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 811-6502
Name of Fund: MuniYield Florida Fund
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President,
MuniYield Florida 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: 10/31/03
Date of reporting period: 11/01/02 - 10/31/03
Item 1 - Attach shareholder report
(BULL LOGO)
Merrill Lynch Investment Managers
www.mlim.ml.com
MuniYield Florida Fund
Annual Report
October 31, 2003
MuniYield Florida Fund seeks to provide shareholders with as high a
level of current income exempt from Federal income taxes as is
consistent with its investment policies and prudent investment
management by investing primarily in a portfolio of long-term
municipal obligations the interest on which, in the opinion of bond
counsel to the issuer, is exempt from Federal income taxes and which
enables shares of the Fund to be exempt from Florida intangible
personal property taxes.
This report, including the financial information herein, is
transmitted to shareholders of MuniYield Florida Fund for their
information. It is not a prospectus. Past performance results shown
in this report should not be considered a representation of future
performance. The Fund has leveraged its Common Shares and intends to
remain leveraged by issuing Preferred Shares to provide the Common
Shareholders with a potentially higher rate of return. Leverage
creates risks for Common Shareholders, including the likelihood of
greater volatility of net asset value and market price of 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.
MuniYield Florida Fund
Box 9011
Princeton, NJ
08543-9011
MuniYield Florida Fund
The Benefits and Risks of Leveraging
MuniYield 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,
net of dividends to Preferred Shares, is paid to Common Shareholders
in the form of dividends, and the value of these portfolio holdings
is reflected in the per share net asset value of the Fund's Common
Shares. However, in order to benefit Common Shareholders, the yield
curve must be positively sloped; that is, short-term interest rates
must be lower than long-term interest rates. At the same time, a
period of generally declining interest rates will benefit Common
Shareholders. If either of these conditions change, then the risks
of leveraging will begin to outweigh the benefits.
To illustrate these concepts, assume a fund's Common 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.
As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to
changes in a floating interest rate ("inverse floaters"). In
general, income on inverse floaters will decrease when short-term
interest rates increase and increase when short-term interest rates
decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of
providing investment leverage and, as a result, the market value of
such securities will generally be more volatile than that of fixed-
rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the
net asset value of the Fund's shares may also be more volatile than
if the Fund did not invest in these securities. As of October 31,
2003, the percentage of the Fund's total net assets invested in
inverse floaters was 10.00%.
Swap Agreements
The Fund may also invest in swap agreements, which are over-the-
counter contracts in which one party agrees to make periodic
payments based on the change in market value of a specified bond,
basket of bonds, or index in return for periodic payments based on a
fixed or variable interest rate or the change in market value of a
different bond, basket of bonds or index. Swap agreements may be
used to obtain exposure to a bond or market without owning or taking
physical custody of securities.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
A Letter From the President
Dear Shareholder
As 2003 draws to a close, it seems appropriate to reflect on what
has been a meaningful year in many respects. We saw the beginning
and the end of all-out war in Iraq, equity market uncertainty turned
to strength and sub par gross domestic product growth of 1.4% in the
first quarter of 2003 grew to an extraordinary 8.2% in the third
quarter. Amid the good news, fixed income investments, which had
become the asset class of choice during the preceding three-year
equity market decline, faced new challenges.
During 2003, municipal bond yields rose and fell in reaction to
geopolitical events, equity market performance, economic activity
and employment figures. By the end of October, long-term municipal
revenue bond yields were slightly higher than they were one year
earlier, at 5.24% as measured by the Bond Buyer Revenue Bond Index.
With many state deficits at record levels, municipalities issued
nearly $400 billion in new long-term tax-exempt bonds during the
12-month period ended October 31, 2003. The availability of bonds,
together with attractive yield ratios relative to U.S. Treasury
issues, made municipal bonds a popular fixed income investment
alternative.
Throughout the year, our portfolio managers continued to work
diligently to deliver on our commitment to provide superior
performance within reasonable expectations for risk and return. This
included striving to outperform our peers and the market indexes.
With that said, remember that the advice and guidance of a skilled
financial advisor often can mean the difference between successful
and unsuccessful investing. A financial professional can help you
choose those investments that will best serve you as you plan for
your financial future.
Finally, I am proud to premiere a new look to our shareholder
communications. Our portfolio manager commentaries have been trimmed
and organized in such a way that you can get the information you
need at a glance, in plain language. Today's markets are confusing
enough. We want to help you put it all in perspective. The report's
new size also allows us certain mailing efficiencies. Any cost
savings in production or postage are passed on to the Fund and,
ultimately, to Fund shareholders.
We thank you for trusting Merrill Lynch Investment Managers with
your investment assets, and we look forward to serving you in the
months and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Trustee
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
A Discussion With Your Fund's Portfolio Manager
To avoid excess price volatility, we concentrated many of the Fund's
new investments on insured general obligation bonds and other
opportunities we viewed as relatively stable.
Describe the market environment relative to municipal bonds during
the fiscal year.
At the end of October, long-term tax-exempt bond yields were
90% - 95% of comparable U.S. Treasury securities, substantially
exceeding their historical average of 85% - 88%. Considering their
tax-free status, this made long-term municipal bonds an attractive
investment alternative during the past 12 months.
Long-term U.S. Treasury bond yields declined throughout most of the
first seven months of the fiscal year, while bond prices--which move
in the opposite direction of yields--rose in response to weak equity
markets, concerns about a growing conflict in Iraq and continued sub
par U.S. economic growth. The Federal Reserve Board continued to
lower short-term interest rates to stimulate business and consumer
economic activity. Bond yields reversed course in July and August,
rising sharply as economic conditions began to improve and as most
analysts agreed the Federal Reserve Board had finished lowering
interest rates. In mid-August, U.S. Treasury bond yields reached
5.45%, their highest level during the period, before again moving
lower and ending the 12-month period at 5.13%, 15 basis points
(.15%) higher than a year earlier.
Long-term tax-exempt bond yields also rose from year-ago levels,
although to a lesser extent than U.S. Treasury bonds, as municipal
bond prices typically are less sensitive to short-term economic and
geopolitical pressures. By the end of October, long-term municipal
revenue bond yields stood at 5.24%, a small increase compared to the
previous year. Yields for long-term Aaa-rated tax-exempt bonds (the
highest rated) declined 10 basis points during the past year. The
decline largely reflected investors' growing demand for high-quality
bonds, which provided valuable stability in an uncertain market.
The municipal market's outperformance of the U.S. Treasury market
was especially impressive given the dramatic increase in new bond
issuance during the fiscal year. Over the past 12 months,
municipalities issued nearly $400 billion in new securities, an
increase of more than 12% compared to last year's issuance. More
recently, however, new municipal bond issuance slowed as tax-exempt
bond yields rose, making borrowing more expensive. This decline
in supply helped support the tax-exempt market's recent performance.
How did conditions in the state of Florida affect the Fund?
Overall, conditions in Florida were relatively favorable. The state
maintained solid credit ratings of Aa2 from Moody's, AA+ from
Standard & Poor's and AA from Fitch. All three rating agencies held
a stable outlook for Florida's finances.
Florida continued to attract new residents because of its climate,
low cost of living and job growth. These factors, along with a
proactive state government, allowed Florida greater-than-average
flexibility to respond to economic downturns. Nevertheless, ongoing
population increases continued to strain the state's social services
programs, especially relating to education, health care and mass
transit. While most states have seen tax revenues decline because of
the difficult economic environment, Florida General Fund revenues
increased marginally in 2003 and are projected to increase by 2.6%
in fiscal year 2004. To keep its finances in order, the state
enacted sizable budget cuts consisting of a hiring freeze, a
rollback of tax breaks and other spending reductions--actions that,
in our opinion, affirm the state's conservative fiscal nature.
