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 811-7404
Van Kampen California Value 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: 4/30/04
Item 1. Report to Shareholders.
The Trust's semi-annual report transmitted to shareholders pursuant to
Rule 30e-1 under the Investment Company Act of 1940 is as follows:
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
California Value 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, 2004.
Market forecasts provided in this report may not necessarily come to
pass. There is no assurance that the trust will achieve its investment
objective. Trusts are subject to market risk, which is the possibility
that the market values of securities owned by the trust will decline and
that the value of 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).
<Table>
<Caption>
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NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE
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NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
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</Table>
Performance Summary as of 4/30/04
<Table>
<Caption>
CALIFORNIA VALUE MUNICIPAL INCOME TRUST
SYMBOL: VCV
- --------------------------------------------------------
AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURNS NAV MARKET PRICE
Since Inception (04/30/93) 7.08% 6.14%
10-year 8.33 8.49
5-year 6.32 5.15
1-year 1.28 -1.03
6-month 1.05 -6.97
- --------------------------------------------------------
</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. NAV per share is determined by dividing the
value of the trust's portfolio securities, cash and other assets, less all
liabilities, by the total number of common shares outstanding. The common share
market price is the price the market is willing to pay for shares of the trust
at a given time. Common share market price is influenced by a range of factors,
including supply and demand and market conditions. Total return assumes an
investment at the beginning of the period, reinvestment of all distributions for
the period in accordance with the trust's dividend reinvestment plan, and sale
of all shares at the end of the period.
The Lehman Brothers California Municipal Bond Index is a broad-based statistical
composite of California municipal bonds. The index 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 SIX-MONTH PERIOD ENDED APRIL 30, 2004
Van Kampen California Value Municipal Income Trust is managed by the adviser's
Municipal Fixed Income team.(1) Current members include Joseph Piraro, Vice
President; Robert Wimmel, Vice President; and John Reynoldson, Executive
Director.
MARKET CONDITIONS
The state of the U.S. economy remained mixed over the six-month period under
review. On the positive side, economic growth continued to be robust, with Gross
Domestic Product growth topping 4 percent in both the last quarter of 2003 and,
preliminarily, the first quarter of this year. While this strength in output has
historically triggered fears of rising interest rates, yields remained
stubbornly low across the municipal curve. These low yields were partly the
result of the continued low levels of observed inflation in the U.S. economy.
Unfortunately, they also reflected continuing weakness in the job market, which
remained soft throughout most of the period. The soft job numbers, coupled with
persistently low inflation, led the Federal Open Market Committee (the Fed) to
maintain its accommodative stance throughout the period.
The surprisingly rapid job growth data released in April, coupled with rapidly
rising commodity and high oil prices, led many investors to fear that the Fed
would be forced to raise interest rates earlier than the market initially
expected. As a result, bond yields across all major sectors spiked in April.
Supply of new municipal bonds in calendar 2003 hit record levels as
municipalities moved to take advantage of historically low interest rates. Many
cities and states sought to reduce expenditures by refinancing existing debt and
replacing it with lower-yielding bonds. In other cases, municipalities attempted
to meet current and future funding needs by issuing new debt. This activity
slowed in the first months of 2004.
The low interest rates that prevailed over much of the period also had an impact
on the demand for municipal bonds. Retail and institutional investor activity
slowed as holders of municipal bonds saw little reason to sell bonds purchased
at higher yield levels and reinvest at lower yields. However, the period was
marked by rising activity among non-traditional investors, such as hedge funds
and insurance companies seeking to take advantage of the attractiveness of
municipal bonds relative to some taxable securities. Additionally, investors'
search for yield led to significant outperformance by lower-rated bonds with
greater credit risk. Sectors such as health care, with a preponderance of
lower-rated issues, performed particularly well.
(1)Team members may change without notice at any time.
2
California remained in the municipal spotlight during the period, with many
investors anxiously awaiting the result of the March 2 referendum on
Propositions 57 and 58. These two measures, which voters ultimately approved,
gave the green light to roughly $15 billion of economic-improvement bonds that
will begin to enter the market in early June. The passage of these measures led
the major ratings agencies to increase their outlooks (though not their ratings)
for the beleaguered state's bonds, with S&P shifting from stable to positive and
Moody's shifting from negative to stable. This surge in issuance will at least
partially offset the surprising decline in new debt in the first quarter of
2004, which was one third lower than the first quarter of last year. The
majority of debt issued by the state for the entire six-month period offered
credit enhancements, with fully two thirds of debt coming to market with credit
insurance.
PERFORMANCE ANALYSIS
Closed-end fund returns can be calculated based upon either the market price or
the net asset value (NAV) of its shares. NAV per share is determined by dividing
the value of the trust's portfolio securities, cash and other assets, less all
liabilities, by the total number of common shares outstanding, while market
price reflects the supply and demand for the shares. As a result, the two
returns can differ significantly. On both an NAV basis and a market-price basis,
the trust underperformed its benchmark, the Lehman Brothers California Municipal
Bond Index. (See table below.)
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 typically reinvested in longer-term securities, taking
advantage of the difference between short- and longer-term rates. As yields rose
during the period, the prices of bonds declined. The trust's use of leverage
magnified this negative movement, leading to a slightly lower total return at
NAV than that of its benchmark, which is not leveraged.
