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 811-5320
Van Kampen Municipal Income Trust
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(Exact name of registrant as specified in charter)
1221 Avenue of the Americas New York, New York 10020
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(Address of principal executive offices) (Zip code)
Ronald Robison
1221 Avenue of the Americas New York, New York 10020
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(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: 6/30
Date of reporting period: 6/30/05
Item 1. Report to Shareholders.
The Trust's annual report transmitted to shareholders pursuant to
Rule 30e-1 under the Investment Company Act of 1940 is as follows:
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
Municipal Income Trust performed during the annual period. The portfolio
management team will provide an overview of the market conditions and
discuss some of the factors that affected investment performance during
the reporting period. In addition, this report includes the trust's
financial statements and a list of trust investments as of June 30, 2005.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE TRUST WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. TRUSTS ARE SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY
THAT THE MARKET VALUES OF SECURITIES OWNED BY THE TRUST WILL DECLINE AND
THAT THE VALUE OF TRUST SHARES MAY THEREFORE BE LESS THAN WHAT YOU PAID
FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS TRUST.
INCOME MAY SUBJECT CERTAIN INDIVIDUALS TO THE FEDERAL ALTERNATIVE MINIMUM
TAX (AMT).
<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 6/30/05
<Table>
<Caption>
MUNICIPAL INCOME TRUST
SYMBOL: VMT
- ------------------------------------------------------------
AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURNS NAV MARKET PRICE
Since Inception (8/26/88) 8.15% 6.74%
10-year 7.69 4.72
5-year 9.93 7.46
1-year 12.05 9.41
- ------------------------------------------------------------
</Table>
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. FOR THE MOST RECENT MONTH-END PERFORMANCE FIGURES, PLEASE VISIT
VANKAMPEN.COM OR SPEAK WITH YOUR FINANCIAL ADVISOR. INVESTMENT RETURNS, NET
ASSET VALUE (NAV) AND COMMON SHARE MARKET PRICE WILL FLUCTUATE AND TRUST SHARES,
WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
The NAV per share is determined by dividing the value of the trust's portfolio
securities, cash and other assets, less all liabilities, by the total number of
common shares outstanding. The common share market price is the price the market
is willing to pay for shares of the trust at a given time. Common share market
price is influenced by a range of factors, including supply and demand and
market conditions. Total return assumes an investment at the beginning of the
period, reinvestment of all distributions for the period in accordance with the
trust's dividend reinvestment plan, and sale of all shares at the end of the
period.
The Lehman Brothers Municipal Bond Index is a broad-based statistical composite
of municipal bonds. The index does not include any expenses, fees or sales
charges, which would lower performance. The index is unmanaged and should not be
considered an investment. It is not possible to invest directly in an index.
Source for index performance: Lipper Inc.
1
Trust Report
FOR THE 12-MONTH PERIOD ENDED JUNE 30, 2005
Van Kampen Municipal Income Trust is managed by the Adviser's Municipal Fixed
Income team.(1) Current members include John Reynoldson, Executive Director of
the Adviser, Thomas Byron and Robert Wimmel, Vice Presidents of the Adviser.
MARKET CONDITIONS
During the 12-month period ended June 30, 2005, ongoing increases in short-term
interest rates were a leading influence on the municipal bond market. Continued
signs of economic growth and record rising oil prices stirred inflation fears.
Against this backdrop, the Federal Open Market Committee (the "Fed") raised the
federal funds target at a "measured" pace. Eight increases of 25 basis points
each brought the target rate from 1.25 percent at the start of the period to
3.25 percent at the close. Although the yields of short- and intermediate-term
bonds rose in response to the Fed's actions, long-term interest rates fell as
buyers seemed undiscouraged by the prospect for rising inflation. The difference
between short and longer-term yields (also known as the yield curve) flattened
and municipal bonds with long maturities generally outperformed those with
shorter maturities.
The municipal bond market posted solid returns overall, outpacing most other
segments of the bond market. Performance was not equally robust across the
municipal market, however. Shorter-term municipal bonds were impeded by the
Fed's tightening, while longer-term bonds posted strong gains. As investors
pursued higher yields, lower quality bonds generally outperformed higher quality
issues.
The supply of new municipal issues declined slightly in 2004, but ramped up
steeply in 2005 as long-term issuers moved to bring securities to market in
advance of additional near-term interest rate rises.
(1)Team members may change without notice at any time.
2
PERFORMANCE ANALYSIS
The trust's return can be calculated based upon either the market price or the
net asset value (NAV) of its shares. NAV per share is determined by dividing the
value of the trust's portfolio securities, cash and other assets, less all
liabilities, by the total number of common shares outstanding, while market
price reflects the supply and demand for the shares. As a result, the two
returns can differ, as they did during the reporting period. On an NAV basis,
the trust outperformed its benchmark index, the Lehman Brothers Municipal Bond
Index. On a market price basis, the trust outperformed its benchmark. (See table
below.)
TOTAL RETURNS FOR THE 12-MONTH PERIOD ENDED JUNE 30, 2005
<Table>
<Caption>
- -----------------------------------------------------------------------
LEHMAN BROTHERS
BASED ON NAV BASED ON MARKET PRICE MUNICIPAL BOND INDEX
12.05% 9.41% 8.24%
- -----------------------------------------------------------------------
</Table>
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. INVESTMENT RETURN, NET ASSET VALUE AND COMMON SHARE MARKET PRICE WILL
FLUCTUATE AND TRUST SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. SEE PERFORMANCE SUMMARY FOR ADDITIONAL PERFORMANCE INFORMATION
AND INDEX DEFINITION.
The trust often uses leverage to enhance its dividend to common shareholders.
The trust borrows money at short-term rates through the issuance of preferred
shares. The proceeds are reinvested in longer-term securities, taking advantage
of the difference between short and longer-term rates. The Fed's policy of
raising interest rates throughout the period made the trust's borrowing activity
more expensive. Overall, however, the strategy of using leverage during the
period was positive, particularly in the first half of 2005.
One of our primary strategies during the period was to take advantage of what we
believed to be compelling opportunities among longer maturity bonds. We sought
to limit exposure to areas of the market that would be most vulnerable to rising
rates, while positioning the trust to benefit from additional flattening of the
yield curve. We sold bonds with maturities of 15 years or shorter. We purchased
bonds with longer maturities, predominantly 25 years and longer.
Accordingly, we extended the trust's duration (a measure of interest rate
sensitivity) as the period progressed. By the close of the period, the trust's
duration was in line with that of its benchmark, the Lehman Brothers Municipal
Bond Index. This positioning proved positive for performance as longer maturity
bonds rallied.
3
The trust's overall credit exposure remained tilted toward higher-quality
securities. At the end of the reporting period, approximately 93 percent of its
bonds were rated A or better. Given the market's preference for lower rated,
higher yielding bonds, this quality bias hindered relative performance during
the reporting period.
That said, we also found opportunities to deploy additional assets into bonds
with BBB ratings, which offered more attractive characteristics as well as the
fundamentals we sought. Bonds rated BBB represented 4 percent of the portfolio
at the end of the reporting period, and gave a boost to overall performance.
Tobacco bonds were among these purchases. Our decision to consider
tobacco-backed securities for inclusion in the trust was predicated on the
improving litigation environment for that sector. Our research efforts uncovered
bonds that we believed to be attractive investments. Tobacco bonds did enhance
performance overall, though we note that the trust's reduced exposure hindered
performance relative to the benchmark.
We kept the trust well diversified across the major sectors of the municipal
bond market. The top three sector exposures at the end of the period were
general purpose, public building and public education.
There is no guarantee the security sectors mentioned will continue to perform
well or be held by the trust in the future.
CHANGES IN INVESTMENT POLICIES
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Trust recently approved a change in its investment policies to allow the
Trust to invest up to 15% of its net assets in "inverse floating rate
obligations." Floating rate obligations bear rates of interest that are adjusted
periodically to reflect changes in market rates of interest. Inverse floating
rate obligations have rates that vary inversely with changes in market rates of
interest. These securities have varying degrees of liquidity and the market
value of such securities generally will fluctuate in response to changes in
market rates of interest to a greater extent than the value of an equal
principal amount of a fixed rate security having similar credit quality,
redemption provisions and maturity.
In order to seek to manage the interest rate exposure of the Trust's portfolio
in a changing interest rate environment, the Trust also recently approved a
change in its investment policies to allow the Trust to purchase or sell
financial futures contracts or engage in transactions involving interest rate
swaps, caps, floors or collars. The Trust expects to enter into these
transactions primarily as a hedge against anticipated interest rate or
fixed-income market changes, for duration management or for risk management
purposes, but may also enter into these transactions to generate additional
income. All of the Trust's portfolio holdings, including derivative instruments,
are marked to market each day with the change
4
in value reflected in the unrealized appreciation/depreciation. Upon
disposition, a realized gain or loss is recognized accordingly, except when
taking delivery of a security underlying a futures contract. In this instance,
the recognition of gain or loss is postponed until the disposal of the security
underlying the futures contract. Risks may arise as a result of the potential
inability of the counterparties to meet the terms of their contracts.
5
<Table>
<Caption>
RATINGS ALLOCATIONS AS OF 6/30/2005
AAA/Aaa 83.6%
AA/Aa 4.2
A/A 5.2
BBB/Baa 4.0
BB/Ba 0.4
B/B 0.2
Non-Rated 2.4
<Caption>
TOP 5 SECTORS AS OF 6/30/2005
General Purpose 15.9%
Public Building 13.0
Public Education 11.6
Transportation 10.3
Health Care 10.1
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 6/30/05
New York 12.5%
California 10.2
Texas 9.2
Illinois 7.8
Florida 7.4
Pennsylvania 5.9
North Carolina 3.7
Washington 3.7
Georgia 3.5
New Jersey 3.2
Nevada 2.8
Louisiana 2.6
Ohio 2.5
Colorado 2.5
Alaska 2.0
Indiana 2.0
Michigan 1.8
Kansas 1.7
Wisconsin 1.5
Missouri 1.2
Tennessee 1.1
Alabama 1.1
Oregon 1.1
South Carolina 1.0
Maryland 1.0
West Virginia 0.9
Massachusetts 0.7
Nebraska 0.7
Connecticut 0.7
Guam 0.7
District of Columbia 0.6
Kentucky 0.5
Virginia 0.5
</Table>
<Table>
(continued on next page)
</Table>
6
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 6/30/05
(continued from previous page)
Rhode Island 0.5
Mississippi 0.3
Utah 0.2
Arizona 0.2
Oklahoma 0.2
Puerto Rico 0.2
South Dakota 0.1
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Total Investments 100.0%
</Table>
Subject to change daily. Ratings allocations and summary of investments by state
classifications are as a percentage of total investments. Sectors are as a
percentage of long-term investments. Provided for informational purposes only
and should not be deemed as a recommendation to buy securities in the sectors
shown above. Securities are classified by sectors that represent broad groupings
of related industries. Ratings allocation based upon ratings as issued by
Standard and Poor's and Moody's, respectively. Van Kampen is a wholly owned
subsidiary of a global securities firm which is engaged in a wide range of
financial services including, for example, securities trading and brokerage
activities, investment banking, research and analysis, financing and financial
advisory services.
7
FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS
Each Van Kampen trust provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
trust's second and fourth fiscal quarters by filing the schedule
electronically with the Securities and Exchange Commission (SEC). The
semiannual reports are filed on Form N-CSRS and the annual reports are
filed on Form N-CSR. Van Kampen also delivers the semiannual and annual
reports to trust shareholders, and makes these reports available on its
public Web site, www.vankampen.com. In addition to the semiannual and
annual reports that Van Kampen delivers to shareholders and makes
available through the Van Kampen public Web site, each trust files a
complete schedule of portfolio holdings with the SEC for the trust's
first and third fiscal quarters on Form N-Q. Van Kampen does not deliver
the reports for the first and third fiscal quarters to shareholders, nor
are the reports posted to the Van Kampen public Web site. You may,
however, obtain the Form N-Q filings (as well as the Form N-CSR and
N-CSRS filings) by accessing the SEC's Web site, http://www.sec.gov. You
may also review and copy them at the SEC's Public Reference Room in
Washington, DC. Information on the operation of the SEC's Public
Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. You
can also request copies of these materials, upon payment of a duplicating
fee, by electronic request at the SEC's e-mail address
(publicinfo@sec.gov) or by writing the Public Reference section of the
SEC, Washington, DC 20549-0102.
You may obtain copies of a trust's fiscal quarter filings by contacting
Van Kampen Client Relations at 1-800-847-2424.
PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD
You may obtain a copy of the trust's Proxy Voting Policy and Procedures
without charge, upon request, by calling toll free 800-847-2424 or by
visiting our Web site at www.vankampen.com. It is also available on the
Securities and Exchange Commission's Web site at http://www.sec.gov.
You may obtain information regarding how the trust voted proxies relating
to portfolio securities during the most recent twelve-month period ended
June 30 by visiting our Web site at www.vankampen.com. This information
is also available on the Securities and Exchange Commission's Web site at
http://www.sec.gov.
8
Investment Advisory Agreement Approval
Both the Investment Company Act of 1940 and the terms of the Fund's investment
advisory agreement require that the investment advisory agreement between the
Fund and its investment adviser be approved annually both by a majority of the
Board of Trustees and by a majority of the independent trustees voting
separately.