The state maintained a Budget Stabilization Fund of $959 million for
fiscal year 2003, providing Florida with a financial cushion.
However, Governor Jeb Bush faced considerable pressure from recently
enacted voter-approved measures for increased spending on education
and a high-speed rail system. Because the cost could total up to
$27 billion, the governor was expected to attempt to repeal these
measures.
Florida's fiscal year 2004 budget was passed in part by shifting
costs onto local governments. We anticipated that local
municipalities would seek to finance these costs through voter-
approved property or sales taxes, a trend that could lead to
increased spending and borrowing activity and, consequently, a
decline in credit ratings. As a result, to avoid excess price
volatility, we concentrated many of the Fund's new investments on
insured general obligation bonds and other opportunities we viewed
as relatively stable.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
How did the Fund perform during the period in light of the existing
market conditions?
For the year ended October 31, 2003, the Common Shares of MuniYield
Florida Fund had a net annualized yield of 6.15%, based on a year-
end per share net asset value of $14.97 and $.920 per share income
dividends. Over the same period, the total investment return on the
Fund's Common Shares was +6.76%, based on an unchanged per share net
asset value of $14.97, and assuming reinvestment of $.918 per share
ordinary income dividends.
For the six-month period ended October 31, 2003, the total
investment return on the Fund's Common Shares was +.92%, based
on a change in per share net asset value of $15.33 to $14.97, and
assuming reinvestment of $.462 per share ordinary income dividends.
For the six-month period ended October 31, 2003, the Fund's Auction
Market Preferred Shares had an average yield of .88% for Series A
and .89% for Series B.
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 the Financial
Statements included in this report. As a closed-end fund, the Fund's
shares may trade in the secondary market at a premium or discount to
the Fund's net asset value. As a result, total investment returns
based on changes in the 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.
The Fund's performance, based on net asset value, slightly exceeded
its comparable Lipper category of Florida Municipal Debt Funds,
which had an average return of +6.40% for the 12-month period ended
October 31, 2003. Performance during the period reflected the Fund's
neutral positioning with respect to duration, or its sensitivity to
changes in interest rates.
What changes were made to the portfolio during the period?
We made a few significant changes to the portfolio during the fiscal
year. Our focus continued to be on reducing the portfolio's
volatility by selling bonds with 10-year - 20-year maturity dates.
With the proceeds from these sales, we bought 20-year - 30-year
bonds offering 5.125% or more in coupon income. This approach was
designed to enhance the Fund's income stream as well as preserve its
asset value in the event of future market volatility. We had only
partial success in implementing this strategy, however, as strong
demand from both individual and institutional investors made it
difficult to buy as many securities as we would have preferred.
In terms of leverage, the Fund's borrowing costs ranged from .50% to
1.55% during the fiscal year. The attractive funding levels, in
combination with a steep tax-exempt yield curve, generated a
significant income benefit to the Fund's Common Shareholders.
Further declines in the Fund's borrowing costs would require
significant easing of monetary policy by the Federal Reserve Board.
While such action is not expected, neither is an imminent increase
in short-term interest rates. We expect short-term borrowing costs
to remain near current attractive levels for the coming months.
However, should the spread between short-term and long-term interest
rates narrow, the benefits of leverage will decline, and as a
result, reduce the yield on the Fund's Common Shares. (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 portfolio's position at the close of
the period?
As the period closed, we remained neutral toward the municipal bond
market. We believe the Fund's neutral duration should help moderate
any negative effects that could result from a rise in market
interest rates. We also expect to maintain the Fund's fully invested
position in order to enhance its income-generating ability for
shareholders.
Robert D. Sneeden
Vice President and Portfolio Manager
November 11, 2003
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Schedule of Investments (In Thousands)
S&P Moody's Face
Ratings++ Ratings++ Amount Municipal Bonds Value
Florida--125.4%
AA NR* $ 3,140 Beacon Tradeport Community Development District, Florida,
Special Assessment Revenue Refunding Bonds (Commercial Project),
Series A, 5.625% due 5/01/2032 (g) $ 3,316
AAA Aaa 7,650 Brevard County, Florida, IDR (NUI Corporation Project), AMT,
6.40% due 10/01/2024 (a) 8,156
AAA Aaa 2,870 Broward County, Florida, Airport System Revenue Bonds, AMT,
Series I, 5.75% due 10/01/2018 (a) 3,103
Citrus County, Florida, Hospital Board Revenue Refunding Bonds
(Citrus Memorial Hospital):
NR* Baa3 2,480 6.25% due 8/15/2023 2,520
NR* Baa3 2,850 6.375% due 8/15/2032 2,903
NR* NR* 2,610 Collier County, Florida, IDA, IDR, Refunding (Southern States
Utilities), AMT, 6.50% due 10/01/2025 2,561
Duval County, Florida, HFA, S/F Mortgage Revenue Refunding
Bonds, AMT (d)(i):
NR* Aaa 475 6.20% due 4/01/2020 (b) 504
NR* Aaa 2,800 5.40% due 10/01/2021 2,877
AAA Aaa 3,245 Escambia County, Florida, HFA, S/F Mortgage Revenue Refunding
Bonds, AMT, 7% due 4/01/2028 (d)(i) 3,367
NR* Aaa 7,860 Escambia County, Florida, Health Facilities Authority, Health
Facility Revenue Bonds (Florida Health Care Facility Loan), 5.95%
due 7/01/2020 (a) 8,311
BBB Baa2 8,295 Escambia County, Florida, PCR (Champion International Corporation
Project), AMT, 6.90% due 8/01/2022 8,627
AAA Aaa 1,270 Florida Housing Finance Corporation, Homeowner Mortgage Revenue
