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 811-08349
Name of Fund: MuniHoldings Florida Insured Fund
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, MuniHoldings Florida Insured Fund, 800 Scudders Mill Road,
Plainsboro, NJ 08536. Mailing address: P.O. Box 9011, Princeton, NJ
08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 08/31/05
Date of reporting period: 09/01/04 - 08/31/05
Item 1 - Report to Stockholders
MuniHoldings Florida Insured Fund
MuniHoldings New York Insured Fund, Inc.
Annual Reports
August 31, 2005
MuniHoldings Florida Insured Fund
MuniHoldings New York Insured Fund, Inc.
The Benefits and Risks of Leveraging
The Funds utilize leveraging to seek to enhance the yield and net asset value of
their Common Shares or Common Stock. However, these objectives cannot be
achieved in all interest rate environments. To leverage, the Funds issue
Preferred Shares or Stock, which pays dividends at prevailing short-term
interest rates, and invests the proceeds in long-term municipal bonds. The
interest earned on these investments, net of dividends to Preferred Shares or
Stock, is paid to Common Shareholders or Common Stock shareholders in the form
of dividends, and the value of these portfolio holdings is reflected in the per
share net asset value of the Fund's Common Shares or Stock. However, in order to
benefit Common Shareholders or Common Stock shareholders, the yield curve must
be positively sloped; that is, short-term interest rates must be lower than
long-term interest rates. At the same time, a period of generally declining
interest rates will benefit Common Shareholders or Common Stock shareholders. If
either of these conditions change, then the risks of leveraging will begin to
outweigh the benefits.
To illustrate these concepts, assume a fund's Common Shares or Stock
capitalization of $100 million and the issuance of Preferred Shares or Stock for
an additional $50 million, creating a total value of $150 million available for
investment in long-term municipal bonds. If prevailing short-term interest rates
are approximately 3% and long-term interest rates are approximately 6%, the
yield curve has a strongly positive slope. The fund pays dividends on the $50
million of Preferred Shares or Stock based on the lower short-term interest
rates. At the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates.
In this case, the dividends paid to Preferred Shareholders or Preferred Stock
shareholders are significantly lower than the income earned on the fund's
long-term investments, and therefore the Common Shareholders or Common Stock
shareholders are the beneficiaries of the incremental yield. However, if
short-term interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the Common Shares
or Stock will be reduced or eliminated completely. At the same time, the market
value on the fund's Common Shares or Stock (that is, its price as listed on the
New York Stock Exchange), may, as a result, decline. Furthermore, if long-term
interest rates rise, the Common Shares' or Stock's net asset value will reflect
the full decline in the price of the portfolio's investments, since the value of
the fund's Preferred Shares or Stock does not fluctuate. In addition to the
decline in net asset value, the market value of the fund's Common Shares or
Stock may also decline.
As a part of their investment strategy, the Funds may invest in certain
securities whose potential income return is inversely related to changes in a
floating interest rate ("inverse floaters"). In general, income on inverse
floaters will decrease when short-term interest rates increase and increase when
short-term interest rates decrease. Investments in inverse floaters may be
characterized as derivative securities and may subject the Funds to the risks of
reduced or eliminated interest payments and losses of invested principal. In
addition, inverse floaters have the effect of providing investment leverage and,
as a result, the market value of such securities will generally be more volatile
than that of fixed rate, tax-exempt securities. To the extent the Funds invest
in inverse floaters, the market value of each Fund's portfolio and the net asset
value of each Fund's shares may also be more volatile than if the Funds did not
invest in these securities. As of August 31, 2005, the percentages of
MuniHoldings Florida Insured Fund's and MuniHoldings New York Insured Fund,
Inc.'s total net assets invested in inverse floaters were 5.00% and 6.99%,
respectively, before the deduction of Preferred Shares or Stock.
2 ANNUAL REPORTS AUGUST 31, 2005
A Letter From the President
Dear Shareholder
Amid what we've coined a "muddle through" year for the financial markets, the
major market benchmarks managed to post positive results for the current
reporting period:
Total Returns as of August 31, 2005 6-month 12-month
===============================================================================================
U.S. equities (Standard & Poor's 500 Index) +2.33% +12.56%
-----------------------------------------------------------------------------------------------
Small-cap U.S. equities (Russell 2000 Index) +5.75% +23.10%
-----------------------------------------------------------------------------------------------
International equities (MSCI Europe Australasia Far East Index) +1.98% +23.58%
-----------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers Aggregate Bond Index) +2.85% + 4.15%
-----------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +2.85% + 5.31%
-----------------------------------------------------------------------------------------------
High yield bonds (Credit Suisse First Boston High Yield Index) +1.35% + 8.98%
-----------------------------------------------------------------------------------------------
Since June 2004, the Federal Reserve Board (the Fed) has tirelessly advanced its
interest rate-hiking program, bringing the federal funds rate to 3.5% by August
31 (and to 3.75% on September 20). Economists and investors have struggled to
project the Fed's future moves, vacillating from expectations for an impending
end to monetary tightening to fears that the central bank may increase interest
rates more than is necessary to moderate economic growth and keep inflation in
check. Most recently, the devastation of Hurricane Katrina added a new element
of ambiguity in terms of its impact on the economy and Fed sentiment. Many now
believe the Fed will suspend its interest rate-hiking campaign at some point
this year.
Equity market returns over the past several months have reflected a degree of
investor uncertainty. After a strong finish to 2004, the S&P 500 Index posted
gains in four of the first eight months of 2005. Up to this point, strong
corporate earnings reports and low long-term bond yields have worked in favor of
equities. Factors that pose the greatest risks to stocks include record-high oil
prices, continued interest rate hikes and the possibility for disappointing
earnings for the remainder of the year.
Fixed income markets have fared relatively well in the face of monetary
tightening. As the short end of the yield curve moved in concert with Fed
interest rate hikes, long-term bond yields remained low, perpetuating the yield
curve flattening trend. Because bond prices move in the opposite direction of
yields, the result has been that longer-term bonds have outperformed short-term
bonds. At period end, the spread between two-year and 10-year Treasury yields
was just 18 basis points (.18%).
Financial markets are likely to face continued crosscurrents for the remainder
of 2005, particularly as the economy digests the impact of Hurricane Katrina.
Nevertheless, opportunities do exist and we encourage you to work with your
financial advisor to diversify your portfolio among a variety of asset types.
This can help to diffuse risk while also tapping into the potential benefits of
a broader range of investment alternatives. As always, we thank you for trusting
Merrill Lynch Investment Managers with your investment assets.
Sincerely,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
President and Director/Trustee
ANNUAL REPORTS AUGUST 31, 2005 3
A Discussion With Your Funds' Portfolio Managers
We continued to focus on increasing the income provided to shareholders
and muting the Funds' net asset value volatility.
Describe the recent market environment relative to municipal bonds.
Over the past year, long-term bond yields generally declined as their prices,
which move in the opposite direction, increased. Most recently, the devastation
of Hurricane Katrina throughout the U.S. Gulf Coast prompted a strong rally in
bond prices. The resultant higher energy prices and expected declines in
consumer confidence and spending pushed longer-term interest rates lower as the
period came to a close.
The Federal Reserve Board (the Fed) continued to raise short-term interest rates
during the period, lifting the federal funds target to 3.50% by period-end (and
to 3.75% on September 20). As short-term interest rates rose in concert with the
Fed interest rate hikes and longer-term bond yields declined, the yield curve
continued to flatten. During the past 12 months, 30-year Treasury yields
declined 68 basis points (.68%) to 4.25% and 10-year Treasury yields fell 11
basis points to 4.02%. By comparison, the two-year Treasury yield rose 143 basis
points to 3.84%. Tax-exempt bond yields exhibited a similar pattern during the
year. The yield on 30-year revenue bonds, as measured by the Bond Buyer Revenue
Bond Index, fell 26 basis points to 4.83%. According to Municipal Market Data,
the yield on AAA-rated issues maturing in 30 years declined 48 basis points to
4.22% while the yield on AAA-rated bonds maturing in 10 years remained unchanged
at 3.50%.
Declining tax-exempt bond yields continued to encourage municipalities to issue
new debt and refund outstanding, higher-couponed issues. Over the past year,
more than $384 billion in new long-term tax-exempt bonds was issued, an increase
of greater than 7.5% versus last year's total of $357 billion. In the past six
months, more than $217 billion in new municipal bonds was underwritten, an
increase of 16.3% versus the same period in 2004. During the first six months of
2005, the volume of refunding issues increased more than 50% compared to
underwritings during the first half of 2004. In August 2005, refunding issuance
increased 18% compared to August 2004 levels. The refunding issues have been
heavily weighted in the 10-year - 20-year maturity range, putting pressure on
intermediate tax-exempt bond yields while supporting longer-term bond prices.
Investor demand for municipal product has remained generally positive. The most
current statistics from the Investment Company Institute indicate that,
year-to-date through July 31, 2005, net new cash flows into long-term municipal
bond funds have exceeded $4.2 billion -- a significant improvement from the
$12.4 billion net outflow seen during the same period in 2004. Weekly figures
for August, as reported by AMG Data Service, pointed to continued positive
flows.
Notably, throughout much of the past six months, high yield tax-exempt bond
funds have been the principal target for the new cash inflows. During August,
these lower-rated/non-rated bond funds received an average of $150 million per
week. The need to invest these cash flows has led to strong demand for
lower-rated issues and a consequent narrowing of credit spreads. Additionally,
an increasing percentage of insured issuance has further reduced the
availability of lower-rated municipal securities, lending more support to higher
prices for these issues.
Municipal bond issues have underperformed their taxable counterparts recently as
Treasury bonds have enjoyed increased demand from foreign governments, which are
unable to benefit from the tax advantage inherent in tax-exempt products. This
underperformance, however, has resulted in attractive tax-exempt bond yield
ratios and, we believe, should continue to attract investors to the municipal
marketplace.
The communities shattered by Hurricane Katrina will require extensive
reconstruction. It is too early to estimate the amount of tax-exempt debt that
may be required to finance these efforts or to assess the overall impact on the
municipal market. However, much of the rebuilding is likely to be funded through
federal loans and grants, and the reconstruction will likely be spread over a
number of years. Consequently, any municipal bond issuance prompted by Katrina
is not likely to disrupt the tax-exempt market in the near future.
MuniHoldings Florida Insured Fund
Describe conditions in the State of Florida.
Florida maintains credit ratings of AA1 from Moody's, AAA from Standard & Poor's
and AA+ from Fitch -- all with stable trends. The favorable ratings are based on
the state's solid economic and financial performance, in addition to moderate
debt and a proactive government that responds to economic downturns faster than
other states. Florida's continued economic strength is bolstered by robust
population growth, which is
4 ANNUAL REPORTS AUGUST 31, 2005
attributed to the state's attractive physical environment and favorable business
climate. Although the growth in population has put a strain on services such as
education, transportation and health care, it also has allowed the state to
recover more quickly from sub par economic trends.
Currently, Florida's revenues are higher than budgeted and expenditures remain
under control due to prudent fiscal oversight. The fiscal year 2005 budget was
brought into balance through tight expenditure controls, including outsourcing
work and requiring local governments to pick up costs historically incurred by
the state. To pay for these additional expenses, municipalities imposed
increases to property taxes and/or local sales taxes through voter initiatives.
Given the government's concerns over the high health care costs facing the state
-- roughly $15 billion, or 26% in the upcoming budget -- Governor Jeb Bush has
proposed a partially private health insurance plan. Florida continues to
maintain solid fund balances with consistent General Fund operations. In
addition, the state has a working Capital Reserve Fund and a Budget
Stabilization Fund in excess of $2.4 billion.
How did the Fund perform during the fiscal year?
For the 12-month period ended August 31, 2005, the Common Shares of MuniHoldings
Florida Insured Fund had net annualized yields of 6.52% and 6.34%, based on a
year-end per share net asset value of $15.32 and a per share market price of
$15.75, respectively, and $.999 per share income dividends. Over the same
period, the total investment return on the Fund's Common Stock was +6.49%, based
on a change in per share net asset value from $15.37 to $15.32, and assuming
reinvestment of all distributions.
The Fund's total return, based on net asset value, lagged the +7.86% average
return of the Lipper Florida Municipal Debt Funds category for the 12-month
period. (Funds in this Lipper category limit their investment to those
securities exempt from taxation in the State of Florida.) The Fund's
conservative investment parameters played some role in the underperformance for
the period. Unlike other funds in the Lipper group, the Fund is prohibited from
investing in non-investment grade issues, which outperformed the high-grade
market as credit spreads narrowed during the period. This put the Fund at a
competitive disadvantage.
Three additional factors affected Fund performance during the period. First,
mortgage-refinancing activity continued strong during the year, which prompted
an increased number of prepayment calls on some of the Fund's single-family
housing bonds. This had a negative impact on total return. Second, several
large-coupon bonds in the portfolio were prerefunded in prior periods, as the
issuers took the opportunity to refinance their debt in the low interest rate
environment. This transformed several of our longer-dated bonds into
intermediate-maturity bonds in the one-year - 10-year maturity range -- a sector
that underperformed as the yield curve flattened. Finally, the Fund has an
above-average exposure to higher-coupon bonds priced to a short call. Like the
prerefunded bonds, these shorter-term issues underperformed on a total return
basis. Nevertheless, we continued to hold these bonds to take advantage of their
high acquisition yield, as we would not be able to match their yield in the
current low interest rate environment. Importantly, the Fund continued to
provide a highly competitive yield relative to other closed-end Florida insured
funds. Our long-term commitment to an above-average yield continues to benefit
performance.
For the six-month period ended August 31, 2005, the total investment return on
the Fund's Common Shares was +2.85%, based on a change in per share net asset
value from $15.39 to $15.32, and assuming reinvestment of all distributions.
For a description of the Fund's total investment return based on a change in the
per share market value of the Fund's Common Shares (as measured by the trading
price of the Fund's shares on the New York Stock Exchange), and assuming
reinvestment of dividends, please refer to the Financial Highlights section of
this report. As a closed-end fund, the Fund's shares may trade in the secondary
market at a premium or discount to the Fund's net asset value. As a result,
total investment returns based on changes in the market value of the Fund's
Common Shares can vary significantly from total investment returns based on
changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
We continued to focus on increasing the income provided to shareholders and
muting the Fund's net asset value volatility. To that end, we sought to sell
bonds in the more volatile 10-year - 15-year maturity range, although this
proved somewhat challenging as the yield curve flattened and bonds in the
intermediate range cheapened relative to longer-dated securities.
In making new purchases, we generally focused on premium-coupon bonds in the
20-year - 25-year maturity range whenever they became available. This is where
we have been able to capture higher yields with reduced volatility. Our
restructuring efforts have been somewhat limited by a modest decline in the
issuance of Florida municipal bonds during the fiscal year and the fact that few
new issues have met our desired investment characteristics. Much of the supply
in the market has come in the form of refinancings, and the majority of the new
issues offered maturities of only 15 years - 20 years and
ANNUAL REPORTS AUGUST 31, 2005 5
A Discussion With Your Funds' Portfolio Managers (concluded)
yields below 5%. We were not inclined to give up bonds booked in the portfolio
at higher yields in order to take advantage of the new-issue calendar.
Importantly, we remained fully invested throughout the fiscal year in order to
augment the portfolio's yield.
For the six-month period ended August 31, 2005, the Fund's Auction Market
Preferred Shares (AMPS) had average yields as follows: Series A, 1.98%; Series
B, 1.91%; Series C, 1.56%; Series D, 2.06%; and Series E, 1.88%. Continued
short-term interest rate increases by the Fed have boosted the Fund's borrowing
costs throughout the 12-month period. Although we believe the majority of the
Fed's actions have already occurred, additional interest rate hikes are expected
until at least year-end. Nevertheless, the Fund's borrowing costs have remained
historically very low, and the leveraging of Preferred Shares has continued to
generate an income benefit to the holders of Common Shares. However, should the
spread between short-term and long-term tax-exempt rates narrow, the benefits of
leverage will decline and, as a result, reduce the yield on the Fund's Common
Shares. At the end of the period, the Fund's leverage amount, due to AMPS, was
38.64% of total net assets, before the deduction of Preferred Shares. (For a
more complete explanation of the benefits and risks of leveraging, see page 2 of
this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
We would characterize the Fund's position as fairly neutral in terms of interest
rate risk. Currently, we favor bonds with 20-year maturities and 5% coupons. We
believe the Fed will continue to raise short-term interest rates at a measured
pace. While long-term bond yields have been slow to react to the Fed's rate
hikes, we will look for an increase in long-term rates as an opportunity to
pursue higher-coupon bonds (5.25% and above) in the 20 year - 30-year maturity
range.
