-----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, EooaN3va2IA+Ac1Cry3zWOFwLC3IWS18Yw/7Auq1LAvw5lztfw0wU04u1BhDH0rh TlVVu1hSsBi1gbNjqo9kUQ== 0000950137-04-001306.txt : 20040227 0000950137-04-001306.hdr.sgml : 20040227 20040227151551 ACCESSION NUMBER: 0000950137-04-001306 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040227 EFFECTIVENESS DATE: 20040227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VAN KAMPEN CALIFORNIA MUNICIPAL TRUST CENTRAL INDEX KEY: 0000840248 IRS NUMBER: 366890255 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05662 FILM NUMBER: 04634820 BUSINESS ADDRESS: STREET 1: ONE PARKVIEW PLZ STREET 2: VAN KAMPEN INVESTMENTS INC CITY: OAKBROOK TERRACE STATE: IL ZIP: 60181 BUSINESS PHONE: 6306846774 MAIL ADDRESS: STREET 1: VAN KAMPEN INVESTMENTS INC STREET 2: ONE PARKVIEW PLZ CITY: OAKBROOK TERRACE STATE: IL ZIP: 60181 FORMER COMPANY: FORMER CONFORMED NAME: VAN KAMPEN AMERICAN CAPITAL CALIFORNIA MUNICIPAL TRUST DATE OF NAME CHANGE: 19960102 FORMER COMPANY: FORMER CONFORMED NAME: VAN KAMPEN MERRITT CALIFORNIA MUNICIPAL TRUST DATE OF NAME CHANGE: 19920703 N-CSRS 1 c81941nvcsrs.txt SEMIANNUAL 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 811-5662 Van Kampen California Municipal 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: 6/30 Date of reporting period: 12/31/03 Item 1. Report to Shareholders. The Trust's semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows: Welcome, Shareholder In this report, you'll learn about how your investment in Van Kampen California Municipal Trust performed during the semiannual period. The portfolio management team will provide an overview of the market conditions and discuss some of the factors that affected investment performance during the reporting period. In addition, this report includes the trust's financial statements and a list of trust investments as of December 31, 2003. 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, therefore, the value of the trust shares may 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 AVERAGE ANNUAL TOTAL RETURNS
CALIFORNIA MUNICIPAL TRUST SYMBOL: VKC - ------------------------------------------------------- AVERAGE ANNUAL BASED ON BASED ON TOTAL RETURNS NAV MARKET PRICE Since Inception (11/01/88) 7.82% 7.45% 10-year 6.79 6.03 5-year 7.10 4.07 1-year 6.76 9.09 6-month 2.12 -0.34 - -------------------------------------------------------
Past performance is no guarantee of future results. Investment return, net asset value (NAV) and common share market price will fluctuate and trust shares, when sold, may be worth more or less than their original cost. As a result of recent market activity, current performance may vary from the figures shown. For more up-to-date information, please visit vankampen.com or speak with your financial advisor. 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. The Lehman Brothers California Municipal Bond Index is a broad-based statistical composite of California municipal bonds. The index does not include any expenses, fees or sales charges, which would lower performance. The index is unmanaged and should not be considered an investment. 1 Trust Report FOR THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2003 Van Kampen California Municipal Trust is managed by the adviser's Municipal Fixed Income team.(1) Current members include Joseph Piraro, Vice President; Robert Wimmel, Vice President; and John Reynoldson, Executive Director. MARKET CONDITIONS The economic backdrop for the six months ended December 31, 2003 was marked by mixed signals regarding the strength of the U.S. economy. While employment strength was generally weak, the economy as measured by gross domestic product (GDP) grew by 8.2 percent in the third quarter of 2003. The beleaguered industrial sector of the economy appeared to show signs of life, however, and consumer spending remained fairly strong. While generally positive for the stock market, none of these improvements made a significant dent in the ongoing budgetary and fiscal difficulties at the state and local levels, however, and many municipal-bond issuers experienced downgrades. The Federal Reserve Board (the Fed) attempted to allay investor fears and keep the economy moving in the right direction by cutting the federal funds target rate on June 25 to a level of 1.00 percent. This movement, which was half of what many investors had hoped for, seemed to signal that deflation was no longer a primary concern for the Fed; as a result, yields began to climb from their June lows. At the same time, investors shifted their attention to the advancing equity market, which reduced demand for municipal bonds. Interest from cross-over investors--those who traditionally favor taxable investments but were drawn to the higher yields of municipal bonds--also evaporated as the relative attractiveness of the taxable market returned. Issuance was heavy through the first half of the period, though it abated somewhat in the last three months of the reporting