UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-7398
Van Kampen Pennsylvania Value Municipal Income Trust
(Exact name of registrant as specified in charter)
1221 Avenue of the Americas, New York, New York 10020
(Address of principal executive offices) (Zip code)
Ronald Robison
1221 Avenue of the Americas, New York, New York 10020
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: 10/31
Date of reporting period: 4/30/07
Item 1. Reports to Shareholders.
The Trust's semi-annual report transmitted to shareholders pursuant to Rule
30e-1 under the Investment Company Act of 1940 is as follows:
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
Pennsylvania Value Municipal Income Trust performed during the semiannual
period. The portfolio management team will provide an overview of the
market conditions and discuss some of the factors that affected
investment performance during the reporting period. In addition, this
report includes the trust's financial statements and a list of trust
investments as of April 30, 2007.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE TRUST WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. TRUSTS ARE SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY
THAT THE MARKET VALUES OF SECURITIES OWNED BY THE TRUST WILL DECLINE AND
THAT THE VALUE OF TRUST SHARES MAY THEREFORE BE LESS THAN WHAT YOU PAID
FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS TRUST.
INCOME MAY SUBJECT CERTAIN INDIVIDUALS TO THE FEDERAL ALTERNATIVE MINIMUM
TAX (AMT).
---------------------------------------------------------------------------------------
NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE
---------------------------------------------------------------------------------------
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
---------------------------------------------------------------------------------------
Performance Summary as of 4/30/07
PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
SYMBOL: VPV
------------------------------------------------------------
AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURNS NAV MARKET PRICE
Since Inception (4/30/93) 6.60% 5.93%
10-year 6.99 7.70
5-year 6.63 5.48
1-year 6.72 12.24
6-month 1.74 8.05
------------------------------------------------------------
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. FOR THE MOST RECENT MONTH-END PERFORMANCE FIGURES, PLEASE VISIT
VANKAMPEN.COM OR SPEAK WITH YOUR FINANCIAL ADVISOR. INVESTMENT RETURNS, NET
ASSET VALUE (NAV) AND COMMON SHARE MARKET PRICE WILL FLUCTUATE AND TRUST SHARES,
WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
NAV per share is determined by dividing the value of the trust's portfolio
securities, cash and other assets, less all liabilities and preferred shares, 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 Trust's advisor has waived or reimbursed fees and
expenses from time to time; absent such waivers/reimbursements the Trust's
returns would have been lower.
The Lehman Brothers Pennsylvania Municipal Bond Index is a broad-based
statistical composite of Pennsylvania municipal bonds. The index is unmanaged
and does not include any sales charges or fees. Such costs would lower
performance. It is not possible to invest directly in an index.
1
Trust Report
FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2007
MARKET CONDITIONS
The overall environment for municipal bonds was favorable during the reporting
period, but mixed economic indicators and concerns about the residential housing
sector led to increased market uncertainty and volatility. At the beginning of
the period, the pace of economic growth appeared to be slowing, but in December,
the outlook for the economy turned positive following a slate of
stronger-than-expected economic releases. The improved economic picture pushed
bond yields higher and effectively reversed the run-up in prices that had begun
in July on concern over the weak housing market's potential drag on the economy.
Bonds continued to decline until February, when the sub-prime mortgage market
showed signs of deterioration, causing a sell-off in equities and a
flight-to-quality bond market rally. In March, the rally ended as strong
employment reports and upward movement in inflationary pressures sparked selling
in an overbought Treasury market. At month end, however, the short end of the
bond market rebounded strongly following news that the Federal Open Market
Committee (the "Fed") had dropped its bias toward higher rates. This came as
somewhat of a surprise, given the fact that core inflation readings remained
elevated.
Municipal bond yields followed the general movement of the Treasury market.
However, the 30-year AAA municipal yield reached lows not seen in decades,
declining to 4.00 percent in the first half of the reporting period before
reversing course and ending the period higher at 4.10 percent. Yields on the
short end of the municipal curve rose more than long-term yields during the
period. As a result, the short end of the curve posted the lowest returns while
the long end outperformed other portions of the curve by as much as 70 basis
points. The slope of the municipal curve (which is defined by the traditional
yield advantage of bonds with longer maturities) still remained relatively flat
and as such, the yield differential between long maturity and short maturity
issues was quite small.
New issue supply rose dramatically during the period, increasing by 34 percent
versus the same six-month period a year ago, as relatively low interest rates
spurred municipalities to refinance their debt. Demand for municipal bonds was
robust as well, particularly for high-yield securities as investors proved
increasingly willing to take on more risk in return for relatively higher
yields. The strong demand caused most credit spreads, which were already near
historically tight levels, to further narrow. As a result, the lower-quality,
higher yielding segment of the market considerably outperformed, returning 182
basis points more than the investment-grade segment for the overall period.
Municipal bond issuance by the Commonwealth of Pennsylvania rose during the
period and higher education bonds continued to represent a significant portion
2
of the new issue supply. As was the case for the municipal market overall, the
large supply of municipal bonds and the low interest-rate environment led to a
high amount of advance refundings, wherein new bonds are issued to repay an
outstanding bond issue prior to its stated maturity. The state's economy
continued to grow at a steady pace and its credit outlook remains stable.
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 and preferred shares, by the total number of common shares
outstanding, while market price reflects the supply and demand for the shares.
As a result, the two returns can differ, as they did during the reporting
period. On an NAV basis, the Trust outperformed its benchmark index, the Lehman
Brothers Pennsylvania Municipal Bond Index. On a market price basis, the Trust
also outperformed its benchmark.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2007
------------------------------------------------------------
LEHMAN BROTHERS
BASED ON BASED ON PENNSYLVANIA MUNICIPAL
NAV MARKET PRICE BOND INDEX
1.74% 8.05% 1.61%
------------------------------------------------------------
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.
A variety of strategies drove the Trust's performance during the course of the
period. One of the key drivers was our focus on the long end of the yield curve.
Given the relatively flat shape of the curve throughout the period, we invested
in bonds with maturities of 25 years or more in order to capture more attractive
yields. These purchases were funded by the proceeds from the sale of bonds in
the intermediate portion of the curve that had low acquisition yields as well as
by bonds that were pre-refunded. The emphasis on longer-maturity issues proved
beneficial to performance as this segment of the curve outperformed for the
overall period.
Additionally, in an effort to further enhance yield, we added to the Trust's
holdings of inverse floating-rate securities.* This strategy was additive to the
Trust's performance during the first four months of the period. In the last two
months, however, rising interest rates hurt the performance of inverse floating-
rate securities. As a result, the Trust's holdings in these credits detracted
from
*An inverse floating-rate security, or "inverse floater", is a variable rate
security whose coupon rate changes in the opposite direction from the change in
the reference rate used to calculate the coupon rate.
3
performance late in the period. Another detractor from overall performance was
the Trust's holdings within the education sector, which was primarily due to the
fact that the portfolio had comparatively fewer bonds than the Lehman Brothers
Pennsylvania Municipal Bond Index that were refunded during the period. Security
selection within the health care sector also hindered relative returns.
Because the Trust's inverse floating-rate securities effectively added to the
portfolio's duration (a measure of interest-rate risk), we hedged that risk by
selling 10- and 30-year U.S. Treasury futures. This strategy was additive to
performance for the overall period and served to keep the Trust's duration
neutral to that of the Lehman Brothers Pennsylvania Municipal Bond Index. The
Trust also benefited from strong security selection within the transportation
sector, particularly in airport bonds, as well as within the utilities sector,
which enjoyed strong performance. The Trust remained well diversified across a
broad spectrum of municipal market sectors. As of the end of the period,
hospital, higher education and public education bonds represented the
portfolio's largest sector weightings.
The Trustees have approved a procedure whereby the trust may, when appropriate,
repurchase its shares in the open market or in privately negotiated transactions
at a price not above market value or NAV, whichever is lower at the time of
purchase. This may help support the market value of the trust's shares.
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the Trust in
the future.
4
TOP FIVE SECTORS AS OF 4/30/07 RATINGS ALLOCATION AS OF 4/30/07
Hospital 16.7% AAA/Aaa 49.0%
Higher Education 16.2 AA/Aa 17.4
Public Education 12.3 A/A 13.2
General Purpose 10.06 BBB/Baa 18.3
Single Family 6.6 BB/Ba 0.7
Non-Rated 1.4
Subject to change daily. Provided for informational purposes only and should not
be deemed as a recommendation to buy or sell the securities mentioned or
securities in the sectors shown above. Ratings are as a percentage of total
investments. Sectors are as a percentage of total long-term investments.