On May 25, 2005, the Board of Trustees, and the independent trustees voting
separately, determined that the terms of the investment advisory agreement are
fair and reasonable and approved the continuance of the investment advisory
contract as being in the best interests of the Fund and its shareholders. In
making its determination, the Board of Trustees considered materials that were
specifically prepared by the investment adviser at the request of the Board and
Fund counsel, and by an independent provider of investment company data
contracted to assist the Board, relating to the contract review process. The
Board also considered information received periodically about the portfolio,
performance, the investment strategy, portfolio management team and fees and
expenses of the Fund. Finally, the Board considered materials it had received in
approving a change in the advisory fee rate effective November 1, 2004 and
materials it had received in approving a reorganization of the Fund. The Board
of Trustees considered the contract over a period of several months and the
non-management trustees held sessions both with the investment adviser and
separate from the investment adviser in reviewing and considering the contract.
In approving the investment advisory agreement, the Board of Trustees
considered, among other things, the nature, extent and quality of the services
provided by the investment adviser, the performance, fees and expenses of the
Fund compared to other similar funds and other products, the investment
adviser's expenses in providing the services and the profitability of the
investment adviser and its affiliated companies. The Board of Trustees
considered the extent to which any economies of scale experienced by the
investment adviser are shared with the Fund's shareholders, and the propriety of
breakpoints in the Fund's investment advisory fee schedule. The Board of
Trustees considered comparative advisory fees of the Fund and other investment
companies and/or other products at different asset levels, and considered the
trends in the industry. The Board of Trustees evaluated other benefits the
investment adviser and its affiliates derive from their relationship with the
Fund. The Board of Trustees reviewed information about the foregoing factors and
considered changes, if any, in such information since its previous approval. The
Board of Trustees discussed the financial strength of the investment adviser and
its affiliated companies and the capability of the personnel of the investment
adviser, and specifically the strength and background of its portfolio
management personnel. The Board of Trustees reviewed the statutory and
regulatory requirements for approval and disclosure of investment advisory
agreements. The Board of Trustees, including the independent trustees, evaluated
all of the foregoing and does not believe any single factor or group of
9
factors control or dominate the review process, and, after considering all
factors together, has determined, in the exercise of its business judgment, that
approval of the investment advisory agreement is in the best interests of the
Fund and its shareholders. The following summary provides more detail on certain
matters considered but does not detail all matters considered.
Nature, Extent and Quality of the Services Provided. On a regular basis, the
Board of Trustees considers the roles and responsibilities of the investment
adviser as a whole and for those specific portfolio management, support and
trading functions servicing the Fund. The trustees discuss with investment
adviser the resources available and used in managing the Fund. The trustees also
discuss certain other services which are provided on a cost-reimbursement basis
by the investment adviser or its affiliates to the Van Kampen funds including
certain accounting, administrative and legal services. The Board has determined
that the nature, extent and quality of the services provided by the investment
adviser support its decision to approve the investment advisory contract.
Performance, Fees and Expenses of the Fund. On a regular basis, the Board of
Trustees reviews the performance, fees and expenses of the Fund compared to its
peers and to appropriate benchmarks. In addition, a performance committee of the
Board spends more focused time on the performance of the Fund and other funds in
the Van Kampen complex, paying specific attention to underperforming funds. The
trustees discuss with the investment adviser the performance goals and the
actual results achieved in managing the Fund. When considering a fund's
performance, the trustees and the investment adviser place emphasis on trends
and longer-term returns (focusing on one-year, three-year and five-year
performance with special attention to three-year performance) and, when a fund's
weighted performance is under the fund's benchmark, they discuss the causes and
where necessary seek to make specific changes to investment strategy or
investment personnel. The Fund discloses more information about its performance
elsewhere in this report and in the Fund's prospectus. The trustees discuss with
the investment adviser the level of advisory fees for this Fund relative to
comparable funds and other products advised by the adviser and others in the
marketplace. The trustees review not only the advisory fees but other fees and
expenses (whether paid to the adviser, its affiliates or others) and the Fund's
overall expense ratio. The Board has determined that the performance, fees and
expenses of the Fund support its decision to approve the investment advisory
contract.
Investment Adviser's Expenses in Providing the Service and Profitability. At
least annually, the trustees review the investment adviser's expenses in
providing services to the Fund and other funds advised by the investment adviser
and the profitability of the investment adviser. These profitability reports are
put together by the investment adviser with the oversight of a special ad hoc
committee of the Board. The trustees discuss with the investment adviser its
revenues and expenses, including among other things, revenues for advisory
10
services, portfolio management-related expenses, revenue sharing arrangement
costs and allocated expenses both on an aggregate basis and per fund. The Board
has determined that the analysis of the investment adviser's expenses and
profitability support its decision to approve the investment advisory contract.
Economies of Scale. On a regular basis, the Board of Trustees considers the size
of the Fund and how that relates to the Fund's expense ratio and particularly
the Fund's advisory fee rate. In conjunction with its review of the investment
adviser's profitability, the trustees discuss with the investment adviser how
more (or less) assets can affect the efficiency or effectiveness of managing the
Fund's portfolio and whether the advisory fee level is appropriate relative to
current asset levels and/or whether the advisory fee structure reflects
economies of scale as asset levels change. The Board has determined that its
review of the actual and potential economies of scale of the Fund support its
decision to approve the investment advisory contract.
Other Benefits of the Relationship. On a regular basis, the Board of Trustees
considers other benefits to the investment adviser and it affiliates derived
from its relationship with the Fund and other funds advised by the investment
adviser. These benefits include, among other things, fees for transfer agency
services provided to the funds, in certain cases research received by the
adviser generated from commission dollars spent on funds' portfolio trading, and
in certain cases distribution or service related fees related to funds' sales.
The trustees review with the investment adviser each of these arrangements and
the reasonableness of its costs relative to the services performed. The Board
has determined that the other benefits received by the investment adviser or its
affiliates support its decision to approve the investment advisory contract.
11
VAN KAMPEN MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
MUNICIPAL BONDS 152.1%
ALABAMA 1.7%
$3,660 Alabama St Brd Ed Rev & Impt Southn Univ St
Cmnty Rfdg (MBIA Insd) (a)................. 5.250% 07/01/20 $ 4,031,234
1,000 Jefferson Cnty, AL Ltd Oblig Sch Wt Ser
A.......................................... 5.000 01/01/24 1,055,240
-------------
5,086,474
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ALASKA 3.0%
2,000 Alaska St Hsg Fin Corp Gen Hsg Ser A (FGIC
Insd)...................................... 5.000 12/01/30 2,119,360
1,250 Alaska St Hsg Fin Corp Gen Hsg Ser A (FGIC
Insd)...................................... 5.250 12/01/34 1,355,750
3,650 Alaska St Intl Arpt Rev Ser B (AMBAC
Insd)...................................... 5.250 10/01/27 3,933,349
1,575 Matanuska-Susitna Boro, AK Ctf Part Pub
Safety Bldg Lease (FSA Insd)............... 5.750 03/01/16 1,740,280
-------------
9,148,739
-------------
ARIZONA 0.4%
1,000 Arizona Hlth Fac Auth Hosp John C Lincoln
Hlth Network............................... 6.375 12/01/37 1,114,600
-------------
CALIFORNIA 15.6%
2,735 Anaheim, CA Pub Fin Auth Rev Elec Sys Dist
Fac Ser A (FSA Insd)....................... 5.000 10/01/31 2,885,288
1,745 California Ed Fac Auth Rev Pepperdine Univ
Ser A Rfdg (FGIC Insd)..................... 5.000 09/01/33 1,846,611
2,500 California St (AMBAC Insd)................. 5.000 04/01/21 2,654,875
4,500 California St (AMBAC Insd)................. 5.125 10/01/27 4,721,760
5,000 California St.............................. 5.000 02/01/33 5,265,400
1,000 California St Dept Wtr Res Ctr Wtr Sys Ser
X (FGIC Insd).............................. 5.000 12/01/29 1,060,650
1,000 California St Dept Wtr Res Pwr Ser A....... 6.000 05/01/15 1,163,630
1,000 California St Dept Wtr Res Pwr Ser A (AMBAC
Insd)...................................... 5.500 05/01/16 1,126,230
2,500 California St Dept Wtr Res Pwr Ser A (AMBAC
Insd) (b).................................. 5.375 05/01/18 2,782,225
5,000 California St Univ Rev & Co Systemwide Ser
A (AMBAC Insd)............................. 5.000 11/01/33 5,280,750
5,000 Contra Costa, CA Home Mtg Fin Auth Home Mtg
Rev (Escrowed to Maturity) (MBIA Insd)..... * 09/01/17 2,426,800
1,500 Long Beach, CA Bd Fin Auth Rev Redev Hsg &
Gas Util Fin Ser A-1 (AMBAC Insd).......... 5.000 08/01/35 1,583,250
4,000 Los Angeles, CA Dept Wtr & Pwr Ser A (FGIC
Insd)...................................... 5.125 07/01/40 4,216,280
2,000 Los Angeles, CA Wtr & Pwr Rev Pwr Sys Ser B
(FSA Insd)................................. 5.000 07/01/28 2,125,260
1,500 Metropolitan Wtr Dist Southn CA Auth Ser B
1 (FGIC Insd).............................. 5.000 10/01/33 1,595,235
</Table>
12 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$1,750 Palm Springs, CA Fin Auth Lease Rev
Convention Ctr Proj Ser A (MBIA Insd)...... 5.500% 11/01/35 $ 1,979,425
3,200 San Jose, CA Fin Auth Lease Rev Civic Ctr
Proj Ser B (AMBAC Insd).................... 5.000 06/01/32 3,360,672
1,000 Santa Clara Cnty, CA Brd Ed Rfdg (MBIA
Insd)...................................... 5.000 04/01/25 1,058,850
-------------
47,133,191
-------------
COLORADO 3.8%
3,405 Colorado Ed & Cultural Fac Impt Charter Sch
Rfdg (XLCA Insd)........................... 5.250 12/01/23 3,690,135
2,325 Colorado Ed & Cultural Fac Student Hsg Univ
Colo Fndtn Proj (AMBAC Insd)............... 5.000 07/01/32 2,444,761
1,000 Colorado Hlth Fac Auth Rev Catholic Hlth