year. These forces combined to drive municipal-bond yields off of their historic lows, and the municipal market ended the six-month period at higher levels. California's economic outlook grew increasingly negative over the course of 2003. The state's economy continued to be affected by the recession, with unemployment well above the national average and very little growth in economic activity. The state also faced the largest state budget deficit in the country, and the legislative and executive branches of the California state government appeared to offer no immediate solution to closing the gap. This difficult situation led both Standard & Poor's and Moody's to downgrade the state's general obligations during the summer of 2003, with additional downgrades by Moody's and Fitch in December. Because of these fiscal and credit concerns, valuations in the state's municipal-bond market declined to extremely low levels during the period, drawing interest from (1)Team members may change without notice at any time. 2 many national investors seeking to benefit from the relatively attractive yields in the California market. PERFORMANCE ANALYSIS Closed-end fund returns 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 can differ significantly. On an NAV basis, Van Kampen California Municipal Trust outperformed its benchmark, the Lehman Brothers California Municipal Bond Index. On a market-price basis, however, the trust underperformed its benchmark. (See table below.) The trust appeared to benefit from our conservative investment approach during the reporting period. Given California's budgetary difficulties, we chose to emphasize essential-services sectors such as water & sewer and transportation. These bonds are tied to revenues from ongoing projects rather than more volatile general tax revenues, which is particularly beneficial in economically challenging times. We also maintained the portfolio's credit quality at a very high level, with more than 85 percent of assets rated AAA by the end of the period. Both of these strategies boosted performance. The trust uses leverage to enhance its dividend to common shareholders. To implement this approach, the trust borrows money at short-term rates through the issuance of preferred shares. The proceeds are invested in longer-term securities, taking advantage of the difference between short- and longer-term rates. With short-term rates at historic lows during the period, the difference between short- and longer-term rates was relatively high. This made using leverage a particularly profitable approach during the period, and added to the trust's performance. Our interest-rate strategy was largely defensive, as we kept the portfolio's duration (a measure of interest-rate sensitivity) below that of its benchmark. We also moved to take advantage of compelling valuations in the 18- to 22-year segment of the yield curve. Our purchases for the portfolio were focused on bonds with 10-year call dates that allow them to offer the dual benefits of strong income and the lower downside vulnerability inherent with shorter-duration securities. This position also TOTAL RETURN FOR THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2003
- ---------------------------------------------------------------- BASED ON BASED ON LEHMAN BROTHERS CALIFORNIA NAV MARKET PRICE MUNICIPAL BOND INDEX 2.12% -0.34% 1.46% - ----------------------------------------------------------------
Past performance is no guarantee of future results. 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 an index definition. 3 added to performance, as the 20-year segment of the curve outperformed its peers during the period. Going forward, we will continue with our disciplined investment approach, monitoring the market closely for compelling investment opportunities. TOP 5 SECTORS AS OF 12/31/03 RATINGS ALLOCATIONS AS OF 12/31/03 Public Education 17.0% AAA/Aaa 86.7% Tax District 15.8 AA/Aa 3.8 Water & Sewer 12.9 A/A 3.2 Public Building 9.9 BBB/Baa 6.3 General Purpose 6.6
Subject to change daily. All percentages are as a percentage of long-term investments. Provided for informational purposes only and should not be deemed as a recommendation to buy securities in the sectors shown above. Securities are classified by sectors that represent broad groupings of related industries. Ratings allocation based upon ratings as issued by Standard and Poor's and Moody's, respectively. 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. 4 PROXY VOTING POLICIES AND PROCEDURES A description of the trust's policies and procedures with respect to the voting of proxies relating to the trust's portfolio securities is available without charge, upon request, by calling 1-800-847-2424. This information is also available on the Securities and Exchange Commission's website at http://www.sec.gov. 5 BY THE NUMBERS YOUR TRUST'S INVESTMENTS December 31, 2003 (Unaudited) THE FOLLOWING PAGES DETAIL YOUR TRUST'S PORTFOLIO OF INVESTMENTS AT THE END OF THE REPORTING PERIOD.
