-----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, LpZ9bgL7xgd7nEw/BrLacmJ6VFZWqy2Z4sYG8wGAXDQNE5dFU5FZ79fJiTH/Cy/0 jzVTr6yP66Sjjsjdde31xw== 0000900092-96-000308.txt : 19961211 0000900092-96-000308.hdr.sgml : 19961211 ACCESSION NUMBER: 0000900092-96-000308 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19961210 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MUNIVEST FLORIDA FUND CENTRAL INDEX KEY: 0000899177 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07580 FILM NUMBER: 96678701 BUSINESS ADDRESS: STREET 1: 800 SCUDDERS MILL RD CITY: PLAINSBORO STATE: NJ ZIP: 08536 BUSINESS PHONE: 6092822800 MAIL ADDRESS: STREET 1: PO BOX 9011 CITY: PRINCETON STATE: NJ ZIP: 08543-9011 N-30D 1 ANNUAL REPORT MUNIVEST FLORIDA FUND FUND LOGO Annual Report October 31, 1996 This report, including the financial information herein, is transmitted to the shareholders of MuniVest Florida Fund for their information. It is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in the report. Past performance results shown in this report should not be considered a representation of future performance. The Fund has leveraged its Common Shares by issuing Preferred Shares to provide the Common Shareholders with a potentially higher rate of return. Leverage creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of shares of the Common Shares, and the risk that fluctuations in the short-term dividend rates of the Preferred Shares may affect the yield to Common Shareholders. Statements and other information herein are as dated and are subject to change. MuniVest Florida Fund Box 9011 Princeton, NJ 08543-9011 Printed on post-consumer recycled paper MUNIVEST FLORIDA FUND The Benefits and Risks of Leveraging MuniVest Florida Fund utilizes leveraging to seek to enhance the yield and net asset value of its Common Shares. However, these objectives cannot be achieved in all interest rate environments. To leverage, the Fund issues Preferred Shares, which pay dividends at prevailing short-term interest rates, and invests the proceeds in long-term municipal bonds. The interest earned on these investments is paid to Common Shareholders in the form of dividends, and the value of these portfolio holdings is reflected in the per share net asset value of the Fund's Common Shares. However, in order to benefit Common Shareholders, the yield curve must be positively sloped; that is, short-term interest rates must be lower than long- term interest rates. At the same time, a period of generally declining interest rates will benefit Common Shareholders. If either of these conditions change, then the risks of leveraging will begin to outweigh the benefits. To illustrate these concepts, assume a fund's Common Share capitalization of $100 million and the issuance of Preferred Shares for an additional $50 million, creating a total value of $150 million available for investment in long-term municipal bonds. If prevailing short-term interest rates are approximately 3% and long- term interest rates are approximately 6%, the yield curve has a strongly positive slope. The fund pays dividends on the $50 million of Preferred Shares based on the lower short-term interest rates. At the same time, the fund's total portfolio of $150 million earns the income based on long-term interest rates. Of course, increases in short-term interest rates would reduce (and even eliminate) the dividends on the Common Shares. In this case, the dividends paid to Preferred Shareholders are significantly lower than the income earned on the fund's long-term investments, and therefore the Common Shareholders are the beneficiaries of the incremental yield. However, if short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental yield pickup on the Common Shares will be reduced or eliminated completely. At the same time, the market value of the fund's Common Shares (that is, its price as listed on the New York Stock Exchange) may, as a result, decline. Furthermore, if long-term interest rates rise, the Common Shares' net asset value will reflect the full decline in the price of the portfolio's investments, since the