Robert D. Sneeden
Vice President and Portfolio Manager
MuniHoldings New York Insured Fund, Inc.
Describe conditions in the State of New York.
The State of New York maintains credit ratings of A1, AA and AA- from Moody's,
Standard and Poor's (S&P) and Fitch, respectively. Moody's assigns a positive
outlook to the state's rating, while Fitch and S&P carry stable outlooks. The
state economy continues to improve and revenue collections are increasing. State
tax collections remain largely dependent on the performance of the financial
sector, but tax receipts for fiscal year 2005 were 15% above the prior fiscal
year. Due to surging tax collections, particularly income taxes, the fiscal year
2005 operating surplus totaled $1.2 billion.
The fiscal year 2006 budget calls for $105 billion in spending and forecasts a
5% increase in tax receipts for the fiscal year. Aided by this revenue growth,
the enacted budget includes most of the governor's original proposals for
closing an estimated $4 billion deficit. However, this does not factor in a
lawsuit won by the Campaign for Fiscal Equity that could add up to $2 billion in
annual state education spending. Crafting balanced budgets beyond fiscal year
2006 will present a challenge given political resistance to additional tax hikes
and cuts in popular programs, as well as pressure from local governments for
pension and Medicaid relief, and new education spending. General fund receipts
are .7% ahead of budget through the first quarter of fiscal year 2006.
The New York economy produced good job growth in 2004, with total non-farm labor
increasing .5% from the prior year. This was the first annual gain since 2000.
Preliminary August 2005 employment (seasonally adjusted) is 1% above the prior
August level. New York ranks fifth-highest among all states in per capita
income. Modest income growth through the remainder of 2005 would boost personal
income tax receipts, which account for roughly 38% of general fund receipts.
How did the Fund perform during the fiscal year?
For the 12-month period ended August 31, 2005, the Common Stock of MuniHoldings
New York Insured Fund, Inc. had net annualized yields of 6.10% and 6.20%, based
on a year-end per share net asset value of $15.54 and a per share market price
of $15.28, respectively, and $.948 per share income dividends. Over the same
period, the total investment return on the Fund's Common Stock was +7.63%, based
on a change in per share net asset value from $15.41 to $15.54, and assuming
reinvestment of all distributions.
The Fund's total return, based on net asset value, lagged the +8.20% average
return of the Lipper New York Insured Municipal Debt Funds category for the
12-month period. (Funds in this Lipper category invest primarily in securities
exempt from taxation in New York and insured as to timely payment.) The modest
underperformance is attributed to the portfolio's slightly shorter-than-average
duration, which we maintained for the bulk of the period based on our belief
that strong economic growth, coupled with a Fed tightening,
6 ANNUAL REPORTS AUGUST 31, 2005
would cause long-term bond yields to increase. The defensive positioning was
designed to limit portfolio volatility and protect the Fund's net asset value
from the price impact associated with rising rates. However, long-term rates
actually declined over the course of the year, costing the Fund some capital
appreciation as bond prices correspondingly rose.
The decline in long-term interest rates as short-term interest rates rose also
resulted in a flattening of the yield curve, a phenomenon we sought to
capitalize on by moving into longer-dated securities as opportunities presented
themselves. This strategy helped the Fund's total return as the price of
longer-dated bonds increased. Over the course of the year, we increased the
portfolio's exposure to bonds maturing in 25 years or longer from 46.8% of net
assets to 59.5%.
For the most part, our focus during the period centered on yield rather than
total return. As a result, the Fund was able to gain a competitive yield
advantage versus its New York insured fund peers. While some of our competitors
were forced to cut their dividends as market rates declined, the Fund was able
to maintain an above-average monthly distribution rate.
For the six-month period ended August 31, 2005, the total investment return on
the Fund's Common Stock was +3.44%, based on a change in per share net asset
value from $15.51 to $15.54, and assuming reinvestment of all distributions.
For a description of the Fund's total investment return based on a change in the
per share market value of the Fund's Common Stock (as measured by the trading
price of the Fund's shares on the New York Stock Exchange), and assuming
reinvestment of dividends, please refer to the Financial Highlights section of
this report. As a closed-end fund, the Fund's shares may trade in the secondary
market at a premium or discount to the Fund's net asset value. As a result,
total investment returns based on changes in the market value of the Fund's
Common Stock can vary significantly from total investment returns based on
changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
Throughout the year, we focused on protecting the Fund's net asset value and
providing shareholders with above-average income. To that end, we remained
essentially fully invested and maintained a low turnover rate in order to retain
bonds booked into the portfolio at attractive yields. Whenever possible, we took
opportunities to move further out on the yield curve to pick up additional
yield. Consequently, the Fund's average maturity lengthened from 19.5 years at
the start of the fiscal period to 20.7 years at August 31, 2005.
Recently, there has been little long-maturity new issuance in the New York
municipal market. As issuers are refunding their existing debt, they have tended
to do so with short and intermediate issues. The limited supply of longer-dated
maturities has provided for few trading opportunities. Until market yields
increase or the new-issue calendar produces compelling opportunities, we are
looking to enhance the diversification of the portfolio. For example, we added
bonds insured by several new insurers in the municipal marketplace. These bonds
came with additional yield and should outperform as credit spreads narrow.
For the six-month period ended August 31, 2005, the Fund's Auction Market
Preferred Stock (AMPS) had average yields as follows: Series A, 2.25%; Series B,
2.31%; Series C, 2.32%; Series D, 2.38%; and Series E, 2.37%. Continued
short-term interest rate increases by the Fed have boosted the Fund's borrowing
costs throughout the 12-month period. Although we believe the majority of the
Fed's actions have already occurred, additional rate hikes are expected until at
least year-end. Nevertheless, the Fund's borrowing costs have remained
historically very low, and the leveraging of Preferred Stock has continued to
generate an income benefit to the holders of Common Stock. However, should the
spread between short-term and long-term tax-exempt rates narrow, the benefits of
leverage will decline and, as a result, reduce the yield on the Fund's Common
Stock. At the end of the period, the Fund's leverage amount, due to AMPS, was
39.55% of total net assets, before the deduction of Preferred Stock. (For a more
complete explanation of the benefits and risks of leveraging, see page 2 of this
report to shareholders.)
How would you characterize the Fund's position at the close of the period?
In view of the current risks to the economy and the uncertainty wrought by
Hurricane Katrina, we believe a neutral approach to duration is appropriate. We
maintain our focus on yield generation and are looking for the new-issue market
to pick up and provide more trading opportunities. We continue our efforts to
diversify the portfolio, which we believe will allow us more flexibility to
capitalize on the rapidly changing market and the dislocations caused by the
various market participants.
Timothy T. Browse, CFA
Vice President and Portfolio Manager
September 20, 2005
ANNUAL REPORTS AUGUST 31, 2005 7
Portfolio Information
Quality Profiles as of August 31, 2005
MuniHoldings Florida Insured Fund Percent of Total
By S&P/Moody's Rating Investments
--------------------------------------------------------------------------------
AAA/Aaa ........................................................... 95.0%
AA/Aa ............................................................. 1.7
A/A ............................................................... 2.5
BBB/Baa ........................................................... 0.6
Other* ............................................................ 0.2
--------------------------------------------------------------------------------
* Includes portfolio holdings in short-term investments.
MuniHoldings New York Insured Fund, Inc. Percent of Total
By S&P/Moody's Rating Investments
--------------------------------------------------------------------------------
AAA/Aaa ........................................................... 87.0%
AA/Aa ............................................................. 2.1
A/A ............................................................... 6.0
BBB/Baa ........................................................... 4.8
Other* ............................................................ 0.1
--------------------------------------------------------------------------------
* Includes portfolio holdings in short-term investments and variable rate
demand notes.
Swap Agreements
The Funds may invest in swap agreements, which are over-the-counter contracts in
which one party agrees to make periodic payments based on the change in market
value of a specified bond, basket of bonds, or index in return for periodic
payments based on a fixed or variable interest rate or the change in market
value of a different bond, basket of bonds or index. Swap agreements may be used
to obtain or reduce exposure to a bond or market without owning or taking
physical custody of securities. Swap agreements involve the risk that the party
with whom each Fund has entered into the swap will default on its obligation to
pay the Fund and the risk that the Fund will not be able to meet its obligations
to pay the other party to the agreement.
Dividend Policy
The Funds' dividend policy is to distribute all or a portion of its net
investment income to their shareholders on a monthly basis. In order to provide
shareholders with a more stable level of dividend distributions, the Funds may
at times pay out less than the entire amount of net investment income earned in
any particular month and may at times in any particular month pay out such
accumulated but undistributed income in addition to net investment income earned
in that month. As a result, the dividends paid by the Funds for any particular
month may be more or less than the amount of net investment income earned by the
Funds during such month. The Funds' current accumulated but undistributed net
investment income, if any, is disclosed in the Statement of Net Assets, which
comprises part of the financial information included in these reports.
8 ANNUAL REPORTS AUGUST 31, 2005
Schedule of Investments MuniHoldings Florida Insured Fund (in Thousands)
Face
Amount Municipal Bonds Value
=================================================================================================
Florida--148.4%
-------------------------------------------------------------------------------------------------
$ 6,600 Alachua County, Florida, School Board, COP,
5.25% due 7/01/2029 (b) $ 7,229
-------------------------------------------------------------------------------------------------
4,195 Beacon Tradeport Community Development District,
Florida, Special Assessment Revenue Refunding Bonds
(Commercial Project), Series A, 5.625% due 5/01/2032 (k) 4,589
-------------------------------------------------------------------------------------------------
Brevard County, Florida, HFA, S/F Mortgage Revenue
Bonds, AMT (d)(g):
350 6.70% due 2/01/2028 354
1,250 6.80% due 3/01/2028 1,267
-------------------------------------------------------------------------------------------------
690 Clay County, Florida, HFA, S/F Mortgage Revenue Bonds,
AMT, 6.55% due 3/01/2028 (d)(i) 705
-------------------------------------------------------------------------------------------------
1,320 Clay County, Florida, School Board, COP (Master Lease
Program), 5.75% due 7/01/2022 (a) 1,464
-------------------------------------------------------------------------------------------------
5,000 Collier County, Florida, IDA, IDR, Refunding (Southern
States Utilities), AMT, 6.50% due 10/01/2025 5,208
-------------------------------------------------------------------------------------------------
5,380 Dade County, Florida, HFA, S/F Mortgage Revenue
Bonds, AMT, 6.70% due 4/01/2028 (d)(g) 5,495
-------------------------------------------------------------------------------------------------
Dade County, Florida, Water and Sewer System
Revenue Bonds (h):
20,575 5.25% due 10/01/2021 21,575
21,640 5.25% due 10/01/2026 22,634
-------------------------------------------------------------------------------------------------
Escambia County, Florida, HFA, S/F Mortgage Revenue
Refunding Bonds (Multi-County Program), AMT,
Series A (a)(i):
340 6.30% due 10/01/2020 341
1,280 6.375% due 10/01/2026 1,283
-------------------------------------------------------------------------------------------------
Florida HFA, Homeowner Mortgage Revenue Refunding
Bonds, AMT, Series 2 (a):
2,205 5.75% due 7/01/2014 2,295
18,025 5.90% due 7/01/2029 18,727
-------------------------------------------------------------------------------------------------
1,230 Florida Housing Finance Corporation, Homeowner
Mortgage Revenue Refunding Bonds, AMT, Series 4,
6.25% due 7/01/2022 (c) 1,284
-------------------------------------------------------------------------------------------------
2,055 Florida Housing Finance Corporation, Housing Revenue
Bonds (Waverly Apartments), AMT, Series C-1,
6.30% due 7/01/2030 (c) 2,225
-------------------------------------------------------------------------------------------------
Florida Municipal Loan Council Revenue Bonds,
Series B (a):
1,285 5.375% due 11/01/2025 1,397
4,150 5.375% due 11/01/2030 4,512
-------------------------------------------------------------------------------------------------
3,750 Florida State Board of Education, Capital Outlay, GO,
Public Education, Refunding, Series D,
5.75% due 6/01/2022 (c) 4,190
-------------------------------------------------------------------------------------------------
7,600 Florida State Board of Education, Capital Outlay, GO,
Public Education, Series C, 5.75% due 6/01/2010 (h)(j) 8,524
-------------------------------------------------------------------------------------------------
12,725 Florida State Board of Education, Lottery Revenue Bonds,
DRIVERS, Series 222, 9.697% due 7/01/2017 (f)(h) 16,404
-------------------------------------------------------------------------------------------------
Florida State Board of Regents, Housing Revenue
Bonds (h):
2,200 (University of Central Florida), 5.25% due 10/01/2026 2,381
1,080 (University of Florida), 6% due 7/01/2018 1,219
-------------------------------------------------------------------------------------------------
7,165 Florida State Board of Regents, University Systems
Improvement Revenue Bonds, 5.25% due 7/01/2022 (a) 7,482
-------------------------------------------------------------------------------------------------
3,505 Florida State Department of General Services, Division
Facilities Management Revenue Bonds (Florida Facilities
Pool), Series A, 6% due 9/01/2010 (b)(j) 3,986
-------------------------------------------------------------------------------------------------
Florida State Governmental Utility Authority, Utility
Revenue Bonds (b):
2,350 (Citrus Utility System), 5.125% due 10/01/2033 2,508
2,900 (Lehigh Utility System), 5.125% due 10/01/2033 3,094
-------------------------------------------------------------------------------------------------
Florida State Turnpike Authority, Turnpike Revenue Bonds:
14,325 DRIVERS, Series 218, 9.698% due 7/01/2029 (f)(h) 18,467
2,835 (Department of Transportation), Series A,
5.75% due 7/01/2010 (j) 3,182
-------------------------------------------------------------------------------------------------
7,135 Highlands County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System),
Series A, 6% due 11/15/2031 7,807
-------------------------------------------------------------------------------------------------
4,500 Hillsborough County, Florida, IDA, PCR, Refunding (Tampa
Electric Company Project), 6.25% due 12/01/2034 (a) 4,631
-------------------------------------------------------------------------------------------------
Hillsborough County, Florida, School Board, COP (a)(j):
6,600 5.375% due 7/01/2009 7,138
33,400 6% due 7/01/2009 37,171
-------------------------------------------------------------------------------------------------
1,300 Indian River County, Florida, Water and Sewer Revenue
Refunding Bonds, Series A, 5.25% due 9/01/2018 (h) 1,400
-------------------------------------------------------------------------------------------------
1,800 Jacksonville, Florida, Economic Development Commission,
Health Care Facilities Revenue Bonds (Mayo Clinic--
Jacksonville), Series A, 5.50% due 11/15/2036 (a) 1,996
-------------------------------------------------------------------------------------------------
7,305 Jacksonville, Florida, Guaranteed Entitlement Revenue
Refunding and Improvement Bonds,
5.25% due 10/01/2032 (h) 7,957
-------------------------------------------------------------------------------------------------
Jacksonville, Florida, Port Authority, Airport Revenue
Bonds, AMT, Series A (h):
1,295 6.10% due 10/01/2018 1,324
8,385 6.25% due 10/01/2024 8,572
-------------------------------------------------------------------------------------------------
Jacksonville, Florida, Port Authority, Seaport Revenue
Bonds, AMT (a):
1,130 5.625% due 11/01/2010 (j) 1,243
1,870 5.625% due 11/01/2026 2,023
-------------------------------------------------------------------------------------------------
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Schedules of Investments,
we have abbreviated the names of many of the securities according to the list at
right.
