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 811-6732
Van Kampen Advantage Pennsylvania Municipal Income Trust
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(Exact name of registrant as specified in charter)
1221 Avenue of the Americas NY NY 10020
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(Address of principal executive offices) (Zip code)
Ronald Robison 1221 Avenue of the Americas New York, NY 10020
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(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: 10/31/03
Item 1. Report to Shareholders
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
Advantage Pennsylvania Municipal 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 October 31, 2003.
Market forecasts provided in this report may not necessarily come to
pass. There is no assurance that the trust will achieve its investment
objective. The trust is subject to market risk, which is the possibility
that the market values of securities owned by the trust will decline and,
therefore, the value of the trust shares may be less than what you paid
for them. Accordingly, you can lose money investing in this trust.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
Performance Summary
<Table>
<Caption>
ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST
SYMBOL: VAP
- ----------------------------------------------------
AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURNS NAV MARKET PRICE
Since Inception
(9/25/92) 7.85% 7.25%
10-Year 6.56 6.74
5-Year 6.48 5.79
1-Year 7.42 6.54
- ----------------------------------------------------
</Table>
Past performance is no guarantee of future results. Investment return, net asset
value (NAV) and common share market price will fluctuate and trust shares, when
sold, may be worth more or less than their original cost.
As a result of recent market activity, current performance may vary from the
figures shown. For more up-to-date information, please visit vankampen.com or
speak with your financial advisor. The NAV per share is determined by dividing
the value of the trust's portfolio securities, cash and other assets, less all
liabilities by the total number of common shares outstanding. The common share
market price is the price the market is willing to pay for shares of the trust
at a given time. Common share market price is influenced by a range of factors,
including supply and demand and market conditions. Total return assumes an
investment at the beginning of the period, reinvestment of all distributions for
the period in accordance with the trust's dividend reinvestment plan, and sale
of all shares at the end of the period.
The Lehman Brothers Pennsylvania Municipal Bond Index is a broad-based
statistical composite of Pennsylvania municipal bonds. The Index is unmanaged
and does not include any sales charges or fees. Such costs would lower
performance. It is not possible to invest directly in an index.
1
Trust Report
FOR THE 12-MONTH PERIOD ENDED OCTOBER 31, 2003
Van Kampen Advantage Pennsylvania Municipal Income Trust is managed by the
adviser's Municipal Fixed Income team.(1) Current members include Dennis
Pietrzak, Executive Director; Robert Wimmel, Vice President; and John
Reynoldson, Executive Director.
MARKET CONDITIONS
The economic backdrop for the 12 months ended October 31 was largely
characterized by the persistent weakness of the U.S. economy. One of the most
closely watched economic indicators, employment strength, was in negative
territory for much of the period. Repeated comments from government and
private-sector economists suggesting that the U.S. economy might be entering a
deflationary period also seemed to weigh heavily on the minds of investors over
the course of the year. At the same time, ongoing budgetary and fiscal
difficulties at the state and local level contributed to ratings downgrades for
many municipal bonds. The Federal Reserve Board (the Fed) attempted to allay
these fears and keep the economy moving in the right direction by cutting the
Fed Funds target rate twice during the period to a level of 1.00 percent.
Although the stock markets appeared to look past the sluggish economic data,
bonds, in general, were hampered.
While yields on intermediate- and long-term bonds ended the period roughly where
they began, the road between those two points was decidedly bumpy. The 12-month
period can be divided into two distinct market environments. The first of these,
which lasted from October 2002 to mid-June 2003, saw municipal yields fall by
roughly 80 basis points to levels not seen since the late 1960s. These
plummeting yields led to a surge in issuance as municipalities moved to lock in
low financing and, in the case of older bonds, low refinancing costs. These
record levels of supply met with substantial demand as investors in search of
relative stability poured cash into municipal bond funds. Demand for municipal
bonds was also strong from so-called "cross-over" buyers--investors who
traditionally favor taxable investments, but were drawn to the relatively
attractive yields of municipal bonds.
The municipal market reversed abruptly in mid-June, when yields began to climb
from their lows. Investors during this phase shifted their attention to the
advancing equity market, which reduced demand for municipal bonds. Interest from
cross-over investors also evaporated as the relative attractiveness of the
taxable market returned. Issuance remained strong throughout this leg of the
period, though it abated somewhat in the last three months of the reporting
year. These forces combined to drive municipal bond yields off of their historic
lows, ending the period where they began.
(1)Team members may change without notice at any time.
2
Pennsylvania's market has historically seen a substantial portion of its
issuance come from the public and higher-education sectors, and this trend
continued throughout the reporting period. Lured by low interest rates,
educational issuers moved to secure low financing costs by issuing new debt and
refinancing older, higher-coupon bonds at lower rates. This activity kept the
issuance pipeline full, though the small size of many of the deals continued to
pose a challenge for Pennsylvania investors.
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 significantly. On both a market price and an NAV basis, the
trust outperformed its benchmark, the Lehman Brothers Pennsylvania Municipal
Bond Index. (See table below.)
The trust's holdings of airport bonds benefited from strong price appreciation
in the sector, which experienced its first solid gains since September 11, 2001.
Our current strategy of avoiding housing bonds also helped the trust; the sector
performed poorly amidst record levels of mortgage-refinancing activity.
The trust uses leverage to enhance its dividend to common shareholders by
borrowing 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. With short-term rates at
historic lows during the period, the difference between short- and longer-term
rates was relatively high. This made using leverage a particularly profitable
approach during the period, and added to the trust's strong performance.
Our interest-rate strategy also added to performance. We maintained the
portfolio's duration (a measure of interest-rate sensitivity) at a level greater
than that of its benchmark. We also emphasized zero-coupon bonds, which are very
sensitive to changes in interest rates. Both strategies delivered strong price
appreciation during the bond market rally that lasted through mid-June.
TOTAL RETURN FOR THE 12-MONTH PERIOD ENDED OCTOBER 31, 2003
<Table>
<Caption>
- -----------------------------------------------------------------------
BASED ON BASED ON LEHMAN BROTHERS PENNSYLVANIA
NAV MARKET PRICE MUNICIPAL BOND INDEX
7.42% 6.54% 5.31%
- -----------------------------------------------------------------------
</Table>
Past performance is no guarantee of future results. Investment return, net asset
value and common share market price will fluctuate and trust shares, when sold,
may be worth more or less than their original cost. See Performance Summary for
additional performance information.
