-----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, HwXqg6XDZNhEaTgMvJ9+EjYKMJO3JT9y+9n/e/WEWpTUCQjw9obPEgVnniGLs6w3 fUtwEneYzQUoVb+FSZ2VLQ== 0000950137-05-002371.txt : 20050228 0000950137-05-002371.hdr.sgml : 20050228 20050228155457 ACCESSION NUMBER: 0000950137-05-002371 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050228 DATE AS OF CHANGE: 20050228 EFFECTIVENESS DATE: 20050228 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VAN KAMPEN HIGH INCOME TRUST CENTRAL INDEX KEY: 0000843506 IRS NUMBER: 363616859 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-05707 FILM NUMBER: 05645532 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 INTERMEDIATE TERM HIGH INCOME TR DATE OF NAME CHANGE: 19960102 FORMER COMPANY: FORMER CONFORMED NAME: VAN KAMPEN MERRITT INTERMEDIATE TERM HIGH INCOME TRUST DATE OF NAME CHANGE: 19920703 N-CSR 1 c91097nvcsr.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 811-5707 Van Kampen High 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: 12/31/04 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 High 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, 2004. MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO PASS. THERE IS NO ASSURANCE THAT THE TRUST WILL ACHIEVE ITS INVESTMENT OBJECTIVE. TRUSTS ARE 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 12/31/04
HIGH INCOME TRUST SYMBOL: VIT - ------------------------------------------------------------ AVERAGE ANNUAL BASED ON BASED ON TOTAL RETURNS NAV MARKET PRICE Since Inception (1/26/89) 5.79% 6.31% 10-year 6.94 8.02 5-year 5.16 9.49 1-year 13.47 7.41 - ------------------------------------------------------------
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 (NAV) AND COMMON SHARE MARKET PRICE WILL FLUCTUATE AND TRUST SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. 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 J.P. Morgan Global High Yield Index is generally representative of high-yield securities. 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. It is not possible to invest directly in an index. 1 Trust Report FOR THE 12-MONTH PERIOD ENDED DECEMBER 31, 2004 Van Kampen High Income Trust is managed by the Adviser's High Yield team.(1) Current team members include Gordon Loery, Executive Director of the Adviser; Josh Givelber and Chad Liu, Vice Presidents of the Adviser; and Sheila Finnerty, Managing Director of the Adviser. MARKET CONDITIONS The CSFB High Yield Index, a broad index for the high yield market, returned 11.95% for the 12-month period ended December 31, 2004. In discussing the high yield market during 2004, it is worth noting that 2003 was one of the best years ever for this asset class, with the CSFB Index returning almost 28%. That banner year was driven by strong economic news, significantly improved corporate earnings, combined with declining defaults and record inflows into the asset class. The strong returns of 2003 continued through the end of January 2004. Beginning in February 2004, however, the market's technical (i.e., supply/demand) situation changed. Though fundamental factors such as earnings and default rate remained as strong as they had been during the prior 15-month rally, demand receded as market participants grew concerned over the lack of job creation in the U.S. economy. Many investors took profits and became more risk-averse. Then, in early April, significant interest rate increases caused a pronounced sell-off in high yield and throughout the fixed income markets. In addition, because of the sustained rally in high yield that had previously taken place, many of these bonds were priced at a premium. In a sense, we believe the high yield market had run out of room to rally. At the same time, the high yield market's new issue calendar continued to be robust, which had a negative impact on the market's technical situation. This difficult environment persisted through May 2004. In June, the high yield sector rebounded, experiencing a solid seven-month run through the end of 2004. The strong fundamental factors detailed above continued during this time and the supply/demand situation improved as buyers returned to the market. For each of the last seven months of 2004, high yield posted gains of 1% or more, and was the best performing fixed-income asset class for the year. As a measure of the high yield market's improvement over the 12-month period, the spread of the CSFB High Yield Index declined compared with Treasuries of similar maturity, from 486 basis points to 346 basis points. In a similar vein, the average yield to maturity of high yield bonds declined from 8.34% at the end of 2003 to 7.56% at the close of 2004. (1)Team members may change without notice at any time. 2 PERFORMANCE ANALYSIS A closed-end fund'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 can differ significantly. On an NAV basis, the trust outperformed its benchmark, the JP Morgan Global High Yield Index, though it underperformed the Index on a market-value basis. (See table below.) During the period, three strategic decisions helped the trust's performance. First, the trust enjoyed favorable security selection within the housing industry. Going back to late 2003, the trust had held several homebuilding issues that performed well, while the performance of building products companies had lagged. Early in 2004, we felt that homebuilding bonds had become overpriced, and based on our analysis we sold most of our allocation, replacing these bonds with building products issues that performed extremely well over the remainder of the period. Second, the trust benefited from its lack of participation in airline bonds. Airlines were the worst performing sector within the high yield market during the 12-month period. Third, our security selection in the wireless communications and telecom sectors added to performance as we avoided several credits that had poor business results while our selections within this sector generally posted solid earnings. The main detractor from performance during the period was security selection within the utility, service and gaming/leisure sectors. In addition, the trust's underweight in the metals/mining sector hurt performance as higher metal prices led this sector to strong gains during 2004. On an ongoing basis, we seek to maintain a balanced and well-diversified portfolio. The trust's portfolio consists of approximately 150 issuers. This level of diversification may help to reduce overall credit risk, yet also allows sufficient average security size for strategic overweights. We continue to maintain an average credit quality of single B, similar to the benchmark. Beginning in late in 2003 and early 2004, we reduced the trust's allocation in BBB and higher BB TOTAL RETURN FOR THE 12-MONTH PERIOD ENDED DECEMBER 31, 2004
- ------------------------------------------------------ BASED ON BASED ON JP MORGAN GLOBAL NAV MARKET PRICE HIGH YIELD INDEX 13.47% 7.41% 11.70% - ------------------------------------------------------
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. 3 credits as many of these issues had performed well when interest rates declined and Treasuries and other fixed-income securities rallied. The performance of these higher rated bonds generally correlates with that of Treasuries, and the trust sold several BBB and BB credits before interest rates spiked in the spring and Treasuries were negatively impacted. In their place, we purchased lower quality credits, which historically have performed better than BBB and BB bonds in a rising interest rate environment. In terms of issuer size, we generally focus on larger companies because of their financial flexibility, ability to withstand less-favorable financial markets and superior access to capital markets. As we have stated, we believe the fundamentals of the high yield market remain positive, with favorable earnings, lower default rates and modestly tightening high yield credit spreads. Many of these positive factors have already been "priced into" the market during the past two years, however, and high yield seems to us to be fairly valued. We believe that in 2005, high yield returns should be driven primarily by coupon income rather than price appreciation. We look for the trust's holdings to earn their coupon in the coming months and are hopeful that market fundamentals will remain favorable through the end of 2005. There is no guarantee that any securities will continue to perform well or be held by the trust in the future. 4
