-----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, FhH3EAvF0swqDDAipO012uNfWTx6Um+pqJJp23+v2Yk8NnnECO52DPj76EnKb3UP AcFHoAgbeqFFpBsMg2mzpg== 0000900092-03-000085.txt : 20030630 0000900092-03-000085.hdr.sgml : 20030630 20030630142322 ACCESSION NUMBER: 0000900092-03-000085 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030430 FILED AS OF DATE: 20030630 EFFECTIVENESS DATE: 20030630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MUNIYIELD FLORIDA INSURED FUND /NJ/ CENTRAL INDEX KEY: 0000891188 IRS NUMBER: 223196058 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-07156 FILM NUMBER: 03763756 BUSINESS ADDRESS: STREET 1: 800 SCUDDERS MILL RD CITY: PLAINSBORO STATE: NJ ZIP: 08536 BUSINESS PHONE: 6092822800 MAIL ADDRESS: STREET 1: P O BOX 9011 CITY: PRINCETON STATE: NJ ZIP: 08543-9011 FORMER COMPANY: FORMER CONFORMED NAME: MUNIYIELD FLORIDA FUND II DATE OF NAME CHANGE: 19600201 FORMER COMPANY: FORMER CONFORMED NAME: MUNIYIELD FLORIDA INSURED FUND DATE OF NAME CHANGE: 19600201 N-CSR 1 ml7021.txt MUNIYIELD FLORIDA INSURED UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-7156 Name of Fund: MuniYield Florida Insured Fund Fund Address: P.O. Box 9011 Princeton, NJ 08543-9011 Name and address of agent for service: Terry K. Glenn, President, MuniYield Florida Insured Fund, 800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton, NJ, 08543- 9011 Registrant's telephone number, including area code: (609) 282-2800 Date of fiscal year end: 04/30/03 Date of reporting period: 11/01/02 - 04/30/03 Item 1 - Attach shareholder report (BULL LOGO) Merrill Lynch Investment Managers Semi-Annual Report April 30, 2003 MuniYield Florida Insured Fund www.mlim.ml.com MuniYield Florida Insured Fund seeks to provide shareholders with as high a level of current income exempt from Federal income taxes as is consistent with its investment policies and prudent investment management by investing primarily in a portfolio of long-term municipal obligations the interest on which, in the opinion of bond counsel to the issuer, is exempt from Federal income taxes and which enables shares of the Fund to be exempt from Florida intangible personal property taxes. This report, including the financial information herein, is transmitted to shareholders of MuniYield Florida Insured Fund for their information. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Fund has leveraged its Common Shares and intends to remain leveraged by issuing Preferred Shares to provide the Common Shareholders with a potentially higher rate of return. Leverage creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in the short- term dividend rates of the Preferred Shares may affect the yield to Common Shareholders. Statements and other information herein are as dated and are subject to change. MuniYield Florida Insured Fund Box 9011 Princeton, NJ 08543-9011 Printed on post-consumer recycled paper MUNIYIELD FLORIDA INSURED FUND The Benefits And Risks of Leveraging MuniYield Florida Insured Fund utilizes leveraging to seek to enhance the yield and net asset value of its Common Shares. However, these objectives cannot be achieved in all interest rate environments. To leverage, the Fund issues Preferred Shares, which pay dividends at prevailing short-term interest rates, and invests the proceeds in long-term municipal bonds. The interest earned on these investments is paid to Common Shareholders in the form of dividends, and the value of these portfolio holdings is reflected in the per share net asset value of the Fund's Common Shares. However, in order to benefit Common Shareholders, the yield curve must be positively sloped; that is, short-term interest rates must be lower than long-term interest rates. At the same time, a period of generally declining interest rates will benefit Common Shareholders. If either of these conditions change, then the risks of leveraging will begin to outweigh the benefits. To illustrate these concepts, assume a fund's Common Shares capitalization of $100 million and the issuance of Preferred Shares for an additional $50 million, creating a total value of $150 million available for investment in long-term municipal bonds. If prevailing short-term interest rates are approximately 3% and long-term interest rates are approximately 6%, the yield curve has a strongly positive slope. The fund pays dividends on the $50 million of Preferred Shares based on the lower short-term interest rates. At the same time, the fund's total portfolio of $150 million earns the income based on long-term interest rates. Of course, increases in short-term interest rates would reduce (and even eliminate) the dividends on the Common Shares. In this case, the dividends paid to Preferred Shareholders are significantly lower than the income earned on the fund's long-term investments, and therefore the Common Shareholders are the beneficiaries of the incremental yield. However, if short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental yield pickup on the Common Shares will be reduced or eliminated completely. At the same time, the market value of the fund's Common Shares (that is, its price as listed on the New York Stock Exchange) may, as a result, decline. Furthermore, if long-term interest rates rise, the Common Shares' net asset value will reflect the full decline in the price of the portfolio's investments, since the value of the fund's Preferred Shares does not fluctuate. In addition to the decline in net asset value, the market value of the fund's Common Shares may also decline. As a part of its investment strategy, the Fund may invest in certain securities whose potential income return is inversely related to changes in a floating interest rate ("inverse floaters"). In general, income on inverse floaters will decrease when short-term interest rates increase and increase when short-term interest rates decrease. Investments in inverse floaters may be characterized as derivative securities and may subject the Fund to the risks of reduced or eliminated interest payments and losses of invested principal. In addition, inverse floaters have the effect of providing investment leverage and, as a result, the market value of such securities will generally be more volatile than that of fixed- rate, tax-exempt securities. To the extent the Fund invests in inverse floaters, the market value of the Fund's portfolio and the net asset value of the Fund's shares