-----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, PfUcyb88NtkMseHJcUsfkz5li1SCYTx71//Wl7mxjiMS4iR/O60pKDkB+LRREHDM ry+ZsveT9iTqXM2xxVX+dA== 0000950137-06-002338.txt : 20060228 0000950137-06-002338.hdr.sgml : 20060228 20060228131738 ACCESSION NUMBER: 0000950137-06-002338 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060228 DATE AS OF CHANGE: 20060228 EFFECTIVENESS DATE: 20060228 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-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-05273 FILM NUMBER: 06649848 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-CSR 1 c01497nvcsr.txt CERTIFIED SHAREHOLDER REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-05273 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: 12/31/05 Item 1. Report to Shareholders. The Trust's 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 annual 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 December 31, 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 12/31/05
INCOME TRUST SYMBOL: VIN - ------------------------------------------------------------------- AVERAGE ANNUAL BASED ON BASED ON TOTAL RETURNS NAV MARKET Since Inception (4/22/88) 6.99% 6.19% 10-year 5.87 5.43 5-year 5.67 3.79 1-year 3.35 1.83 - -------------------------------------------------------------------
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 12-MONTH PERIOD ENDED DECEMBER 31, 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 Adviser. MARKET CONDITIONS A range of events influenced the fixed-income markets in 2005. The series of natural disasters that struck the U.S., combined with soaring energy prices, led to concerns about whether the economy could sustain its level of growth. In the wake of Hurricane Katrina, some observers initially believed that the economy would suffer lingering after effects. As the weeks progressed, however, it became apparent that the impact on the economy would be smaller and more temporary than anticipated. Even the sharply higher energy prices failed to interrupt the positive economic momentum, and real gross domestic product growth continued at a good clip throughout the year. Given the economy's solid growth and relatively low inflation, the Federal Open Market Committee (the Fed) continued with its tightening policy, raising the federal funds target rate from 2.25 percent to 4.25 percent through eight increases of 25 basis points each. The minutes from the Fed's December meeting, however, indicated that this "measured pace" of increases may slow in the future. Short- and intermediate-term Treasury yields rose sharply during the year in response to stronger-than-expected economic data and the Fed's numerous tightening moves. In contrast, 10-year Treasury yields experienced little net change for the year and 30-year yields declined slightly. As a result, the yield curve flattened during the reporting period. The fundamentals of the high yield bond market remained generally positive throughout 2005. Default rates remained low, the economy advanced at a good clip, and corporate earnings trends continued to be favorable. Given the low yields available in the long-term bond market, high yield bonds were also rewarded by income-oriented investors. Yet, the period was also quite volatile, particularly from mid-March through mid-May. The migration of leading auto manufacturers into the high yield universe created doubt about corporate profitability overall and caused heightened concerns of supply/demand imbalances within the high yield market. Sentiment improved as the period progressed and investors returned their attention to the broader fundamentals of the high yield market. Investment grade corporate bonds underperformed other major U.S. bond market sectors as the credit downgrades of leading auto manufacturers roiled (1)Team members may change without notice from time to time. 2 not only the high yield market, but the investment grade segment of the corporate market as well. Sector returns were unevenly distributed, with a few key names driving performance within each sector. Overall, Aa-rated issues posted the highest returns while medium-quality, Baa-rated issues lagged. Among the corporate sub-sectors, the best performers were energy, utilities, and banking issues. The most significant industry laggards were automotive manufacturers and parts producers. 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, as they did during the reporting period. The trust returned 3.35 percent on an NAV basis and 1.83 percent on a market price basis. TOTAL RETURNS FOR THE 12-MONTH PERIOD ENDED DECEMBER 31, 2005
- ------------------------------------------------------------------------------ BASED ON NAV BASED ON MARKET PRICE 3.35% 1.83% - ------------------------------------------------------------------------------
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 and index definition. Within the investment grade portion of the portfolio, we attempted to keep the trust's overall interest-rate exposure defensively positioned. This posture was beneficial as interest rates rose across the short-term and intermediate-term portions of the curve. However, during periods of rate declines, such as we saw in the early part of the period, this stance detracted from relative performance. Among its high yield holdings, the trust benefited from its bias away from the transportation sector, the worst performing sector in the high yield market during the period. The trust was particularly well served by its de-emphasis of auto-related companies. Overall security selection in the cable sector and utility sectors further enhanced relative performance. In contrast, security selection in several sectors, including forest products, housing, financials and telecommunications, detracted from relative performance. There is no guarantee that any sectors mentioned will continue to perform well or that securities in such sectors will be held by the trust in the future. 3
RATINGS ALLOCATION AS OF 12/31/05 AAA/Aaa 40.8% A/A 0.3 BBB/Baa 2.1 BB/Ba 20.2 B/B 31.9 CCC/Caa 4.4 CC/Ca 0.1 Non-Rated 0.2 SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 12/31/05 U.S. Government Agency Obligations 31.7% Healthcare 4.2 Chemicals 3.3 Media-Cable 3.2 Electric 2.5 Integrated Energy 2.4 Gaming 2.2 Consumer Products 2.0 Media-Noncable 2.0 Retail 1.7 Wireless Communications 1.6 Automotive 1.5 Home Construction 1.5 Food/Beverage 1.5 Paper 1.5 Transportation Services 1.4 Natural Gas Pipelines 1.1 Metals 1.1 Technology 1.1 Oil Field Services 1.1 Packaging 1.1 Lodging 0.9 Independent Energy 0.7 Wireline Communications 0.7 Environmental & Facilities Services 0.6 Railroads 0.5 Supermarkets 0.5 Building Materials 0.4 Diversified Manufacturing 0.4 Refining 0.4 Aerospace & Defense 0.4 Tobacco 0.4 Services 0.4
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4
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 12/31/05 (continued from previous page) Construction Machinery 0.3 Noncaptive-Consumer Finance 0.2 Pharmaceuticals 0.2 Sovereigns 0.2 ----- Total Long-Term Investments 76.9% Short-Term Investments 23.1 ----- 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 investments 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. 5 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 (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 (800) 847-2424. 6 PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD You may obtain a copy of the trust'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 trust voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 without charge 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. 7 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ---------------------------------------------------------------------------------------------- DOMESTIC CORPORATE BONDS 42.0% AEROSPACE & DEFENSE 0.4% $ 400 K & F Acquisition, Inc. .............. 7.750% 11/15/14 $ 406,000 ----------- AUTOMOTIVE 1.7% 115 Arvin Meritor, Inc. .................. 8.750 03/01/12 110,687 270 Ford Motor Credit Co. ................ 5.625 10/01/08 237,056 300 General Motors Acceptance Corp. ...... 4.375 12/10/07 266,697 330 General Motors Acceptance Corp. ...... 6.875 09/15/11 301,285 80 General Motors Acceptance Corp. ...... 6.875 08/28/12 72,200 125 General Motors Corp. ................. 7.125 07/15/13 83,125 250 General Motors Corp. ................. 8.375 07/15/33 166,250 415 Lear Corp. ........................... 8.110 05/15/09 386,518 ----------- 1,623,818 ----------- BUILDING MATERIALS 0.5% 445 NMHG Holdings Co. .................... 10.000 05/15/09 476,150 ----------- CHEMICALS 2.9% 100 Equistar Chemicals LP................. 10.625 05/01/11 110,500 240 Huntsman ICI Chemicals LLC............ 10.125 07/01/09 249,000 250 Innophos, Inc.,144A--Private Placement (a)................................... 8.875 08/15/14 253,125 146 Innophos, Inc.,144A--Private Placement (Floating Rate) (a)................... 12.340 02/15/15 138,331 140 ISP Chemco, Inc., Ser B............... 10.250 07/01/11 149,800 300 ISP Holdings, Inc., Ser B............. 10.625 12/15/09 316,500 230 JohnsonDiversey, Inc. ................ 9.625 05/15/12 232,300 80 Koppers, Inc. ........................ 9.875 10/15/13 87,200 225 Lyondell Chemical Co. ................ 10.500 06/01/13 256,781 225 Millennium America, Inc. ............. 7.000 11/15/06 230,062 95 Nalco Co. ............................ 7.750 11/15/11 98,087 370 Nalco Co. ............................ 8.875 11/15/13 389,425 204 Rockwood Specialties Group, Inc. ..... 10.625 05/15/11 224,655 75 Rockwood Specialties Group, Inc. (EUR)................................. 7.625 11/15/14 92,122 ----------- 2,827,888 ----------- CONSTRUCTION MACHINERY 0.3% 25 Manitowoc Co., Inc. (EUR)............. 10.375 05/15/11 32,113 214 Manitowoc Co., Inc. .................. 10.500 08/01/12 238,610 ----------- 270,723 ----------- CONSUMER PRODUCTS 2.1% 160 Amscan Holdings, Inc. ................ 8.750 05/01/14 135,600 370 Iron Mountain, Inc. .................. 8.625 04/01/13 387,575 545 Levi Strauss & Co. (Floating Rate).... 8.804 04/01/12 551,812 120 Oxford Industrials, Inc. ............. 8.875 06/01/11 122,850 250 Phillips Van-Heusen Corp. ............ 7.250 02/15/11 255,000 315 Rayovac Corp. ........................ 8.500 10/01/13 276,412
8 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ---------------------------------------------------------------------------------------------- CONSUMER PRODUCTS (CONTINUED) $ 175 Spectrum Brands, Inc. ................ 7.375% 02/01/15 $ 147,000 194 Tempur-Pedic, Inc. ................... 10.250 08/15/10 210,732 ----------- 2,086,981 ----------- DIVERSIFIED MANUFACTURING 0.4% 250 Hexcel Corp. ......................... 6.750 02/01/15 242,500 200 Propex Fabrics, Inc. ................. 10.000 12/01/12 179,500 ----------- 422,000 ----------- ELECTRIC 2.6% 41 AES Corp. ............................ 9.375 09/15/10 44,997 26 AES Corp. ............................ 8.875 02/15/11 28,242 160 AES Corp. ............................ 7.750 03/01/14 168,600 260 AES Corp., 144A--Private Placement (a)................................... 9.000 05/15/15 286,000 300 CMS Energy Corp. ..................... 7.500 01/15/09 310,500 100 CMS Energy Corp. ..................... 6.300 02/01/12 99,375 200 Dynegy Holdings, Inc., 144A--Private Placement (a)......................... 9.875 07/15/10 220,250 75 IPALCO Enterprises, Inc. ............. 8.625 11/14/11 82,125 260 Monongahela Power Co. ................ 5.000 10/01/06 259,915 170 Nevada Power Co. ..................... 8.250 06/01/11 189,125 140 Nevada Power Co. ..................... 9.000 08/15/13 154,876 625 PSEG Energy Holdings.................. 8.625 02/15/08 653,125 100 Reliant Energy, Inc. ................. 6.750 12/15/14 87,750 ----------- 2,584,880 ----------- ENVIRONMENTAL & FACILITIES SERVICES 0.7% 110 Allied Waste North America, Inc. ..... 6.500 11/15/10 109,450 115 Allied Waste North America, Inc. ..... 5.750 02/15/11 109,537 310 Allied Waste North America, Inc. ..... 6.375 04/15/11 303,800 123 Allied Waste North America, Inc., Ser B..................................... 9.250 09/01/12 133,762 ----------- 656,549 ----------- FOOD/BEVERAGE 1.6% 195 Michael Foods, Inc. .................. 8.000 11/15/13 200,850 580 Pilgrim's Pride Corp. ................ 9.625 09/15/11 620,600 140 Pilgrim's Pride Corp. ................ 9.250 11/15/13 150,150 150 Smithfield Foods, Inc. ............... 7.000 08/01/11 153,750 430 Smithfield Foods, Inc., Ser B......... 8.000 10/15/09 455,800 ----------- 1,581,150 ----------- GAMING 2.3% 250 Caesars Entertainment................. 8.875 09/15/08 270,937 530 Isle of Capri Casinos, Inc. .......... 7.000 03/01/14 519,400 255 Las Vegas Sands Corp. ................ 6.375 02/15/15 246,712 725 MGM Mirage, Inc. ..................... 6.000 10/01/09 724,094 60 MGM Mirage, Inc. ..................... 5.875 02/27/14 57,600 465 Station Casinos, Inc. ................ 6.000 04/01/12 466,162 ----------- 2,284,905 -----------
See Notes to Financial Statements 9 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ---------------------------------------------------------------------------------------------- HEALTHCARE 4.5% $ 520 AmerisourceBergen Corp.144A--Private Placement (a)......................... 5.625% 09/15/12 $ 522,600 200 Community Health Systems, Inc. ....... 6.500 12/15/12 195,750 205 Davita, Inc. ......................... 6.625 03/15/13 209,613 225 Fisher Scientific International, Inc. 144A--Private Placement (a)........... 6.125 07/01/15 226,125 38 Fresenius Medical Care Capital Trust II.................................... 7.875 02/01/08 388,125 240 Fresenius Medical Care Capital Trust IV.................................... 7.875 06/15/11 256,800 140 HCA, Inc. ............................ 8.700 02/10/10 153,196 355 HCA, Inc. ............................ 8.750 09/01/10 394,404 105 HCA, Inc. ............................ 6.300 10/01/12 106,049 240 Medcath Holdings Corp. ............... 9.875 07/15/12 254,400 50 National Nephrology Associates, Inc., 144A--Private Placement (a)........... 9.000 11/01/11 55,625 185 Omnicare, Inc. ....................... 6.750 12/15/13 188,006 250 Res Care Inc., 144A--Private Placement (a)................................... 7.750 10/15/13 251,250 80 Tenet Healthcare Corp. ............... 7.375 02/01/13 74,200 275 Tenet Healthcare Corp. ............... 9.875 07/01/14 279,813 480 Ventas Realty Ltd Partnership......... 6.750 06/01/10 494,400 335 VWR International, Inc. .............. 6.875 04/15/12 334,163 ----------- 4,384,519 ----------- HOME CONSTRUCTION 1.7% 535 Associated Materials, Inc. (c)........ 0/11.250 03/01/14 264,825 160 Goodman Global Holdings Inc., 144A--Private Placement (a)........... 7.875 12/15/12 149,600 85 Goodman Global Holdings Inc., 144A--Private Placement (Floating Rate) (a)............................. 7.491 06/15/12 84,575 65 Interface, Inc. ...................... 7.300 04/01/08 65,975 75 Interface, Inc. ...................... 10.375 02/01/10 81,563 255 Interface, Inc. ...................... 9.500 02/01/14 255,000 360 Nortek, Inc. ......................... 8.500 09/01/14 349,200 75 Technical Olympic USA, Inc. .......... 9.000 07/01/10 76,219 180 Technical Olympic USA, Inc. .......... 9.000 07/01/10 182,925 115 Technical Olympic USA, Inc. .......... 10.375 07/01/12 113,706 ----------- 1,623,588 ----------- INDEPENDENT ENERGY 0.7% 240 Equistar Chemicals LP................. 10.125 09/01/08 261,600 465 Massey Energy Co., 144A--Private Placement (a)......................... 6.875 12/15/13 471,394 ----------- 732,994 ----------- INTEGRATED ENERGY 2.2% 370 Chaparral Energy, Inc., 144A--Private Placement (a)......................... 8.500 12/01/15 384,800
