UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-07410
Exact name of registrant as specified in charter: Delaware Investments Florida Insured Municipal
Income Fund
Address of principal executive offices: 2005 Market Street
Philadelphia, PA 19103
Name and address of agent for service: David F. Connor, Esq.
2005 Market Street
Philadelphia, PA 19103
Registrant's telephone number, including area code: (800) 523-1918
Date of fiscal year end: March 31
Date of reporting period: December 31, 2005
Item 1. Schedule of Investments.
Schedule of Investments (Unaudited)
Delaware Investments Florida Insured Municipal Income Fund
----------------------------------------------------------
December 31, 2005
Principal Market
Amount Value
Municipal Bonds- 153.35%
Airport Revenue Bonds - 9.36%
Dade County Aviation Revenue Series B 5.60% 10/1/26 (MBIA) $1,000,000 $1,033,770
Miami-Dade County Aviation Revenue (Miami International Airport) Series B
5.00% 10/1/37 (FGIC) 2,250,000 2,336,940
---------
3,370,710
---------
Dedicated Tax & Fees Revenue Bonds - 28.23%
Flagler County Capital Improvements Revenue 5.00% 10/1/35 (MBIA) 1,000,000 1,048,310
Florida State Department of Transportation 5.00% 7/1/31 (FGIC) 1,525,000 1,587,388
Jacksonville Sales Tax Revenue 5.00% 10/1/30 (MBIA) 1,500,000 1,564,995
Jacksonville Transportation Revenue 5.25% 10/1/29 (MBIA) 2,000,000 2,132,499
Miami Beach Resort Tax Revenue 5.50% 10/1/16 (AMBAC) 1,000,000 1,036,260
[star] Miami-Dade County Special Obligation (Capital Appreciation & Income) Series B
5.00% 10/1/35 (MBIA) 2,000,000 1,746,600
Seminole County Sales Tax Revenue 5.00% 10/1/31 (MBIA) 1,000,000 1,050,740
---------
10,166,792
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Electric/Gas Revenue Bonds - 5.74%
JEA Electric Systems Revenue Series 3-A 5.00% 10/1/34 (FSA) 2,000,000 2,068,940
---------
2,068,940
Higher Education Revenue Bonds - 3.54%
Florida Agriculture & Mechanical University Revenue (Student Apartment Facility)
5.625% 7/1/21 (MBIA) 1,250,000 1,276,288
---------
1,276,288
---------
Hospital Revenue Bonds - 19.18%
Escambia County Health Facilities Authority (Florida Health Care Facilities - VHA
Program) 5.95% 7/1/20 (AMBAC) 355,000 377,702
Lee County Memorial Health System Board of Directors Series A 5.00% 4/1/20 (FSA) 1,000,000 1,042,690
Miami-Dade County Public Facilities Revenue (Jackson Health Systems) Series A
5.00% 6/1/35 (MBIA) 1,500,000 1,552,350
Orange County Health Facilities Authority Revenue
(Adventist Health Systems) 5.75% 11/15/25 (AMBAC) 1,500,000 1,532,670
(Orlando Regional Healthcare) Series A 6.25% 10/1/18 (MBIA) 2,000,000 2,402,580
---------
6,907,992
---------
Multifamily Housing Revenue Bonds - 23.22%
Broward County Housing Finance Authority (St. Croix Apartments Project) Series A
5.45% 11/1/36 (FSA) (AMT) 935,000 961,984
Florida Housing Finance Agency
(Homeowner Mortgage) Series 2 5.90% 7/1/29 (MBIA) (AMT) 565,000 583,589
(Leigh Meadows Apartments HUD) Series N 6.30% 9/1/36 (AMBAC) (AMT) 2,510,000 2,578,096
(Woodbridge Apartments Project) Series L
6.05% 12/1/16 (AMBAC) (AMT) 1,120,000 1,153,398
6.25% 6/1/36 (AMBAC) (AMT) 1,500,000 1,544,250
Volusia County Multifamily Housing Finance Authority (San Marco Apartments) Series A
5.60% 1/1/44 (FSA) (AMT) 1,500,000 1,543,155
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8,364,472
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Municipal Lease Revenue Bonds - 15.81%
Broward County School Board Certificates of Participation Series A 5.25% 7/1/24 (FSA) 1,000,000 1,070,210
Florida State Municipal Loan (Council Revenue) Series A 5.00% 2/1/35 (MBIA) 2,000,000 2,083,680