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE CALIFORNIA MUNICIPAL BONDS 158.2% $1,000 Abag Fin Auth For Nonprofit Corp CA Ctf Part Childrens Hosp Med Ctr (AMBAC Insd).............. 5.875% 12/01/19 $ 1,146,340 1,000 Abag Fin Auth For Nonprofit Corp CA Insd Rev Ctf Lincoln Glen Manor Sr Citizens (CA MTG Insd)..... 6.100 02/15/25 1,076,520 1,000 Abag Fin Auth For Nonprofit Corp CA Multi-Family Rev Hsg Utd Dominion Ser A Rfdg (GTY AGMT: Utd Dominion Realty Tr).............................. 6.400 08/15/30 1,092,810 1,205 Alameda Cnty, CA Wtr Dist Rev Rfdg (MBIA Insd)... 4.750 06/01/20 1,231,787 1,400 Alhambra, CA City Elem Sch Dist Ser A (FSA Insd)............................................ 5.600 09/01/24 1,541,778 1,000 Banning, CA Cmnty Redev Agy Tax Alloc Merged Downtown Proj.................................... 5.000 08/01/28 1,004,440 790 Bay Area Govt Assn CA Rev Tax Alloc CA Redev Agy Pool Rev Ser A (FSA Insd)........................ 6.000 12/15/15 838,790 1,000 Bay Area Toll Auth CA Toll Brdg Rev San Francisco Bay Area Ser D................................... 5.000 04/01/17 1,071,370 835 California Edl Fac Auth Rev Student Ln CA Ln Pgm Ser A (MBIA Insd)................................ 6.000 03/01/16 888,841 1,000 California Hlth Fac Fin Auth Rev Cedars Sinai Med Ctr Ser A........................................ 6.125 12/01/19 1,097,510 15 California Hsg Fin Agy Rev Home Mtg Ser E (AMBAC Insd)............................................ 6.100 08/01/29 15,063 1,000 California Hsg Fin Agy Rev Multi-Family Hsg III Ser A (MBIA Insd)................................ 5.850 08/01/17 1,051,770 1,000 California Infrastructure & Econ Dev Bk Rev (MBIA Insd)............................................ 5.500 06/01/15 1,132,690 1,000 California Pollutn Ctl Fin Auth Pollutn Ctl Rev Southn CA Edison Co (AMBAC Insd)................. 6.000 07/01/27 1,013,330 175 California Rural Home Mtg Fin Auth Single Family Mtg Rev Ser C (GNMA Collateralized).............. 7.800 02/01/28 188,512 2,000 California St (FGIC Insd)........................ 5.000 10/01/23 2,050,540 1,000 California St Univ Fresno Assn Inc Rev Sr Aux Organization Event Ctr........................... 6.000 07/01/22 1,043,010 1,000 California St Vet Bd Ser BH (FSA Insd)........... 5.400 12/01/15 1,059,780 1,000 California St Vet Bd Ser BH (FSA Insd)........... 5.400 12/01/16 1,054,760 1,000 East Bay, CA Muni Util Dist Wtr Sys Rev (MBIA Insd)............................................ 5.000 06/01/21 1,048,220 1,280 El Cerrito, CA Redev Agy Tax Alloc Redev Proj Area Ser B Rfdg (MBIA Insd)...................... 5.250 07/01/15 1,426,957
6 See Notes to Financial Statements YOUR TRUST'S INVESTMENTS December 31, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE CALIFORNIA MUNICIPAL BONDS (CONTINUED) $1,000 Emeryville, CA Pub Fin Auth Shellmound Pk Redev & Hsg Proj B (MBIA Insd)........................... 5.000% 09/01/19 $ 1,060,090 1,000 Folsom, CA Spl Tax Cmnty Fac Dist No 2 Rfdg (Connie Lee Insd)................................ 5.250 12/01/19 1,088,890 1,000 Fontana, CA Redev Agy Tax Southeast Indl Pk Proj Rfdg (MBIA Insd)................................. 5.000 09/01/22 1,048,130 1,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap Apprec Rfdg...................................... * 01/15/30 216,590 1,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev Conv Cap Apprec Sr Lien Ser A (Escrowed to Maturity) (a).............................................. 0/7.050 01/01/10 1,152,540 1,000 Imperial Irr Dist CA Ctf Part Elec Sys Proj (FSA Insd)............................................ 5.250 11/01/23 1,070,910 1,000 Irvine, CA Pub Fac & Infrastructure Auth Assmt Rev Ser B (AMBAC Insd)........................... 5.000 09/02/22 1,034,910 800 Kern, CA Cmnty College Sch Fac Impt Dist Mammoth Campus Ser A (AMBAC Insd)........................ 5.000 08/01/19 848,256 1,250 Los Angeles Cnty, CA Sch Regionalized Business Svc Ctf LA Cnty Sch Polled Fin Proj Ser A (FSA Insd)............................................ 5.000 09/01/28 1,285,150 591 Los Angeles Cnty, CA Tran Comm Lease Rev Dia RR Lease Ltd (FSA Insd)............................. 7.375 12/15/06 607,388 1,000 Los Angeles, CA Uni Sch Dist 1997 Election Ser E (MBIA Insd)...................................... 5.500 07/01/17 1,124,590 1,000 Los Angeles, CA Uni Sch Dist Ser A (FSA Insd).... 5.250 07/01/20 1,090,150 1,000 Metropolitan Wtr Dist Southn CA Wtrwks Rev Auth Ser B2 (FGIC Insd)............................... 5.000 10/01/26 1,032,260 1,405 Moorpark, CA Uni Sch Dist Ser A (FSA Insd)....... 5.375 08/01/18 1,555,433 1,000 Pico Rivera, CA Wtr Auth Rev Wtr Sys Proj Ser A (MBIA Insd)...................................... 