N-CSR 1 ml7145.txt MUNIYIELD FLORIDA INSURED UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSRS 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: 10/31/04 Date of reporting period: 11/01/03 - 04/30/04 Item 1 - Report to Stockholders (BULL LOGO) Merrill Lynch Investment Managers www.mlim.ml.com MuniYield Florida Insured Fund Semi-Annual Report April 30, 2004 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, investment-grade 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. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling toll-free 1-800-MER-FUND (1-800-637-3863); (2) on www.mutualfunds.ml.com; and (3) on the Securites and Exchange Commission's website at http://www.sec.gov. MuniYield Florida Insured Fund Box 9011 Princeton, NJ 08543-9011 (GO PAPERLESS LOGO) It's Fast, Convenient, & Timely! To sign up today, go to www.icsdelivery.com/live. 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 pays dividends at prevailing short-term interest rates, and invests the proceeds in long-term municipal bonds. The interest earned on these investments, net of dividends to Preferred Shares, 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 Share's 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 these securities. As of April 30, 2004, the percentage of the Fund's total net assets invested in inverse floaters was 10.60%. 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, 2004 A Letter From the President Dear Shareholder For the six-month and 12-month periods ended April 30, 2004, the Lehman Brothers Municipal Bond Index posted returns of +1.19% and +2.68%, respectively. Its taxable counterpart, the Lehman Brothers Aggregate Bond Index, had returns of +1.25% and +1.82% for the same periods. Amid considerable month-to-month volatility, tax-exempt bond yields rose over the past year, although not to the same extent as 10-year U.S. Treasury yields. In all, tax-exempt securities continued to be an attractive fixed income investment alternative. As of April month-end, the Federal Reserve Board maintained its accommodative policy stance, although a better-than-expected employment report for the month of March prompted speculation that an interest rate increase could come sooner than many had expected. On April 2, 2004, the good news on the employment front - previously the one dim spot in an otherwise bright economic picture - helped prompt the yield on the 10-year Treasury bond to spike nearly 25 basis points (.25%), from 3.91% to 4.15%. Market watchers continue to monitor the economic data and Federal Reserve Board language for indications of interest rate direction. If economic growth maintains its recent pace and employment figures continue to improve, many believe it is just a matter of time before interest rates move upward. Equity markets, in the meantime, gleaned support from the improving economic environment and provided attractive returns. For the six-month and 12-month periods ended April 30, 2004, the Standard & Poor's 500 Index returned +6.27% and +22.88%, respectively. Significant fiscal and monetary stimulus in 2003, including low interest rates and tax cuts, has opened the door to consumer spending, capital spending, increases in exports and long-awaited job growth. As expected, these developments have led the way to improvements in corporate earnings - a positive for stock markets. The events and efforts of the past year leave us with a much stronger economy today. Of course, markets will always fluctuate, and there are many uncertainties - not the least of which are geopolitical in nature - which can translate into negative market movements. Keeping this in mind, we encourage you to revisit your portfolio and your asset allocation strategy to ensure you are well positioned to take advantage of the opportunities that lie ahead. Importantly, your financial advisor can help you develop a strategy most suitable for your circumstances through all types of market and economic cycles. We thank you for trusting Merrill Lynch Investment Managers with your investment assets, and we look forward to serving you in the months and years ahead. Sincerely, (Terry K. Glenn) Terry K. Glenn President and Trustee MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 A Discussion With Your Fund's Portfolio Manager Our strategy has been and continues to be focused on increasing the Fund's yield while protecting net asset value in what has been a volatile interest rate environment. Describe the recent market environment relative to municipal bonds. For much of the six-month period, a positive economic backdrop helped bond prices to move higher as yields, which typically move opposite of prices, declined. In early April, however, a surprisingly strong monthly employment report triggered fears that the long-accommodative Federal Reserve Board might raise interest rates