Orange County School Board Certificates of Participation Series A 5.00% 8/1/27 (MBIA) 1,250,000 1,296,413
Palm Beach County School Board Certificates of Participation Series D 5.00% 8/1/28 (FSA) 1,200,000 1,242,468
---------
5,692,771
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Ports & Harbors Revenue Bonds - 2.86%
Florida Ports Financing Commission State Transportation Trust Fund
5.375% 6/1/27 (MBIA) (AMT) 1,000,000 1,029,290
---------
1,029,290
---------
ss.Pre-Refunded Bonds - 20.74%
Florida State Board of Education (Capital Outlay Public Education) Series C
6.00% 6/1/21-10 (FGIC) 2,000,000 2,232,540
Indian River County Water & Sewer Revenue 5.50% 9/1/16-06 (FGIC) 1,000,000 1,034,050
Sunrise Utility System Revenue Series A 5.75% 10/1/26-06 (AMBAC) 2,000,000 2,056,980
Tampa Utility Tax Improvement Series A 6.125% 10/1/19-09 (AMBAC) 1,000,000 1,106,240
Village Center Community Development District Recreational Revenue Series A
5.85% 11/1/16-06 (MBIA) 1,000,000 1,041,050
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7,470,860
---------
State General Obligation Bonds - 5.81%
Florida State Board Education Public Education (Capital Outlay)
Series C 5.00% 6/1/34 (AMBAC) 2,000,000 2,094,000
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2,094,000
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Tax Increment /Special Assessment Bonds - 0.85%
Julington Creek Plantation Community Development District Special Assessment
5.00% 5/1/29 (MBIA) 295,000 306,635
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306,635
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Turnpike/Toll Road Revenue Bonds - 2.89%
Miami-Dade County Expressway Authority Toll Systems Revenue Series B 5.00%
7/1/33 (FGIC) 1,000,000 1,041,820
---------
1,041,820
---------
Water & Sewer Revenue Bonds - 15.12%
JEA Florida Water & Sewer Systems Revenue Sub-Second Crossover
5.00% 10/1/25 (MBIA) 1,000,000 1,055,400
Riviera Beach Utilities Special District Water & Sewer Revenue 5.00% 10/1/34 (FGIC) 1,200,000 1,253,088
Village Center Community Development District Utility Revenue 5.00% 10/1/36 (MBIA) 1,500,000 1,559,610
Winter Haven Utilities Systems Revenue Refunding & Improvement 5.00% 10/1/30 (MBIA) 1,500,000 1,578,555
---------
5,446,653
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Total Municipal Bonds (cost $53,168,992) 55,237,223
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Total Market Value of Securities - 153.35%
(cost $53,168,992) 55,237,223
Receivables and Other Assets Net of Liabilities (See Notes) - 2.17% 782,344
Liquidation Value of Preferred Stock - (55.52%) (20,000,000)
------------
Net Assets Applicable to 2,422,200 Shares Outstanding - 100.00% $36,019,567
-----------
ss.Pre-Refunded Bonds. Pre-Refunded Bonds are municipals that are generally
backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated
maturity is followed by the year in which the bond is pre-refunded. See Note 3
in "Notes."
[star] Step coupon bond. Indicates security that has a zero coupon that remains
in effect until a predetermined date at which time the stated interest rate
becomes effective.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Assurance Corporation
AMT - Subject to Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
VHA - Veterans Health Administration
--------------------------------------------------------------------------------
Notes
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted
accounting principles and are consistently followed by Delaware Investments
Florida Insured Municipal Income Fund (the "Fund").