Our analysis of the macroeconomic environment, coupled with the levels of
interest rates near multi-decade lows, led us to believe that interest rates
were more likely to rise than to fall further. As a result, we kept the trust's
duration (a measure of interest-rate sensitivity) below that of its benchmark in
order to limit the potentially damaging impact of any increase in interest
rates. This
TOTAL RETURN FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2004
<Table>
<Caption>
- --------------------------------------------------------------------
BASED ON LEHMAN BROTHERS CALIFORNIA
BASED ON NAV MARKET PRICE MUNICIPAL BOND INDEX
1.05% -6.97% 1.53%
- --------------------------------------------------------------------
</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 and index definition.
3
approach hampered the trust's returns for much of the period as interest rates
fell; however, it helped buoy returns when interest rates soared in the final
weeks of the period.
The trust's performance was also modestly hampered by its bias, relative to the
benchmark, toward high-quality securities. Municipal bond investors during the
period responded to the improving economy by reducing the yield spreads between
higher and lower-rated bonds (yield spreads reflect the premium demanded by
investors to buy lower-rated bonds). As a result, lower-quality bonds
outperformed. The portfolio had 87.4 percent exposure to bonds rated AA/Aa or
higher at the end of the period.
We adjusted the portfolio's term structure in anticipation of rising interest
rates. Our research showed that the intermediate portion of the curve offered
the most promising total-return potential. As a result, we focused our purchases
on the 18- to 22-year segment of the curve. Many of the securities we identified
had the added appeal of premium coupons and 10-year call dates, which served to
add income to the portfolio while limiting its interest-rate exposure.
Our trading activity during the period was well below traditional norms because
we wanted to avoid having to reinvest into securities with low yields. That
said, we were able to make selective relative-value trades among securities and
sectors as they moved into and out of fair value. Some of these acquisitions
were funded by the proceeds of the sale of prerefunded bonds. In other cases we
sold bonds that met their performance objectives during the period. We
reinvested this cash into securities with more promising total-return
characteristics.
The trust's portfolio remained well diversified during the period, with its
holdings spread across many major municipal-bond sectors. We believe this
long-standing strategy helps to minimize the risk of over-concentration in any
single sector, while also giving the portfolio exposure to as many potential
sources of return as possible. Our strategy during the period emphasized bonds
tied to essential services. The three largest sector exposures at the end of the
period were public building, public education and tax districts.
<Table>
TOP 5 SECTORS AS OF 4/30/04 RATINGS ALLOCATION AS OF 4/30/04
Public Building 15.4% AAA/Aaa 82.0%
Public Education 13.3 AA/Aa 5.4
Tax District 12.9 BBB/Baa 12.6
Water & Sewer 12.6
Transportation 11.4
</Table>
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. All percentages are as a percentage of
long-term investments. Securities are classified by sectors that represent broad
groupings of related industries. Ratings allocations based upon ratings as
issued by Standard and Poor's and Moody's. Van Kampen is a wholly owned
subsidiary of a global securities firm which is engaged in a wide range of
financial services including, for example, securities trading and brokerage
activities, investment banking, research and analysis, financing and financial
advisory services.
4
As mentioned above, the portfolio's below-market duration served it well in the
final weeks of the period, when interest rates rose sharply. While it is
impossible to predict how long this trend will hold, we believe that the trust
is well positioned to weather further increases in rates. We look forward to
becoming more active in seeking attractive structures and relative-value trading
opportunities now that rates have moved into a more normal range.
5
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.
6
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2004 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
MUNICIPAL BONDS 158.0%
CALIFORNIA 146.2%
$2,000 A B C CA Uni Sch Dist Cap Apprec Ser B (FGIC
Insd)........................................... * 08/01/21 $ 814,660
1,610 A B C CA Uni Sch Dist Cap Apprec Ser B (FGIC
Insd)........................................... * 08/01/22 615,068
1,000 Abag Fin Auth For Nonprofit Corp CA Ctf Part