Refunding Bonds, AMT, Series 4, 6.25% due 7/01/2022 (e) 1,335
NR* Aaa 5,250 Florida Housing Finance Corporation, Housing Revenue Bonds
(Augustine Club Apartments), Series D-1, 5.75% due 10/01/2030 (b) 5,476
AAA Aaa 4,250 Florida Municipal Loan Council Revenue Bonds, Series B, 5.375%
due 11/01/2030 (b) 4,427
AA+ Aa2 1,220 Florida State Board of Education, Capital Outlay, GO, Series A,
6% due 1/01/2014 1,394
AAA Aaa 1,000 Florida State Board of Education, Lottery Revenue Bonds, Series A,
6% due 7/01/2014 (c) 1,153
AA+ Aa2 5,000 Florida State Board of Education, Public Education, Capital
Outlay, GO, Refunding, Series D, 5.375% due 6/01/2018 5,419
A A3 5,900 Highlands County, Florida, Health Facilities Authority, Hospital
Revenue Bonds (Adventist Health System), Series A, 6% due 11/15/2031 6,210
AAA Aaa 5,000 Hillsborough County, Florida, Court Facilities Revenue Bonds,
5.40% due 5/01/2030 (a) 5,247
Hillsborough County, Florida, IDA, Exempt Facilities Revenue
Bonds (National Gypsum), AMT:
NR* NR* 2,500 Series A, 7.125% due 4/01/2030 2,648
NR* NR* 3,750 Series B, 7.125% due 4/01/2030 3,973
Portfolio Abbreviations
To simplify the listings of MuniYield Florida Fund's port-folio
holdings in the Schedule of Investments, we have abbreviated the
names of many of the securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DRIVERS Derivative Inverse Tax-Exempt Receipts
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
S/F Single-Family
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Schedule of Investments (continued) (In Thousands)
S&P Moody's Face
Ratings++ Ratings++ Amount Municipal Bonds Value
Florida (continued)
A A3 $ 1,000 Hillsborough County, Florida, IDA, Hospital Revenue Bonds (H. Lee
Moffitt Cancer Center Project), Series C, 5.50% due 7/01/2032 $ 1,007
NR* Baa1 1,725 Hillsborough County, Florida, IDA, Hospital Revenue Refunding
Bonds (Tampa General Hospital Project), Series A, 5.25% due
10/01/2024 1,673
BBB- Baa1 5,905 Hillsborough County, Florida, IDA, PCR, Refunding (Tampa Electric
Company Project), 5.10% due 10/01/2013 5,842
AAA Aaa 4,000 Hillsborough County, Florida, School District, Sales Tax Revenue
Refunding Bonds, 5.375% due 10/01/2020 (a) 4,317
AA Aa2 2,000 Jacksonville, Florida, Electric Authority, Electric System Revenue
Bonds, Series 3-A, 5.375% due 10/01/2032 2,040
A+ Aa3 14,800 Jacksonville, Florida, Electric Authority, Water and Sewer System
Revenue Bonds, Series C, 5.25% due 10/01/2037 14,949
AAA Aaa 2,315 Jacksonville, Florida, Guaranteed Entitlement Revenue Refunding
and Improvement Bonds, 5.25% due 10/01/2032 (c) 2,394
NR* B3 295 Jacksonville, Florida, Health Facilities Authority, IDR (National
Benevolent Association, Cypress Village Florida Project), Series A,
6.125% due 12/01/2016 181
AAA Aaa 3,500 Lakeland, Florida, Hospital System Revenue Bonds (Lakeland Regional
Health System), Series A, 5.50% due 11/15/2026 (b) 3,640
NR* Aaa 210 Lee County, Florida, HFA, S/F Mortgage Revenue Bonds (Multi-County
Program), AMT, Series A-1, 7.125% due 3/01/2028 (d)(i) 223
AAA Aaa 1,000 Lee County, Florida, IDA, Utility System Revenue Bonds (Bonita
Springs Utilities Inc. Project), AMT, 5% due 11/01/2027 (b) 994
AAA NR* 455 Leon County, Florida, HFA, S/F Mortgage Revenue Bonds (Multi-County
Program), AMT, Series B, 7.30% due 1/01/2028 (d)(j) 480
NR* Aaa 795 Manatee County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT,
Sub-Series 2, 7.75% due 5/01/2026 (d)(j) 798
NR* Aaa 1,005 Manatee County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds,
AMT, Sub-Series 1, 6.25% due 11/01/2028 (d) 1,051
Martin County, Florida, Health Facilities Authority, Hospital
Revenue Bonds (Martin Memorial Medical Center), Series A:
BBB+ NR* 1,350 5.75% due 11/15/2022 1,342
BBB+ NR* 3,430 5.875% due 11/15/2032 3,339
AAA Aaa 3,000 Miami Beach, Florida, Water and Sewer Revenue Bonds, 5.75% due
9/01/2025 (a) 3,250
Miami-Dade County, Florida, Aviation Revenue Bonds, AMT, Series A:
AAA Aaa 1,650 5.125% due 10/01/2035 (e) 1,660
AAA Aaa 4,300 (Miami International Airport), 6% due 10/01/2029 (c) 4,708
AAA Aaa 4,560 (Miami International Airport), 5% due 10/01/2033 (c) 4,518
AAA Aaa 1,750 Miami-Dade County, Florida, Educational Facilities Authority
Revenue Bonds (University of Miami), Series A, 5.75% due 4/01/2029 (a) 1,887
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Schedule of Investments (continued) (In Thousands)
S&P Moody's Face
Ratings++ Ratings++ Amount Municipal Bonds Value
Florida (continued)
AAA Aaa $ 8,000 Miami-Dade County, Florida, Expressway Authority, Toll System
Revenue Bonds, DRIVERS, Series 160, 11.48% due 7/01/2010 (c)(f)(k) $ 11,377
NR* Aaa 905 Miami-Dade County, Florida, HFA, Home Ownership Mortgage Revenue
Refunding Bonds, AMT, Series A-1, 6.30% due 10/01/2020 (d)(i) 958
AAA NR* 3,300 Miami-Dade County, Florida, Health Facilities Authority, Hospital
Revenue Refunding Bonds, DRIVERS, Series 208, 9.87% due
8/15/2017 (a)(k) 3,941
Miami-Dade County, Florida, School Board COP (e):
AAA Aaa 3,200 Series A, 5.50% due 10/01/2020 3,465
AAA Aaa 1,635 Series C, 5.50% due 10/01/2017 1,808
Orange County, Florida, Health Facilities Authority, Hospital
Revenue Bonds:
A A3 1,750 (Adventist Health System), 6.25% due 11/15/2024 1,871
A- A2 5,140 (Orlando Regional Healthcare), 6% due 12/01/2028 5,393
A- A2 1,300 (Orlando Regional Healthcare), 5.75% due 12/01/2032 1,327
NR* Aaa 10,500 Orange County, Florida, School Board, COP, Series A, 5.25% due
8/01/2023 (b) 10,961
AAA Aaa 8,615 Orange County, Florida, Tourist Development, Tax Revenue Bonds,
5.50% due 10/01/2032 (a) 9,109
Orlando and Orange County, Florida, Expressway Authority Revenue
Bonds, Series B (a):
AAA Aaa 1,000 5% due 7/01/2030 1,011
AAA Aaa 2,850 5% due 7/01/2035 2,876
AA Aa1 1,000 Orlando, Florida, Utilities Commission, Water and Electric Revenue
Refunding Bonds, Series C, 5.25% due 10/01/2023 1,043
AAA Aaa 1,760 Osceola County, Tourist Development Tax Revenue Bonds, Series A,
5.50% due 10/01/2027 (c) 1,871
AAA Aaa 3,390 Palm Beach County, Florida, Criminal Justice Facilities Revenue
Bonds, 7.20% due 6/01/2015 (c) 4,361
NR* Aaa 420 Palm Beach County, Florida, HFA, S/F Mortgage Revenue Refunding