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Short-term debt securities having less than 60 days to maturity are
valued at amortized cost, which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith under the direction of the Fund's Board of
Trustees. In determining whether market quotations are readily available or fair
valuation will be used, various factors will be taken into consideration, such
as market closures, aftermarket trading or significant events after local market
trading (e.g., government actions or pronouncements, trading volume or
volatility on markets, exchanges among dealers, or news events).
Federal Income Taxes - The Fund intends to continue to qualify for federal
income tax purposes as a regulated investment company and make the requisite
distributions to shareholders. Accordingly, no provision for federal income
taxes has been made in the financial statements.
Use of Estimates - The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Other - Expenses common to all funds within the Delaware Investments(R) Family
of Funds are allocated amongst the funds on the basis of average net assets.
Management fees and some other expenses are paid monthly. Security transactions
are recorded on the date the securities are purchased or sold (trade date) for
financial reporting purposes. Costs used in calculating realized gains and
losses on the sale of investment securities are those of the specific securities
sold. Interest income is recorded on the accrual basis. Discounts and premiums
are amortized to interest income over the lives of the respective securities.
The Fund declares and pays dividends from net investment income monthly and
distributions from net realized gain on investments, if any, annually. In
addition, in order to satisfy certain distribution requirements of the Tax
Reform Act of 1986, the Fund may declare special year-end dividend and capital
gains distributions during November or December to shareholders of record on a
date in such month. Such distributions, if received by shareholders by January
31, are deemed to have been paid by the Fund and received by shareholders on the
earlier of the date paid or December 31 of the prior year.
2. Investments
At December 31, 2005, the cost of investments for federal income tax purposes
has been estimated since the final tax characteristics cannot be determined
until fiscal year end. At December 31, 2005, the cost of investments and
unrealized appreciation (depreciation) for the Fund were as follows:
Cost of investments $53,168,992
-----------
Aggregate unrealized appreciation 2,147,390
Aggregate unrealized depreciation (79,159)
-----------
Net unrealized appreciation $ 2,068,231
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3. Credit and Market Risk
The Fund uses leverage in the form of preferred shares. Leveraging may result in
a higher degree of volatility because the Fund's net asset value could be more
sensitive to fluctuations in short-term interest rates and changes in market
value of portfolio securities attributable to the leverage.
The Fund concentrates its investments in securities issued by municipalities.
The value of these investments may be adversely affected by new legislation
within the state, regional or local economic conditions, and differing levels of
supply and demand for municipal bonds. Many municipalities insure repayment for
their obligations. Although bond insurance reduces the risk of loss due to
default by an issuer, such bonds remain subject to the risk that market value
may fluctuate for other reasons and there is no assurance that the insurance
company will meet its obligations. These securities have been identified in the
Schedule of Investments.
The Fund may invest in inverse floating rate securities ("inverse floaters"), a
type of derivative tax-exempt obligation with floating or variable interest
rates that move in the opposite direction of short-term interest rates, usually
at an accelerated speed. Consequently, the market values of inverse floaters
will generally be more volatile than other tax-exempt investments. Such
securities are denoted on the Schedule of Investments.
The Fund may invest in advanced refunded bonds, escrow secured bonds or defeased
bonds. Under current federal tax laws and regulations, state and local
government borrowers are permitted to refinance outstanding bonds by issuing new
bonds. The issuer refinances the outstanding debt to either reduce interest
costs or to remove or alter restrictive covenants imposed by the bonds being
refinanced. A refunding transaction where the municipal securities are being
refunded within 90 days or less from the issuance of the refunding issue is
known as a "current refunding". "Advance refunded bonds" are bonds in which the
refunded bond issue remains outstanding for more than 90 days following the
issuance of the refunding issue. In an advance refunding, the issuer will use
the proceeds of a new bond issue to purchase high grade interest bearing debt
securities which are then deposited in an irrevocable escrow account held by an
escrow agent to secure all future payments of principal and interest and bond
premium of the advance refunded bond. Bonds are "escrowed to maturity" when the
proceeds of the refunding issue are deposited in an escrow account for
investment sufficient to pay all of the principal and interest on the original
interest payment and maturity dates. Bonds are considered "pre-refunded" when
the refunding issue's proceeds are escrowed only until a permitted call date or
dates on the refunded issue with the refunded issue being redeemed at the time,
including any required premium. Bonds become "defeased" when the rights and
interests of the bondholders and of their lien on the pledged revenues or other
security under the terms of the bond contract are substituted with an
alternative source of revenues (the escrow securities) sufficient to meet
payments of principal and interest to maturity or to the first call dates.