sooner than many had expected. As a result, bond yields rose (prices fell) sharply for the remainder of the period. At the end of April, long-term U.S. Treasury bond yields had climbed to 5.13%, representing an increase of approximately 15 basis points (.15%) over the past six months. Ten-year U.S. Treasury note yields stood at 4.30% as of period end, an increase of more than 20 basis points. Tax-exempt bond yields generally mimicked the movement of their taxable counterparts, although volatility in the municipal market was more subdued. Long-term revenue bond yields, as measured by the Bond Buyer Revenue Bond Index, rose just four basis points over the past six months. For the same period, yields on AAA-rated issues maturing in 30 years increased approximately 10 basis points to 4.93% while yields on 10-year, AAA-rated issues increased more than 16 basis points to nearly 4%, according to Municipal Market Data. The more marked increase in 10-year bond yields may be attributed to the fact that recent issuance has been heavily concentrated in the 10-year - 20-year range. The resulting supply imbalance prompted higher intermediate bond yields (and lower prices). Longer-maturity and lower-rated issues continued to benefit from more favorable supply/demand factors and, therefore, have seen less price depreciation. For the six-month period as a whole, municipal bond supply declined approximately 5% compared to the same period a year ago. While investor enthusiasm for stocks has taken some attention away from fixed income markets, overall demand for tax-exempt municipal bonds has remained positive. Recent Federal Reserve Board statistics showed that U.S. household holdings of municipal securities increased by more than $25 billion during the fourth quarter of 2003 to approximately $680 billion. In addition, data from the Investment Company Institute indicates that, in just the first three months of 2004, tax-exempt bond funds have seen net new cash flows of almost $640 million. Describe conditions in the State of Florida. Overall, conditions in Florida remained favorable. The state maintained solid credit ratings of Aa2 from Moody's, AA+ from Standard & Poor's and AA from Fitch. All three rating agencies held a stable outlook for Florida's finances. This was based on an improving and diverse economy, solid finances, moderate debt and a proactive government that responds to economic downturns quicker than other states. Florida's economy is bolstered by strong population growth, which is attributed to its attractive physical environment and favorable business climate. The population growth is one reason Florida's economy typically has performed better than the national economy. Although the growth in population has put a strain on services such as education, transportation and health care, it also has allowed the state to recover quickly from the recent sub-par economic trends. Currently, the state's revenues are modestly higher than projected and expenditures remain under control due to strong fiscal oversight. The fiscal year 2004 budget was pressured by only modest revenue increases, but was brought into balance through tight expenditure controls, including outsourcing work and requiring local governments to pick up costs historically incurred by the state. To pay for these additional expenses, municipalities imposed increases to property taxes and/or local sales taxes through voter initiatives. Florida continues to maintain sound and solid fund balances with consistent General Fund operations. In addition, the state has a working Capital Reserve Fund and a Budget Stabilization Fund in excess of $1.8 billion. Our strategy in purchasing Florida issues has been to favor insured general obligation bonds and their equivalents rather than uninsured bonds. We believe this is a prudent approach, as there is no meaningful yield offered in exchange for the additional risk associated with uninsured bonds. How did the Fund perform during the period in light of the existing market conditions? For the six-month period ended April 30, 2004, the Common Shares of MuniYield Florida Insured Fund had net annualized yields of 6.34% and 6.96%, based on a period-end per share net asset value of $14.72 and a per share market price of $13.40, respectively, and $.465 per share income dividends. Over the same period, the total investment return on the Fund's Common Shares was +1.03%, based on a change in per share net asset value from $15.04 to $14.72, and assuming reinvestment of $.464 per share ordinary income dividends. MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 For the six-month period ended April 30, 2004, the Fund's Auction Market Preferred Shares (AMPS) had an average yield of .89%. The Fund's return, based on net asset value, lagged the +1.78% average return of its comparable Lipper category