RATINGS ALLOCATION AS OF 12/31/04 BBB/Baa 1.4% BB/Ba 39.7 B/B 53.1 CCC/Caa 5.6 Non-Rated 0.2 SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 12/31/04 Energy 8.8% Chemicals 7.7 Gaming & Leisure 7.7 Forest Products 7.6 Utility 7.0 Diversified Media 6.0 Healthcare 5.6 Housing 5.5 Cable 5.3 Food & Tobacco 4.6 Services 4.3 Transportation 4.1 Wireless Communications 3.8 Telecommunications 3.8 Manufacturing 2.7 Consumer Products 2.4 Information Technology 2.4 Food & Drug 2.4 Metals 1.7 Retail 1.0 Financial 0.9 Aerospace 0.6 Broadcasting 0.4 ----- Total Long-Term Investments 96.3% Short-Term Investments 3.7 ----- 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 sectors shown above. Ratings allocation percentages are as a percentage of long-term investments. Summary of investments by industry classification percentages are as a percentage of total investments. 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. 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 1-800-SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's e-mail address (publicinfo@sec.gov) or by writing the Public Reference section of the SEC, Washington, DC 20549-0102. In addition to filing a complete schedule of portfolio holdings with the SEC each fiscal quarter, each Van Kampen trust makes portfolio holdings information available by periodically providing the information on its public web site, www.vankampen.com. Each Van Kampen trust provides a complete schedule of portfolio holdings on the public web site on a calendar-quarter basis approximately 30 days after the close of the calendar quarter. Van Kampen closed-end funds do not presently provide partial lists of their portfolio holdings on a monthly basis, but may do so in the future. You may obtain copies of a trust's fiscal quarter filings, or its monthly or calendar-quarter web site postings, by contacting Van Kampen Client Relations at 1-800-847-2424. 6 PROXY VOTING POLICIES AND PROCEDURES AND PROXY VOTING RECORD The trust's policies and procedures with respect to the voting of proxies relating to the trust's portfolio securities and information on how the trust voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge, upon request, by calling 1-800-847-2424 or 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 HIGH INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ------------------------------------------------------------------------------------------- CORPORATE BONDS 162.8% AEROSPACE 1.0% $ 475 K & F Acquisition, Inc., 144A-- Private Placement (a).............................................. 7.750% 11/15/14 $ 492,812 ----------- BROADCASTING 0.6% 295 Salem Communications Corp. ...................... 7.750 12/15/10 320,444 ----------- CABLE 9.0% 575 Cablevision Systems Corp., 144A--Private Placement (a) (b)................................ 6.669 04/01/09 612,375 1,005 Charter Communications Holdings LLC.............. 9.625 11/15/09 886,912 160 DirecTV Holdings LLC............................. 8.375 03/15/13 180,200 855 Echostar DBS Corp. .............................. 6.375 10/01/11 878,512 1,000 Kabel Deutschland GmbH, 144A--Private Placement (Germany) (a).................................... 10.625 07/01/14 1,155,000 850 PanAmSat Corp., 144A--Private Placement (a)...... 9.000 08/15/14 953,062 ----------- 4,666,061 ----------- CHEMICALS 13.1% 610 Equistar Chemicals LP............................ 10.125 09/01/08 706,075 350 Equistar Chemicals LP............................ 10.625 05/01/11 407,750 245 FMC Corp. ....................................... 10.250 11/01/09 282,362 190 Huntsman Advanced Materials LLC, 144A--Private Placement (a).................................... 11.000 07/15/10 227,050 265 Innophos, Inc.,144A--Private Placement (a)....... 8.875 08/15/14 287,525 190 ISP Chemco, Inc. ................................ 10.250 07/01/11 215,650 900 ISP Holdings, Inc. .............................. 10.625 12/15/09 1,001,250 145 Koppers, Inc. ................................... 9.875 10/15/13 166,025 780 Lyondell Chemical Co. ........................... 10.500 06/01/13 932,100 55 Millennium America, Inc. ........................ 7.000 11/15/06 57,475 520 Millennium America, Inc. ........................ 9.250 06/15/08 594,100 535 Nalco Co. ....................................... 7.750 11/15/11 580,475 495 Rhodia SA (France)............................... 8.875 06/01/11 501,187 600 Rockwood Specialties Group, Inc. ................ 10.625 05/15/11 693,000 137 Westlake Chemical Corp. ......................... 8.750 07/15/11 155,495 ----------- 6,807,519 ----------- CONSUMER PRODUCTS 3.7% 270 Amscan Holdings, Inc. ........................... 8.750 05/01/14 271,350 210 Oxford Industrials, Inc. ........................ 8.875 06/01/11 226,537 830 Phillips Van-Heusen Corp. ....................... 7.250 02/15/11 875,650 315 Rayovac Corp. ................................... 8.500 10/01/13 351,225 158 Tempur Pedic, Inc. .............................. 10.250 08/15/10 182,490 ----------- 1,907,252 ----------- DIVERSIFIED MEDIA 10.1% 830 Advanstar Communications, Inc. (b)............... 9.790 08/15/08 870,975 750 CanWest Media, Inc. (Canada)..................... 10.625 05/15/11 845,625
8 See Notes to Financial Statements VAN KAMPEN HIGH INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ------------------------------------------------------------------------------------------- DIVERSIFIED MEDIA (CONTINUED) $ 655 Houghton Mifflin Co. ............................ 9.875% 02/01/13 $ 720,500 635 Interpublic Group of Cos., Inc. ................. 6.250 11/15/14 645,706 625 Marquee, Inc., 144A--Private Placement (a) (b)... 6.540 08/15/10 660,937 150 PEI Holdings, Inc. .............................. 11.000 03/15/10 175,500 860 Primedia, Inc. .................................. 8.875 05/15/11 913,750 400 Vertis, Inc. .................................... 9.750 04/01/09 436,000 ----------- 5,268,993 ----------- ENERGY 14.9% 335 BRL Universal Equipment.......................... 8.875 02/15/08 353,844 455 CHC Helicopter Corp. (Canada).................... 7.375 05/01/14 482,300 140 CITGO Petroleum Corp., 144A-- Private Placement (a).............................................. 6.000 10/15/11 140,000 905 El Paso Production Holding Co. .................. 7.750 06/01/13 952,512 860 Frontier Oil Corp., 144A--Private Placement (a).............................................. 6.625 10/01/11 881,500 90 Hanover Compressor Co. .......................... 8.625 12/15/10 98,775 385 Hanover Compressor Co. .......................... 9.000 06/01/14 430,237 375 Hanover Equipment Trust.......................... 8.500 09/01/08 405,000 160 Hanover Equipment Trust.......................... 8.750 09/01/11 174,400 550 Hilcorp Energy Finance Corp., 144A--Private Placement (a).................................... 10.500 09/01/10 624,250 188 Magnum Hunter Resources, Inc. ................... 9.600 03/15/12 214,320 375 Pacific Energy Partners.......................... 7.125 06/15/14 401,250 850 Plains Exploration & Production Co. ............. 7.125 06/15/14 930,750 305 Port Arthur Finance Corp. ....................... 12.500 01/15/09 358,234 180 Tesoro Petroleum Corp. .......................... 9.625 04/01/12 207,900 1,025 Vintage Petroleum, Inc. ......................... 7.875 05/15/11 1,096,750 ----------- 7,752,022 ----------- FINANCIAL 1.4% 680 Refco Finance Holdings LLC, 144A--Private Placement (a).................................... 9.000 08/01/12 748,000 ----------- FOOD & DRUG 4.0% 690 Delhaize America, Inc. .......................... 8.125 04/15/11 807,800 150 Jean Coutu Group (PJC), Inc., 144A--Private Placement (Canada) (a)........................... 7.625 08/01/12 159,375 725 Jean Coutu Group (PJC), Inc., 144A--Private Placement (Canada) (a)........................... 8.500 08/01/14 746,750 1,570 Jitney-Jungle Stores America, Inc. (c) (d) (e)... 12.000 03/01/06 0 360 Rite Aid Corp. .................................. 8.125 05/01/10 382,500 ----------- 2,096,425 ----------- FOOD & TOBACCO 7.9% 750 Constellation Brands, Inc. ...................... 8.000 02/15/08 819,375 340 Michael Foods, Inc. ............................. 8.000 11/15/13 360,400 210 Pilgrim's Pride Corp. ........................... 9.250 11/15/13 236,250 765 Pilgrim's Pride Corp. ........................... 9.625 09/15/11 864,450
See Notes to Financial Statements 9 VAN KAMPEN HIGH INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ------------------------------------------------------------------------------------------- FOOD & TOBACCO (CONTINUED) $ 380 Smithfield Foods, Inc. .......................... 7.000% 08/01/11 $ 407,550 220 Smithfield Foods, Inc. .......................... 7.625 02/15/08 236,500 1,050 Smithfield Foods, Inc. .......................... 8.000 10/15/09 1,168,125 ----------- 4,092,650 ----------- FOREST PRODUCTS 12.9% 1,020 Abitibi-Consolidated, Inc. (Canada).............. 6.000 06/20/13 977,925 330 Abitibi-Consolidated, Inc. (Canada).............. 8.550 08/01/10 359,287 535 Georgia-Pacific Corp. ........................... 8.875 02/01/10 625,281 775 Graphic Packaging International, Inc. ........... 9.500 08/15/13 885,437 560 MDP Acquisitions PLC (Ireland)................... 9.625 10/01/12 627,200 235 Norampac, Inc. (Canada).......................... 6.750 06/01/13 248,512 1,350 Owens-Brockway Glass Containers, Inc. ........... 8.875 02/15/09 1,473,187 495 Pliant Corp. .................................... 13.000 06/01/10 485,100 1,065 Tembec Industries, Inc. (Canada)................. 7.750 03/15/12 1,035,712 ----------- 6,717,641 ----------- GAMING & LEISURE 13.1% 425 Ceasars Entertainment............................ 8.875 09/15/08 482,375 320 Gaylord Entertainment Co., 144A--Private Placement (a).................................... 6.750 11/15/14 323,200 920 Harrahs Operating Co., Inc. ..................... 