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: 811-7410
Exact name of registrant as specified in charter:
Delaware Investments Florida Insured Municipal Income Fund, Inc.
Address of principal executive offices:
2005 Market Street
Philadelphia, PA 19103
Name and address of agent for service:
David F. Connor, Esq.
2005 Market Street
Philadelphia, PA 19103
Registrant's telephone number, including area code: (800) 523-1918
Date of fiscal year end: March 31
Date of reporting period: September 30, 2006
Item 1. Reports to Stockholders
Semiannual Report Delaware
Investments
Closed-End
Municipal Bond
Funds
September 30, 2006
Closed-End
[DELAWARE INVESTMENTS LOGO] [LOGO] POWERED BY RESEARCH(R)
Table of contents
> Sector allocations and credit rating breakdowns .............................1
> Statements of net assets ....................................................3
> Statements of operations ...................................................13
> Statements of changes in net assets ........................................14
> Financial highlights .......................................................16
> Notes to financial statements ..............................................20
> Other Fund information .....................................................26
> About the organization .....................................................30
Dividend Reinvestment Plans
Each Fund offers an automatic dividend reinvestment program. If Fund shares are
registered in your name and you are not already reinvesting dividends but would
like to do so, contact the dividend plan agent, Mellon Investor Services LLC, at
800 851-9677. You will be asked to put your request in writing. If you have
shares registered in a "street" name, contact your financial advisor or the
broker/dealer holding the shares.
Under the current policies of Arizona Municipal Income Fund, Florida Insured
Municipal Income Fund, and Minnesota Municipal Income Fund II, all distributions
of net investment income and capital gains to common stock shareholders are
automatically reinvested in additional shares unless shareholders elect to
receive all dividends and other distributions in cash paid by check mailed
directly to shareholders by the dividend plan agent. Under the current policies
of Colorado Insured Municipal Income Fund, distributions of net investment
income and capital gains to common shareholders will be paid in cash unless
shareholders notify Mellon Investor Services LLC of their desire to participate
in the dividend reinvestment program.
After each Fund declares a dividend or determines to make a capital gains
distribution, the plan agent will, as agent for the participants, receive the
cash payment and use it to buy shares in the open market on the American Stock
Exchange. The Funds will not issue any new shares in connection with the plan.
You can contact Mellon at:
Mellon Investor Services LLC
Dividend Reinvestment Department
Overpeck Centre
85 Challenger Road
Ridgefield, NJ 07660
800 851-9677
Funds are not FDIC insured and are not guaranteed. It is possible to lose
the principal amount invested.
Mutual fund advisory services provided by Delaware Management Company, a
series of Delaware Management Business Trust, which is a registered
investment advisor.
Sector allocations and credit rating breakdowns
As of September 30, 2006
Sector designations may be different than the sector designations presented in
other Fund materials.
Delaware Investments
Arizona Municipal Income Fund, Inc.
Percentage
Sector of Net Assets
________________________________________________________________________________
Municipal Bonds 149.22%
Education Revenue Bonds 14.47%
Electric Revenue Bonds 6.52%
Health Care Revenue Bonds 20.05%
Housing Revenue Bonds 2.07%
Lease Revenue Bonds 10.80%
Local General Obligation Bonds 19.81%
Pre-Refunded Bonds 28.56%
Special Tax Revenue Bonds 8.26%
State General Obligation Bonds 6.08%
Transportation Revenue Bonds 27.06%
Water & Sewer Revenue Bonds 5.54%
________________________________________________________________________________
Short-Term Investments 7.23%
________________________________________________________________________________
Total Market Value of Securities 156.45%
________________________________________________________________________________
Receivables and Other Assets Net of Liabilities 0.03%
________________________________________________________________________________
Liquidation Value of Preferred Stock (56.48%)
________________________________________________________________________________
Total Net Assets 100.00%
________________________________________________________________________________
Credit Rating Breakdown
(as a % of fixed income investments)
________________________________________________________________________________
AAA 71.91%
AA 13.05%
A 6.75%
BBB 3.68%
Not Rated 4.61%
________________________________________________________________________________
Total 100.00%
________________________________________________________________________________
Delaware Investments
Colorado Insured Municipal Income Fund, Inc.
Percentage
Sector of Net Assets
________________________________________________________________________________
Municipal Bonds 147.44%
Education Revenue Bonds 31.54%
Electric Revenue Bonds 1.46%
Health Care Revenue Bonds 5.32%
Lease Revenue Bonds 10.78%
Local General Obligation Bonds 15.45%
Pre-Refunded Bonds 48.60%
Special Tax Revenue Bonds 3.82%
Transportation Revenue Bonds 17.81%
Water & Sewer Revenue Bonds 12.66%
________________________________________________________________________________
Short-Term Investments 5.39%
________________________________________________________________________________
Total Market Value of Securities 152.83%
________________________________________________________________________________
Receivables and Other Assets Net of Liabilities 1.20%
________________________________________________________________________________
Liquidation Value of Preferred Stock (54.03%)
________________________________________________________________________________
Total Net Assets 100.00%
________________________________________________________________________________
Credit Rating Breakdown
(as a % of fixed income investments)
________________________________________________________________________________
AAA 97.55%
AA 2.45%
________________________________________________________________________________
Total 100.00%
________________________________________________________________________________
(continues) 1
Sector allocations and credit rating breakdowns
As of September 30, 2006
Sector designations may be different than the sector designations presented in
other Fund materials.
Delaware Investments
Florida Insured Municipal Income Fund
Percentage
Sector of Net Assets
________________________________________________________________________________
Municipal Bonds 151.98%
Education Revenue Bonds 3.56%
Electric Revenue Bonds 5.79%
Health Care Revenue Bonds 18.16%
Housing Revenue Bonds 23.16%
Lease Revenue Bonds 16.94%
Local General Obligation Bonds 3.84%
Pre-Refunded Bonds 12.07%
Special Tax Revenue Bonds 28.84%
State General Obligation Bonds 5.93%
Transportation Revenue Bonds 18.28%
Water & Sewer Revenue Bonds 15.41%
________________________________________________________________________________
Total Market Value of Securities 151.98%
________________________________________________________________________________
Receivables and Other Assets Net of Liabilities 4.28%
________________________________________________________________________________
Liquidation Value of Preferred Stock (56.26%)
________________________________________________________________________________
Total Net Assets 100.00%
________________________________________________________________________________
Credit Rating Breakdown
(as a % of fixed income investments)
________________________________________________________________________________
AAA 100.00%
________________________________________________________________________________
Total 100.00%
________________________________________________________________________________
Delaware Investments
Minnesota Municipal Income Fund II, Inc.
Percentage
Sector of Net Assets
________________________________________________________________________________
Municipal Bonds 152.79%
Corporate-Backed Revenue Bonds 6.66%
Education Revenue Bonds 8.63%
Electric Revenue Bonds 17.93%
Escrowed to Maturity Bonds 17.16%
Health Care Revenue Bonds 20.31%
Housing Revenue Bonds 10.31%
Lease Revenue Bonds 10.41%
Local General Obligation Bonds 25.45%
Pre-Refunded Bonds 16.25%
Special Tax Revenue Bonds 1.63%
State General Obligation Bonds 4.74%
Transportation Revenue Bonds 13.31%
________________________________________________________________________________
Total Market Value of Securities 152.79%
________________________________________________________________________________
Receivables and Other Assets Net of Liabilities 2.53%
________________________________________________________________________________
Liquidation Value of Preferred Stock (55.32%)
________________________________________________________________________________
Total Net Assets 100.00%
________________________________________________________________________________
Credit Rating Breakdown
(as a % of fixed income investments)
________________________________________________________________________________
AAA 57.06%
AA 14.90%
A 15.55%
BBB 9.07%
BB 2.18%
B 0.33%
Not Rated 0.91%
________________________________________________________________________________
Total 100.00%
________________________________________________________________________________
2
Statements of net assets
Delaware Investments Arizona Municipal Income Fund, Inc.
September 30, 2006 (Unaudited)
Principal Market
Amount Value
________________________________________________________________________________
Municipal Bonds - 149.22%
________________________________________________________________________________
Education Revenue Bonds - 14.47%
Arizona State University Certificates
of Participation (Research
Infrastructure Project)
5.00% 9/1/30 (AMBAC) $ 1,000,000 $ 1,048,940
Arizona Student Loan Acquisition
Authority Revenue Series A-1
5.90% 5/1/24 (AMT) 1,500,000 1,588,605
Coconino County Unified School
District #8 (Aid Revenue Project of
2004) Series A 5.00% 7/1/15 (MBIA) 1,000,000 1,085,140
Northern Arizona University Certificates
of Participation (Northern Arizona
University Research Project)
5.00% 9/1/30 (AMBAC) 1,000,000 1,054,800
South Campus Group Student
Housing Revenue (Arizona State
University South Campus Project)
5.625% 9/1/35 (MBIA) 1,000,000 1,099,910
University of Arizona Certificates
of Participation (University
of Arizona Project) Series B
5.125% 6/1/22 (AMBAC) 500,000 528,785
_________
6,406,180
_________
Electric Revenue Bonds - 6.52%
Salt River Project Agricultural
Improvement & Power District
Electric System Revenue
(Salt River Project)
Series A 5.00% 1/1/31 1,500,000 1,564,065
Series B 5.00% 1/1/25 1,250,000 1,320,625
_________
2,884,690
_________
Health Care Revenue Bonds - 20.05%
Maricopa County Industrial Development
Authority Health Facilities Revenue
(Catholic Healthcare West)
Series A 5.50% 7/1/26 430,000 461,055
(Mayo Clinic Hospital)
5.00% 11/15/36 750,000 784,073
5.25% 11/15/37 2,000,000 2,060,560
Mohave County Industrial
Development Authority
Revenue (Chris/Silver Ridge)
6.375% 11/1/31 (GNMA) 260,000 268,229
Show Low Industrial Development
Authority Hospital Revenue
(Navapache Regional Medical Center)
Series A 5.50% 12/1/17 (ACA) 1,600,000 1,652,192
University Medical Center Corporation
Arizona Hospital Revenue
5.00% 7/1/33 1,000,000 1,018,260
5.00% 7/1/35 500,000 510,630
Yavapai County Industrial
Development Authority Revenue
(Yavapai Regional Medical Center)
Series A 5.25% 8/1/21 (RADIAN) 2,000,000 2,120,539
_________
8,875,538
_________
Housing Revenue Bonds - 2.07%
Phoenix Industrial Development
Authority Single Family
Statewide Revenue
Series A 5.35% 6/1/20 (GNMA)
(FNMA) (FHLMC) (AMT) 465,000 474,147
Series C 5.30% 4/1/20 (GNMA)
(FNMA) (FHLMC) (AMT) 370,000 373,256
Pima County Industrial Development
Authority Single Family
Mortgage Revenue Series A-1
6.125% 11/1/33 (GNMA) (FNMA)
(FHLMC) (AMT) 70,000 70,842
_________
918,245
_________
Lease Revenue Bonds - 10.80%
Greater Arizona Development
Authority Infrastructure Revenue
Series A 5.00% 8/1/22 (MBIA) 500,000 535,545
Nogales Development Authority
Municipal Facilities Revenue
5.00% 6/1/30 (AMBAC) 500,000 527,490
Phoenix Civic Improvement
Corporation Excise Tax Senior Lien
(Municipal Courthouse Project)
Series A 5.25% 7/1/24 1,000,000 1,045,750
Prescott Valley Municipal Property
Corporation 5.00% 1/1/27 (FGIC) 500,000 522,475
Tucson Certificates of Participation
5.60% 7/1/11 1,100,000 1,114,333
Yuma Municipal Property Corporation
5.00% 7/1/25 (AMBAC) 1,000,000 1,032,900
_________
4,778,493
_________
Local General Obligation Bonds - 19.81%
Maricopa County School District #6
(Washington Elementary) Series A
5.375% 7/1/13 (FSA) 3,000,000 3,313,800
(Washington Elementary School
Improvement Project of 2001)
Series B 5.00% 7/1/17 (FSA) 1,000,000 1,099,980
Maricopa County School District #38
(Madison Elementary)
5.00% 7/1/13 (FSA) 1,250,000 1,352,875
5.00% 7/1/14 (FSA) 825,000 898,145
Queen Creek Improvement District #1
5.00% 1/1/32 1,000,000 1,016,200
Tempe Union High School District #213
5.00% 7/1/14 (FSA) 1,000,000 1,088,660
_________
8,769,660
_________
$ Pre-Refunded Bonds - 28.56%
Arizona School Facilities Board
Certificates of Participation
Series B 5.25% 9/1/19-14 (FSA) 1,000,000 1,106,140
Arizona School Facilities Board
Revenue (State School
Improvement) Series 2001
5.00% 7/1/19-11 2,000,000 2,126,219
(continues) 3
Statements of net assets
Delaware Investments Arizona Municipal Income Fund, Inc.
Principal Market
Amount Value
________________________________________________________________________________
Municipal Bonds (continued)
________________________________________________________________________________
$ Pre-Refunded Bonds (continued)
Arizona State Transportation Board
Highway Revenue Refunding
5.75% 7/1/18-09 $ 2,350,000 $ 2,486,652
Arizona Water Infrastructure Finance
Authority Revenue Water Quality
Series A 5.05% 10/1/20-11 1,500,000 1,601,999
Oro Valley Municipal Property
Corporation Excise Tax
5.00% 7/1/20-11 (FGIC) 1,000,000 1,060,290
Puerto Rico Commonwealth
Public Improvement Series A
5.125% 7/1/31-11 250,000 267,473
Scottsdale Industrial Development
Authority Hospital Revenue
(Scottsdale Healthcare)
5.80% 12/1/31-11 1,000,000 1,109,390
Southern Arizona Capital Facilities
Finance Corporation (University of
Arizona Project)
5.00% 9/1/23-12 (MBIA) 1,150,000 1,236,101
Virgin Islands Public Finance Authority
Revenue (Gross Receipts Tax)
Series A 6.125% 10/1/29-10 (ACA) 1,250,000 1,379,313
Yuma Industrial Development
Authority Hospital Revenue
(Yuma Regional Medical Center)
5.00% 8/1/31-11 (FSA) 250,000 268,108
__________
12,641,685
__________
Special Tax Revenue Bonds - 8.26%
Arizona Tourism & Sports Authority
Tax Revenue Multipurpose
Stadium Facilities Series A
5.00% 7/1/31 (MBIA) 1,000,000 1,043,880
Glendale Municipal Property
Corporation Series A
5.00% 7/1/33 (AMBAC) 2,000,000 2,087,760
San Luis Civic Improvement Corporation
Municipal Facilities Excise Tax
Revenue 5.00% 7/1/38 (XLCA) 500,000 523,980
__________
3,655,620
__________
State General Obligation Bonds - 6.08%
Puerto Rico Commonwealth
Infrastructure Financing Authority
Series A 5.50% 10/1/40 2,500,000 2,692,050
__________
2,692,050
__________
Transportation Revenue Bonds - 27.06%
Phoenix Civic Improvement
Corporation Airport Revenue
Senior Lien
Series A 5.00% 7/1/25 (FSA) 1,000,000 1,024,600
Series B 5.25% 7/1/27 (FGIC) (AMT) 2,000,000 2,092,200
Puerto Rico Commonwealth Highway
& Transportation Authority
Transportation Refunding Series D
5.00% 7/1/32 (FSA) 8,500,000 8,859,380
__________
11,976,180
__________
Water & Sewer Revenue Bonds - 5.54%
Phoenix Civic Improvement
Corporation Wastewater Systems
Revenue Junior Lien
5.00% 7/1/24 (FGIC) 1,590,000 1,664,459
5.00% 7/1/26 (FGIC) 750,000 785,618
__________
2,450,077
__________
Total Municipal Bonds (cost $62,845,322) 66,048,418
__________
________________________________________________________________________________
Short-Term Investments - 7.23%
________________________________________________________________________________
~ Variable Rate Demand Note - 7.23%
Scottsdale Industrial Development
Authority Hospital Revenue
(Scottsdale Healthcare)
Series C 3.73% 9/1/35 (FSA) 3,200,000 3,200,000
___________
Total Short-Term Investments
(cost $3,200,000) 3,200,000
___________
Total Market Value of Securities - 156.45%
(cost $66,045,322) 69,248,418
Receivables and Other Assets
Net of Liabilities - 0.03% 13,531
Liquidation Value of Preferred Stock - (56.48%) (25,000,000)
___________
Net Assets Applicable to 2,982,200 Shares
Outstanding - 100.00% $44,261,949
___________
Net Asset Value Per Common Share
($44,261,949 / 2,982,200 Shares) $14.84
______
Components of Net Assets at September 30, 2006:
Common stock, $0.01 par value, 200 million shares
authorized to the Fund $40,838,893
Undistributed net investment income 56,064
Accumulated net realized gain on investments 163,896
Net unrealized appreciation of investments 3,203,096
___________
Total net assets $44,261,949
___________
$ Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S.
Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the
year in which the bond is pre-refunded. See Note 7 in "Notes to Financial
Statements."
~ Variable rate security. The interest rate shown is the rate as of September
30, 2006.
Summary of Abbreviations:
ACA - Insured by American Capital Access
AMBAC - Insured by the AMBAC Assurance Corporation
AMT - Subject to Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FHLMC - Insured by the Federal Home Loan Mortgage Corporation
FNMA - Insured by Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
GNMA - Insured by Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
RADIAN - Insured by Radian Asset Assurance
XLCA - Insured by XL Capital Assurance
See accompanying notes
4
Delaware Investments Colorado Insured Municipal Income Fund, Inc.
September 30, 2006 (Unaudited)
Principal Market
Amount Value
________________________________________________________________________________
Municipal Bonds - 147.44%
________________________________________________________________________________
Education Revenue Bonds - 31.54%
Boulder County Development
Revenue (University Corporation
for Atmospheric Research)
5.00% 9/1/26 (MBIA) $ 4,500,000 $ 4,677,705
Colorado Educational & Cultural
Facilities Authority
(Bromley School Project)
5.25% 9/15/32 (XLCA) 1,000,000 1,074,240
(Johnson & Wales University Project)
Series A 5.00% 4/1/28 (XLCA) 3,000,000 3,132,780
(University of Colorado
Foundation Project)
5.00% 7/1/27 (AMBAC) 4,000,000 4,171,200
(University of Denver Project)
Series B 5.25% 3/1/35 (FGIC) 1,500,000 1,622,070
(University of Northern Colorado)
Series A 5.00% 7/1/31 (MBIA) 2,500,000 2,584,700
Colorado State Board of Governors
(Colorado University) Series B
5.00% 3/1/35 (AMBAC) 1,800,000 1,874,610
University of Northern Colorado
Revenue Refunding
5.00% 6/1/35 (FSA) 4,000,000 4,214,000
___________
23,351,305
___________
Electric Revenue Bonds - 1.46%
Arkansas River Power Authority
Colorado Power Revenue
Improvement
5.25% 10/1/32 (XLCA) 1,000,000 1,081,240
___________
1,081,240
___________
Health Care Revenue Bonds - 5.32%
Colorado Health Facilities Authority
Revenue
(North Colorado Medical Center)
5.95% 5/15/12 (MBIA) 1,250,000 1,269,763
(Porter Place) Series A
6.00% 1/20/36 (GNMA) 2,515,000 2,669,999
___________
3,939,762
___________
Lease Revenue Bonds - 10.78%
Broomfield City & County Certificates
of Participation
5.75% 12/1/24 (AMBAC) 1,500,000 1,587,015
Denver Convention Center Series A
5.00% 12/1/35 (XLCA) 2,000,000 2,099,340
Glendale Certificates of Participation
5.00% 12/1/25 (XLCA) 1,500,000 1,605,480
Westminster Building Authority
Certificates of Participation
5.25% 12/1/22 (MBIA) 1,555,000 1,652,390
Westminster Certificates of
Participation (Ice Centre Project)
5.40% 1/15/23 (AMBAC) 1,000,000 1,038,180
___________
7,982,405
___________
Local General Obligation Bonds - 15.45%
Adams & Arapahoe Counties Joint
School District #28J (Aurora)
Series A 5.25% 12/1/25 (MBIA) 1,000,000 1,099,620
Arapahoe County Water &
Wastewater Public Improvement
District Refunding Series A
5.125% 12/1/32 (MBIA) 1,000,000 1,058,690
Bowles Metropolitan District
5.00% 12/1/33 (FSA) 2,000,000 2,093,680
Centennial Downs Metropolitan
District 5.00% 12/1/28 (AMBAC) 1,000,000 1,057,990
Douglas County School District #Re-1
(Douglas & Elbert Counties)
5.00% 12/15/21 (MBIA) 1,000,000 1,056,430
Garfield Pitkin & Eagle County
School District #Re-1
(Roaring Fork County) Series A
5.00% 12/15/27 (FSA) 1,500,000 1,590,540
Green Valley Ranch Metropolitan
District 5.75% 12/1/19 (AMBAC) 1,000,000 1,061,230
Sand Creek Metropolitan District
Refunding & Improvement
5.00% 12/1/31 (XLCA) 500,000 522,160
Stonegate Village Metropolitan
District Refunding & Improvement
Series A 5.50% 12/1/21 (FSA) 1,000,000 1,012,890
Weld & Adams Counties School
District #Re-3J
5.00% 12/15/24 (FSA) 830,000 884,265
___________
11,437,495
___________
$ Pre-Refunded Bonds - 48.60%
Auraria Higher Education Center
Parking Facilities System Revenue
5.50% 4/1/26-10 (AMBAC) 2,485,000 2,645,506
Aurora Certificates of Participation
5.50% 12/1/30-10 (AMBAC) 2,000,000 2,147,080
Burlingame Multifamily Housing
Revenue Series A
6.00% 11/1/29-09 (MBIA) 2,290,000 2,470,773
City of Colorado Springs (Colorado
Springs College Project)
5.375% 6/1/32-09 (MBIA) 5,000,000 5,279,200
Colorado Educational & Cultural
Facilities Authority (University of
Denver Project)
5.50% 3/1/21-11 (AMBAC) 3,200,000 3,453,888
Denver City & County Excise Tax
Revenue (Colorado Convention
Center Project) Series A
5.00% 9/1/20-11 (FSA) 6,500,000 6,883,759
Denver Convention Center Series A
5.00% 12/1/33-13 (XLCA) 3,000,000 3,243,180
(continues) 5
Statements of net assets
Delaware Investments Colorado Insured Municipal Income Fund, Inc.
Principal Market
Amount Value
________________________________________________________________________________
Municipal Bonds (continued)
________________________________________________________________________________
$ Pre-Refunded Bonds (continued)
E-470 Public Highway Authority
Series A
5.75% 9/1/29-10 (MBIA) $ 3,000,000 $ 3,293,940
5.75% 9/1/35-10 (MBIA) 1,700,000 1,866,566
Eagle County Certificates of
Participation
5.40% 12/1/18-09 (MBIA) 1,000,000 1,064,710
Lakewood Certificates of
Participation
5.375% 12/1/22-10 (AMBAC) 2,000,000 2,141,480
Pueblo County (Library District Project)
5.80% 11/1/19-09 (AMBAC) 1,395,000 1,486,972
___________
35,977,054
___________
Special Tax Revenue Bonds - 3.82%
Broomfield County Sales &
Use Tax Revenue Refunding &
Improvement Series A
5.00% 12/1/31 (AMBAC) 650,000 678,516
Golden Sales & Use Tax Revenue
Improvement Series B
5.10% 12/1/20 (AMBAC) 1,000,000 1,060,710
Gypsum Sales Tax & General Funding
Revenue 5.25% 6/1/30 (Assured Gty) 1,000,000 1,088,110
___________
2,827,336
___________
Transportation Revenue Bonds - 17.81%
Denver City & County Airport
Revenue
Series A 5.00% 11/15/25 (FGIC) 1,000,000 1,068,380
Series E 5.25% 11/15/23 (MBIA) 7,500,000 7,687,950
Northwest Parkway Public Highway
Authority Series A
5.25% 6/15/41 (FSA) 4,150,000 4,431,038
___________
13,187,368
___________
Water & Sewer Revenue Bonds - 12.66%
Colorado Water Resources & Power
Development Authority Small
Revenue Series A
5.80% 11/1/20 (FGIC) 2,000,000 2,157,560
Colorado Water Resources & Power
Development Authority Revenue
(Parker Water & Sanitation
District) Series D
5.125% 9/1/34 (MBIA) 1,500,000 1,591,395
5.25% 9/1/43 (MBIA) 2,000,000 2,135,900
Lafayette Water Revenue Series A
5.00% 12/1/27 (MBIA) 1,100,000 1,159,169
Ute Utility Water Conservancy District
Revenue 5.75% 6/15/20 (MBIA) 2,155,000 2,325,159
___________
9,369,183
___________
Total Municipal Bonds (cost $103,097,325) 109,153,148
___________
________________________________________________________________________________
Short-Term Investments - 5.39%
________________________________________________________________________________
~ Variable Rate Demand Notes - 5.39%
City of Colorado Springs
(Colorado College Project)
3.86% 6/1/29 (SPA) 2,800,000 2,800,000
Colorado Housing & Finance
Authority (Single Family
Mortgage) Series 1-A3
3.75% 11/1/21 (SPA) 1,190,000 1,190,000
___________
Total Short-Term Investments
(cost $3,990,000) 3,990,000
___________
Total Market Value of Securities - 152.83%
(cost $107,087,325) 113,143,148
Receivables and Other Assets Net
of Liabilities - 1.20% 886,330
Liquidation Value of Preferred Stock - (54.03%) (40,000,000)
___________
Net Assets Applicable to 4,837,100 Shares
Outstanding - 100.00% $74,029,478
___________
Net Asset Value Per Common Share
($74,029,478 / 4,837,100 Shares) $15.30
______
Components of Net Assets at September 30, 2006:
Common stock, $0.01 par value, 200 million shares
authorized to the Fund $67,238,110
Undistributed net investment income 566,699
Accumulated net realized gain on investments 168,846
Net unrealized appreciation of investments 6,055,823
___________
Total net assets $74,029,478
___________
$ Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S.
Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by
the year in which the bond is pre-refunded. See Note 7 in "Notes to Financial
Statements.
