-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M6/UDtAn3KujrDZvz/39APYibtkcuxMVZ7bZLs8W7xlfRE1w9qN+uzhyNoZlaNYg vKxMeqo1n8yWBYHxnn6WUA== 0000950137-05-010913.txt : 20050831 0000950137-05-010913.hdr.sgml : 20050831 20050831130854 ACCESSION NUMBER: 0000950137-05-010913 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050831 DATE AS OF CHANGE: 20050831 EFFECTIVENESS DATE: 20050831 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VAN KAMPEN INCOME TRUST CENTRAL INDEX KEY: 0000820026 IRS NUMBER: 766040347 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05273 FILM NUMBER: 051061058 BUSINESS ADDRESS: STREET 1: VAN KAMPEN INVESTMENTS INC. STREET 2: 1221 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2127625441 MAIL ADDRESS: STREET 1: VAN KAMPEN INVESTMENTS INC. STREET 2: 1221 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 FORMER COMPANY: FORMER CONFORMED NAME: VAN KAMPEN AMERICAN CAPITAL INCOME TRUST DATE OF NAME CHANGE: 19960102 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN CAPITAL INCOME TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN CAPITAL BALANCED INCOME TRUST DATE OF NAME CHANGE: 19880327 N-CSRS 1 c96528nvcsrs.txt FORM N-CSRS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSRS CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-05273 Van Kampen Income Trust - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 1221 Avenue of the Americas, New York, New York 10020 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Ronald Robison 1221 Avenue of the Americas, New York, New York 10020 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 212-762-4000 Date of fiscal year end: 12/31 Date of reporting period: 6/30/05 Item 1. Report to Shareholders. The Trust's semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows: Welcome, Shareholder In this report, you'll learn about how your investment in Van Kampen Income Trust performed during the semiannual period. The portfolio management team will provide an overview of the market conditions and discuss some of the factors that affected investment performance during the reporting period. In addition, this report includes the trust's financial statements and a list of trust investments as of June 30, 2005. MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO PASS. THERE IS NO ASSURANCE THAT THE TRUST WILL ACHIEVE ITS INVESTMENT OBJECTIVE. THE TRUST IS SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY THAT THE MARKET VALUES OF SECURITIES OWNED BY THE TRUST WILL DECLINE AND THAT THE VALUE OF THE TRUST SHARES MAY THEREFORE BE LESS THAN WHAT YOU PAID FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS TRUST.
--------------------------------------------------------------------------------------- NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE --------------------------------------------------------------------------------------- NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT ---------------------------------------------------------------------------------------
Performance Summary as of 6/30/05
INCOME TRUST SYMBOL: VIN - ----------------------------------------------------------- AVERAGE ANNUAL BASED ON BASED ON TOTAL RETURNS NAV MARKET Since Inception (4/22/88) 7.11% 6.38% 10-year 6.42 5.89 5-year 5.48 4.73 1-year 8.33 14.11 6-month 1.77 1.81 - -----------------------------------------------------------
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. FOR THE MOST RECENT MONTH-END PERFORMANCE FIGURES, PLEASE VISIT VANKAMPEN.COM OR SPEAK WITH YOUR FINANCIAL ADVISOR. INVESTMENT RETURNS, NET ASSET VALUE AND COMMON SHARE MARKET PRICE WILL FLUCTUATE AND TRUST SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. The NAV per share is determined by dividing the value of the trust's portfolio securities, cash and other assets, less all liabilities, by the total number of common shares outstanding. The common share market price is the price the market is willing to pay for shares of the trust at a given time. Common share market price is influenced by a range of factors, including supply and demand and market conditions. Total return assumes an investment at the beginning of the period, reinvestment of all distributions for the period in accordance with the trust's dividend reinvestment plan, and sale of all shares at the end of the period. 1 Trust Report FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005 Van Kampen Income Trust is managed by the adviser's Taxable Fixed-Income team.(1) Current team members include Gordon Loery, Jaidip Singh, and Menglin Luo, Executive Directors of the Advisor. MARKET CONDITIONS As expected, the Federal Open Market Committee (the "Fed") increased the federal funds target rate at each of its four meetings in the first half of 2005. Consequently, the benchmark overnight rate increased from 2.25 percent at the beginning of the review period to 3.25 percent at the end. Despite the actions of the Fed, most U.S. Treasury yields fell during the second half of the six-month period, erasing all of the gains posted by long-term Treasuries and much of the gains posted by short- and intermediate-term Treasuries during the first half of the six-month period. Nevertheless, the period concluded on a positive note, with bond markets achieving mostly positive returns during the month of June. It is important to note, however, that as of the end of the period, we believe we have yet to see the full effects of the Fed's actions on economic activity. For the most part, the market's concerns over rising energy prices and inflation as well as faltering growth have muted the impact of the Fed's rate increases. With two-year and five-year Treasuries near the 3.6 percent to 3.7 percent area at the end of June, the market reflects neither underlying fundamental trends nor a more likely course for Fed policy. The investment grade credit sector underperformed during the first half of the year, with higher-quality credits generally outperforming their medium- and lower-quality counterparts. The brunt of this weakness came from the industrial sector, while the financial and utilities sectors posted the highest returns. Among the corporate sub-sectors, autos performed the worst due, for the most part, to news that General Motors had lowered it earnings guidance for the balance of 2005 and that Standard and Poor's downgraded GM and Ford to below investment-grade. Banking was the best performing sub-sector. Despite good economic growth, strong underlying company fundamentals, reasonable corporate earnings, low default rates and improving credit quality, the high yield market encountered considerable volatility. In January, heavy new issuance created a less favorable supply-and-demand relationship. Of greater consequence, however, was General Motors' mid-March announcement. The realization that such a bellwether company was struggling so significantly cast a grim shadow across the market overall. Toward the end of the reporting period, however, the market became more comfortable with the inclusion of General Motors and Ford Motor in the high yield arena, while new issuance slowed. Investors seemed to turn their attention to company fundamentals and favorable economic and corporate data. (1)Team members may change without notice from time to time. 2 Overall, the higher-rated segment of the high yield universe greatly outperformed issues rated CCC and lower. From an industry perspective, wireless communications, telecommunications and food/tobacco fared the best, while transportation, aerospace and forest products lagged most significantly. PERFORMANCE ANALYSIS The trust's return can be calculated based upon either the market price or the net asset value (NAV) of its shares. NAV per share is determined by dividing the value of the trust's portfolio securities, cash and other assets, less all liabilities, by the total number of common shares outstanding, while market price reflects the supply and demand for the shares. As a result, the two returns may differ significantly. The trust returned 1.77 percent on an NAV basis and 1.81 percent on a market price basis. TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005
- ------------------------------------------------ BASED ON NAV BASED ON MARKET PRICE 1.77% 1.81% - ------------------------------------------------
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN, NET ASSET VALUE AND COMMON SHARE MARKET PRICE WILL FLUCTUATE AND TRUST SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. SEE PERFORMANCE SUMMARY FOR ADDITIONAL PERFORMANCE INFORMATION. Within the investment grade portion of the trust, an underweight to banking and finance, and energy contributed positively to relative performance. We kept the trust's overall interest-rate exposure well below that of its benchmark during the period. This posture was beneficial as interest rates rose across the short- and intermediate-portions of the curve. That said, we note that during periods of rate declines, this position may have a negative effect on relative performance. During the period, the high yield portion of the trust benefited from advantageous positioning in transportation securities, where our investment discipline had led us to de-emphasize struggling auto and auto-related companies. Security selection in wireless communications also enhanced performance. The sector performed well overall, and several of the trust's positions were particularly rewarded for their strong fundamentals. In contrast, forest products, housing and manufacturing securities slowed the trust's pace. Within housing, exposure to highly leveraged building product companies hindered performance as investors worried about a potential decline in home construction. Forest and manufacturing securities detracted from overall returns, due mostly to company-specific reasons. There is no guarantee the security sectors mentioned will continue to perform well or be held by the trust in the future. 3 CHANGES IN INVESTMENT POLICIES A derivative financial instrument in very general terms refers to a security whose value is "derived" from the value of an underlying asset, reference rate or index. The Trust recently approved changes in its investment policies to allow the Trust to enter into the following transactions. Swaps. The Trust recently approved a change in its investment policies to allow the Trust to enter into interest rate and index swaps and the purchase or sale of related caps, floors and collars. The Trust expects to enter into these transactions primarily to preserve a return or spread on a particular investment or portion of its portfolio, as a duration management technique or to protect against any increase in the price of securities the Trust anticipates purchasing at a later date. The Trust intends to use these transactions as hedges and not as speculative investments and will not sell interest rate caps or floors where it does not own securities or other instruments providing the income stream the Trust may be obligated to pay. Interest rate swaps involve the exchange by the Trust with another party of their respective commitments to pay or receive interest, e.g., an exchange of floating rate payments for fixed rate payments with respect to a notional amount of principal. The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index exceeds a predetermined interest rate, to receive payments of interest on a contractually-based principal amount from the party selling the interest rate cap. The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls below a predetermined interest rate, to receive payments of interest on a contractually-based principal amount from the party selling the interest rate floor. An interest rate collar combines the elements of purchasing a cap and selling a floor. The collar protects against an interest rate rise above the maximum amount but foregoes the benefit of an interest rate decline below the minimum amount. An index swap is an agreement to swap cash flows on a notional amount based on changes in the values of the reference indices. The purchase of a cap entitles the purchaser to receive payments on a notional principal amount from the party selling such cap to the extent that a specified index exceeds a predetermined interest rate or amount. The purchase of a floor entitles the purchaser to receive payments on a notional principal amount from the party selling such floor to the extent that a specified index falls below a predetermined interest rate or amount. A collar is a combination of a cap and