Securities are classified by sectors that represent broad groupings of related
industries. Van Kampen is a wholly owned subsidiary of a global securities firm
which is engaged in a wide range of financial services including, for example,
securities trading and brokerage activities, investment banking, research and
analysis, financing and financial advisory services. Rating allocations based
upon ratings as issued by Standard and Poor's and Moody's, respectively.
5
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. The semiannual reports and the
annual reports are filed electronically with the Securities and Exchange
Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. 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
(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 (800) 341-2929.
6
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) 341-2929 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 without charge 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.
7
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2007 (UNAUDITED)
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
--------------------------------------------------------------------------------------------
MUNICIPAL BONDS 196.2%
PENNSYLVANIA 186.8%
$ 2,000 Abington, PA Sch Dist Ser A (FSA Insd)........ 5.000% 04/01/32 $ 2,116,060
1,925 Allegheny Cnty, PA Arpt Auth Rev Pittsburgh
Intl Arpt Rfdg (MBIA Insd) (AMT) (a).......... 5.000 01/01/21 2,066,242
3,435 Allegheny Cnty, PA Arpt Auth Rev Pittsburgh
Intl Arpt Rfdg (FGIC Insd) (AMT) (a).......... 5.000 01/01/23 3,687,034
3,000 Allegheny Cnty, PA Arpt Auth Rev Pittsburgh
Intl Arpt Rfdg (FGIC Insd) (AMT).............. 5.750 01/01/18 3,151,080
2,000 Allegheny Cnty, PA Higher Ed Bldg Carnegie
Mellon Univ................................... 5.125 03/01/32 2,088,100
2,750 Allegheny Cnty, PA Higher Ed Bldg Carnegie
Mellon Univ................................... 5.250 03/01/32 2,892,230
1,360 Allegheny Cnty, PA Hosp Dev Auth Rev Hlth Sys
Ser A (MBIA Insd)............................. 6.500 11/15/30 1,499,849
3,145 Allegheny Cnty, PA Hosp Dev Auth Rev OH Vly
Gen Hosp Proj Ser A........................... 5.125 04/01/35 3,225,103
1,250 Allegheny Cnty, PA Indl Dev Auth Lease Rev
Residential Res Inc Proj...................... 5.125 09/01/31 1,292,562
3,000 Allegheny Cnty, PA Port Auth Spl Rev Trans
(FGIC Insd)................................... 5.000 03/01/29 3,112,530
2,000 Allegheny Cnty, PA Port Auth Spl Rev Trans
(MBIA Insd) (Prerefunded @ 3/01/09)........... 6.000 03/01/24 2,100,060
1,300 Allegheny Cnty, PA Redev Auth Tax Increment
Rev Robinson Mall Proj Ser A.................. 7.000 11/01/17 1,416,324
410 Allegheny Cnty, PA Residential Fin Auth Mtg
Rev Single Family Ser II-1 (GNMA
Collateralized) (AMT)......................... 5.800 05/01/21 424,088
615 Allegheny Cnty, PA Residential Fin Auth Mtg
Rev Single Family Ser II-2 (GNMA
Collateralized) (AMT)......................... 5.800 11/01/20 636,876
3,525 Allegheny Cnty, PA Residential Fin Auth Mtg
Rev Single Family Ser KK-2 (GNMA
Collateralized) (AMT) (b)..................... 5.750 05/01/33 3,633,993
1,510 Allegheny Cnty, PA Residential Fin Auth Mtg
Rev Single Family Ser MM (GNMA Collateralized)
(AMT)......................................... 5.200 05/01/33 1,545,138
1,000 Allegheny Cnty, PA Residential Fin Auth Mtg
Rev Single Family Ser RR (GNMA Collateralized)
(AMT)......................................... 4.750 11/01/25 998,170
1,775 Allegheny Cnty, PA Residential Fin Auth Mtg
Rev Single Family Ser TT (GNMA Collateralized)
(AMT) (c)..................................... 4.900 11/01/26 1,788,241
460 Allegheny Cnty, PA San Auth Swr Rev (MBIA
Insd)......................................... 5.500 12/01/30 488,874
1,000 Allegheny Cnty, PA San Auth Swr Rev (MBIA
Insd)......................................... 5.750 12/01/13 1,075,940
8 See Notes to Financial Statements
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2007 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
--------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 2,220 Allegheny Cnty, PA San Auth Swr Rev (MBIA
Insd) (Prerefunded @ 12/01/10)................ 5.750% 12/01/17 $ 2,386,655
1,830 Allegheny Cnty, PA San Auth Swr Rev (MBIA
Insd) (Prerefunded @ 12/01/10)................ 5.750 12/01/18 1,967,378
3,725 Allegheny Cnty, PA San Auth Swr Rev Rfdg Ser A
(MBIA Insd)................................... 5.000 12/01/30 3,947,457
1,705 Armstrong, PA Sch Dist (XLCA Insd) (c)........ 5.250 03/15/25 1,858,348
12,500 Beaver Cnty, PA Indl Dev Auth Pollutn Ctl Rev
Duquesne Conv Rfdg (AMBAC Insd) (a)........... 4.500 11/01/29 12,403,875
12,700 Bensalem Twp, PA Sch Dist (FGIC Insd) (a)..... 4.500 06/15/28 12,766,167
1,335 Bentworth, PA Sch Dist Ser B (FSA Insd)....... 5.000 03/15/28 1,419,999
1,695 Berks Cnty, PA Muni Auth Albright College Proj
(c)........................................... 5.500 10/01/16 1,823,532
1,800 Berks Cnty, PA Muni Auth Albright College Proj
(c)........................................... 5.500 10/01/17 1,933,884
6,000 Berks Cnty, PA Muni Auth Hosp Rev Reading Hosp
& Med Ctr Proj (FSA Insd) (Prerefunded @
11/01/09)..................................... 6.000 11/01/29 6,443,220
4,460 Bethlehem, PA Auth Wtr Gtd (FSA Insd)......... 5.000 11/15/19 4,765,778
1,000 Bradford Cnty, PA Indl Dev Auth Solid Waste
Disp Rev Intl Paper Rfdg Ser B (AMT).......... 5.200 12/01/19 1,017,480
7,060 Bristol Boro, PA Sch Dist (FSA Insd) (a)...... 4.250 03/01/31 7,190,698
1,270 Bucks Cnty, PA Auth Wtr & Swr Rev Swr Sys
(AMBAC Insd) (Prerefunded @ 12/01/11) (c)..... 5.375 06/01/16 1,359,764
1,215 Bucks Cnty, PA Wtr & Swr Rev Neshaminy
Interceptor Ser A (AMBAC Insd) (Prerefunded @
12/01/11) (c)................................. 5.375 06/01/15 1,300,876
1,000 Canon McMillan Sch Dist PA Ser B (FGIC
Insd)......................................... 5.500 12/01/29 1,054,050
2,270 Carbon Cnty, PA Indl Dev Auth Panther Creek
Partn Proj Rfdg (AMT) (LOC: Paribas & Union Bk
of CA Intl)................................... 6.650 05/01/10 2,359,642
5,500 Central Dauphin, PA Sch Dist (FSA Insd)....... 5.000 12/01/19 5,857,225
1,370 Central Greene, PA Sch Dist Rfdg Ser B (FSA
Insd) (c)..................................... 5.000 02/15/23 1,463,818
1,435 Central Greene, PA Sch Dist Rfdg Ser B (FSA
Insd) (c)..................................... 5.000 02/15/24 1,531,073
1,000 Chartiers Vly, PA Indl & Coml Dev Auth First
Mtg Rev Asbury Hlth Ctr Rfdg.................. 6.375 12/01/19 1,040,780
1,000 Chartiers Vly, PA Indl & Coml Dev Auth First
Mtg Rev Asbury Hlth Ctr Rfdg.................. 6.375 12/01/24 1,039,500
3,000 Cheltenham Twp, PA (AMBAC Insd)............... 5.000 01/01/28 3,178,200
3,555 Chester Cnty, PA Indl Dev Auth Rev Collegium
Charter Sch Proj Ser A (ACA Insd)............. 5.500 04/15/31 3,817,821
1,500 Crawford Cnty, PA Hosp Auth Sr Living Fac Rev
Westbury Utd Methodist Cmnty.................. 6.250 08/15/29 1,545,300
See Notes to Financial Statements 9
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2007 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
--------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 1,000 Cumberland Cnty, PA Muni Auth Dickinson
College Ser A (AMBAC Insd) (Prerefunded @
11/01/10)..................................... 5.500% 11/01/30 $ 1,059,130
5,000 Dauphin Cnty, PA Genl Auth Hosp Rev Hapsco
West PA Hosp Proj B Rfdg (MBIA Insd) (d)...... 6.250 07/01/16 5,582,200
360 Delaware Cnty, PA Auth College Cabrini College
(Radian Insd)................................. 5.750 07/01/23 372,488
1,640 Delaware Cnty, PA Auth College Cabrini College
(Radian Insd) (Prerefunded @ 7/01/09)......... 5.750 07/01/23 1,709,897
2,295 Delaware Cnty, PA Auth College Neumann College
Rfdg (c)...................................... 5.875 10/01/21 2,422,441
2,000 Delaware Cnty, PA Auth College Neumann College
Rfdg.......................................... 6.000 10/01/31 2,110,340
4,500 Delaware Cnty, PA Auth Rev Eastern Univ
(Radian Insd)................................. 4.550 10/01/36 4,396,365