3
While the trust outperformed its benchmark, not all of its positions performed
strongly over the entire period in question. Given the steepness of the yield
curve for much of the period (steepness is a measure of the difference in yields
between long- and short-maturity securities), we focused on a strategy designed
to outperform in a curve-flattening environment. We purchased premium bonds in
the 15- to 22-year range that were priced to 10-year call dates. These bonds
offer attractive yields compared to bonds with similar interest-rate risk. We
sold bonds in the 5- to 10-year range and sub-5 percent coupons on the long end
of the curve, both areas of the curve that we feel will underperform if short
rates rise. This curve flattening did not occur as early as we anticipated,
however, and the strategy hampered performance when short rates fell in the
first part of the period. However, when long-bond yields rose in the latter part
of the period, our emphasis on defensive bonds in the 15- to 22-year range
helped to preserve principal.
During the period, many municipalities in Pennsylvania faced budget shortfalls
and potential credit downgrades. In this challenging environment, we emphasized
the highest credit-quality tiers of the state's municipal bond market. As of
October 31, 2003, approximately 70 percent of the fund's long-term investments
were invested in bonds rated AAA, the highest credit quality available. We will
continue with our disciplined investment approach, monitoring the market closely
for compelling opportunities.
PROXY VOTING POLICIES AND PROCEDURES
A description of the trust's policies and procedures with respect to the
voting of proxies relating to the trust's portfolio securities is
available without charge, upon request, by calling 1-800-847-2424. This
information is also available on the Securities and Exchange Commission's
website at http://www.sec.gov.
<Table>
TOP 5 SECTORS AS OF 10/31/03 RATINGS ALLOCATION AS OF 10/31/03
Water & Sewer 17.6% AAA/Aaa 69.9%
Public Education 17.1 AA/Aa 12.5
Health Care 16.5 A/A 11.9
Higher Education 15.4 BBB/Baa 5.7
General Purpose 11.2
</Table>
Subject to change daily. All percentages are as a percentage of long-term
investments. Provided for informational purposes only and should not be deemed
as a recommendation to buy securities in the sectors shown above. Securities are
classified by sectors that represent broad groupings of related industries.
Rating allocations based upon ratings as issued by Standard and Poor's and
Moody's, respectively. Morgan Stanley is a full-service securities firm engaged
in securities trading and brokerage activities, investment banking, research and
analysis, financing and financial advisory services.
4
BY THE NUMBERS
YOUR TRUST'S INVESTMENTS
October 31, 2003
THE FOLLOWING PAGES DETAIL YOUR TRUST'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.
<Table>
<Caption>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
MUNICIPAL BONDS 153.9%
PENNSYLVANIA 152.4%
$1,000 Allegheny Cnty, PA Higher Ed Bldg Carnegie
Mellon Univ..................................... 5.125% 03/01/32 $ 1,014,420
1,500 Allegheny Cnty, PA Higher Ed Bldg Carnegie
Mellon Univ..................................... 5.250 03/01/32 1,534,335
3,250 Allegheny Cnty, PA Hosp Dev Auth Rev Hlth Cent
Dev Inc Proj Rfdg (MBIA Insd)................... 6.300 09/01/13 3,295,597
975 Allegheny Cnty, PA Residential Mtg Single Family
Ser KK-2 (GNMA Collateralized).................. 5.750 05/01/33 1,002,027
1,000 Allegheny Cnty, PA San Auth Swr (MBIA Insd)..... 5.750 12/01/13 1,139,220
1,830 Allegheny Cnty, PA San Auth Swr (MBIA Insd)..... 5.750 12/01/18 2,072,274
2,000 Allegheny Cnty, PA San Auth Swr Rev (MBIA
Insd)........................................... 5.500 12/01/24 2,129,160
2,640 Bensalem Twp, PA Sch Dist (FGIC Insd)........... 5.000 08/15/18 2,774,878
1,150 Bucks Cnty, PA Wtr & Swr Rev Neshaminy
Interceptor Ser A (AMBAC Insd).................. 5.375 06/01/14 1,274,165
1,215 Bucks Cnty, PA Wtr & Swr Rev Neshaminy
Interceptor Ser A (AMBAC Insd).................. 5.375 06/01/15 1,344,312
945 Carbon Cnty, PA Indl Dev Auth Panther Creek
Partn Proj Rfdg (LOC: Paribas & Union Bk of CA
Intl)........................................... 6.650 05/01/10 1,015,724
1,115 Chichester Sch Dist PA (FGIC Insd).............. * 03/01/19 538,378
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 5,923,250
1,000 Delaware Cnty, PA Auth College Neumann College
Rfdg............................................ 6.000 10/01/31 1,017,250
1,000 Delaware Cnty, PA Cap Apprec Rfdg............... * 11/15/10 779,790
1,045 Delaware Cnty, PA Cap Apprec Rfdg............... * 11/15/11 768,127
1,225 Delaware Cnty, PA Cap Apprec Rfdg............... * 11/15/12 847,541
1,500 Delaware Vly, PA Regl Fin Auth.................. 5.750 07/01/17 1,717,050
2,735 Exeter Twp, PA Sch Dist (FGIC Insd)............. 5.000 05/15/25 2,770,500
2,000 Greater Latrobe, PA Sch Auth (FGIC Insd)........ 5.250 04/01/17 2,157,080
3,750 Lehigh Cnty, PA Gen Purp Auth Hosp Muhlenberg
Hosp Ctr Ser A (Prerefunded @ 07/15/04)......... 6.600 07/15/22 3,895,388
1,000 Lycoming Cnty, PA Auth College Rev PA College of
Technology (AMBAC Insd)......................... 5.350 07/01/26 1,038,910
1,095 Mars, PA Area Sch Dist Ser AA (MBIA Insd)....... * 09/01/17 586,471
1,095 Mars, PA Area Sch Dist Ser AA (MBIA Insd)....... * 09/01/18 550,916
1,095 Mars, PA Area Sch Dist Ser AA (MBIA Insd)....... * 09/01/19 516,314
