-----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, JBtxuKpVIbamIAJgCe12N+RYzJyzZoSUKb6NcbOGJ7oXWQCSvTlqxlx1qIfzoWjH jqxaqrVpD+cAyUrlYr99xQ== 0000950137-05-008021.txt : 20050628 0000950137-05-008021.hdr.sgml : 20050628 20050628133354 ACCESSION NUMBER: 0000950137-05-008021 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050430 FILED AS OF DATE: 20050628 DATE AS OF CHANGE: 20050628 EFFECTIVENESS DATE: 20050628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST CENTRAL INDEX KEY: 0000889518 IRS NUMBER: 367006143 STATE OF INCORPORATION: PA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-06732 FILM NUMBER: 05919763 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 ADVANTAGE PENNSYLVANIA DATE OF NAME CHANGE: 19960102 FORMER COMPANY: FORMER CONFORMED NAME: VAN KAMPEN MERRITT ADVANTAGE PENNSYLVANIA MUNICIPAL INC TRUS DATE OF NAME CHANGE: 19920929 N-CSRS 1 c95569nvcsrs.txt SEMIANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSRS CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-6732 Van Kampen Advantage Pennsylvania Municipal 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: 10/31 Date of reporting period: 4/30/05 Item 1. Reports to Shareholders. The Trust's semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows: Welcome, Shareholder In this report, you'll learn about how your investment in Van Kampen Advantage Pennsylvania Municipal Income Trust performed during the semiannual period. The portfolio management team will provide an overview of the market conditions and discuss some of the factors that affected investment performance during the reporting period. In addition, this report includes the trust's financial statements and a list of trust investments as of April 30, 2005. MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO PASS. THERE IS NO ASSURANCE THAT THE TRUST WILL ACHIEVE ITS INVESTMENT OBJECTIVE. 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 TRUST SHARES MAY THEREFORE BE LESS THAN WHAT YOU PAID FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS TRUST. INCOME MAY SUBJECT CERTAIN INDIVIDUALS TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT).
--------------------------------------------------------------------------------------- NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE --------------------------------------------------------------------------------------- NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT ---------------------------------------------------------------------------------------
Performance Summary as of 4/30/05
ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST SYMBOL: VAP - ------------------------------------------------------------ AVERAGE ANNUAL BASED ON BASED ON TOTAL RETURNS NAV MARKET PRICE Since Inception (9/25/92) 7.86% 6.49% 10-year 7.71 7.40 5-year 9.23 8.25 1-year 10.54 6.67 6-month 2.55 -5.04 - ------------------------------------------------------------
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 Lehman Brothers Pennsylvania Municipal Bond Index is a broad-based statistical composite of Pennsylvania municipal bonds. 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 6-MONTH PERIOD ENDED APRIL 30, 2005 Van Kampen Advantage Pennsylvania Municipal Income Trust is managed by the Adviser's Municipal Fixed Income team.(1) Current members include Dennis Pietrzak and John Reynoldson, Executive Directors of the Adviser; and Robert Wimmel, Vice President of the Adviser. MARKET CONDITIONS The six-month period ended April 30, 2005, was characterized by continued short-term interest rate increases. As crude oil prices reached record highs, the prospect of rising inflation also cast a shadow. The Federal Open Market Committee (the "Fed") raised the federal funds target rate 100 basis points during the period through a series of four, "measured" 0.25 percent tightenings to 2.75 percent by the end of April. Although rates in the short and intermediate areas of the yield curve shifted upward as the Fed tightened, long- term interest rates fell as buyers did not seem deterred by the prospect of rising inflation. As a result, the yield curve (the difference between short and longer-term yields) flattened and the long end of the municipal market handily outperformed the shorter end. The municipal market in total posted positive returns during the period, though it was not uniformly strong. In contrast to the strong showing by longer-term bonds, shorter-term municipals were hampered by the Fed's tightening and turned in a flat to slightly negative showing. Within the investment-grade segment of the market, yield differentials between BBB-rated and AAA-rated municipal securities were slightly wider, though BBB-rated securities still outperformed high grades due to their higher coupons, while securities rated below investment grade strongly outperformed as investors sought out their higher yields. The Fed's interest rate hikes did not appear to dampen investors' appetites for municipal bonds, as net inflows into municipal bond funds topped $290 million during the period. The supply of new issues was modest during the closing months of 2004 (the first two months of the period) before soaring in the opening months of 2005 as long-term issuers rushed to