Escrowed secured bonds will often receive a rating of AAA from Moody's, S&P,
and/or Fitch due to the strong credit quality of the escrow securities and the
irrevocable nature of the escrow deposit agreement.
The Fund may invest up to 15% of its total assets in illiquid securities, which
may include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of these securities may impair the Fund from disposing of them in a
timely manner and at a fair price when it is necessary or desirable to do so.
While maintaining oversight, the Fund's Board of Trustees has delegated to
Delaware Management Company the day-to-day functions of determining whether
individual Rule 144A securities are liquid for purposes of the Fund's limitation
on investments in illiquid assets. At December 31, 2005, no securities have been
determined to be illiquid under the Fund's Liquidity Procedures.
Item 2. Controls and Procedures.
The registrant's principal executive officer and principal financial
officer have evaluated the registrant's disclosure controls and procedures
within 90 days of the filing of this report and have concluded that they are
effective in providing reasonable assurance that the information required to be
disclosed by the registrant in its reports or statements filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and
Exchange Commission.
There were no significant changes in the registrant's internal control
over financial reporting that occurred during the registrant's last fiscal
quarter (the registrant's second fiscal half-year in the case of an annual
report) that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
Item 3. Exhibits.
File as exhibits as part of this Form a separate certification for each
principal executive officer and principal financial officer of the registrant as
required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)), exactly as set
forth below:
CERTIFICATION
-------------
I, Jude T. Driscoll, certify that:
1. I have reviewed this report on Form N-Q of Delaware Investments
Florida Insured Municipal Income Fund;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the schedules of investments included in
this report fairly present in all material respects the
investments of the registrant as of the end of the fiscal quarter
for which the report is filed;
4. The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment
Company Act of 1940) and internal control over financial reporting
(as defined in Rule 30a-3(d) under the Investment Company Act of
1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this
report is being prepared;
(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting
and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of a date within 90 days prior
to the filing date of this report, based on such evaluation;
and
(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer(s) and I have disclosed
to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize, and
report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
Jude T. Driscoll
-------------------------------------
By: Jude T. Driscoll
Title: Chief Executive Officer
Date: February 28, 2006
CERTIFICATION
-------------
I, Michael P. Bishof, certify that:
1. I have reviewed this report on Form N-Q of Delaware Investments
Florida Insured Municipal Income Fund;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the schedules of investments included in
this report fairly present in all material respects the
investments of the registrant as of the end of the fiscal quarter
for which the report is filed;
4. The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment
Company Act of 1940) and internal control over financial reporting
(as defined in Rule 30a-3(d) under the Investment Company Act of
1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this
report is being prepared;
(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting
and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of a date within 90 days prior
to the filing date of this report, based on such evaluation;
and
(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize, and
report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
Michael P. Bishof
---------------------------------------
By: Michael P. Bishof
Title: Chief Financial Officer
Date: February 28, 2006
SIGNATURES
----------
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.
DELAWARE INVESTMENTS FLORIDA INSURED MUNICIPAL INCOME FUND
Jude T. Driscoll
--------------------------------------
By: Jude T. Driscoll
Title: Chief Executive Officer
Date: February 28, 2006
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.
Jude T. Driscoll
--------------------------------------
By: Jude T. Driscoll
Title: Chief Executive Officer
Date: February 28, 2006
Michael P. Bishof
--------------------------------------
By: Michael P. Bishof
Title: Chief Financial Officer
Date: February 28, 2006