1,000 Delaware Cnty, PA Auth Rev White Horse Vlg
Proj Rfdg Ser A (Prerefunded @ 7/01/10)....... 7.625 07/01/30 1,119,610
2,750 Delaware Cnty, PA Indl Dev Auth Rev Wtr Fac
Aqua PA Inc Proj Ser A (FGIC Insd) (AMT)...... 5.000 11/01/37 2,879,910
9,300 Delaware Cnty, PA Indl Dev Auth Rev Wtr Fac
Aqua PA Inc Proj Ser B (FGIC Insd) (AMT)
(a)........................................... 5.000 11/01/36 9,739,332
4,000 Delaware Cnty, PA Indl Dev Auth Rev Wtr Fac
Aqua PA Inc Proj Ser C (FGIC Insd) (AMT)...... 5.000 02/01/35 4,174,640
1,750 Delaware Cnty, PA Indl Dev Auth Rev Wtr Fac
(FGIC Insd) (AMT)............................. 6.000 06/01/29 1,837,552
2,500 Delaware Cnty, PA Indl Dev Auth Wtr Fac PA
Subn Wtr (AMBAC Insd) (AMT)................... 5.350 10/01/31 2,637,100
1,230 Delaware Cnty, PA Regl Wtr Qual Ctl Auth Swr
Rev (MBIA Insd)............................... 5.250 05/01/19 1,331,684
1,480 Delaware Cnty, PA Regl Wtr Qual Ctl Auth Swr
Rev (MBIA Insd) (c)........................... 5.250 05/01/21 1,598,578
1,555 Delaware Cnty, PA Regl Wtr Qual Ctl Auth Swr
Rev (MBIA Insd) (c)........................... 5.250 05/01/22 1,679,587
8,000 Delaware Vly, PA Regl Fin Auth................ 5.750 07/01/17 9,095,360
2,000 Downingtown, PA Area Sch Dist (FSA Insd)...... 5.250 04/01/15 2,109,680
2,800 Erie, PA Sch Dist (AMBAC Insd) (Prerefunded @
9/01/10)...................................... 5.800 09/01/29 2,984,156
2,735 Exeter Twp, PA Sch Dist (FGIC Insd)........... 5.000 05/15/25 2,882,963
6,665 Falls Twp, PA Hosp Auth Hosp Rev DE Vly Med
Rfdg (FHA Gtd)................................ 7.000 08/01/22 6,706,056
1,000 Fayette Cnty, PA (AMBAC Insd) (Prerefunded @
11/15/10)..................................... 5.625 11/15/28 1,063,840
10,000 Geisinger Auth PA Hlth Sys (a)(e)(f).......... 4.359 05/01/37 10,000,000
6,575 Harrisburg, PA Auth Wtr Rev Rfdg (FSA Insd)
(c)........................................... 5.000 07/15/21 6,995,537
1,000 Harveys Lake Gen Muni Auth PA College Rev
College Misericordia Proj (ACA Insd).......... 6.000 05/01/19 1,044,030
10 See Notes to Financial Statements
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2007 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
--------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 1,985 Jim Thorpe, PA Area Sch Dist (FSA Insd) (c)... 5.000% 03/15/25 $ 2,104,795
5,000 Lancaster Cnty, PA Hosp Auth Rev Hlth Sys
Lancaster Gen Rfdg Ser B (a).................. 4.500 03/15/31 4,933,750
5,000 Lancaster Cnty, PA Hosp Auth Rev Hlth Sys
Lancaster Gen Rfdg Ser B (a).................. 4.500 03/15/36 4,933,750
3,500 Lancaster, PA Higher Ed Auth Rev Franklin &
Marshall College.............................. 5.000 04/15/22 3,703,175
1,000 Lebanon Cnty, PA Hlth Fac Pleasant View Auth
Hlth Ctr Rev Retirement Ser A................. 5.125 12/15/20 1,010,630
1,510 Lehigh Cnty, PA Gen Purp Auth Cedar Crest
College Rfdg (Radian Insd).................... 5.000 04/01/26 1,580,155
2,000 Lehigh Cnty, PA Gen Purp Auth Rev Good
Shepherd Group Ser A.......................... 5.500 11/01/24 2,120,280
1,000 Lehigh Cnty, PA Gen Purp Auth Rev Good
Shepherd Group Ser A.......................... 5.625 11/01/34 1,072,280
16,000 Lehigh Cnty, PA Gen Purp Auth Rev Hosp Saint
Lukes Bethlhem (a)(f)......................... 4.609 08/15/42 15,997,600
1,800 Lehigh Cnty, PA Gen Purp Auth Rev Hosp Saint
Lukes Bethlehem (Prerefunded @ 8/15/13)....... 5.250 08/15/23 1,939,302
1,750 Lehigh Cnty, PA Gen Purp Auth Rev Hosp Saint
Lukes Bethlehem (Prerefunded @ 8/15/13)....... 5.375 08/15/33 1,897,560
1,240 Lehigh Northampton, PA Arpt Lehigh Vly Arpt
Sys Rfdg Ser A (MBIA Insd) (AMT) (c).......... 5.000 01/01/20 1,295,304
1,360 Lehigh Northampton, PA Arpt Lehigh Vly Arpt
Sys Rfdg Ser A (MBIA Insd) (AMT) (c).......... 5.000 01/01/22 1,414,346
675 Lehigh Northampton, PA Arpt Lehigh Vly Arpt
Sys Rfdg Ser A (MBIA Insd) (AMT).............. 5.000 01/01/23 701,082
1,500 Lehigh Northampton, PA Arpt Ser A (MBIA Insd)
(AMT)......................................... 6.000 05/15/25 1,583,550
2,700 Lehigh Northampton, PA Arpt Ser A (MBIA Insd)
(AMT)......................................... 6.000 05/15/30 2,850,390
8,290 Luzerne Cnty, PA Ser A (MBIA Insd)
(Prerefunded @ 11/15/12)...................... 5.250 11/15/25 8,934,796
6,650 Lycoming Cnty, PA Auth College Rev PA College
of Technology (AMBAC Insd).................... 5.350 07/01/26 6,966,606
5,000 Lycoming Cnty, PA Auth College Rev PA College
of Technology (AMBAC Insd).................... 5.375 07/01/30 5,242,600
1,000 Mercer Cnty, PA (FGIC Insd)................... 5.500 10/01/15 1,071,600
5,000 Mercer Cnty, PA Indl Dev Auth Wtr Fac Sub Corp
(MBIA Insd) (AMT)............................. 6.000 07/01/30 5,295,350
1,000 Mifflin Cnty, PA Hosp Auth Rev (Radian
Insd)......................................... 6.200 07/01/25 1,083,860
2,500 Mifflin Cnty, PA Hosp Auth Rev (Radian
Insd)......................................... 6.200 07/01/30 2,706,100
3,755 Mifflin Cnty, PA Ser A (FGIC Insd) (c)........ 5.000 09/01/31 3,915,301
3,000 Monroe Cnty, PA Hosp Auth Rev Hosp Pocono Med
Ctr........................................... 6.000 01/01/43 3,238,290
See Notes to Financial Statements 11
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2007 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
--------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 6,500 Montgomery Cnty, PA Higher Ed & Hlth Auth Hosp
Rev Abington Mem Hosp Ser A................... 5.125% 06/01/32 $ 6,686,030
5,000 Montgomery Cnty, PA Higher Ed & Hlth Auth Rev
Arcadia Univ (Radian Insd).................... 5.000 04/01/27 5,232,300
2,000 Montgomery Cnty, PA Higher Ed & Hlth Auth Rev
Arcadia Univ (Radian Insd).................... 5.000 04/01/36 2,088,420
5,000 Montgomery Cnty, PA Higher Ed & Hlth Auth Rev
Dickinson College Proj Ser FF-1 (CIFG Insd)... 5.000 05/01/28 5,303,050
12,000 Montgomery Cnty, PA Indl Dev Auth Retirement
Cmnty Rev Ser A (a)........................... 4.500 11/15/36 11,407,320
4,000 Moon Area Sch Dist PA (FSA Insd).............. 5.000 11/15/25 4,258,640
2,345 Moon Indl Dev Auth PA Ed Fac Rev Ellis Sch
Proj (Prerefunded @ 3/01/09).................. 5.800 03/01/25 2,430,874
1,500 Mount Lebanon, PA Hosp Auth Saint Clair Mem
Hosp Ser A.................................... 5.625 07/01/32 1,580,490
630 New Castle, PA San Auth Swr Rfdg (MBIA
Insd)......................................... 5.000 06/01/24 646,531
1,225 Northampton Twp, PA (FGIC Insd) (c)........... 5.375 05/15/15 1,300,215
2,625 Norwin, PA Sch Dist (FSA Insd) (Prerefunded @
4/01/16)...................................... 5.000 04/01/35 2,860,305
2,100 Owen J. Roberts Sch Dist PA (FSA Insd)........ 5.000 05/15/27 2,239,104
1,000 Pennsylvania Econ Dev Fin Auth Res Recovery
Rev Colver Proj Rfdg Ser G (AMT).............. 5.125 12/01/15 1,019,080
1,000 Pennsylvania Econ Dev Fin Auth Solid Waste
Disp Rev Waste Mgmt Inc Proj Ser A (AMT)...... 5.100 10/01/27 1,028,880
3,500 Pennsylvania Hsg Fin Agy Single Family Mtg Rev
Ser 94-A (AMT)................................ 5.100 10/01/31 3,602,410
3,200 Pennsylvania Hsg Fin Agy Single Family Mtg Rev
Ser 96-A (AMT) (a)............................ 4.600 10/01/27 3,165,752
4,500 Pennsylvania Hsg Fin Agy Single Family Mtg Rev
Ser 96-A (AMT) (a)............................ 4.650 10/01/31 4,451,839
8,300 Pennsylvania Hsg Fin Agy Single Family Mtg Rev
Ser 96-A (AMT) (a)............................ 4.700 10/01/37 8,211,169
4,000 Pennsylvania Hsg Fin Agy Single Family Mtg Rev
Ser 97-A (AMT) (a)............................ 4.700 10/01/37 3,957,190
520 Pennsylvania Hsg Fin Agy Single Family Mtg Ser
66-A (AMT).................................... 5.650 04/01/29 522,059
960 Pennsylvania Hsg Fin Agy Single Family Mtg Ser
90-A (AMT).................................... 4.700 10/01/25 964,445
2,500 Pennsylvania St Higher Ed Fac Auth Rev
Allegheny College............................. 4.800 05/01/36 2,549,825
1,000 Pennsylvania St Higher Ed Fac Auth Rev Clarion
Univ Fndtn Inc Ser A (XLCA Insd).............. 5.000 07/01/28 1,043,850