may also be more volatile than if the Fund did not invest in such securities. Swap Agreements The Fund may also invest in swap agreements, which are over-the- counter contracts in which one party agrees to make periodic payments based on the change in market value of a specified bond, basket of bonds, or index in return for periodic payments based on a fixed or variable interest rate or the change in market value of a different bond, basket of bonds or index. Swap agreements may be used to obtain exposure to a bond or market without owning or taking physical custody of securities. MuniYield Florida Insured Fund, April 30, 2003 DEAR SHAREHOLDER For the six months ended April 30, 2003, the Common Shares of MuniYield Florida Insured Fund had a net annualized yield of 5.98%, based on a period-end per share net asset value of $15.48 and $.459 per share income dividends. Over the same period, the total investment return on the Fund's Common Shares was +6.16%, based on a change in per share net asset value from $15.04 to $15.48, and assuming reinvestment of $.459 per share ordinary income dividends. For the six-month period ended April 30, 2003, the Fund's Auction Market Preferred Shares had an average yield of 1.10%. For a description of the Fund's total investment return based on a change in the per share market value (as measured by the trading price of the Fund's shares on the New York Stock Exchange), and assuming reinvestment of dividends, please refer to the Financial Highlights section of the Financial Statements included in this report. As a closed-end fund, the Fund's shares may trade in the secondary market at a premium or discount to the Fund's net asset value. As a result, total investment returns based on changes in the Fund's market value can vary significantly from total investment return based on changes in the Fund's net asset value. The Municipal Market Environment During the six-month period ended April 30, 2003, amid considerable weekly and monthly volatility, long-term fixed income interest rates generally declined. Geopolitical tensions and volatile equity valuations continued to overshadow economic fundamentals as they have for most of the last 12 months. Reacting to the strong U.S. equity rally that began last October, fixed income bond yields remained under pressure in November 2002, as U.S. equity markets continued to strengthen. During November, the Standard & Poor's 500 (S&P 500) Index rose an additional 5.50%. Equity prices were supported by further signs of U.S. economic recovery, especially improving labor market activity. In late November, third-quarter 2002 U.S. gross domestic product growth was 4%, well above the second-quarter 2002 rate of 1.30%. Financial conditions were also strengthened by a larger-than-expected reduction in short-term interest rates by the Federal Reserve Board in early November. The Federal Funds target rate was lowered 50 basis points (0.50%) to 1.25%, its lowest level since the 1960s. This action by the Federal Reserve Board was largely viewed as being taken to bolster the sputtering U.S. economic recovery. Rebounding U.S. equity markets and the prospects for a more substantial U.S. economic recovery pushed long-term U.S. Treasury yield levels to 5.10% by late November. However, into early 2003, softer equity prices and renewed investor concerns about U.S. military action against Iraq and North Korea again pushed bond prices higher. Reacting to disappointing holiday sales and corporate managements' attempts to scale back analysts' expectation of future earnings, the S&P 500 Index declined more than 10% from December 2002 to February 2003. Fearing an eventual U.S./ Iraq military confrontation in 2003, investors again sought the safety of U.S. Treasury obligations and the prices of fixed income issues rose. By the end of February 2003, U.S. Treasury bond yields had declined approximately 40 basis points to 4.67%. Bond yields continued to fall into early March. Once direct U.S. military action against Iraq began, bond yields quickly rose. Prior uncertainty surrounding the Iraqi situation was obviously removed and early U.S. military successes fostered the hope that the conflict would be quickly and positively concluded. Concurrently, the S&P 400 Index rose over 6% as investors, in part, sold fixed income issues to purchase equities in anticipation of a strong U.S. economic recovery once the Iraqi conflict was resolved. By mid-March, U.S. Treasury bond yields again rose to above 5%. However, as there was growing sentiment that hostilities may not be resolved in a matter of weeks, U.S. Treasury bond yields again declined to end the month at 4.81%. For the six months ended April 30, 2003, long-term U.S. Treasury bond yields ratcheted back to near 5% by mid-April, as U.S. equity markets continued to improve and the safe-haven premium U.S. Treasury issues had commanded prior to the beginning of the Iraqi conflict continued to be withdrawn. However, with the quick positive resolution of the Iraqi war, investors quickly resumed their focus on the fragile U.S. economic recovery. Business activity in the United States has remained sluggish, especially job creation. Investors have also been concerned that the recent SARS outbreak would have a material, negative impact on world economic conditions, especially in China and Japan. First quarter 2003 U.S. gross domestic product was released in late April initially estimating U.S. economic activity to be growing at 1.60%, well below many analysts' assessments. These factors, as well as the possibility that the Federal Reserve Board could again lower short-term interest rates to encourage more robust U.S. economic growth, pushed bond prices higher during the last two weeks of the period. By April 30, 2003, long-term U.S. Treasury bond yields had declined to almost 4.75%. Over the past six months, long-term U.S. bond yields fell more than 20 basis points. For the six months ended April 30, 2003, long-term tax-exempt bond yields also fell modestly. Yield volatility was reduced relative to that seen in U.S. Treasury issues, as municipal bond prices were much less sensitive to worldwide geopolitical pressures on a daily and weekly basis. Tax-exempt bond yields generally followed their taxable counterparts higher, responding to a more positive U.S. fixed income environment and continued slow economic growth. After rising approximately 