-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OtTaiT36NhaAHD3e0i2wFr3tg1IHZLj+UmlYmPBt0U60Tr74j+lFaLldyVRcJzN4 medP2iJFtdXmERzjpp7lIQ== 0000897101-97-000638.txt : 19970602 0000897101-97-000638.hdr.sgml : 19970602 ACCESSION NUMBER: 0000897101-97-000638 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970530 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOYAGEUR ARIZONA MUNICIPAL INCOME FUND INC CENTRAL INDEX KEY: 0000895577 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 411737155 STATE OF INCORPORATION: MN FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07412 FILM NUMBER: 97617270 BUSINESS ADDRESS: STREET 1: 90 SOUTH SEVENTH STREET SUITE CITY: MINNIAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 2127131251 MAIL ADDRESS: STREET 1: MITCHELL HUTCHINS A90 SOUTH SEVENTH ST CITY: MINNIAPOLIS STATE: MN ZIP: 55402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND INC CENTRAL INDEX KEY: 0000884174 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 411718337 STATE OF INCORPORATION: MN FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-06568 FILM NUMBER: 97617271 BUSINESS ADDRESS: STREET 1: 90 SOUTH SEVENTH STREET STREET 2: SUITE CITY: MINNIAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123764000 MAIL ADDRESS: STREET 1: MITCHELL HUTCHINS 90 SOUTH SEVENTH ST STREET 2: SUITE CITY: MINNIAPOLIS STATE: MN ZIP: 55402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND CENTRAL INDEX KEY: 0000895574 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 411737161 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07410 FILM NUMBER: 97617272 BUSINESS ADDRESS: STREET 1: 90 SOUTH SEVENTH STREET STREET 2: SUITE CITY: MINNIAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123764000 MAIL ADDRESS: STREET 1: 90 SOUTH SEVENTH STREET STREET 2: SUITE CITY: MINNIAPOLIS STATE: MN ZIP: 55402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II INC CENTRAL INDEX KEY: 0000895658 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MN FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07420 FILM NUMBER: 97617273 BUSINESS ADDRESS: STREET 1: 90 SOUTH SEVENTH STREET STREET 2: SUITE CITY: MINNIAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123764000 MAIL ADDRESS: STREET 1: 90 SOUTH SEVENTH ST STREET 2: SUITE CITY: MINNIAPOLIS STATE: MN ZIP: 55402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND INC CENTRAL INDEX KEY: 0000907573 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 411751991 STATE OF INCORPORATION: MN FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07810 FILM NUMBER: 97617274 BUSINESS ADDRESS: STREET 1: 90 SOUTH SEVENTH STREET STREET 2: SUITE 4400 CITY: MINNEAPOLIS STATE: MN ZIP: 55402-4115 BUSINESS PHONE: 6123764000 MAIL ADDRESS: STREET 1: 90 SOUTH SEVENTH STREET STREET 2: SUITE CITY: MINNIAPOLIS STATE: MN ZIP: 55402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III INC CENTRAL INDEX KEY: 0000910347 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 411761999 STATE OF INCORPORATION: MN FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07938 FILM NUMBER: 97617275 BUSINESS ADDRESS: STREET 1: 90 SOUTH SEVENTH STREET STREET 2: SUITE CITY: MINNIAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123764000 MAIL ADDRESS: STREET 1: 90 SOTH SEVENTH STREET STREET 2: SUITE CITY: MINNIAPOLIS STATE: MN ZIP: 55402 N-30D 1 CLOSED END ANNUAL REPORT VOYAGEUR YOUR TAX SENSITIVE INVESTMENT MANAGER MINNESOTA MUNICIPAL INCOME FUND, INC. MINNESOTA MUNICIPAL INCOME FUND II, INC. MINNESOTA MUNICIPAL INCOME FUND III, INC. ARIZONA MUNICIPAL INCOME FUND, INC. FLORIDA INSURED MUNICIPAL INCOME FUND COLORADO INSURED MUNICIPAL INCOME FUND, INC. ANNUAL REPORT [GRAPHIC OF PEN AND PAPER] Dated March 31, 1997 THE VOYAGEUR FUNDS GENERAL INFORMATION - ------------------------------------------------------------------------------- THE FUNDS Voyageur Minnesota Municipal Income Fund, Inc., Voyageur Minnesota Municipal Income Fund II, Inc., Voyageur Minnesota Municipal Income Fund III, Inc., Voyageur Arizona Municipal Income Fund, Inc., Voyageur Florida Insured Municipal Income Fund and Voyageur Colorado Insured Municipal Income Fund, Inc. (the "Funds") are each, closed-end management investment companies whose shares trade on the American Stock Exchange ("ASE") under the symbols VMN, VMM, VYM, VAZ, VFL and VCF, respectively. Voyageur Minnesota Municipal Income Fund, Inc., Voyageur Minnesota Municipal Income Fund III, Inc., and Voyageur Colorado Insured Municipal Income Fund, Inc. are non-diversified management investment companies and the remaining Funds are diversified management investment companies. The investment objective of each Fund is to provide high current income exempt from federal income tax and from the personal income tax of its state, if any, consistent with the preservation of capital. In addition, Voyageur Florida Insured Municipal Income Fund will generally seek investments that will enable its shares to be exempt from Florida's intangible personal property tax. Each Fund will seek to achieve its investment objective by investing substantially all (at least 80%) of its net assets in investment grade, tax-exempt municipal obligations. INVESTMENT ADVISER Voyageur Fund Managers, Inc. (the "Adviser") acts as the Funds' investment adviser. As of March 31, 1997, the Adviser acted as the investment adviser to six closed-end investment companies and ten open-end investment companies (comprising thirty-three separate investment portfolios) and numerous private accounts with combined total assets of approximately $12.2 billion. Prior to the close of business on April 30, 1997, Voyageur had been retained under an investment advisory contract to act as each Fund's investment adviser subject to the authority of the Board of Directors' or Trustees, as appropriate for each Fund. Prior to the close of business on April 30, 1997, Voyageur was an indirect, wholly-owned subsidiary of Dougherty Financial Group, Inc. ("DFG"). After the close of business on April 30, 1997, Voyageur became an indirect, wholly-owned subsidiary of Lincoln National corporation ("LNC") as a result of LNC's acquisition of DFG. LNC, headquartered in Fort Wayne, Indiana, owns and operates insurance and investment management businesses, including Delaware Management Holdings, Inc. ("DMH"). Affiliates of DMH serve as adviser, distributor and transfer agent for the Delaware Group of Mutual Funds which currently includes 16 open-end funds and 2 closed-end funds (comprising 48 separate investment portfolios). DMH, through its subsidiaries, is responsible for the management of approximately $32 billion. Because LNC's acquisition of DFG resulted in a change of control of Voyageur, the Fund's previous investment advisory agreements with Voyageur were "assigned," as that term is defined by the Investment Company Act of 1940, and the previous agreements therefore terminated upon the completion of the acquisition. The Boards of Directors and Trustees of the Funds unanimously approved new investment advisory agreements at a meeting held in person on February 14, 1997, and called for a shareholders meeting to approve the new agreements. At a meeting held on April 11, 1997, the shareholders of each Fund approved its respective investment advisory agreements with either Voyageur or Delaware to become effective after the close of business on April 30, 1997, the date the acquisition was completed. Following April 30, 1997, VFM continues to serve as investment adviser to each Fund other than Florida Insured Municipal Income Fund and Delaware Management Company, Inc. ("DMC"), an indirect wholly-owned subsidiary of DMH, serves as investment adviser to Florida Insured Municipal Income Fund. Following the April 30, 1997, Andrew M. McCullagh, Jr. continues to serve as portfolio manager for Colorado Insured Municipal Income Fund and Arizona Municipal Income Fund and Elizabeth H. Howell continues to serve as portfolio manager for Minnesota Municipal Income Fund I, Minnesota Muncicpal Income Fund II, and Minnesota Municipal Income Fund III. Others involved in the investment process with Mr. McCullagh and Ms. Howell, including assistant portfolio managers and research analysts, have also accepted offers of employment with LNC. As of May 1, 1997, Florida Insured Municipal Income Fund will be managed by Patrick P. Coyne and Mitchell L. Conery. Messrs. Coyne and Conery each serve as Vice President/Senior Portfolio Manager of the tax-free funds and of the tax-free and fixed-income investment companies in the Delaware Group, DMC, and Delaware Capital Management, Inc. Mr. Coyne has served in various capacities within the Delaware organization for more than five years. Prior to joining the Delaware Group in 1997, Mr. Conery was an investment officer with Travelers insurance and a research analyst with CS First Boston. SHAREHOLDER INFORMATION Weekly net asset value and market price information for the Funds are published each Monday in THE WALL STREET JOURNAL, each Sunday in THE NEW YORK TIMES and each Saturday in BARRON'S, as well as numerous other newspapers. DISTRIBUTIONS AND DIVIDEND REINVESTMENT PLAN Under the Funds' current policies, shareholders may elect to receive all dividends and other distributions in cash paid by check mailed directly to the shareholders by the dividend paying agent, Norwest Bank Minnesota, N.A., (the "Plan Agent"). Under each Fund's Dividend Reinvestment Plan, (collectively the "Plans"), common shareholders not making such election will be automatically enrolled in the Funds' Plans. Under the Plans, all distributions to common shareholders of net investment income and capital gains will be automatically reinvested in additional shares of the Funds' common shares. The Plan Agent serves as agent for the common shareholders in administering the Plans. After each Fund declares a dividend or determines to make a capital gains distribution, the Plan Agent will, as agent for the participants, receive the cash payment and use it to buy shares of each Fund's common shares in the open market, on the ASE or elsewhere, for the participants' accounts. The Funds will not issue any new shares in connection with the Plans. A participant may withdraw from a plan at any time by advising the Plan Agent in writing (see address on back page under "Shareholder Servicing Agent"). Shares held in nominee name at brokerage firm may not be eligible for automatic dividend reinvestment. You should contact your financial adviser to determine such firm's policies. The automatic reinvestment of dividends and capital gains distributions does not relieve you of any income tax which may be otherwise payable on dividends or distributions. STATE OR MUNICIPAL LEASE OBLIGATIONS Pursuant to Board of Directors or Trustees resolutions, the Funds may invest without limit in state or municipal leases and participation interests therein. Municipal leases are obligations issued by state and local governments or authorities to finance the acquisition of equipment and facilities such as fire, sanitation or police vehicles or telecommunications equipment, buildings or other capital assets. Municipal lease obligations, except in certain circumstances, are considered illiquid by the staff of the Securities and Exchange Commission. Municipal lease obligations held by the Funds will be treated as illiquid unless they are determined to be liquid pursuant to guidelines established by the Funds' Board of Directors or Trustees. Under these guidelines, the Adviser will consider factors including, but not limited to (1) whether the lease can be cancelled, (2) what assurance there is that the assets represented by the lease can be sold, (3) the municipality's general credit strength (e.g., its debt, administrative, economic and financial characteristics), (4) the likelihood that the municipality will discontinue appropriating funding for the leased property because the property is no longer deemed essential to the operations of the municipality (e.g., the potential for an "event of nonappropriation"), and (5) the legal recourse in the event of failure to appropriate. Additionally, the lack of an established trading market for municipal lease obligations may make the determination of fair market value more difficult. OTHER INFORMATION Since March 31, 1996, except as stated above, there have been (I) no material changes in the Funds' investment objectives or policies, (II) no change to the Funds' charters or by-laws, (III) no material changes in the prinicpal risk factors associated with investment in the Funds, and (IV) no changes in persons who are primarily responsible for the day-to-day management of the Funds' portfolios. LETTER FROM THE PRESIDENT Dear Shareholder, For the municipal bond market, the year 1996 marked the demise of the flat tax. By the beginning of 1997, the municipal to Treasury yield ratio improved substantially, declining from 90% to a more traditional 80%. Long-term tax-exempt investors who held fast to their investments in spite of flat tax threats and municipal bond market upheaval were rewarded for their patience. In the beginning of 1997, economic data continued to indicate surprising strength in the U.S. economy, inciting inflation fears. In March 1997, the Federal Reserve Chairman Alan Greenspan and the members of the Federal Reserve made a "preemptive" strike against inflation and voted to raise short-term interest rates by 0.25%. By increasing short-term rates the Federal Reserve hopes to slow economic growth and reduce inflationary pressures. After Alan Greenspan's repeated "warnings" about the U.S. economy's above-target growth, the increase in federal funds rate -- the rate at which banks lend money to one another on an overnight basis -- came as no surprise to the markets. Perhaps the most apparent short-run fallout from this rate hike was its negative impact on the stock market. However, after a 10% decline, stocks have since attained new all-time highs. History has shown that once the Federal Reserve starts raising short-term rates, more increases are generally on the way. It typically takes anywhere from six to nine months for the effects of a rate hike to become apparent. We believe a sound approach is not to fight the Federal Reserve during this time. Until the Federal Reserve is satisfied that it has successfully reduced inflationary pressures, the markets will be volatile. During this time, we urge investors to maintain a long-term perspective -- especially since historically the markets have rewarded investors for their patience. Despite the short-term volatility caused by rising interest rates, our outlook for the bond market continues to be favorable. We believe that the Federal Reserve will be diligent in slowing the economy to a more sustainable rate. We continue to emphasize a long-term, high credit quality style of management in our closed-end municipal bond funds. Over the long term, we believe our shareholders should be pleased with the overall results of this approach -- an approach that keeps what's best for our shareholders foremost in our mind. Sincerely, Wayne A. Stork President Voyageur Minnesota Municipal Income Fund, I, II, III, Inc. Voyageur Arizona Municipal Income Fund, Inc. Voyageur Florida Insured Municipal Income Fund Voyageur Colorado Insured Municipal Income Fund, Inc. VOYAGEUR MINNESOTA MUNICIPAL INCOME FUNDS -- I, II, III [PHOTO BOX] ELIZABETH H. HOWELL IS THE SENIOR MUNICIPAL BOND PORTFOLIO MANAGER FOR THE VOYAGEUR MINNESOTA MUNICIPAL INCOME FUNDS -- I, II, III. MS. HOWELL HAS MORE THAN 13 YEARS OF INVESTMENT INDUSTRY EXPERIENCE. The Minnesota Municipal Income Funds and the overall municipal bond market finished the fiscal year ended March 31, 1997, with positive total returns. In the spring of 1996, bond prices continued the price decline that began in the first quarter. However, by mid-year the tax-exempt bond market rebounded and prices rose steadily until the end of December. Throughout the first quarter of 1997, municipal bond prices fluctuated, but on March 31, 1997, returns on the Voyageur Minnesota Municipal Income Funds were modestly positive. VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND The Voyageur Minnesota Municipal Income Fund continues to be well diversified by sector. At the Fund's fiscal year, we continued to maintain a very high credit quality in the Fund. More than half (52%) of the Fund's holdings were invested in AAA-rated securities as of March 31, 1997. Another 32% of the Fund's holdings were invested in securities rated A or higher. The Fund is fully invested in long-term Minnesota tax-exempt municipal bonds. Many of the Fund's holdings are in older, higher coupon bonds and are trading at a premium. This has helped dampen the impact of price swings on the portfolio during the past 12 months and has contributed to the positive total return of the Fund. VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II The Voyageur Minnesota Municipal Income Fund II continues to be well diversified by sector. At the Fund's fiscal year end, we continued to maintain a very high credit quality in the Fund. More than half (56%) of the Fund's holdings were invested in AAA-rated securities as of March 31, 1997. Another 28% of the Fund's holdings were invested in securities rated A or higher. The Fund is fully invested in long-term Minnesota tax-exempt municipal bonds. The average call protection on the portfolio is approximately seven to eight years. Due to its duration of 9.77 years, the Fund's performance generally moves in line with the market for longer-dated Minnesota municipal bonds. In order to improve coupon income for the portfolio -- thereby creating a cushion against market fluctuations -- we have been adding bonds that are now trading at a premium and generating an above-market rate of tax-free income. VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III The Voyageur Minnesota Municipal Income Fund III continues to be well diversified by sector. At the Fund's fiscal year end, we continued to maintain a very high credit quality in the Fund. More than half (58%) of the Fund's holdings were invested in AAA-rated securities as of March 31, 1997. Another 10% were invested in securities rated AA. The Fund is fully invested in long-term Minnesota tax exempt municipal bonds. The average call protection on the portfolio is approximately seven to eight years. As of March 31, 1997, the duration for the Fund was 8.85 years. This means the Fund's performance generally moves in line with the market for longer-dated Minnesota municipal bonds. In order to improve coupon income for the portfolio -- thereby creating a cushion against market fluctuations -- we have been adding bonds that are now trading at a premium and generating an above-market rate of tax free income. OUTLOOK Overall, our general outlook for the 1997 municipal market remains favorable. The diligent efforts of the Federal Reserve should help keep the rate of inflation low and slow the U.S. economy to a more modest and sustainable growth rate. Due to increases in interest rates, we expect the stock markets to lose a little steam in 1997 and, as a result, investors should begin allocating more of their investment dollars into fixed income investments. For the first half of 1997, we expect municipal bonds to experience some temporary weakness as the Federal Reserve continues to try to keep inflation under control by increasing the federal funds rate. In spite of this short-term weakness, we believe the long-term trend of downward interest rates remains intact. As a result of the recent interest rate increases, investors can expect some price relief in their tax-free investments due to the dynamics of supply and demand. In the past few years, a large portion of the municipal bond supply has been generated by refundings -- where municipalities have replaced old municipal bond issues with a new ones in order to lower their interest rate costs. As interest rates increase, refundings become economically infeasible for municipalities. We believe this decline in supply should be advantageous for tax free investors -- acting as a cushion for municipal bond prices. We believe the overall credit quality of the municipal bond market remains strong, consistent with reasonable growth in the economy. In 1996, Standard & Poor's upgraded two credits for every one it downgraded while Moody's Investor Services upgraded four for every one downgraded. The Minnesota economy continues to be strong. The economy is well diversified in comparison to other states and has historically been less cyclical than that of the coasts. As a result, the overall credit quality of Minnesota bonds remains very good. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. ALL QUALITY RATINGS ARE BY MOODY'S INVESTORS SERVICE AND/OR STANDARD & POOR'S RATINGS SERVICES. VOYAGEUR ARIZONA MUNICIPAL INCOME FUND [PHOTO BOX] ANDREW M. MCCULLAGH, JR. IS THE SENIOR MUNICIPAL BOND PORTFOLIO MANAGER FOR THE VOYAGEUR ARIZONA MUNICIPAL INCOME AND VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUNDS. MR. MCCULLAGH HAS MORE THAN 25 YEARS OF INVESTMENT INDUSTRY EXPERIENCE. During the fiscal year ended March 31, 1997, long-term interest rates climbed approximately 44 basis points from 6.65% on March 29, 1996 to 7.09% on March 31, 1997, as measured by the Bond Buyer Index. In spite of the down market, the Voyageur Arizona Municipal Income Fund ended its fiscal year with positive total returns. This positive return was primarily due to our defensive strategy of adding income to the Fund's portfolio by selling lower trade yield bonds and replacing them with higher coupon bonds. At its fiscal year end, the Voyageur Arizona Municipal Income Fund continued to maintain a high credit quality -- with 80% of the Fund's holdings were invested in municipal bond securities rated AAA as of March 31, 1997. The remaining holdings in the Fund are invested in securities rated A or higher. The Fund is well diversified in a wide variety of municipal bond sectors -- with the heaviest sector weightings in general obligation, health care, and water and sewer bonds. In an attempt to protect our shareholders' income streams for a longer period of time, we continue to emphasize investing in municipal bonds with longer call protection. Arizona's economy continues to be vibrant, making it an attractive investment for municipal bond investors across the state. The supply of municipal bonds in Arizona, however, continues to be limited. Due to the strong demand for its municipal bonds, the price of Arizona municipal bonds has a tendency to be less volatile than other state issues. OUTLOOK Overall, our general outlook for the 1997 municipal market remains favorable. The diligent efforts of the Federal Reserve should help keep the rate of inflation low and slow the U.S. economy to a more modest and sustainable pace. Due to increases in interest rates, we expect the stock markets to lose a little steam in 1997 and, as a result, investors should begin allocating more of their investment dollars into fixed income investments. For the first half of 1997, we expect the municipal bonds to experience some temporary weakness as the Federal Reserve continues to try to keep inflation under control by increasing the federal funds rate. In spite of this short-term weakness, we believe the long-term trend of interest rates is downward. As a result of the recent interest rate increases, investors can expect some price relief in their tax-free investments due to the dynamics of supply and demand. In the past few years, a large portion of the municipal bond supply has been generated by refundings -- where municipalities have replaced old municipal bond issues with new ones in order to lower their interest rate costs. As interest rates increase, refundings become economically not feasible for municipalities. We believe this decline in supply should be advantageous for tax free investors -- enhancing municipal bond prices. We believe the overall credit quality of the municipal bond market remains strong, consistent with reasonable growth in the economy. In 1996, Standard & Poor's upgraded two credits for every one it downgraded while Moody's Investor Services upgraded four for every one downgraded. Spurred by the influx of people and businesses moving into the state, especially from California, Arizona continues to be one of the strongest economies in the United States. We continue to believe the supply of Arizona municipal bonds will continue to be limited in 1997. This limited supply -- in light of the strong demand for Arizona's municipal bonds issues -- should ultimately continue to help bolster the Fund's performance. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. ALL QUALITY RATINGS ARE BY MOODY'S INVESTORS SERVICE AND/OR STANDARD & POOR'S RATINGS SERVICES. VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND [PHOTO BOX] STEVEN P. ELDREDGE WAS SENIOR PORTFOLIO MANAGER OF VOYAGEUR INSURED MUNICIPAL BOND FUND DURING THE PAST FISCAL YEAR. ON MAY 1, 1997, PATRICK P. COYNE AND MITCHELL CONERY OF DELAWARE MANAGEMENT CO. IN PHILADELPHIA BEGAN CO-MANAGING THE FUND. During the fiscal year ended March 31, 1997, long-term interest rates climbed approximately 44 basis points from 6.65% on March 29, 1996 to 7.09% on March 31, 1997, as measured by the Bond Buyer Index. In spite of the down market, the Voyageur Florida Insured Municipal Income Fund ended its fiscal year with positive total returns. This positive return was primarily due to our defensive strategy of adding income to the Fund's portfolio. At its fiscal year end, the Voyageur Florida Insured Municipal Income Fund continued to maintain a high credit quality -- with 100% of the Fund invested in municipal bond securities rated AAA as of March 31, 1997. The Fund is well diversified in a wide variety of municipal bond sectors -- with the top sector weightings in general revenue, health care, and lease/COP bonds. In an attempt to protect our shareholders' income streams for a longer period of time, we continue to emphasize investing in municipal bond securities with longer call protection. OUTLOOK Overall, our general outlook for the 1997 municipal market remains favorable. The diligent efforts of the Federal Reserve should help keep the rate of inflation low and slow the U.S. economy to a more modest and sustainable growth rate. Due to increases in interest rates, we expect the stock markets to lose a little steam in 1997 and, as a result, investors should begin allocating more of their investment dollars into fixed income investments. For the first half of 1997, we expect municipal bonds to experience some temporary weakness as the Federal Reserve continues to try to keep inflation under control by increasing the federal funds rate. In spite of this short-term weakness, we believe the long-term trend of downward interest rates remains intact. However, even though we expect some modest interest rate increases by the Federal Reserve, investors can expect some price relief in their tax-free investments due to the dynamics of supply and demand. In the past few years, a large portion of the municipal bond supply has been generated by refundings -- where municipalities have replaced old municipal bond issues with a new ones in order to lower their interest rate cost. As interest rates have increased recently, refundings have become economically infeasible for municipalities. We believe this decline in supply should be advantageous for tax free investors -- acting as a cushion for municipal bond prices. The overall credit quality of the municipal bond market remains strong, consistent with reasonable growth in the economy. In 1996, Standard & Poor's upgraded two credits for every one it downgraded while Moody's Investor Services upgraded four for every one downgraded. Likewise, the Florida's economy continues to be relatively strong, as evidenced by the Standard & Poor's upgrade of the state from AA to AA+. This grade is a reflection of the economic strength and good balance sheets of the individual cities and counties in Florida. The year 1996 was a good one for Florida, according to the April 1997 issue of Florida Trend. Tourists flocked to Florida in record numbers -- 42.5 million -- while activity in the real estate industry reached boom levels not seen since the late 1980s. Although some people express a concern about Florida's ongoing reliance on these two economic sectors -- tourism and real estate -- the first hints of diversification within the state are becoming apparent. In order to attract new industries and businesses, economic development efforts are intensifying and broadening on a community and state level. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. ALL QUALITY RATINGS ARE BY MOODY'S INVESTORS SERVICE AND/OR STANDARD & POOR'S RATINGS SERVICES. INSURANCE PERTAINS ONLY TO THE TIMELY PAYMENT OF PRINCIPAL AND INTEREST BY THE SECURITIES IN THE FUND'S PORTFOLIO. THE VALUE OF THE INSURED SECURITIES AND THE FUND ITSELF WILL FLUCTUATE DUE TO CHANGING MARKET CONDITIONS. NO REPRESENTATION IS MADE AS TO ANY INSURER'S ABILITY TO MEET ITS COMMITMENTS. VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND [PHOTO BOX] ANDREW M. MCCULLAGH, JR. IS THE SENIOR MUNICIPAL BOND PORTFOLIO MANAGER FOR THE VOYAGEUR ARIZONA MUNICIPAL INCOME AND VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUNDS. MR. MCCULLAGH HAS MORE THAN 25 YEARS OF INVESTMENT INDUSTRY EXPERIENCE. During the fiscal year ended March 31, 1997, long-term interest rates climbed approximately 44 basis points from 6.65% on March 29, 1996 to 7.09% on March 31, 1997, as measured by the Bond Buyer Index. In spite of the down market, the Voyageur Colorado Insured Municipal Income Fund ended its fiscal year with positive total returns. This positive return was primarily due to our defensive strategy of adding income to the Fund's portfolio by selling lower trade yield bonds and replacing them with higher coupon bonds. At its fiscal year end, the Voyageur Colorado Insured Municipal Income Fund continued to maintain a high credit quality -- 100% of the Fund's holdings were invested in municipal bond securities rated AAA as March 31, 1997. The Fund is well diversified in a wide variety of municipal bond sectors -- with the top sector weightings in general obligation, transportation, and education bonds. In an attempt to protect our shareholders' income streams for a longer period of time, we continue to emphasize investing in municipal bonds with longer call protection. Colorado's economy continues to be one of the strongest in the United States, making it an attractive investment for municipal bond investors across the state. The supply of municipal bonds in Colorado, however, continues to be limited. Due to the strong demand for its municipal bonds, the price of Colorado municipal bonds has a tendency to be less volatile than other state issues. OUTLOOK Overall, our general outlook for the 1997 municipal market remains favorable. The diligent efforts of the Federal Reserve should help keep the rate of inflation low and slow the U.S. economy to a more modest and sustainable growth rate. Due to increases in interest rates, we expect the stock markets to lose a little steam in 1997 and, as a result, investors should begin allocating more of their investment dollars into fixed income investments. For the first half of 1997, we expect the municipal bonds to experience some temporary weakness as the Federal Reserve continues to try to keep inflation under control by increasing the federal funds rate. In spite of this short-term weakness, we believe the long-term trend of interest rates is downward. Due to recent interest rate increases, investors can expect some price relief in their tax-free investments due to the dynamics of supply and demand. In the past few years, a large portion of the municipal bond supply has been generated by refundings -- where municipalities have replaced old municipal bond issues with new ones in order to lower their interest rate costs. As interest rates increase, refundings become economically not feasible for municipalities. We believe this decline in supply should be advantageous for tax free investors -- enhancing municipal bond prices. We believe the overall credit quality of the municipal bond market remains strong, consistent with reasonable growth in the economy. In 1996, Standard & Poor's upgraded two credits for every one it downgraded while Moody's Investor Services upgraded four for every one downgraded. Although Colorado's growth is showing some signs of slowing, there are still signs of strength in the state. Colorado has a much more broad-based economy than it has had in the past -- due to a strong influx of people and businesses from the state of California. This broad-based economy should help dampen the effects of any future economic recession. We continue to believe the supply of Colorado municipal bonds will continue to be limited in 1997. This limited supply -- in light of the strong demand for Colorado's municipal bonds issues -- should ultimately continue to help bolster the Fund's performance. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. ALL QUALITY RATINGS ARE BY MOODY'S INVESTORS SERVICE AND/OR STANDARD & POOR'S RATINGS SERVICES. INSURANCE PERTAINS ONLY TO THE TIMELY PAYMENT OF PRINCIPAL AND INTEREST BY THE SECURITIES IN THE FUND'S PORTFOLIO. THE VALUE OF THE INSURED SECURITIES AND THE FUND ITSELF WILL FLUCTUATE DUE TO CHANGING MARKET CONDITIONS. NO REPRESENTATION IS MADE AS TO ANY INSURER'S ABILITY TO MEET ITS COMMITMENTS. VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND Market Price/NAV Fluctuation form 4/1/96 through 3/31/97 [LINE GRAPH] Market Price NAV April '96 15 14.4 14.9 14.2 14.5 14.2 14.6 14.3 14.6 14.4 14.8 14.3 14.8 14.5 14.6 14.7 14.9 14.9 14.6 14.8 14.5 14.8 14.5 14.8 March '97 14.4 14.5 Sector Weightings/Credit Quality as of 3/31/97 (as a percentage of total net assets) [PIE GRAPH] Industrial 6% Transportation 1% Pollution Control 3% Pre-Refunded/Escrow 10% Education 9% General Obligation 16% Health Care 15% Utility 14% Housing 23% Aaa/AAA 52% Aa/AA 15% A/A 17% Baa/BBB 5% NR/NR 11% Portfolio Statistics as of 3/31/97 (excluding short-term securities) Average Effective Maturity 20.0 Years Duration 7.5 Years % AMT 18.7% Total Market Value $56.0 Million Average Coupon 6.5% Average Annual Fund Performance Market Value * One Year 2.01% Since Inception (5/1/92) 7.11% Net Asset Value ** One Year 6.90% Since Inception (5/1/92) 7.55% Past performance is no guarantee of future results. * Assumes purchase of common shares at market price on the first day and sale on the last day of the period and reinvestment of dividends at market price, if any. Performance does not reflect initial sales charge or brokerage commissions. ** Assumes purchase of common share at net asset value on the first day and sale on the last day of the period and reinvestment of dividends at net asset value, if any. VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II Market Price/NAV Fluctuation form 4/1/96 through 3/31/97 [LINE GRAPH] Market Price NAV April '96 15 14.4 14.9 14.2 14.5 14.2 14.6 14.3 14.6 14.4 14.8 14.3 14.8 14.5 14.6 14.7 14.9 14.9 14.6 14.8 14.5 14.8 14.5 14.8 March '97 14.4 14.5 Sector Weightings/Credit Quality as of 3/31/97 (as a percentage of total net assets) [PIE GRAPH] Transportation 4% Industrial 6% Pollution Control 6% Pre-Refunded/Escrow 13% Education 10% Utility 8% Health Care 16% General Obligation 15% Housing 21% Aaa/AAA 56% Aa/AA 17% A/A 11% Baa/BBB 10% NR/NR 6% Portfolio Statistics as of 3/31/97 (excluding short-term securities) Average Effective Maturity 22.8 Years Duration 9.8 Years % AMT 19.8% Total Market Value $156.4 Million Average Coupon 6.1% Average Annual Fund Performance Market Value * One Year 1.47% Since Inception (2/26/93) 3.59% Net Asset Value ** One Year 6.97% Since Inception (2/26/93) 5.32% Past performance is no guarantee of future results. * Assumes purchase of common shares at market price on the first day and sale on the last day of the period and reinvestment of dividends at market price, if any. Performance does not reflect initial sales charge or brokerage commissions. ** Assumes purchase of common share at net asset value on the first day and sale on the last day of the period and reinvestment of dividends at net asset value, if any. VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III Market Price/NAV Fluctuation form 4/1/96 through 3/31/97 [LINE GRAPH] Market Price NAV April '96 12 12.54 11.75 12.34 12 12.31 11.63 12.47 11.5 12.54 11.75 12.46 11.88 12.7 11.88 12.83 12.25 13.16 11.5 13.01 12 12.95 12.5 13.05 March '97 12.25 12.71 Sector Weightings/Credit Quality as of 3/31/97 (as a percentage of total net assets) [PIE GRAPH] Transportation 3% Pollution control 3% Pre-Refunded/Escrow 12% Education 9% Industrial 11% General Obligation 11% Utility 9% Health Care 14% Housing 25% Aaa/AAA 58% Aa/AA 10% A/A 14% Baa/BBB 13% NR/NR 5% Portfolio Statistics as of 3/31/97 (excluding short-term securities) Average Effective Maturity 22.8 Years Duration 9.0 Years % AMT 17.2% Total Market Value $37.2 Million Average Coupon 6.3% Average Annual Fund Performance Market Value * One Year 8.62% Since Inception (10/29/93) 2.09% Net Asset Value ** One Year 7.50% Since Inception (10/29/93) 2.93% Past performance is no guarantee of future results. * Assumes purchase of common shares at market price on the first day and sale on the last day of the period and reinvestment of dividends at market price, if any. Performance does not reflect initial sales charge or brokerage commissions. ** Assumes purchase of common share at net asset value on the first day and sale on the last day of the period and reinvestment of dividends at net asset value, if any. VOYAGEUR ARIZONA MUNICIPAL INCOME FUND Market Price/NAV Fluctuation form 4/1/96 through 3/31/97 [LINE GRAPH] Market Price NAV April '96 12.75 13.74 12.625 13.59 12.375 13.47 12.25 13.66 12.25 13.86 12.5 13.68 12.5 13.95 12.625 14.1 13 14.39 12.625 14.21 13 14.1 13.125 14.2 March '97 13 13.78 Sector Weightings/Credit Quality as of 3/31/97 (as a percentage of total net assets) [PIE GRAPH] Industrial 4% Other 7% Housing 8% Education 3% Transportation 11% Health Care 16% Utility 17% General Obligation 33% Aaa/AAA 80% Aa/AA 13% A/A 7% Portfolio Statistics as of 3/31/97 (excluding short-term securities) Average Effective Maturity 17.9 Years Duration 9.1 Years % AMT 1.5% Total Market Value $65.2 Million Average Coupon 5.8% Average Annual Fund Performance Market Value * One Year 8.20% Since Inception (2/26/93) 4.32% Net Asset Value ** One Year 5.94% Since Inception (2/26/93) 5.55% Past performance is no guarantee of future results. * Assumes purchase of common shares at market price on the first day and sale on the last day of the period and reinvestment of dividends at market price, if any. Performance does not reflect initial sales charge or brokerage commissions. ** Assumes purchase of common share at net asset value on the first day and sale on the last day of the period and reinvestment of dividends at net asset value, if any. VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND Market Price/NAV Fluctuation form 4/1/96 through 3/31/97 [LINE GRAPH] Market Price NAV April '96 12.75 13.71 12.625 13.51 12.25 13.43 12.625 13.67 12.625 13.81 12.875 13.52 12.375 13.91 12.625 14.12 13.125 14.42 12.75 14.22 12.875 14 13.125 14.07 March '97 12.5 13.67 Sector Weightings/Credit Quality as of 3/31/97 (as a percentage of total net assets) [PIE GRAPH] General Obligation 2% Education 5% Transportation 6% Housing 10% Lease/C.O.P. 13% Utility 16% Health Care 20% Other Revenue 26% Aaa/AAA 100% Portfolio Statistics as of 3/31/97 (excluding short-term securities) Average Effective Maturity 23.7 Years Duration 10.6 Years % AMT 13.6% Total Market Value $51.9 Million Average Coupon 5.7% Average Annual Fund Performance Market Value * One Year 3.94% Since Inception (2/26/93) 2.91% Net Asset Value ** One Year 5.23% Since Inception (2/26/93) 4.86% Past performance is no guarantee of future results. * Assumes purchase of common shares at market price on the first day and sale on the last day of the period and reinvestment of dividends at market price, if any. Performance does not reflect initial sales charge or brokerage commissions. ** Assumes purchase of common share at net asset value on the first day and sale on the last day of the period and reinvestment of dividends at net asset value, if any. VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND Market Price/NAV Fluctuation form 4/1/96 through 3/31/97 [LINE GRAPH] Market Price NAV April '96 12.625 13.61 12.625 13.46 12.375 13.36 12.625 13.53 12.5 13.68 12.625 13.49 12.375 13.71 12.625 13.88 13 14.2 13 14.01 13.125 13.84 13.25 14 March '97 12.5 13.58 Sector Weightings/Credit Quality as of 3/31/97 (as a percentage of total net assets) [PIE GRAPH] Lease/C.O.P. 2% Pollution Control 1% Pre-Refunded/Escrow 5% Housing 7% Utility 9% Health Care 9% Education 9% Other Revenue 5% Transportation 20% General Obligation 31% Aaa/AAA 100% Portfolio Statistics as of 3/31/97 (excluding short-term securities) Average Effective Maturity 18.3 Years Duration 9.3 Years % AMT 0.0% Total Market Value $103.7 Million Average Coupon 5.8% Average Annual Fund Performance Market Value * One Year 4.77% Since Inception (7/29/93) 2.22% Net Asset Value ** One Year 5.19% Since Inception (7/29/93) 4.35% Past performance is no guarantee of future results. * Assumes purchase of common shares at market price on the first day and sale on the last day of the period and reinvestment of dividends at market price, if any. Performance does not reflect initial sales charge or brokerage commissions. ** Assumes purchase of common share at net asset value on the first day and sale on the last day of the period and reinvestment of dividends at net asset value, if any. INDEPENDENT AUDITORS' REPORT The Board of Directors or Trustees and Shareholders Voyageur Minnesota Municipal Income Fund, Inc. Voyageur Minnesota Municipal Income Fund II, Inc. Voyageur Minnesota Municipal Income Fund III, Inc. Voyageur Arizona Municipal Income Fund, Inc. Voyageur Florida Insured Municipal Income Fund Voyageur Colorado Insured Municipal Income Fund, Inc.: We have audited the accompanying statements of assets and liabilities, including the schedules of investments in securities of Voyageur Minnesota Municipal Income Fund, Inc., Voyageur Minnesota Municipal Income Fund II, Inc., Voyageur Minnesota Municipal Income Fund III, Inc., Voyageur Arizona Municipal Income Fund, Inc., Voyageur Florida Insured Municipal Income Fund and Voyageur Colorado Insured Municipal Income Fund, Inc. (the Funds) as of March 31, 1997 and the related statements of operations for the year then ended and the statements of changes in net assets for each of the years in the two-year period ended March 31, 1997 and the financial highlights for each of the periods presented. These financial statements and the financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Investment securities held in custody are confirmed to us by the custodian. As to securities purchased and sold, but not received or delivered, we request confirmations from brokers, and where replies are not received, we carry out other appropriate auditing procedures. 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 the financial highlights referred to above present fairly, in all material respects, the financial position of Voyageur Minnesota Municipal Income Fund, Inc., Voyageur Minnesota Municipal Income Fund II, Inc., Voyageur Minnesota Municipal Income Fund III, Inc., Voyageur Arizona Municipal Income Fund, Inc., Voyageur Florida Insured Municipal Income Fund and Voyageur Colorado Insured Municipal Income Fund, Inc. as of March 31, 1997 and the results of their operations, changes in their net assets and the financial highlights for the periods stated in the first paragraph above, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Minneapolis, Minnesota May 9, 1997
THE VOYAGEUR FUNDS STATEMENTS OF ASSETS AND LIABILITIES - -------------------------------------------------------------------------------------- VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC. ------------ ASSETS Investments in securities (note 2) (identified cost: $54,391,035, $155,624,292, $36,901,305, $64,389,685, $52,281,746 and $104,131,095, respectively) ....................... $ 56,387,769 Cash in bank on demand deposit ........................................ 68 Receivable for investment securities sold ............................. 2,276,076 Accrued interest receivable ........................................... 1,029,021 ------------ Total assets ...................................................... 59,692,934 ------------ LIABILITIES Payable for investment securities purchased ........................... 2,043,407 Dividends payable to preferred shareholders ........................... 51,856 Administration fee payable ............................................ 8,333 Adviser fee payable ................................................... -- Other accrued expenses ................................................ 45,147 ------------ Total liabilities ................................................. 2,148,743 ------------ NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL SHARES ............... $ 57,544,191 ============ Represented by: Preferred shares (note 5) ......................................... $ 20,000,000 Common shares: Par value ..................................................... 25,947 Additional paid-in capital .................................... 35,452,118 ------------ 55,478,065 Undistributed or (distributions in excess of) net investment income (4,007) Accumulated net realized gain (loss) from investments ............. 73,399 Unrealized net appreciation (depreciation) of investments ......... 1,996,734 ------------ TOTAL REPRESENTING NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL SHARES ........................................... $ 57,544,191 ============ TOTAL REPRESENTING NET ASSETS APPLICABLE TO OUTSTANDING COMMON SHARES ............................................ $ 37,544,191 ============ NET ASSET VALUE PER COMMON SHARE: (2,594,700, 7,252,200, 1,837,200, 2,982,200, 2,422,200 and 4,837,100 common shares issued and outstanding, respectively) ..... $ 14.47 ============
See accompanying notes to financial statements.
MARCH 31, 1997 - ------------------------------------------------------------------------------------------------------------------------ VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR FLORIDA COLORADO MINNESOTA MINNESOTA ARIZONA INSURED INSURED MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL INCOME INCOME INCOME INCOME INCOME FUND II, INC. FUND III, INC. FUND, INC. FUND FUND, INC. ------------- ------------- ------------- ------------- ------------- $ 156,462,251 $ 37,709,335 $ 65,186,314 $ 52,164,707 $ 103,652,327 3,649 961 112,803 6,756 58,908 -- -- -- -- 1,036,491 2,451,856 716,929 925,764 1,040,467 2,095,491 ------------- ------------- ------------- ------------- ------------- 158,917,756 38,427,225 66,224,881 53,211,930 106,843,217 ------------- ------------- ------------- ------------- ------------- -- -- -- -- 1,014,684 157,644 42,576 64,760 52,574 105,248 20,371 4,930 8,511 6,843 13,610 47,533 -- -- -- -- 120,159 31,819 49,153 42,566 22,963 ------------- ------------- ------------- ------------- ------------- 345,707 79,325 122,424 101,983 1,156,505 ------------- ------------- ------------- ------------- ------------- $ 158,572,049 $ 38,347,900 $ 66,102,457 $ 53,109,947 $ 105,686,712 ============= ============= ============= ============= ============= $ 60,000,000 $ 15,000,000 $ 25,000,000 $ 20,000,000 $ 40,000,000 72,522 18,372 29,822 24,222 48,371 99,637,480 25,228,358 40,809,071 33,337,167 67,189,739 ------------- ------------- ------------- ------------- ------------- 159,710,002 40,246,730 65,838,893 53,361,389 107,238,110 675,420 182,527 362,681 332,659 536,803 (2,651,332) (2,889,387) (895,746) (467,062) (1,609,433) 837,959 808,030 796,629 (117,039) (478,768) ------------- ------------- ------------- ------------- ------------- $ 158,572,049 $ 38,347,900 $ 66,102,457 $ 53,109,947 $ 105,686,712 ============= ============= ============= ============= ============= $ 98,572,049 $ 23,347,900 $ 41,102,457 $ 33,109,947 $ 65,686,712 ============= ============= ============= ============= ============= $ 13.59 $ 12.71 $ 13.78 $ 13.67 $ 13.58 ============= ============= ============= ============= =============
THE VOYAGEUR FUNDS STATEMENTS OF OPERATIONS - ---------------------------------------------------------------------------------------- VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC. ----------- Investment income: Interest ............................................................. $ 3,221,344 ----------- Expenses (note 4): Investment advisory and management fees .............................. 230,187 Administration fees .................................................. 100,000 Remarketing agent fees ............................................... 50,000 Custodian and transfer agent fees .................................... 26,394 Audit and legal fees ................................................. 21,190 Other expenses ....................................................... 40,610 ----------- Total expenses .................................................. 468,381 Less: Earnings credits on uninvested cash ........................... (407) ----------- Total net expenses .............................................. 467,974 ----------- Investment income - net .................................. 2,753,370 ----------- Realized and unrealized gain (loss) on investments: Realized gain (loss) on investments - net (note 3) ................... 101,820 Change in unrealized appreciation or depreciation of investments - net 374,814 ----------- Net gain (loss) on investments .................................. 476,634 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..... $ 3,230,004 ===========
See accompanying notes to financial statements.
YEAR ENDED MARCH 31, 1997 - ------------------------------------------------------------------------------------------------------------- VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR FLORIDA COLORADO MINNESOTA MINNESOTA ARIZONA INSURED INSURED MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL INCOME INCOME INCOME INCOME INCOME FUND II, INC. FUND III, INC. FUND, INC. FUND FUND, INC. ----------- ----------- ----------- ----------- ----------- $ 9,351,847 $ 2,286,842 $ 3,725,311 $ 3,043,563 $ 5,855,777 ----------- ----------- ----------- ----------- ----------- 633,680 152,965 265,235 213,722 424,556 237,632 57,363 99,463 80,146 159,210 150,000 37,500 62,500 50,000 100,000 49,282 13,725 26,225 18,087 35,969 38,881 17,312 22,500 18,576 33,888 70,521 31,266 40,605 38,190 62,390 ----------- ----------- ----------- ----------- ----------- 1,179,996 310,131 516,528 418,721 816,013 (1,571) (1,452) (10,929) (1,027) (18,240) ----------- ----------- ----------- ----------- ----------- 1,178,425 308,679 505,599 417,694 797,773 ----------- ----------- ----------- ----------- ----------- 8,173,422 1,978,163 3,219,712 2,625,869 5,058,004 ----------- ----------- ----------- ----------- ----------- (122,342) (485,545) (169,429) 55,988 (1,395,905) 732,771 752,657 192,773 (263,919) 1,100,880 ----------- ----------- ----------- ----------- ----------- 610,429 267,112 23,344 (207,931) (295,025) ----------- ----------- ----------- ----------- ----------- $ 8,783,851 $ 2,245,275 $ 3,243,056 $ 2,417,938 $ 4,762,979 =========== =========== =========== =========== ===========
THE VOYAGEUR FUNDS STATEMENTS OF CHANGES IN NET ASSETS - ---------------------------------------------------------------------------------------------------------------------------------- VOYAGEUR VOYAGEUR MINNESOTA MINNESOTA MUNICIPAL MUNICIPAL INCOME INCOME FUND, INC. FUND II, INC. ------------------------------ ------------------------------ YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED MARCH 31, MARCH 31, MARCH 31, MARCH 31, 1997 1996 1997 1996 ------------- ------------- ------------- ------------- OPERATIONS: Investment income - net ................................ $ 2,753,370 $ 3,061,031 $ 8,173,422 $ 8,010,373 Realized gain (loss) on investments - net .............. 101,820 131,577 (122,342) 4,015 Change in unrealized appreciation or depreciation of investments - net .................. 374,814 536,027 732,771 2,666,757 ------------- ------------- ------------- ------------- Net increase in net assets resulting from operations .................................... 3,230,004 3,728,635 8,783,851 10,681,145 ------------- ------------- ------------- ------------- DISTRIBUTIONS TO: Common shareholders from investment income - net ....... (2,413,073) (2,413,073) (5,860,687) (5,765,503) Preferred shareholders from investment income - net .... (702,068) (766,760) (2,106,108) (2,299,902) ------------- ------------- ------------- ------------- Total distributions ................................ (3,115,141) (3,179,833) (7,966,795) (8,065,405) ------------- ------------- ------------- ------------- Total increase (decrease) in net assets ............ 114,863 548,802 817,056 2,615,740 Net assets at beginning of year ........................ 57,429,328 56,880,526 157,754,993 155,139,253 ------------- ------------- ------------- ------------- Net assets at end of year (including undistributed or (distributions in excess of) net investment income of $(4,007) and $357,764, $675,298 and $468,671, $182,527 and $148,042, $362,609 and $273,140, $332,659 and $221,731, and $536,803 and $398,026, respectively) ...................................... $ 57,544,191 $ 57,429,328 $ 158,572,049 $ 157,754,993 ============= ============= ============= =============
See accompanying notes to financial statements.
- -------------------------------------------------------------------------------------------------------------------------------- VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR FLORIDA COLORADO MINNESOTA ARIZONA INSURED INSURED MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL INCOME INCOME INCOME INCOME FUND III, INC. FUND, INC. FUND FUND, INC. ----------------------------- ----------------------------- ----------------------------- ----------------------------- YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, 1997 1996 1997 1996 1997 1996 1997 1996 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- $ 1,978,163 $ 1,934,216 $ 3,219,712 $ 3,239,205 $ 2,625,869 $ 2,579,556 $ 5,058,004 $ 4,987,033 (485,545) (431,936) (169,429) 125,368 55,988 (45,483) (1,395,905) 92,188 752,657 1,031,280 192,773 1,304,899 (263,919) 1,282,076 1,100,880 1,902,659 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- 2,245,275 2,533,560 3,243,056 4,669,472 2,417,938 3,816,149 4,762,979 6,981,880 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- (1,374,458) (1,327,377) (2,275,793) (2,180,735) (1,812,111) (1,750,040) (3,509,923) (3,385,973) (569,220) (578,328) (854,450) (937,463) (702,830) (750,558) (1,409,304) (1,534,220) ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- (1,943,678) (1,905,705) (3,130,243) (3,118,198) (2,514,941) (2,500,598) (4,919,227) (4,920,193) ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- 301,597 627,855 112,813 1,551,274 (97,003) 1,315,551 (156,248) 2,061,687 38,046,303 37,418,448 65,989,644 64,438,370 53,206,950 51,891,399 105,842,960 103,781,273 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- $ 38,347,900 $ 38,046,303 $ 66,102,457 $ 65,989,644 $ 53,109,947 $ 53,206,950 $ 105,686,712 $ 105,842,960 ============= ============= ============= ============= ============= ============= ============= ============= See accompanying notes to financial statements.