value of the fund's Preferred Shares does not fluctuate. In addition to the decline in net asset value, the market value of the fund's Common Shares may also decline. DEAR SHAREHOLDER For the year ended October 31, 1996, the Common Shares of MuniVest Florida Fund earned $0.762 per share income dividends, which included earned and unpaid dividends of $0.066. This represents a net annualized yield of 5.69%, based on a month-end per share net asset value of $13.39. Over the same period, the total investment return on the Fund's Common Shares was +8.17%, based on a change in per share net asset value from $13.16 to $13.39, and assuming reinvestment of $0.760 per share income dividends. For the six-month period ended October 31, 1996, the total investment return on the Fund's Common Shares was +6.93%, based on a change in per share net asset value from $12.91 to $13.39, and assuming reinvestment of $0.373 per share income dividends. For the six-month period ended October 31, 1996, the Fund's Auction Market Preferred Shares had an average yield of 3.56%. The Municipal Market Environment Municipal bond yields generally moved lower during the six-month period ended October 31, 1996. Long-term tax-exempt revenue bond yields, as measured by the Bond Buyer Revenue Bond Index, declined approximately 35 basis points (0.35%) to end the October period at approximately 5.94%. The municipal bond market exhibited considerable weekly yield volatility over the last six months with bond yields vacillating as much as 20 basis points. This ongoing volatility was in response to fluctuating evidence regarding the degree to which recent economic growth will result in any significant increase in inflationary pressures. Much of the evidence supporting stronger growth centered around the strong employment growth seen in April and June and bond yields rose in response. Other, more recent, economic indicators suggested that economic growth will not be excessive and inflationary pressures will remain well-contained. This continued benign inflationary environment supported lower tax-exempt bond yields in recent months. US Treasury bond yields exhibited similar, albeit greater, volatility during the period falling over 20 basis points to end the period at 6.64%. Over the past six months, tax-exempt bond yields registered significantly greater declines than shown by the US Treasury bond market. This relative outperformance by the municipal bond market was largely the result of the strong technical support the tax-exempt market enjoyed throughout most of 1996. Perhaps most significantly, the pace of new bond issuance recently slowed. Over the last year, approximately $180 billion in long-term municipal securities was issued, an increase of over 25% compared to the same period a year ago. Much of this increase was the result of issuers seeking to refinance their existing higher-couponed debt as interest rates declined in 1995 and early 1996. As interest rates rose, these financings became increasingly economically impractical, and issuance declined. Over the last six months, approximately $90 billion in long-term, tax-exempt securities was underwritten, an increase of 5% versus the comparable period a year earlier. Only $41 billion in tax-exempt securities was issued in the last three months, a 3% decline in issuance versus the October 31, 1995 quarter. At the same time, investor demand remained consistently strong. With nominal new-issue yields generally above 6%, retail investor interest was steady. Additionally, investors received over $50 billion this June and July in assets derived from coupon income, bond maturities, and proceeds from early redemptions. Annual new bond issuance declined in recent years and is expected to remain below levels seen in the early 1990s. Consequently, as the higher- couponed bonds issued in the early-to-mid 1980s were redeemed at their first optional call dates, the total number of outstanding tax- exempt bonds has declined. This combination of a declining net supply and significant amounts of assets available for investment helped maintain investor demand