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
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
VRDN Variable Rate Demand Notes
ANNUAL REPORTS AUGUST 31, 2005 9
Schedule of Investments (continued)
MuniHoldings Florida Insured Fund (in Thousands)
Face
Amount Municipal Bonds Value
=================================================================================================
Florida (continued)
-------------------------------------------------------------------------------------------------
Jacksonville, Florida, Sales Tax Revenue Bonds (b):
$ 2,000 5.50% due 10/01/2016 $ 2,228
3,800 5.50% due 10/01/2018 4,226
-------------------------------------------------------------------------------------------------
1,500 Jacksonville, Florida, Water and Sewer Revenue Bonds
(United Water Florida Project), AMT,
6.35% due 8/01/2025 (b) 1,534
-------------------------------------------------------------------------------------------------
Lee County, Florida, Airport Revenue Bonds (c):
9,963 RIB, AMT, Series 811-X, 9.20% due 10/01/2029 (f) 12,145
1,000 Series B, 5.75% due 10/01/2033 1,109
-------------------------------------------------------------------------------------------------
150 Lee County, Florida, HFA, S/F Mortgage Revenue Bonds
(Multi-County Program), AMT, Series A-1,
7.20% due 3/01/2033 (d)(g) 151
-------------------------------------------------------------------------------------------------
740 Lee County, Florida, HFA, S/F Mortgage Revenue Refunding
Bonds, AMT, Series A-2, 6.30% due 3/01/2029 (d)(e)(g) 748
-------------------------------------------------------------------------------------------------
8,640 Lee County, Florida, Transportation Facilities Revenue
Bonds (Sanibel Bridges and Causeway), Series B,
5% due 10/01/2035 (l) 9,174
-------------------------------------------------------------------------------------------------
Leesburg, Florida, Capital Improvement Revenue Bonds (h):
1,605 5.25% due 10/01/2027 1,764
3,425 5.25% due 10/01/2034 3,746
-------------------------------------------------------------------------------------------------
775 Manatee County, Florida, HFA, S/F Mortgage Revenue
Refunding Bonds, AMT, Sub-Series 1,
6.25% due 11/01/2028 (d) 778
-------------------------------------------------------------------------------------------------
1,330 Marco Island, Florida, Utility System Revenue Bonds,
5.25% due 10/01/2020 (a) 1,479
-------------------------------------------------------------------------------------------------
5,990 Martin County, Florida, Utilities System Revenue Bonds,
5.125% due 10/01/2033 (b) 6,392
-------------------------------------------------------------------------------------------------
2,000 Miami Beach, Florida, Redevelopment Agency, Tax
Increment Revenue Bonds, City Center Tax Allocation
(Historic Village), AMT, 5.875% due 12/01/2022 (a) 2,044
-------------------------------------------------------------------------------------------------
Miami Beach, Florida, Stormwater Revenue Bonds (h):
1,630 5.75% due 9/01/2016 1,827
1,000 5.25% due 9/01/2020 1,084
4,400 5.25% due 9/01/2025 4,758
1,910 5.375% due 9/01/2030 2,073
-------------------------------------------------------------------------------------------------
Miami Beach, Florida, Water and Sewer Revenue Bonds (b):
2,690 5.625% due 9/01/2018 2,992
10,600 5.75% due 9/01/2025 11,795
-------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Aviation Revenue Bonds,
AMT, Series A :
5,000 5% due 10/01/2033 (c) 5,187
4,210 5.125% due 10/01/2035 (c) 4,402
6,000 (Miami International Airport), 6% due 10/01/2024 (h) 6,657
10,000 (Miami International Airport), 6% due 10/01/2029 (h) 11,095
-------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Educational Facilities
Authority Revenue Bonds, Series A (b):
1,000 5.50% due 4/01/2019 1,099
19,425 6% due 4/01/2023 21,700
5,000 (University of Miami), 5.75% due 4/01/2029 5,524
2,810 (University of Miami), 5% due 4/01/2031 2,985
-------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Expressway Authority, Toll
System Revenue Bonds, Series B (h):
8,995 5.25% due 7/01/2027 9,852
10,375 5% due 7/01/2033 11,013
-------------------------------------------------------------------------------------------------
12,250 Miami-Dade County, Florida, Expressway Authority, Toll
System Revenue Refunding Bonds,
5.125% due 7/01/2025 (h) 13,188
-------------------------------------------------------------------------------------------------
6,705 Miami-Dade County, Florida, GO (Parks Program),
6% due 11/01/2024 (h) 7,460
-------------------------------------------------------------------------------------------------
2,185 Miami-Dade County, Florida, HFA, M/F Mortgage
Revenue Bonds (Marbrisa Apartments Project), AMT,
Series 2A, 6% due 8/01/2026 (c) 2,347
-------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, IDA, IDR (b):
5,100 (Airis Miami II LLC Project), AMT, 6% due 10/15/2019 5,617
3,280 (BAC Funding Corporation Project), Series A,
5.25% due 10/01/2020 3,586
-------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Solid Waste System
Revenue Bonds:
2,945 5.50% due 10/01/2015 (c) 3,279
3,105 5.50% due 10/01/2016 (c) 3,455
8,800 5.25% due 10/01/2030 (a) 9,713
-------------------------------------------------------------------------------------------------
Nassau County, Florida, Public Improvement Revenue
Refunding Bonds (a):
1,035 5.75% due 5/01/2016 1,159
1,095 5.75% due 5/01/2017 1,225
1,155 5.75% due 5/01/2018 1,291
1,225 5.75% due 5/01/2019 1,370
-------------------------------------------------------------------------------------------------
5,175 Nassau County, Florida, Water and Sewer System
Revenue Bonds, 5.125% due 9/01/2033 (a) 5,519
-------------------------------------------------------------------------------------------------
5 Orange County, Florida, HFA, Homeowner Revenue
Refunding Bonds, AMT, Series B-1,
6.20% due 9/01/2029 (d)(g) 5
-------------------------------------------------------------------------------------------------
2,375 Orange County, Florida, HFA, M/F Housing Revenue
Bonds, Series A, 6.40% due 1/01/2031 (a) 2,477
-------------------------------------------------------------------------------------------------
1,705 Orange County, Florida, HFA, S/F Mortgage Revenue
Bonds, AMT, 6.85% due 10/01/2027 (d)(g) 1,737
-------------------------------------------------------------------------------------------------
Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds:
2,900 (Adventist Health System), 6.25% due 11/15/2024 3,262
9,220 (Orlando Regional Healthcare), 6% due 12/01/2029 10,115
5,000 (Orlando Regional Healthcare), Series A,
6.25% due 10/01/2018 (a) 6,143
-------------------------------------------------------------------------------------------------
1,300 Orange County, Florida, School Board COP,
5.50% due 8/01/2025 (b) 1,409
-------------------------------------------------------------------------------------------------
Orange County, Florida, Tourist Development, Tax
Revenue Bonds (b):
31,745 5.75% due 10/01/2009 (j) 34,909
27,075 5.50% due 10/01/2032 29,816
-------------------------------------------------------------------------------------------------
Orlando and Orange County, Florida, Expressway
Authority Revenue Bonds, Series B (b):
3,250 5% due 7/01/2030 3,442
28,700 5% due 7/01/2035 30,296
-------------------------------------------------------------------------------------------------
Osceola County, Florida, Infrastructure Sales Surplus
Tax Revenue Bonds (b):
3,155 5.375% due 10/01/2018 3,504
7,680 5.25% due 10/01/2025 8,366
-------------------------------------------------------------------------------------------------
Osceola County, Florida, Sales Tax Revenue Bonds (h):
2,065 5.625% due 6/01/2016 2,319
1,605 5.625% due 6/01/2017 1,801
1,075 5.625% due 6/01/2018 1,205
-------------------------------------------------------------------------------------------------
10 ANNUAL REPORTS AUGUST 31, 2005
Schedule of Investments (continued)
MuniHoldings Florida Insured Fund (in Thousands)
Face
Amount Municipal Bonds Value
=================================================================================================
Florida (continued)
-------------------------------------------------------------------------------------------------
$ 4,240 Osceola County, Florida, School Board, COP, Series A,
5.25% due 6/01/2027 (b) $ 4,599
-------------------------------------------------------------------------------------------------
5,560 Osceola County, Florida, Tourist Development Tax
Revenue Bonds, Series A, 5.50% due 10/01/2027 (h) 6,160
-------------------------------------------------------------------------------------------------
Palm Beach County, Florida, GO (Liquid Acquisition
Program), Series B (a):
4,605 5.75% due 8/01/2016 5,082
5,330 5.75% due 8/01/2018 5,874
-------------------------------------------------------------------------------------------------
5,500 Palm Beach County, Florida, Public Improvement
Revenue Bonds (Convention Center Project),
5.625% due 11/01/2011 (h)(j) 6,204
-------------------------------------------------------------------------------------------------
6,115 Palm Beach County, Florida, School Board COP,
Refunding, Series B, 5.375% due 8/01/2017 (b) 6,769
-------------------------------------------------------------------------------------------------
Palm Beach County, Florida, School Board, COP,
Series A (h)(j):
5,070 6% due 8/01/2010 5,756
13,205 6.25% due 8/01/2010 15,141
-------------------------------------------------------------------------------------------------
2,070 Pembroke Pines, Florida, Public Improvement Revenue
Bonds, Series A, 5% due 10/01/2034 (b) 2,204
-------------------------------------------------------------------------------------------------
9,885 Polk County, Florida, School Board COP, Master Lease,
Series A, 5.50% due 1/01/2025 (c) 10,830
-------------------------------------------------------------------------------------------------
9,645 Pompano Beach, Florida, Water and Sewer Revenue
Bonds, 6% due 7/01/2020 (h) 10,231
-------------------------------------------------------------------------------------------------
3,000 Port St. Lucie, Florida, GO, 5% due 7/01/2032 (a) 3,208
-------------------------------------------------------------------------------------------------
Port St. Lucie, Florida, Utility Revenue Bonds (a):
1,280 5.25% due 9/01/2026 1,421
1,345 5.25% due 9/01/2027 1,477
-------------------------------------------------------------------------------------------------
Saint Johns County, Florida, IDA, IDR, Refunding
(Professional Golf Project) (a):
1,275 5.50% due 9/01/2015 1,430
1,345 5.50% due 9/01/2016 1,500
1,420 5.50% due 9/01/2017 1,582
1,500 5.50% due 9/01/2018 1,670
-------------------------------------------------------------------------------------------------
Saint Johns County, Florida, Sales Tax Revenue Bonds,
GO (b):
1,375 Series A, 5.25% due 10/01/2028 1,510
1,355 Series A, 5.25% due 10/01/2031 1,484
2,000 Series A, 5.25% due 10/01/2034 2,187
1,430 Series B, 5.25% due 10/01/2027 1,572
840 Series B, 5.25% due 10/01/2032 919
-------------------------------------------------------------------------------------------------
3,500 Saint Johns County, Florida, Transportation Improvement
Revenue Bonds, 5.125% due 10/01/2032 (b) 3,736
-------------------------------------------------------------------------------------------------
4,055 Saint Lucie County, Florida, School Board, COP,
6.25% due 7/01/2010 (c)(j) 4,641
-------------------------------------------------------------------------------------------------
Saint Lucie County, Florida, School Board COP,
Refunding (c):
1,495 Series A, 5.50% due 7/01/2018 1,660
1,170 Series C, 5.50% due 7/01/2018 1,299
-------------------------------------------------------------------------------------------------
Saint Lucie, Florida, West Services District, Utility
Revenue Bonds (a):
1,720 5.25% due 10/01/2034 (a) 1,893
4,750 5% due 10/01/2038 (a) 5,068
-------------------------------------------------------------------------------------------------
3,250 Saint Lucie, Florida, West Services District, Utility
Revenue Refunding Bonds, Senior Lien, 6% due 10/01/2022 (a) 3,693
-------------------------------------------------------------------------------------------------
1,750 South Lake County, Florida, Hospital District Revenue
Bonds (South Lake Hospital Inc.),
5.80% due 10/01/2034 1,843
-------------------------------------------------------------------------------------------------
Sunrise, Florida, Utility System Revenue Refunding
Bonds (b):
8,000 5.50% due 10/01/2018 9,257
2,250 5.20% due 10/01/2022 2,554
-------------------------------------------------------------------------------------------------
2,430 Sunrise Lakes, Florida, Phase 4 Recreation District,
Refunding Bonds, GO, 5.25% due 8/01/2024 (b) 2,541
-------------------------------------------------------------------------------------------------
Tallahassee, Florida, Lease Revenue Bonds (Florida
State University Project), Series A (a):
2,800 5.25% due 8/01/2023 3,000
1,000 5.375% due 8/01/2026 1,084
-------------------------------------------------------------------------------------------------
30,335 Tampa Bay, Florida, Water Utility System Revenue Bonds,
6% due 10/01/2011 (h)(j) 34,815
-------------------------------------------------------------------------------------------------
14,750 Tampa, Florida, Sports Authority Revenue Bonds
(Local Option Sales Tax--Stadium Project),
5.25% due 1/01/2027 (a) 15,245
-------------------------------------------------------------------------------------------------
3,835 Taylor County, Florida, Sales Tax Revenue Bonds,
6% due 10/01/2010 (h)(j) 4,335
-------------------------------------------------------------------------------------------------
University of Central Florida (UCF) Athletics
Association Inc., COP, Series A (a):
1,500 5% due 10/01/2030 1,597
8,935 5.25% due 10/01/2034 9,700
-------------------------------------------------------------------------------------------------
Village Center Community Development District,
Florida, Recreational Revenue Bonds, Series A (a):
4,155 5% due 11/01/2032 4,399
10,775 5.375% due 11/01/2034 11,951
1,750 5.125% due 11/01/2036 1,885
-------------------------------------------------------------------------------------------------
3,000 Village Center Community Development District, Florida,
Utility Revenue Bonds, 5.25% due 10/01/2023 (a) 3,336
-------------------------------------------------------------------------------------------------
10,185 Volusia County, Florida, Educational Facility Authority,
Educational Facilities Revenue Refunding Bonds
(Embry-Riddle Aeronautical University, Inc. Project),
5% due 10/15/2025 (k) 10,748
-------------------------------------------------------------------------------------------------
9,450 Winter Haven, Florida, Utility System Revenue Refunding
and Improvement Bonds, 5% due 10/01/2035 (a) 10,114
=================================================================================================
District of Columbia--0.4%
-------------------------------------------------------------------------------------------------
2,050 Metropolitan Washington Airports Authority, D.C.,
Airport System Revenue Bonds, AMT, Series A,
5.25% due 10/01/2032 (h) 2,159
=================================================================================================
Illinois--0.7%
-------------------------------------------------------------------------------------------------
3,685 Chicago, Illinois, O'Hare International Airport, General
Airport Revenue Bonds, Third Lien, AMT, Series D,
5% due 1/01/2034 (l) 3,822
=================================================================================================
Massachusetts--2.9%
-------------------------------------------------------------------------------------------------
15,700 Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A,
5% due 8/15/2030 (c) 16,805
ANNUAL REPORTS AUGUST 31, 2005 11
Schedule of Investments (concluded)
MuniHoldings Florida Insured Fund (in Thousands)
Face
Amount Municipal Bonds Value
=================================================================================================
Mississippi--0.7%
-------------------------------------------------------------------------------------------------
$ 4,000 Jackson, Mississippi, Municipal Airport Authority,
Airport Revenue Refunding Bonds, Series A, 5%
due 10/01/2031 (b) $ 4,227
=================================================================================================
Pennsylvania--1.4%
-------------------------------------------------------------------------------------------------
1,680 Delaware County, Pennsylvania, IDA, Water Facilities
Revenue Bonds (Aqua Pennsylvania Inc. Project), AMT,
Series A, 5% due 11/01/2037 (h) 1,758
-------------------------------------------------------------------------------------------------
5,700 Delaware County, Pennsylvania, IDA, Water Facilities
Revenue Refunding Bonds (Aqua Pennsylvania Inc.
Project), AMT, Series B, 5% due 11/01/2036 (h) 5,969
=================================================================================================
Texas--5.4%
-------------------------------------------------------------------------------------------------
30,000 San Antonio, Texas, Convention Center Hotel Finance
Corporation, Contract Revenue Empowerment Zone
Bonds, AMT, Series A, 5% due 7/15/2034 (b) 31,317
=================================================================================================
Puerto Rico--0.8%
-------------------------------------------------------------------------------------------------
1,580 Puerto Rico Electric Power Authority, Power Revenue
Bonds, Series RR, 5% due 7/01/2029 (l) 1,698
-------------------------------------------------------------------------------------------------
2,725 Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Revenue Bonds (University
Plaza Project), Series A, 5.625% due 7/01/2019 (a) 3,010
-------------------------------------------------------------------------------------------------
Total Municipal Bonds
(Cost--$865,038)--160.7% 926,828
=================================================================================================
Shares
Held Short-Term Securities
=================================================================================================
2,535 Merrill Lynch Institutional Tax-Exempt Fund (m) 2,535
-------------------------------------------------------------------------------------------------
Total Short-Term Securities
(Cost--$2,535)--0.4% 2,535
=================================================================================================
Total Investments (Cost--$867,573*)--161.1% 929,363
Other Assets Less Liabilities--1.9% 10,881
Preferred Shares, at Redemption Value--(63.0%) (363,313)
---------
Net Assets Applicable to Common Shares--100.0% $ 576,931
=========
* The cost and unrealized appreciation (depreciation) of investments as of
August 31, 2005, as computed for federal income tax purposes, were as
follows:
Aggregate cost .............................................. $868,208
========
Gross unrealized appreciation ............................... $ 61,187
Gross unrealized depreciation ............................... (32)
--------
Net unrealized appreciation ................................. $ 61,155
========
(a) MBIA Insured.