Bonds, AMT, Series A, 6.80% due 10/01/2027 (d)(i) 431
A NR* 1,270 Palm Beach County, Florida, Health Facilities Authority, Hospital
Revenue Refunding Bonds (Branch Corporation Obligation Group),
5.50% due 12/01/2021 1,298
BBB+ NR* 1,600 Palm Beach County, Florida, Health Facilities Authority, Retirement
Community Revenue Bonds (Acts Obligation Group), 5.625% due
11/15/2020 1,609
AAA Aaa 1,260 Palm Beach County, Florida, Public Improvement Revenue Bonds
(Convention Center Project), 5.625% due 11/01/2016 (c) 1,422
AAA Aaa 6,000 Palm Beach County, Florida, School Board COP, Series A, 6.25%
due 8/01/2010 (c)(f) 7,233
NR* Aaa 1,000 Pasco County, Florida, Sales Tax Revenue Bonds (Half-Cent), 5%
due 12/01/2033 (a) 1,009
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Schedule of Investments (continued) (In Thousands)
S&P Moody's Face
Ratings++ Ratings++ Amount Municipal Bonds Value
Florida (concluded)
Pinellas County, Florida, HFA, S/F Housing Revenue Refunding
Bonds (Multi-County Program), AMT, Series A-1 (d)(i):
NR* Aaa $ 995 6.30% due 9/01/2020 $ 1,059
NR* Aaa 1,520 6.35% due 9/01/2025 1,609
NR* A1 3,000 Pinellas County, Florida, Health Facilities Authority Revenue
Bonds (BayCare Health System Inc.), 5.75% due 11/15/2029 3,068
AAA Aaa 4,385 Polk County, Florida, School Board COP, Master Lease, Series A,
5.50% due 1/01/2025 (e) 4,636
AAA Aaa 1,200 Port Everglades Authority, Florida, Port Revenue Bonds, 7.125%
due 11/01/2016 (h) 1,496
AAA NR* 4,250 South Broward, Florida, Hospital District Revenue Bonds, DRIVERS,
Series 337, 9.88% due 5/01/2032 (b)(k) 4,872
South Lake County, Florida, Hospital District Revenue Bonds
(South Lake Hospital Inc.):
A- A2 1,000 5.80% due 10/01/2034 1,018
NR* Baa3 1,150 6.375% due 10/01/2034 1,154
AAA Aaa 5,000 Tampa Bay, Florida, Water Utility System Revenue Bonds, 5.75%
due 10/01/2011 (c)(f) 5,846
Village Center Community Development District, Florida, Utility
Revenue Bonds (b):
AAA Aaa 5,040 5.125% due 10/01/2028 5,179
AAA Aaa 1,000 5% due 10/01/2036 1,007
AAA Aaa 5,000 Volusia County, Florida, School Board, COP (Master Lease Program),
5.50% due 8/01/2024 (e) 5,307
New Jersey--1.4%
BBB Baa2 2,955 Tobacco Settlement Financing Corporation of New Jersey Revenue
Bonds, 7% due 6/01/2041 2,770
Puerto Rico--11.8%
Children's Trust Fund, Puerto Rico, Tobacco Settlement Revenue
Refunding Bonds:
BBB Baa2 2,040 5.375% due 5/15/2033 1,839
BBB Baa2 1,100 5.50% due 5/15/2039 963
AAA NR* 7,500 Puerto Rico Commonwealth, GO, Refunding, DRIVERS, Series 232,
9.667% due 7/01/2017 (k)(l) 9,612
A Baa1 8,000 Puerto Rico Commonwealth, Highway and Transportation Authority,
Transportation Revenue Bonds, Series D, 5.75% due 7/01/2041 8,639
A- A3 1,000 Puerto Rico Electric Power Authority, Power Revenue Bonds,
Series T, 6.0% due 7/01/2016 (f) 1,053
BBB+ Baa3 1,715 Puerto Rico Public Finance Corporation Revenue Bonds, Commonwealth
Appropriation, Series E, 5.70% due 8/01/2025 1,800
Total Municipal Bonds (Cost--$266,951)--138.6% 281,121
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Schedule of Investments (concluded) (In Thousands)
Shares
Held Short-Term Securities Value
13,230 Merrill Lynch Institutional Tax-Exempt Fund** $ 13,230
Total Short-Term Securities (Cost--$13,230)--6.5% 13,230
Total Investments (Cost--$280,181)--145.1% 294,351
Other Assets Less Liabilities--1.9% 3,901
Unrealized Depreciation on Forward Interest Rate Swaps--(0.2%)*** (362)
Preferred Shares, at Redemption Value--(46.8%) (95,000)
---------
Net Assets Applicable to Common Shares--100.0% $ 202,890
=========
(a)AMBAC Insured.
(b)MBIA Insured.
(c)FGIC Insured.
(d)GNMA Collateralized.
(e)FSA Insured.
(f)Prerefunded.
(g)Radian Insured.
(h)Escrowed to maturity.
(i)FNMA Collateralized.
(j)FHLMC Collateralized.
(k)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at October 31, 2003.
(l)XL Capital Insured.
*Not Rated.
**Investments in companies considered to be an affiliate of the Fund
(such companies are defined as "Affiliated Companies" in Section
2(a)(3) of the Investment Company Act of 1940) are as follows:
(in Thousands)
Net Dividend
Affiliate Activity Income
Merrill Lynch Institutional
Tax-Exempt Fund 11,130 $44
***Forward interest rate swaps entered into as of October 31, 2003
were as follows:
(in Thousands)
Notional Unrealized
Amount Depreciation
Receive a variable rate equal to
7-Day Bond Market Association
Municipal Swap Index Rate and
pay a fixed rate of 4.425%
Broker, J.P. Morgan Chase Bank
Expires November 2023 $15,000 $(362)
++Ratings of issues shown are unaudited.
See Notes to Financial Statements.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Statement of Net Assets
As of October 31, 2003
Assets
Investments, at value (identified cost--$280,180,875) $ 294,350,684
Cash 17,873
Receivables:
Interest $ 4,304,277
Securities sold 1,194,767
Dividends from affiliates 319 5,499,363
---------------
Prepaid expenses 6,215
---------------
Total assets 299,874,135
---------------
Liabilities
Unrealized depreciation on forward interest rate swaps 361,995
Payables:
Securities purchased 1,378,462
Investment adviser 140,412
Dividends to Common Shareholders 67,187
Other affiliates 2,147 1,588,208
---------------
Accrued expenses 33,696
---------------
Total liabilities 1,983,899
---------------
Preferred Shares
Preferred Shares, par value $.05 per share (2,200 Series A Shares and
1,600 Series B Shares of AMPS* issued and outstanding at $25,000 per
share liquidation preference) 95,000,000
---------------
Net Assets Applicable to Common Shares
Net assets applicable to Common Shares $ 202,890,236
===============
Analysis of Net Assets Applicable to Common Shares
Common Shares, par value $.10 per share (13,551,880 shares issued
and outstanding) $ 1,355,188
Paid-in capital in excess of par 194,722,663
Undistributed investment income--net $ 3,279,762
Accumulated realized capital losses on investments--net (10,275,191)
Unrealized appreciation on investments--net 13,807,814
---------------
Total accumulated earnings--net 6,812,385
---------------
Total--Equivalent to $14.97 net asset value per Common Share
(market price--$13.80) $ 202,890,236
===============
*Auction Market Preferred Shares.