THE VOYAGEUR FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- (1) ORGANIZATION Voyageur Minnesota Municipal Income Fund, Inc. ("Minnesota Municipal"); Voyageur Minnesota Municipal Income Fund II, Inc. ("Minnesota Municipal II"); Voyageur Minnesota Municipal Income Fund III, Inc. ("Minnesota Municipal III"); Voyageur Arizona Municipal Income Fund, Inc. ("Arizona Municipal"); Voyageur Florida Insured Municipal Income Fund ("Florida Insured Municipal"); and Voyageur Colorado Insured Municipal Income Fund, Inc. ("Colorado Insured Municipal") (collectively the "Funds") are registered under the Investment Company Act of 1940 ("1940 Act") (as amended) as closed-end, diversified management investment companies (except Minnesota Municipal, Minnesota Municipal III and Colorado Insured Municipal, which are non-diversified management investment companies). Shares of the Funds are listed on the American Stock Exchange. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies followed by the Funds are as follows: USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net increases (decreases) in net assets from operations during the reporting period. Actual results could differ from those estimates. INVESTMENTS IN SECURITIES The values of fixed-income securities are determined using pricing services or prices quoted by independent brokers. When market quotations are not readily available, securities are valued at fair value according to methods selected in good faith by the Board of Directors or Trustees. Short-term securities with maturities less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued at amortized cost which approximates market value. Security transactions are accounted for on the date securities are purchased or sold. Realized gains and losses are calculated on the identified cost basis. Interest income, including level-yield amortization of premium and original issue discount, is accrued daily. The Funds concentrate their investments in limited geographical areas. Therefore, there may be more credit risk related to the economic conditions of these areas than a portfolio with broader geographical diversification. SECURITIES PURCHASED ON A WHEN-ISSUED BASIS Delivery and payment for securities which have been purchased by the Funds on a forward commitment or when-issued basis can take place up to a month or more after the transaction date. During this period, such securities are subject to market fluctuations and the portfolio maintains, in a segregated account with its custodian, assets with a market value equal to or greater than the amount of its purchase commitments. FEDERAL TAXES The Funds intend to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of their taxable net investment income and net realized capital gains, if any, to shareholders in amounts that will avoid or minimize federal income or excise taxes. Net investment income and net realized gains (losses) may differ for financial statement and tax purposes primarily because of losses deferred for tax purposes due to "wash sale" transactions. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Furthermore, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the Funds. On the statements of assets and liabilities, as a result of permanent book-to-tax differences, reclassification adjustments have been made to increase undistributed net investment income and decrease additional paid-in capital by $122 for Minnesota Municipal and $72 for Arizona Municipal. DISTRIBUTIONS TO SHAREHOLDERS The Funds intend to pay monthly dividends from net investment income. Net realized capital gains, if any, will be distributed on an annual basis. These distributions are recorded as of the close of business on the ex-dividend date. Such distributions are payable in cash or, pursuant to the Funds' Dividend Reinvestment Plans, reinvested in additional common shares of the Funds. Under the Plans, shares of the Funds will be purchased in the open market. (3) INVESTMENT SECURITIES TRANSACTIONS Purchases of securities and proceeds from sales, other than investments in short-term securities, for Minnesota Municipal, Minnesota Municipal II, Minnesota Municipal III, Arizona Municipal, Florida Insured Municipal and Colorado Insured Municipal were $2,381,275 and $3,360,198, $30,803,557 and $30,596,717, $14,553,535 and $15,019,259, $20,456,602 and $20,699,433, $36,128,928 and $36,196,927, and $92,478,155 and $92,665,440, respectively, for the year ended March 31, 1997. (4) FEES AND EXPENSES The Funds have entered into the following agreements with Voyageur Fund Managers, Inc. (the "Adviser") and with Mitchell Hutchins Asset Management Inc. (Princeton Administrators, L.P. on Colorado Insured Municipal only) (the "Administrators"). The investment advisory agreements provide the Adviser with a monthly investment management fee computed at an annual rate of .40% of each Fund's average daily net assets, including assets attributable to any preferred stock that may be outstanding. For its fee, the Adviser provides investment advice and, in general, conducts the management and investments of the Funds. The administration agreements provide the Administrators with a monthly fee computed at an annual rate of .15% of each Fund's average daily net assets, including assets attributable to any preferred stock that may be outstanding. Certain Funds have minimum annual fees payable to the Administrators. Minnesota Municipal paid the minimum fee for the year ended March 31, 1997. For their fees, the Administrators provide certain administrative, clerical and recordkeeping services to the Funds. In addition to advisory and administrative fees, the Funds are responsible for paying most of the other operating expenses, including outside directors' or trustees' fees and expenses, custodian fees, registration fees, printing of shareholder reports, transfer agent fees and expenses, legal, auditing and accounting services, insurance, interest and other miscellaneous expenses. During the year ended March 31, 1997, Minnesota Municipal earned $407, Minnesota Municipal II earned $1,571, Minnesota Municipal III earned $1,452, Arizona Municipal earned $10,929, Florida Insured Municipal earned $1,027 and Colorado Insured Municipal earned $18,240 in credits on uninvested cash balances held by each Fund at the custodian. These credits were used to reduce various custodial services provided by the custodial bank. (5) CAPITAL SHARE TRANSACTIONS Pursuant to their articles of incorporation, Minnesota Municipal, Minnesota Municipal II, Minnesota Municipal III, Arizona Municipal and Colorado Insured Municipal each have 200 million shares of $0.01 par value common shares authorized. Florida Insured Municipal has been authorized to issue an unlimited amount of $0.01 par value common shares. The common shares outstanding at March 31, 1997 were 2,594,700 for Minnesota Municipal, 7,252,200 for Minnesota Municipal II, 1,837,200 for Minnesota Municipal III, 2,982,200 for Arizona Municipal, 2,422,200 for Florida Insured Municipal and 4,837,100 for Colorado Insured Municipal. For the years ended March 31, 1997 and 1996, there were no transactions in common shares for the Funds. The Funds each have one million shares of $0.01 par value preferred shares authorized, except for Florida Insured Municipal which has an unlimited amount of $0.01 par value preferred shares authorized. Under resolutions adopted by the Board of Directors or Trustees, Minnesota Municipal is allowed to issue up to 400 preferred shares, of which the entire amount was issued on August 6, 1992. On May 14, 1993, Minnesota Municipal II, Arizona Municipal and Florida Insured Municipal issued 1,200, 500 and 400 preferred shares, respectively. On December 10, 1993, Minnesota Municipal III issued 300 preferred shares and on September 23, 1993, Colorado Insured Municipal issued 800 preferred shares. The preferred shares have a liquidation preference of $50,000 per share plus an amount equal to accumulated but unpaid dividends. Dividends for the outstanding preferred shares of each Fund are cumulative at a rate established at the initial public offering and are typically reset every 28 days based on the results of an auction. Dividend rates (adjusted for capital gains distributions) ranged from 3.38% to 3.80% on Minnesota Municipal, from 3.39% to 3.85% on Minnesota Municipal II, from 3.38% to 3.80% on Minnesota Municipal III, from 3.20% to 3.80% on Arizona Municipal, from 3.35% to 3.80% on Florida Insured Municipal and from 3.29% to 4.125% on Colorado Insured Municipal during the year ended March 31, 1997. Smith Barney Inc. and Merrill Lynch Pierce, Fenner & Smith Inc. (on Colorado Insured Municipal only), as the remarketing agents, receive an annual fee from each of the Funds of .25% of the average amount of preferred stock outstanding. Under the 1940 Act, the Funds may not declare dividends or make other distributions on common shares or purchase any such shares if, at the time of the declaration, distribution or purchase, asset coverage with respect to the outstanding preferred stock is less than 200%. Each of the Fund's preferred shares are redeemable at the option of the Fund, in whole or in part, on any dividend payment date at $50,000 per share plus any accumulated but unpaid dividends whether or not declared. The preferred shares are also subject to mandatory redemption at $50,000 per share plus any accumulated but unpaid dividends, whether or not declared, if certain requirements relating to the composition of the assets and liabilities of each Fund is not satisfied. The holders of preferred shares have voting rights equal to the holders of common shares (one vote per share) and will vote together with holders of common shares as a single class. However, holders of preferred shares are also entitled to elect two of each Fund's directors or trustees. In addition, the 1940 Act requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding preferred shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the preferred shares, and (b) take any action requiring a vote of security holders pursuant to Section 13(a) of the 1940 Act, including, among other things, changes in each of the Fund's subclassification as a closed-end investment company or changes in their fundamental investment restrictions. (6) CAPITAL LOSS CARRYFORWARDS For federal income tax purposes, Minnesota Municipal II, Minnesota Municipal III, Arizona Municipal, Florida Insured Municipal and Colorado Insured Municipal had capital loss carryforwards of $2,612,098, $2,889,387, $895,746, $467,062 and $1,609,433, respectively, at March 31, 1997, that will expire in years 2002 through 2005 if not offset by subsequent realized capital gains. It is unlikely the Board of Directors or Trustees will authorize a distribution of any net realized capital gains until the available capital loss carryforwards have been offset or expire. (7) FUND REORGANIZATION On January 15, 1997 Voyageur's parent, Dougherty Financial Group. Inc. ("DFG"), executed an agreement and plan of merger with Lincoln National Corporation ("LNC") pursuant to which LNC would acquire DFG, including the mutual fund investment advisory business of DFG conducted by Voyageur. The "assignment" of advisory agreement relating to the merger has been approved by the Funds' Board of Directors and Trustees and shareholders. LNC acquired DFG on April 30, 1997. (8) FINANCIAL HIGHLIGHTS Per share data (rounded to the nearest cent) for a share of common stock outstanding and selected information for each period are as follows:
MINNESOTA MUNICIPAL -------------------------------------------------------------- PERIOD FROM YEAR YEAR YEAR YEAR MAY 1, ENDED ENDED ENDED ENDED 1992* TO MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, 1997 1996 1995 1994 1993** -------- -------- -------- -------- -------- Net asset value: Beginning of period .................................... $ 14.43 $ 14.21 $ 13.89 $ 14.67 $ 13.95 -------- -------- -------- -------- -------- Operations: Investment income - net ................................ 1.06 1.18 1.21 1.20 0.90 Realized and unrealized gain (loss) on investments - net 0.18 0.26 0.34 (0.68) 1.00 -------- -------- -------- -------- -------- Total from operations .............................. 1.24 1.44 1.55 0.52 1.90 -------- -------- -------- -------- -------- Distributions to: Common shareholders from investment income - net ....... (0.93) (0.93) (0.93) (0.93) (0.70) Preferred shareholders from investment income - net .... (0.27) (0.29) (0.27) (0.18) (0.12) Common shareholders from realized capital gains - net .. -- -- (0.02) (0.16) (0.06) Preferred shareholders from realized capital gains - net -- -- (0.01) (0.03) (0.02) -------- -------- -------- -------- -------- Total distributions ................................ (1.20) (1.22) (1.23) (1.30) (0.90) -------- -------- -------- -------- -------- Capital share transactions: Capital charge with respect to issuance of shares ...... -- -- -- -- (0.28) -------- -------- -------- -------- -------- Net asset value: End of period .......................................... $ 14.47 $ 14.43 $ 14.21 $ 13.89 $ 14.67 ======== ======== ======== ======== ======== Market value: End of period .......................................... $ 14.38 $ 15.00 $ 14.50 $ 15.63 $ 16.00 ======== ======== ======== ======== ======== Total investment return: Market value (a) ....................................... 2.01% 10.31% (0.71)% 4.28% 20.31% Net asset value (b) .................................... 6.90% 8.20% 9.72 % 1.63% 10.91% Net assets applicable to outstanding capital shares at end of period (000's omitted) ....................... $ 57,544 $ 57,429 $ 56,881 $ 56,034 $ 58,075 Ratios/Supplemental Data: Ratio of expenses to average net assets (c) (f) ........ 0.81% 0.82% 0.85% 0.78% 0.88%(d) Ratio of expenses to average net assets applicable to common shares (f) .................... 1.24% 1.24% 1.33% 1.17% 1.21%(d) Ratio of investment income - net to average net assets (c) ............................. 4.78% 5.28% 5.66% 5.22% 4.92%(d) Ratio of investment income-net to average net assets applicable to common shares (g) ............. 5.45% 6.04% 6.93% 6.68% 6.62%(d) Portfolio turnover rate (excluding short-term securities) ............................. 5% 7% 13% 11% 43% Value of preferred shares outstanding (000's omitted) .. $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 Net asset coverage per share of preferred shares, end of period .............................. $143,860 $143,573 $142,201 $140,086 $145,188 Liquidation value per share of preferred shares (e) .... $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 * Commencement of investment operations ** Initial period
See accompanying notes to financial highlights. (8) FINANCIAL HIGHLIGHTS (CONTINUED)
MINNESOTA MUNICIPAL II -------------------------------------------------------------- PERIOD FROM YEAR YEAR YEAR YEAR FEBRUARY 26, ENDED ENDED ENDED ENDED 1993* TO MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, 1997 1996 1995 1994 1993** -------- -------- -------- -------- -------- Net asset value: Beginning of period .................................... $ 13.48 $ 13.12 $ 12.73 $ 13.84 $ 13.95 -------- -------- -------- -------- -------- Operations: Investment income - net ................................ 1.13 1.10 1.11 0.98 0.03 Realized and unrealized gain (loss) on investments - net 0.08 0.38 0.39 (0.96) (0.11) -------- -------- -------- -------- -------- Total from operations .............................. 1.21 1.48 1.50 0.02 (0.08) -------- -------- -------- -------- -------- Distributions to: Common shareholders from investment income - net ....... (0.81) (0.80) (0.83) (0.76) -- Preferred shareholders from investment income - net .... (0.29) (0.32) (0.28) (0.18) -- Common shareholders from realized capital gains - net .. -- -- -- (0.02) -- Preferred shareholders from realized capital gains - net -- -- -- (0.00) -- -------- -------- -------- -------- -------- Total distributions ................................ (1.10) (1.12) (1.11) (0.96) -- -------- -------- -------- -------- -------- Capital share transactions: Capital charge with respect to issuance of shares ....... -- -- -- (0.17) (0.03) -------- -------- -------- -------- -------- Net asset value: End of period .......................................... $ 13.59 $ 13.48 $ 13.12 $ 12.73 $ 13.84 ======== ======== ======== ======== ======== Market value: End of period .......................................... $ 12.63 $ 13.25 $ 12.38 $ 14.63 $ 15.13 ======== ======== ======== ======== ======== Total investment return: Market value (a) ....................................... 1.47% 14.16% (9.59)% 1.71% 8.42% Net asset value (b) .................................... 6.97% 8.88% 10.16% (2.93)% (0.79)% Net assets applicable to outstanding capital shares at end of period (000's omitted) ....................... $158,572 $157,755 $155,139 $152,326 $100,392 Ratios/Supplemental Data: Ratio of expenses to average net assets (c) (f) ........ 0.74% 0.77% 0.77% 0.76% 0.83%(d) Ratio of expenses to average net assets applicable to common shares (f) .................... 1.19% 1.23% 1.28% 1.15% 0.83%(d) Ratio of investment income - net to average net assets (c) ............................. 5.15% 5.03% 5.39% 4.54% 2.29%(d) Ratio of investment income-net to average net assets applicable to common shares (g) ............. 6.15% 5.76% 6.69% 5.58% 2.29%(d) Portfolio turnover rate (excluding short-term securities) ............................. 20% 11% 32% 27% 11% Value of preferred shares outstanding (000's omitted) .. $ 60,000 $ 60,000 $ 60,000 $ 60,000 -- Net asset coverage per share of preferred shares, end of period .............................. $132,143 $131,462 $129,283 $126,938 -- Liquidation value per share of preferred shares (e) .... $ 50,000 $ 50,000 $ 50,000 $ 50,000 --
* Commencement of investment operations ** Initial period See accompanying notes to financial highlights. (8) FINANCIAL HIGHLIGHTS (CONTINUED)
