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 811-6738
Van Kampen Ohio 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 semiannual 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 Ohio
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>
---------------------------------------------------------------------------------------
NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE
---------------------------------------------------------------------------------------
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
---------------------------------------------------------------------------------------
</Table>
Performance Summary as of 4/30/04
<Table>
<Caption>
OHIO VALUE MUNICIPAL INCOME TRUST
SYMBOL: VOV
- ------------------------------------------------------
AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURNS NAV MARKET PRICE
Since Inception (04/30/93) 5.73% 4.85%
10-year 6.85 7.12
5-year 5.22 5.86
1-year 1.46 -10.31
6-month 0.91 -4.66
- ------------------------------------------------------
</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 Ohio Municipal Bond Index is a broad-based statistical
composite of Ohio 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 Ohio Value Municipal Income Trust is managed by the adviser's
Municipal Fixed Income team.(1) Current members include Timothy D. Haney, 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 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
Ohio's state economy suffered from unemployment in the manufacturing sector in
early 2003 but experienced some employment stability in the latter half of the
period. The 2004-2005 biennium budget calls for a temporary 1 percent sales tax
increase to replace one-time revenues from fiscal 2003. In March of 2004, the
state issued $150 million in general-obligation bonds for education projects.
Education funding remains a concern after the state Supreme Court ruled in 2002
that the state's education funding system was unconstitutional and appeals to
the U.S. Supreme Court were declined.
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 Ohio 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 price movement, leading to a somewhat lower total return
at NAV than that of its benchmark, which is not leveraged.
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 15- to 20-year segment of the curve. These securities had the added
appeal of premium coupons and 10-year call dates, which offered attractive
income coupled with limited interest-rate exposure. Our term-structure strategy
also included an attempt to capitalize on a temporary pricing anomaly, which
boosted the short-term returns of securities in the ten-year range as they
"rolled down" the yield curve at the end of the calendar year.
TOTAL RETURN FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2004
<Table>
<Caption>
- --------------------------------------------------------------
BASED ON LEHMAN BROTHERS OHIO
BASED ON NAV MARKET PRICE MUNICIPAL BOND INDEX
0.91% -4.66% 1.08%
- --------------------------------------------------------------
</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
The trust's performance was modestly hampered by its relatively high-quality
bias. Municipal-bond investors during the period responded to the protracted low
rate environment by favoring high-yield bonds, which caused the yield spreads
between higher- and lower-rated bonds (yield spreads reflect the premium
demanded by investors to buy lower-rated bonds) to narrow. As a result,
lower-quality bonds outperformed. The portfolio had 79 percent exposure to bonds
rated AA/Aa or higher at the end of the period.
Our trading activity during the period was 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 bonds that were called away by their issuers
during the period. In other cases we sold bonds that met their performance
objectives. 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. The three largest sector exposures at the end of
the period were health care, public education and higher education.
As mentioned above, in the final weeks of the period 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.
<Table>
TOP 5 SECTORS AS OF 4/30/04 RATINGS ALLOCATION AS OF 4/30/04
Health Care 23.5% AAA/Aaa 57.8%
Public Education 20.0 AA/Aa 20.7
Higher Education 10.1 A/A 7.7
Public Building 10.1 BBB/Baa 10.3
Transportation 9.5 Non-Rated 3.5
</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
PROXY VOTING POLICIES AND PROCEDURES
A description of the trust's policies and procedures with respect to the
voting of proxies relating to the trust's portfolio securities is
available without charge, upon request, by calling 1-800-847-2424. This
information is also available on the Securities and Exchange Commission's
website at http://www.sec.gov.