See Notes to Financial Statements.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Statement of Operations
For the Year Ended October 31, 2003
Investment Income
Interest $ 16,485,912
Dividends from affiliates 43,793
---------------
Total income 16,529,705
---------------
Expenses
Investment advisory fees $ 1,504,559
Commission fees 242,970
Accounting services 120,122
Transfer agent fees 57,120
Professional fees 52,601
Printing and shareholder reports 33,952
Listing fees 28,965
Trustees' fees and expenses 23,899
Custodian fees 18,097
Pricing fees 12,721
Other 41,874
---------------
Total expenses before reimbursement 2,136,880
Reimbursement of expenses (9,681)
---------------
Total expenses after reimbursement 2,127,199
---------------
Investment income--net 14,402,506
---------------
Realized & Unrealized Gain (Loss) on Investments--Net
Realized gain on investments--net 955,774
Change in unrealized appreciation on investments--net (2,016,147)
---------------
Total realized and unrealized loss on investments--net (1,060,373)
---------------
Dividends to Preferred Shareholders
Investment income--net (930,466)
---------------
Net Increase in Net Assets Resulting from Operations $ 12,411,667
===============
See Notes to Financial Statements.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Statements of Changes in Net Assets
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2003 2002
Operations
Investment income--net $ 14,402,506 $ 13,911,948
Realized gain on investments--net 955,774 481,869
Change in unrealized appreciation on investments--net (2,016,147) 970,890
Dividends and distributions to Preferred Shareholders (930,466) (1,284,066)
--------------- ---------------
Net increase in net assets resulting from operations 12,411,667 14,080,641
--------------- ---------------
Dividends & Distributions to Common Shareholders
Investment income--net (12,440,626) (11,853,830)
Realized gain on investments--net -- (36,333)
--------------- ---------------
Net decrease in net assets resulting from dividends and distributions
to Common Shareholders (12,440,626) (11,890,163)
--------------- ---------------
Net Assets Applicable to Common Shares
Total increase (decrease) in net assets applicable to Common Shares (28,959) 2,190,478
Beginning of year 202,919,195 200,728,717
--------------- ---------------
End of year* $ 202,890,236 $ 202,919,195
=============== ===============
*Undistributed investment income--net $ 3,279,762 $ 2,249,114
=============== ===============
See Notes to Financial Statements.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Financial Highlights
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 2003 2002 2001++++ 2000++++ 1999++++
Per Share Operating Performance
Net asset value, beginning of year $ 14.97 $ 14.81 $ 13.78 $ 13.27 $ 15.70
---------- ---------- ---------- ---------- ----------
Investment income--net 1.06+++ 1.03 1.00 .95 .98
Realized and unrealized gain (loss)
on investments--net (.07) .09 1.04 .59 (1.90)
Dividends and distributions to Preferred
Shareholders:
Investment income--net (.07) (.09) (.22) (.28) (.16)
Realized gain on investments--net -- --++ -- -- --
In excess of realized gain on
investments--net -- -- -- -- (.09)
---------- ---------- ---------- ---------- ----------
Total from investment operations .92 1.03 1.82 1.26 (1.17)
---------- ---------- ---------- ---------- ----------
Less dividends and distributions to Common
Shareholders:
Investment income--net (.92) (.87) (.79) (.75) (.83)
Realized gain on investments--net -- --++ -- -- --
In excess of realized gain on
investment--net -- -- -- -- (.43)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions to Common
Shareholders (.92) (.87) (.79) (.75) (1.26)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 14.97 $ 14.97 $ 14.81 $ 13.78 $ 13.27
========== ========== ========== ========== ==========
Market price per share, end of year $ 13.80 $ 13.34 $ 13.98 $ 11.3125 $ 11.75
========== ========== ========== ========== ==========
Total Investment Return*
Based on market price per share 10.44% 1.77% 31.36% 2.82% (19.96%)
========== ========== ========== ========== ==========
Based on net asset value per share 6.76% 7.80% 14.24% 10.90% (7.88%)
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Common Shares
Total expenses, net of reimbursement and
excluding reorganization expenses** 1.04% 1.06% 1.06% 1.12% 1.12%
========== ========== ========== ========== ==========
Total expenses, excluding reorganization
expenses** 1.04% 1.06% 1.06% 1.12% 1.12%
========== ========== ========== ========== ==========
Total expenses** 1.04% 1.06% 1.06% 1.33% 1.12%
========== ========== ========== ========== ==========
Total investment income--net** 7.01% 7.00% 6.98% 7.39% 6.73%
========== ========== ========== ========== ==========
Amount of dividends to Preferred Shareholders .45% .64% 1.53% 2.10% 1.10%
========== ========== ========== ========== ==========
Investment income--net, to Common Shareholders 6.56% 6.36% 5.45% 5.29% 5.63%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Common & Preferred Shares**
Total expenses, net of reimbursement and
excluding reorganization expenses .71% .72% .71% .74% .76%
========== ========== ========== ========== ==========
Total expenses, excluding reorganization
expenses .71% .72% .71% .74% .76%
========== ========== ========== ========== ==========
Total expenses .71% .72% .71% .87% .76%
========== ========== ========== ========== ==========
Total investment income--net 4.79% 4.74% 4.69% 4.85% 4.58%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Preferred Shares
Dividends to Preferred Shareholders .97% 1.34% 3.14% 4.02% 2.36%
========== ========== ========== ========== ==========
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Financial Highlights (concluded)
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 2003 2002 2001++++ 2000++++ 1999++++
Supplemental Data
Net assets applicable to Common Shares,
end of year (in thousands) $ 202,890 $ 202,919 $ 200,729 $ 186,777 $ 106,050
========== ========== ========== ========== ==========
Preferred Shares outstanding, end of year
(in thousands) $ 95,000 $ 95,000 $ 95,000 $ 95,000 $ 55,000
========== ========== ========== ========== ==========
Portfolio turnover 40.45% 39.54% 86.85% 51.16% 97.73%
========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 3,136 $ 3,136 $ 3,113 $ 2,966 $ 2,928
========== ========== ========== ========== ==========
Dividends Per Share on Preferred Shares Outstanding+++++
Series A--Investment income--net $ 247 $ 337 $ 771 $ 1,006 $ 587
========== ========== ========== ========== ==========
Series B--Investment income--net $ 242 $ 333 $ 801 $ 738 $ --
========== ========== ========== ========== ==========
*Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales charges.
**Do not reflect the effect of dividends to Preferred Shareholders.
++Amount is less than $(.01) per share.
++++Certain prior period amounts have been reclassified to conform
to current period presentation.
+++Based on average shares outstanding.
+++++The Fund's Preferred Shares were issued on April 10, 1992
(Series A) and February 7, 2000 (Series B).
See Notes to Financial Statements.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Notes to Financial Statements
1. Significant Accounting Policies:
MuniYield Florida Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified,
closed-end management investment company. The Fund's financial
statements are prepared in conformity with accounting principles
generally accepted in the United States of America, which may
require the use of management accruals and estimates. 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 MYF. The
following is a summary of significant accounting policies followed
by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the last available
bid price in the over-the-counter markets or on the basis of yield
equivalents as obtained by the Fund's pricing service from one or
more dealers that make markets in such securities. Financial futures
contracts and options thereon, which are traded on exchanges, are
valued at their closing prices as of the close of such exchanges.
Options written or purchased are valued at the last sale price in
the case of exchange-traded options. In the case of options traded
in the over-the-counter market, valuation is the last asked price
(options written) or the last bid price (options purchased). Swap
agreements are valued by quoted fair values received daily by the
Fund from the counterparty. Short-term investments with a remaining
maturity of sixty days or less are valued at amortized cost, which
approximates market value. Securities and assets for which market
quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of
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 investment strategies both to increase the return of the
Fund and to hedge, or protect, its exposure to interest rate
movements and movements in the securities markets. Losses may arise
due to changes in the value of the contract or if the counterparty
does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts.
Futures contracts are contracts for delayed delivery of securities
at a specific future date and at a specific price or yield. Upon
entering into a contract, the Fund deposits and maintains as
collateral such initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund
agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Fund
as unrealized gains or losses. When the contract is closed, the Fund
records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the
time it was closed.
* Options--The Fund is authorized to 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--The Fund may enter into forward
interest rate swaps. In a forward interest rate swap, the Fund and
the counterparty agree to make periodic net payments on a specified
notional contract amount, commencing on a specified future effective
date, unless terminated earlier. When the agreement is closed, the
Fund records a realized gain or loss in an amount equal to the value
of the agreement.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Notes to Financial Statements (continued)
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Realized gains and losses on security
transactions are determined on the identified cost basis. Divided
income is recorded on the ex-dividend dates. Interest income is
recognized on the accrual basis. The Fund amortizes all premiums and
discounts on debt securities.