7.875 12/15/05 959,100 176 HMH Properties, Inc. ............................ 7.875 08/01/08 181,720 275 Host Marriott LP................................. 7.125 11/01/13 295,281 650 Intrawest Corp., 144A--Private Placement (Canada) (a).............................................. 7.500 10/15/13 694,687 480 Isle of Capri Casinos, Inc. ..................... 7.000 03/01/14 492,000 150 MGM Mirage, Inc. ................................ 5.875 02/27/14 148,125 1,120 MGM Mirage, Inc. ................................ 6.000 10/01/09 1,153,600 865 Mohegan Tribal Gaming Authority.................. 7.125 08/15/14 914,738 490 Park Place Entertainment Corp. .................. 7.875 12/15/05 509,600 625 Station Casinos, Inc. ........................... 6.000 04/01/12 639,844 ----------- 6,794,270 ----------- HEALTHCARE 9.6% 390 AmerisourceBergen Corp. ......................... 8.125 09/01/08 435,825 340 Community Health Systems, Inc., 144A--Private Placement (a).................................... 6.500 12/15/12 344,250 1,140 Extendicare Health Services, Inc. ............... 6.875 05/01/14 1,168,500 400 Fisher Scientific International, Inc. ........... 8.125 05/01/12 446,000 160 Fisher Scientific International, Inc., 144A-- Private Placement (a)............................ 6.750 08/15/14 172,400 560 Fresenius Medical Care Capital Trust II.......... 7.875 02/01/08 609,000 235 Fresenius Medical Care Capital Trust IV.......... 7.875 06/15/11 263,200 515 HCA, Inc. ....................................... 6.375 01/15/15 518,034 85 National Nephrology Associates, Inc., 144A-- Private Placement (a)............................ 9.000 11/01/11 98,813
10 See Notes to Financial Statements VAN KAMPEN HIGH INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ------------------------------------------------------------------------------------------- HEALTHCARE (CONTINUED) $ 450 Team Health Inc. ................................ 9.000% 04/01/12 $ 442,125 435 Tenet Healthcare Corp., 144A-- Private Placement (a).............................................. 9.875 07/01/14 476,325 ----------- 4,974,472 ----------- HOUSING 9.3% 104 CB Richard Ellis Service, Inc. .................. 9.750 05/15/10 119,080 545 CB Richard Ellis Service, Inc. .................. 11.250 06/15/11 629,475 625 Interface, Inc. ................................. 9.500 02/01/14 684,375 615 Nortek, Inc., 144A--Private Placement (a)........ 8.500 09/01/14 645,750 875 Ply Gem Industries, Inc., 144A--Private Placement (a).............................................. 9.000 02/15/12 892,500 340 Propex Fabrics, Inc., 144A--Private Placement (a).............................................. 10.000 12/01/12 354,450 445 RMCC Acquisition Co., 144A--Private Placement (a).............................................. 9.500 11/01/12 446,113 370 Technical Olympic USA, Inc. ..................... 9.000 07/01/10 397,750 290 Technical Olympic USA, Inc. ..................... 9.000 07/01/10 311,750 310 Technical Olympic USA, Inc. ..................... 10.375 07/01/12 348,750 ----------- 4,829,993 ----------- INFORMATION TECHNOLOGY 4.1% 445 Iron Mountain, Inc. ............................. 7.750 01/15/15 453,900 770 Iron Mountain, Inc. ............................. 8.625 04/01/13 821,975 800 Xerox Corp. ..................................... 7.125 06/15/10 868,000 ----------- 2,143,875 ----------- MANUFACTURING 4.5% 155 Flowserve Corp. ................................. 12.250 08/15/10 172,050 530 Johnsondiversey, Inc. ........................... 9.625 05/15/12 594,925 439 Manitowoc, Inc. ................................. 10.500 08/01/12 507,045 1,010 Trimas Corp. .................................... 9.875 06/15/12 1,075,650 ----------- 2,349,670 ----------- METALS 2.8% 202 Doe Run Resources Corp. (Acquired 02/15/01 to 10/15/04, Cost $177,470) (f) (g)................. 11.750 11/01/08 172,915 140 Foundation PA Coal Co., 144A-- Private Placement (a).............................................. 7.250 08/01/14 149,800 210 General Cable Corp. ............................. 9.500 11/15/10 238,350 440 UCAR Finance, Inc. .............................. 10.250 02/15/12 504,900 337 United States Steel Corp. ....................... 9.750 05/15/10 385,865 ----------- 1,451,830 ----------- RETAIL 1.7% 290 General Nutrition Center, Inc. .................. 8.500 12/01/10 275,500 590 Petro Stopping Center Financial.................. 9.000 02/15/12 626,875 ----------- 902,375 ----------- SERVICES 7.3% 45 Allied Waste North America, Inc. ................ 7.875 04/15/13 46,350 1,500 Allied Waste North America, Inc. ................ 8.875 04/01/08 1,612,500 510 Buhrmann US, Inc. ............................... 8.250 07/01/14 518,288
See Notes to Financial Statements 11 VAN KAMPEN HIGH INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ------------------------------------------------------------------------------------------- SERVICES (CONTINUED) $ 405 MSW Energy Holdings II LLC....................... 7.375% 09/01/10 $ 427,275 85 MSW Energy Holdings LLC.......................... 8.500 09/01/10 93,500 390 United Rentals North America, Inc. .............. 6.500 02/15/12 382,200 740 United Rentals North America, Inc. .............. 7.750 11/15/13 728,900 ----------- 3,809,013 ----------- TELECOMMUNICATIONS 6.4% 605 Axtel SA (Mexico)................................ 11.000 12/15/13 654,913 860 Cincinnati Bell, Inc. ........................... 7.250 07/15/13 887,950 280 Exodus Communications, Inc. (c) (d) (e).......... 11.250 07/01/08 0 430 Qwest Communications International, Inc., 144A-- Private Placement (a) (b)........................ 6.040 02/15/09 437,525 710 Qwest Corp. ..................................... 6.625 09/15/05 727,750 575 Qwest Corp., 144A--Private Placement (a)......... 7.875 09/01/11 626,750 ----------- 3,334,888 ----------- TRANSPORTATION 7.0% 450 AutoNation, Inc. ................................ 9.000 08/01/08 516,375 585 Laidlaw International, Inc. ..................... 10.750 06/15/11 685,913 1,065 Sonic Automotive, Inc. .......................... 8.625 08/15/13 1,140,881 1,100 TRW Automotive, Inc. ............................ 9.375 02/15/13 1,281,500 ----------- 3,624,669 ----------- UTILITY 11.9% 485 AES Corp. ....................................... 7.750 03/01/14 528,650 23 AES Corp. ....................................... 8.875 02/15/11 26,393 73 AES Corp. ....................................... 9.375 09/15/10 85,228 330 Calpine Corp., 144A--Private Placement (a)....... 8.500 07/15/10 284,625 65 CMS Energy Corp. ................................ 7.500 01/15/09 69,550 405 CMS Energy Corp. ................................ 8.500 04/15/11 462,206 605 Dynegy Holdings, Inc. ........................... 6.875 04/01/11 585,338 345 Dynegy Holdings, Inc., 144A--Private Placement (a).............................................. 9.875 07/15/10 387,263 235 IPALCO Enterprises, Inc. ........................ 8.625 11/14/11 264,375 485 Monongahela Power Co. ........................... 5.000 10/01/06 496,184 290 Nevada Power Co. ................................ 8.250 06/01/11 334,588 490 Nevada Power Co. ................................ 9.000 08/15/13 575,750 385 PSEG Energy Holdings, Inc. ...................... 7.750 04/16/07 409,063 20 PSEG Energy Holdings, Inc. ...................... 8.625 02/15/08 22,050 270 Reliant Energy, Inc. ............................ 6.750 12/15/14 269,663 195 Southern Natural Gas Co. ........................ 8.875 03/15/10 219,375 785 TNP Enterprises, Inc. ........................... 10.250 04/01/10 841,913 270 Trans Continental Gas Pipe Line Corp. ........... 8.875 07/15/12 329,738 ----------- 6,191,952 ----------- WIRELESS COMMUNICATIONS 6.5% 160 Centennial Communications Corp. ................. 8.125 02/01/14 165,200 1,025 Nextel Communications, Inc. ..................... 6.875 10/31/13 1,117,250 295 Rogers Wireless Communications, Inc., 144A--Private Placement (Canada) (a)............. 7.500 03/15/15 312,700
12 See Notes to Financial Statements VAN KAMPEN HIGH INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ------------------------------------------------------------------------------------------- WIRELESS COMMUNICATIONS (CONTINUED) $ 205 Rogers Wireless Communications, Inc., 144A--Private Placement (Canada) (a)............. 8.000% 12/15/12 $ 217,813 250 Rural Cellular Corp. (b)......................... 6.990 03/15/10 260,000 575 Rural Cellular Corp. ............................ 8.250 03/15/12 610,938 670 SBA Communications Corp., 144A--Private Placement (a).............................................. 8.500 12/01/12 686,750 ----------- 3,370,651 ----------- TOTAL CORPORATE BONDS 162.8%................................................ 84,647,477 -----------