Initiatives Ser A (Escrowed to Maturity)... 5.500 03/01/32 1,122,520
3,000 Colorado Springs, CO Util Rev Sys Sub Lien
Impt Ser A Rfdg............................ 5.000 11/15/29 3,138,840
1,000 El Paso Cnty, CO Ctf Part Detention Fac
Proj Ser B (AMBAC Insd).................... 5.375 12/01/18 1,116,370
-------------
11,512,626
-------------
CONNECTICUT 1.0%
1,750 Connecticut St Spl Oblig Pkg Rev Bradley
Intl Arpt Ser A (AMT) (ACA Insd)........... 6.600 07/01/24 1,906,817
1,000 Hartford, CT Pkg Sys Rev Ser A (Prerefunded
@ 7/1/10).................................. 6.500 07/01/25 1,150,190
-------------
3,057,007
-------------
DISTRICT OF COLUMBIA 1.0%
2,775 District of Columbia Hosp Rev Medlantic
Hlthcare Ser A Rfdg (Escrowed to Maturity)
(MBIA Insd)................................ 5.250 8/15/12 2,906,368
-------------
FLORIDA 11.3%
2,500 Brevard Cnty, FL Sch Brd Ctf Ser B Rfdg
(FGIC Insd)................................ 5.000 07/01/21 2,703,225
3,000 Broward Cnty, FL Sch Brd Ctf Ser A (FSA
Insd)...................................... 5.000 07/01/29 3,205,740
230 Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC
Insd)...................................... 5.950 07/01/20 232,597
1,700 Florida St Brd of Ed Pub Ed Ser A.......... 5.000 06/01/32 1,800,980
2,295 Florida St Dept Trans Tpk Rev Ser A........ 5.000 07/01/29 2,467,974
2,420 Florida St Muni Ln Council Rev Ser A (MBIA
Insd) (a).................................. 5.000 02/01/24 2,596,079
1,745 Hillsborough Cnty, FL Port Dist Tampa Port
Auth Proj Ser A (AMT) (MBIA Insd).......... 5.375 06/01/27 1,881,564
1,000 Marion Cnty, FL Sch Brd Ctf (FSA Insd)..... 5.250 06/01/18 1,104,090
1,500 Miami Beach, FL Stormwtr Rev (FGIC Insd)... 5.250 09/01/25 1,620,885
</Table>
See Notes to Financial Statements 13
VAN KAMPEN MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$1,720 Miami-Dade Cnty, FL Aviation Rev Miami Intl
Arpt (AMT) (FGIC Insd)..................... 5.375% 10/01/32 $ 1,835,911
5,000 Miami-Dade Cnty, FL Spl Oblig Cap Apprec &
Income Sub Ser A (MBIA Insd) (c)........... 0.000/5.000 10/01/30 3,476,900
3,000 Orange Cnty, FL Sch Brd Ctf Ser A (AMBAC
Insd)...................................... 5.250 08/01/14 3,354,720
4,000 Orange Cnty, FL Tourist Dev Tax Rev
(Prerefunded @ 10/01/09) (AMBAC Insd)...... 5.625 10/01/14 4,420,320
2,000 Orange Cnty, FL Tourist Dev Tax Rev
(Prerefunded @ 10/01/09) (AMBAC Insd)...... 5.500 10/01/31 2,200,240
1,115 Tallahassee, FL Lease Rev FL St Univ Proj
Ser A (MBIA Insd) (a)...................... 5.500 08/01/19 1,239,780
-------------
34,141,005
-------------
GEORGIA 5.4%
3,483 Fulton Cnty, GA Lease Rev (Acquired
12/23/94, Cost $3,483,124) (d)............. 7.250 06/15/10 3,638,089
2,635 Georgia Muni Elec Auth Pwr Rev Ser A (MBIA
Insd)...................................... 6.500 01/01/20 3,386,713
3,000 Georgia Muni Elec Auth Pwr Rev Ser B Rfdg
(FGIC Insd)................................ 6.250 01/01/17 3,700,290
2,000 Municipal Elec Auth GA Combustion Turbine
Proj Ser A (MBIA Insd)..................... 5.250 11/01/22 2,196,120
800 Royston, GA Hosp Auth Hosp Rev Ctf Hlthcare
Sys Inc.................................... 6.700 07/01/16 826,576
2,500 Royston, GA Hosp Auth Hosp Rev Ctf Hlthcare
Sys Inc.................................... 6.500 07/01/27 2,537,125
-------------
16,284,913
-------------
ILLINOIS 12.0%
4,000 Chicago, IL Brd Ed Chicago Sch Reform Ser A
(AMBAC Insd)............................... 5.250 12/01/27 4,259,640
1,400 Chicago, IL Brd Ed Ser A (Prerefunded @
12/01/11) (MBIA Insd)...................... 5.500 12/01/28 1,582,182
1,500 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien C 2 Rfdg (AMT) (FSA Insd)....... 5.250 01/01/30 1,597,845
1,500 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien C-2 Rfdg (AMT) (XLCA Insd)...... 5.250 01/01/34 1,595,640
1,000 Chicago, IL O'Hare Intl Arpt Rev Second
Lien Passenger Fac Ser B (AMBAC Insd)...... 5.500 01/01/16 1,104,150
1,000 Chicago, IL Proj Ser C Rfdg (FGIC Insd).... 5.750 01/01/14 1,125,550
1,000 Chicago, IL Proj Ser C Rfdg (FGIC Insd).... 5.750 01/01/15 1,118,910
4,895 Chicago, IL Pub Bldg Comm Bldg Rev Ser A
(Escrowed to Maturity) (MBIA Insd)......... * 01/01/07 4,689,116
1,000 Chicago, IL Ser B Rfdg (AMBAC Insd)........ 5.125 01/01/15 1,111,010
1,000 Cook Cnty, IL Ser A (FGIC Insd)............ 5.500 11/15/31 1,092,010
3,230 Cook Cnty, IL Ser A Rfdg (MBIA Insd)....... 5.625 11/15/16 3,446,798
</Table>
14 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$2,310 Illinois Dev Fin Auth Rev Adventist Hlth
Ser A (MBIA Insd).......................... 5.500% 11/15/13 $ 2,619,101
2,500 Illinois Dev Fin Auth Rev Adventist Hlth
Ser A (MBIA Insd).......................... 5.500 11/15/15 2,841,950
2,000 Illinois Ed Fac Auth Rev Lewis Univ........ 6.125 10/01/26 2,005,020
1,500 Illinois St First Ser (FGIC Insd).......... 5.375 11/01/14 1,673,580
1,900 Kendall, Kane & Will Cntys, IL Cmnty Unit
Sch Dist No. 308 Ser B (FGIC Insd)......... 5.250 10/01/21 2,084,452
1,250 Sangamon Cnty, IL Ctf Part................. 10.000 12/01/06 1,369,412
1,000 Schaumburg, IL Ser B (FGIC Insd)........... 5.000 12/01/41 1,055,700
-------------
36,372,066
-------------
INDIANA 3.0%
1,000 Clark Pleasant, IN Cmnty Sch First Mtg
(AMBAC Insd)............................... 5.500 07/15/18 1,113,850
1,500 Indiana Hlth Fac Fin Auth Cmnthy Hosp Rev
Proj Ser A (AMBAC Insd).................... 5.000 05/01/35 1,584,645
4,000 Indiana Hlth Fac Fin Auth Rev Deaconess
Hosp Ser A (AMBAC Insd).................... 5.375 03/01/34 4,353,480
2,000 Indiana Trans Fin Auth Toll Rfdg (AMBAC
Insd)...................................... 5.375 07/01/09 2,089,980
-------------
9,141,955
-------------
KANSAS 2.7%
3,810 Kansas St Dev Fin Auth Rev KS Proj Ser N
(AMBAC Insd) (a)........................... 5.250 10/01/22 4,159,644
1,250 Kansas St Dev Fin Auth Rev KS St Proj
(AMBAC Insd)............................... 5.500 03/01/16 1,383,925
2,235 Sedgwick Cnty, KA Uni Sch Dist No. 259
Wichita (MBIA Insd)........................ 5.500 09/01/11 2,494,729
-------------
8,038,298
-------------
KENTUCKY 0.8%
2,190 Kenton Cnty, KY Arpt Brd Rev Cincinnati/
Northn KY Intl Arpt Ser A Rfdg (AMT) (MBIA
Insd)...................................... 6.250 03/01/09 2,395,093
-------------
LOUISIANA 4.0%
4,395 Ernest N Morial New Orleans LA Sr Sub Ser A
(AMBAC Insd)............................... 5.250 07/15/22 4,868,254
3,000 Lafayette, LA Util Rev (MBIA Insd)......... 5.250 11/01/21 3,325,380
995 Louisiana Hsg Fin Agy Rev Azalea Estates
Ser A Rfdg (AMT) (GNMA Collateralized)..... 5.375 10/20/39 1,048,571
2,580 Louisiana Loc Govt Environmental Rev
Southeastn LA Student Hsg A (MBIA Insd).... 5.250 08/01/21 2,843,212
-------------
12,085,417
-------------
</Table>
See Notes to Financial Statements 15
VAN KAMPEN MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
MARYLAND 1.5%
$2,180 Baltimore, MD Cap Apprec Ser A (FGIC
Insd)...................................... * 10/15/09 $ 1,702,689
1,325 Maryland St Hlth & Higher Ed Fac Auth Rev
Civista Med Ctr (Radian Insd).............. 5.000% 07/01/37 1,370,129
1,425 Maryland St Hlth & Higher Ed Fac Auth Rev
Un Hosp Cecil Cnty Issue (e)............... 5.000 07/01/35 1,473,863
-------------
4,546,681
-------------
MASSACHUSETTS 1.1%
1,000 Massachusetts St Indl Fin Agy Rev Higher Ed
Hampshire College Proj (Prerefunded @
10/01/07).................................. 5.625 10/01/12 1,076,450
2,000 Massachusetts St Spl Oblig Dedicated Tax
Rev (Prerefunded @ 01/01/14) (FGIC Insd)... 5.000 01/01/34 2,207,380
-------------
3,283,830
-------------
MICHIGAN 2.7%
1,000 Grand Rapids, MI Wtr Supply Sys Rfdg (FGIC
Insd)...................................... 5.750 01/01/13 1,124,240
1,180 Hillsdale, MI Hosp Fin Auth Hosp Rev
Hillsdale Cmnty Hlth Ctr................... 5.750 05/15/18 1,277,326
1,000 Kent Hosp Fin Auth MI Rev Met Hosp Proj Ser
A.......................................... 6.000 07/01/35 1,089,550
1,000 Michigan St Strategic Fd Detroit Edison Co
Proj C Rfdg (AMT) (XLCA Insd).............. 5.450 12/15/32 1,074,410
2,500 Michigan St Strategic Fd Detroit Edison
Conv Rfdg (Variable Rate Coupon) (AMBAC
Insd)...................................... 4.850 09/01/30 2,666,400
1,000 Michigan St Strategic Fd Detroit Edison
Pollutn Ctl Ser B Rfdg (AMT)............... 5.650 09/01/29 1,062,340
-------------
8,294,266
-------------
MISSISSIPPI 0.5%
1,500 Mississippi Hosp Equip & Fac MS Baptist Med
Ctr Rfdg (MBIA Insd)....................... 6.000 05/01/13 1,533,870
-------------
MISSOURI 1.8%
1,250 Cole Cnty, MO Indl Dev Auth Sr Living Fac
Rev Lutheran Sr Svcs Heisinger Proj........ 5.500 02/01/35 1,325,550
2,720 Platte Cnty, MO Neighborhood Impt Parkville
B (MBIA Insd).............................. 5.000 02/01/22 2,912,331
1,250 Saint Charles, MO Ctf Part Ser B........... 5.500 05/01/18 1,347,525
-------------
5,585,406
-------------
</Table>
16 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
NEBRASKA 1.1%
$3,025 Nebraska Pub Pwr Dist Rev Gen Ser A (AMBAC
Insd)...................................... 5.000% 01/01/35 $ 3,203,868
-------------
NEVADA 4.2%
4,000 Clark Cnty, NV Arpt Rev Sub Lien Ser A-2
(FGIC Insd)................................ 5.000 07/01/36 4,216,360
5,165 Clark Cnty, NV Bd Bk (MBIA Insd)........... 5.000 06/01/32 5,414,160
3,000 Clark Cnty, NV Indl Dev Rev Southwest Gas
Corp Proj Ser A (AMT) (AMBAC Insd)......... 5.250 07/01/34 3,200,040
-------------
12,830,560
-------------
NEW JERSEY 4.9%
1,000 Bergen Cnty, NJ Impt Auth Sch Wyckoff Twp
Brd Ed Proj................................ 5.000 04/01/32 1,075,190
3,000 Casino Reinv Dev Auth NJ Hotel Room Fee Rev
(AMBAC Insd)............................... 5.250 01/01/22 3,311,310
1,200 New Jersey Econ Dev Auth Rev Cigarette
Tax........................................ 5.750 06/15/29 1,299,900
1,500 New Jersey Econ Dev Auth Rev Motor Vehicle
Sur Rev Ser A (MBIA Insd).................. 5.000 07/01/23 1,610,700
1,835 New Jersey St Ed Fac Auth Higher Ed Cap
Impt Ser A (AMBAC Insd).................... 5.250 09/01/21 2,011,380
3,000 New Jersey St Tpk Auth Tpk Rev Ser C-1
(AMBAC Insd)............................... 5.000 01/01/35 3,159,120
2,095 New Jersey St Trans Tr Fd Auth Trans Sys
Ser A...................................... 5.750 06/15/17 2,474,677
-------------
14,942,277
-------------
NEW YORK 19.2%
3,000 Metropolitan Trans Auth NY Ser A Rfdg
(AMBAC Insd)............................... 5.500 11/15/18 3,385,860
6,000 Metropolitan Trans Auth NY Ser A Rfdg (FSA
Insd)...................................... 5.000 11/15/30 6,358,020
2,500 Metropolitan Trans Auth NY Ser A Rfdg (FGIC
Insd)...................................... 5.250 11/15/31 2,717,900
5,700 New York City Muni Wtr Fin Auth Ser A (FSA
Insd) (a).................................. 5.375 06/15/17 6,356,754
4,220 New York City Ser B (AMBAC Insd)........... 7.250 08/15/07 4,600,053
280 New York City Ser B (Escrowed to Maturity)
(AMBAC Insd)............................... 7.250 08/15/07 306,340
445 New York City Ser C........................ 7.000 08/15/08 446,513
2,500 New York City Ser E (FSA Insd)............. 5.000 11/01/20 2,716,400
1,000 New York City Ser H........................ 5.750 03/15/13 1,123,710
6,930 New York City Trans Auth Trans Fac
Livingston Plaza Proj Rfdg (Escrowed to
Maturity) (FSA Insd)....................... 5.400 01/01/18 7,915,446
3,000 New York City Transitional Fin Auth Rev
Future Tax Secd Ser A Rfdg (c)............. 5.500/14.000 11/01/26 3,367,680
</Table>