(e) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
(f) Reclassification--Accounting principles generally accepted in
the United States of America require that certain components of net
assets be adjusted to reflect permanent differences between
financial and tax reporting. Accordingly, the current year's
permanent book/tax difference of $766 has been reclassified between
undistributed net investment income and accumulated realized capital
loss. This reclassification has no effect on net assets or net asset
value per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect, wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of .50% of
the Fund's average weekly net assets, including proceeds from the
issuance of Preferred Shares. For the year ended October 31, 2003,
FAM reimbursed the Fund in the amount of $9,681.
For the year ended October 31, 2003, the Fund reimbursed FAM $15,098
for certain accounting services.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 2003 were $117,430,727 and
$127,157,508, respectively.
Net realized gains for the year ended October 31, 2003 and net
unrealized gains (losses) as of October 31, 2003 were as follows:
Realized Unrealized
Gains Gains (Losses)
Long-term investments $ 437,203 $ 14,169,809
Forward interest rate swaps 518,571 (361,995)
-------------- --------------
Total $ 955,774 $ 13,807,814
============== ==============
As of October 31, 2003, net unrealized appreciation for Federal
income tax purposes aggregated $14,033,935, of which $14,576,088
related to appreciated securities and $542,153 related to
depreciated securities. The aggregate cost of investments at
October 31, 2003 for Federal income tax purposes was $280,316,749.
4. Share Transactions:
The Fund is authorized to issue an unlimited number of shares of
beneficial interest, including Preferred Shares, par value $.10 per
share, all of which were initially classified as Common Shares. The
Board of Trustees is authorized, however, to reclassify any unissued
shares of beneficial interest without approval of the holders of
Common Shares.
Preferred Shares
Auction Market Preferred Shares ("AMPS") are Preferred Shares of the
Fund, with a par value of $.05 per share and a liquidation
preference of $25,000 per share plus accrued and unpaid dividends,
that entitle their holders to receive cash dividends at an annual
rate that may vary for the successive dividend periods. The yields
in effect at October 31, 2003 were as follows: Series A, .80% and
Series B, .82%.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Notes to Financial Statements (concluded)
The Fund pays commissions to certain broker-dealers at the end
of each auction at an annual rate ranging from .25% to .375%,
calculated on the proceeds of each auction. For the year
ended October 31, 2003, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, an affiliate of FAM, earned $107,277 as commissions.
5. Distributions to Shareholders:
The Fund paid a tax-exempt income dividend to holders of Common
Shares in the amount of $.077000 per share on November 26, 2003 to
shareholders of record on November 14, 2003.
The tax character of distributions paid during the fiscal years
ended October 31, 2003 and October 31, 2002 was as follows:
10/31/2003 10/31/2002
Distributions paid from:
Tax-exempt income $ 13,371,092 $ 13,127,704
Ordinary income -- 46,525
-------------- --------------
Total distributions $ 13,371,092 $ 13,174,229
============== ==============
As of October 31, 2003, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 3,189,717
Undistributed long-term capital gains--net --
--------------
Total undistributed earnings--net 3,189,717
Capital loss carryforward (8,985,089)*
Unrealized gains--net 12,607,757**
--------------
Total accumulated earnings--net $ 6,812,385
==============
*On October 31, 2003, the Fund had a net capital loss carryforward
of $8,985,089, of which $1,948,898 expires in 2007 and $7,036,191
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
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 FLORIDA FUND, OCTOBER 31, 2003
Independent Auditors' Report
To the Shareholders and Board of Trustees
of MuniYield Florida Fund:
We have audited the accompanying statement of net assets, including
the schedule of investments, of MuniYield Florida Fund as of October
31, 2003, and the related statement 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
Fund's 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 auditing standards
generally accepted in the United States of America. 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. 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 at October 31, 2003, by
correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of MuniYield Florida Fund as of October 31, 2003,
the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then
ended, and its financial highlights for each of the five years in
the period then ended, in conformity with accounting principles
generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
December 17, 2003
Important Tax Information (unaudited)
All of the net investment income distributions paid by MuniYield
Florida Fund during the taxable year ended October 31, 2003 qualify
as tax-exempt interest dividends for Federal income tax purposes.
Please retain this information for your records.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Automatic Dividend Reinvestment Plan
The following description of the Fund's Automatic Dividend
Reinvestment Plan (the "Plan") is sent to you annually as required
by Federal securities laws.
Pursuant to the Fund's Plan, unless a holder of Common Shares
otherwise elects, all dividend and capital gains distributions will
be automatically reinvested by The Bank of New York (the "Plan
Agent"), as agent for shareholders in administering the Plan, in
additional Common Shares of the Fund. Holders of Common Shares who
elect not to participate in the Plan will receive all distributions
in cash paid by check mailed directly to the shareholder of record
(or, if the shares are held in street or other nominee name then to
such nominee) by The Bank of New York, as dividend paying agent.
Such participants may elect not to participate in the Plan and to
receive all distributions of dividends and capital gains in cash by
sending written instructions to The Bank of New York, as dividend
paying agent, at the address set forth below. Participation in the
Plan is completely voluntary and may be terminated or resumed at any
time without penalty by written notice if received by the Plan Agent
not less than ten days prior to any dividend record date; otherwise
such termination will be effective with respect to any subsequently
declared dividend or distribution.
Whenever the Fund declares an income dividend or capital gains
distribution (collectively referred to as "dividends") payable
either in shares or in cash, non-participants in the Plan will
receive cash and participants in the Plan will receive the
equivalent of Common Shares. The shares will be acquired by the
Plan Agent for the participant's account, depending upon the
circumstances described below, either (i) through receipt of
additional unissued but authorized Common Shares from the Fund
("newly issued shares") or (ii) by purchase of outstanding Common
Shares on the open market ("open-market purchases") on the New York
Stock Exchange or elsewhere. If on the payment date for the
dividend, the net asset value per Common Share is equal to or less
than the market price per Common Share plus estimated brokerage
commissions (such conditions being referred to herein as "market
premium"), the Plan Agent will invest the dividend amount in newly
issued shares on behalf of the participant. The number of newly
issued Common Shares to be credited to the participant's account
will be determined by dividing the dollar amount of the dividend by
the net asset value per share on the date the shares are issued,
provided that the maximum discount from the then current market
price per share on the date of issuance may not exceed 5%. If on the
dividend payment date the net asset value per share is greater than
the market value (such condition being referred to herein as "market
discount"), the Plan Agent will invest the dividend amount in shares
acquired on behalf of the participant in open-market purchases.
In the event of a market discount on the dividend payment date, the
Plan Agent will have until the last business day before the next
date on which the shares trade on an "ex-dividend" basis or in no
event more than 30 days after the dividend payment date (the "last
purchase date") to invest the dividend amount in shares acquired in
open-market purchases. It is contemplated that the Fund will pay
monthly income dividends. Therefore, the period during which open-
market purchases can be made will exist only from the payment date
on the dividend through the date before the next "ex-dividend" date,
which typically will be approximately ten days. If, before the Plan
Agent has completed its open-market purchases, the market price of a
Common Share exceeds the net asset value per share, the average per
share purchase price paid by the Plan Agent may exceed the net asset
value of the Fund's shares, resulting in the acquisitions of fewer
shares than if the dividend had been paid in newly issued shares on
the dividend payment date. Because of the foregoing difficulty with
respect to open-market purchases, the Plan provides that if the Plan
Agent is unable to invest the full dividend amount in open-market
purchases during the purchase period or if the market discount
shifts to a market premium during the purchase period, the Plan
Agent will cease making open-market purchases and will invest the
uninvested portion of the dividend amount in newly issued shares at
the close of business on the last purchase date determined by
dividing the uninvested portion of the dividend by the net asset
value per share.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Automatic Dividend Reinvestment Plan (concluded)
The Plan Agent maintains all shareholders' accounts in the Plan and
furnishes written confirmation of all transactions in the account,
including information needed by shareholders for tax records. Shares
in the account of each Plan participant will be held by the Plan
Agent in non-certificated form in the name of the participant, and
each shareholder's proxy will include those shares purchased or
received pursuant to the Plan. The Plan Agent will forward all proxy
solicitation materials to participants and vote proxies for shares
held pursuant to the Plan in accordance with the instructions of the
participants.