10 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ---------------------------------------------------------------------------------------------- INTEGRATED ENERGY (CONTINUED) $ 280 Chesapeake Energy Corp. .............. 7.500% 09/15/13 $ 298,900 260 Chesapeake Energy Corp. .............. 6.625 01/15/16 264,550 350 El Paso Production Holding Co. ....... 7.750 06/01/13 364,875 60 Hanover Compressor Co. ............... 8.625 12/15/10 63,750 95 Hanover Equipment Trust............... 8.750 09/01/11 100,938 91 Hanover Equipment Trust, Ser A........ 8.500 09/01/08 94,754 320 Hilcorp Energy Finance Corp., 144A--Private Placement (a)........... 7.750 11/01/15 327,200 50 MSW Energy Holdings LLC............... 8.500 09/01/10 53,500 215 Pacific Energy Partners............... 7.125 06/15/14 222,525 ----------- 2,175,792 ----------- LODGING 1.0% 33 HMH Properties, Inc. ................. 7.875 08/01/08 33,536 240 Host Marriott LP...................... 7.125 11/01/13 250,800 500 Host Marriott LP...................... 6.375 03/15/15 501,250 140 Starwood Hotels & Resorts Worldwide, Inc. ................................. 7.875 05/01/12 155,050 ----------- 940,636 ----------- MEDIA-CABLE 2.1% 400 Cablevision Systems Corp. (Floating Rate)................................. 8.716 04/01/09 406,000 293 Cch I LLC, 144A--Private Placement (a)................................... 11.000 10/01/15 247,585 320 Echostar DBS Corp. ................... 6.375 10/01/11 309,600 200 Echostar DBS Corp. ................... 6.625 10/01/14 192,750 120 General Cable Corp. .................. 9.500 11/15/10 127,800 110 Lin Television Corp. ................. 6.500 05/15/13 106,013 140 Lin Television Corp., Ser B........... 6.500 05/15/13 134,925 45 PanAmSat Corp. ....................... 9.000 08/15/14 47,363 440 PanAmSat Holding Corp. (c)............ 0/10.375 11/01/14 310,200 1,000 Park N View, Inc., Ser B (d) (e) (f)................................... 13.000 05/15/08 0 135 Renaissance Media Group (c)........... 0/10.000 04/15/08 135,844 ----------- 2,018,080 ----------- MEDIA-NONCABLE 1.7% 45 Advanstar Communications, Inc. ....... 10.750 08/15/10 49,556 175 AMC Entertainment, Inc. (Floating Rate)................................. 8.590 08/15/10 180,906 127 Dex Media East LLC.................... 12.125 11/15/12 149,225 171 Dex Media West LLC, Ser B............. 9.875 08/15/13 190,665 130 Houghton Mifflin Co. ................. 8.250 02/01/11 134,875 370 Houghton Mifflin Co. ................. 9.875 02/01/13 397,288 220 Nebraska Book Co., Inc. .............. 8.625 03/15/12 203,500 375 Primedia, Inc. ....................... 8.875 05/15/11 347,813 ----------- 1,653,828 -----------
See Notes to Financial Statements 11 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ---------------------------------------------------------------------------------------------- METALS 0.6% $ 100 Doe Run Resources Corp. (Acquired 03/06/98, Cost $172,660) (g) (i)...... 11.750% 11/01/08 $ 78,612 85 Foundation, PA Coal Co. .............. 7.250 08/01/14 88,294 245 UCAR Finance, Inc. ................... 10.250 02/15/12 260,006 189 United States Steel Corp. ............ 9.750 05/15/10 206,483 ----------- 633,395 ----------- NATURAL GAS PIPELINES 1.2% 210 Colorado Interstate Gas Co., 144A--Private Placement (a)........... 6.800 11/15/15 215,623 315 Dynegy Holdings, Inc. ................ 6.875 04/01/11 311,850 55 Northwest Pipeline Corp. ............. 8.125 03/01/10 58,575 105 Southern Natural Gas Co. ............. 8.875 03/15/10 112,740 470 Williams Cos., Inc. .................. 7.875 09/01/21 511,125 ----------- 1,209,913 ----------- NONCAPTIVE-CONSUMER FINANCE 0.3% 255 Residential Capital Corp. ............ 6.375 06/30/10 259,360 ----------- OIL FIELD SERVICES 1.1% 225 Hanover Compressor Co. ............... 9.000 06/01/14 246,375 170 Hilcorp Energy Finance Corp., 144A--Private Placement (a)........... 10.500 09/01/10 189,125 104 Magnum Hunter Resources, Inc. ........ 9.600 03/15/12 113,360 230 MSW Energy Holdings II LLC............ 7.375 09/01/10 237,475 260 Pogo Producing Co., 144A--Private Placement (a)......................... 6.875 10/01/17 254,800 ----------- 1,041,135 ----------- PACKAGING 1.0% 180 Crown Americas LLC, 144A--Private Placement (a)......................... 7.625 11/15/13 187,650 65 Owens-Illinois, Inc. ................. 7.350 05/15/08 66,138 680 Owens-Illinois, Inc. ................. 7.500 05/15/10 693,600 ----------- 947,388 ----------- PAPER 1.0% 230 Graham Packaging Co. ................. 8.500 10/15/12 227,700 285 Graham Packaging Co. ................. 9.875 10/15/14 279,300 350 Graphic Packaging International, Inc. ................................. 9.500 08/15/13 336,000 65 Pliant Corp. ......................... 11.125 09/01/09 58,175 135 Pliant Corp. (d)...................... 13.000 06/01/10 27,000 110 Pliant Corp. (d)...................... 13.000 06/01/10 22,000 ----------- 950,175 ----------- PHARMACEUTICALS 0.2% 245 Warner Chilcott Corp., 144A--Private Placement (a)......................... 8.750 02/01/15 226,625 -----------
12 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ---------------------------------------------------------------------------------------------- RAILROADS 0.5% $ 505 Amsted Industries, Inc., 144A--Private Placement (a)......................... 10.250% 10/15/11 $ 542,875 ----------- REFINING 0.4% 390 Vintage Petroleum, Inc. .............. 7.875 05/15/11 409,500 ----------- RETAIL 1.5% 210 Brown Shoe Co., Inc. ................. 8.750 05/01/12 220,500 140 General Nutrition Center, Inc. ....... 8.500 12/01/10 121,100 480 JC Penny Co., Inc. ................... 8.000 03/01/10 528,119 350 Petro Shopping Center Financial....... 9.000 02/15/12 353,500 210 Rite Aid Corp. ....................... 8.125 05/01/10 214,725 ----------- 1,437,944 ----------- SERVICES 0.4% 280 Buhrmann US, Inc. .................... 8.250 07/01/14 282,450 100 Buhrmann US, Inc. .................... 7.875 03/01/15 98,125 ----------- 380,575 ----------- SUPERMARKETS 0.5% 225 Delhaize America, Inc. ............... 8.125 04/15/11 246,390 219 Kroger Co., 144A--Private Placement (a)................................... 8.500 07/15/17 240,675 ----------- 487,065 ----------- TECHNOLOGY 0.7% 270 Eastman Kodak Co. .................... 7.250 11/15/13 259,420 170 Iron Mountain, Inc. .................. 7.750 01/15/15 172,125 235 Sungard Data Sys, Inc., 144A--Private Placement (a)......................... 9.125 08/15/13 244,400 20 Sungard Data Sys, Inc., 144A--Private Placement (Floating Rate) (a)......... 8.525 08/15/13 20,800 ----------- 696,745 ----------- TOBACCO 0.4% 390 RJ Reynolds Tobacco Holdings Inc., 144A--Private Placement (a)........... 6.500 07/15/10 390,000 ----------- TRANSPORTATION SERVICES 1.0% 640 Sonic Automotive, Inc. ............... 8.625 08/15/13 622,400 356 TRW Automotive, Inc. ................. 9.375 02/15/13 387,150 ----------- 1,009,550 ----------- WIRELESS COMMUNICATIONS 1.5% 185 American Tower Corp. ................. 7.500 05/01/12 194,250 190 American Tower Corp. ................. 7.125 10/15/12 196,650 250 Nextel Communications Inc., Ser E..... 6.875 10/31/13 261,021 145 Rural Cellular Corp. (Floating Rate)................................. 8.991 03/15/10 149,713 235 SBA Communications Corp. (c).......... 0/9.750 12/15/11 219,138 123 SBA Communications Corp. ............. 8.500 12/01/12 137,145
See Notes to Financial Statements 13 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ---------------------------------------------------------------------------------------------- WIRELESS COMMUNICATIONS (CONTINUED) $ 250 UbiquiTel Operating Co. .............. 9.875% 03/01/11 $ 278,125 ----------- 1,436,042 ----------- WIRELINE COMMUNICATIONS 0.3% 250 Exodus Communications, Inc. (d) (e) (f)................................... 11.250 07/01/08 0 400 Exodus Communications, Inc. (d) (e) (f)................................... 11.625 07/15/10 0 300 Qwest Communications International, Inc. (Floating Rate).................. 7.840 02/15/09 305,625 ----------- 305,625 ----------- TOTAL DOMESTIC CORPORATE BONDS 42.0%........................................... 41,114,393 ----------- FOREIGN BONDS AND DEBT SECURITIES (US$) 6.6% BERMUDA 0.5% 205 Intelsat Bermuda Ltd., 144A--Private Placement (Floating Rate) (a)......... 8.695 01/15/12 209,356 25 Intelsat Bermuda Ltd., 144A--Private Placement (a)......................... 8.250 01/15/13 25,375 270 Intelsat Bermuda Ltd., 144A--Private Placement (a)......................... 8.625 01/15/15 274,050 ----------- 508,781 ----------- CANADA 3.0% 139 Abitibi-Consolidated, Inc. ........... 8.550 08/01/10 141,432 80 Abitibi-Consolidated, Inc. ........... 7.750 06/15/11 76,600 60 Abitibi-Consolidated, Inc. ........... 6.000 06/20/13 51,150 398 CanWest Media, Inc. .................. 8.000 09/15/12 408,534 500 CHC Helicopter Corp. ................. 7.375 05/01/14 508,125 285 Husky Oil Ltd. (Floating Rate)........ 8.900 08/15/28 307,112 90 Jean Coutu Group (PJC), Inc. ......... 7.625 08/01/12 89,100 275 Jean Coutu Group (PJC), Inc. ......... 8.500 08/01/14 253,000 260 Nortel Networks Corp. ................ 4.250 09/01/08 245,050 250 Nortel Networks Ltd. ................. 6.125 02/15/06 251,250 410 Novelis, Inc.,144A--Private Placement (a)......................... 7.250 02/15/15 384,375 350 Tembec Industries, Inc. .............. 7.750 03/15/12 189,000 ----------- 2,904,728 ----------- FRANCE 0.8% 115 Compagnie Generale de Geophysique, SA....................... 7.500 05/15/15 119,600 125 Crown European Holdings SA (EUR)...... 6.250 09/01/11 158,532 150 Rhodia SA (EUR)....................... 8.000 06/01/10 187,352 285 Rhodia SA............................. 8.875 06/01/11 293,550 ----------- 759,034 -----------
14 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ---------------------------------------------------------------------------------------------- GERMANY 0.7% $ 260 Cognis Deutschland, 144A--Private Placement (Floating Rate) (EUR) (a)... 7.226% 11/15/13 $ 316,664 325 Kabel Deutschland, 144A--Private Placement (a)......................... 10.625 07/01/14 343,687 ----------- 660,351 ----------- IRELAND 0.1% 100 JSG Funding PLC (EUR)................. 10.125 10/01/12 127,861 ----------- LUXEMBOURG 1.1% 345 Cablecom Luxembourg, 144A--Private Placement (EUR) (a)................... 9.375 04/15/14 468,181 110 JohnsonDiversey, Inc. (EUR)........... 9.625 05/15/12 131,531 140 SGL Carbon Luxembourg SA, 144A--Private Placement (EUR) (a)..... 8.500 02/01/12 182,321 280 Wind Acquisition Finance SA, 144A--Private Placement (a)........... 10.750 12/01/15 290,500 ----------- 1,072,533 ----------- MEXICO 0.4% 350 Axtel SA.............................. 11.000 12/15/13 397,250 105 Satelites Mexicanos SA, Ser B (d) (e)................................... 10.125 11/01/04 50,400 ----------- 447,650 ----------- TOTAL FOREIGN BONDS AND DEBT SECURITIES 6.6%................................... 6,480,938 ----------- COLLATERALIZED MORTGAGE OBLIGATIONS 1.7% 59 Federal Home Loan Mortgage Corp. ..... 5.000 08/15/12 59,387 318 Federal Home Loan Mortgage Corp. (Floating Rate) REMIC................. 4.529 09/25/45 317,717 238 Federal Home Loan Mortgage Corp. (Floating Rate)....................... 4.969 03/15/34 241,974 95 Federal Home Loan Mortgage Corp. (Interest Only) (h)................... 3.630 03/15/32 8,282 584 Federal Home Loan Mortgage Corp. (Interest Only)....................... 5.000 09/15/14 to 12/15/16 47,929 104 Federal Home Loan Mortgage Corp. (Interest Only)....................... 6.000 05/15/30 7,054 283 Federal Home Loan Mortgage Corp. (Interest Only) (Floating Rate) REMIC (h)................................... 2.630 06/17/27 9,912 312 Federal National Mortgage Association (Floating Rate)....................... 4.580 05/25/35 312,298 318 Federal National Mortgage Association (Floating Rate)....................... 4.770 12/18/32 320,748 283 Federal National Mortgage Association (Interest Only)....................... 5.500 06/25/26 to 05/25/27 16,377 303 Federal National Mortgage Association (Interest Only)....................... 6.000 08/25/32 to 07/25/33 46,918
See Notes to Financial Statements 15 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ---------------------------------------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED) $ 681 Federal National Mortgage Association (Interest Only)....................... 6.500% 07/01/31 to 05/25/33 $ 149,494 40 Federal National Mortgage Association (Interest Only)....................... 8.000 05/01/30 8,991 168 Federal National Mortgage Association (Interest Only) REMIC................. 7.000 03/01/32 to 04/25/33 37,294 295 Government National Mortgage Association (Interest Only) REMIC (h)................................... 4.030 06/16/27 12,986 122 Government National Mortgage Association (Interest Only) REMIC (h)................................... 3.030 05/16/32 6,704 118 Government National Mortgage Association (Interest Only) REMIC (h)................................... 3.630 05/16/32 5,364 ----------- TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS 1.7%................................. 1,609,429 ----------- MORTGAGE BACKED SECURITIES 17.2% 368 Federal Home Loan Mortgage Corp. ..... 7.500 11/01/29 to 06/01/32 386,743 98 Federal Home Loan Mortgage Corp. (ARM)................................. 3.566 07/01/34 95,032 255 Federal Home Loan Mortgage Corp. (ARM)................................. 4.171 08/01/34 252,534 1,425 Federal Home Loan Mortgage Corp., January............................... 5.000 TBA 1,410,750 1,150 Federal Home Loan Mortgage Corp., January............................... 5.500 TBA 1,156,829 1,500 Federal National Mortgage Association, February.............................. 4.500 TBA 1,443,593 397 Federal National Mortgage Association REMIC................................. 4.748 05/28/35 398,643 133 Federal National Mortgage Association REMIC................................. 4.761 05/28/35 133,331 893 Federal National Mortgage Association........................... 6.500 06/01/15 to 01/01/34 918,425 5,475 Federal National Mortgage Association........................... 7.000 03/01/15 to 12/01/35 5,713,414 376 Federal National Mortgage Association........................... 7.500 03/01/15 to 03/01/32 393,800 123 Federal National Mortgage Association (ARM)................................. 3.588 07/01/34 121,084 254 Federal National Mortgage Association (ARM)................................. 4.045 07/01/33 254,018 153 Federal National Mortgage Association (ARM)................................. 4.116 09/01/34 151,423 139 Federal National Mortgage Association (ARM)................................. 4.170 10/01/34 138,065 137 Federal National Mortgage Association (ARM)................................. 4.246 10/01/34 135,608 426 Federal National Mortgage Association (ARM)................................. 4.334 02/01/34 425,507