See Notes to Financial Statements 17
VAN KAMPEN MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$3,000 New York St Dorm Auth Rev Hosp (MBIA
Insd)...................................... 5.000% 08/01/33 $ 3,206,520
2,000 New York St Dorm Auth Rev Sch Dist Fin Pgm
Ser D (MBIA Insd).......................... 5.500 10/01/17 2,253,460
3,000 New York, NY City Muni Wtr Fin Auth Wtr &
Sew Sys Rev Ser A (AMBAC Insd)............. 5.000 06/15/35 3,184,860
2,680 Port Auth NY & NJ Cons 119th Ser (AMT)
(FGIC Insd)................................ 5.500 09/15/17 2,779,080
2,500 Sales Tax Asset Receivable Corp Ser A (MBIA
Insd)...................................... 5.000 10/15/23 2,709,450
3,750 Triborough Brdg & Tunl Auth NY Rev Rfdg
(MBIA Insd)................................ 5.000 11/15/32 3,968,887
700 Westchester, NY Tob Asset Securitization
Corp....................................... 5.125 06/01/38 702,562
-------------
58,099,495
-------------
NORTH CAROLINA 5.7%
2,000 Charlotte, NC Ctf Part Convention Fac Proj
Ser A Rfdg................................. 5.500 08/01/19 2,247,260
3,000 North Carolina Eastern Muni Pwr Agy Pwr Sys
Rev Ser D.................................. 6.750 01/01/26 3,370,560
10,000 North Carolina Muni Pwr Agy No 1 Catawba
Elec Rev Rfdg (MBIA Insd).................. 6.000 01/01/12 11,527,500
-------------
17,145,320
-------------
OHIO 3.9%
1,000 Cleveland, OH Muni Sch Dist (FSA Insd)..... 5.250 12/01/23 1,098,080
3,000 Columbus, OH City Sch Dist Sch Fac Constr &
Impt (FSA Insd)............................ 5.250 12/01/22 3,322,860
1,000 Cuyahoga Cnty, OH Hosp Fac Rev Canton Inc
Proj....................................... 7.500 01/01/30 1,137,210
2,660 Licking Heights, OH Loc Sch Dist (FGIC
Insd)...................................... 5.250 12/01/23 2,929,298
1,000 Lorain Cnty, OH Hosp Rev Catholic
Hlthcare................................... 5.375 10/01/30 1,057,050
2,000 Lorain, OH City Sch Dist Classroom Fac Impt
(MBIA Insd)................................ 5.250 12/01/20 2,218,820
-------------
11,763,318
-------------
OKLAHOMA 0.4%
1,000 Central, OK Trans & Pkg Auth Pkg Sys (AMBAC
Insd)...................................... 5.000 07/01/18 1,082,500
-------------
</Table>
18 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
OREGON 1.6%
$1,350 Oregon Hlth Sciences Univ Insd Ser A (MBIA
Insd)...................................... 5.250% 07/01/22 $ 1,486,930
2,060 Oregon St Dept Admin Ser C Rfdg (MBIA
Insd)...................................... 5.250 11/01/17 2,267,524
1,135 Portland, OR Swr Sys Rev Second Lien Ser A
Rfdg (FSA Insd)............................ 5.250 06/01/19 1,255,594
-------------
5,010,048
-------------
PENNSYLVANIA 9.0%
1,500 Allegheny Cnty, PA San Auth Swr (MBIA
Insd)...................................... 5.500 12/01/30 1,688,655
575 Allegheny Cnty, PA Ser C-53 Rfdg (FGIC
Insd)...................................... 5.500 11/01/14 641,694
1,000 Greensburg Salem, PA Sch Dist Rfdg (FGIC
Insd)...................................... 5.375 09/15/15 1,118,830
1,500 Harrisburg, PA Auth Res Gtd Sub Ser D-2
(Variable Rate Coupon) (FSA Insd).......... 5.000 12/01/33 1,637,880
1,200 Harrisburg, PA Cap Apprec Nt Ser F Rfdg
(AMBAC Insd)............................... * 09/15/14 836,004
1,000 Pennsylvania St Higher Ed FAC Auth Rev UPMC
Hlth Sys Ser A............................. 6.250 01/15/18 1,131,360
2,600 Philadelphia, PA Auth Indl Ser B (FSA
Insd)...................................... 5.500 10/01/16 2,919,098
2,400 Philadelphia, PA Gas Wks Rev 1998 Gen
Ordinance Fourth Ser (FSA Insd)............ 5.250 08/01/22 2,611,488
1,290 Philadelphia, PA Gas Wks Rev Eighteenth Ser
(AGC Insd)................................. 5.250 08/01/19 1,409,222
4,570 Pittsburgh, PA Ser A (AMBAC Insd).......... 5.500 09/01/16 5,080,515
2,000 Ridley Park, PA Hosp Auth Rev Taylor Hosp
Ser A (Escrowed to Maturity)............... 6.000 12/01/13 2,250,900
5,600 State Pub Sch Bldg Auth PA Sch Rev Lease
Philadelphia Sch Dist Proj (FSA Insd)...... 5.000 06/01/33 5,916,344
-------------
27,241,990
-------------
RHODE ISLAND 0.7%
2,000 Rhode Island Clean Wtr Fin Revolving Fd
Pooled Ln Assn Ser A....................... 5.000 10/01/21 2,168,580
-------------
SOUTH CAROLINA 1.5%
1,000 Chesterfield Cnty, SC Sch Dist (FSA
Insd)...................................... 5.375 03/01/18 1,108,420
2,300 Medical Univ SC Hosp Auth Facs FHA Insd Mtg
Ser A Rfdg (MBIA Insd)..................... 5.250 08/15/25 2,497,731
1,000 South Carolina Jobs Econ Dev Auth Indl Rev
Elec & Gas Co Proj Ser A (AMBAC Insd)...... 5.200 11/01/27 1,083,520
-------------
4,689,671
-------------
SOUTH DAKOTA 0.3%
875 Deadwood, SD Ctf Partn (ACA Insd).......... 6.375 11/01/20 942,121
-------------
</Table>
See Notes to Financial Statements 19
VAN KAMPEN MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
TENNESSEE 1.7%
$2,000 Johnson City, TN Hlth & Ed Fac Brd Hosp Rev
First Mtg Mtn St Hlth Ser A Rfdg (MBIA
Insd)...................................... 7.500% 07/01/25 $ 2,521,480
2,500 Memphis, TN (Prerefunded @ 10/01/06)....... 5.250 10/01/14 2,605,075
-------------
5,126,555
-------------
TEXAS 13.0%
300 Brazos Cnty, TX Hlth Fac Dev Oblig Grp..... 5.375 01/01/32 314,487
1,430 Cameron Cnty, TX Ctf Oblig (Prerefunded @
02/15/10) (AMBAC Insd) (a)................. 5.750 02/15/15 1,580,050
1,000 Harris Cnty, TX Hlth Fac Dev Mem Hermann
Hlthcare Ser A............................. 6.375 06/01/29 1,112,110
2,000 Harris Cnty, TX Perm Impt & Rfdg........... 5.000 10/01/11 2,090,640
4,820 Harris Cnty, TX Toll Rd (Prerefunded @
08/15/09) (AMBAC Insd)..................... * 08/15/18 2,281,499
1,000 Harris Cnty, TX Toll Rd (Prerefunded @
08/15/09) (AMBAC Insd)..................... * 08/15/21 385,050
2,000 Harris Cnty, TX Toll Rd Sub Lien Rfdg...... 5.000 08/01/33 2,044,920
2,250 Harris Cnty-Houston, TX Sports Auth Spl Rev
Jr Lien Ser B Rfdg (MBIA Insd)............. 5.250 11/15/40 2,381,468
2,105 Houston, TX Hotel Occupancy Tax & Spl Rev
Convention & Entmt Ser B (AMBAC Insd)...... 5.750 09/01/15 2,377,492
95 Houston, TX Pub Impt & Rfdg (FSA Insd)..... 5.750 03/01/15 106,046
2,750 Lower CO Riv Auth TX Transmission Contract
Rev Svc Corp Proj Rfdg (FGIC Insd)......... 5.000 05/15/33 2,859,725
2,500 Mabank, TX Indpt Sch Dist (PSF Gtd)........ 5.125 08/15/35 2,640,700
1,500 Mesquite, TX Hlth Fac Dev Retirement Fac
Christian A................................ 7.500 02/15/18 1,646,025
1,100 Metropolitan Hlth Fac Dev Corp TX Wilson N
Jones Mem Hosp Proj........................ 7.200 01/01/21 1,138,731
1,750 North Cent TX Hlth Fac Dev Hosp Childrens
Med Ctr Dallas (AMBAC Insd)................ 5.250 08/15/32 1,875,510
2,805 Tarrant Regl Wtr Dist TX Wtr Impt Rfdg (FSA
Insd)...................................... 5.250 03/01/19 3,079,105
3,272 Texas Mun Pwr Agy Rev (AMBAC Insd)......... * 09/01/07 3,069,071
253 Texas Mun Pwr Agy Rev (Escrowed to
Maturity) (AMBAC Insd)..................... * 09/01/07 237,666
1,610 Texas St Pub Ppty Fin Corp Rev Mental Hlth
& Retardation Rfdg (FSA Insd).............. 5.500 09/01/13 1,617,229
1,000 Texas Tech Univ Rev Fin Sys Seventh (MBIA
Insd)...................................... 5.000 08/15/25 1,059,440
1,500 Texas Wtr Dev Brd Rev St Revolving Fd Sr
Lien Ser B................................. 5.250 07/15/17 1,622,085
1,000 Trinity River Auth TX Rev Tarrant Cnty Wtr
Proj Impt & Rfdg (MBIA Insd)............... 5.500 02/01/21 1,118,780
2,500 University TX Rev Fin Sys Ser B............ 5.250 08/15/20 2,756,775
-------------
39,394,604
-------------
</Table>
20 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
UTAH 0.4%
$1,000 Salt Lake Cnty, UT College Rev Westminster
College Proj............................... 5.750% 10/01/27 $ 1,034,270
90 Utah St Hsg Fin Agy Single Family Mtg Ser B
Class 2 (AMT) (FHA/VA Gtd)................. 6.250 07/01/14 91,108
-------------
1,125,378
-------------
VIRGINIA 0.7%
500 Tobacco Settlement Fin Corp VA............. 5.500 06/01/26 513,435
1,670 Tobacco Settlement Fin Corp VA............. 5.625 06/01/37 1,717,862
-------------
2,231,297
-------------
WASHINGTON 5.6%
1,300 Energy Northwest WA Elec Rev Proj No 3 Ser
A Rfdg (FSA Insd).......................... 5.500 07/01/17 1,446,120
2,500 Goat Hill Ppty WA Lease Rev Govt Office
Bldg Proj (MBIA Insd)...................... 5.000 12/01/33 2,643,225
4,400 King Cnty, WA Ser B Rfdg (MBIA Insd)....... 5.250 01/01/34 4,642,836
1,500 Port Seattle, WA Rev Inter Lien Ser A Rfdg
(MBIA Insd) (e)............................ 5.000 03/01/35 1,598,775
3,000 Seattle, WA Wtr Sys Rev (MBIA Insd)........ 5.000 09/01/34 3,182,100
1,000 Spokane, WA Pub Fac Dist Hotel (MBIA
Insd)...................................... 5.750 12/01/20 1,149,450
2,100 Spokane, WA Pub Fac Dist Hotel (MBIA
Insd)...................................... 5.750 12/01/21 2,413,845
-------------
17,076,351
-------------
WEST VIRGINIA 1.3%
3,750 West Virginia Univ Rev Impt Univ Proj Ser C
(FGIC Insd)................................ 5.000 10/01/34 3,997,050
-------------
WISCONSIN 2.3%
2,345 Appleton, WI Wtrwks Rev Rfdg (FGIC Insd)... 5.375 01/01/19 2,593,711
510 Badger Tob Asset Securitization Corp WI.... 6.375 06/01/32 550,173
3,500 Milwaukee, WI Redev Auth Rev Milwaukee Pub
Schs (AMBAC Insd).......................... 5.125 08/01/22 3,766,385
-------------
6,910,269
-------------
GUAM 1.0%
2,800 Guam Pwr Auth Rev Ser A (AMBAC Insd)....... 5.250 10/01/34 3,020,108
-------------
</Table>
See Notes to Financial Statements 21
VAN KAMPEN MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2005 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
PUERTO RICO 0.3%
$1,000 Puerto Rico Indl Tourist Ed Med &
Environmental Ctl Fac Fin Auth Higher Ed
Rev........................................ 5.375% 02/01/19 $ 1,039,860
-------------
TOTAL LONG-TERM INVESTMENTS 152.1%
(Cost $430,750,962)........................................................ 460,703,025
SHORT-TERM INVESTMENT 1.1%
(Cost $3,300,000).......................................................... 3,300,000
-------------
TOTAL INVESTMENTS 153.2%
(Cost $434,050,962)........................................................ 464,003,025
OTHER ASSETS IN EXCESS OF LIABILITIES 1.3%.................................. 3,899,499
-------------
PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (54.5%).................. (165,125,822)
-------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0%............................... $ 302,776,702
=============
</Table>
Percentages are calculated as a percentage of net assets applicable to common
shares.
* Zero coupon bond
(a) The Trust owns 100% of the bond issuance.
(b) All or a portion of these securities have been physically segregated in
connection with open futures contracts.
(c) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date.
(d) These securities are restricted and may be resold only in transactions
exempt from registration which are normally those transactions with
qualified institutional buyers. Restricted securities comprise 1.2% of net
assets applicable to common shares.
(e) Securities purchased on a when-issued or delayed delivery basis.
ACA--American Capital Access
AGC--AGC Insured Custody Certificates
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
FGIC--Financial Guaranty Insurance Co.
FHA/VA-Federal Housing Administration/Department of Veterans Affairs
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
MBIA--Municipal Bond Investors Assurance Corp.
PSF--Public School Fund
Radian--Radian Asset Assurance
XLCA--XL Capital Assurance Inc.