MINNESOTA MUNICIPAL III ------------------------------------------------------------ PERIOD FROM YEAR YEAR YEAR OCTOBER 29, ENDED ENDED ENDED 1993* TO MARCH 31, MARCH 31, MARCH 31, MARCH 31, 1997 1996 1995 1994** ----------- ----------- ----------- ----------- Net asset value: Beginning of period ........................................ $ 12.54 $ 12.20 $ 11.86 $ 14.03 ----------- ----------- ----------- ----------- Operations: Investment income - net .................................... 1.08 1.05 1.06 0.32 Realized and unrealized gain (loss) on investments - net ... 0.15 0.33 0.28 (1.88) ----------- ----------- ----------- ----------- Total from operations .................................. 1.23 1.38 1.34 (1.56) ----------- ----------- ----------- ----------- Distributions to: Common shareholders from investment income - net ........... (0.75) (0.72) (0.73) (0.25) Preferred shareholders from investment income - net ........ (0.31) (0.32) (0.28) (0.06) ----------- ----------- ----------- ----------- Total distributions .................................... (1.06) (1.04) (1.01) (0.31) ----------- ----------- ----------- ----------- Capital share transactions: Capital charge/adjustment with respect to issuance of shares -- -- 0.01 (0.30) ----------- ----------- ----------- ----------- Net asset value: End of period .............................................. $ 12.71 $ 12.54 $ 12.20 $ 11.86 =========== =========== =========== =========== Market value: End of period .............................................. $ 12.25 $ 12.00 $ 11.25 $ 14.00 =========== =========== =========== =========== Total investment return: Market value (a) ........................................... 8.62% 13.51% (14.27)% 1.53% Net asset value (b) ........................................ 7.50% 8.79% 9.55% (13.85)% Net assets applicable to outstanding capital shares at end of period (000's omitted) ........................... $ 38,348 $ 38,046 $ 37,418 $ 36,785 Ratios/Supplemental Data: Ratio of expenses to average net assets (c) (f) ............ 0.81% 0.81% 0.82% 0.90%(d) Ratio of expenses to average net assets applicable to common shares (f) ........................ 1.33% 1.33% 1.40% 1.30%(d) Ratio of investment income - net to average net assets (c) ................................. 5.17% 5.05% 5.37% 3.95%(d) Ratio of investment income-net to average net assets applicable to common shares (g) ................. 6.05% 5.81% 6.79% 4.62%(d) Portfolio turnover rate (excluding short-term securities) ................................. 39% 35% 47% 21% Value of preferred shares outstanding (000's omitted) ...... $ 15,000 $ 15,000 $ 15,000 $ 15,000 Net asset coverage per share of preferred shares, end of period .................................. $ 127,826 $ 126,821 $ 124,728 $ 122,616 Liquidation value per share of preferred shares (e) ........ $ 50,000 $ 50,000 $ 50,000 $ 50,000
* Commencement of investment operations ** Initial period See accompanying notes to financial highlights. (8) FINANCIAL HIGHLIGHTS (CONTINUED)
ARIZONA MUNICIPAL ------------------------------------------------------------- PERIOD FROM YEAR YEAR YEAR YEAR FEBRUARY 26, ENDED ENDED ENDED ENDED 1993* TO MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, 1997 1996 1995 1994 1993** -------- -------- -------- -------- -------- Net asset value: Beginning of period .................................... $ 13.74 $ 13.22 $ 12.70 $ 13.77 $ 13.95 -------- -------- -------- -------- -------- Operations: Investment income - net ................................ 1.08 1.09 1.08 0.95 0.01 Realized and unrealized gain (loss) on investments - net 0.01 0.47 0.56 (0.79) (0.13) -------- -------- -------- -------- -------- Total from operations .............................. 1.09 1.56 1.64 0.16 (0.12) -------- -------- -------- -------- -------- Distributions to: Common shareholders from investment income - net ....... (0.76) (0.73) (0.78) (0.75) -- Preferred shareholders from investment income - net .... (0.29) (0.31) (0.28) (0.18) -- Common shareholders from realized capital gains - net .. -- -- (0.05) (0.09) -- Preferred shareholders from realized capital gains - net -- -- (0.01) (0.02) -- -------- -------- -------- -------- -------- Total distributions ................................ (1.05) (1.04) (1.12) (1.04) -- -------- -------- -------- -------- -------- Capital share transactions: Capital charge with respect to issuance of shares ...... -- -- -- (0.19) (0.06) -------- -------- -------- -------- -------- Net asset value: End of period .......................................... $ 13.78 $ 13.74 $ 13.22 $ 12.70 $ 13.77 ======== ======== ======== ======== ======== Market value: End of period .......................................... $ 13.00 $ 12.75 $ 12.13 $ 13.88 $ 15.13 ======== ======== ======== ======== ======== Total investment return: Market value (a) ....................................... 8.20% 11.52% (6.43)% (2.91)% 8.42% Net asset value (b) .................................... 5.94% 9.55% 11.29% (2.20)% (1.29)% Net assets applicable to outstanding capital shares at end of period (000's omitted) ....................... $ 66,102 $ 65,990 $ 64,438 $ 62,881 $ 41,063 Ratios/Supplemental Data: Ratio of expenses to average net assets (c) (f) ........ 0.78% 0.78% 0.79% 0.82% 0.90%(d) Ratio of expenses to average net assets applicable to common shares (f) .................... 1.25% 1.26% 1.32% 1.24% 0.90%(d) Ratio of investment income - net to average net assets (c) ............................. 4.85% 4.88% 5.19% 4.41% 1.29%(d) Ratio of investment income-net to average net assets applicable to common shares (g) ............. 5.71% 5.57% 6.42% 5.45% 1.29%(d) Portfolio turnover rate (excluding short-term securities) ............................. 31% 30% 18% 15% 0% Value of preferred shares outstanding (000's omitted) .. $ 25,000 $ 25,000 $ 25,000 $ 25,000 -- Net asset coverage per share of preferred shares, end of period .............................. $132,205 $131,979 $128,877 $125,762 -- Liquidation value per share of preferred shares (e) .... $ 50,000 $ 50,000 $ 50,000 $ 50,000 --
* Commencement of investment operations ** Initial period See accompanying notes to financial highlights. (8) FINANCIAL HIGHLIGHTS (CONTINUED)
FLORIDA INSURED MUNICIPAL -------------------------------------------------------------- PERIOD FROM YEAR YEAR YEAR YEAR FEBRUARY 26, ENDED ENDED ENDED ENDED 1993* TO MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, 1997 1996 1995 1994 1993** -------- -------- -------- -------- -------- Net asset value: Beginning of period .................................... $ 13.71 $ 13.17 $ 12.46 $ 13.73 $ 14.05 -------- -------- -------- -------- -------- Operations: Investment income - net ................................ 1.08 1.06 1.07 0.96 0.01 Realized and unrealized gain (loss) on investments - net (.08) 0.51 0.69 (1.10) (0.25) -------- -------- -------- -------- -------- Total from operations .............................. 1.00 1.57 1.76 (0.14) (0.24) -------- -------- -------- -------- -------- Distributions to: Common shareholders from investment income - net ....... (0.75) (0.72) (0.77) (0.74) -- Preferred shareholders from investment income - net .... (0.29) (0.31) (0.28) (0.19) -- -------- -------- -------- -------- -------- Total distributions ................................ (1.04) (1.03) (1.05) (0.93) -- -------- -------- -------- -------- -------- Capital share transactions: Capital charge with respect to issuance of shares ...... -- -- -- (0.20) (0.08) -------- -------- -------- -------- -------- Net asset value: End of period .......................................... $ 13.67 $ 13.71 $ 13.17 $ 12.46 $ 13.73 ======== ======== ======== ======== ======== Market value: End of period .......................................... $ 12.50 $ 12.75 $ 12.25 $ 12.50 $ 15.13 ======== ======== ======== ======== ======== Total investment return: Market value (a) ....................................... 3.94% 10.39% 4.69% (13.04)% 7.65% Net asset value (b) .................................... 5.23% 9.66% 12.56% (4.40)% (2.28)% Net assets applicable to outstanding capital shares at end of period (000's omitted) ....................... $ 53,110 $ 53,207 $ 51,891 $ 50,189 $ 33,247 Ratios/Supplemental Data: Ratio of expenses to average net assets (c) (f) ........ 0.78% 0.80% 0.81% 0.85% 0.90%(d) Ratio of expenses to average net assets applicable to common shares (f) .................... 1.25% 1.27% 1.35% 1.28% 0.90%(d) Ratio of investment income - net to average net assets (c) ............................. 4.91% 4.82% 5.21% 4.49% 1.24%(d) Ratio of investment income-net to average net assets applicable to common shares (g) ............. 5.74% 5.45% 6.37% 5.46% 1.24%(d) Portfolio turnover rate (excluding short-term securities) ............................. 68% 22% 10% 20% 0% Value of preferred shares outstanding (000's omitted) .. $ 20,000 $ 20,000 $ 20,000 $ 20,000 -- Net asset coverage per share of preferred shares, end of period .............................. $132,775 $133,017 $129,728 $125,473 -- Liquidation value per share of preferred shares (e) .... $ 50,000 $ 50,000 $ 50,000 $ 50,000 --
* Commencement of investment operations ** Initial period See accompanying notes to financial highlights. (8) FINANCIAL HIGHLIGHTS (CONTINUED)
COLORADO INSURED MUNICIPAL ----------------------------------------------------------- PERIOD FROM YEAR YEAR YEAR JULY 29, ENDED ENDED ENDED 1993* TO MARCH 31, MARCH 31, MARCH 31, MARCH 31, 1997 1996 1995 1994** ----------- ----------- ----------- ----------- Net asset value: Beginning of period .................................... $ 13.61 $ 13.19 $ 12.80 $ 14.10 ----------- ----------- ----------- ----------- Operations: Investment income - net ................................ 1.05 1.03 1.02 0.59 Realized and unrealized gain (loss) on investments - net (0.06) 0.41 0.44 (1.19) ----------- ----------- ----------- ----------- Total from operations .................................. 0.99 1.44 1.46 (0.60) ----------- ----------- ----------- ----------- Distributions to: Common shareholders from investment income - net ....... (0.73) (0.70) (0.76) (0.39) Preferred shareholders from investment income - net .... (0.29) (0.32) (0.27) (0.11) Common shareholders from realized capital gains - net .. -- -- (0.03) -- Preferred shareholders from realized capital gains - net -- -- (0.01) -- ----------- ----------- ----------- ----------- Total distributions .................................... (1.02) (1.02) (1.07) (0.50) ----------- ----------- ----------- ----------- Capital share transactions: Capital charge with respect to issuance of shares ........... -- -- -- (0.20) ----------- ----------- ----------- ----------- Net asset value: End of period .......................................... $ 13.58 $ 13.61 $ 13.19 $ 12.80 =========== =========== =========== =========== Market value: End of period .......................................... $ 12.50 $ 12.63 $ 12.25 $ 14.50 =========== =========== =========== =========== Total investment return: Market value (a) ....................................... 4.77% 8.99% (10.05)% 5.52% Net asset value (b) .................................... 5.19% 8.55% 9.67% (6.66)% Net assets applicable to outstanding capital shares at end of period (000's omitted) ....................... $ 105,687 $ 105,843 $ 103,781 $ 101,923 Ratios/Supplemental Data: Ratio of expenses to average net assets (c) (f) ........ 0.77% 0.75% 0.76% 0.78%(d) Ratio of expenses to average net assets applicable to common shares (f) .................... 1.23% 1.21% 1.27% 1.13%(d) Ratio of investment income - net to average net assets (c) ............................. 4.76% 4.68% 4.88% 4.26%(d) Ratio of investment income-net to average net assets applicable to common shares (g) ............. 5.51% 5.18% 5.88% 5.02%(d) Portfolio turnover rate (excluding short-term securities) ............................. 88% 39% 7% 3% Value of preferred shares outstanding (000's omitted) .. $ 40,000 $ 40,000 $ 40,000 $ 40,000 Net asset coverage per share of preferred shares, end of period .............................. $ 132,109 $ 132,304 $ 129,727 $ 127,404 Liquidation value per share of preferred shares (e) .... $ 50,000 $ 50,000 $ 50,000 $ 50,000
* Commencement of investment operations ** Initial period See accompanying notes to financial highlights. (8) FINANCIAL HIGHLIGHTS (CONTINUED) Notes to Financial Highlights (a) Total investment return is calculated assuming a purchase of common shares at the current market value on the first day and a sale at the current market value on the last day of each period reported. Underwriting discounts and commissions are not reflected in the total investment return for the initial period of each Fund. If underwriting discounts and commissions had been reflected, total investment returns for the initial period would have been 11.89%, 0.83%, (5.07)%, 0.83%, 0.83% and (0.81)% for Minnesota Municipal, Minnesota Municipal II, Minnesota Municipal III, Arizona Municipal, Florida Insured Municipal and Colorado Insured Municipal, respectively. Distributions, if any, are assumed for purposes of this calculation, to be reinvested at prices obtained under the Funds' dividend reinvestment plans. Total investment returns for periods of less than one year are not annualized. (b) Total investment return is calculated assuming a purchase of common shares at the current net asset value on the first day and a sale at the current net asset value on the last day of each period reported. Distributions, if any, are assumed for purposes of this calculation, to be reinvested at net asset value as of dividend payable date. Total investment returns for periods of less than one year are not annualized. These percentages are not an indication of the performance of a shareholder's investment in the Fund based on market value due to differences between the market price of the stock and the net asset value of the Fund. (c) Ratios calculated on the basis of expenses and net investment income applicable to both the common and preferred shares relative to the average net assets of common and preferred shareholders. (d) Annualized. (e) Excluding any accumulated but unpaid dividends. (f) Beginning in the year ended March 31, 1996, the expense ratio reflects the effect of gross expenses attributable to earnings credits on uninvested cash balances received by the Funds. Prior period expense ratios have not been adjusted. (g) Ratio reflects total net investment income less dividends paid to preferred shareholders from net investment income dividend by average net assets applicable to common stock.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC. INVESTMENTS IN SECURITIES MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- (PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.) MUNICIPAL BONDS (97.3%): EDUCATION REVENUE (9.2%): ----------------------------------------------------------------------------------------------------------------------- $1,000 Minnesota Higher Education Facilities Authority Revenue, Series 3-C, St. Thomas University ............................................................. 6.25% 09-01-16 $ 1,023,500 1,000 Minnesota Higher Education Facilities Authority Revenue, Series 3-J, Macalester College................................................................. 6.40 03-01-22 1,050,540 250 Minnesota State University Board Revenue, State University System, Series A............ 6.05 06-30-18 253,895 1,075 Northfield, St. Olaf College Revenue................................................... 6.30 10-01-12 1,122,042 1,750 Northfield, St. Olaf College Revenue................................................... 6.40 10-01-21 1,831,515 ----------- 5,281,492 ----------- GENERAL OBLIGATION (16.0%): ----------------------------------------------------------------------------------------------------------------------- 1,000 Carver County, Series 1992-A........................................................... 5.88 02-01-14 1,005,950 305 Edina Recreational Facilities Bonds, Series 1992-A..................................... 6.00 01-01-09 313,577 320 Edina Recreational Facilities Bonds, Series 1992-A..................................... 6.00 01-01-10 327,651 1,600 Minneapolis............................................................................ 6.00 03-01-16 1,627,216 1,500 Minneapolis-St. Paul, Metro Airport Commission, AMT.................................... 6.60(f) 01-01-11 1,596,960 2,000 Puerto Rico Commonwealth............................................................... 6.00(e) 07-01-26 2,008,400 1,000 Rosemount Independent School District #196............................................. 5.70 04-01-12 1,005,030 1,250 St. Francis Independent School District #15 (FSA Insured).............................. 6.30 02-01-11 1,329,000 ----------- 9,213,784 ----------- HEALTH CARE REVENUE (14.9%): ----------------------------------------------------------------------------------------------------------------------- 1,000 Bloomington Health Care Facilities, Masonic Home Care Center (AMBAC Insured) 5.88 07-01-22 1,001,350 1,270 Duluth Economic Development Authority, Health Care Facilities Revenue, Series 1992, Duluth Clinic (AMBAC Insured)...................................................... 6.30 11-01-22 1,307,656 1,000 Duluth Economic Development Authority, Health Care Facilities Revenue, Series 1993-C, St. Mary's Hospital (Connie Lee Insured)........................................... 6.00 02-15-20 990,100 1,000 Duluth Economic Development Authority, Hospital Facilities Revenue, Series 1992-B, St. Luke's Hospital (Connie Lee Insured)........................................... 6.40 05-01-18 1,031,460 2,210 Minneapolis Hospital System Revenue, Fairview Hospital, Series 1991-A (MBIA Insured)..................................................................... 6.50 01-01-11 2,342,821 1,500 Minneapolis Hospital System Revenue, Fairview Hospital, Series 1993-A (MBIA Insured)..................................................................... 5.25 11-15-19 1,356,465 500 Minneapolis-St. Paul HRA, Health One (MBIA Insured).................................... 6.75 08-15-14 534,790 ----------- 8,564,642 ----------- HOUSING REVENUE (23.5%): ----------------------------------------------------------------------------------------------------------------------- 1,800 Brooklyn Center, Multi-Family Housing Revenue, Four Courts, AMT........................ 7.50(f) 06-01-25 1,802,340 1,430 Minnesota HFA, Single Family Mortgage Revenue, Series 1991-A, AMT (FHA Insured)........ 7.45(f) 07-01-22 1,498,282