a floor that preserves a certain return within a predetermined range of interest rates or values. The Trust may enter into credit default swap contracts or credit-linked notes for hedging purposes or to gain exposure to a credit in which the Trust may otherwise invest. A credit default swap is an agreement between two parties to exchange the credit risk of an issuer (reference entity). A buyer of a credit default swap is said to buy protection by paying periodic fees in return for a 4 contingent payment from the seller if the reference entity has a credit event such as a bankruptcy, a failure to pay outstanding obligations or deteriorating credit while the swap is outstanding. A seller of a credit default swap is said to sell protection and thus collects the periodic fees and profits if the credit of the reference entity remains stable or improves while the swap is outstanding but the seller in a credit default swap contract would be required to pay an agreed-upon amount to the buyer in the event of an adverse credit event of the reference entity. A credit-linked note is a synthetic security, typically issued by a special purpose vehicle, that trades like a bond issued by the reference entity but with the economics of the credit default swap. For this security, the buyer of protection sells the note. The buyer of protection (note seller) will pay periodic payments and profit if the reference entity defaults. Unlike the swap, the buyer of protection in a credit-linked note will receive money at the time of transaction from the sale of the note, and will return this money at the contract's maturity if no credit event occurs. Conversely, the seller of protection purchases the notes. As with a credit default swap, the note purchaser (protection seller) receives periodic payments. Unlike the swap transaction, the protection seller must pay for the note at the time of the transaction and will collect this money at the contract's maturity if no credit event occurs. The Trust will enter into swap, cap or floor transactions only with counterparties approved by the Adviser in accordance with guidelines established by the Trust's Board of Trustees. The Adviser will monitor the creditworthiness of counterparties to the Trust's swap, cap, floor and collar transactions on an ongoing basis. If there is a default by the other party to such a transaction, the Trust will have contractual remedies pursuant to the agreements related to the transaction. The Trust may enter into swaps on either an asset-based or liability-based basis, and will usually enter into swaps on a net basis, i.e., the two payment streams are netted out, with the Trust receiving or paying, as the case may be, only the net amount of the two payments. The net amount of the excess, if any, of the Trust's obligations over its entitlements with respect to each swap will be accrued on a daily basis and the Trust segregates an amount of cash and/or liquid securities having an aggregate net asset value at least equal to the accrued excess. If the Trust enters into a swap transaction on other than a net basis, the Trust would segregate the full amount accrued on a daily basis of the Trust's obligations with respect to the swap. To the extent the Trust sells (i.e. writes) caps, floors and collars, it will segregate cash and/or liquid securities having an aggregate net asset value at least equal to the full amount, accrued on a daily basis, of the Trust's net obligations with respect to the caps, floors or collars. The use of swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Adviser is incorrect in its forecasts of the market values, interest rates and other applicable factors, the investment performance of the Trust would diminish compared with what it would have been if these investment techniques were not used. The use of swaps, caps, collars and floors 5 may also have the effect of shifting the recognition of income between current and future periods. Inverse Floating Rate Obligations. The Trust may invest up to 10% of its net assets in "inverse floating rate obligations." Floating rate obligations bear rates of interest that are adjusted periodically to reflect changes in market rates of interest. Inverse floating rate obligations have rates that vary inversely with changes in market rates of interest. These securities have varying degrees of liquidity and the market value of such securities generally will fluctuate in response to changes in market rates of interest to a greater extent than the value of an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity. Foreign Currency Exchange Risks. To the extent the Trust invests in securities denominated or quoted in currencies other than the U.S. dollar, the Trust will be affected by changes in foreign currency exchange rates (and exchange control regulations) which affect the value of investments in the Trust and the income and appreciation or depreciation of the investments. Changes in foreign currency exchange ratios relative to the U.S. dollar will affect the U.S. dollar value of the Trust's assets denominated in that currency and the Trust's yield on such assets. In addition, the Trust will incur costs in connection with conversions between various currencies. The Trust's foreign currency exchange transactions may be conducted on a spot basis (that is, cash basis) at the spot rate for purchasing or selling currency prevailing in the foreign currency exchange market. The Trust also may enter into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date ("forward contracts"). A foreign currency forward contract is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. The Trust may attempt to protect against adverse changes in the value of the U.S. dollar in relation to a foreign currency by entering into a forward contract for the purchase or sale of the amount of foreign currency invested or to be invested or by buying or selling a foreign currency option or futures contract for such amount. Such strategies may be employed before the Trust purchases a foreign security traded in the currency which the Trust anticipates acquiring or between the date the foreign security is purchased or sold and the date on which payment therefor is made or received. Seeking to protect against a change in the value of a foreign currency in the foregoing manner does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. Furthermore, such transactions reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. Unanticipated changes in currency prices may result in poorer overall performance for the Trust than if it had not entered into such contracts. The Trust is not required to enter into such transactions 6 with regard to its foreign currency-denominated securities. It also should be realized that this method of protecting the value of portfolio securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange which one can achieve at some future point in time. In addition, although such contracts tend to minimize the risk of loss due to a decline in the value of the hedged currency, at the same time, they tend to limit any potential gain which might result should the value of such currency increase. The Trust may cross-hedge currencies by entering into a transaction to purchase or sell one or more currencies that are expected to decline in value relative to other currencies to which a portfolio has or expects to have portfolio exposure. The Trust may also engage in proxy hedging, which is defined as entering into positions in one currency to hedge investments denominated in another currency, where two currencies are economically linked. The Trust's entry into forward contracts, as well as any use of proxy or cross hedging techniques, will generally require the Trust to segregate cash and/or liquid securities at least equal to the Trust's obligations throughout the duration of the contract. The Trust may combine forward contracts with investments in securities denominated in other currencies to achieve desired security and currency exposures. Such combinations are generally referred to as synthetic securities. For example, in lieu of purchasing a foreign bond, the Trust may purchase a U.S. dollar- denominated security and at the same time enter into a forward contract to exchange U.S. dollars for the contract's underlying currency at a future date. By matching the amount of U.S. dollars to be exchanged with the anticipated value of the U.S. dollar-denominated security, the Trust may be able to lock in the foreign currency value of the security and adopt a synthetic position reflecting the credit quality of the U.S. dollar-denominated security. To the extent required by the rules and regulations of the SEC, the Trust will segregate cash and/or liquid securities in an amount at least equal to the value of the Trust's total assets committed to the consummation of forward foreign currency exchange contracts. If the value of the segregated assets declines, additional cash and/or liquid securities will be segregated on a daily basis so that the value of the segregated assets will be at least equal to the amount of the Trust's commitments with respect to such contracts. Collateralized Mortgage Obligations and Multiclass Pass-Through Securities. The Trust may invest in collateralized mortgage obligations ("CMOs"). CMOs are debt obligations collateralized by mortgage loans or mortgage pass-through securities. Typically, CMOs are collateralized by GNMA, FNMA or FHLMC certificates, but also may be collateralized by whole loans or private pass- through securities (such collateral collectively hereinafter referred to as "Mortgage Assets"). Multiclass pass-through securities are equity interests in a trust composed of Mortgage Assets. Unless the context indicates otherwise, all references herein to CMOs include multiclass pass-through securities. Payments of principal of and interest on the Mortgage Assets, and any reinvestment 7 income thereon, provide the funds to pay debt service on the CMOs or make scheduled distributions on the multiclass pass-through securities. CMOs deemed to be U.S. government securities are those issued or guaranteed as to principal and interest by a person controlled or supervised by and acting as an agency or instrumentality of the U.S. government. The issuer of a series of CMOs may elect to be treated as a Real Estate Mortgage Investment Conduit (a "REMIC"). In a CMO, a series of bonds or certificates is issued in multiple classes. Each class of CMOs, often referred to as a "tranche," is issued at a specific fixed or floating coupon rate and has a stated maturity or final distribution date. Principal prepayments on the Mortgage Assets may cause the CMOs to be retired substantially earlier than their stated maturities or final distribution dates. Interest is paid or accrues on all classes of the CMOs on a monthly, quarterly or semi-annual basis. The principal of and interest on the Mortgage Assets may be allocated among the several classes of a series of a CMO in innumerable ways. The Trust may invest in, among others, parallel pay CMOs and Planned Authorization Class CMOs ("PAC Bonds"). Parallel pay CMOs are structured to provide payments of principal on each payment date to more than one class. These simultaneous payments are taken into account in calculating the stated maturity date or final distribution date of each class, which, as with other CMO structures, must be retired by its stated maturity date or final distribution date but may be retired earlier. PAC Bonds generally require payments of a specified amount of principal on each payment date. PAC Bonds are always parallel pay CMOs with the required principal payment on such securities having the highest priority after interest has been paid to all classes. Substantially all of the CMOs in which the Trust invests are PAC Bonds. Stripped Mortgage-Backed Securities. The Trust also may invest in stripped mortgage-backed securities ("SMBS"). An SMBS is a derivative multiclass mortgage security. SMBS usually are structured with two classes that receive different proportions of the interest and principal distribution on a pool of Mortgage Assets. In the most extreme case, one class will receive all of the interest (the interest-only or "IO" class), while the other class will receive all of the principal (the principal-only or "PO" class). The yield to maturity on an IO class is extremely sensitive to the rate of principal payments (including prepayments) on the related underlying mortgage assets, and a rapid rate of principal payments may have a material adverse effect on such security's yield to maturity. If the underlying mortgage assets experience greater than anticipated prepayments of principal, the Trust may fail to fully recoup its initial investment in these securities. Conversely, if the underlying mortgage assets experience less than anticipated prepayments of principal, the yield of POs could be materially adversely affected. The market values of IOs and POs are subject to greater risk of fluctuation in response to changes in market rates of interest than many other types of government securities and, to the extent the Trust invests in IOs and POs, increases the risk of fluctuations in the net asset value of the Trust. The Adviser will seek to manage these risks (and potential benefits) by investing in a variety of such securities and through the use of derivative transactions. 8