5.500 05/01/19 1,143,130 2,000 Redding, CA Jt Pwrs Fin Auth Elec Sys Rev Ser A (MBIA Insd)...................................... 5.500 06/01/11 2,203,240 1,000 Redlands, CA Redev Agy Tax Alloc Redev Proj Ser A Rfdg (MBIA Insd)................................. 4.750 08/01/21 1,017,780 1,000 San Bernardino Cnty, CA Ctf Part Med Cent Fin Proj (MBIA Insd)................................. 5.000 08/01/28 1,011,170 955 San Diego, CA Hsg Auth Multi-Family Hsg Rev (GNMA Collateralized).................................. 5.000 07/20/18 990,574 1,000 San Dimas, CA Redev Agy Tax Alloc Creative Growth Ser A (FSA Insd)................................. 5.000 09/01/16 1,078,820 2,000 San Jose, CA Fin Auth Lease Rev Convention Ctr Proj Ser F Rfdg (MBIA Insd)...................... 5.000 09/01/17 2,146,120 1,000 Sanger, CA Uni Sch Dist Rfdg (MBIA Insd)......... 5.600 08/01/23 1,154,240 1,350 Santa Ana, CA Uni Sch Dist (MBIA Insd)........... 5.375 08/01/21 1,469,704
See Notes to Financial Statements 7 YOUR TRUST'S INVESTMENTS December 31, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE CALIFORNIA MUNICIPAL BONDS (CONTINUED) $1,305 South Orange Cnty, CA Pub Fin Auth Reassmt Rev (FSA Insd)....................................... 5.800% 09/02/18 $ 1,505,383 600 Southern CA Pub Pwr Auth Pwr Proj Rev Multi-Projs...................................... 5.500 07/01/20 600,654 1,325 Sweetwater, CA Auth Wtr Rev (FSA Insd)........... 5.500 04/01/18 1,482,569 1,000 University of CA Rev Gen Ser A (AMBAC Insd)...... 5.000 05/15/26 1,031,280 1,000 University of CA Rev Multi Purp Proj Ser M (FGIC Insd)............................................ 5.125 09/01/17 1,085,610 ------------ TOTAL INVESTMENTS 158.2% (Cost $49,709,940)........................................................... 54,210,379 OTHER ASSETS IN EXCESS OF LIABILITIES 0.2%.................................... 75,956 PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (58.4%).................... (20,013,863) ------------ NET ASSETS APPLICABLE TO COMMON SHARES 100.0%................................. $ 34,272,472 ============
* Zero coupon bond (a) Security is a "step-up" bond where the coupon increases or steps up at a predetermined date. AMBAC--AMBAC Indemnity Corp. CA MTG--California Mortgage Insurance Connie Lee--Connie Lee Insurance Co. FGIC--Financial Guaranty Insurance Co. FSA--Financial Security Assurance Inc. GNMA--Government National Mortgage Association MBIA--Municipal Bond Investors Assurance Corp. Radian--Radian Asset Assurance 8 See Notes to Financial Statements FINANCIAL STATEMENTS Statement of Assets and Liabilities December 31, 2003 (Unaudited) ASSETS: Total Investments (Cost $49,709,940)........................ $54,210,379 Interest Receivable......................................... 775,582 Other....................................................... 729 ----------- Total Assets............................................ 54,986,690 ----------- LIABILITIES: Payables: Custodian Bank............................................ 412,224 Capital Gain Distributions--Common Shares................. 29,211 Investment Advisory Fee................................... 27,527 Income Distributions--Common Shares....................... 11,447 Other Affiliates.......................................... 4,951 Trustees' Deferred Compensation and Retirement Plans........ 171,114 Accrued Expenses............................................ 43,881 ----------- Total Liabilities....................................... 700,355 Preferred Shares (including accrued distributions).......... 20,013,863 ----------- NET ASSETS APPLICABLE TO COMMON SHARES...................... $34,272,472 =========== NET ASSET VALUE PER COMMON SHARE ($34,272,472 divided by 3,257,560 shares outstanding)............................. $ 10.52 =========== NET ASSETS CONSIST OF: Common Shares ($.01 par value with an unlimited number of shares authorized, 3,257,560 shares issued and outstanding).............................................. $ 32,576 Paid in Surplus............................................. 29,564,418 Net Unrealized Appreciation................................. 4,500,439 Accumulated Undistributed Net Investment Income............. 258,200 Accumulated Net Realized Loss............................... (83,161) ----------- NET ASSETS APPLICABLE TO COMMON SHARES...................... $34,272,472 =========== PREFERRED SHARES ($.01 par value, authorized 1,000,000 shares, 400 issued with liquidation preference of $50,000 per share)................................................ $20,000,000 =========== NET ASSETS INCLUDING PREFERRED SHARES....................... $54,272,472 ===========