bring securities to market in anticipation of additional interest rate increases in the near term. The most significant development in the Pennsylvania municipal market over the period was the ongoing trend of refundings of municipal securities by issuers. Municipal borrowers were able to take advantage of rising short-term rates and relatively stable long-term rates, which in turn allowed them to refund outstanding debt. As a result, the Pennsylvania market saw a wave of refinancings, especially in education-related sectors. (1)Team members may change without notice at any time. 2 PERFORMANCE ANALYSIS The trust's return can be calculated based upon either the market price or the net asset value (NAV) of its shares. NAV per share is determined by dividing the value of the trust's portfolio securities, cash and other assets, less all liabilities, by the total number of common shares outstanding, while market price reflects the supply and demand for the shares. As a result, the two returns can differ, as they did during the reporting period. On an NAV basis, the trust outperformed its benchmark index, the Lehman Brothers Pennsylvania Municipal Bond Index. On a market price basis, the trust underperformed its benchmark. TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2005
- ----------------------------------------------------------------------- BASED ON BASED ON LEHMAN BROTHERS NAV MARKET PRICE PENNSYLVANIA MUNICIPAL BOND INDEX 2.55% -5.04% 1.82% - -----------------------------------------------------------------------
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. The trust uses leverage to enhance its dividend to common shareholders. The trust borrows money at short-term rates through the issuance of preferred shares. The proceeds are reinvested in longer-term securities, taking advantage of the difference between short- and longer-term rates. The Fed's policy of raising interest rates throughout the period made the trust's borrowing activity more expensive. These expenses, however, were more than offset by the positive performance of the bonds in which the trust invested. One of our key strategies in managing the trust was to position it for rising interest rates. This approach was largely the result of our analysis of interest rates, which remained relatively low by historical standards even after rising from their multi-decade lows earlier. First, we kept the trust's duration (a measure of interest-rate sensitivity) below that of its benchmark. Second, to limit the trust's exposure to areas of the market that would be most likely susceptible to rising rates, we also trimmed the trust's shorter-maturity bonds. We reinvested the proceeds from those sales into bonds with premium coupons and maturities between 20 and 30 years. In addition to offering relatively attractive income streams, these securities positioned the trust to benefit from any future flattening of the yield curve. We kept the trust's exposure well diversified across the major sectors of the Pennsylvania municipal market. Much of our relative-value trading activity was focused on selling issues that had been pre-refunded, many of which were in the public education sector; and purchasing what we believed were more attractive securities in the public education sector. The trust remained focused 3 on investment-grade securities, with 100 percent of the portfolio rated BBB or higher at the end of the period. There is no guarantee the security sectors mentioned will continue to perform well or be held by the trust in the future. RATINGS ALLOCATIONS AS OF 4/30/05 TOP FIVE SECTORS AS OF 4/30/05 AAA/Aaa 75.4% Public Education 18.3% AA/Aa 8.9 Higher Education 18.0 A/A 9.4 Water & Sewer 16.8 BBB/Baa 6.3 Health Care 11.9 General Purpose 8.2
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 are as a percentage of total investments. Sectors are as a percentage of long-term investments. Securities are classified by sectors that represent broad groupings of related industries. 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. Rating allocations based upon ratings as issued by Standard and Poor's and Moody's, respectively. 4 FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS Each Van Kampen trust provides a complete schedule of portfolio holdings in its semiannual and annual reports within 60 days of the end of the trust's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semiannual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Van Kampen also delivers the semiannual and annual reports to trust shareholders, and makes these reports available on its public Web site, www.vankampen.com. In addition to the semiannual and annual reports that Van Kampen delivers to shareholders and makes available through the Van Kampen public Web site, each trust files a complete schedule of portfolio holdings with the SEC for the trust's first and third fiscal quarters on Form N-Q. Van Kampen does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Van Kampen public Web site. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's Web site, http://www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's e-mail address (publicinfo@sec.gov) or by writing the Public Reference section of the SEC, Washington, DC 20549-0102. You may obtain copies of a trust's fiscal quarter filings by contacting Van Kampen Client Relations at 1-800-847-2424. 5 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 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. 6 VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED)