See accompanying notes to investments in securities.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC. INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- $ 560 Minnesota HFA, Single Family Mortgage Revenue, Series 1992-G........................... 6.50% 07-01-06 $ 574,549 2,725 Minnetonka Senior Housing Project (Guaranteed by Presbyterian Homes of Minnesota)...... 7.70 06-01-25 2,805,660 1,400 New Brighton, Multi-Family Mortgage Revenue, Polynesian Village Apartments, Series 1995-A, AMT................................................................. 7.60(f) 04-01-25 1,412,656 2,265 St. Anthony Multi-Family Housing Development (Asset Guaranty Insured).................. 6.88 07-01-22 2,366,336 2,950 St. Paul HRA, Multi-Family Housing Revenue, Pointe of St. Paul Project, Series 1992 (FNMA Backed) ......................................................... 6.60 10-01-12 3,062,867 ----------- 13,522,690 ----------- INDUSTRIAL REVENUE (6.2%): ----------------------------------------------------------------------------------------------------------------------- 2,575 Bass Brook PCR, Minnesota Power and Light.............................................. 6.00 07-01-22 2,553,550 1,000 Metropolitan Council Sports Facilities Commission, Hubert H. Humphrey Metrodome........ 6.00 10-01-09 1,021,770 ----------- 3,575,320 ----------- POLLUTION CONTROL REVENUE (2.8%): ----------------------------------------------------------------------------------------------------------------------- 1,500 Minnesota Public Facilities Authority, Water Pollution Control Revenue Bonds, Series 1992........................................................................ 6.50 03-01-14 1,608,900 ----------- PRE-REFUNDED/ESCROWED (9.8%): ----------------------------------------------------------------------------------------------------------------------- 2,555 Dakota & Washington Counties HRA, Single Family Mortgage Revenue, Bloomington, AMT (GNMA Backed)..................................................... 8.38(f) 09-01-21 3,355,354 730 Duluth Economic Development Authority, Health Care Facilities Revenue, Series 1992, Duluth Clinic (AMBAC Insured)..................................................... 6.30 11-01-04 791,641 1,000 St. Cloud Hospital Revenue (AMBAC Insured)............................................. 6.75 07-01-01 1,092,440 390 Southern Minnesota Municipal Power Agency (AMBAC Insured).............................. 5.50 01-01-15 386,825 ----------- 5,626,260 ----------- TRANSPORTATION REVENUE (1.1%): ----------------------------------------------------------------------------------------------------------------------- 700 Puerto Rico Commonwealth, Highway & Transportation Authority........................... 5.50 07-01-26 651,945 ----------- UTILITY REVENUE (13.8%): ----------------------------------------------------------------------------------------------------------------------- 1,000 Anoka County Solid Waste Disposal, National Rural Co-Op Utility, AMT................... 6.95(f) 12-01-08 1,070,400 1,500 Northern Minnesota Municipal Power Agency, Electric System, Series A................... 5.00 01-01-21 1,311,255 1,250 Northern Minnesota Municipal Power Agency, Electric System, Series B (AMBAC Insured).................................................................... 5.50 01-01-18 1,197,700 1,000 Southern Minnesota Municipal Power Agency (FGIC Insured)............................... 5.75 01-01-11 1,029,650 610 Southern Minnesota Municipal Power Agency (AMBAC Insured).............................. 5.50 01-01-15 588,516 580 Southern Minnesota Municipal Power Agency (FGIC Insured)............................... 5.00 01-01-16 526,101 2,275 Western Minnesota Municipal Power Agency (MBIA Insured)................................ 5.50 01-01-15 2,207,114 ----------- 7,930,736 ----------- TOTAL MUNICIPAL BONDS (cost: $53,979,035) 55,975,769 ----------- SHORT-TERM SECURITIES (0.7%): ----------------------------------------------------------------------------------------------------------------------- 412 Federated Minnesota Municipal Cash Trust............................................... 3.27(c) 412,000 ----------- TOTAL SHORT-TERM SECURITIES (cost: $412,000) 412,000 ----------- TOTAL INVESTMENTS IN SECURITIES (cost: $54,391,035)(d) $56,387,769 ===========
See accompanying notes to investments in securities.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC. INVESTMENTS IN SECURITIES MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- (PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.) MUNICIPAL BONDS (98.7%): EDUCATION REVENUE (9.5%): ----------------------------------------------------------------------------------------------------------------------- $1,250 Minnesota Higher Education Facilities Authority Revenue, Macalester College............ 5.55% 03-01-16 $ 1,221,337 1,000 Minnesota Higher Education Facilities Authority Revenue, Series 4A-1, St. Thomas University.............................................................. 5.63 10-01-21 963,350 1,050 Minnesota Higher Education Facilities Authority Revenue, Series R1, St. Thomas University.............................................................. 5.60 10-01-15 1,028,696 275 Minnesota Higher Education Facilities Authority Revenue, Series R2, St. Thomas University.............................................................. 5.60 09-01-14 270,782 1,150 Minnesota State University Board Revenue, Series 1993-A, State University System....... 6.10 06-30-23 1,163,743 4,115 Minnesota State University Board Revenue, Series 1993-C, State University System (MBIA Insured)..................................................................... 5.60 06-30-16 3,955,379 3,720 Minnesota State University Board Revenue, Series 1993-C, State University System (MBIA Insured)..................................................................... 5.60 06-30-19 3,564,578 3,000 University of Minnesota, Series A...................................................... 5.50 07-01-21 2,887,080 ----------- 15,054,945 ----------- GENERAL OBLIGATION (15.2%): ----------------------------------------------------------------------------------------------------------------------- 3,700 Becker, AMT (MBIA Insured)............................................................. 6.25(f) 08-01-15 3,817,993 4,030 Buffalo Independent School District (FSA Insured)...................................... 6.15 02-01-22 4,098,591 550 Esko Independent School District (FSA Insured)......................................... 5.65 04-01-12 554,867 1,000 Hawley Independent School District (FSA Insured)....................................... 5.75 02-01-17 1,002,660 3,225 Melrose Independent School District #740, Series A (FSA Insured)....................... 5.63 02-01-13 3,219,711 3,000 Minneapolis Convention Center Facilities............................................... 5.40 04-01-12 2,951,580 1,000 Minnesota State........................................................................ 5.38 08-01-11 990,080 2,925 Red Wing Independent School District #256, Series 1993-A............................... 5.70 02-01-12 2,942,316 1,625 Red Wing Independent School District #256, Series 1993-A............................... 5.70 02-01-13 1,630,606 1,270 Rosemount Independent School District #196............................................. 5.70 04-01-12 1,276,388 1,705 Stewartville Independent School District #534.......................................... 5.75 02-01-17 1,681,045 ----------- 24,165,837 ----------- HEALTH CARE REVENUE (16.1%): ----------------------------------------------------------------------------------------------------------------------- 4,000 Bloomington Health Care Facilities, Masonic Home Care Center (AMBAC Insured)........... 5.88 07-01-22 4,005,400 1,195 Brainerd Lutheran Hospital, Health Care Facilities, Series A (FSA Insured)............. 6.65 03-01-17 1,272,269 1,250 Detroit Lakes Benedictine Health Systems, St. Mary's Hospital (Connie Lee Insured)..... 6.00 02-15-19 1,249,900 720 Duluth Economic Development Authority, Health Care Facilities Revenue, Duluth Clinic (AMBAC Insured)...................................................... 6.20 11-01-12 747,706
See accompanying notes to investments in securities.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC. INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- $3,890 Duluth Economic Development Authority, Health Care Facilities Revenue, Series 1992, Duluth Clinic (AMBAC Insured) ..................................................... 6.30% 11-01-22 $ 4,005,338 6,000 Duluth Economic Development Authority, Health Care Facilities Revenue, Series 1993-C, St. Mary's Hospital (Connie Lee Insured)........................................... 6.00 02-15-20 5,940,600 1,000 Minneapolis Health Care Facilities, Series 1993-A, Fairview Hospital (MBIA Insured).... 5.25 11-15-19 904,310 2,105 Minneapolis HRA, Health One (MBIA Insured)............................................. 7.40 08-15-11 2,298,892 1,500 Minneapolis-St. Paul HRA, Childrens Health Care (FSA Insured )......................... 5.50 08-15-25 1,404,045 4,000 Robbinsdale, North Memorial Medical Center, Series 1993-B (AMBAC Insured).............. 5.50 05-15-23 3,727,560 ----------- 25,556,020 ----------- HOUSING REVENUE (21.4%): ----------------------------------------------------------------------------------------------------------------------- 1,105 Chanhassen Multi-Family Housing, Heritage Park Project, AMT (FHA Insured).............. 6.20(f) 07-01-30 1,107,608 1,880 Dakota County HRA, Multi-Family Mortgage Revenue, Imperial Ridge Project, Series 1993-A (GNMA Backed)........................................................ 6.10 12-15-28 1,891,844 1,115 Minnesota HFA, Multi-Family Rental Housing, Series-D................................... 5.90 02-01-14 1,115,624 2,295 Minnesota HFA, Multi-Family Rental Housing, Series-D................................... 6.00 08-01-22 2,282,951 1,550 Minnesota HFA, Single Family Housing, Series 1994-F.................................... 6.30 07-01-25 1,588,533 1,715 Minnesota HFA, Single Family Mortgage Revenue, AMT..................................... 7.05(f) 07-01-22 1,774,339 4,070 Minnesota HFA, Single Family Mortgage Revenue, Series 1992-B2, AMT..................... 6.15(f) 01-01-26 4,064,058 4,110 Minnesota HFA, Single Family Mortgage Revenue, Series 1992-C2, AMT..................... 6.15(f) 07-01-23 4,104,205 3,795 Minnesota HFA, Single Family Mortgage Revenue, Series 1994-J, AMT...................... 6.95(f) 07-01-26 3,953,327 1,225 Minnetonka Senior Housing Project (Guaranteed by Presbyterian Homes of Minnesota)...... 7.25 06-01-09 1,267,887 760 Minnetonka Senior Housing Project (Guaranteed by Presbyterian Homes of Minnesota)...... 7.50 06-01-14 784,768 2,365 Minnetonka Senior Housing Project (Guaranteed by Presbyterian Homes of Minnesota)...... 7.55 06-01-19 2,478,449 3,820 New Brighton, Multi-Family Mortgage Revenue, Polynesian Village Apartments, Series 1995-A, AMT................................................................. 7.60(f) 04-01-25 3,854,533 2,000 St. Paul HRA, Single Family Mortgage Revenue (FNMA Backed)............................. 6.40 03-01-21 2,056,000 1,540 Stillwater Minnesota, Multi-Family Mortgage Revenue, AMT............................... 7.25(f) 11-01-27 1,537 983 ----------- 33,862,109 ----------- INDUSTRIAL REVENUE (6.1%): ----------------------------------------------------------------------------------------------------------------------- 7,660 Bass Brook PCR, Minnesota Power and Light.............................................. 6.00 07-01-22 7,596,192 2,000 Metropolitan Council Sports Facilities Commission, Hubert H. Humphrey Metrodome........ 6.00 10-01-09 2,043,540 ----------- 9,639,732 ----------- POLLUTION CONTROL REVENUE (6.0%): ----------------------------------------------------------------------------------------------------------------------- 5,000 Cloquet-Minnesota Pollution Control Revenue, Potlach Corporation Project............... 5.90 10-01-26 4,983,350 1,000 Minnesota Public Facilities Authority, Water Pollution Control Revenue Bonds........... 6.25 03-01-16 1,039,760 3,300 Minnesota Public Facilities Authority, Water Pollution Control Revenue Bonds, Series 1992....................................................................... 6.50 03-01-14 3,539,580 ----------- 9,562,690 -----------
See accompanying notes to investments in securities.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC. INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- PRE-REFUNDED/ESCROWED (12.9%): ----------------------------------------------------------------------------------------------------------------------- $5,500 Dakota & Washington Counties HRA, Single Family Mortgage Revenue, Bloomington, AMT (GNMA Backed)..................................................... 8.38%(f)09-01-21 $ 7,222,875 280 Duluth Economic Development Authority, Hospital Facilities Revenue, Duluth Clinic (AMBAC Insured)...................................................... 6.20 11-01-12 301,890 960 Duluth Economic Development Authority, Health Care Facilities Revenue, (AMBAC Insured).................................................................... 6.30 11-01-22 1,041,062 4,200 St. Paul HRA, Sales Tax Revenue, Civic Center (MBIA Insured)........................... 5.55 11-01-23 4,144,056 2,300 St. Paul HRA, Sales Tax Revenue, Civic Center.......................................... 5.55 11-01-23 2,269,364 3,715 Southern Minnesota Municipal Power Agency Power Supply................................. 5.75 01-01-18 3,723,583 1,535 Western Minnesota Municipal Power Agency............................................... 6.63 01-01-16 1,700,089 ------------ 20,402,919 ------------ TRANSPORTATION REVENUE (3.5%): ----------------------------------------------------------------------------------------------------------------------- 6,000 Puerto Rico Commonwealth, Highway & Transportation Authority........................... 5.50 07-01-26 5,588,100 ------------ UTILITY REVENUE (8.0%): ----------------------------------------------------------------------------------------------------------------------- 5,955 Northern Minnesota Municipal Power Agency, Electric System, Series B (AMBAC Insured).................................................................... 5.50 01-01-18 5,705,843 2,000 Puerto Rico Electric, Power Authority.................................................. 5.25 07-01-21 1,797,660 3,565 Southern Minnesota Municipal Power Agency (FGIC Insured)............................... 5.75 01-01-18 3,543,289 1,605 Western Minnesota Municipal Power Agency (MBIA Insured)................................ 5.50 01-01-15 1,557,107 ------------ 12,603,899 ------------ TOTAL MUNICIPAL BONDS (cost: $155,598,292) 156,436,251 ------------ SHORT-TERM SECURITIES (0.0%): ----------------------------------------------------------------------------------------------------------------------- 26 Federated Minnesota Municipal Cash Trust............................................... 3.27(c) 26,000 ------------ TOTAL SHORT-TERM SECURITIES (cost: $26,000) 26,000 ------------ TOTAL INVESTMENTS IN SECURITIES (cost: $155,624,292) (d) $156,462,251 ============
See accompanying notes to investments in securities.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC. INVESTMENTS IN SECURITIES MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- (PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.) MUNICIPAL BONDS (97.1%): EDUCATION REVENUE (9.0%): ----------------------------------------------------------------------------------------------------------------------- $1,010 Minnesota Higher Education Facilities Authority Revenue, Series 4-A1, St. Thomas University.............................................................. 5.63% 10-01-21 $ 972,984 1,000 Minnesota Higher Education Facilities, Series 3-Q, St. Mary's College.................. 6.15 10-01-23 989,690 1,275 Minnesota Higher Education Facilities, Series 3-W, St. Benedict College................ 6.38 03-01-20 1,296,611 200 Minnesota Higher Education Facilities, Series 4-C, Macalester College.................. 5.50 03-01-12 194,832 ----------- 3,454,117 ----------- GENERAL OBLIGATION (10.9%): ----------------------------------------------------------------------------------------------------------------------- 2,245 Esko Independent School District (FSA Insured)......................................... 5.75 04-01-17 2,250,410 1,000 North Branch Independent School District (FGIC Insured)................................ 5.63 02-01-17 984,800 1,000 Prior Lake Independent School District (FGIC Insured).................................. 5.25 02-01-16 946,160 ----------- 4,181,370 ----------- HEALTH CARE REVENUE (14.0%): ----------------------------------------------------------------------------------------------------------------------- 1,080 Duluth Economic Development Authority, Hospital Facilities Revenue, Duluth Clinic (AMBAC Insured)...................................................... 6.20 11-01-12 1,121,558 2,000 Princeton, Fairview Hospital Revenue, Series 1991-C (MBIA Insured)..................... 6.25 01-01-21 2,056,200 1,500 Robbinsdale, North Memorial Medical Center, Series 1993-B (AMBAC Insured).............. 5.50 05-15-23 1,397,835 750 Wadena County Health Care Facilities Revenue........................................... 7.75 09-01-24 786,143 ----------- 5,361,736 ----------- HOUSING REVENUE (25.5%): ----------------------------------------------------------------------------------------------------------------------- 1,000 Brooklyn Center, Multi-Family Housing Revenue, Four Courts, AMT........................ 7.50(f) 06-01-25 1,001,300 2,000 Burnsville Multi-Family Mortgage Revenue, Series A (FSA Insured) ...................... 7.10 01-01-30 2,151,080 1,000 Edina HRA, Edina Park Plaza (FHA Insured).............................................. 7.70 12-01-28 1,046,430 1,000 Minneapolis, Findley Place, Series 1994, AMT........................................... 7.00(f) 12-01-16 1,044,100 2,175 Minneapolis Multi-Family Housing Revenue, Olson Townhomes, AMT......................... 6.00(f) 12-01-19 2,109,337 1,585 Minnesota HFA, Single Family Mortgage Revenue, Series 1991-A, AMT (FHA Insured)........ 7.45(f) 07-01-22 1,660,684 750 Minnesota HFA, Single Family Mortgage Revenue, Series C, AMT (FHA Insured)............. 9.00(f) 08-01-18 770,520 ----------- 9,783,451 ----------- INDUSTRIAL REVENUE (11.0%): ----------------------------------------------------------------------------------------------------------------------- 1,505 Bass Brook PCR, Minnesota Power and Light.............................................. 6.00 07-01-22 1,492,463 2,820 Minnesota Public Facility Authority, Water Pollution Control........................... 5.40 03-01-15 2,734,272 ----------- 4,226,735 ----------- POLLUTION CONTROL REVENUE (2.6%): ----------------------------------------------------------------------------------------------------------------------- 1,000 Cloquet-Minnesota, Pollution Control Revenue, Potlach Corporation Project ............. 5.90 10-01-26 996,670 -----------