DESCRIPTION VALUE - ------------------------------------------------------------------------------------------- EQUITIES 0.5% DecisionOne Corp. (3,033 common shares) (e) (h).............................. 0 DecisionOne Corp. (6,670 common stock warrants) (e) (h)...................... 0 Doe Run Resources Corp. (1 common stock warrant) (e) (h)..................... 0 HCI Direct, Inc. (30,357 common shares) (e) (h).............................. 236,784 Hosiery Corp of America, Inc. (500 common shares) (e) (h).................... 0 VS Holdings, Inc. (11,316 common shares) (e) (h)............................. 2,037 ----------- TOTAL EQUITIES............................................................... 238,821 ----------- TOTAL LONG-TERM INVESTMENTS 163.3% (Cost $83,043,939)......................................................... 84,886,298 REPURCHASE AGREEMENT 6.2% State Street Bank & Trust Co. ($3,230,000 par collateralized by U.S. Government obligations in a pooled cash account, interest rate of 2.15%, dated 12/31/04, to be sold on 01/03/05 at $3,230,579) (Cost $3,230,000).......................................................... 3,230,000 ----------- TOTAL INVESTMENTS 169.5% (Cost $86,273,939)......................................................... 88,116,298 OTHER ASSETS IN EXCESS OF LIABILITIES 2.9%.................................. 1,530,879 PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (72.4%).................. (37,657,654) ----------- NET ASSETS APPLICABLE TO COMMON SHARES 100.0%............................... $51,989,523 ===========
See Notes to Financial Statements 13 VAN KAMPEN HIGH INCOME TRUST PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 continued Percentages are calculated as a percentage of net assets applicable to common shares. (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) Variable rate security. Interest rate shown is that in effect at December 31, 2004. (c) Non-income producing as security is in default. (d) This borrower has filed for protection in federal bankruptcy court. (e) Market value is determined in accordance with procedures established in good faith by the Board of Trustees. (f) Payment-in-kind security. (g) These securities are restricted and may be resold only in transactions exempt from registration which are normally those transactions with qualified institutional buyers. Restricted securities comprise 0.3% of net assets applicable to common shares. (h) Non-income producing security. 14 See Notes to Financial Statements VAN KAMPEN HIGH INCOME TRUST FINANCIAL STATEMENTS Statement of Assets and Liabilities December 31, 2004 ASSETS: Total Investments (Cost $86,273,939)........................ $ 88,116,298 Cash........................................................ 155 Receivables: Interest.................................................. 1,624,213 Investments Sold.......................................... 271,724 Other....................................................... 1,074 ------------ Total Assets............................................ 90,013,464 ------------ LIABILITIES: Payables: Investment Advisory Fee................................... 53,061 Income Distributions--Common Shares....................... 17,316 Other Affiliates.......................................... 3,628 Trustees' Deferred Compensation and Retirement Plans........ 214,548 Accrued Expenses............................................ 77,734 ------------ Total Liabilities....................................... 366,287 Preferred Shares (including accrued distributions).......... 37,657,654 ------------ NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 51,989,523 ============ NET ASSET VALUE PER COMMON SHARE ($51,989,523 divided by 13,710,760 shares outstanding)...... $ 3.79 ============ NET ASSETS CONSIST OF: Common Shares ($.01 par value with an unlimited number of shares authorized, 13,710,760 shares issued and outstanding).............................................. $ 137,108 Paid in Surplus............................................. 84,024,777 Net Unrealized Appreciation................................. 1,842,359 Accumulated Undistributed Net Investment Income............. (282,849) Accumulated Net Realized Loss............................... (33,731,872) ------------ NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 51,989,523 ============ PREFERRED SHARES ($.01 par value, authorized 1,000,000 shares, 376 issued with liquidation preference of $100,000 per share)................................................ $ 37,600,000 ============ NET ASSETS INCLUDING PREFERRED SHARES....................... $ 89,589,523 ============
See Notes to Financial Statements 15 VAN KAMPEN HIGH INCOME TRUST FINANCIAL STATEMENTS continued Statement of Operations For the Year Ended December 31, 2004 INVESTMENT INCOME: Interest.................................................... $6,666,820 Other....................................................... 117,015 ---------- Total Income............................................ 6,783,835 ---------- EXPENSES: Investment Advisory Fee..................................... 612,483 Preferred Share Maintenance................................. 110,325 Trustees' Fees and Related Expenses......................... 50,900 Legal....................................................... 19,006 Custody..................................................... 13,585 Other....................................................... 184,968 ---------- Total Expenses.......................................... 991,267 ---------- NET INVESTMENT INCOME....................................... $5,792,568 ========== REALIZED AND UNREALIZED GAIN/LOSS: Net Realized Gain........................................... $1,201,689 ---------- Unrealized Appreciation/Depreciation: Beginning of the Period................................... 1,289,421 End of the Period......................................... 1,842,359 ---------- Net Unrealized Appreciation During the Period............... 552,938 ---------- NET REALIZED AND UNREALIZED GAIN............................ $1,754,627 ========== DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $ (575,670) ========== NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM OPERATIONS................................................ $6,971,525 ==========
16 See Notes to Financial Statements VAN KAMPEN HIGH INCOME TRUST FINANCIAL STATEMENTS continued Statements of Changes in Net Assets (Unaudited)
FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 2004 DECEMBER 31, 2003 ------------------------------------- FROM INVESTMENT ACTIVITIES: Operations: Net Investment Income................................... $ 5,792,568 $ 5,701,677 Net Realized Gain/Loss.................................. 1,201,689 (7,269,381) Net Unrealized Appreciation During the Period........... 552,938 15,491,653 Distributions to Preferred Shareholders: Net Investment Income................................. (575,670) (452,433) ----------- ----------- Change in Net Assets Applicable to Common Shares from Operations............................................ 6,971,525 13,471,516 Distributions to Common Shareholders: Net Investment Income................................. (4,934,906) (4,881,353) Return of Capital Distribution........................ -0- (122,439) ----------- ----------- NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM INVESTMENT ACTIVITIES............................ 2,036,619 8,467,724 NET ASSETS APPLICABLE TO COMMON SHARES: Beginning of the Period................................. 49,952,904 41,485,180 ----------- ----------- End of the Period (Including accumulated undistributed net investment income of ($282,849) and ($735,678), respectively)......................................... $51,989,523 $49,952,904 =========== ===========
See Notes to Financial Statements 17 VAN KAMPEN HIGH INCOME TRUST FINANCIAL HIGHLIGHTS THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
-------------------------------- 2004 2003 2002 -------------------------------- NET ASSET VALUE, BEGINNING OF THE PERIOD................. $ 3.64 $ 3.03 $ 3.78 -------- -------- -------- Net Investment Income.................................. .42 .41 .47 Net Realized and Unrealized Gain/Loss.................. .13 .59 (.69) Common Share Equivalent of Distributions Paid to Preferred Shareholders: Net Investment Income................................ (.04) (.03) (.06) -------- -------- -------- Total from Investment Operations......................... .51 .97 (.28) Distributions Paid to Common Shareholders: Net Investment Income................................ (.36) (.35) (.46) Return of Capital Distributions...................... -0- (.01) (.01) -------- -------- -------- NET ASSET VALUE, END OF THE PERIOD....................... $ 3.79 $ 3.64 $ 3.03 ======== ======== ======== Common Share Market Price at End of the Period........... $ 4.10 $ 4.16 $ 3.10 Total Return (a)......................................... 7.41% 47.66% -22.99% Net Assets Applicable to Common Shares at End of the Period (In millions)................................... $ 52.0 $ 50.0 $ 41.5 Ratio of Expenses to Average Net Assets Applicable to Common Shares (b)...................................... 1.99% 2.10% 2.15% Ratio of Net Investment Income to Average Net Assets Applicable to Common Shares (b)........................ 11.61% 12.36% 14.42% Portfolio Turnover....................................... 86% 73% 82% SUPPLEMENTAL RATIOS: Ratio of Expenses to Average Net Assets Including Preferred Shares (b)................................... 1.13% 1.16% 1.12% Ratio of Net Investment Income to Average Net Assets Applicable to Common Shares (d)........................ 10.46% 11.38% 12.75% SENIOR SECURITIES: Total Preferred Shares Outstanding....................... 376 376 376 Asset Coverage Per Preferred Share (e)................... $238,423 $232,928 $210,413 Involuntary Liquidating Preference Per Preferred Share... $100,000 $100,000 $100,000 Average Market Value Per Preferred Share................. $100,000 $100,000 $100,000