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ------------------------------------------------------------------------------------------- MUNICIPAL BONDS 148.9% PENNSYLVANIA 147.4% $1,000 Allegheny Cnty, PA Higher Ed Bldg Carnegie Mellon Univ..................................... 5.125% 03/01/32 $ 1,045,360 1,500 Allegheny Cnty, PA Higher Ed Bldg Carnegie Mellon Univ..................................... 5.250 03/01/32 1,586,940 905 Allegheny Cnty, PA Residential Mtg Single Family Ser KK-2 (AMT) (GNMA Collateralized)............ 5.750 05/01/33 941,535 1,000 Allegheny Cnty, PA San Auth Swr (MBIA Insd)..... 5.750 12/01/13 1,128,150 1,830 Allegheny Cnty, PA San Auth Swr (Prerefunded @ 12/01/10) (MBIA Insd)........................... 5.750 12/01/18 2,070,810 2,000 Allegheny Cnty, PA San Auth Swr Rev (Prerefunded @ 12/01/10) (MBIA Insd)......................... 5.500 12/01/24 2,237,860 2,640 Bensalem Twp, PA Sch Dist (FGIC Insd) (a)....... 5.000 08/15/18 2,842,646 1,000 Bethlehem, PA Auth Wtr Gtd (FSA Insd)........... 5.000 11/15/19 1,083,550 1,150 Bucks Cnty, PA Wtr & Swr Rev Neshaminy Interceptor Ser A (AMBAC Insd) (a).............. 5.375 06/01/14 1,278,869 1,215 Bucks Cnty, PA Wtr & Swr Rev Neshaminy Interceptor Ser A (AMBAC Insd) (a).............. 5.375 06/01/15 1,344,811 785 Carbon Cnty, PA Indl Dev Auth Panther Creek Partn Proj Rfdg (AMT) (LOC: Paribas & Union Bk of CA Intl)..................................... 6.650 05/01/10 851,592 1,500 Central Dauphin, PA Sch Dist (FSA Insd)......... 5.000 12/01/19 1,618,170 5,000 Dauphin Cnty, PA Genl Auth Hosp Rev Hapsco Western PA Hosp Proj B Rfdg (Escrowed to Maturity) (MBIA Insd)........................... 6.250 07/01/16 5,827,450 1,000 Delaware Cnty, PA Auth College Neumann College Rfdg............................................ 6.000 10/01/31 1,052,910 1,500 Delaware Vly, PA Regl Fin Auth.................. 5.750 07/01/17 1,729,770 2,735 Exeter Twp, PA Sch Dist (FGIC Insd)............. 5.000 05/15/25 2,907,223 2,000 Greater Latrobe, PA Sch Auth (Prerefunded @ 04/01/12) (FGIC Insd)........................... 5.250 04/01/17 2,234,940 1,100 Harrisburg, PA Auth Res Gtd Sub Ser D-2 (FSA Insd)...................................... 5.000 12/01/33 1,197,779 1,345 Jenkintown, PA Sch Dist Ser A (FGIC Insd)....... 5.000 05/15/28 1,402,176 1,360 Lehigh Northampton PA Aprt Lehigh Vly Arpt Sys Ser A Rfdg (AMT) (MBIA Insd) (a)................ 5.000 01/01/22 1,414,386 675 Lehigh Northampton PA Arpt Lehigh Vly Arpt Sys Ser A Rfdg (AMT) (MBIA Insd).................... 5.000 01/01/23 700,387 1,000 Lycoming Cnty, PA Auth College Rev PA College of Technology (AMBAC Insd)......................... 5.350 07/01/26 1,072,570 2,500 Mercer Cnty, PA Indl Dev Auth Wtr Fac Philadelphia Sub Corp (AMT) (MBIA Insd)......... 6.000 07/01/30 2,759,000 1,255 Mifflin Cnty, PA Ser A (FGIC Insd) (b).......... 5.000 09/01/31 1,307,158 1,000 Monroe Cnty, PA Hosp Auth Rev Hosp Pocono Med Ctr............................................. 6.000 01/01/43 1,054,830 1,205 Monroeville, PA Muni Auth San Ser B (MBIA Insd)..................................... 5.250 12/01/18 1,327,139
See Notes to Financial Statements 7 VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ------------------------------------------------------------------------------------------- PENNSYLVANIA (CONTINUED) $1,350 Monroeville, PA Muni Auth San Ser B (MBIA Insd) (a)................................. 5.250% 12/01/20 $ 1,471,459 1,500 Montgomery Cnty, PA Higher Ed & Hlth Auth Hosp Rev Abington Mem Hosp Ser A..................... 5.125 06/01/32 1,520,745 1,000 Montgomery Cnty, PA Indl Dev Auth Rev Res Rec Montenay Proj Ser A (MBIA Insd)................. 5.250 11/01/14 1,120,880 1,000 Moon Area Sch Dist PA (FSA Insd)................ 5.000 11/15/25 1,067,480 2,385 Pennsylvania Hsg Fin Agy Single Family Mtg Ser 66A (AMT)................................... 5.650 04/01/29 2,496,427 2,000 Pennsylvania St Higher Ed Fac Auth Rev Drexel Univ..................................... 5.500 05/01/17 2,212,780 1,000 Pennsylvania St Higher Ed Fac Auth Rev La Salle Univ............................................ 5.500 05/01/34 1,046,950 1,000 Pennsylvania St Higher Ed Fac Auth Rev Thomas Jefferson....................................... 5.375 01/01/25 1,076,330 1,500 Pennsylvania St Higher Ed Fac Auth Rev Univ Sciences Philadelphia Ser A (XLCA Insd)......... 5.000 11/01/36 1,564,680 1,500 Pennsylvania St Higher Ed Fac Clarion Univ Fndtn Inc Ser A (XLCA Insd)........................... 5.250 07/01/18 1,623,000 1,500 Pennsylvania St Higher Ed Fac Clarion Univ Fndtn Inc Ser A (XLCA Insd)........................... 5.000 07/01/33 1,559,040 1,000 Pennsylvania St Higher Ed Fac Messiah College Ser AA3 (Radian Insd)........................... 5.500 11/01/22 1,083,990 1,560 Pennsylvania St Higher Ed Fac Philadelphia College Osteopathic Med (a)..................... 