~ Variable rate security. The interest rate shown is the rate as of
September 30, 2006.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Assurance Corporation
Assured Gty - Insured by the Assured Guaranty Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
GNMA - Insured by Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
SPA - Stand-by Purchase Agreement
XLCA - Insured by XL Capital Assurance
See accompanying notes
6
Delaware Investments Florida Insured Municipal Income Fund
September 30, 2006 (Unaudited)
Principal Market
Amount Value
________________________________________________________________________________
Municipal Bonds - 151.98%
________________________________________________________________________________
Education Revenue Bonds - 3.56%
Florida Agriculture & Mechanical
University Revenue
(Student Apartment Facility)
5.625% 7/1/21 (MBIA) $1,250,000 $ 1,264,425
___________
1,264,425
___________
Electric Revenue Bonds - 5.79%
JEA Electric Systems Revenue
Series 3-A 5.00% 10/1/34 (FSA) 2,000,000 2,058,400
___________
2,058,400
___________
Health Care Revenue Bonds - 18.16%
Escambia County Health Facilities
Authority (Florida Health Care
Facilities - VHA Program)
5.95% 7/1/20 (AMBAC) 355,000 371,777
Lee County Memorial Health System
Board of Directors Series A
5.00% 4/1/20 (FSA) 1,000,000 1,044,700
Miami-Dade County Public Facilities
Revenue (Jackson Health Systems)
Series A 5.00% 6/1/35 (MBIA) 1,500,000 1,571,385
Orange County Health Facilities
Authority Revenue (Orlando
Regional Healthcare) Series A
6.25% 10/1/18 (MBIA) 2,000,000 2,411,900
South Broward Hospital Refunding
5.00% 5/1/35 (MBIA) 1,000,000 1,054,090
___________
6,453,852
___________
Housing Revenue Bonds - 23.16%
Broward County Housing Finance
Authority (St. Croix Apartments
Project ) Series A
5.45% 11/1/36 (FSA) (AMT) 935,000 967,071
Florida Housing Finance Agency
(Homeowner Mortgage) Series 2
5.90% 7/1/29 (MBIA) (AMT) 470,000 477,097
(Leigh Meadows Apartments
HUD) Series N 6.30% 9/1/36
(AMBAC) (AMT) 2,510,000 2,562,434
(Woodbridge Apartments
Project) Series L
6.05% 12/1/16 (AMBAC) (AMT) 1,120,000 1,144,259
6.25% 6/1/36 (AMBAC) (AMT) 1,500,000 1,532,715
Volusia County Multifamily
Housing Finance Authority (San
Marco Apartments) Series A
5.60% 1/1/44 (FSA) (AMT) 1,500,000 1,550,535
___________
8,234,111
___________
Lease Revenue Bonds - 16.94%
Broward County School Board
Certificates of Participation
Series A 5.25% 7/1/24 (FSA) 1,000,000 1,066,340
Florida State Municipal Loan
(Council Revenue) Series A
5.00% 2/1/35 (MBIA) 2,000,000 2,096,400
Orange County School Board
Certificates of Participation
Series A 5.00% 8/1/27 (MBIA) 1,250,000 1,300,250
Palm Beach County School Board
Certificates of Participation
Series D 5.00% 8/1/28 (FSA) 1,500,000 1,557,945
___________
6,020,935
___________
Local General Obligation Bonds - 3.84%
Julington Creek Plantation
Community Development
District Special Assessment
5.00% 5/1/29 (MBIA) 295,000 308,018
Port St. Lucie 5.00% 7/1/35 (MBIA) 1,000,000 1,058,910
___________
1,366,928
___________
$ Pre-Refunded Bonds - 12.07%
Florida State Board of Education
(Capital Outlay Public Education)
Series C 6.00% 6/1/21-10 (FGIC) 2,000,000 2,185,860
Tampa Utility Tax Improvement
Series A
6.125% 10/1/19-09 (AMBAC) 1,000,000 1,082,530
Village Center Community
Development District
Recreational Revenue Series A
5.85% 11/1/16-06 (MBIA) 1,000,000 1,021,940
___________
4,290,330
___________
Special Tax Revenue Bonds - 28.84%
Flagler County Capital
Improvements Revenue
5.00% 10/1/35 (MBIA) 1,000,000 1,054,330
Florida State Department of
Transportation
5.00% 7/1/31 (FGIC) 1,525,000 1,595,562
Jacksonville Sales Tax Revenue
5.00% 10/1/30 (MBIA) 1,500,000 1,571,715
Jacksonville Transportation Revenue
5.25% 10/1/29 (MBIA) 2,000,000 2,118,900
Miami Beach Resort Tax Revenue
5.50% 10/1/16 (AMBAC) 1,000,000 1,021,400
{ Miami-Dade County Special
Obligation (Capital
Appreciation & Income) Series B
5.00% 10/1/35 (MBIA) 2,000,000 1,840,380
Seminole County Sales Tax Revenue
5.00% 10/1/31 (MBIA) 1,000,000 1,051,430
___________
10,253,717
___________
State General Obligation Bonds - 5.93%
Florida State Board Education
Public Education (Capital Outlay)
Series C 5.00% 6/1/34 (AMBAC) 2,000,000 2,107,880
___________
2,107,880
___________
(continues) 7
Statements of net assets
Delaware Investments Florida Insured Municipal Income Fund
Principal Market
Amount Value
________________________________________________________________________________
Municipal Bonds (continued)
________________________________________________________________________________
Transportation Revenue Bonds - 18.28%
Dade County Aviation Revenue
Series B 5.60% 10/1/26 (MBIA) $ 1,000,000 $ 1,021,330
Florida Ports Financing Commission
State Transportation Trust Fund
5.375% 6/1/27 (MBIA) (AMT) 1,000,000 1,018,880
Miami-Dade County Aviation
Revenue (Miami International
Airport) Series B
5.00% 10/1/37 (FGIC) 2,250,000 2,351,070
Miami-Dade County Expressway
Authority Toll Systems Revenue
5.00% 7/1/37 (AMBAC) 1,000,000 1,058,090
Series B 5.00% 7/1/33 (FGIC) 1,000,000 1,048,040
___________
6,497,410
___________
Water & Sewer Revenue Bonds - 15.41%
JEA Water & Sewer Systems
Revenue Sub-Second Crossover
5.00% 10/1/25 (MBIA) 1,000,000 1,059,840
Riviera Beach Utilities Special
District Water & Sewer Revenue
5.00% 10/1/34 (FGIC) 1,200,000 1,260,276
Village Center Community
Development District Utility
Revenue 5.00% 10/1/36 (MBIA) 1,500,000 1,566,870
Winter Haven Utilities Systems
Revenue Refunding &
Improvement
5.00% 10/1/30 (MBIA) 1,500,000 1,590,945
___________
5,477,931
___________
Total Municipal Bonds (cost $52,118,837) 54,025,919
___________
Total Market Value of Securities - 151.98%
(cost $52,118,837) 54,025,919
Receivables and Other Assets Net
of Liabilities - 4.28% 1,520,938
Liquidation Value of Preferred Stock - (56.26%) (20,000,000)
___________
Net Assets Applicable to 2,422,200 Shares
Outstanding - 100.00% $35,546,857
___________
Net Asset Value Per Common Share
($35,546,857 / 2,422,200 Shares) $14.68
______
Components of Net Assets at September 30, 2006:
Common stock, $0.01 par value, unlimited shares
authorized to the Fund $33,361,389
Undistributed net investment income 179,421
Accumulated net realized gain on investments 98,965
Net unrealized appreciation of investments 1,907,082
___________
Total net assets $35,546,857
___________
$ Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S.
Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by
the year in which the bond is pre-refunded. See Note 7 in "Notes to Financial
Statements."
{ Step coupon bond. Indicates security that has a zero coupon that
remains in effect until a predetermined date at which time the stated interest
rate becomes effective.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Assurance Corporation
AMT - Subject to Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security
HUD - Housing and Urban Development
MBIA - Insured by the Municipal Bond Insurance Association
VHA - Veterans Health Administration
See accompanying notes
8
Delaware Investments Minnesota Municipal Income Fund II, Inc.
September 30, 2006 (Unaudited)
Principal Market
Amount Value
_______________________________________________________________________________
Municipal Bonds - 152.79%
_______________________________________________________________________________
Corporate-Backed Revenue Bonds - 6.66%
Anoka County Solid Waste Disposal
National Rural Co-Op Utility
Revenue (United Power
Association) Series A
6.95% 12/1/08 (AMT) $ 435,000 $ 448,224
Cloquet Pollution Control Revenue
(Potlatch Corporation Project)
5.90% 10/1/26 5,500,000 5,648,500
Laurentian Energy Authority I
Cogeneration Revenue Series A
5.00% 12/1/21 3,325,000 3,378,599
Minneapolis Community Development
Agency (Supported Limited Tax
Common Bond Fund - Pajor
Graphics) Series A 6.75% 12/1/25
(LOC - US Bank NA) (AMT) 865,000 933,620
Sartell Environmental Improvement
Revenue (International Paper)
Series A 5.20% 6/1/27 1,000,000 1,029,500
____________
11,438,443
____________
Education Revenue Bonds - 8.63%
Minneapolis Art Center Facilities
Revenue (Walker Art Center Project)
5.125% 7/1/21 4,250,000 4,446,860
Minnesota State Higher Education
Facilities Authority Revenue
(Augsburg College) Series 6-J1
5.00% 5/1/28 750,000 771,060
(College of St. Benedict)
Series 5-W
5.00% 3/1/20 2,000,000 2,068,120
5.25% 3/1/24 300,000 313,695
(St. Catherine College) Series 5-N1
5.375% 10/1/32 1,500,000 1,576,845
(St. Mary's University) Series 5-U
4.80% 10/1/23 1,400,000 1,425,914
(St. Thomas University) Series 5-Y
5.00% 10/1/24 1,000,000 1,048,020
5.25% 10/1/34 1,500,000 1,593,570
St. Cloud Housing & Redevelopment
Authority Revenue (State
University Foundation Project)
5.00% 5/1/23 1,000,000 1,046,290
University of the Virgin Islands
Series A 5.375% 6/1/34 500,000 527,055
____________
14,817,429
____________
Electric Revenue Bonds - 17.93%
Chaska Electric Revenue (Generating
Facilities) Series A 5.25% 10/1/25 250,000 268,640
Minnesota State Municipal Power
Agency Electric Revenue Series A
5.00% 10/1/34 6,500,000 6,712,030
5.25% 10/1/19 1,610,000 1,732,763
Rochester Electric Utility Revenue
5.25% 12/1/30 (AMBAC) 600,000 631,116
Southern Minnesota Municipal
Power Agency Supply System
Revenue Series A
5.25% 1/1/15 (AMBAC) 1,270,000 1,404,582
5.25% 1/1/16 (AMBAC) 1,500,000 1,668,915
&Southern Minnesota Municipal
Power Agency Supply System
Revenue, Inverse Floater ROLs
Series II-R-189
7.251% 1/1/15 (AMBAC) 1,500,000 1,817,910
Series II-R-189-3
6.636% 1/1/14 (AMBAC) 7,000,000 8,373,679
Western Minnesota Municipal Power
Agency Supply Revenue
Series A 5.00% 1/1/30 (MBIA) 6,790,000 7,087,606
Series B 5.00% 1/1/15 (MBIA) 1,000,000 1,088,360
____________
30,785,601
____________
Escrowed to Maturity Bonds - 17.16%
Dakota/Washington Counties
Housing & Redevelopment
Authority Bloomington
Mortgage Single Family
Residential Revenue
8.375% 9/1/21 (GNMA) (FHA)
(VA) (AMT) 8,055,000 11,771,255
Southern Minnesota Municipal
Power Agency Supply System
Revenue Series B
5.50% 1/1/15 (AMBAC) 390,000 413,544
5.75% 1/1/11 (FGIC) 1,000,000 1,005,050
St. Paul Housing & Redevelopment
Authority Sales Tax
(Civic Center Project)
5.55% 11/1/23 2,300,000 2,386,066
5.55% 11/1/23 (MBIA) 4,200,000 4,357,164
University of Minnesota Hospital &
Clinics 6.75% 12/1/16 2,580,000 3,123,219
University of Minnesota Series A
5.50% 7/1/21 4,000,000 4,612,240
Western Minnesota Municipal Power
Agency Supply Revenue Series A
6.625% 1/1/16 1,535,000 1,798,867
____________
29,467,405
____________
Health Care Revenue Bonds - 20.31%
Bemidji Hospital Facilities First Meeting
Revenue (North Country Health
Services) 5.00% 9/1/24 (RADIAN) 1,500,000 1,553,940
Duluth Economic Development
Authority Health Care Facilities
Revenue (Benedictine Health
System - St. Mary's Hospital)
5.25% 2/15/33 5,000,000 5,207,449
Glencoe Health Care Facilities
Revenue (Glencoe Regional
Health Services Project)
5.00% 4/1/25 2,000,000 2,063,600
(continues) 9
Statements of net assets
Delaware Investments Minnesota Municipal Income Fund II, Inc.
Principal Market
Amount Value
_______________________________________________________________________________
Municipal Bonds (continued)
_______________________________________________________________________________
Health Care Revenue Bonds (continued)
Maple Grove Health Care Facilities
Revenue (North Memorial Health
Care) 5.00% 9/1/29 $1,515,000 $ 1,572,934
Minneapolis Health Care System
Revenue
(Allina Health Systems) Series A
5.75%11/15/32 3,200,000 3,445,312
(Fairview Health Services) Series D
5.00% 11/15/30 (AMBAC) 1,500,000 1,582,560
5.00% 11/15/34 (AMBAC) 3,250,000 3,417,083
Minnesota Agricultural & Economic
Development Board Revenue
(Fairview Health Care System)
Series A
5.75% 11/15/26 (MBIA) 100,000 104,033
6.375% 11/15/29 195,000 211,624
Northfield Hospital Revenue
5.375% 11/1/31 750,000 793,050
Rochester Health Care Facilities Revenue
(Mayo Clinic) 5.00% 11/15/36 2,000,000 2,095,660
(Mayo Foundation) Series B
5.50% 11/15/27 4,365,000 4,524,714
Shakopee Health Care Facilities
Revenue (St. Francis Regional
Medical Center) 5.25% 9/1/34 1,560,000 1,629,046
St. Louis Park Health Care Facilities
Revenue (Park Nicollet Health
Services) Series B 5.25% 7/1/30 1,250,000 1,315,738
St. Paul Housing & Redevelopment
Authority Health Care Facilities
Revenue
(Franciscan Health Project)
5.40% 11/20/42 (GNMA) (FHA) 2,700,000 2,845,260
(Regions Hospital Project)
5.30% 5/15/28 1,000,000 1,017,850
Waconia Health Care Facilities
Revenue (Ridgeview Medical
Center Project) Series A
6.10% 1/1/19 (RADIAN) 1,405,000 1,501,692
____________
34,881,545
____________
Housing Revenue Bonds - 10.31%
Chanhassen Multifamily Housing
Revenue (Heritage Park
Apartments Project-Section 8)
6.20% 7/1/30 (FHA) (AMT) 1,105,000 1,130,282
Dakota County Housing &
Redevelopment Authority Single
Family Mortgage Revenue
Series B 5.85% 10/1/30
(GNMA) (FNMA) (AMT) 17,000 17,396
Harmony Multifamily Housing
Revenue Section 8 (Zedakah
Foundation Project) Series A
5.95% 9/1/20 1,000,000 887,230
Minneapolis Multifamily Housing
Revenue
(Gaar Scott Loft Project)
5.95% 5/1/30 (AMT) 955,000 994,929
(Olson Townhomes Project)
6.00% 12/1/19 (AMT) 930,000 930,186
(Seward Towers Project)
5.00% 5/20/36 (GNMA) 2,000,000 2,086,840
(Sumner Housing Project) Series A
5.15% 2/20/45 (GNMA) (AMT) 3,575,000 3,660,549
Minnesota State Housing Finance
Agency Rental Housing Revenue
Series A 5.00% 2/1/35 (AMT) 1,000,000 1,017,020
Series D 5.95% 2/1/18 (MBIA) 135,000 136,006
Minnesota State Housing Finance
Agency Single Family Mortgage
Revenue
Series 1992-C2
6.15% 7/1/23 (AMT) 920,000 924,407
Series B 5.35% 1/1/33 (AMT) 1,780,000 1,831,335
Series I 5.15% 7/1/38 (AMT) 1,000,000 1,031,040
Series J 5.90% 7/1/28 (AMT) 1,090,000 1,124,095
Southeastern Minnesota
Multi-County Housing &
Redevelopment Authority
Revenue (Winona County)
5.35% 1/1/28 1,170,000 1,172,106
Washington County Housing &
Redevelopment Authority
Governmental Revenue
(Woodland Park Apartments
Project) 4.70% 10/1/32 750,000 756,203
____________
17,699,624
____________
Lease Revenue Bonds - 10.41%
Andover Economic Development
Authority Public Facilities Lease
Revenue (Andover Community
Center)
5.125% 2/1/24 500,000 524,895
5.20% 2/1/29 1,000,000 1,052,790
Puerto Rico Public Buildings Authority
Guaranteed Government Facilities
Revenue Series D 5.25% 7/1/27 530,000 557,189
St. Paul Port Authority Lease Revenue
(Cedar Street Office Building Project)
5.00% 12/1/22 2,385,000 2,523,521
5.125% 12/1/27 1,000,000 1,059,760
5.25% 12/1/27 4,800,000 5,099,375
(Robert Street Office Building Project)
5.00% 12/1/27 3,045,000 3,206,872
Series 9 5.25% 12/1/27 2,000,000 2,132,600
10
Principal Market
Amount Value
_______________________________________________________________________________
Municipal Bonds (continued)
_______________________________________________________________________________
Lease Revenue Bonds (continued)
Virginia Housing & Redevelopment
Authority Health Care Facility
Lease Revenue
5.25% 10/1/25 $ 680,000 $ 709,995
5.375% 10/1/30 965,000 1,015,634
____________
17,882,631
____________
Local General Obligation Bonds - 25.45%
Centennial Independent School
District #012 Series A
5.00% 2/1/20 (FSA) 800,000 846,552
Dakota County Community
Development Agency
Governmental Housing Series A
5.00% 1/1/23 1,100,000 1,169,069
Elk River Independent School
District #728 Series A
5.00% 2/1/16 (FGIC) 1,500,000 1,622,340
Farmington Independent School
District #192
Series A 5.00% 2/1/23 (FSA) 2,280,000 2,400,840
Series B 5.00%2/1/27 (FSA) 1,500,000 1,592,820
Hennepin County Regional Railroad
Authority 5.00% 12/1/26 3,500,000 3,633,069
Hennepin County Series B
5.00% 12/1/18 2,300,000 2,416,771
Lakeville Independent School
District #194 Series A
4.75% 2/1/22 (FSA) 2,000,000 2,082,580
Metropolitan Council Waste
Water Treatment Series B
5.00% 12/1/21 2,000,000 2,146,080
Minneapolis Special School
District #001 5.00% 2/1/19 (FSA) 1,675,000 1,781,765
Minneapolis Sports Arena Project
5.125% 10/1/20 750,000 765,458
Minneapolis/St. Paul Metropolitan
Area Council Series C
5.00% 2/1/22 1,000,000 1,044,690
Moorhead Economic Development
Authority Tax Increment Series A
5.25% 2/1/25 (MBIA) 1,000,000 1,061,560
Moorhead Series B
5.00% 2/1/33 (MBIA) 3,250,000 3,415,718
Morris Independent School District
#769 5.00% 2/1/28 (MBIA) 3,750,000 4,009,462
Mounds View Independent
School District #621 Series A
5.00% 2/1/23 (FSA) 2,020,000 2,129,120
Princeton Independent School
District #477 Series A
5.00% 2/1/24 (FSA) 1,000,000 1,066,240
Robbinsdale Independent School
District #281 5.00% 2/1/21 (FSA) 500,000 529,095
St. Michael Independent School
District #885
5.00% 2/1/22 (FSA) 2,000,000 2,102,060
5.00% 2/1/24 (FSA) 1,125,000 1,182,409
Washington County Housing &
Redevelopment Authority Series B
5.50% 2/1/22 (MBIA) 1,705,000 1,825,492
5.50% 2/1/32 (MBIA) 2,140,000 2,272,209
Willmar (Rice Memorial Hospital
Project) 5.00% 2/1/32 (FSA) 2,500,000 2,610,875
____________
43,706,274
____________
$ Pre-Refunded Bonds - 16.25%
Chaska Electric Revenue Series A
6.00% 10/1/25-10 1,000,000 1,090,920
Minneapolis Community
Development Agency (Limited Tax
Supported Common Bond Fund)
Series G-1 5.70% 12/1/19-11 1,100,000 1,198,714
Series G-3 5.45% 12/1/31-11 1,000,000 1,086,300
Minneapolis Health Care System
Revenue (Fairview Health Services)
Series A 5.625% 5/15/32-12 2,750,000 3,050,823
Minnesota Agricultural & Economic
Development Board Revenue
(Fairview Health Care System)
Series A
5.75% 11/15/26-07 (MBIA) 5,450,000 5,688,983
6.375% 11/15/29-10 6,105,000 6,801,824
Puerto Rico Commonwealth
6.00% 7/1/26-07 1,000,000 1,034,210
Puerto Rico Commonwealth
Highway & Transportation
Authority Revenue Series D
5.25% 7/1/38-12 1,000,000 1,087,470
Puerto Rico Commonwealth
Public Improvement Series A
5.00% 7/1/27-12 1,250,000 1,343,200
Puerto Rico Public Buildings
Authority Revenue (Guaranteed
Government Facilities) Series D
5.25% 7/1/27-12 1,470,000 1,592,216
Southern Minnesota Municipal
Power Agency Supply Revenue
Series A 5.75% 1/1/18-13 3,715,000 3,921,591
____________
27,896,251
____________
Special Tax Revenue Bonds - 1.63%
Minneapolis Community Development
Agency Revenue (Limited Tax
Supported Common Bond Fund)
Series 5 5.70% 12/1/27 375,000 380,160
Minneapolis Development Revenue
(Limited Tax Supported Common
Bond Fund) 5.50% 12/1/24 (AMT) 1,000,000 1,066,270
(continues) 11
Statements of net assets
Delaware Investments Minnesota Municipal Income Fund II, Inc.