of Florida Municipal Debt Funds for the six-month period ended April 30, 2004. (Funds in this Lipper category limit their investment to securities exempt from taxation in Florida or a city in Florida). While our overall strategy has been to favor issues with longer maturities, the Fund does hold a fair amount of pre-refunded bonds in the one-year - ten-year maturity range. This sector of the yield curve was hard hit during the past six months, and this portion of the portfolio detracted from overall returns. On a positive note, the Fund's yield remains competitive and we recently were able to increase the monthly dividend paid to shareholders. For a description of the Fund's total investment return based on a change in the per share market value of the Fund's Common Shares (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 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 market value of the Fund's Common Shares can vary significantly from total investment return based on changes in the Fund's net asset value. What changes were made to the portfolio during the period? We made no significant changes to the portfolio or our investment strategy in the past six months. We maintained our focus on increasing the income provided to shareholders and muting the Fund's net asset value volatility. The most volatile part of the yield curve during the period continued to be the 10-year - 15-year sector. During periods of sustained strength in the bond market, we sought to reduce some of our holdings in this maturity range. With the proceeds from the sales, we looked to purchase premium-coupon bonds in the 20-year - 30-year maturity range whenever they became available. Our observations and research reveal that the longer end of the yield curve has held firm. As such, this is where we have found the greatest value. By taking advantage of the steep yield curve, we have been able to increase the Fund's yield while muting its price volatility. In terms of leverage, the Fund's borrowing costs generally remained below 1% throughout the period. The attractive funding levels, in combination with a steep tax-exempt yield curve, continued to generate a significant income benefit to the Fund's Common Shareholders. At this point, the Federal Reserve Board appears poised to begin raising short-term interest rates, most likely later in 2004. The increase, however, is expected to be gradual and is not likely to have a material impact on the positive advantage leverage has had on the yield of the Fund's Common Shares. We expect short- term borrowing costs to remain near 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 as a result, reduce the yield on the Fund's Common Shares. At the end of the period, the Fund's leverage amount, due to AMPS, was 32.56% of total assets. (For a complete explanation of the benefits and risks of leveraging, see page 2 of this report to shareholders.) How would you characterize the portfolio's position at the close of the period? In our view, the municipal market will continue to be volatile over the next few months. Should interest rates continue to decline, we intend to shift to a more defensive posture to prepare the Fund to outperform when rates eventually head higher. As long as the municipal yield curve remains steep, we will continue to sell the intermediate part of the curve and use periods of volatility to structure higher-coupon bonds whenever they are attractively priced. Robert D. Sneeden Vice President and Portfolio Manager May 11, 2004 MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Proxy Results
During the six-month period ended April 30, 2004, MuniYield Florida Insured Fund's Common Shareholders voted on the following proposal. The proposal was approved at a shareholders' meeting on April 27, 2004. 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: Donald W. Burton 8,082,302 74,734 David H. Walsh 8,082,597 74,439 Fred G. Weiss 8,082,182 74,854 During the six-month period ended April 30, 2004, MuniYield Florida Insured Fund's Preferred Shareholders voted on the following proposal. The proposal was approved at a shareholders' meeting on April 27, 2004. 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: Donald W. Burton, M. Colyer Crum, Laurie Simon Hodrick, David H. Walsh and Fred G. Weiss 2,231 10
Quality Profile The quality ratings of securities in the Fund as of April 30, 2004 were as follows: Percent of Total S&P Rating/Moody's Rating Investments AAA/Aaa 87.0% AA/Aa 4.0 A/A 4.0 BBB/Baa 2.5 NR (Not Rated) 2.1 Other* 0.4 *Temporary investments in short-term variable rate municipal securities. MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Schedule of Investments (In Thousands)