5.000 12/01/16 1,674,145 1,850 Pennsylvania St Higher Ed UPMC Hlth Sys Ser A... 6.000 01/15/31 2,035,740 3,015 Pennsylvania St Tpk Commn Ser T Rfdg (FGIC Insd)..................................... 5.500 12/01/10 3,362,810 1,970 Pennsylvania St Univ Rfdg....................... 5.250 03/01/18 2,164,774 1,500 Philadelphia, PA (FSA Insd)..................... 5.250 09/15/25 1,597,275 1,005 Philadelphia, PA Auth Indl Dev Amern College of Physicians...................................... 5.500 06/15/27 1,056,607 2,500 Philadelphia, PA Auth Indl Dev Philadelphia Arpt Sys Proj Ser A (AMT) (FGIC Insd)................ 5.250 07/01/28 2,572,750 4,250 Philadelphia, PA Gas Wks Rev 12th Ser B (Escrowed to Maturity) (MBIA Insd).............. 7.000 05/15/20 5,247,177 5,000 Pittsburgh & Allegheny Cnty, PA Pub Aud Regl Asset Dist Sales Tax (AMBAC Insd)............... 5.000 02/01/24 5,285,500 1,000 Pittsburgh, PA Pub Pkg Auth Rev Ser B (FGIC Insd)..................................... 5.000 12/01/23 1,066,190 2,500 Pittsburgh, PA Ser A (AMBAC Insd)............... 5.500 09/01/17 2,753,700 2,000 Pittsburgh, PA Ser A (Prerefunded @ 09/01/09) (FGIC Insd)..................................... 5.750 09/01/21 2,189,280 2,000 Pittsburgh, PA Wtr & Swr Rfdg (FGIC Insd)....... 6.500 09/01/13 2,379,720 1,000 Southcentral, PA Gen Auth Rev Wellspan Hlth Oblig (MBIA Insd)............................... 5.375 05/15/28 1,067,150
8 See Notes to Financial Statements VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE - ------------------------------------------------------------------------------------------- PENNSYLVANIA (CONTINUED) $ 685 State Pub Sch Bldg Auth PA Sch Conneaut Sch Dist (FGIC Insd)..................................... 5.250% 11/01/18 $ 756,610 1,220 State Pub Sch Bldg Auth PA Sch Conneaut Sch Dist (Prerefunded @ 11/01/13) (FGIC Insd)............ 5.250 11/01/18 1,375,123 1,205 State Pub Sch Bldg Auth PA Sch Tuscarora Sch Dist Proj (FSA Insd) (a)........................ 5.250 04/01/20 1,321,801 1,270 State Pub Sch Bldg Auth PA Sch Tuscarora Sch Dist Proj (FSA Insd) (a)........................ 5.250 04/01/21 1,393,101 1,500 Susquehanna Area Regl Arpt Auth PA Arpt Ser D... 5.375 01/01/18 1,539,210 1,850 Trinity Area Sch Dist PA (FGIC Insd)............ 5.250 11/01/20 2,040,568 1,285 Unity Twp, PA Muni Auth Swr Rev (FSA Insd)...... 5.000 12/01/24 1,369,694 1,500 West Shore, PA Area Hosp Auth Holy Spirit Hosp Proj............................................ 6.250 01/01/32 1,603,830 1,075 Wilson, PA Sch Dist Second Ser (FSA Insd)....... 5.375 05/15/16 1,188,198 ------------ 108,902,725 ------------ U. S. VIRGIN ISLANDS 1.5% 1,000 Virgin Islands Pub Fin Auth Rev Gross Rcpt Taxes Ln Nt Ser A (ACA Insd).......................... 6.125 10/01/29 1,119,510 ------------ TOTAL LONG-TERM INVESTMENTS 148.9% (Cost $102,068,218)....................................................... 110,022,235 SHORT-TERM INVESTMENTS 4.9% (Cost $3,600,000)......................................................... 3,600,000 ------------ TOTAL INVESTMENTS 153.8% (Cost $105,668,218)....................................................... 113,622,235 OTHER ASSETS IN EXCESS OF LIABILITIES 0.4%................................. 294,017 PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (54.2%)................. (40,029,099) ------------ NET ASSETS APPLICABLE TO COMMON SHARES 100.0%.............................. $ 73,887,153 ============
Percentages are calculated as a percentage of net assets applicable to common shares. (a) The Trust owns 100% of the bond issuance. (b) Security purchased on a when-issued or delayed delivery basis. ACA--American Capital Access AMBAC--AMBAC Indemnity Corp. AMT--Alternative Minimum Tax FGIC--Financial Guaranty Insurance Co. See Notes to Financial Statements 9 VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued FSA--Financial Security Assurance Inc. GNMA--Government National Mortgage Association LOC--Letter of Credit MBIA--Municipal Bond Investors Assurance Corp. Radian--Radian Asset Assurance XLCA--XL Capital Assurance Inc. 10 See Notes to Financial Statements VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST FINANCIAL STATEMENTS Statement of Assets and Liabilities April 30, 2005 (Unaudited) ASSETS: Total Investments (Cost $105,668,218)....................... $113,622,235 Cash........................................................ 72,404 Receivables: Interest.................................................. 1,771,984 Investments Sold.......................................... 85,000 Other....................................................... 316 ------------ Total Assets............................................ 115,551,939 ------------ LIABILITIES: Payables: Investments Purchased..................................... 1,286,551 Investment Advisory Fee................................... 51,051 Income Distributions--Common Shares....................... 13,345 Other Affiliates.......................................... 10,069 Trustees' Deferred Compensation and Retirement Plans........ 221,117 Accrued Expenses............................................ 53,554 ------------ Total Liabilities....................................... 1,635,687 Preferred Shares (including accrued distributions).......... 