1,500 Pennsylvania St Higher Ed Fac Auth Rev Clarion
Univ Fndtn Inc Ser A (XLCA Insd).............. 5.000 07/01/33 1,561,650
1,500 Pennsylvania St Higher Ed Fac Auth Rev Clarion
Univ Fndtn Inc Ser A (XLCA Insd).............. 5.250 07/01/18 1,604,070
12 See Notes to Financial Statements
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2007 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
--------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 3,000 Pennsylvania St Higher Ed Fac Auth Rev Drexel
Univ (c)...................................... 5.500% 05/01/16 $ 3,217,530
4,000 Pennsylvania St Higher Ed Fac Auth Rev Drexel
Univ (c)...................................... 5.500 05/01/17 4,316,680
1,000 Pennsylvania St Higher Ed Fac Auth Rev Geneva
College Proj.................................. 6.125 04/01/22 1,072,090
5,500 Pennsylvania St Higher Ed Fac Auth Rev La
Salle Univ.................................... 5.500 05/01/34 5,789,465
1,300 Pennsylvania St Higher Ed Fac Auth Rev
Lycoming College Assn Indpt (Radian Insd)..... 5.250 11/01/19 1,385,943
3,000 Pennsylvania St Higher Ed Fac Auth Rev Messiah
College Ser AA-3 (Radian Insd)................ 5.500 11/01/22 3,233,190
1,000 Pennsylvania St Higher Ed Fac Auth Rev PA
Univ.......................................... 5.000 06/01/35 1,024,910
1,540 Pennsylvania St Higher Ed Fac Auth Rev Thomas
Jefferson Univ................................ 5.375 01/01/25 1,636,342
3,230 Pennsylvania St Higher Ed Fac Auth Rev Thomas
Jefferson Univ (Prerefunded @ 1/01/13)........ 5.375 01/01/25 3,494,795
6,000 Pennsylvania St Higher Ed Fac Auth Rev Univ
Sciences Philadelphia Ser A (XLCA Insd)....... 5.000 11/01/36 6,300,480
7,850 Pennsylvania St Higher Ed Fac Auth Rev UPMC
Hlth Sys Ser A................................ 6.000 01/15/31 8,475,881
6,600 Pennsylvania St Higher Ed Fac Auth Rev UPMC
Hlth Sys Ser A (FSA Insd)..................... 5.000 08/01/29 6,781,368
20,000 Pennsylvania St Pub Sch Bldg Auth Lease Rev
Sch Dist Philadelphia Proj Ser A (FSA Insd)
(a)........................................... 4.500 06/01/36 19,823,000
4,505 Pennsylvania St Tpk Com Tpk Rev Rfdg Ser T
(FGIC Insd)................................... 5.500 12/01/13 4,973,610
3,500 Pennsylvania St Tpk Com Tpk Rev Ser A (AMBAC
Insd)......................................... 5.000 12/01/26 3,738,175
1,200 Pennsylvania St Tpk Com Tpk Rev Ser A (AMBAC
Insd)......................................... 5.250 12/01/21 1,302,996
2,000 Pennsylvania St Univ.......................... 5.000 09/01/29 2,119,380
4,000 Pennsylvania St Univ.......................... 5.000 09/01/35 4,224,320
1,970 Pennsylvania St Univ Rfdg..................... 5.250 03/01/18 2,119,759
1,550 Perkiomen Vly Sch Dist PA Ser A (FSA Insd)
(Prerefunded @ 3/01/14)....................... 5.250 03/01/28 1,689,469
1,250 Philadelphia, PA Arpt Rev Ser A (MBIA Insd)
(AMT)......................................... 5.000 06/15/23 1,305,925
9,160 Philadelphia, PA Auth for Indl Dev Rev
Cultural & Coml Corridors Pgm Ser A (FGIC
Insd) (a)..................................... 4.450 12/01/31 9,045,042
4,220 Philadelphia, PA Auth for Indl Dev Rev Please
Touch Museum Proj (a)......................... 5.250 09/01/21 4,355,234
8,460 Philadelphia, PA Auth for Indl Dev Rev Please
Touch Museum Proj (a)......................... 5.250 09/01/26 8,658,830
See Notes to Financial Statements 13
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2007 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
--------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 1,000 Philadelphia, PA Auth for Indl Dev Rev Please
Touch Museum Proj (a)......................... 5.250% 09/01/31 $ 1,059,555
6,720 Philadelphia, PA Auth for Indl Dev Rev Please
Touch Museum Proj (a)......................... 5.250 09/01/36 7,120,210
4,005 Philadelphia, PA Auth Indl Dev Amern College
of Physicians (c)............................. 5.500 06/15/27 4,152,825
2,250 Philadelphia, PA Auth Indl Dev PA Arpt Sys
Proj Ser A (FGIC Insd) (AMT).................. 5.125 07/01/19 2,349,923
2,500 Philadelphia, PA Auth Indl Dev PA Arpt Sys
Proj Ser A (FGIC Insd) (AMT).................. 5.250 07/01/28 2,617,375
4,000 Philadelphia, PA Auth Indl Ser B (FSA Insd)... 5.125 10/01/26 4,200,800
11,160 Philadelphia, PA Auth Indl Ser B (FSA Insd)... 5.500 10/01/17 12,006,486
3,000 Philadelphia, PA (FSA Insd)................... 5.000 03/15/28 3,071,280
3,000 Philadelphia, PA (FSA Insd)................... 5.250 09/15/25 3,140,910
3,900 Philadelphia, PA Gas Wks Rev 12th Ser B (MBIA
Insd) (d)..................................... 7.000 05/15/20 4,652,661
1,700 Philadelphia, PA Gas Wks Rev Ser 18 (AGL
Insd)......................................... 5.250 08/01/21 1,822,026
5,000 Philadelphia, PA Gas Wks Rev Ser 2 (FSA Insd)
(Prerefunded @ 7/01/09)....................... 5.250 07/01/29 5,181,650
1,000 Philadelphia, PA Hosp & Higher Ed Fac Auth Rev
Chestnut Hill College (Prerefunded @
10/01/09)..................................... 6.000 10/01/29 1,066,100
14,800 Philadelphia, PA Hosp & Higher Ed Fac Auth Rev
Childrens Hosp Proj (a)....................... 4.500 07/01/37 14,891,723
1,455 Philadelphia, PA Hosp & Higher Ed Fac Auth Rev
Cmnty College Rfdg Ser B (MBIA Insd) (c)...... 6.500 05/01/09 1,530,500
1,645 Philadelphia, PA Proj Auth Rev Ser A (AMBAC
Insd)......................................... 5.250 02/15/29 1,695,715
12,940 Philadelphia, PA Redev Auth Residential Mtg Ln
Rev Ser A (AMT) (a)........................... 4.750 12/01/28 12,922,984
4,675 Philadelphia, PA Redev Auth Rev Neighborhood
Trans Ser A (FGIC Insd)....................... 5.250 04/15/12 4,990,609
1,905 Philadelphia, PA Redev Auth Rev Neighborhood
Trans Ser A (FGIC Insd)....................... 5.500 04/15/16 2,056,943
500 Pittsburgh & Allegheny Cnty, PA Pub Aud Hotel
Room (AMBAC Insd)............................. 5.125 02/01/35 516,435
16,000 Pittsburgh & Allegheny Cnty, PA Pub Aud Regl
Asset Dist Sales Tax (AMBAC Insd)............. 5.000 02/01/24 16,511,200
4,990 Pittsburgh & Allegheny Cnty, PA Pub Aud Regl
Asset Dist Sales Tax (AMBAC Insd)............. 5.000 02/01/29 5,137,405
2,215 Pittsburgh, PA Pub Pkg Auth Rev Rfdg Ser A
(FGIC Insd)................................... 5.000 12/01/25 2,353,858
5,000 Pittsburgh, PA Rfdg Ser B (FSA Insd).......... 5.250 09/01/17 5,508,050
5,140 Pittsburgh, PA Ser A (AMBAC Insd)............. 5.500 09/01/17 5,503,192
4,860 Pittsburgh, PA Ser A (AMBAC Insd) (Prerefunded
@ 3/01/12).................................... 5.500 09/01/17 5,247,196
14 See Notes to Financial Statements
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2007 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
--------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 2,000 Pittsburgh, PA Ser A (FGIC Insd) (Prerefunded
@ 9/01/09).................................... 5.750% 09/01/21 $ 2,090,160
3,000 Pittsburgh, PA Ser A (FGIC Insd) (Prerefunded
@ 9/01/09).................................... 5.750 09/01/22 3,135,240
1,000 Pittsburgh, PA Urban Redev Auth Cent Triangle
Tax Increment Ser A........................... 6.100 05/01/19 1,038,430
1,755 Pittsburgh, PA Urban Redev Auth Mtg Rev Ser A
(GNMA Collateralized) (AMT)................... 5.000 10/01/36 1,788,134
1,495 Pittsburgh, PA Urban Redev Auth Mtg Rev Ser C
(GNMA Collateralized) (AMT)................... 5.700 04/01/30 1,517,111
1,500 Radnor Twp, PA Sch Dist Ser B (FSA Insd)...... 5.000 02/15/28 1,591,290
2,000 Rostraver Twp, PA (AMBAC Insd) (Prerefunded @
7/01/10)...................................... 5.500 07/01/24 2,111,220
1,000 Saxonburg, PA Area Auth Swr & Wtr Rev (AGL
Insd)......................................... 5.000 03/01/30 1,057,360
1,500 Saxonburg, PA Area Auth Swr & Wtr Rev (AGL
Insd)......................................... 5.000 03/01/35 1,581,510
4,390 Souderton, PA Area Sch Dist (FGIC Insd)....... 5.000 11/15/22 4,690,496
1,000 Southcentral, PA Gen Auth Rev Hanover Hosp Inc
(Radian Insd)................................. 5.000 12/01/30 1,045,760