1,095 Mars, PA Area Sch Dist Ser AA (MBIA Insd)....... * 09/01/20 482,753
</Table>
See Notes to Financial Statements 5
YOUR TRUST'S INVESTMENTS
October 31, 2003
<Table>
<Caption>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
PENNSYLVANIA (CONTINUED)
$1,095 Mars, PA Area Sch Dist Ser AA (MBIA Insd)....... * 09/01/21 $ 449,541
2,500 Mercer Cnty, PA Indl Dev Auth Wtr Facs
Philadelphia Sub Corp (MBIA Insd)............... 6.000% 07/01/30 2,672,925
1,000 Monroe Cnty, PA Hosp Auth Rev Hosp Pocono Med
Ctr............................................. 6.000 01/01/43 1,002,010
1,205 Monroeville, PA Muni Auth San Ser B (MBIA
Insd)........................................... 5.250 12/01/18 1,296,387
1,350 Monroeville, PA Muni Auth San Ser B (MBIA
Insd)........................................... 5.250 12/01/20 1,435,631
2,000 Montgomery Cnty, PA Higher Ed & Hlth Auth Hosp
Rev Abington Mem Hosp Ser A..................... 5.125 06/01/32 1,927,300
1,000 Montgomery Cnty, PA Indl Dev Auth Retirement
Cmnty Rev Adult Cmntys Total Svcs Ser B......... 5.625 11/15/12 1,050,470
1,000 Montgomery Cnty, PA Indl Dev Auth Rev Res Rec
Montenay Proj Ser A (MBIA Insd)................. 5.250 11/01/14 1,112,720
1,000 Pennsylvania Hsg Fin Agy Single Family Mtg Ser
53A............................................. 6.000 10/01/15 1,046,880
2,500 Pennsylvania Hsg Fin Agy Single Family Mtg Ser
66A............................................. 5.650 04/01/29 2,548,025
2,000 Pennsylvania St Higher Ed Fac Auth Rev Drexel
Univ............................................ 5.500 05/01/17 2,158,200
1,000 Pennsylvania St Higher Ed Fac Auth Rev La Salle
Univ............................................ 5.500 05/01/34 1,002,270
1,000 Pennsylvania St Higher Ed Fac Auth Rev Thomas
Jefferson....................................... 5.375 01/01/25 1,039,540
1,500 Pennsylvania St Higher Ed Fac Clarion Univ Fndtn
Inc Ser A (XLCA Insd)........................... 5.250 07/01/18 1,611,030
1,500 Pennsylvania St Higher Ed Fac Clarion Univ Fndtn
Inc Ser A (XLCA Insd)........................... 5.000 07/01/33 1,502,745
1,000 Pennsylvania St Higher Ed Fac Messiah College
Ser AA3 (Radian Insd)........................... 5.500 11/01/22 1,057,120
1,560 Pennsylvania St Higher Ed Fac Philadelphia
College Osteopathic Med......................... 5.000 12/01/16 1,631,058
1,850 Pennsylvania St Higher Ed UPMC Hlth Sys Ser A... 6.000 01/15/31 1,925,739
3,015 Pennsylvania St Tpk Commn Ser T Rfdg (FGIC
Insd)........................................... 5.500 12/01/10 3,468,004
1,970 Pennsylvania St Univ Rfdg....................... 5.250 03/01/18 2,114,854
1,500 Philadelphia, PA (FSA Insd)..................... 5.250 09/15/25 1,546,575
1,005 Philadelphia, PA Auth Indl Dev Amern College Of
Physicians...................................... 5.500 06/15/27 1,038,004
2,500 Philadelphia, PA Auth Indl Dev Philadelphia Arpt
Sys Proj Ser A (FGIC Insd)...................... 5.250 07/01/28 2,541,225
4,250 Philadelphia, PA Gas Wks Rev 12th Ser B
(Escrowed to Maturity) (MBIA Insd).............. 7.000 05/15/20 5,310,545
4,250 Philadelphia, PA Wtr & Swr Rev Cap Apprec 14th
Ser (MBIA Insd)................................. * 10/01/07 3,878,380
5,000 Pittsburgh & Allegheny Cnty, PA Pub Aud Regl
Asset Dist Sales Tax (AMBAC Insd)............... 5.000 02/01/24 5,055,250
</Table>
6 See Notes to Financial Statements
YOUR TRUST'S INVESTMENTS
October 31, 2003
<Table>
<Caption>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
PENNSYLVANIA (CONTINUED)
$2,500 Pittsburgh, PA Ser A (AMBAC Insd)............... 5.500% 09/01/17 $ 2,698,100
2,000 Pittsburgh, PA Ser A (Prerefunded @ 09/01/09)
(FGIC Insd)..................................... 5.750 09/01/21 2,312,500
2,000 Pittsburgh, PA Wtr & Swr Rfdg (FGIC Insd)....... 6.500 09/01/13 2,439,880
1,000 Southcentral, PA Gen Auth Rev Wellspan Hlth
Oblig (MBIA Insd)............................... 5.375 05/15/28 1,044,720
1,905 State Pub Sch Bldg Auth PA Conneaut Sch Dist
Proj (FGIC Insd)................................ 5.250 11/01/18 2,061,305
1,000 State Pub Sch Bldg Auth PA Philadelphia Sch Dist
Proj (FSA Insd)................................. 5.000 06/01/33 1,007,150
1,205 State Pub Sch Bldg Auth PA Tuscarora Sch Dist
Proj (FSA Insd)................................. 5.250 04/01/20 1,283,699
1,270 State Pub Sch Bldg Auth PA Tuscarora Sch Dist
Proj (FSA Insd)................................. 5.250 04/01/21 1,345,908
1,500 Susquehanna Area Regl Arpt Auth PA Arpt Ser D... 5.375 01/01/18 1,468,605
1,850 Trinity Area Sch Dist PA (FGIC Insd)............ 5.250 11/01/20 1,979,981
1,035 Unity Twp, PA Muni Auth Gtd Swr Cap Apprec
(AMBAC Insd).................................... * 11/01/14 651,326
1,075 Wilson, PA Sch Dist Second Ser (FSA Insd)....... 5.375 05/15/16 1,177,351
1,100 York Cnty, PA (AMBAC Insd) (a).................. 5.000 06/01/20 1,142,823
------------
114,221,606
------------
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 1,094,300
------------
TOTAL INVESTMENTS 153.9%
(Cost $107,147,782)....................................................... 115,315,906
LIABILITIES IN EXCESS OF OTHER ASSETS (0.5%)............................... (362,110)
PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (53.4%)................. (40,021,221)
------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0%.............................. $ 74,932,575
============
</Table>
* Zero coupon bond
(a) Security purchased on a when-issued or delayed delivery basis.