Childrens Hosp Med Ctr (AMBAC Insd)............. 5.875% 12/01/19 1,114,560
1,000 Abag Fin Auth For Nonprofit Corp CA Insd Rev Ctf
Lincoln Glen Manor Sr Citizens (CA MTG Insd).... 6.100 02/15/25 1,034,200
1,000 Abag Fin Auth For Nonprofit Corp CA Multi-Family
Rev Hsg Utd Dominion Ser A Rfdg (AMT) (Asset Gty
Insd)........................................... 6.400 08/15/30 1,112,040
1,000 Abag Fin Auth For Nonprofit Corp CA Multi-Family
Rev Hsg Utd Dominion Ser B Rfdg (Asset Gty
Insd)........................................... 6.250 08/15/30 1,114,550
1,485 Anaheim, CA City Sch Dist Election 2002 (FGIC
Insd)........................................... 5.375 08/01/20 1,583,663
2,000 Bay Area Toll Auth CA Toll Brdg Rev San
Francisco Bay Area Ser D........................ 5.000 04/01/17 2,077,620
2,500 Beverly Hills, CA Pub Fin Auth Lease Rev Ser A
(MBIA Insd)..................................... 5.250 06/01/12 2,742,050
1,390 Brea & Olinda, CA Uni Sch Dist Ctf Part Ser A
Rfdg (FSA Insd)................................. 5.500 08/01/19 1,502,381
1,510 Brea & Olinda, CA Uni Sch Dist Ctf Part Ser A
Rfdg (FSA Insd)................................. 5.500 08/01/20 1,623,084
2,000 Burbank, CA Pub Fin Auth Rev Golden State Redev
Proj Ser A (AMBAC Insd)......................... 5.250 12/01/19 2,114,880
1,500 Burbank, CA Pub Fin Auth Rev Golden State Redev
Proj Ser A (AMBAC Insd)......................... 5.250 12/01/23 1,557,735
1,000 California Edl Fac Auth Rev Pooled College &
Univ Proj Ser B................................. 6.750 06/01/30 1,071,840
1,000 California Edl Fac Auth Rev Pooled College &
Univ Proj Ser B (Partially prerefunded @
04/01/09)....................................... 5.250 04/01/24 963,480
835 California Edl Fac Auth Rev Student Ln CA Ln Pgm
Ser A (AMT) (MBIA Insd)......................... 6.000 03/01/16 881,743
1,000 California Hsg Fin Agy Rev Multi-Family Hsg III
Ser A (AMT) (MBIA Insd)......................... 5.850 08/01/17 1,042,860
2,000 California Infrastructure & Econ Dev Bk Rev Bay
Area Toll Brdgs First Lien Ser A (FGIC Insd).... 5.000 07/01/29 2,002,040
1,000 California Pollutn Ctl Fin Auth Pollutn Ctl Rev
Gas & Elec Ser A Rfdg (MBIA Insd)............... 5.900 06/01/14 1,145,390
280 California Rural Home Mtg Fin Auth Single Family
Mtg Rev Mtg Bkd Secs Pgm Ser B (AMT) (GNMA
Collateralized)................................. 6.150 06/01/20 290,441
75 California Rural Home Mtg Fin Auth Single Family
Mtg Rev Mtg Bkd Secs Pgm Ser C (AMT) (GNMA
Collateralized)................................. 7.500 08/01/27 79,424
</Table>
See Notes to Financial Statements 7
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 70 California Rural Home Mtg Fin Auth Single Family
Mtg Rev Mtg Bkd Secs Ser A2 (AMT) (GNMA
Collateralized)................................. 7.950% 12/01/24 $ 72,485
2,400 California St (AMBAC Insd)...................... 6.400 09/01/08 2,753,016
1,000 California St (FGIC Insd)....................... 5.000 10/01/23 1,005,850
1,000 California St (MBIA Insd)....................... 5.000 02/01/26 996,640
1,585 California St Pub Wks Brd Dept Corrections Ser
C............................................... 5.000 06/01/09 1,689,673
1,000 California St Pub Wks Brd Dept Corrections Ser
C............................................... 5.500 06/01/23 1,019,720
3,000 California St Pub Wks Brd Energy Efficiency Rev
Ser A (FSA Insd)................................ 5.250 05/01/08 3,039,000
3,000 California St Pub Wks Brd Lease Rev Dept of
Corrections CA St Prison Ser D (MBIA Insd)...... 5.375 06/01/18 3,040,950
1,255 California St Rfdg (XLCA Insd).................. 5.500 03/01/11 1,391,795
1,000 California St Univ Fresno Assn Sr Aux
Organization Event Ctr.......................... 6.000 07/01/31 1,004,050
3,000 California St Vet Bd Ser BH (AMT) (FSA Insd).... 5.400 12/01/15 3,123,060
2,000 California St Vet Bd Ser BH (AMT) (FSA Insd).... 5.400 12/01/16 2,082,040
1,000 California Statewide Cmntys Dev Auth Wtr Rev
Pooled Fin Pgm Ser C (FSA Insd)................. 5.250 10/01/24 1,033,360
1,000 California Statewide Cmntys Dev Huntington Mem
Hosp (Connie Lee Insd).......................... 5.750 07/01/16 1,086,010
1,085 Cathedral City, CA Pub Fin Auth Rev Cap Apprec
Ser A (MBIA Insd)............................... * 08/01/32 221,665
1,085 Cathedral City, CA Pub Fin Auth Rev Cap Apprec
Ser A (MBIA Insd)............................... * 08/01/33 208,841
2,000 Central Vly Fin Auth CA Cogeneration Proj Rev
Carson Ice-Gen Proj Rev (MBIA Insd)............. 5.000 07/01/17 2,071,800
1,500 Chaffey, CA Uni High Sch Dist Ser C (FSA
Insd)........................................... 5.000 05/01/27 1,504,845
1,440 Chino Basin, CA Regl Fin Auth Rev Muni Wtr Dist
Swr Sys Proj (AMBAC Insd)....................... 7.000 08/01/08 1,686,802