22 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
June 30, 2005
<Table>
ASSETS:
Total Investments (Cost $434,050,962)....................... $464,003,025
Cash........................................................ 48,317
Receivables:
Interest.................................................. 6,456,991
Investments Sold.......................................... 1,802,700
Other....................................................... 10,321
------------
Total Assets............................................ 472,321,354
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 3,593,906
Investment Advisory Fee................................... 211,217
Income Distributions--Common Shares....................... 82,311
Variation Margin on Futures............................... 79,375
Other Affiliates.......................................... 17,083
Trustees' Deferred Compensation and Retirement Plans........ 316,253
Accrued Expenses............................................ 118,685
------------
Total Liabilities....................................... 4,418,830
Preferred Shares (including accrued distributions).......... 165,125,822
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $302,776,702
============
NET ASSET VALUE PER COMMON SHARES ($302,776,702 divided by
28,684,985 shares outstanding)............................ $ 10.56
============
NET ASSETS CONSIST OF:
Common Shares ($.01 par value with an unlimited number of
shares authorized, 28,684,985 shares issued and
outstanding).............................................. $ 286,850
Paid in Surplus............................................. 265,829,515
Net Unrealized Appreciation................................. 29,898,437
Accumulated Net Realized Gain............................... 5,514,345
Accumulated Undistributed Net Investment Income............. 1,247,555
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $302,776,702
============
PREFERRED SHARES ($.01 par value, authorized 1,000,000
shares, 330 issued with liquidation preference of $500,000
per share)................................................ $165,000,000
============
NET ASSETS INCLUDING PREFERRED SHARES....................... $467,776,702
============
</Table>
See Notes to Financial Statements 23
VAN KAMPEN MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS continued
Statement of Operations
For the Year Ended June 30, 2005
<Table>
INVESTMENT INCOME:
Interest.................................................... $22,146,706
-----------
EXPENSES:
Investment Advisory Fee..................................... 2,629,367
Preferred Share Maintenance................................. 435,067
Trustees' Fees and Related Expenses......................... 82,613
Legal....................................................... 64,822
Custody..................................................... 32,215
Other....................................................... 272,961
-----------
Total Expenses.......................................... 3,517,045
-----------
NET INVESTMENT INCOME....................................... $18,629,661
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 6,591,053
Futures................................................... (1,186,388)
-----------
Net Realized Gain........................................... 5,404,665
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 19,234,329
-----------
End of the Period:
Investments............................................. 29,952,063
Futures................................................. (53,626)
-----------
29,898,437
-----------
Net Unrealized Appreciation During the Period............... 10,664,108
-----------
NET REALIZED AND UNREALIZED GAIN............................ $16,068,773
===========
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $(3,078,965)
===========
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
OPERATIONS................................................ $31,619,469
===========
</Table>
24 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
JUNE 30, 2005 JUNE 30, 2004
------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income...................................... $ 18,629,661 $ 18,608,395
Net Realized Gain.......................................... 5,404,665 1,489,594
Net Unrealized Appreciation/Depreciation During the
Period................................................... 10,664,108 (19,692,828)
Distributions to Preferred Shareholders:
Net Investment Income.................................... (3,078,965) (1,580,017)
------------ ------------
Change in Net Assets Applicable to Common Shares from
Operations............................................... 31,619,469 (1,174,856)
Distributions to Common Shareholders:
Net Investment Income.................................... (16,794,084) (17,210,089)
Net Realized Gain........................................ (232,335) (1,325,170)
------------ ------------
NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
INVESTMENT ACTIVITIES.................................... 14,593,050 (19,710,115)
NET ASSETS APPLICABLE TO COMMON SHARES:
Beginning of the Period.................................... 288,183,652 307,893,767
------------ ------------
End of the Period (Including accumulated undistributed net
investment income of $1,247,555 and $2,505,440,
respectively)............................................ $302,776,702 $288,183,652
============ ============
</Table>
See Notes to Financial Statements 25
VAN KAMPEN MUNICIPAL INCOME TRUST
FINANCIAL HIGHLIGHTS
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
--------------------------------------
2005 2004 2003
--------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD............ $ 10.05 $ 10.73 $ 9.99
---------- ---------- ----------
Net Investment Income............................. .66 .65 .66
Net Realized and Unrealized Gain/Loss............. .56 (.62) .70
Common Share Equivalent of Distributions Paid to
Preferred Shareholders:
Net Investment Income............................. (.11) (.06) (.07)
---------- ---------- ----------
Total from Investment Operations.................... 1.11 (.03) 1.29
Distributions Paid to Common Shareholders:
Net Investment Income............................. (.59) (.60) (.55)
Net Realized Gain................................. (.01) (.05) -0-
---------- ---------- ----------
NET ASSET VALUE, END OF THE PERIOD.................. $ 10.56 $ 10.05 $ 10.73
---------- ---------- ----------
Common Share Market Price at End of the Period...... $ 9.10 $ 8.87 $ 9.66
Total Return (a).................................... 9.41% -1.63% 15.76%
Net Assets Applicable to Common Shares at End of the
Period (In millions).............................. $ 302.8 $ 288.2 $ 307.9
Ratio of Expenses to Average Net Assets Applicable
to Common Shares (b).............................. 1.18% 1.23% 1.21%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (b)................... 6.23% 6.25% 6.35%
Portfolio Turnover.................................. 34% 22% 35%
SUPPLEMENTAL RATIOS:
Ratio of Expenses to Average Net Assets Including
Preferred Shares (b).............................. .76% .79% .78%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (c)................... 5.20% 5.72% 5.67%
SENIOR SECURITIES:
Total Preferred Shares Outstanding.................. 330 330 330
Asset Coverage Per Preferred Share (d).............. $1,417,886 $1,373,451 $1,433,101
Involuntary Liquidating Preference Per Preferred
Share............................................. $ 500,000 $ 500,000 $ 500,000
Average Market Value Per Preferred Share............ $ 500,000 $ 500,000 $ 500,000
</Table>
(a)Total return assumes an investment at the common share market price at the
beginning of the period indicated, reinvestment of all distributions for the
period in accordance with the Trust's dividend reinvestment plan, and sale of
all shares at the closing common share market price at the end of the period
indicated.
(b)Ratios do not reflect the effect of dividend payments to preferred
shareholders.
(c)Ratios reflect the effect of dividend payments to preferred shareholders.
(d)Calculated by subtracting the Trust's total liabilities (not including the
preferred shares) from the Trust's total assets and dividing this by the
number of preferred shares outstanding.
(e)As required, effective July 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 June 30, 2002 was to increase net investment income
per share by $.01, decrease 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 .04%. Per shares, supplemental data for
the period prior to June 30, 2002 have not been restated to reflect this
change in presentation.
26
VAN KAMPEN MUNICIPAL INCOME TRUST
FINANCIAL HIGHLIGHTS continued
<Table>
<Caption>
YEAR ENDED JUNE 30,
- ---------------------------------------------------------------------------------------------
2002 (e) 2001 2000 1999 1998 1997 1996
- ---------------------------------------------------------------------------------------------
$ 9.62 $ 8.99 $ 9.56 $ 10.26 $ 10.01 $ 9.76 $ 9.76
---------- ---------- ---------- ---------- ---------- ---------- ----------
.70 .75 .81 .84 .89 .92 .94
.31 .66 (.55) (.70) .26 .26 .05
(.11) (.23) (.22) (.19) (.21) (.21) (.22)
---------- ---------- ---------- ---------- ---------- ---------- ----------
.90 1.18 .04 (.05) .94 .97 .77
(.53) (.55) (.61) (.65) (.69) (.72) (.77)
-0- -0- -0- -0- -0- -0- -0-
---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 9.99 $ 9.62 $ 8.99 $ 9.56 $ 10.26 $ 10.01 $ 9.76
---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 8.85 $ 8.89 $ 8.6875 $ 9.625 $ 10.875 $ 10.875 $ 9.875
5.64% 8.88% -3.08% -5.68% 6.85% 18.32% -4.27%
$ 286.4 $ 276.0 $ 258.0 $ 274.1 $ 292.3 $ 283.2 $ 273.7
1.25% 1.27% 1.32% 1.24% 1.23% 1.28% 1.31%
6.99% 7.94% 9.06% 8.23% 8.69% 9.25% 9.47%
41% 50% 54% 98% 103% 53% 29%
.79% .79% .81% .79% .79% .80% .82%
5.92% 5.50% 6.59% 6.35% 6.64% 7.18% 7.26%
330 330 330 330 330 330 330
$1,368,316 $1,336,403 $1,281,820 $1,330,642 $1,385,892 $1,358,326 $1,329,390
$ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000
$ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000
</Table>
See Notes to Financial Statements 27
VAN KAMPEN MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2005
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen 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 income tax, consistent with preservation of
capital. The Trust commenced investment operations on August 26, 1988.
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.
Futures contracts are valued at the settlement price established each day on the
exchange on which they are traded. Short-term securities with remaining
maturities of 60 days or less are valued at amortized cost, which is considered
to approximate 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 June 30, 2005, the Trust had $3,040,573 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 Subchapter M of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.
At June 30, 2005, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $433,778,726
============
Gross tax unrealized appreciation........................... $ 30,225,707
Gross tax unrealized depreciation........................... (1,408)
------------
Net tax unrealized appreciation on investments.............. $ 30,224,299
============
</Table>
28
VAN KAMPEN MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2005 continued
E. DISTRIBUTION OF INCOME AND GAINS The Trust declares and pays monthly
dividends from net investment income to common shareholders. Net realized gains,
if any, are distributed annually to common shareholders. Distributions from net
realized gains for book purposes may include short-term capital gains and gains
on future transactions. All short-term capital gains and a portion of futures
gains are included as ordinary income for tax purposes.
The tax character of distributions paid during the years ended June 30, 2005
and 2004 was as follows:
<Table>
<Caption>
2005 2004
Distributions paid from:
Ordinary income........................................... $119,108 $ 145,772
Long-term capital gain.................................... 177,940 1,305,092
-------- ----------
$297,048 $1,450,864
======== ==========
</Table>
Due to inherent differences in the recognition of income, expenses, and
realized gain/ losses under accounting principles generally accepted in the
United States of America and federal income tax purposes, permanent differences
between book and tax basis reporting have been identified and appropriately
reclassified on the Statement of Assets and Liabilities. A permanent difference
relating to book to tax accretion differences totaling $14,497 was reclassified
from accumulated undistributed net investment income to accumulated net realized
gain.
As of June 30, 2005, the component of distributable earnings on a tax basis
were as follows:
<Table>
Undistributed ordinary income............................... $ 15,674
Undistributed long-term capital gain........................ 5,393,590
</Table>
Net realized gains or losses may differ for financial and tax reporting
purposes primarily as a result of gains or losses recognized for tax purposes on
open futures contracts on June 30, 2005.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, Van Kampen Asset
Management (the "Adviser") provides investment advice and facilities to the
Trust for an annual fee payable monthly of .55% of the average daily net assets
of the Trust. Effective November 1, 2004, the investment advisory fee was
reduced from .60% to .55%.
For the year ended June 30, 2005, the Trust recognized expenses of
approximately $32,400 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, of which a trustee of the Trust is a partner of such
firm and he and his law firm provide legal services as legal counsel to the
Trust.
Under separate Legal Services, Accounting Services and Chief Compliance
Officer ("CCO") Employment agreements, the Adviser provides accounting and legal
services and the CCO provides compliance services to the Trust. The costs of
these services are allocated to each trust. For the year ended June 30, 2005,
the Trust recognized expenses of approximately $61,500, representing Van Kampen
Investment Inc.'s or its affiliates' (collectively "Van Kampen") cost of
providing accounting and legal services to the Trust, as well as, the salary,
benefits and related costs of the CCO and related support staff paid by Van
Kampen.
29
VAN KAMPEN MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2005 continued
Services provided pursuant to the Legal Services agreement are reported as part
of "Legal" expenses on the Statement of Operations. Services provided pursuant
to the Accounting Services and CCO Employment agreement are reported as part of
"Other" expenses on the Statement of Operations.
Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
also officers of Van Kampen.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable upon retirement for a
ten-year period and are based upon each trustee's years of service to the Trust.
The maximum annual benefit per trustee under the plan is $2,500.
3. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $156,365,760 and $160,650,567,
respectively.
4. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate,
or index.
In order to seek to manage the interest rate exposure of the Trust's
portfolio in a changing interest rate environment, the Trust may purchase or
sell financial futures contracts or engage in transactions involving interest
rate swaps, caps, floors, or collars. The Trust expects to enter into these
transactions primarily as a hedge against anticipated interest rate or
fixed-income market changes, for duration management or for risk management
purposes, but may also enter into these transactions to generate additional
income. All of the Trust's portfolio holdings, including derivative instruments,
are marked to market each day with the change in value reflected in unrealized
appreciation/depreciation. Upon disposition, a realized gain or loss is
recognized accordingly, except when taking delivery of a security underlying a
futures contract. In this instance, the recognition of gain or loss is postponed
until the disposal of the security underlying the futures contract. Risks may
arise as a result of the potential inability of the counterparties to meet the
terms of their contracts or agreements.
During the period, the Trust invested in futures contracts, a type of
derivative. A futures contract is an arrangement involving the delivery of a
particular asset on a specified future date at an agreed upon price. The Trust
generally invests in exchange traded futures on U.S. Treasury Bonds and Notes
and typically closes the contract prior to the delivery date. Upon entering into
futures contracts, the Trust maintains an amount of cash or liquid securities
with a value equal to a percentage of the contract amount with either a futures
commission merchant pursuant to the rules and regulations promulgated under the
1940 Act, as amended, or with its custodian in an account in the broker's name.
This amount is known an initial margin. During the period the futures contract
is open, payments are received from or made to the broker based upon changes in
the value of the contract (the variation margin). The risk of loss associated
with a futures contract is in excess of the variation margin reflected on the
Statement of Assets and Liabilities.
30
VAN KAMPEN MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2005 continued
Transactions in futures contracts for the year ended June 30, 2005, were as
follows:
<Table>
<Caption>
CONTRACTS
Outstanding at June 30, 2004................................ 71
Futures Opened.............................................. 1,668
Futures Closed.............................................. (1,231)
------
Outstanding at June 30, 2005................................ 508
======
</Table>
The futures contracts outstanding as of June 30, 2005, and the description
and unrealized appreciation/depreciation are as follows:
<Table>
<Caption>
UNREALIZED
CONTRACTS DEPRECIATION
SHORT CONTRACTS:
U.S. Treasury Note 5-Year September 2005
(Current Notional Value of $108,891 per contract)......... 508 $(53,626)
</Table>
5. PREFERRED SHARES
The Trust has outstanding 330 shares of Rate Adjusted Tax-Exempt Shares
("Rates") in three series of 110 shares each. Dividends are cumulative and the
dividend rate is currently reset every 28 days through an auction process. The
average rate in effect on June 30, 2005 was 2.583%. During the year ended June
30, 2005, the rates ranged from 1.156% to 2.900%.
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 Rates are redeemable at the option of the Trust in whole or in part at a
price of $500,000 per share plus accumulated and unpaid dividends. The Trust is
subject to certain asset coverage tests, and the Rates are subject to mandatory
redemption if the tests are not met.
6. INDEMNIFICATIONS
The Trust enters into contracts that contain a variety of indemnifications. The
Trust's maximum exposure under these arrangements is unknown. However, the Trust
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
7. TRUST MERGER
On March 18, 2005, the Trustees of Municipal Income Trust ("Target Trust")
announced its intention to merge the Target Trust into Trust for Investment
Grade Municipals ("Acquiring Trust"). The Trustees of each of the trusts have
approved in principal an agreement and plan of reorganization between the trusts
providing for a transfer of assets and liabilities of the Target Trust to the
Acquiring Trust in exchange for shares of beneficial interest of the Acquiring
Trust (the "Reorganization"). The Reorganization is subject to the approval by
the shareholders of the Target Trust.