See accompanying notes to investments in securities.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC. INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- PRE-REFUNDED/ESCROW (12.2%): ----------------------------------------------------------------------------------------------------------------------- $ 420 Duluth Economic Development Authority, Hospital Facilities Revenue, Duluth Clinic (AMBAC Insured)...................................................... 6.20% 11-01-12 $ 452,836 1,300 St. Paul HRA, Sales Tax Revenue, Civic Center (MBIA Insured)........................... 5.55 11-01-23 1,282,684 2,580 University of Minnesota Hospital....................................................... 6.75 12-01-16 2,928,403 ----------- 4,663,923 ----------- TRANSPORTATION REVENUE (3.2%): ----------------------------------------------------------------------------------------------------------------------- 1,300 Puerto Rico Commonwealth, Highway & Transportation Authority........................... 5.50 07-01-26 1,210,755 ----------- UTILITY REVENUE (8.7%): ----------------------------------------------------------------------------------------------------------------------- 1,500 Moorhead Public Utilities Revenue (MBIA Insured)....................................... 6.25 11-01-12 1,566,540 1,800 Southern Minnesota Municipal Power Agency (FGIC Insured)............................... 5.75 01-01-18 1,789,038 ----------- 3,355,578 ----------- TOTAL MUNICIPAL BONDS (cost: $36,426,305) 37,234,335 ----------- SHORT-TERM SECURITIES (1.2%): ----------------------------------------------------------------------------------------------------------------------- 475 Federated Minnesota Municipal Cash Trust............................................... 3.27(c) 475,000 ----------- TOTAL SHORT-TERM SECURITIES (cost: $475,000) 475,000 ----------- TOTAL INVESTMENTS IN SECURITIES (cost: $36,901,305) (d) $37,709,335 ===========
See accompanying notes to investments in securities.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC. INVESTMENTS IN SECURITIES MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- (PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.) ARIZONA MUNICIPAL BONDS (98.6%): CERTIFICATES OF PARTICIPATION (1.6%) ----------------------------------------------------------------------------------------------------------------------- $1,100 Tucson................................................................................. 5.60% 07-01-11 $ 1,074,590 ----------- EDUCATION REVENUE (3.2%): ----------------------------------------------------------------------------------------------------------------------- 1,000 University of Arizona.................................................................. 6.25 06-01-11 1,053,510 1,000 University of Arizona.................................................................. 6.35 06-01-14 1,051,200 ----------- 2,104,710 ----------- GENERAL OBLIGATION (32.4%): ----------------------------------------------------------------------------------------------------------------------- 1,500 Eagle Mountain Community Facilities, District A2....................................... 6.40 07-01-17 1,526,430 3,400 Maricopa County, Alhambra Elementary School District #68 (AMBAC Insured)............... 5.63 07-01-13 3,372,868 2,000 Maricopa County Unified School District #4 (FGIC Insured).............................. 5.55 07-01-10 2,008,820 3,000 Maricopa County Unified School District #11............................................ 5.50 07-01-10 2,974,680 1,400 Maricopa County Unified School District #38 (MBIA Insured)............................. 5.50 07-01-10 1,399,874 1,500 Maricopa County Unified School District #41 (FSA Insured).............................. 6.25 07-01-15 1,565,130 1,000 Maricopa County, Washington Elementary Unified School District #6 (AMBAC Insured)...... 5.38 07-01-14 969,850 1,800 Mesa General Obligation Project of 1987 (MBIA Insured)................................. 5.70 07-01-08 1,847,448 1,500 Mohave County Unified School District #1 (FGIC Insured)................................ 5.90 07-01-15 1,524,510 575 Mohave County Unified School District #1 (FGIC Insured)................................ 5.70 07-01-09 588,375 2,000 Pima County Unified School District #6 (FGIC Insured).................................. 5.75 07-01-12 2,022,040 600 Santa Cruz Valley Unified School District #35 (AMBAC Insured).......................... 5.80 07-01-09 617,280 1,000 Tempe, Series B........................................................................ 6.00 07-01-12 1,024,450 ----------- 21,441,755 ----------- HEALTH CARE REVENUE (15.7%): ----------------------------------------------------------------------------------------------------------------------- 1,500 Arizona Hospital Health Facilities Authority (MBIA Insured)............................ 6.25 09-01-11 1,589,535 1,750 Maricopa County Health Facilities, Catholic Health Care West, Series A (MBIA Insured).. 5.75 07-01-11 1,761,147 1,100 Maricopa County Health Facilities, Catholic Health Care West, Series A (MBIA Insured).. 6.00 07-01-21 1,083,302 300 Maricopa County Industrial Development Authority, Baptist Hospital (MBIA Insured)...... 5.50 09-01-13 294,267 500 Mohave County Industrial Development Authority, Baptist Hospital (MBIA Insured)........ 5.50 09-01-21 471,190 150 Mohave County Baptist Hospital (MBIA Insured).......................................... 5.75 09-01-26 148,521 1,100 Phoenix Industrial Development Authority, John C. Lincoln Hospital (FSA Insured)....... 5.50 12-01-13 1,070,674 1,250 Scottsdale Industrial Development Authority, Scottsdale Memorial Hospital (AMBAC Insured).................................................................... 5.25 09-01-18 1,141,950 1,360 University of Arizona Medical Center (MBIA Insured).................................... 5.00 07-01-13 1,251,744 700 University of Arizona Medical Center (MBIA Insured).................................... 6.25 07-01-16 720,853 1,000 University of Arizona Medical Center (MBIA Insured).................................... 5.00 07-01-21 877,610 ----------- 10,410,793 ----------- HOUSING REVENUE (7.9%): ----------------------------------------------------------------------------------------------------------------------- 1,000 Maricopa County Industrial Development Authority, Tempe Grove Apartments, AMT (GNMA Backed)..................................................................... 6.15(f) 07-20-28 995,760 1,230 Peoria Multi-Family Housing Mortgage Revenue (GNMA Backed)............................. 7.30 02-20-28 1,330,184 500 Phoenix Industrial Development Authority, Multi-Family Mortgage Revenue (FHA Insured)...................................................................... 6.80 11-01-25 518,935 2,305 Tempe Industrial Development Authority, Multi-Family Mortgage Revenue (FHA Insured)...................................................................... 6.13 06-01-10 2,357,462 ----------- 5,202,341 -----------
See accompanying notes to investments in securities.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC. INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL REVENUE (4.0%): ----------------------------------------------------------------------------------------------------------------------- $1,750 Maricopa County Stadium District (MBIA Insured)........................................ 5.50% 07-01-13 $ 1,716,697 1,000 Navajo County Pollution Control Corporation (AMBAC Insured)............................ 5.50 08-15-28 930,960 ----------- 2,647,657 ----------- LEASE REVENUE (2.0%): ----------------------------------------------------------------------------------------------------------------------- 1,300 Scottsdale Municipal Property Corporation (FGIC Insured)............................... 6.25 11-01-14 1,346,254 ----------- SALES TAX REVENUE (3.4%): ----------------------------------------------------------------------------------------------------------------------- 2,290 Oro Valley, Canada Hills Water Revenue (MBIA Insured).................................. 5.45 07-01-14 2,236,757 ----------- TRANSPORTATION REVENUE (11.1%): ----------------------------------------------------------------------------------------------------------------------- 1,000 Arizona State Transportation Board..................................................... 5.25 07-01-09 992,780 1,300 City of Phoenix, Junior Lien Street & Highway (FGIC Insured)........................... 6.25 07-01-11 1,355,939 2,000 Tucson Airport Authority Revenue Funding (MBIA Insured)................................ 5.70 06-01-13 2,001,640 3,000 Tucson Street & Highway User Revenue (MBIA Insured).................................... 5.50 07-01-12 2,960,160 ----------- 7,310,519 ----------- UTILITY REVENUE (17.3%): ----------------------------------------------------------------------------------------------------------------------- 1,150 Chandler Water & Sewer (FGIC Insured).................................................. 5.00 07-01-09 1,103,103 2,000 Phoenix Civic Improvement Corporation (AMBAC Insured).................................. 5.50 07-01-21 1,880,160 1,000 Phoenix Civic Improvement Corporation, Water System Revenue, Junior Lien............... 5.60 07-01-18 969,710 2,000 Phoenix Water System Revenue........................................................... 5.50 07-01-22 1,900,460 2,000 Salt River Project, Electric System Revenue............................................ 6.25 01-01-27 2,066,360 3,500 Tucson Water Revenue Refunding, Series A (FGIC Insured)................................ 5.75 07-01-18 3,491,145 ----------- 11,410,938 ----------- TOTAL INVESTMENTS IN SECURITIES (cost: $64,389,685) (d) $65,186,314 ===========
See accompanying notes to investments in securities.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND INVESTMENTS IN SECURITIES MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- (PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.) FLORIDA MUNICIPAL BONDS (97.8%): CERTIFICATES OF PARTICIPATION (13.0%) ----------------------------------------------------------------------------------------------------------------------- $1,000 Dade County School Board Revenue (AMBAC Insured)....................................... 5.60% 08-01-17 $ 972,720 5,000 Escambia County School District Revenue (MBIA Insured)................................. 5.50 02-01-22 4,740,550 1,250 St. Lucie School Board Revenue (FSA Insured)........................................... 5.38 07-01-19 1,167,688 ----------- 6,880,958 ----------- EDUCATION (5.0%): ----------------------------------------------------------------------------------------------------------------------- 1,250 State of Florida Board of Regents, University System Improvements Revenue (MBIA Insured)..................................................................... 5.63 07-01-21 1,204,275 1,500 Volusia Education Facilities Authority Revenue, Stetson Univeristy (MBIA Insured)..................................................................... 5.50 06-01-17 1,439,895 ----------- 2,644,170 ----------- GENERAL OBLIGATION (2.0%): ----------------------------------------------------------------------------------------------------------------------- 1,000 Dade County Seaport (AMBAC Insured).................................................... 6.25 10-01-21 1,069,910 ----------- HEALTH CARE (20.2%): ----------------------------------------------------------------------------------------------------------------------- 1,000 Hillsborough County Industrial Development Authority Revenue, Alleghany Health System (MBIA Insured)..................................................................... 5.75 12-01-21 975,470 2,500 Lakeland Hospital System Revenue, Lakeland Regional Medical Center (FGIC Insured)..................................................................... 5.75 11-15-15 2,474,475 1,500 Orange County Health Facilities Authority Revenue, Adventist Health System (AMBAC Insured)................................................................... 5.75 11-15-25 1,460,880 2,000 Orange County Health Facilities Authority Revenue, Orlando Regional Health (MBIA Insured).................................................................... 6.25 10-01-18 2,130,200 1,500 Palm Beach County Health Facilities Authority Revenue, Jupiter Medical Center Project (FSA Insured).............................................................. 5.25 08-01-18 1,368,855 2,405 Venice Health Care Revenue, Bon Secours Health System Project (MBIA Insured)........... 5.60 08-15-16 2,322,172 ----------- 10,732,052 ----------- HOUSING (9.7%): ----------------------------------------------------------------------------------------------------------------------- 2,510 Florida State Housing Revenue, Leigh Meadows Project, AMT (AMBAC Insured).............. 6.30(f) 09-01-36 2,526,064 1,120 Florida State Housing Revenue, Woodbridge Project, AMT (AMBAC Insured)................. 6.05(f) 12-01-16 1,127,347 1,500 Florida State Housing Revenue, Woodbridge Project, AMT (AMBAC Insured)................. 6.25(f) 06-01-36 1,503,540 ----------- 5,156,951 -----------
See accompanying notes to investments in securities.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- SALES TAX & MISCELLANEOUS REVENUE (26.2%): ----------------------------------------------------------------------------------------------------------------------- $1,500 Boca Raton Community Redevelopment Tax Increment Revenue, Minzer Park Project (FGIC Insured)..................................................................... 5.88% 03-01-13 $ 1,517,730 1,000 Dade County Professional Sports Franchise Facilities Revenue (FGIC Insured)............ 6.00 10-01-22 1,007,190 2,250 Florida Ports Financing Commission Revenue, AMT (MBIA Insured)......................... 5.38(f) 06-01-27 2,054,812 1,000 Miami Beach Resort Tax Revenue (AMBAC Insured)......................................... 5.50 10-01-16 960,730 3,000 Orange County Public Service Tax Revenue (FGIC Insured)................................ 6.00 10-01-24 3,027,900 1,000 Orange County Sales Tax Revenue (FGIC Insured)......................................... 6.13 01-01-19 1,011,150 2,300 Reedy Creek Improvement District Revenue (MBIA Insured)................................ 5.75 06-01-13 2,317,664 1,000 Tampa Utilities Tax Revenue (AMBAC Insured)............................................ 6.00 10-01-15 1,010,580 1,000 Village Center Community Development District Revenue (MBIA Insured)................... 5.85 11-01-16 1,007,470 ----------- 13,915,226 ----------- TRANSPORTATION (5.6%): ----------------------------------------------------------------------------------------------------------------------- 1,500 Dade County Aviation Revenue (MBIA Insured)............................................ 5.60 10-01-26 1,435,440 1,600 Hillsborough County Aviation Authority Revenue, Tampa International Airport (FGIC Insured)..................................................................... 5.60 10-01-19 1,531,040 ----------- 2,966,480 ----------- UTILITY REVENUE (16.1%): ----------------------------------------------------------------------------------------------------------------------- 1,000 City of Panama, Beach Water & Sewer (AMBAC Insured).................................... 5.50 06-01-18 950,760 1,700 Florida Keys Aqueduct Water Revenue (AMBAC Insured).................................... 5.25 09-01-21 1,551,760 1,250 Florida State Municipal Power Agency Revenue, St. Lucie Project (FGIC Insured)..................................................................... 5.70 10-01-16 1,236,950 1,000 Indian River County Water & Sewer Revenue (FGIC Insured)............................... 5.50 09-01-16 960,770 1,500 Sarasota County Utility System Revenue (FGIC Insured).................................. 5.50 10-01-22 1,410,120 2,500 Sunrise Utility System Revenue (AMBAC Insured)......................................... 5.75 10-01-26 2,461,600 ----------- 8,571,960 ----------- TOTAL FLORIDA MUNICIPAL BONDS (cost: $52,054,746) 51,937,707 ----------- SHORT-TERM SECURITIES (0.4%): ----------------------------------------------------------------------------------------------------------------------- 227 Federated Tax-Free Obligations Fund.................................................... 3.27(c) 227,000 ----------- TOTAL SHORT-TERM SECURITIES (cost: $227,000) 227,000 ----------- TOTAL INVESTMENTS IN SECURITIES (cost: $52,281,746) (d) $52,164,707 ===========