See Notes to Financial Statements 7
YOUR TRUST'S INVESTMENTS
October 31, 2003
ACA--American Capital Access
AMBAC--AMBAC Indemnity Corp.
FGIC--Financial Guaranty Insurance Co.
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.
8 See Notes to Financial Statements
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
October 31, 2003
<Table>
ASSETS:
Total Investments (Cost $107,147,782)....................... $115,315,906
Receivables:
Interest.................................................. 1,624,111
Investments Sold.......................................... 10,000
Other....................................................... 2,179
------------
Total Assets............................................ 116,952,196
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 1,152,695
Custodian Bank............................................ 516,706
Investment Advisory Fee................................... 58,404
Income Distributions--Common Shares....................... 22,639
Affiliates................................................ 5,441
Administrative Fee........................................ 4,867
Trustees' Deferred Compensation and Retirement Plans........ 164,006
Accrued Expenses............................................ 73,642
------------
Total Liabilities....................................... 1,998,400
Preferred Shares (including accrued distributions).......... 40,021,221
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 74,932,575
============
NET ASSET VALUE PER COMMON SHARE ($74,932,575 divided by
4,368,552 shares outstanding)............................. $ 17.15
============
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............................................. 64,236,073
Net Unrealized Appreciation................................. 8,168,124
Accumulated Net Realized Gain............................... 2,017,264
Accumulated Undistributed Net Investment Income............. 467,428
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 74,932,575
------------
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....................... $114,932,575
============
</Table>
See Notes to Financial Statements 9
Statement of Operations
For the Year Ended October 31, 2003
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 5,897,545
-----------
EXPENSES:
Investment Advisory Fee..................................... 692,009
Preferred Share Maintenance................................. 115,905
Administrative Fee.......................................... 57,666
Trustees' Fees and Related Expenses......................... 43,204
Legal....................................................... 21,720
Custody..................................................... 7,819
Other....................................................... 135,791
-----------
Total Expenses.......................................... 1,074,114
Less Credits Earned on Cash Balances.................... 389
-----------
Net Expenses............................................ 1,073,725
-----------
NET INVESTMENT INCOME....................................... $ 4,823,820
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 2,009,409
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 9,318,857
End of the Period......................................... 8,168,124
-----------
Net Unrealized Depreciation During the Period............... (1,150,733)
-----------
NET REALIZED AND UNREALIZED GAIN............................ $ 858,676
===========
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $ (438,877)
===========
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
OPERATIONS................................................ $ 5,243,619
===========
</Table>
10 See Notes to Financial Statements
Statements of Changes in Net Assets
<Table>
<Caption>
YEAR ENDED YEAR ENDED
OCTOBER 31, 2003 OCTOBER 31, 2002
------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 4,823,820 $ 5,193,550
Net Realized Gain....................................... 2,009,409 984,476
Net Unrealized Depreciation During the Period........... (1,150,733) (627,512)
Distributions to Preferred Shareholders:
Net Investment Income................................. (341,199) (518,158)
Net Realized Gain..................................... (97,678) (121,194)
----------- -----------
Change in Net Assets Applicable to Common Shares from
Operations............................................ 5,243,619 4,911,162
Distributions to Common Shareholders:
Net Investment Income................................. (4,748,108) (4,588,520)
Net Realized Gain..................................... (887,691) (482,426)
----------- -----------
NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES
FROM INVESTMENT ACTIVITIES............................ (392,180) (159,784)
----------- -----------
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued Through Dividend
Reinvestment.......................................... -0- 112,866
----------- -----------
Total Decrease in Net Assets Applicable to Common
Shares................................................ (392,180) (46,918)
NET ASSETS APPLICABLE TO COMMON SHARES:
Beginning of the Period................................. 75,324,755 75,371,673
----------- -----------
End of the Period (Including accumulated undistributed
net investment income of $467,428 and $740,653,
respectively)......................................... $74,932,575 $75,324,755
=========== ===========
</Table>
See Notes to Financial Statements 11
Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
------------------------------
2003 2002 (e) 2001
------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD.................... $ 17.24 $ 17.28 $ 16.40
------- ------- -------
Net Investment Income..................................... 1.11 1.19 1.21
Net Realized and Unrealized Gain/Loss..................... .19 .08 1.15
Common Share Equivalent of Distributions Paid to Preferred
Shareholders:
Net Investment Income................................... (.08) (.12) (.25)
Net Realized Gain....................................... (.02) (.03) (.09)
------- ------- -------
Total from Investment Operations............................ 1.20 1.12 2.02
Distributions Paid to Common Shareholders:
Net Investment Income..................................... (1.09) (1.05) (.93)
Net Realized Gain......................................... (.20) (.11) (.21)
------- ------- -------
NET ASSET VALUE, END OF THE PERIOD.......................... $ 17.15 $ 17.24 $ 17.28
======= ======= =======
Common Share Market Price at End of the Period.............. $ 16.23 $ 16.45 $ 15.75
Total Return (a)............................................ 6.54% 11.96% 13.31%
Net Assets Applicable to Common Shares at End of the Period
(In millions)............................................. $ 74.9 $ 75.3 $ 75.4
Ratio of Expenses to Average Net Assets Applicable to Common
Shares (b)................................................ 1.43% 1.50% 1.71%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (b)........................... 6.40% 7.02% 7.12%
Portfolio Turnover.......................................... 31% 19% 17%
SUPPLEMENTAL RATIOS:
Ratio of Expenses to Average Net Assets Including Preferred
Shares (b)................................................ .93% .97% 1.10%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (c)........................... 5.95% 6.32% 5.70%
SENIOR SECURITIES:
Total Preferred Shares Outstanding.......................... 1,600 1,600 1,600
Asset Coverage Per Preferred Share (d)...................... $71,846 $72,101 $72,107
Involuntary Liquidating Preference Per Preferred Share...... $25,000 $25,000 $25,000
Average Market Value Per Preferred Share.................... $25,000 $25,000 $25,000
</Table>
(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.