31
VAN KAMPEN MUNICIPAL INCOME TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees/Directors and Shareholders of Van Kampen Municipal
Income Trust
We have audited the accompanying statement of assets and liabilities of Van
Kampen Municipal Income Trust (the "Trust"), including the portfolio of
investments, as of June 30, 2005, the related statement of operations for the
year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Trust is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Trust's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of June 30, 2005, by correspondence with the Trust's
custodian and brokers. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of Van
Kampen Municipal Income Trust as of June 30, 2005, the results of its operations
for the year then ended, the changes in its net assets and the financial
highlights for the respective stated periods, in conformity with accounting
principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
August 11, 2005
32
VAN KAMPEN MUNICIPAL INCOME TRUST
DIVIDEND REINVESTMENT PLAN
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, State Street Bank and Trust
Company, as your Plan Agent, will automatically invest your dividends and
capital gains distributions in Common Shares of the Trust for your account.
HOW TO PARTICIPATE
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be
re-registered in your own name which will enable your participation in the Plan.
HOW THE PLAN WORKS
Participants in the Plan will receive the equivalent in Common Shares valued
on the valuation date, generally at the lower of market price or net asset
value, except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value
33
VAN KAMPEN MUNICIPAL INCOME TRUST
DIVIDEND REINVESTMENT PLAN continued
of the Trust's Common Shares, resulting in the acquisition of fewer Common
Shares than if the dividend or distribution had been paid in Common Shares
issued by the Trust. All reinvestments are in full and fractional Common shares
and are carried to three decimal places.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
change sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.
COSTS OF THE PLAN
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.
TAX IMPLICATIONS
You will receive tax information annually for your personal records and to
help you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA
02266-8200. If you withdraw, you will receive, without charge, a share
certificate issued in your name for all full Common Shares credited to your
account under the Plan and a cash payment will be made for any fractional Common
Share credited to your account under the Plan. You may again elect to
participate in the Plan at any time by calling 1-800-341-2929 or writing to the
Trust at:
Van Kampen Funds Inc.
Attn: Closed-End Funds
2800 Post Oak Blvd.
Houston, TX 77056
34
VAN KAMPEN MUNICIPAL INCOME TRUST
BOARD OF TRUSTEES, OFFICERS AND IMPORTANT ADDRESSES
BOARD OF TRUSTEES
DAVID C. ARCH
JERRY D. CHOATE
ROD DAMMEYER
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
HOWARD J KERR
MITCHELL M. MERIN*
JACK E. NELSON
RICHARD F. POWERS, III*
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
MITCHELL M. MERIN
President and Chief Executive Officer
RONALD E. ROBISON
Executive Vice President and Principal Executive Officer
JOSEPH J. MCALINDEN
Executive Vice President and Chief Investment Officer
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
JAMES W. GARRETT
Chief Financial Officer and Treasurer
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
1221 Avenue of the Americas
New York, New York 10020
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02110
TRANSFER AGENT
EQUISERVE TRUST COMPANY, N.A.
C/O COMPUTERSHARE INVESTOR SERVICES
P.O. Box 43010
Providence, Rhode Island 02940-3011
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
DELOITTE & TOUCHE LLP
111 South Wacker Drive
Chicago, Illinois 60606-4301
For federal income tax purposes, the following information is furnished with
respect to the distributions paid by the Trust during its taxable year ended
June 30, 2005. The Trust designated 99.7% of the income distributions as a
tax-exempt income distribution. The Trust designated and paid $177,940 as a
long-term capital gain distribution. In January, the Trust provides tax
information to shareholders for the preceding calendar year.
* "Interested persons" of the Trust, as defined in the Investment Company Act
of 1940, as amended.
35
VAN KAMPEN MUNICIPAL INCOME TRUST
TRUSTEE AND OFFICER INFORMATION
The business and affairs of the Trust are managed under the direction of the
Trust's Board of Trustees and the Trust's officers appointed by the Board of
Trustees. The tables below list the trustees and executive officers of the Trust
and their principal occupations during the last five years, other directorships
held by trustees and their affiliations, if any, with Van Kampen Investments
Inc. ("Van Kampen Investments"), Van Kampen Asset Management (the "Adviser"),
Van Kampen Funds Inc. (the "Distributor"), Van Kampen Advisors Inc., Van Kampen
Exchange Corp. and Van Kampen Investor Services Inc. ("Investor Services"). The
term "Fund Complex" includes each of the investment companies advised by the
Adviser as of the date of this Annual Report. Trustees of the Funds generally
serve three year terms or until their successors are duly elected and qualified.
Officers are annually elected by the trustees.
INDEPENDENT TRUSTEES:
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
David C. Arch (60) Trustee Trustee Chairman and Chief 82 Trustee/Director/Managing
Blistex Inc. since 1988 Executive Officer of General Partner of funds
1800 Swift Drive Blistex Inc., a consumer in the Fund Complex.
Oak Brook, IL 60523 health care products
manufacturer. Director of
the Heartland Alliance, a
nonprofit organization
serving human needs based
in Chicago. Director of
St. Vincent de Paul
Center, a Chicago based
day care facility serving
the children of low
income families. Board
member of the Illinois
Manufacturers'
Association.
Jerry D. Choate (66) Trustee Trustee Prior to January 1999, 80 Trustee/Director/Managing
33971 Selva Road since 2003 Chairman and Chief General Partner of funds
Suite 130 Executive Officer of the in the Fund Complex.
Dana Point, CA 92629 Allstate Corporation Director of Amgen Inc., a
("Allstate") and Allstate biotechnological company,
Insurance Company. Prior and Director of Valero
to January 1995, Energy Corporation, an
President and Chief independent refining
Executive Officer of company.
Allstate. Prior to August
1994, various management
positions at Allstate.
</Table>
36
<Table>
<Caption>
VAN KAMPEN MUNICIPAL INCOME TRUST
TRUSTEE AND OFfiCER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Rod Dammeyer (64) Trustee Trustee President of CAC, L.L.C., 82 Trustee/Director/Managing
CAC, L.L.C. since 1988 a private company General Partner of funds
4350 LaJolla Village Drive offering capital in the Fund Complex.
Suite 980 investment and management Director of Stericycle,
San Diego, CA 92122-6223 advisory services. Prior Inc., Ventana Medical
to February 2001, Vice Systems, Inc., and GATX
Chairman and Director of Corporation, and Trustee
Anixter International, of The Scripps Research
Inc., a global Institute. Prior to
distributor of wire, January 2005, Trustee of
cable and communications the University of Chicago
connectivity products. Hospitals and Health
Prior to July 2000, Systems. Prior to April
Managing Partner of 2004, Director of
Equity Group Corporate TheraSense, Inc. Prior to
Investment (EGI), a January 2004, Director of
company that makes TeleTech Holdings Inc.
private investments in and Arris Group, Inc.
other companies. Prior to May 2002,
Director of Peregrine
Systems Inc. Prior to
February 2001, Director
of IMC Global Inc. Prior
to July 2000, Director of
Allied Riser
Communications Corp.,
Matria Healthcare Inc.,
Transmedia Networks,
Inc., CNA Surety, Corp.
and Grupo Azcarero Mexico
(GAM).
</Table>
37
<Table>
<Caption>
VAN KAMPEN MUNICIPAL INCOME TRUST
TRUSTEE AND OFfiCER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Linda Hutton Heagy (57) Trustee Trustee Managing Partner of 80 Trustee/Director/Managing
Heidrick & Struggles since 2003 Heidrick & Struggles, an General Partner of funds
233 South Wacker Drive executive search firm. in the Fund Complex.
Suite 7000 Trustee on the University
Chicago, IL 60606 of Chicago Hospitals
Board, Vice Chair of the
Board of the YMCA of
Metropolitan Chicago and
a member of the Women's
Board of the University
of Chicago. Prior to
1997, Partner of Ray &
Berndtson, Inc., an
executive recruiting
firm. Prior to 1996,
Trustee of The
International House
Board, a fellowship and
housing organization for
international graduate
students. Prior to 1995,
Executive Vice President
of ABN AMRO, N.A., a bank
holding company. Prior to
1990, Executive Vice
President of The Exchange
National Bank.
R. Craig Kennedy (53) Trustee Trustee Director and President of 80 Trustee/Director/Managing
1744 R Street, NW since 2003 the German Marshall Fund General Partner of funds
Washington, DC 20009 of the United States, an in the Fund Complex.
independent U.S.
foundation created to
deepen understanding,
promote collaboration and
stimulate exchanges of
practical experience
between Americans and
Europeans. Formerly,
advisor to the Dennis
Trading Group Inc., a
managed futures and
option company that
invests money for
individuals and
institutions. Prior to
1992, President and Chief
Executive Officer,
Director and member of
the Investment Committee
of the Joyce Foundation,
a private foundation.
Howard J Kerr (69) Trustee Trustee Prior to 1998, President 82 Trustee/Director/Managing
736 North Western Avenue since 1992 and Chief Executive General Partner of funds
P.O. Box 317 Officer of Pocklington in the Fund Complex.
Lake Forest, IL 60045 Corporation, Inc., an Director of the Lake
investment holding Forest Bank & Trust.
company. Director of the
Marrow Foundation.
</Table>
38
<Table>
<Caption>
VAN KAMPEN MUNICIPAL INCOME TRUST
TRUSTEE AND OFfiCER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Jack E. Nelson (69) Trustee Trustee President of Nelson 80 Trustee/Director/Managing
423 Country Club Drive since 2003 Investment Planning General Partner of funds
Winter Park, FL 32789 Services, Inc., a in the Fund Complex.
financial planning
company and registered
investment adviser in the
State of Florida.
President of Nelson Ivest
Brokerage Services Inc.,
a member of the NASD,
Securities Investors
Protection Corp. and the
Municipal Securities
Rulemaking Board.
President of Nelson Sales
and Services Corporation,
a marketing and services
company to support
affiliated companies.
Hugo F. Sonnenschein (64) Trustee Trustee President Emeritus and 82 Trustee/Director/Managing
1126 E. 59th Street since 1994 Honorary Trustee of the General Partner of funds
Chicago, IL 60637 University of Chicago and in the Fund Complex.
the Adam Smith Director of Winston
Distinguished Service Laboratories, Inc.
Professor in the
Department of Economics
at the University of
Chicago. Prior to July
2000, President of the
University of Chicago.
Trustee of the University
of Rochester and a member
of its investment
committee. Member of the
National Academy of
Sciences, the American
Philosophical Society and
a fellow of the American
Academy of Arts and
Sciences.
Suzanne H. Woolsey, Ph.D. (63) Trustee Trustee Chief Communications 80 Trustee/Director/Managing
815 Cumberstone Road since 2003 Officer of the National General Partner of funds
Harwood, MD 20776 Academy of in the Fund Complex.
Sciences/National Director of Fluor Corp.,
Research Council, an an engineering,
independent, federally procurement and
chartered policy construction
institution, from 2001 to organization, since
November 2003 and Chief January 2004 and Director
Operating Officer from of Neurogen Corporation,
1993 to 2001. Director of a pharmaceutical company,
the Institute for Defense since January 1998.
Analyses, a federally
funded research and
development center,
Director of the German
Marshall Fund of the
United States, Director
of the Rocky Mountain
Institute and Trustee of
Colorado College. Prior
to 1993, Executive
Director of the
Commission on Behavioral
and Social Sciences and
Education at the National
Academy of
Sciences/National
Research Council. From
1980 through 1989,
Partner of Coopers &
Lybrand.
</Table>
39
VAN KAMPEN MUNICIPAL INCOME TRUST
TRUSTEE AND OFFICER INFORMATION continued
INTERESTED TRUSTEES:*
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INTERESTED TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Mitchell M. Merin* (52) Trustee and Trustee President of funds in the 80 Trustee/Director/Managing
1221 Avenue of the Americas President since Fund Complex. Chairman, General Partner of funds
New York, NY 10020 2003; President, Chief in the Fund Complex.
President Executive Officer and
since 2002 Director of the Adviser
and Van Kampen Advisors
Inc. since December 2002.
Chairman, President and
Chief Executive Officer
of Van Kampen Investments
since December 2002.
Director of Van Kampen
Investments since
December 1999. Chairman
and Director of Van
Kampen Funds Inc. since
December 2002. President,
Director and Chief
Operating Officer of
Morgan Stanley Investment
Management since December
1998. President and
Director since April 1997
and Chief Executive
Officer since June 1998
of Morgan Stanley
Investment Advisors Inc.
and Morgan Stanley
Services Company Inc.
Chairman, Chief Executive
Officer and Director of
Morgan Stanley
Distributors Inc. since
June 1998. Chairman since
June 1998, and Director
since January 1998 of
Morgan Stanley Trust.
Director of various
Morgan Stanley
subsidiaries. President
of the Morgan Stanley
Funds since May 1999.
Previously Chief
Executive Officer of Van
Kampen Funds Inc. from
December 2002 to July
2003, Chief Strategic
Officer of Morgan Stanley
Investment Advisors Inc.
and Morgan Stanley
Services Company Inc. and
Executive Vice President
of Morgan Stanley
Distributors Inc. from
April 1997 to June 1998.
Chief Executive Officer
from September 2002 to
April 2003 and Vice
President from May 1997
to April 1999 of the
Morgan Stanley Funds.