in recent months. It is unlikely that the municipal bond market will continue to significantly outperform US Treasury securities in the near future. The tax-exempt bond market's recent performance led to the yield ratio between long-term taxable and tax-exempt securities falling from in excess of 90% to approximately 85%. While historically still very attractive, some institutional investors, particularly short- term traders, began to view the tax-exempt bond market's recent outperformance as an opportunity to sell a relatively expensive asset. However, to the long-term investor such a sale would represent the loss of an attractively priced asset which may not be easily replaced given the relative scarcity of municipal bonds under present supply conditions. Looking ahead, no clear consensus for the direction of interest rates currently exists. Perhaps, the primary focus going forward will be the extent to which the increase in interest rates seen thus far in 1996 will negatively impact future economic growth. Should growth slow in the interest rate-sensitive sectors of the economy, like housing, auto, and consumer spending, as many economists assert is likely, then bond yields are likely to decline. Under such a scenario, the municipal bond market's performance is likely to closely mirror that of the US Treasury bond market. Portfolio Strategy Our investment strategy for MuniVest Florida Fund shifted dramatically during the past 12 months. We began the year ended October 31, 1996 optimistic about the interest rate outlook because of slow economic growth and low inflation. This strategy proved successful as the bond market rallied into January 1996. Unfortunately, our portfolio strategy remained constructive during February and early March while interest rates began to rise. We reversed course and became extremely defensive, seeking to protect the Fund from the significant backup in interest rates that brought the 30-year Treasury bond to 6.90% by the end of March. Since that time we successfully utilized the trading range that confined the bond market, enabling the Fund to realize an attractive total return. Currently, we are cautious on the interest rate outlook. There is a considerable amount of good news priced into the market, and any surprises, such as a stronger economy or larger employment increases, could cause interest rates to increase substantially. We will focus on purchasing higher-coupon bonds that are less sensitive to interest rate volatility in an effort to enhance tax-exempt income to the Fund's Common Shareholders while seeking to protect its net asset value. The interest rate on the Fund's Auction Market Preferred Shares, which averaged approximately 3.40% over the past year, continued to benefit the Fund's Common Shareholders. However, should the spread between short-term and long-term interest rates narrow, the benefits of leverage will diminish and, as a result, reduce the yield of the Fund's Common Shares. (For a complete explanation of the benefits and risks of leveraging, see page 1 of this report to shareholders.) In Conclusion We appreciate your ongoing interest in MuniVest Florida Fund, and we look forward to serving your investment needs in the months and years to come. Sincerely, (Arthur Zeikel) Arthur Zeikel President (Vincent R. Giordano) Vincent R. Giordano Senior Vice President (Robert A. DiMella) Robert A. DiMella Portfolio Manager November 26, 1996 PROXY RESULTS During the six-month period ended October 31, 1996, MuniVest Florida Fund Common Shareholders voted on the following proposals. The proposals were approved at a special shareholders' meeting on September 9, 1996. The description of each proposal and number of shares voted are as follows:
Shares Voted Shares Voted For Without Authority 1. To elect the Fund's Board of Trustees: Edward H. Meyer 5,735,237 116,036 Jack B. Sunderland 5,737,796 113,477 J. Thomas Touchton 5,739,496 111,777 Arthur Zeikel 5,739,196 112,077 Shares Voted Shares Voted Shares Voted For Against Abstain 2. To select Deloitte & Touche LLP as the Fund's independent auditors. 5,728,120 44,054 79,099 During the six-month period ended October 31, 1996, MuniVest Florida Fund Preferred Shareholders voted on the following proposals. The proposals were approved at a special shareholders' meeting on September 6, 1996. The description of each proposal and number of shares voted are as follows: Shares Voted Shares Voted For Without Authority 1. To elect the Fund's Board of Trustees: Donald Cecil 1,482 37 M. Colyer Crum 1,482 37 Edward H. Meyer 1,482 37 Jack B. Sunderland 1,482 37 J. Thomas Touchton 1,482 37 Arthur Zeikel 1,482 37 Shares Voted Shares Voted Shares Voted For Against Abstain 2. To select Deloitte & Touche LLP as the Fund's independent auditors. 1,482 0 37
Portfolio Abbreviations To simplify the listings of MuniVest Florida Fund's portfolio holdings in the Schedule of Investments, we have abbreviated the names of many of the securities according to the list below and at right. AMT Alternative Minimum Tax (subject to) DATES Daily Adjustable Tax-Exempt Securities HFA Housing Finance Agency IDA Industrial Development Authority IDR Industrial Development Revenue Bonds PCR Pollution Control Revenue Bonds S/F Single-Family UT Unlimited Tax VRDN Variable Rate Demand Notes SCHEDULE OF INVESTMENTS (in Thousands)
S&P Moody's Face Value STATE Ratings Ratings Amount Issue (Note 1a) Florida--98.8% AAA Aaa $ 5,000 Brevard County, Florida, IDR (NUI Corporation Project), AMT, 6.40% due 10/01/2024 (b) $ 5,328 AAA NR* 1,400 Broward County, Florida, HFA, Revenue Bonds, AMT, Series A, 7.35% due 3/01/2023 (e)(f) 1,468 A+ A1 8,000 Citrus County, Florida, PCR, Refunding (Florida Power Corporation--Crystal River), Series B, 6.35% due 2/01/2022 8,342 AAA Aaa 5,000 Dade County, Florida, Aviation Revenue Bonds (Miami International Airport), AMT, Series B, 5.75% due 10/01/2013 (c) 5,040 AAA Aaa 1,125 Dade County, Florida, Educational Facilities Authority, Exchangeable Revenue Bonds (University of Miami), 7.65% due 4/01/2010 (c) 1,252 AA- Aa3 2,250 Dade County, Florida, IDA, Solid Waste Disposal Revenue Bonds (Florida Power & Light Co. Project), AMT, 7.15% due 2/01/2023 2,444 AAA Aaa 4,710 Dade County, Florida, Seaport Revenue Bonds, UT, 6.50% due 10/01/2001 (b)(h) 5,176 Escambia County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT (f): AAA Aaa 3,000 Refunding (Multi-County Program), 7% due 4/01/2028 (e) 3,201 NR* Aaa 2,230 Series A, 7.40% due 10/01/2023 2,346 BBB Baa1 1,920 Escambia County, Florida, PCR (Champion International Corporation Project), AMT, 6.90% due 8/01/2022 2,029 NR* Aaa 1,770 Florida HFA, Home Ownership Revenue Bonds, AMT, Series G1, 7.90% due 3/01/2022 (f) 1,870 Florida State Board of Education, Public Education Revenue Bonds (Capital Outlay) (h): AAA Aaa 6,430 Series A, 6.75% due 6/01/2001 7,095 AAA Aaa 3,500 Series B, 6.70% due 6/01/2001 3,855 AA Aa 2,000 Florida State, Department of Transportation (Right of Way Acquisition and Bridge), 5.375% due 7/01/2026 1,924 AAA Aaa 2,000 Florida State Division, Board of Finance, Department of General Services Revenue Bonds (Department of Natural Resource Preservation), Series 2000-A, 6.75% due 7/01/2013 (b) 2,194
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
S&P Moody's Face Value STATE Ratings Ratings Amount Issue (Note 1a) Florida NR* NR* $ 4,700 Florida State, Mid-Bay Bridge Authority, Crossover (concluded) Revenue Refunding Bonds, Series A, 6.10% due 10/01/2022 $ 4,709 AAA Aaa 5,000 Florida State Municipal Power Agency Revenue Bonds (Stanton II Project), 6.50% due 10/01/2002 (b)(h) 5,585 AAA Aaa 5,900 Florida State Turnpike Authority, Turnpike Revenue Refunding Bonds, Series A, 5% due 7/01/2019 (d) 5,427 AA Aa 6,925 Gainesville, Florida, Utilities System Revenue Bonds, Series A, 6.50% due 10/01/2002 (h) 7,726 A A 5,400 Hillsborough County, Florida, Capital Improvement Revenue Bonds (County Center Project), Second Series, 6.75% due 7/01/2002 (h) 6,077 AAA Aaa 2,000 Hillsborough County, Florida, Utility Revenue Refunding Bonds, Series B, 6.50% due 8/01/2016 (c) 2,160 AA+ NR* 2,000 Jacksonville, Florida, Health Facilities Authority, Hospital Revenue Refunding Bonds (Saint Luke's Hospital