1,965 Contra Costa Cnty, CA Ctf Part Merrithew Mem
Hosp Proj Rfdg (MBIA Insd)...................... 5.500 11/01/22 2,079,127
1,250 Corona Norco, CA Uni Sch Dist Cap Apprec Ser B
(FSA Insd)...................................... * 09/01/16 694,188
1,595 Corona Norco, CA Uni Sch Dist Cap Apprec Ser B
(FSA Insd)...................................... * 09/01/17 833,627
1,735 Corona Norco, CA Uni Sch Dist Cap Apprec Ser B
(FSA Insd)...................................... * 09/01/18 851,729
2,000 East Bay, CA Muni Util Dist Wtr Sys Rev Sub..... 5.250 06/01/19 2,097,280
1,000 El Monte, CA Wtr Auth Rev Wtr Sys Proj (AMBAC
Insd)........................................... 5.600 09/01/29 1,053,240
1,000 El Monte, CA Wtr Auth Rev Wtr Sys Proj (AMBAC
Insd)........................................... 5.600 09/01/34 1,050,990
1,000 Fairfield Suisun, CA Uni Sch Dist Spl Tax Cmnty
Fac Dist No 5 New Sch (FSA Insd)................ 5.375 08/15/29 1,026,900
</Table>
8 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$3,000 Florin, CA Res Consv Dist Cap Impt Elk Grove Wtr
Svc A (MBIA Insd)............................... 5.000% 09/01/33 $ 2,974,710
1,010 Folsom Cordova, CA Uni Sch Dist Fac Impt Dist No
1 Cap Apprec Ser A (AMBAC Insd)................. * 10/01/19 462,156
1,060 Folsom Cordova, CA Uni Sch Dist Fac Impt Dist No
1 Cap Apprec Ser A (AMBAC Insd)................. * 10/01/21 427,975
6,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap
Apprec Rfdg..................................... * 01/15/30 1,265,880
5,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap
Apprec Rfdg..................................... * 01/15/31 990,350
2,950 Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap
Apprec Sr Lien Ser A (Escrowed to Maturity)..... * 01/01/27 874,734
3,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev
Conv Cap Apprec Rfdg (a)........................ 0/5.875 01/15/27 2,227,020
1,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev
Rfdg............................................ 5.750 01/15/40 987,200
1,000 Galt Schs Jt Pwrs Auth CA Rev High Sch & Elem
Sch Ser A Rfdg (MBIA Insd)...................... 5.750 11/01/16 1,112,890
1,115 Garden Grove, CA Pub Fin Auth Rev Ctfs Partn Wtr
Svcs Cap Impt Pgm (FSA Insd) (b)................ 5.000 12/15/23 1,127,310
1,500 Glendale, CA Uni Sch Dist Ser C (FSA Insd)...... 5.500 09/01/19 1,624,620
2,000 Industry, CA Urban Dev Agy Tax Alloc Civic Rec
Indl No 1 Rfdg (MBIA Insd)...................... 5.500 05/01/14 2,182,880
1,000 Inland Empire Solid Waste Fin Auth CA Rev
Landfill Impt Fin Proj Ser B (AMT) (Prerefunded
@ 08/01/06) (FSA Insd).......................... 6.000 08/01/16 1,106,420
1,000 Irvine, CA Pub Fac & Infrastructure Auth Assmt
Rev Ser B (AMBAC Insd).......................... 5.000 09/02/22 1,020,440
1,420 La Quinta, CA Redev Agy Tax Alloc Redev Proj
Area No 1 (AMBAC Insd).......................... 5.000 09/01/22 1,446,895
1,600 La Quinta, CA Redev Agy Tax Alloc Redev Proj
Area No 1 Rfdg (MBIA Insd)...................... 7.300 09/01/08 1,896,512
1,145 Larkspur, CA Sch Dist Cap Apprec Ser A (FGIC
Insd)........................................... * 08/01/21 466,324
1,020 Larkspur, CA Sch Dist Cap Apprec Ser A (FGIC
Insd)........................................... * 08/01/24 342,271
1,255 Larkspur, CA Sch Dist Cap Apprec Ser A (FGIC
Insd)........................................... * 08/01/25 392,476
1,685 Long Beach, CA Bd Fin Auth North Long Beach
Redev Proj Ser A (AMBAC Insd)................... 5.375 08/01/21 1,782,612
1,000 Long Beach, CA Bond Fin Auth Lease Rev Rainbow
Harbor Refin Proj Ser A (AMBAC Insd)............ 5.250 05/01/24 1,026,200
1,000 Los Angeles, CA Cmnty College Dist Ser A (MBIA
Insd)........................................... 5.000 06/01/26 1,002,940
1,000 Los Angeles, CA Ctf Part Dept Pub Social Svcs
Ser A (AMBAC Insd).............................. 5.500 08/01/31 1,031,250
1,000 Los Angeles, CA Ctf Part Sr Sonnenblick Del Rio
W L. A. (AMBAC Insd)............................ 6.000 11/01/19 1,134,960
1,000 Los Gatos, CA Jt Uni High Sch Election of 1998
Ser C (FSA Insd)................................ 5.000 06/01/27 1,003,220
</Table>
See Notes to Financial Statements 9
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$3,650 Manhattan Beach, CA Uni Sch Dist Cap Apprec Ser
B (FGIC Insd)................................... * 09/01/22 $ 1,387,548
2,400 Metropolitan Wtr Dist Southn CA Auth Ser B2
(FGIC Insd)..................................... 5.000% 10/01/26 2,413,344
3,240 Midpeninsula Regl Open Space Dist CA Fin Auth
Rev Cap Apprec Second Issue (AMBAC Insd)........ * 08/01/26 872,014
3,180 Mount Diablo, CA Uni Sch Dist (FSA Insd)........ 5.000 08/01/26 3,195,773
1,230 Palm Desert, CA Fin Auth Tax Alloc Rev Proj Area