16 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ---------------------------------------------------------------------------------------------- MORTGAGE BACKED SECURITIES (CONTINUED) $ 400 Federal National Mortgage Association, February.............................. 6.000% TBA $ 403,250 1,000 Federal National Mortgage Association, January............................... 5.500 TBA 990,312 500 Federal National Mortgage Association, January............................... 6.000 TBA 504,688 300 Federal National Mortgage Association, January............................... 7.000 TBA 313,031 124 Government National Mortgage Association........................... 7.000 07/15/29 to 01/15/30 130,075 328 Government National Mortgage Association........................... 7.500 07/15/23 to 09/15/29 346,799 201 Government National Mortgage Association........................... 8.000 03/15/17 to 10/15/22 215,205 116 Government National Mortgage Association........................... 8.500 07/15/24 to 12/15/24 126,682 221 Government National Mortgage Association........................... 9.000 08/15/16 to 12/15/24 241,056 72 Government National Mortgage Association........................... 9.500 11/15/09 to 01/15/17 78,569 ----------- TOTAL MORTGAGE BACKED SECURITIES 17.2%......................................... 16,878,466 ----------- U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS 3.7% 1,100 Federal Home Loan Mortgage Corp. ..... 7.000 03/15/10 1,195,172 785 Federal National Mortgage Association........................... 6.625 11/15/30 971,175 1,250 Federal National Mortgage Association........................... 7.125 06/15/10 1,368,614 100 Federal National Mortgage Association........................... 7.250 01/15/10 109,054 ----------- TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS......................... 3,644,015 ----------- UNITED STATES TREASURY OBLIGATIONS 11.1% 1,600 United States Treasury Bonds.......... 5.250 02/15/29 1,746,438 840 United States Treasury Bonds.......... 6.125 08/15/29 1,023,455 1,230 United States Treasury Bonds.......... 6.375 08/15/27 1,524,096 1,810 United States Treasury Bonds.......... 7.625 02/15/25 2,494,549 335 United States Treasury Notes.......... 3.875 02/15/13 324,806 2,250 United States Treasury Notes (j)...... 4.250 08/15/13 2,230,578 1,000 United States Treasury Notes.......... 4.250 11/15/13 990,782 1,200 United States Treasury Notes (STRIPS).............................. * 05/15/25 488,890 ----------- TOTAL UNITED STATES TREASURY OBLIGATIONS........................................ 10,823,594 ----------- GOVERNMENT AND GOVERNMENT AGENCY OBLIGATION 0.2% 180 United Mexican States (Mexico)........ 8.375 01/14/11 205,650 -----------
See Notes to Financial Statements 17 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued
DESCRIPTION VALUE - -------------------------------------------------------------------------------------------------- EQUITIES 0.0% Doe Run Resources Corp. (1 Common Stock Warrant) (f) (k)............................ $ 0 HF Holdings, Inc. (5,260 Common Stock Warrants) (f) (k)............................. 0 Optel, Inc. (500 Common Shares) (f)................................................. 0 Park N View, Inc., 144A--Private Placement (1,000 Common Stock Warrants) (a) (e) (f) (k)................................................................................. 0 ----------- TOTAL EQUITIES...................................................................... 0 ----------- TOTAL LONG-TERM INVESTMENTS 82.5% (Cost $81,947,481)................................................................ 80,756,485 ----------- SHORT-TERM INVESTMENTS 24.8% REPURCHASE AGREEMENT 9.4% State Street Bank & Trust Co. ($9,177,000 par collateralized by U.S. Government obligations in a pooled cash account, interest rate of 4.12%, dated 12/30/05, to be sold on 01/03/06 at $9,181,201)..................................................... 9,177,000 U.S. GOVERNMENT AGENCY OBLIGATIONS 15.4% Federal Home Loan Bank ($15,000,000 par, yielding 3.401%, 01/03/06 maturity)........ 14,997,167 United States Treasury Bills ($100,000 par, yielding 3.171%, 01/12/06 maturity) (b)....................................................................... 99,903 ----------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS............................................ 15,097,070 ----------- TOTAL SHORT-TERM INVESTMENTS (Cost $24,274,070)................................................................ 24,274,070 ----------- TOTAL INVESTMENTS 107.3% (Cost $106,221,551)............................................................... 105,030,555 FOREIGN CURRENCY 0.0% (Cost $188)....................................................................... 185 LIABILITIES IN EXCESS OF OTHER ASSETS (7.3%)....................................... (7,165,467) ----------- NET ASSETS 100.0%.................................................................. $97,865,273 ===========
* Zero coupon bond Percentages are calculated as a percentage of net assets. (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) All or a portion of this security has been physically segregated in connection with open futures contracts. (c) Security is a "step-up" bond where the coupon increases or steps up at a predetermined date. (d) Non-income producing as security is in default. (e) This borrower has filed for protection in federal bankruptcy court. (f) Market value is determined in accordance with procedures established in good faith by the Board of Trustees. 18 See Notes to Financial Statements VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued (g) This security is restricted and may be resold only in transactions exempt from registration which are normally those transactions with qualified institutional buyers. The restricted security comprises 0.1% 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 holding s, 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) Payment-in-kind security. (j) Security purchased on a when-issued or delayed delivery basis. (k) Non-income producing security. 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. FUTURES CONTRACTS OUTSTANDING AS OF DECEMBER 31, 2005:
UNREALIZED APPRECIATION/ CONTRACTS DEPRECIATION LONG CONTRACTS: U.S. Treasury Notes 10-Year Futures March 2006 (Current Notional Value of $109,406 per contract).................. 84 $57,598 U.S. Treasury Bonds Futures March 2006 (Current Notional Value of $114,188 per contract)........................... 6 10,544 SHORT CONTRACTS: U.S. Treasury Notes 5-Year Futures March 2006 (Current Notional Value of $106,344 per contract).................. 79 (27,972) U.S. Treasury Notes 2-Year Futures March 2006 (Current Notional Value of $102,594 per contract).................. 12 (939) --- ------- 181 $39,231 === =======
See Notes to Financial Statements 19 VAN KAMPEN INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2005 continued FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AS OF DECEMBER 31, 2005:
UNREALIZED CURRENT APPRECIATION/ IN EXCHANGE FOR VALUE DEPRECIATION SHORT CONTRACTS: Euro Currency 240,000 expiring 1/26/06...................... US$ $ 284,557 $ 4,907 874,000 expiring 1/26/06...................... US$ 1,036,262 17,170 259,000 expiring 1/26/06...................... US$ 307,085 5,166 45,000 expiring 1/26/06....................... US$ 53,354 943 ---------- ------- $1,681,258 $28,186 ========== =======
20 See Notes to Financial Statements VAN KAMPEN INCOME TRUST FINANCIAL STATEMENTS Statement of Assets and Liabilities December 31, 2005 ASSETS: Total Investments (Cost $106,221,551)....................... $105,030,555 Foreign Currency (Cost $188)................................ 185 Cash........................................................ 654 Receivables: Investments Sold.......................................... 1,842,637 Interest.................................................. 1,289,584 Forward Foreign Currency Contracts.......................... 28,186 Other....................................................... 33,264 ------------ Total Assets............................................ 108,225,065 ------------ LIABILITIES: Payables: Investments Purchased..................................... 10,004,807 Investment Advisory Fee................................... 54,044 Income Distributions...................................... 38,458 Variation Margin on Futures............................... 11,297 Other Affiliates.......................................... 1,713 Trustees' Deferred Compensation and Retirement Plans........ 169,092 Accrued Expenses............................................ 80,381 ------------ Total Liabilities....................................... 10,359,792 ------------ NET ASSETS.................................................. $ 97,865,273 ============ NET ASSET VALUE PER COMMON SHARE ($97,865,273 divided by 15,371,738 shares outstanding)............................ $ 6.37 ============ 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............. (430,333) Net Unrealized Depreciation................................. (1,123,764) Accumulated Net Realized Loss............................... (20,733,235) ------------ NET ASSETS.................................................. $ 97,865,273 ============
See Notes to Financial Statements 21 VAN KAMPEN INCOME TRUST FINANCIAL STATEMENTS continued Statement of Operations For the Year Ended December 31, 2005 INVESTMENT INCOME: Interest.................................................... $ 6,013,948 Dividends................................................... 54,437 Other....................................................... 77,337 ----------- Total Income............................................ 6,145,722 ----------- EXPENSES: Investment Advisory Fee..................................... 646,730 Trustees' Fees and Related Expenses......................... 52,980 Custody..................................................... 48,447 Legal....................................................... 6,061 Other....................................................... 172,497 ----------- Total Expenses.......................................... 926,715 Less Credits Earned on Cash Balances.................... 1,511 ----------- Net Expenses............................................ 925,204 ----------- NET INVESTMENT INCOME....................................... $ 5,220,518 =========== REALIZED AND UNREALIZED GAIN/LOSS: Realized Gain/Loss: Investments............................................... $(1,092,927) Futures................................................... 85,950 Foreign Currency Transactions............................. 241,339 ----------- Net Realized Loss........................................... (765,638) ----------- Unrealized Appreciation/Depreciation: Beginning of the Period................................... 791,159 ----------- End of the Period: Investments............................................. (1,190,996) Futures................................................. 39,231 Forward Foreign Currency Contracts...................... 28,186 Foreign Currency Translation............................ (185) ----------- (1,123,764) ----------- Net Unrealized Depreciation During the Period............... (1,914,923) ----------- NET REALIZED AND UNREALIZED LOSS............................ $(2,680,561) =========== NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 2,539,957 ===========
22 See Notes to Financial Statements VAN KAMPEN INCOME TRUST FINANCIAL STATEMENTS continued Statements of Changes in Net Assets
FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 2005 DECEMBER 31, 2004 -------------------------------------- FROM INVESTMENT ACTIVITIES: Operations: Net Investment Income................................ $ 5,220,518 $ 5,138,752 Net Realized Gain/Loss............................... (765,638) 897,502 Net Unrealized Appreciation/Depreciation During the Period............................................. (1,914,923) 833,683 ------------ ------------ Change in Net Assets from Operations................. 2,539,957 6,869,937 Distributions from Net Investment Income............. (5,824,258) (5,072,676) ------------ ------------ NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES......................................... (3,284,301) 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 $(430,333) and $(264,593), respectively)...................... $ 97,865,273 $101,149,574 ============ ============
See Notes to Financial Statements 23 VAN KAMPEN INCOME TRUST FINANCIAL HIGHLIGHTS THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
YEAR ENDED DECEMBER 31, -------------------------------------------- 2005 2004 2003 2002 2001 -------------------------------------------- NET ASSET VALUE, BEGINNING OF THE PERIOD....... $6.58 $ 6.46 $6.10 $ 6.51 $ 6.85 ----- ------ ----- ------ ------ Net Investment Income........................ .39 .33 .32 .39 .53 Net Realized and Unrealized Gain/Loss........ (.17) .12 .41 (.33) (.29) ----- ------ ----- ------ ------ Total from Investment Operations............... .22 .45 .73 .06 .24 ----- ------ ----- ------ ------ Less: Distributions from Net Investment Income..... .43 .33 .34 .47 .58 Return of Capital Distributions.............. -0- -0- .03 -0- -0- ----- ------ ----- ------ ------ Total Distributions............................ .43 .33 .37 .47 .58 ----- ------ ----- ------ ------ NET ASSET VALUE, END OF THE PERIOD............. $6.37 $ 6.58 $6.46 $ 6.10 $ 6.51 ===== ====== ===== ====== ====== Common Share Market Price at End of the Period....................................... $5.58 $ 5.85 $5.81 $ 5.71 $ 6.33 Total Return (a)............................... 1.83% 6.62% 8.42% -2.59% 5.05% Net Assets at End of the Period (In millions).................................... $97.9 $101.1 $99.4 $ 93.8 $100.0 Ratio of Expenses to Average Net Assets........ .93% .92% .92% .89% .93% Ratio of Net Investment Income to Average Net Assets....................................... 5.25% 5.17% 5.14% 6.29% 7.88% Portfolio Turnover............................. 180% 225% 299%(b) 101% 46%