(b) AMBAC Insured.
(c) FSA Insured.
(d) GNMA Collateralized.
(e) FHLMC Collateralized.
(f) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(g) FNMA Collateralized.
(h) FGIC Insured.
(i) FHA Insured.
(j) Prerefunded.
(k) Radian Insured.
(l) CIFG Insured.
(m) Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
--------------------------------------------------------------------------
Net Dividend
Affiliate Activity Income
--------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund (7,800) $244
--------------------------------------------------------------------------
Forward interest rate swaps outstanding as of August 31, 2005 were as
follows:
--------------------------------------------------------------------------
Notional Unrealized
Amount Depreciation
--------------------------------------------------------------------------
Receive a variable rate equal to 7-Day
Bond Market Association Municipal
Swap Index Rate and pay a fixed
rate equal to 3.647%
Broker, JPMorgan Chase Bank
Expires October 2015 $65,000 $(961)
--------------------------------------------------------------------------
See Notes to Financial Statements.
12 ANNUAL REPORTS AUGUST 31, 2005
Schedule of Investments
MuniHoldings New York Insured Fund, Inc. (in Thousands)
Face
Amount Municipal Bonds Value
=================================================================================================
New York--143.6%
-------------------------------------------------------------------------------------------------
Albany County, New York, Airport Authority, Airport
Revenue Bonds, AMT (d):
$ 1,500 5.375% due 12/15/2017 $ 1,589
1,500 5.50% due 12/15/2019 1,594
5,200 6% due 12/15/2023 5,602
-------------------------------------------------------------------------------------------------
3,375 Albany, New York, IDA, Civic Facility Revenue Bonds
(The University Heights Association--Albany Law
School), Series A, 6.75% due 12/01/2029 (l) 3,822
-------------------------------------------------------------------------------------------------
1,000 Albany, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Refunding Bonds,
Series A, 6.375% due 12/01/2009 (b)(f) 1,140
-------------------------------------------------------------------------------------------------
Buffalo, New York, GO, Series D (d):
1,000 6% due 12/01/2009 (f) 1,126
1,000 6% due 12/01/2013 1,117
-------------------------------------------------------------------------------------------------
1,025 Erie County, New York, GO, Public Improvement, Series A,
5.75% due 10/01/2013 (b) 1,131
-------------------------------------------------------------------------------------------------
Erie County, New York, IDA, School Facility Revenue
Bonds (City of Buffalo Project) (d):
2,500 5.75% due 5/01/2019 2,833
5,150 5.75% due 5/01/2024 5,676
-------------------------------------------------------------------------------------------------
Long Island Power Authority, New York, Electric System
Revenue Bonds:
3,000 Series A, 5% due 9/01/2029 (a) 3,199
5,950 Series A, 5% due 9/01/2034 (a) 6,317
1,045 Series C, 5% due 9/01/2033 (j) 1,101
-------------------------------------------------------------------------------------------------
540 Metropolitan Transportation Authority, New York,
Commuter Facilities Revenue Refunding Bonds,
Series D, 5.125% due 7/01/2022 (e)(i) 560
-------------------------------------------------------------------------------------------------
7,280 Metropolitan Transportation Authority, New York,
Dedicated Tax Fund Revenue Bonds, Series A,
5% due 11/15/2011 (b)(f) 8,001
-------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York,
Revenue Bonds :
2,700 Series A, 5% due 11/15/2033 (a) 2,885
2,500 Series A, 4.50% due 11/15/2034 (a) 2,522
2,000 Series B, 5% due 11/15/2035 (e) 2,137
-------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York,
Revenue Refunding Bonds:
3,000 RIB, Series 724X, 8.77% due 11/15/2032 (d)(g) 3,804
2,500 Series A, 5.25% due 11/15/2031 (b) 2,731
29,000 Series A, 5.75% due 11/15/2032 (d) 32,885
1,500 Series B, 5% due 11/15/2028 (e) 1,594
-------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Service
Contract Revenue Refunding Bonds, Series A (b):
3,500 5% due 7/01/2021 3,766
2,000 5% due 7/01/2025 2,142
-------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Transit
Facilities Revenue Bonds:
2,500 Series A, 5% due 11/15/2032 (b) 2,641
2,535 Series C, 4.75% due 7/01/2012 (d)(f) 2,757
1,000 Series C-1, 5.50% due 7/01/2008 (e)(f) 1,074
-------------------------------------------------------------------------------------------------
6,300 Metropolitan Transportation Authority, New York,
Transportation Revenue Refunding Bonds, Series F,
5.25% due 11/15/2027 (e)(f) 6,883
-------------------------------------------------------------------------------------------------
2,385 Monroe Woodbury, New York, Central School District,
GO, 5.625% due 5/15/2006 (e) 2,480
-------------------------------------------------------------------------------------------------
1,410 Montgomery County, New York, IDA, Lease Revenue
Bonds (Hamilton Fulton Montgomery Board of
Cooperative Educational Services Project), Series A,
5% due 7/01/2034 (k) 1,487
-------------------------------------------------------------------------------------------------
Nassau County, New York, Interim Finance Authority,
Sales Tax Secured Revenue Refunding Bonds,
Series A-2 (a):
460 5.375% due 11/15/2013 478
135 5.375% due 11/15/2014 140
-------------------------------------------------------------------------------------------------
5,210 Nassau Health Care Corporation, New York, Health
System Revenue Bonds, 5.75% due 8/01/2009 (d)(f)(n) 5,824
-------------------------------------------------------------------------------------------------
705 New York City, New York, City Health and Hospital
Corporation, Health System Revenue Bonds, Series A,
5.375% due 2/15/2026 740
-------------------------------------------------------------------------------------------------
2,000 New York City, New York, City Health and Hospital
Corporation, Health System Revenue Refunding Bonds,
Series A, 5.25% due 2/15/2017 (e) 2,146
-------------------------------------------------------------------------------------------------
2,340 New York City, New York, City Housing Development
Corporation, M/F Housing Revenue Bonds, AMT,
Series H-2, 5.125% due 11/01/2034 2,388
-------------------------------------------------------------------------------------------------
885 New York City, New York, City IDA, Civic Facility Revenue
Bonds (Anti-Defamation League Foundation), Series A,
5.50% due 6/01/2022 (e) 940
-------------------------------------------------------------------------------------------------
1,200 New York City, New York, City IDA, Civic Facility Revenue
Refunding Bonds (Nightingale-Bamford School),
5.25% due 1/15/2017 (a) 1,329
-------------------------------------------------------------------------------------------------
13,625 New York City, New York, City IDA, IDR (Japan Airlines
Company), AMT, 6% due 11/01/2015 (d) 14,205
-------------------------------------------------------------------------------------------------
7,965 New York City, New York, City IDA, Parking Facility
Revenue Bonds (Royal Charter--New York
Presbyterian), 5.75% due 12/15/2029 (d) 9,096
-------------------------------------------------------------------------------------------------
5,000 New York City, New York, City IDA, Special Facilities
Revenue Bonds (Terminal One Group Association Project),
AMT, 6.125% due 1/01/2024 (e) 5,075
-------------------------------------------------------------------------------------------------
ANNUAL REPORTS AUGUST 31, 2005 13
Schedule of Investments (continued)
MuniHoldings New York Insured Fund, Inc. (in Thousands)
Face
Amount Municipal Bonds Value
=================================================================================================
New York (continued)
-------------------------------------------------------------------------------------------------
$ 500 New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System, Crossover Revenue
Refunding Bonds, Series F, 5% due 6/15/2029 (d) $ 523
-------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System Revenue Bonds:
11,500 RIB, Series 726X, 8.77% due 6/15/2027 (e)(g) 14,413
2,850 Series A, 5.75% due 6/15/2009 (b)(f) 3,154
3,970 Series B, 5.75% due 6/15/2006 (e)(f) 4,101
11,000 Series B, 5.75% due 6/15/2007 (e)(f) 11,661
900 VRDN, Series C, 2.30% due 6/15/2023 (b)(h) 900
-------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System, Revenue
Refunding Bonds (e):
1,250 Series A, 5.125% due 6/15/2034 1,339
7,380 Series B, 5.75% due 6/15/2026 7,611
-------------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance
Authority, Future Tax Secured Revenue Bonds:
1,145 Series B, 5.50% due 2/01/2012 (e) 1,273
805 Series B, 5.50% due 2/01/2013 (e) 895
6,405 Series B, 6.25% due 11/15/2018 (b) 7,342
1,990 Series C, 5.50% due 5/01/2009 (f) 2,180
1,180 Series C, 5.50% due 5/01/2025 1,273
16,200 Series C, 5% due 2/01/2033 (b) 17,146
2,500 Series E, 5.25% due 2/01/2022 (e) 2,759
-------------------------------------------------------------------------------------------------
1,000 New York City, New York, City Transitional Finance
Authority Revenue Refunding Bonds, Series A,
5% due 11/15/2026 (b) 1,059
-------------------------------------------------------------------------------------------------
New York City, New York, GO:
4,750 RIB, Series 725X, 8.77% due 3/15/2027 (d)(g) 5,925
4,500 Series B, 5.75% due 8/01/2013 (e) 5,032
3,750 Series D, 5.25% due 10/15/2023 4,056
2,500 Series D, 5% due 11/01/2026 2,643
5,000 Series D, 5% due 11/01/2034 5,255
1,725 Series I, 6.25% due 4/15/2007 (e)(f) 1,835
125 Series I, 6.25% due 4/15/2027 (e) 132
8,000 Series J, 5% due 5/15/2023 8,468
8,000 Series M, 5% due 4/01/2035 8,423
1,150 Sub-Series C-1, 5.25% due 8/15/2026 1,245
-------------------------------------------------------------------------------------------------
New York City, New York, GO, Refunding, Series A:
880 6.375% due 5/15/2010 (b)(f) 1,013
120 6.375% due 5/15/2013 (b) 137
3,700 6.25% due 5/15/2026 (d) 4,192
-------------------------------------------------------------------------------------------------
New York City, New York, IDA, Civic Facility Revenue
Bonds (Ethical Culture Fieldston School Project),
Sub-Series B-1 (k):
5,000 4.50% due 6/01/2035 5,043
4,095 5% due 6/01/2035 4,395
-------------------------------------------------------------------------------------------------
New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds (a):
1,250 DRIVERS, Series 884-Z, 7.373% due 10/15/2012 (g) 1,505
5,855 Series A, 5% due 10/15/2029 6,275
25,250 Series A, 5% due 10/15/2032 26,928
1,745 Series A, 4.50% due 10/15/2033 1,766
-------------------------------------------------------------------------------------------------
3,950 New York City, New York, Trust for Cultural Resources,
Revenue Refunding Bonds (American Museum of
Natural History), Series A, 5% due 7/01/2036 (e) 4,208
-------------------------------------------------------------------------------------------------
2,300 New York State Dormitory Authority, Hospital Revenue
Bonds (New York Methodist Hospital), Series A,
6.05% due 8/01/2006 (a)(c)(f) 2,412
-------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Hospital Revenue
Refunding Bonds:
1,000 (New York Presbyterian Hospital),
5.50% due 8/01/2011 (a)(c) 1,108
2,000 (North General Hospital), 5.75% due 2/15/2017 (k) 2,273
-------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Lease
Revenue Bonds:
1,535 (Municipal Health Facilities Improvement Program),
Series 1, 5.50% due 1/15/2014 (d) 1,696
645 (Office Facilities Audit and Control),
5.50% due 4/01/2023 (e) 701
-------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Mental Health
Services Facilities Improvement, Revenue Bonds,
Series B (a):
2,500 5% due 2/15/2030 2,665
2,500 5% due 2/15/2035 2,657
-------------------------------------------------------------------------------------------------
2,850 New York State Dormitory Authority, Non-State
Supported Debt, Revenue Refunding Bonds (School
Districts Bond Financing Program), Series C, 5%
due 4/01/2035 (e) 3,035
-------------------------------------------------------------------------------------------------
New York State Dormitory Authority Revenue Bonds:
1,340 (853 Schools Program), Issue 2, Series E,
5.75% due 7/01/2019 (a) 1,477
1,200 (Cooper Union of Advance Science),
6.25% due 7/01/2029 (e) 1,338
2,058 (Gustavus Adolphus Child & Family Services, Inc.),
Series B, 5.50% due 7/01/2018 (a) 2,248
6,750 (Interfaith Medical Center), Series D,
5.40% due 2/15/2028 (e) 7,175
1,585 (Long Island University), Series B,
5.50% due 9/01/2020 (l) 1,731
1,250 (Long Island University), Series B,
5.25% due 9/01/2028 (l) 1,335
1,180 (New York State Rehabilitation Association),
Series A, 5.25% due 7/01/2019 (j) 1,297
1,000 (New York State Rehabilitation Association),
Series A, 5.125% due 7/01/2023 (j) 1,070
5,345 (Pace University), 6% due 7/01/2010 (e)(f) 6,076
2,150 (Saint Barnabas Hospital),
5.45% due 8/01/2035 (a)(c) 2,263
1,240 (School Districts Financing Program), Series D,
5% due 10/01/2030 (e) 1,306
6,900 (School Districts Financing Program), Series E,
5.75% due 10/01/2030 (e) 7,811
1,400 (State University Educational Facilities), Series B,
5.75% due 5/15/2010 (d)(f) 1,572
1,595 (Upstate Community Colleges), Series A,
6% due 7/01/2010 (d)(f) 1,813
-------------------------------------------------------------------------------------------------
14 ANNUAL REPORTS AUGUST 31, 2005
Schedule of Investments (continued)
MuniHoldings New York Insured Fund, Inc. (in Thousands)
Face
Amount Municipal Bonds Value
=================================================================================================
New York (continued)
-------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Revenue
Refunding Bonds:
$ 3,700 (Bronx-Lebanon Hospital Center), Series E,
5.20% due 2/15/2013 (e) $ 3,918
1,865 (City University System), Series 1,
5.25% due 7/01/2014 (b) 1,989
3,400 (Saint Charles Hospital and Rehabilitation Center),
Series A, 5.625% due 7/01/2012 (e) 3,688
1,370 (School District Financing Program), Series I,
5.75% due 10/01/2018 (e) 1,563
4,485 Series B, 5.50% due 2/15/2007 (e)(f) 4,736
-------------------------------------------------------------------------------------------------
6,500 New York State Dormitory Authority, State University
Educational Facilities Revenue Refunding Bonds
(1989 Resources), 6% due 5/15/2012 (e) 7,322
-------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Supported Debt
Revenue Bonds (Mental Health Facilities):
1,550 Series B, 5.25% due 2/15/2014 (f) 1,739
285 Series B, 5.25% due 2/15/2023 309
1,060 Series D, 5.875% due 8/15/2010 (d)(f) 1,193
40 Series D, 5.875% due 2/15/2015 (d) 45
-------------------------------------------------------------------------------------------------
1,000 New York State Dormitory Authority, Supported Debt
Revenue Refunding Bonds (Department of Health),
Series A, 5% due 7/01/2025 (j) 1,072
-------------------------------------------------------------------------------------------------
6,000 New York State Energy Research and Development
Authority, PCR, Refunding (Central Hudson Gas and
Electric), Series A, 5.45% due 8/01/2027 (a) 6,497
-------------------------------------------------------------------------------------------------
6,000 New York State Environmental Facilities Corporation,
Water Facilities Revenue Bonds (Long Island Water Corp.