40,029,099 ------------ NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 73,887,153 ============ NET ASSET VALUE PER COMMON SHARE ($73,887,153 divided by 4,368,552 shares outstanding)....... $ 16.91 ============ NET ASSETS CONSIST OF: Common Shares ($.01 par value with an unlimited number of shares authorized, 4,368,552 shares issued and outstanding).............................................. $ 43,686 Paid in Surplus............................................. 64,233,585 Net Unrealized Appreciation................................. 7,954,017 Accumulated Net Realized Gain............................... 1,336,310 Accumulated Undistributed Net Investment Income............. 319,555 ------------ NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 73,887,153 ============ PREFERRED SHARES ($.01 par value, authorized 100,000,000 shares, 1,600 issued with liquidation preference of $25,000 per share)........................................ $ 40,000,000 ============ NET ASSETS INCLUDING PREFERRED SHARES....................... $113,887,153 ============
See Notes to Financial Statements 11 VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST FINANCIAL STATEMENTS continued Statement of Operations For the Six Months Ended April 30, 2005 (Unaudited) INVESTMENT INCOME: Interest.................................................... $ 2,667,858 ----------- EXPENSES: Investment Advisory Fee..................................... 310,160 Preferred Share Maintenance................................. 57,110 Legal....................................................... 17,738 Trustees' Fees and Related Expenses......................... 17,350 Custody..................................................... 6,407 Other....................................................... 64,336 ----------- Total Expenses.......................................... 473,101 ----------- NET INVESTMENT INCOME....................................... $ 2,194,757 =========== REALIZED AND UNREALIZED GAIN/LOSS: Net Realized Gain........................................... $ 1,336,161 ----------- Unrealized Appreciation/Depreciation: Beginning of the Period................................... 9,549,893 End of the Period......................................... 7,954,017 ----------- Net Unrealized Depreciation During the Period............... (1,595,876) ----------- NET REALIZED AND UNREALIZED LOSS............................ $ (259,715) =========== DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $ (413,023) =========== NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM OPERATIONS................................................ $ 1,522,019 ===========
12 See Notes to Financial Statements VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST FINANCIAL STATEMENTS continued Statements of Changes in Net Assets (Unaudited)
FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED APRIL 30, 2005 OCTOBER 31, 2004 ----------------------------------- FROM INVESTMENT ACTIVITIES: Operations: Net Investment Income.................................... $ 2,194,757 $ 4,527,804 Net Realized Gain........................................ 1,336,161 829,941 Net Unrealized Appreciation/Depreciation During the Period................................................. (1,595,876) 1,381,769 Distributions to Preferred Shareholders: Net Investment Income.................................. (351,514) (340,314) Net Realized Gain...................................... (61,509) (141,213) ----------- ----------- Change in Net Assets Applicable to Common Shares from Operations............................................. 1,522,019 6,257,987 Distributions to Common Shareholders: Net Investment Income.................................. (1,887,035) (4,293,918) Net Realized Gain...................................... (768,356) (1,876,119) ----------- ----------- NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM INVESTMENT ACTIVITIES.................................. (1,133,372) 87,950 NET ASSETS APPLICABLE TO COMMON SHARES: Beginning of the Period.................................. 75,020,525 74,932,575 ----------- ----------- End of the Period (Including accumulated undistributed net investment income of $319,555 and $363,347, respectively).......................................... $73,887,153 $75,020,525 =========== ===========
See Notes to Financial Statements 13 VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST FINANCIAL HIGHLIGHTS (UNAUDITED) THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
