-----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, B+SCEFhW8hgrvUOBTsBz60ocsgxe788yAas5B7wDBh1yX0gr1DtfagHr1kGZ6/MZ 2DJtVbbdxu9z+y2y9zaoug== 0000900092-05-000518.txt : 20051230 0000900092-05-000518.hdr.sgml : 20051230 20051230154747 ACCESSION NUMBER: 0000900092-05-000518 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20051031 FILED AS OF DATE: 20051230 DATE AS OF CHANGE: 20051230 EFFECTIVENESS DATE: 20051230 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: 051294604 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 myfl.txt MUNIYIELD FLORIDA INSURED FUND 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 811-07156 Name of Fund: MuniYield Florida Insured Fund Fund Address: P.O. Box 9011 Princeton, NJ 08543-9011 Name and address of agent for service: Robert C. Doll, Jr., Chief Executive Officer, 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: 10/31/05 Date of reporting period: 11/01/04 - 10/31/05 Item 1 - Report to Stockholders MuniYield Florida Insured Fund MuniYield New Jersey Insured Fund, Inc. MuniYield Pennsylvania Insured Fund Annual Reports October 31, 2005 (BULL LOGO) Merrill Lynch Investment Managers www.mlim.ml.com Mercury Advisors A Division of Merrill Lynch Investment Managers www.mercury.ml.com These reports, including the financial information herein, are transmitted to shareholders of MuniYield Florida Insured Fund, MuniYield New Jersey Insured Fund, Inc. and MuniYield Pennsylvania Insured Fund for their information. This is not a prospectus. Past performance results shown in these reports should not be considered a representation of future performance. The Funds have leveraged their Common Shares or Stock and intend to remain leveraged by issuing Preferred Shares or Stock to provide the Common Shareholders or Common Stock Shareholders with potentially higher rates of return. Leverage creates risks for Common Shareholders or Common Stock Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares or Stock, and the risk that fluctuations in the short-term dividend rates of the Preferred Shares or Stock may affect the yield to Common Shareholders or Common Stock Shareholders. Statements and other information herein are as dated and are subject to change. A description of the policies and procedures that the Funds use 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) at www.mutualfunds.ml.com; and (3) on the Securities and Exchange Commission's Web site at http://www.sec.gov. Information about how the Funds vote proxies relating to securities held in the Funds' portfolios during the most recent 12-month period ended June 30 is available (1) at www.mutualfunds.ml.com; and (2) on the Securities and Exchange Commission's Web site at http://www.sec.gov. MuniYield Florida Insured Fund MuniYield New Jersey Insured Fund, Inc. MuniYield Pennsylvania 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 MuniYield New Jersey Insured Fund, Inc. MuniYield Pennsylvania Insured Fund The Benefits and Risks of Leveraging The Funds utilize leveraging to seek to enhance the yield and net asset value of their Common Shares or Common Stock. However, these objectives cannot be achieved in all interest rate environments. To leverage, the Funds issue Preferred Shares or Stock, 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 or Stock, is paid to Common Shareholders or Common Stock 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 or Stock. However, in order to benefit Common Shareholders or Common Stock 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 or Common Stock 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 or Stock capitalization of $100 million and the issuance of Preferred Shares or Stock 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 or Stock 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. In this case, the dividends paid to Preferred Shareholders or Common Stock shareholders are significantly lower than the income earned on the fund's long- term investments, and therefore the Common Shareholders or Common Stock 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 or Stock will be reduced or eliminated completely. At the same time, the market value of the fund's Common Shares or Stock (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' or Stock'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 or Stock does not fluctuate. In addition to the decline in net asset value, the market value of the fund's Common Shares or Stock may also decline. As a part of their investment strategy, the Funds 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 Funds 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 Funds invest in inverse floaters, the market value of each Fund's portfolio and the net asset value of each Fund's shares may also be more volatile than if the Funds did not invest in these securities. As of October 31, 2005, the percentages of MuniYield Florida Insured Fund's, MuniYield New Jersey Insured Fund, Inc.'s and MuniYield Pennsylvania Insured Fund's total net assets invested in inverse floaters were 5.37%, 9.08% and 11.26%, respectively, before the deduction of Preferred Shares or Stock. ANNUAL REPORTS OCTOBER 31, 2005 A Letter From the President Dear Shareholder As the financial markets continued to muddle their way through 2005, the Federal Reserve Board (the Fed) advanced its monetary tightening campaign full steam ahead. The 12th consecutive interest rate hike since June 2004 came on November 1, bringing the target federal funds rate to 4%. The central bank is clearly more focused on inflationary figures than on economic growth, which has shown some signs of moderating. Despite rising short-term interest rates and record-high energy prices, the major market indexes managed to post positive results for the current reporting period:
Total Returns as of October 31, 2005 6-month 12-month U.S. equities (Standard & Poor's 500 Index) + 5.27% + 8.72% Small-cap U.S. equities (Russell 2000 Index) +12.25 +12.08 International equities (MSCI Europe Australasia Far East Index) + 8.63 +18.09 Fixed income (Lehman Brothers Aggregate Bond Index) + 0.15 + 1.13 Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 0.59 + 2.54 High yield bonds (Credit Suisse First Boston High Yield Index) + 2.87 + 3.54
The headlines in recent months focused on Hurricanes Katrina and Rita and, more recently, the nomination of Ben Bernanke to succeed Alan Greenspan as Chairman of the Fed. While the hurricanes prompted a spike in energy prices and short-term disruptions to production and spending, the longer-term economic impact is likely to be tempered. In fact, the fiscal stimulus associated with reconstruction efforts in the Gulf Coast region could add to gross domestic product growth in 2006. Notably, the uncontroversial nomination of Dr. Bernanke was well received by the markets. The U.S. equity markets remained largely range bound in 2005. Up to this point, strong corporate earnings reports and relatively low long-term bond yields have worked in favor of equities. Looking ahead, high energy prices, continued interest rate hikes, a potential consumer slowdown and/or disappointing earnings pose the greatest risks to U.S. stocks. Internationally, many markets have benefited from strong economic statistics, trade surpluses and solid finances. The bond market continued to be characterized by a flattening yield curve, although long-term yields finally began to inch higher toward period end. The 10-year Treasury yield hit 4.57% on October 31, 2005, its highest level in more than six months. Still, the difference between the two-year and 10-year Treasury yield was just 17 basis points (.17%) at period end, compared to 149 basis points a year earlier. Financial markets are likely to face continued crosscurrents in the months ahead. Nevertheless, opportunities do exist and we encourage you to work with your financial advisor to diversify your portfolio among a variety of asset types. This can help to diffuse risk while also tapping into the potential benefits of a broader range of investment alternatives. As always, we thank you for trusting Merrill Lynch Investment Managers with your investment assets. Sincerely, (Robert C. Doll, Jr.) Robert C. Doll, Jr. President and Director/Trustee ANNUAL REPORTS OCTOBER 31, 2005 A Discussion With Your Funds' Portfolio Managers Throughout the year, we continued to focus on enhancing the income provided to shareholders and, by period-end, the Funds had relatively neutral exposure to interest rate risk. Describe the recent market environment relative to municipal bonds. Over the past year, long-term bond yields were little changed. Initially, U.S. Treasury prices rallied strongly, while their yields, which move in the opposite direction, fell. By the end of June 2005, 30-year U.S. Treasury bond yields had declined 60 basis points (.60%) to 4.19%. Bond prices improved in response to several favorable factors, including moderating U.S. economic growth, slowing growth in foreign economies, modest inflationary pressures and strong demand for U.S. Treasury issues on the part of Asian governments. During the final months of the period, however, bond yields rose (prices fell) as investors worried that higher energy costs in the wake of Hurricanes Katrina and Rita would pressure inflation upward. Stronger-than-expected third quarter gross domestic product growth also added to inflationary concerns. For its part, the Federal Reserve Board (the Fed) continued to raise short-term interest rates at each of its meetings, lifting the federal funds target rate to 4% on November 1, 2005. As short-term interest rates moved higher in concert with the Fed interest rate hikes and longer-term bond yields remained steadier, the yield curve continued to flatten. During the past 12 months, 30-year Treasury bond yields declined three basis points to 4.76%, while 10-year Treasury note yields rose 52 basis points to 4.57%. Tax-exempt bond yields exhibited a similar pattern. According to Municipal Market Data, the yield on AAA-rated issues maturing in 30 years increased one basis point to 4.59%, while the yield on AAA-rated issues maturing in 10 years rose 52 basis points to 3.92%. Historically low nominal tax-exempt bond yields continued to encourage municipalities to issue new debt and refund outstanding, higher-couponed issues. During the past year, more than $394 billion in new long-term tax- exempt bonds was issued, an 8.4% increase over the previous year's total of $363 billion. During the first nine months of 2005, the volume of refunding issues increased by more than 55% versus the same period one year ago. Refunding issues were heavily weighted in the 10-year - 20-year maturity range, putting pressure on intermediate tax-exempt bond yields while supporting longer-term bond prices. Investor demand for municipal product remained positive during most of the period. The most current statistics from the Investment Company Institute indicate that, year-to-date through September 2005, net new cash flows into long-term municipal bond funds exceeded $6.7 billion - a significant improvement from the $12.9 billion net outflow seen during the same period in 2004. Notably, throughout much of the past year, high yield tax-exempt bond funds have been the principal target for these new cash inflows. During recent months, these lower-rated and non-rated bond funds received an average of $115 million per week. The need to invest these cash flows has led to strong demand for lower-rated issues and a consequent narrowing of credit spreads. Solid investor demand for tax-exempt issues generally helped municipal bond performance approach that of taxable bonds in recent months and reverse some of their prior underperformance. In addition, the ratio of tax-exempt bond yields to taxable bond yields remains attractive and should continue to draw both traditional and non-traditional investors to the municipal marketplace, especially if municipal bond issuance remains manageable. The communities shattered by Hurricanes Katrina and Rita will require extensive reconstruction. It is too early to estimate the amount of tax-exempt debt that may be required to finance these efforts or to assess the overall impact on the municipal market. However, much of the rebuilding is likely to be funded through federal loans and grants, and the reconstruction will likely be spread over a number of years. Consequently, any new municipal bond issuance prompted by the hurricanes is not likely to disrupt the tax-exempt market in the near future. MuniYield Florida Insured Fund Describe conditions in the State of Florida. Florida maintains credit ratings of AA1 from Moody's, AAA from Standard & Poor's and AA+ from Fitch - all with stable trends. The favorable ratings are based on the state's solid economic and financial performance, in addition to moderate debt and a proactive government that responds to economic downturns faster than other states. Florida's continued economic strength is bolstered by robust population growth, which is attributed to the state's attractive physical environment and favorable business climate. Although the growth in population has put a strain on services such as education, transportation and healthcare, it also has allowed the state to recover more quickly from sub par economic trends. ANNUAL REPORTS OCTOBER 31, 2005 Currently, Florida's revenues are higher than budgeted and expenditures remain under control due to prudent fiscal oversight. The fiscal year 2005 budget 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. Given the government's concerns over the high healthcare costs facing the state, Governor Jeb Bush has proposed a partially private health insurance plan. Florida continues to maintain 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 $2 billion. How did the Fund perform during the fiscal year? For the 12-month period ended October 31, 2005, the Common Shares of MuniYield Florida Insured Fund had net annualized yields of 6.03% and 6.26%, based on a year-end per share net asset value of $14.72 and a per share market price of $14.18, respectively, and $.888 per share income dividends. Over the same period, the total investment return on the Fund's Common Shares was +2.72%, based on a change in per share net asset value from $15.22 to $14.72, and assuming reinvestment of all distributions. The Fund's return, based on net asset value, lagged the +3.81% average return of the Lipper Florida Municipal Debt Funds category for the 12-month period. (Funds in this Lipper category limit their investment to securities exempt from taxation in Florida or a city in Florida. Notably, the Fund has more limited investment parameters than many of its Lipper peers. Specifically, as an insured product, we are limited in our ability to invest in lower-quality issues. This placed the Fund at a competitive disadvantage as credit spreads tightened significantly and lower-rated and non-rated credits outperformed higher-quality issues. Factors that had a positive influence on Fund performance included our yield curve positioning. Essentially, we continued to focus on the longer end of the curve, which significantly outperformed the short end as the yield curve flattened and shorter-term bond prices suffered. Our large concentration in bonds with 5.50% and higher coupons also was additive to Fund results as these bonds outperformed those with lower coupons. Offsetting this was the aforementioned underexposure to lower-quality issues and the underperformance of prerefunded bonds and those with short calls, some of which we retained in the portfolio for their attractive acquisition yields. Overall, however, the Fund continued to provide a competitive yield and positive total return while investing in a portfolio consisting primarily of high-quality, insured bonds. For the six-month period ended October 31, 2005, the total investment return on the Fund's Common Shares was -.08%, based on a change in per share net asset value from $15.17 to $14.72, and assuming reinvestment of all distributions. 