See accompanying notes to investments in securities.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC. INVESTMENTS IN SECURITIES MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- (PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.) COLORADO MUNICIPAL BONDS (98.1%): CERTIFICATES OF PARTICIPATION (1.9%): ----------------------------------------------------------------------------------------------------------------------- $2,000 Arapahoe County Colorado Library District (MBIA Insured).............................. 5.70% 12-15-10 $ 2,028,980 ----------- EDUCATION REVENUE (9.5%): ----------------------------------------------------------------------------------------------------------------------- 2,500 Aurora Educational Development Revenue (Connie Lee Insured)............................ 6.00 10-15-15 2,509,850 1,000 Colorado Mountain College Residence Hall Authority Revenue (MBIA Insured).............. 5.75 06-01-23 998,570 4,000 Colorado Postsecondary Education Facility Authority Revenue, University of Denver Project (Connie Lee Insured).................................. 6.00 03-01-16 4,009,720 500 Colorado State Board Community College & Occupational Education Revenue (AMBAC Insured).................................................................... 5.75 11-01-11 512,320 2,000 Colorado State Colleges Board of Trustees, Adams State College (MBIA Insured).......... 5.75 05-15-19 1,994,880 ----------- 10,025,340 ----------- GENERAL OBLIGATION (31.5%): ----------------------------------------------------------------------------------------------------------------------- 2,350 Adams & Weld Counties School District #27J, Brighton (FGIC Insured).................... 5.60 12-01-12 2,343,984 2,000 Adams County School District #12, Five Star (FGIC Insured)............................. 5.40 12-15-16 1,926,120 1,250 Adams County School District #12, Five Star (FGIC Insured)............................. 5.40 12-15-15 1,209,325 1,000 Archuleta & Hinsdale Counties School District #50JT (MBIA Insured)..................... 5.50 12-01-14 976,700 4,000 Archuleta & Hinsdale Counties School District #50JT (MBIA Insured)..................... 5.55 12-01-20 3,846,920 1,200 Brighton County (FSA Insured).......................................................... 5.50 12-01-11 1,198,704 1,000 Eagle Garfield & Routt Counties School District #Re-50J (FGIC Insured)................. 6.30 12-01-12 1,055,430 1,000 El Paso County School District #20 (MBIA Insured)...................................... 5.63 12-15-16 987,600 3,000 El Paso County School District #20 (AMBAC Insured)..................................... 5.63 12-15-16 2,924,790 2,435 Jefferson County School District #R-001 (AMBAC Insured )............................... 6.25 12-15-12 2,530,111 1,575 Jefferson County School District #R-001 (AMBAC Insured)................................ 6.00 12-15-12 1,622,770 1,000 Larimer County School District #R 1, Poudre Improvement (MBIA Insured)................. 5.63 12-15-12 1,002,550 1,000 Larimer & Weld Counties School District #Re-5J (AMBAC Insured)......................... 5.75 11-15-20 994,810 1,700 Larimer & Weld Counties School District #Re-5J (MBIA Insured).......................... 5.75 11-15-20 1,691,177 1,500 Larimer, Weld, & Boulder Counties School District #R-2J Thompson (FGIC Insured)..................................................................... 5.45 12-15-16 1,458,225 1,100 Mesa County Colorado Valley School District #51 Grand Junction (MBIA Insured)..................................................................... 5.50 12-01-16 1,070,289 1,675 Mesa County Colorado Valley School District #51 Grand Junction (MBIA Insured)..................................................................... 5.50 12-01-15 1,636,676 1,405 Pueblo County (MBIA Insured)........................................................... 5.80 06-01-11 1,429,854 3,500 Stonegate Metropolitan District (FSA Insured).......................................... 5.50 12-01-21 3,336,410 ----------- 33,242,445 ----------- HEALTH CARE REVENUE (8.9%): ----------------------------------------------------------------------------------------------------------------------- 2,625 Colorado Health Facilities Authority Revenue, Boulder Community Hospital Project, Series 1994 B (MBIA Insured)..................................... 5.88 10-01-23 2,637,311 250 Colorado Health Facilities Authority Revenue, Childrens Hospital Association (MBIA Insured)..................................................................... 5.25 10-01-26 229,695 2,000 Colorado Health Facilities Authority Revenue, North Colorado Medical Center (MBIA Insured)..................................................................... 5.95 05-15-12 2,034,600 1,000 Colorado Health Facilities Authority Revenue, North Colorado Medical Center (MBIA Insured).................................................................... 6.00 05-15-20 997,440 1,000 Colorado Springs Memorial Hospital Revenue (MBIA Insured).............................. 6.00 12-15-24 998,550 2,510 Logan County Health Care Facilities Revenue, Western Health Network Inc. (MBIA Insured)..................................................................... 5.90 01-01-19 2,522,123 ----------- 9,419,719 -----------
See accompanying notes to investments in securities.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC. INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 1997 - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT COUPON MARKET ($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a) - ----------------------------------------------------------------------------------------------------------------------------------- HOUSING REVENUE (6.5%): ----------------------------------------------------------------------------------------------------------------------- $5,000 Colorado Housing Finance Authority-Single-Family Housing Series AA (MBIA Insured)..................................................................... 5.63% 11-01-23 $ 4,855,500 2,000 Snowmass Village Multi-Family Housing, Revenue Refunding Essential Function Housing (FSA Insured).......................................... 6.25 12-15-16 2,052,580 ------------ 6,908,080 ------------ MISCELLANEOUS & SALES TAX REVENUE (5.0%): ----------------------------------------------------------------------------------------------------------------------- 1,755 Castle Rock Sales & Use Tax Revenue (FSA Insured)...................................... 5.90 06-01-16 1,778,377 3,500 Douglas County Sales & Use Tax Revenue (MBIA Insured).................................. 5.50 10-15-11 3,486,035 ------------ 5,264,412 ------------ POLLUTION CONTROL REVENUE (1.4%): ----------------------------------------------------------------------------------------------------------------------- 1,500 Adams County Pollution Control Revenue Refunding, Public Service Company Project, Series A (MBIA Insured)................................... 5.88 04-01-14 1,520,595 ------------ PRE-REFUNDED/ESCROW (5.1%): ----------------------------------------------------------------------------------------------------------------------- 5,000 City of Westminster County Sales & Use Tax Refunding Revenue, Series A (FGIC Insured)..................................................................... 6.25 12-01-02 5,355,600 ------------ TRANSPORTATION REVENUE (19.5%): ----------------------------------------------------------------------------------------------------------------------- 4,700 Arapahoe County Capital Improvements Revenue (MBIA Insured)............................ 6.05 08-31-15 4,832,399 1,300 Colorado Springs Airport Revenue, Series A (MBIA Insured).............................. 5.25 01-01-17 1,220,817 6,000 Denver City & County Airport Revenue, Series A (MBIA Insured).......................... 5.50 11-15-25 5,646,180 2,500 Denver City & County Airport Revenue, Series A (MBIA Insured).......................... 5.60 11-15-20 2,374,375 2,000 Denver City & County Airport Revenue, Series D (MBIA Insured).......................... 5.50 11-15-25 1,882,060 4,500 Regional Transportation District Sales Tax Revenue Refunding & Improvement (FGIC Insured)....................................................... 6.25 11-01-12 4,671,405 ------------ 20,627,236 ------------ UTILITY REVENUE (8.8%): ----------------------------------------------------------------------------------------------------------------------- 1,000 Left Hand Water District Colorado Water Revenue (MBIA Insured)......................... 5.70 11-15-15 999,240 5,000 Municipal Subdistrict Northern Colorado Water Conservancy District Revenue Series F (AMBAC Insured)........................................................... 6.50 12-01-12 5,407,950 3,000 Platte River Power Authority Colorado Power Revenue (MBIA Insured)..................... 5.38 06-01-17 2,852,730 ------------ 9,259,920 ------------ TOTAL INVESTMENTS IN SECURITIES (cost: $104,131,095) (d) $103,652,327 ============
See accompanying notes to investments in securities. THE VOYAGEUR FUNDS NOTES TO INVESTMENTS IN SECURITIES - ------------------------------------------------------------------------------- (a) Securities are valued by procedures described in note 2 to the Financial Statements. (b) Investments in bonds, by rating category as a percentage of total bonds, are as follows:
Aaa/AAA Aa/AA A/A Baa Unrated Total ------- ----- --- --- ------- ----- Minnesota Municipal Income Fund, Inc............... 52% 15% 17% 5% 11% 100% Minnesota Municipal Income Fund II, Inc............ 56% 17% 11% 10% 6% 100% Minnesota Municipal Income Fund III, Inc........... 58% 10% 14% 13% 5% 100% Arizona Municipal Income Fund, Inc................. 80% 13% 7% -- -- 100% Florida Insured Municipal Income Fund.............. 100% -- -- -- -- 100% Colorado Insured Municipal Income Fund, Inc........ 100% -- -- -- -- 100%
(c) Dividend yields change daily to reflect current market conditions. Rate shown is the quoted yield as of March 31, 1997. (d) The cost of securities for federal income tax purposes for Minnesota Municipal, Minnesota Municipal II, Minnesota Municipal III, Arizona Municipal, Florida Insured Municipal and Colorado Insured Municipal was $54,391,035, $155,663,526, $36,901,305, $64,389,685, $52,281,746 and $104,131,095, respectively. The aggregate gross unrealized appreciation and depreciation of securities based on these costs were as follows:
Net Gross Gross Unrealized Unrealized Unrealized Appreciation/ Appreciation (Depreciation) (Depreciation) ------------ -------------- -------------- Minnesota Municipal Income Fund, Inc............... $2,047,857 $ (51,123) $1,996,734 Minnesota Municipal Income Fund II, Inc............ 2,045,083 (1,246,358) 798,725 Minnesota Municipal Income Fund III, Inc........... 991,042 (183,012) 808,030 Arizona Municipal Income Fund, Inc................. 1,263,550 (466,921) 796,629 Florida Insured Municipal Income Fund.............. 254,585 (371,624) (117,039) Colorado Insured Municipal Income Fund, Inc........ 853,699 (1,332,467) (478,768)
(e) At March 31, 1997, the cost of securities purchased on a when-issued basis was $2,032,740 for Minnesota Municipal Income Fund. (f) Securities represent private activity bonds issued after August 7, 1986. The interest on these securities is a tax preference item for Alternative Minimum Tax purposes. The ratio of private activity bonds to total net assets as of March 31, 1997 was as follows: Minnesota Municipal Income Fund, Inc............... 18.7% Minnesota Municipal Income Fund II, Inc............ 19.8% Minnesota Municipal Income Fund III, Inc........... 17.2% Arizona Municipal Income Fund, Inc................. 1.5% Florida Insured Municipal Income Fund.............. 13.6% Colorado Municipal Income Fund, Inc................ 0.0% THE VOYAGEUR FUNDS SHAREHOLDER MEETING RESULTS - ------------------------------------------------------------------------------- A meeting of the fund's shareholders was held on April 11, 1997. The meeting results including the number of votes cast for, against or withheld, the number of abstentions, and the number of broker non-voters with the respect to such matter, are set forth below. 1. The funds' common and preferred shareholders (preferred shareholders only for Messrs. Longstreth and Madison) elected the following directors:
ARIZONA MUNICIPAL INCOME FUND, INC. Shares Shares Withholding Voted "For" Authority to Vote ----------- ----------------- Walter P. Babich................................. 2,815,996 34,684 Anthony D. Knerr................................. 2,816,330 34,350 Ann R. Leven..................................... 2,820,267 30,413 W. Thacher Longstreth............................ 500 -- Thomas F. Madison................................ 500 -- Jeffrey J. Nick.................................. 2,815,330 35,350 Charles E. Peck.................................. 2,815,531 35,149 Wayne A. Stork................................... 2,813,730 36,950 COLORADO INSURED MUNICIPAL INCOME FUND, INC. Shares Shares Withholding Voted "For" Authority to Vote ----------- ----------------- Walter P. Babich................................. 4,479,722 82,054 Anthony D. Knerr................................. 4,477,622 84,154 Ann R. Leven..................................... 4,477,622 84,154 W. Thacher Longstreth............................ 800 -- Thomas F. Madison................................ 800 -- Jeffrey J. Nick.................................. 4,477,622 84,154 Charles E. Peck.................................. 4,478,822 82,954 Wayne A. Stork................................... 4,477,622 84,154 FLORIDA INSURED MUNICIPAL INCOME FUND Shares Shares Withholding Voted "For" Authority to Vote ----------- ----------------- Walter P. Babich................................. 2,168,706 31,231 Anthony D. Knerr................................. 2,168,706 31,231 Ann R. Leven..................................... 2,168,306 31,631 W. Thacher Longstreth............................ 334 -- Thomas F. Madison................................ 334 -- Jeffrey J. Nick.................................. 2,168,706 31,231 Charles E. Peck.................................. 2,168,706 31,231 Wayne A. Stork................................... 2,168,706 31,231 MINNESOTA MUNICIPAL INCOME FUND, INC. Shares Shares Withholding Voted "For" Authority to Vote ----------- ----------------- Walter P. Babich................................. 2,234,609 21,199 Anthony D. Knerr................................. 2,235,668 20,140 Ann R. Leven..................................... 2,235,668 20,140 Jeffrey J. Nick.................................. 2,234,614 21,194 Charles E. Peck.................................. 2,233,555 22,253 Wayne A. Stork................................... 2,235,668 20,140 MINNESOTA MUNICIPAL INCOME FUND II, INC. Shares Shares Withholding Voted "For" Authority to Vote ----------- ----------------- Walter P. Babich................................. 6,517,785 79,146 Anthony D. Knerr................................. 6,521,930 75,002 Ann R. Leven..................................... 6,521,679 75,253 W. Thacher Longstreth............................ 1,103 -- Thomas F. Madison................................ 1,103 -- Jeffrey J. Nick.................................. 6,523,407 76,544 Charles E. Peck.................................. 6,518,492 78,440 Wayne A. Stork................................... 6,520,741 76,191 MINNESOTA MUNICIPAL INCOME FUND III, INC. Shares Shares Withholding Voted "For" Authority to Vote ----------- ----------------- Walter P. Babich................................. 1,640,820 30,921 Anthony D. Knerr................................. 1,640,903 30,838 Ann R. Leven..................................... 1,640,903 30,838 W. Thacher Longstreth............................ 1,640,903 30,838 Thomas F. Madison................................ 1,640,903 30,838 Jeffrey J. Nick.................................. 1,640,903 30,838 Charles E. Peck.................................. 1,632,028 39,713 Wayne A. Stork................................... 1,640,603 30,838
THE VOYAGEUR FUNDS SHAREHOLDER MEETING RESULTS (CONTINUED) - ------------------------------------------------------------------------------- 2. The funds' common and preferred shareholders voted to approve a new Investment Advisory Agreement. The following votes were cast regarding this matter: Shares Shares Voted "For" Voted "Against" Abstentions ----------- --------------- ----------- Arizona 2,722,840 49,846 77,994 Colorado 4,359,048 72,603 130,123 Florida 2,092,093 67,074 40,435 Minnesota 2,164,340 27,115 64,352 Minnesota II 6,332,488 121,988 142,455 Minnesota III 1,609,666 29,645 32,429 3. The funds' common and preferred shareholders ratified the selection by a majority of the independent members of the funds' Board of Directors of Ernst and Young as the independent public accountants for the funds. The following votes were cast regarding this matter: Shares Shares Voted "For" Voted "Against" Abstentions ----------- --------------- ----------- Arizona 2,791,684 20,035 38,961 Colorado 4,484,702 28,029 49,044 Florida 2,162,642 20,175 16,785 Minnesota 2,204,055 6,681 45,071 Minnesota II 6,496,251 28,749 71,931 Minnesota III 1,631,889 21,598 18,253 There were no broker non-votes with this proxy. VOYAGEUR FUNDS FEDERAL INCOME TAX INFORMATION - ------------------------------------------------------------------------------- Information for federal income tax purposes is presented as an aid to shareholders in reporting dividend distributions for the fiscal year ended March 31, 1997 shown below. Shareholders must report distributions on a calendar year basis for income tax purposes which may include distributions for portions of two fiscal years. Accordingly, a notification which will reflect the amount to be used for calendar year taxpayers will be mailed in January 1998. Shareholders are advised to consult a tax adviser with respect to the tax consequences of their investment in the Funds.
PER SHARE ----------------------------------------------------------------------------- VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR FLORIDA COLORADO MINNESOTA MINNESOTA MINNESOTA ARIZONA INSURED INSURED MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL INCOME INCOME INCOME INCOME INCOME INCOME FUND, INC. FUND II, INC. FUND III, INC. FUND, INC. FUND FUND, INC. ---------- ------------- -------------- ---------- ---------- ---------- Distributions to Common shareholders from: Investment income - net (none qualifying for for the corporate dividend received deduction): $ .9300 $ .8081 $ .7481 $ .7631 $ .7481 $ .7256 ========= ========= ========= ========= ========= ========= Distributions to Preferred shareholders from: Investment income - net (none qualifying for the corporate dividend received deduction): Series A..................................... $1,755.17* $1,752.37 $1,897.40* $1,714.41 $1,756.89 $1,749.69 Series B..................................... -- $1,757.81 -- $1,703.39 $1,757.26 $1,773.57 ========= ========= ========= ========= ========= =========
* Represents the single class of preferred stock outstanding. For federal income tax purposes, 100% for Minnesota Municipal Income Fund, Minnesota Municipal Income Fund II, Florida Insured Municipal Income Fund, 99.95% for Minnesota Municipal Income Fund III, 99.99% for Arizona Municipal Income Fund and 99.75% for Colorado Insured Municipal Income Fund of the above net investment income distributions were derived from interest on securities exempt from federal income tax. INVESTMENT ADVISER AND ACCOUNTING SERVICES AGENT Voyageur Fund Managers, Inc. 90 South Seventh Street, Suite 4400 Minneapolis, Minnesota 55402-4115 (612) 376-7000 / (800) 553-2143 ADMINISTRATORS Mitchell Hutchins Asset Management Inc. New York, New York Princeton Administrators L.P. Plainsboro, New Jersey (on Colorado Insured Municipal Income Fund, Inc. only) CUSTODIAN First Trust, N.A. St. Paul, Minnesota SHAREHOLDER SERVICING AGENT Norwest Bank Minnesota, N.A. 161 North Concord Exchange South St. Paul, Minnesota 55075 (612) 450-4064 / (800) 468-9716 PREFERRED SHARES REMARKETING AGENTS Smith Barney Inc. New York, New York Merrill Lynch, Pierce, Fenner & Smith Incorporated New York, New York (on Colorado Insured Municipal Income Fund, Inc. only) COUNSEL Dorsey & Whitney P.L.L.P Minneapolis, Minnesota INDEPENDENT AUDITORS KPMG Peat Marwick LLP Minneapolis, Minnesota Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Fund may purchase at market prices shares of its common stock in the open market. This report, including the financial statements herein, is sent to the shareholders of the Funds for their information. It is not a prospectus, circular or representation intended for use in the purchase or sale of shares of the Funds or any securities mentioned in this report. VOYAGEUR YOUR TAX SENSITIVE INVESTMENT MANAGER 90 South Seventh Street, Suite 4400 Minneapolis, Minnesota 55402-4115 VOY-CESA 3/97 -----END PRIVACY-ENHANCED MESSAGE-----