10 basis points in November 2002 to 5.30%, municipal bond yields generally declined through February 2003. At February 28, 2003, long-term tax-exempt revenue bond yields, as measured by the Bond Buyer Revenue Bond Index, fell to approximately 5.05%. However, similar to U.S. Treasury bond yields, once military action began in Iraq, municipal bond yields rose sharply to nearly 5.20% before declining to approximately 5.10% by the end of April. Over the past six months, long-term tax-exempt bond yields fell approximately 11 basis points, slightly less than U.S. Treasury obligations. A number of factors have combined to generate consistently strong demand for municipal bonds throughout the six-month period ended April 30, 2003. Generally weak U.S. equity markets have supported continued positive demand for tax-exempt products as investors have sought the relative security of fixed income issues. Also, with tax- exempt money market rates near 1%, the demand for longer maturity municipal issues has increased as investors have opted to buy longer maturity issues rather than remain in cash reserves. Additionally, investors received approximately $30 billion in January 2003 from bond maturities, coupon income and proceeds from early redemptions. However, these positive demand factors were not totally able to offset the increase in tax-exempt new-issue supply, preventing more significant declines in tax-exempt bond yields. This modest underperformance has served to make municipal bonds a particularly attractive purchase relative to their taxable counterparts. Throughout most of the yield curve, municipal bonds have been able to be purchased at yields near or exceeding those of comparable Treasury issues. Compared to their recent historical averages of 82% - 88% of U.S. Treasury yields, municipal bond yield ratios in their current 95% - 105% range are likely to prove attractive to long-term investors. Declining U.S. equity markets and escalating geopolitical pressures have resulted in reduced economic activity and consumer confidence. It is important to note that, despite all the recent negative factors impeding the growth of U.S. businesses, the U.S. economy still grew at an approximate 2.50% rate for all of 2002, twice that of 2001. Similar expansion is expected for early 2003. Lower oil prices, reduced geopolitical uncertainties, increased Federal spending for defense, and a likely Federal tax cut are all factors which should promote stronger economic growth later this year. However, it is questionable to expect that business and in-vestor confidence can be so quickly restored as to trigger dramatic, explosive U.S. economic growth and engender associated, large-scale interest rate increases. The resumption of solid economic growth is likely to be a gradual process accompanied by equally graduated increases in bond yields. Moderate economic growth, especially within a context of negligible inflationary pressures, should not greatly endanger the positive fixed income environments tax-exempt products currently enjoy. Specific to Florida, the state's general fund budget proposal for fiscal year 2003 - 2004 came in at $53.9 billion, a 7.0% increase from the prior year. This budget will attempt to close a $2 billion fiscal year 2004 operating shortfall. It includes currently passed referendums for smaller classroom sizes, enrolling four-year olds as pre-kindergartners and a high-speed rail line. Florida is projected to end fiscal year 2002 - 2003 with an operating surplus of $140 million and a rainy day fund at $960 million, a sharp contrast to most other states. With the implementation of the constitutional amendments, spending will increase faster than revenues and will force the state to borrow. In fiscal year 2004, $3 billion is earmarked for schools. However, this is just scratching the surface of an estimated $4 billion - $27 billion price tag for education during the next eight years. With this increase in spending in the current fiscal year, other programs will be reduced and/or eliminated. Some proposed cuts include $200 million from transportation, $111 million from universities, and $51 million from juvenile crime prevention. Additional expenditure savings will be derived by outsourcing state agency functions such as payroll and benefits administration totaling another $200 million. These reductions, along with an increase in the corporate tax structure, the inclusion of video lottery terminals being placed in dog and horse racetracks and improving sales tax collections are estimated to generate more than $1 billion. Proposed expenditure reductions, revenue increases, along with a sizable rainy day fund, will enable the state to operate without increasing other taxes. However, the state balanced its budget by burdening local governments and universities by asking the voters to increase local sales taxes and/or increase tuition to meet local operations. Even though the state is being pressured by a weak national economy, we believe it is in a position in the upcoming year to perform well given their prospective management and financial flexibility. MuniYield Florida Insured Fund, April 30, 2003 Portfolio Strategy During the six-month period ended April 30, 2003, we maintained our neutral position on the municipal bond market. We continued to focus on reducing the volatility of the Fund by selling some of the Fund's 10-year - 15-year bonds and purchasing larger-couponed bonds maturing in 20 years - 30 years. We believe these longer maturities are likely to enhance the Fund's income stream and help preserve asset valuations in future periods of market volatility. During the six-month period, Florida's new-issue supply was up approximately 50% compared to the same time a year ago. Despite the heavy supply, retail and institutional demand remained quite strong. However, this strong demand hindered us from fully implementing our desired strategy. The vast majority of new bond issuance has been structured as par bonds, which are more price sensitive and produce less income than premium coupon structured issues. Going forward, the municipal bond curve is expected to remain quite steep. We will maintain our neutral position and remain fully invested in an effort to enhance shareholder income. During the six-month period ended April 30, 2003, the Fund's borrowing costs remained in the 1% - 1.5% range, with interest rates presently