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 of 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 continued to focus on increasing the income provided to shareholders and muting the Fund's net asset value volatility. To that end, we sought to sell some of the portfolio's prerefunded bonds in the five-year - 10-year maturity range. In doing so, we were cognizant not to sell bonds that were booked at higher yields than are available in the current market. ANNUAL REPORTS OCTOBER 31, 2005 A Discussion With Your Funds' Portfolio Managers (continued) In August, the Fund increased its use of leverage through the issuance of $12 million in additional Auction Market Preferred Shares (AMPS). With the proceeds, we generally focused on premium-coupon bonds in the 20-year - 25-year maturity range whenever they became available. This is where we have been able to capture higher yields with reduced volatility. Our efforts in this area have been somewhat limited by a lack of new long-term bonds in the Florida municipal market. Although new issuance increased 38% versus the previous 12-month period, much of the supply in the market has come in the form of refinancings, the majority of which offered maturities of only 15 years - 20 years and yields below 5%. Importantly, we remained fully invested throughout the fiscal year in order to augment the portfolio's yield. For the six-month period ended October 31, 2005, the Fund's AMPS had average yields of 2.45% for Series A and 2.43% for Series B. The Fed's interest rate hikes are clearly having a material impact on the Fund's borrowing costs. The Fed raised the short-term interest rate target 200 basis points during the 12-month period (and 25 basis points more on November 1). Still, the tax- exempt yield curve remained relatively steep and continued to generate an income benefit to the holders of Common Shares from the leveraging of Preferred Shares. However, should the spread between short-term and long-term interest rates narrow, the benefits of leveraging 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 36.66% of total net assets, before the deduction of Preferred Shares. (For a more complete explanation of the benefits and risks of leveraging, see page 2 of this report to shareholders.) How would you characterize the Fund's position at the close of the period? We would characterize the Fund's position as fairly neutral in terms of interest rate risk. Currently, we favor bonds with 20-year - 25-year maturities and prefer to structure coupons of 5.25%. Long-term bond yields, which had been slow to react to the Fed's interest rate hikes, have started to inch upward. We will look for an increase in long-term rates as an opportunity to pursue higher- coupon bonds in the 20-year--30-year maturity range and will remain fully invested to augment shareholders' income. MuniYield New Jersey Insured Fund, Inc. Describe conditions in the State of New Jersey. New Jersey's fiscal year 2006 budget was passed on June 30, 2005. Shortly after, Standard & Poor's (S&P) upgraded the state's credit rating to AA while Moody's and Fitch affirmed the state's credit ratings of Aa3 and AA-, respectively, all with stable outlooks. The S&P rating was based largely on the state's improving revenue collections in fiscal year 2005 and a more structurally balanced 2006 budget when compared to the amount of one-time revenues used in the past several years. However, New Jersey's plan to use $150 million of tobacco settlement refinancing proceeds to balance the 2006 budget was challenged in court. The lawsuit alleged that using the proceeds in the budget was deficit funding and, therefore, was unconstitutional as ruled by New Jersey's Supreme Court last year when the state used revenue from securitizing motor vehicle surcharges and cigarette taxes to balance the budget. New Jersey's economy continued to show signs of recovery as revenues through the first 10 months of fiscal year 2005 came in better than budget. The largest revenue increase was in the income tax category, which rose by 31.7% compared to the prior year. Accordingly, one of New Jersey's strongest credit strengths is its high wealth levels. In fact, the U.S. Census Bureau reported in August that New Jersey was the wealthiest state in the nation with a median household income of $61,359. Connecticut placed second with a median household income of $60,528. However, New Jersey's unemployment rate rose to 4.2% in the month of August, up from 4.1% in July, 4% in June and 3.9% in May. Although the state's unemployment rate has trended upward, it compared favorably to the national rate of 4.9% in August. How did the Fund perform during the fiscal year? For the 12-month period ended October 31, 2005, the Common Stock of MuniYield New Jersey Insured Fund, Inc. had net annualized yields of 6.01% and 6.18%, based on a year-end per share net asset value of $15.07 and a per share market price of $14.65, respectively, and $.906 per share income dividends. Over the same period, the total investment return on the Fund's Common Stock was +3.49%, based on a change in per share net asset value from $15.46 to $15.07, and assuming reinvestment of all distributions. ANNUAL REPORTS OCTOBER 31, 2005 The Fund's total return, based on net asset value, trailed the +4.88% average return of the Lipper New Jersey Municipal Debt Funds category for the 12-month period. (Funds in this Lipper category limit their investment to those securities exempt from taxation in New Jersey or a city in New Jersey.) Notably, the Fund was disadvantaged relative to many of its peers by its conservative investment parameters. Specifically, the Fund is limited in its ability to invest in lower-quality issues, which outperformed during the year as credit spreads (versus higher-quality issues of comparable maturity) tightened dramatically. Per its investment parameters, roughly 80% of the portfolio is invested in AAA-rated, insured bonds. Offsetting this was the positive influence of our yield curve positioning, which was designed to take advantage of what we expected would be a flattening trend, and the extension of the portfolio's duration to a more neutral posture. We moved a portion of bonds in the 10-year - 15-year maturity range further out on the curve to the 20-year - 25-year area. Our strategy paid off as the yield curve flattened and longer-term bonds significantly outpaced shorter-term issues. For the six-month period ended October 31, 2005, the total investment return on the Fund's Common Stock was -.30%, based on a change in per share net asset value from $15.56 to $15.07, and assuming reinvestment of all distributions. 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 Stock (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 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 Stock may vary significantly from total investment returns based on changes in the Fund's net asset value. What changes were made to the portfolio during the period? We continued to reallocate the portfolio's assets into longer-dated sectors of the municipal yield curve in an effort to capitalize on our view that the curve would flatten. New purchases were largely funded from the proceeds of bond calls as well as outright sales of relatively short, prerefunded bonds that had appreciated in value. Over the fiscal year, municipal bond supply in the State of New Jersey was roughly comparable to the same 12 months one year ago, at approximately $15 billion in long-term issuance. Notably, new issuance slowed in the last six months of the period. The past few months have seen a modest rise in interest rates, making refinancing a less attractive proposition. However, the slowdown in the new-issue calendar also reflects the fact that the state pursued the bulk of its refunding opportunities earlier in the year. Pending the outcome of the aforementioned legal challenge, new supply in the New Jersey municipal market could come in the form of a large refinancing of tobacco settlement bonds. For the six-month period ended October 31, 2005, the Fund's Auction Market Preferred Stock (AMPS) had an average yield of 2.20% for Series A and 2.08% for Series B. The Fed's interest rate hikes are clearly having a material impact on the Fund's borrowing costs. The Fed raised the short-term interest rate target 200 basis points during the 12-month period (and 25 basis points more on November 1). Still, the tax-exempt yield curve remained relatively steep and continued to generate an income benefit to the holders of Common Stock from the leveraging of Preferred Stock. However, should the spread between short-term and long-term interest rates narrow, the benefits of leveraging will decline and, as a result, reduce the yield on the Fund's Common Stock. At the end of the period, the Fund's leverage amount, due to AMPS, was 35.20% of total net assets, before the deduction of Preferred Stock. (For a more complete explanation of the benefits and risks of leveraging, see page 2 of this report to shareholders.) How would you characterize the Fund's position at the close of the period? The Fund ended the period relatively neutral with respect to interest rate risk, and with a high-quality credit profile. For the most part, it appears that credit spreads have stabilized and, in some cases, widened - notably in the tobacco sector. Thus, we maintain an underweight exposure to this sector in anticipation of an increase in supply. We believe this should benefit the Fund's performance relative to its Lipper peers. ANNUAL REPORTS OCTOBER 31, 2005 A Discussion With Your Funds' Portfolio Managers (concluded) MuniYield Pennsylvania Insured Fund Describe conditions in the Commonwealth of Pennsylvania. Pennsylvania continued to protect its credit ratings of Aa2, AA and AA from Moody's, Standard & Poor's and Fitch, respectively, by maintaining conservative budgeting practices, a relatively low debt burden and a diversified service economy. Fiscal challenges in recent years were primarily managed with the drawdown of the commonwealth's rainy-day reserves and state- source tax increases. The recovery in the national economy also helped to bolster revenue growth and stabilized Pennsylvania's finances at a satisfactory level. General fund collections for fiscal year 2004-2005 are projected to exceed the official budget estimates by 1.9%, or $442 million. Year-over-year general fund revenues gained 6.5% as a result of strong growth in personal income and corporate taxes. The enacted 2005-2006 budget increases expenditures 3.6% over last year, for a budget of $24.6 billion. Major gubernatorial initiatives that will impact Pennsylvania's finances over the next several years include up to $2 billion in debt issuance to fund economic stimulus programs ranging from venture capital guarantees, real estate development and strengthening tourism and agricultural bases. The commonwealth's share of K-12 education expenditures will increase with local property tax reductions funded from slot machine tax revenues. Gaming revenues of approximately $1 billion from the installation of 61,000 slot machines at 12 facilities are expected to be realized in 2007. In a somewhat controversial move, Act 72 requires that school districts opt into the program by agreeing to tax limits and increasing earned income taxes in exchange for state dollars to lower property taxes. Broad-based job growth continues to be a favorable trend in the commonwealth. August 2005 employment was up 4,700 to 5,711,600, just under Pennsylvania's all-time high of 5,719,300 in 2001. The manufacturing sector provided just under 12% of employment and continues to show incremental contraction in contrast to the leading professional and business services, leisure and hospitality, and government sectors. Pennsylvania's unemployment rate was 5.0% in August, down from 5.1% in July. Personal income growth of 1.4% just trailed the U.S. average growth rate, ranking the Keystone State 34th in the second quarter of 2005, but overall reflected a wealth level on par with the nation. How did the Fund perform during the fiscal year? For the 12-month period ended October 31, 2005, the Common Shares of MuniYield Pennsylvania Insured Fund had net annualized yields of 6.09% and 6.36%, based on a year-end per share net asset value of $15.57 and a per share market price of $14.91, respectively, and $.948 per share income dividends. Over the same period, the total investment return on the Fund's Common Shares was +3.16%, based on a change in per share net asset value from $16.04 to $15.57, and assuming reinvestment of all distributions. The Fund provided an above-average yield during the 12-month period although its total return, based on net asset value, fell short of the +3.27% average return of the Lipper Pennsylvania Municipal Debt Funds category. (Funds in this Lipper category limit their investment to those securities exempt from taxation in Pennsylvania or a city in Pennsylvania.) Detracting from relative results was the Fund's conservative investment parameters. Unlike many of its Lipper peers, the Fund is limited in its ability to invest in lower-rated bonds, which outperformed the broader market during the year. The Fund's above-average duration also hindered performance somewhat. We had anticipated that Hurricanes Katrina and Rita would have a negative impact on the economy, at least initially, therefore benefiting credit markets (that is, increasing bond prices and decreasing yields). This prompted us to increase our average duration. However, it appeared that the markets and the Fed were more focused on rising energy costs and their potential to increase inflationary pressures. This served to push rates higher all along the yield curve. Offsetting these negative factors was our focus on the long end of the municipal yield curve. As the yield curve flattened considerably over the past year, long-term bonds outperformed shorter-term issues, and our focus on this segment of the curve benefited Fund performance. For the six-month period ended October 31, 2005, the total investment return on the Fund's Common Shares was -.31%, based on a change in per share net asset value from $16.09 to $15.57, and assuming reinvestment of all distributions. ANNUAL REPORTS OCTOBER 31, 2005 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 of 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 returns based on changes in the Fund's net asset value. What changes were made to the portfolio during the period? We maintained our focus on protecting the Fund's net asset value and providing shareholders with an above-average level of income. We sought to pick up additional yield for the portfolio by investing in longer-dated bonds. Although the yield curve began to flatten considerably, the long end remained fairly steep. This area of the curve also has been less subject to bouts of volatility, allowing us the opportunity to add incremental yield while also muting the Fund's price volatility. For the most part, we favor bonds with 25-year - 28-year maturities and with premium coupons. Like the supply trends on the national level, issuance in Pennsylvania has tended to fall within the intermediate maturity range, largely because much of the new supply represents refunding issues. Overall, we expect that municipal issuance will begin to slow as interest rates increase and municipalities feel less compelled to refinance their debt. Importantly, the Fund was essentially fully invested throughout the period, consistent with our goal of maintaining an attractive level of income. For the six-month period ended October 31, 2005, the Fund's Auction Market Preferred Shares (AMPS) had an average yield of 2.40% for Series A, 2.46% for Series B and 2.40% for Series C. The Fed's interest rate hikes are clearly having a material impact on the Fund's borrowing costs. The Fed raised the short-term interest rate target 200 basis points during the 12-month period (and 25 basis points more on November 1). Still, the tax-exempt yield curve remained relatively steep and continued to generate an income benefit to the holders of Common Shares from the leveraging of Preferred Shares. However, should the spread between short-term and long-term interest rates narrow, the benefits of leveraging 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 36.33% of total net assets, before the deduction of Preferred Shares. (For a more complete explanation of the benefits and risks of leveraging, see page 2 of this report to shareholders.) How would you characterize the Fund's position at the close of the period? We believe the municipal yield curve will remain relatively steep when compared to the U.S. Treasury yield curve, which should continue to provide attractive opportunities on the long end. The Fed appears poised to continue pushing short-term interest rates higher in its effort to keep inflation contained. Amid these conditions, we expect market volatility to increase given continued hawkish commentary from the Fed and the potential for stronger economic releases. We will look to this volatility for opportunities to purchase attractively structured municipal issues. We continued to look for maturities in the 25-year area and favor a neutral to slightly long portfolio duration, which we believe offers the benefit of incremental yield. Ultimately, we expect that above-average yields will overcome price depreciation and provide for competitive Fund returns over time. Robert D. Sneeden Vice President and Portfolio Manager MuniYield Florida Insured Fund Theodore R. Jaeckel Jr., CFA Vice President and Portfolio Manager MuniYield New Jersey Insured Fund, Inc. William R. Bock Vice President and Portfolio Manager MuniYield Pennsylvania Insured Fund November 22, 2005 ANNUAL REPORTS OCTOBER 31, 2005 Automatic Dividend Reinvestment Plan How the Plan Works--The Funds offer a Dividend Reinvestment Plan (the "Plan") under which income and capital gains dividends paid by each Fund are automatically reinvested in additional shares of Common Stock of each Fund. The Plan is administered on behalf of the shareholders by The Bank of New York for MuniYield Florida Insured Fund and MuniYield New Jersey Insured Fund, Inc. and Equiserve Trust Company N.A. for MuniYield Pennsylvania Insured Fund (individually, the "Plan Agent" or together, the "Plan Agents"). Under the Plan, whenever the Funds declare a dividend, participants in the Plan will receive the equivalent in shares of Common Stock of each Fund. The Plan Agents will acquire the shares for the participant's account either (i) through receipt of additional unissued but authorized shares of each Fund ("newly issued shares") or (ii) by purchase of outstanding shares of Common Stock on the open market on the New York Stock Exchange or elsewhere. If, on the dividend payment date, each Fund's net asset value per share is equal to or less than the market price per share plus estimated brokerage commissions (a condition often referred to as a "market premium"), the Plan Agents will invest the dividend amount in newly issued shares. If the Funds' net asset value per share is greater than the market price per share (a condition often referred to as a "market discount"), the Plan Agents will invest the dividend amount by purchasing on the open market additional shares. If the Plan Agents are unable to invest the full dividend amount in open market purchases, or if the market discount shifts to a market premium during the purchase period, the Plan Agents will invest any uninvested portion in newly issued shares. The shares acquired are credited to each shareholder's account. The amount credited is determined by dividing the dollar amount of the dividend by either (i) when the shares are newly issued, the net asset value per share on the date the shares are issued or (ii) when shares are purchased in the open market, the average purchase price per share. Participation in the Plan--Participation in the Plan is automatic, that is, a shareholder is automatically enrolled in the Plan when he or she purchases shares of Common Stock of the Funds unless the shareholder specifically elects not to participate in the Plan. Shareholders who elect not to participate will receive all dividend distributions in cash. Shareholders who do not wish to participate in the Plan, must advise their Plan Agent in writing (at the address set forth below) that they elect not to participate in the Plan. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by writing to the Plan Agent. Benefits of the Plan--The Plan provides an easy, convenient way for shareholders to make additional, regular investments in the Funds. The Plan promotes a long-term strategy of investing at a lower cost. All shares acquired pursuant to the Plan receive voting rights. In addition, if the market price plus commissions of each Fund's shares is above the net asset value, participants in the Plan will receive shares of the Funds for less than they could otherwise purchase them and with a cash value greater than the value of any cash distribution they would have received. However, there may not be enough shares available in the market to make distributions in shares at prices below the net asset value. Also, since each Fund does not redeem shares, the price on resale may be more or less than the net asset value. Plan Fees--There are no enrollment fees or brokerage fees for participating in the Plan. The Plan Agents' service fees for handling the reinvestment of distributions are paid for by the Funds. However, brokerage commissions may be incurred when the Funds purchase shares on the open market and shareholders will pay a pro rata share of any such commissions. Tax Implications--The automatic reinvestment of dividends and distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. Therefore, income and capital gains may still be realized even though shareholders do not receive cash. The value of shares acquired pursuant to the Plan will generally be excluded from gross income to the extent that the cash amount reinvested would be excluded from gross income. If, when the Funds' shares are trading at a market premium, the Funds issue shares pursuant to the Plan that have a greater fair market value than the amount of cash reinvested, it is possible that all or a portion of the discount from the market value (which may not exceed 5% of the fair market value of each Fund's shares) could be viewed as a taxable distribution. If the discount is viewed as a taxable distribution, it is also possible that the taxable character of this discount would be allocable to all the shareholders, including shareholders who do not participate in the Plan. Thus, shareholders who do not participate in the Plan might be required to report as ordinary income a portion of their distributions equal to their allocable share of the discount. Contact Information--All correspondence concerning the Plan, including any questions about the Plan, should be directed to the Plan Agent at The Bank of New York, Church Street Station, P.O. Box 11258, New York, NY 10286-1258, Telephone: 800-432-8224 for MuniYield Florida Insured Fund and MuniYield New Jersey Insured Fund, Inc. and Equiserve Trust Company N.A. (c/o Computershare Investors Services), P.O. Box 43010, Providence, RI 02940-3010, Telephone: 800-426-4523 for MuniYield Pennsylvania Insured Fund. ANNUAL REPORTS OCTOBER 31, 2005 Portfolio Information Quality Profiles as of October 31, 2005 Percent of MuniYield Florida Insured Fund Total By S&P/Moody's Rating Investments AAA/Aaa 89.2% AA/Aa 1.0 A/A 4.5 BBB/Baa 3.1 Other* 2.2 * Includes portfolio holdings in short-term investments and variable rate demand notes. Percent of MuniYield New Jersey Insured Fund, Inc. Total By S&P/Moody's Rating Investments AAA/Aaa 82.7% AA/Aa 4.5 A/A 3.5 BBB/Baa 9.1 Other* 0.2 * Includes portfolio holdings in short-term investments. Percent of MuniYield Pennsylvania Insured Fund Total By S&P/Moody's Rating Investments AAA/Aaa 80.2% AA/Aa 4.4 A/A 2.5 BBB/Baa 8.4 NR (Not Rated) 3.0 Other* 1.5 * Includes portfolio holdings in short-term investments and variable rate demand notes. Swap Agreements The Funds may 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. Swap agreements involve the risk that the party with whom each Fund has entered into a swap will default on its obligation to pay the Fund and the risk that the Fund will not be able to meet its obligation to pay the other party to the agreement. Dividend Policy The Funds' dividend policy is to distribute all or a portion of their net investment income to their shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Funds 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 Funds for any particular month may be more or less than the amount of net investment income earned by the Funds during such month. The Funds' 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 these reports. ANNUAL REPORTS OCTOBER 31, 2005 Schedule of Investments (In Thousands) MuniYield Florida Insured Fund Face Amount Municipal Bonds Value District of Columbia--5.7% $ 1,000 Metropolitan Washington Airports Authority, D.C., Airport System Revenue Bonds, AMT, Series A, 5.25% due 10/01/2032 (c) $ 1,027 6,000 Metropolitan Washington Airports Authority, D.C., Airport System Revenue Refunding Bonds, AMT, Series A, 5% due 10/01/2035 (h) 6,060 Florida--139.6% 1,300 Alachua County, Florida, School Board, COP, 5.25% due 7/01/2029 (a) 1,382 700 Boynton Beach, Florida, Utility System Revenue Refunding Bonds, 6.25% due 11/01/2020 (b)(c) 822 5,000 Dade County, Florida, Aviation Revenue Bonds, AMT, Series B, 5.75% due 10/01/2012 (h) 5,110 1,000 Daytona Beach, Florida, Utility System Revenue Refunding Bonds, Series B, 5% due 11/15/2027 (c) 1,031 2,110 First Florida Governmental Financing Commission Revenue Bonds, 5.70% due 7/01/2017 (h) 2,210 1,000 Flagler County, Florida, Capital Improvement Revenue Bonds, 5% due 10/01/2035 (h) 1,029 1,150 Florida HFA, Housing Revenue Bonds (Brittany Rosemont Apartments), AMT, Series C-1, 6.75% due 8/01/2014 (a) 1,173 625 Florida Housing Finance Corporation, Homeowner Mortgage Revenue Refunding Bonds, AMT, Series 4, 6.25% due 7/01/2022 (f) 648 2,000 Florida State Board of Education, Capital Outlay, GO, Public Education, Series B, 5% due 6/01/2031 (c) 2,056 6,190 Florida State Board of Education, Lottery Revenue Bonds, Series A, 6% due 7/01/2015 (c) 6,898 1,000 Florida State Governmental Utility Authority, Utility Revenue Bonds (Lehigh Utility System), 5.125% due 10/01/2033 (a) 1,037 1,860 Florida State Turnpike Authority, Turnpike Revenue Bonds (Department of Transportation), Series B, 5% due 7/01/2030 1,899 3,700 Highlands County, Florida, Health Facilities Authority, Hospital Revenue Bonds (Adventist Health System), Series A, 6% due 11/15/2031 3,962 Hillsborough County, Florida, School Board, COP (h): 6,000 5.375% due 7/01/2009 (i) 6,411 1,000 5% due 7/01/2029 1,031 Face Amount Municipal Bonds Value Florida (continued) Jacksonville Electric Authority, Florida, Water and Sewer System Revenue Bonds (h): $ 2,000 Series A, 5.375% due 10/01/2030 $ 2,047 2,610 Series C, 5.25% due 10/01/2006 (i) 2,662 Jacksonville, Florida, Economic Development Commission, Health Care Facilities Revenue Bonds (Mayo Clinic--Jacksonville) (h): 1,000 Series A, 5.50% due 11/15/2036 1,075 750 Series B, 5.50% due 11/15/2036 806 1,140 Jacksonville, Florida, Economic Development Commission, IDR (Metropolitan Parking Solutions Project), 5.50% due 10/01/2030 (l) 1,193 1,455 Jacksonville, Florida, Guaranteed Entitlement Revenue Refunding and Improvement Bonds, 5.25% due 10/01/2032 (c) 1,526 Jacksonville, Florida, Port Authority, Seaport Revenue Bonds, AMT (h): 1,025 5.625% due 11/01/2010 (i) 1,109 1,225 5.625% due 11/01/2026 1,302 2,000 Lakeland, Florida, Electric and Water Revenue Refunding Bonds, Series A, 5% due 10/01/2028 (h) 2,046 1,000 Lee County, Florida, Airport Revenue Bonds, AMT, Series A, 6% due 10/01/2029 (f) 1,088 1,285 Lee County, Florida, Capital Revenue Bonds, 5.25% due 10/01/2023 (a) 1,381 85 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)(g) 86 2,905 Lee County, Florida, Transportation Facilities Revenue Bonds (Sanibel Bridges and Causeway), Series B, 5% due 10/01/2035 (m) 2,978 1,000 Leesburg, Florida, Capital Improvement Revenue Bonds, 5.25% due 10/01/2034 (c) 1,060 300 Marco Island, Florida, Utility System Revenue Bonds, 5.25% due 10/01/2021 (h) 323 1,000 Martin County, Florida, Utilities System Revenue Bonds, 5.125% due 10/01/2033 (a) 1,037 2,000 Miami Beach, Florida, Water and Sewer Revenue Bonds, 5.75% due 9/01/2025 (a) 2,190 Miami-Dade County, Florida, Aviation Revenue Bonds, ATM, Series A: 7,500 5% due 10/01/2033 (f) 7,578 5,000 (Miami International Airport), 6% due 10/01/2024 (c) 5,451 Portfolio Abbreviations To simplify the listings of portfolio holdings in the Schedules of Investments, we have abbreviated the names of many of the securities according to the list at right. ACES (SM) Adjustable Convertible Extendable Securities AMT Alternative Minimum Tax (subject to) COP Certificates of Participation DRIVERS Derivative Inverse Tax-Exempt Receipts DATES Daily Adjustable Tax-Exempt Securities EDA Economic Development Authority GO General Obligation Bonds HFA Housing Finance Agency IDA Industrial Development Authority IDR Industrial Development Revenue Bonds M/F Multi-Family PCR Pollution Control Revenue Bonds RIB Residual Interest Bonds RITR Residual Interest Trust Receipts S/F Single-Family VRDN Variable Rate Demand Notes ANNUAL REPORTS OCTOBER 31, 2005 Schedule of Investments (continued) (In Thousands) MuniYield Florida Insured Fund Face Amount Municipal Bonds Value Florida (continued) $ 1,120 Miami-Dade County, Florida, Aviation Revenue Refunding Bonds (Miami International Airport), AMT, Series A, 5% due 10/01/2038 (m) $ 1,121 2,000 Miami-Dade County, Florida, Educational Facilities Authority Revenue Bonds (University of Miami), Series A, 5.75% due 4/01/2029 (a) 2,177 Miami-Dade County, Florida, Expressway Authority, Toll System Revenue Bonds, Series B (c): 1,000 5.25% due 7/01/2027 1,064 2,875 5% due 7/01/2033 2,956 Miami-Dade County, Florida, GO (Building Better Communities Program) (c): 1,505 5% due 7/01/2030 1,559 1,000 5% due 7/01/2035 1,032 3,480 Miami-Dade County, Florida, Health Facilities Authority, Hospital Revenue Refunding Bonds, DRIVERS, Series 208, 8.237% due 8/15/2017 (a)(k) 4,068 1,655 Miami-Dade County, Florida, IDA, IDR (BAC Funding Corporation Project), Series A, 5.375% due 10/01/2030 (a) 1,753 2,000 Miami-Dade County, Florida, Public Facilities Revenue Bonds (Jackson Health System), Series A, 5% due 6/01/2029 (h) 2,060 2,000 Miami-Dade County, Florida, School Board COP, Series A, 5.50% due 10/01/2009 (f)(i) 2,155 1,865 Miami-Dade County, Florida, Solid Waste System Revenue Bonds, 5.25% due 10/01/2030 (h) 1,990 Miami-Dade County, Florida, Subordinate Special Obligation Revenue Bonds, Series A (h): 4,375 5.186%** due 10/01/2031 1,133 5,735 5.203%** due 10/01/2033 1,331 4,765 Orange County, Florida, Educational Facilities Authority, Educational Facilities Revenue Refunding Bonds (Rollins College Project), 5.50% due 12/01/2032 (a) 5,116 Orange County, Florida, Health Facilities Authority, Hospital Revenue Bonds: 600 (Adventist Health System), 6.25% due 11/15/2024 659 1,835 (Orlando Regional Healthcare), 6% due 12/01/2029 1,966 1,000 Orange County, Florida, Sales Tax Revenue Refunding Bonds, Series A, 5.125% due 1/01/2023 (c) 1,055 6,500 Orange County, Florida, School Board, COP, Series A, 5.25% due 8/01/2023 (h) 6,858 5,330 Orange County, Florida, Tourist Development, Tax Revenue Bonds, 5.50% due 10/01/2032 (a) 5,722 Orlando and Orange County, Florida, Expressway Authority Revenue Bonds, Series B (a): 4,000 5% due 7/01/2030 4,118 5,015 5% due 7/01/2035 5,143 1,530 Osceola County, Florida, Infrastructure Sales Surplus Tax Revenue Bonds, 5.25% due 10/01/2025 (a) 1,632 2,000 Osceola County, Florida, School Board, COP, Series A, 5.25% due 6/01/2027 (a) 2,109 Face Amount Municipal Bonds Value Florida (concluded) $ 1,100 Osceola County, Florida, Tourist Development Tax Revenue Bonds, Series A, 5.50% due 10/01/2027 (c) $ 1,193 1,000 Palm Bay, Florida, Utility System Improvement Revenue Bonds, Series A, 5% due 10/01/2025 (c) 1,045 1,500 Palm Beach County, Florida, Criminal Justice Facilities Revenue Bonds, 7.20% due 6/01/2015 (c) 1,879 2,000 Palm Beach County, Florida, School Board, COP, Refunding, Series D, 5.25% due 8/01/2021 (f) 2,131 5,000 Palm Beach County, Florida, School Board, COP, Series A, 6% due 8/01/2010 (c)(i) 5,574 1,000 Palm Coast, Florida, Utility System Revenue Bonds, 5% due 10/01/2027 (h) 1,032 1,000 Pembroke Pines, Florida, Public Improvement Revenue Bonds, Series A, 5% due 10/01/2034 (a) 1,031 2,000 Pinellas County, Florida, Health Facilities Authority, Revenue Refunding Bonds (Pooled Hospital Loan Program), VRDN, DATES, 2.69% due 12/01/2015 (a)(n) 2,000 1,000 Polk County, Florida, Utility System Revenue Bonds, 5.25% due 10/01/2022 (c) 1,076 1,000 Port St. Lucie, Florida, GO, 5% due 7/01/2032 (h) 1,033 1,055 Port St. Lucie, Florida, Utility Revenue Bonds, 5.25% due 9/01/2024 (h) 1,132 1,400 Saint Johns County, Florida, Sales Tax Revenue Bonds, GO, Series A, 5.25% due 10/01/2031 (a) 1,486 1,000 Saint Lucie, Florida, West Services District, Utility Revenue Bonds, 5.25% due 10/01/2034 (h) 1,065 2,000 South Broward, Florida, Hospital District Revenue Bonds, DRIVERS, Series 337, 8.237% due 5/01/2032 (h)(k) 2,319 1,000 South Lake County, Florida, Hospital District Revenue Bonds (South Lake Hospital Inc.), 5.80% due 10/01/2034 1,036 1,240 Stuart, Florida, Public Utilities Revenue Refunding and Improvement Bonds, 5.25% due 10/01/2024 (c) 1,331 University of Central Florida (UCF) Athletics Association Inc., COP, Series A (c ): 2,280 5.25% due 10/01/2034 2,399 190 5% due 10/01/2035 194 Village Center Community Development District, Florida, Recreational Revenue Bonds, Series A (h): 1,000 5% due 11/01/2032 1,025 1,640 5.375% due 11/01/2034 1,763 1,000 5.125% due 11/01/2036 1,041 Village Center Community Development District, Florida, Utility Revenue Bonds (h): 2,585 5.25% due 10/01/2023 2,762 4,030 5.125% due 10/01/2028 4,204 1,570 Winter Haven, Florida, Utility System Revenue Refunding and Improvement Bonds, 5% due 10/01/2035 (h) 1,622 ANNUAL REPORTS OCTOBER 31, 2005 Schedule of Investments (concluded) (In Thousands) MuniYield Florida Insured Fund Face Amount Municipal Bonds Value Illinois--0.8% $ 1,000 Chicago, Illinois, O'Hare International Airport, General Airport Revenue Bonds, Third Lien, AMT, Series D, 5% due 1/01/2034 (m) $ 1,007 New Jersey--1.7% 2,000 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50% due 6/15/2024 2,076 Puerto Rico--9.3% 2,990 Puerto Rico Commonwealth Highway and Transportation Authority, Transportation Revenue Refunding Bonds, Series K, 5% due 7/01/2040 2,999 1,970 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series II, 5.375% due 7/01/2019 (h) 2,153 1,000 Puerto Rico Public Buildings Authority, Government Facilities, Revenue Refunding Bonds, Series I, 5% due 7/01/2036 1,004 Face Amount Municipal Bonds Value Puerto Rico (concluded) $ 1,145 Puerto Rico Public Finance Corporation, Commonwealth Appropriation Revenue Bonds, Series E, 5.70% due 2/01/2010 (i) $ 1,245 3,550 Puerto Rico Public Finance Corporation, Revenue Refunding Bonds, RIB, Series 522X, 7.83% due 8/01/2022 (h)(k) 4,163 Total Municipal Bonds (Cost--$187,670)--157.1% 195,521 Shares Held Short-Term Securities 2,600 Merrill Lynch Institutional Tax-Exempt Fund (j) 2,600 Total Short-Term Securities (Cost--$2,600)--2.1% 2,600 Total Investments (Cost--$190,270*)--159.2% 198,121 Liabilities in Excess of Other Assets--(1.3%) (1,670) Preferred Shares, at Redemption Value--(57.9%) (72,029) ---------- Net Assets Applicable to Common Shares--100.0% $ 124,422 ========== Forward interest rate swaps outstanding as of October 31, 2005 were as follows: Notional Unrealized Amount Appreciation Pay a fixed rate of 3.779% and receive a floating rate based on 1-week USD Bond Market Association Rate Broker, JPMorgan Chase Bank Expires November 2015 $ 7,300 $ 51 Pay a fixed rate of 3.801% and receive a floating rate based on 1-week USD Bond Market Association Rate Broker, JPMorgan Chase Bank Expires January 2016 $ 7,300 52 Pay a fixed rate of 3.852% and receive a floating rate based on 1-week USD Bond Market Association Rate Broker, JPMorgan Chase Bank Expires January 2016 $15,000 51 ------- Total $ 154 ======= * The cost and unrealized appreciation (depreciation) of investments as of October 31, 2005, as computed for federal income tax purposes, were as follows: Aggregate cost $ 190,204 =============== Gross unrealized appreciation $ 8,586 Gross unrealized depreciation (669) --------------- Net unrealized appreciation $ 7,917 =============== ** Represents a zero coupon bond; the interest rate shown reflects the effective yield at the time of purchase. (a) AMBAC Insured. (b) Escrowed to maturity. (c) FGIC Insured. (d) FHLMC Collateralized. (e) FNMA Collateralized. (f) FSA Insured. (g) GNMA Collateralized. (h) MBIA Insured. (i) Prerefunded. (j) Investments in companies considered to be an affiliate of the Fund, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows: Net Dividend Affiliate Activity Income Merrill Lynch Institutional Tax-Exempt Fund (2,319) $31 (k) The rate disclosed is that currently in effect. This rate changes periodically and inversely based upon prevailing market rates. (l) ACA Insured. (m) CIFG Insured. (n) Security may have a maturity of more than one year at time of issuance, but has variable rate and demand features that qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based upon prevailing market rates. See Notes to Financial Statements. ANNUAL REPORTS OCTOBER 31, 2005 Schedule of Investments (In Thousands) MuniYield New Jersey Insured Fund, Inc. Face Amount Municipal Bonds Value New Jersey--143.9% $ 1,000 Delaware River and Bay Authority Revenue Bonds, 5% due 1/01/2033 (e) $ 1,030 Delaware River Joint Toll Bridge Commission, Pennsylvania, Bridge Revenue Refunding Bonds: 1,875 5% due 7/01/2023 1,936 1,000 5% due 7/01/2028 1,021 2,500 Delaware River Port Authority of New Jersey and Pennsylvania Revenue Bonds, RIB, Series 396, 9.003% due 1/01/2019 (d)(i) 2,961 540 Essex County, New Jersey, Improvement Authority Revenue Bonds, Series A, 5% due 10/01/2028 (c) 559 6,925 Garden State Preservation Trust of New Jersey, Capital Appreciation Revenue Bonds, Series B, 5.12%** due 11/01/2023 (d) 2,954 Garden State Preservation Trust of New Jersey, Open Space and Farmland Preservation Revenue Bonds, Series A (d): 2,605 5.80% due 11/01/2022 2,956 3,300 5.75% due 11/01/2028 3,890 2,000 Gloucester County, New Jersey, Improvement Authority, Solid Waste Resource Recovery, Revenue Refunding Bonds (Waste Management Inc. Project), Series A, 6.85% due 12/01/2029 2,203 1,000 Hudson County, New Jersey, COP, Refunding, 6.25% due 12/01/2016 (e) 1,182 8,250 Hudson County, New Jersey, Improvement Authority, Facility Lease Revenue Refunding Bonds (Hudson County Lease Project), 5.375% due 10/01/2024 (c) 8,707 Jackson Township, New Jersey, School District, GO (c): 2,880 5% due 4/15/2017 3,031 5,200 5% due 4/15/2020 5,446 3,750 Jersey City, New Jersey, Sewer Authority, Sewer Revenue Refunding Bonds, 6.25% due 1/01/2014 (a) 4,275 3,000 Middlesex County, New Jersey, COP, Refunding, 5% due 8/01/2022 (e) 3,100 Monmouth County, New Jersey, Improvement Authority, Governmental Loan Revenue Bonds (a): 735 5.20% due 12/01/2014 787 2,305 5.25% due 12/01/2015 2,468 Monmouth County, New Jersey, Improvement Authority, Governmental Loan Revenue Refunding Bonds (a): 1,695 5% due 12/01/2017 1,788 1,520 5% due 12/01/2018 1,601 1,540 5% due 12/01/2019 1,621 New Jersey EDA, Cigarette Tax Revenue Bonds: 1,060 5.625% due 6/15/2019 1,123 785 5.75% due 6/15/2029 825 225 5.50% due 6/15/2031 231 465 5.75% due 6/15/2034 486 1,685 New Jersey EDA, EDR, Refunding (The Seeing Eye, Inc. Project), 5% due 12/01/2024 (a) 1,766 Face Amount Municipal Bonds Value New Jersey (continued) $ 1,000 New Jersey EDA, First Mortgage Revenue Bonds (Fellowship Village), Series C, 5.50% due 1/01/2028 $ 995 1,700 New Jersey EDA, First Mortgage Revenue Refunding Bonds (Fellowship Village), Series A, 5.50% due 1/01/2018 1,714 New Jersey EDA, Motor Vehicle Surcharge Revenue Bonds, Series A (e): 3,325 4.95%** due 7/01/2021 1,616 3,900 5% due 7/01/2029 4,047 8,500 5.25% due 7/01/2033 9,028 1,765 5% due 7/01/2034 1,824 New Jersey EDA, School Facilities Construction Revenue Bonds: 3,390 Series F, 5% due 6/15/2013 (c)(h) 3,644 3,500 Series L, 5% due 3/01/2030 (d) 3,637 3,340 Series O, 5.25% due 3/01/2023 3,537 6,500 New Jersey EDA, School Facilities Construction, Revenue Refunding Bonds, Series K, 5.25% due 12/15/2017 (c) 7,103 2,000 New Jersey EDA, State Lease Revenue Bonds (Liberty State Park Project), Series C, 5% due 3/01/2027 (d) 2,080 5,070 New Jersey EDA, Water Facilities Revenue Bonds (New Jersey--American Water Company, Inc. Project), Series A, 6.875% due 11/01/2034 (c) 5,135 New Jersey Health Care Facilities Financing Authority Revenue Bonds: 2,100 (RWJ Healthcare Corporation), Series B, 5% due 2/01/2035 (f) 2,132 1,125 (Somerset Medical Center), 5.50% due 7/01/2033 1,134 4,000 (South Jersey Hospital), 6% due 7/01/2026 4,254 New Jersey Health Care Facilities Financing Authority, Revenue Refunding Bonds: 615 (Atlantic City Medical Center), 6.25% due 7/01/2017 685 1,315 (Atlantic City Medical Center), 5.75% due 7/01/2025 1,394 2,425 (Holy Name Hospital), 6% due 7/01/2025 2,514 2,250 (Meridian Health System Obligation Group), 5.25% due 7/01/2019 (d) 2,387 New Jersey Sports and Exposition Authority, Luxury Tax Revenue Refunding Bonds (Convention Center) (e): 2,000 5% due 9/01/2017 2,095 1,000 5.50% due 3/01/2022 1,132 3,200 New Jersey State Educational Facilities Authority, Higher Education, Capital Improvement Revenue Bonds, Series A, 5.125% due 9/01/2022 (a) 3,376 New Jersey State Educational Facilities Authority Revenue Bonds (Rowan University), Series C (e): 1,315 5.125% due 7/01/2028 1,378 1,185 5% due 7/01/2034 1,224 ANNUAL REPORTS OCTOBER 31, 2005 Schedule of Investments (continued) (In Thousands) MuniYield New Jersey Insured Fund, Inc. Face Amount Municipal Bonds Value New Jersey (continued) New Jersey State Educational Facilities Authority, Revenue Refunding Bonds: $ 3,185 (Montclair State University), Series L, 5% due 7/01/2034 (e) $ 3,291 555 (Rowan University), Series C, 5% due 7/01/2031 (c) 570 1,440 (William Paterson University), Series E, 5.375% due 7/01/2017 (g) 1,557 1,725 (William Paterson University), Series E, 5% due 7/01/2021 (g) 1,801 3,500 New Jersey State, GO, Refunding, Series H, 5.25% due 7/01/2015 (d) 3,836 5,350 New Jersey State Higher Education Assistance Authority, Student Loan Revenue Bonds, AMT, Series A, 5.30% due 6/01/2017 (a) 5,457 4,425 New Jersey State Housing and Mortgage Finance Agency, Capital Fund Program Revenue Bonds, Series A, 4.70% due 11/01/2025 (d) 4,435 3,150 New Jersey State Housing and Mortgage Finance Agency, Home Buyer Revenue Bonds, AMT, Series CC, 5.80% due 10/01/2020 (e) 3,283 2,780 New Jersey State Housing and Mortgage Finance Agency, M/F Revenue Bonds, AMT, Series A, 4.90% due 11/01/2035 (c) 2,763 New Jersey State Transportation Trust Fund Authority, Transportation System Revenue Bonds (d): 1,500 Series A, 5% due 6/15/2008 (h) 1,566 3,545 Series D, 5% due 6/15/2019 3,733 3,600 New Jersey State Transportation Trust Fund Authority, Transportation System Revenue Refunding Bonds, Series B, 5.50% due 12/15/2021 (e) 4,071 3,005 New Jersey State Turnpike Authority, Turnpike Revenue Bonds, Series B, 5.15%** due 1/01/2035 (a) 1,923 New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds: 2,500 Series A, 5.75% due 1/01/2010 (e)(h) 2,723 1,835 Series C-1, 4.50% due 1/01/2031 (a) 1,781 1,000 Port Authority of New Jersey and New York, Consolidated Revenue Bonds, 93rd Series, 6.125% due 6/01/2094 1,167 4,075 Port Authority of New Jersey and New York, Revenue Bonds, Trust Receipts, AMT, Class R, Series 10, 8.65% due 1/15/2017 (d)(i) 4,364 3,180 Port Authority of New Jersey and New York, Revenue Refunding Bonds, DRIVERS, AMT, Series 153, 7.476% due 9/15/2012 (c)(i) 3,336 4,100 Rahway Valley Sewerage Authority, New Jersey, Sewer Revenue Bonds (Capital Appreciation), Series A, 4.74%** due 9/01/2026 (e) 1,470 2,200 South Jersey Port Corporation of New Jersey, Revenue Refunding Bonds, 5% due 1/01/2023 2,257 Face Amount Municipal Bonds Value New Jersey (concluded) $ 1,715 Tobacco Settlement Financing Corporation of New Jersey, Asset-Backed Revenue Bonds, 7% due 6/01/2041 $ 2,006 Union County, New Jersey, Utilities Authority, Senior Lease Revenue Refunding Bonds (Ogden Martin System of Union, Inc.), AMT, Series A (a): 1,590 5.375% due 6/01/2017 1,656 1,670 5.375% due 6/01/2018 1,740 University of Medicine and Dentistry, New Jersey, Revenue Bonds, Series A (a): 570 5.50% due 12/01/2018 625 1,145 5.50% due 12/01/2019 1,256 1,130 5.50% due 12/01/2020 1,236 865 5.50% due 12/01/2021 946 Puerto Rico--12.7% Puerto Rico Commonwealth Highway and Transportation Authority, Transportation Revenue Refunding Bonds: 1,500 Series J, 5% due 7/01/2029 (e) 1,560 1,380 Series K, 5% due 7/01/2045 1,378 Puerto Rico Electric Power Authority, Power Revenue Bonds: 1,830 Series HH, 5.25% due 7/01/2029 (d) 1,951 2,000 Series RR, 5% due 7/01/2028 (b) 2,082 1,500 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, Series PP, 5% due 7/01/2025 (c) 1,570 2,110 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Revenue Bonds (Ascension Health), RIB, Series 377, 9.28% due 11/15/2030 (i) 2,536 5,250 Puerto Rico Public Buildings Authority Revenue Bonds, DRIVERS, Series 211, 7.508% due 7/01/2021 (e)(i) 5,763 Total Municipal Bonds (Cost--$198,745)--156.6% 207,701 Shares Held Short-Term Securities 515 CMA New Jersey Municipal Money Fund (j) $ 515 Total Short-Term Securities (Cost--$515)--0.4% 515 Total Investments (Cost--$199,260*)--157.0% 208,216 Liabilities in Excess of Other Assets--(1.6%) (2,094) Preferred Stock, at Redemption Value--(55.4%) (73,500) ---------- Net Assets Applicable to Common Stock--100.0% $ 132,622 ========== ANNUAL REPORTS OCTOBER 31, 2005 Schedule of Investments (concluded) (In Thousands) MuniYield New Jersey Insured Fund, Inc. Forward interest rate swaps outstanding as of October 31, 2005 were as follows: Notional Unrealized Amount Appreciation Pay a fixed rate of 3.923% and receive a floating rate based on 1-week USD Bond Market Association Rate Broker, JPMorgan Chase Bank Expires November 2018 $ 1,520 $ 11 Pay a fixed rate of 4.09% and receive a floating rate based on 1-week USD Bond Market Association Rate Broker, JPMorgan Chase Bank Expires August 2026 $ 3,210 36 -------- Total $ 47 ======== * The cost and unrealized appreciation (depreciation) of investments as of October 31, 2005, as computed for federal income tax purposes, were as follows: Aggregate cost $ 199,008 =============== Gross unrealized appreciation $ 9,774 Gross unrealized depreciation (566) --------------- Net unrealized appreciation $ 9,208 =============== ** Represents a zero coupon bond; the interest rate shown reflects the effective yield at the time of purchase. (a) AMBAC Insured. (b) CIFG Insured. (c) FGIC Insured. (d) FSA Insured. (e) MBIA Insured. (f) Radian Insured. (g) XL Capital Insured. (h) Prerefunded. (i) The rate disclosed is that currently in effect. This rate changes periodically and inversely based upon prevailing market rates. (j) Investments in companies considered to be an affiliate of the Fund, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows: Net Dividend Affiliate Activity Income CMA New Jersey Municipal Money Fund (2,013) $28 See Notes to Financial Statements. ANNUAL REPORTS OCTOBER 31, 2005 Schedule of Investments (In Thousands) MuniYield Pennsylvania Insured Fund Face Amount Municipal Bonds Value Pennsylvania--136.3% Abington, Pennsylvania, School District, GO, Series A (e): $ 3,085 5% due 4/01/2029 $ 3,200 3,285 5% due 4/01/2032 3,396 3,000 Allegheny County, Pennsylvania, Higher Education Building Authority, University Revenue Bonds (Carnegie Mellon University), 5.125% due 3/01/2032 3,090 2,000 Allegheny County, Pennsylvania, Hospital Development Authority, Health Center Revenue Bonds (University of Pittsburgh Medical Center Health System), Series B, 6% due 7/01/2026 (f) 2,392 5,000 Allegheny County, Pennsylvania, Sanitation Authority, Sewer Revenue Refunding Bonds, Series A, 5% due 12/01/2030 (f) 5,176 1,000 Bristol Borough, Pennsylvania, School District, GO, 5.25% due 3/01/2031 (e) 1,060 1,000 Chester County, Pennsylvania, School Authority, School Lease Revenue Bonds (Intermediate Unit Project), 5% due 4/01/2026 (a) 1,037 1,000 Dauphin County, Pennsylvania, GO, Series C, 5% due 3/01/2024 (f) 1,039 5,500 Delaware County, Pennsylvania, IDA Revenue Bonds (Pennsylvania Suburban Water Company Project), AMT, Series A, 5.15% due 9/01/2032 (a) 5,621 4,770 Delaware County, Pennsylvania, IDA, Water Facilities Revenue Refunding Bonds (Aqua Pennsylvania Inc. Project), AMT, Series B, 5% due 11/01/2036 (c) 4,824 1,500 Delaware Valley, Pennsylvania, Regional Finance Authority, Local Government Revenue Bonds, 5.75% due 7/01/2032 1,686 4,000 Gettysburg, Pennsylvania, Municipal Authority, College Revenue Refunding Bonds, 5% due 8/15/2023 (f) 4,155 4,000 Lancaster County, Pennsylvania, Hospital Authority Revenue Bonds (Lancaster General Hospital Project), 5.50% due 3/15/2026 4,155 3,000 Lehigh County, Pennsylvania, General Purpose Authority, Hospital Revenue Refunding Bonds (Saint Lukes Hospital of Bethlehem), 5.375% due 8/15/2033 3,067 7,800 Lehigh County, Pennsylvania, IDA, PCR, Refunding (Pennsylvania Power and Light Utilities Corporation Project), Series A, 4.70% due 9/01/2029 (c) 7,744 3,500 Luzerne County, Pennsylvania, IDA, Water Facility Revenue Refunding Bonds, RIB, AMT, Series 1170, 7.22% due 9/01/2034 (a)(h) 3,633 2,675 North Allegheny, Pennsylvania, School District, GO, Series C, 5.25% due 5/01/2027 (e) 2,846 Face Amount Municipal Bonds Value Pennsylvania (continued) $ 5,000 Northampton Borough, Pennsylvania, Municipal Authority, Water Revenue Bonds, 5% due 5/15/2034 (f) $ 5,147 6,000 Northumberland County, Pennsylvania, IDA, Water Facilities Revenue Refunding Bonds (Aqua Pennsylvania Inc. Project), AMT, 5.05% due 10/01/2039 (c) 6,079 3,055 Pennsbury, Pennsylvania, School District, GO, Refunding, 5.50% due 1/15/2020 (c) 3,328 1,200 Pennsylvania Economic Development Financing Authority, Solid Waste Disposal Revenue Bonds (Waste Management Inc. Project), AMT, Series A, 5.10% due 10/01/2027 1,202 710 Pennsylvania HFA, S/F Mortgage Revenue Refunding Bonds, AMT, Series 60A, 5.85% due 10/01/2027 (d)(f) 728 3,000 Pennsylvania State Higher Educational Facilities Authority Revenue Bonds (UPMC Health System), Series A, 6% due 1/15/2022 3,252 3,900 Pennsylvania State Higher Educational Facilities Authority, Revenue Refunding Bonds (The Trustees of the University of Pennsylvania Project), Series C, 5% due 7/15/2038 4,018 7,000 Pennsylvania State, IDA, EDR, Refunding, 5.50% due 7/01/2020 (a) 7,677 Pennsylvania State Public School Building Authority, Revenue Bonds (Lehigh Career and Technical Institute) (c): 3,585 5.125% due 10/01/2028 3,728 2,000 5.25% due 10/01/2032 2,103 Pennsylvania State Public School Building Authority, School Lease Revenue Bonds (The School District of Philadelphia Project) (e): 10,000 5.25% due 6/01/2025 10,659 10,300 5% due 6/01/2033 10,554 7,500 Pennsylvania State Public School Building Authority, School Revenue Bonds, DRIVERS, Series 371, 7.487% due 6/01/2011 (e)(h) 8,373 7,500 Pennsylvania State Turnpike Commission, Oil Franchise Tax Revenue Bonds, DRIVERS, Series 366, 7.987% due 6/01/2011 (f)(h) 8,911 1,700 Pennsylvania State Turnpike Commission, Oil Franchise Tax Revenue Refunding Bonds, Series A, 5% due 12/01/2023 (a) 1,768 3,900 Pennsylvania State Turnpike Commission, Turnpike Revenue Bonds, DRIVERS, Series 460-Z, 7.987% due 6/01/2012 (a)(h) 4,603 ANNUAL REPORTS OCTOBER 31, 2005 Schedule of Investments (continued) (In Thousands) MuniYield Pennsylvania Insured Fund Face Amount Municipal Bonds Value Pennsylvania (continued) Philadelphia, Pennsylvania, Airport Revenue Bonds, Series A, AMT (f): $ 1,000 5% due 6/15/2025 $ 1,021 8,000 4.75% due 6/15/2035 7,650 Philadelphia, Pennsylvania, Authority for Industrial Development, Airport Revenue Refunding Bonds (Philadelphia Airport System Project), AMT, Series A (c): 4,000 5.50% due 7/01/2017 4,281 3,655 5.50% due 7/01/2018 3,899 Philadelphia, Pennsylvania, Authority for Industrial Development, Lease Revenue Bonds: 9,125 (City of Philadelphia Project), Series A, 5.375% due 2/15/2027 (f) 9,499 3,000 Series B, 5.50% due 10/01/2020 (e) 3,264 4,680 Series B, 5.50% due 10/01/2021 (e) 5,091 10,000 Philadelphia, Pennsylvania, Gas Works Revenue Bonds, 1998 General Ordinance, 4th Series, 5% due 8/01/2032 (e) 10,244 Philadelphia, Pennsylvania, Hospitals and Higher Education Facilities Authority, Hospital Revenue Refunding Bonds: 1,300 (Children's Hospital Project), VRDN, Series D, 2.70% due 7/01/2031 (f)(k) 1,300 3,000 (Presbyterian Medical Center), 6.65% due 12/01/2019 (b) 3,607 3,000 Philadelphia, Pennsylvania, Housing Authority Revenue Bonds (Capital Fund Program), Series A, 5.50% due 12/01/2018 (e) 3,244 4,645 Philadelphia, Pennsylvania, Qualified Redevelopment Authority Revenue Bonds, AMT, Series B, 5% due 4/15/2027 (c) 4,715 1,750 Philadelphia, Pennsylvania, Redevelopment Authority Revenue Bonds (Neighborhood Transformation), Series A, 5.50% due 4/15/2022 (c) 1,895 Philadelphia, Pennsylvania, School District, GO (c): 5,000 RIB, Series 677, 8.29% due 8/01/2021 (h) 6,106 5,000 Series D, 5.125% due 6/01/2034 5,179 4,000 Series D, 5.25% due 6/01/2034 4,217 5,000 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, Series A, 5% due 7/01/2028 (e) 5,178 1,525 Pittsburgh, Pennsylvania, Public Parking Authority, Parking Revenue Bonds, 5.85% due 6/01/2010 (a)(i) 1,675 Pittsburgh, Pennsylvania, Water and Sewer Authority, Water and Sewer System Revenue Bonds, First Lien: 6,000 5% due 9/01/2033 (f) 6,192 2,400 Series B, 5.255%** due 9/01/2030 (c) 684 Face Amount Municipal Bonds Value Pennsylvania (concluded) Reading, Pennsylvania, School District, GO (c): $ 10,425 Series B, 5.263%** due 1/15/2028 $ 3,400 3,145 Series B, 5.213%** due 1/15/2030 924 2,600 Sayre, Pennsylvania, Health Care Facilities Authority, Revenue Refunding Bonds (Guthrie Healthcare System), Series A, 5.875% due 12/01/2031 2,762 Southeastern Pennsylvania Transportation Authority, Special Revenue Bonds (c): 4,500 5.375% due 3/01/2017 4,700 2,525 5.375% due 3/01/2022 2,632 Guam--1.4% 2,500 A.B. Won Guam International Airport Authority, General Revenue Refunding Bonds, AMT, Series C, 5% due 10/01/2023 (f) 2,544 Puerto Rico--15.0% 10,000 Puerto Rico Commonwealth, Public Improvement, GO, Series A, 5% due 7/01/2034 10,038 7,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series RR, 5% due 7/01/2027 (g) 7,839 Puerto Rico Public Buildings Authority, Government Facilities Revenue Refunding Bonds, Series I: 2,500 5.50% due 7/01/2025 2,670 5,000 5.375% due 7/01/2034 5,218 1,000 Puerto Rico Public Finance Corporation, Commonwealth Appropriation Revenue Bonds, Series E, 5.50% due 8/01/2029 1,046 Total Municipal Bonds (Cost--$263,289)--152.7% 272,965 Shares Held Short-Term Securities 2,714 CMA Pennsylvania Municipal Money Fund (j) $ 2,714 Total Short-Term Securities (Cost--$2,714)--1.5% 2,714 Total Investments (Cost--$266,003*)--154.2% 275,679 Other Assets Less Liabilities--2.9% 5,134 Preferred Shares, at Redemption Value--(57.1%) (102,042) ---------- Net Assets Applicable to Common Shares--100.0% $ 178,771 ========== ANNUAL REPORTS OCTOBER 31, 2005 Schedule of Investments (concluded) (In Thousands) MuniYield Pennsylvania Insured Fund Forward interest rate swaps outstanding as of October 31, 2005 were as follows: Notional Unrealized Amount Appreciation Pay a fixed rate of 4.796% and receive a floating rate based on 3-month LIBOR. Broker, JPMorgan Chase Bank Expires November 2015 $ 36,000 $ 678 Pay a fixed rate of 3.808% and receive a floating rate based on 1-week USD Bond Market Association Rate. Broker, JPMorgan Chase Bank Expires January 2016 $ 14,000 92 ------- Total $ 770 ======= * The cost and unrealized appreciation (depreciation) of investments as of October 31, 2005, as computed for federal income tax purposes, were as follows: Aggregate cost $ 265,922 =============== Gross unrealized appreciation $ 10,859 Gross unrealized depreciation (1,102) --------------- Net unrealized appreciation $ 9,757 =============== ** Represents a zero coupon bond; the interest rate shown reflects the effective yield at the time of purchase. (a) AMBAC Insured. (b) Escrowed to maturity. (c) FGIC Insured. (d) FHA Insured. (e) FSA Insured. (f) MBIA Insured. (g) XL Capital Insured. (h) The rate disclosed is that currently in effect. This rate changes periodically and inversely based upon prevailing market rates. (i) Prerefunded. (j) Investments in companies considered to be an affiliate of the Fund, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows: Net Dividend Affiliate Activity Income CMA Pennsylvania Municipal Money Fund (1,425) $19 (k) Security may have a maturity of more than one year at time of issuance, but has variable rate and demand features that qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based upon prevailing market rates. See Notes to Financial Statements. ANNUAL REPORTS OCTOBER 31, 2005 Statements of Net Assets