SIX MONTHS ENDED APRIL 30, ------------------ 2005 2004 2003 -------------------------------- NET ASSET VALUE, BEGINNING OF THE PERIOD................... $ 17.17 $ 17.15 $ 17.24 ------- ------- ------- Net Investment Income.................................... .50 1.03 1.11 Net Realized and Unrealized Gain/Loss.................... (.06) .51 .19 Common Share Equivalent of Distributions Paid to Preferred Shareholders: Net Investment Income.................................. (.08) (.08) (.08) Net Realized Gain...................................... (.01) (.03) (.02) ------- ------- ------- Total from Investment Operations........................... .35 1.43 1.20 Distributions Paid to Common Shareholders: Net Investment Income.................................. (.43) (.98) (1.09) Net Realized Gain...................................... (.18) (.43) (.20) ------- ------- ------- NET ASSET VALUE, END OF THE PERIOD......................... $ 16.91 $ 17.17 $ 17.15 ======= ======= ======= Common Share Market Price at End of the Period............. $ 14.50 $ 15.90 $ 16.23 Total Return (a)........................................... -5.04%* 6.95% 6.54% Net Assets Applicable to Common Shares at End of the Period (In millions)............................................ $ 73.9 $ 75.0 $ 74.9 Ratio of Expenses to Average Net Assets Applicable to Common Shares (b)........................................ 1.29% 1.43% 1.43% Ratio of Net Investment Income to Average Net Assets Applicable to Common Shares (b).......................... 6.00% 6.13% 6.40% Portfolio Turnover......................................... 10%* 8% 31% SUPPLEMENTAL RATIOS: Ratio of Expenses to Average Net Assets Including Preferred Shares (b)............................................... .84% .93% .93% Ratio of Net Investment Income to Average Net Assets Applicable to Common Shares (c).......................... 5.04% 5.67% 5.95% SENIOR SECURITIES: Total Preferred Shares Outstanding......................... 1,600 1,600 1,600 Asset Coverage Per Preferred Share (d)..................... $71,198 $71,912 $71,846 Involuntary Liquidating Preference Per Preferred Share..... $25,000 $25,000 $25,000 Average Market Value Per Preferred Share................... $25,000 $25,000 $25,000
* Non-Annualized (a)Total return assumes an investment at the common share market price at the beginning of the period indicated, reinvestment of all distributions for the period in accordance with the Trust's dividend reinvestment plan, and sale of all shares at the closing common share market price at the end of the period indicated. (b)Ratios do not reflect the effect of dividend payments to preferred shareholders. (c)Ratios reflect the effect of dividend payments to preferred shareholders. (d)Calculated by subtracting the Trust's total liabilities (not including the preferred shares) from the Trust's total assets and dividing this by the number of preferred shares outstanding. (e)As required, effective November 1, 2001, the Trust has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on fixed income securities. The effect of this change for the year ended October 31, 2002 was to increase net investment income per share by less than $.01, decrease net realized and unrealized gains and losses per share by less than $.01 and increase the ratio of net investment income to average net assets by .02%. Per share, ratios and supplemental data for periods prior to October 31, 2002 have not been restated to reflect this change in presentation. 14
Year Ended October 31, - ---------------------------------------------------------------------------------------- 2002 (e) 2001 2000 1999 1998 1997 1996 1995 - ---------------------------------------------------------------------------------------- $ 17.28 $ 16.40 $ 16.18 $ 17.66 $ 17.23 $ 16.72 $ 16.69 $ 14.63 ------- ------- -------- ------- -------- -------- -------- -------- 1.19 1.21 1.27 1.24 1.24 1.25 1.24 1.25 .08 1.15 .28 (1.46) .47 .54 .04 2.06 (.12) (.25) (.37) (.30) (.32) (.32) (.32) (.36) (.03) (.09) -0- -0- -0- -0- -0- -0- ------- ------- -------- ------- -------- -------- -------- -------- 1.12 2.02 1.18 (.52) 1.39 1.47 .96 2.95 (1.05) (.93) (.96) (.96) (.96) (.96) (.93) (.89) (.11) (.21) -0- -0- -0- -0- -0- -0- ------- ------- -------- ------- -------- -------- -------- -------- $ 17.24 $ 17.28 $ 16.40 $ 16.18 $ 17.66 $ 17.23 $ 16.72 $ 16.69 ======= ======= ======== ======= ======== ======== ======== ======== $ 16.45 $ 15.75 $14.9375 $14.625 $ 17.25 $16.4375 $ 15.125 $ 14.00 11.96% 13.31% 9.10% -10.14% 11.03% 15.38% 14.85% 23.03% $ 75.3 $ 75.4 $ 71.5 $ 70.6 $ 77.0 $ 75.2 $ 72.9 $ 72.8 1.50% 1.71% 1.78% 1.69% 1.67% 1.70% 1.77% 1.77% 7.02% 7.12% 7.89% 7.22% 7.11% 7.41% 7.48% 7.96% 19% 17% 31% 7% 3% 2% 2% 9% .97% 1.10% 1.13% 1.10% 1.10% 1.10% 1.14% 1.12% 6.32% 5.70% 5.59% 5.45% 5.25% 5.48% 5.52% 5.68% 1,600 1,600 1,600 1,600 800 800 800 800 $72,101 $72,107 $ 69,704 $69,097 $146,292 $143,968 $141,175 $141,025 $25,000 $25,000 $ 25,000 $25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $25,000 $25,000 $ 25,000 $25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
See Notes to Financial Statements 15 VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES Van Kampen Advantage Pennsylvania Municipal Income Trust (the "Trust") is registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended. The Trust's investment objective is to seek to provide a high level of current income exempt from federal and Pennsylvania income taxes and, where possible under local law, local income and personal property taxes, consistent with preservation of capital. The Trust will invest substantially all of its assets in Pennsylvania municipal securities rated investment grade at the time of investment. The Trust commenced investment operations on September 25, 1992. The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. A. SECURITY VALUATION Municipal bonds are valued by independent pricing services or dealers using the mean of the bid and asked prices or, in the absence of market