See Notes to Financial Statements 9 Statement of Operations For the Six Months Ended December 31, 2003 (Unaudited) INVESTMENT INCOME: Interest.................................................... $1,332,613 ---------- EXPENSES: Investment Advisory Fee..................................... 162,166 Preferred Share Maintenance................................. 32,075 Trustees' Fees and Related Expenses......................... 21,166 Legal....................................................... 8,115 Custody..................................................... 2,241 Other....................................................... 49,902 ---------- Total Expenses.......................................... 275,665 ---------- NET INVESTMENT INCOME....................................... $1,056,948 ========== REALIZED AND UNREALIZED GAIN/LOSS: Net Realized Loss........................................... $ (85,905) ---------- Unrealized Appreciation/Depreciation: Beginning of the Period................................... 4,722,170 End of the Period......................................... 4,500,439 ---------- Net Unrealized Depreciation During the Period............... (221,731) ---------- NET REALIZED AND UNREALIZED LOSS............................ $ (307,636) ========== DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $ (94,204) ========== NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM OPERATIONS................................................ $ 655,108 ==========
10 See Notes to Financial Statements Statements of Changes in Net Assets (Unaudited)
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, 2003 JUNE 30, 2003 ---------------------------------- FROM INVESTMENT ACTIVITIES: Operations: Net Investment Income................................... $ 1,056,948 $ 2,200,161 Net Realized Gain/Loss.................................. (85,905) 560,495 Net Unrealized Appreciation/Depreciation During the Period................................................ (221,731) 1,527,573 Distributions to Preferred Shareholders: Net Investment Income................................. (94,204) (238,566) ----------- ----------- Change in Net Assets Applicable to Common Shares from Operations............................................ 655,108 4,049,663 Distributions to Common Shareholders: Net Investment Income................................. (977,204) (2,061,858) Net Realized Gain..................................... (415,665) (372,990) ----------- ----------- NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM INVESTMENT ACTIVITIES............................ (737,761) 1,614,815 NET ASSETS APPLICABLE TO COMMON SHARES: Beginning of the Period................................. 35,010,233 33,395,418 ----------- ----------- End of the Period (Including accumulated undistributed net investment income of $258,200 and $272,660, respectively)......................................... $34,272,472 $35,010,233 =========== ===========
See Notes to Financial Statements 11 Financial Highlights (Unaudited) THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
SIX MONTHS ENDED DECEMBER 31, -------------------- 2003 2003 2002 (e) ------------------------------------ NET ASSET VALUE, BEGINNING OF THE PERIOD............... $ 10.75 $ 10.25 $ 9.99 -------- -------- -------- Net Investment Income................................ .32 .67 .71 Net Realized and Unrealized Gain/Loss................ (.09) .64 .28 Common Share Equivalent of Distributions Paid to Preferred Shareholders: Net Investment Income.............................. (.03) (.07) (.11) -------- -------- -------- Total from Investment Operations....................... .20 1.24 .88 Distributions Paid to Common Shareholders: Net Investment Income.............................. (.30) (.63) (.55) Net Realized Gain.................................. (.13) (.11) (.07) -------- -------- -------- NET ASSET VALUE, END OF THE PERIOD..................... $ 10.52 $ 10.75 $ 10.25 ======== ======== ======== Common Share Market Price at End of the Period......... $ 9.98 $ 10.45 $ 10.14 Total Return (a)....................................... -0.34%** 10.97% 22.39% Net Assets Applicable to Common Shares at End of the Period (In millions)................................. $ 34.3 $ 35.0 $ 33.4 Ratio of Expenses to Average Net Assets Applicable to Common Shares (b).................................... 1.62% 1.56% 1.59% Ratio of Net Investment Income to Average Net Assets Applicable to Common Shares (b)...................... 6.23% 6.38% 6.90% Portfolio Turnover..................................... 13%** 19% 24% SUPPLEMENTAL RATIOS: Ratio of Expenses to Average Net Assets Including Preferred Shares (b)................................. 1.02% .99% .99% Ratio of Net Investment Income to Average Net Assets Applicable to Common Shares (c)...................... 5.67% 5.69% 5.86% SENIOR SECURITIES: Total Preferred Shares Outstanding..................... 400 400 400 Asset Coverage Per Preferred Share (d)................. $135,716 $137,533 $133,498 Involuntary Liquidating Preference Per Preferred Share................................................ $ 50,000 $ 50,000 $ 50,000 Average Market Value Per Preferred Share............... $ 50,000 $ 50,000 $ 50,000