RATINGS ALLOCATION AS OF 6/30/05 AAA/Aaa 42.8% BBB/Baa 1.9 BB/Ba 16.9 B/B 31.1 CCC/Caa 6.6 CC/Ca 0.4 Non-Rated 0.3 SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 6/30/05 U.S. Government Agency Obligations 33.8% Chemicals 3.8 Media-Cable 3.0 Media-Noncable 2.7 Electric 2.4 Healthcare 2.4 Home Construction 2.4 Paper 2.3 Integrated Energy 2.1 Gaming 2.0 Consumer Products 1.8 Retail 1.7 Wireless Communications 1.7 Food/Beverage 1.4 Metals 1.4 Transportation Services 1.3 Oil Field Services 1.2 Natural Gas Pipelines 1.0 Automotive 0.9 Packaging 0.9 Refining 0.9 Services 0.9 Wireline Communications 0.9 Building Materials 0.8 Technology 0.8 Lodging 0.7 Electric Utilities 0.5 Supermarkets 0.5 Aerospace & Defense 0.4 Brokerage 0.4 Construction Machinery 0.4 Diversified Manufacturing 0.4 Railroads 0.4 Wireless Telecommunication Services 0.4 Environmental & Facilities Services 0.3 Independent Energy 0.2 Pharmaceuticals 0.2
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9
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 6/30/05 (continued from previous page) Sovereigns 0.2 Advertising 0.1 ----- Total Long-Term Investments 79.6% Short Term Investments 20.4 ----- Total Investments 100.0%
Subject to change daily. Provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities mentioned or securities in the industries shown above. Ratings are as a percentage of long-term debt and summary of investments by industry classification are as a percentage of total investments. Van Kampen is a wholly owned subsidiary of a global securities firm which is engaged in a wide range of financial services including, for example, securities trading and brokerage activities, investment banking, research and analysis, financing and financial advisory services. 10 FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS Each Van Kampen trust provides a complete schedule of portfolio holdings in its semiannual and annual reports within 60 days of the end of the trust's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semiannual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Van Kampen also delivers the semiannual and annual reports to trust shareholders, and makes these reports available on its public Web site, www.vankampen.com. In addition to the semiannual and annual reports that Van Kampen delivers to shareholders and makes available through the Van Kampen public Web site, each trust files a complete schedule of portfolio holdings with the SEC for the trust's first and third fiscal quarters on Form N-Q. Van Kampen does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Van Kampen public Web site. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's Web site, http://www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's e-mail address (publicinfo@sec.gov) or by writing the Public Reference section of the SEC, Washington, DC 20549-0102. You may obtain copies of a trust's fiscal quarter filings by contacting Van Kampen Client Relations at 1-800-847-2424. 11 PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD You may obtain a copy of the fund's Proxy Voting Policy and Procedures without charge, upon request, by calling toll free 800-847-2424 or by visiting our Web site at www.vankampen.com. It is also available on the Securities and Exchange Commission's Web site at http://www.sec.gov. You may obtain information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 by visiting our Web site at www.vankampen.com. This information is also available on the Securities and Exchange Commission's Web site at http://www.sec.gov. 12 Investment Advisory Agreement Approval Both the Investment Company Act of 1940 and the terms of the Fund's investment advisory agreement require that the investment advisory agreement between the Fund and its investment adviser be approved annually both by a majority of the Board of Trustees and by a majority of the independent trustees voting separately. On May 25, 2005, the Board of Trustees, and the independent trustees voting separately, determined that the terms of the investment advisory agreement are fair and reasonable and approved the continuance of the investment advisory contract as being in the best interests of the Fund and its shareholders. In making its determination, the Board of Trustees considered materials that were specifically prepared by the investment adviser at the request of the Board and Fund counsel, and by an independent provider of investment company data contracted to assist the Board, relating to the contract review process. The Board also considered information received periodically about the portfolio, performance, the investment strategy, portfolio management team and fees and expenses of the Fund. The Board of Trustees considered the contract over a period of several months and the non-management trustees held sessions both with the investment adviser and separate from the investment adviser in reviewing and considering the contract. In approving the investment advisory agreement, the Board of Trustees considered, among other things, the nature, extent and quality of the services provided by the investment adviser, the performance, fees and expenses of the Fund compared to other similar funds and other products, the investment adviser's expenses in providing the services and the profitability of the investment adviser and its affiliated companies. The Board of Trustees considered the extent to which any economies of scale experienced by the investment adviser are shared with the Fund's shareholders, and the propriety of breakpoints in the Fund's investment advisory fee schedule. The Board of Trustees considered comparative advisory fees of the Fund and other investment companies and/or other products at different asset levels, and considered the trends in the industry. The Board of Trustees evaluated other benefits the investment adviser and its affiliates derive from their relationship with the Fund. The Board of Trustees reviewed information about the foregoing factors and considered changes, if any, in such information since its previous approval. The Board of Trustees discussed the financial strength of the investment adviser and its affiliated companies and the capability of the personnel of the investment adviser, and specifically the strength and background of its portfolio management personnel. The Board of Trustees reviewed the statutory and regulatory requirements for approval and disclosure of investment advisory agreements. The Board of Trustees, including the independent trustees, evaluated all of the foregoing and does not believe any single factor or group of factors control or dominate the review process, and, after considering all factors together, has determined, in the exercise of its business judgment, that approval 13 of the investment advisory agreement is in the best interests of the Fund and its shareholders. The following summary provides more detail on certain matters considered but does not detail all matters considered. Nature, Extent and Quality of the Services Provided. On a regular basis, the Board of Trustees considers the roles and responsibilities of the investment adviser as a whole and for those specific portfolio management, support and trading functions servicing the Fund. The trustees discuss with investment adviser the resources available and used in managing the Fund. The trustees also discuss certain other services which are provided on a cost-reimbursement basis by the investment adviser or its affiliates to the Van Kampen funds including certain accounting, administrative and legal services. The Board has determined that the nature, extent and quality of the services provided by the investment adviser support its decision to approve the investment advisory contract. Performance, Fees and Expenses of the Fund. On a regular basis, the Board of Trustees reviews the performance, fees and expenses of the Fund compared to its peers and to appropriate benchmarks. In addition, a performance committee of the Board spends more focused time on the performance of the Fund and other funds in the Van Kampen complex, paying specific attention to underperforming funds. The trustees discuss with the investment adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the trustees and the investment adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance with special attention to three-year performance) and, when a fund's weighted performance is under the fund's benchmark, they discuss the causes and where necessary seek to make specific changes to investment strategy or investment personnel. The Fund discloses more information about its performance elsewhere in this report and in the Fund's prospectus. The trustees discuss with the investment adviser the level of advisory fees for this Fund relative to comparable funds and other products advised by the adviser and others in the marketplace. The trustees review not only the advisory fees but other fees and expenses (whether paid to the adviser, its affiliates or others) and the Fund's overall expense ratio. The Board has determined that the performance, fees and expenses of the Fund support its decision to approve the investment advisory contract. Investment Adviser's Expenses in Providing the Service and Profitability. At least annually, the trustees review the investment adviser's expenses in providing services to the Fund and other funds advised by the investment adviser and the profitability of the investment adviser. These profitability reports are put together by the investment adviser with the oversight of a special ad hoc committee of the Board. The trustees discuss with the investment adviser its revenues and expenses, including among other things, revenues for advisory services, portfolio management-related expenses, revenue sharing arrangement costs and allocated expenses both on an aggregate basis and per fund. The 14 Board has determined that the analysis of the investment adviser's expenses and profitability support its decision to approve the investment advisory contract. Economies of Scale. On a regular basis, the Board of Trustees considers the size of the Fund and how that relates to the Fund's expense ratio and particularly the Fund's advisory fee rate. In conjunction with its review of the investment adviser's profitability, the trustees discuss with the investment adviser how more (or less) assets can affect the efficiency or effectiveness of managing the Fund's portfolio and whether the advisory fee level is appropriate relative to current asset levels and/or whether the advisory fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Fund support its decision to approve the investment advisory contract. Other Benefits of the Relationship. On a regular basis, the Board of Trustees considers other benefits to the investment adviser and it affiliates derived from its relationship with the Fund and other funds advised by the investment adviser. These benefits include, among other things, fees for transfer agency services provided to the funds, in certain cases research received by the adviser generated from commission dollars spent on funds' portfolio trading, and in certain cases distribution or service related fees related to funds' sales. The trustees review with the investment adviser each of these arrangements and the reasonableness of its costs relative to the services performed. The Board has determined that the other benefits received by the investment adviser or its affiliates support its decision to approve the investment advisory contract. 15 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED)