</Table>
40
<Table>
<Caption>
VAN KAMPEN MUNICIPAL INCOME TRUST
TRUSTEE AND OFfiCER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INTERESTED TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Richard F. Powers, III* (59) Trustee Trustee Advisory Director of 82 Trustee/Director/Managing
1221 Avenue of the Americas since 1999 Morgan Stanley. Prior to General Partner of funds
New York, NY 10020 December 2002, Chairman, in the Fund Complex.
Director, President,
Chief Executive Officer
and Managing Director of
Van Kampen Investments
and its investment
advisory, distribution
and other subsidiaries.
Prior to December 2002,
President and Chief
Executive Officer of
funds in the Fund
Complex. Prior to May
1998, Executive Vice
President and Director of
Marketing at Morgan
Stanley and Director of
Dean Witter, Discover &
Co. and Dean Witter
Realty. Prior to 1996,
Director of Dean Witter
Reynolds Inc.
Wayne W. Whalen* (66) Trustee Trustee Partner in the law firm 82 Trustee/Director/Managing
333 West Wacker Drive since 1988 of Skadden, Arps, Slate, General Partner of funds
Chicago, IL 60606 Meagher & Flom LLP, legal in the Fund Complex.
counsel to funds in the Director of the Abraham
Fund Complex. Lincoln Presidential
Library Foundation.
</Table>
* Such trustee is an "interested person" (within the meaning of Section
2(a)(19) of the 1940 Act). Messrs. Merin and Powers are interested persons
of funds in the Fund Complex and the Adviser by reason of their current or
former positions with Morgan Stanley or its affiliates. Mr. Whalen is an
interested person of certain funds in the Fund Complex by reason of he and
his firm currently providing legal services as legal counsel to such funds
in the Fund Complex.
41
VAN KAMPEN MUNICIPAL INCOME TRUST
TRUSTEE AND OFFICER INFORMATION continued
OFFICERS
<Table>
<Caption>
TERM OF
OFFICE AND
POSITION(S) LENGTH OF
NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER TRUST SERVED DURING PAST 5 YEARS
Ronald E. Robison (66) Executive Vice Officer Executive Vice President and Principal Executive Officer of
1221 Avenue of the Americas President and since 2003 funds in the Fund Complex. Chief Executive Officer and
New York, NY 10020 Principal Executive Chairman of Investor Services. Managing Director of Morgan
Officer Stanley. Chief Administrative Officer, Managing Director and
Director of Morgan Stanley Investment Advisors Inc., Morgan
Stanley Services Company Inc. and Managing Director and
Director of Morgan Stanley Distributors Inc. Chief Executive
Officer and Director of Morgan Stanley Trust. Executive Vice
President and Principal Executive Officer of the
Institutional and Retail Morgan Stanley Funds; Director of
Morgan Stanley SICAV; previously Chief Global Operations
Officer and Managing Director of Morgan Stanley Investment
Management Inc.
Joseph J. McAlinden (62) Executive Vice President Officer Managing Director and Chief Investment Officer of Morgan
1221 Avenue of the Americas and Chief Investment since 2002 Stanley Investment Advisors Inc., and Morgan Stanley
New York, NY 10020 Officer Investment Management Inc. and Director of Morgan Stanley
Trust for over 5 years. Executive Vice President and Chief
Investment Officer of funds in the Fund Complex. Managing
Director and Chief Investment Officer of Van Kampen
Investments, the Adviser and Van Kampen Advisors Inc. since
December 2002.
Amy R. Doberman (43) Vice President Officer Managing Director and General Counsel, U.S. Investment
1221 Avenue of the Americas since 2004 Management; Managing Director of Morgan Stanley Investment
New York, NY 10020 Management, Inc., Morgan Stanley Investment Advisers Inc.
and the Adviser. Vice President of the Morgan Stanley
Institutional and Retail Funds since July 2004 and Vice
President of funds in the Fund Complex as of August 2004.
Previously, Managing Director and General Counsel of
Americas, UBS Global Asset Management from July 2000 to July
2004 and General Counsel of Aeltus Investment Management,
Inc. from January 1997 to July 2000.
Stefanie V. Chang (38) Vice President Officer Executive Director of Morgan Stanley Investment Management.
1221 Avenue of the Americas and Secretary since 2003 Vice President and Secretary of funds in the Fund Complex.
New York, NY 10020
</Table>
42
<Table>
<Caption>
VAN KAMPEN MUNICIPAL INCOME TRUST
TRUSTEE AND OFfiCER INFORMATION continued
TERM OF
OFFICE AND
POSITION(S) LENGTH OF
NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER TRUST SERVED DURING PAST 5 YEARS
John L. Sullivan (50) Chief Compliance Officer Officer Chief Compliance Officer of funds in the Fund Complex since
1 Parkview Plaza since 1996 August 2004. Prior to August 2004, Director and Managing
Oakbrook Terrace, IL 60181 Director of Van Kampen Investments, the Adviser, Van Kampen
Advisors Inc. and certain other subsidiaries of Van Kampen
Investments, Vice President, Chief Financial Officer and
Treasurer of funds in the Fund Complex and head of Fund
Accounting for Morgan Stanley Investment Management. Prior
to December 2002, Executive Director of Van Kampen
Investments, the Adviser and Van Kampen Advisors Inc.
James W. Garrett (36) Chief Financial Officer Officer Executive Director of Morgan Stanley Investment Management.
1221 Avenue of the Americas and Treasurer since 2005 Chief Financial Officer and Treasurer of the Morgan Stanley
New York, NY 10020 Institutional Funds since 2002 and funds in the Fund Complex
since January 2005.
</Table>
In accordance with Section 303A.12(a) of the New York Stock Exchange Listed
Company Manual, the Fund's Chief Executive Officer has certified to the New York
Stock Exchange that, as of July 18, 2005, he was not aware of any violation by
the Fund of NYSE corporate governance listing standards.
The certifications by the Fund's principal executive officer and principal
financial officer required by Rule 30a-2 under the 1940 Act were filed with the
Fund's report to the SEC on Form N-CSR and are available on the Securities and
Exchange Commission's web site at http://www.sec.gov.
43
Van Kampen Municipal Income Trust
An Important Notice Concerning Our U.S. Privacy Policy
We are required by federal law to provide you with a copy of our Privacy
Policy annually.
The following Policy applies to current and former individual clients of Van
Kampen Investments Inc., Van Kampen Asset Management, Van Kampen Advisors
Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc. and Van
Kampen Exchange Corp., as well as current and former individual investors in
Van Kampen mutual funds, unit investment trusts, and related companies.
This Policy is not applicable to partnerships, corporations, trusts or other
non-individual clients or account holders, nor is this Policy applicable to
individuals who are either beneficiaries of a trust for which we serve as
trustee or participants in an employee benefit plan administered or advised
by us. This Policy is, however, applicable to individuals who select us to
be a custodian of securities or assets in individual retirement accounts,
401(k) accounts, 529 Educational Savings Accounts, accounts subject to the
Uniform Gifts to Minors Act, or similar accounts.
Please note that we may amend this Policy at any time, and will inform you
of any changes to this Policy as required by law.
WE RESPECT YOUR PRIVACY
We appreciate that you have provided us with your personal financial
information. We strive to maintain the privacy of such information while we
help you achieve your financial objectives. This Policy describes what
non-public personal information we collect about you, why we collect it, and
when we may share it with others.
We hope this Policy will help you understand how we collect and share
non-public personal information that we gather about you. Throughout this
Policy, we refer to the non-public information that personally identifies
you or your accounts as "personal information."
1. WHAT PERSONAL INFORMATION DO WE COLLECT ABOUT YOU?
To serve you better and manage our business, it is important that we collect
and maintain accurate information about you. We may obtain this information
from applications and other forms you submit to us, from your dealings with
us, from consumer reporting agencies, from our Web sites and from third
parties and other sources.
(continued on next page)
Van Kampen Municipal Income Trust
An Important Notice Concerning Our U.S. Privacy Policy continued
For example:
-- We may collect information such as your name, address, e-mail address,
telephone/fax numbers, assets, income and investment objectives through
applications and other forms you submit to us.
-- We may obtain information about account balances, your use of
account(s) and the types of products and services you prefer to receive
from us through your dealings and transactions with us and other
sources.
-- We may obtain information about your creditworthiness and credit
history from consumer reporting agencies.
-- We may collect background information from and through third-party
vendors to verify representations you have made and to comply with
various regulatory requirements.
-- If you interact with us through our public and private Web sites, we
may collect information that you provide directly through online
communications (such as an e-mail address). We may also collect
information about your Internet service provider, your domain name,
your computer's operating system and Web browser, your use of our Web
sites and your product and service preferences, through the use of
"cookies." "Cookies" recognize your computer each time you return to
one of our sites, and help to improve our sites' content and
personalize your experience on our sites by, for example, suggesting
offerings that may interest you. Please consult the Terms of Use of
these sites for more details on our use of cookies.
2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?
To provide you with the products and services you request, to serve you
better and to manage our business, we may disclose personal information we
collect about you to our affiliated companies and to non-affiliated third
parties as required or permitted by law.
A. INFORMATION WE DISCLOSE TO OUR AFFILIATED COMPANIES. We do not disclose
personal information that we collect about you to our affiliated companies
except to enable them to provide services on our behalf or as otherwise
required or permitted by law.
B. INFORMATION WE DISCLOSE TO THIRD PARTIES. We do not disclose personal
information that we collect about you to non-affiliated third parties except
to enable them to provide services on our behalf, to perform joint marketing
agreements with
(continued on back)
Van Kampen Municipal Income Trust
An Important Notice Concerning Our U.S. Privacy Policy continued
other financial institutions, or as otherwise required or permitted by law.
For example, some instances where we may disclose information about you to
non-affiliated third parties include: for servicing and processing
transactions, to offer our own products and services, to protect against
fraud, for institutional risk control, to respond to judicial process or to
perform services on our behalf. When we share personal information with
these companies, they are required to limit their use of personal
information to the particular purpose for which it was shared and they are
not allowed to share personal information with others except to fulfill that
limited purpose.
3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL
INFORMATION WE COLLECT ABOUT YOU?
We maintain physical, electronic and procedural security measures to help
safeguard the personal information we collect about you. We have internal
policies governing the proper handling of client information. Third parties
that provide support or marketing services on our behalf may also receive
personal information, and we require them to adhere to confidentiality
standards with respect to such information.
Van Kampen Funds Inc.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com
Copyright (C)2005 Van Kampen Funds Inc. All rights reserved.
Member NASD/SIPC.
920, 919, 107
VMT ANR 8/05
(VAN KAMPEN INVESTMENTS SHINE LOGO) RN05-019518-Y06/05
Item 2. Code of Ethics.
(a) The Trust has adopted a code of ethics (the "Code of Ethics") that applies
to its principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the Trust or a third
party.
(b) No information need be disclosed pursuant to this paragraph.
(c) The Trust has amended its Code of Ethics during the period covered by the
shareholder report presented in Item 1 hereto to delete from the end of the
following paragraph on page 2 of the Code the phrase "to the detriment of the
Fund.":
"Each Covered Officer must not use his personal influence or personal
relationship improperly to influence investment decisions or financial reporting
by the Fund whereby the Covered Officer would benefit personally (directly or
indirectly)."
Further, due to personnel changes at the Adviser, the list of Covered Officers
set forth in Exhibit B and the General Counsel designee to whom questions about
the application of the Code should be referred in Exhibit C were amended during
the period. Exhibit B was then amended again in March 2005 and a third time in
August 2005. All three editions of Exhibit B are attached.
(d) Not applicable.
(e) Not applicable.
(f)
(1) The Trust's Code of Ethics is attached hereto as Exhibit 12A.
(2) Not applicable.
(3) Not applicable.
Item 3. Audit Committee Financial Expert.
The Trust's Board of Trustees has determined that it has two "audit committee
financial experts" serving on its audit committee, each of whom are
"independent" Trustees : Jerry Choate and R. Craig Kennedy. Under applicable
securities laws, a person who is determined to be an audit committee financial
expert will not be deemed an "expert" for any purpose, including without
limitation for the purposes of Section 11 of the Securities Act of 1933, as a
result of being designated or identified as an audit committee financial expert.
The designation or identification of a person as an audit committee financial
expert does not impose on such person any duties, obligations, or liabilities
that are greater than the duties, obligations, and liabilities imposed on such
person as a member of the audit committee and Board of Trustees in the absence
of such designation or identification.
Item 4. Principal Accountant Fees and Services.
(a)(b)(c)(d) and (g). Based on fees billed for the periods shown:
2004
<Table>
<Caption>
REGISTRANT COVERED ENTITIES(1)
AUDIT FEES........................... $32,355 N/A
NON-AUDIT FEES
AUDIT-RELATED FEES......... $400 $321,000(2)
TAX FEES................... $1,600(3) $0(4)
ALL OTHER FEES............. $0 $0(5)
TOTAL NON-AUDIT FEES................. $2,000 $321,000
TOTAL................................ $34,355 $321,000
</Table>
2003
<Table>
<Caption>
REGISTRANT COVERED ENTITIES(1)
AUDIT FEES.......................... $29,480 N/A
NON-AUDIT FEES
AUDIT-RELATED FEES........ $400 $230,000(2)
TAX FEES.................. $1,550(3) $0(4)
ALL OTHER FEES............ $0 $0(6)
TOTAL NON-AUDIT FEES................ $1,950 $230,000
TOTAL............................... $31,430 $230,000
</Table>
N/A- Not applicable, as not required by Item 4.
(1) Covered Entities include the Adviser (excluding sub-advisors)
and any entity controlling, controlled by or under common
control with the Adviser that provides ongoing services to the
Registrant.
(2) Audit-Related Fees represent assurance and related services
provided that are reasonably related to the performance of the
audit of the financial statements of the Covered Entities' and
funds advised by the Adviser or its affiliates, specifically
attestation services provided in connection with a SAS 70
Report.