Association Project), 7.125% due 11/15/2020 2,190 NR* Baa1 345 Jacksonville, Florida, Health Facilities Authority, IDR (National Benevolent Cypress Village), Series A, 6.125% due 12/01/2016 341 AAA Aaa 1,320 Lakeland, Florida, Hospital System Revenue Bonds (Lakeland Regional Medical Center), Series A, 5.25% due 11/15/2016 (c) 1,263 NR* Aaa 3,250 Manatee County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT, Sub-Series 2, 7.75% due 5/01/2026 (f) 3,639 A1+ VMIG1++ 100 Martin County, Florida, PCR, Refunding (Florida Power & Light Company Project), VRDN, 3.60% due 9/01/2024 (a) 100 BBB+ Baa 2,890 Nassau County, Florida, PCR, Refunding (ITT Rayonier, Inc. Project), 6.20% due 7/01/2015 2,932 AA- Aa 7,250 Orlando, Florida, Utilities Commission Water and Electric Revenue Refunding Bonds, Series A, 5.25% due 10/01/2023 6,813 AAA Aaa 1,890 Palm Beach County, Florida, Criminal Justice Facilities Revenue Bonds, 7.20% due 6/01/2015 (d) 2,286 NR* VMIG1++ 2,600 Palm Beach County, Florida, Water and Sewer Revenue Bonds, VRDN, 3.70% due 10/01/2011 (a) 2,600 A1 VMIG1++ 1,000 Pinellas County, Florida, Health Facilities Authority, Revenue Refunding Bonds (Pooled Hospital Loan Program), DATES, 3.65% due 12/01/2015 (a) 1,000 AAA Aaa 1,200 Port Everglades Authority, Florida, Port Improvement Revenue Bonds, 7.125% due 11/01/2016 (g) 1,364 A1+ VMIG1++ 900 Saint Lucie County, Florida, PCR, Refunding (Florida Power & Light Co. Project), VRDN, 3.60% due 1/01/2026 (a) 900 AA- Aa3 1,000 Saint Lucie County, Florida, Solid Waste Disposal Revenue Bonds (Florida Power & Light Co. Project), AMT, 6.70% due 5/01/2027 1,066 AAA Aaa 3,500 Sunrise, Florida, Utility System Revenue Bonds, Series A, 5.75% due 10/01/2026 (b) 3,508 Tampa, Florida, Utility Tax, Capital Appreciation, Sales Tax Revenue Bonds (b): AAA Aaa 2,000 6.22%** due 4/01/2021 487 AAA Aaa 2,800 6.22%** due 10/01/2021 662 NR* Aaa 2,000 Tampa, Florida, Water and Sewer Revenue Refunding Bonds (SBMRS), 6.60% due 10/01/2002 (h) 2,229 Total Investments (Cost--$113,238)--98.8% 118,628 Other Assets Less Liabilities--1.2% 1,430 -------- Net Assets--100.0% $120,058 ======== (a)The interest rate is subject to change periodically based upon prevailing market rates. The interest rate shown is the rate in effect at October 31, 1996. (b)AMBAC Insured. (c)MBIA Insured. (d)FGIC Insured. (e)FNMA Collateralized. (f)GNMA Collateralized. (g)Escrowed to Maturity. (h)Prerefunded. *Not Rated. **Represents a zero coupon bond; the interest rate shown is the effective yield at the time of purchase by the Fund. ++Highest short-term rating by Moody's Investors Service, Inc. Ratings of issues shown have not been audited by Deloitte & Touche LLP. See Notes to Financial Statements.
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
As of October 31, 1996 Assets: Investments, at value (identified cost--$113,238,601) (Note 1a) $118,628,470 Cash 84,297 Interest receivable 1,563,927 Deferred organization expenses (Note 1e) 7,999 Prepaid expenses and other assets 6,840 ------------ Total assets 120,291,533 ------------ Liabilities: Payables: Dividends to shareholders (Note 1f) $ 83,852 Investment adviser (Note 2) 50,665 134,517 ------------ Accrued expenses and other liabilities 99,409 ------------ Total liabilities 233,926 ------------ Net Assets: Net assets $120,057,607 ============ Capital: Capital Shares (unlimited number of shares of beneficial interest authorized) (Note 4): Preferred Shares, par value $.05 per share (1,600 shares of AMPS* issued and outstanding at $25,000 per share liquidation preference) $ 40,000,000 Common Shares, par value $.10 per share (5,978,662 shares issued and outstanding) $ 597,866 Paid-in capital in excess of par 83,198,076 Undistributed investment income--net 460,992 Accumulated realized capital losses on investments--net (Note 5) (9,589,196) Unrealized appreciation on investments--net 5,389,869 ------------ Total--Equivalent to $13.39 net asset value per Common Share (market price--$12.75) 80,057,607 ------------ Total capital $120,057,607 ============ *Auction Market Preferred Shares. See Notes to Financial Statements.