No 2 Ser A Rfdg (MBIA Insd)..................... 5.000 08/01/21 1,260,160
1,100 Pasadena, CA Area Cmnty College Dist Election of
2002 Ser A (FGIC Insd).......................... 5.000 06/01/21 1,131,097
1,000 Pomona, CA Ctf Part Mission Promenade Proj Ser
AE (AMBAC Insd)................................. 5.375 10/01/32 1,016,490
3,350 Port Oakland, CA Port Rev Ser G (AMT) (MBIA
Insd)........................................... 5.375 11/01/25 3,415,258
2,000 Port Oakland, CA Spl Fac Rev Mitsui O.S.K. Line
Ltd Ser A (AMT)................................. 6.750 01/01/12 2,007,460
1,000 Rancho Cucamonga, CA Redev Agy Tax Alloc Rancho
Redev Proj (FSA Insd)........................... 5.250 09/01/20 1,053,960
2,000 Sacramento Cnty, CA Santn Dist Fin Auth Rev Ser
A............................................... 5.875 12/01/27 2,123,540
2,000 Sacramento Cnty, CA Santn Dist Fin Auth Rev Ser
A Rfdg (AMBAC Insd)............................. 5.500 12/01/16 2,230,300
1,360 Sacramento Cnty, CA Wtr Fin Auth Rev Agy Zones
40 41 Wtr Sys Proj (AMBAC Insd)................. 5.000 06/01/17 1,426,232
2,000 Sacramento, CA City Fin Auth Rev Cap Impt (AMBAC
Insd)........................................... 5.000 12/01/33 1,986,160
700 Sacramento, CA Cogeneration Auth Cogeneration
Proj Rev Proctor & Gamble Proj.................. 6.375 07/01/10 733,901
2,000 San Bernardino, CA Jt Pwrs Fin Auth Ctf Part
(MBIA Insd)..................................... 5.500 09/01/20 2,159,160
1,000 San Diego, CA Pub Fac Fin Auth Swr Rev (FGIC
Insd)........................................... 5.000 05/15/20 1,030,070
2,000 San Francisco, CA City & Cnty Arpt Commn Intl
Arpt Rev Second Ser Issue 12-A (AMT) (FGIC
Insd)........................................... 5.800 05/01/21 2,120,800
1,500 San Francisco, CA City & Cnty Arpt Commn Intl
Arpt Rev Second Ser Issue 30 (XLCA Insd)........ 5.250 05/01/16 1,611,705
1,000 San Jose, CA Fin Auth Lease Rev Convention Ctr
Proj Ser F Rfdg (MBIA Insd)..................... 5.000 09/01/17 1,037,850
1,600 San Leandro, CA Ctf Part Lib & Fire Stations Fin
(AMBAC Insd).................................... 5.700 11/01/20 1,756,480
1,220 Simi Vly, CA Cmnty Dev Agy Tax Alloc Tapo Canyon
& West End Proj Rfdg (FGIC Insd)................ 5.250 09/01/20 1,281,927
1,285 Simi Vly, CA Cmnty Dev Agy Tax Alloc Tapo Canyon
& West End Proj Rfdg (FGIC Insd)................ 5.250 09/01/21 1,346,243
1,350 Simi Vly, CA Cmnty Dev Agy Tax Alloc Tapo Canyon
& West End Proj Rfdg (FGIC Insd)................ 5.250 09/01/22 1,408,091
</Table>
10 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 955 Stanton, CA Multi-Family Rev Hsg Contl Garden
Apts (AMT) (FNMA Collateralized)................ 5.625% 08/01/29 $ 1,027,475
1,260 Sweetwater, CA Auth Wtr Rev (FSA Insd).......... 5.500 04/01/17 1,368,322
2,000 University of CA Ctf Part San Diego Campus Proj
Ser A........................................... 5.250 01/01/32 2,026,940
1,000 University of CA Rev Gen Ser A (AMBAC Insd)..... 5.000 05/15/26 1,005,400
1,000 University of CA Rev Resh Fac Ser E (AMBAC
Insd)........................................... 5.000 09/01/19 1,032,750
1,000 Woodland, CA Fin Auth Lease Rev Cap Proj Rfdg
(XLCA Insd)..................................... 5.000 03/01/25 1,002,840
------------
142,581,927
------------
PUERTO RICO 9.5%
5,000 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev Ser
Y Rfdg (FSA Insd)............................... 6.250 07/01/21 6,028,300
1,000 Puerto Rico Comwlth Hwy & Tran Rev Tran Rev Sub
(FGIC Insd)..................................... 5.250 07/01/16 1,090,690
2,000 Puerto Rico Elec Pwr Auth Pwr Rev Ser II (XLCA
Insd)........................................... 5.375 07/01/17 2,189,020
------------
9,308,010
------------
U. S. VIRGIN ISLANDS 2.3%
1,000 Virgin Islands Pub Fin Auth Rev Gross Rcpt Taxes
Ln Nt Ser A..................................... 6.375 10/01/19 1,113,670
1,000 Virgin Islands Pub Fin Auth Rev Gross Rcpt Taxes
Ln Nt Ser A..................................... 6.500 10/01/24 1,119,980
------------
2,233,650
------------
TOTAL LONG-TERM INVESTMENTS 158.0%
(Cost $146,414,779)........................................................ 154,123,587
SHORT-TERM INVESTMENTS 2.7%
(Cost $2,600,000).......................................................... 2,600,000
------------
TOTAL INVESTMENTS 160.7%
(Cost $149,014,779)........................................................ 156,723,587
OTHER ASSETS IN EXCESS OF LIABILITIES 0.8%.................................. 786,085
PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (61.5%).................. (60,003,189)
------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0%............................... $ 97,506,483
============
</Table>
* Zero coupon bond
(a) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date.