Project), AMT, Series A, 4.90% due 10/01/2034 (e) 6,164
-------------------------------------------------------------------------------------------------
4,400 New York State Environmental Facilities Corporation,
Water Facilities Revenue Refunding Bonds (Spring Valley
Water Company), Series B, 6.15% due 8/01/2024 (a) 4,456
-------------------------------------------------------------------------------------------------
New York State, HFA, Revenue Refunding Bonds, Series A:
2,000 (Fulton Manor), 6.10% due 11/15/2025 (a)(c) 2,058
1,560 (Housing Mortgage Project)
6.10% due 11/01/2015 (d) 1,627
-------------------------------------------------------------------------------------------------
750 New York State Housing Finance Agency, State Personal
Income Tax Revenue Bonds (Economic Development and
Housing), Series A, 5% due 9/15/2023 (e) 803
-------------------------------------------------------------------------------------------------
New York State Housing Finance Agency, State Personal
Income Tax, Revenue Refunding Bonds (Economic
Development and Housing), Series A (b):
2,000 5% due 9/15/2030 2,123
1,000 5% due 9/15/2034 1,058
-------------------------------------------------------------------------------------------------
6,800 New York State Medical Care Facilities Finance Agency,
Revenue Bonds (Montefiore Medical Center), Series A,
5.75% due 2/15/2025 (a)(c) 6,982
-------------------------------------------------------------------------------------------------
2,805 New York State Mortgage Agency, Homeowner
Mortgage Revenue Bonds, AMT, Series 84,
5.90% due 4/01/2022 (e) 2,912
-------------------------------------------------------------------------------------------------
New York State Mortgage Agency, Homeowner
Mortgage Revenue Refunding Bonds:
2,140 AMT, Series 67, 5.70% due 10/01/2017 (e) 2,208
13,285 AMT, Series 67, 5.80% due 10/01/2028 (e) 13,550
1,000 Series 61, 5.80% due 10/01/2017 1,042
2,100 Series 83, 5.55% due 10/01/2027 (e) 2,182
-------------------------------------------------------------------------------------------------
New York State Mortgage Agency Revenue Bonds,
AMT, Series 27:
3,500 5.80% due 10/01/2020 3,651
5,700 5.875% due 4/01/2030 (e) 5,963
-------------------------------------------------------------------------------------------------
1,285 New York State Mortgage Agency, Revenue Refunding
Bonds, AMT, Series 82, 5.65% due 4/01/2030 (e) 1,321
-------------------------------------------------------------------------------------------------
New York State Municipal Bond Bank Agency, Special
School Purpose Revenue Bonds, Series C:
2,000 5.25% due 6/01/2019 2,176
3,900 5.25% due 6/01/2020 4,274
-------------------------------------------------------------------------------------------------
5,000 New York State Thruway Authority, General Revenue
Bonds, Series F, 5% due 1/01/2030 (a) 5,334
-------------------------------------------------------------------------------------------------
8,000 New York State Thruway Authority, Highway and
Bridge Trust Fund Revenue Bonds, Series B-1,
5.75% due 4/01/2010 (b)(f) 8,965
-------------------------------------------------------------------------------------------------
3,000 New York State Thruway Authority, Highway and Bridge
Trust Fund, Second General Revenue Refunding Bonds,
Series B, 5% due 4/01/2021 (a) 3,270
-------------------------------------------------------------------------------------------------
3,095 New York State Thruway Authority, Local Highway and
Bridge Service Contract, Revenue Refunding Bonds,
6% due 4/01/2012 (e) 3,301
-------------------------------------------------------------------------------------------------
3,045 New York State Thruway Authority, Second General
Highway and Bridge Trust Fund Revenue Bonds, Series A,
5.25% due 4/01/2013 (e)(f) 3,421
-------------------------------------------------------------------------------------------------
3,000 New York State Urban Development Corporation,
Personal Income Tax Revenue Bonds, Series C-1,
5% due 3/15/2013 (e)(f) 3,319
-------------------------------------------------------------------------------------------------
1,000 Niagara Falls, New York, City School District, COP,
Refunding (High School Facility), 5% due 6/15/2028 (d) 1,064
-------------------------------------------------------------------------------------------------
1,700 Oneida County, New York, IDA, Civic Facilities Revenue
Bonds (Mohawk Valley), Series A, 5.20%
due 2/01/2013 (d) 1,807
-------------------------------------------------------------------------------------------------
1,800 Oneida-Herkimer, New York, Solid Waste
Management Authority, Solid Waste Revenue Refunding
Bonds, 5.50% due 4/01/2013 (d) 2,017
-------------------------------------------------------------------------------------------------
2,500 Port Authority of New York and New Jersey,
Consolidated Revenue Bonds, AMT, 137th Series,
5.125% due 7/15/2030 (d) 2,681
-------------------------------------------------------------------------------------------------
5,000 Port Authority of New York and New Jersey,
Consolidated Revenue Refunding Bonds, 132nd Series,
5% due 9/01/2033 (j) 5,319
-------------------------------------------------------------------------------------------------
ANNUAL REPORTS AUGUST 31, 2005 15
Schedule of Investments (continued)
MuniHoldings New York Insured Fund, Inc. (in Thousands)
Face
Amount Municipal Bonds Value
=================================================================================================
New York (concluded)
-------------------------------------------------------------------------------------------------
$ 6,000 Port Authority of New York and New Jersey, Revenue
Refunding Bonds, DRIVERS, AMT, Series 177,
9.189% due 10/15/2032 (e)(g) $ 6,787
-------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey, Special
Obligation Revenue Bonds, AMT (e):
13,365 DRIVERS, Series 278, 8.678% due 12/01/2022 (g) 15,256
3,000 (JFK International Air Terminal LLC), Series 6,
6.25% due 12/01/2011 3,399
7,830 (JFK International Air Terminal LLC), Series 6,
6.25% due 12/01/2015 9,141
7,000 (JFK International Air Terminal LLC), Series 6,
5.90% due 12/01/2017 7,529
-------------------------------------------------------------------------------------------------
2,340 Rome, New York, City School District, GO,
5.50% due 6/15/2009 (d)(f) 2,562
-------------------------------------------------------------------------------------------------
5,000 Schenectady, New York, IDA, Civic Facility Revenue
Bonds (Union College Project), Series A, 5.45%
due 12/01/2029 (a) 5,486
-------------------------------------------------------------------------------------------------
3,000 Schenectady, New York, IDA, Civic Facility Revenue
Refunding Bonds (Union College Project), Series A,
5.625% due 7/01/2031 (a) 3,374
-------------------------------------------------------------------------------------------------
4,355 Suffolk County, New York, IDA, IDR (Keyspan--Port
Jefferson), AMT, 5.25% due 6/01/2027 4,556
-------------------------------------------------------------------------------------------------
Suffolk County, New York, IDA, Solid Waste Disposal
Facility, Revenue Refunding Bonds (Ogden Martin System
Huntington Project), AMT (a):
4,660 6% due 10/01/2010 5,215
5,000 6.15% due 10/01/2011 5,708
3,530 6.25% due 10/01/2012 4,098
-------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corporation of New York
Revenue Bonds:
5,000 Series A-1, 5.25% due 6/01/2020 (a) 5,497
20,275 Series A-1, 5.25% due 6/01/2021 (a) 22,217
2,000 Series A-1, 5.25% due 6/01/2022 (a) 2,185
3,700 Series C-1, 5.50% due 6/01/2021 4,095
-------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York,
Revenue Refunding Bonds (e):
12,000 5.25% due 11/15/2023 13,174
8,315 5% due 11/15/2032 8,736
2,095 Series A, 5% due 1/01/2012 (f) 2,298
405 Series A, 5% due 1/01/2032 424
1,500 Series B, 5% due 11/15/2032 1,576
-------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York,
Subordinate Revenue Bonds:
2,465 5% due 11/15/2028 (a) 2,620
6,000 Series A, 5.25% due 11/15/2030 (e) 6,515
-------------------------------------------------------------------------------------------------
7,000 Westchester County, New York, IDA, Civic Facility
Revenue Bonds (Purchase College Foundation Housing
Project), Series A, 5.75% due 12/01/2031 (a) 7,990
-------------------------------------------------------------------------------------------------
5,000 Yonkers, New York, GO, Refunding, Series B,
5% due 8/01/2035 (e) 5,321
-------------------------------------------------------------------------------------------------
1,795 Yonkers, New York, GO, Series A, 5.75%
due 10/01/2010 (b) 2,030
=================================================================================================
Guam--1.1%
-------------------------------------------------------------------------------------------------
A.B. Won Guam International Airport Authority, General
Revenue Refunding Bonds, AMT, Series C (e):
3,700 5.25% due 10/01/2021 3,965
1,050 5.25% due 10/01/2022 1,125
=================================================================================================
Puerto Rico--19.3%
-------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth, Highway and
Transportation Authority, Transportation Revenue Bonds:
4,800 5.25% due 7/01/2017 (b) 5,364
1,250 Trust Receipts, Class R, Series B,
8.912% due 7/01/2035 (e)(g) 1,556
-------------------------------------------------------------------------------------------------
15,495 Puerto Rico Commonwealth, Highway and
Transportation Authority, Transportation Revenue
Refunding Bonds, Series D, 5.75% due 7/01/2041 17,347
-------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth, Infrastructure Financing
Authority, Special Tax and Capital Appreciation Revenue
Bonds, Series A:
11,780 4.62%** due 7/01/2031 (b) 3,701
5,500 4.66%** due 7/01/2033 (b) 1,566
9,300 4.66%** due 7/01/2034 (a) 2,532
6,700 4.67%** due 7/01/2037 (a) 1,578
-------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth, Infrastructure Financing
Authority, Special Tax Revenue Bonds, Series B:
6,750 5% due 7/01/2041 7,107
4,750 5% due 7/01/2041 (j) 5,041
-------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth, Public Improvement,
GO, Series A:
4,600 5.25% due 7/01/2019 4,993
7,475 5.25% due 7/01/2020 8,103
-------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority, Power
Revenue Bonds:
4,750 Series NN, 5.125% due 7/01/2029 5,101
4,850 Series RR, 5% due 7/01/2029 (j) 5,212
4,950 Series RR, 5% due 7/01/2030 (k) 5,307
7,000 Series RR, 5% due 7/01/2035 (b) 7,523
-------------------------------------------------------------------------------------------------
4,100 Puerto Rico Public Buildings Authority, Government
Facilities, Revenue Refunding Bonds, Series J,
5% due 7/01/2036 (a) 4,486
-------------------------------------------------------------------------------------------------
5,600 Puerto Rico Public Finance Corporation Revenue Bonds,
DRIVERS, Series 272, 8.567% due 8/01/2030 (g) 6,043
-------------------------------------------------------------------------------------------------
Total Municipal Bonds
(Cost--$743,363)--164.0% 784,679
-------------------------------------------------------------------------------------------------
Shares
Held Short-Term Securities
=================================================================================================
43 CMA New York Municipal Money Fund (m) 43
-------------------------------------------------------------------------------------------------
Total Short-Term Securities (Cost--$43)--0.0% 43
=================================================================================================
Total Investments (Cost--$743,406*)--164.0% 784,722
Other Assets Less Liabilities--1.4% 6,721
Preferred Stock, at Redemption Value--(65.4%) (313,030)
---------
Net Assets Applicable to Common Stock--100.0% $ 478,413
=========
16 ANNUAL REPORTS AUGUST 31, 2005
Schedule of Investments (concluded)
MuniHoldings New York Insured Fund, Inc. (in Thousands)
* The cost and unrealized appreciation (depreciation) of investments as of
August 31, 2005, as computed for federal income tax purposes, were as
follows:
Aggregate cost .............................................. $743,315
========
Gross unrealized appreciation ............................... $ 41,446
Gross unrealized depreciation ............................... (39)
--------
Net unrealized appreciation ................................. $ 41,407
========
** Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase by the Fund.
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FHA Insured.
(d) FSA Insured.
(e) MBIA Insured.
(f) Prerefunded.
(g) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(h) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(i) Escrowed to maturity.
(j) CIFG Insured.
(k) XL Capital Insured.
(l) Radian Insured.
(m) Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
--------------------------------------------------------------------------
Net Dividend
Affiliate Activity Income
--------------------------------------------------------------------------
CMA New York Municipal Money Fund 15 $15
--------------------------------------------------------------------------
(n) All or a portion of security held as collateral in connection with open
financial futures contracts.
Financial futures contracts sold as of August 31, 2005 were as follows:
--------------------------------------------------------------------------
Number of Expiration Face Unrealized
Contracts Issue Date Value Depreciation
--------------------------------------------------------------------------
510 Ten-Year U.S. September
Treasury Bond 2005 $57,294 $(296)
--------------------------------------------------------------------------
See Notes to Financial Statements.
ANNUAL REPORTS AUGUST 31, 2005 17
Statements of Net Assets
MuniHoldings MuniHoldings
Florida New York
Insured Insured
As of August 31, 2005 Fund Fund, Inc.
===========================================================================================================================
Assets
---------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value* ............... $ 926,827,502 $ 784,679,319
Investments in affiliated securities, at value** ................ 2,535,265 43,144
Cash ............................................................ 47,714 43,875
Interest receivable ............................................. 14,230,904 10,669,214
Receivable for securities sold .................................. 1,365,000 3,241,290
Dividend receivable from affiliates ............................. 160 2
Prepaid expenses and other assets ............................... 3,102 3,455
-------------------------------
Total assets .................................................... 945,009,647 798,680,299
-------------------------------
===========================================================================================================================
Liabilities
---------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on forward interest rate swaps .......... 961,415 --
Payable for securities purchased ................................ 3,385,683 6,451,680
Payable to investment adviser ................................... 316,645 263,174
Payable for other affiliates .................................... 11,283 6,992
Variation margin payable ........................................ -- 239,063
Dividends payable to Common Stock shareholders/Common
Shareholders ................................................... -- 185,820
Accrued expenses and other liabilities .......................... 90,692 90,046
-------------------------------
Total liabilities ............................................... 4,765,718 7,236,775
-------------------------------
===========================================================================================================================
Preferred Stock/Shares
---------------------------------------------------------------------------------------------------------------------------
Preferred Stock/Shares, at redemption value, par value
$.10 per share of AMPS@ at $25,000 per share
liquidation preference*** ...................................... 363,313,216 313,030,057
-------------------------------
===========================================================================================================================
Net Assets Applicable to Common Stock/Shares
---------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common Stock/Shares .................... $ 576,930,713 $ 478,413,467
===============================
===========================================================================================================================
Analysis of Net Assets Applicable to Common Stock/Shares
---------------------------------------------------------------------------------------------------------------------------
Undistributed investment income--net ............................ $ 6,553,712 $ 5,288,059
Accumulated realized capital losses--net ........................ (65,217,752) (45,875,805)
Unrealized appreciation--net .................................... 60,827,905 41,020,636
-------------------------------
Total accumulated earnings--net ................................. 2,163,865 432,890
-------------------------------
Common Stock/Shares, par value $.10 per share+ .................. 3,766,315 3,078,462
Paid-in capital in excess of par ................................ 571,000,533 474,902,115
-------------------------------
Net Assets ...................................................... $ 576,930,713 $ 478,413,467
===============================
18 ANNUAL REPORTS AUGUST 31, 2005
Statements of Net Assets (concluded)
MuniHoldings MuniHoldings
Florida New York
Insured Insured
As of August 31, 2005 Fund Fund, Inc.
===========================================================================================================================
Net Assets Value
---------------------------------------------------------------------------------------------------------------------------
Net assets value per share of Common Stock/Shares ............... $ 15.32 $ 15.54
===============================
Market price .................................................... $ 15.75 $ 15.28
===============================
* Identified cost for unaffiliated securities ................ $ 865,038,182 $ 743,362,416
===============================
** Identified cost for affiliated securities .................. $ 2,535,265 $ 43,144
===============================
*** Preferred Stock/Shares authorized, issued and
outstanding:
Series A Stock/Shares ................................... 2,095 1,900
===============================
Series B Stock/Shares ................................... 3,495 1,900
===============================
Series C Stock/Shares ................................... 3,440 3,040
===============================
Series D Stock/Shares ................................... 2,160 3,680
===============================
Series E Stock/Shares ................................... 3,340 2,000
===============================
+ Common Stock/Shares issued and outstanding ................. 37,663,153 30,784,615
===============================
@ Auction Market Preferred Stock/Shares.
See Notes to Financial Statements.
ANNUAL REPORTS AUGUST 31, 2005 19
Statements of Operations
MuniHoldings MuniHoldings
Florida New York
Insured Insured
For the Year Ended August 31, 2005 Fund Fund, Inc.