(a) 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. (b) 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. Beginning with the fiscal year ended December 31, 2003, the Trust's portfolio turnover rate reflects mortgage pool forward commitments as purchases and sales, which had not been the case in the past. This caused the reported portfolio turnover rate to be higher in previous fiscal years. 24 See Notes to Financial Statements VAN KAMPEN INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2005 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 segregate assets having an aggregate value at least equal to the amount of the when-issued, delayed delivery, or forward purchase commitments until payment is made. At December 31, 2005, the Trust had $10,004,807 of when-issued, delayed delivery or 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 25 VAN KAMPEN INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2005 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, 2005, the Trust had an accumulated capital loss carryforward for tax purposes of $20,554,644, 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 1,080,278.................................................. December 31, 2013
At December 31, 2005, the cost and related gross unrealized appreciation and depreciation are as follows: Cost of investments for tax purposes........................ $106,488,777 ============ Gross tax unrealized appreciation........................... $ 1,954,067 Gross tax unrealized depreciation........................... (3,412,289) ------------ Net tax unrealized depreciation on investments.............. $ (1,458,222) ============
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 and a portion of future gains, which are included in ordinary income for tax purposes. 26 VAN KAMPEN INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2005 continued The tax character of distributions paid during the years ended December 31, 2005 and 2004 were as follows:
2005 2004 Distribution paid from: Ordinary Income........................................... $5,803,454 $5,081,293 Long-term Capital Gains................................... -0- -0- ---------- ---------- $5,803,454 $5,081,293 ========== ==========
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under accounting principles generally accepted in the United States of America and federal income tax purposes, permanent differences between book and tax basis reporting have been identified and appropriately reclassified on the Statement of Assets and Liabilities. A permanent book and tax difference relating to paydowns on mortgage-backed securities totaling $106,420 was reclassified to accumulated net realized loss from accumulated undistributed net investment income. A permanent book and tax difference related to the recognition of net realized losses on foreign currency transactions totaling $241,339 has been reclassified from accumulated net realized loss to accumulated undistributed net investment income. A permanent book and tax difference relating to consent fee income received from tender offers totaling $74,812 has been reclassified from accumulated undistributed net investment income to accumulated net realized loss. Additionally, a permanent difference relating to book to tax amortization differences totaling $165,053 was reclassified from accumulated undistributed net investment income to accumulated net realized loss. As of December 31, 2005, the components of distributable earnings on a tax basis were as follows: Undistributed ordinary income............................... $78,218 Undistributed long-term capital gains....................... -0-
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, gains or losses recognized for tax purposes on open futures transactions at December 31, 2005 and post October losses which are not recognized for tax purposes at the first day of the following fiscal year. 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 year ended December 31, 2005, the Trust's custody fee was reduced by $1,511 as a result of credits earned on cash balances. 27 VAN KAMPEN INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2005 continued 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 year ended December 31, 2005, the Trust recognized expenses of approximately $6,100 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, 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 year ended December 31, 2005, the Trust recognized expenses of approximately $11,900, 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. 3. INVESTMENT TRANSACTIONS During the period, the cost of purchases and proceeds from sales of investments, excluding short-term investments and U.S. Government securities, were $38,644,373 and $38,255,369, respectively. The cost of purchases and proceeds from sales of long-term U.S. Government securities, including paydowns on mortgage-backed securities, for the period were $114,617,195 and 125,365,895, 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. 28 VAN KAMPEN INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2005 continued 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 contacts. 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 Trust 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 Trust 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 year ended December 31, 2005, were as follows:
CONTRACTS Outstanding at December 31, 2004............................ -0- Futures Opened.............................................. 558 Futures Closed.............................................. (377) ---- Outstanding at December 31, 2005............................ 181 ====
5. 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. 29 VAN KAMPEN INCOME TRUST REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees and Shareholders of Van Kampen Income Trust: We have audited the accompanying statement of assets and liabilities of Van Kampen Income Trust (the "Trust"), including the portfolio of investments, as of December 31, 2005, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2005, by correspondence with the Trust's custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Van Kampen Income Trust as of December 31, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Chicago, Illinois February 7, 2006 30 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 JACK E. NELSON HUGO F. SONNENSCHEIN WAYNE W. WHALEN* - Chairman SUZANNE H. WOOLSEY OFFICERS RONALD E. ROBISON 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 PHILLIP G. GOFF Chief Financial Officer and Treasurer INVESTMENT ADVISER VAN KAMPEN ASSET MANAGEMENT 1221 Avenue of the Americas New York, New York 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 02940-3011 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 For federal income tax purposes, the following information is furnished with respect to the distributions paid by the Trust during its taxable year ended December 31, 2005. For corporate shareholders 1% of the distributions qualify for the dividends received deduction. As provided by the American Jobs Creation Act of 2004, certain interest-related dividends paid by the Trust to Foreign shareholders may not be subject to U.S. withholding tax. The Trust intends to designate up to a maximum of $5,803,454 as qualifying as interest-related dividends. In January, the Trust provides tax information to shareholders for the preceding calendar year. * "Interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended. 31 VAN KAMPEN INCOME TRUST RESULTS OF SHAREHOLDER VOTES The Annual Meeting of the Shareholders of the Trust was held on October 28, 2005, where shareholders voted on the election of trustees. With regard to the election of the following trustees by the common shareholders of the Trust:
# OF SHARES ---------------------- IN FAVOR WITHHELD - ------------------------------------------------------------------------------------ Rod Dammeyer................................................ 13,639,271 885,753 Linda Hutton Heagy.......................................... 13,645,907 879,753 Wayne W. Whalen............................................. 13,633,907 891,117
The other trustees of the Trust whose terms did not expire in 2005 are David C. Arch, Jerry D. Choate, R. Craig Kennedy, Howard J Kerr, Jack E. Nelson, Hugo F. Sonnenschein, and Suzanne H. Woolsey. 32 VAN KAMPEN INCOME TRUST TRUSTEES AND OFFICERS The business and affairs of the Trust are managed under the direction of the Trust's Board of Trustees and the Trust's officers appointed by the Board of Trustees. The tables below list the trustees and executive officers of the Trust and their principal occupations during the last five years, other directorships held by trustees and their affiliations, if any, with Van Kampen Investments, the Adviser, the Distributor, Van Kampen Advisors Inc., Van Kampen Exchange Corp. and Investor Services. The term "Fund Complex" includes each of the investment companies advised by the Adviser as of the date of this Annual Report. Trustees of the Funds generally serve three year terms or until their successors are duly elected and qualified. Officers are annually elected by the trustees. INDEPENDENT TRUSTEES
NUMBER OF TERM OF FUNDS IN OFFICE AND FUND POSITION(S) LENGTH OF COMPLEX NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS OF INDEPENDENT TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE David C. Arch (60) Trustee Trustee Chairman and Chief 66 Trustee/Director/Managing Blistex Inc. since 1997 Executive Officer of General Partner of funds 1800 Swift Drive Blistex Inc., a consumer in the Fund Complex. Oak Brook, IL 60523 health care products manufacturer. Director of the Heartland Alliance, a nonprofit organization serving human needs based in Chicago. Director of St. Vincent de Paul Center, a Chicago based day care facility serving the children of low income families. Board member of the Illinois Manufacturers' Association. Jerry D. Choate (67) Trustee Trustee Prior to January 1999, 64 Trustee/Director/Managing 33971 Selva Road since 2003 Chairman and Chief General Partner of funds Suite 130 Executive Officer of the in the Fund Complex. Dana Point, CA 92629 Allstate Corporation Director of Amgen Inc., a ("Allstate") and Allstate biotechnological company, Insurance Company. Prior and Director of Valero to January 1995, Energy Corporation, an President and Chief independent refining Executive Officer of company. Allstate. Prior to August 1994, various management positions at Allstate.
33
VAN KAMPEN INCOME TRUST TRUSTEES AND OFFICERS continued NUMBER OF TERM OF FUNDS IN OFFICE AND FUND POSITION(S) LENGTH OF COMPLEX NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS OF INDEPENDENT TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE Rod Dammeyer (65) Trustee Trustee President of CAC, L.L.C., 66 Trustee/Director/Managing CAC, L.L.C. since 1997 a private company General Partner of funds 4350 LaJolla Village Drive offering capital in the Fund Complex. Suite 980 investment and management Director of Stericycle, San Diego, CA 92122-6223 advisory services. Prior Inc., Ventana Medical to February 2001, Vice Systems, Inc., and GATX Chairman and Director of Corporation, and Trustee Anixter International, of The Scripps Research Inc., a global Institute. Prior to distributor of wire, January 2005, Trustee of cable and communications the University of Chicago connectivity products. Hospitals and Health Prior to July 2000, Systems. Prior to April Managing Partner of 2004, Director of Equity Group Corporate TheraSense, Inc. Prior to Investment (EGI), a January 2004, Director of company that makes TeleTech Holdings Inc. private investments in and Arris Group, Inc. other companies. Prior to May 2002, Director of Peregrine Systems Inc. Prior to February 2001, Director of IMC Global Inc. Prior to July 2000, Director of Allied Riser Communications Corp., Matria Healthcare Inc., Transmedia Networks, Inc., CNA Surety, Corp. and Grupo Azcarero Mexico (GAM).
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VAN KAMPEN INCOME TRUST TRUSTEES AND OFFICERS continued NUMBER OF TERM OF FUNDS IN OFFICE AND FUND POSITION(S) LENGTH OF COMPLEX NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS OF INDEPENDENT TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE Linda Hutton Heagy (57) Trustee Trustee Managing Partner of 64 Trustee/Director/Managing Heidrick & Struggles since 2003 Heidrick & Struggles, an General Partner of funds 233 South Wacker Drive executive search firm. in the Fund Complex. Suite 7000 Trustee on the University Chicago, IL 60606 of Chicago Hospitals Board, Vice Chair of the Board of the YMCA of Metropolitan Chicago and a member of the Women's Board of the University of Chicago. Prior to 1997, Partner of Ray & Berndtson, Inc., an executive recruiting firm. Prior to 1996, Trustee of The International House Board, a fellowship and housing organization for international graduate students. Prior to 1995, Executive Vice President of ABN AMRO, N.A., a bank holding company. Prior to 1990, Executive Vice President of The Exchange National Bank. R. Craig Kennedy (54) Trustee Trustee Director and President of 64 Trustee/Director/Managing 1744 R Street, NW since 2003 the German Marshall Fund General Partner of funds Washington, DC 20009 of the United States, an in the Fund Complex. independent U.S. foundation created to deepen understanding, promote collaboration and stimulate exchanges of practical experience between Americans and Europeans. Formerly, advisor to the Dennis Trading Group Inc., a managed futures and option company that invests money for individuals and institutions. Prior to 1992, President and Chief Executive Officer, Director and member of the Investment Committee of the Joyce Foundation, a private foundation. Howard J Kerr (70) Trustee Trustee Prior to 1998, President 66 Trustee/Director/Managing 14 Huron Trace since 1997 and Chief Executive General Partner of funds Galena, IL 61036 Officer of Pocklington in the Fund Complex. Corporation, Inc., an Director of the Lake investment holding Forest Bank & Trust. company. Director of the Marrow Foundation.
