unrealized Depreciation During the Period............... (80,505)
----------
NET REALIZED AND UNREALIZED LOSS............................ $ (44,181)
==========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 827,552
==========
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 1998 and the
Year Ended October 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1998 October 31, 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 871,733 $ 1,751,274
Net Realized Gain/Loss.................................. 36,324 (238)
Net Unrealized Appreciation/Depreciation During the
Period................................................ (80,505) 1,190,926
------------ ------------
Change in Net Assets from Operations.................... 827,552 2,941,962
------------ ------------
Distributions from Net Investment Income:
Common Shares......................................... (616,036) (1,232,089)
Preferred Shares...................................... (260,964) (562,577)
------------ ------------
Total Distributions..................................... (877,000) (1,794,666)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES..... (49,448) 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 $172,677 and $177,944,
respectively)......................................... $40,795,495 $40,844,943
============ ============
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share of
the Trust outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
July 30, 1993
Six Months (Commencement
Ended Year Ended October 31, of Investment
April 30, ----------------------------------- 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............. .518 1.041 1.078 1.163 1.050 .091
Net Realized and Unrealized
Gain/Loss........................ (.026) .707 .023 2.226 (3.180) .251
------- ------- ------- ------- ------- -------
Total from Investment
Operations....................... .492 1.748 1.101 3.389 (2.130) .342
------- ------- ------- ------- ------- -------
Less:
Distributions from Net Investment
Income:
Paid to Common Shareholders.... .366 .732 .732 .732 .787 .066
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders....... .155 .334 .315 .368 .236 .016
------- ------- ------- ------- ------- -------
Total Distributions............... .521 1.066 1.047 1.100 1.023 .082
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period........................... $14.731 $14.760 $14.078 $14.024 $11.735 $14.888
======= ======= ======= ======= ======= =======
Market Price Per Share at End of
the Period....................... $13.6875 $13.125 $12.625 $12.000 $9.750 $14.875
Total Investment Return at Market
Price (b)........................ 7.04%* 9.96% 11.57% 31.16% (30.20%) (.40%)*
Total Return at Net Asset Value
(c).............................. 2.26%* 10.33% 5.80% 26.30% (16.27%) (.36%)*
Net Assets at End of the Period
(In millions).................... $40.8 $40.8 $39.7 $39.6 $35.8 $ 41.0
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares(1, 2) 2.11% 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)............. 4.88% 4.96% 5.46% 6.13% 6.06% 2.10%
Portfolio Turnover................ 5%* 4% 16% 24% 101% 0%*
* Non-Annualized
(1) Ratio of Expenses to Average
Net Assets including Preferred
Shares........................ 1.29% 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
13
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
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. At April 30, 1998, there were no
when issued or delayed delivery purchase commitments.
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 American Capital
Distributors Inc. or its affiliates (collectively "VKAC") for costs incurred in
connection with
14
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
the Trust's organization in the amount of $25,000. These costs are being
amortized on a straight line basis over the 60 month period ending July 29,
1998. Van Kampen American Capital Investment Advisory Corp. (the "Adviser") has
agreed that in the event any of the initial shares of the Trust originally
purchased by VKAC are redeemed during the amortization period, the Trust will be
reimbursed for any unamortized organizational costs in the same proportion as
the number of shares redeemed bears to the number of initial shares held at the
time of redemption.
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, 1997, the Trust had an accumulated capital loss
carryforward for tax purposes of $3,121,514 which will expire between October
31, 2002 and October 31, 2005.
At April 30, 1998, for federal income tax purposes, cost of long-term
investments is $37,252,364; the aggregate gross unrealized appreciation is
$3,028,377 and the aggregate gross unrealized depreciation is $18,676 resulting
in net unrealized appreciation of $3,009,701.
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.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, 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 VKAC, 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.
15
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
For the six months ended April 30, 1998, the Trust recognized expenses of
approximately $400, representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Trust of which a trustee of the
Trust is an affiliated person.
For the six months ended April 30, 1998, the Trust recognized expenses of
approximately $17,700 representing VKAC's cost of providing accounting and legal
services to the Trust.
Certain officers and trustees of the Trust are also officers and directors
of VKAC. The Trust does not compensate its officers or trustees who are officers
of VKAC.
The Trust provides deferred compensation and retirement plans for its
Trustees who are not officers of VKAC. 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 April 30, 1998, VKAC 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 $2,229,170 and $2,233,340, 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 April 30, 1998 was 3.332%. During the six
months ended April 30, 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.
16
<PAGE> 18
VAN KAMPEN AMERICAN CAPITAL 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
EDWARD C. WOOD, III*
Vice President and Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
JOHN L. SULLIVAN*
Treasurer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
Vice President
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
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 American Capital Distributors, Inc., 1998
All rights reserved.
(SM) denotes a service mark of
Van Kampen American Capital Distributors, Inc.
17
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> FL MUNI OPP
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 37,252,364
<INVESTMENTS-AT-VALUE> 40,262,065
<RECEIVABLES> 667,831
<ASSETS-OTHER> 1,793
<OTHER-ITEMS-ASSETS> 76,425
<TOTAL-ASSETS> 41,008,114
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 212,619
<TOTAL-LIABILITIES> 212,619
<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> 172,677
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,085,190)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,009,701
<NET-ASSETS> 40,795,495
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,135,085
<OTHER-INCOME> 0
<EXPENSES-NET> (263,352)
<NET-INVESTMENT-INCOME> 871,733
<REALIZED-GAINS-CURRENT> 36,324
<APPREC-INCREASE-CURRENT> (80,505)
<NET-CHANGE-FROM-OPS> 827,552
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (877,000)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (49,448)
<ACCUMULATED-NII-PRIOR> 177,944
<ACCUMULATED-GAINS-PRIOR> (3,121,514)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 132,845
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 263,352
<AVERAGE-NET-ASSETS> 41,218,157
<PER-SHARE-NAV-BEGIN> 14.760
<PER-SHARE-NII> 0.518
<PER-SHARE-GAIN-APPREC> (0.026)
<PER-SHARE-DIVIDEND> (0.521)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.731
<EXPENSE-RATIO> 2.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