near 1%. These very attractive funding levels, in combination with the steep tax-exempt yield curve, have continued to generate significant income benefits to the Fund's Common Shareholder. We do not expect any material reduction in our borrowing costs in 2003 as no additional monetary easings by the Federal Reserve Board are anticipated. We expect our short-term borrowing costs to remain at current attractive levels for the coming months. However, should the spread between short-term and long-term interest rates narrow, the benefits of leverage will decline and the yield to the Fund's Common Shareholders will be reduced. (For a more complete explanation of the benefits and risks of leveraging, see page 1 of this report to shareholders.) In Conclusion We appreciate your continuing interest in MuniYield Florida Insured Fund, and we look forward to serving your investment needs in the months and years to come. Sincerely, (Terry K. Glenn) Terry K. Glenn President and Trustee (Kenneth A. Jacob) Kenneth A. Jacob Senior Vice President (John M. Loffredo) John M. Loffredo Senior Vice President (Robert D. Sneeden) Robert D. Sneeden Vice President and Portfolio Manager May 19, 2003 PROXY RESULTS
During the six-month period ended April 30, 2003, MuniYield Florida Insured Fund's Common Shareholders voted on the following proposal. The proposal was approved at a shareholders' meeting on April 28, 2003. A description of the proposal and number of shares voted are as follows: Shares Voted Shares Withheld For From Voting 1. To elect the Fund's Trustees: Terry K. Glenn 7,951,789 104,627 Donald W. Burton 7,951,789 104,627 Fred G. Weiss 7,951,789 104,627 During the six-month period ended April 30, 2003, MuniYield Florida Insured Fund's Preferred Shareholders voted on the following proposal. The proposal was approved at a shareholders' meeting on April 28, 2003. A description of the proposal and number of shares voted are as follows: Shares Voted Shares Withheld For From Voting 1. To elect the Fund's Board of Trustees: Terry K. Glenn, Donald W. Burton, M. Colyer Crum, Laurie Simon Hodrick and Fred G. Weiss 2,156 4
QUALITY PROFILE The quality ratings of securities in the Fund as of April 30, 2003 were as follows: Percent of S&P Rating/Moody's Rating Total Investments AAA/Aaa 90.3% AA/Aa 2.1 A/A 6.0 BBB/Baa 0.6 NR (Not Rated) 1.0 MuniYield Florida Insured Fund, April 30, 2003 SCHEDULE OF INVESTMENTS (in Thousands)
S&P Moody's Face STATE Ratings Ratings Amount Issue Value Florida--125.0% AA NR* $ 2,785 Beacon Tradeport Community Development District, Florida, Special Assessment Revenue Refunding Bonds (Commercial Project), Series A, 5.625% due 5/01/2032 (g) $ 2,965 AAA Aaa 700 Boynton Beach, Florida, Utility System Revenue Refunding Bonds, 6.25% due 11/01/2020 (c)(h) 866 AAA Aaa 3,000 Brevard County, Florida, IDR (NUI Corporation Project), AMT, 6.40% due 10/01/2024 (a) 3,235 AAA Aaa 4,290 Broward County, Florida, School Board, COP, 5% due 7/01/2028 (b) 4,423 Dade County, Florida, Aviation Revenue Bonds, AMT, Series B (b): AAA Aaa 5,000 5.75% due 10/01/2012 5,458 AAA Aaa 2,650 6.55% due 10/01/2013 2,712 AAA Aaa 12,715 6.60% due 10/01/2022 13,119 NR* Aaa 1,000 Daytona Beach, Florida, Utility System Revenue Refunding Bonds, Series B, 5% due 11/15/2027 (c) 1,034 NR* Aaa 685 Duval County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds, AMT, 6.20% due 4/01/2020 (b)(d)(i) 739 AAA Aaa 4,005 Escambia County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds, AMT, 7% due 4/01/2028 (d)(i) 4,211 NR* Aaa 7,000 Escambia County, Florida, Health Facilities Authority, Health Facility Revenue Bonds (Florida Health Care Facility Loan), 5.95% due 7/01/2020 (a) 7,661 AAA Aaa 1,000 Escambia County, Florida, Health Facilities Authority, Revenue Refunding Bonds (Ascension Health Credit), Series A-1, 5.75% due 11/15/2009 (a)(f) 1,184 First Florida Governmental Fianancing Commission Revenue Bonds (b): AAA Aaa 890 5.70% due 7/01/2007(f) 1,025 AAA Aaa 2,110 5.70% due 7/01/2017 2,379 AAA Aaa 1,150 Florida HFA, Housing Revenue Bonds (Brittany Rosemont Apartments), AMT, Series C-1, 6.75% due 8/01/2014 (a) 1,215 AAA Aaa 1,410 Florida Housing Finance Corporation, Homeowner Mortgage Revenue Refunding Bonds, AMT, Series 4, 6.25% due 7/01/2022 (e) 1,524 AA+ Aaa 1,650 Florida State Board of Education, Capital Outlay, GO (Public Education), Series B, 5.875% due 6/01/2005 (f) 1,817 AAA Aaa 6,190 Florida State Board of Education, Lottery Revenue Bonds, Series A, 6% due 7/01/2015 (c) 7,281 AAA Aaa 1,140 Florida State Board of Education, Public Education, GO, Refunding, Series D, 5.75% due 6/01/2022 (e) 1,282 A- A3 3,700 Highlands County, Florida, Health Facilities Authority Revenue Bonds (Adventist Health System/Sunbelt Obligated Group), Series A, 6% due 11/15/2031 3,931 NR* Aaa 6,000 Hillsborough County, Florida, School Board, COP, 5.375% due 7/01/2026 (b) 6,409 AAA Aaa 2,615 Hillsborough County, Florida, School District, Sales Tax Revenue Refunding Bonds, 5.375% due 10/01/2020 (a) 2,835 AAA Aaa 750 Jacksonville, Florida, Economic Development Community Health Care Facilities Revenue Bonds (Mayo Clinic), Series B, 5.50% due 11/15/2036 (b) 804 AAA Aaa 1,455 Jacksonville, Florida, Guaranteed Entitlement Revenue Refunding and Improvement Bonds, 5.25% due 10/01/2032 (c) 1,532 Jacksonville, Florida, Port Authority, Seaport Revenue Bonds, AMT: NR* Aaa 1,025 5.625% due 11/01/2010 (f) 1,190 NR* Aaa 1,225 5.625% due 11/01/2026 (b) 1,286 AAA Aaa 1,000 Lee County, Florida, Airport Revenue Bonds, AMT, Series A, 6% due 10/01/2029 (e) 1,113 AAA NR* 850 Lee County, Florida, HFA, S/F Mortgage Revenue Bonds (Multi-County Program), AMT, Series A, Sub-Series 3, 7.45% due 9/01/2027 (d)(i)(k) 942 AAA Aaa 2,000 Miami Beach, Florida, Water and Sewer Revenue Bonds, 5.75% due 9/01/2025 (a) 2,238 AAA Aaa 5,000 Miami-Dade County, Florida, Aviation Revenue Bonds (Miami International Airport), AMT, Series A, 6% due 10/01/2024 (c) 5,656 AAA Aaa 2,000 Miami-Dade County, Florida, Educational Facilities Authority Revenue Bonds (University of Miami), Series A, 5.75% due 4/01/2029 (a) 2,242 AAA NR* 3,480 Miami-Dade County, Florida, Health Facilities Authority, Hospital Revenue Refunding Bonds, DRIVERS, Series 208, 9.56% due 8/15/2017 (a)(j) 4,355 AAA Aaa 1,115 Miami-Dade County, Florida, IDA, IDR (BAC Funding Corporation Project), Series A, 5.375% due 10/01/2030 (a) 1,193 AAA Aaa 2,000 Miami-Dade