900 Southcentral, PA Gen Auth Rev Wellspan (MBIA
Insd)......................................... 5.375 05/15/28 959,310
4,100 Southcentral, PA Gen Auth Rev Wellspan (MBIA
Insd) (Prerefunded @ 5/15/11) (c)............. 5.375 05/15/28 4,386,918
1,000 State Pub Sch Bldg Auth PA Delaware Cnty
College Proj (MBIA Insd) (Prerefunded @
10/01/10)..................................... 5.750 10/01/16 1,065,740
895 State Pub Sch Bldg Auth PA Sch Conneaut Sch
Dist (FGIC Insd) (c).......................... 5.250 11/01/23 960,621
2,360 State Pub Sch Bldg Auth PA Sch Rev Jefferson
Cnty Dubois Tech Sch (FGIC Insd) (c).......... 5.375 02/01/23 2,573,250
1,600 State Pub Sch Bldg Auth PA Sch Rev Lease
Colonial Inter Unit 20 (FGIC Insd)............ 5.000 05/15/30 1,688,240
1,270 State Pub Sch Bldg Auth PA Sch Tuscarora Sch
Dist Proj (FSA Insd) (Prerefunded @ 4/01/13)
(c)........................................... 5.250 04/01/21 1,372,692
2,140 Susquehanna Area Regl Arpt Auth PA Arpt Sys
Rev Ser A (AMBAC Insd) (AMT).................. 5.375 01/01/21 2,259,819
5,205 Susquehanna Area Regl Arpt Auth PA Arpt Sys
Rev Ser A (AMBAC Insd) (AMT).................. 5.375 01/01/23 5,491,067
2,545 Susquehanna Area Regl Arpt Auth PA Arpt Sys
Rev Ser A (AMBAC Insd) (AMT) (c).............. 5.500 01/01/18 2,712,868
5,500 Susquehanna Area Regl Arpt Auth PA Arpt Sys
Rev Ser D..................................... 5.375 01/01/18 5,667,090
1,950 Swarthmore Boro Auth PA College............... 5.250 09/15/18 2,089,640
2,850 Trinity Area Sch Dist PA (FGIC Insd).......... 5.250 11/01/20 3,085,268
See Notes to Financial Statements 15
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2007 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
--------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 1,820 Twin Vly, PA Sch Dist (FSA Insd) (c).......... 5.250% 04/01/26 $ 1,977,812
1,000 Union Cnty, PA Higher Ed Fac Auth Bucknell
Univ Ser A.................................... 5.250 04/01/19 1,077,010
1,000 Union Cnty, PA Higher Ed Fac Auth Bucknell
Univ Ser A.................................... 5.250 04/01/21 1,069,620
500 Union Cnty, PA Higher Ed Fac Auth Bucknell
Univ Ser A.................................... 5.250 04/01/22 534,810
2,300 Union Cnty, PA Hosp Auth Hosp Rev Evangelical
Cmnty Hosp (Radian Insd)...................... 5.250 08/01/24 2,442,117
1,285 Unity Twp, PA Muni Auth Swr Rev (FSA Insd).... 5.000 12/01/24 1,360,995
5,850 Washington Cnty, PA Ser A (AMBAC Insd)........ 5.125 09/01/27 6,145,893
3,420 Westmoreland Cnty, PA Muni Auth Svc Rev (FSA
Insd) (a)..................................... 5.250 08/15/24 3,773,012
6,475 Westmoreland Cnty, PA Muni Auth Svc Rev (FSA
Insd) (a)..................................... 5.250 08/15/27 7,143,350
3,825 Westmoreland Cnty, PA Muni Auth Svc Rev (FSA
Insd) (a)..................................... 5.250 08/15/28 4,219,817
6,000 West Shore, PA Area Hosp Auth Holy Spirit Hosp
Proj.......................................... 6.250 01/01/32 6,415,200
4,000 York Cnty, PA Indl Dev Auth Wtr Co Proj (FGIC
Insd) (AMT)................................... 4.750 10/01/36 4,036,160
1,485 York Cnty, PA (MBIA Insd)..................... 5.000 06/01/23 1,584,733
1,000 York Cnty, PA (MBIA Insd)..................... 5.000 06/01/26 1,064,180
2,200 York Cnty, PA (MBIA Insd)..................... 5.000 06/01/29 2,334,662
2,200 York Cnty, PA (MBIA Insd)..................... 5.000 06/01/33 2,328,128
500 York Cnty, PA Sch Technology Auth Lease Rev
(FGIC Insd) (Prerefunded @ 2/15/13)........... 5.500 02/15/22 540,545
1,000 York Cnty, PA Sch Technology Auth Lease Rev
(FGIC Insd) (Prerefunded @ 2/15/13)........... 5.500 02/15/23 1,081,090
-------------
726,031,833
-------------
GUAM 0.4%
1,585 Guam Intl Arpt Auth Gen Ser B (MBIA Insd)..... 5.250 10/01/21 1,712,434
-------------
PUERTO RICO 7.0%
2,500 Childrens Tr Fd PR Tob Settlement Rev Asset
Bkd........................................... 5.500 05/15/39 2,622,850
5,000 Childrens Tr Fd PR Tob Settlement Rev Asset
Bkd........................................... 5.625 05/15/43 5,266,750
4,000 Puerto Rico Comwlth Hwy & Trans Auth Hwy Rev
Rfdg Ser Y (FSA Insd) (b)..................... 6.250 07/01/21 4,948,800
5,000 Puerto Rico Comwlth Infrastrucure Fin Auth Spl
Ser B......................................... 5.000 07/01/41 5,191,550
4,950 University PR Univ Rev Rfdg Sys Ser P (a)..... 5.000 06/01/30 5,180,373
3,950 University PR Univ Rev Sys Ser Q (a).......... 5.000 06/01/36 4,133,833
-------------
27,344,156
-------------
16 See Notes to Financial Statements
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2007 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
--------------------------------------------------------------------------------------------
U.S. VIRGIN ISLANDS 2.0%
$ 1,500 University VI Impt Ser A...................... 5.375% 06/01/34 $ 1,595,400
1,000 Virgin Islands Pub Fin Auth Rev Gross Rcpt
Taxes Ln Nt Ser A............................. 6.375 10/01/19 1,086,740
3,000 Virgin Islands Pub Fin Auth Rev Gross Rcpt
Taxes Ln Nt Ser A (ACA Insd) (Prerefunded @
10/01/10)..................................... 6.125 10/01/29 3,257,520
1,500 Virgin Islands Pub Fin Auth Rev Gross Rcpt
Taxes Ln Nt Ser A (Prerefunded @ 10/01/10)
(b)........................................... 6.500 10/01/24 1,644,630
-------------
7,584,290
-------------
TOTAL LONG-TERM INVESTMENTS 196.2%
(Cost $733,700,748)....................................................... 762,672,713
-------------
TOTAL SHORT-TERM INVESTMENTS 0.7%
(Cost $2,800,000)......................................................... 2,800,000
-------------
TOTAL INVESTMENTS 196.9%
(Cost $736,500,748)....................................................... 765,472,713
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD (41.4%)
(Cost ($161,130,000))
(161,130) Notes with interest rates ranging from 3.95% to 4.02% at April
30, 2007 and contractual maturities of collateral ranging from
2021 to 2042 (See Note 1) (g)................................... (161,130,000)
-------------
TOTAL NET INVESTMENTS 155.5%
(Cost $575,370,748)....................................................... 604,342,713
OTHER ASSETS IN EXCESS OF LIABILITIES 1.2%................................. 4,720,044
PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (56.7%)................. (220,393,036)
-------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0%.............................. $ 388,669,721
=============
Percentages are calculated as a percentage of net assets applicable to common
shares.
(a) Underlying security related to Inverse Floaters entered into by the Trust.
See Note 1.
(b) All or a portion of this security has been physically segregated in
connection with open futures contracts.
(c) The Trust owns 100% of the outstanding bond issuance.
(d) Escrowed to Maturity
(e) Security purchased on a when-issued or delayed delivery basis.
See Notes to Financial Statements 17
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2007 (UNAUDITED) continued
(f) Floating rate coupon
(g) Floating rate notes. The interest rate shown reflects the rates in effect at
April 30, 2007.
ACA--American Capital Access
AGL--Assured Guaranty Ltd.
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
CIFG--CDC IXIS Financial Guaranty
FGIC--Financial Guaranty Insurance Co.
FHA--Federal Housing Administration
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance Corp.
Radian--Radian Asset Assurance
XLCA--XL Capital Assurance Inc.
FUTURES CONTRACTS OUTSTANDING AS OF APRIL 30, 2007:
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
SHORT CONTRACTS:
U.S. Treasury Bonds Futures, June 2007 (Current Notional
Value of $111,750 per contract)........................... 1,067 $508,082
===== ========
18 See Notes to Financial Statements
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
April 30, 2007 (Unaudited)
ASSETS:
Total Investments (Cost $736,500,748)....................... $765,472,713
Cash........................................................ 7,741
Receivables:
Investments Sold.......................................... 10,635,000