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - --------------------------------------------------------------------------------------------- DOMESTIC CORPORATE BONDS 40.1% AEROSPACE & DEFENSE 0.4% $ 400 K & F Acquisition, Inc. ........... 7.750% 11/15/14 $ 411,000 ------------ AUTOMOTIVE 1.0% 150 Arvinmeritor, Inc. ................ 6.800 02/15/09 149,250 115 Arvinmeritor, Inc. ................ 8.750 03/01/12 120,462 85 AutoNation, Inc. .................. 9.000 08/01/08 93,287 75 Commercial Vehicle Group, Inc., 144A--Private Placement (a)........ 8.000 07/01/13 76,594 50 General Motors Acceptance Corp. ... 6.875 09/15/11 46,211 390 General Motors Acceptance Corp. ... 6.875 08/28/12 357,501 125 Lear Corp. ........................ 8.110 05/15/09 129,361 ------------ 972,666 ------------ BROKERAGE 0.4% 400 Refco Finance Holdings LLC......... 9.000 08/01/12 426,000 ------------ BUILDING MATERIALS 0.8% 290 NMHG Holdings Co. ................. 10.000 05/15/09 305,950 380 NTK Holdings, Inc., 144A--Private Placement (a) (b).................. 0/10.750 03/01/14 180,500 355 Trimas Corp. ...................... 9.875 06/15/12 299,975 ------------ 786,425 ------------ CHEMICALS 3.1% 100 Equistar Chemicals LP.............. 10.625 05/01/11 110,875 110 Huntsman Advanced Materials LLC.... 11.000 07/15/10 124,850 240 Huntsman ICI Chemicals LLC......... 10.125 07/01/09 248,100 250 Innophos, Inc., 144A--Private Placement (a)...................... 8.875 08/15/14 256,250 138 Innophos, Inc., 144A--Private Placement (Variable Rate Coupon) (a)................................ 11.268 02/15/15 127,532 140 ISP Chemco, Inc., Ser B............ 10.250 07/01/11 153,300 300 ISP Holdings, Inc., Ser B.......... 10.625 12/15/09 324,000 230 JohnsonDiversey, Inc. ............. 9.625 05/15/12 234,600 80 Koppers, Inc. ..................... 9.875 10/15/13 86,800 225 Lyondell Chemical Co. ............. 10.500 06/01/13 258,469 225 Millennium America, Inc. .......... 7.000 11/15/06 231,187 95 Nalco Co. ......................... 7.750 11/15/11 101,650 370 Nalco Co. ......................... 8.875 11/15/13 398,675 280 Rockwood Specialties Group, Inc. .............................. 10.625 05/15/11 310,100 75 Rockwood Specialties Group, Inc., 144A--Private Placement (a)........ 7.625 11/15/14 91,896 ------------ 3,058,284 ------------
16 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - --------------------------------------------------------------------------------------------- CONSTRUCTION MACHINERY 0.4% $ 85 Flowserve Corp. ................... 12.250% 08/15/10 $ 92,225 214 Manitowoc Co., Inc. ............... 10.500 08/01/12 242,890 25 Manitowoc Co., Inc. (EUR).......... 10.375 05/15/11 33,582 ------------ 368,697 ------------ CONSUMER PRODUCTS 1.9% 160 Amscan Holdings, Inc. ............. 8.750 05/01/14 147,200 370 Iron Mountain, Inc. ............... 8.625 04/01/13 384,800 170 Iron Mountain, Inc. ............... 7.750 01/15/15 171,700 485 Levi Strauss & Co. (Variable Rate Coupon)............................ 7.730 04/01/12 460,750 120 Oxford Industrials, Inc. .......... 8.875 06/01/11 129,000 375 Rayovac Corp. ..................... 8.500 10/01/13 393,750 115 Rayovac Corp., 144A--Private Placement (a)...................... 7.375 02/01/15 111,837 89 Tempur-Pedic, Inc. ................ 10.250 08/15/10 98,345 ------------ 1,897,382 ------------ DIVERSIFIED MANUFACTURING 0.4% 250 Hexcel Corp. ...................... 6.750 02/01/15 251,250 200 Propex Fabrics, Inc. .............. 10.000 12/01/12 191,000 ------------ 442,250 ------------ ELECTRIC 2.5% 41 AES Corp. ......................... 9.375 09/15/10 46,637 26 AES Corp. ......................... 8.875 02/15/11 29,120 160 AES Corp. ......................... 7.750 03/01/14 174,400 260 AES Corp., 144A--Private Placement (a)................................ 9.000 05/15/15 293,150 135 Allegheny Energy, Inc. ............ 7.750 08/01/05 135,472 35 CMS Energy Corp. .................. 7.500 01/15/09 37,012 220 CMS Energy Corp. .................. 8.500 04/15/11 246,400 100 CMS Energy Corp. .................. 6.300 02/01/12 101,000 200 Dynegy Holdings, Inc., 144A--Private Placement (a)........ 9.875 07/15/10 222,000 75 IPALCO Enterprises, Inc. .......... 7.625 11/14/11 84,750 260 Monongahela Power Co. ............. 5.000 10/01/06 262,182 170 Nevada Power Co. .................. 8.250 06/01/11 192,525 140 Nevada Power Co. .................. 9.000 08/15/13 158,200 205 PSEG Energy Holdings............... 8.625 02/15/08 218,837 310 Reliant Energy, Inc. .............. 6.750 12/15/14 304,575 ------------ 2,506,260 ------------
See Notes to Financial Statements 17 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - --------------------------------------------------------------------------------------------- ENVIRONMENTAL & FACILITIES SERVICES 0.4% $ 110 Allied Waste North America, Inc. .............................. 6.500% 11/15/10 $ 108,900 115 Allied Waste North America, Inc., 144A--Private Placement (a)........ 7.250 03/15/15 111,837 123 Allied Waste North America, Inc., Ser B.............................. 9.250 09/01/12 133,455 ------------ 354,192 ------------ FOOD/BEVERAGE 1.5% 195 Michael Foods, Inc. ............... 8.000 11/15/13 199,387 435 Pilgrim's Pride Corp. ............. 9.625 09/15/11 477,412 140 Pilgrim's Pride Corp. ............. 9.250 11/15/13 156,100 150 Smithfield Foods, Inc. ............ 7.000 08/01/11 158,625 430 Smithfield Foods, Inc., Ser B...... 8.000 10/15/09 466,550 ------------ 1,458,074 ------------ GAMING 2.1% 250 Caesars Entertainment.............. 8.875 09/15/08 279,687 210 Harrahs Operating Co., Inc. ....... 7.875 12/15/05 213,675 370 Isle of Capri Casinos, Inc. ....... 7.000 03/01/14 373,700 725 MGM Mirage, Inc. .................. 6.000 10/01/09 732,250 60 MGM Mirage, Inc. .................. 5.875 02/27/14 58,575 465 Station Casinos, Inc. ............. 6.000 04/01/12 474,300 ------------ 2,132,187 ------------ HEALTHCARE 2.5% 230 AmerisourceBergen Corp. ........... 8.125 09/01/08 250,700 200 Community Health Systems, Inc. .... 6.500 12/15/12 204,500 205 DaVita, Inc., 144A--Private Placement (a)...................... 6.625 03/15/13 212,687 110 Del Laboratories, Inc. ............ 8.000 02/01/12 95,150 105 Fisher Scientific International, Inc. .............................. 6.750 08/15/14 110,250 120 Fisher Scientific International, Inc. 144A--Private Placement (a) (j)................................ 6.125 07/01/15 120,750 240 Fresenius Medical Care Capital Trust IV........................... 7.875 06/15/11 259,200 240 Medcath Holdings Corp. ............ 9.875 07/15/12 269,400 50 National Nephrology Associates, Inc., 144A--Private Placement (a)................................ 9.000 11/01/11 56,375 80 Tenet Healthcare Corp. ............ 7.375 02/01/13 79,400 135 Tenet Healthcare Corp. ............ 9.875 07/01/14 145,462 480 Ventas Realty Ltd Partnership, 144A--Private Placement (a)........ 6.750 06/01/10 500,424 110 VWR International, Inc. ........... 6.875 04/15/12 108,900 140 VWR International, Inc. ........... 8.000 04/15/14 134,050 ------------ 2,547,248 ------------
18 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - --------------------------------------------------------------------------------------------- HOME CONSTRUCTION 2.5% $ 725 Associated Materials, Inc. (b)..... 0/11.250% 03/01/14 $ 464,000 365 Goodman Global Holdings Inc., 144A--Private Placement (a)........ 7.875 12/15/12 339,450 85 Goodman Global Holdings Inc., 144A--Private Placement (Variable Rate Coupon) (a)................... 6.410 06/15/12 84,150 65 Interface, Inc. ................... 7.300 04/01/08 66,625 75 Interface, Inc. ................... 10.375 02/01/10 82,875 255 Interface, Inc. ................... 9.500 02/01/14 261,375 360 Nortek, Inc. ...................... 8.500 09/01/14 336,600 155 Ply Gem Industries, Inc. .......... 9.000 02/15/12 131,750 260 RMCC Acquisition Co., 144A--Private Placement (a)...................... 9.500 11/01/12 249,600 75 Technical Olympic USA, Inc. ....... 9.000 07/01/10 77,531 180 Technical Olympic USA, Inc. ....... 9.000 07/01/10 186,075 180 Technical Olympic USA, Inc. ....... 10.375 07/01/12 189,000 75 Technical Olympic USA, Inc. ....... 7.500 01/15/15 67,875 ------------ 2,536,906 ------------ INDEPENDENT ENERGY 0.3% 240 Equistar Chemicals LP.............. 10.125 09/01/08 261,000 ------------ INTEGRATED ENERGY 1.9% 345 Chesapeake Energy Corp. ........... 7.500 09/15/13 375,187 260 Chesapeake Energy Corp., 144A--Private Placement (a)........ 6.625 01/15/16 269,750 525 El Paso Production Holding Co. .... 7.750 06/01/13 563,062 60 Hanover Compressor Co. ............ 8.625 12/15/10 63,750 95 Hanover Equipment Trust............ 8.750 09/01/11 101,412 205 Hanover Equipment Trust, Ser A..... 8.500 09/01/08 214,225 50 MSW Energy Holdings LLC............ 8.500 09/01/10 53,125 215 Pacific Energy Partners............ 7.125 06/15/14 224,944 ------------ 1,865,455 ------------ LODGING 0.7% 33 HMH Properties, Inc. .............. 7.875 08/01/08 33,660 500 Host Marriott LP, 144A--Private Placement (a)...................... 6.375 03/15/15 497,500 155 Starwood Hotels & Resorts Worldwide, Inc. ................... 7.875 05/01/12 175,538 ------------ 706,698 ------------ MEDIA-CABLE 1.5% 175 Cablevision Systems Corp. ......... 7.890 04/01/09 176,313 565 Charter Communications Holdings LLC................................ 9.625 11/15/09 425,163 320 Echostar DBS Corp. ................ 6.375 10/01/11 318,800 120 General Cable Corp. ............... 9.500 11/15/10 129,000
See Notes to Financial Statements 19 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - --------------------------------------------------------------------------------------------- MEDIA-CABLE (CONTINUED) $ 45 PanAmSat Corp. .................... 9.000% 08/15/14 $ 49,331 440 PanAmSat Holding Corp. ............ * 11/01/14 304,700 1,000 Park N View, Inc., Ser B (c) (d) (e)................................ 13.000 05/15/08 0 135 Renaissance Media Group............ 10.000 04/15/08 134,325 ------------ 1,537,632 ------------ MEDIA-NONCABLE 2.4% 45 Advanstar Communications, Inc. .... 10.750 08/15/10 49,388 393 Advanstar Communications, Inc. (Variable Rate Coupon)............. 10.768 08/15/08 421,689 175 AMC Entertainment, Inc. (Variable Rate Coupon)....................... 7.518 08/15/10 181,781 127 Dex Media East LLC................. 12.125 11/15/12 152,718 171 Dex Media West LLC, Ser B.......... 9.875 08/15/13 195,795 40 Houghton Mifflin Co. .............. 8.250 02/01/11 41,700 310 Houghton Mifflin Co. .............. 9.875 02/01/13 332,475 185 Houghton Mifflin Co. (b)........... 0/11.500 10/15/13 135,975 80 Interpublic Group of Companies, Inc. .............................. 5.400 11/15/09 76,483 120 Interpublic Group of Companies, Inc. .............................. 6.250 11/15/14 112,658 235 Nebraska Book Co., Inc. ........... 8.625 03/15/12 220,313 375 Primedia, Inc. .................... 8.875 05/15/11 394,688 140 Vertis, Inc., 144A--Private Placement (a)...................... 13.500 12/07/09 105,175 ------------ 2,420,838 ------------ METALS 0.8% 361 Doe Run Resources Corp. (Acquired 03/06/98 to 10/15/04, Cost $524,900) (f) (g).................. 13.063 11/01/08 290,720 85 Foundation PA Coal Co. ............ 7.250 08/01/14 89,675 245 UCAR Finance, Inc. ................ 10.250 02/15/12 259,088 189 United States Steel Corp. ......... 9.750 05/15/10 205,065 ------------ 844,548 ------------ NATURAL GAS PIPELINES 1.0% 315 Dynegy Holdings, Inc. ............. 6.875 04/01/11 312,638 55 Northwest Pipeline Corp. .......... 8.125 03/01/10 59,950 105 Southern Natural Gas Co. .......... 8.875 03/15/10 115,702 470 Williams Cos., Inc. ............... 7.875 09/01/21 536,975 ------------ 1,025,265 ------------ OIL FIELD SERVICES 1.2% 225 Hanover Compressor Co. ............ 9.000 06/01/14 240,750 350 Hilcorp Energy Finance Corp., 144A--Private Placement (a)........ 10.500 09/01/10 388,500 104 Magnum Hunter Resources, Inc. ..... 9.600 03/15/12 115,960