County, Florida, School Board COP, Series A, 5.50% due 10/01/2020 (e) 2,199 AAA Aaa 2,515 North Miami Beach, Florida, GO, 6.30% due 2/01/2004 (c)(f) 2,663 NR* Aaa 4,765 Orange County, Florida, Educational Facilities Authority, Educational Facilities Revenue Refunding Bonds (Rollins College Project), 5.50% due 12/01/2032 (a) 5,171 Orange County, Florida, Health Facilities Authority, Hospital Revenue Bonds: A- A3 600 (Adventist Health System), 6.25% due 11/15/2024 646 A- A2 1,835 (Orlando Regional Healthcare), 6% due 12/01/2029 1,946 AAA Aaa 2,000 Orange County, Florida, Sales Tax Revenue Refunding Bonds, Series B, 5% due 1/01/2025 (c) 2,068 NR* Aaa 6,500 Orange County, Florida, School Board, COP, Series A, 5.25% due 8/01/2023 (b) 6,893 AAA Aaa 5,330 Orange County, Florida, Tourist Development, Tax Revenue Bonds, 5.50% due 10/01/2032 (a) 5,726 AAA Aaa 165 Orange County, Florida, Tourist Development, Tax Revenue Refunding Bonds, Series A, 6.50% due 10/01/2010 (a)(h) 169 NR* Aaa 1,530 Osceola County, Florida, Infrastructure Sales Surplus Tax Revenue Bonds, 5.25% due 10/01/2025 (a) 1,615 AAA Aaa 1,100 Osceola County, Tourist Development Tax Revenue Bonds, Series A, 5.50% due 10/01/2027 (c) 1,187 AAA Aaa 1,500 Palm Beach County, Florida, Criminal Justice Facilities Revenue Bonds, 7.20% due 6/01/2015 (c) 1,987 Palm Beach County, Florida, School Board, COP: AAA Aaa 5,000 Series A, 6% due 8/01/2010 (c)(f) 5,980 AAA Aaa 1,500 Series A, 5.50% due 8/01/2022 (a) 1,638 AAA Aaa 2,475 Series C, 5% due 8/01/2027 (e) 2,548 NR* Aaa 1,000 Pasco County, Florida, Sales Tax Revenue Bonds (Half-Cent), 5% due 12/01/2033 (a) 1,032 NR* Aaa 1,460 Polk County, Florida, Utility System Revenue Bonds, 5% due 10/01/2029 (c) 1,508 AAA Aaa 5,600 Sarasota County, Florida, Public Hospital Board, Revenue Refunding Bonds (Sarasota Memorial Hospital), Series B, 5.50% due 7/01/2028 (b) 6,279 AAA Aaa 4,920 Sarasota County, Florida, Utility System Revenue Bonds, 6.50% due 10/01/2004 (c)(f) 5,385
Portfolio Abbreviations To simplify the listings of MuniYield Florida Insured Fund's portfolio holdings in the Schedule of Investments, we have abbreviated the names of many of the securities according to the list at right. AMT Alternative Minimum Tax (subject to) COP Certificates of Participation DRIVERS Derivative Inverse Tax-Exempt Receipts GO General Obligation Bonds HFA Housing Finance Agency IDA Industrial Development Authority IDR Industrial Development Revenue Bonds RIB Residual Interest Bonds S/F Single-Family MuniYield Florida Insured Fund, April 30, 2003 SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
S&P Moody's Face STATE Ratings Ratings Amount Issue Value Florida AAA NR* $ 2,000 South Broward, Florida, Hospital District Revenue Bonds, DRIVERS, (concluded) Series 337, 9.70% due 5/01/2032 (b)(j) $ 2,354 AAA Aaa 2,275 South Florida Water Management District, Special Obligation Land Acquisition Revenue Bonds, 6.0% due 4/01/2004 (a)(f) 2,399 A- A2 1,000 South Lake County, Florida, Hospital District Revenue Bonds (South Lake Hospital Inc.), 5.80% due 10/01/2034 1,018 AA Aa2 1,000 Tampa, Florida, Water and Sewer Revenue Refunding Bonds, Series A, 5% due 10/01/2026 1,030 New Jersey-- Tobacco Settlement Financing Corporation of New Jersey Revenue Bonds: 2.8% A- A3 2,035 6.75% due 6/01/2039 1,800 A- A3 2,025 7% due 6/01/2041 1,863 Puerto Rico-- AAA NR* 7,500 Puerto Rico Commonwealth, GO, Refunding, DRIVERS, Series 232, 9.441% 13.3% due 7/01/2017 (j)(l) 9,915 AAA Aaa 1,970 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series II, 5.375% due 7/01/2019 (b) 2,188 BBB+ Baa3 1,145 Puerto Rico Public Finance Corporation Revenue Bonds, Commonwealth Appropriation, Series E, 5.70% due 8/01/2025 1,208 NR* Aaa 3,550 Puerto Rico Public Finance Corporation, Revenue Refunding Bonds, RIB, Series 522X, 9.16% due 8/01/2022 (b)(j) 4,131 Total Municipal Bonds (Cost--$171,310) 141.1% 184,402 Shares Held Short-Term Securities 1,919 Merrill Lynch Institutional Tax-Exempt Fund** 1,919 Total Short-Term Securities (Cost--$1,919)--1.5% 1,919 Total Investments (Cost--$173,229)--142.6% 186,321 Other Assets Less Liabilities--3.3% 4,357 Preferred Shares, at Redemption Value--(45.9%) (60,000) -------- Net Assets Applicable to Common Shares--100.0% $130,678 ======== (a)AMBAC Insured. (b)MBIA Insured. (c)FGIC Insured. (d)GNMA Collateralized. (e)FSA Insured. (f)Prerefunded. (g)Radian Insured. (h)Escrowed to maturity. (i)FNMA Collateralized. (j)The interest rate is subject to change periodically and inversely based upon prevailing market rates. The interest rate shown is the rate in effect at April 30, 2003. (k)FHLMC Collateralized. (l)XL Capital Insured. *Not Rated. **Investments in companies considered to be an affiliate of the Fund (such companies are defined as "Affiliated Companies" in Section 2 (a)(3) of the Investment Company Act of 1940) are as follows: (in Thousands) Net Dividend Affiliate Activity Income Merrill Lynch Institutional Tax-Exempt Fund (1,534) $17 See Notes to Financial Statements.
STATEMENT OF NET ASSETS
As of April 30, 2003 Assets: Investments, at value (identified cost--$173,228,935) $186,321,408 Cash 45,872 Receivables: Interest $ 2,400,634 Securities sold 2,020,317 Dividends 62 4,421,013 ------------ Prepaid expenses 19,322 ------------ Total assets 190,807,615 ------------ Liabilities: Payables: Investment adviser 79,698 Dividends to Common Shareholders 41,386 Other affiliates 1,435 122,519 ------------ Accrued expenses 7,590 ------------ Total liabilities 130,109 ------------ Preferred Shares: Preferred Shares, par value $.05 per share (2,400 Series A shares of AMPS* issued and outstanding at $25,000 per share liquidation preference) 60,000,000 ------------ Net Assets Net assets applicable to Common Shares $130,677,506 Applicable ============ To Common Shares: Analysis of Common Shares, par value $.10 per share (8,440,456 shares issued Net Assets and outstanding) $ 844,046 Applicable to Paid-in capital in excess of par 117,649,821 Common Shares: Undistributed investment income--net $ 1,725,006 Accumulated realized capital losses on investments--net (2,633,840) Unrealized appreciation on investments--net 13,092,473 ------------ Total accumulated earnings--net 12,183,639 ------------ Total--Equivalent to $15.48 net asset value per Common Share (market price--$14.90) $130,677,506 ============ *Auction Market Preferred Shares. See Notes to Financial Statements.