quotations, at fair value based upon yield data relating to municipal bonds with similar characteristics and general market conditions. Securities which are not valued by independent pricing services or dealers are valued at fair value using procedures established in good faith by the Board of Trustees. Short-term securities with remaining maturities of 60 days or less are valued at amortized cost, which approximates market value. B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses are determined on an identified cost basis. The Trust may purchase and sell securities on a "when-issued" or "delayed delivery" basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Trust will segregate assets with the custodian having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made. At April 30, 2005, the Trust had $1,286,551 of when-issued and delayed delivery purchase commitments. C. INVESTMENT INCOME Interest income is recorded on an accrual basis. Bond premium is amortized and discount is accreted over the expected life of each applicable security. D. FEDERAL INCOME TAXES It is the Trust's policy to comply with the requirements of 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. 16 VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued At April 30, 2005, the cost and related gross unrealized appreciation and depreciation are as follows: Cost of investments for tax purposes........................ $105,596,584 ============ Gross tax unrealized appreciation........................... $ 8,036,599 Gross tax unrealized depreciation........................... (10,948) ------------ Net tax unrealized appreciation on investments.............. $ 8,025,651 ============
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 on a pro rata basis to common and preferred shareholders. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income for tax purposes. The tax character of distributions paid during the year ended October 31, 2004 was as follows: Distributions paid from: Ordinary income........................................... $ 155,669 Long-term capital gain.................................... 1,897,804 ---------- $2,053,473 ==========
As of October 31, 2004, the components of distributable earnings on a tax basis were as follows: Undistributed ordinary income............................... $38,539 Undistributed long-term capital gain........................ 791,896
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of the Trust's Investment Advisory Agreement, Van Kampen Asset Management (the "Adviser") provides investment advice and facilities to the Trust for an annual fee payable monthly of .55% of the average daily net assets of the Trust. Effective November 1, 2004, the investment advisory fee was reduced from .60% to .55%. For the six months ended April 30, 2005, the Trust recognized expenses of approximately $3,200 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 six months ended April 30, 2005, the Trust recognized expenses of approximately $19,100 representing Van Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of providing accounting and legal services to the Trust, which are reported as part of "Other" and "Legal" expenses, respectively, on the Statement of Operations. Certain officers and trustees of the Trust are also officers and directors of Van Kampen. The Trust does not compensate its officers or trustees who are also officers of Van Kampen. 17 VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued 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 $11,052,397 and $12,738,146, respectively. 4. PREFERRED SHARES The Trust has outstanding 1,600 Auction Preferred Shares ("APS"). Dividends are cumulative and the dividend rate is currently reset every 28 days through an auction process. The rate in effect on April 30, 2005 was 2.950%. During the six months ended April 30, 2005, the rates ranged from 1.450% to 2.950%. 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 on the Statement of Operations. The APS are redeemable at the option of the Trust in whole or in part at the liquidation value of $25,000 per share plus accumulated and unpaid dividends. The Trust is subject to certain asset coverage tests and the APS 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. 6. DERIVATIVE FINANCIAL INSTRUMENTS A derivative financial instrument in very general terms refers to a security whose value is "derived" from the value of an underlying asset, reference rate or index. The Trust may invest up to 15% of its net assets in "inverse floating rate obligations." The inverse floating rate obligations in which the Trust may invest are typically created through a division of a fixed-rate municipal obligation into two separate instruments, a short-term obligation and a long-term obligation. The interest rate on the short-term obligation is set at periodic auctions. The interest rate on the long-term obligation which the Trust may purchase is the rate the issuer would have paid on the fixed-income obligation, (i) plus the difference between such fixed rate and the rate on the short-term obligation, if the short-term rate is lower than the fixed rate; or (ii) minus such difference if the interest rate on the short-term obligation is higher than the