In the case of shareholders such as banks, brokers or nominees
which hold shares of others who are the beneficial owners, the
Plan Agent will administer the Plan on the basis of the number of
shares certified from time to time by the record shareholders as
representing the total amount registered in the record shareholder's
name and held for the account of beneficial owners who are to
participate in the Plan.
There will be no brokerage charges with respect to shares issued
directly by the Fund as a result of dividends or capital gains
distributions payable either in shares or in cash. However, each
participant will pay a pro rata share of brokerage commissions
incurred with respect to the Plan Agent's open-market purchases in
connection with the reinvestment of dividends.
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.
Shareholders participating in the Plan may receive benefits not
available to shareholders not participating in the Plan. If the
market price plus commissions of the Fund's shares is above the net
asset value, participants in the Plan will receive shares of the
Fund at less than they could otherwise purchase them and will have
shares with a cash value greater than the value of any cash
distribution they would have received on their shares. If the market
price plus commissions is below the net asset value, participants
will receive distributions in shares with a net asset value greater
than the value of any cash distribution they would have received on
their shares. However, there may be insufficient shares available in
the market to make distributions in shares at prices below the net
asset value. Also, since the Fund does not redeem shares, the price
on resale may be more or less than the net asset value.
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 Fund's
shares are trading at a premium over net asset value, the Fund
issues 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 such discount (which may not exceed 5% of the fair
market value of the 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.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the
Plan. There is no direct service charge to participants in the Plan;
however, the Fund reserves the right to amend the Plan to include a
service charge payable by the participants.
All correspondence concerning 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.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Officers and Trustees (unaudited)
Number of
Portfolios in Other Public
Position(s) Length Fund Complex Directorships
Held Of Time Overseen by Held by
Name, Address & Age with Fund Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Interested Trustee
Terry K. Glenn* President 1999 to President and Chairman of Merrill Lynch 124 Funds None
P.O. Box 9011 and present Investment Managers, L.P. ("MLIM")/Fund 163 Portfolios
Princeton, Trustee and Asset Management, L.P. ("FAM")--Advised
NJ 08543-9011 1998 to Funds since 1999; Chairman (Americas
Age: 63 present Region) of MLIM from 2000 to 2002;
Executive Vice President of MLIM and
FAM (which terms as used herein include
their corporate predecessors) from 1983
to 2002; President of FAM Distributors,
Inc. ("FAMD") from 1986 to 2002 and
Director thereof from 1991 to 2002;
Executive Vice President and Director of
Princeton Services, Inc. ("Princeton
Services") from 1993 to 2002; President
of Princeton Administrators, L.P. from
1989 to 2002; Director of Financial Data
Services, Inc. since 1985.
* Mr. Glenn 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. Glenn is an "interested person," as
described in the Investment Company Act, of the Fund based on his
former positions with MLIM, FAM, FAMD, Princeton Services and
Princeton Administrators, L.P. The Trustee's term is unlimited.
Trustees serve until their resignation, removal or death, or until
December 31 of the year in which they turn 72. As Fund President,
Mr. Glenn serves at the pleasure of the Board of Trustees.
Independent Trustees*
James H. Bodurtha Trustee 1995 to Director, The China Business Group, Inc. 40 Funds None
P.O. Box 9095 present since 1996 and Executive Vice President 59 Portfolios
Princeton, thereof from 1996 to 2003; Chairman of
NJ 08543-9095 the Board, Berkshire Holding Corporation
Age: 59 since 1980; Partner, Squire, Sanders &
Dempsey from 1980 to 1993.
Joe Grills Trustee 2002 to Member of the Committee of Investment of 40 Funds Kimco Realty
P.O. Box 9095 present Employee Benefit Assets of the Association 59 Portfolios Corporation
Princeton, of Financial Professionals ("CIEBA") since
NJ 08543-9095 1986 and its Chairman from 1991 to 1992;
Age: 68 Member of the Investment Advisory Committees
of the State of New York Common Retirement
Fund since 1989; Member of the Investment
Advisory Committee of the Howard Hughes
Medical Institute from 1997 to 2000;
Director, Duke Management Company since
1992 and Vice Chairman thereof since 1998;
Director LaSalle Street Fund from 1995 to
2001; Director, Kimco Realty Corporation
since 1997; Member of the Investment
Advisory Committee of the Virginia Retirement
System since 1998 and Vice Chairman thereof
since 2002; Director, Montpelier Foundation
since 1998 and Vice Chairman thereof since
2000; Member of the Investment Committee of
the Woodberry Forest School since 2000;
Member of the Investment Committee of the
National Trust for Historic Preservation
since 2000.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Officers and Trustees (unaudited)(continued)
Number of
Portfolios in Other Public
Position(s) Length Fund Complex Directorships
Held Of Time Overseen by Held by
Name, Address & Age with Fund Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Independent Trustees* (concluded)
Herbert I. London Trustee 1992 to John M. Olin Professor of Humanities, New 40 Funds None
P.O. Box 9095 present York University since 1993 and Professor 59 Portfolios
Princeton, thereof since 1980; President of Hudson
NJ 08543-9095 Institute since 1997 and Trustee thereof
Age: 64 since 1980.
Andre F. Perold Trustee 1992 to George Gund Professor of Finance and 40 Funds None
P.O. Box 9095 present Banking, Harvard Business School since 59 Portfolios
Princeton, 2000 and a member of the faculty since
NJ 08543-9095 1979; Director and Chairman of the Board,
Age: 51 UNX, Inc. since 2003; Director, Sanlam
Limited and Sanlam Life since 2001; Director,
Genbel Securities and Gensec Bank since 1999;
Director, Stockback.com from 2002 to 2002;
Director, Bulldogresearch.com from 2000 to
2001; Director, Sanlam Investment Management
from 1999 to 2001; Director, Quantec Limited
from 1991 to 1999.
Roberta Cooper Ramo Trustee 1999 to Shareholder, Modrall, Sperling, Roehl, 40 Funds None
P.O. Box 9095 present Harris & Sisk, P.A. since 1993; Director 59 Portfolios
Princeton, of Cooper's, Inc. since 1999 and Chairman
NJ 08543-9095 of the Board since 2000; Director of ECMC,
Age: 61 Inc. since 2001.
Robert S. Salomon, Jr. Trustee 2002 to Principal of STI Management since 1994, 40 Funds None
P.O. Box 9095 present Trustee of Commonfund from 1980 to 2001; 59 Portfolios
Princeton, Director of Rye Country Day School since
NJ 08543-9095 2001.