35
VAN KAMPEN INCOME TRUST TRUSTEES AND OFFICERS continued NUMBER OF TERM OF FUNDS IN OFFICE AND FUND POSITION(S) LENGTH OF COMPLEX NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS OF INDEPENDENT TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE Jack E. Nelson (70) Trustee Trustee President of Nelson 64 Trustee/Director/Managing 423 Country Club Drive since 2003 Investment Planning General Partner of funds Winter Park, FL 32789 Services, Inc., a in the Fund Complex. financial planning company and registered investment adviser in the State of Florida. President of Nelson Ivest Brokerage Services Inc., a member of the NASD, Securities Investors Protection Corp. and the Municipal Securities Rulemaking Board. President of Nelson Sales and Services Corporation, a marketing and services company to support affiliated companies. Hugo F. Sonnenschein (65) Trustee Trustee President Emeritus and 66 Trustee/Director/Managing 1126 E. 59th Street since 1997 Honorary Trustee of the General Partner of funds Chicago, IL 60637 University of Chicago and in the Fund Complex. the Adam Smith Director of Winston Distinguished Service Laboratories, Inc. Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago. Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences. Suzanne H. Woolsey, Ph.D. (64) Trustee Trustee Chief Communications 64 Trustee/Director/Managing 815 Cumberstone Road since 2003 Officer of the National General Partner of funds Harwood, MD 20776 Academy of in the Fund Complex. Sciences/National Director of Fluor Corp., Research Council, an an engineering, independent, federally procurement and chartered policy construction institution, from 2001 to organization, since November 2003 and Chief January 2004 and Director Operating Officer from of Neurogen Corporation, 1993 to 2001. Director of a pharmaceutical company, the Institute for Defense since January 1998. Analyses, a federally funded research and development center, Director of the German Marshall Fund of the United States, Director of the Rocky Mountain Institute and Trustee of Colorado College. Prior to 1993, Executive Director of the Commission on Behavioral and Social Sciences and Education at the National Academy of Sciences/National Research Council. From 1980 through 1989, Partner of Coopers & Lybrand.
36 VAN KAMPEN INCOME TRUST TRUSTEES AND OFFICERS continued INTERESTED TRUSTEE*
NUMBER OF TERM OF FUNDS IN OFFICE AND FUND POSITION(S) LENGTH OF COMPLEX NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS OF INTERESTED TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE Wayne W. Whalen* (66) Trustee Trustee Partner in the law firm 66 Trustee/Director/Managing 333 West Wacker Drive since 1997 of Skadden, Arps, Slate, General Partner of funds Chicago, IL 60606 Meagher & Flom LLP, legal in the Fund Complex. counsel to funds in the Director of the Abraham Fund Complex. Lincoln Presidential Library Foundation.
* Mr. Whalen is an "interested person" (within the meaning of Section 2(a)(19) of the 1940 Act) of certain funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such funds in the Fund Complex. 37 VAN KAMPEN INCOME TRUST TRUSTEES AND OFFICERS continued OFFICERS
TERM OF OFFICE AND POSITION(S) LENGTH OF NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S) ADDRESS OF OFFICER TRUST SERVED DURING PAST 5 YEARS Ronald E. Robison (67) President and Officer President of funds in the Fund Complex since September 2005 1221 Avenue of the Americas Principal since 2003 and Principal Executive Officer of funds in the Fund Complex New York, NY 10020 Executive since May 2003. Managing Director of Van Kampen Advisors Officer Inc. since June 2003. Director of Investor Services since September 2002. Director of the Adviser, Van Kampen Investments and Van Kampen Exchange Corp. since January 2005. Managing Director of Morgan Stanley and Morgan Stanley & Co. Incorporated. Managing Director and Director of Morgan Stanley Investment Management Inc. Chief Administrative Officer, Managing Director and Director of Morgan Stanley Investment Advisors Inc. and Morgan Stanley Services Company Inc. Managing Director and Director of Morgan Stanley Distributors Inc. and Morgan Stanley Distribution Inc. Chief Executive Officer and Director of Morgan Stanley Trust. Executive Vice President and Principal Executive Officer of the Institutional and Retail Morgan Stanley Funds. Director of Morgan Stanley SICAV. Previously Chief Global Operations Officer of Morgan Stanley Investment Management Inc. and Executive Vice President of funds in the Fund Complex from May 2003 to September 2005. Joseph J. McAlinden (63) Executive Vice Officer Managing Director and Chief Investment Officer of Morgan 1221 Avenue of the Americas President and since 2002 Stanley Investment Advisors Inc., and Morgan Stanley New York, NY 10020 Chief Investment Investment Management Inc. and Director of Morgan Stanley Officer Trust for over 5 years. Executive Vice President and Chief Investment Officer of funds in the Fund Complex. Managing Director and Chief Investment Officer of Van Kampen Investments, the Adviser and Van Kampen Advisors Inc. since December 2002. Amy R. Doberman (43) Vice President Officer Managing Director and General Counsel, U.S. Investment 1221 Avenue of the Americas since 2004 Management; Managing Director of Morgan Stanley Investment New York, NY 10020 Management Inc., Morgan Stanley Investment Advisers Inc. and the Adviser. Vice President of the Morgan Stanley Institutional and Retail Funds since July 2004 and Vice President of funds in the Fund Complex since August 2004. Previously, Managing Director and General Counsel of Americas, UBS Global Asset Management from July 2000 to July 2004 and General Counsel of Aeltus Investment Management, Inc. from January 1997 to July 2000. Stefanie V. Chang (39) Vice President Officer Executive Director of Morgan Stanley Investment Management 1221 Avenue of the Americas and Secretary since 2003 Inc. Vice President and Secretary of funds in the Fund New York, NY 10020 Complex.
38
VAN KAMPEN INCOME TRUST TRUSTEES AND OFFICERS continued TERM OF OFFICE AND POSITION(S) LENGTH OF NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S) ADDRESS OF OFFICER TRUST SERVED DURING PAST 5 YEARS John L. Sullivan (50) Chief Compliance Officer Chief Compliance Officer of funds in the Fund Complex since 1 Parkview Plaza Officer since 1998 August 2004. Prior to August 2004, Director and Managing Oakbrook Terrace, IL 60181 Director of Van Kampen Investments, the Adviser, Van Kampen Advisors Inc. and certain other subsidiaries of Van Kampen Investments, Vice President, Chief Financial Officer and Treasurer of funds in the Fund Complex and head of Fund Accounting for Morgan Stanley Investment Management Inc. Prior to December 2002, Executive Director of Van Kampen Investments, the Adviser and Van Kampen Advisors Inc. Phillip G. Goff (42) Chief Financial Officer Executive Director of Morgan Stanley Investment Management 1 Parkview Plaza Officer and since 2005 Inc. since June 2005. Chief Financial Officer and Treasurer Oakbrook Terrace, IL 60181 Treasurer of funds in the Fund Complex since August 2005. Prior to June 2005, Vice President and Chief Financial Officer of Enterprise Capital Management, Inc., an investment holding company.
In accordance with Section 303A.12(a) of the New York Stock Exchange Listed Company Manual, the Trust's Chief Executive Officer has certified to the New York Stock Exchange that, as of July 18, 2005, he was not aware of any violation by the Trust of NYSE corporate governance listing standards. The certifications by the Trust's principal executive officer and principal financial officer required by Rule 30a-2 under the 1940 Act were filed with the Trust's report to the SEC on Form N-CSR and are available on the Securities and Exchange Commission's web site at http://www.sec.gov. 39 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 ANR 2/06 (VAN KAMPEN INVESTMENTS SHINE LOGO) RN06-00267P-Y02/06 Item 2. Code of Ethics. (a) The Trust has adopted a code of ethics (the "Code of Ethics") that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Trust or a third party. (b) No information need be disclosed pursuant to this paragraph. (c) The Trust has amended its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto to delete from the end of the following paragraph on page 2 of the Code the phrase "to the detriment of the Fund.": "Each Covered Officer must not use his personal influence or personal relationship improperly to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally (directly or indirectly)." Further, due to personnel changes at the Adviser, the list of Covered Officers set forth in Exhibit B and the General Counsel designee to whom questions about the application of the Code should be referred in Exhibit C were amended during the period. Exhibit B was then amended again in March 2005 and a third time in August 2005 and a fourth time in September 2005. All four editions of Exhibit B are attached. Additionally, Exhibit B was amended to remove Mitchell M. Merin as a covered officer. (d) Not applicable. (e) Not applicable. (f) (1) The Trust's Code of Ethics is attached hereto as Exhibit 12A. (2) Not applicable. (3) Not applicable. Item 3. Audit Committee Financial Expert. The Trust's Board of Trustees has determined that it has two "audit committee financial experts" serving on its audit committee, each of whom are "independent" Trustees : Jerry Choate and R. Craig Kennedy. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification. Item 4. Principal Accountant Fees and Services. (a)(b)(c)(d) and (g). Based on fees billed for the periods shown:
2004 REGISTRANT COVERED ENTITIES(1) AUDIT FEES......................... $26,000 N/A NON-AUDIT FEES AUDIT-RELATED FEES....... $0 $321,000(2) TAX FEES................. $1,600(4) $0 ALL OTHER FEES........... $0 $0 TOTAL NON-AUDIT FEES............... $1,600 $321,000 TOTAL.............................. $27,600 $321,000
2003 REGISTRANT COVERED ENTITIES(1) AUDIT FEES......................... $24,780 N/A NON-AUDIT FEES AUDIT-RELATED FEES....... $0 $198,000(2) TAX FEES................. $1,550(3) $0 ALL OTHER FEES........... $0 $0 TOTAL NON-AUDIT FEES............... $1,550 $198,000 TOTAL.............................. $26,330 $198,000
N/A- Not applicable, as not required by Item 4. (1) Covered Entities include the Adviser (excluding sub-advisors) and any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Registrant. (2) Audit-Related Fees represent assurance and related services provided that are reasonably related to the performance of the audit of the financial statements of the Covered Entities' and funds advised by the Adviser or its affiliates, specifically attestation services provided in connection with a SAS 70 Report. (3) Tax Fees represent tax advice and compliance services provided in connection with the review of the Registrant's tax. (e)(1) The audit committee's pre-approval policies and procedures are as follows: JOINT AUDIT COMMITTEE AUDIT AND NON-AUDIT SERVICES PRE-APPROVAL POLICY AND PROCEDURES OF THE VAN KAMPEN FUNDS AS ADOPTED JULY 23, 2003 AND AMENDED MAY 26, 2004(1) 1. STATEMENT OF PRINCIPLES The Audit Committee of the Board is required to review and, in its sole discretion, pre-approve all Covered Services to be provided by the Independent Auditors to the Fund and Covered Entities in order to assure that services performed by the Independent Auditors do not impair the auditor's independence from the Fund.(2) The SEC has issued rules specifying the types of services that an independent auditor may not provide to its audit client, as well as the audit committee's administration of the engagement of the independent auditor. The SEC's rules establish two different approaches to pre-approving services, which the SEC considers to be equally valid. Proposed services either: may be pre-approved without consideration of specific case-by-case services by the Audit Committee ("general pre-approval"); or require the specific pre-approval of the Audit Committee ("specific pre-approval"). The Audit Committee believes that the combination of these two approaches in this Policy will result in an effective and efficient procedure to pre-approve services performed by the Independent Auditors. As set forth in this Policy, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee (or by any member of the Audit Committee to which pre-approval authority has been delegated) if it is to be provided by the Independent Auditors. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval by the Audit Committee. For both types of pre-approval, the Audit Committee will consider whether such services are consistent with the SEC's rules on auditor independence. The Audit Committee will also consider whether the Independent Auditors are best positioned to provide the most effective and efficient services, for reasons such as its familiarity with the Fund's business, people, culture, accounting systems, risk profile and other factors, and whether the service might enhance the Fund's ability to manage or control risk or improve audit quality. All such factors will be considered as a whole, and no one factor should necessarily be determinative. The Audit Committee is also mindful of the relationship between fees for audit and non-audit services in deciding whether to pre-approve any such services and may determine for each fiscal year, the appropriate ratio between the total amount of fees for Audit, Audit-related and Tax services for the Fund (including any Audit-related or Tax service fees for Covered Entities that were subject to pre-approval), and the total amount of fees for certain permissible non-audit services classified as All Other services for the Fund (including any such services for Covered Entities subject to pre-approval). The appendices to this Policy describe the Audit, Audit-related, Tax and All Other services that have the general pre-approval of the Audit Committee. The term of any general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee considers and provides a different period and states otherwise. The Audit Committee will annually review and pre-approve the services that may be provided by the Independent Auditors without obtaining specific pre-approval - ---------- (1) This Joint Audit Committee Audit and Non-Audit Services Pre-Approval Policy and Procedures (the "Policy"), amended as of the date above, supercedes and replaces all prior versions that may have been amended from time to time. (2) Terms used in this Policy and not otherwise defined herein shall have the meanings as defined in the Joint Audit Committee Charter. from the Audit Committee. The Audit Committee will add to or subtract from the list of general pre-approved services from time to time, based on subsequent determinations. The purpose of this Policy is to set forth the policy and procedures by which the Audit Committee intends to fulfill its responsibilities. It does not delegate the Audit Committee's responsibilities to pre-approve services performed by the Independent Auditors to management. The Fund's Independent Auditors have reviewed this Policy and believes that implementation of the Policy will not adversely affect the Independent Auditors' independence. 2. DELEGATION As provided in the Act and the SEC's rules, the Audit Committee may delegate either type of pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting. 3. AUDIT SERVICES The annual Audit services engagement terms and fees are subject to the specific pre-approval of the Audit Committee. Audit services include the annual financial statement audit and other procedures required to be performed by the Independent Auditors to be able to form an opinion on the Fund's financial statements. These other procedures include information systems and procedural reviews and testing performed in order to understand and place reliance on the systems of internal control, and consultations relating to the audit. The Audit Committee will monitor the Audit services engagement as necessary, but no less than on a quarterly basis, and will also approve, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope, Fund structure or other items. In addition to the annual Audit services engagement approved by the Audit Committee, the Audit Committee may grant general pre-approval to other Audit services, which are those services that only the Independent Auditors reasonably can provide. Other Audit services may include statutory audits and services associated with SEC registration statements (on Forms N-1A, N-2, N-3, N-4, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings. The Audit Committee has pre-approved the Audit services in Appendix B.1. All other Audit services not listed in Appendix B.1 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated). 