5
VAN KAMPEN OHIO VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2004 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
MUNICIPAL BONDS 157.6%
OHIO 146.0%
$ 400 Akron Bath Copley, OH Jt Twp Hosp Fac Summa Hosp
Ser A............................................ 5.375% 11/15/18 $ 387,828
1,000 Akron, OH Ctf Part Akron Muni Baseball Stad
Proj............................................. 6.900 12/01/16 1,077,660
845 Beavercreek, OH Cap Apprec (MBIA Insd)........... * 02/01/21 366,739
880 Cleveland Cuyahoga Cnty, OH Port Auth Rev Dev
Port Cleveland Bd Fd Ser A (LOC: Fifth Third
Bank)............................................ 6.250 05/15/16 890,868
1,000 Cuyahoga Cnty, OH Multi-Family Rev Hsg Dalebridge
Apts (AMT) (GNMA Collateralized)................. 6.500 10/20/20 1,037,880
400 Cuyahoga Cnty, OH Multi-Family Rev Hsg Wtr Str
Assoc (AMT) (GNMA Collateralized)................ 6.150 12/20/26 422,744
1,000 Cuyahoga, OH Cmnty College Dist Ser A (AMBAC
Insd)............................................ 5.000 12/01/32 1,000,410
1,000 Dayton, OH Arpt Rev Rfdg (AMT) (Radian Insd)..... 5.350 12/01/32 992,710
1,225 Fairfield, OH City Sch Dist (Prerefunded @
12/01/05) (FGIC Insd)............................ 7.200 12/01/12 1,367,223
1,000 Franklin Cnty, OH Rev Mtg Seton Square North Proj
(FHA Gtd)........................................ 6.150 10/01/18 1,030,050
1,000 Garfield Heights, OH City Sch Dist Sch Impt (FSA
Insd)............................................ 5.000 12/15/22 1,023,350
1,000 Greene Cnty, OH Swr Sys Rev Govt Enterprise
(AMBAC Insd)..................................... 5.625 12/01/25 1,060,040
2,145 Groveport, OH Inc Tax Rcpt (MBIA Insd)........... 5.000 12/01/20 2,207,505
2,025 Hamilton Cnty, OH Sales Tax Sub Ser B Cap Apprec
(AMBAC Insd)..................................... * 12/01/23 731,754
595 Lake Loc Sch Dist OH Wood Cap Apprec (MBIA
Insd)............................................ * 12/01/12 416,238
1,000 Lakota, OH Loc Sch Dist (AMBAC Insd)............. 7.000 12/01/09 1,191,300
900 Logan Cnty, OH (Prerefunded @ 12/01/04).......... 6.250 12/01/14 944,559
1,000 Lorain Cnty, OH Hosp Rev Catholic Hlthcare....... 5.375 10/01/30 1,001,290
1,000 Lorain Cnty, OH Hosp Rev Catholic Hlthcare Part
Ser B (MBIA Insd)................................ 5.625 09/01/15 1,095,000
1,000 Lorain Cnty, OH Hosp Rev EMH Regl Med Ctr Rfdg
(AMBAC Insd)..................................... 7.750 11/01/13 1,103,740
1,000 Mahoning Cnty, OH Hosp Fac Forum Hlth Oblig Group
Ser A............................................ 6.000 11/15/32 1,041,680
</Table>
6 See Notes to Financial Statements
VAN KAMPEN OHIO VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
OHIO (CONTINUED)
$ 385 Marion Cnty, OH Hosp Impt Rev Cmnty Hosp Rfdg.... 6.375% 05/15/11 $ 406,318
1,030 Marysville, OH Exmp Vlg Sch Dist Rfdg (MBIA
Insd)............................................ 5.250 12/01/16 1,103,027
1,000 Miami Cnty, OH Hosp Fac Rev Impt Upper Vly Med
Ctr Ser C Rfdg................................... 6.250 05/15/13 1,046,950
1,000 Miami Univ OH Rfdg (AMBAC Insd).................. 5.000 12/01/22 1,023,290
1,000 Montgomery Cnty, OH Hosp Rev Grandview Hosp & Med
Ctr Rfdg (Prerefunded @ 12/01/09)................ 5.600 12/01/11 1,127,900
2,000 Montgomery Cnty, OH Rev Catholic Hlth
Initiatives...................................... 6.000 12/01/26 2,120,080
1,000 New Albany, OH (FGIC Insd)....................... 5.000 12/01/33 1,000,330
1,000 Ohio Hsg Fin Agy Single Family Mtg Rev
(Prerefunded @ 01/15/14) (FGIC Insd)............. * 01/15/15 579,130
1,000 Ohio Muni Elec Generation Agy Jt Venture 5 Ctf
Ben Int (MBIA Insd).............................. * 02/15/25 323,710
1,000 Ohio Muni Elec Generation Agy Jt Venture 5 Ctf
Ben Int (MBIA Insd).............................. * 02/15/30 240,630
1,000 Ohio St Rev Major New St Infrastructure 1........ 5.000 06/15/11 1,087,320
2,000 Ohio St Univ Gen Rcpt Ser A...................... 5.000 12/01/26 2,010,320
845 Penta Career Ctr OH Ctf (FGIC Insd).............. 5.250 04/01/18 905,358
1,895 Sugarcreek, OH Loc Sch Dist Sch Impt Rfdg (MBIA
Insd)............................................ 5.250 12/01/27 1,951,888
1,040 Toledo, OH Sew Sys Rev (AMBAC Insd).............. 5.000 11/15/24 1,052,178
500 Toledo-Lucas Cnty, OH Port Auth Crocker Park Pub
Impt Proj........................................ 5.375 12/01/35 483,825
------------
36,852,822
------------
PUERTO RICO 7.2%
1,500 Puerto Rico Comwlth Hwy & Trans Auth Hwy Rev Ser
Y Rfdg (FSA Insd)................................ 6.250 07/01/21 1,808,490
------------
U. S. VIRGIN ISLANDS 4.4%
1,000 Virgin Islands Pub Fin Auth Rev Gross Rcpt Taxes
Ln Nt Ser A...................................... 6.375 10/01/19 1,113,670
------------
TOTAL INVESTMENTS 157.6%
(Cost $37,856,482)......................................................... 39,774,982
OTHER ASSETS IN EXCESS OF LIABILITIES 1.8%.................................. 471,194
PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (59.4%).................. (15,002,177)
------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0%............................... $ 25,243,999
============
</Table>
See Notes to Financial Statements 7
VAN KAMPEN OHIO VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2004 (UNAUDITED) continued
* Zero coupon bond
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
FGIC--Financial Guaranty Insurance Co.