Principal Market
Amount Value
_______________________________________________________________________________
Municipal Bonds (continued)
_______________________________________________________________________________
Special Tax Revenue Bonds (continued)
Puerto Rico Commonwealth
Infrastructure Financing
Authority Special Tax Revenue
5.00% 7/1/46 $ 800,000 $ 824,176
Virgin Islands Public Finance
Authority Revenue (Matching
Fund Loan Notes) 5.25% 10/1/23 500,000 529,280
____________
2,799,886
____________
State General Obligation Bonds - 4.74%
Minnesota State 5.00% 8/1/21 5,025,000 5,318,963
& Minnesota State, Inverse Floater
ROLs 6.196% 11/1/17 570,000 601,766
Puerto Rico Commonwealth
Public Improvement Series A
5.50% 7/1/19 (MBIA) 1,000,000 1,156,800
Puerto Rico Government
Development Bank Senior Notes
Series B 5.00% 12/1/14 1,000,000 1,070,870
____________
8,148,399
____________
Transportation Revenue Bonds - 13.31%
Minneapolis/St. Paul Metropolitan
Airports Commission Revenue
Series A 5.00% 1/1/22 (MBIA) 3,000,000 3,151,680
Series A 5.00% 1/1/28 (MBIA) 2,120,000 2,211,732
Series A 5.00% 1/1/30 (AMBAC) 2,450,000 2,495,472
Series A 5.00% 1/1/35 (AMBAC) 2,000,000 2,097,000
Series A 5.125% 1/1/25 (FGIC) 900,000 930,987
Series A 5.25% 1/1/16 (MBIA) 1,000,000 1,077,400
Series B 5.25% 1/1/24 (FGIC) 1,000,000 1,040,070
Series C 5.25% 1/1/32 (FGIC) 6,000,000 6,288,060
St. Paul Housing & Redevelopment
Authority Parking Revenue
(Block 19 Ramp Project) Series A
5.35% 8/1/29 (FSA) 3,350,000 3,563,965
____________
22,856,366
____________
Total Municipal Bonds (cost $249,678,634) 262,379,854
____________
Total Market Value of Securities - 152.79%
(cost $249,678,634) $262,379,854
Receivables and Other Assets
Net of Liabilities - 2.53% 4,338,761
Liquidation Value of Preferred Stock - (55.32%) (95,000,000)
____________
Net Assets Applicable to 11,504,975
Shares Outstanding - 100.00% $171,718,615
____________
Net Asset Value Per Common Share
($171,718,615 / 11,504,975 Shares) $14.93
______
Components of Net Assets at September 30, 2006:
Common stock, $0.01 par value, 200 million shares
authorized to the Fund $158,785,529
Undistributed net investment income 301,052
Accumulated net realized loss on investments (69,186)
Net unrealized appreciation of investments 12,701,220
____________
Total net assets $171,718,615
____________
& An inverse floater bond is a type of bond with variable or floating interest
rates that move in the opposite direction of short-term interest rates.
Interest rate disclosed is in effect as of September 30, 2006. See Note 7 in
"Notes to Financial Statements."
$ Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S.
Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the
year in which the bond is pre-refunded. See Note 7 in "Notes to Financial
Statements."
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Assurance Corporation
AMT - Subject to Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Administration
FNMA - Insured by Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
GNMA - Insured by Government National Mortgage Association
LOC - Letter of Credit
MBIA - Insured by the Municipal Bond Insurance Association
RADIAN - Insured by Radian Asset Assurance
ROLs - Residual Option Longs
VA - Insured by the Veterans Administration
See accompanying notes
12
Statements of operations
Six Months Ended September 30, 2006 (Unaudited)
Delaware Delaware Delaware Delaware
Investments Investments Investments Investments
Arizona Colorado Insured Florida Insured Minnesota
Municipal Municipal Municipal Municipal
Income Income Income Income
Fund, Inc. Fund, Inc. Fund Fund II, Inc.
Investment Income:
Interest $ 1,628,412 $2,772,255 $1,375,528 $ 6,408,639
___________ __________ __________ ___________
Expenses:
Management fees 137,259 226,565 110,274 527,830
Remarketing agent fees 31,597 50,000 25,278 117,430
Accounting and administration expenses 13,763 22,718 11,057 52,760
Dividend disbursing and transfer agent fees and expenses 9,960 13,983 11,622 45,674
Audit and tax 9,047 10,150 9,250 10,350
Rating agency fees 6,713 6,400 6,460 15,333
Reports and statements to shareholders 4,659 6,529 5,945 9,243
Taxes (other than taxes on income) 2,999 4,744 203 10,642
Legal fees 2,617 4,679 1,980 6,554
Directors'/Trustees' fees and benefits 2,349 3,944 1,891 9,073
Custodian fees 1,512 2,062 1,311 4,075
Stock exchange fees 1,360 2,291 1,105 9,108
Pricing fees 890 810 683 2,175
Insurance fees 667 1,108 530 4,841
Dues and services 417 475 265 1,625
Registration fees 310 310 310 261
Consulting fees 263 542 145 373
Trustee expenses 102 185 83 329
Other 4 5 3 28
___________ __________ __________ ___________
226,488 357,500 188,395 827,704
Less expense paid indirectly (1,493) (2,030) (1,296) (4,001)
___________ __________ __________ ___________
Total operating expenses 224,995 355,470 187,099 823,703
___________ __________ __________ ___________
Net Investment Income 1,403,417 2,416,785 1,188,429 5,584,936
___________ __________ __________ ___________
Net Realized and Unrealized Gain on Investments:
Net realized gain on investments 164,120 169,941 100,056 139,209
Net change in unrealized appreciation/depreciation of investments 446,071 635,466 305,691 2,761,173
___________ __________ __________ ___________
Net Realized and Unrealized Gain on Investments 610,191 805,407 405,747 2,900,382
___________ __________ __________ ___________
Dividends on Preferred Stock (482,128) (703,768) (384,138) (1,702,857)
___________ __________ __________ ___________
Net Increase in Net Assets Resulting from Operations $ 1,531,480 $2,518,424 $1,210,038 $ 6,782,461
___________ __________ __________ ___________
See accompanying notes
13
Statements of changes in net assets
Delaware Investments Delaware Investments
Arizona Municipal Colorado Insured Municipal
Income Fund, Inc. Income Fund, Inc.
Six Months Year Six Months Year
Ended Ended Ended Ended
9/30/06 3/31/06 9/30/06 3/31/06
(Unaudited) (Unaudited)
Increase (Decrease) in Net Assets from Operations:
Net investment income $ 1,403,417 $ 2,835,929 $ 2,416,785 $ 4,925,858
Net realized gain (loss) on investments 164,120 (34,038) 169,941 411,416
Net change in unrealized appreciation/depreciation of investments 446,071 (488,430) 635,466 (1,020,909)
Dividends on preferred stock (482,128) (701,535) (703,768) (1,058,796)
___________ ___________ ___________ ____________
Net increase in net assets resulting from operations 1,531,480 1,611,926 2,518,424 3,257,569
___________ ___________ ___________ ____________
Dividends and Distributions to Common Shareholders from:
Net investment income (1,192,880) (2,564,692) (2,128,324) (4,643,616)
Net realized gain on investments - (59,644) (193,484) (145,113)
___________ ___________ ___________ ____________
(1,192,880) (2,624,336) (2,321,808) (4,788,729)
___________ ___________ ___________ ____________
Net Increase (Decrease) in Net Assets 338,600 (1,012,410) 196,616 (1,531,160)
Net Assets:
Beginning of period 43,923,349 44,935,759 73,832,862 75,364,022
___________ ___________ ___________ ____________
End of period (1) $44,261,949 $43,923,349 $74,029,478 $ 73,832,862
___________ ___________ ___________ ____________
(1) Undistributed net investment income $ 56,064 $ 330,793 $ 566,699 $ 938,459
___________ ___________ ___________ ____________
See accompanying notes
14
Delaware Investments Delaware Investments
Florida Insured Municipal Minnesota Municipal Income
Income Fund Fund II, Inc.
Six Months Year Six Months Year
Ended Ended Ended Ended
9/30/06 3/31/06 9/30/06 3/31/06
(Unaudited) (Unaudited)
Increase (Decrease) in Net Assets from Operations:
Net investment income $ 1,188,429 $ 2,462,489 $ 5,584,936 $ 7,447,276
Net realized gain on investments 100,056 806,263 139,209 217,830
Net change in unrealized appreciation/depreciation of investments 305,691 (1,379,442) 2,761,173 (1,110,246)
Dividends on preferred stock (384,138) (622,604) (1,702,857) (1,840,835)
___________ ___________ ____________ ____________
Net increase in net assets resulting from operations 1,210,038 1,266,706 6,782,461 4,714,025
___________ ___________ ____________ ____________
Dividends and Distributions to Common Shareholders from:
Net investment income (1,065,768) (2,349,534) (4,544,465) (6,835,306)
Net realized gain on investments (89,621) (591,017) - -
___________ ___________ ____________ ____________
(1,155,389) (2,940,551) (4,544,465) (6,835,306)
___________ ___________ ____________ ____________
Capital Share Transactions:
Net assets from reorganization* - - - 63,644,025
___________ ___________ ____________ ____________
- - - 63,644,025
___________ ___________ ____________ ____________
Net Increase (Decrease) in Net Assets 54,649 (1,673,845) 2,237,996 61,522,744
Net Assets:
Beginning of period 35,492,208 37,166,053 169,480,619 107,957,875
___________ ___________ ____________ ____________
End of period (1) $35,546,857 $35,492,208 $171,718,615 $169,480,619
___________ ___________ ____________ ____________
(1) Undistributed net investment income $ 178,330 $ 422,158 $ 301,052 $ 969,303
___________ ___________ ____________ ____________
*See Note 6 in "Notes to Financial Statements."
See accompanying notes
15
Financial highlights
Delaware Investments Arizona Municipal Income Fund, Inc.