fixed rate. These securities have varying degrees of liquidity and the market value of such securities generally will fluctuate in response to changes in market rates of interest to a greater extent than the value of an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity. These securities tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds 18 VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued when interest rates decline or remain relatively stable. Although volatile, inverse floating rate obligations typically offer the potential for yields exceeding the yields available on fixed rate bonds with comparable credit quality, coupon, call provisions and maturity. These securities usually permit the investor to convert the floating rate security counterpart to a fixed rate (normally adjusted downward), and this optional conversion feature may provide a partial hedge against rising rates if exercised at an opportune time. 19 VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST BOARD OF TRUSTEES, OFFICERS AND IMPORTANT ADDRESSES BOARD OF TRUSTEES DAVID C. ARCH JERRY D. CHOATE ROD DAMMEYER LINDA HUTTON HEAGY R. CRAIG KENNEDY HOWARD J KERR MITCHELL M. MERIN* JACK E. NELSON RICHARD F. POWERS, III* HUGO F. SONNENSCHEIN WAYNE W. WHALEN* - Chairman SUZANNE H. WOOLSEY OFFICERS MITCHELL M. MERIN President and Chief Executive Officer RONALD E. ROBISON Executive Vice President and Principal Executive Officer JOSEPH J. MCALINDEN Executive Vice President and Chief Investment Officer AMY R. DOBERMAN Vice President STEFANIE V. CHANG Vice President and Secretary JOHN L. SULLIVAN Chief Compliance Officer JAMES W. GARRETT Chief Financial Officer and Treasurer INVESTMENT ADVISER VAN KAMPEN ASSET MANAGEMENT 1221 Avenue of the Americas New York, New York 10020 CUSTODIAN STATE STREET BANK AND TRUST COMPANY 225 Franklin Street P.O. Box 1713 Boston, Massachusetts 02110 TRANSFER AGENT EQUISERVE TRUST COMPANY, N.A. 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. 20 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. Van Kampen Funds Inc. 1 Parkview Plaza, P.O. Box 5555 Oakbrook Terrace, IL 60181-5555 www.vankampen.com Copyright (C)2005 Van Kampen Funds Inc. All rights reserved. Member NASD/SIPC. VAP SAR 6/04 RN05-01293P-Y04/05 (VAN KAMPEN INVESTMENTS LOGO) Item 2. Code of Ethics. Not applicable for semi-annual reports. Item 3. Audit Committee Financial Expert. Not applicable for semi-annual reports. Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual reports. Item 5. Audit Committee of Listed Registrants. Not applicable for semi-annual reports. Item 6. Schedule of Investments. Please refer to Item #1. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 10. Submission of Matters to a Vote of Security Holders. Not applicable. Item 11. Controls and Procedures (a) The Trust's principal executive officer and principal financial officer have concluded that the Trust's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits. (a) Code of Ethics - Not applicable for semi-annual reports. (b)(1) A certification for the Principal Executive Officer of the registrant is attached hereto as part of EX-99.CERT. (b)(2) A certification for the Principal Financial Officer of the registrant is attached hereto as part of EX-99.CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Van Kampen Advantage Pennsylvania Municipal Income Trust By: /s/ Ronald E. Robison ---------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: June 16, 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: June 16, 2005 By: /s/ James W. Garrett --------------------- Name: James W. Garrett Title: Principal Financial Officer Date: June 16, 2005 EX-99.CERT 2 c95569exv99wcert.txt CERTIFICATION I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-CSR of Van Kampen Advantage Pennsylvania Municipal 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 Rule 30a-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: June 16, 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 Advantage Pennsylvania Municipal 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 Rule 30a-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: June 16, 2005 /s/ James W. Garrett --------------------- Principal Financial Officer EX-99.906CERT 3 c95569exv99w906cert.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 Advantage Pennsylvania Municipal Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended April 30, 2005 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: June 16, 2005 /s/ Ronald E. Robison ---------------------- Ronald E. Robison Principal Executive Officer A signed original of this written statement required by Section 906 has been provided to Van Kampen Advantage Pennsylvania Municipal Income Trust and will be retained by Van Kampen Advantage Pennsylvania Municipal 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 Advantage Pennsylvania Municipal Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended April 30, 2005 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: June 16, 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 Advantage Pennsylvania Municipal Income Trust and will be retained by Van Kampen Advantage Pennsylvania Municipal 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-----