20 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - --------------------------------------------------------------------------------------------- OIL FIELD SERVICES (CONTINUED) $ 230 MSW Energy Holdings II LLC......... 7.375% 09/01/10 $ 236,900 160 Plains E & P Co. .................. 7.125 06/15/14 172,000 ------------ 1,154,110 ------------ PACKAGING 0.8% 65 Owens-Illinois, Inc. .............. 7.350 05/15/08 67,763 680 Owens-Illinois, Inc. .............. 7.500 05/15/10 717,400 ------------ 785,163 ------------ PAPER 1.6% 570 Georgia-Pacific Corp. ............. 8.875 02/01/10 649,800 130 Graham Packaging Co., Inc., 144A--Private Placement (a)........ 8.500 10/15/12 131,950 285 Graham Packaging Co., Inc., 144A--Private Placement (a)........ 9.875 10/15/14 287,138 365 Graphic Packaging International, Inc. .............................. 9.500 08/15/13 369,563 150 Pliant Corp. ...................... 13.000 06/01/10 122,250 110 Pliant Corp. ...................... 13.000 06/01/10 89,650 ------------ 1,650,351 ------------ PHARMACEUTICALS 0.2% 245 Warner Chilcott Corp., 144A--Private Placement (a)........ 8.750 02/01/15 239,488 ------------ RAILROADS 0.4% 390 Amsted Industries, Inc., 144A--Private Placement (a)........ 10.250 10/15/11 423,150 ------------ REFINING 1.0% 390 CITGO Petroleum Corp. ............. 6.000 10/15/11 390,975 135 Tesoro Petroleum Corp. ............ 9.625 04/01/12 150,019 390 Vintage Petroleum, Inc. ........... 7.875 05/15/11 413,400 ------------ 954,394 ------------ RETAIL 1.2% 210 Brown Shoe Co., Inc. .............. 8.750 05/01/12 219,975 295 General Nutrition Center, Inc. .... 8.500 12/01/10 237,475 350 Petro Shopping Center Financial.... 9.000 02/15/12 353,500 210 Rite Aid Corp. .................... 8.125 05/01/10 217,350 1,000 Sleepmaster LLC, Ser B (c) (d) (e)................................ 11.000 05/15/09 220,000 ------------ 1,248,300 ------------ SERVICES 0.9% 525 Allied Waste North America, Inc. .............................. 6.375 04/15/11 506,625 300 Buhrmann US, Inc. ................. 8.250 07/01/14 301,500 100 Buhrmann US, Inc., 144A--Private Placement (a)...................... 7.875 03/01/15 98,000 ------------ 906,125 ------------
See Notes to Financial Statements 21 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - --------------------------------------------------------------------------------------------- SUPERMARKETS 0.5% $ 225 Delhaize America, Inc. ............ 8.125% 04/15/11 $ 253,481 228 Kroger Co., 144A--Private Placement (a)................................ 8.500 07/15/17 261,027 ------------ 514,508 ------------ TECHNOLOGY 0.3% 345 Sanmina-SCI Corp., 144A--Private Placement (a)...................... 6.750 03/01/13 331,200 ------------ TRANSPORTATION SERVICES 0.9% 495 Sonic Automotive, Inc. ............ 8.625 08/15/13 502,425 356 TRW Automotive, Inc. .............. 9.375 02/15/13 396,050 ------------ 898,475 ------------ WIRELESS COMMUNICATIONS 1.6% 185 American Tower Corp. .............. 7.500 05/01/12 198,413 190 American Tower Corp. .............. 7.125 10/15/12 201,875 250 Nextel Communications, Inc. ....... 6.875 10/31/13 268,438 145 Rural Cellular Corp. (Variable Rate Coupon)............................ 7.910 03/15/10 150,075 282 SBA Communications Corp. (b)....... 0/9.750 12/15/11 260,850 190 SBA Communications Corp. .......... 8.500 12/01/12 205,675 250 UbiquiTel Operating Co. ........... 9.875 03/01/11 275,625 ------------ 1,560,951 ------------ WIRELINE COMMUNICATIONS 1.0% 250 Exodus Communications, Inc. (c) (d) (e)................................ 11.250 07/01/08 0 400 Exodus Communications, Inc. (c) (d) (e)................................ 11.625 07/15/10 0 300 Qwest Communications International, Inc. (Variable Rate Coupon)........ 7.268 02/15/09 296,250 495 Qwest Services Corp. .............. 13.500 12/15/10 574,200 95 Qwest Services Corp. .............. 14.000 12/15/14 115,663 ------------ 986,113 ------------ TOTAL DOMESTIC CORPORATE BONDS 40.1%......................................... 40,211,335 ------------ FOREIGN BONDS AND DEBT SECURITIES (US $) 7.1% BELGIUM 0.2% 215 Telenet Group Holding NV, 144A--Private Placement (a) (b).... 0/11.500 06/15/14 168,237 ------------
22 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - --------------------------------------------------------------------------------------------- BERMUDA 0.5% $ 25 Intelsat Bermuda Ltd., 144A--Private Placement (a)........ 8.250% 01/15/13 $ 25,937 270 Intelsat Bermuda Ltd., 144A--Private Placement (a)........ 8.625 01/15/15 286,200 205 Intelsat Bermuda Ltd., 144A--Private Placement (Variable Rate Coupon) (a)................... 7.805 01/15/12 209,612 ------------ 521,749 ------------ CANADA 3.5% 205 Abitibi-Consolidated, Inc. ........ 8.550 08/01/10 214,737 80 Abitibi-Consolidated, Inc. ........ 7.750 06/15/11 80,800 60 Abitibi-Consolidated, Inc. ........ 6.000 06/20/13 55,500 398 Canwest Media, Inc. ............... 8.000 09/15/12 420,974 300 CHC Helicopter Corp. .............. 7.375 05/01/14 300,750 205 CHC Helicopter Corp., 144A--Private Placement (a)...................... 7.375 05/01/14 205,512 285 Husky Oil Ltd. (Variable Rate Coupon)............................ 8.900 08/15/28 316,582 90 Jean Coutu Group (PJC), Inc. ...... 7.625 08/01/12 93,375 430 Jean Coutu Group (PJC), Inc. ...... 8.500 08/01/14 426,775 260 Nortel Networks Corp. ............. 4.250 09/01/08 243,750 250 Nortel Networks Ltd. .............. 6.125 02/15/06 252,812 410 Novelis, Inc. 144A--Private Placement (a)...................... 7.250 02/15/15 413,588 170 Rogers Wireless Communications, Inc. .............................. 7.500 03/15/15 185,725 350 Tembec Industries, Inc. ........... 7.750 03/15/12 259,000 ------------ 3,469,880 ------------ FRANCE 0.7% 115 Compagnie Generale de Geophysique SA, 144A--Private Placement (a).... 7.500 05/15/15 120,463 125 Crown European Holdings SA (EUR)... 6.250 09/01/11 159,967 150 Rhodia SA (EUR).................... 8.000 06/01/10 181,069 285 Rhodia SA.......................... 8.875 06/01/11 275,738 ------------ 737,237 ------------ GERMANY 0.7% 260 Cognis Deutschland, 144A--Private Placement (Variable Rate Coupon) (EUR) (a).......................... 6.897 11/15/13 322,505 325 Kabel Deutschland, 144A--Private Placement (a)...................... 10.625 07/01/14 354,250 ------------ 676,755 ------------ IRELAND 0.2% 160 JSG Funding PLC (EUR).............. 10.125 10/01/12 202,337 ------------
See Notes to Financial Statements 23 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - --------------------------------------------------------------------------------------------- LUXEMBOURG 0.8% $ 345 Cablecom Luxembourg, 144A--Private Placement (EUR) (a)................ 9.375% 04/15/14 $ 473,343 110 JohnsonDiversey, Inc. (EUR)........ 9.625 05/15/12 131,120 140 SGL Carbon Luxembourg SA, 144A--Private Placement (EUR) (a)................................ 8.500 02/01/12 186,363 ------------ 790,826 ------------ MEXICO 0.5% 350 Axtel SA........................... 11.000 12/15/13 383,250 250 Satelites Mexicanos SA, Ser B (c)................................ 10.125 11/01/04 133,750 ------------ 517,000 ------------ TOTAL FOREIGN BONDS AND DEBT SECURITIES 7.1%................................. 7,084,021 ------------ COLLATERALIZED MORTGAGE OBLIGATIONS 2.3% 299 Federal Home Loan Mortgage Corp. .. 5.000 08/15/12 299,696 344 Federal Home Loan Mortgage Corp. (Interest Only) (h)................ 3.750 06/17/27 21,517 120 Federal Home Loan Mortgage Corp. (Interest Only) (h)................ 4.780 03/15/32 12,447 719 Federal Home Loan Mortgage Corp. (Interest Only).................... 5.000 09/15/14 to 12/15/16 68,260 197 Federal Home Loan Mortgage Corp. (Interest Only).................... 6.000 05/15/30 13,905 344 Federal National Mortgage Association........................ 3.514 05/25/35 344,321 389 Federal National Mortgage Association........................ 3.660 12/18/32 391,662 512 Federal National Mortgage Association (Interest Only)........ 5.500 06/25/26 to 05/25/27 31,458 389 Federal National Mortgage Association (Interest Only) (REMIC)............................ 6.000 08/25/32 to 07/25/33 53,662 840 Federal National Mortgage Association (Interest Only)........ 6.500 07/01/31 to 05/25/33 142,950 49 Federal National Mortgage Association (Interest Only)........ 8.000 05/01/30 10,012 209 Federal National Mortgage Association (Interest Only) (REMIC)............................ 7.000 03/01/32 to 04/25/33 38,414 589 Federal National Mortgage Association (REMIC)................ 3.685 05/28/35 589,096 240 Federal National Mortgage Association (REMIC)................ 3.696 05/28/35 240,355 398 Government National Mortgage Association (Interest Only) (REMIC) (h)................................ 5.164 06/16/27 21,482
24 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - --------------------------------------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED) $ 157 Government National Mortgage Association (Interest Only) (REMIC) (h)................................ 4.164% 05/16/32 $ 9,326 151 Government National Mortgage Association (Interest Only) (REMIC) (h)................................ 4.764 05/16/32 9,633 ------------ TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS 2.3%............................... 2,298,196 ------------ MORTGAGE BACKED SECURITIES 11.6% 0 Federal Home Loan Mortgage Corp. .. 3.470 01/15/35 0 1,450 Federal Home Loan Mortgage Corp. .. 5.000 06/01/20 1,467,617 478 Federal Home Loan Mortgage Corp. .. 7.500 11/01/29 to 06/01/32 512,813 121 Federal Home Loan Mortgage Corp. (ARM).............................. 3.637 07/01/34 119,320 300 Federal Home Loan Mortgage Corp. (ARM).............................. 4.182 08/01/34 301,063 1,200 Federal Home Loan Mortgage Corp., July............................... 5.500 TBA 1,231,500 1,088 Federal National Mortgage Association........................ 6.500 06/01/15 to 01/01/34 1,128,568 821 Federal National Mortgage Association........................ 7.000 03/01/15 to 07/01/32 863,587 515 Federal National Mortgage Association........................ 7.500 03/01/15 to 03/01/32 550,532 149 Federal National Mortgage Association (ARM).................. 3.725 07/01/34 148,986 195 Federal National Mortgage Association (ARM).................. 4.111 09/01/34 195,237 174 Federal National Mortgage Association (ARM).................. 4.237 10/01/34 176,051 199 Federal National Mortgage Association (ARM).................. 4.269 10/01/34 200,012 400 Federal National Mortgage Association, August................ 6.000 TBA 409,750 1,500 Federal National Mortgage Association, July.................. 4.500 TBA 1,484,687 500 Federal National Mortgage Association, July.................. 6.000 TBA 512,656 126 Government National Mortgage Association........................ 7.000 07/15/29 to 01/15/30 133,443 407 Government National Mortgage Association........................ 7.500 07/15/23 to 09/15/29 438,542
See Notes to Financial Statements 25 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - --------------------------------------------------------------------------------------------- MORTGAGE BACKED SECURITIES (CONTINUED) $ 218 Government National Mortgage Association........................ 8.000% 03/15/17 to 10/15/22 $ 236,630 118 Government National Mortgage Association........................ 8.500 07/15/24 to 12/15/24 129,760 249 Government National Mortgage Association........................ 9.000 08/15/16 to 12/15/24 273,432 78 Government National Mortgage Association........................ 9.500 11/15/09 to 01/15/17 85,461 1,000 Government National Mortgage Association, July.................. 5.500 TBA 1,021,250 ------------ TOTAL MORTGAGE BACKED SECURITIES 11.6%....................................... 11,620,897 ------------ U.S. GOVERNMENT AGENCY OBLIGATIONS 3.3% 1,100 Federal Home Loan Mortgage Corp. .. 7.000 03/15/10 1,241,910 415 Federal National Mortgage Association........................ 6.625 11/15/30 540,413 1,250 Federal National Mortgage Association........................ 7.125 06/15/10 1,425,099 100 Federal National Mortgage Association........................ 7.250 01/15/10 113,505 ------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS...................................... 3,320,927 ------------ UNITED STATES TREASURY OBLIGATIONS 18.3% 1,600 United States Treasury Bonds....... 5.250 02/15/29 1,830,438 1,590 United States Treasury Bonds....... 6.125 08/15/29 2,030,667 1,810 United States Treasury Bonds....... 7.625 02/15/25 2,608,239 685 United States Treasury Notes....... 3.875 02/15/13 686,044 10,400 United States Treasury Notes....... 4.250 08/15/13 10,663,255 1,200 United States Treasury Notes (STRIPS)........................... 0.000 05/15/25 504,331 ------------ TOTAL UNITED STATES TREASURY OBLIGATIONS...................................... 18,322,974 ------------ FOREIGN GOVERNMENT AGENCY OBLIGATION 0.2% 180 United Mexican States (Mexico)..... 8.375 01/14/11 209,970 ------------
26 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued
DESCRIPTION VALUE - --------------------------------------------------------------------------------------------- EQUITIES 0.6% Doe Run Resources Corp. (1 Common Stock Warrant) (e) (i)...................... $ 0 HF Holdings, Inc. (5,260 Common Stock Warrants) (e) (i)....................... 0 Optel, Inc. (500 Common Shares) (e) (i)....................................... 0 Park N View, Inc., 144A--Private Placement Common Stock Warrants) (a) (e) (i)........................................................................... 0 Paxon Communications Corp. (9 Preferred Shares) (f)........................... 58,072 TNP Enterprises, Inc. (463 Preferred Shares) (f).............................. 525,505 ------------ TOTAL EQUITIES................................................................ 583,577 ------------ TOTAL LONG-TERM INVESTMENTS 83.5% (Cost $83,908,997).......................................................... 83,651,897 ------------ SHORT-TERM INVESTMENTS 21.4% REPURCHASE AGREEMENT 11.4% State Street Bank & Trust Co. ($11,407,000 par collateralized by U.S. Government obligations in a pooled cash account, interest rate of 3.25%, dated 06/30/05, to be sold on 07/01/05 at $11,408,030).............................. 11,407,000 U.S. GOVERNMENT AGENCY OBLIGATIONS 10.0% Federal Home Loan Bank ($9,905,000 par, yielding 3.185%, 07/19/05 maturity)... 9,889,251 United States Treasury Bills ($100,000 par, yielding 2.836%, 07/14/05 maturity)..................................................................... 99,898 ------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS...................................... 9,989,149 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $21,396,153).......................................................... 21,396,149 ------------ TOTAL INVESTMENTS 104.9% (Cost $105,305,150)......................................................... 105,048,046 LIABILITIES IN EXCESS OF OTHER ASSETS (4.9%)................................. (4,952,418) ------------ NET ASSETS 100.0%............................................................ $100,095,628 ============
Percentages are calculated as a percentage of net assets. * Zero coupon bond (a) 144A securities are those which are exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may only be resold in transactions exempt from registration which are normally those transactions with qualified institutional buyers. (b) Security is a "step-up" bond where the coupon increases or steps up at a predetermined date. (c) Non-income producing as security is in default. (d) This borrower has filed for protection in federal bankruptcy court. (e) Market value is determined in accordance with procedures established in good faith by the Board of Trustees. See Notes to Financial Statements 27 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) continued (f) Payment-in-kind security. (g) These securities are restricted and may be resold only in transactions exempt from registration which are normally those transactions with qualified institutional buyers. Restricted securities comprise 0.3% of net assets. (h) An Inverse Floating Rate security is one where the coupon is inversely indexed to a short-term floating interest rate multiplied by a specific factor. As the floating rate rises, the coupon is reduced. Conversely, as the floating rate declines, the coupon is increased. The price of these securities may be more volatile than the price of a comparable fixed rate security. These instruments are typically used by the Trust to enhance the yield of the portfolio. All of the Trust's portfolio holdings, including derivative instruments, are marked to market each day with the change in value reflected in the unrealized appreciation/depreciation. Upon disposition, a realized gain or loss is recognized accordingly. (i) Non-income producing security. (j) Securities purchased on a when-issued or delayed delivery basis. ARM--Adjustable Rate Mortgage EUR--Eurodollar REMIC--Real Estate Mortgage Investment Conduits STRIPS--Separate Trading of Registered Interest and Principal of Securities TBA--To be announced, maturity date has not yet been established. Upon settlement and delivery of the mortgage pools, maturity dates will be assigned. 28 See Notes to Financial Statements VAN KAMPEN INCOME TRUST FINANCIAL STATEMENTS Statement of Assets and Liabilities June 30, 2005 (Unaudited) ASSETS: Total Investments, including repurchase agreement of $11,407,000 (Cost $105,305,150)....................................... $105,048,046 Cash........................................................ 394,278 Receivables: Investments Sold.......................................... 1,564,507 Interest.................................................. 1,328,776 Forward Foreign Currency Contracts.......................... 196,514 Other....................................................... 32,276 ------------ Total Assets............................................ 108,564,397 ------------ LIABILITIES: Payables: Investments Purchased..................................... 8,163,509 Investment Advisory Fee................................... 53,294 Income Distributions...................................... 14,810 Variation Margin on Futures............................... 9,219 Other Affiliates.......................................... 1,729 Trustees' Deferred Compensation and Retirement Plans........ 161,432 Accrued Expenses............................................ 64,776 ------------ Total Liabilities....................................... 8,468,769 ------------ NET ASSETS.................................................. $100,095,628 ============ NET ASSET VALUE PER COMMON SHARE ($100,095,628 divided by 15,371,738 shares outstanding)............................ $ 6.51 ============ NET ASSETS CONSIST OF: Common Shares (no par value with unlimited shares authorized, 15,371,738 shares issued and outstanding)..... $120,152,605 Accumulated Undistributed Net Investment Income............. (230,876) Net Unrealized Depreciation................................. (66,526) Accumulated Net Realized Loss............................... (19,759,575) ============ NET ASSETS.................................................. $100,095,628 ============
See Notes to Financial Statements 29 VAN KAMPEN INCOME TRUST FINANCIAL STATEMENTS continued Statement of Operations For the Six Months Ended June 30, 2005 (Unaudited) INVESTMENT INCOME: Interest.................................................... $ 2,965,058 Dividends................................................... 36,722 Other....................................................... 32,007 ----------- Total Income................................................ 3,033,787 ----------- EXPENSES: Investment Advisory Fee..................................... 322,167 Trustees' Fees and Related Expenses......................... 29,628 Accounting.................................................. 26,509 Custody..................................................... 23,906 Legal....................................................... 2,783 Other....................................................... 59,524 ----------- Total Expenses.......................................... 464,517 Less Credits Earned on Cash Balances.................... 714 ----------- Net Expenses............................................ 463,803 ----------- NET INVESTMENT INCOME....................................... $ 2,569,984 =========== REALIZED AND UNREALIZED GAIN/LOSS: Realized Gain/Loss: Investments............................................... $ (242,319) Forward Foreign Currency Contracts........................ (91,766) Foreign Currency Transactions............................. 104,107 ----------- Net Realized Loss........................................... (229,978) ----------- Unrealized Appreciation/Depreciation: Beginning of the Period................................... 791,159 ----------- End of the Period: Investments............................................. (257,104) Futures................................................. (4,660) Forward Foreign Currency Contracts...................... 196,514 Foreign Currency Translation............................ (1,276) ----------- (66,526) ----------- Net Unrealized Depreciation During the Period............... (857,685) ----------- NET REALIZED AND UNREALIZED LOSS............................ $(1,087,663) =========== NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 1,482,321 ===========
30 See Notes to Financial Statements VAN KAMPEN INCOME TRUST FINANCIAL STATEMENTS continued Statements of Changes in Net Assets (Unaudited)
FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED JUNE 30, 2005 DECEMBER 31, 2004 ------------------------------------- FROM INVESTMENT ACTIVITIES: Operations: Net Investment Income................................. $ 2,569,984 $ 5,138,752 Net Realized Gain/Loss................................ (229,978) 897,502 Net Unrealized Appreciation/Depreciation During the Period.............................................. (857,685) 833,683 ------------ ------------ Change in Net Assets from Operations.................. 1,482,321 6,869,937 Distributions from Net Investment Income.............. (2,536,267) (5,072,676) ------------ ------------ NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES... (1,053,946) 1,797,261 ------------ ------------ NET ASSETS: Beginning of the Period............................... 101,149,574 99,352,313 ------------ ------------ End of the Period (Including accumulated undistributed net investment income of ($230,876) and ($264,593), respectively)....................................... $100,095,628 $101,149,574 ============ ============
See Notes to Financial Statements 31 VAN KAMPEN INCOME TRUST FINANCIAL HIGHLIGHTS (UNAUDITED) THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
SIX MONTHS ENDED JUNE 30, --------------- 2005 2004 2003 ----------------------------- NET ASSET VALUE, BEGINNING OF THE PERIOD.................... $ 6.58 $ 6.46 $6.10 ------ ------ ----- Net Investment Income..................................... .17 .33 .32 Net Realized and Unrealized Gain/Loss..................... (.07) .12 .41 ------ ------ ----- Total from Investment Operations............................ .10 .45 .73 ------ ------ ----- Less: Distributions from Net Investment Income.................. .17 .33 .34 Return of Capital Distributions........................... -0- -0- .03 ------ ------ ----- Total Distributions......................................... .17 .33 .37 ------ ------ ----- NET ASSET VALUE, END OF THE PERIOD.......................... $ 6.51 $ 6.58 $6.46 ====== ====== ===== Common Share Market Price at End of the Period.............. $ 5.79 $ 5.85 $5.81 Total Return (b)............................................ 1.81%* 6.62% 8.42% Net Assets at End of the Period (In millions)............... $100.1 $101.1 $99.4 Ratio of Expenses to Average Net Assets..................... .94% .92% .92% Ratio of Net Investment Income to Average Net Assets........ 5.19% 5.17% 5.14% Portfolio Turnover.......................................... 86%* 225% 299%(c)
* Non-Annualized (a)As required, effective January 1, 2001, the Trust has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium on fixed income securities and presenting paydown gains and losses on mortgage- and asset-backed securities as interest income. The effect of these changes for the year ended December 31, 2001 was an increase in the ratio of net investment income to average net assets from 7.83% to 7.88%. Net investment income per share and net realized and unrealized gains and losses per share were unaffected by the adjustments. Per share, ratios and supplemental data for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (b)Total return assumes an investment at the common share market price at the beginning of the period indicated, reinvestment of all distributions for the period in accordance with the Trust's dividend reinvestment plan, and sale of all shares at the closing common share price at the end of the period indicated. (c)The Trust's portfolio turnover rate is calculated by dividing the lesser of purchases or sales of portfolio securities for a fiscal year by the average monthly value of the Trust's portfolio securities during such fiscal year. The turnover rate may vary greatly from year to year as well as within a year. The accounting treatment used by the Trust for mortgage pool forward commitments now reflects them as purchases and sales, which had not been the case in the past. This caused the reported portfolio turnover rate to be higher during the current fiscal year than in previous fiscal years. 32 VAN KAMPEN INCOME TRUST FINANCIAL HIGHLIGHTS (UNAUDITED) continued