(b) Securities purchased on a when-issued or delayed delivery basis.
AMBAC--AMBAC Indemnity Corp.
See Notes to Financial Statements 11
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2004 (UNAUDITED) continued
AMT--Alternative Minimum Tax
Asset Gty--Asset Guaranty Insurance Co.
CA MTG--California Mortgage Insurance
Connie Lee--Connie Lee Insurance Co.
FGIC--Financial Guaranty Insurance Co.
FNMA--Federal National Mortgage Association
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
MBIA--Municipal Bond Investors Assurance Corp.
XLCA--XL Capital Assurance Inc.
12 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
April 30, 2004 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $149,014,779)....................... $156,723,587
Cash........................................................ 9,107
Interest Receivable......................................... 2,278,072
Other....................................................... 1,569
------------
Total Assets............................................ 159,012,335
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 1,128,670
Investment Advisory Fee................................... 78,439
Income Distributions--Common Shares....................... 29,072
Other Affiliates.......................................... 9,186
Administrative Fee........................................ 6,537
Trustees' Deferred Compensation and Retirement Plans........ 201,833
Accrued Expenses............................................ 48,926
------------
Total Liabilities....................................... 1,502,663
Preferred Shares (including accrued distributions).......... 60,003,189
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 97,506,483
============
NET ASSET VALUE PER COMMON SHARE ($97,506,483 divided by
6,043,220 shares outstanding)............................. $ 16.13
============
NET ASSETS CONSIST OF:
Common Shares ($.01 par value with an unlimited number of
shares authorized, 6,043,220 shares issued and
outstanding).............................................. $ 60,432
Paid in Surplus............................................. 88,815,499
Net Unrealized Appreciation................................. 7,708,808
Accumulated Undistributed Net Investment Income............. 664,247
Accumulated Net Realized Gain............................... 257,497
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 97,506,483
============
PREFERRED SHARES ($.01 par value, authorized 100,000,000
shares, 2,400 issued with liquidation preference of
$25,000 per share)........................................ $ 60,000,000
============
NET ASSETS INCLUDING PREFERRED SHARES....................... $157,506,483
============
</Table>
See Notes to Financial Statements 13
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended April 30, 2004 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 3,960,917
-----------
EXPENSES:
Investment Advisory Fee..................................... 484,366
Preferred Share Maintenance................................. 84,435
Trustees' Fees and Related Expenses......................... 40,968
Administrative Fee.......................................... 40,364
Legal....................................................... 12,059
Custody..................................................... 5,065
Other....................................................... 70,720
-----------
Total Expenses.......................................... 737,977
-----------
NET INVESTMENT INCOME....................................... $ 3,222,940
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 258,005
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 9,712,081
End of the Period......................................... 7,708,808
-----------
Net Unrealized Depreciation During the Period............... (2,003,273)
-----------
NET REALIZED AND UNREALIZED LOSS............................ $(1,745,268)
===========
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $ (333,058)
===========
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
OPERATIONS................................................ $ 1,144,614
===========
</Table>
14 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2004 OCTOBER 31, 2003
------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 3,222,940 $ 6,751,153
Net Realized Gain....................................... 258,005 2,231,887
Net Unrealized Depreciation During the Period........... (2,003,273) (2,383,187)
Distributions to Preferred Shareholders:
Net Investment Income................................. (149,063) (532,146)
Net Realized Gain..................................... (183,995) (25,518)
------------ ------------
Change in Net Assets Applicable to Common Shares from
Operations............................................ 1,144,614 6,042,189
Distributions to Common Shareholders:
Net Investment Income................................. (3,254,054) (6,668,626)
Net Realized Gain..................................... (2,174,844) (427,516)
------------ ------------
NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES
FROM INVESTMENT ACTIVITIES............................ (4,284,284) (1,053,953)
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued Through Dividend
Reinvestment.......................................... 225,716 -0-
------------ ------------
TOTAL DECREASE IN NET ASSETS APPLICABLE TO COMMON
SHARES................................................ (4,058,568) (1,053,953)
NET ASSETS APPLICABLE TO COMMON SHARES:
Beginning of the Period................................. 101,565,051 102,619,004
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $664,247 and $844,424,
respectively)......................................... $ 97,506,483 $101,565,051
============ ============
</Table>
See Notes to Financial Statements 15
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED
APRIL 30, -------------------
2004 2003 2002 (e)
---------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD................... $ 16.84 $ 17.02 $ 17.02
------- ------- -------
Net Investment Income.................................... .53 1.12 1.17
Net Realized and Unrealized Gain/Loss.................... (.29) .03 (.05)
Common Share Equivalent of Distributions Paid to Preferred
Shareholders:
Net Investment Income.................................. (.02) (.09) (.13)
Net Realized Gain...................................... (.03) -0-** -0-**
------- ------- -------
Total from Investment Operations........................... .19 1.00 .99
Distributions Paid to Common Shareholders:
Net Investment Income.................................. (.54) (1.11) (.99)
Net Realized Gain...................................... (.36) (.07) -0-
------- ------- -------
NET ASSET VALUE, END OF THE PERIOD......................... $ 16.13 $ 16.84 $ 17.02
======= ======= =======
Common Share Market Price at End of the Period............. $ 14.70 $ 16.67 $ 16.16
Total Return (a)........................................... -6.97%* 10.83% 7.95%
Net Assets Applicable to Common Shares at End of the Period
(In millions)............................................ $ 97.5 $ 101.6 $ 102.6
Ratio of Expenses to Average Net Assets Applicable to
Common Shares (b)........................................ 1.45% 1.43% 1.49%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (b).......................... 6.33% 6.56% 7.00%
Portfolio Turnover......................................... 6%* 25% 21%
SUPPLEMENTAL RATIOS:
Ratio of Expenses to Average Net Assets Including Preferred
Shares (b)............................................... .91% .90% .93%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (c).......................... 6.04% 6.04% 6.23%
SENIOR SECURITIES:
Total Preferred Shares Outstanding......................... 2,400 2,400 2,400
Asset Coverage Per Preferred Share (d)..................... $65,629 $67,320 $67,759