(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)As required, effective January 1, 2001, the Trust has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium on fixed income securities. The effect of this change for the year ended December 31, 2001 was to decrease net investment income per share by $.02, increase net realized and unrealized gains and losses per share by $.02 and decrease the ratio of net investment income to average net assets applicable to common shares by .38%. Per share, ratios and supplemental data for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (d)Ratios reflect the effect of dividend payments to preferred shareholders. (e)Calculated by subtracting the Trust's total liabilities (not including the preferred shares) from the Trust's total assets and dividing this by the number of preferred shares outstanding. 18
YEAR ENDED DECEMBER 31 - ------------------------------------------------------------------------------- 2001 (c) 2000 1999 1998 1997 1996 1995 - ------------------------------------------------------------------------------- $ 4.22 $ 5.10 $ 5.86 $ 6.47 $ 6.35 $ 6.19 $ 5.62 -------- -------- -------- -------- -------- -------- -------- .71 .85 .88 .91 .93 .94 .98 (.44) (.85) (.75) (.58) .13 .15 .54 (.15) (.26) (.22) (.24) (.24) (.23) (.25) -------- -------- -------- -------- -------- -------- -------- .12 (.26) (.09) .09 .82 .86 1.27 (.56) (.61) (.67) (.70) (.70) (.70) (.70) -0- (.01) -0- -0- -0- -0- -0- -------- -------- -------- -------- -------- -------- -------- $ 3.78 $ 4.22 $ 5.10 $ 5.86 $ 6.47 $ 6.35 $ 6.19 ======== ======== ======== ======== ======== ======== ======== $ 4.54 $ 4.125 $ 4.50 $ 6.375 $ 7.375 $ 6.75 $ 6.375 23.76% 4.08% -21.20% -4.33% 20.29% 17.34% 29.17% $ 51.8 $ 57.9 $ 70.0 $ 80.4 $ 88.7 $ 87.0 $ 84.8 1.98% 1.95% 1.92% 1.85% 1.76% 1.87% 1.92% 16.80% 18.05% 16.13% 14.56% 14.60% 15.32% 16.39% 64% 62% 57% 65% 102% 92% 119% 1.07% 1.04% 1.07% 1.09% 1.05% 1.11% 1.12% 13.32% 12.48% 12.09% 10.77% 10.90% 11.58% 12.16% 450 500 588 588 588 588 588 $215,081 $215,271 $219,005 $236,742 $250,850 $247,974 $244,242 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
See Notes to Financial Statements 19 VAN KAMPEN HIGH INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2004 1. SIGNIFICANT ACCOUNTING POLICIES Van Kampen High 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 high current income, while seeking to preserve shareholders' capital through investment in a professionally managed diversified portfolio of high yield, fixed income securities. The Trust commenced investment operations on January 26, 1989. 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 principals 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 Investments are stated at value using market quotations or indications of value obtained from an independent pricing service. For those securities where quotations or prices are not available, valuations are obtained from yield data relating to instruments or securities with similar characteristics in accordance with procedures established in good faith by the Board of Trustees. 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 after payment is made. At December 31, 2004, the Trust had no when-issued and delayed delivery purchase commitments. The Trust may invest in repurchase agreements, which are short-term investments in which 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 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. Bond discount is accreted and premium is amortized over the expected life of each applicable security. Other 20 VAN KAMPEN HIGH INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2004 continued income is comprised primarily of consent fees. Consent fees are earned as compensation for agreeing to changes in the terms of debt instruments. 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 such losses against any future realized capital gains. At December 31, 2004, the Trust had an accumulated capital loss carry forward for tax purposes of $33,728,272 which will expire according to the following schedule.
AMOUNT EXPIRATION $ 2,385,010................................................. December 31, 2007 4,010,584................................................. December 31, 2008 6,489,257................................................. December 31, 2009 12,317,287................................................. December 31, 2010 7,532,784................................................. December 31, 2011 993,350.................................................. December 31, 2012
At December 31, 2004, the cost and related gross unrealized appreciation and depreciation are as follows: Cost of investments for tax purposes........................ $86,670,128 =========== Gross tax unrealized appreciation........................... $ 5,161,971 Gross tax unrealized depreciation........................... (3,715,801) ----------- Net tax unrealized appreciation on investments.............. $ 1,446,170 ===========
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 in ordinary income for tax purposes. The tax character of distributions paid during the years ended December 31, 2004 and 2003 was as follows:
2004 2003 Distributions paid from: Ordinary income........................................... $5,483,867 $5,315,792 Return of capital......................................... -- 122,439 ---------- ---------- $5,483,867 $5,438,231 ========== ==========
Due to inherent differences in the recognition of income, expenses and realized gain/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 for the 2004 fiscal year have been identified and appropriately reclassified. Permanent 21 VAN KAMPEN HIGH INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2004 continued differences of $289,912 relating to book to tax amortization differences were reclassified from accumulated undistributed net investment income to accumulated net realized loss and permanent differences of $116,450 relating to fee income received from tender offers were reclassified from accumulated undistributed net investment income to accumulated net realized loss. Also, a permanent book and tax difference relating to the true-up of prior year adjustments totaling $2,625 was reclassified from accumulated undistributed net investment income to accumulated net realized loss in the amount of $2,265 and capital in the amount of $360. As of December 31, 2004, the components of distributable earnings on a tax basis were as follows: Undistributed ordinary income............................... $416,226
Net realized gains or losses may differ for financial and tax reporting purposes primarily as a result of the deferral of losses relating to wash sale transactions. 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 .70% of the average daily net assets of the Trust. For the year ended December 31, 2004, the Trust recognized expenses of approximately $6,900 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 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 year ended December 31, 2004, the Trust recognized expenses of approximately $24,600 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 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, were $72,271,452 and $71,704,851, respectively. 22 VAN KAMPEN HIGH INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2004 continued 4. AUCTION MARKET PREFERRED SHARES The Trust has outstanding 376 shares of Auction Market Preferred Shares ("AMPS") at a liquidation value of $100,000 per share. Dividends are cumulative and the rate is currently reset through an auction process every 28 days. The rate in effect on December 31, 2004 was 2.30%. During the year ended December 31, 2004, the rates ranged from 1.00% to 2.30%. 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. The AMPS are redeemable at the option of the Trust in whole or in part at a price of $100,000 per share plus accumulated and unpaid dividends. The Trust is subject to certain asset coverage tests, and the AMPS are subject to mandatory redemption if the tests are not met. 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. 23 VAN KAMPEN HIGH INCOME TRUST REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees and Shareholders of Van Kampen High Income Trust We have audited the accompanying statement of assets and liabilities of Van Kampen High Income Trust (the "Trust"), including the portfolio of investments, as of December 31, 2004, 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. The Fund's financial highlights for the periods ended prior to December 31, 2000, were audited by other auditors whose report, dated February 10, 2000, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with 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. An audit includes 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 Fund'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, 2004, by correspondence with the Trust's custodian. 