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1996 Investment Interest and amortization of premium and discount earned $ 6,884,455 Income (Note 1d): Expenses: Investment advisory fees (Note 2) $ 594,730 Commission fees (Note 4) 101,488 Accounting services (Note 2) 71,027 Professional fees 66,854 Printing and shareholder reports 39,646 Transfer agent fees 27,883 Trustees' fees and expenses 20,253 Listing fees 13,850 Custodian fees 10,743 Pricing fees 5,880 Amortization of organization expenses (Note 1e) 5,372 Other 14,322 ------------ Total expenses 972,048 ------------ Investment income--net 5,912,407 ------------ Realized & Realized gain on investments--net 2,150,848 Unrealized Gain Change in unrealized appreciation on investments--net (779,005) (Loss) on ------------ Investments--Net Net Increase in Net Assets Resulting from Operations $ 7,284,250 (Notes 1b, 1d & 3): ============ See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended October 31, Increase (Decrease) in Net Assets: 1996 1995 Operations: Investment income--net $ 5,912,407 $ 6,011,312 Realized gain (loss) on investments--net 2,150,848 (3,707,575) Change in unrealized appreciation/depreciation on investments--net (779,005) 11,742,362 ------------ ------------ Net increase in net assets resulting from operations 7,284,250 14,046,099 ------------ ------------ Dividends to Investment income--net: Shareholders Common Shares (4,543,484) (4,521,327) (Note 1f): Preferred Shares (1,378,160) (1,504,120) ------------ ------------ Net decrease in net assets resulting from dividends to shareholders (5,921,644) (6,025,447) ------------ ------------ Net Assets: Total increase in net assets 1,362,606 8,020,652 Beginning of year 118,695,001 110,674,349 ------------ ------------ End of year* $120,057,607 $118,695,001 ============ ============ *Undistributed investment income--net $ 460,992 $ 470,229 ============ ============ See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
For the Period The following per share data and ratios have been derived Apr. 30, from information provided in the financial statements. 1993++ to For the Year Ended October 31, Oct. 31, Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 Per Share Net asset value, beginning of period $ 13.16 $ 11.82 $ 14.99 $ 14.18 Operating -------- -------- -------- -------- Performance: Investment income--net .99 1.01 1.00 .49 Realized and unrealized gain (loss) on investments --net .23 1.34 (3.05) .90 -------- -------- -------- -------- Total from investment operations 1.22 2.35 (2.05) 1.39 -------- -------- -------- -------- Less dividends and distributions to Common Shareholders: Investment income--net (.76) (.76) (.84) (.35) Realized gain on investments--net -- -- (.11) -- -------- -------- -------- -------- Total dividends and distributions to Common Shareholders (.76) (.76) (.95) (.35) -------- -------- -------- -------- Capital charge resulting from issuance of Common Shares -- -- -- (.04) -------- -------- -------- -------- Effect of Preferred Share activity:++++ Dividends and distributions to Preferred Shareholders: Investment income--net (.23) (.25) (.15) (.07) Realized gain on investments--net -- -- (.02) -- Capital charge resulting from issuance of Preferred Shares -- -- -- (.12) -------- -------- -------- -------- Total effect of Preferred Share activity (.23) (.25) (.17) (.19) -------- -------- -------- -------- Net asset value, end of period $ 13.39 $ 13.16 $ 11.82 $ 14.99 ======== ======== ======== ======== Market price per share, end of period $ 12.75 $ 11.50 $ 10.00 $ 15.00 ======== ======== ======== ======== Total Investment Based on market price per share 17.87% 22.93% (28.20%) 2.37%+++ Return:** ======== ======== ======== ======== Based on net asset value per share 8.17% 19.02% (15.07%) 8.22%+++ ======== ======== ======== ======== Ratios to Average Expenses, net of reimbursement .82% .85% .75% .48%* Net Assets:*** ======== ======== ======== ======== Expenses .82% .85% .78% .83%* ======== ======== ======== ======== Investment income--net 4.96% 5.38% 4.94% 4.85%* ======== ======== ======== ======== Supplemental Net assets, net of Preferred Shares, end of period Data: (in thousands) $ 80,058 $ 78,695 $ 70,674 $ 89,438 ======== ======== ======== ======== Preferred Shares outstanding, end of period (in thousands) $ 40,000 $ 40,000 $ 40,000 $ 40,000 ======== ======== ======== ======== Portfolio turnover 116.82% 92.54% 100.98% 23.23% ======== ======== ======== ======== Leverage: Asset coverage per $1,000 $ 3,001 $ 2,967 $ 2,767 $ 