FHA--Federal Housing Administration
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance Corp.
Radian--Radian Asset Assurance
8 See Notes to Financial Statements
VAN KAMPEN OHIO VALUE MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
April 30, 2004 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $37,856,482)........................ $39,774,982
Receivables:
Interest.................................................. 753,380
Investments Sold.......................................... 25,000
Other....................................................... 1,192
-----------
Total Assets............................................ 40,554,554
-----------
LIABILITIES:
Payables:
Custodian Bank............................................ 59,119
Investment Advisory Fee................................... 20,044
Income Distributions--Common Shares....................... 6,298
Other Affiliates.......................................... 3,560
Administrative Fee........................................ 1,670
Trustees' Deferred Compensation and Retirement Plans........ 180,664
Accrued Expenses............................................ 37,023
-----------
Total Liabilities....................................... 308,378
Preferred Shares (including accrued distributions).......... 15,002,177
-----------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $25,243,999
===========
NET ASSET VALUE PER COMMON SHARE ($25,243,999 divided by
1,686,828 shares outstanding)............................. $ 14.97
===========
NET ASSETS CONSIST OF:
Common Shares ($.01 par value with an unlimited number of
shares authorized, 1,686,828 shares issued and
outstanding).............................................. $ 16,868
Paid in Surplus............................................. 24,027,461
Net Unrealized Appreciation................................. 1,918,500
Accumulated Undistributed Net Investment Income............. 124,379
Accumulated Net Realized Loss............................... (843,209)
-----------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $25,243,999
===========
PREFERRED SHARES ($.01 par value, authorized 100,000,000
shares, 600 issued with liquidation preference of $25,000
per share)................................................ $15,000,000
===========
NET ASSETS INCLUDING PREFERRED SHARES....................... $40,243,999
===========
</Table>
See Notes to Financial Statements 9
VAN KAMPEN OHIO VALUE MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended April 30, 2004 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $1,034,312
----------
EXPENSES:
Investment Advisory Fee..................................... 123,241
Trustees' Fees and Related Expenses......................... 32,872
Preferred Share Maintenance................................. 29,109
Administrative Fee.......................................... 10,270
Legal....................................................... 7,542
Custody..................................................... 1,854
Other....................................................... 42,945
----------
Total Expenses.......................................... 247,833
----------
NET INVESTMENT INCOME....................................... $ 786,479
==========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 63,280
----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 2,461,948
End of the Period......................................... 1,918,500
----------
Net Unrealized Depreciation During the Period............... (543,448)
----------
NET REALIZED AND UNREALIZED LOSS............................ $ (480,168)
==========
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $ (70,334)
==========
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
OPERATIONS................................................ $ 235,977
==========
</Table>
10 See Notes to Financial Statements
VAN KAMPEN OHIO 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................................... $ 786,479 $ 1,649,052
Net Realized Gain....................................... 63,280 528,879
Net Unrealized Depreciation During the Period........... (543,448) (475,482)
Distributions to Preferred Shareholders:
Net Investment Income................................. (70,334) (148,484)
----------- -----------
Change in Net Assets Applicable to Common Shares from
Operations............................................ 235,977 1,553,965
Distributions to Common Shareholders:
Net Investment Income................................. (748,540) (1,544,118)
----------- -----------
NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES
FROM INVESTMENT ACTIVITIES............................ (512,563) 9,847
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued Through Dividend
Reinvestment.......................................... 18,773 46,999
----------- -----------
TOTAL INCREASE/DECREASE IN NET ASSETS APPLICABLE TO