YEAR ENDED DECEMBER 31, - ------------------------------------------------------------------------------ 2002 2001 (a) 2000 1999 1998 1997 1996 1995 - ------------------------------------------------------------------------------ $ 6.51 $ 6.85 $ 7.25 $ 7.84 $ 8.05 $ 7.93 $ 7.94 $ 7.28 ------ ------ ------- ------- ------ ------ ------ ------ .39 .53 .60 .64 .66 .66 .66 .65 (.33) (.29) (.40) (.63) (.22) .18 (.01) .66 ------ ------ ------- ------- ------ ------ ------ ------ .06 .24 .20 .01 .44 .84 .65 1.31 ------ ------ ------- ------- ------ ------ ------ ------ .47 .58 .60 .60 .65 .72 .66 .65 -0- -0- -0- -0- -0- -0- -0- -0- ------ ------ ------- ------- ------ ------ ------ ------ .47 .58 .60 .60 .65 .72 .66 .65 ------ ------ ------- ------- ------ ------ ------ ------ $ 6.10 $ 6.51 $ 6.85 $ 7.25 $ 7.84 $ 8.05 $ 7.93 $ 7.94 ====== ====== ======= ======= ====== ====== ====== ====== $ 5.71 $ 6.33 $6.5625 $5.6875 $ 7.75 $ 8.00 $ 7.50 $ 7.25 -2.59% 5.05% 26.59% -19.81% 5.05% 16.97% 12.95% 21.83% $ 93.8 $100.0 $ 104.8 $ 110.9 $120.0 $123.1 $121.2 $121.4 .89% .93% .96% .95% .96% .91% 1.00% .94% 6.29% 7.88% 8.51% 8.46% 8.17% 8.32% 8.40% 8.50% 101% 46% 60% 28% 47% 55% 36% 34%
See Notes to Financial Statements 33 VAN KAMPEN INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2005 (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES Van Kampen Income Trust (the "Trust") is registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended. The Trust's investment objective is to provide current income through investing in a portfolio of U.S. Government securities and in corporate fixed income securities, including high-yielding, lower rated or nonrated securities believed not to involve undue risk to income or principal. The Trust commenced investment operations on April 22, 1988. The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 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. A. SECURITY VALUATION Fixed income investments are stated at value using market quotations or indications of value obtained from an independent pricing service. Investments in securities listed on a securities exchange are valued at their sales price as of the close of such securities exchange. Securities listed on a foreign exchange are valued at their closing price. Listed and unlisted securities for which the last sales price is not available are valued at the mean of the bid and asked prices. For those securities where quotations or prices are not available, valuations are determined in accordance with procedures established in good faith by the Board of Trustees. Short-term securities with remaining maturities of 60 days or less are valued at amortized cost, which approximates market value. Forward foreign currency contracts are valued using quoted foreign exchange rates. Futures contracts are valued at the settlement price established each day on the exchange on which they are traded. B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses are determined on an identified cost basis. The Trust may purchase and sell securities on a "when-issued", "delayed delivery" or "forward commitment" basis, with settlement to occur at a later date. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The value of the security so purchased is subject to market fluctuations during this period. Purchasing securities on this basis involves a risk that the market value at the time of delivery may be lower than the agreed upon purchase price resulting in an unrealized loss. The Trust will maintain, in a segregated account with its custodian, assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made. At June 30, 2005, the Trust had $8,163,509 of when-issued, delayed delivery and forward purchase commitments. The Trust may invest in repurchase agreements, which are short-term investments whereby the Trust acquires ownership of a debt security and the seller agrees to repurchase the security at a future time and specified price. The Trust may invest independently in repurchase agreements, or transfer uninvested cash balances into a pooled cash account along with other investment companies advised by Van Kampen Asset Management (the "Adviser") or its affiliates, the daily aggregate of which is invested in repurchase agreements. Repurchase agreements are fully collateralized by the underlying debt security. The Trust will make 34 VAN KAMPEN INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2005 (UNAUDITED) continued payment for such securities only upon physical delivery or evidence of book entry transfer to the account of the custodian bank. The seller is required to maintain the value of the underlying security at not less than the repurchase proceeds due the Trust. C. INVESTMENT INCOME Interest income is recorded on an accrual basis and dividend income is recorded on the ex-dividend date. Discounts are accreted and premiums are amortized over the expected life of each applicable security. D. FEDERAL INCOME TAXES It is the Trust's policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no provision for federal income taxes is required. The Trust intends to utilize provisions of the federal income tax laws which allow it to carry a realized capital loss forward for eight years following the year of the loss and offset these losses against any future realized capital gains. At December 31, 2004, the Trust had an accumulated capital loss carryforward for tax purposes of $19,474,366, which will expire according to the following schedule.
AMOUNT EXPIRATION $1,416,375.................................................. December 31, 2007 1,347,021.................................................. December 31, 2008 5,081,926.................................................. December 31, 2009 6,212,026.................................................. December 31, 2010 4,974,996.................................................. December 31, 2011 442,022.................................................. December 31, 2012
At June 30, 2005, the cost and related gross unrealized appreciation and depreciation are as follows: Cost of investments for tax purposes........................ $105,521,608 ============ Gross tax unrealized appreciation........................... $ 3,334,279 Gross tax unrealized depreciation........................... (3,807,841) ------------ Net tax unrealized depreciation on investments.............. $ (473,562) ============
E. DISTRIBUTION OF INCOME AND GAINS The Trust declares and pays dividends monthly from net investment income to shareholders. Net realized gains, if any, are distributed annually. Distributions from net realized gains for book purposes may include short-term capital gains, which are included in ordinary income for tax purposes. The tax character of distributions paid during the year ended December 31, 2004 was as follows: Distribution paid from: Ordinary Income........................................... $5,081,293 ==========
35 VAN KAMPEN INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2005 (UNAUDITED) continued As of December 31, 2004, the components of distributable earnings on a tax basis were as follows: Undistributed ordinary income............................... $186,578
Net realized gains or losses may differ for financial reporting and tax purposes primarily as a result of the deferral of losses relating to wash sale transactions. F. FOREIGN CURRENCY TRANSLATION Asset and liabilities denominated in foreign currencies and commitments under forward foreign currency contracts are translated into U.S. dollars at the mean of the quoted bid and ask prices of such currencies against the U.S. dollar. Purchases and sales of portfolio securities are translated at the rate of exchange prevailing when such securities were acquired or sold. Realized gain and loss on foreign currency transactions on the Statement of Operations includes the net realized amount from the sale of foreign currency and the amount realized between trade date and settlement date on securities transactions. Income and expenses are translated at rates prevailing when accrued. G. EXPENSE REDUCTION During the six months ended June 30, 2005, the Trust's custody fee was reduced by $714 as a result of credits earned on cash balances. 2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of the Trust's Investment Advisory Agreement, the Adviser will provide investment advice and facilities to the Trust for an annual fee payable monthly of .65% of the average daily net assets of the Trust. For the six months ended June 30, 2005, the Trust recognized expenses of approximately $2,800 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Trust, of which a trustee of the Trust is a partner of such firm and he and his law firm provide legal services as legal counsel to the Trust. Under separate Accounting Services and Chief Compliance Officer ("CCO") Employment agreements, the Adviser provides accounting services and the CCO provides compliance services to the Trust. The costs of these services are allocated to each trust. For the six months ended June 30, 2005, the Trust recognized expenses of approximately $6,000, representing Van Kampen Investment Inc.'s or its affiliates' (collectively "Van Kampen") cost of providing accounting services to the Trust, as well as, the salary, benefits and related costs of the CCO and related support staff paid by Van Kampen. Services provided pursuant to the Accounting Services and CCO Employment agreement are reported as part of "Other" expenses on the Statement of Operations. Certain officers and trustees of the Trust are also officers and directors of Van Kampen. The Trust does not compensate its officers or trustees who are also officers of Van Kampen. The Trust provides deferred compensation and retirement plans for its trustees who are not officers of Van Kampen. Under the deferred compensation plan, trustees may elect to defer all or a portion of their compensation to a later date. Benefits under the retirement plan are payable upon retirement for a ten-year period and are based upon each trustee's years of service to the Trust. The maximum annual benefit per trustee under the plan is $2,500. 36 VAN KAMPEN INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2005 (UNAUDITED) continued 3. INVESTMENT TRANSACTIONS During the period, the cost of purchases and proceeds from sales of investments, including principal paydowns and excluding short-term investments, were $75,336,085 and $84,526,894, respectively. 4. DERIVATIVE FINANCIAL INSTRUMENTS A derivative financial instrument in very general terms refers to a security whose value is "derived" from the value of an underlying asset, reference rate, or index. The Trust has a variety of reasons to use derivative instruments, such as to attempt to protect the Trust against possible changes in the market value of its portfolio, foreign currency exposure, or to generate potential gain. All of the Trust's holdings, including derivative instruments, are marked to market each day with the change in value reflected in unrealized appreciation/depreciation. Upon disposition, a realized gain or loss is recognized accordingly, except when taking delivery of a security underlying a futures or forward commitment. In this instance, the recognition of gain or loss is postponed until the disposal of the security underlying the futures or forward commitment. Risks may arise as a result of the potential inability of the counterparties to meet the terms of their contracts. Summarized below are the specific types of derivative financial instruments used by the Trust. A. FORWARD FOREIGN CURRENCY CONTRACTS Purchasing securities on a forward commitment involves a risk that the market value at the time of delivery may be lower than the agreed upon purchase price resulting in an unrealized loss. Selling securities on a forward commitment involves different risks and can result in losses more significant than those arising from the purchase of such securities. Risks may arise as a result of the potential inability of the counterparties to meet the terms of their contracts. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. Upon the settlement of the contract, a realized gain or loss is recognized and is included as a component of realized gain/ loss on forward foreign currency contracts. The following forward foreign currency contracts were outstanding as of June 30, 2005.