* Amount is less than $.01 ** Non-Annualized (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 market price at the end of the period indicated. (b)Ratios do not reflect the effect of dividend payments to preferred shareholders. (c)Ratios reflect the effect of dividend payments to preferred shareholders. (d)Calculated by subtracting the Trust's total liabilities (not including the preferred shares) from the Trust's total assets and dividing by the number of preferred shares outstanding. (e)As required, effective July 1, 2001, the Trust has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on fixed income securities. The effect of this change for the year ended June 30, 2002 was to increase the ratio of net investment income to average net assets applicable to common shares by .06%. Net investment income per share and net realized and unrealized gains and losses per share were unaffected by the adjustments. Per share, ratios and supplemental data for periods prior to June 30, 2002 have not been restated to reflect this change in presentation. 12
YEAR ENDED JUNE 30, - ------------------------------------------------------------------------------------------ 2001 2000 1999 1998 1997 1996 1995 1994 - ------------------------------------------------------------------------------------------ $ 9.36 $ 9.93 $ 10.67 $ 10.45 $ 10.28 $ 10.40 $ 10.30 $ 10.96 -------- -------- -------- -------- -------- -------- -------- -------- .73 .76 .78 .85 .89 .91 .95 .96 .58 (.44) (.37) .53 .39 -0-* .11 (.74) (.23) (.22) (.20) (.22) (.21) (.23) (.23) (.16) -------- -------- -------- -------- -------- -------- -------- -------- 1.08 .10 .21 1.16 1.07 .68 .83 .06 (.45) (.53) (.62) (.72) (.75) (.75) (.72) (.71) -0-* (.14) (.33) (.22) (.15) (.05) (.01) (.01) -------- -------- -------- -------- -------- -------- -------- -------- $ 9.99 $ 9.36 $ 9.93 $ 10.67 $ 10.45 $ 10.28 $ 10.40 $ 10.30 ======== ======== ======== ======== ======== ======== ======== ======== $ 8.83 $ 8.375 $ 9.875 $ 12.125 $12.1875 $ 10.875 $ 10.75 $ 10.625 10.99% -8.14% -11.17% 7.77% 21.40% 9.02% 8.67% 4.32% $ 32.5 $ 30.5 $ 32.3 $ 34.5 $ 33.6 $ 32.9 $ 33.0 $ 32.6 1.65% 1.47% 1.67% 1.57% 1.58% 1.65% 1.65% 1.53% 7.33% 8.25% 7.38% 8.00% 8.54% 8.76% 9.35% 8.70% 16% 60% 33% 53% 30% 19% 16% 11% 1.02% .88% 1.05% .99% .99% 1.03% 1.02% .97% 5.02% 5.82% 5.49% 5.91% 6.51% 6.57% 7.02% 7.28% 400 400 400 400 400 400 400 400 $131,365 $126,216 $130,843 $136,309 $134,055 $132,192 $132,521 $131,433 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
See Notes to Financial Statements 13 NOTES TO FINANCIAL STATEMENTS December 31, 2003 (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES Van Kampen California Municipal 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 a high level of current income exempt from federal and California income taxes, consistent with preservation of capital. The Trust will invest in a portfolio consisting substantially of California municipal obligations rated investment grade at the time of investment. The Trust commenced investment operations on November 1, 1988. Effective November 30, 2003, the Trust's investment adviser, Van Kampen Investment Advisory Corp. merged into its affiliate, Van Kampen Asset Management. 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 Municipal bonds are valued by independent pricing services or dealers using the mean of the bid and asked prices or, in the absence of market quotations, at fair value based upon yield data relating to municipal bonds with similar characteristics and general market conditions. Securities which are not valued by independent pricing services or dealers are valued at fair value using 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. 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" or "delayed delivery" basis with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Trust will segregate assets with the custodian having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made. At December 31, 2003, the Trust had no when-issued or delayed delivery purchase commitments. C. INVESTMENT INCOME Interest income is recorded on an accrual basis. Bond premium is amortized and discounts are accreted over the expected life of each applicable security. D. FEDERAL INCOME TAXES It is the Trust's policy to comply with the requirements 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. 14 NOTES TO FINANCIAL STATEMENTS December 31, 2003 (Unaudited) At December 31, 2003, the cost and related gross unrealized appreciation and depreciation are as follows: Cost of investments for tax purposes........................ $49,652,994 =========== Gross tax unrealized appreciation........................... $ 4,560,402 Gross tax unrealized depreciation........................... (3,017) ----------- Net tax unrealized appreciation on investments.............. $ 4,557,385 ===========