===========================================================================================================================
Investment Income
---------------------------------------------------------------------------------------------------------------------------
Interest and amortization of premium and discount earned ........ $ 47,207,236 $ 37,380,917
Dividends from affiliates ....................................... 243,721 14,829
-------------------------------
Total income .................................................... 47,450,957 37,395,746
-------------------------------
===========================================================================================================================
Expenses
---------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ........................................ 5,173,879 4,340,557
Commission fees ................................................. 925,660 795,786
Accounting services ............................................. 271,846 243,431
Transfer agent fees ............................................. 97,001 90,372
Professional fees ............................................... 59,787 55,679
Printing and shareholder reports ................................ 47,547 43,802
Custodian fees .................................................. 45,015 41,670
Directors'/Trustees' fees and expenses .......................... 33,540 33,643
Pricing fees .................................................... 28,496 29,977
Listing fees .................................................... 26,757 21,891
Other ........................................................... 12,249 48,989
-------------------------------
Total expenses before waiver and reimbursement .................. 6,721,777 5,745,797
Waiver and reimbursement of expenses ............................ (336,823) (325,291)
-------------------------------
Total expenses after waiver and reimbursement ................... 6,384,954 5,420,506
-------------------------------
Investment income--net .......................................... 41,066,003 31,975,240
-------------------------------
===========================================================================================================================
Realized & Unrealized Gain (Loss)--Net
---------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments--net ............................................. 3,844,199 3,355,550
Futures contracts and/or forward interest rate swaps--net .... (5,769,147) (5,732,569)
-------------------------------
Total realized loss--net ........................................ (1,924,948) (2,377,019)
-------------------------------
Change in unrealized appreciation/depreciation on:
Investments--net ............................................. 1,657,775 5,334,606
Futures contracts and/or forward interest rate swaps--net .... 1,653,871 3,505,740
-------------------------------
Total change in unrealized appreciation/depreciation--net ....... 3,311,646 8,840,346
-------------------------------
Total realized and unrealized gain--net ......................... 1,386,698 6,463,327
-------------------------------
===========================================================================================================================
Dividends to Preferred Stock Shareholders/Preferred Shareholders
---------------------------------------------------------------------------------------------------------------------------
Investment income--net .......................................... (6,626,611) (5,197,939)
-------------------------------
Net Increase in Net Assets Resulting from Operations ............ $ 35,826,090 $ 33,240,628
===============================
See Notes to Financial Statements.
20 ANNUAL REPORTS AUGUST 31, 2005
Statements of Changes in Net Assets MuniHoldings Florida Insured Fund
For the Year Ended
August 31,
-------------------------------
Increase (Decrease) in Net Assets: 2005 2004
===========================================================================================================================
Operations
---------------------------------------------------------------------------------------------------------------------------
Investment income--net .......................................... $ 41,066,003 $ 41,889,397
Realized loss--net .............................................. (1,924,948) (7,608,498)
Change in unrealized appreciation/depreciation--net ............. 3,311,646 19,399,334
Dividends to Preferred Shareholders ............................. (6,626,611) (3,460,330)
-------------------------------
Net increase in net assets resulting from operations ............ 35,826,090 50,219,903
-------------------------------
===========================================================================================================================
Dividends to Common Shareholders
---------------------------------------------------------------------------------------------------------------------------
Investment income--net .......................................... (37,933,871) (37,703,849)
-------------------------------
Net decrease in net assets resulting from dividends to Common
Shareholders ................................................... (37,933,871) (37,703,849)
-------------------------------
===========================================================================================================================
Capital Share Transactions
---------------------------------------------------------------------------------------------------------------------------
Value of shares issued to Common Shareholders in reinvestment
of dividends ................................................... 529,463 --
-------------------------------
===========================================================================================================================
Net Assets Applicable to Common Shares
---------------------------------------------------------------------------------------------------------------------------
Total increase/decrease in net assets applicable to Common
Shares ......................................................... (1,578,318) 12,516,054
Beginning of year ............................................... 578,509,031 565,992,977
-------------------------------
End of year* .................................................... $ 576,930,713 $ 578,509,031
===============================
* Undistributed investment income--net ....................... $ 6,553,712 $ 10,048,191
===============================
MuniHoldings New York Insured Fund, Inc.
For the Year Ended
August 31,
-------------------------------
2005 2004
===========================================================================================================================
Operations
---------------------------------------------------------------------------------------------------------------------------
Investment income--net .......................................... $ 31,975,240 $ 32,292,063
Realized loss--net .............................................. (2,377,019) (8,733,114)
Change in unrealized appreciation/depreciation--net ............. 8,840,346 14,608,114
Dividends to Preferred Stock shareholders ....................... (5,197,939) (2,600,404)
-------------------------------
Net increase in net assets resulting from operations ............ 33,240,628 35,566,659
-------------------------------
===========================================================================================================================
Dividends to Common Stock Shareholders
---------------------------------------------------------------------------------------------------------------------------
Investment income--net .......................................... (29,183,815) (28,722,046)
-------------------------------
Net decrease in net assets resulting from dividends to Common
Stock shareholders ............................................. (29,183,815) (28,722,046)
-------------------------------
===========================================================================================================================
Net Assets Applicable to Common Stock
---------------------------------------------------------------------------------------------------------------------------
Total increase in net assets applicable to Common Stock ......... 4,056,813 6,844,613
Beginning of year ............................................... 474,356,654 467,512,041
-------------------------------
End of year* .................................................... $ 478,413,467 $ 474,356,654
===============================
* Undistributed investment income--net ....................... $ 5,288,059 $ 7,693,792
===============================
See Notes to Financial Statements.
ANNUAL REPORTS AUGUST 31, 2005 21
Financial Highlights MuniHoldings Florida Insured Fund
For the Year Ended August 31,
The following per share data and ratios have been derived ------------------------------------------------------------
from information provided in the financial statements. 2005 2004 2003 2002 2001
=========================================================================================================================
Per Share Operating Performance
-------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year .......... $ 15.37 $ 15.04 $ 15.41 $ 15.29 $ 13.85
------------------------------------------------------------
Investment income--net ...................... 1.09+ 1.11+ 1.15+ 1.14 1.02
Realized and unrealized gain (loss)--net .... .05 .31 (.46) .06 1.42
Dividends and distributions to Preferred
Shareholders:
Investment income--net ................... (.18) (.09) (.10) (.13) (.22)
Realized gain--net ....................... -- -- -- --@ --
Capital write-off (charge) resulting from
issuance of Preferred Shares ............... -- -- -- -- --@
------------------------------------------------------------
Total from investment operations ............ .96 1.33 .59 1.07 2.22
------------------------------------------------------------
Less dividends and distributions to Common
Shareholders:
Investment income--net ................... (1.01) (1.00) (.96) (.95) (.78)
Realized gain--net ....................... -- -- -- --@ --
------------------------------------------------------------
Total dividends and distributions to Common
Shareholders ............................... (1.01) (1.00) (.96) (.95) (.78)
------------------------------------------------------------
Net asset value, end of year ................ $ 15.32 $ 15.37 $ 15.04 $ 15.41 $ 15.29
============================================================
Market price per share, end of year ......... $ 15.75 $ 14.84 $ 14.08 $ 14.66 $ 14.04
============================================================
=========================================================================================================================
Total Investment Return*
-------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share .......... 6.49% 9.43% 4.17% 7.75% 17.47%
============================================================
Based on market price per share ............. 13.39% 12.86% 2.51% 11.63% 27.82%
============================================================
=========================================================================================================================
Ratios Based on Average Net Assets of Common Shares
-------------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver and
reimbursement and excluding reorganization
expenses** ................................. 1.11% 1.10% 1.10% 1.13% 1.14%
============================================================
Total expenses, excluding reorganization
expenses** ................................. 1.16% 1.17% 1.17% 1.20% 1.23%
============================================================
Total expenses** ............................ 1.16% 1.17% 1.17% 1.21% 1.26%
============================================================
Total investment income--net** .............. 7.11% 7.23% 7.40% 7.71% 7.88%
============================================================
Amount of dividends to Preferred Shareholders 1.15% .60% .65% .96% 2.31%
============================================================
Investment income--net, to Common Shareholders 5.96% 6.63% 6.75% 6.75% 5.57%
============================================================
=========================================================================================================================
Ratios Based on Average Net Assets of Preferred Shares
-------------------------------------------------------------------------------------------------------------------------
Dividends to Preferred Shareholders ......... 1.82% .95% 1.06% 1.49% 3.43%
============================================================
22 ANNUAL REPORTS AUGUST 31, 2005
Financial Highlights (concluded) MuniHoldings Florida Insured Fund
For the Year Ended August 31,
The following per share data and ratios have been derived ------------------------------------------------------------
from information provided in the financial statements. 2005 2004 2003 2002 2001
=========================================================================================================================
Supplemental Data
-------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common Shares, end
of year (in thousands) ..................... $576,931 $578,509 $565,993 $580,003 $575,251
============================================================
Preferred Shares outstanding, end of year
(in thousands) ............................. $363,250 $363,250 $363,250 $363,250 $363,250
============================================================
Portfolio turnover .......................... 26.50% 21.20% 27.40% 13.89% 47.50%
============================================================
=========================================================================================================================
Leverage
-------------------------------------------------------------------------------------------------------------------------
Asset coverage per $1,000 ................... $ 2,588 $ 2,593 $ 2,558 $ 2,597 $ 2,584
============================================================
=========================================================================================================================
Dividends Per Share on Preferred Shares Outstanding
-------------------------------------------------------------------------------------------------------------------------
Series A--Investment income--net ............ $ 441 $ 233 $ 252 $ 362 $ 885
============================================================
Series B--Investment income--net ............ $ 451 $ 237 $ 267 $ 375 $ 754
============================================================
Series C--Investment income--net ............ $ 461 $ 237 $ 252 $ 369 $ 889
============================================================
Series D--Investment income--net ............ $ 462 $ 243 $ 273 $ 368 $ 855
============================================================
Series E--Investment income--net ............ $ 463 $ 241 $ 276 $ 381 $ 850
============================================================
* 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.
+ Based on average shares outstanding.
@ Amount is less than $(.01) per share.
See Notes to Financial Statements.
ANNUAL REPORTS AUGUST 31, 2005 23
Financial Highlights MuniHoldings New York Insured Fund, Inc.
For the Year Ended August 31,
The following per share data and ratios have been derived ------------------------------------------------------------
from information provided in the financial statements. 2005 2004 2003 2002 2001
=========================================================================================================================
Per Share Operating Performance
-------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year .......... $ 15.41 $ 15.19 $ 15.66 $ 15.78 $ 14.19
------------------------------------------------------------
Investment income--net+ ..................... 1.04 1.05 1.09 1.07 1.12
Realized and unrealized gain (loss)--net .... .21 .18 (.58) (.19) 1.52
Dividends to Preferred Stock shareholders
from investment income--net ................ (.17) (.08) (.08) (.12) (.27)
Capital charge resulting from issuance of
Preferred Stock ............................ -- -- -- -- --@
------------------------------------------------------------
Total from investment operations ............ 1.08 1.15 .43 .76 2.37
------------------------------------------------------------
Less dividends to Common Stock shareholders
from investment income--net ................ (.95) (.93) (.90) (.88) (.78)
Capital charge resulting from issuance of
Common Stock ............................... -- -- -- -- --@
------------------------------------------------------------
Net asset value, end of year ................ $ 15.54 $ 15.41 $ 15.19 $ 15.66 $ 15.78
============================================================
Market price per share, end of year ......... $ 15.28 $ 14.10 $ 13.79 $ 14.37 $ 14.37
============================================================
=========================================================================================================================
Total Investment Return*
-------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share .......... 7.63% 8.36% 3.32% 5.68% 17.97%
============================================================
Based on market price per share ............. 15.66% 9.21% 2.22% 6.49% 20.75%
============================================================
=========================================================================================================================
Ratios Based on Average Net Assets of Common Stock
-------------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver and
reimbursement excluding reorganization
expenses** ................................. 1.14% 1.14% 1.13% 1.16% 1.14%
============================================================
Total expenses, excluding reorganization
expenses** ................................. 1.21% 1.21% 1.20% 1.23% 1.24%
============================================================
Total expenses** ............................ 1.21% 1.21% 1.20% 1.26% 1.32%
============================================================
Total investment income--net** .............. 6.71% 6.80% 6.96% 7.01% 7.46%
============================================================
Amount of dividends to Preferred Stock
shareholders ............................... 1.09% .55% .68% .98% 2.22%
============================================================
Investment income--net, to Common Stock
shareholders ............................... 5.62% 6.25% 6.28% 6.03% 5.24%
============================================================
=========================================================================================================================
Ratios Based on Average Net Assets of Preferred Stock
-------------------------------------------------------------------------------------------------------------------------
Dividends to Preferred Stock shareholders ... 1.66% .83% 1.05% 1.47% 3.21%
============================================================
24 ANNUAL REPORTS AUGUST 31, 2005
Financial Highlights (concluded) MuniHoldings New York Insured Fund, Inc.
For the Year Ended August 31,
The following per share data and ratios have been derived ------------------------------------------------------------
from information provided in the financial statements. 2005 2004 2003 2002 2001
=========================================================================================================================
Supplemental Data
-------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common Stock, end of
year (in thousands) ........................ $478,413 $474,357 $467,512 $482,184 $485,790
============================================================
Preferred Stock outstanding, end of year
(in thousands) ............................. $313,000 $313,000 $313,000 $313,000 $313,000
============================================================
Portfolio turnover .......................... 35.63% 32.04% 59.02% 86.39% 94.03%
============================================================
=========================================================================================================================
Leverage
-------------------------------------------------------------------------------------------------------------------------
Asset coverage per $1,000 ................... $ 2,528 $ 2,516 $ 2,494 $ 2,541 $ 2,552
============================================================
=========================================================================================================================
Dividends Per Share on Preferred Stock Outstanding
-------------------------------------------------------------------------------------------------------------------------
Series A--Investment income--net ............ $ 409 $ 197 $ 247 $ 347 $ 765
============================================================
Series B--Investment income--net ............ $ 385 $ 182 $ 236 $ 348 $ 784
============================================================
Series C--Investment income--net ............ $ 432 $ 201 $ 258 $ 377 $ 843
============================================================
Series D--Investment income--net ............ $ 434 $ 238 $ 287 $ 391 $ 842
============================================================
Series E--Investment income--net ............ $ 389 $ 198 $ 256 $ 347 $ 818
============================================================
* 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 Stock shareholders.
+ Based on average shares outstanding.
@ Amount is less than $(.01) per share.
See Notes to Financial Statements.
ANNUAL REPORTS AUGUST 31, 2005 25
Notes to Financial Statements
1. Significant Accounting Policies:
MuniHoldings Florida Insured Fund and MuniHoldings New York Insured Fund, Inc.
(the "Funds" or individually as the "Fund") are registered under the Investment
Company Act of 1940, as amended, as non-diversified, closed-end management
investment companies. The Funds' financial statements are prepared in conformity
with U.S. generally accepted accounting principles, which may require the use of
management accruals and estimates. Actual results may differ from these
estimates. The Funds determine and make available for publication the net asset
value of their Common Stock/Shares on a daily basis. The Funds' Common
Stock/Shares are listed on the New York Stock Exchange under the symbols MFL and
MHN, respectively. The following is a summary of significant accounting policies
followed by the Funds.
(a) Valuation of investments -- Municipal bonds are traded primarily in the
over-the-counter ("OTC") markets and are valued at the last available bid price
in the OTC market or on the basis of values as obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Funds under the general direction
of the Board of Directors/Trustees. Such valuations and procedures are reviewed
periodically by the Board of Directors/Trustees of the Funds. Financial futures
contracts and options thereon, which are traded on exchanges, are valued at
their closing prices as of the close of such exchanges. Options written or
purchased are valued at the last sale price in the case of exchange-traded
options. In the case of options traded in the OTC market, valuation is the last
asked price (options written) or the last bid price (options purchased). Swap
agreements are valued by quoted fair values received daily by the Funds' pricing
service. Short-term investments with a remaining maturity of 60 days or less are
valued at amortized cost which approximates market value, under which method the
investment is valued at cost and any premium or discount is amortized on a
straight line basis to maturity. Investments in open-end investment companies
are valued at their net asset value each business day. Securities and other
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Board of
Directors/Trustees of the Funds.
(b) Derivative financial instruments -- Each Fund may engage in various
portfolio investment strategies both to increase the return of the Fund and to
hedge, or protect, its exposure to interest rate movements and movements in the
securities markets. Losses may arise due to changes in the value of the contract
or if the counterparty does not perform under the contract.
o Financial futures contracts -- Each Fund may purchase or sell financial
futures contracts and options on such futures contracts. Futures contracts
are contracts for delayed delivery of securities at a specific future date
and at a specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required by
the exchange on which the transaction is effected. Pursuant to the
contract, the Fund agrees to receive from or pay to the broker an amount
of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as variation margin and are recorded by the
Funds 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.
o Options -- Each Fund may write covered call options and purchase 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.
o Forward interest rate swaps -- Each Fund may enter into forward interest
rate swaps. In a forward interest rate swap, the Fund and the counterparty
agree to make periodic net payments on a specified notional contract
amount, commencing on a specified future effective date, unless terminated
earlier. When the agreement is closed, the Fund records a realized gain or
loss in an amount equal to the value of the agreement.
(c) Income taxes -- It is each Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute
26 ANNUAL REPORTS AUGUST 31, 2005
Notes to Financial Statements (continued)
substantially all of its taxable income to its shareholders. Therefore, no
federal income tax provision is required.
(d) Security transactions and investment income -- Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis. The Funds amortize all
premiums and discounts on debt securities.