MuniYield MuniYield MuniYield Florida New Jersey Pennsylvania Insured Insured Insured As of October 31, 2005 Fund Fund, Inc. Fund Assets Investments in unaffiliated securities, at value* $ 195,520,815 $ 207,701,167 $ 272,965,488 Investments in affiliated securities, at value** 2,600,000 515,186 2,713,938 Cash 63,171 89,397 79,152 Unrealized appreciation on forward interest rate swaps 154,152 46,507 770,452 Interest receivable 2,250,467 3,418,136 4,116,836 Receivable for securities sold 216,643 742,398 6,788,018 Dividends receivable from affiliates 183 30 152 Prepaid expenses 5,565 5,271 6,796 --------------- --------------- --------------- Total assets 200,810,996 212,518,092 287,440,832 --------------- --------------- --------------- Liabilities Payable for securities purchased 4,207,115 6,152,609 6,333,047 Dividends payable to Common Stock/Shareholders 35,579 118,784 123,790 Payable to investment adviser 77,872 81,749 111,834 Payable to other affiliates 2,589 2,548 3,720 Accrued expenses and other liabilities 37,101 39,927 55,115 --------------- --------------- --------------- Total liabilities 4,360,256 6,395,617 6,627,506 --------------- --------------- --------------- Preferred Stock/Shares Preferred Stock/Shares, at redemption value, of AMPS+++ at $25,000 per share liquidation preference++*** 72,028,776 73,500,000 102,042,128 --------------- --------------- --------------- Net Assets Applicable to Common Stock/Shares Net assets applicable to Common Stock/Shares $ 124,421,964 $ 132,622,475 $ 178,771,198 =============== =============== =============== Analysis of Net Assets Applicable to Common Stock/Shares Undistributed investment income--net $ 1,135,801 $ 1,116,478 $ 1,164,541 Accumulated realized capital losses--net (3,113,027) (1,633,624) (3,940,128) Unrealized appreciation--net 8,004,838 9,002,847 10,447,197 --------------- --------------- --------------- Total accumulated earnings--net 6,027,612 8,485,701 7,671,610 --------------- --------------- --------------- Common Stock/Shares, par value $.10 per share++++ 844,996 880,210 1,148,057 Paid-in capital in excess of par 117,549,356 123,256,564 169,951,531 --------------- --------------- --------------- Net Assets $ 124,421,964 $ 132,622,475 $ 178,771,198 =============== =============== =============== Net asset value per share of Common Stock/Shares $ 14.72 $ 15.07 $ 15.57 =============== =============== =============== Market Price $ 14.18 $ 14.65 $ 14.91 =============== =============== =============== * Identified cost on unaffiliated securities $ 187,670,129 $ 198,744,827 $ 263,288,743 =============== =============== =============== ** Identified cost on affiliated securities $ 2,600,000 $ 515,186 $ 2,713,938 =============== =============== =============== *** Preferred Stock/Shares issued and outstanding: Series A, par value of $.05 per share 2,400 2,240 1,600 =============== =============== =============== Series B, par value of $.05 per share 480 -- 1,920 =============== =============== =============== Series B, par value of $.10 per share -- 700 -- =============== =============== =============== Series C, par value of $.05 per share -- -- 560 =============== =============== =============== ++ Preferred Stock/Shares authorized 1,000,000 2,940 1,000,000 =============== =============== =============== ++++ Common Stock/Shares issued and outstanding 8,449,963 8,802,099 11,480,567 =============== =============== =============== +++ Auction Market Preferred Stock/Shares. See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005 Statements of Operations
MuniYield MuniYield MuniYield Florida New Jersey Pennsylvania Insured Insured Insured For the Year Ended October 31, 2005 Fund Fund, Inc. Fund Investment Income Interest and amortization of premium and discount earned $ 9,787,345 $ 9,971,474 $ 14,121,955 Dividends from affiliates 31,163 28,196 18,608 --------------- --------------- --------------- Total income 9,818,508 9,999,670 14,140,563 --------------- --------------- --------------- Expenses Investment advisory fees 993,988 1,046,187 1,424,890 Commission fees 180,365 189,952 256,091 Accounting services 88,463 91,978 111,843 Transfer agent fees 82,974 56,430 80,027 Professional fees 50,337 45,800 61,304 Printing and shareholder reports 25,550 28,443 30,468 Directors'/Trustees' fees and expenses 26,715 26,715 26,715 Listing fees 19,117 19,215 19,117 Pricing fees 15,898 19,869 12,608 Custodian fees 13,217 15,174 18,844 Other 34,708 41,055 47,885 --------------- --------------- --------------- Total expenses before reimbursement 1,531,332 1,580,818 2,089,792 Reimbursement of expenses (3,088) (9,184) (5,929) --------------- --------------- --------------- Total expenses after reimbursement 1,528,244 1,571,634 2,083,863 --------------- --------------- --------------- Investment income--net 8,290,264 8,428,036 12,056,700 --------------- --------------- --------------- Realized and Unrealized Gain (Loss)--Net Realized gain (loss) on: Investments--net 1,909,384 2,584,792 5,581,564 Futures contracts and forward interest rate swaps--net (346,973) 144,333 (1,512,389) --------------- --------------- --------------- Total realized gain 1,562,411 2,729,125 4,069,175 --------------- --------------- --------------- Change in unrealized appreciation/depreciation on: Investments--net (5,185,860) (5,411,836) (9,562,568) Futures contracts and forward interest rate swaps--net 407,941 263,260 1,441,852 --------------- --------------- --------------- Total change in unrealized appreciation/depreciation (4,777,919) (5,148,576) (8,120,716) --------------- --------------- --------------- Total realized and unrealized loss--net (3,215,508) (2,419,451) (4,051,541) --------------- --------------- --------------- Dividends to Preferred Stock/Shareholders Investment income--net (1,442,962) (1,395,905) (2,146,454) --------------- --------------- --------------- Net Increase in Net Assets Resulting from Operations $ 3,631,794 $ 4,612,680 $ 5,858,705 =============== =============== =============== See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005 Statements of Changes in Net Assets MuniYield Florida Insured Fund
For the Year Ended October 31, Increase (Decrease) in Net Assets: 2005 2004 Operations Investment income--net $ 8,290,264 $ 8,303,172 Realized gain (loss)--net 1,562,411 (1,633,469) Change in unrealized appreciation/depreciation--net (4,777,919) 3,344,665 Dividends to Preferred Shareholders (1,442,962) (612,024) --------------- --------------- Net increase in net assets resulting from operations 3,631,794 9,402,344 --------------- --------------- Dividends to Common Shareholders Investment income--net (7,564,939) (7,862,285) --------------- --------------- Net decrease in net assets resulting from dividends to Common Shareholders (7,564,939) (7,862,285) --------------- --------------- Share Transactions Value of shares issued to Common Shareholders in reinvestment of dividends 144,662 -- Offering and underwriting costs resulting from the issuance of Preferred Shares (244,177) -- --------------- --------------- Net decrease in net assets derived from Share transactions (99,515) -- --------------- --------------- Net Assets Applicable to Common Shares Total increase (decrease) in net assets applicable to Common Shares (4,032,660) 1,540,059 Beginning of year 128,454,624 126,914,565 --------------- --------------- End of year* $ 124,421,964 $ 128,454,624 =============== =============== * Undistributed investment income--net $ 1,135,801 $ 1,853,438 =============== =============== See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005 Statements of Changes in Net Assets MuniYield New Jersey Insured Fund, Inc.
For the Year Ended October 31, Increase (Decrease) in Net Assets: 2005 2004 Operations Investment income--net $ 8,428,036 $ 9,010,629 Realized gain (loss)--net 2,729,125 (196,472) Change in unrealized appreciation/depreciation--net (5,148,576) 2,083,358 Dividends to Preferred Stock shareholders (1,395,905) (560,277) --------------- --------------- Net increase in net assets resulting from operations 4,612,680 10,337,238 --------------- --------------- Dividends to Common Stock Shareholders Investment income--net (8,036,760) (8,192,082) --------------- --------------- Net decrease in net assets resulting from dividends to Common Stock shareholders (8,036,760) (8,192,082) --------------- --------------- Stock Transactions Value of shares issued to Common Stock shareholders in reinvestment of dividends 675,155 289,289 Offering and underwriting costs resulting from the issuance of Preferred Stock -- (304,468) Adjustment of offering costs resulting from the issuance of Preferred Stock 1,285 -- --------------- --------------- Net increase (decrease) in net assets derived from Stock transactions 676,440 (15,179) --------------- --------------- Net Assets Applicable to Common Stock Total increase (decrease) in net assets applicable to Common Stock (2,747,640) 2,129,977 Beginning of year 135,370,115 133,240,138 --------------- --------------- End of year* $ 132,622,475 $ 135,370,115 =============== =============== * Undistributed investment income--net $ 1,116,478 $ 2,121,107 =============== =============== See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005 Statements of Changes in Net Assets MuniYield Pennsylvania Insured Fund
For the Year Ended October 31, Increase (Decrease) in Net Assets: 2005 2004 Operations Investment income--net $ 12,056,700 $ 12,376,868 Realized gain--net 4,069,175 1,895,759 Change in unrealized appreciation/depreciation--net (8,120,716) 3,646,173 Dividends to Preferred Shareholders (2,146,454) (914,080) --------------- --------------- Net increase in net assets resulting from operations 5,858,705 17,004,720 --------------- --------------- Dividends to Common Shareholders Investment income--net (10,967,433) (11,464,926) --------------- --------------- Net decrease in net assets resulting from dividends to Common Shareholders (10,967,433) (11,464,926) --------------- --------------- Share Transactions Value of shares issued to Common Shareholders in reinvestment of dividends 269,585 -- Offering and underwriting costs resulting from the issuance of Preferred Shares (266,553) -- --------------- --------------- Net increase in net assets derived from Share transactions 3,032 -- --------------- --------------- Net Assets Applicable to Common Shares Total increase (decrease) in net assets applicable to Common Shares (5,105,696) 5,539,794 Beginning of year 183,876,894 178,337,100 --------------- --------------- End of year* $ 178,771,198 $ 183,876,894 =============== =============== * Undistributed investment income--net $ 1,164,541 $ 2,201,956 =============== =============== See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005 Financial Highlights MuniYield Florida Insured Fund
The following per share data and ratios have been derived For the Year Ended October 31, from information provided in the financial statements. 2005 2004 2003 2002 2001 Per Share Operating Performance Net asset value, beginning of year $ 15.22 $ 15.04 $ 15.04 $ 14.94 $ 13.89 ---------- ---------- ---------- ---------- ---------- Investment income--net .98+++ .98+++ 1.05+++ 1.04 1.00 Realized and unrealized gain (loss)--net (.38) .20 (.06) .06 1.06 Less dividends and distributions to Preferred Shareholders: Investment income--net (.17) (.07) (.07) (.10) (.23) Realized gain--net -- -- -- --++ -- ---------- ---------- ---------- ---------- ---------- Total from investment operations .43 1.11 .92 1.00 1.83 ---------- ---------- ---------- ---------- ---------- Less dividends and distributions to Common Shareholders: Investment income--net (.90) (.93) (.92) (.90) (.78) Realized gain--net -- -- -- --++ -- ---------- ---------- ---------- ---------- ---------- Total dividends and distributions to Common Shareholders (.90) (.93) (.92) (.90) (.78) ---------- ---------- ---------- ---------- ---------- Offering and underwriting costs resulting from the issuance of Preferred Shares (.03) -- -- -- -- ---------- ---------- ---------- ---------- ---------- Net asset value, end of year $ 14.72 $ 15.22 $ 15.04 $ 15.04 $ 14.94 ========== ========== ========== ========== ========== Market price per share, end of year $ 14.18 $ 14.98 $ 14.18 $ 14.30 $ 14.21 ========== ========== ========== ========== ========== Total Investment Return* Based on net asset value per share 2.72% 7.98% 6.45% 7.22% 13.96% ========== ========== ========== ========== ========== Based on market price per share .54% 12.73% 5.56% 7.19% 24.17% ========== ========== ========== ========== ========== Ratios Based on Average Net Assets of Common Shares Total expenses, net of reimbursement** 1.20% 1.09% 1.08% 1.11% 1.15% ========== ========== ========== ========== ========== Total expenses** 1.20% 1.10% 1.08% 1.11% 1.15% ========== ========== ========== ========== ========== Total investment income--net** 6.50% 6.54% 6.86% 7.02% 6.90% ========== ========== ========== ========== ========== Amount of dividends to Preferred Shareholders 1.13% .48% .47% .67% 1.58% ========== ========== ========== ========== ========== Investment income--net, to Common Shareholders 5.37% 6.06% 6.39% 6.35% 5.32% ========== ========== ========== ========== ========== Ratios Based on Average Net Assets of Preferred Shares Dividends to Preferred Shareholders 2.02% 1.02% 1.00% 1.39% 3.21% ========== ========== ========== ========== ==========
ANNUAL REPORTS OCTOBER 31, 2005 Financial Highlights (concluded) MuniYield Florida Insured Fund
The following per share data and ratios have been derived For the Year Ended October 31, from information provided in the financial statements. 2005 2004 2003 2002 2001 Supplemental Data Net assets applicable to Common Shares, end of year (in thousands) $ 124,422 $ 128,455 $ 126,915 $ 126,947 $ 126,035 ========== ========== ========== ========== ========== Preferred Shares outstanding, end of year (in thousands) $ 72,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000 ========== ========== ========== ========== ========== Portfolio turnover 51.33% 31.22% 47.21% 40.55% 78.48% ========== ========== ========== ========== ========== Leverage Asset coverage per $1,000 $ 2,728 $ 3,141 $ 3,115 $ 3,116 $ 3,101 ========== ========== ========== ========== ========== Dividends Per Share on Preferred Shares Outstanding Series A--Investment income--net $ 505 $ 255 $ 251 $ 348 $ 803 ========== ========== ========== ========== ========== Series B++++--Investment income--net $ 482 -- -- -- -- ========== ========== ========== ========== ========== * 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. ** Does not reflect the effect of dividends to Preferred Shareholders. ++ Amount is less than $(.01) per share. ++++ Series B was issued on November 22, 2004. +++ Based on average shares outstanding. See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005 Financial Highlights MuniYield New Jersey Insured Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31, from information provided in the financial statements. 2005 2004 2003 2002 2001 Per Share Operating Performance Net asset value, beginning of year $ 15.46 $ 15.25 $ 15.14 $ 15.17 $ 13.96 ---------- ---------- ---------- ---------- ---------- Investment income--net .96+++ 1.03+++ 1.06+++ 1.07 1.04 Realized and unrealized gain (loss)--net (.27) .21 .06 (.06) 1.21 Less dividends and distributions to Preferred Stock shareholders: Investment income--net (.16) (.06) (.06) (.09) (.20) Realized gain--net -- -- --++ --++ -- ---------- ---------- ---------- ---------- ---------- Total from investment operations .53 1.18 1.06 .92 2.05 ---------- ---------- ---------- ---------- ---------- Less dividends and distributions to Common Stock shareholders: Investment income--net (.92) (.94) (.94) (.94) (.84) Realized gain--net -- -- (.01) (.01) -- ---------- ---------- ---------- ---------- ---------- Total dividends and distributions to Common Stock shareholders (.92) (.94) (.95) (.95) (.84) ---------- ---------- ---------- ---------- ---------- Offering and underwriting costs resulting from the issuance of Preferred Stock -- (.03) -- -- -- ---------- ---------- ---------- ---------- ---------- Adjustment of offering costs resulting from the issuance of Preferred Stock --+++++ -- -- -- -- ---------- ---------- ---------- ---------- ---------- Net asset value, end of year $ 15.07 $ 15.46 $ 15.25 $ 15.14 $ 15.17 ========== ========== ========== ========== ========== Market price per share, end of year $ 14.65 $ 15.16 $ 14.39 $ 14.45 $ 15.04 ========== ========== ========== ========== ========== Total Investment Return* Based on net asset value per share 3.49% 7.99% 7.24% 6.27% 15.04% ========== ========== ========== ========== ========== Based on market price per share 2.60% 12.23% 6.02% 2.30% 19.04% ========== ========== ========== ========== ========== Ratios Based on Average Net Assets of Common Stock Total expenses, net of reimbursement** 1.16% 1.06% 1.03% 1.07% 1.11% ========== ========== ========== ========== ========== Total expenses** 1.16% 1.07% 1.04% 1.07% 1.11% ========== ========== ========== ========== ========== Total investment income--net** 6.21% 6.79% 6.89% 7.04% 7.01% ========== ========== ========== ========== ========== Amount of dividends to Preferred Stock shareholders 1.03% .42% .38% .57% 1.33% ========== ========== ========== ========== ========== Investment income--net, to Common Stock shareholders 5.18% 6.37% 6.51% 6.47% 5.68% ========== ========== ========== ========== ========== Ratios Based on Average Net Assets of Preferred Stock Dividends to Preferred Stock shareholders 1.90% .95% .91% 1.32% 3.01% ========== ========== ========== ========== ==========
ANNUAL REPORTS OCTOBER 31, 2005 Financial Highlights (concluded) MuniYield New Jersey Insured Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31, from information provided in the financial statements. 2005 2004 2003 2002 2001 Supplemental Data Net assets applicable to Common Stock, end of year (in thousands) $ 132,622 $ 135,370 $ 133,240 $ 132,146 $ 131,012 ========== ========== ========== ========== ========== Preferred Stock outstanding, end of year (in thousands) $ 73,500 $ 73,500 $ 56,000 $ 56,000 $ 56,000 ========== ========== ========== ========== ========== Portfolio turnover 37.31% 18.25% 24.70% 28.45% 57.25% ========== ========== ========== ========== ========== Leverage Asset coverage per $1,000 $ 2,804 $ 2,842 $ 3,379 $ 3,360 $ 3,340 ========== ========== ========== ========== ========== Dividends Per Share on Preferred Stock Outstanding Series A--Investment income--net $ 492 $ 232 $ 228 $ 330 $ 753 ========== ========== ========== ========== ========== Series B++++--Investment income--net $ 420 $ 57 -- -- -- ========== ========== ========== ========== ========== * 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. ** Does not reflect the effect of dividends to Preferred Stock shareholders. ++ Amount is less than $(.01) per share. ++++ Series B was issued on August 25, 2004. +++ Based on average shares outstanding. +++++ Amount is less than $.01 per share. See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005 Financial Highlights MuniYield Pennsylvania Insured Fund