UNREALIZED CURRENT APPRECIATION/ VALUE DEPRECIATION LONG CONTRACTS: Euro Currency 190,000 expiring 7/26/05.................................. $ 230,128 $(15,840) 220,000 expiring 7/26/05.................................. 266,464 (13,083) 150,000 expiring 7/26/05.................................. 181,680 (7,395) 60,000 expiring 7/26/05................................... 72,672 (762) 136,000 expiring 7/26/05.................................. 164,723 (797) 180,000 expiring 7/26/05.................................. 218,016 727 ---------- -------- 1,133,683 (37,150) ---------- --------
37 VAN KAMPEN INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2005 (UNAUDITED) continued
UNREALIZED CURRENT APPRECIATION/ VALUE DEPRECIATION SHORT CONTRACTS: Euro Currency 669,000 expiring 7/26/05.................................. $ 810,294 $ 65,829 45,000 expiring 7/26/05................................... 54,504 4,459 300,000 expiring 7/26/05.................................. 363,360 30,034 1,340,000 expiring 7/26/05................................ 1,623,010 133,342 ---------- -------- 2,851,168 233,664 ---------- -------- $3,984,851 $196,514 ========== ========
B. FUTURES CONTRACTS A futures contract is an agreement involving the delivery of a particular asset on a specified future date at an agreed upon price. The Fund generally invests in exchange traded futures contracts on U.S. Treasury Bonds and Notes and typically closes the contract prior to the delivery date. Upon entering into futures contracts, the Fund maintains an amount of cash or liquid securities with a value equal to a percentage of the contract amount with either a futures commission merchant pursuant to rules and regulations promulgated under the 1940 Act, as amended, or with its custodian in an account in the broker's name. This amount is known as initial margin. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). The risk of loss associated with a futures contract is in excess of the variation margin reflected on the Statement of Assets and Liabilities. Transactions in futures contracts for the six months ended June 30, 2005, were as follows:
CONTRACTS Outstanding at December 31, 2004............................ -0- Futures Opened.............................................. 81 Futures Closed.............................................. -0- --- Outstanding at June 30, 2005................................ 81 ===
The futures contracts outstanding as of June 30, 2005, and the descriptions and the unrealized appreciation/depreciation are as follows:
UNREALIZED APPRECIATION/ CONTRACTS DEPRECIATION SHORT CONTRACTS: 2-Year U.S. Treasury Note -- September 2005 (Current Notional Value of $207,688 per contract).................. 22 $ 1,986 5-Year U.S. Treasury Note -- September 2005 (Current Notional Value of $108,891 per contract).................. 59 (6,646) -- -------- 81 ($ 4,660) == ========
38 VAN KAMPEN INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2005 (UNAUDITED) continued 6. INDEMNIFICATIONS The Trust enters into contracts that contain a variety of indemnifications. The Trust's maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. 39 VAN KAMPEN INCOME TRUST BOARD OF TRUSTEES, OFFICERS, AND IMPORTANT ADDRESSES BOARD OF TRUSTEES DAVID C. ARCH JERRY D. CHOATE ROD DAMMEYER LINDA HUTTON HEAGY R. CRAIG KENNEDY HOWARD J KERR MITCHELL M. MERIN* JACK E. NELSON RICHARD F. POWERS, III* HUGO F. SONNENSCHEIN WAYNE W. WHALEN* - Chairman SUZANNE H. WOOLSEY OFFICERS MITCHELL M. MERIN President and Chief Executive Officer RONALD E. ROBISON Executive Vice President and Principal Executive Officer JOSEPH J. MCALINDEN Executive Vice President and Chief Investment Officer AMY R. DOBERMAN Vice President STEFANIE V. CHANG Vice President and Secretary JOHN L. SULLIVAN Chief Compliance Officer JAMES W. GARRETT Chief Financial Officer and Treasurer INVESTMENT ADVISER VAN KAMPEN ASSET MANAGEMENT 1221 Avenue of the Americas New York, NY 10020 CUSTODIAN STATE STREET BANK AND TRUST COMPANY 225 Franklin Street P.O. Box 1713 Boston, Massachusetts 02110 TRANSFER AGENT EQUISERVE TRUST COMPANY, N.A. c/o Computershare Investor Services P.O. Box 43010 Providence, Rhode Island 02940-3010 LEGAL COUNSEL SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 333 West Wacker Drive Chicago, Illinois 60606 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM DELOITTE & TOUCHE LLP 111 South Wacker Drive Chicago, Illinois 60606-4301 * "Interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended. 40 Van Kampen Income Trust An Important Notice Concerning Our U.S. Privacy Policy We are required by federal law to provide you with a copy of our Privacy Policy annually. The following Policy applies to current and former individual clients of Van Kampen Investments Inc., Van Kampen Asset Management, Van Kampen Advisors Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc. and Van Kampen Exchange Corp., as well as current and former individual investors in Van Kampen mutual funds, unit investment trusts, and related companies. This Policy is not applicable to partnerships, corporations, trusts or other non-individual clients or account holders, nor is this Policy applicable to individuals who are either beneficiaries of a trust for which we serve as trustee or participants in an employee benefit plan administered or advised by us. This Policy is, however, applicable to individuals who select us to be a custodian of securities or assets in individual retirement accounts, 401(k) accounts, 529 Educational Savings Accounts, accounts subject to the Uniform Gifts to Minors Act, or similar accounts. Please note that we may amend this Policy at any time, and will inform you of any changes to this Policy as required by law. WE RESPECT YOUR PRIVACY We appreciate that you have provided us with your personal financial information. We strive to maintain the privacy of such information while we help you achieve your financial objectives. This Policy describes what non-public personal information we collect about you, why we collect it, and when we may share it with others. We hope this Policy will help you understand how we collect and share non-public personal information that we gather about you. Throughout this Policy, we refer to the non-public information that personally identifies you or your accounts as "personal information." 1. WHAT PERSONAL INFORMATION DO WE COLLECT ABOUT YOU? To serve you better and manage our business, it is important that we collect and maintain accurate information about you. We may obtain this information from applications and other forms you submit to us, from your dealings with us, from consumer reporting agencies, from our Web sites and from third parties and other sources. (continued on next page) Van Kampen Income Trust An Important Notice Concerning Our U.S. Privacy Policy continued For example: -- We may collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us. -- We may obtain information about account balances, your use of account(s) and the types of products and services you prefer to receive from us through your dealings and transactions with us and other sources. -- We may obtain information about your creditworthiness and credit history from consumer reporting agencies. -- We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements. -- If you interact with us through our public and private Web sites, we may collect information that you provide directly through online communications (such as an e-mail address). We may also collect information about your Internet service provider, your domain name, your computer's operating system and Web browser, your use of our Web sites and your product and service preferences, through the use of "cookies." "Cookies" recognize your computer each time you return to one of our sites, and help to improve our sites' content and personalize your experience on our sites by, for example, suggesting offerings that may interest you. Please consult the Terms of Use of these sites for more details on our use of cookies. 2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU? To provide you with the products and services you request, to serve you better and to manage our business, we may disclose personal information we collect about you to our affiliated companies and to non-affiliated third parties as required or permitted by law. A. INFORMATION WE DISCLOSE TO OUR AFFILIATED COMPANIES. We do not disclose personal information that we collect about you to our affiliated companies except to enable them to provide services on our behalf or as otherwise required or permitted by law. B. INFORMATION WE DISCLOSE TO THIRD PARTIES. We do not disclose personal information that we collect about you to non-affiliated third parties except to enable them to provide services on our behalf, to perform joint marketing agreements with (continued on back) Van Kampen Income Trust An Important Notice Concerning Our U.S. Privacy Policy continued other financial institutions, or as otherwise required or permitted by law. For example, some instances where we may disclose information about you to non-affiliated third parties include: for servicing and processing transactions, to offer our own products and services, to protect against fraud, for institutional risk control, to respond to judicial process or to perform services on our behalf. When we share personal information with these companies, they are required to limit their use of personal information to the particular purpose for which it was shared and they are not allowed to share personal information with others except to fulfill that limited purpose. 3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU? We maintain physical, electronic and procedural security measures to help safeguard the personal information we collect about you. We have internal policies governing the proper handling of client information. Third parties that provide support or marketing services on our behalf may also receive personal information, and we require them to adhere to confidentiality standards with respect to such information. Van Kampen Funds Inc. 1 Parkview Plaza P.O. Box 5555 Oakbrook Terrace, IL 60181-5555 www.vankampen.com Copyright (C)2005 Van Kampen Funds Inc. All rights reserved. Member NASD/SIPC. 920,957,107 VIN SAR 8/05 (VAN KAMPEN INVESTMENTS SHINE LOGO) RN05-02002P-Y06/05 Item 2. Code of Ethics. Not applicable for semi-annual reports. Item 3. Audit Committee Financial Expert. Not applicable for semi-annual reports. Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual reports. Item 5. Audit Committee of Listed Registrants. Not applicable for semi-annual reports. Item 6. Schedule of Investments. Please refer to Item #1. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable for semi-annual reports. Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable for semi-annual reports. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 10. Submission of Matters to a Vote of Security Holders. Not applicable. Item 11. Controls and Procedures (a) The Trust's principal executive officer and principal financial officer have concluded that the Trust's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits. (a) Code of Ethics - Not applicable for semi-annual reports. (b)(1) A certification for the Principal Executive Officer of the registrant is attached hereto as part of EX-99.CERT. (b)(2) A certification for the Principal Financial Officer of the registrant is attached hereto as part of EX-99.CERT. 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. (Registrant) Van Kampen Income Trust By: /s/ Ronald E. Robison ---------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: August 23, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Ronald E. Robison --------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: August 23, 2005 By: /s/ Phillip G. Goff ------------------- Name: Phillip G. Goff Title: Principal Financial Officer Date: August 23, 2005 EX-99.CERT 2 c96528exv99wcert.txt CERTIFICATION FOR PRINCIPAL EXECUTIVE OFFICER I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-CSR of Van Kampen Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: August 23, 2005 /s/ Ronald E. Robison --------------------------- Principal Executive Officer I, Phillip G. Goff, certify that: 1. I have reviewed this report on Form N-CSR of Van Kampen Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: August 23, 2005 /s/ Phillip G. Goff --------------------------- Principal Financial Officer EX-99.906CERT 3 c96528exv99w906cert.txt CERTIFICATION FOR PRINCIPAL FINANCIAL OFFICER Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Name of Issuer: Van Kampen Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended June 30, 2005 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: August 23, 2005 /s/ Ronald E. Robison --------------------------- Ronald E. Robison Principal Executive Officer A signed original of this written statement required by Section 906 has been provided to Van Kampen Income Trust and will be retained by Van Kampen Income Trust and furnished to the Securities and Exchange Commission or its staff upon request. This written statement required by Section 906 is being furnished with this report, but not being filed as part of this Report. Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Name of Issuer: Van Kampen Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended June 30, 2005 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: August 23, 2005 /s/ Phillip G. Goff --------------------------- Phillip G. Goff Principal Financial Officer A signed original of this written statement required by Section 906 has been provided to Van Kampen Income Trust and will be retained by Van Kampen Income Trust and furnished to the Securities and Exchange Commission or its staff upon request. This written statement required by Section 906 is being furnished with this report, but not being filed as part of this Report. -----END PRIVACY-ENHANCED MESSAGE-----