(3) Tax Fees represent tax advice and compliance services provided
in connection with the review of the Registrant's tax.
(4) Tax Fees represent tax advice services provided to Covered
Entities, including research and identification of PFIC
entities.
(5) All Other Fees represent attestation services provided in
connection with performance presentation standards.
(6) All Other Fees represent attestation services provided in
connection with performance presentation standards, general
industry education seminars provided, and a regulatory review
project performed.
(e)(1) The audit committee's pre-approval policies and procedures are as
follows:
JOINT AUDIT COMMITTEE
AUDIT AND NON-AUDIT SERVICES
PRE-APPROVAL POLICY AND PROCEDURES
OF THE
VAN KAMPEN FUNDS
AS ADOPTED JULY 23, 2003 AND AMENDED MAY 26, 2004(1)
1. STATEMENT OF PRINCIPLES
The Audit Committee of the Board is required to review and, in its sole
discretion, pre-approve all Covered Services to be provided by the Independent
Auditors to the Fund and Covered Entities in order to assure that services
performed by the Independent Auditors do not impair the auditor's independence
from the Fund.(2)
The SEC has issued rules specifying the types of services that an
independent auditor may not provide to its audit client, as well as the audit
committee's administration of the engagement of the independent auditor. The
SEC's rules establish two different approaches to pre-approving services, which
the SEC considers to be equally valid. Proposed services either: may be
pre-approved without consideration of specific case-by-case services by the
Audit Committee ("general pre-approval"); or require the specific pre-approval
of the Audit Committee ("specific pre-approval"). The Audit Committee believes
that the combination of these two approaches in this Policy will result in an
effective and efficient procedure to pre-approve services performed by the
Independent Auditors. As set forth in this Policy, unless a type of service has
received general pre-approval, it will require specific pre-approval by the
Audit Committee (or by any member of the Audit Committee to which pre-approval
authority has been delegated) if it is to be provided by the Independent
Auditors. Any proposed services exceeding pre-approved cost levels or budgeted
amounts will also require specific pre-approval by the Audit Committee.
For both types of pre-approval, the Audit Committee will consider
whether such services are consistent with the SEC's rules on auditor
independence. The Audit Committee will also consider whether the Independent
Auditors are best positioned to provide the most effective and efficient
services, for reasons such as its familiarity with the Fund's business, people,
culture, accounting systems, risk profile and other factors, and whether the
service might enhance the Fund's ability to manage or control risk or improve
audit quality. All such factors will be considered as a whole, and no one factor
should necessarily be determinative.
The Audit Committee is also mindful of the relationship between fees
for audit and non-audit services in deciding whether to pre-approve any such
services and may determine for each fiscal year, the appropriate ratio between
the total amount of fees for Audit, Audit-related and Tax services for the Fund
(including any Audit-related or Tax service fees for Covered Entities that were
subject to pre-approval), and the total amount of fees for certain permissible
non-audit services classified as All Other services for the Fund (including any
such services for Covered Entities subject to pre-approval).
The appendices to this Policy describe the Audit, Audit-related, Tax
and All Other services that have the general pre-approval of the Audit
Committee. The term of any general pre-approval is 12 months from the date of
pre-approval, unless the Audit Committee considers and provides a different
period and states otherwise. The Audit Committee will annually review and
pre-approve the services that may be provided by the Independent Auditors
without obtaining specific pre-approval
- ----------
(1) This Joint Audit Committee Audit and Non-Audit Services Pre-Approval
Policy and Procedures (the "Policy"), amended as of the date above,
supercedes and replaces all prior versions that may have been amended
from time to time.
(2) Terms used in this Policy and not otherwise defined herein shall have
the meanings as defined in the Joint Audit Committee Charter.
from the Audit Committee. The Audit Committee will add to or subtract from the
list of general pre-approved services from time to time, based on subsequent
determinations.
The purpose of this Policy is to set forth the policy and procedures by
which the Audit Committee intends to fulfill its responsibilities. It does not
delegate the Audit Committee's responsibilities to pre-approve services
performed by the Independent Auditors to management.
The Fund's Independent Auditors have reviewed this Policy and believes
that implementation of the Policy will not adversely affect the Independent
Auditors' independence.
2. DELEGATION
As provided in the Act and the SEC's rules, the Audit Committee may
delegate either type of pre-approval authority to one or more of its members.
The member to whom such authority is delegated must report, for informational
purposes only, any pre-approval decisions to the Audit Committee at its next
scheduled meeting.
3. AUDIT SERVICES
The annual Audit services engagement terms and fees are subject to the
specific pre-approval of the Audit Committee. Audit services include the annual
financial statement audit and other procedures required to be performed by the
Independent Auditors to be able to form an opinion on the Fund's financial
statements. These other procedures include information systems and procedural
reviews and testing performed in order to understand and place reliance on the
systems of internal control, and consultations relating to the audit. The Audit
Committee will monitor the Audit services engagement as necessary, but no less
than on a quarterly basis, and will also approve, if necessary, any changes in
terms, conditions and fees resulting from changes in audit scope, Fund structure
or other items.
In addition to the annual Audit services engagement approved by the
Audit Committee, the Audit Committee may grant general pre-approval to other
Audit services, which are those services that only the Independent Auditors
reasonably can provide. Other Audit services may include statutory audits and
services associated with SEC registration statements (on Forms N-1A, N-2, N-3,
N-4, etc.), periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings.
The Audit Committee has pre-approved the Audit services in Appendix
B.1. All other Audit services not listed in Appendix B.1 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).
4. AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are
reasonably related to the performance of the audit or review of the Fund's
financial statements or, to the extent they are Covered Services, the Covered
Entities' financial statements, or that are traditionally performed by the
Independent Auditors. Because the Audit Committee believes that the provision of
Audit-related services does not impair the independence of the auditor and is
consistent with the SEC's rules on auditor independence, the Audit Committee may
grant general pre-approval to Audit-related services. Audit-related services
include, among others, accounting consultations related to accounting, financial
reporting or disclosure matters not classified as "Audit services"; assistance
with understanding and implementing new accounting and financial reporting
guidance from rulemaking authorities; agreed-upon or expanded audit procedures
related to accounting and/or billing records required to respond to or comply
with financial, accounting or regulatory reporting matters; and assistance with
internal control reporting requirements under Forms N-SAR and/or N-CSR.
The Audit Committee has pre-approved the Audit-related services in
Appendix B.2. All other Audit-related services not listed in Appendix B.2 must
be specifically pre-approved by the Audit Committee (or by any member of the
Audit Committee to which pre-approval has been delegated).
5. TAX SERVICES
The Audit Committee believes that the Independent Auditors can provide
Tax services to the Fund and, to the extent they are Covered Services, the
Covered Entities, such as tax compliance, tax planning and tax advice without
impairing the auditor's independence, and the SEC has stated that the
Independent Auditors may provide such services. Hence, the Audit Committee
believes it may grant general pre-approval to those Tax services that have
historically been provided by the Independent Auditors, that the Audit Committee
has reviewed and believes would not impair the independence of the Independent
Auditors, and that are consistent with the SEC's rules on auditor independence.
The Audit Committee will not permit the retention of the Independent Auditors in
connection with a transaction initially recommended by the Independent Auditors,
the sole business purpose of which may be tax avoidance and the tax treatment of
which may not be supported in the Internal Revenue Code and related regulations.
The Audit Committee will consult with Director of Tax or outside counsel to
determine that the tax planning and reporting positions are consistent with this
policy.
Pursuant to the preceding paragraph, the Audit Committee has
pre-approved the Tax Services in Appendix B.3. All Tax services involving large
and complex transactions not listed in Appendix B.3 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated), including tax services proposed to be
provided by the Independent Auditors to any executive officer or
trustee/director/managing general partner of the Fund, in his or her individual
capacity, where such services are paid for by the Fund (generally applicable
only to internally managed investment companies).
6. ALL OTHER SERVICES
The Audit Committee believes, based on the SEC's rules prohibiting the
Independent Auditors from providing specific non-audit services, that other
types of non-audit services are permitted. Accordingly, the Audit Committee
believes it may grant general pre-approval to those permissible non-audit
services classified as All Other services that it believes are routine and
recurring services, would not impair the independence of the auditor and are
consistent with the SEC's rules on auditor independence.
The Audit Committee has pre-approved the All Other services in Appendix
B.4. Permissible All Other services not listed in Appendix B.4 must be
specifically pre-approved by the Audit Committee (or by any member of the Audit
Committee to which pre-approval has been delegated).
A list of the SEC's prohibited non-audit services is attached to this
policy as Appendix B.5. The SEC's rules and relevant guidance should be
consulted to determine the precise definitions of these services and the
applicability of exceptions to certain of the prohibitions.
7. PRE-APPROVAL FEE LEVELS OR BUDGETED AMOUNTS
Pre-approval fee levels or budgeted amounts for all services to be
provided by the Independent Auditors will be established annually by the Audit
Committee. Any proposed services exceeding these levels or amounts will require
specific pre-approval by the Audit Committee. The Audit Committee is mindful of
the overall relationship of fees for audit and non-audit services in determining
whether to pre-approve any such services. For each fiscal year, the Audit
Committee may determine the appropriate ratio between the total amount of fees
for Audit, Audit-related, and Tax services for the Fund (including any
Audit-related or Tax services fees for Covered Entities subject to
pre-approval), and the total amount of fees for certain permissible non-audit
services classified as All Other services for the Fund (including any such
services for Covered Entities subject to pre-approval).
8. PROCEDURES
All requests or applications for services to be provided by the
Independent Auditors that do not require specific approval by the Audit
Committee will be submitted to the Fund's Chief Financial Officer and must
include a detailed description of the services to be rendered. The Fund's Chief
Financial Officer will determine whether such services are included within the
list of services that have received the general pre-approval of the Audit
Committee. The Audit Committee will be informed on a timely basis of any such
services rendered by the Independent Auditors. Requests or applications to
provide services that require specific approval by the Audit Committee will be
submitted to the Audit Committee by both the Independent Auditors and the Fund's
Chief Financial Officer, and must include a joint statement as to whether, in
their view, the request or application is consistent with the SEC's rules on
auditor independence.
The Audit Committee has designated the Fund's Chief Financial Officer
to monitor the performance of all services provided by the Independent Auditors
and to determine whether such services are in compliance with this Policy. The
Fund's Chief Financial Officer will report to the Audit Committee on a periodic
basis on the results of its monitoring. A sample report is included as Appendix
B.7. Both the Fund's Chief Financial Officer and management will immediately
report to the chairman of the Audit Committee any breach of this Policy that
comes to the attention of the Fund's Chief Financial Officer or any member of
management.
9. ADDITIONAL REQUIREMENTS
The Audit Committee has determined to take additional measures on an
annual basis to meet its responsibility to oversee the work of the Independent
Auditors and to assure the auditor's independence from the Fund, such as
reviewing a formal written statement from the Independent Auditors delineating
all relationships between the Independent Auditors and the Fund, consistent with
Independence Standards Board No. 1, and discussing with the Independent Auditors
its methods and procedures for ensuring independence.
10. COVERED ENTITIES
Covered Entities include the Fund's investment adviser(s) and any
entity controlling, controlled by or under common control with the Fund's
investment adviser(s) that provides ongoing services to the Fund(s). Beginning
with non-audit service contracts entered into on or after May 6, 2003, the
Fund's audit committee must pre-approve non-audit services provided not only to
the Fund but also to the Covered Entities if the engagements relate directly to
the operations and financial reporting of the Fund. This list of Covered
Entities would include:
- Van Kampen Investments Inc.
- Van Kampen Asset Management
- Van Kampen Advisors Inc.
- Van Kampen Funds Inc.
- Van Kampen Investor Services Inc.
- Morgan Stanley Investment Management Inc.
- Morgan Stanley Trust Company
- Morgan Stanley Investment Management Ltd.
- Morgan Stanley Investment Management Company
- Morgan Stanley Asset & Investment Trust Management Company Ltd.
(e)(2) Beginning with non-audit service contracts entered into on or after May
6, 2003, the audit committee also is required to pre-approve services to Covered
Entities to the extent that the services
are determined to have a direct impact on the operations or financial reporting
of the Registrant. 100% of such services were pre-approved by the audit
committee pursuant to the Audit Committee's pre-approval policies and procedures
(included herein).
(f) Not applicable.
(g) See table above.
(h) The audit committee of the Board of Trustees has considered whether the
provision of services other than audit services performed by the auditors to the
Registrant and Covered Entities is compatible with maintaining the auditors'
independence in performing audit services.
Item 5. Audit Committee of Listed Registrants.
(a) The Trust has a separately-designated standing audit committee established
in accordance with Section 3(a)(58)(A) of the Exchange Act whose members are:
Craig Kennedy, Jerry Choate and Rod Dammeyer.
(b) Not applicable.
Item 6. Schedule of Investments.
Please refer to Item #1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
The Trust invests in exclusively non-voting securities and therefore this item
is not applicable to the Trust.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Applicable only for reports covering fiscal years on or after December 31, 2005.
Item 9. Purchase of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not Applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not Applicable.
Item 11. Controls and Procedures
(a) The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits.
(a) The Code of Ethics for Principal Executive and Senior Financial Officers is
attached hereto.
(b)(1) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(b)(2) A certification for the Principal Financial Officer of the registrant is
attached hereto as part of EX-99.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Van Kampen Municipal Income Trust
By: /s/ Ronald E. Robison
---------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: August 23, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Ronald E. Robison
---------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: August 23, 2005
By: /s/ Phillip G. Goff
---------------------
Name: Phillip G. Goff
Title: Principal Financial Officer
Date: August 23, 2005