MuniYield Florida Insured Fund, April 30, 2003 STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2003 Investment Interest $ 5,056,077 Income: Dividends 16,645 ------------ Total income 5,072,722 ------------ Expenses: Investment advisory fees $ 465,649 Commission fees 73,611 Accounting services 39,493 Professional fees 27,242 Transfer agent fees 18,372 Printing and shareholder reports 15,868 Trustees' fees and expenses 11,280 Listing fees 10,008 Custodian fees 5,613 Pricing fees 4,612 Other 12,849 ------------ Total expenses before reimbursement 684,597 Reimbursement of expenses (2,972) ------------ Total expenses after reimbursement 681,625 ------------ Investment income--net 4,391,097 ------------ Realized & Realized gain on investments--net 1,384,080 Unrealized Change in unrealized appreciation on investments--net 2,155,924 Gain on ------------ Investments--Net: Total realized and unrealized gain on investments--net 3,540,004 ------------ Dividends to Investment income--net (326,688) Preferred ------------ Shareholders-- Net Increase in Net Assets Resulting from Operations $ 7,604,413 Net: ============ See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
For the Six For the Months Ended Year Ended April 30, October 31, Increase (Decrease) in Net Assets: 2003 2002 Operations: Investment income--net $ 4,391,097 $ 8,741,052 Realized gain on investments--net 1,384,080 437,124 Change in unrealized appreciation on investments--net 2,155,924 162,111 Total dividends and distributions to Preferred Shareholders (326,688) (842,256) ------------ ------------ Net increase in net assets resulting from operations 7,604,413 8,498,031 ------------ ------------ Dividends & Investment income--net (3,874,169) (7,608,374) Distributions to Realized gain on investments--net -- (22,503) Common ------------ ------------ Shareholders: Net decrease in net assets resulting from dividends and distributions to Common Shareholders (3,874,169) (7,630,877) ------------ ------------ Common Share Value of shares issued to Common Shareholders in reinvestment Transactions: of dividends and distributions -- 45,169 ------------ ------------ Net Assets Total increase in net assets applicable to Common Shares 3,730,244 912,323 Applicable to Beginning of period 126,947,262 126,034,939 Common Shares: ------------ ------------ End of period* $130,677,506 $126,947,262 ============ ============ *Undistributed investment income--net $ 1,725,006 $ 1,534,766 ============ ============ See Notes to Financial Statements.
MuniYield Florida Insured Fund, April 30, 2003 FINANCIAL HIGHLIGHTS
The following per share data and ratios have been derived from information For the Six provided in the financial statements. Months Ended April 30, For the Year Ended October 31, Increase (Decrease) in Net Asset Value: 2003 2002 2001 2000 1999 Per Share Net asset value, beginning of period $ 15.04 $ 14.94 $ 13.89 $ 13.30 $ 15.79 Operating -------- -------- -------- -------- -------- Performance:++++ Investment income--net .52+++++ 1.04 1.00 1.02 1.01 Realized and unrealized gain (loss) on investments--net .42 .06 1.06 .61 (1.96) Dividends and distributions to Preferred Shareholders: Investment income--net (.04) (.10) (.23) (.29) (.15) Realized gain on investments--net -- --++ -- -- --++ In excess of realized gain on investments--net -- -- -- -- (.11) -------- -------- -------- -------- -------- Total from investment operations .90 1.00 1.83 1.34 (1.21) -------- -------- -------- -------- -------- Less dividends and distributions to Common Shareholders: Investment income--net (.46) (.90) (.78) (.75) (.86) Realized gain on investments--net -- --++ -- -- (.01) In excess of realized gain on investments--net -- -- -- -- (.41) -------- -------- -------- -------- -------- Total dividends and distributions to Common Shareholders (.46) (.90) (.78) (.75) (1.28) -------- -------- -------- -------- -------- Net asset value, end of period $ 15.48 $ 15.04 $ 14.94 $ 13.89 $ 13.30 ======== ======== ======== ======== ======== Market price per share, end of period $ 14.90 $ 14.30 $ 14.21 $ 12.125 $ 12.125 ======== ======== ======== ======== ======== Total Investment Based on market price per share 7.47%+++ 7.19% 24.17% 6.45% (15.43%) Return:** ======== ======== ======== ======== ======== Based on net asset value per share 6.16%+++ 7.22% 13.96% 11.17% (8.20%) ======== ======== ======== ======== ======== Ratios Based on Total expenses, net of reimbursement*** 1.08%* 1.11% 1.15% 1.14% 1.12% Average Net ======== ======== ======== ======== ======== Assets of Total expenses*** 1.08%* 1.11% 1.15% 1.14% 1.12% Common Shares: ======== ======== ======== ======== ======== Total investment income--net*** 6.94%* 7.02% 6.90% 7.55% 6.88% ======== ======== ======== ======== ======== Amount of dividends to Preferred Shareholders .52%* .67% 1.58% 2.13% 1.04% ======== ======== ======== ======== ======== Investment income--net, to Common Shareholders 6.42%* 6.35% 5.32% 5.42% 5.84% ======== ======== ======== ======== ======== Ratios Based on Total expenses, net of reimbursement .73%* .75% .77% .75% .75% Average Net ======== ======== ======== ======== ======== Assets of Total expenses .74%* .75% .77% .75% .75% Common & ======== ======== ======== ======== ======== Preferred Total investment income--net 4.72%* 4.74% 4.63% 4.94% 4.64% Shares:*** ======== ======== ======== ======== ======== Ratios Based on Dividends to Preferred Shareholders 1.10%* 1.39% 3.21% 4.03% 2.16% Average Net ======== ======== ======== ======== ======== Assets of Preferred Shares: Supplemental Net assets applicable to Common Shares, Data: end of period (in thousands) $130,678 $126,947 $126,035 $117,201 $112,219 ======== ======== ======== ======== ======== Preferred Shares outstanding, end of period (in thousands) $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000 ======== ======== ======== ======== ======== Portfolio turnover 16.08% 40.55% 78.48% 40.41% 85.16% ======== ======== ======== ======== ======== Leverage: Asset coverage per $1,000 $ 3,178 $ 3,116 $ 3,101 $ 2,953 $ 2,870 ======== ======== ======== ======== ======== Dividends Per Investment income--net $ 136 $ 348 $ 803 $ 1,010 $ 538 Share On ======== ======== ======== ======== ======== Preferred Shares Outstanding: *Annualized. **Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges. ***Do not reflect the effect of dividends to Preferred Shareholders. ++Amount is less than $(.01) per share. ++++Certain prior period amounts have been reclassified to conform to current period presentation. +++Aggregate total investment return. +++++Based on average shares outstanding. See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS 1. Significant Accounting Policies: MuniYield Florida Insured Fund (the "Fund") is registered under the Investment Company Act of 1940 as a non-diversified, closed-end management investment company. The Fund's financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which may require the use of management accruals and estimates. These unaudited financial statements reflect all adjustments, which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. All such adjustments are of a normal, recurring nature. The Fund determines and makes available for publication the net asset value of its Common Shares on a weekly basis. The Fund's Common Shares are listed on the New York Stock Exchange under the symbol MFT. The following is a summary of significant accounting policies followed by the Fund. (a) Valuation of investments--Municipal bonds are traded primarily in the over-the-counter markets and are valued at the most recent bid price or yield equivalent as obtained by the Fund's pricing service from dealers that make markets in such securities. Financial futures contracts and options thereon, which are traded on exchanges, are valued at their closing prices as of the close of such exchanges. Options written or purchased are valued at the last sale price in the case of exchange-traded options. In the case of options traded in the over-the-counter market, valuation is the last asked price (options written) or the last bid price (options purchased). Securities with remaining maturities of sixty days or less are valued at amortized cost, which approximates market value. Securities and assets for which market quotations are not readily available are valued at their fair value as determined in good faith by or under the direction of the Board of Trustees of the Fund, including valuations furnished by a pricing service retained by the Fund, which may utilize a matrix system for valuations. The procedures of the pricing service and its valuations are reviewed by the officers of the Fund under general supervision of the Board of Trustees. (b) Derivative financial instruments--The Fund may engage in various portfolio investment strategies both to increase the return of the Fund and to hedge, or protect, its exposure to interest rate movement and movements in the securities markets. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. * Financial futures contracts--The Fund may purchase or sell financial futures contracts and options on such futures contracts. Futures contracts are contracts for delayed delivery of securities at a specific future date and at a specific price or yield. Upon entering into a contract, the Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. * Options--The Fund is authorized to write covered call options and purchase put options. When the Fund writes an option, an amount equal to the premium received by the Fund is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked to market to reflect the current market value of the option written. MuniYield Florida Insured Fund, April 30, 2003 NOTES TO FINANCIAL STATEMENTS (concluded) When a security is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the security acquired or deducted from (or added to) the proceeds of the security sold. When an option expires (or the Fund enters into a closing transaction), the Fund realizes a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premium paid or received). Written and purchased options are non-income producing investments. * Forward interest rate swaps--The Fund is authorized to enter into forward interest rate swaps. In a forward interest rate swap, the Fund and the counterparty agree to pay or receive interest on a specified notional contract amount, commencing on a specified future effective date, unless terminated earlier. The value of the agreement is determined by quoted fair values received daily by the Fund from the counterparty. When the agreement is closed, the Fund records a realized gain or loss in an amount equal to the value of the agreement. (c) Income taxes--It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no Federal income tax provision is required. (d) Security transactions and investment income--Security transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on security transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income is recognized on the accrual basis. The Fund amortizes all premiums and discounts on debt securities. (e) Dividends and distributions--Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. 2. Investment Advisory Agreement and Transactions with Affiliates: The Fund has entered into an Investment Advisory Agreement with Fund Asset Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc. ("PSI"), an indirect, wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the limited partner. FAM is responsible for the management of the Fund's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Fund. For such services, the Fund pays a monthly fee at an annual rate of .50% of the Fund's average weekly net assets, including proceeds from the issuance of Preferred Shares. For the six months ended April 30, 2003, FAM reimbursed the Fund in the amount of $2,972. For the six months ended April 30, 2003, the Fund reimbursed FAM $2,059 for certain accounting services. Certain officers and/or trustees of the Fund are officers and/or directors of FAM, PSI, and/or ML & Co. 3. Investments: Purchases and sales of investments, excluding short-term securities, for the six months ended April 30, 2003 were $30,961,143 and $29,494,033, respectively. Net realized gains for the six months ended April 30, 2003 and net unrealized gains on April 30, 2003 were as follows: Realized Unrealized Gains Gains Long-term investments $ 1,384,080 $ 13,092,473 ------------ ------------ Total $ 1,384,080 $ 13,092,473 ============ ============ As of April 30, 2003, net unrealized appreciation for Federal income tax purposes aggregated $13,136,438, of which $13,350,560 related to appreciated securities and $214,122 related to depreciated securities. The aggregate cost of investments at April 30, 2003 for Federal income tax purposes was $173,184,970. 4. Share Transactions: The Fund is authorized to issue an unlimited number of shares of beneficial interest, including Preferred Shares, par value $.10 per share, all of which were initially classified as Common Shares. The Board of Trustees is authorized, however, to reclassify any unissued shares of beneficial interest without approval of the holders of Common Shares. Common Shares Shares issued and outstanding during the six months ended April 30, 2003 remained constant and for the year ended October 31, 2002 increased by 3,098 as a result of dividend reinvestment. Preferred Shares Auction Market Preferred Shares ("AMPS") are redeemable Preferred Shares of the Fund, with a par value of $.05 per share and a liquidation preference of $25,000 per share plus accrued and unpaid dividends, that entitle their holders to receive cash dividends at an annual rate that may vary for the successive dividend periods. The yield in effect at April 30, 2003 was 1.15%. Shares issued and outstanding during the six months ended April 30, 2003 and for the year ended October 31, 2002 remained constant. The Fund pays commissions to certain broker-dealers at the end of each auction at an annual rate ranging from .25% to .375%, calculated on the proceeds of each auction. For the six months ended April 30, 2003, Merrill Lynch, Pierce, Fenner & Smith Incorporated, an affiliate of FAM, earned $32,894 as commissions. 5. Capital Loss Carryforward: On October 31, 2002, the Fund had a net capital loss carryforward of $2,697,518, all of which expires in 2008. This amount will be available to offset like amounts of any future taxable gains. 6. Subsequent Event: The Fund paid a tax-exempt income dividend to holders of Common Shares in the amount of $.076500 per share on May 29, 2003 to shareholders of record on May 16, 2003. MANAGED DIVIDEND POLICY The Fund's dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more consistent yield to the current trading price of Common Shares of the Fund, the Fund may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Fund for any particular month may be more or less than the amount of net investment income earned by the Fund during such month. The Fund's current accumulated but undistributed net investment income, if any, is disclosed in the Statement of Net Assets, which comprises part of the Financial Information included in this report. OFFICERS AND TRUSTEES Terry K. Glenn, President and Trustee Donald W. Burton, Trustee M. Colyer Crum, Trustee Laurie Simon Hodrick, Trustee Fred G. Weiss, Trustee Kenneth A. Jacob, Senior Vice President John M. Loffredo, Senior Vice President Robert D. Sneeden, Vice President Donald C. Burke, Vice President and Treasurer Brian D. Stewart, Secretary J. Thomas Touchton, Trustee of MuniYield Florida Insured Fund, has recently retired. The Fund's Board of Trustees wishes Mr. Touchton well in his retirement. Custodian The Bank of New York 100 Church Street New York, NY 10286 Transfer Agents Common Shares: The Bank of New York 101 Barclay Street New York, NY 10286 Preferred Shares: The Bank of New York 100 Church Street New York, NY 10286 NYSE Symbol MFT Item 2 - Did registrant adopt a code of ethics, as of the end of the period covered by this report, that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party? If