The following per share data and ratios have been derived For the Year Ended October 31, from information provided in the financial statements. 2005 2004 2003 2002 2001 Per Share Operating Performance Net asset value, beginning of year $ 16.04 $ 15.56 $ 15.34 $ 15.19 $ 14.16 ---------- ---------- ---------- ---------- ---------- Investment income--net 1.05+++ 1.08+++ 1.11+++ 1.11 1.07 Realized and unrealized gain (loss)--net (.35) .48 .16 .13 1.03 Less dividends to Preferred Shareholders: Investment income--net (.19) (.08) (.07) (.11) (.24) ---------- ---------- ---------- ---------- ---------- Total from investment operations .51 1.48 1.20 1.13 1.86 ---------- ---------- ---------- ---------- ---------- Less dividends to Common Shareholders: Investment income--net (.96) (1.00) (.98) (.98) (.83) ---------- ---------- ---------- ---------- ---------- Total dividends to Common Shareholders (.96) (1.00) (.98) (.98) (.83) ---------- ---------- ---------- ---------- ---------- Offering and underwriting costs resulting from the issuance of Preferred Shares (.02) -- -- -- -- ---------- ---------- ---------- ---------- ---------- Net asset value, end of year $ 15.57 $ 16.04 $ 15.56 $ 15.34 $ 15.19 ========== ========== ========== ========== ========== Market price per share, end of year $ 14.91 $ 15.61 $ 14.81 $ 14.37 $ 14.96 ========== ========== ========== ========== ========== Total Investment Return* Based on net asset value per share 3.16% 10.15% 8.33% 7.84% 14.02% ========== ========== ========== ========== ========== Based on market price per share 1.51% 12.63% 10.07% 2.57% 35.32% ========== ========== ========== ========== ========== Ratios Based on Average Net Assets of Common Shares Total expenses, net of reimbursement** 1.13% 1.05% 1.07% 1.12% 1.16% ========== ========== ========== ========== ========== Total expenses** 1.14% 1.07% 1.08% 1.12% 1.16% ========== ========== ========== ========== ========== Total investment income--net** 6.56% 6.89% 7.08% 7.30% 7.28% ========== ========== ========== ========== ========== Amount of dividends to Preferred Shareholders 1.17% .51% .47% .70% 1.62% ========== ========== ========== ========== ========== Investment income--net, to Common Shareholders 5.39% 6.38% 6.61% 6.60% 5.66% ========== ========== ========== ========== ========== Ratios Based on Average Net Assets of Preferred Shares Dividends to Preferred Shareholders 2.12% 1.04% .95% 1.37% 3.11% ========== ========== ========== ========== ==========
ANNUAL REPORTS OCTOBER 31, 2005 Financial Highlights (concluded) MuniYield Pennsylvania Insured Fund
The following per share data and ratios have been derived For the Year Ended October 31, from information provided in the financial statements. 2005 2004 2003 2002 2001 Supplemental Data Net assets applicable to Common Shares, end of year (in thousands) $ 178,771 $ 183,877 $ 178,337 $ 175,720 $ 173,665 ========== ========== ========== ========== ========== Preferred Shares outstanding, end of year (in thousands) $ 102,000 $ 88,000 $ 88,000 $ 88,000 $ 88,000 ========== ========== ========== ========== ========== Portfolio turnover 46.42% 50.00% 55.57% 51.37% 69.58% ========== ========== ========== ========== ========== Leverage Asset coverage per $1,000 $ 2,753 $ 3,090 $ 3,027 $ 2,997 $ 2,973 ========== ========== ========== ========== ========== Dividends Per Share on Preferred Shares Outstanding Series A--Investment income--net $ 531 $ 254 $ 242 $ 338 $ 781 ========== ========== ========== ========== ========== Series B--Investment income--net $ 530 $ 261 $ 235 $ 346 $ 774 ========== ========== ========== ========== ========== Series C++--Investment income--net $ 501 -- -- -- -- ========== ========== ========== ========== ========== * 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. ** Does not reflect the effect of dividends to Preferred Shareholders. ++ Series C was issued on November 22, 2004. +++ Based on average shares outstanding. See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005 Notes to Financial Statements 1. Significant Accounting Policies: MuniYield Florida Insured Fund, MuniYield New Jersey Insured Fund, Inc., and MuniYield Pennsylvania Insured Fund (the "Funds" or individually as the "Fund") are registered under the Investment Company Act of 1940, as amended, as non-diversified, closed-end management investment companies. The Funds' financial statements are prepared in conformity with U.S. generally accepted accounting principles, which may require the use of management accruals and estimates. Actual results may differ from these estimates. The Funds determine and make available for publication the net asset value of their Common Stock/Shares on a daily basis. The Fund's Common Stock/ Shares are listed on the New York Stock Exchange under the symbol MFT for MuniYield Florida Insured Fund, MJI for MuniYield New Jersey Insured Fund, Inc., and MPA for MuniYield Pennsylvania Insured Fund. The following is a summary of significant accounting policies followed by the Funds. (a) Valuation of investments--Municipal bonds are traded primarily in the over- the-counter ("OTC") markets and are valued at the last available bid price in the OTC markets or on the basis of values as obtained by a pricing service. Pricing services use valuation matrixes that incorporate both dealer-supplied valuations and valuation models. The procedures of the pricing service and its valuations are reviewed by the officers of the Funds under the general direction of the Board of Directors/Trustees. Such valuations and procedures are reviewed periodically by the Board of Directors/Trustees of the Funds. 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 OTC 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 Funds' pricing service.Short-term investments with a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value, under which method the investment is valued at cost and any premium or discount is amortized on a straight line basis to maturity. Investments in open-end investment companies are valued at their net asset value each business day. Securities and other 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 Directors/Trustees of the Funds. (b) Derivative financial instruments--Each 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--Each 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--Each 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). Written and purchased options are non-income producing investments. * Forward interest rate swaps--Each 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. ANNUAL REPORTS OCTOBER 31, 2005 Notes to Financial Statements (continued) (c) Income taxes--It is each 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 Funds amortize 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. (f) Offering expenses--Direct expenses relating to the public offering of certain Fund's Preferred Stock/Shares were charged to capital. Any adjustments to estimates of offering costs were recorded back to capital. (g) Reclassification for MuniYield Pennsylvania Insured Fund--U.S. generally accepted accounting principles require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. Accordingly, during the current year, $19,772 has been reclassified between accumulated net realized capital losses and undistributed net investment income as a result of permanent differences attributable to amortization methods on fixed income securities. This reclassification has no effect on net assets or net asset values per share. 2. Investment Advisory Agreement and Transactions with Affiliates: Each 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 each Fund's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Fund. For such services, each 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 Stock/Shares. For the year ended October 31, 2005, the Investment Adviser agreed to reimburse its management fee by the amount of management fees each Fund pays to FAM indirectly through its investment described below: Investment Reimbursement MuniYield Florida Merrill Lynch Institutional Insured Fund Tax-Exempt Fund $3,088 MuniYield New Jersey CMA New Jersey Insured Fund, Inc. Municipal Money Fund $9,184 MuniYield Pennsylvania CMA Pennsylvania Insured Fund Municipal Money Fund $5,929 For the year ended October 31, 2005, Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), an affiliate of FAM, received underwriting fees of $120,000 relating to MuniYield Florida Insured Fund and $140,000 relating to MuniYield Pennsylvania Insured Fund, in connection with the issuance of each Fund's Preferred Shares. For the year ended October 31, 2005, the Funds reimbursed FAM for certain accounting services. Each Fund's reimbursement was as follows: Reimbursement MuniYield Florida Insured Fund $5,278 MuniYield New Jersey Insured Fund, Inc. $6,146 MuniYield Pennsylvania Insured Fund $7,387 Certain officers and/or directors/trustees of the Funds 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 year ended October 31, 2005 were as follows: MuniYield MuniYield MuniYield Florida New Jersey Pennsylvania Insured Insured Insured Fund Fund, Inc. Fund Total Purchases $115,247,011 $83,478,648 $139,939,097 Total Sales $ 98,926,211 $77,335,811 $128,798,967 ANNUAL REPORTS OCTOBER 31, 2005 Notes to Financial Statements (continued) 4. Stock/Share Transactions: MuniYield Florida Insured Fund and MuniYield Pennsylvania Insured Fund are authorized to issue an unlimited number of common shares of beneficial interest, par value $.10 per share together with 1,000,000 Preferred Shares of beneficial interest, par value of $.05 per share. The Board of Trustees is authorized, however, to reclassify any unissued shares of beneficial interest without approval of the holders of Common Shares. MuniYield New Jersey Insured Fund, Inc. is authorized to issue 200,000,000 shares of stock, including Preferred Stock, par value $.10 per share, all of which were initially classified as Common Stock. The Board of Directors is authorized, however, to classify any unissued shares of stock without approval of holders of Common Stock. Common Stock/Shares MuniYield Florida Insured Fund Shares issued and outstanding during the year ended October 31, 2005 increased by 9,507 as a result of dividend reinvestment and remained constant during the year ended October 31, 2004. MuniYield New Jersey Insured Fund, Inc. Shares issued and outstanding during the years ended October 31, 2005 and October 31, 2004 increased by 43,611 and 18,785, respectively, as a result of dividend reinvestment. MuniYield Pennsylvania Insured Fund Shares issued and outstanding during the year ended October 31, 2005 increased by 16,822 as a result of dividend reinvestment and remained constant during the year ended October 31, 2004. Preferred Stock/Shares Auction Market Preferred Stock/Shares are redeemable Preferred Stock/Shares of the Funds, with 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. MuniYield Florida Insured Fund and MuniYield Pennsylvania Insured Fund have a par value of $.05 per share. MuniYield New Jersey Insured Fund, Inc. has a par value of $.05 per share for Series A Shares and $.10 per share for Series B Shares. The yields in effect at October 31, 2005 were as follows: MuniYield MuniYield MuniYield Florida New Jersey Pennsylvania Insured Insured Insured Fund Fund, Inc. Fund Series A 2.50% 2.65% 2.55% Series B 2.55% 2.45% 2.45% Series C -- -- 2.55% MuniYield Florida Insured Fund Shares issued and outstanding during the year ended October 31, 2005 increased by 480 shares from the issuance of an additional series of Preferred Shares. Shares issued and outstanding during the year ended October 31, 2004 remained constant. MuniYield New Jersey Insured Fund, Inc. Shares issued and outstanding during the year ended October 31, 2005 remained constant. Shares issued and outstanding during the year ended October 31, 2004 increased by 700 shares from the issuance of an additional series of Preferred Stock. MuniYield Pennsylvania Insured Fund Shares issued and outstanding during the year ended October 31, 2005 increased by 560 shares from the issuance of an additional series of Preferred Shares. Shares issued and outstanding during the year ended October 31, 2004 remained constant. The Funds pay 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 year ended October 31, 2005 MLPF&S, earned commissions as follows: Commissions MuniYield Florida Insured Fund $ 93,910 MuniYield New Jersey Insured Fund, Inc. $ 119,076 MuniYield Pennsylvania Insured Fund $ 160,938 ANNUAL REPORTS OCTOBER 31, 2005 Notes to Financial Statements (concluded) 5. Distribution to Shareholders: Each Fund paid a tax-exempt income dividend to holders of Common Stock/Shares on November 29, 2005 to stock/shareholders of record on November 15, 2005. The amount of the tax-exempt income dividend was as follows: Per Share Amount MuniYield Florida Insured Fund $.070000 MuniYield New Jersey Insured Fund, Inc. $.068000 MuniYield Pennsylvania Insured Fund $.075000 MuniYield Florida Insured Fund The tax character of distributions paid during the fiscal years ended October 31, 2004 and October 31, 2005 was as follows: 10/31/2005 10/31/2004 Distributions paid from: Tax-exempt income $ 9,007,901 $ 8,474,309 --------------- --------------- Total distributions $ 9,007,901 $ 8,474,309 =============== =============== As of October 31, 2005, the components of accumulated earnings on a tax basis were as follows: Undistributed tax-exempt income--net $ 1,054,957 Undistributed long-term capital gains--net -- --------------- Total undistributed earnings--net 1,054,957 Capital loss carryforward (2,775,558)* Unrealized gains--net 7,748,213** --------------- Total accumulated earnings--net $ 6,027,612 =============== * On October 31, 2005, the Fund had a net capital loss carryforward of $2,775,558, of which $693,833 expires in 2008 and $2,081,725 expires in 2012. These amounts will be available to offset like amounts of any future taxable gains. ** The difference between book-basis and tax-basis net unrealized gains is attributable primarily to the tax deferral of losses on wash sales, the tax deferral of losses on straddles and the difference between book and tax amortization methods for premiums and discounts on fixed income securities. MuniYield New Jersey Insured Fund, Inc. The tax character of distributions paid during the fiscal years ended October 31, 2005 and October 31, 2004 was as follows: 10/31/2005 10/31/2004 Distributions paid from: Tax-exempt income $ 9,432,665 $ 8,752,359 --------------- --------------- Total distributions $ 9,432,665 $ 8,752,359 =============== =============== As of October 31, 2005, the components of accumulated earnings on a tax basis were as follows: Undistributed tax-exempt income--net $ 864,934 Undistributed long-term capital gains--net -- --------------- Total undistributed earnings--net 864,934 Capital loss carryforward (667,579)* Unrealized gains--net 8,288,346** --------------- Total accumulated earnings--net $ 8,485,701 =============== * On October 31, 2005, the Fund had a net capital loss carryforward of $667,579, all of which expires in 2012. This amount will be available to offset like amounts of any future taxable gains. ** The difference between book-basis and tax-basis net unrealized gains is attributable primarily to the tax deferral of losses on straddles and the difference between book and tax amortization methods for premiums and discounts on fixed income securities. MuniYield Pennsylvania Insured Fund The tax character of distributions paid during the fiscal years ended October 31, 2005 and October 31, 2004 was as follows: 10/31/2005 10/31/2004 Distributions paid from: Tax-exempt income $ 13,113,887 $ 12,291,777 Ordinary income -- 87,229 --------------- --------------- Total distributions $ 13,113,887 $ 12,379,006 =============== =============== As of October 31, 2005, the components of accumulated earnings on a tax basis were as follows: Undistributed tax-exempt income--net $ 1,084,172 Undistributed long-term capital gains--net -- --------------- Total undistributed earnings--net 1,084,172 Capital loss carryforward (3,277,078)* Unrealized gains--net 9,864,516** --------------- Total accumulated earnings--net $ 7,671,610 =============== * On October 31, 2005, the Fund had a net capital loss carryforward of $3,277,078, all of which expires in 2008. This amount will be available to offset like amounts of any future taxable gains. ** The difference between book-basis and tax-basis net unrealized gains is attributable primarily to the tax deferral of losses on straddles and the difference between book and tax amortization methods for premiums and discounts on fixed income securities. ANNUAL REPORTS OCTOBER 31, 2005 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors/Trustees of MuniYield Florida Insured Fund, MuniYield New Jersey Insured Fund, Inc. and MuniYield Pennsylvania Insured Fund: We have audited the accompanying statements of net assets, including the schedules of investments, of MuniYield Florida Insured Fund, MuniYield New Jersey Insured Fund, Inc. and MuniYield Pennsylvania Insured Fund (the "Funds"), as of October 31, 2005, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, audits of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2005 by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the respective financial positions of MuniYield Florida Insured Fund, MuniYield New Jersey Insured Fund, Inc. and MuniYield Pennsylvania Insured Fund as of October 31, 2005, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles. Deloitte & Touche LLP Princeton,New Jersey December 19, 2005 Fund Certification (unaudited) In May 2005, MuniYield Florida Insured Fund, MuniYield New Jersey Insured Fund, Inc. and MuniYield Pennsylvania Insured Fund filed their Chief Executive Officer Certification for the prior year with the New York Stock Exchange pursuant to Section 303A.12(a) of the New York Stock Exchange Corporate Governance Listing Standards. The Funds' Chief Executive Officer and Chief Financial Officer Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 were filed with the Funds' Form N-CSR and are available on the Securities and Exchange Commission's Web site at http://www.sec.gov. Important Tax Information (unaudited) All of the net investment income distributions paid by MuniYield Florida Insured Fund, MuniYield New Jersey Insured Fund, Inc. and MuniYield Pennsylvania Insured Fund during the taxable year ended October 31, 2005 qualify as tax-exempt interest dividends for federal income tax purposes. ANNUAL REPORTS OCTOBER 31, 2005 Disclosure of Investment Advisory Agreement Activities of and Composition of the Board of Directors (1) All but one member of each Fund's Board of Directors is an independent director whose only affiliation with Fund Asset Management, L.P. (the "Investment Adviser") or other Merrill Lynch affiliates is as a director of each Fund and as a director of certain other funds advised by the Investment Adviser or its affiliates. The Chairman of the Boards is also an independent director. New director nominees are chosen as nominees by a Nominating Committee comprised of independent directors. All independent directors also are members of each Board's Audit Committee and the independent directors meet in executive session at each in-person Board meeting. The Board and the Audit Committee meet in person for at least two days each quarter and conduct other in-person and telephone meetings throughout the year, some of which are formal board meetings, and some of which are informational meetings. The