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 High Income Trust as of December 31, 2004, 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 11, 2005 24 VAN KAMPEN HIGH INCOME TRUST DIVIDEND REINVESTMENT PLAN The Trust offers a Dividend Reinvestment Plan (the "Plan") in which Common Shareholders may elect to have dividends and capital gains distributions automatically reinvested in Common Shares of the Trust. The service is entirely voluntary and you may join or withdraw at any time. HOW TO PARTICIPATE If you wish to elect to participate in the Plan and your shares are held in your own name, call 1-800-341-2929 for more information and a brochure. If your shares are held in the name of a brokerage firm, bank, or other nominee, you should contact your nominee to see if it would participate in the Plan on your behalf. If you wish to participate in the Plan, but your brokerage firm, bank, or nominee is unable to participate on your behalf, you should request that your shares be re-registered in your own name which will enable your participation in the Plan. HOW THE PLAN WORKS State Street Bank and Trust Company, as your Plan Agent, serves as agent for the Common Shareholders in administering the Plan. After the Trust declares a dividend or determines to make a capital gains distribution, the Plan Agent will, as agent for the participants, receive the cash payment and use it to buy Common Shares in the open market, on the New York Stock Exchange or elsewhere, for the participants' accounts. The Trust will not issue any new Common Shares in connection with the Plan. All reinvestments are in full and fractional Common Shares, carried to three decimal places. Experience under the Plan may indicate that changes are desirable. Accordingly, the Trust reserves the right to amend or terminate the Plan as applied to any dividend or capital gains distribution paid subsequent to written notice of the change sent to all Common Shareholders of the Trust at least 90 days before the record date for the dividend or distribution. The Plan also may be amended or terminated by the Plan Agent, with the written consent of the Trust, by providing at least 90 days written notice to all Participants in the Plan. COSTS OF THE PLAN The Plan Agent's fees for the handling of the reinvestment of dividends and distributions will be paid by the Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent's open market purchases in connection with the reinvestment of dividends and distributions. No other charges will be made to participants for reinvesting dividends or capital gains distributions, except for certain brokerage commissions, as described above. 25 VAN KAMPEN HIGH INCOME TRUST DIVIDEND REINVESTMENT PLAN continued TAX IMPLICATIONS You will receive tax information annually for your personal records and to help you prepare your federal income tax return. The automatic reinvestment of dividends and capital gains distributions does not relieve you of any income tax which may be payable on dividends or capital gains distributions. RIGHT TO WITHDRAW You may withdraw from the Plan at any time by calling 1-800-341-2929 or by writing State Street Bank and Trust Company. If you withdraw, you will receive, without charge, a share certificate issued in your name for all full Common Shares credited to your account under the Plan, and a cash payment will be made for any fractional Common Share credited to your account under the Plan. You may again elect to participate in the Plan at any time by calling 1-800-341-2929 or writing to the Trust at: 2800 Post Oak Blvd. Houston, TX 77056 Attn: Closed-End Funds 26 VAN KAMPEN HIGH INCOME TRUST BOARD OF TRUSTEES AND IMPORTANT ADDRESSES BOARD OF TRUSTEES DAVID C. ARCH JERRY D. CHOATE ROD DAMMEYER LINDA HUTTON HEAGY R. CRAIG KENNEDY HOWARD J KERR MITCHELL M. MERIN* JACK E. NELSON RICHARD F. POWERS, III* HUGO F. SONNENSCHEIN WAYNE W. WHALEN* - Chairman SUSAN H. WOOLSEY INVESTMENT ADVISER VAN KAMPEN ASSET MANAGEMENT 1221 Avenue of the Americas New York, New York 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 LLP 333 West Wacker Drive Chicago, Illinois 60606 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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. 27 VAN KAMPEN HIGH INCOME TRUST TRUSTEE AND OFFICER INFORMATION 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 Inc. ("Van Kampen Investments"), Van Kampen Asset Management (the "Adviser"), Van Kampen Funds Inc. (the "Distributor"), Van Kampen Advisors Inc., Van Kampen Exchange Corp. and Van Kampen Investor Services Inc. ("Investor Services"). The term "Fund Complex" includes each of the investment companies advised by the Adviser or its affiliates as of the date of this Statement of Additional Information. Trustees serve until reaching their retirement age 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 (59) Trustee Trustee Chairman and Chief 83 Trustee/Director/Managing Blistex Inc. since 1988 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 (66) Trustee Trustee Prior to January 1999, 81 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.
28
VAN KAMPEN HIGH INCOME TRUST TRUSTEE AND OFFICER INFORMATION 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 (64) Trustee Trustee President of CAC, L.L.C., 83 Trustee/Director/Managing CAC, L.L.C. since 1988 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 and the distributor of wire, University of Chicago cable and communications Hospitals and Health connectivity products. Systems. Prior to January Prior to July 2000, 2004, Director of Managing Partner of TeleTech Holdings Inc. Equity Group Corporate and Arris Group, Inc. Investment (EGI), a Prior to May 2002, company that makes Director of Peregrine private investments in Systems Inc. Prior to other companies. 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).
29
VAN KAMPEN HIGH INCOME TRUST TRUSTEE AND OFFICER INFORMATION 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 (56) Trustee Trustee Managing Partner of 81 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 1992, Executive Vice President of La Salle National Bank. R. Craig Kennedy (52) Trustee Trustee Director and President of 81 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 (69) Trustee Trustee Prior to 1998, President 83 Trustee/Director/Managing 736 North Western Avenue since 1992 and Chief Executive General Partner of funds P.O. Box 317 Officer of Pocklington in the Fund Complex. Lake Forest, IL 60045 Corporation, Inc., an Director of the Lake investment holding Forest Bank & Trust. company. Director of the Marrow Foundation.
30
VAN KAMPEN HIGH INCOME TRUST TRUSTEE AND OFFICER INFORMATION 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 (68) Trustee Trustee President of Nelson 81 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 (64) Trustee Trustee President Emeritus and 83 Trustee/Director/Managing 1126 E. 59th Street since 1994 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. Trustee Trustee Chief Communications 81 Trustee/Director/Managing (63) since 2003 Officer of the National General Partner of funds 815 Cumberstone Road Academy of in the Fund Complex. Harwood, MD 20776 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.
31 VAN KAMPEN HIGH INCOME TRUST TRUSTEE AND OFFICER INFORMATION continued INTERESTED 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 Mitchell M. Merin* (51) Trustee, Trustee President and Chief 81 Trustee/Director/Managing 1221 Avenue of the Americas President since Executive Officer of General Partner of funds New York, NY 10020 and Chief 2003; funds in the Fund in the Fund Complex. Executive President Complex. Chairman, Officer and Chief President, Chief Executive Executive Officer and Officer Director of the Adviser since 2002 and Van Kampen Advisors Inc. since December 2002. Chairman, President and Chief Executive Officer of Van Kampen Investments since December 2002. Director of Van Kampen Investments since December 1999. Chairman and Director of Van Kampen Funds Inc. since December 2002. President, Director and Chief Operating Officer of Morgan Stanley Investment Management since December 1998. President and Director since April 1997 and Chief Executive Officer since June 1998 of Morgan Stanley Investment Advisors Inc. and Morgan Stanley Services Company Inc. Chairman, Chief Executive Officer and Director of Morgan Stanley Distributors Inc. since June 1998. Chairman since June 1998, and Director since January 1998 of Morgan Stanley Trust. Director of various Morgan Stanley subsidiaries. President of the Morgan Stanley Funds since May 1999. Previously Chief Executive Officer of Van Kampen Funds Inc. from December 2002 to July 2003, Chief Strategic Officer of Morgan Stanley Investment Advisors Inc. and Morgan Stanley Services Company Inc. and Executive Vice President of Morgan Stanley Distributors Inc. from April 1997 to June 1998. Chief Executive Officer from September 2002 to April 2003 and Vice President from May 1997 to April 1999 of the Morgan Stanley Funds.