not, why not? Briefly describe any amendments or waivers that occurred during the period. State here if code of ethics/amendments/waivers are on website and give website address-. State here if fund will send code of ethics to shareholders without charge upon request--N/A (not answered until July 15, 2003 and only annually for funds) Item 3 - Did the registrant's board of directors determine that the registrant either: (i) has at least one audit committee financial expert serving on its audit committee; or (ii) does not have an audit committee financial expert serving on its audit committee? If yes, disclose name of financial expert and whether he/she is "independent," (fund may, but is not required, to disclose name/independence of more than one financial expert) If no, explain why not. -N/A (not answered until July 15, 2003 and only annually for funds) Item 4 - Disclose annually only (not answered until December 15, 2003) (a) Audit Fees - Disclose aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. N/A. (b) Audit-Related Fees - Disclose aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. N/A. (c) Tax Fees - Disclose aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. Registrants shall describe the nature of the services comprising the fees disclosed under this category. N/A. (d) All Other Fees - Disclose aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. N/A. (e)(1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. N/A. (e)(2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. N/A. (f) If greater than 50%, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees. N/A. (g) Disclose the aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant. N/A. (h) Disclose whether the registrant's audit committee has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. N/A. Item 5 - If the registrant is a listed issuer as defined in Rule 10A- 3 under the Exchange Act, state whether or not the registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. If the registrant has such a committee, however designated, identify each committee member. If the entire board of directors is acting as the registrant's audit committee in Section 3(a)(58)(B) of the Exchange Act, so state. If applicable, provide the disclosure required by Rule 10A-3(d) under the Exchange Act regarding an exemption from the listing standards for audit committees. (Listed issuers must be in compliance with the new listing rules by the earlier of their first annual shareholders meeting after January 2004, or October 31, 2004 (annual requirement)) Item 6 - Reserved Item 7 - For closed-end funds that contain voting securities in their portfolio, describe the policies and procedures that it uses to determine how to vote proxies relating to those portfolio securities. N/A (not answered until July 1, 2003) Item 8--Reserved Item 9(a) - The registrant's certifying officers have reasonably designed such disclosure controls and procedures to ensure material information relating to the registrant is made known to us by others particularly during the period in which this report is being prepared. The registrant's certifying officers have determined that the registrant's disclosure controls and procedures are effective based on our evaluation of these controls and procedures as of a date within 90 days prior to the filing date of this report. Item 9(b)--There were no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Item 10 - Exhibits 10(a) - Attach code of ethics or amendments/waivers, unless code of ethics or amendments/waivers is on website or offered to shareholders upon request without charge. N/A. 10(b) - Attach certifications pursuant to Section 302 of the Sarbanes-Oxley Act. Attached hereto. Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MuniYield Florida Insured Fund By: _/s/ Terry K. Glenn_______ Terry K. Glenn, President of MuniYield Florida Insured Fund Date: June 23, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: _/s/ Terry K. Glenn________ Terry K. Glenn, President of MuniYield Florida Insured Fund Date: June 23, 2003 By: _/s/ Donald C. Burke________ Donald C. Burke, Chief Financial Officer of MuniYield Florida Insured Fund Date: June 23, 2003 Attached hereto as an exhibit are the certifications pursuant to Section 906 of the Sarbanes-Oxley Act. EX-99.CERT 3 ex99cert.txt EX-99 CERT EX-99. CERT CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Terry K. Glenn, President of MuniYield Florida Insured Fund, certify that: 1. I have reviewed this report on Form N-CSR of MuniYield Florida Insured Fund (the "Fund"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Fund as of, and for, the periods presented in this report; 4. The Fund's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the Fund and have: a) designed such disclosure controls and procedures to ensure that material information relating to the Fund, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the Fund's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The Fund's other certifying officers and I have disclosed, based on our most recent evaluation, to the Fund's auditors and the audit committee of the Fund's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Fund's ability to record, process, summarize, and report financial data and have identified for the Fund's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Fund's internal controls; and 6. The Fund's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 23, 2003 /s/ Terry K. Glenn Terry K. Glenn, President of MuniYield Florida Insured Fund EX-99. CERT CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Donald C. Burke, Chief Financial Officer of MuniYield Florida Insured Fund, certify that: 1. I have reviewed this report on Form N-CSR of MuniYield Florida Insured Fund (the "Fund"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Fund as of, and for, the periods presented in this report; 4. The Fund's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the Fund and have: a) designed such disclosure controls and procedures to ensure that material information relating to the Fund, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the Fund's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The Fund's other certifying officers and I have disclosed, based on our most recent evaluation, to the Fund's auditors and the audit committee of the Fund's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Fund's ability to record, process, summarize, and report financial data and have identified for the Fund's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Fund's internal controls; and 6. The Fund's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 23, 2003 /s/ Donald C. Burke Donald C. Burke, Chief Financial Officer of MuniYield Florida Insured Fund Exhibit 99.1350CERT Certification Pursuant to Section 906 of the Sarbanes Oxley Act I, Terry K. Glenn, President of MuniYield Florida Insured Fund (the "Fund"), certify that: 1. The N-CSR of the Fund (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Dated: June 23, 2003 /s/ Terry K. Glenn Terry K. Glenn, President of MuniYield Florida Insured Fund A signed original of this written statement required by Section 906 has been provided to MuniYield Florida Insured Fund and will be retained by MuniYield Florida Insured Fund and furnished to the Securities and Exchange Commission or staff upon request. Exhibit 99.1350CERT Certification Pursuant to Section 906 of the Sarbanes Oxley Act I, Donald C. Burke, Chief Financial Officer of MuniYield Florida Insured Fund (the "Fund"), certify that: 1. The N-CSR of the Fund (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Dated: June 23, 2003 /s/ Donald C. Burke Donald C. Burke, Chief Financial Officer of MuniYield Florida Insured Fund A signed original of this written statement required by Section 906 has been provided to MuniYield Florida Insured Fund and will be retained by MuniYield Florida Insured Fund and furnished to the Securities and Exchange Commission or staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----