Interest.................................................. 9,395,212
Other....................................................... 6,977
------------
Total Assets............................................ 785,517,643
------------
LIABILITIES:
Floating Rate Note Obligations.............................. 161,130,000
Payables:
Investments Purchased..................................... 12,500,000
Variation Margin on Futures............................... 900,281
Investment Advisory Fee................................... 224,992
Trust Shares Repurchased.................................. 171,235
Income Distributions--Common Shares....................... 71,099
Other Affiliates.......................................... 28,176
Trustees' Deferred Compensation and Retirement Plans........ 1,301,735
Accrued Expenses............................................ 127,368
------------
Total Liabilities....................................... 176,454,886
Preferred Shares (including accrued distributions).......... 220,393,036
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $388,669,721
============
NET ASSET VALUE PER COMMON SHARE ($388,669,721 divided by
24,510,553 shares outstanding)............................ $ 15.86
============
NET ASSETS CONSIST OF:
Common Shares ($0.01 par value with an unlimited number of
shares authorized, 24,510,553 shares issued and
outstanding).............................................. $ 245,105
Paid in Surplus............................................. 358,991,205
Net Unrealized Appreciation................................. 29,480,047
Accumulated Net Realized Gain............................... 162,861
Accumulated Undistributed Net Investment Income............. (209,497)
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $388,669,721
============
PREFERRED SHARES ($0.01 par value, authorized 100,000,000
shares, 8,800 issued with liquidation preference of
$25,000 per share)........................................ $220,000,000
============
NET ASSETS INCLUDING PREFERRED SHARES....................... $608,669,721
============
See Notes to Financial Statements 19
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended April 30, 2007 (Unaudited)
INVESTMENT INCOME:
Interest.................................................... $17,119,121
-----------
EXPENSES:
Interest and Residual Trust Expenses........................ 2,048,721
Investment Advisory Fee..................................... 1,670,795
Preferred Share Maintenance................................. 291,163
Trustees' Fees and Related Expenses......................... 92,212
Accounting and Administrative Expenses...................... 57,376
Professional Fees........................................... 54,286
Custody..................................................... 34,224
Transfer Agent Fees......................................... 31,371
Reports to Shareholders..................................... 25,374
Registration Fees........................................... 12,637
Other....................................................... 12,360
-----------
Total Expenses.......................................... 4,330,519
Investment Advisory Fee Reduction....................... 253,316
-----------
Net Expenses............................................ 4,077,203
-----------
NET INVESTMENT INCOME....................................... $13,041,918
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 886,550
Futures................................................... (106,424)
Swap Contracts............................................ (979,531)
-----------
Net Realized Loss........................................... (199,405)
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 32,702,920
-----------
End of the Period:
Investments............................................. 28,971,965
Futures................................................. 508,082
-----------
29,480,047
-----------
Net Unrealized Depreciation During the Period............... (3,222,873)
-----------
NET REALIZED AND UNREALIZED LOSS............................ $(3,422,278)
===========
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $(4,060,244)
===========
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
OPERATIONS................................................ $ 5,559,396
===========
20 See Notes to Financial Statements
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2007 OCTOBER 31, 2006
------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 13,041,918 $ 22,767,287
Net Realized Gain/Loss.................................. (199,405) 984,707
Net Unrealized Appreciation/Depreciation During the
Period................................................ (3,222,873) 5,719,300
Distributions to Preferred Shareholders:
Net Investment Income................................. (4,009,034) (7,232,818)
Net Realized Gain..................................... (51,210) (276,995)
------------ ------------
Change in Net Assets Applicable to Common Shares from
Operations............................................ 5,559,396 21,961,481
Distributions to Common Shareholders:
Net Investment Income................................. (8,719,052) (16,356,750)
Net Realized Gain..................................... (115,657) (1,065,531)
------------ ------------
NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES
FROM INVESTMENT ACTIVITIES............................ (3,275,313) 4,539,200
FROM CAPITAL TRANSACTIONS:
Proceeds from Common Shares Acquired Through Merger..... -0- 317,870,416
Repurchase of Shares.................................... (1,434,019) -0-
------------ ------------
TOTAL INCREASE/DECREASE IN NET ASSETS APPLICABLE TO
COMMON SHARES......................................... (4,709,332) 322,409,616
NET ASSETS APPLICABLE TO COMMON SHARES:
Beginning of the Period................................. 393,379,053 70,969,437
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $(209,497) and $(523,329),
respectively)......................................... $388,669,721 $393,379,053
============ ============
See Notes to Financial Statements 21
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -----------------------------------------------
2007 2006 2005 2004 2003 2002
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD............ $ 15.99 $ 15.85 $ 16.43 $ 16.20 $ 16.12 $ 16.04
------- ------- ------- ------- ------- -------
Net Investment Income.............................. 0.53(a) 1.00(a) 1.03 1.06 1.10 1.14
Net Realized and Unrealized Gain/Loss.............. (0.15) 0.23 (0.45) 0.39 0.12 0.08
Common Share Equivalent of Distributions Paid to
Preferred Shareholders:
Net Investment Income............................ (0.16) (0.32) (0.21) (0.11) (0.10) (0.15)
Net Realized Gain................................ 0.00(f) (0.01) (0.01) (0.01) 0.00 0.00
------- ------- ------- ------- ------- -------
Total from Investment Operations.................... 0.22 0.90 0.36 1.33 1.12 1.07
Distributions Paid to Common Shareholders:
Net Investment Income............................ (0.35) (0.72) (0.87) (1.00) (1.04) (0.99)
Net Realized Gain................................ 0.00(f) (0.04) (0.07) (0.10) 0.00 0.00
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE PERIOD.................. $ 15.86 $ 15.99 $ 15.85 $ 16.43 $ 16.20 $ 16.12
======= ======= ======= ======= ======= =======
Common Share Market Price at End of the Period...... $ 14.62 $ 13.87 $ 14.26 $ 15.58 $ 16.05 $ 15.85
Total Return* (b)................................... 8.05%** 2.77% -2.70% 4.15% 8.07% 11.76%
Net Assets Applicable to Common Shares at End of the
Period (In millions)............................... $ 388.7 $ 393.4 $ 71.0 $ 73.5 $ 72.5 $ 72.1
Ratio of Expenses to Average Net Assets Applicable
to Common Shares* (c).............................. 2.09% 1.41% 1.41% 1.51% 1.53% 1.60%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares* (c)................... 6.70% 6.40% 6.37% 6.50% 6.76% 7.22%
Portfolio Turnover.................................. 9%** 20% 27% 18% 23% 16%