COMMON SHARES......................................... (493,790) 56,846
NET ASSETS APPLICABLE TO COMMON SHARES:
Beginning of the Period................................. 25,737,789 25,680,943
----------- -----------
End of the Period (Including accumulated undistributed
net investment income of $124,379 and $156,774,
respectively)......................................... $25,243,999 $25,737,789
=========== ===========
</Table>
See Notes to Financial Statements 11
VAN KAMPEN OHIO 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 (f)
---------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD................... $ 15.27 $ 15.26 $ 15.06
------- ------- -------
Net Investment Income...................................... .47 .98 1.01
Net Realized and Unrealized Gain/Loss...................... (.29) .04 .17
Common Share Equivalent of Distributions Paid to Preferred
Shareholders:
Net Investment Income.................................. (.04) (.09) (.13)
Net Realized Gain...................................... -0- -0- -0-
------- ------- -------
Total from Investment Operations........................... .14 .93 1.05
Distributions Paid to Common Shareholders:
Net Investment Income.................................. (.44) (.92) (.85)
Net Realized Gain...................................... -0- -0- -0-
------- ------- -------
NET ASSET VALUE, END OF THE PERIOD......................... $ 14.97 $ 15.27 $ 15.26
======= ======= =======
Common Share Market Price at End of the Period............. $ 13.80 $ 14.90 $ 14.85
Total Return (b)........................................... -4.66%* 6.52% 13.09%
Net Assets Applicable to Common Shares at End of the Period
(In millions)............................................ $ 25.2 $ 25.7 $ 25.7
Ratio of Expenses to Average Net Assets Applicable to
Common Shares (c)........................................ 1.89% 1.81% 1.83%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (c).......................... 6.01% 6.35% 6.73%
Portfolio Turnover....................................... 8%* 28% 33%
SUPPLEMENTAL RATIOS:
Ratio of Expenses to Average Net Assets Including Preferred
Shares (c)............................................... 1.21% 1.15% 1.15%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (d).......................... 5.47% 5.78% 5.88%
SENIOR SECURITIES:
Total Preferred Shares Outstanding......................... 600 600 600
Asset Coverage Per Preferred Share (e)..................... $67,077 $67,899 $67,806
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
(a)Amount is less than $.01.
(b)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.
(c)Ratios do not reflect the effect of dividend payments to preferred
shareholders.
(d)Ratios reflect the effect of dividend payments to preferred shareholders.
(e)Calculated by subtracting the Trust's total liabilities (not including the
preferred shares) from the Trust's total assets and dividing this by the
number of preferred shares outstanding.
(f)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.
12
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
- ----------------------------------------------------------------------------------------
2001 2000 1999 1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------
$ 13.87 $ 13.98 $ 15.72 $ 15.16 $ 14.48 $ 14.32 $ 12.36 $ 15.60
------- -------- ------- -------- -------- -------- -------- --------
.96 1.07 1.00 .99 .99 1.00 .98 1.01
1.21 (.08) (1.75) .56 .64 .09 2.02 (3.25)
(.28) (.35) (.28) (.29) (.29) (.29) (.33) (.22)
-0- -0- -0- -0- -0- -0- -0- -0-(a)
------- -------- ------- -------- -------- -------- -------- --------
1.89 .64 (1.03) 1.26 1.34 .80 2.67 (2.46)
(.70) (.75) (.71) (.70) (.66) (.64) (.71) (.77)
-0- -0- -0- -0- -0- -0- -0- (.01)
------- -------- ------- -------- -------- -------- -------- --------
$ 15.06 $ 13.87 $ 13.98 $ 15.72 $ 15.16 $ 14.48 $ 14.32 $ 12.36
======= ======== ======= ======== ======== ======== ======== ========
$ 13.91 $12.0625 $ 12.25 $13.9375 $12.9375 $ 11.75 $ 11.75 $ 11.125
21.51% 4.64% -7.52% 13.24% 16.19% 5.55% 12.04% -20.59%
$ 25.3 $ 23.3 $ 23.5 $ 26.4 $ 25.5 $ 24.3 $ 24.1 $ 20.8
2.10% 2.11% 2.06% 2.12% 2.23% 2.29% 2.39% 2.20%
6.66% 7.67% 6.62% 6.42% 6.75% 7.02% 7.35% 7.16%
26% 20% 17% 18% 17% 41% 45% 56%
1.30% 1.29% 1.29% 1.34% 1.39% 1.41% 1.44% 1.35%
4.71% 5.17% 4.74% 4.51% 4.78% 4.95% 4.89% 5.57%
600 600 600 300 300 300 300 300
$67,215 $ 63,870 $64,181 $138,124 $134,988 $131,142 $130,243 $119,270
$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 13
VAN KAMPEN OHIO VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2004 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Ohio Value 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 Ohio income taxes,
consistent with preservation of capital. The Trust will invest substantially all
of its assets in Ohio municipal securities 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, there were no 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.