4. AUDIT-RELATED SERVICES Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Fund's financial statements or, to the extent they are Covered Services, the Covered Entities' financial statements, or that are traditionally performed by the Independent Auditors. Because the Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor and is consistent with the SEC's rules on auditor independence, the Audit Committee may grant general pre-approval to Audit-related services. Audit-related services include, among others, accounting consultations related to accounting, financial reporting or disclosure matters not classified as "Audit services"; assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; agreed-upon or expanded audit procedures related to accounting and/or billing records required to respond to or comply with financial, accounting or regulatory reporting matters; and assistance with internal control reporting requirements under Forms N-SAR and/or N-CSR. The Audit Committee has pre-approved the Audit-related services in Appendix B.2. All other Audit-related services not listed in Appendix B.2 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated). 5. TAX SERVICES The Audit Committee believes that the Independent Auditors can provide Tax services to the Fund and, to the extent they are Covered Services, the Covered Entities, such as tax compliance, tax planning and tax advice without impairing the auditor's independence, and the SEC has stated that the Independent Auditors may provide such services. Hence, the Audit Committee believes it may grant general pre-approval to those Tax services that have historically been provided by the Independent Auditors, that the Audit Committee has reviewed and believes would not impair the independence of the Independent Auditors, and that are consistent with the SEC's rules on auditor independence. The Audit Committee will not permit the retention of the Independent Auditors in connection with a transaction initially recommended by the Independent Auditors, the sole business purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee will consult with Director of Tax or outside counsel to determine that the tax planning and reporting positions are consistent with this policy. Pursuant to the preceding paragraph, the Audit Committee has pre-approved the Tax Services in Appendix B.3. All Tax services involving large and complex transactions not listed in Appendix B.3 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated), including tax services proposed to be provided by the Independent Auditors to any executive officer or trustee/director/managing general partner of the Fund, in his or her individual capacity, where such services are paid for by the Fund (generally applicable only to internally managed investment companies). 6. ALL OTHER SERVICES The Audit Committee believes, based on the SEC's rules prohibiting the Independent Auditors from providing specific non-audit services, that other types of non-audit services are permitted. Accordingly, the Audit Committee believes it may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, would not impair the independence of the auditor and are consistent with the SEC's rules on auditor independence. The Audit Committee has pre-approved the All Other services in Appendix B.4. Permissible All Other services not listed in Appendix B.4 must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated). A list of the SEC's prohibited non-audit services is attached to this policy as Appendix B.5. The SEC's rules and relevant guidance should be consulted to determine the precise definitions of these services and the applicability of exceptions to certain of the prohibitions. 7. PRE-APPROVAL FEE LEVELS OR BUDGETED AMOUNTS Pre-approval fee levels or budgeted amounts for all services to be provided by the Independent Auditors will be established annually by the Audit Committee. Any proposed services exceeding these levels or amounts will require specific pre-approval by the Audit Committee. The Audit Committee is mindful of the overall relationship of fees for audit and non-audit services in determining whether to pre-approve any such services. For each fiscal year, the Audit Committee may determine the appropriate ratio between the total amount of fees for Audit, Audit-related, and Tax services for the Fund (including any Audit-related or Tax services fees for Covered Entities subject to pre-approval), and the total amount of fees for certain permissible non-audit services classified as All Other services for the Fund (including any such services for Covered Entities subject to pre-approval). 8. PROCEDURES All requests or applications for services to be provided by the Independent Auditors that do not require specific approval by the Audit Committee will be submitted to the Fund's Chief Financial Officer and must include a detailed description of the services to be rendered. The Fund's Chief Financial Officer will determine whether such services are included within the list of services that have received the general pre-approval of the Audit Committee. The Audit Committee will be informed on a timely basis of any such services rendered by the Independent Auditors. Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by both the Independent Auditors and the Fund's Chief Financial Officer, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC's rules on auditor independence. The Audit Committee has designated the Fund's Chief Financial Officer to monitor the performance of all services provided by the Independent Auditors and to determine whether such services are in compliance with this Policy. The Fund's Chief Financial Officer will report to the Audit Committee on a periodic basis on the results of its monitoring. A sample report is included as Appendix B.7. Both the Fund's Chief Financial Officer and management will immediately report to the chairman of the Audit Committee any breach of this Policy that comes to the attention of the Fund's Chief Financial Officer or any member of management. 9. ADDITIONAL REQUIREMENTS The Audit Committee has determined to take additional measures on an annual basis to meet its responsibility to oversee the work of the Independent Auditors and to assure the auditor's independence from the Fund, such as reviewing a formal written statement from the Independent Auditors delineating all relationships between the Independent Auditors and the Fund, consistent with Independence Standards Board No. 1, and discussing with the Independent Auditors its methods and procedures for ensuring independence. 10. COVERED ENTITIES Covered Entities include the Fund's investment adviser(s) and any entity controlling, controlled by or under common control with the Fund's investment adviser(s) that provides ongoing services to the Fund(s). Beginning with non-audit service contracts entered into on or after May 6, 2003, the Fund's audit committee must pre-approve non-audit services provided not only to the Fund but also to the Covered Entities if the engagements relate directly to the operations and financial reporting of the Fund. This list of Covered Entities would include: - Van Kampen Investments Inc. - Van Kampen Asset Management - Van Kampen Advisors Inc. - Van Kampen Funds Inc. - Van Kampen Investor Services Inc. - Morgan Stanley Investment Management Inc. - Morgan Stanley Trust Company - Morgan Stanley Investment Management Ltd. - Morgan Stanley Investment Management Company - Morgan Stanley Asset & Investment Trust Management Company Ltd. (e)(2) Beginning with non-audit service contracts entered into on or after May 6, 2003, the audit committee also is required to pre-approve services to Covered Entities to the extent that the services are determined to have a direct impact on the operations or financial reporting of the Registrant. 100% of such services were pre-approved by the audit committee pursuant to the Audit Committee's pre-approval policies and procedures (included herein). (f) Not applicable. (g) See table above. (h) The audit committee of the Board of Trustees has considered whether the provision of services other than audit services performed by the auditors to the Registrant and Covered Entities is compatible with maintaining the auditors' independence in performing audit services. Item 5. Audit Committee of Listed Registrants. (a) The Trust has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act whose members are: Craig Kennedy, Jerry Choate and Rod Dammeyer. (b) Not applicable. 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. The Trust's and its investment advisor's Proxy Voting Policies and Procedures are as follows: MORGAN STANLEY INVESTMENT MANAGEMENT PROXY VOTING POLICY AND PROCEDURES I. POLICY STATEMENT Introduction - Morgan Stanley Investment Management's ("MSIM") policy and procedures for voting proxies ("Policy") with respect to securities held in the accounts of clients applies to those MSIM entities that provide discretionary investment management services and for which a MSIM entity has authority to vote proxies. The Policy will be reviewed and, updated, as necessary, to address new or revised proxy voting issues. The MSIM entities covered by the Policy currently include the following: Morgan Stanley Investment Advisors Inc., Morgan Stanley AIP GP LP, Morgan Stanley Investment Management Inc., Morgan Stanley Investment Management Limited, Morgan Stanley Investment Management Company, Morgan Stanley Asset & Investment Trust Management Co., Limited, Morgan Stanley Investment Management Private Limited, Morgan Stanley Hedge Fund Partners GP LP, Morgan Stanley Hedge Fund Partners LP, Van Kampen Asset Management, and Van Kampen Advisors Inc. (each an "MSIM Affiliate" and collectively referred to as the "MSIM Affiliates"). Each MSIM Affiliate will use its best efforts to vote proxies as part of its authority to manage, acquire and dispose of account assets. With respect to the MSIM registered management investment companies (Van Kampen, Institutional and Advisor Funds)(collectively referred to herein as the "MSIM Funds"), each MSIM Affiliate will vote proxies pursuant to authority granted under its applicable investment advisory agreement or, in the absence of such authority, as authorized by the Board of Directors or Trustees of the MSIM Funds. A MSIM Affiliate will not vote proxies if the "named fiduciary" for an ERISA account has reserved the authority for itself, or in the case of an account not governed by ERISA, the investment management or investment advisory agreement does not authorize the MSIM Affiliate to vote proxies. MSIM Affiliates will, in a prudent and diligent manner, vote proxies in the best interests of clients, including beneficiaries of and participants in a client's benefit plan(s) for which the MSIM Affiliates manage assets, consistent with the objective of maximizing long-term investment returns ("Client Proxy Standard"). In certain situations, a client or its fiduciary may provide a MSIM Affiliate with a proxy voting policy. In these situations, the MSIM Affiliate will comply with the client's policy unless to do so would be inconsistent with applicable laws or regulations or the MSIM Affiliate's fiduciary responsibility. Proxy Research Services - Institutional Shareholder Services ("ISS") and Glass Lewis (together with other proxy research providers as MSIM Affiliates may retain from time to time, the "Research Providers") are independent advisers that specialize in providing a variety of fiduciary-level proxy-related services to institutional investment managers, plan sponsors, custodians, consultants, and other institutional investors. The services provided include in-depth research, global issuer analysis, and voting recommendations. While the MSIM Affiliates may review and utilize the recommendations of the Research Providers in making proxy voting decisions, they are in no way obligated to follow such recommendations. In addition to research, ISS provides vote execution, reporting, and recordkeeping. MSIM's Proxy Review Committee (see Section IV.A. below) will carefully monitor and supervise the services provided by the Research Providers. Voting Proxies for Certain Non-U.S. Companies - While the proxy voting process is well established in the United States and other developed markets with a number of tools and services available to assist an investment manager, voting proxies of non-U.S. companies located in certain jurisdictions, particularly emerging markets, may involve a number of problems that may restrict or prevent a MSIM Affiliate's ability to vote such proxies. These problems include, but are not limited to: (i) proxy statements and ballots being written in a language other than English; (ii) untimely and/or inadequate notice of shareholder meetings; (iii) restrictions on the ability of holders outside the issuer's jurisdiction of organization to exercise votes; (iv) requirements to vote proxies in person, (v) the imposition of restrictions on the sale of the securities for a period of time in proximity to the shareholder meeting; and (vi) requirements to provide local agents with power of attorney to facilitate the MSIM Affiliate's voting instructions. As a result, clients' non-U.S. proxies will be voted on a best efforts basis only, after weighing the costs and benefits to MSIM's clients of voting such proxies, consistent with the Client Proxy Standard. ISS has been retained to provide assistance to the MSIM Affiliates in connection with voting their clients' non-U.S. proxies. II. GENERAL PROXY VOTING GUIDELINES To ensure consistency in voting proxies on behalf of its clients, MSIM Affiliates will follow (subject to any exception set forth herein) this Policy, including the guidelines set forth below. These guidelines address a broad range of issues, including board size and composition, executive compensation, anti-takeover proposals, capital structure proposals and social responsibility issues and are meant to be general voting parameters on issues that arise most frequently. The MSIM Affiliates, however, may, pursuant to the procedures set forth in Section IV. below, vote in a manner that is not in accordance with the following general guidelines, provided the vote is approved by the Proxy Review Committee and is consistent with the Client Proxy Standard. A MSIM Affiliate will not generally vote a proxy if it has sold the affected security between the record date and the meeting date. III. GUIDELINES A. CORPORATE GOVERNANCE MATTERS. The following proposals will generally be voted as indicated below, unless otherwise determined by the Proxy Review Committee. i. General. 1. Generally, routine management proposals will be supported. The following are examples of routine management proposals: - Approval of financial statements, director and auditor reports. - General updating/corrective amendments to the charter. - Proposals related to the conduct of the annual meeting, except those proposals that relate to the "transaction of such other business which may come before the meeting." 2. Proposals to eliminate cumulative voting generally will be supported; proposals to establish cumulative voting in the election of directors will not be supported. 3. Proposals requiring confidential voting and independent tabulation of voting results will be supported. 4. Proposals requiring a U.S. company to have a separate Chairman and CEO will not be supported. Proposals requiring non-U.S. companies to have a separate Chairman and CEO will be supported. 5. Proposals by management of non-U.S. companies regarding items that are clearly related to the regular course of business will be supported. 6. Proposals to require the company to expense stock options will be supported. 7. Open-ended requests for adjournment generally will not be supported. However, where management specifically states the reason for requesting an adjournment and the requested adjournment is necessary to permit a proposal that would otherwise be supported under this Policy to be carried out (i.e. an uncontested corporate transaction), the adjournment request will be supported. 8. Proposals to declassify the Board of Directors (if management supports a classified board) generally will not be supported. 9. Proposal requiring that the company prepare reports that are costly to provide or that would require duplicative efforts or expenditures that are of a non-business nature or would provide no pertinent information from the perspective of institutional shareholders generally will not be supported. ii. Election of Directors. In situations where no conflict exists and where no specific governance deficiency has been noted, unless otherwise determined by the Proxy Review Committee, proxies will be voted in support of nominees of management. 1. The following proposals generally will be supported: - Proposals requiring that a certain percentage (up to 66 2/3%) of the company's board members be independent directors. - Proposals requiring that members of the company's compensation, nominating and audit committees be comprised of independent or unaffiliated directors. 