32
VAN KAMPEN HIGH INCOME TRUST TRUSTEE AND OFFICER INFORMATION 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 Richard F. Powers, III* (58) Trustee Trustee Advisory Director of 83 Trustee/Director/Managing 1 Parkview Plaza since 1999 Morgan Stanley. Prior to General Partner of funds P.O. Box 5555 December 2002, Chairman, in the Fund Complex. Oakbrook Terrace, IL 60181 Director, President, Chief Executive Officer and Managing Director of Van Kampen Investments and its investment advisory, distribution and other subsidiaries. Prior to December 2002, President and Chief Executive Officer of funds in the Fund Complex. Prior to May 1998, Executive Vice President and Director of Marketing at Morgan Stanley and Director of Dean Witter, Discover & Co. and Dean Witter Realty. Prior to 1996, Director of Dean Witter Reynolds Inc. Wayne W. Whalen* (65) Trustee Trustee Partner in the law firm 83 Trustee/Director/Managing 333 West Wacker Drive since 1988 of Skadden, Arps, Slate, General Partner of funds Chicago, IL 60606 Meagher & Flom LLP, legal in the Fund Complex. counsel to funds in the Fund Complex.
* Such trustee is an "interested person" (within the meaning of Section 2(a)(19) of the 1940 Act). Messrs. Merin and Powers are interested persons of funds in the Fund Complex and the Adviser by reason of their current or former positions with Morgan Stanley or its affiliates. Mr. Whalen is an interested person 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. 33 VAN KAMPEN HIGH INCOME TRUST TRUSTEE AND OFFICER INFORMATION 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 Stefanie V. Chang (38) Vice President Officer Executive Director of Morgan Stanley Investment Management. 1221 Avenue of the Americas and Secretary since 2003 Vice President of funds in the Fund Complex. New York, NY 10020 Amy R. Doberman (42) 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 as of August 2004. Previously, Managing Director and General Counsel of Americas, UBS Global Asset Management from July 2000 to July 2004 and General Counsel of Aeitus Investment Management, Inc. from January 1997 to July 2000. James W. Garrett (36) Chief Financial Officer Officer Executive Director of Morgan Stanley Investment Management. 1221 Avenue of the Americas and Treasurer since 2005 Chief Financial Officer and Treasurer of the Morgan Stanley New York, NY 10020 Institutional Funds since 2002 and funds in the Fund Complex since January 2005. Joseph J. McAlinden (62) Executive Vice Officer Managing Director and Chief Investment Officer of Morgan 1221 Avenue of the Americas President and Chief since 2002 Stanley Investment Advisors Inc., and Morgan Stanley New York, NY 10020 Investment Officer Investment Management Inc. and Director of Morgan Stanley 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.
34
VAN KAMPEN HIGH INCOME TRUST TRUSTEE AND OFFICER INFORMATION 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 Ronald E. Robison (66) Executive Vice Officer Principal Executive Officer of funds in the Fund Complex 1221 Avenue of the Americas President and since 2003 since May 2003. Chief Executive Officer and Chairman of New York, NY 10020 Principal Executive Investor Services. Executive Vice President and Principal Officer Executive Officer of funds in the Fund Complex. Managing Director of Morgan Stanley. Chief Administrative Officer, Managing Director and Director of Morgan Stanley Investment Advisors Inc., Morgan Stanley Services Company Inc. and Managing Director and Director of Morgan Stanley Distributors 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 and Managing Director of Morgan Stanley Investment Management Inc. John L. Sullivan (49) Chief Compliance Officer Chief Compliance Officer of funds in the Fund Complex since 1 Parkview Plaza Officer since 1998 August 2004. Director and Managing Director of Van Kampen Oakbrook Terrace, IL 60181 Investments, the Adviser, Van Kampen Advisors Inc. and certain other subsidiaries of Van Kampen Investments. Prior August 2004, Vice President, Chief Financial Officer and Treasurer of funds in the Fund Complex and head of Fund Accounting for Morgan Stanley Investment Management. Prior to December 2002, Executive Director of Van Kampen Investments, the Adviser and Van Kampen Advisors Inc.
35 VAN KAMPEN 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. 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, (continued on back) VAN KAMPEN AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY continued 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 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. The Statement of Additional Information includes additional information about Fund trustees and is available, without charge, upon request by calling 1-800-847-2424. Van Kampen Funds Inc. 1 Parkview Plaza, P.O. Box 5555 Oakbrook Terrace, IL 60181-5555 www.vankampen.com Copyright (C)2004 Van Kampen Funds Inc. All rights reserved. Member NASD/SIPC. 920, 911, 104 VIT ANR 3/05 RN05-00263P-Y12/04 (VAN KAMPEN INVESTMENTS LOGO) 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 February 2005. Both editions of Exhibit B are attached. (d) Not applicable. (e) Not applicable. (f) (1) The Trust's Code of Ethics is attached hereto as Exhibit 11A. (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........................ $42,130 N/A NON-AUDIT FEES AUDIT-RELATED FEES...... $750(2) $198,000(3) TAX FEES................... $1550(4) $0 ALL OTHER FEES........... $0 $0 TOTAL NON-AUDIT FEES.......... $2,300 $198,000 TOTAL.............................. $44,430 $198,000 2003 REGISTRANT COVERED ENTITIES(1) AUDIT FEES........................ $38,135 N/A NON-AUDIT FEES AUDIT-RELATED FEES..... $3,000(2) $230,000(3) TAX FEES.................. $1,500(4) $0 ALL OTHER FEES........... $0 $0 TOTAL NON-AUDIT FEES......... $4,500 $230,000 TOTAL.............................. $42,635 $230,000
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 agreed upon procedures provided that are reasonably related to the performance of the audit of the financial statements of the Registrant. (3) 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. (4) 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: I. POLICY STATEMENT Introduction - Morgan Stanley Investment Management's ("MSIM") policies and procedures for voting proxies 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 the authority to vote their proxies. The policies and procedures and general guidelines in this section will be reviewed and, as necessary, updated periodically to address new or revised proxy voting issues. The MSIM entities covered by these policies and procedures currently include the following: Morgan Stanley Investment Advisors Inc., Morgan Stanley Alternative Investment Partners, L.P., Morgan Stanley AIP GP LP, Morgan Stanley Investment Management Inc., Morgan Stanley Investment Group 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 Investments LP, Morgan Stanley Hedge Fund Partners GP LP, Morgan Stanley Hedge Fund Partners LP, Van Kampen Investment Advisory Corp., Van Kampen Asset Management Inc., and Van Kampen Advisors Inc. (each a "MSIM Affiliate" and collectively referred to as the "MSIM Affiliates"). Each MSIM Affiliate will 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 as the "MSIM Funds"), each MSIM Fund will vote proxies pursuant to authority granted under its applicable investment advisory agreement or, in the absence of such authority, as authorized by its Board of Directors or Trustees. 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 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 we 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 statement of 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 - To assist the MSIM Affiliates in their responsibility for voting proxies and the overall global proxy voting process, Institutional Shareholder Services ("ISS") and the Investor Responsibility Research Center ("IRRC") have been retained as experts in the proxy voting and corporate governance area. ISS and IRRC 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 to MSIM Affiliates include in-depth research, global issuer analysis, and voting 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 proxy research services. Voting Proxies for certain Non-US 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-US 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, consistent with the Client Proxy Standard. ISS has been retained to provide assistance to the MSIM Affiliates in connection with voting their clients' non-US 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) these Proxy Voting Policies and Procedures, 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 vote in a manner that is contrary to the following general guidelines, pursuant to the procedures set forth in Section IV. below, provided the vote is consistent with the Client Proxy Standard. III. GUIDELINES A. MANAGEMENT PROPOSALS 1. When voting on routine ballot items the following proposals are generally voted in support of management, subject to the review and approval of the Proxy Review Committee, as appropriate. o Selection or ratification of auditors. o Approval of financial statements, director and auditor reports. o Election of Directors. o Limiting Directors' liability and broadening indemnification of Directors. o Requirement that a certain percentage (up to 66 2/3%) of its Board's members be comprised of independent and unaffiliated Directors. o Requirement that members of the company's compensation, nominating and audit committees be comprised of independent or unaffiliated Directors. o Recommendations to set retirement ages or require specific levels of stock ownership by Directors. o General updating/corrective amendments to the charter. o Elimination of cumulative voting. o Elimination of preemptive rights. o Provisions for confidential voting and independent tabulation of voting results. o 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. The following non-routine proposals, which potentially may have a substantive financial or best interest impact on a shareholder, are generally voted in support of management, subject to the review and approval of the Proxy Review Committee, as appropriate. Capitalization changes o Capitalization changes that eliminate other classes of stock and voting rights. o 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. o Proposals to create a new class of preferred stock or for issuances of preferred stock up to 50% of issued capital. o Proposals for share repurchase plans. o Proposals to reduce the number of authorized shares of common or preferred stock, or to eliminate classes of preferred stock. o Proposals to effect stock splits. o 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 will generally be approved if the resulting increase in authorized shares coincides with the proxy guidelines set forth above for common stock increases. Compensation o Director fees, provided the amounts are not excessive relative to other companies in the country or industry. o 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. o Establishment of Employee Stock Option Plans and other employee ownership plans. Anti-Takeover Matters o Modify or rescind existing supermajority vote requirements to amend the charters or bylaws. o Adoption of anti-greenmail provisions provided that the proposal: (i) defines greenmail; (ii) prohibits buyback offers to large block holders 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. The following non-routine proposals, which potentially may have a substantive financial or best interest impact on the shareholder, are generally voted against (notwithstanding management support), subject to the review and approval of the Proxy Review Committee, as appropriate. o Capitalization changes that add classes of stock which substantially dilute the voting interests of existing shareholders. o Proposals to increase the authorized number of shares of existing classes of stock that carry preemptive rights or supervoting rights. o Creation of "blank check" preferred stock. o Changes in capitalization by 100% or more. o Compensation proposals that allow for discounted stock options that have not been offered to employees in general. o Amendments to bylaws that would require a supermajority shareholder vote to pass or repeal certain provisions. o Proposals to indemnify auditors. 