The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At October 31, 2003, the Trust had an accumulated capital loss
carryforward for tax purposes of $906,489, which will expire between October 31,
2007 and October 31, 2009.
14
VAN KAMPEN OHIO 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........................ $37,850,543
===========
Gross tax unrealized appreciation........................... $ 2,066,270
Gross tax unrealized depreciation........................... (141,831)
-----------
Net tax unrealized appreciation on investments.............. $ 1,924,439
===========
</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........................................... $12,941
Long-term capital gain.................................... -0-
-------
$12,941
=======
</Table>
As of October 31, 2003, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $6,185
</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 $1,400 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 $11,500
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.
15
VAN KAMPEN OHIO VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2004 (UNAUDITED) continued
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable upon retirement for a
ten-year period and are based upon each trustee's years of service to the Trust.
The maximum annual benefit per trustee under the plan is $2,500.
3. CAPITAL TRANSACTIONS
At April 30, 2004 and October 31, 2003, paid in surplus related to common shares
aggregated $24,027,461 and $24,008,700, respectively. Transaction in common
shares were as follows:
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2004 OCTOBER 31, 2003
Beginning Shares........................................ 1,685,625 1,682,608
Shares Issued Through Dividend Reinvestment............. 1,203 3,017
--------- ---------
Ending Shares........................................... 1,686,828 1,685,625
========= =========
</Table>
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $5,178,306 and $3,288,184, respectively.
5. PREFERRED SHARES
The Trust has outstanding 600 Auction Preferred Shares ("APS"). Dividends are
cumulative and the dividend rate is generally reset every seven days through an
auction process. The rate in effect on April 30, 2004 was 1.060%. During the six
months ended April 30, 2004, the rates ranged from 0.400% to 1.400%.
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.
16
VAN KAMPEN OHIO VALUE MUNICIPAL INCOME TRUST
BOARD OF TRUSTEES AND IMPORTANT ADDRESSES
BOARD OF TRUSTEES
DAVID C. ARCH
J. MILES BRANANGAN
JERRY D. CHOATE
ROD DAMMEYER
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
HOWARD J KERR
MITCHELL M. MERIN*
JACK 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 Act
of 1940, as amended.
17
Van Kampen
Privacy Notice
The Van Kampen companies and investment products* respect your right to privacy.
We also know that you expect us to conduct and process your business in an
accurate and efficient manner. To do so, we must collect and maintain certain
nonpublic personal information about you. This is information we collect from
you on applications or other forms, and from the transactions you conduct with
us, our affiliates, or third parties. We may also collect information you
provide when using our Web site, and text files (also known as "cookies") may be
placed on your computer to help us to recognize you and to facilitate
transactions you initiate. We do not disclose any nonpublic personal information
about you or any of our former customers to anyone, except as permitted by law.
For instance, so that we may continue to offer you Van Kampen investment
products and services that meet your investing needs, and to effect transactions
that you request or authorize, we may disclose the information we collect to
companies that perform services on our behalf, such as printers and mailers that
assist us in the distribution of investor materials. These companies will use
this information only for the services for which we hired them, and are not
permitted to use or share this information for any other purpose. To protect
your nonpublic personal information internally, we permit access to it only by
authorized employees, and maintain physical, electronic and procedural
safeguards to guard your nonpublic personal information.
* Includes Van Kampen Investments Inc., Van Kampen Asset Management, Van
Kampen Advisors Inc., Van Kampen Funds Inc., Van Kampen Investor Services
Inc., Van Kampen System Inc. and Van Kampen Exchange Corp., as well as the
many Van Kampen mutual funds and Van Kampen unit investment trusts.
Van Kampen Funds Inc.
1 Parkview Plaza, P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com
(VAN KAMPEN INVESTMENTS LOGO)
Copyright (C)2004 Van Kampen
Funds Inc. All rights reserved.
Member NASD/SIPC.
VOV SAR 6/04 RN04-00746P-Y04/04
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. [Reserved.]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. [Reserved.]
Item 9. Controls and Procedures
(a) The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10. Exhibits.
(a) Code of Ethics -- Not applicable for semi-annual reports.
(b)(1) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(b)(2) A certification for the Principal Financial Officer of the registrant is
attached hereto as part of EX-99.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Van Kampen Ohio 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