E. DISTRIBUTION OF INCOME AND GAINS The Trust declares and pays monthly dividends from net investment income to common shareholders. Net realized gains, if any, are distributed annually to common shareholders. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income for tax purposes. The tax character of distributions paid during the year ended June 30, 2003 was as follows:
2003 Distributions paid from: Ordinary income........................................... $ 37,415 Long-term capital gain.................................... 344,219 -------- $381,634 ========
As of June 30, 2003, the components of distributable earnings on a tax basis were as follows: Undistributed ordinary income............................... $417,385
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of the Trust's Investment Advisory Agreement, Van Kampen Asset Management (the "Adviser") will provide investment advice and facilities to the Trust for an annual fee payable monthly of .60% of the average daily net assets of the Trust. For the six months ended December 31, 2003, the Trust recognized expenses of approximately $1,800 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom (Illinois), counsel to the Trust, of which a trustee of the Trust is an affiliated person. Under separate Accounting Services and Legal Services agreements, the Adviser provides accounting and legal services to the Trust. The Adviser allocates the cost of such services to each trust. For the six months ended December 31, 2003, the Trust recognized expenses of approximately $12,100 representing Van Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of providing accounting and legal services to the Trust, which are reported as part of "Other" and "Legal" expenses, respectively, in 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 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 15 NOTES TO FINANCIAL STATEMENTS December 31, 2003 (Unaudited) 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, were $7,376,875 and $6,798,960, respectively. 4. REMARKETED PREFERRED SHARES The Trust has outstanding 400 shares of Remarketed Preferred Shares ("RP"). Dividends are cumulative and the rate is reset through an auction process every 28 days. The rate in effect on December 31, 2003 was 1.150%. During the six months ended December 31, 2003, rates ranged from 0.840% to 1.150%. The Trust pays annual fees equivalent to .25% of the preferred share liquidation value for the remarketing efforts associated with the preferred auctions. These fees are included as a component of "Preferred Share Maintenance" expense in the Statement of Operations. The RP are redeemable at the option of the Trust in whole or in part at the liquidation value of $50,000 per share plus accumulated and unpaid dividends. The Trust is subject to certain asset coverage tests, and the RP are subject to mandatory redemption if the tests are not met. 16 BOARD OF TRUSTEES AND IMPORTANT ADDRESSES VAN KAMPEN CALIFORNIA MUNICIPAL TRUST BOARD OF TRUSTEES DAVID C. ARCH J. MILES BRANAGAN JERRY D. CHOATE ROD DAMMEYER LINDA HUTTON HEAGY R. CRAIG KENNEDY HOWARD J KERR MITCHELL M. MERIN* JACK E. NELSON RICHARD F. POWERS, III* HUGO F. SONNENSCHEIN WAYNE W. WHALEN* - Chairman SUZANNE H. WOOLSEY INVESTMENT ADVISER VAN KAMPEN ASSET MANAGEMENT 1221 Avenue of the Americas New York, NY 10020 CUSTODIAN AND TRANSFER AGENT STATE STREET BANK AND TRUST COMPANY c/o EquiServe P.O. Box 43011 Providence, Rhode Island 02940-3011 LEGAL COUNSEL SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS) 333 West Wacker Drive Chicago, Illinois 60606 INDEPENDENT AUDITORS DELOITTE & TOUCHE LLP 180 North Stetson Avenue Chicago, Illinois 60601 * "Interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended. 