4. The following types of non-routine proposals, which potentially may have a potential financial or best interest impact on an issuer, are voted as determined by the Proxy Review Committee. Corporate Transactions o 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, ISS and IRRC research and analysis will be used along with MSIM Affiliates' research and analysis, based on, among other things, MSIM internal company-specific knowledge. o 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. o Shareholders rights plans that allow appropriate offers to shareholders to be blocked by the board or trigger provisions that prevent legitimate offers from proceeding. o Executive/Director stock option plans. Generally, stock option plans should meet the following criteria: (i) Whether the stock option plan is incentive based; (ii) For mature companies, should be no more than 5% of the issued capital at the time of approval; (iii) For growth companies, should be no more than 10% of the issued capital at the time of approval. Anti-Takeover Provisions o Proposals requiring shareholder ratification of poison pills. o Anti-takeover and related provisions that serve to prevent the majority of shareholders from exercising their rights or effectively deter the appropriate tender offers and other offers. B. SHAREHOLDER PROPOSALS 1. The following shareholder proposals are generally supported, subject to the review and approval of the Proxy Review Committee, as appropriate: o Requiring auditors to attend the annual meeting of shareholders. o Requirement that members of the company's compensation, nominating and audit committees be comprised of independent or unaffiliated Directors. o Requirement that a certain percentage of its Board's members be comprised of independent and unaffiliated Directors. o Confidential voting. o Reduction or elimination of supermajority vote requirements. 2. The following shareholder proposals will be voted as determined by the Proxy Review Committee. o Proposals that limit tenure of directors. o Proposals to limit golden parachutes. o Proposals requiring directors to own large amounts of stock to be eligible for election. o Restoring cumulative voting in the election of directors. o Proposals that request or require disclosure of executive compensation in addition to the disclosure required by the Securities and Exchange Commission ("SEC") regulations. o Proposals that limit retirement benefits or executive compensation. o Requiring shareholder approval for bylaw or charter amendments. o Requiring shareholder approval for shareholder rights plan or poison pill. o Requiring shareholder approval of golden parachutes. o Elimination of certain anti-takeover related provisions. o Prohibit payment of greenmail. 3. The following shareholder proposals are generally not supported, subject to the review and approval of the Committee, as appropriate. o Requirements that the issuer 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. o Restrictions related to social, political or special interest issues that impact the ability of the company to do business or be competitive and that have a significant financial or best interest impact to the shareholders. o Proposals that require inappropriate endorsements or corporate actions. IV. ADMINISTRATION OF PROXY POLICIES AND PROCEDURES A. PROXY REVIEW COMMITTEE 1. The MSIM Proxy Review Committee ("Committee") is responsible for creating and implementing MSIM's Proxy Voting Policy and Procedures and, in this regard, has expressly adopted them. Following are some of the functions and responsibilities of the Committee. (a) The Committee, which will consist of members designated by MSIM's Chief Investment Officer, is responsible for establishing MSIM's proxy voting policies and guidelines 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 MSIM's proxy voting policies and guidelines (as expressed in these Proxy Voting Policy and Procedures) 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 MSIM's Proxy Voting Policy and Procedures; and (2) generally review proposals at upcoming shareholder meetings of MSIM portfolio companies in accordance with this Policy and Procedures 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 Proxy Voting Policy and Procedures (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 Procedures); (2) review and approve upcoming votes, as appropriate, for matters for which specific direction has been provided in Sections I, II, and III above; and (3) determine how to vote matters for which specific direction has not been provided in Sections I, II and III above. Split votes will generally not be approved within a single Global Investor Group team. The Committee may take into account ISS recommendations and the research provided by IRRC as well as any other relevant information they may request or receive. (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 designate a special committee to review, and recommend a course of action with respect to, the conflict(s) in question ("Special Committee"). The Special Committee may request the assistance of the Law and Compliance Departments and will have sole discretion to cast a vote. In addition to the research provided by ISS and IRRC, 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. The Committee and Special Committee, or their designee(s), will timely communicate to applicable PMs, 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. Item 8. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not Applicable. Item 9. Submission of Matters to a Vote of Security Holders. Not Applicable. Item 10. 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 11. Exhibits. (a) The Code of Ethics for Principal Executive and Senior Financial Officers is attached hereto. (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 High Income Trust By: /s/ Ronald E. Robison --------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: February 17, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Ronald E. Robison --------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: February 17, 2005 By: /s/ James W. Garrett -------------------- Name: James W. Garrett Title: Principal Financial Officer Date: February 17, 2005 EX-99.CODE 2 c91097exv99wcode.txt CODE OF ETHICS CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS ADOPTED JULY 23, 2003, AS AMENDED SEPTEMBER 22, 2004 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: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. o 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; o compliance with applicable laws and governmental rules and regulations; o prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o 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: o 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); o 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 o 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: o service or significant business relationships as a director on the board of any public or private company; o 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; o 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 o 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 o Each Covered Officer should familiarize himself/herself with the disclosure and compliance requirements generally applicable to the Funds; o 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; o 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 o 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: o 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; o annually thereafter affirm to the Boards that he has complied with the requirements of the Code; o 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 o 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: o the General Counsel will take all appropriate action to investigate any potential violations reported to him; o if, after such investigation, the General Counsel believes that no violation has occurred, the General Counsel is not required to take any further action; o any matter that the General Counsel believes is a violation will be reported to the relevant Fund's Audit Committee; o 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 - --------- (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." recommendation to dismiss the Covered Officer or other appropriate disciplinary actions; o the Independent Directors/Trustees/Managing General Partners of the relevant Fund will be responsible for granting waivers of this Code, as appropriate; and o 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 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 Mitchell M. Merin -- President Ronald E. Robison -- Executive Vice President and Principal Executive Officer James M. Dykas -- Chief Financial Officer and Treasurer EXHIBIT B (REVISED FEBRUARY 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 C GENERAL COUNSEL'S DESIGNEE Amy Doberman EX-99.CERT 3 c91097exv99wcert.txt CERTIFICATION I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-CSR of Van Kampen High Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: February 17, 2005 /s/ Ronald E. Robison --------------------- Principal Executive Officer I, James W. Garrett, certify that: 1. I have reviewed this report on Form N-CSR of Van Kampen High Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: February 17, 2005 /s/ James W. Garrett -------------------- Principal Financial Officer EX-99.906CERT 4 c91097exv99w906cert.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 High Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended December 31, 2004 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 17, 2005 /s/ Ronald E. Robison --------------------- Ronald E. Robison Principal Executive Officer Asigned original of this written statement required by Section 906 has been provided to Van Kampen High Income Trust and will be retained by Van Kampen High 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 High Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended December 31, 2004 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 17, 2005 /s/ James W. Garrett -------------------- James W. Garrett Principal Financial Officer A signed original of this written statement required by Section 906 has been provided to Van Kampen High Income Trust and will be retained by Van Kampen High 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-----