(e) Dividends and distributions -- Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
(f) Reclassification for MuniHoldings New York Insured Fund, Inc. -- U.S.
generally accepted accounting principles require that certain components of net
assets be adjusted to reflect permanent differences between financial and tax
reporting. Accordingly, during the current year, $781 has been reclassified
between accumulated net realized capital losses and undistributed net investment
income as a result of permanent differences attributable to amortization methods
on fixed income securities. This reclassification has no effect on net assets or
net asset values per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
Each Fund has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect, wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML
& Co."), which is the limited partner.
FAM is responsible for the management of each Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services, each Fund pays a monthly fee
at an annual rate of .55% of the Fund's average weekly net assets, including
proceeds from the issuance of Preferred Stock/Shares. The Investment Adviser has
agreed to reimburse its management fee by the amount of management fees each
Fund pays to FAM indirectly through its investments described below:
--------------------------------------------------------------------------------
Investment Reimbursement
--------------------------------------------------------------------------------
MuniHoldings Florida Merrill Lynch Institutional
Insured Fund Tax-Exempt Fund $25,756
--------------------------------------------------------------------------------
MuniHoldings New York CMA New York Municipal
Insured Fund, Inc. Money Fund $ 4,154
--------------------------------------------------------------------------------
In addition, the Investment Adviser has agreed to reimburse its management fee
on the proceeds of Preferred Stock/Shares that exceeds 35% of each Fund's total
net assets. For the year ended August 31, 2005, FAM earned and waived the
following:
--------------------------------------------------------------------------------
Fees Earned Waived
--------------------------------------------------------------------------------
MuniHoldings Florida
Insured Fund ..................................... $5,173,879 $311,067
MuniHoldings New York
Insured Fund, Inc. ............................... $4,340,557 $321,137
--------------------------------------------------------------------------------
For the year ended August 31, 2005, the Funds reimbursed FAM for certain
accounting services. The reimbursements were as follows:
--------------------------------------------------------------------------------
Reimbursement
--------------------------------------------------------------------------------
MuniHoldings Florida Insured Fund ................................ $21,295
MuniHoldings New York Insured Fund, Inc. ......................... $17,862
--------------------------------------------------------------------------------
Certain officers and/or directors/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 August 31, 2005 were as follows:
--------------------------------------------------------------------------------
MuniHoldings MuniHoldings
Florida Insured New York Insured
Fund Fund, Inc.
--------------------------------------------------------------------------------
Total Purchases ...................... $249,070,620 $276,339,378
Total Sales .......................... $242,625,234 $276,047,729
--------------------------------------------------------------------------------
4. Stock/Share Transactions:
MuniHoldings Florida Insured 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 the approval of holders of Common Shares.
MuniHoldings New York Insured Fund, Inc. is authorized to issue 200,000,000
shares of stock, including Preferred Stock, par value $.10 per share, all of
which were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of stock without approval
of holders of Common Stock.
Common Shares
MuniHoldings Florida Insured Fund:
Shares issued and outstanding during the year ended August 31, 2005 increased by
34,561 as a result of dividend reinvestments and for the year ended August 31,
2004 remained constant.
ANNUAL REPORTS AUGUST 31, 2005 27
Notes to Financial Statements (concluded)
MuniHoldings New York Insured Fund, Inc.:
Shares issued and outstanding during the years ended August 31, 2005 and August
31, 2004 remained constant.
Preferred Stock
Auction Market Preferred Stock/Shares are shares of Preferred Stock/Shares of
the Funds, with a par value of $.10 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 August 31, 2005 were as follows:
--------------------------------------------------------------------------------
MuniHoldings MuniHoldings
Florida Insured New York Insured
Fund Fund, Inc.
--------------------------------------------------------------------------------
Series A ............................... 2.38% 1.65%
Series B ............................... 2.38% 1.65%
Series C ............................... 2.45% 1.90%
Series D ............................... 2.47% 1.90%
Series E ............................... 2.35% 2.05%
--------------------------------------------------------------------------------
Each 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 August 31, 2005, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, an affiliate of FAM, earned commissions as follows:
--------------------------------------------------------------------------------
Commissions
--------------------------------------------------------------------------------
MuniHoldings Florida Insured Fund ................................. $467,672
MuniHoldings New York Insured Fund, Inc. .......................... $296,931
--------------------------------------------------------------------------------
5. Distributions to Shareholders:
Each Fund paid a tax-exempt income dividend to holders of Common Stock/Shares in
the amounts of $.083000 per share and $.079000 per share relating to
MuniHoldings Florida Insured Fund and MuniHoldings New York Insured Fund, Inc.
respectively, on September 29, 2005 to shareholders of record on September 14,
2005.
MuniHoldings Florida Insured Fund
The tax character of distributions paid during the fiscal years ended August 31,
2005 and August 31, 2004 was as follows:
--------------------------------------------------------------------------------
8/31/2005 8/31/2004
--------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt Income ............................ $44,560,482 $41,164,179
-----------------------------
Total distributions ............................ $44,560,482 $41,164,179
=============================
As of August 31, 2005, the components of accumulated earnings on a tax basis
were as follows:
--------------------------------------------------------------------------------
Undistributed tax-exempt income--net .................... $ 6,445,041
Undistributed long-term capital gains--net .............. --
------------
Total undistributed earnings--net ....................... 6,445,041
Capital loss carryforward ............................... (61,566,460)*
Unrealized gains--net ................................... 57,285,284**
------------
Total accumulated earnings--net ......................... $ 2,163,865
============
* On August 31, 2005, the Fund had a net capital loss carryforward of
$61,566,460, of which $25,345,146 expires in 2007, $9,834,324 expires in
2008, $16,563,861 expires in 2009, $1,836,991 expires in 2012 and
$7,986,138 expires in 2013. 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 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.
MuniHoldings New York Insured Fund, Inc.
The tax character of distributions paid during the fiscal years ended August 31,
2005 and August 31, 2004 was as follows:
--------------------------------------------------------------------------------
8/31/2005 8/31/2004
--------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income ............................ $34,381,754 $31,322,450
---------------------------
Total distributions ............................. $34,381,754 $31,322,450
===========================
As of August 31, 2005, the components of accumulated earnings on a tax basis
were as follows:
------------------------------------------------------------------------------
Undistributed tax-exempt income--net .................... $ 5,178,903
Undistributed long-term capital gains--net .............. --
============
Total undistributed earnings--net ....................... 5,178,903
Capital loss carryforward ............................... (36,185,739)*
Unrealized gains--net ................................... 31,439,726**
------------
Total accumulated earnings--net ......................... $ 432,890
============
* On August 31, 2005, the Fund had a net capital loss carryforward of
$36,185,739, of which $566,530 expires in 2007, $3,509,287 expires in
2008, $17,055,889 expires in 2009 and $15,054,033 expires in 2013. 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, the difference between book and tax
amortization methods for premiums and discounts on fixed income
securities, the realization for tax purposes of unrealized gains (losses)
on certain futures contracts and the deferral of post-October capital
losses for tax purposes.
28 ANNUAL REPORTS AUGUST 31, 2005
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors/ Trustees of MuniHoldings Florida
Insured Fund and MuniHoldings New York Insured Fund, Inc.:
We have audited the accompanying statements of net assets, including the
schedules of investments, of MuniHoldings Florida Insured Fund and MuniHoldings
New York Insured Fund, Inc. (the "Funds"), as of August 31, 2005, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement.The Funds
are not required to have, nor were we engaged to perform, audits of their
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Funds' internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of August 31, 2005 by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
MuniHoldings Florida Insured Fund and MuniHoldings New York Insured Fund, Inc.
as of August 31, 2005, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended, in conformity with U.S. generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
October 21, 2005
Fund Certification (unaudited)
In February 2005, MuniHoldings Florida Insured Fund and MuniHoldings New York
Insured Fund, Inc. filed their Chief Executive Officer Certification for the
prior year with the New York Stock Exchange pursuant to Section 303A.12(a) of
the New York Stock Exchange Corporate Governance Listing Standards.
The Funds' Chief Executive Officer and Chief Financial Officer Certifications
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 were filed with the
Funds' Form N-CSR and are available on the Securities and Exchange Commission's
Web site at http://www.sec.gov.
Important Tax Information (unaudited)
All of the net investment income distributions paid by MuniHoldings Florida
Insured Fund and MuniHoldings New York Insured Fund, Inc. during the taxable
year ended August 31, 2005 qualify as tax-exempt interest dividends for federal
income tax purposes.
ANNUAL REPORTS AUGUST 31, 2005 29
Automatic Dividend Reinvestment Plan
The following description of the Funds' 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 or Stock 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 or shares of Common Stock
of the Fund. Holders of Common Shares or Stock 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 in Common Shares or shares of Common Stock. 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 or shares of Common Stock from the Fund
("newly issued shares") or (ii) by purchase of outstanding Common Shares or
shares of Common Stock 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 share of the Common Shares or Stock is equal to or less than
the market price per Common Share or share of the Common Stock 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 or shares
of Common Stock 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 or share of Common
Stock 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.
30 ANNUAL REPORTS AUGUST 31, 2005
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 Funds' shares is above the net asset value, participants in the Plan will
receive shares of the Funds 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 Funds do 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 each Fund's shares are trading at a premium
over net asset value, each 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 each Fund's shares) could be viewed as a taxable distribution.
If the discount is viewed as a taxable distribution, it is also possible that
the taxable character of this discount would be allocable to all the
shareholders, including shareholders who do not participate in the Plan. Thus,
shareholders who do not participate in the Plan might be required to report as
ordinary income a portion of their distributions equal to their allocable share
of the discount.
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 Funds reserve 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.
ANNUAL REPORTS AUGUST 31, 2005 31
Officers and Directors or Trustees
Number of
Portfolios in Other Public
Fund Complex Directorships
Position(s) Length of Overseen by Held by
Held with Time Director or Director or
Name Address & Age Funds Served Principal Occupation(s) During Past 5 Years Trustee Trustee
====================================================================================================================================
Interested Director or Trustee
------------------------------------------------------------------------------------------------------------------------------------
Robert C. P.O. Box 9011 President 2005 to President of the MLIM/FAM-advised funds since 2005; 130 Funds None
Doll, Jr.* Princeton, NJ and Director present President of MLIM and FAM since 2001; Co-Head 175 Portfolios
08543-9011 or Trustee (Americas Region) thereof from 2000 to 2001 and
Age: 51 Senior Vice President from 1999 to 2001; President
and Director of Princeton Services, Inc. ("Princeton
Services") since 2001; President of Princeton
Administrators, L.P. ("Princeton Administrators")
since 2001; Chief Investment Officer of Oppenheimer
Funds, Inc. in 1999 and Executive Vice President
thereof from 1991 to 1999.
------------------------------------------------------------------------------------------------------------------------
* Mr. Doll is a director, trustee or member of an advisory board of certain other investment companies for which
MLIM or FAM acts as investment adviser. Mr. Doll is an "interested person," as defined in the Investment Company
Act, of the Fund based on his current positions with MLIM, FAM, Princeton Services and Princeton Administrators.
Directors or Trustees serve until their resignation, removal or death, or until December 31 of the year in which
they turn 72. As Fund President, Mr. Doll serves at the pleasure of the Board of Directors or Trustees.
====================================================================================================================================
Independent Directors or Trustees*
------------------------------------------------------------------------------------------------------------------------------------
Ronald W. P.O. Box 9095 Director 1997 to Professor Emeritus of Finance, School of Business, 48 Funds None
Forbes** Princeton, NJ or Trustee present State University of New York at Albany since 2000 48 Portfolios
08543-9095 and Professor thereof from 1989 to 2000;
Age: 64 International Consultant, Urban Institute,
Washington, D.C. from 1995 to 1999.
------------------------------------------------------------------------------------------------------------------------------------
Cynthia A. P.O. Box 9095 Director 1997 to Professor, Harvard Business School since 1989; 48 Funds Newell
Montgomery Princeton, NJ or Trustee present Associate Professor, J.L. Kellogg Graduate School of 48 Portfolios Rubbermaid,
08543-9095 Management, Northwestern University from 1985 to Inc.
Age: 53 1989; Associate Professor, Graduate School of (manufactur-
Business Administration, University of Michigan from ing)
1979 to 1985; Director, Harvard Business School of
Publishing since 2005.
------------------------------------------------------------------------------------------------------------------------------------
Jean Margo P.O. Box 9095 Director 2004 to Self-employed consultant since 2001; Counsel of 48 Funds None
Reid Princeton, NJ or Trustee present Alliance Capital Management (investment adviser) 48 Portfolios
08543-9095 in 2000; General Counsel, Director and Secretary of
Age: 60 Sanford C. Bernstein & Co., Inc. (investment adviser/
broker-dealer) from 1997 to 2000; Secretary,
Sanford C. Bernstein Fund, Inc. from 1994 to 2000;
Director and Secretary of SCB, Inc. since 1998;
Director and Secretary of SCB Partners, Inc. since
2000; Director of Covenant House from 2001 to 2004.
------------------------------------------------------------------------------------------------------------------------------------
Roscoe S. P.O. Box 9095 Director 2000 to President, Middle East Institute from 1995 to 2001; 48 Funds None
Suddarth Princeton, NJ or Trustee present Foreign Service Officer, United States Foreign 48 Portfolios
08543-9095 Service from 1961 to 1995; Career Minister from 1989
Age: 70 to 1995; Deputy Inspector General, U.S. Department
of State, from 1991 to 1994; U.S. Ambassador to the
Hashemite Kingdom of Jordan from 1987 to 1990.
------------------------------------------------------------------------------------------------------------------------------------
Richard R. P.O. Box 9095 Director 1997 to Professor of Finance from 1984 to 1995, Dean from 48 Funds Bowne & Co.,
West Princeton, NJ or Trustee present 1984 to 1993 and Dean Emeritus since 1995 of 48 Portfolios Inc.
08543-9095 New York University's Leonard N. Stern School of (financial
Age: 67 Business Administration. printers);
Vornado
Realty Trust
(real estate
company);
Alexander's,
Inc. (real
estate
company).
32 ANNUAL REPORTS AUGUST 31, 2005
Officers and Directors or Trustees (concluded)
Number of
Portfolios in Other Public
Fund Complex Directorships
Position(s) Length of Overseen by Held by
Held with Time Director or Director or
Name Address & Age Funds Served Principal Occupation(s) During Past 5 Years Trustee Trustee
====================================================================================================================================
Independent Directors or Trustees* (concluded)
------------------------------------------------------------------------------------------------------------------------------------
Edward D. P.O. Box 9095 Director 2000 to Self-employed financial consultant since 1994; 48 Funds None
Zinbarg Princeton, NJ or Trustee present Executive Vice President of the Prudential Insurance 48 Portfolios
08543-9095 Company of America from 1988 to 1994; former
Age: 70 Director of Prudential Reinsurance Company and
former Trustee of the Prudential Foundation.
------------------------------------------------------------------------------------------------------------------------
* Directors or Trustees serve until their resignation, removal or death, or until December 31 of the year in which
they turn 72.
** Chairman of the Board and the Audit Committee.
------------------------------------------------------------------------------------------------------------------------------------
Position(s) Length of
Held with Time
Name Address & Age Funds Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers*
------------------------------------------------------------------------------------------------------------------------------------
Donald C. P.O. Box 9011 Vice 1997 to First Vice President of MLIM and FAM since 1997 and Treasurer thereof since 1999;
Burke Princeton, NJ President present Senior Vice President and Treasurer of Princeton Services since 1999 and Director
08543-9011 and and since 2004; Vice President of FAM Distributors, Inc. ("FAMD") since 1999; Vice
Age: 45 Treasurer 1999 to President of MLIM and FAM from 1990 to 1997; Director of Taxation of MLIM from
present 1990 to 2001; Vice President, Treasurer and Secretary of the IQ Funds since 2004.
------------------------------------------------------------------------------------------------------------------------------------
Kenneth A. P.O. Box 9011 Senior 2002 to Managing Director of MLIM since 2000; Director (Tax-Exempt Fund Management) of
Jacob Princeton, NJ Vice present MLIM from 1997 to 2000.
08543-9011 President
Age: 54
------------------------------------------------------------------------------------------------------------------------------------
John M. P.O. Box 9011 Senior 2002 to Managing Director of MLIM since 2000; Director (Tax-Exempt Fund Management) of
Loffredo Princeton, NJ Vice present MLIM from 1997 to 2000.
08543-9011 President
Age: 41
------------------------------------------------------------------------------------------------------------------------------------
Timothy T. P.O. Box 9011 Vice 2004 to Vice President (Tax-Exempt Fixed Income) and portfolio manager with the Tax-Exempt
Browse Princeton, NJ President present Fixed Income group of MLIM; Vice President, portfolio manager and team leader of
08543-9011 the Municipal Investments Team with Lord Abbett & Co. from 2000 to 2003; Vice
Age: 46 President and portfolio manager in the municipal fund management group of Eaton
Vance Management, Inc. from 1992 to 2000.