17 Van Kampen Privacy Notice The Van Kampen companies and investment products* respect your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain nonpublic personal information about you. This is information we collect from you on applications or other forms, and from the transactions you conduct with us, our affiliates, or third parties. We may also collect information you provide when using our Web site, and text files (also known as "cookies") may be placed on your computer to help us to recognize you and to facilitate transactions you initiate. We do not disclose any nonpublic personal information about you or any of our former customers to anyone, except as permitted by law. For instance, so that we may continue to offer you Van Kampen investment products and services that meet your investing needs, and to effect transactions that you request or authorize, we may disclose the information we collect to companies that perform services on our behalf, such as printers and mailers that assist us in the distribution of investor materials. These companies will use this information only for the services for which we hired them, and are not permitted to use or share this information for any other purpose. To protect your nonpublic personal information internally, we permit access to it only by authorized employees, and maintain physical, electronic and procedural safeguards to guard your nonpublic personal information. * Includes Van Kampen Investments Inc., Van Kampen Asset Management, Van Kampen Advisors Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc., Van Kampen System Inc. and Van Kampen Exchange Corp., as well as the many Van Kampen mutual funds and Van Kampen unit investment trusts. Van Kampen Funds Inc. 1 Parkview Plaza, P.O. Box 5555 Oakbrook Terrace, IL 60181-5555 www.vankampen.com (VAN KAMPEN INVESTMENTS LOGO) Copyright (C)2004 Van Kampen Funds Inc. All rights reserved. Member NASD/SIPC. 920, 910, 106 VKC SAR 2/04 13654B04-AS-2/04 Item 2. Code of Ethics. Not applicable for semi-annual reports. Item 3. Audit Committee Financial Expert. Not applicable for semi-annual reports. Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual reports. Item 5. Audit Committee of Listed Registrants. Not applicable for semi-annual reports. Item 6. [Reserved.] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. [Reserved.] Item 9. Controls and Procedures (a) The Trust's principal executive officer and principal financial officer have concluded that the Trust's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 10. Exhibits. (a) Code of Ethics - Not applicable for semi-annual reports. (b)(1) A certification for the Principal Executive Officer of the registrant is attached hereto as part of EX-99.CERT. (b)(2) A certification for the Principal Financial Officer of the registrant is attached hereto as part of EX-99.CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Van Kampen California Municipal Trust ------------------------------------------------- By: /s/Ronald E. Robison --------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: February 18, 2004 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 18, 2004 By: /s/ John L. Sullivan -------------------- Name: John L. Sullivan Title: Principal Financial Officer Date: February 18, 2004 EX-99.CERT 3 c81941exv99wcert.txt CERTIFICATION I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-CSR of Van Kampen California Municipal 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) 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) Omitted.] c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: February 18, 2004 /s/ Ronald E. Robison --------------------------- Principal Executive Officer I, John L. Sullivan, certify that: 1. I have reviewed this report on Form N-CSR of Van Kampen California Municipal 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) 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) Omitted.] c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: February 18, 2004 /s/ John L. Sullivan --------------------- Principal Financial Officer EX-99.906CERT 4 c81941exv99w906cert.txt 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 California Municipal Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended December 31, 2003 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 18, 2004 /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 California Municipal Trust and will be retained by Van Kampen California Municipal 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 California Municipal Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended December 31, 2003 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 18, 2004 /s/ John L. Sullivan --------------------- John L. Sullivan Principal Financial Officer A signed original of this written statement required by Section 906 has been provided to Van Kampen California Municipal Trust and will be retained by Van Kampen California Municipal 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-----