2. Unless otherwise determined by the Proxy Review Committee, a withhold vote will be made in the following circumstances: (a) If a company's board is not comprised of a majority of disinsterested directors, a withhold vote will be made for interested directors. A director nominee may be deemed to be interested if the nominee has, or any time during the previous five years had, a relationship with the issuer (e.g., investment banker, counsel or other professional service provider, or familial relationship with a senior officer of the issuer) that may impair his or her independence; (b) If a nominee who is interested is standing for election as a member of the company's compensation, nominating or audit committees; (c) A direct conflict exists between the interests of the nominee and the public shareholders; (d) Where the nominees standing for election have not taken action to implement generally accepted governance practices for which there is a "bright line" test. These would include elimination of dead hand or slow hand poison pills, requiring audit, compensation or nominating committees to be composed of independent directors and requiring a majority independent board; (e) A nominee has failed to attend at least 75% of board meetings within a given year without a reasonable excuse; or (f) A nominee serves on the board of directors for more than six companies (excluding investment companies). iii. Auditors 1. Generally, management proposals for selection or ratification of auditors will be supported. However, such proposals may not be supported if the audit fees are excessive. Generally, to determine if audit fees are excessive, a 50% test will be applied for audit fees in excess of $1 million: if audit fees are $1 million or more, non-audit fees should less than 50% of the total fees paid to the auditor. If audit fees are less than $1 million, the fees will be reviewed case by case by the Proxy Review Committee. 2. Proposals requiring auditors to attend the annual meeting of shareholders will be supported. 3. Proposals to indemnify auditors will not be supported. iv. Anti-Takeover Matters 1. Proposals to modify or rescind existing supermajority vote requirements to amend the charter or bylaws will be supported; proposals to amend by-laws to require a supermajority shareholder vote to pass or repeal certain provisions will not be supported. 2. Proposals relating to the adoption of anti-greenmail provisions will be supported, provided that the proposal: (i) defines greenmail; (ii) prohibits buyback offers to large block holders (holders of at least 1% of the outstanding shares and in certain cases, a greater amount, as determined by the Proxy Review Committee) not made to all shareholders or not approved by disinterested shareholders; and (iii) contains no anti-takeover measures or other provisions restricting the rights of shareholders. 3. Proposals requiring shareholder approval or ratification of a shareholder rights plan or poison pill will be supported. B. CAPITALIZATION CHANGES. The following proposals generally will be voted as indicated below, unless otherwise determined by the Proxy Review Committee. 1. The following proposals generally will be supported: - Proposals relating to capitalization changes that eliminate other classes of stock and/or eliminate unequal voting rights. - Proposals to increase the authorization of existing classes of common stock (or securities convertible into common stock) if: (i) a clear and legitimate business purpose is stated; (ii) the number of shares requested is reasonable in relation to the purpose for which authorization is requested; and (iii) the authorization does not exceed 100% of shares currently authorized and at least 30% of the new authorization will be outstanding. - Proposals to create a new class of preferred stock or for issuances of preferred stock up to 50% of issued capital. - Proposals for share repurchase plans. - Proposals to reduce the number of authorized shares of common or preferred stock, or to eliminate classes of preferred stock. - Proposals to effect stock splits. - Proposals to effect reverse stock splits if management proportionately reduces the authorized share amount set forth in the corporate charter. Reverse stock splits that do not adjust proportionately to the authorized share amount generally will be approved if the resulting increase in authorized shares coincides with the proxy guidelines set forth above for common stock increases. 2. The following proposals generally will not be supported (notwithstanding management support). - Proposals relating to capitalization changes that add classes of stock which substantially dilute the voting interests of existing shareholders. - Proposals to increase the authorized number of shares of existing classes of stock that carry preemptive rights or supervoting rights. - Proposals to create "blank check" preferred stock. - Proposals relating to changes in capitalization by 100% or more. C. COMPENSATION. The following proposals generally will be voted as indicated below, unless otherwise determined by the Proxy Review Committee. 1. The following proposals generally will be supported: - Proposals relating to director fees, provided the amounts are not excessive relative to other companies in the country or industry. - Proposals for employee stock purchase plans that permit discounts up to 15%, but only for grants that are part of a broad-based employee plan, including all non-executive employees. - Proposals for the establishment of employee stock option plans and other employee ownership plans, provided that our research does not indicate that approval of the plan would be against shareholder interest. - Proposals for the establishment of employee retirement and severance plans, provided that our research does not indicate that approval of the plan would be against shareholder interest. 2. Blanket proposals requiring shareholder approval of all severance agreements will not be supported, however, proposals that require shareholder approval for agreements in excess of three times the annual compensation (salary and bonus) generally will be supported. 3. Blanket proposals requiring shareholder approval of executive compensation generally will not be supported. 4. Proposals that request or require disclosure of executive compensation in addition to the disclosure required by the Securities and Exchange Commission ("SEC") regulations generally will not be supported. D. OTHER RECURRING ITEMS. The following proposals generally will be voted as indicated below, unless otherwise determined by the Proxy Review Committee. 1. Proposals to add restrictions related to social, political, environmental or special interest issues that do not relate directly to the business of the company and which do not appear to be directed specifically to the business or financial interest of the company generally will not be supported. 2. Proposals requiring adherence to workplace standards that are not required or customary in market(s) to which the proposals relate will not be supported. E. ITEMS TO BE REVIEWED BY THE PROXY REVIEW COMMITTEE The following types of non-routine proposals, which potentially may have a substantive financial or best interest impact on an issuer, will be voted as determined by the Proxy Review Committee. i. Corporate Transactions - Proposals relating to mergers, acquisitions and other special corporate transactions (i.e., takeovers, spin-offs, sales of assets, reorganizations, restructurings and recapitalizations) will be examined on a case-by-case basis. In all cases, Research Providers' research and analysis will be used along with MSIM Affiliates' research and analysis, including, among other things, MSIM internal company-specific knowledge. Proposals for mergers or other significant transactions that are friendly, approved by the Research Providers, and where there is no portfolio manager objection, generally will be supported. ii. Compensation - Proposals relating to change-in-control provisions in non-salary compensation plans, employment contracts, and severance agreements that benefit management and would be costly to shareholders if triggered. With respect to proposals related to severance and change of control situations, MSIM Affiliates will support a maximum of three times salary and bonus. - Proposals relating to Executive/Director stock option plans. Generally, stock option plans should be incentive based. The Proxy Review Committee will evaluate the the quantitative criteria used by a Research Provider when considering such Research Provider's recommendation. If the Proxy Review Committee determines that the criteria used by the Research Provider is reasonable, the proposal will be supported if it falls within a 5% band above the Research Provider's threshold. - Compensation proposals that allow for discounted stock options that have not been offered to employees in general. iii. Other - Proposals for higher dividend payouts. - Proposals recommending set retirement ages or requiring specific levels of stock ownership by directors. - Proposals for election of directors, where a director nominee is related to MSIM (i.e. on an MSIM Fund's Board of Directors/Trustees or part of MSIM senior management) must be considered by the Proxy Review Committee. If the proposal relates to a director nominee who is on a Van Kampen Fund's Board of Directors/Trustees, to the extent that the shares of the relevant company are held by a Van Kampen Fund, the Van Kampen Board shall vote the proxies with respect to those shares, to the extent practicable. In the event that the Committee cannot contact the Van Kampen Board in advance of the shareholder meeting, the Committee will vote such shares pursuant to the Proxy Voting Policy. - Proposals requiring diversity of board membership relating to broad based social, religious or ethnic groups. - Proposals to limit directors' liability and/or broaden indemnification of directors. Generally, the Proxy Review Committee will support such proposals provided that the officers and directors are eligible for indemnification and liability protection if they have acted in good faith on company business and were found innocent of any civil or criminal charges for duties performed on behalf of the company. F. FUND OF FUNDS. Certain Funds advised by an MSIM Affiliate invest only in other MSIM funds. If an underlying fund has a shareholder meeting, in order to avoid any potential conflict of interest, such proposals will be voted in the same proportion as the votes of the other shareholders of the underlying fund, unless otherwise determined by the Proxy Review Committee. IV. ADMINISTRATION OF POLICY A. PROXY REVIEW COMMITTEE 1. The MSIM Proxy Review Committee ("Committee") is responsible for creating and implementing the Policy and, in this regard, has expressly adopted it. (a) The Committee, which is appointed by MSIM's Chief Investment Officer ("CIO"), consists of senior investment professionals who represent the different investment disciplines and geographic locations of the firm. The Committee is responsible for establishing MSIM's Policy and determining how MSIM will vote proxies on an ongoing basis. (b) The Committee will periodically review and have the authority to amend, as necessary, the Policy and establish and direct voting positions consistent with the Client Proxy Standard. (c) The Committee will meet at least monthly to (among other matters): (1) address any outstanding issues relating to the Policy and (2) review proposals at upcoming shareholder meetings of MSIM portfolio companies in accordance with this Policy including, as appropriate, the voting results of prior shareholder meetings of the same issuer where a similar proposal was presented to shareholders. The Committee, or its designee, will timely communicate to ISS MSIM's Policy (and any amendments to them and/or any additional guidelines or procedures it may adopt). (d) The Committee will meet on an ad hoc basis to (among other matters): (1) authorize "split voting" (i.e., allowing certain shares of the same issuer that are the subject of the same proxy solicitation and held by one or more MSIM portfolios to be voted differently than other shares) and/or "override voting" (i.e., voting all MSIM portfolio shares in a manner contrary to the Policy); (2) review and approve upcoming votes, as appropriate, for matters for which specific direction has been provided in this Policy; and (3) determine how to vote matters for which specific direction has not been provided in this Policy. Split votes generally will not be approved within a single Global Investor Group investment team. The Committee may take into account Research Providers' recommendations and research as well as any other relevant information they may request or receive, including portfolio manager and/or analyst research, as applicable. Generally, proxies related to securities held in accounts that are managed pursuant to quantitative, index or index-like strategies ("Index Strategies") will be voted in the same manner as those held in actively managed accounts. Because accounts managed using Index Strategies are passively managed accounts, research from portfolio managers and/or analysts related to securities held in these accounts may not be available. If the affected securities are held only in accounts that are managed pursuant to Index Strategies, and the proxy relates to a matter that is not described in this Policy, the Committee will consider all available information from the Research Providers, and to the extent that the holdings are significant, from the portfolio managers and/or analysts. (e) In addition to the procedures discussed above, if the Committee determines that an issue raises a potential material conflict of interest, or gives rise to the appearance of a potential material conflict of interest, the Committee will request a special committee to review, and recommend a course of action with respect to, the conflict(s) in question ("Special Committee"). The Special Committee shall be comprised of the Chairperson of the Proxy Review Committee, the Compliance Director for the area of the firm involved or his/her designee, a senior portfolio manager (if practicable, one who is a member of the Proxy Review Committee) designated by the Proxy Review Committee, and MSIM's Chief Investment Officer or his/her designee. The Special Committee may request the assistance of MSIM's General Counsel or his/her designee and will have sole discretion to cast a vote. In addition to the research provided by Research Providers, the Special Committee may request analysis from MSIM Affiliate investment professionals and outside sources to the extent it deems appropriate. (f) The Committee and the Special Committee, or their designee(s), will document in writing all of their decisions and actions, which documentation will be maintained by the Committee and the Special Committee, or their designee(s), for a period of at least 6 years. To the extent these decisions relate to a security held by a MSIM U.S. registered investment company, the Committee and Special Committee, or their designee(s), will report their decisions to each applicable Board of Trustees/Directors of those investment companies at each Board's next regularly scheduled Board meeting. The report will contain information concerning decisions made by the Committee and Special Committee during the most recently ended calendar quarter immediately preceding the Board meeting. (g) The Committee and Special Committee, or their designee(s), will timely communicate to applicable portfolio managers, the Compliance Departments and, as necessary, to ISS, decisions of the Committee and Special Committee so that, among other things, ISS will vote proxies consistent with their decisions. B. IDENTIFICATION OF MATERIAL CONFLICTS OF INTEREST 1. If there is a possibility that a vote may involve a material conflict of interest, the vote must be decided by the Special Committee in consultation with MSIM's General Counsel or his/her designee. 