Selected data for each share of the Fund outstanding throughout each period were
as follows:
Six Months Year Ended
Ended __________________________________________________________
9/30/06 (1)
(Unaudited) 3/31/06 3/31/05 3/31/04 3/31/03 3/31/02
____________________________________________________________________________________________________________________________________
Net asset value, beginning of period $14.730 $15.070 $15.570 $15.480 $14.650 $14.970
Income (loss) from investment operations:
Net investment income 0.471 0.951 0.956 1.020 1.067 1.113
Net realized and unrealized gain (loss) on investments 0.201 (0.177) (0.332) 0.276 0.988 (0.257)
Dividends on preferred stock from:
Net investment income 0.162) (0.232) (0.118) (0.075) (0.103) (0.164)
Net realized gain on investments - (0.002) (0.003) (0.016) (0.018) (0.051)
_______ _______ _______ _______ _______ _______
Total dividends on preferred stock (0.162) (0.234) (0.121) (0.091) (0.121) (0.215)
_______ _______ _______ _______ _______ _______
Total from investment operations 0.510 0.540 0.503 1.205 1.934 0.641
_______ _______ _______ _______ _______ _______
Less dividends and distributions to common
shareholders from:
Net investment income (0.400) (0.860) (0.960) (0.960) (0.940) (0.817)
Net realized gain on investments - (0.020) (0.043) (0.155) (0.164) (0.144)
_______ _______ _______ _______ _______ _______
Total dividends and distributions (0.400) (0.880) (1.003) (1.115) (1.104) (0.961)
_______ _______ _______ _______ _______ _______
Net asset value, end of period $14.840 $14.730 $15.070 $15.570 $15.480 $14.650
_______ _______ _______ _______ _______ _______
Market value, end of period $15.800 $15.980 $15.390 $16.560 $15.490 $14.750
_______ _______ _______ _______ _______ _______
Total investment return based on: (2)
Market value 1.47% 9.74% (0.78%) 14.64% 12.74% 10.22%
Net asset value 3.39% 3.31% 3.34% 7.86% 13.44% 4.21%
Ratios and supplemental data:
Net assets applicable to common shares,
end of period (000 omitted) $44,262 $43,923 $44,936 $46,429 $46,167 $43,703
Ratio of expenses to average net assets
applicable to common shares (3) 1.03% 1.03% 1.18% 1.05% 1.16% 1.19%
Ratio of net investment income to average net assets
applicable to common shares (3) 6.42% 6.28% 6.34% 6.63% 6.96% 7.41%
Ratio of net investment income to average net assets
applicable to common shares net of dividends
to preferred shares (4) 4.21% 4.72% 5.54% 6.04% 6.18% 5.99%
Portfolio turnover 11% 2% 8% 30% 24% 43%
Leverage analysis:
Value of preferred shares outstanding (000 omitted) $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Net asset coverage per share of preferred shares,
end of period $138,524 $137,847 $139,872 $142,858 $142,334 $137,405
Liquidation value per share of preferred shares (5) $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
____________________________________________________________________________________________________________________________________
(1) Ratios and portfolio turnover have been annualized and total return has not
been annualized.
(2) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
the purposes of this calculation to be reinvested at prices obtained under
the Fund's dividend reinvestment plan.
Generally, total investment return based on net asset value will be higher
than total investment return based on market value in periods where there is
an increase in the discount or a decrease in the premium of the market value
to the net asset value from the beginning to the end of such periods.
Conversely, total investment return based on net asset value will be lower
than total investment return based on market value in periods where there is
a decrease in the discount or an increase in the premium of the market value
to the net asset value from the beginning to the end of such periods.
(3) Ratios do not reflect the effect of dividend payments to preferred
shareholders.
(4) Ratio reflects total net investment income less dividends paid to preferred
shareholders divided by average net assets applicable to common
shareholders.
(5) Excluding any accumulated but unpaid dividends.
See accompanying notes
16
Delaware Investments Colorado Insured Municipal Income Fund, Inc.
Selected data for each share of the Fund outstanding throughout each period were
as follows:
Six Months Year Ended
Ended __________________________________________________________
9/30/06 (1)
(Unaudited) 3/31/06 3/31/05 3/31/04 3/31/03 3/31/02
____________________________________________________________________________________________________________________________________
Net asset value, beginning of period $15.260 $15.580 $16.110 $15.920 $14.780 $15.260
Income (loss) from investment operations:
Net investment income 0.500 1.018 1.019 1.043 1.068 1.094
Net realized and unrealized gain (loss) on investments 0.165 (0.129) (0.432) 0.324 1.324 (0.401)
Dividends on preferred stock from:
Net investment income (0.145) (0.213) (0.124) (0.077) (0.098) (0.172)
Net realized gain on investments - (0.006) (0.003) (0.013) (0.023) (0.051)
_______ _______ _______ _______ _______ _______
Total dividends on preferred stock (0.145) (0.219) (0.127) (0.090) (0.121) (0.223)
_______ _______ _______ _______ _______ _______
Total from investment operations 0.520 0.670 0.460 1.277 2.271 0.470
_______ _______ _______ _______ _______ _______
Less dividends and distributions to common
shareholders from:
Net investment income (0.440) (0.960) (0.960) (0.960) (0.940) (0.818)
Net realized gain on investments (0.040) (0.030) (0.030) (0.127) (0.191) (0.132)
_______ _______ _______ _______ _______ _______
Total dividends and distributions (0.480) (0.990) (0.990) (1.087) (1.131) (0.950)
_______ _______ _______ _______ _______ _______
Net asset value, end of period $15.300 $15.260 $15.580 $16.110 $15.920 $14.780
_______ _______ _______ _______ _______ _______
Market value, end of period $17.460 $18.650 $17.180 $16.960 $16.650 $14.700
_______ _______ _______ _______ _______ _______
Total investment return based on: (2)
Market value (3.73%) 14.64% 7.42% 8.76% 21.31% 7.52%
Net asset value 3.10% 3.44% 2.56% 8.05% 15.37% 3.15%
Ratios and supplemental data:
Net assets applicable to common shares,
end of period (000 omitted) $74,029 $73,833 $75,364 $77,903 $76,988 $71,506
Ratio of expenses to average net assets
applicable to common shares (3) 0.97% 0.95% 1.03% 1.01% 1.05% 1.01%
Ratio of net investment income to average net assets
applicable to common shares (3) 6.58% 6.51% 6.51% 6.54% 6.83% 7.18%
Ratio of net investment income to average net assets
applicable to common shares net of dividends
to preferred shares (4) 4.66% 5.11% 5.69% 5.98% 6.08% 5.71%
Portfolio turnover 6% 12% 5% 13% 14% 37%
Leverage analysis:
Value of preferred shares outstanding (000 omitted) $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
Net asset coverage per share of preferred shares,
end of period $142,537 $142,291 $144,205 $147,379 $146,235 $139,382
Liquidation value per share of preferred shares (5) $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
____________________________________________________________________________________________________________________________________
(1) Ratios and portfolio turnover have been annualized and total return has not
been annualized.
(2) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
the purposes of this calculation to be reinvested at prices obtained under
the Fund's dividend reinvestment plan.
Generally, total investment return based on net asset value will be higher
than total investment return based on market value in periods where there is
an increase in the discount or a decrease in the premium of the market value
to the net asset value from the beginning to the end of such periods.
Conversely, total investment return based on net asset value will be lower
than total investment return based on market value in periods where there is
a decrease in the discount or an increase in the premium of the market value
to the net asset value from the beginning to the end of such periods.
(3) Ratios do not reflect the effect of dividend payments to preferred
shareholders.
(4) Ratio reflects total net investment income less dividends paid to preferred
shareholders divided by average net assets applicable to common
shareholders.
(5) Excluding any accumulated but unpaid dividends.
See accompanying notes
(continues) 17
Financial highlights
Delaware Investments Florida Insured Municipal Income Fund
Selected data for each share of the Fund outstanding throughout each period were
as follows:
Six Months Year Ended
Ended __________________________________________________________
9/30/06 (1)
(Unaudited) 3/31/06 3/31/05 3/31/04 3/31/03 3/31/02
____________________________________________________________________________________________________________________________________
Net asset value, beginning of period $14.650 $15.340 $16.200 $16.370 $15.150 $15.400
Income (loss) from investment operations:
Net investment income 0.491 1.017 1.057 1.088 1.084 1.071
Net realized and unrealized gain (loss) on investments 0.175 (0.236) (0.675) (0.130) 1.186 (0.337)
Dividends on preferred stock from:
Net investment income (0.159) (0.202) (0.114) (0.082) (0.109) (0.179)
Net realized gain on investments - (0.055) (0.009) (0.005) - -
_______ _______ _______ _______ _______ _______
Total dividends on preferred stock (0.159) (0.257) (0.123) (0.087) (0.109) (0.179)
_______ _______ _______ _______ _______ _______
Total from investment operations 0.507 0.524 0.259 0.871 2.161 0.555
_______ _______ _______ _______ _______ _______
Less dividends and distributions to common
shareholders from:
Net investment income (0.440) (0.970) (1.020) (0.995) (0.941) (0.805)
Net realized gain on investments (0.037) (0.244) (0.099) (0.046) - -
_______ _______ _______ _______ _______ _______
Total dividends and distributions (0.477) (1.214) (1.119) (1.041) (0.941) (0.805)
_______ _______ _______ _______ _______ _______
Net asset value, end of period $14.680 $14.650 $15.340 $16.200 $16.370 $15.150
_______ _______ _______ _______ _______ _______
Market value, end of period $15.540 $16.050 $15.050 $16.650 $15.050 $14.020
_______ _______ _______ _______ _______ _______
Total investment return based on: (2)
Market value (0.20%) 14.75% (3.02%) 18.04% 14.17% 12.63%
Net asset value 3.29% 2.76% 1.59% 5.59% 14.92% 4.16%
Ratios and supplemental data:
Net assets applicable to common shares,
end of period (000 omitted) $35,547 $35,492 $37,166 $39,244 $39,651 $36,696
Ratio of expenses to average net assets
applicable to common shares (3) 1.06% 1.07% 1.24% 1.11% 1.18% 1.34%
Ratio of net investment income to average net assets
applicable to common shares (3) 6.75% 6.70% 6.75% 6.70% 6.81% 6.95%
Ratio of net investment income to average net assets
applicable to common shares net of dividends
to preferred shares (4) 4.57% 5.01% 5.97% 6.16% 6.13% 5.79%
Portfolio turnover 9% 28% 11% 3% 13% 13%
Leverage analysis:
Value of preferred shares outstanding (000 omitted) $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
Net asset coverage per share of preferred shares,
end of period $138,867 $138,731 $142,915 $148,110 $149,128 $141,740
Liquidation value per share of preferred shares (5) $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
____________________________________________________________________________________________________________________________________
(1) Ratios and portfolio turnover have been annualized and total return has not
been annualized.
(2) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
the purposes of this calculation to be reinvested at prices obtained under
the Fund's dividend reinvestment plan.
Generally, total investment return based on net asset value will be higher
than total investment return based on market value in periods where there is
an increase in the discount or a decrease in the premium of the market value
to the net asset value from the beginning to the end of such periods.
Conversely, total investment return based on net asset value will be lower
than total investment return based on market value in periods where there is
a decrease in the discount or an increase in the premium of the market value
to the net asset value from the beginning to the end of such periods.
(3) Ratios do not reflect the effect of dividend payments to preferred
shareholders.
(4) Ratio reflects total net investment income less dividends paid to preferred
shareholders divided by average net assets applicable to common
shareholders.
(5) Excluding any accumulated but unpaid dividends.
See accompanying notes
18
Delaware Investments Minnesota Municipal Income Fund II, Inc.
Selected data for each share of the Fund outstanding throughout each period were
as follows:
Six Months Year Ended
Ended __________________________________________________________
9/30/06 (1)
(Unaudited) 3/31/06 3/31/05 3/31/04 3/31/03 3/31/02
____________________________________________________________________________________________________________________________________
Net asset value, beginning of period $14.730 $14.890 $15.280 $15.060 $14.280 $14.450
Income (loss) from investment operations:
Net investment income 0.485 0.971 1.025 1.093 1.143 1.163
Net realized and unrealized gain (loss) on investments 0.258 0.012 (0.237) 0.207 0.689 (0.313)
Dividends on preferred stock from:
Net investment income (0.148) (0.243) (0.128) (0.082) (0.112) (0.182)
_______ _______ _______ _______ _______ _______
Total dividends on preferred stock (0.148) (0.243) (0.128) (0.082) (0.112) (0.182)
_______ _______ _______ _______ _______ _______
Total from investment operations 0.595 0.740 0.660 1.218 1.720 0.668
_______ _______ _______ _______ _______ _______
Less dividends to common shareholders from:
Net investment income (0.395) (0.900) (1.050) (0.998) (0.940) (0.838)
_______ _______ _______ _______ _______ _______
Total dividends (0.395) (0.900) (1.050) (0.998) (0.940) (0.838)
_______ _______ _______ _______ _______ _______
Net asset value, end of period $14.930 $14.730 $14.890 $15.280 $15.060 $14.280
_______ _______ _______ _______ _______ _______
Market value, end of period $15.510 $16.200 $16.370 $16.800 $15.300 $14.050
_______ _______ _______ _______ _______ _______
Total investment return based on: (2)
Market value (1.77%) 4.73% 4.02% 16.87% 15.84% 5.75%
Net asset value 3.99% 4.69% 4.03% 7.99% 12.19% 4.73%
Ratios and supplemental data:
Net assets applicable to common shares,
end of period (000 omitted) $171,719 $169,481 $107,958 $110,828 $109,212 $103,573
Ratio of expenses to average net assets
applicable to common shares (3) 0.98% 1.07% 1.00% 0.93% 1.03% 1.06%
Ratio of net investment income to average net assets
applicable to common shares (3) 6.61% 6.45% 6.85% 7.23% 7.74% 8.03%
Ratio of net investment income to average net assets
applicable to common shares net of dividends
to preferred shares (4) 4.60% 4.86% 6.00% 6.69% 6.99% 6.79%
Portfolio turnover 4% 8% 15% 34% 22% 7%
Leverage analysis:
Value of preferred shares outstanding (000 omitted) $95,000 $95,000 $60,000 $60,000 $60,000 $60,000
Net asset coverage per share of preferred shares,
end of period $140,378 $139,200 $139,965 $142,357 $141,010 $136,311
Liquidation value per share of preferred shares (5) $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
____________________________________________________________________________________________________________________________________
(1) Ratios and portfolio turnover have been annualized and total return has not
been annualized.
(2) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
the purposes of this calculation to be reinvested at prices obtained under
the Fund's dividend reinvestment plan.
Generally, total investment return based on net asset value will be higher
than total investment return based on market value in periods where there is
an increase in the discount or a decrease in the premium of the market value
to the net asset value from the beginning to the end of such periods.
Conversely, total investment return based on net asset value will be lower
than total investment return based on market value in periods where there is
a decrease in the discount or an increase in the premium of the market value
to the net asset value from the beginning to the end of such periods.
(3) Ratios do not reflect the effect of dividend payments to preferred
shareholders.
(4) Ratio reflects total net investment income less dividends paid to preferred
shareholders divided by average net assets applicable to common
shareholders.
(5) Excluding any accumulated but unpaid dividends.
See accompanying notes
19
Notes to financial statements
Delaware Investments Closed-End Municipal Bond Funds
September 30, 2006 (Unaudited)
Delaware Investments Arizona Municipal Income Fund, Inc. ("Arizona Municipal
Fund"); Delaware Investments Colorado Insured Municipal Income Fund, Inc.
("Colorado Insured Municipal Fund") and Delaware Investments Minnesota Municipal
Income Fund II, Inc. ("Minnesota Municipal Fund II") are organized as Minnesota
corporations and Delaware Investments Florida Insured Municipal Income Fund
("Florida Insured Municipal Fund") is organized as a Massachusetts Business
Trust (each referred to as a "Fund" and collectively as the "Funds"). Arizona
Municipal Fund, Florida Insured Municipal Fund and Minnesota Municipal Fund II
are considered diversified closed-end management investment companies and
Colorado Insured Municipal Fund is considered a non-diversified closed-end
management investment company under the Investment Company Act of 1940, as
amended. The Funds' common shares trade on the American Stock Exchange. The
Funds' preferred shares are traded privately through a remarketing agent.