3,236 ======== ======== ======== ======== Dividends Per Investment income--net $ 861 $ 940 $ 569 $ 245 Share on ======== ======== ======== ======== Preferred Shares Outstanding:++++++ *Annualized. **Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales loads. ***Do not reflect the effect of dividends to Preferred Shareholders. ++Commencement of Operations. ++++The Fund's Preferred Shares were issued on June 1, 1993. ++++++Dividends per share have been adjusted to reflect a two-for- one stock split that occurred on December 1, 1994. +++Aggregate total investment return. See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS 1. Significant Accounting Policies: MuniVest Florida Fund (the "Fund") is registered under the Investment Company Act of 1940 as a non-diversified, closed-end man- agement investment company. The Fund determines and makes available for publication the net asset value of its Common Shares on a weekly basis. The Fund's Common Shares are listed on the New York Stock Exchange under the symbol MVS. The following is a summary of significant accounting policies followed by the Fund. (a) Valuation of investments--Municipal bonds are traded primarily in the over-the-counter markets and are valued at the most recent bid price or yield equivalent as obtained by the Fund's pricing service from dealers that make markets in such securities. Financial futures contracts and options thereon, which are traded on exchanges, are valued at their closing prices as of the close of such exchanges. Options, which are traded on exchanges, are valued at their last sale price as of the close of such exchanges or, lacking any sales, at the last available bid price. Securities with remaining maturities of sixty days or less are valued at amortized cost, which approximates market value. Securities 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 Trustees of the Fund, including valuations furnished by a pricing service retained by the Fund, which may utilize a matrix system for valuations. The procedures of the pricing service and its valuations are reviewed by the officers of the Fund under the general supervision of the Board of Trustees. (b) Derivative financial instruments--The Fund may engage in various portfolio strategies to seek to increase its return by hedging its portfolio against adverse movements in the debt markets. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. * Financial futures contracts--The Fund may purchase or sell interest rate futures contracts and options on such futures contracts for the purpose of hedging the market risk on existing securities or the intended purchase of securities. Futures contracts are contracts for delayed delivery of securities at a specific future date and at a specific price or yield. Upon entering into a contract, the Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. * Options--The Fund is authorized to write covered call options and purchase put options. When the Fund writes an option, an amount equal to the premium received by the Fund is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked to market to reflect the current market value of the option written. 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. (c) Income taxes--It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no Federal income tax provision is required. (d) Security transactions and investment income--Security transactions are recorded on the dates the transactions are entered into (the trade dates). Interest income is recognized on the accrual basis. Discounts and market premiums are amortized into interest income. Realized gains and losses on security transactions are determined on the identified cost basis. (e) Deferred organization expenses--Deferred organization expenses are amortized on a straight-line basis over a five-year period. (f) Dividends and distributions--Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. 