* If certain expenses had not been voluntarily assumed by Van Kampen, total return would have been lower and the
ratios would have been as follows:
Ratio of Expenses to Average Net Assets Applicable
to Common Shares (c)............................ 2.22% N/A N/A N/A N/A N/A
Ratio of Net Investment Income to Average Net
Assets Applicable to Common Shares (c).......... 6.57% N/A N/A N/A N/A N/A
SUPPLEMENTAL RATIOS:
Ratio of Expenses (Excluding Interest and Residual
Trust Expenses) to Average Net Assets Applicable to
Common Shares (c).................................. 1.04% 1.30% 1.41% 1.51% 1.53% 1.60%
Ratio of Expenses (Excluding Interest and Residual
Trust Expenses) to Average Net Assets Including
Preferred Shares (c)............................... 0.67% 0.82% 0.87% 0.93% 0.95% 0.98%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (d).................... 4.64% 4.36% 5.05% 5.85% 6.13% 6.26%
SENIOR SECURITIES:
Total Preferred Shares Outstanding.................. 8,800 8,800 1,800 1,800 1,800 1,800
Asset Coverage Per Preferred Share (e).............. $69,212 $69,733 $64,436 $65,858 $65,259 $65,061
Involuntary Liquidating Preference Per Preferred
Share.............................................. $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Average Market Value Per Preferred Share............ $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
** Non-Annualized
N/A=Not Applicable
(a) Based on average shares outstanding.
(b) Total return assumes an investment at the common share market price at the
beginning of the period indicated, reinvestment of all distributions for the
period in accordance with the Trust's dividend reinvestment plan, and sale
of all shares at the closing common share market price at the end of the
period indicated.
(c) Ratios do not reflect the effect of dividend payments to preferred
shareholders.
(d) Ratios reflect the effect of dividend payments to preferred shareholders.
(e) Calculated by subtracting the Trust's total liabilities (not including the
preferred shares) from the Trust's total assets and dividing this by the
number of preferred shares outstanding.
(f) Amount is less than $0.01 per share.
22 See Notes to Financial Statements
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2007 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Pennsylvania Value Municipal Income Trust (the "Trust") is registered
as a non-diversified, closed-end management investment company under the
Investment Company Act of 1940 (the "1940 Act"), as amended but operates as a
diversified management investment company. The Trust's investment objective is
to seek to provide a high level of current income exempt from federal and
Pennsylvania income taxes and, where possible under local law, local income and
personal property taxes, consistent with preservation of capital. The Trust will
invest substantially all of its assets in Pennsylvania municipal securities
rated investment grade at the time of investment, but may invest up to 20% of
its assets in unrated securities which are believed to be of comparable quality
to those rated investment grade. The Trust commenced investment operations on
April 30, 1993.
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 last reported 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. Interest rate swaps are valued
using market quotations obtained from brokers. Short-term securities with
remaining maturities of 60 days or less are valued at amortized cost, which
approximates market value.
B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when-issued" or "delayed delivery"
basis with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
segregate assets with the custodian having an aggregate value at least equal to
the amount of the when-issued or delayed delivery purchase commitments until
payment is made. At April 30, 2007, the Trust had $10,000,000 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.
23
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2007 (UNAUDITED) continued
At April 30, 2007, the cost and related gross unrealized appreciation and
depreciation were as follows:
Cost of investments for tax purposes........................ $574,774,169
============
Gross tax unrealized appreciation........................... 30,935,046
Gross tax unrealized depreciation........................... (1,366,502)
------------
Net tax unrealized appreciation on investments.............. $ 29,568,544
============
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 at least annually on a pro rata basis to common and
preferred shareholders. Distributions from net realized gains for book purposes
may include short-term capital gains and a portion of futures gains, which are
included as ordinary income for tax purposes.
The tax character of distributions paid during the year ended October 31,
2006 was as follows:
Distributions Paid From:
Ordinary income........................................... $ 294,810
Tax-exempt income......................................... 23,223,650
Long-term capital gain.................................... 1,103,706
-----------
$24,622,166
===========
As of October 31, 2006, the components of distributable earnings on a tax
basis were as follows:
Undistributed ordinary income............................... $114,587
Undistributed tax-exempt income............................. 390,577
Undistributed long-term capital gain........................ 162,938
Net realized gains or losses may differ for financial reporting and tax
purposes primarily as a result of gains or losses recognized on securities for
tax purposes, but not for book.
F. FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD The Trust enters
into transactions in which it transfers to dealer trusts fixed rate bonds in
exchange for cash and residual interests in the dealer trusts' assets and cash
flows, which are in the form of inverse floating rate investments. The dealer
trusts fund the purchases of the fixed rate bonds by issuing floating rate notes
to third parties and allowing the Trust to retain residual interests in the
bonds. The Trust enters into shortfall agreements with the dealer trusts, which
commit the Trust to pay the dealer trusts, in certain circumstances, the
difference between the liquidation value of the fixed rate bonds held by the
dealer trusts and the liquidation value of the floating rate notes held by third
parties, as well as any shortfalls in interest cash flows. The residual
interests held by the Trust (inverse floating rate investments) include the
right of the Trust (1) to cause the holders of the floating rate notes to tender
their notes at par at the next interest rate reset date, and (2) to transfer the
municipal bond from the dealer trusts to the Trust, thereby collapsing the
dealer trusts. The Trust accounts for the transfer of bonds to the dealer trusts
as secured borrowings, with the securities transferred remaining in the
24
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2007 (UNAUDITED) continued
Trust's investment assets, and the related floating rate notes reflected as
Trust liabilities under the caption "Floating Rate Note Obligations" on the
Statement of Assets and Liabilities. The Trust records the interest income from
the fixed rate bonds under the caption "Interest" and records the expenses
related to floating rate note obligations and any administrative expenses of the
dealer trusts under the caption "Interest and Residual Trust Expenses" on the
Trust's Statement of Operations. The notes issued by the dealer trusts have
interest rates that reset weekly and the floating rate note holders have the
option to tender their notes to the dealer trusts for redemption at par at each
reset date. At April 30, 2007, Trust investments with a value of $217,238,681
are held by the dealer trusts and serve as collateral for the $161,130,000 in
floating rate notes outstanding at that date. Contractual maturities of the
floating rate notes and interest rates in effect at April 30, 2007 are presented
on the Portfolio of Investments.