Age: 66
Stephen B. Swensrud Trustee 2002 to Chairman, Fernwood Advisors (investment 41 Funds None
P.O. Box 9095 present adviser) since 1996; Principal of Fernwood 60 Portfolios
Princeton, Associates (financial consultant) since
NJ 08543-9095 1975; Chairman of RPP Corporation since
Age: 70 1978; Director, International Mobile
Communications, Inc. since 1998.
* The Trustee's term is unlimited. Trustees serve until their
resignation, removal or death, or until December 31 of the year in
which they turn 72.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Officers and Trustees (unaudited)(concluded)
Position(s) Length
Held Of Time
Name, Address & Age with Fund 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
P.O. Box 9011 President present 1999; Senior Vice President and Treasurer of Princeton Services since 1999;
Princeton, and and Vice President of FAMD since 1999; Director of MLIM Taxation since 1990.
NJ 08543-9011 Treasurer 1999 to
Age: 43 present
Kenneth A. Jacob Senior 2002 to Managing Director of MLIM since 2000; Director (Municipal Tax-Exempt Fund
P.O. Box 9011 Vice present Management) of MLIM from 1997 to 2000.
Princeton, President
NJ 08543-9011
Age: 52
John M. Loffredo Senior 2002 to Managing Director of MLIM since 2000; Director (Municipal Tax-Exempt Fund
P.O. Box 9011 Vice present Management) of MLIM from 1998 to 2000.
Princeton, President
NJ 08543-9011
Age: 39
Robert D. Sneeden Vice 1998 to Vice President of MLIM since 1998.
P.O. Box 9011 President present
Princeton,
NJ 08543-9011
Age: 50
Brian D. Stewart Secretary 2003 to Vice President (Legal Advisory) of MLIM since 2002; Attorney with Reed Smith
P.O. Box 9011 present from 2001 to 2002; Attorney with Saul Ewing from 1999 to 2001.
Princeton,
NJ 08543-9011
Age: 34
* Officers of the Fund serve at the pleasure of the Board of
Trustees.
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agents
Common Shares:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Shares:
The Bank of New York
100 Church Street
New York, NY 10286
NYSE Symbol
MYF
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Dividend Policy
The Fund's dividend policy is to distribute all or a portion of its
net investment income to its shareholders on a monthly basis. In
order to provide shareholders with a more stable level of dividend
distributions, the Fund may at times pay out less than the entire
amount of net investment income earned in any particular month and
may at times in any particular month pay out such accumulated but
undistributed income in addition to net investment income earned in
that month. As a result, the dividends paid by the Fund for any
particular month may be more or less than the amount of net
investment income earned by the Fund during such month. The Fund's
current accumulated but undistributed net investment income, if any,
is disclosed in the Statement of Net Assets, which comprises part of
the financial information included in this report.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Quality Profile (unaudited)
The quality ratings of securities in the Fund as of October 31, 2003
were as follows:
Percent of
Total
S&P Rating/Moody's Rating Investments
AAA/Aaa 59.9%
AA/Aa 4.5
A/A 15.6
BBB/Baa 12.3
B/B 0.1
NR (Not Rated) 7.6
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Electronic Delivery
The Fund is now offering electronic delivery of communications to
its shareholders. In order to receive this service, you must
register your account and provide us with e-mail information.
To sign up for this service, simply access this website
http://www.icsdelivery.com/live and follow the instructions.
When you visit this site, you will obtain a personal identification
number (PIN). You will need this PIN should you wish to update your
e-mail address, choose to discontinue this service and/or make any
other changes to the service. This service is not available for
certain retirement accounts at this time.
MUNIYIELD FLORIDA FUND, OCTOBER 31, 2003
Item 2 - Did registrant adopt a code of ethics, as of the end of the
period covered by this report, that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by
the registrant or a third party? If not, why not? Briefly describe
any amendments or waivers that occurred during the period. State
here if code of ethics/amendments/waivers are on website and give
website address-. State here if fund will send code of ethics to
shareholders without charge upon request--
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 - Did the registrant's board of directors determine that the
registrant either: (i) has at least one audit committee financial
expert serving on its audit committee; or (ii) does not have an
audit committee financial expert serving on its audit committee? If
yes, disclose name of financial expert and whether he/she is
"independent," (fund may, but is not required, to disclose name/
independence of more than one financial expert) If no, explain why
not. -
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) Joe Grills, (2) Andre Perold,
(3) Robert S. Salomon, Jr., and (4) Stephen B. Swensrud.
Item 4 - Disclose annually only (not answered until December 15,
2003)
(a) Audit Fees - Disclose aggregate fees billed for each of the last
two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements
for those fiscal years. N/A.
(b) Audit-Related Fees - Disclose aggregate fees billed in each of
the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance
of the audit of the registrant's financial statements and are not
reported under paragraph (a) of this Item. Registrants shall
describe the nature of the services comprising the fees disclosed
under this category. N/A.
(c) Tax Fees - Disclose aggregate fees billed in each of the last
two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the
fees disclosed under this category. N/A.
(d) All Other Fees - Disclose aggregate fees billed in each of the
last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs
(a) through (c) of this Item. Registrants shall describe the nature
of the services comprising the fees disclosed under this category.
N/A.
(e)(1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation
S-X. N/A.
(e)(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the
audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X. N/A.
(f) If greater than 50%, disclose the percentage of hours expended
on the principal accountant's engagement to audit the registrant's
financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal
accountant's full-time, permanent employees. N/A.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to
the registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant for each of the
last two fiscal years of the registrant. N/A.
(h) Disclose whether the registrant's audit committee has considered
whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence. N/A.
Item 5 - If the registrant is a listed issuer as defined in Rule
10A-3 under the Exchange Act, state whether or not the registrant
has a separately-designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act. If the
registrant has such a committee, however designated, identify each
committee member. If the entire board of directors is acting as the
registrant's audit committee in Section 3(a)(58)(B) of the Exchange
Act, so state.
If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act regarding an exemption from the listing
standards for audit committees. N/A
(Listed issuers must be in compliance with the new listing rules by
the earlier of their first annual shareholders meeting after January
2004, or October 31, 2004 (annual requirement))
Item 6 - Reserved
Item 7 - For closed-end funds that contain voting securities in
their portfolio, describe the policies and procedures that it uses
to determine how to vote proxies relating to those portfolio
securities.
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 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--Reserved
Item 9(a) - The registrant's certifying officers have reasonably
designed such disclosure controls and procedures to ensure material
information relating to the registrant is made known to us by others
particularly during the period in which this report is being
prepared. The registrant's certifying officers have determined that
the registrant's disclosure controls and procedures are effective
based on our evaluation of these controls and procedures as of a
date within 90 days prior to the filing date of this report.
Item 9(b)--There were no significant changes in the registrant's
internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Item 10 - Exhibits
10(a) - Attach code of ethics or amendments/waivers, unless code of
ethics or amendments/waivers is on website or offered to
shareholders upon request without charge. N/A.
10(b) - Attach certifications pursuant to Section 302 of the
Sarbanes-Oxley Act. Attached hereto.
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
MuniYield Florida Fund
By: _/s/ Terry K. Glenn_______
Terry K. Glenn,
President of
MuniYield Florida Fund
Date: December 22, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
By: _/s/ Terry K. Glenn________
Terry K. Glenn,
President of
MuniYield Florida Fund
Date: December 22, 2003
By: _/s/ Donald C. Burke________
Donald C. Burke,
Chief Financial Officer of
MuniYield Florida Fund
Date: December 22, 2003
Attached hereto as a furnished exhibit are the certifications
pursuant to Section 906 of the Sarbanes-Oxley Act.