The investment objective of each Fund is to provide high current income exempt
from federal income tax and from the personal income tax of its state, if any,
consistent with the preservation of capital. Florida Insured Municipal Fund will
generally seek investments that will enable its shares to be exempt from
Florida's intangible personal property tax. Each Fund will seek to achieve its
investment objective by investing substantially all of its net assets in
investment grade, tax-exempt municipal obligations of its respective state.
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Short-term debt securities having less than 60 days to maturity are
valued at amortized cost, which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith under the direction of each Fund's Board of
Directors/Trustees. In determining whether market quotations are readily
available or fair valuation will be used, various factors will be taken into
consideration, such as market closures, aftermarket trading or significant
events after local market trading (e.g., government actions or pronouncements,
trading volume or volatility on markets, exchanges among dealers, or news
events).
In September 2006, the Financial Accounting Standards Board (FASB) issued FASB
Statement No. 157, Fair Value Measurements, (Statement 157). Statement 157
establishes a framework for measuring fair value in generally accepted
accounting principles, clarifies the definition of fair value within that
framework, and expands disclosures about the use of fair value measurements.
Statement 157 is intended to increase consistency and comparability among fair
value estimates used in financial reporting. Statement 157 is effective for
fiscal years beginning after November 15, 2007. Management does not expect the
adoption of Statement 157 to have an impact on the amounts reported in the
financial statements.
Federal Income Taxes - Each Fund intends to continue to qualify for federal
income tax purposes as a regulated investment company and make the requisite
distributions to shareholders. Accordingly, no provision for federal income
taxes has been made in the financial statements.
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is
required for fiscal years beginning after December 15, 2006 and is to be applied
to all open tax years as of the effective date. Although the Funds' tax
positions are currently being evaluated, management does not expect the adoption
of FIN 48 to have a material impact on the Funds' financial statements.
Use of Estimates - The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Other - Expenses directly attributable to a Fund are charged directly to that
Fund. Other expenses common to various funds within the Delaware Investments(R)
Family of Funds are generally allocated amongst such funds on the basis of
average net assets. Management fees and some other expenses are paid monthly.
Security transactions are recorded on the date the securities are purchased or
sold (trade date) for financial reporting purposes. Costs used in calculating
realized gains and losses on the sale of investment securities are those of the
specific securities sold. Interest income is recorded on the accrual basis.
Discounts and premiums are amortized to interest income over the lives of the
respective securities. Each Fund declares and pays dividends from net investment
income monthly and distributions from net realized gain on investments, if any,
at least annually. In addition, in order to satisfy certain distribution
requirements of the Tax Reform Act of 1986, the Funds may declare special
year-end dividend and capital gains distributions during November or December to
shareholders of record on a date in such month. Such distributions, if received
by shareholders by January 31, are deemed to have been paid by the Funds and
received by shareholders on the earlier of the date paid or December 31 of the
prior year.
The Funds receive earnings credits from their custodian when positive cash
balances are maintained, which are used to offset custody fees. The expense paid
under the above arrangement is included in custodian fees on the Statements of
Operations with the corresponding expense offset shown as "expense paid
indirectly."
20
2. Investment Management, Administration Agreements and Other Transactions with
Affiliates
In accordance with the terms of its respective investment management agreement,
each Fund pays Delaware Management Company (DMC), a series of Delaware
Management Business Trust and the investment manager, an annual fee of 0.40%,
which is calculated daily based on the average weekly net assets of each Fund,
including assets attributable to any preferred stock that may be outstanding.
Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting
and administration services. Each Fund pays DSC a monthly fee computed at the
annual rate of 0.04% of the Fund's average daily net assets for accounting and
administration services.
At September 30, 2006, each Fund had liabilities payable to affiliates as
follows:
Arizona Colorado Insured Florida Insured Minnesota
Municipal Municipal Municipal Municipal
Fund Fund Fund Fund II
_______________ __________________ _________________ _____________
Investment management fee payable to DMC $23,054 $37,980 $18,502 $88,743
Accounting administration and other expenses
payable to DSC 3,915 19,076 3,462 22,785
Other expenses payable to DMC and affiliates* 1,824 2,750 1,585 6,406
*DMC, as part of its administrative services, pays operating expenses on behalf of each Fund and is reimbursed on a periodic basis.
Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, stock exchange fees,
custodian fees and directors/trustees' fees.
As provided in the investment management agreement, each Fund bears the cost of
certain legal and tax services, including internal legal and tax services
provided to each Fund by DMC and/or its' affiliates employees. For the six
months ended September 30, 2006, each Fund was charged for internal legal and
tax services by DMC as follows:
Arizona Colorado Insured Florida Insured Minnesota
Municipal Municipal Municipal Municipal
Fund Fund Fund Fund II
_______________ __________________ _________________ _____________
$927 $1,555 $746 $3,582
Directors/Trustees' Fees and Benefits include expenses accrued by the Funds for
each Directors/Trustee's retainer, per meeting fees and retirement benefits.
Independent Directors/Trustees with over five years of uninterrupted service are
eligible to participate in a retirement plan that provides for the payment of
benefits upon retirement. The amount of the retirement benefit is based on
factors set forth in the plan including the number of years of service. On
November 16, 2006, the Board of Directors/Trustees of the Fund unanimously voted
to terminate the retirement plan. Payments equal to the net present value of the
earned benefits will be made in 2007 to those independent directors/trustees and
retired independent directors/trustees so entitled. The retirement benefit
payout for the Arizona Municipal Fund, Colorado Insured Municipal Fund, Florida
Insured Municipal Fund and Minnesota Municipal Fund II are $5,506, $9,218,
$4,431 and $21,329, respectively. Certain officers of DMC and DSC are officers
and/or directors/trustees of the Funds. These officers and directors/trustees
are paid no compensation by the Funds.
3. Investments
For the six months ended September 30, 2006, the Funds made purchases and sales
of investment securities other than short-term investments as follows:
Arizona Colorado Insured Florida Insured Minnesota
Municipal Municipal Municipal Municipal
Fund Fund Fund Fund II
_______________ __________________ _________________ _____________
Purchases $3,567,938 $3,095,720 $2,390,770 $10,083,279
Sales 5,869,390 6,545,283 3,034,590 5,185,250
At September 30, 2006, the cost of investments for federal income tax purposes
has been estimated since the final tax characteristics cannot be determined
until fiscal year end. At September 30, 2006, the cost of investments and
unrealized appreciation (depreciation) for each Fund were as follows:
Arizona Colorado Insured Florida Insured Minnesota
Municipal Municipal Municipal Municipal
Fund Fund Fund Fund II
_______________ __________________ _________________ _______________
Cost of investments $66,014,565 $107,088,420 $52,118,837 $249,352,322
___________ ____________ ___________ ____________
Aggregate unrealized appreciation $ 3,261,863 $ 6,054,728 $ 1,918,702 $ 13,175,988
Aggregate unrealized depreciation (28,010) - (11,620) (148,456)
___________ ____________ ___________ ____________
Net unrealized appreciation $ 3,233,853 $ 6,054,728 $ 1,907,082 $ 13,027,532
___________ ____________ ___________ ____________
(continues) 21
Notes to financial statements
Delaware Investments Closed-End Municipal Bond Funds
4. Dividend and Distribution Information
Income and long-term capital gain distributions are determined in accordance
with federal income tax regulations, which may differ from U.S. generally
accepted accounting principles. Additionally, net short-term gains on sales of
investment securities are treated as ordinary income for federal income tax
purposes. The tax character of dividends and distributions paid during the six
months ended September 30, 2006 and the year ended March 31, 2006 was as
follows:
Arizona Colorado Insured Florida Insured Minnesota
Municipal Municipal Municipal Municipal
Fund Fund Fund Fund II
_______________ __________________ _________________ _______________
Six Months Ended 9/30/06*
Tax-exempt income $1,675,008 $2,788,545 $1,432,257 $6,247,322
Long-term capital gain - 237,031 107,270 -
__________ __________ __________ __________
Total $1,675,008 $3,025,576 $1,539,527 $6,247,322
__________ __________ __________ __________
Year Ended 3/31/06
Tax-exempt income $3,261,410 $5,673,140 $2,839,838 $8,676,141
Long-term capital gain 64,461 174,385 723,317 -
__________ __________ __________ __________
Total $3,325,871 $5,847,525 $3,563,155 $8,676,141
__________ __________ __________ __________
*Tax information for the six months ended September 30, 2006 is an estimate and the tax character of dividends and distributions
may be redesignated at fiscal year end.
The components of net assets are estimated since final tax characteristics
cannot be determined until fiscal year end. As of September 30, 2006, the
estimated components of net assets on a tax basis were as follows:
Arizona Colorado Insured Florida Insured Minnesota
Municipal Municipal Municipal Municipal
Fund Fund Fund Fund II
_______________ __________________ _________________ _______________
Shares of beneficial interest $40,838,893 $67,238,110 $33,361,389 $158,785,529
Undistributed tax-exempt income 56,064 566,699 179,421 301,052
Undistributed long-term capital gains - 169,941 98,965 -
Realized gains 4/1/06 - 9/30/06 164,120 - - 138,091
Capital loss carryforwards as of 3/31/06 (30,981) - - (533,589)
Unrealized appreciation of investments 3,233,853 6,054,728 1,907,082 13,027,532
___________ ___________ ___________ ____________
Net assets $44,261,949 $74,029,478 $35,546,857 $171,718,615
___________ ___________ ___________ ____________
The differences between book basis and tax basis components of net assets are
primarily attributable to tax deferral of losses on wash sales and tax treatment
of market discount on debt instruments.
For financial reporting purposes, capital accounts are adjusted to reflect the
tax character of permanent book/tax differences. Reclassifications are primarily
due to tax treatment of dividends and distributions and market discount on
certain debt instruments. Results of operations and net assets were not affected
by these reclassifications. For the six months ended September 30, 2006, the
Funds recorded an estimate of these differences since the final tax
characteristics cannot be determined until fiscal year end.
Arizona Colorado Insured Minnesota
Municipal Municipal Municipal
Fund Fund Fund II
_______________ __________________ _______________
Undistributed (Accumulated) net investment income (loss) $(3,138) 627 $(5,865)
Accumulated net realized gains (losses) 3,138 (627) 5,865
22
4. Dividend and Distribution Information (continued)
For federal income tax purposes, capital loss carryforwards may be carried
forward and applied against future capital gains. Capital loss carryforwards
remaining at March 31, 2006 will expire as follows:
Arizona Minnesota
Municipal Municipal
Fund Fund II
_______________ _______________
2008 $ - $339,543
2009 - 175,804
2010 - 8,416
2013 - 9,826
2014 30,981 -
________ ________
Total $ 30,981 $533,589
________ ________
For the six months ended September 30, 2006, each Fund had capital gains, which
may reduce the capital losses carryforwards as follows:
Arizona Minnesota
Municipal Municipal
Fund Fund II
_______________ _______________
$164,120 $138,091
5. Capital Stock
Pursuant to their articles of incorporation, Arizona Municipal Fund, Colorado
Insured Municipal Fund and Minnesota Municipal Fund II each have 200 million
shares of $0.01 par value common shares authorized. Florida Insured Municipal
Fund has been authorized to issue an unlimited amount of $0.01 par value common
shares. The Funds did not repurchase any shares under the Share Repurchase
Program during the six months ended September 30, 2006. Shares issuable under
the Funds' dividend reinvestment plan are purchased by the Funds' transfer
agent, Mellon Investor Services, LLC, in the open market.
For the six months ended September 30, 2006, the Funds did not have any
transactions in common shares.
The Funds each have one million shares of $0.01 par value preferred shares
authorized, except for Florida Insured Municipal Fund, which has an unlimited
amount of $0.01 par value preferred shared authorized. On May 14, 1993, Arizona
Municipal Fund and Florida Insured Municipal Fund issued 500 and 400 preferred
shares, respectively. Also on that date, Minnesota Municipal Fund II issued 600
Series A and 600 Series B preferred shares. On September 23, 1993, Colorado
Insured Municipal Fund issued 800 preferred shares. The preferred shares of each
Fund have a liquidation preference of $50,000 per share plus an amount equal to
accumulated but unpaid dividends.
In connection with the reorganizations described in Note 6 on the next page,
shareholders of Minnesota Municipal Fund II approved amendments to its charter
to create two new series to absorb the preferred stock of Delaware Investments
Minnesota Municipal Income Fund, Inc. ("Minnesota Municipal Fund") and Delaware
Investments Minnesota Municipal Income Fund III, Inc. ("Minnesota Municipal Fund
III"). These new series have identical rights and preferences (including
liquidation rights) in all material respects to the preferred shares of
Minnesota Municipal Fund and Minnesota Municipal Fund III, and are substantially
similar to the Series A and B preferred shares of Minnesota Municipal Fund II
with respect to their preferences, voting powers, restrictions, limitation as to
dividends, qualifications, liquidation rights, and term and conditions of
redemption.
Minnesota Municipal Fund II issued 400 Series C Preferred Shares to preferred
shareholders of Minnesota Municipal Fund in exchange for that Fund's preferred
shares and 300 Series D Preferred Shares to preferred shareholders of Minnesota
Municipal Fund III in exchange for that Fund's preferred shares at the close of
the reorganization on February 24, 2006.
Dividends for the outstanding preferred shares of each Fund are cumulative at a
rate established at the initial public offering and are typically reset every 28
days based on the results of an auction. Dividend rates (adjusted for any
capital gain distributions) ranged during the six months ended September 30,
2006 as follows:
Fund Low High
____ ______ _______
Arizona Municipal Fund 3.00% to 3.97%
Colorado Insured Municipal Fund 3.05% to 4.00%
Florida Insured Municipal Fund 3.00% to 4.20%
Minnesota Municipal Fund II 3.21% to 3.95%
(continues) 23
Notes to financial statements
Delaware Investments Closed-End Municipal Bond Funds
5. Capital Stock (continued)
Citigroup Global Markets, Inc. (formerly Salomon Smith Barney, Inc.), and
Merrill Lynch Pierce, Fenner & Smith Inc. (Colorado Insured Municipal Fund
only), as the remarketing agents, receive an annual fee from each of the Funds
of 0.25% of the average amount of preferred stock outstanding.
Under the 1940 Act, the Funds may not declare dividends or make other
distributions on common shares or purchase any such shares if, at the time of
the declaration, distribution or purchase, asset coverage with respect to the
outstanding preferred stock is less than 200%. The preferred shares are
redeemable at the option of the Funds, in whole or in part, on any dividend
payment date at $50,000 per share plus any accumulated but unpaid dividends
whether or not declared. The preferred shares are also subject to mandatory
redemption at $50,000 per share plus any accumulated but unpaid dividends
whether or not declared, if certain requirements relating to the composition of
the assets and liabilities of each Fund are not satisfied. The holders of
preferred shares have voting rights equal to the holders of common shares (one
vote per share) and will vote together with holders of common shares as a single
class. However, holders of preferred shares are also entitled to elect two of
each Fund's Directors. In addition, the 1940 Act requires that along with
approval by shareholders that might otherwise be required, the approval of the
holders of a majority of any outstanding preferred shares, voting separately as
a class would be required to (a) adopt any plan of reorganization that would
adversely affect the preferred shares, and (b) take any action requiring a vote
of security holders pursuant to Section 13(a) of the 1940 Act, including, among
other things, changes in each of the Fund's subclassificiation as a closed-end
investment company or (c) changes in their fundamental investment restrictions.