2. Investment Advisory Agreement and Transactions with Affiliates: The Fund has entered into an Investment Advisory Agreement with Fund Asset Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the limited partner. FAM is responsible for the management of the Fund's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Fund. For such services, the Fund pays a monthly fee at an annual rate of 0.50% of the Fund's average weekly net assets. Accounting services are provided to the Fund by FAM at cost. Certain officers and/or trustees of the Fund are officers and/or directors of FAM, PSI, Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S"), and/or ML & Co. 3. Investments: Purchases and sales of investments, excluding short-term securities, for the year ended October 31, 1996 were $129,422,054 and $130,264,124, respectively. Net realized and unrealized gains as of October 31, 1996 were as follows: Realized Unrealized Gains Gains Long-term investments $1,602,979 $5,389,869 Financial futures contracts 547,869 -- ---------- ---------- Total $2,150,848 $5,389,869 ========== ========== As of October 31, 1996, net unrealized appreciation for Federal income tax purposes aggregated $5,389,869, of which $5,420,115 related to appreciated securities and $30,246 related to depreciated securities. The aggregate cost of investments at October 31, 1996 for Federal income tax purposes was $113,238,601. 4. Capital Shares Transactions: The Fund is authorized to issue an unlimited number of shares of beneficial interest, including Preferred Shares, par value $.10 per share, all of which were initially classified as Common Shares. The Board of Trustees is authorized, however, to reclassify any unissued shares of capital without approval of holders of Common Shares. Common Shares For the year ended October 31, 1996, shares issued and outstanding remained constant at 5,978,662. At October 31, 1996, total paid-in capital amounted to $83,795,942. Preferred Shares Auction Market Preferred Shares ("AMPS") are Preferred Shares of the Fund that entitle their holders to receive cash dividends at an annual rate that may vary for the successive dividend periods. The yield in effect at October 31, 1996 was 3.177%. For the year ended October 31, 1996, there were 1,600 AMPS authorized, issued and outstanding with a liquidation preference of $25,000 per share. The Fund pays commissions to certain broker-dealers at the end of each auction at an annual rate ranging from 0.25% to 0.375%, calculated on the proceeds of each auction. For the year ended October 31, 1996, MLPF&S, an affiliate of FAM, earned $68,574 as commissions. 5. Capital Loss Carryforward: At October 31, 1996, the Fund had a capital loss carryforward of approximately $7,746,000, of which $5,492,000 expires in 2002 and $2,254,000 expires in 2003. This amount will be available to offset like amounts of any future taxable gains. 6. Subsequent Event: On November 8, 1996, the Fund's Board of Trustees declared an ordinary income dividend to Common shareholders in the amount of $.066242 per share, payable on November 27, 1996 to shareholders of record as of November 18, 1996. INDEPENDENT AUDITORS' REPORT The Board of Trustees and Shareholders, MuniVest Florida Fund: We have audited the accompanying statement of assets, liabilities and capital, including the schedule of investments, of MuniVest Florida Fund as of October 31, 1996, the related statements of operations for the year then ended and changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the three-year period then ended and for the period April 30, 1993 (commencement of operations) to October 31, 1993. These financial statements and the financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 1996 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of MuniVest Florida Fund as of October 31, 1996, the results of its operations, the changes in its net assets, and the financial highlights for the respective stated periods in conformity with generally accepted accounting principles. Deloitte & Touche LLP Princeton, New Jersey December 3, 1996 IMPORTANT TAX INFORMATION (UNAUDITED) All of the net investment income distributions paid by MuniVest Florida Fund during its taxable year ended October 31, 1996 qualify as tax-exempt interest dividends for Federal income tax purposes. Additionally, there were no capital gains distributed by the Fund during the year. Please retain this information for your records. OFFICERS AND TRUSTEES Arthur Zeikel, President and Trustee Donald Cecil, Trustee M. Colyer Crum, Trustee Edward H. Meyer, Trustee Jack B. Sunderland, Trustee J. Thomas Touchton, Trustee Terry K. Glenn, Executive Vice President Vincent R. Giordano, Senior Vice President Donald C. Burke, Vice President Kenneth A. Jacob, Vice President Gerald M. Richard, Treasurer Mark B. Goldfus, Secretary Custodian The Bank of New York 90 Washington Street New York, New York 10286 Transfer Agents Common Shares: The Bank of New York 101 Barclay Street New York, New York 10286 Preferred Shares: IBJ Schroder Bank &Trust Company One State Street New York, New York 10004 NYSE Symbol MVS -----END PRIVACY-ENHANCED MESSAGE-----