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>
* Non-Annualized
** Amount is less than $.01.
(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 the dividend payments to preferred
shareholders.
(c)Ratios reflect the effect of the 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 $.01, decrease net realized and unrealized gains and
losses per share by $.01 and increase the ratio of net investment income to
average net assets applicable to common shares by .05%. Per share, ratios and
supplemental data for periods prior to October 31, 2002 have not been
restated to reflect this change in presentation.
16
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
- -----------------------------------------------------------------------------------------
2001 2000 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------
$ 15.92 $ 14.92 $ 16.76 $ 15.94 $ 15.09 $ 14.80 $ 12.64 $ 15.81
------- -------- -------- -------- -------- -------- -------- --------
1.16 1.16 1.13 1.13 1.13 1.14 1.12 1.12
1.15 1.03 (1.87) .83 .82 .21 2.21 (3.13)
(.31) (.35) (.28) (.33) (.33) (.34) (.40) (.26)
-0- -0- -0- -0- -0- -0- -0- (.01)
------- -------- -------- -------- -------- -------- -------- --------
2.00 1.84 (1.02) 1.63 1.62 1.01 2.93 (2.28)
(.90) (.84) (.82) (.81) (.77) (.72) (.77) (.83)
-0- -0- -0- -0- -0- -0- -0- (.06)
------- -------- -------- -------- -------- -------- -------- --------
$ 17.02 $ 15.92 $ 14.92 $ 16.76 $ 15.94 $ 15.09 $ 14.80 $ 12.64
======= ======== ======== ======== ======== ======== ======== ========
$ 15.92 $13.8125 $13.6875 $ 15.875 $ 14.25 $ 12.375 $ 12.00 $ 11.125
22.12% 7.10% -9.11% 17.39% 21.89% 9.28% 15.04% -19.23%
$ 102.6 $ 96.0 $ 90.0 $ 101.1 $ 96.1 $ 91.0 $ 89.3 $ 76.2
1.71% 1.77% 1.74% 1.75% 1.81% 1.86% 1.96% 1.89%
7.08% 7.64% 6.99% 6.93% 7.38% 7.66% 8.17% 7.87%
10% 22% 19% 17% 23% 33% 41% 93%
1.06% 1.07% 1.07% 1.09% 1.10% 1.11% 1.14% 1.11%
5.19% 5.34% 5.24% 4.90% 5.23% 5.36% 5.25% 6.02%
2,400 2,400 2,400 1,200 1,200 1,200 1,200 1,200
$67,765 $ 64,994 $ 62,488 $134,213 $130,102 $125,832 $124,385 $113,537
$25,000 $ 25,000 $ 25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
$25,000 $ 25,000 $ 25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
</Table>
See Notes to Financial Statements 17
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2004 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen California Value Municipal Income Trust (the "Trust") is registered
as a diversified, closed-end management investment company under the Investment
Company Act of 1940, as amended. The Trust's investment objective is to provide
a high level of current income exempt from federal and California income taxes,
consistent with preservation of capital. The Trust will invest in a portfolio
consisting substantially of California municipal obligations rated investment
grade at the time of investment. The Trust commenced investment operations on
April 30, 1993. Effective November 30, 2003, the Trust's investment adviser, Van
Kampen Investment Advisory Corp. merged into its affiliate, Van Kampen Asset
Management.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
A. SECURITY VALUATION Municipal bonds are valued by independent pricing services
or dealers using the mean of the bid and asked prices or, in the absence of
market quotations, at fair value based upon yield data relating to municipal
bonds with similar characteristics and general market conditions. Securities
which are not valued by independent pricing services or dealers are valued at
fair value using procedures established in good faith by the Board of Trustees.
Short-term securities with remaining maturities of 60 days or less are valued at
amortized cost, which approximates market value.
B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when-issued" or "delayed delivery"
basis with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
segregate assets with the custodian having an aggregate value at least equal to
the amount of the when-issued or delayed delivery purchase commitments until
payment is made. At April 30, 2004, the Trust had $1,128,670 of when-issued or
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.