12
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
- ------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------
$ 16.18 $ 17.66 $ 17.23 $ 16.72 $ 16.69 $ 14.63 $ 17.33
-------- ------- -------- -------- -------- -------- --------
1.27 1.24 1.24 1.25 1.24 1.25 1.25
.28 (1.46) .47 .54 .04 2.06 (2.77)
(.37) (.30) (.32) (.32) (.32) (.36) (.27)
-0- -0- -0- -0- -0- -0- (.01)
-------- ------- -------- -------- -------- -------- --------
1.18 (.52) 1.39 1.47 .96 2.95 (1.80)
(.96) (.96) (.96) (.96) (.93) (.89) (.88)
-0- -0- -0- -0- -0- -0- (.02)
-------- ------- -------- -------- -------- -------- --------
$ 16.40 $ 16.18 $ 17.66 $ 17.23 $ 16.72 $ 16.69 $ 14.63
======== ======= ======== ======== ======== ======== ========
$14.9375 $14.625 $ 17.25 $16.4375 $ 15.125 $ 14.00 $ 12.125
9.10% -10.14% 11.03% 15.38% 14.85% 23.03% -19.94%
$ 71.5 $ 70.6 $ 77.0 $ 75.2 $ 72.9 $ 72.8 $ 63.8
1.78% 1.69% 1.67% 1.70% 1.77% 1.77% 1.80%
7.89% 7.22% 7.11% 7.41% 7.48% 7.96% 7.75%
31% 7% 3% 2% 2% 9% 5%
1.13% 1.10% 1.10% 1.10% 1.14% 1.12% 1.15%
5.59% 5.45% 5.25% 5.48% 5.52% 5.68% 6.05%
1,600 1,600 800 800 800 800 800
$ 69,704 $69,097 $146,292 $143,968 $141,175 $141,025 $129,764
$ 25,000 $25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
$ 25,000 $25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
</Table>
See Notes to Financial Statements 13
NOTES TO
FINANCIAL STATEMENTS
October 31, 2003
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 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 October 31, 2003, the Trust had $1,152,695 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 the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.
14
NOTES TO
FINANCIAL STATEMENTS
October 31, 2003
At October 31, 2003, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $107,056,630
============
Gross tax unrealized appreciation........................... $ 8,424,972
Gross tax unrealized depreciation........................... (165,696)
------------
Net tax unrealized appreciation on investments.............. $ 8,259,276
============
</Table>
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 years ended October 31,
2003 and 2002 was as follows:
<Table>
<Caption>
2003 2002
Distributions paid from:
Ordinary income........................................... $ 43,589 $170,739
Long-term capital gain.................................... 962,055 464,935
---------- --------
$1,055,644 $635,674
========== ========
</Table>
Due to inherent differences in the recognition of income, expenses and
realized gains/losses under generally accepted accounting principles and federal
income tax purposes, permanent differences between financial and tax basis
reporting for the 2003 fiscal year have been identified and appropriately
reclassified. A permanent difference relating to expenses which are not
deductible for tax purposes totaling $1,366 was reclassified from accumulated
undistributed net investment income to paid in surplus. Also, a permanent
difference of $9,104 relating to book to tax accretion differences was
reclassified from accumulated undistributed net investment income to accumulated
net realized gain.
As of October 31, 2003, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 155,602
Undistributed long-term capital gain........................ $1,897,803
</Table>
F. EXPENSE REDUCTIONS During the year ended October 31, 2003, the Trust's
custody fee was reduced by $389 as a result of credits earned on cash balances.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, Van Kampen
Investment Advisory Corp. (the "Adviser") will provide investment advice and
facilities to the Trust for
15
NOTES TO
FINANCIAL STATEMENTS
October 31, 2003
an annual fee payable monthly of .60% of the average daily net assets of the
Trust. In addition, the Trust will pay a monthly administrative fee to Van
Kampen Investments Inc. or its affiliates (collectively "Van Kampen"), the
Trust's Administrator, at an annual rate of .05% of the average daily net assets
of the Trust. The administrative services provided by the Administrator include
record keeping and reporting responsibilities with respect to the Trust's
portfolio and preferred shares and providing certain services to shareholders.
For the year ended October 31, 2003, the Trust recognized expenses of
approximately $8,600 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Trust, of which a trustee of
the Trust is an affiliated person.
Under separate Accounting Services and Legal Services agreements, the
Adviser provides accounting and legal services to the Trust. The Adviser
allocates the cost of such services to each trust. For the year ended October
31, 2003, the Trust recognized expenses of approximately $27,300 representing
Van Kampen's cost of providing accounting and legal services to the Trust, which
are reported as part of "Other" and "Legal" expenses, respectively, in the
Statement of Operations.
Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
officers of Van Kampen.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or 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. CAPITAL TRANSACTIONS
At October 31, 2003 and October 31, 2002, paid in surplus related to common
shares aggregated $64,236,073 and $64,237,439, respectively.
Transactions in common shares were as follows:
<Table>
<Caption>
YEAR ENDED YEAR ENDED
OCTOBER 31, 2003 OCTOBER 31, 2002
Beginning Shares........................................ 4,368,552 4,361,902
Shares Issued Through Dividend Reinvestment............. -0- 6,650
--------- ---------
Ending Shares........................................... 4,368,552 4,368,552
========= =========
</Table>
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $34,787,790 and $35,928,181,
respectively.
5. 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
16
NOTES TO
FINANCIAL STATEMENTS
October 31, 2003
effect on October 31, 2003 was 0.880%. During the year ended October 31, 2003,
the rates ranged from 0.700% to 1.599%.
The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of "Preferred Share
Maintenance" expense in the Statement of Operations.
The 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.