6. Fund Reorganization
At the close of business on February 24, 2006, Minnesota Municipal Fund II
acquired substantially all of the assets of Minnesota Municipal Fund and
Minnesota Municipal Fund III, each pursuant to an Agreement and Plan of
Acquisition (the "Reorganization"). The common shareholders of Minnesota
Municipal Fund and Minnesota Municipal Fund III each received common shares of
Minnesota Municipal Fund II equal to the aggregate net asset value of their
respective shares prior to the Reorganization. The preferred shares of Minnesota
Municipal Fund and Minnesota Municipal Fund III received the same number of
Series C and Series D preferred shares, respectively, of Minnesota Municipal
Fund II as they held in their respective Funds prior to the Reorganization (see
Note 5). The Reorganizations were treated as non-taxable events and,
accordingly, Minnesota Municipal Fund II's basis in the securities acquired
reflected the historical cost basis as of the date of transfer. The net assets,
net unrealized appreciation and accumulated net realized gain (loss) of
Minnesota Municipal Fund and Minnesota Municipal Fund III as of the close of
business on February 24, 2006, were as follows:
Net Unrealized Accumulated Net
Net Assets Appreciation Realized Gain/Loss
_____________ ______________ __________________
Minnesota Municipal Fund $38,077,404 $2,648,640 $ 2,145
Minnesota Municipal Fund III 25,566,621 1,999,455 (81,744)
The net assets of Minnesota Municipal Fund II prior to the Reorganization were
$108,531,274. The combined net assets of Minnesota Municipal Fund II after the
Reorganization were $172,175,299.
Minnesota Municipal Fund II will continue to trade and to be listed on the
American Stock Exchange. Beginning on February 27, 2006 and going forward,
however, Minnesota Municipal Fund and Minnesota Municipal Fund III will no
longer trade or be listed on the American Stock Exchange, and their corporate
existence will be liquidated and dissolved. In January 2007, shareholders of
Minnesota Municipal Fund and Minnesota Municipal Fund III will receive Form
1099-DIV that will report the amount and character of each Fund's distributions
paid in calendar year 2006.
Common and preferred shares of Minnesota Municipal Fund II issued to
shareholders of Minnesota Municipal Fund and Minnesota Municipal Fund III in
connection with the Reorganization were as follows:
Common Exchange Preferred Exchange
Shares Issued Ratio Shares Issued Ratio
_______________ ___________ _______________ __________
Minnesota Municipal Fund 2,543,581 1.02 to 1 400 1 to 1
Minnesota Municipal Fund III 1,709,194 1.08 to 1 300 1 to 1
7. Credit and Market Risk
The Funds use leverage in the form of preferred shares. Leveraging may result in
a higher degree of volatility because each Fund's net asset value could be more
sensitive to fluctuations in short-term interest rates and changes in market
value of portfolio securities attributable to the leverage.
The Funds concentrate their investments in securities issued by municipalities.
The value of these investments may be adversely affected by new legislation
within the states, regional or local economic conditions, and differing levels
of supply and demand for municipal bonds. Many municipalities insure repayment
for their obligations. Although bond insurance reduces the risk of loss due to
default by an issuer, such bonds remain subject to the risk that market value
may fluctuate for other reasons and there is no assurance that the insurance
company will meet its obligations. These securities have been identified in the
Statements of Net Assets.
24
7. Credit and Market Risk (continued)
The Funds may invest in inverse floating rate securities ("inverse floaters"), a
type of derivative tax-exempt obligation with floating or variable interest
rates that move in the opposite direction of short-term interest rates, usually
at an accelerated speed. Consequently, the market values of inverse floaters
will generally be more volatile than other tax-exempt investments. Such
securities are identified on the Statements of Net Assets.
The Funds may invest in advanced refunded bonds, escrow secured bonds or
defeased bonds. Under current federal tax laws and regulations, state and local
government borrowers are permitted to refinance outstanding bonds by issuing new
bonds. The issuer refinances the outstanding debt to either reduce interest
costs or to remove or alter restrictive covenants imposed by the bonds being
refinanced. A refunding transaction where the municipal securities are being
refunded within 90 days from the issuance of the refunding issue is known as a
"current refunding". "Advance refunded bonds" are bonds in which the refunded
bond issue remains outstanding for more than 90 days following the issuance of
the refunding issue. In an advance refunding, the issuer will use the proceeds
of a new bond issue to purchase high grade interest bearing debt securities
which are then deposited in an irrevocable escrow account held by an escrow
agent to secure all future payments of principal and interest and bond premium
of the advance refunded bond. Bonds are "escrowed to maturity" when the proceeds
of the refunding issue are deposited in an escrow account for investment
sufficient to pay all of the principal and interest on the original interest
payment and maturity dates.
Bonds are considered "pre-refunded" when the refunding issue's proceeds are
escrowed only until a permitted call date or dates on the refunded issue with
the refunded issue being redeemed at the time, including any required premium.
Bonds become "defeased" when the rights and interests of the bondholders and of
their lien on the pledged revenues or other security under the terms of the bond
contract are substituted with an alternative source of revenues (the escrow
securities) sufficient to meet payments of principal and interest to maturity or
to the first call dates. Escrowed secured bonds will often receive a rating of
AAA from Moody's Investor's Service, Inc., Standard & Poor's Ratings Group,
and/or Fitch Ratings due to the strong credit quality of the escrow securities
and the irrevocable nature of the escrow deposit agreement.
Each Fund may invest up to 15% of its total assets in illiquid securities, which
may include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of these securities may impair each Fund from disposing of them in a
timely manner and at a fair price when it is necessary or desirable to do so.
While maintaining oversight, each Fund's Board of Trustees/Directors has
delegated to DMC the day-to-day functions of determining whether individual
securities are liquid for purposes of each Fund's limitation on investments in
illiquid assets. At September 30, 2006, there were no Rule 144A securities and
no securities have been determined to be illiquid under each Fund's Liquidity
Procedures.
8. Contractual Obligations
The Funds enter into contracts in the normal course of business that contain a
variety of indemnifications. The Funds' maximum exposure under these
arrangements is unknown. However, the Funds have not had prior claims or losses
pursuant to these contracts. Management has reviewed the Funds' existing
contracts and expects the risk of loss to be remote.
25
Other Fund information
Delaware Investments Closed-End Municipal Bond Funds
Changes to the Funds' Investment Policies
At a meeting on August 16-17, 2006, the Funds' Boards of Directors/Trustees
approved the following changes and clarifications to the Funds' non-fundamental
investment policies. The changes became effective on September 1, 2006.
Delaware Investments Arizona Municipal Income Fund, Inc. - The Fund may invest
up to 20% of its net assets in municipal obligations issued by or on behalf of
territories of the United States - such as Guam, the U.S. Virgin Islands or
Puerto Rico - that are exempt from Arizona and federal income tax, subject to
the Fund's fundamental investment policy to invest 80% of its net assets in
Arizona municipal obligations.
The Fund may invest in the lowest tier of investment grade rated bonds (i.e.,
rated Baa by Moody's or BBB by S&P).
Delaware Investments Colorado Insured Municipal Income Fund, Inc. - The Fund may
invest up to 20% of its net assets in municipal obligations issued by or on
behalf of territories of the United States - such as Guam, the U.S. Virgin
Islands or Puerto Rico - that are exempt from Colorado and federal income tax,
subject to the Fund's fundamental investment policy to invest 80% of its net
assets in Colorado municipal obligations.
Delaware Investments Florida Insured Municipal Income Fund - The Fund may invest
up to 20% of its net assets in municipal obligations issued by or on behalf of
territories of the United States - such as Guam, the U.S. Virgin Islands or
Puerto Rico - that are exempt from federal income tax and Florida's intangible
personal property tax, subject to the Fund's fundamental investment policy to
invest 80% of its net assets in Florida municipal obligations.
Delaware Investments Minnesota Municipal Income Fund II, Inc. - The Fund may
invest in municipal obligations issued by or on behalf of territories of the
United States - such as Guam, the U.S. Virgin Islands or Puerto Rico - that are
exempt from Minnesota and federal income tax to the extent that not more than 5%
of the Fund's exempt interest dividends are derived from such obligations,
subject to the Fund's fundamental investment policy to invest 80% of its net
assets in Minnesota municipal obligations.
The Fund may invest in the lowest tier of investment grade rated bonds (i.e.,
rated Baa by Moody's or BBB by S&P).
Proxy Results
The shareholders of Delaware Investments Arizona Municipal Income Fund, Inc.,
Delaware Investments Colorado Insured Municipal Income Fund, Inc., Delaware
Investments Florida Insured Municipal Income Fund, and Delaware Investments
Minnesota Municipal Income Fund II, Inc. (each, a "Fund") voted on the following
proposals (as applicable) at the annual meeting of shareholders on August 16,
2006 (the "Annual Meeting"). The description of each proposal and number of
shares voted are as follows:
1. To elect a Board of Directors for each Fund.
Delaware Investments Arizona Municipal Income Fund, Inc.
Common Shareholders Preferred Shareholders
________________________________________ ________________________________________
Shares Voted Shares Voted
Shares Voted For Withheld Authority Shares Voted For Withheld Authority
__________________ ____________________ __________________ ____________________
Patrick P. Coyne * 2,922,669 23,287
Thomas L. Bennett 2,922,156 23,800
John A. Fry 2,922,669 23,287
Anthony D. Knerr 2,922,669 23,287
Lucinda S. Landreth 2,922,669 23,287
Ann R. Leven 2,922,669 23,287
Thomas F. Madison 490 0
Janet L. Yeomans 490 0
J. Richard Zecher 2,922,668.940 23,287.207
26
Other Fund information
Delaware Investments Closed-End Municipal Bond Funds
Delaware Investments Colorado Insured Municipal Fund, Inc.
Common Shareholders Preferred Shareholders
________________________________________ ________________________________________
Shares Voted Shares Voted
Shares Voted For Withheld Authority Shares Voted For Withheld Authority
__________________ ____________________ __________________ ____________________
Patrick P. Coyne * 4,582,707 56,914
Thomas L. Bennett 4,549,334 90,287
John A. Fry 4,582,207 57,414
Anthony D. Knerr 4,583,741 55,880
Lucinda S. Landreth 4,584,407 55,214
Ann R. Leven 4,584,688 54,933
Thomas F. Madison 507 0
Janet L. Yeomans 507 0
J. Richard Zecher 4,584,157.162 55,463.585
Delaware Investments Florida Insured Municipal Fund
Common Shareholders Preferred Shareholders
________________________________________ ________________________________________
Shares Voted Shares Voted
Shares Voted For Withheld Authority Shares Voted For Withheld Authority
__________________ ____________________ __________________ ____________________
Patrick P. Coyne * 2,272,312 13,322
Thomas L. Bennett 2,267,912 17,722
John A. Fry 2,272,312 13,322
Anthony D. Knerr 2,272,312 13,322
Lucinda S. Landreth 2,272,312 13,322
Ann R. Leven 2,270,212 15,422
Thomas F. Madison 398 2
Janet L. Yeomans 398 2
J. Richard Zecher 2,270,212 15,422
Delaware Investments Minnesota Municipal Income Fund II, Inc.
Common Shareholders Preferred Shareholders
________________________________________ ________________________________________
Shares Voted Shares Voted
Shares Voted For Withheld Authority Shares Voted For Withheld Authority
__________________ ____________________ __________________ ____________________
Patrick P. Coyne * 9,972,071 367,397
Thomas L. Bennett 9,966,036 373,432
John A. Fry 9,971,763 367,705
Anthony D. Knerr 9,968,331 371,137
Lucinda S. Landreth 9,974,924 364,544
Ann R. Leven 9,976,761 362,707
Thomas F. Madison 1,416 0
Janet L. Yeomans 1,416 0
J. Richard Zecher 9,969,705 369,763
*Subsequent to the mailing of the proxy materials for the Annual Meeting, Jude T. Driscoll, a
Director/Trustee and one of the nominees for election to the Board of each Fund, resigned from the Board
of each Fund, effective August 1, 2006. As a result, Mr. Driscoll withdrew from the election. At a
regularly scheduled Board meeting on August 16, 2006, each Fund's Nominating Committee recommended to the
applicable Fund's Board substituting Patrick P. Coyne for Mr. Driscoll as a nominee for election to the
Board and each Board recommended naming Mr. Coyne as a substitute nominee for election to the Board.
As disclosed in the Proxy Statement, in the case of the withdrawal of a nominee
for election, the power given by shareholders in the Proxy Card may be used by
the persons named as proxies to vote for a substitute nominee or nominees as
recommended by the existing Board. Accordingly, the proxies exercised their
discretion to vote for the Mr. Coyne, the substitute nominee for election to
each Board, at the Annual Meeting.
(continues) 27
Other Fund information
Delaware Investments Closed-End Municipal Bond Funds
Board Consideration of Delaware Investments Closed-End Municipal Bond Funds
Investment Advisory Agreement
At a meeting held on May 17-18,2006 (the "Annual Meeting"), the Board of
Trustees/Directors ("Trustees"), including a majority of disinterested or
independent Trustees, approved the renewal of the Investment Advisory Agreements
for the Delaware Investments Arizona Municipal Income Fund, Inc.; Delaware
Investments Colorado Insured Municipal Income Fund, Inc.; Delaware Investments
Florida Insured Municipal Income Fund; and Delaware Investments Minnesota
Municipal Income Fund II, Inc. (each a "Fund" and collectively the "Funds"). In
making its decision, the Board considered information furnished throughout the
year at regular Board meetings, as well as information prepared specifically in
connection with the Annual Meeting. Information furnished and discussed
throughout the year included reports detailing Fund performance, investment
strategies, expenses, compliance matters and other services provided by Delaware
Management Company ("DMC"), the investment advisor. Information furnished
specifically in connection with the Annual Meeting included materials provided
by DMC and its affiliates ("Delaware Investments") concerning, among other
things, the level of services provided to the Funds, the costs of such services
to the Funds, economies of scale and the financial condition and profitability
of Delaware Investments. In addition, in connection with the Annual Meeting, the
Board considered independent historical and comparative reports prepared by
Lipper Inc. ("Lipper"), an independent statistical compilation organization. The
Board also considered industry comparative information presented by
representatives from Lipper. The Lipper reports compared each Fund's investment
performance and expenses with those of other comparable mutual funds. The Board
also received certain supplemental information regarding management's policy
with respect to advisory fee levels and its philosophy with respect to
breakpoints; the structure of portfolio manager compensation; and any
constraints or limitations on the availability of securities in certain
investment styles which might inhibit DMC's ability to fully invest in
accordance with Fund policies.