18
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2004 (UNAUDITED) continued
At April 30, 2004, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $148,845,125
============
Gross tax unrealized appreciation........................... $ 8,178,903
Gross tax unrealized depreciation........................... (300,441)
------------
Net tax unrealized appreciation on investments.............. $ 7,878,462
============
</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 year ended October 31,
2003 was as follows:
<Table>
<Caption>
2003
Distributions paid from:
Ordinary income............................................. $ 30,797
Long-term capital gain...................................... 456,404
--------
$487,201
========
</Table>
As of October 31, 2003, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 226,155
Undistributed long-term capital gain........................ 2,358,331
</Table>
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 .60% of the average daily net assets
of the Trust. In addition, the Trust pays 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. Effective June 1, 2004, the administrative fee was reduced from
..05% to .00%.
For the six months ended April 30, 2004, the Trust recognized expenses of
approximately $5,200 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, counsel to the Trust, of which a trustee of the Trust
is an affiliated person.
Under separate Accounting Services and Legal Services agreements, the
Adviser provides accounting and legal services to the Trust. The Adviser
allocates the cost of such services to each trust. For the six months ended
April 30, 2004, the Trust recognized expenses of approximately $14,400
representing Van Kampen's cost of providing accounting and legal
19
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2004 (UNAUDITED) continued
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
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 April 30, 2004, and October 31, 2003, paid in surplus related to common
shares aggregated $88,815,499 and $88,589,917, respectively.
Transactions in common shares were as follows:
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2004 OCTOBER 31, 2003
Beginning Shares......................................... 6,029,844 6,029,844
Shares Issued Through Dividend Reinvestment.............. 13,376 -0-
--------- ---------
Ending Shares............................................ 6,043,220 6,029,844
========= =========
</Table>
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $12,343,874 and $10,263,722,
respectively.
5. PREFERRED SHARES
The Trust has outstanding 2,400 Auction Preferred Shares ("APS"). Dividends are
cumulative and the dividend rate is currently reset every seven days through an
auction process. The rate in effect on April 30, 2004, was 0.970% and for the
six months then ended rates ranged from 0.850% to 2.000%.
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.
20
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
BOARD OF TRUSTEES AND IMPORTANT ADDRESSES
BOARD OF TRUSTEES
DAVID C. ARCH
J. MILES BRANAGAN
JERRY D. CHOATE
ROD DAMMEYER
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
HOWARD J KERR
MITCHELL M. MERIN*
JACK E. NELSON
RICHARD F. POWERS, III*
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
1221 Avenue of the Americas
New York, New York 10020
CUSTODIAN AND TRANSFER AGENT
STATE STREET BANK
AND TRUST COMPANY
c/o EquiServe
P.O. Box 43011
Providence, Rhode Island 02940-3011
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT AUDITORS
DELOITTE & TOUCHE LLP
180 North Stetson Avenue
Chicago, Illinois 60601
* "Interested persons" of the Trust, as defined in the Investment Company of
Act 1940, as amended.
21
Van Kampen
Privacy Notice
The Van Kampen companies and investment products* respect your right to privacy.
We also know that you expect us to conduct and process your business in an
accurate and efficient manner. To do so, we must collect and maintain certain
nonpublic personal information about you. This is information we collect from
you on applications or other forms, and from the transactions you conduct with
us, our affiliates, or third parties. We may also collect information you
provide when using our Web site, and text files (also known as "cookies") may be
placed on your computer to help us to recognize you and to facilitate
transactions you initiate. We do not disclose any nonpublic personal information
about you or any of our former customers to anyone, except as permitted by law.
For instance, so that we may continue to offer you Van Kampen investment
products and services that meet your investing needs, and to effect transactions
that you request or authorize, we may disclose the information we collect to
companies that perform services on our behalf, such as printers and mailers that
assist us in the distribution of investor materials. These companies will use
this information only for the services for which we hired them, and are not
permitted to use or share this information for any other purpose. To protect
your nonpublic personal information internally, we permit access to it only by
authorized employees, and maintain physical, electronic and procedural
safeguards to guard your nonpublic personal information.
* Includes Van Kampen Investments Inc., Van Kampen Asset Management, Van
Kampen Advisors Inc., Van Kampen Funds Inc., Van Kampen Investor Services
Inc., Van Kampen System Inc. and Van Kampen Exchange Corp., as well as the
many Van Kampen mutual funds and Van Kampen unit investment trusts.
Van Kampen Funds Inc.
1 Parkview Plaza, P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com
(VAN KAMPEN INVESTMENTS LOGO)
Copyright (C)2004 Van Kampen
Funds Inc. All rights reserved.
Member NASD/SIPC.
VCV SAR 6/04 RN04-00740P-Y04/04
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:
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. [Reserved.]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. [Reserved.]
Item 9. Controls and Procedures
(a) The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10. Exhibits.
(a) Code of Ethics -- Not applicable for semi-annual reports.
(b)(1) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(b)(2) A certification for the Principal Financial Officer of the registrant is
attached hereto as part of EX-99.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Van Kampen California Value Municipal Income Trust
By: /s/ Ronald E. Robison
----------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: June 22, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Ronald E. Robison
----------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: June 22, 2004
By: /s/ John L. Sullivan
---------------------
Name: John L. Sullivan
Title: Principal Financial Officer
Date: June 22, 2004