17
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees and Shareholders of Van Kampen Advantage Pennsylvania
Municipal Income Trust:
We have audited the accompanying statement of assets and liabilities of Van
Kampen Advantage Pennsylvania Municipal Income Trust (the "Trust"), including
the portfolio of investments, as of October 31, 2003, 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 four 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 Trust's financial highlights for
the periods ended prior to October 31, 2000, were audited by other auditors
whose report, dated December 6, 1999, expressed an unqualified opinion on those
financial highlights.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2003, by correspondence with the Trust's
custodian; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. 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 Advantage Pennsylvania Municipal Income Trust as of October 31, 2003, the
results of its operations, the changes in its net assets and the financial
highlights for the respective stated periods, in conformity with accounting
principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
December 8, 2003
18
DIVIDEND REINVESTMENT PLAN
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, State Street Bank and Trust
Company, as your Plan Agent, will automatically invest your dividends and
capital gains distributions in Common Shares of the Trust for your account.
HOW TO PARTICIPATE
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan 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
Participants in the Plan will receive the equivalent in Common Shares valued
on the valuation date, generally at the lower of market price or net asset
value, except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Trust's Common Shares,
resulting in the acquisition of fewer Common
19
Shares than if the dividend or distribution had been paid in Common Shares
issued by the Trust. All reinvestments are in full and fractional Common Shares
and are 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 distribution paid subsequent to written notice of the
changes 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 by at least 90 days written notice to all Common
Shareholders of the Trust.
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.
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 distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA
02266-8200. 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:
Van Kampen Funds Inc.
Attn: Closed-End Funds
2800 Post Oak Blvd.
Houston, TX 77056
20
BOARD OF TRUSTEES AND IMPORTANT ADDRESSES
VAN KAMPEN ADVANTAGE PENNSYLVANIA
MUNICIPAL INCOME TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
J. MILES BRANAGAN
JERRY D. CHOATE
ROD DAMMEYER
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
HOWARD J KERR
MITCHELL M. MERIN*
THEODORE A. MYERS
JACK E. NELSON
RICHARD F. POWERS, III*
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
INVESTMENT ADVISER
VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
CUSTODIAN AND TRANSFER AGENT
STATE STREET BANK
AND TRUST COMPANY
c/o EquiServe
P.O. Box 43011
Providence, Rhode Island 02940-3011
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT AUDITORS
DELOITTE & TOUCHE LLP
180 North Stetson Avenue
Chicago, Illinois 60601
For federal income tax purposes, the following information is furnished with
respect to the distributions paid by the Trust during its taxable year ended
October 31, 2003. The Trust designated 99.6% of the income distributions as a
tax-exempt income distribution. The Trust designated and paid $962,055 as a
long-term capital gain distribution. In January, the Trust provides tax
information to shareholders for the preceding calendar year
* "Interested persons" of the Trust, as defined in the Investment Company Act
of 1940, as amended.
21
RESULTS OF
SHAREHOLDER VOTES
The Annual Meeting of Shareholders of the Trust was held on June 24, 2003, where
shareholders voted on the election of trustees and the amendment to the
Declaration of Trust.
With regard to the election of the following trustees by common shareholders of
the Trust:
<Table>
<Caption>
# OF SHARES
-----------------------------
IN FAVOR WITHHELD
- ------------------------------------------------------------------------------------------
Jerry D. Choate............................................ 4,041,391 38,603
Linda Hutton Heagy......................................... 4,040,791 39,203
R. Craig Kennedy........................................... 4,041,421 38,573
Wayne W. Whalen............................................ 4,006,144 73,850
Suzanne H. Woolsey......................................... 4,041,091 38,903
</Table>
The other trustees of the Trust whose terms did not expire in 2003 are David C.
Arch, Rod Dammeyer, Howard J Kerr, Theodore A. Myers, Richard F. Powers, III,
and Hugo F. Sonnenschein.
With regard to the vote for the amendment to the Declaration of Trust by the
common shareholders of the Trust, 3,917,366 shares voted in favor of the
proposal, 123,420 shares voted against and 39,208 abstained.
22
TRUSTEES AND OFFICERS
The business and affairs of the Trust are managed under the direction of the
Trust's Board of Trustees and the Trust's officers appointed by the Board of
Trustees. The tables below list the trustees and executive officers of the Trust
and their principal occupations during the last five years, other directorships
held by trustees and their affiliations, if any, with Van Kampen Investments
Inc. ("Van Kampen Investments"), Van Kampen Investment Advisory Corp. ("Advisory
Corp."), Van Kampen Asset Management Inc. ("Asset Management"), Van Kampen Funds
Inc. (the "Distributor"), Van Kampen Advisors Inc., Van Kampen Exchange Corp.
and Van Kampen Investor Services Inc. ("Investor Services"). Advisory Corp. and
Asset Management sometimes are referred to herein collectively as the
"Advisers." The term "Fund Complex" includes each of the investment companies
advised by the Advisers or their 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
<Table>
<Caption>
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 (58) Trustee Trustee Chairman and Chief 90 Trustee/Director/Managing
Blistex Inc. since 1992 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. Former
Director of the World
Presidents
Organization-Chicago
Chapter. Director of the
Heartland Alliance, a
nonprofit organization
serving human needs based
in Chicago.
J. Miles Branagan (71) Trustee Trustee Private investor. 88 Trustee/Director/Managing
1632 Morning Mountain Road since 2003 Co-founder, and prior to General Partner of funds
Raleigh, NC 27614 August 1996, Chairman, in the Fund Complex.
Chief Executive Officer
and President, MDT
Corporation (now known as
Getinge/Castle, Inc., a
subsidiary of Getinge
Industrier AB), a company
which develops,
manufactures, markets and
services medical and
scientific equipment.
</Table>
23
<Table>
<Caption>
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
Jerry D. Choate (65) Trustee Trustee Prior to January 1999, 88 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.
Rod Dammeyer (63) Trustee Trustee President of CAC, llc., a 90 Trustee/Director/Managing
CAC, llc. since 1992 private company offering General Partner of funds
4350 LaJolla Village Drive capital investment and in the Fund Complex.
Suite 980 management advisory Director of TeleTech
San Diego, CA 92122-6223 services. Prior to July Holdings Inc.,
2000, Managing Partner of Stericycle, Inc.,
Equity Group Corporate TheraSense, Inc., GATX
Investment (EGI), a Corporation, Arris Group,
company that makes Inc. and Trustee of the
private investments in University of Chicago
other companies. Hospitals and Health
Systems. Prior to May
2002, Director of
Peregrine Systems Inc.