independent counsel to the independent directors attends all in-person Board and Audit Committee meetings and other meetings at the independent directors' request. Investment Advisory Agreements--Matters Considered by the Board Every year, each Board considers approval of each Fund's investment advisory agreement (the "Investment Advisory Agreement"). Each Board assesses the nature, scope and quality of the services provided to each Fund by the personnel of the Investment Adviser and its affiliates, including administrative services, shareholder services, oversight of fund accounting, marketing services and assistance in meeting legal and regulatory requirements. Each Board also receives and assesses information regarding the services provided to the Fund by certain unaffiliated service providers. At various times throughout the year, each Board also considers a range of information in connection with its oversight of the services provided by the Investment Adviser and its affiliates. Among the matters considered are: (a) fees (in addition to management fees) paid to the Investment Adviser and its affiliates by each Fund; (b) Fund operating expenses paid to third parties; (c) the resources devoted to and compliance reports relating to each Fund's investment objective, policies and restrictions, and its compliance with its Code of Ethics and the Investment Adviser's compliance policies and procedures; and (d) the nature, cost and character of non-investment management services provided by the Investment Adviser and its affiliates. Each Board believes that the Investment Adviser is one of the most experienced global asset management firms and considers the overall services provided by the Investment Adviser to be generally of high quality. Each Board also believes that the Investment Adviser is financially sound and well managed and notes that the Investment Adviser is affiliated with one of America's largest financial firms. Each Board works closely with the Investment Adviser in over- seeing the Investment Adviser's efforts to achieve good performance. As part of this effort, each Board discusses portfolio manager effectiveness and, when performance is not satisfactory, discusses with the Investment Adviser taking steps such as changing investment personnel. Annual Consideration of Approvals by the Board of Directors In the period prior to the Board meeting to consider renewal of the Investment Advisory Agreement, each Board requests and receives materials specifically relating to the Fund's Investment Advisory Agreement. These materials are prepared with respect to each Fund separately, and include (a) information compiled by Lipper Inc. ("Lipper") on the fees and expenses and the investment performance of the Fund as compared to a comparable group of funds as classified by Lipper; (b) information comparing the Fund's market price with its net asset value per share; (c) a discussion by the Fund's portfolio management team of investment strategies used by the Fund during its most recent fiscal year; (d) information on the profitability to the Investment Adviser and its affiliates of the Investment Advisory Agreement and other relationships with the Fund; and (e) information provided by the Investment Adviser concerning investment advisory fees charged to other clients, such as offshore funds under similar investment mandates and generally to institutional clients. Each Board also considers other matters it deems important to the approval process such as services related to the valuation and pricing of Fund portfolio holdings, allocation of Fund brokerage fees, the Fund's portfolio turnover statistics, and direct and indirect benefits to the Investment Adviser and its affiliates from their relationship with the Fund. (1) References to directors shall include trustees. ANNUAL REPORTS OCTOBER 31, 2005 Disclosure of Investment Advisory Agreement (continued) Certain Specific Renewal Data In connection with the most recent renewal of each Fund's Investment Advisory Agreement in May 2005, the independent directors' and Board's review included the following: Investment Adviser's Services and Fund Performance--Each Board reviewed the nature, extent and quality of services provided by the Investment Adviser, including the investment advisory services and the resulting performance of each Fund. The Boards focused primarily on the Investment Adviser's investment advisory services and each Fund's investment performance, having concluded that the other services provided to each Fund by the Investment Adviser were satisfactory. Each Board compared Fund performance - both including and excluding the effects of each Fund's fees and expenses - to the performance of a comparable group of mutual funds, and the performance of a relevant index or combination of indexes. While each Board reviews performance data quarterly, consistent with the Investment Adviser's investment goals, each Board attaches primary importance to performance over relatively long periods of time, typically three to five years. The Board noted that for the period ended March 31, 2005, MuniYield Florida Insured Fund's performance was in the second quintile for the one-year period, and it ranked fourth out of five for the three-year period, and third out of four for the five-year period. The Board noted that the universe of comparable funds was very small. The Board noted that for the five-year period ended August 31, 2003, MuniYield New Jersey Insured Fund, Inc.'s performance was in the third quintile for the one-year period, the fifth quintile for the three-year period, and the third quintile for the five-year period. The Board noted that MuniYield Pennsylvania Insured Fund's performance was in the first quintile for each of the one-, three- and five-year periods ended August 31, 2003. Considering these factors, each Board concluded that the Fund's performance supported the continuation of the Investment Advisory Agreement. The Investment Adviser's Personnel and Investment Process--Each Board reviews at least annually the Fund's investment objectives and strategies. Each Board discusses with senior management of the Investment Adviser responsible for investment operations and the senior management of the Investment Adviser's municipal investing group the strategies being used to achieve the stated objectives. Among other things, the Board considers the size, education and experience of the Investment Adviser's investment staff, its use of technology, and the Investment Adviser's approach to training and retaining portfolio managers and other research, advisory and management personnel. Each Board also reviews the Investment Adviser's compensation policies and practices with respect to the Fund's portfolio managers. Each Board also considered the experience of the Fund's portfolio manager. The Board of MuniYield Florida Insured Fund noted that Mr. Sneeden has more than ten years of experience in portfolio management. The Board of MuniYield New Jersey Insured Fund, Inc. noted that Mr. Jaeckel has more than fifteen years of experience in portfolio management. The Board of MuniYield Pennsylvania Insured Fund noted that Mr. Bock has more than fifteen years of experience in portfolio management. The Investment Adviser and its investment staff have extensive experience in analyzing and managing the types of investments used by the Funds. Each Board concluded that the Fund benefits from that expertise. Management Fees and Other Expenses--Each Board reviews the Fund's contractual management fee rate and actual management fee rate as a percentage of total assets at common asset levels - the actual rate includes advisory and administrative service fees and the effects of any fee waivers - compared to the other funds in its Lipper category. It also compares the Fund's total expenses to those of other comparable funds. Each Board considered the services provided to and the fees charged by the Investment Adviser to other types of clients such as offshore funds, with similar investment mandates and noted that the fees charged by the Investment Adviser in those cases typically exceeded those being charged to the Fund. Each Board also noted that, as a general matter, fees charged to institutional clients were lower than the fees charged to the Fund, but believed that less extensive services were being provided to such clients. In the case of MuniYield Florida Insured Fund, the contractual management fee rate and total expenses are below the median of fees and expenses charged by comparable funds as determined by Lipper, while the actual management fee rate is slightly higher than the median fee charged by comparable funds. In the case of MuniYield New Jersey Insured Fund, Inc., the contractual management fee rate is lower than the median fee charged by comparable funds as determined by Lipper, while the actual management fee rate and total expenses are higher than the median fees and expenses charged by comparable funds. In the case of MuniYield Pennsylvania Insured Fund, the contractual management fee rate is below the median of fees charged by comparable funds as determined by Lipper, while the total expenses are equal to, and the actual management fee rate is slightly higher than, the median fees and expenses charged by comparable funds. Each Board has concluded that the Fund's management fee and fee rate and overall expense ratio are reasonable compared to those of other comparable funds. ANNUAL REPORTS OCTOBER 31, 2005 Disclosure of Investment Advisory Agreement (concluded) Profitability--Each Board considers the cost of the services provided to the Fund by the Investment Adviser, and the Investment Adviser's and its affiliates' profits in relation to the management and distribution of the Fund and the MLIM/FAM-advised funds. As part of its analysis, each Board reviewed the Investment Adviser's methodology in allocating its costs to the management of the Fund and concluded that there was a reasonable basis for the allocation. Each Board believes the Investment Adviser's profits are reasonable in relation to the nature and quality of services provided. The Boards also considered the federal court decisions discussing an investment adviser's profitability and profitability levels considered to be reasonable in those decisions. Economies of Scale--Each Board considered the extent to which economies of scale might be realized as the assets of the Fund increase and whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in these economies of scale. Each Board considered economies of scale to the extent applicable to each Fund's closed-end structure and determined that each Fund currently appropriately benefits from any economies of scale and no changes were currently necessary. Conclusion After the independent directors deliberated in executive session, each entire Board, including all of the independent directors, approved the renewal of the existing Investment Advisory Agreement, concluding that the advisory fee was reasonable in relation to the services provided and that a contract renewal was in the best interests of the shareholders. Officers and Directors or Trustees
Number of Portfolios in Other Public Fund Complex Directorships Position(s) Length of Overseen by Held by Held with Time Director or Director or Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Trustee Trustee Interested Director or Trustee Robert C. Doll, Jr.* President 2005 to President of the MLIM/FAM-advised funds since 131 Funds None P.O. Box 9011 and present 2005; President of MLIM and FAM since 2001; 177 Portfolios Princeton, Director Co-Head (Americas Region) thereof from 2000 NJ 08543-9011 or Trustee to 2001 and Senior Vice President from 1999 Age: 51 to 2001; President and Director of Princeton Services, Inc. ("Princeton Services") since 2001; President of Princeton Administrators, L.P. ("Princeton Administrators") since 2001; Chief Investment Officer of OppenheimerFunds, Inc. in 1999 and Executive Vice President thereof from 1991 to 1999. * Mr. Doll is a director, trustee or member of an advisory board of certain other investment companies for which MLIM or FAM acts as investment adviser. Mr. Doll is an "interested person," as described in the Investment Company Act, of the Fund based on his current positions with MLIM, FAM, Princeton Services and Princeton Administrators. Directors or Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. As Fund President, Mr. Doll serves at the pleasure of the Board of Directors or Trustees.
ANNUAL REPORTS OCTOBER 31, 2005 Officers and Directors or Trustees (continued)
Number of Portfolios in Other Public Fund Complex Directorships Position(s) Length of Overseen by Held by Held with Time Director or Director or Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Trustee Trustee Independent Directors or Trustees* Donald W. Burton Director 2002 to General Partner of The Burton Partnership, 23 Funds Knology, Inc. P.O. Box 9095 or Trustee present Limited Partnership (an investment partnership) 42 Portfolios (telecommuni- Princeton, since 1979; Managing General Partner of The cations); and NJ 08543-9095 South Atlantic Venture Funds since 1983; Symbion, Inc. Age: 61 Member of the Investment Advisory Council (healthcare) of the Florida State Board of Administration since 2001. LaurieSimon Hodrick Director 1999 to Professor of Finance and Economics, Graduate 23 Funds None P.O. Box 9095 or Trustee present School of Business, Columbia University 42 Portfolios Princeton, since 1998. NJ 08543-9095 Age: 43 John Francis O'Brien Director 2005 to President and Chief Executive Officer of 23 Funds ABIOMED P.O. Box 9095 or Trustee present Allmerica Financial Corporation (financial 42 Portfolios (medical device Princeton, services holding company) from 1995 to 2002 manufacturer), NJ 08543-9095 and Director from 1995 to 2003; President of Cabot Age: 62 Allmerica Investment Management Co., Inc. Corporation (investment adviser) from 1989 to 2002, Director (chemicals), from 1989 to 2002 and Chairman of the Board from LKQ Corporation 1989 to 1990; President, Chief Executive Officer (auto parts and Director of First Allmerica Financial Life manufacturing), Insurance Company from 1989 to 2002 and Director and TJX Companies, of various other Allmerica Financial companies Inc. (retailer) until 2002; Director since 1989 and Member of the Governance Nominating Committee since 2004; Member of the Compensation Committee of ABIOMED since 1989 and Member of the Audit Committee of ABIOMED from 1990 to 2004; Director and member of the Governance and Nomination Committee of Cabot Corporation and Member of the Audit Committee since 1990; Director and Member of the Audit Committee and Compensation Committee of LKQ Corporation since 2003; Lead Director of TJX Companies, Inc. since 1999; Trustee of the Woods Hole Oceanographic Institute since 2003. David H. Walsh Director 2003 to Consultant with Putnam Investments from 1993 23 Funds None P.O. Box 9095 or Trustee present to 2003, and employed in various capacities 42 Portfolios Princeton, therewith from 1973 to 1992; Director, The NJ 08543-9095 National Audubon Society since 1998; Director, Age: 64 The American Museum of Fly Fishing since 1997. Fred G. Weiss** Director 1998 to Managing Director of FGW Associates since 23 Funds Watson P.O. Box 9095 or Trustee present 1997; Vice President, Planning, Investment and 42 Portfolios Pharmaceuticals, Princeton, Development of Warner Lambert Co. from 1979 Inc. NJ 08543-9095 to 1997; Director of the Michael J. Fox (pharmaceutical Age: 64 Foundation for Parkinson's Research since company) 2000; Director of BTG International PLC (a global technology commercialization company) since 2001. * Directors or Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. ** Chairman of the Board and the Audit Committee.
ANNUAL REPORTS OCTOBER 31, 2005 Officers and Directors or Trustees (concluded)
Position(s) Length of Held with Time Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Fund Officers* Donald C. Burke Vice 1993 to First Vice President of MLIM and FAM since 1997 and Treasurer thereof since 1999; P.O. Box 9011 President present Senior Vice President and Treasurer of Princeton Services since 1999 and Director Princeton, and and since 2004; Vice President of FAM Distributors, Inc. ("FAMD") since 1999; Vice NJ 08543-9011 Treasurer 1999 to President of MLIM and FAM from 1990 to 1997; Director of Taxation of MLIM from Age: 45 present 1990 to 2001; Vice President, Treasurer and Secretary of the IQ Funds since 2004. Kenneth A. Jacob Senior 2002 to Managing Director (Municipal Tax-Exempt Fund Management) of MLIM since 2000; P.O. Box 9011 Vice present Director of MLIM from 1997 to 2000. Princeton, President NJ 08543-9011 Age: 54 John M. Loffredo Senior 2002 to Managing Director (Municipal Tax-Exempt Fund Management) of MLIM since 2000; P.O. Box 9011 Vice present Director of MLIM from 1997 to 2000. Princeton, President NJ 08543-9011 Age: 41 William R. Bock Vice 1997 (MPA) Director (Municipal Tax-Exempt Fund Management) of MLIM since 2005; P.O. Box 9011 President present Vice President of MLIM from 1989 to 2005. Princeton, NJ 08543-9011 Age: 69 Theodore R. Jaeckel, Jr. Vice 1997 (MJI) Managing Director (Municipal Tax-Exempt Fund Management) of MLIM since 2005; P.O. Box 9011 President to present Director of MLIM from 1997 to 2005; Vice President of MLIM from 1991 to 1997. Princeton, NJ 08543-9011 Age: 46 Robert D. Sneeden Vice 2002 (MFT) Vice President (Municipal Tax-Exempt Fund Management) of MLIM since 1998; P.O. Box 9011 President to present Assistant Vice President of MLIM from 1994 to 1998. Princeton, NJ 08543-9011 Age: 52 Jeffrey Hiller Chief 2004 to Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President P.O. Box 9011 Compliance present and Chief Compliance Officer of MLIM (Americas Region) since 2004; Chief Princeton, Officer Compliance Officer of the IQ Funds since 2004; Global Director of Compliance at NJ 08543-9011 Morgan Stanley Investment Management from 2002 to 2004; Managing Director Age: 54 and Global Director of Compliance at Citigroup Asset Management from 2000 to 2002; Chief Compliance Officer at Soros Fund Management in 2000; Chief Compliance Officer at Prudential Financial from 1995 to 2000; Senior Counsel in the Commission's Division of Enforcement in Washington, D.C. from 1990 to 1995. Alice A. Pellegrino Secretary 2004 to Director (Legal Advisory) of MLIM since 2002; Vice President of MLIM from 1999 to P.O. Box 9011 present 2002; Attorney associated with MLIM since 1997; Secretary of MLIM, FAM, FAMD Princeton, and Princeton Services since 2004. NJ 08543-9011 Age: 45 * Officers of the Funds serve at the pleasure of the Board of Directors or Trustees.