S&P Moody's Face Ratings Ratings Amount Municipal Bonds Value Florida--131.0% NR* VMIG1++ $ 700 Alachua County, Florida, Health Facilities Authority, Health Facilities Revenue Bonds (Shands Teaching Hospital and Clinics, Inc. Project), VRDN, Series A, 1.10% due 12/01/2012 (k) $ 700 AA NR* 2,065 Beacon Tradeport Community Development District, Florida, Special Assessment Revenue Refunding Bonds (Commercial Project), Series A, 5.625% due 5/01/2032 2,155 AAA Aaa 700 Boynton Beach, Florida, Utility System Revenue Refunding Bonds, 6.25% due 11/01/2020 (c)(h) 823 AAA Aaa 3,000 Brevard County, Florida, IDR (NUI Corporation Project), AMT, 6.40% due 10/01/2024 (a) 3,111 AAA Aaa 5,000 Dade County, Florida, Aviation Revenue Bonds, AMT, Series B, 5.75% due 10/01/2012 (b) 5,338 NR* Aaa 1,000 Daytona Beach, Florida, Utility System Revenue Refunding Bonds, Series B, 5% due 11/15/2027 (c) 1,003 AAA Aaa 1,000 Deltona, Florida, Utility System Revenue Bonds, 5.125% due 10/01/2027 (b) 1,015 NR* Aaa 25 Duval County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds, AMT, 6.20% due 4/01/2020 (b)(d)(e) 25 AAA Aaa 2,275 Escambia County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds, AMT, 7% due 4/01/2028 (d)(e) 2,346 NR* Aaa 4,585 Escambia County, Florida, Health Facilities Authority, Health Facility Revenue Bonds (Florida Health Care Facility Loan), 5.95% due 7/01/2020 (a) 4,782 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)(l) 1,143 AAA Aaa 2,110 First Florida Governmental Financing Commission Revenue Bonds, 5.70% due 7/01/2017 (b) 2,303 AAA Aaa 1,150 Florida HFA, Housing Revenue Bonds (Brittany Rosemont Apartments), AMT, Series C-1, 6.75% due 8/01/2014 (a) 1,187 AAA Aaa 920 Florida Housing Finance Corporation, Homeowner Mortgage Revenue Refunding Bonds, AMT, Series 4, 6.25% due 7/01/2022 (f) 955 AAA Aaa 1,650 Florida State Board of Education, Capital Outlay, GO (Public Education), Series B, 5.875% due 6/01/2005 (l) 1,746 AAA Aaa 6,190 Florida State Board of Education, Lottery Revenue Bonds, Series A, 6% due 7/01/2015 (c) 7,027 Florida State Governmental Utility Authority, Utility Revenue Bonds (a): AAA Aaa 1,000 (Citrus Utility System), 5.125% due 10/01/2033 1,009 AAA Aaa 1,100 (Lehigh Utility System), 5.125% due 10/01/2028 1,115 AAA Aaa 1,000 (Lehigh Utility System), 5.125% due 10/01/2033 1,009 AA- Aa3 1,860 Florida State Turnpike Authority, Turnpike Revenue Bonds (Department of Transportation), Series B, 5% due 7/01/2030 1,854 A A3 3,700 Highlands County, Florida, Health Facilities Authority, Hospital Revenue Bonds (Adventist Health System), Series A, 6% due 11/15/2031 3,880 NR* Baa1 1,025 Hillsborough County, Florida, IDA, Hospital Revenue Refunding Bonds (Tampa General Hospital Project), Series A, 5.25% due 10/01/2024 1,014 NR* Aaa 6,000 Hillsborough County, Florida, School Board, COP, 5.375% due 7/01/2026 (b) 6,185 AAA Aaa 2,615 Hillsborough County, Florida, School District, Sales Tax Revenue Refunding Bonds, 5.375% due 10/01/2020 (a) 2,787
Portfolio Abbreviations To simplify the listings of MuniYield Florida Insured Fund's portfolio holdings in the Schedule of Invest-ments, 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 VRDN Variable Rate Demand Notes MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Schedule of Investments (continued) (In Thousands)
S&P Moody's Face Ratings Ratings Amount Municipal Bonds Value Florida (continued) AA- Aa3 $ 2,610 Jacksonville Electric Authority, Florida, Water and Sewer System Revenue Bonds, Series C, 5.25% due 10/01/2037 $ 2,616 AAA Aaa 750 Jacksonville, Florida, Economic Development Commission, Health Care Facilities Revenue Bonds (Mayo Clinic--Jacksonville), Series B, 5.50% due 11/15/2036 (b) 784 AAA Aaa 1,455 Jacksonville, Florida, Guaranteed Entitlement Revenue Refunding and Improvement Bonds, 5.25% due 10/01/2032 (c) 1,488 Jacksonville, Florida, Port Authority, Seaport Revenue Bonds, AMT (b): NR* Aaa 1,025 5.625% due 11/01/2010 (l) 1,143 NR* Aaa 1,225 5.625% due 11/01/2026 1,261 AAA Aaa 2,000 Lakeland, Florida, Electric and Water Revenue Refunding Bonds, Series A, 5% due 10/01/2028 (b) 2,002 AAA Aaa 1,000 Lee County, Florida, Airport Revenue Bonds, AMT, Series A, 6% due 10/01/2029 (f) 1,077 AAA NR* 395 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)(e)(i) 409 AAA Aaa 500 Marco Island, Florida, Utility System Revenue Bonds, 5.25% due 10/01/2021 (b) 528 NR* Aaa 1,000 Martin County, Florida, Utilities System Revenue Bonds, 5.125% due 10/01/2033 (a) 1,009 AAA Aaa 2,000 Miami Beach, Florida, Water and Sewer Revenue Bonds, 5.75% due 9/01/2025 (a) 2,154 Miami-Dade County, Florida, Aviation Revenue Bonds, AMT, Series A: AAA Aaa 1,100 5.125% due 10/01/2035 (f) 1,090 AAA Aaa 5,000 (Miami International Airport), 6% due 10/01/2024 (c) 5,407 AAA Aaa 1,300 (Miami International Airport), 5% due 10/01/2033 (c) 1,269 AAA Aaa 1,510 (Miami International Airport), 5% due 10/01/2036 (c) 1,464 Miami-Dade County, Florida, Educational Facilities Authority Revenue Bonds (University of Miami), Series A (a): AAA Aaa 1,000 5.75% due 4/01/2013 1,116 AAA Aaa 2,000 5.75% due 4/01/2029 2,150 AAA Aaa 2,000 Miami-Dade County, Florida, Expressway Authority, Toll System Revenue Bonds, 6.375% due 7/01/2010 (c)(l) 2,357 AAA NR* 3,480 Miami-Dade County, Florida, Health Facilities Authority, Hospital Revenue Refunding Bonds, DRIVERS, Series 208, 9.87% due 8/15/2017 (a)(j) 4,055 AAA Aaa 1,115 Miami-Dade County, Florida, IDA, IDR (BAC Funding Corporation Project), Series A, 5.375% due 10/01/2030 (a) 1,159 AAA Aaa 2,000 Miami-Dade County, Florida, School Board COP, Series A, 5.50% due 10/01/2020 (f) 2,167 AAA Aaa 1,000 Miami-Dade County, Florida, Special Obligation Revenue Bonds (Juvenile Courthouse Project), Series A, 5% due 4/01/2035 (a) 995 AAA Aaa 1,000 Ocoee, Florida, Water and Sewer System Revenue Refunding and Improvement Bonds, 5.125% due 10/01/2033 (a) 1,009 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) 5,038 Orange County, Florida, Health Facilities Authority, Hospital Revenue Bonds: A A3 600 (Adventist Health System), 6.25% due 11/15/2024 645 A- A2 1,835 (Orlando Regional Healthcare), 6% due 12/01/2029 1,919 Orange County, Florida, Sales Tax Revenue Refunding Bonds (c): AAA Aaa 1,000 Series A, 5.125% due 1/01/2023 1,028 AAA Aaa 2,000 Series B, 5% due 1/01/2025 2,012 NR* Aaa 6,500 Orange County, Florida, School Board, COP, Series A, 5.25% due 8/01/2023 (b) 6,723 AAA Aaa 5,330 Orange County, Florida, Tourist Development, Tax Revenue Bonds, 5.50% due 10/01/2032 (a) 5,541 AAA A2 165 Orange County, Florida, Tourist Development, Tax Revenue Refunding Bonds, Series A, 6.50% due 10/01/2010 (a)(h) 168
MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Schedule of Investments (continued) (In Thousands)
S&P Moody's Face Ratings Ratings Amount Municipal Bonds Value Florida (concluded) Orlando and Orange County, Florida, Expressway Authority Revenue Bonds, Series B (a): AAA Aaa $ 1,000 5% due 7/01/2030 $ 1,000 AAA Aaa 1,650 5% due 7/01/2035 1,641 NR* Aaa 1,530 Osceola County, Florida, Infrastructure Sales Surplus Tax Revenue Bonds, 5.25% due 10/01/2025 (a) 1,573 NR* Aaa 2,000 Osceola County, Florida, School Board, COP, Series A, 5.25% due 6/01/2027 (a) 2,048 AAA Aaa 1,100 Osceola County, Florida, Tourist Development Tax Revenue Bonds, Series A, 5.50% due 10/01/2027 (c) 1,144 AAA Aaa 1,500 Palm Beach County, Florida, Criminal Justice Facilities Revenue Bonds, 7.20% due 6/01/2015 (c) 1,891 Palm Beach County, Florida, School Board, COP, Series A: AAA Aaa 5,000 6% due 8/01/2010 (c)(l) 5,794 AAA Aaa 1,500 5.50% due 8/01/2022 (a) 1,606 AAA Aaa 1,000 Pasco County, Florida, Sales Tax Revenue Bonds (Half-Cent), 5% due 12/01/2033 (a) 995 NR* Aaa 1,000 Pembroke Pines, Florida, Public Improvement Revenue Bonds, Series A, 5% due 10/01/2034 (a) 995 NR* Aaa 1,460 Polk County, Florida, Utility System Revenue Bonds, 5% due 10/01/2029 (c) 1,461 NR* Aaa 1,055 Port St. Lucie, Florida, Utility Revenue Bonds, 5.25% due 9/01/2024 (b) 1,096 AAA Aaa 1,350 Saint Lucie County, Florida, School Board, COP (Master Lease Program), Series A, 5% due 7/01/2028 (f) 1,345 NR* Aaa 1,405 Saint Petersburg, Florida, Professional Sports Facility, Sales Tax Revenue Refunding Bonds, 5.125% due 10/01/2019 (f) 1,475 AAA Aaa 4,920 Sarasota County, Florida, Utility System Revenue Bonds, 6.50% due 10/01/2004 (c)(l) 5,127 AAA NR* 2,000 South Broward, Florida, Hospital District Revenue Bonds, DRIVERS, Series 337, 9.832% due 5/01/2032 (b)(j) 2,258 A- A2 1,000 South Lake County, Florida, Hospital District Revenue Bonds (South Lake Hospital Inc.), 5.80% due 10/01/2034 1,016 AAA Aaa 1,240 Stuart, Florida, Public Utilities Revenue Refunding and Improvement Bonds, 5.25% due 10/01/2024 (c) 1,285 AA Aa2 750 Tampa, Florida, Water and Sewer Revenue Refunding Bonds, Series A, 5% due 10/01/2026 752 AAA Aaa 1,060 Tohopekaliga, Florida, Water Authority, Utility System Revenue Refunding Bonds, Series A, 5% due 10/01/2028 (f) 1,061 Village Center Community Development District, Florida, Utility Revenue Bonds (b): AAA Aaa 2,585 5.25% due 10/01/2023 2,684 AAA Aaa 4,000 5.125% due 10/01/2028 4,058 AAA Aaa 4,300 5% due 10/01/2036 4,215 New Jersey--0.6% BBB Baa3 735 Tobacco Settlement Financing Corporation of New Jersey Revenue Bonds, 7% due 6/01/2041 721 Puerto Rico--14.7% Children's Trust Fund Project of Puerto Rico, Tobacco Settlement Revenue Refunding Bonds: BBB Baa3 1,110 5.375% due 5/15/2033 1,044 BBB Baa3 700 5.50% due 5/15/2039 648 AAA NR* 7,500 Puerto Rico Commonwealth, GO, Refunding, DRIVERS, Series 232, 9.657% due 7/01/2017 (g)(j) 9,183 AAA Aaa 1,970 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series II, 5.375% due 7/01/2019 (b) 2,150 BBB+ Baa3 1,145 Puerto Rico Public Finance Corporation Revenue Bonds, Commonwealth Appropriation, Series E, 5.70% due 8/01/2025 1,200 NR* Aaa 3,550 Puerto Rico Public Finance Corporation, Revenue Refunding Bonds, RIB, Series 522X, 9.41% due 8/01/2022 (b)(j) 4,042 Total Municipal Bonds (Cost--$175,158)--146.3% 181,803
MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Schedule of Investments (concluded) (In Thousands)
Shares Held Short-Term Securities Value 3,919 Merrill Lynch Institutional Tax-Exempt Fund (m) $ 3,919 Total Short-Term Securities (Cost--$3,919)--3.1% 3,919 Total Investments (Cost--$179,077)--149.4% 185,722 Liabilities in Excess of Other Assets--(1.1%) (1,428) Preferred Shares, at Redemption Value--(48.3%) (60,011) --------- Net Assets Applicable to Common Shares--100.0% $ 124,283 ========= *Not Rated. ++Highest short-term rating by Moody's Investors Service, Inc. (a)AMBAC Insured. (b)MBIA Insured. (c)FGIC Insured. (d)GNMA Collateralized. (e)FNMA Collateralized. (f)FSA Insured. (g)XL Capital Insured. (h)Escrowed to maturity. (i)FHLMC 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, 2004. (k)The interest rate is subject to change periodically based upon prevailing market rates. The interest rate shown is the rate in effect at April 30, 2004. (l)Prerefunded. (m)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 (1,800) $16 Forward interest rate swaps entered into as of April 30, 2004 were as follows: (in Thousands) Unrealized Notional Appreciation Amount (Depreciation) Receive a variable rate equal to 7-Day Bond Market Association Municipal Swap Index Rate and pay a fixed rate equal to 3.581% Broker, J.P. Morgan Chase Bank Expires May 2014 $ 7,300 $ 146 Receive a variable rate equal to 7-Day Bond Market Association Municipal Swap Index Rate and pay a fixed rate equal to 3.744% Broker, J.P. Morgan Chase Bank Expires July 2014 $ 7,300 87 Receive a variable rate equal to 7-Day Bond Market Association Municipal Swap Index Rate and pay a fixed rate equal to 4.46% Broker, J.P. Morgan Chase Bank Expires July 2024 $10,000 (66) ------ Total $ 167 ====== See Notes to Financial Statements.
MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Statement of Net Assets
As of April 30, 2004 Assets Investments in unaffiliated securities, at value (identified cost--$175,158,135) $ 181,803,610 Investments in affiliated securities, at value (identified cost--$3,918,831) 3,918,831 Cash 1,396,215 Unrealized appreciation on forward interest rate swaps 167,025 Receivables: Interest $ 2,418,793 Dividends from affiliates 95 2,418,888 --------------- Prepaid expenses 4,406 --------------- Total assets 189,708,975 --------------- Liabilities Payables: Securities purchased 5,263,668 Investment adviser 88,083 Dividends to Common Shareholders 48,630 Other affiliates 1,302 5,401,683 --------------- Accrued expenses 13,413 --------------- Total liabilities 5,415,096 --------------- Preferred Shares Preferred Shares, at redemption value, par value $.05 per share (2,400 Series A Shares of AMPS* issued and outstanding at $25,000 per share liquidation preference) 60,011,160 --------------- Net Assets Applicable to Common Shares Net assets applicable to Common Shares $ 124,282,719 =============== Analysis of Net Assets Applicable to Common Shares Common Shares, par value $.10 per share (8,440,456 shares issued and outstanding) $ 844,046 Paid-in capital in excess of par 117,649,821 Undistributed investment income--net $ 1,990,087 Accumulated realized capital losses on investments--net (3,013,735) Unrealized appreciation on investments--net 6,812,500 --------------- Total accumulated earnings--net 5,788,852 --------------- Total--Equivalent to $14.72 net asset value per share of Common Share (market price--$13.40) $ 124,282,719 =============== *Auction Market Preferred Shares. See Notes to Financial Statements.
MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Statement of Operations
For the Six Months Ended April 30, 2004 Investment Income Interest $ 4,822,102 Dividends from affiliates 16,323 --------------- Total income 4,838,425 --------------- Expenses Investment advisory fees $ 471,637 Commission fees 75,032 Accounting services 40,493 Professional fees 27,572 Transfer agent fees 18,240 Printing and shareholder reports 17,205 Trustees' fees and expenses 12,817 Listing fees 10,474 Custodian fees 6,235 Pricing fees 5,062 Other 13,929 --------------- Total expenses before reimbursement 698,696 Reimbursement of expenses (3,943) --------------- Total expenses after reimbursement 694,753 --------------- Investment income--net 4,143,672 --------------- Realized & Unrealized Gain (Loss) on Investments--Net Realized gain on investments--net 28,529 Change in unrealized appreciation on investments--net (2,625,592) --------------- Total realized and unrealized loss on investments--net (2,597,063) --------------- Dividends to Preferred Shareholders Investment income--net (266,304) --------------- Net Increase in Net Assets Resulting from Operations $ 1,280,305 =============== See Notes to Financial Statements.
MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Statements of Changes in Net Assets
For the Six For the Months Ended Year Ended April 30, October 31, Increase (Decrease) in Net Assets: 2004 2003 Operations Investment income--net $ 4,143,672 $ 8,840,171 Realized gain on investments--net 28,529 975,656 Change in unrealized appreciation on investments--net (2,625,592) (1,498,457) Dividends to Preferred Shareholders (266,304) (601,728) --------------- --------------- Net increase in net assets resulting from operations 1,280,305 7,715,642 --------------- --------------- Dividends to Common Shareholders Investment income--net (3,912,151) (7,748,339) --------------- --------------- Net decrease in net assets resulting from dividends to Common Shareholders (3,912,151) (7,748,339) --------------- --------------- Net Assets Applicable to Common Shares Total decrease in net assets applicable to Common Shares (2,631,846) (32,697) Beginning of period 126,914,565 126,947,262 --------------- --------------- End of period* $ 124,282,719 $ 126,914,565 =============== =============== *Undistributed investment income--net $ 1,990,087 $ 2,024,870 =============== =============== See Notes to Financial Statements.
MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Financial Highlights
The following per share data and ratios have been derived For the Six from information provided in the financial statements. Months Ended April 30, For the Year Ended October 31, Increase (Decrease) in Net Asset Value: 2004 2003 2002 2001++++ 2000++++ Per Share Operating Performance Net asset value, beginning of period $ 15.04 $ 15.04 $ 14.94 $ 13.89 $ 13.30 ------------ ---------- ---------- ---------- ---------- Investment income--net .49+++ 1.05+++ 1.04 1.00 1.02 Realized and unrealized gain (loss) on investments--net (.32) (.06) .06 1.06 .61 Dividends and distributions to Preferred Shareholders: Investment income--net (.03) (.07) (.10) (.23) (.29) Realized gain on investments--net -- -- --++ -- -- ------------ ---------- ---------- ---------- ---------- Total from investment operations .14 .92 1.00 1.83 1.34 ------------ ---------- ---------- ---------- ---------- Less dividends and distributions to Common Shareholders: Investment income--net (.46) (.92) (.90) (.78) (.75) Realized gain on investments--net -- -- --++ -- -- ------------ ---------- ---------- ---------- ---------- Total dividends and distributions to Common Shareholders (.46) (.92) (.90) (.78) (.75) ------------ ---------- ---------- ---------- ---------- Net asset value, end of period $ 14.72 $ 15.04 $ 15.04 $ 14.94 $ 13.89 ============ ========== ========== ========== ========== Market price per share, end of period $ 13.40 $ 14.18 $ 14.30 $ 14.21 $ 12.125 ============ ========== ========== ========== ========== Total Investment Return** Based on market price per share (2.46%)+++++ 5.56% 7.19% 24.17% 6.45% ============ ========== ========== ========== ========== Based on net asset value per share 1.03%+++++ 6.45% 7.22% 13.96% 11.17% ============ ========== ========== ========== ========== Ratios Based on Average Net Assets of Common Shares Total expenses, net of reimbursement*** 1.08%* 1.08% 1.11% 1.15% 1.14% ============ ========== ========== ========== ========== Total expenses*** 1.08%* 1.08% 1.11% 1.15% 1.14% ============ ========== ========== ========== ========== Total investment income--net*** 6.42%* 6.86% 7.02% 6.90% 7.55% ============ ========== ========== ========== ========== Amount of dividends to Preferred Shareholders .41%* .47% .67% 1.58% 2.13% ============ ========== ========== ========== ========== Investment income--net, to Common Shareholders 6.01%* 6.39% 6.35% 5.32% 5.42% ============ ========== ========== ========== ========== Ratios Based on Average Net Assets of Common & Preferred Shares*** Total expenses, net of reimbursement .74%* .74% .75% .77% .75% ============ ========== ========== ========== ========== Total expenses .74%* .74% .75% .77% .75% ============ ========== ========== ========== ========== Total investment income--net 4.39%* 4.67% 4.74% 4.63% 4.94% ============ ========== ========== ========== ========== Ratios Based on Average Net Assets of Preferred Shares Dividends to Preferred Shareholders .89%* 1.00% 1.39% 3.21% 4.03% ============ ========== ========== ========== ==========
MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Financial Highlights (concluded)
For the Six Months Ended The following per share data and ratios have been derived April 30, For the Year Ended October 31, from information provided in the financial statements. 2004 2003 2002 2001++++ 2000++++ Supplemental Data Net assets applicable to Common Shares, end of period (in thousands) $ 124,283 $ 126,915 $ 126,947 $ 126,035 $ 117,201 ============ ========== ========== ========== ========== Preferred Shares outstanding, end of period (in thousands) $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000 ============ ========== ========== ========== ========== Portfolio turnover 11.16% 47.21% 40.55% 78.48% 40.41% ============ ========== ========== ========== ========== Leverage Asset coverage per $1,000 $ 3,071 $ 3,115 $ 3,116 $ 3,101 $ 2,953 ============ ========== ========== ========== ========== Dividends Per Share on Preferred Shares Outstanding Investment income--net $ 111 $ 251 $ 348 $ 803 $ 1,010 ============ ========== ========== ========== ========== *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. +++Based on average shares outstanding. +++++Aggregate total investment return. See Notes to Financial Statements.
MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Notes to Financial Statements 1. Significant Accounting Policies: MuniYield Florida Insured Fund (the "Fund") is registered under the Investment Company Act of 1940, as amended, 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. Actual results may differ from these 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 last available bid price in the over-the-counter markets or on the basis of yield equivalents as obtained by the Fund's pricing service from one or more 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). Swap agreements are valued by quoted fair values received daily by the Fund from the counterparty. Short-term investments with a remaining maturity 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 fair value as determined in good faith by or under the direction of the Board of Trustee's 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 the 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 movements 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 itwas closed. * Options--The Fund may purchase and write call and put options. When the Fund writes an option, an amount equal to the premium received by the Fund is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked to market to reflect the current market value of the option written.When a security is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the security acquired or deducted from (or added to) the proceeds of the security sold. When an option expires (or the Fund enters into a closing transaction), the Fund realizes a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premium paid or received). MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Notes to Financial Statements (continued) Written and purchased options are non-income producing investments. * Forward interest rate swaps--The Fund may enter into forward interest rate swaps. In a forward interest rate swap, the Fund and the counterparty agree to make periodic net payments on a specified notional contract amount, commencing on a specified future effective date, unless terminated earlier. 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. Divided 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, 2004, FAM reimbursed the Fund in the amount of $3,943. For the six months ended April 30, 2004, the Fund reimbursed FAM $1,910 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, 2004 were $24,559,889 and $20,431,139, respectively. Net realized gains (losses) for the six months ended April 30, 2004 and net unrealized appreciation as of April 30, 2004 were as follows: Realized Unrealized Gains (Losses) Appreciation Long-term investments $ 298,680 $ 6,645,475 Forward interest rate swaps (270,151) 167,025 -------------- -------------- Total $ 28,529 $ 6,812,500 ============== ============== As of April 30, 2004, net unrealized appreciation for Federal income tax purposes aggregated $6,627,785, of which $7,414,346 related to appreciated securities and $786,561 related to depreciated securities. The aggregate cost of investments at six months ended April 30, 2004 for Federal income tax purposes was $179,094,656. 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. MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Notes to Financial Statements (concluded) Preferred Shares Auction Market Preferred Shares 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, 2004 was .97%. 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, 2004 Merrill Lynch, Pierce, Fenner & Smith Incorporated, an affiliate of FAM, earned $33,528 as commissions. 5. Capital Loss Carryforward: On October 31, 2003, the Fund had a net capital loss carryforward of $2,028,136, 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 $.078000 per share on May 27, 2004 to shareholders of record on May 14, 2004. 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 stable level of dividend distributions, 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 particular 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. MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Officers and Trustees Terry K. Glenn, President and Trustee Donald W. Burton, Trustee M. Colyer Crum, Trustee Laurie Simon Hodrick, Trustee David H. Walsh, 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 Phillip S. Gillespie, Secretary 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 101 Barclay Street - 7 West New York, NY 10286 NYSE Symbol MFT Electronic Delivery The Fund offers electronic delivery of communications to its shareholders. In order to receive this service, you must register your account and provide us with e-mail information. To sign up for this service, simply access this website http://www.icsdelivery.com/live and follow the instructions. When you visit this site, you will obtain a personal identification number (PIN). You will need this PIN should you wish to update your e-mail address, choose to discontinue this service and/or make any other changes to the service. This service is not available for certain retirement accounts at this time. MUNIYIELD FLORIDA INSURED FUND, APRIL 30, 2004 Item 2 - Code of Ethics - Not Applicable to this semi-annual report Item 3 - Audit Committee Financial Expert - Not Applicable to this semi-annual report Item 4 - Principal Accountant Fees and Services - Not Applicable to this semi-annual report Item 5 - Audit Committee of Listed Registrants - Not Applicable to this semi-annual report Item 6 - Schedule of Investments - Not Applicable Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies - Not Applicable to this semi-annual report Item 8 - Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers - Not Applicable Item 9 - Submission of Matters to a Vote of Security Holders - Not Applicable Item 10 - Controls and Procedures 10(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. 10(b) - There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the last fiscal half-year of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 11 - Exhibits attached hereto 11(a)(1) - Code of Ethics - Not Applicable to this semi-annual report 11(a)(2) - Certifications - Attached hereto 11(a)(3) - Not Applicable 11(b) - Certifications - 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 18, 2004 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 18, 2004 By: _/s/ Donald C. Burke________ Donald C. Burke, Chief Financial Officer of MuniYield Florida Insured Fund Date: June 18, 2004