Prior to February 2001,
Vice Chairman and
Director of Anixter
International, Inc. and
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). Prior to April
1999, Director of Metal
Management, Inc.
</Table>
24
<Table>
<Caption>
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 (55) Trustee Trustee Managing Partner of 88 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 (51) Trustee Trustee Director and President of 88 Trustee/Director/Managing
11 DuPont Circle, N.W. since 2003 the German Marshall Fund General Partner of funds
Washington, D.C. 20016 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 (68) Trustee Trustee Prior to 1998, President 90 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.
</Table>
25
<Table>
<Caption>
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
Theodore A. Myers (73) Trustee Trustee Financial consultant, 36 Director of Met Life
550 Washington Avenue since 1992 Trustee or Managing Investors (formerly knows
Glencoe, IL 60022 General Partner of other as COVA Financial Life
funds in the Closed-End Insurance). Prior to
Fund Complex. Prior to 1997, Director of McLouth
1998, Senior Financial Steel.
Advisor (and, prior to
1997, an Executive Vice
President, Chief
Financial Officer and
Director) of Qualitech
Steel Corporation, a
producer of high quality
engineered steels for
automotive,
transportation and
capital goods industries.
Prior to 1997, member of
the Arthur Andersen Chief
Financial Officers'
Advisory Committee.
Jack E. Nelson (67) Trustee Trustee President of Nelson 88 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 (63) Trustee Trustee President Emeritus and 90 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.
</Table>
26
<Table>
<Caption>
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
Suzanne H. Woolsey (61) Trustee Trustee Currently with Paladin 88 Trustee/Director/Managing
2101 Constitution Ave., N.W. since 2003 Capital Group/Paladin General Partner of funds
Room 285 Homeland Security Fund. in the Fund Complex.
Washington, D.C. 20418 Previously Chief Director of Neurogen
Communications Officer of Corporation, a
the National Academy of pharmaceutical company,
Sciences/National since January 1998.
Research Council, an
independent, federally
chartered policy
institution, since 2001
and Chief Operating
Officer from 1993 to
2001. Director of the
Institute for Defense
Analyses, a federally
funded research and
development center,
Director of the German
Marshall Fund of the
United States, 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.
</Table>
27
INTERESTED TRUSTEES*
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INTERESTED TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Mitchell M. Merin* (50) Trustee, Trustee President and Chief 88 Trustee/Director/Managing
1221 Avenue of the Americas President since 2002 Executive Officer of General Partner of funds
New York, NY 10020 and Chief funds in the Fund in the Fund Complex.
Executive Complex. Chairman,
Officer President, Chief
Executive Officer and
Director of the Advisers
and VK 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.
</Table>
28
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INTERESTED TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Richard F. Powers, III* (57) Trustee Trustee Advisory Director of 90 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* (64) Trustee Trustee Partner in the law firm 90 Trustee/Director/Managing
333 West Wacker Drive since 1992 of Skadden, Arps, Slate, General Partner of funds
Chicago, IL 60606 Meagher & Flom in the Fund Complex.
(Illinois), legal counsel
to funds in the Fund
Complex.
</Table>
* Such trustee is an "interested person" (within the meaning of Section
2(a)(19) of the 1940 Act). Mr. Whalen is an interested person of certain
funds in the Fund Complex by reason of his firm currently acting as legal
counsel to such funds in the Fund Complex. Messrs. Merin and Powers are
interested persons of funds in the Fund Complex and the Advisers by reason
of their current or former positions with Morgan Stanley or its affiliates.
29
OFFICERS
<Table>
<Caption>
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
Stephen L. Boyd (63) Vice President Officer Managing Director of Global Research Investment Management.
2800 Post Oak Blvd. since 1998 Vice President of funds in the Fund Complex. Prior to
45th Floor December 2002, Chief Investment Officer of Van Kampen
Houston, TX 77056 Investments and President and Chief Operations Officer of
the Advisers and Van Kampen Advisors Inc. Prior to May 2002,
Executive Vice President and Chief Investment Officer of
funds in the Fund Complex. Prior to May 2001, Managing
Director and Chief Investment Officer of Van Kampen
Investments, and Managing Director and President of the
Advisers and Van Kampen Advisors Inc. Prior to December
2000, Executive Vice President and Chief Investment Officer
of Van Kampen Investments, and President and Chief Operating
Officer of the Advisers. Prior to April 2000, Executive Vice
President and Chief Investment Officer for Equity
Investments of the Advisers. Prior to October 1998, Vice
President and Senior Portfolio Manager with AIM Capital
Management, Inc. Prior to February 1998, Senior Vice
President and Portfolio Manager of Van Kampen American
Capital Asset Management, Inc., Van Kampen American Capital
Investment Advisory Corp. and Van Kampen American Capital
Management, Inc.
Stefanie V. Chang (37) Vice President Officer Executive Director of Morgan Stanley Investment Management.
1221 Avenue of the Americas since 2003 Vice President of funds in the Fund Complex.
New York, NY 10020
Joseph J. McAlinden (60) 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., Morgan Stanley Investment
New York, NY 10020 Investment Officer Management Inc. and Morgan Stanley Investments LP 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 Advisers and Van Kampen
Advisors Inc. since December 2002.
</Table>
30
<Table>
<Caption>
TERM OF
OFFICE AND
POSITION(S) LENGTH OF
NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER TRUST SERVED DURING PAST 5 YEARS
John R. Reynoldson (50) Vice President Officer Executive Director and Portfolio Specialist of the Advisers
1 Parkview Plaza since 2000 and Van Kampen Advisors Inc. Vice President of funds in the
P.O. Box 5555 Fund Complex. Prior to July 2001, Principal and Co-head of
Oakbrook Terrace, IL 60181 the Fixed Income Department of the Advisers and Van Kampen
Advisors Inc. Prior to December 2000, Senior Vice President
of the Advisers and Van Kampen Advisors Inc. Prior to May
2000, Senior Vice President of the investment grade taxable
group for the Advisers. Prior to June 1999, Senior Vice
President of the government securities bond group for Asset
Management.