In considering such materials, the independent Trustees received assistance and
advice from and met separately with independent counsel and representatives from
Lipper. At the meeting with representatives from Lipper, Mr. Driscoll, then
Chairman of the Delaware Investments Family of Funds, and Chairman and Chief
Executive Officer of the investment advisor, was present to respond to questions
by Lipper and the independent Trustees. While the Board considered the
Investment Advisory Agreements for all of the funds in the Delaware Investments
Family of Funds at the same Board meeting, information was provided and
considered by the Board for each fund individually. In approving the continuance
of the Investment Advisory Agreement for each Fund, the Board, including a
majority of independent Trustees, determined that the existing advisory fee
structure was fair and reasonable and that the continuance of the Investment
Advisory Agreement was in the best interests of the Fund and its shareholders.
While attention was given to all information furnished, the following discusses
the primary factors relevant to the Board's deliberations and determination,
including those relating to the selection of the investment advisor and the
approval of the advisory fee.
Nature, Extent and Quality Of Service. Consideration was given to the services
provided by Delaware Investments to the Funds and their shareholders. In
reviewing the nature, extent and quality of services, the Board emphasized
reports furnished to it throughout the year at regular Board meetings covering
matters such as the compliance of portfolio managers with the investment
policies, strategies and restrictions for the Funds, the compliance of
management personnel with the Code of Ethics adopted throughout the Delaware
Investments Family of Funds complex, the adherence to fair value pricing
procedures as established by the Board and the accuracy of net asset value
calculations. The Board noted that it was pleased with the current staffing of
the Funds' investment advisor during the past year, the emphasis on research and
the compensation system for advisory personnel. Favorable consideration was
given to DMC's efforts to maintain, and in some instances increase, financial
and human resources committed to fund matters. Other factors taken into account
by the Board were Delaware Investments' preparedness for, and response to, legal
and regulatory matters. The Board was satisfied with the nature, extent and
quality of the overall services provided by Delaware Investments.
Investment Performance. The Board considered the investment performance of DMC
and the Funds. The Board was pleased by DMC's investment performance. The Board
placed significant emphasis on the investment performance of the Funds in view
of its importance to shareholders. While consideration was given to performance
reports and discussions with portfolio managers at Board meetings throughout the
year, particular weight was given to the Lipper reports furnished for the Annual
Meeting. The Lipper reports prepared for each Fund showed the investment
performance of its shares in comparison to a group of similar funds as selected
by Lipper (the "Performance Universe"). A fund with the highest performance is
ranked first, and a fund with the lowest is ranked last. The highest/best
performing 25% of funds in the Performance Universe make up the first quartile;
the next 25% - the second quartile; the next 25% - the third quartile; and the
lowest/worst performing 25% of funds in the Performance Universe make up the
fourth quartile. Comparative annualized performance for the Fund was shown for
the past one, three, five and 10 year periods ended January 31,2006. The Board
noted its objective that each Fund's performance for the periods considered be
at or above the median of its Performance Universe. The following paragraph
summarizes the performance results for the Funds and the Board's view of such
performance.
Delaware Investments Arizona Municipal Income Fund, Inc. - The Performance
Universe for the Fund consisted of the Fund and all leveraged closed-end other
states municipal debt funds as selected by Lipper. The Lipper report comparison
showed that the Fund's total return for the one and three year periods was in
the fourth quartile of such Performance Universe. The report further showed that
the Fund's total return for the five and 10 year periods was in the second
quartile. The Board noted that the Fund's performance results were mixed, but on
an overall basis tended toward median, which was acceptable.
Delaware Investments Colorado Insured Municipal Income Fund, Inc. - The
Performance Universe for the Fund consisted of the Fund and all leveraged
closed-end other states municipal debt funds as selected by Lipper. The Lipper
report comparison showed that the Fund's total return for the one and three year
periods was in the fourth quartile of such Performance Universe. The report
further showed that the Fund's total return for the five and 10 year periods was
in the second and first quartiles, respectively. The Board noted that the Fund's
performance results were mixed, but on an overall basis tended toward median,
which was acceptable.
28
Other Fund information
Delaware Investments Closed-End Municipal Bond Funds
Board Consideration of Delaware Investments Closed-End Municipal Bond Funds
Investment Advisory Agreement (continued)
Delaware Investments Florida Insured Municipal Income Fund - The Performance
Universe for the Fund consisted of the Fund and all leveraged closed-end Florida
municipal debt funds as selected by Lipper. The Lipper report comparison showed
that the Fund's total return for the one year period was in the third quartile
of such Performance Universe. The report further showed that the Fund's total
return for the three and five year periods was in the forth quartile and the
Fund's total return for the 10 year period was in the second quartile. The Board
noted that the Fund's performance results were not in line with the Board's
objective. The Board also noted that the Performance Universe is not comprised
solely of insured funds. Many of the funds (even certain of the insured funds)
in the Performance Universe can maintain exposure to BBB rated bonds, which have
significantly outperformed the AAA rated bonds that the Fund invests in. Based
upon the Fund's investment restrictions and the composition of the Performance
Universes, the Board was satisfied with the Fund's performance results.
Delaware Investments Minnesota Municipal Income Fund II, Inc. - The Performance
Universe for the Fund consisted of the Fund and all leveraged closed-end
Minnesota municipal debt funds as selected by Lipper. The Lipper report
comparison showed that the Fund's total return for the one year period was
ranked third of the three funds in the Performance Universe. The report further
showed that the Fund's total return for the three year period ranked first of
the three funds in the Performance Universe and the Fund's total return for the
five and 10 year periods ranked first of the two funds in the Performance
Universe. The Board noted that the Fund's performance results were mixed, but on
an overall basis, tended toward median, which was acceptable.
Comparative Expenses. The Board considered expense comparison data for the
Delaware Investments Family of Funds. Management provided the Board with
information on pricing levels and fee structures for the Funds. The Board
focused particularly on the comparative analysis of the management fees and
total expense ratios of each Fund and the management fees and expense ratios of
a group of similar leveraged closed-end funds as selected by Lipper (the
"Expense Group"). In reviewing comparative costs, each Fund's contractual
management fee and the actual management fee incurred by the Fund were compared
with the contractual management fees (assuming all funds in the Expense Group
were similar in size to the Fund) and actual management fees (as reported by
each fund) of other funds within the Expense Group, taking into effect any
applicable breakpoints and fee waivers. Each Fund's total expenses were also
compared with those of its Expense Group. The Board also considered fees paid to
Delaware Investments for non-management services. The Board noted its objective
to limit each Fund's total expense ratio to an acceptable range as compared to
the median of the Expense Group. The following paragraph summarizes the expense
results for the Funds and the Board's view of such expenses.
Delaware Investments Arizona Municipal Income Fund, Inc. - The expense
comparisons for the Fund showed that its actual management fee and total
expenses were in the quartile with the second lowest expenses of its Expense
Group. The Board was satisfied with the management fees and total expenses of
the Fund in comparison to its Expense Group as shown in the Lipper report.
Delaware Investments Colorado Insured Municipal Income Fund, Inc. - The expense
comparisons for the Fund showed that its management fee was in the quartile with
the second lowest expenses of its Expense Group and its total expenses were in
the quartile with the lowest expenses of its Expense Group. The Board was
satisfied with the management fees and total expenses of the Fund in comparison
to its Expense Group as shown in the Lipper report.
Delaware Investments Florida Insured Municipal Income Fund - The expense
comparisons for the Fund showed that its management fee was in the quartile with
the lowest expenses of its Expense Group and its total expenses were in the
quartile with the second lowest of its Expense Group. The Board was satisfied
with the management fees and total expenses of the Fund in comparison to its
Expense Group as shown in the Lipper report.
Delaware Investments Minnesota Municipal Income Fund II, Inc. - The expense
comparisons for the Fund showed that its management fee was in the quartile with
the second highest expenses of its Expense Group and its total expenses were in
the quartile with the second lowest expenses of its Expense Group. The Board was
satisfied with the total expenses of the Fund in comparison to its Expense Group
as shown in the Lipper report.
Management Profitability. The Board considered the level of profits, if any,
realized by Delaware Investments in connection with the operation of the Funds.
In this respect, the Board reviewed the Investment Management Profitability
Analysis that addressed the overall profitability of Delaware Investments'
business in providing management and other services to each of the individual
funds and the Delaware Investments Family of Funds as a whole. Specific
attention was given to the methodology followed in allocating costs for the
purpose of determining profitability. Management stated that the level of
profits of Delaware Investments, to a certain extent, reflected operational cost
savings and efficiencies initiated by Delaware Investments. The Board considered
Delaware Investments' expenditures to improve services provided to fund
shareholders and to meet additional regulatory and compliance requirements
resulting from recent SEC initiatives. The Board also considered the extent to
which Delaware Investments might derive ancillary benefits from fund operations,
including the potential for procuring additional business as a result of the
prestige and visibility associated with its role as service provider to the
Delaware Investments Family of Funds, the benefits from allocation of fund
brokerage to improve trading efficiencies and the use of "soft" commission
dollars to pay for proprietary and non-proprietary research. The Board did not
find that the level of profits realized by Delaware Investments from the
relationships with the Funds and the Delaware Investments Family of Funds
required negotiation of reduction fees.
Economies of Scale. As a closed-end fund, each Fund does not issue shares on a
continuous basis. Fund assets increase only to the extent that the value of the
underlying securities in the Fund increase. Accordingly, the Board determined
that the Funds were not likely to experience significant economies of scale due
to asset growth and, therefore, a fee schedule with breakpoints to pass the
benefit of such economies of scale on to shareholders was not likely to provide
the intended effect.
29
About the organization
This semiannual report is for the information of Delaware Investments Closed-End
Municipal Bond Funds shareholders. The return and principal value of an
investment in each Fund will fluctuate so that shares, when resold, may be worth
more or less than their original cost. Notice is hereby given in accordance with
Section 23(c) of the Investment Company Act of 1940 that the Funds may, from
time-to-time, purchase shares of their common stock on the open market at market
prices.
Board of Trustees
Patrick P. Coyne
Chairman, President,
and Chief Executive Officer
Delaware Investments Family of Funds
Philadelphia, PA
Thomas L. Bennett
Private Investor
Rosemont, PA
John A. Fry
President
Franklin & Marshall College
Lancaster, PA
Anthony D. Knerr
Founder and Managing Director
Anthony Knerr & Associates
New York, NY
Lucinda S. Landreth
Former Chief Investment Officer
Assurant Inc.
Philadelphia, PA
Ann R. Leven
Owner - ARL Associates
Strategic Financial Planning
Consulting Firm
Washington, DC
Thomas F. Madison
President and Chief Executive Officer
MLM Partners Inc.
Minneapolis, MN
Janet L. Yeomans
Vice President and Treasurer
3M Corporation
St. Paul, MN
J. Richard Zecher
Founder
Investor Analytics
Scottsdale, AZ
Affiliated Officers
David F. Connor
Vice President, Deputy General Counsel,
and Secretary
Delaware Investments Family of Funds
Philadelphia, PA
David P. O'Connor
Senior Vice President, General Counsel,
and Chief Legal Officer
Delaware Investments Family of Funds
Philadelphia, PA
John J. O'Connor
Senior Vice President and Treasurer
Delaware Investments Family of Funds
Philadelphia, PA
Richard Salus
Senior Vice President and
Chief Financial Officer
Delaware Investments Family of Funds
Philadelphia, PA
Each Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission for the first and third quarters of each fiscal year on
Form N-Q. Each Fund's Form N-Q, as well as a description of the policies and
procedures that each Fund uses to determine how to vote proxies (if any)
relating to portfolio securities is available without charge (i) upon request,
by calling 800 523-1918; (ii) on each Fund's Web site at
http://www.delawareinvestments.com; and (iii) on the Commission's Web site at
http://www.sec.gov. Each Fund's Form N-Q may be reviewed and copied at the
Commission's Public Reference Room in Washington, DC; information on the
operation of the Public Reference Room may be obtained by calling 800 SEC-0330.
Information (if any) regarding how each Fund voted proxies relating to portfolio
securities during the most recently disclosed 12-month period ended June 30 is
available without charge (i) through each Fund's Web site at
http://www.delawareinvestments.com; and (ii) on the Commission's Web site at
http://www.sec.gov.
Contact Information
Investment Manager
Delaware Management Company
Philadelphia, PA
Principal Office of the Funds
2005 Market Street
Philadelphia, PA 19103-7057
Independent Registered Public
Accounting Firm
Ernst & Young LLP
2001 Market Street
Philadelphia, PA 19103
Registrar and Stock Transfer
Agent
Mellon Investor Services, LLC
Overpeck Centre
85 Challenger Road
Ridgefield Park, NJ 07660
800 851-9677
For Securities Dealers
and Financial Institutions
Representatives
800 362-7500
Web Site
www.delawareinvestments.com
Delaware Investments is the marketing name of Delaware Management Holdings, Inc.
and its subsidiaries.
Number of Recordholders as of
March 31, 2006:
Arizona Municipal Income Fund 83
Colorado Insured Municipal
Income Fund 161
Florida Insured Municipal
Income Fund 143
Minnesota Municipal Income
Fund II 769
30
[DELAWARE INVESTMENTS LOGO]
(1072) Printed in the USA
SA-CEMUNI [9/06] CGI 11/06 MF-06-10-387 PO11338
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Included as part of report to shareholders filed under Item 1 of this Form
N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Companies and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
The registrant's principal executive officer and principal financial
officer have evaluated the registrant's disclosure controls and procedures
within 90 days of the filing of this report and have concluded that they are
effective in providing reasonable assurance that the information required to be
disclosed by the registrant in its reports or statements filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and
Exchange Commission.
There were no significant changes in the registrant's internal control over
financial reporting that occurred during the second fiscal quarter of the period
covered by the report to stockholders included herein (i.e., the registrant's
second fiscal quarter) that have materially affected, or are reasonably likely
to materially affect, the registrant's internal control over financial
reporting.
Item 12. Exhibits
(a) (1) Code of Ethics
Not applicable.
(2) Certifications of Principal Executive Officer and Principal Financial
Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are
attached hereto as Exhibit 99.CERT.
(3) Written solicitations to purchase securities pursuant to Rule 23c-1
under the Securities Exchange Act of 1934.
Not applicable.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
are furnished herewith as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf, by the undersigned, thereunto duly authorized.
Name of Registrant:
Delaware Investments Florida Insured Municipal Income Fund, Inc.
PATRICK P. COYNE
________________________________
By: Patrick P. Coyne
Title: Chief Executive Officer
Date: November 29, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
PATRICK P. COYNE
________________________________
By: Patrick P. Coyne
Title: Chief Executive Officer
Date: November 29, 2006
RICHARD SALUS
________________________________
By: Richard Salus
Title: Chief Financial Officer
Date: November 29, 2006