------------------------------------------------------------------------------------------------------------------------------------
Robert D. P.O. Box 9011 Vice 1999 to Vice President of MLIM since 1998; Assistant Vice President of MLIM from 1994 to
Sneeden Princeton, NJ President present 1998.
08543-9011
Age: 51
------------------------------------------------------------------------------------------------------------------------------------
Jeffrey P.O. Box 9011 Chief 2004 to Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President and
Hiller Princeton, NJ Compliance present Chief Compliance Officer of MLIM (Americas Region) since 2004; Chief Compliance
08543-9011 Officer Officer of the IQ Funds since 2004; Global Director of Compliance at Morgan Stanley
Age: 53 Investment Management from 2002 to 2004; Managing Director and Global Director of
Compliance at Citigroup Asset Management from 2000 to 2002; Chief Compliance
Officer at Soros Fund Management in 2000; Chief Compliance Officer at Prudential
Financial from 1995 to 2000; Senior Counsel in the Commission's Division of
Enforcement in Washington, D.C. from 1990 to 1995.
------------------------------------------------------------------------------------------------------------------------------------
Alice A. P.O. Box 9011 Secretary 2004 to Director (Legal Advisory) of MLIM since 2002; Vice President of MLIM from 1999 to
Pellegrino Princeton, NJ present 2002; Attorney associated with MLIM since 1997; Secretary of MLIM, FAM, FAMD and
08543-9011 Princeton Services since 2004.
Age: 45
------------------------------------------------------------------------------------------------------------------------
* Officers of the Funds serve at the pleasure of the Board of Directors or Trustees.
------------------------------------------------------------------------------------------------------------------------------------
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agents
Common Shares or Stock:
The Bank of New York
101 Barclay Street -- 11 East
New York, NY 10286
Preferred Shares or Stock:
The Bank of New York
101 Barclay Street -- 7 West
New York, NY 10286
ANNUAL REPORTS AUGUST 31, 2005 33
Investment Objectives
NYSE Symbol MuniHoldings Florida Insured Fund seeks to provide
MFL shareholders with current income exempt from federal income
tax. The Fund also seeks to offer shareholders the opportunity
to own shares, the value of which is exempt from Florida
intangible personal property tax. The Fund seeks to achieve
its investment objective by investing primarily in a portfolio
of long-term, investment grade municipal obligations, the
interest on which, in the opinion of bond counsel to the
issuer, is exempt from federal income taxes and which enables
shares of the Fund to be exempt from Florida intangible
personal property tax.
NYSE Symbol MuniHoldings New York Insured Fund, Inc. seeks to provide
MHN shareholders with current income exempt from federal income
taxes and New York State and New York City personal income
taxes by investing primarily in a portfolio of long-term,
investment grade municipal obligations, the interest on which,
in the opinion of bond counsel to the issuer, is exempt from
federal income taxes and New York State and New York City
personal income taxes.
Availability of Quarterly Schedules of Investments
The Funds file their complete schedules of portfolio holdings with the
Securities and Exchange Commission ("SEC") for the first and third quarters of
each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the SEC's
Web site at http://www.sec.gov. The Funds' Forms N-Q may also be reviewed and
copied at the SEC's Public Reference Room in Washington, DC. Information on the
operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
34 ANNUAL REPORTS AUGUST 31, 2005
Electronic Delivery
The Funds offer electronic delivery of communications to their shareholders. In
order to receive this service, you must register your account and provide us
with e-mail information. To sign up for this service, simply access this Web
site at http://www.icsdelivery.com/live and follow the instructions. When you
visit this site, you will obtain a personal identification number (PIN). You
will need this PIN should you wish to update your e-mail address, choose to
discontinue this service and/or make any other changes to the service. This
service is not available for certain retirement accounts at this time.
ANNUAL REPORTS AUGUST 31, 2005 35
[LOGO] Merrill Lynch Investment Managers
www.mlim.ml.com
--------------------------------------------------------------------------------
Mercury Advisors
A Division of Merrill Lynch Investment Managers
www.mercury.ml.com
These reports, including the financial information herein, are transmitted to
shareholders of MuniHoldings Florida Insured Fund and MuniHoldings New York
Insured Fund, Inc. for their information. This is not a prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. The Funds have leveraged their Common
Shares or Stock and intend to remain leveraged by issuing Preferred Shares or
Stock to provide the Common Shareholders or Common Stock shareholders with a
potentially higher rate of return. Leverage creates risks for Common
Shareholders or Common Stock shareholders, including the likelihood of greater
volatility of net asset value and market price of shares of the Common Shares or
Stock, and the risk that fluctuations in the short-term dividend rates of the
Preferred Shares or Stock may affect the yield to Common Shareholders or Common
Stock shareholders. Statements and other information herein are as dated and are
subject to change.
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-800-MER-FUND (1-800-637-3863); (2)
at www.mutualfunds.ml.com; and (3) on the Securities and Exchange Commission's
Web site at http://www.sec.gov. Information about how the Funds vote proxies
relating to securities held in the Funds' portfolios during the most recent
12-month period ended June 30 is available (1) at www.mutualfunds.ml.com; and
(2) on the Securities and Exchange Commission's Web site at http://www.sec.gov.
MuniHoldings Florida Insured Fund
MuniHoldings New York Insured Fund, Inc.
Box 9011
Princeton, NJ 08543-9011
#MHFLNY -- 8/05
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of the
end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial officer
and principal accounting officer, or persons performing similar
functions. A copy of the code of ethics is available without charge
upon request by calling toll-free 1-800-MER-FUND (1-800-637-3863).
Item 3 - Audit Committee Financial Expert - The registrant's board of directors
has determined that (i) the registrant has the following audit
committee financial experts serving on its audit committee and (ii)
each audit committee financial expert is independent: (1) Ronald W.
Forbes, (2) Richard R. West, and (3) Edward D. Zinbarg.
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending August 31, 2005 - $32,000
Fiscal Year Ending August 31, 2004 - $30,000
(b) Audit-Related Fees - Fiscal Year Ending August 31, 2005 - $3,500
Fiscal Year Ending August 31, 2004 - $3,000
The nature of the services include assurance and related services
reasonably related to the performance of the audit of financial
statements not included in Audit Fees.
(c) Tax Fees - Fiscal Year Ending August 31, 2005 - $7,000
Fiscal Year Ending August 31, 2004 - $5,610
The nature of the services include tax compliance, tax advice and tax
planning.
(d) All Other Fees - Fiscal Year Ending August 31, 2005 - $0
Fiscal Year Ending August 31, 2004 - $0
(e)(1) The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to the
registrant's affiliated service providers that relate directly to the
operations and the financial reporting of the registrant. Certain of
these non-audit services that the Committee believes are a) consistent
with the SEC's auditor independence rules and b) routine and recurring
services that will not impair the independence of the independent
accountants may be approved by the Committee without consideration on a
specific case-by-case basis ("general pre-approval"). However, such
services will only be deemed pre-approved provided that any individual
project does not exceed $5,000 attributable to the registrant or
$50,000 for all of the registrants the Committee oversees. Any proposed
services exceeding the pre-approved cost levels will require specific
pre-approval by the Committee, as will any other services not subject
to general pre-approval (e.g., unanticipated but permissible services).
The Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending August 31, 2005 - $7,377,027
Fiscal Year Ending August 31, 2004 - $14,913,836
(h) The registrant's audit committee has considered and determined that
the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling, controlled
by, or under common control with the investment adviser that provides
ongoing services to the registrant that were not pre-approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible
with maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,227,000, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals are
members of the registrant's separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the
Exchange Act (15 U.S.C. 78c(a)(58)(A)):
Ronald W. Forbes
Cynthia A. Montgomery
Jean Margo Reid
Kevin A. Ryan (retired as of December 31, 2004)
Roscoe S. Suddarth
Richard R. West
Edward D. Zinbarg
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies -
Proxy Voting Policies and Procedures
Each Fund's Board of Directors/Trustees has delegated to Merrill Lynch
Investment Managers, L.P. and/or Fund Asset Management, L.P. (the
"Investment Adviser") authority to vote all proxies relating to the
Fund's portfolio securities. The Investment Adviser has adopted
policies and procedures ("Proxy Voting Procedures") with respect to the
voting of proxies related to the portfolio securities held in the
account of one or more of its clients, including a Fund. Pursuant to
these Proxy Voting Procedures, the Investment Adviser's primary
objective when voting proxies is to make proxy voting decisions solely
in the best interests of each Fund and its shareholders, and to act in
a manner that the Investment Adviser believes is most likely to enhance
the economic value of the securities held by the Fund. The Proxy Voting
Procedures are designed to ensure that the Investment Adviser considers
the interests of its clients, including the Funds, and not the
interests of the Investment Adviser, when voting proxies and that real
(or perceived) material conflicts that may arise between the Investment
Adviser's interest and those of the Investment Adviser's clients are
properly addressed and resolved.
In order to implement the Proxy Voting Procedures, the Investment
Adviser has formed a Proxy Voting Committee (the "Committee"). The
Committee is comprised of the Investment Adviser's Chief Investment
Officer (the "CIO"), one or more other senior investment professionals
appointed by the CIO, portfolio managers and investment analysts
appointed by the CIO and any other personnel the CIO deems appropriate.
The Committee will also include two non-voting representatives from the
Investment Adviser's Legal department appointed by the Investment
Adviser's General Counsel. The Committee's membership shall be limited
to full-time employees of the Investment Adviser. No person with any
investment banking, trading, retail brokerage or research
responsibilities for the Investment Adviser's affiliates may serve as a
member of the Committee or participate in its decision making (except
to the extent such person is asked by the Committee to present
information to the Committee, on the same basis as other interested
knowledgeable parties not affiliated with the Investment Adviser might
be asked to do so). The Committee determines how to vote the proxies of
all clients, including a Fund, that have delegated proxy voting
authority to the Investment Adviser and seeks to ensure that all votes
are consistent with the best interests of those clients and are free
from unwarranted and inappropriate influences. The Committee
establishes general proxy voting policies for the Investment Adviser
and is responsible for determining how those policies are applied to
specific proxy votes, in light of each issuer's unique structure,
management, strategic options and, in certain circumstances, probable
economic and other anticipated consequences of alternate actions. In so
doing, the Committee may determine to vote a particular proxy in a
manner contrary to its generally stated policies. In addition, the
Committee will be responsible for ensuring that all reporting and
recordkeeping requirements related to proxy voting are fulfilled.
The Committee may determine that the subject matter of a recurring
proxy issue is not suitable for general voting policies and requires a
case-by-case determination. In such cases, the Committee may elect not
to adopt a specific voting policy applicable to that issue. The
Investment Adviser believes that certain proxy voting issues require
investment analysis - such as approval of mergers and other significant
corporate transactions - akin to investment decisions, and are,
therefore, not suitable for general guidelines. The Committee may elect
to adopt a common position for the Investment Adviser on certain proxy
votes that are akin to investment decisions, or determine to permit the
portfolio manager to make individual decisions on how best to maximize
economic value for a Fund (similar to normal buy/sell investment
decisions made by such portfolio managers). While it is expected that
the Investment Adviser will generally seek to vote proxies over which
the Investment Adviser exercises voting authority in a uniform manner
for all the Investment Adviser's clients, the Committee, in conjunction
with a Fund's portfolio manager, may determine that the Fund's specific
circumstances require that its proxies be voted differently.
To assist the Investment Adviser in voting proxies, the Committee has
retained Institutional Shareholder Services ("ISS"). ISS is an
independent adviser that specializes in providing a variety of
fiduciary-level proxy-related services to institutional investment
managers, plan sponsors, custodians, consultants, and other
institutional investors. The services provided to the Investment
Adviser by ISS include in-depth research, voting recommendations
(although the Investment Adviser is not obligated to follow such
recommendations), vote execution, and recordkeeping. ISS will also
assist the Fund in fulfilling its reporting and recordkeeping
obligations under the Investment Company Act.
The Investment Adviser's Proxy Voting Procedures also address special
circumstances that can arise in connection with proxy voting. For
instance, under the Proxy Voting Procedures, the Investment Adviser
generally will not seek to vote proxies related to portfolio securities
that are on loan, although it may do so under certain circumstances. In
addition, the Investment Adviser will vote proxies related to
securities of foreign issuers only on a best efforts basis and may
elect not to vote at all in certain countries where the Committee
determines that the costs associated with voting generally outweigh the
benefits. The Committee may at any time override these general policies
if it determines that such action is in the best interests of a Fund.
From time to time, the Investment Adviser may be required to vote proxies in
respect of an issuer where an affiliate of the Investment Adviser (each, an
"Affiliate"), or a money management or other client of the Investment Adviser
(each, a "Client") is involved. The Proxy Voting Procedures and the Investment
Adviser's adherence to those procedures are designed to address such conflicts
of interest. The Committee intends to strictly adhere to the Proxy Voting
Procedures in all proxy matters, including matters involving Affiliates and
Clients. If, however, an issue representing a non-routine matter that is
material to an Affiliate or a widely known Client is involved such that the
Committee does not reasonably believe it is able to follow its guidelines (or if
the particular proxy matter is not addressed by the guidelines) and vote
impartially, the Committee may, in its discretion for the purposes of ensuring
that an independent determination is reached, retain an independent fiduciary to
advise the Committee on how to vote or to cast votes on behalf of the Investment
Adviser's clients.
In the event that the Committee determines not to retain an independent
fiduciary, or it does not follow the advice of such an independent
fiduciary, the powers of the Committee shall pass to a subcommittee,
appointed by the CIO (with advice from the Secretary of the Committee),
consisting solely of Committee members selected by the CIO. The CIO
shall appoint to the subcommittee, where appropriate, only persons
whose job responsibilities do not include contact with the Client and
whose job evaluations would not be affected by the Investment Adviser's
relationship with the Client (or failure to retain such relationship).
The subcommittee shall determine whether and how to vote all proxies on
behalf of the Investment Adviser's clients or, if the proxy matter is,
in their judgment, akin to an investment decision, to defer to the
applicable portfolio managers, provided that, if the subcommittee
determines to alter the Investment Adviser's normal voting guidelines
or, on matters where the Investment Adviser's policy is case-by-case,
does not follow the voting recommendation of any proxy voting service
or other independent fiduciary that may be retained to provide research
or advice to the Investment Adviser on that matter, no proxies relating
to the Client may be voted unless the Secretary, or in the Secretary's
absence, the Assistant Secretary of the Committee concurs that the
subcommittee's determination is consistent with the Investment
Adviser's fiduciary duties
In addition to the general principles outlined above, the Investment
Adviser has adopted voting guidelines with respect to certain recurring
proxy issues that are not expected to involve unusual circumstances.
These policies are guidelines only, and the Investment Adviser may
elect to vote differently from the recommendation set forth in a voting
guideline if the Committee determines that it is in a Fund's best
interest to do so. In addition, the guidelines may be reviewed at any
time upon the request of a Committee member and may be amended or
deleted upon the vote of a majority of Committee members present at a
Committee meeting at which there is a quorum.
The Investment Adviser has adopted specific voting guidelines with
respect to the following proxy issues:
o 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.
o 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.
o 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.
o 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.
o 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.
o Routine proposals related to requests regarding the formalities of
corporate meetings.
o 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.
o Proposals related to limiting corporate conduct in some manner that
relates to the shareholder's environmental or social concerns. The
Committee generally believes that annual shareholder meetings are
inappropriate forums for discussion of larger social issues, and opposes
shareholder resolutions "micromanaging" corporate conduct or requesting
release of information that would not help a shareholder evaluate an
investment in the corporation as an economic matter. While the Committee
is generally supportive of proposals to require corporate disclosure of
matters that seem relevant and material to the economic interests of
shareholders, the Committee is generally not supportive of proposals to
require disclosure of corporate matters for other purposes.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies - Not
Applicable at this time
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - Not Applicable
Item 11 - Controls and Procedures
11(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to
the filing date of this report.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the second fiscal half-year of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
MuniHoldings Florida Insured Fund
By: /s/ Robert C. Doll, Jr.
---------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
MuniHoldings Florida Insured Fund
Date: October 19, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Robert C. Doll, Jr.
---------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
MuniHoldings Florida Insured Fund
Date: October 19, 2005
By: /s/ Donald C. Burke
---------------------------------
Donald C. Burke,
Chief Financial Officer of
MuniHoldings Florida Insured Fund
Date: October 19, 2005