Ronald E. Robison (64) Executive Vice Officer Chief Executive Officer and Chairman of Investor Services.
1221 Avenue of the Americas President and Principal since 2003 Executive Vice President and Principal Executive Officer of
New York, NY 10020 Executive Officer funds in the Fund Complex. Chief Global Operations Officer
and Managing Director of Morgan Stanley Investment
Management Inc. Managing Director of Morgan Stanley.
Managing Director and Director of Morgan Stanley Investment
Advisors Inc. and Morgan Stanley Services Company Inc. Chief
Executive Officer and Director of Morgan Stanley Trust. Vice
President of the Morgan Stanley Funds.
A. Thomas Smith III (46) Vice President and Officer Managing Director of Morgan Stanley, Managing Director and
1221 Avenue of the Americas Secretary since 1999 Director of Van Kampen Investments, Director of the
New York, NY 10020 Advisers, Van Kampen Advisors Inc., the Distributor,
Investor Services and certain other subsidiaries of Van
Kampen Investments. Managing Director and General
Counsel-Mutual Funds of Morgan Stanley Investment Advisors,
Inc. Vice President and Secretary of funds in the Fund
Complex. Prior to July 2001, Managing Director, General
Counsel, Secretary and Director of Van Kampen Investments,
the Advisers, the Distributor, Investor Services, and
certain other subsidiaries of Van Kampen Investments. Prior
to December 2000, Executive Vice President, General Counsel,
Secretary and Director of Van Kampen Investments, the
Advisers, Van Kampen Advisors Inc., the Distributor,
Investor Services and certain other subsidiaries of Van
Kampen Investments. Prior to January 1999, Vice President
and Associate General Counsel to New York Life Insurance
Company ("New York Life"), and prior to March 1997,
Associate General Counsel of New York Life. Prior to
December 1993, Assistant General Counsel of The Dreyfus
Corporation. Prior to August 1991, Senior Associate, Willkie
Farr & Gallagher. Prior to January 1989, Staff Attorney at
the Securities and Exchange Commission, Division of
Investment Management, Office of Chief Counsel.
</Table>
31
<Table>
<Caption>
TERM OF
OFFICE AND
POSITION(S) LENGTH OF
NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER TRUST SERVED DURING PAST 5 YEARS
John L. Sullivan (48) Vice President, Chief Officer Director and Managing Director of Van Kampen Investments,
1 Parkview Plaza Financial Officer and since 1996 the Advisers, Van Kampen Advisors Inc. and certain other
P.O. Box 5555 Treasurer subsidiaries of Van Kampen Investments. Vice President,
Oakbrook Terrace, IL 60181 Chief Financial Officer and Treasurer of funds in the Fund
Complex. Head of Fund Accounting for Morgan Stanley
Investment Management. Prior to December 2002, Executive
Director of Van Kampen Investments, the Advisers and Van
Kampen Advisors Inc.
</Table>
32
Van Kampen
Privacy Notice
The Van Kampen companies and investment products* respect your right to privacy.
We also know that you expect us to conduct and process your business in an
accurate and efficient manner. To do so, we must collect and maintain certain
nonpublic personal information about you. This is information we collect from
you on applications or other forms, and from the transactions you conduct with
us, our affiliates, or third parties. We may also collect information you
provide when using our Web site, and text files (also known as "cookies") may be
placed on your computer to help us to recognize you and to facilitate
transactions you initiate. We do not disclose any nonpublic personal information
about you or any of our former customers to anyone, except as permitted by law.
For instance, so that we may continue to offer you Van Kampen investment
products and services that meet your investing needs, and to effect transactions
that you request or authorize, we may disclose the information we collect to
companies that perform services on our behalf, such as printers and mailers that
assist us in the distribution of investor materials. These companies will use
this information only for the services for which we hired them, and are not
permitted to use or share this information for any other purpose. To protect
your nonpublic personal information internally, we permit access to it only by
authorized employees, and maintain physical, electronic and procedural
safeguards to guard your nonpublic personal information.
* Includes Van Kampen Investments Inc., Van Kampen Investment Advisory Corp.,
Van Kampen Asset Management Inc., Van Kampen Advisors Inc., Van Kampen
Management Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc.,
Van Kampen System Inc. and Van Kampen Exchange Corp., as well as the many
Van Kampen mutual funds and Van Kampen unit investment trusts.
Van Kampen Funds Inc.
1 Parkview Plaza, P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com
(VAN KAMPEN INVESTMENTS LOGO)
Copyright (C)2003 Van Kampen
Funds Inc. All rights reserved.
VAP ANR 12/03 Member NASD/SIPC.
12525L03-AS-12/03
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) Not applicable
(d) Not applicable
(e) Not applicable.
(f)
(1) The Trust's Code of Ethics is attached hereto as Exhibit 10A.
(2) Not applicable.
(3) Not applicable.
Item 3. Audit Committee Financial Expert.
The Trust's Board of Trustees has determined that it has four "audit committee
financial experts" serving on its audit committee, each of whom are
"independent" Trustees : J. Miles Branagan, Jerry Choate, R. Craig Kennedy and
Theodore A. Myers. 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.
Applicable only for reports covering fiscal years ending on or after December
15, 2003.
Item 5. Audit Committee of Listed Registrants.
Applicable only for reports covering periods ending on or after the earlier of
(i) the first annual shareholder meeting after January 15, 2004 or (ii) October
31, 2004.
Item 6. [Reserved.]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
The Trust invests in exclusively non-voting securities and therefore this item
is not applicable to the Trust.
Item 8. [Reserved.]
Item 9. Controls and Procedures
(a) The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Trust's internal controls
or in other factors that could significantly affect the Trust's internal
controls subsequent to the date of their evaluation.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10. Exhibits.
(a) The Code of Ethics for Principal Executive and Senior Financial Officers is
attached hereto.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant are 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: December 18, 2003
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: December 18, 2003
By: /s/ John L. Sullivan
--------------------
Name: John L. Sullivan
Title: Principal Financial Officer
Date: December 18, 2003