2. A material conflict of interest could exist in the following situations, among others: (a) The issuer soliciting the vote is a client of MSIM or an affiliate of MSIM and the vote is on a material matter affecting the issuer; (b) The proxy relates to Morgan Stanley common stock or any other security issued by Morgan Stanley or its affiliates; or (c) Morgan Stanley has a material pecuniary interest in the matter submitted for a vote (e.g., acting as a financial advisor to a party to a merger or acquisition for which Morgan Stanley will be paid a success fee if completed). C. PROXY VOTING REPORTS (a) MSIM will promptly provide a copy of this Policy to any client requesting them. MSIM will also, upon client request, promptly provide a report indicating how each proxy was voted with respect to securities held in that client's account. (b) MSIM's legal department is responsible for filing an annual Form N-PX on behalf of each registered management investment company for which such filing is required, indicating how all proxies were voted with respect to such investment company's holdings. Item 8. Portfolio Managers of Closed-End Management Investment Companies. FOR VAN KAMPEN INCOME TRUST TRUST MANAGEMENT PORTFOLIO MANAGEMENT. As of the date of this report, the Trust is managed by members of the Taxable Fixed Income team. The team consists of portfolio managers and analysts. Current members of the team jointly and primarily responsible for the day-to-day management of the Trust's portfolio are Gordon W. Loery, Michael Luo and Jaidip Singh, Executive Directors of the Adviser. Mr. Loery has been associated with the Adviser in an investment management capacity since June 1990 and joined the team managing the Trust in April 2003. Mr. Luo has been associated with the Adviser in an investment management capacity since July 1998 and joined the team managing the Trust in April 2003. Mr. Singh has been associated with the Adviser in an investment management capacity since April 1996 and joined the team managing the Trust in April 2003. The composition of the team may change without notice from time to time. OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGERS The following information is dated as of December 31, 2005. As of December 31, 2005, Mr. Loery managed eleven mutual funds with a total of approximately $2.1 billion in assets; five pooled investment vehicles other than mutual funds with a total of approximately $934 million in assets; and one other account with a total of approximately $1 thousand in assets. As of December 31, 2005, Mr. Luo managed eight mutual funds with a total of approximately $9.3 billion in assets; no pooled investment vehicles other than mutual funds; and eight other accounts with a total of approximately $934.8 million in assets. Of these other accounts, one account with a total of approximately $216.2 million in assets, had performance based fees. As of December 31, 2005, Mr. Singh managed four mutual funds with a total of approximately $4.5 billion in assets; no pooled investment vehicles other than mutual funds; and one other account with a total of approximately $118.6 million in assets. Because the portfolio managers manage assets for other investment companies, pooled investment vehicles, and/or other accounts (including institutional clients, pension plans and certain high net worth individuals), there may be an incentive to favor one client over another resulting in conflicts of interest. For instance, the Adviser may receive fees from certain accounts that are higher than the fee it receives from the Trust, or it may receive a performance-based fee on certain accounts. In those instances, the portfolio managers may have an incentive to favor the higher and/or performance-based fee accounts over the Trust. The Adviser has adopted trade allocation and other policies and procedures that it believes are reasonably designed to address these and other conflicts of interest. PORTFOLIO MANAGER COMPENSATION STRUCTURE Portfolio managers receive a combination of base compensation and discretionary compensation, comprised of a cash bonus and several deferred compensation programs described below. The methodology used to determine portfolio manager compensation is applied across all accounts managed by the portfolio manager. BASE SALARY COMPENSATION. Generally, portfolio managers receive base salary compensation based on the level of their position with the Adviser. DISCRETIONARY COMPENSATION. In addition to base compensation, portfolio managers may receive discretionary compensation. Discretionary compensation can include: - - Cash Bonus; - - Morgan Stanley's Equity Incentive Compensation Program (EICP) awards -- a mandatory program that defers a portion of discretionary year-end compensation into restricted stock units or other awards based on Morgan Stanley common stock that are subject to vesting and other conditions; - - Investment Management Deferred Compensation Plan (IMDCP) awards -- a mandatory program that defers a portion of discretionary year-end compensation and notionally invests it in designated Trusts advised by the Adviser or its affiliates. The award is subject to vesting and other conditions. Portfolio managers must notionally invest a minimum of 25% to a maximum of 75% of the IMDCP deferral into a combination of the designated open-end funds they manage that are included in the IMDCP fund menu; - - Voluntary Deferred Compensation Plans -- voluntary programs that permit certain employees to elect to defer a portion of their discretionary year-end compensation and directly or notionally invest the deferred amount: (1) across a range of designated investment Trusts, including Trusts advised by the Adviser or its affiliates; and/or (2) in Morgan Stanley stock units. Several factors determine discretionary compensation, which can vary by portfolio management team and circumstances. In order of relative importance, these factors include: - - Investment performance. A portfolio manager's compensation is linked to the pre-tax investment performance of the Trusts/accounts managed by the portfolio manager. Investment performance is calculated for one-, three- and five-year periods measured against an appropriate securities market index (or indices) for the Trusts/accounts managed by the portfolio manager. In the case of the Trust, the Trust's investment performance is measured against the Lehman Brothers Municipal Bond Index and against appropriate rankings or rating prepared by Lipper Inc., Morningstar Inc. or similar independent services which monitor Trust performance. Other Trusts/accounts managed by the same portfolio manager may be measured against this same index and same rankings or ratings, if appropriate, or against other indices and other rankings or ratings that are deemed more appropriate given the size and/or style of such Trusts/accounts as set forth in such Trusts'/accounts' disclosure materials and guidelines. The assets managed by the portfolio managers in Trusts, pooled investment vehicles and other accounts are described in "Other Accounts Managed by the Portfolio Managers" above. Generally, the greatest weight is placed on the three- and five-year periods. - - Revenues generated by the investment companies, pooled investment vehicles and other accounts managed by the portfolio manager. - - Contribution to the business objectives of the Adviser. - - The dollar amount of assets managed by the portfolio manager. - - Market compensation survey research by independent third parties. - - Other qualitative factors, such as contributions to client objectives. - - Performance of Morgan Stanley and Morgan Stanley Investment Management, and the overall performance of the Global Investor Group, a department within Morgan Stanley Investment Management that includes all investment professionals. SECURITIES OWNERSHIP OF PORTFOLIO MANAGERS As of December 31, 2005, the dollar range of securities beneficially owned by each portfolio manager in the Trust is shown below: Gordon W. Loery: None Michael Luo: None Jaidip Singh: None (1) (1) Not included in the table above, the portfolio manager has made investments in one or more mutual funds managed by the same portfolio management team pursuant to a similar strategy. Item 9. Purchase 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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits. (1) The Code of Ethics for Principal Executive and Senior Financial Officers is attached hereto. (2)(a) A certification for the Principal Executive Officer of the registrant is attached hereto as part of EX-99.CERT. (2)(b) 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: February 9, 2006 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: February 9, 2006 By: /s/ Phillip G. Goff ------------------- Name: Phillip G. Goff Title: Principal Financial Officer Date: February 9, 2006 EX-99.CODE 2 c01497exv99wcode.txt CODE OF ETHICS CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS ADOPTED JULY 23, 2003, AS AMENDED AUGUST 10, 2005 AND SEPTEMBER 22, 2005 I. This Code of Ethics (the "Code") for the investment companies within the Van Kampen complex identified in Exhibit A (collectively, "Funds" and each, a "Fund") applies to each Fund's Principal Executive Officer, President, Principal Financial Officer and Treasurer (or persons performing similar functions) ("Covered Officers" each of whom are set forth in Exhibit B) for the purpose of promoting: - honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. - full, fair, accurate, timely and understandable disclosure in reports and documents that a company files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; - compliance with applicable laws and governmental rules and regulations; - prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and - accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. Any question about the application of the Code should be referred to the General Counsel or his/her designee (who is set forth in Exhibit C). II. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF INTEREST OVERVIEW. A "conflict of interest" occurs when a Covered Officer's private interest interferes, or appears to interfere, with the interests of, or his service to, the Fund. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Fund. Certain conflicts of interest arise out of the relationships between Covered Officers and the Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Fund because of their status as "affiliated persons" (as defined in the Investment Company Act) of the Fund. The Fund's and its investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside the parameters of this Code, unless or until the General Counsel determines that any violation of such programs and procedures is also a violation of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts may arise from, or as a result of, the contractual relationship between the Fund and its investment adviser of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Fund or for the investment adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the Fund and its investment adviser. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Fund and the investment adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Fund. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds' Boards of Directors/Trustees ("Boards") that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Fund. Each Covered Officer must not: - use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally (directly or indirectly); - cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Fund; or - use material non-public knowledge of portfolio transactions made or contemplated for, or actions proposed to be taken by, the Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions. Each Covered Officer must, at the time of signing this Code, report to the General Counsel all affiliations or significant business relationships outside the Morgan Stanley complex and must update the report annually. Conflict of interest situations should always be approved by the General Counsel and communicated to the relevant Fund or Fund's Board. Any activity or relationship that would present such a conflict for a Covered Officer would likely also present a conflict for the Covered Officer if an immediate member of the Covered Officer's family living in the same household engages in such an activity or has such a relationship. Examples of these include: - service or significant business relationships as a director on the board of any public or private company; - accepting directly or indirectly, anything of value, including gifts and gratuities in excess of $100 per year from any person or entity with which the Fund has current or prospective business dealings, not including occasional meals or tickets for theatre or sporting events or other similar entertainment; provided it is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; - any ownership interest in, or any consulting or employment relationship with, any of the Fund's service providers, other than its investment adviser, principal underwriter, or any affiliated person thereof; and - a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. III. DISCLOSURE AND COMPLIANCE - Each Covered Officer should familiarize himself/herself with the - disclosure and compliance requirements generally applicable to the Funds; - each Covered Officer must not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, whether within or outside the Fund, including to the Fund's Directors/Trustees and auditors, or to governmental regulators and self-regulatory organizations; - each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Funds and their investment advisers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and - it is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. IV. REPORTING AND ACCOUNTABILITY Each Covered Officer must: - upon adoption of the Code (thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Boards that he has received, read and understands the Code; - annually thereafter affirm to the Boards that he has complied with the requirements of the Code; - not retaliate against any other Covered Officer, other officer or any employee of the Funds or their affiliated persons for reports of potential violations that are made in good faith; and - notify the General Counsel promptly if he/she knows or suspects of any violation of this Code. Failure to do so is itself a violation of this Code. The General Counsel is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, any waivers(3) sought by a Covered Officer must be considered by the Board of the relevant Fund or Funds. The Funds will follow these procedures in investigating and enforcing this Code: - the General Counsel will take all appropriate action to investigate any potential violations reported to him; - if, after such investigation, the General Counsel believes that no violation has occurred, the General Counsel is not required to take any further action; - any matter that the General Counsel believes is a violation will be reported to the relevant Fund's Audit Committee; - if the directors/trustees/managing general partners who are not "interested persons" as defined by the Investment Company Act (the "Independent Directors/Trustees/Managing General Partners") of the relevant Fund concur that a violation has occurred, they will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer or other appropriate disciplinary actions; - the Independent Directors/Trustees/Managing General Partners of the relevant Fund will be responsible for granting waivers of this Code, as appropriate; and - any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. V. OTHER POLICIES AND PROCEDURES This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, the Funds' investment advisers, principal underwriters, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code unless any provision of this Code conflicts with any applicable federal or state law, in which case the requirements of such law will govern. The Funds' and their investment advisers' and principal underwriters' codes of ethics under Rule 17j-1 under the Investment Company Act and Morgan Stanley's Code of Ethics are separate requirements applying to the Covered Officers and others, and are not part of this Code. VI. AMENDMENTS Any amendments to this Code, other than amendments to Exhibits A, B or C, must be approved or ratified by a majority vote of the Board of each Fund, including a majority of Independent Directors/Trustees/Managing General Partners. VII. CONFIDENTIALITY - ---------- (3) Item 2 of Form N-CSR defines "waiver" as "the approval by the registrant of a material departure from a provision of the code of ethics." All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Independent Directors/Trustees/Managing General Partners of the relevant Fund or Funds and their counsel, the relevant Fund or Funds and their counsel and the relevant investment adviser and its counsel. VIII. INTERNAL USE The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Fund, as to any fact, circumstance, or legal conclusion I have read and understand the terms of the above Code. I recognize the responsibilities and obligations incurred by me as a result of my being subject to the Code. I hereby agree to abide by the above Code. ____________________________________ Date:_______________________________ EXHIBIT B COVERED OFFICERS Ronald E. Robison - President and Principal Executive Officer Phillip G. Goff - Chief Financial Officer and Treasurer EXHIBIT B (PRIOR TO SEPTEMBER 22, 2005) COVERED OFFICERS Mitchell M. Merin - President Ronald E. Robison - Executive Vice President and Principal Executive Officer Phillip G. Goff - Chief Financial Officer and Treasurer EXHIBIT B (PRIOR TO AUGUST 10, 2005) COVERED OFFICERS Mitchell M. Merin - President Ronald E. Robison - Executive Vice President and Principal Executive Officer James W. Garrett - Chief Financial Officer and Treasurer EXHIBIT B (PRIOR TO MARCH 2, 2005) COVERED OFFICERS Mitchell M. Merin - President Ronald E. Robison - Executive Vice President and Principal Executive Officer James M. Dykas - Chief Financial Officer and Treasurer EXHIBIT C GENERAL COUNSEL'S DESIGNEE Amy Doberman EX-99.CERT 3 c01497exv99wcert.txt CERTIFICATION 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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 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: February 9, 2006 /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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 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: February 9, 2006 /s/ Phillip G. Goff -------------------- Principal Financial Officer EX-99.906CERT 4 c01497exv99w906cert.txt 906 CERTIFICATION 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 December 31, 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: February 9, 2006 /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 December 31, 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: February 9, 2006 /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-----