MuniYield Florida Insured Fund and MuniYield New Jersey Insured Fund, Inc. Custodian The Bank of New York 100 Church Street New York, NY 10286 Transfer Agents Common Shares or Stock: The Bank of New York 101 Barclay Street - 11 East New York, NY 10286 Preferred Shares or Stock: The Bank of New York 101 Barclay Street - 7 West New York, NY 10286 MuniYield Pennsylvania Insured Fund Custodian State Street Bank and Trust Company P.O. Box 351 Boston, MA 02101 Transfer Agents Common Shares: Equiserve Trust Company N.A. (c/o Computershare Investor Services) P.O. Box 43010 Providence, RI 02940-3010 1-800-426-5523 Preferred Shares: The Bank of New York 101 Barclay Street - 7 West New York, NY 10286 ANNUAL REPORTS OCTOBER 31, 2005 Investment Objectives NYSE Symbol MuniYield Florida Insured Fund seeks to provide shareholders with MFT 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. NYSE Symbol MuniYield New Jersey Insured Fund, Inc. seeks to provide MJI shareholders with as high a level of current income exempt from federal income tax and New Jersey personal 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 tax and New Jersey personal income taxes. NYSE Symbol MuniYield Pennsylvania Insured Fund seeks to provide shareholders MPA with as high a level of current income exempt from federal and Pennsylvania 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 and Pennsylvania income taxes. ANNUAL REPORTS OCTOBER 31, 2005 Availability of Quarterly Schedule of Investments The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the SEC's Web site at http://www.sec.gov. The Funds' Forms N-Q may also be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Electronic Delivery The Funds offer electronic delivery of communications to their 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 Web site at 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. ANNUAL REPORTS OCTOBER 31, 2005 Item 2 - Code of Ethics - The registrant has adopted 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 and principal accounting officer, or persons performing similar functions. A copy of the code of ethics is available without charge upon request by calling toll-free 1-800-MER-FUND (1-800-637-3863). Item 3 - Audit Committee Financial Expert - The registrant's board of directors has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent: (1) Donald W. Burton, (2) M. Colyer Crum (retired as of December 31, 2004), (3) Laurie Simon Hodrick, (4) John F. O'Brien (as of November 22, 2004), (5) David H. Walsh and (6) Fred G. Weiss. The registrant's board of directors has determined that Laurie Simon Hodrick and M. Colyer Crum qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR. Ms. Hodrick has a thorough understanding of generally accepted accounting principals, financial statements, and internal controls and procedures for financial reporting. Ms. Hodrick earned a Ph.D. in economics and has taught courses in finance for over 15 years. Her M.B.A.-level course centers around the evaluation and analysis of firms' corporate financial statements. She has also taught in financial analysts' training programs. Ms. Hodrick has also worked with several prominent corporations in connection with the analysis of financial forecasts and projections and analysis of the financial statements of those companies, serving on the Financial Advisory Council of one of these major corporations. She has also served as the Treasurer and Finance Chair of a 501(c)(3) organization. Ms. Hodrick has published a number of articles in leading economic and financial journals and is the associate editor of two leading finance journals. M. Colyer Crum also possesses a thorough understanding of generally accepted accounting principals, financial statements, and internal controls and procedures for financial reporting through a combination of education and experience. Professor Crum was a professor of investment management at the Harvard Business School for 25 years. The courses taught by Professor Crum place a heavy emphasis on the analysis of underlying company financial statements with respect to stock selection and the analysis of credit risk in making loans. Professor Crum has also served on a number of boards of directors and has served on the audit committees, and in some cases chaired the audit committee, for several major corporations and financial institutions. For two such organizations, Professor Crum has performed extensive investment analysis of financial statements in connection with investment management decisions. From these experiences, he has gained significant experience with the establishment of reserves and accounting policies, differences between U.S. GAAP and Canadian GAAP and executive compensation issues. Item 4 - Principal Accountant Fees and Services (a) Audit Fees - Fiscal Year Ending October 31, 2005 - $26,000 Fiscal Year Ending October 31, 2004 - $24,000 (b) Audit-Related Fees - Fiscal Year Ending October 31, 2005 - $19,400 Fiscal Year Ending October 31, 2004 - $3,000 The nature of the services include assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees, and services rendered in connection with the registration and issuance of a new series of AMPS. (c) Tax Fees - Fiscal Year Ending October 31, 2005 - $5,700 Fiscal Year Ending October 31, 2004 - $5,610 The nature of the services include tax compliance, tax advice and tax planning. (d) All Other Fees - Fiscal Year Ending October 31, 2005 - $0 Fiscal Year Ending October 31, 2004 - $0 (e)(1) The registrant's audit committee (the "Committee") has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre- approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the registrant's affiliated service providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are a) consistent with the SEC's auditor independence rules and b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case- by-case basis ("general pre-approval"). However, such services will only be deemed pre-approved provided that any individual project does not exceed $5,000 attributable to the registrant or $50,000 for all of the registrants the Committee oversees. Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. (e)(2) 0% (f) Not Applicable (g) Fiscal Year Ending October 31, 2005 - $6,277,749 Fiscal Year Ending October 31, 2004 - $13,270,096 (h) The registrant's audit committee has considered and determined that the provision of non-audit services that were rendered to the registrant's 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. Regulation S-X Rule 2-01(c)(7)(ii) - $1,227,000, 0% Item 5 - Audit Committee of Listed Registrants - The following individuals are members of the registrant's separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)): Donald W. Burton M. Colyer Crum (retired as of December 31, 2004) Laurie Simon Hodrick John F. O'Brien (as of November 22, 2004) David H. Walsh Fred G. Weiss Item 6 - Schedule of Investments - Not Applicable Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies - Proxy Voting Policies and Procedures Each Fund's Board of Directors/Trustees has delegated to Merrill Lynch Investment Managers, L.P. and/or Fund Asset Management, L.P. (the "Investment Adviser") authority to vote all proxies relating to the Fund's portfolio securities. The Investment Adviser has adopted policies and procedures ("Proxy Voting Procedures") with respect to the voting of proxies related to the portfolio securities held in the account of one or more of its clients, including a Fund. Pursuant to these Proxy Voting Procedures, the Investment Adviser's primary objective when voting proxies is to make proxy voting decisions solely in the best interests of each Fund and its shareholders, and to act in a manner that the Investment Adviser believes is most likely to enhance the economic value of the securities held by the Fund. The Proxy Voting Procedures are designed to ensure that the Investment Adviser considers the interests of its clients, including the Funds, and not the interests of the Investment Adviser, when voting proxies and that real (or perceived) material conflicts that may arise between the Investment Adviser's interest and those of the Investment Adviser's clients are properly addressed and resolved. In order to implement the Proxy Voting Procedures, the Investment Adviser has formed a Proxy Voting Committee (the "Committee"). The Committee is comprised of the Investment Adviser's Chief Investment Officer (the "CIO"), one or more other senior investment professionals appointed by the CIO, portfolio managers and investment analysts appointed by the CIO and any other personnel the CIO deems appropriate. The Committee will also include two non- voting representatives from the Investment Adviser's Legal department appointed by the Investment Adviser's General Counsel. The Committee's membership shall be limited to full-time employees of the Investment Adviser. No person with any investment banking, trading, retail brokerage or research responsibilities for the Investment Adviser's affiliates may serve as a member of the Committee or participate in its decision making (except to the extent such person is asked by the Committee to present information to the Committee, on the same basis as other interested knowledgeable parties not affiliated with the Investment Adviser might be asked to do so). The Committee determines how to vote the proxies of all clients, including a Fund, that have delegated proxy voting authority to the Investment Adviser and seeks to ensure that all votes are consistent with the best interests of those clients and are free from unwarranted and inappropriate influences. The Committee establishes general proxy voting policies for the Investment Adviser and is responsible for determining how those policies are applied to specific proxy votes, in light of each issuer's unique structure, management, strategic options and, in certain circumstances, probable economic and other anticipated consequences of alternate actions. In so doing, the Committee may determine to vote a particular proxy in a manner contrary to its generally stated policies. In addition, the Committee will be responsible for ensuring that all reporting and recordkeeping requirements related to proxy voting are fulfilled. The Committee may determine that the subject matter of a recurring proxy issue is not suitable for general voting policies and requires a case-by-case determination. In such cases, the Committee may elect not to adopt a specific voting policy applicable to that issue. The Investment Adviser believes that certain proxy voting issues require investment analysis - such as approval of mergers and other significant corporate transactions - akin to investment decisions, and are, therefore, not suitable for general guidelines. The Committee may elect to adopt a common position for the Investment Adviser on certain proxy votes that are akin to investment decisions, or determine to permit the portfolio manager to make individual decisions on how best to maximize economic value for a Fund (similar to normal buy/sell investment decisions made by such portfolio managers). While it is expected that the Investment Adviser will generally seek to vote proxies over which the Investment Adviser exercises voting authority in a uniform manner for all the Investment Adviser's clients, the Committee, in conjunction with a Fund's portfolio manager, may determine that the Fund's specific circumstances require that its proxies be voted differently. To assist the Investment Adviser in voting proxies, the Committee has retained Institutional Shareholder Services ("ISS"). ISS is an independent adviser that specializes in providing a variety of fiduciary-level proxy-related services to institutional investment managers, plan sponsors, custodians, consultants, and other institutional investors. The services provided to the Investment Adviser by ISS include in-depth research, voting recommendations (although the Investment Adviser is not obligated to follow such recommendations), vote execution, and recordkeeping. ISS will also assist the Fund in fulfilling its reporting and recordkeeping obligations under the Investment Company Act. The Investment Adviser's Proxy Voting Procedures also address special circumstances that can arise in connection with proxy voting. For instance, under the Proxy Voting Procedures, the Investment Adviser generally will not seek to vote proxies related to portfolio securities that are on loan, although it may do so under certain circumstances. In addition, the Investment Adviser will vote proxies related to securities of foreign issuers only on a best efforts basis and may elect not to vote at all in certain countries where the Committee determines that the costs associated with voting generally outweigh the benefits. The Committee may at any time override these general policies if it determines that such action is in the best interests of a Fund. From time to time, the Investment Adviser may be required to vote proxies in respect of an issuer where an affiliate of the Investment Adviser (each, an "Affiliate"), or a money management or other client of the Investment Adviser (each, a "Client") is involved. The Proxy Voting Procedures and the Investment Adviser's adherence to those procedures are designed to address such conflicts of interest. The Committee intends to strictly adhere to the Proxy Voting Procedures in all proxy matters, including matters involving Affiliates and Clients. If, however, an issue representing a non-routine matter that is material to an Affiliate or a widely known Client is involved such that the Committee does not reasonably believe it is able to follow its guidelines (or if the particular proxy matter is not addressed by the guidelines) and vote impartially, the Committee may, in its discretion for the purposes of ensuring that an independent determination is reached, retain an independent fiduciary to advise the Committee on how to vote or to cast votes on behalf of the Investment Adviser's clients. In the event that the Committee determines not to retain an independent fiduciary, or it does not follow the advice of such an independent fiduciary, the powers of the Committee shall pass to a subcommittee, appointed by the CIO (with advice from the Secretary of the Committee), consisting solely of Committee members selected by the CIO. The CIO shall appoint to the subcommittee, where appropriate, only persons whose job responsibilities do not include contact with the Client and whose job evaluations would not be affected by the Investment Adviser's relationship with the Client (or failure to retain such relationship). The subcommittee shall determine whether and how to vote all proxies on behalf of the Investment Adviser's clients or, if the proxy matter is, in their judgment, akin to an investment decision, to defer to the applicable portfolio managers, provided that, if the subcommittee determines to alter the Investment Adviser's normal voting guidelines or, on matters where the Investment Adviser's policy is case-by-case, does not follow the voting recommendation of any proxy voting service or other independent fiduciary that may be retained to provide research or advice to the Investment Adviser on that matter, no proxies relating to the Client may be voted unless the Secretary, or in the Secretary's absence, the Assistant Secretary of the Committee concurs that the subcommittee's determination is consistent with the Investment Adviser's fiduciary duties In addition to the general principles outlined above, the Investment Adviser has adopted voting guidelines with respect to certain recurring proxy issues that are not expected to involve unusual circumstances. These policies are guidelines only, and the Investment Adviser may elect to vote differently from the recommendation set forth in a voting guideline if the Committee determines that it is in a Fund's best interest to do so. In addition, the guidelines may be reviewed at any time upon the request of a Committee member and may be amended or deleted upon the vote of a majority of Committee members present at a Committee meeting at which there is a quorum. The Investment Adviser has adopted specific voting guidelines with respect to the following proxy issues: * Proposals related to the composition of the Board of Directors of issuers other than investment companies. As a general matter, the Committee believes that a company's Board of Directors (rather than shareholders) is most likely to have access to important, nonpublic information regarding a company's business and prospects, and is therefore best-positioned to set corporate policy and oversee management. The Committee, therefore, believes that the foundation of good corporate governance is the election of qualified, independent corporate directors who are likely to diligently represent the interests of shareholders and oversee management of the corporation in a manner that will seek to maximize shareholder value over time. In individual cases, the Committee may look at a nominee's history of representing shareholder interests as a director of other companies or other factors, to the extent the Committee deems relevant. * Proposals related to the selection of an issuer's independent auditors. As a general matter, the Committee believes that corporate auditors have a responsibility to represent the interests of shareholders and provide an independent view on the propriety of financial reporting decisions of corporate management. While the Committee will generally defer to a corporation's choice of auditor, in individual cases, the Committee may look at an auditors' history of representing shareholder interests as auditor of other companies, to the extent the Committee deems relevant. * Proposals related to management compensation and employee benefits. As a general matter, the Committee favors disclosure of an issuer's compensation and benefit policies and opposes excessive compensation, but believes that compensation matters are normally best determined by an issuer's board of directors, rather than shareholders. Proposals to "micro-manage" an issuer's compensation practices or to set arbitrary restrictions on compensation or benefits will, therefore, generally not be supported. * Proposals related to requests, principally from management, for approval of amendments that would alter an issuer's capital structure. As a general matter, the Committee will support requests that enhance the rights of common shareholders and oppose requests that appear to be unreasonably dilutive. * Proposals related to requests for approval of amendments to an issuer's charter or by-laws. As a general matter, the Committee opposes poison pill provisions. * Routine proposals related to requests regarding the formalities of corporate meetings. * Proposals related to proxy issues associated solely with holdings of investment company shares. As with other types of companies, the Committee believes that a fund's Board of Directors (rather than its shareholders) is best-positioned to set fund policy and oversee management. However, the Committee opposes granting Boards of Directors authority over certain matters, such as changes to a fund's investment objective, that the Investment Company Act envisions will be approved directly by shareholders. * Proposals related to limiting corporate conduct in some manner that relates to the shareholder's environmental or social concerns. The Committee generally believes that annual shareholder meetings are inappropriate forums for discussion of larger social issues, and opposes shareholder resolutions "micromanaging" corporate conduct or requesting release of information that would not help a shareholder evaluate an investment in the corporation as an economic matter. While the Committee is generally supportive of proposals to require corporate disclosure of matters that seem relevant and material to the economic interests of shareholders, the Committee is generally not supportive of proposals to require disclosure of corporate matters for other purposes. Item 8 - Portfolio Managers of Closed-End Management Investment Companies - as of October 31, 2005. (a)(1) Mr. Robert D. Sneeden is primarily responsible for the day-to-day management of the registrant's portfolio ("Portfolio Manager"). Mr. Sneeden has been a portfolio manager and and Director of MLIM since 2005. He was a Vice President of MLIM from 1998 to 2005 and has seven years of experience investing in Municipal Bonds as a portfolio manager on behalf of registered investment companies. He has been the portfolio manager and a Vice President of the Fund since 2002. (a)(2) As of October 31, 2005:
(iii) Number of Other Accounts and (ii) Number of Other Accounts Managed Assets for Which Advisory Fee is and Assets by Account Type Performance-Based Other Other (i) Name of Registered Other Pooled Registered Other Pooled Portfolio Investment Investment Other Investment Investment Other Manager Companies Vehicles Accounts Companies Vehicles Accounts Robert D. Sneeden 3 0 0 0 0 0 $ 1,362,325,030 $ 0 $ 0 $ 0 $ 0 $ 0 (iv) Potential Material Conflicts of Interest
Real, potential or apparent conflicts of interest may arise when a portfolio manager has day-to-day portfolio management responsibilities with respect to more than one fund or account, including the following: Certain investments may be appropriate for the Fund and also for other clients advised by the Investment. Adviser and its affiliates, including other client accounts managed by the Fund's portfolio management team. Investment decisions for the Fund and other clients are made with a view to achieving their respective investment objectives and after consideration of such factors as their current holdings, availability of cash for investment and the size of their investments generally. Frequently, a particular security may be bought or sold for only one client or in different amounts and at different times for more than one but less than all clients. Likewise, because clients of the Investment Adviser and its affiliates may have differing investment strategies, a particular security may be bought for one or more clients when one or more other clients are selling the security. The investment results for the Fund may differ from the results achieved by other clients of the Investment Adviser and its affiliates and results among clients may differ. In addition, purchases or sales of the same security may be made for two or more clients on the same day. In such event, such transactions will be allocated among the clients in a manner believed by the Investment Adviser and its affiliates to be equitable to each. The Investment Adviser will not determine allocations based on whether it receives a performance based fee from the client. In some cases, the allocation procedure could have an adverse effect on the price or amount of the securities purchased or sold by the Fund. Purchase and sale orders for the Fund may be combined with those of other clients of the Investment Adviser and its affiliates in the interest of achieving the most favorable net results to the Fund. To the extent that the Fund's portfolio management team has responsibilities for managing accounts in addition to the Fund, a portfolio manager will need to divide his time and attention among relevant accounts. In some cases, a real, potential or apparent conflict may also arise where (i) the Investment Adviser may have an incentive, such as a performance based fee, in managing one account and not with respect to other accounts it manages or (ii) where a member of the Fund's portfolio management team owns an interest in one fund or account he or she manages and not another. (a)(3) As of October 31, 2005: Portfolio Manager Compensation The Portfolio Manager Compensation Program of MLIM and its affiliates, including the Investment Adviser, is critical to MLIM's ability to attract and retain the most talented asset management professionals. This program ensures that compensation is aligned with maximizing investment returns and it provides a competitive pay opportunity for competitive performance. Compensation Program The elements of total compensation for MLIM and its affiliates portfolio managers are a fixed base salary, annual performance-based cash and stock compensation (cash and stock bonus) and other benefits. MLIM has balanced these components of pay to provide portfolio managers with a powerful incentive to achieve consistently superior investment performance. By design, portfolio manager compensation levels fluctuate - both up and down - with the relative investment performance of the portfolios that they manage. Base Salary Under the MLIM approach, like that of many asset management firms, base salaries represent a relatively small portion of a portfolio manager's total compensation. This approach serves to enhance the motivational value of the performance-based (and therefore variable) compensation elements of the compensation program. Performance-Based Compensation MLIM believes that the best interests of investors are served by recruiting and retaining exceptional asset management talent and managing their compensation within a consistent and disciplined framework that emphasizes pay for performance in the context of an intensely competitive market for talent. To that end, MLIM and its affiliates portfolio manager incentive compensation is based on a formulaic compensation program. MLIM's formulaic portfolio manager compensation program includes: investment performance relative to a subset of general closed-end, Florida insured municipal debt funds over 1-, 3- and 5-year performance periods and a measure of operational efficiency. Portfolio managers are compensated based on the pre-tax performance of the products they manage. If a portfolio manager's tenure is less than 5 years, performance periods will reflect time in position. Portfolio managers are compensated based on products they manage. A discretionary element of portfolio manager compensation may include consideration of: financial results, expense control, profit margins, strategic planning and implementation, quality of client service, market share, corporate reputation, capital allocation, compliance and risk control, leadership, workforce diversity, supervision, technology and innovation. MLIM and its affiliates also consider the extent to which individuals exemplify and foster ML & Co.'s principles of client focus, respect for the individual, teamwork, responsible citizenship and integrity. All factors are considered collectively by MLIM management. Cash Bonus Performance-based compensation is distributed to portfolio managers in a combination of cash and stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of total compensation for portfolio managers. Stock Bonus A portion of the dollar value of the total annual performance-based bonus is paid in restricted shares of ML & Co. stock. Paying a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a given year "at risk" based on the company's ability to sustain and improve its performance over future periods. The ultimate value of stock bonuses is dependent on future ML & Co. stock price performance. As such, the stock bonus aligns each portfolio manager's financial interests with those of the ML & Co. shareholders and encourages a balance between short-term goals and long-term strategic objectives. Management strongly believes that providing a significant portion of competitive performance-based compensation in stock is in the best interests of investors and shareholders. This approach ensures that portfolio managers participate as shareholders in both the "downside risk" and "upside opportunity" of the company's performance. Portfolio managers therefore have a direct incentive to protect ML & Co.'s reputation for integrity. Other Compensation Programs Portfolio managers who meet relative investment performance and financial management objectives during a performance year are eligible to participate in a deferred cash program. Awards under this program are in the form of deferred cash that may be benchmarked to a menu of MLIM mutual funds (including their own fund) during a five-year vesting period. The deferred cash program aligns the interests of participating portfolio managers with the investment results of MLIM products and promotes continuity of successful portfolio management teams. Other Benefits Portfolio managers are also eligible to participate in broad-based plans offered generally to employees of ML & Co. and its affiliates, including broad-based retirement, 401(k), health, and other employee benefit plans. (a)(4) Beneficial Ownership of Securities. As of October 31, 2005, Mr. Sneeden does not beneficially own any stock issued by the Fund. Item 9 - Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers - Not Applicable Item 10 - Submission of Matters to a Vote of Security Holders - Not Applicable Item 11 - Controls and Procedures 11(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. 11(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 second 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 12 - Exhibits attached hereto 12(a)(1) - Code of Ethics - See Item 2 12(a)(2) - Certifications - Attached hereto 12(a)(3) - Not Applicable 12(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/ Robert C. Doll, Jr. ---------------------------- Robert C. Doll, Jr., Chief Executive Officer of MuniYield Florida Insured Fund Date: December 16, 2005 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/ Robert C. Doll, Jr. ---------------------------- Robert C. Doll, Jr., Chief Executive Officer of MuniYield Florida Insured Fund Date: December 16, 2005 By: /s/ Donald C. Burke ---------------------------- Donald C. Burke, Chief Financial Officer of MuniYield Florida Insured Fund Date: December 16, 2005 EX-99.CERT 2 ex99cert.txt SECTION 302 EX-99. CERT CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Robert C. Doll, Jr., Chief Executive Officer of MuniYield Florida Insured Fund, certify that: 1. I have reviewed this report on Form N-CSR of MuniYield Florida Insured 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 registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, 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) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter 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; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 16, 2005 /s/ Robert C. Doll, Jr. ------------------------- Robert C. Doll, Jr., Chief Executive Officer 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; 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 registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, 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) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter 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; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 16, 2005 /s/ Donald C. Burke -------------------- Donald C. Burke, Chief Financial Officer of MuniYield Florida Insured Fund EX-99.1350CERT 3 section906.txt SECTION 906 Exhibit 99.1350CERT Certification Pursuant to Section 906 of the Sarbanes Oxley Act I, Robert C. Doll, Jr., Chief Executive 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: December 16, 2005 /s/ Robert C. Doll, Jr. ------------------------- Robert C. Doll, Jr., Chief Executive Officer of MuniYield Florida Insured Fund A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version 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 its 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: December 16, 2005 /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, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version 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 its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----