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") will provide investment advice and facilities to the
Trust for an annual fee payable monthly of .55% of the average daily net assets
including preferred shares of the Trust. Effective December 1, 2006, the Adviser
has agreed to waive investment advisory fees equal to .10% of the average daily
net assets including preferred shares of the Trust. During the period ended
April 30, 2007, the Adviser waived $253,316 of its advisory fees. This waiver is
voluntary and can be discontinued at any time.
For the six months ended April 30, 2007, the Trust recognized expenses of
approximately $25,000 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 six months ended April 30,
2007, the Trust recognized expenses of approximately $31,900 representing Van
Kampen Investments 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. Services provided pursuant to the Legal Services agreement are reported
as part of "Professional Fees" on the Statement of Operations. Services provided
pursuant to the Accounting Services and CCO Employment agreement are reported as
part of "Accounting and Administrative 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.
25
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2007 (UNAUDITED) continued
3. CAPITAL TRANSACTIONS
For the six months ended April 30, 2007 and the year ended October 31, 2006,
transactions in common shares were as follows:
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2007 OCTOBER 31, 2006
Beginning Shares........................................ 24,608,103 4,476,965
Shares Repurchased*..................................... (97,550) -0-
Shares Acquired Through Merger.......................... -0- 20,131,138
---------- ----------
Ending Shares........................................... 24,510,553 24,608,103
========== ==========
* On February 28, 2007, the Trust commenced a share repurchase program for
purposes of enhancing stockholder value and reducing the discount at which the
Trust's shares trade from their net asset value. For the period ended April 30,
2007, the Trust repurchased 97,550 of its shares at an average discount of
7.792% from net asset value per share. The Trust expects to continue to
repurchase its outstanding shares at such time and in such amounts as it
believes such activity will further the accomplishment of the foregoing
objectives, subject to review of the Trustees.
On December 2, 2005, the Trust acquired all of the assets and liabilities of
the Van Kampen Advantage Pennsylvania Municipal Income Trust (ticker symbol
VAP), Pennsylvania Quality Municipal Income Trust (ticker symbol VPQ) and Trust
for Investment Grade Pennsylvania Municipals (ticker symbol VTP) through a tax
free reorganization approved by VAP, VPQ and VTP shareholders on November 22,
2005. The Trust issued 20,131,138 common shares with a net asset value of
$317,870,416 and 7,000 Auction Preferred Shares (APS) with a liquidation value
of $175,000,000 in exchange for VAP's, VPQ's, and VTP's net assets. The shares
of VAP were converted into Trust shares at a ratio of 1.005624 to 1 and 1 to 1,
for common shares and APS, respectively. The shares of VPQ were converted into
Trust shares at a ratio of 1.002660 to 1 and 1 to 1, for common shares and APS,
respectively. The shares of VTP were converted into Trust shares at a ratio of
1.002103 to 1 and 1 to 1, for common shares and APS, respectively. Net
unrealized appreciation of VAP, VPQ and VTP as of December 2, 2005 was
$22,548,134. The Trust assumed VAP, VPQ, and VTP's book to tax accretion
differences, which resulted in a $409,362 increase to accumulated undistributed
net investment income and a corresponding decrease to net unrealized
appreciation. Combined net assets applicable to common shares on the day of
reorganization were $388,563,174 and combined net assets including preferred
shares were $608,563,174. Included in these net assets was a deferred
compensation and retirement plan balance of $770,770 which is included with
accumulated undistributed net investment income. Additionally, included in these
net assets were gains or losses of $181,794 recognized for tax purposes on open
futures transactions at December 2, 2005, which are included with accumulated
net realized gain. The Trust incurred merger expenses of $340,753, which
represent costs related to the preparation, printing, and distribution of the
Proxy Statement/Prospectus, Reorganization Agreement and registration statements
as well as legal, audit, and filing fees.
26
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2007 (UNAUDITED) continued
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $193,825,289 and $65,397,117,
respectively.
5. 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 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.
Summarized below are the specific types of derivative financial instruments
used by the Trust.
A. FUTURES CONTRACTS A futures contract is an agreement 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 contracts on U.S. Treasury
securities and typically closes the contract prior to the delivery date. These
contracts are generally used to manage the Trust's effective maturity and
duration. 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 as 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.
Transactions in futures contracts for the six months ended April 30, 2007
were as follows:
CONTRACTS
Outstanding at October 31, 2006............................. 194
Futures Opened.............................................. 3,319
Futures Closed.............................................. (2,446)
------
Outstanding at April 30, 2007............................... 1,067
======
B. INTEREST RATE SWAPS The Trust may enter into forward interest rate swap
transactions intended to help the Trust manage its overall interest rate
sensitivity, either shorter or longer, generally to more closely align the
Trust's interest rate sensitivity with that of the broader
27
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2007 (UNAUDITED) continued
municipal market. Forward interest rate swap transactions involve the Trust's
agreement with a counterparty to pay, in the future, a fixed or variable rate
payment in exchange for the counterparty paying the Trust a variable or fixed
rate payment, the accruals for which would begin at a specified date in the
future (the "effective date"). The amount of the payment obligation is based on
the notional amount of the forward swap contract and the termination date of the
swap (which is akin to a bond's maturity). The value of the Trust's swap
commitment would increase or decrease based primarily on the extent to which
long-term interest rates for bonds having a maturity of the swap's termination
date increases or decreases. The Trust may terminate a swap contract prior to
the effective date, at which point a realized gain or loss is recognized. When a
forward swap is terminated, it ordinarily does not involve the delivery of
securities or other underlying assets or principal, but rather is settled in
cash on a net basis. The Trust intends, but is not obligated, to terminate its
forward swaps before the effective date. Accordingly, the risk of loss with
respect to the swap counterparty on such transactions is limited to the credit
risk associated with a counterparty failing to honor its commitment to pay any
realized gain to the Trust upon termination. To reduce such credit risk, all
counterparties are required to pledge collateral daily (based on the daily
valuation of each swap) on behalf of the Trust with a value approximately equal
to the amount of any unrealized gain. Reciprocally, when the Trust has an
unrealized loss on a swap contract, the Trust has instructed the custodian to
pledge cash or liquid securities as collateral with a value approximately equal
to the amount of the unrealized loss. Collateral pledges are monitored and
subsequently adjusted if and when the swap valuations fluctuate. Restricted
cash, if any, for segregating purposes is shown on the Statement of Assets and
Liabilities.
C. INVERSE FLOATING RATE INVESTMENTS The Trust may invest a portion of its
assets in inverse floating rate instruments, either through outright purchases
of inverse floating rate securities or through the transfer of bonds to a dealer
trust in exchange for cash and residual interests in the dealer trust. These
investments are typically used by the Trust in seeking to enhance the yield of
the portfolio. These instruments typically involve greater risks than a fixed
rate municipal bond. In particular, these instruments are acquired through
leverage or may have leverage embedded in them and therefore involve many of the
risks associated with leverage. Leverage is a speculative technique that may
expose the Trust to greater risk and increased costs. Leverage may cause the
Trust's net asset value to be more volatile than if it had not been leveraged
because leverage tends to magnify the effect of any increases or decreases in
the value of the Trust's portfolio securities. The use of leverage may also
cause the Trust to liquidate portfolio positions when it may not be advantageous
to do so in order to satisfy its obligations with respect to inverse floating
rate instruments.
6. PREFERRED SHARES
As of April 30, 2007, the Trust has outstanding 8,800 APS. Series A contains
1,800 shares, Series B contains 1,600 shares, Series C contains 2,600 shares,
and Series D contains 2,800 shares. Dividends are cumulative and the dividend
rates are generally reset every 7 days for Series A, while Series B, Series C,
and Series D are generally reset every 28 days through an auction process. The
average rate in effect on April 30, 2007 was 3.757%. During the six months ended
April 30, 2007, the rates ranged from 3.260% to 4.690%.
28
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2007 (UNAUDITED) continued
The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of "Preferred Share
Maintenance" expense on the Statement of Operations.
The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $25,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests and the APS are subject to
mandatory redemption if the tests are not met.
7. 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.
8. ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation 48, Accounting for Uncertainty in Income Taxes -- an
interpretation of FASB Statement 109 (FIN 48). FIN 48 clarifies the accounting
for income taxes by prescribing the minimum recognition threshold a tax position
must meet before being recognized in the financial statements. FIN 48 is
effective for fiscal years beginning after December 15, 2006 and is to be
applied to all open tax years as of the effective date. Recent SEC guidance
allows implementing FIN 48 in the trust's NAV calculations as late as the
trust's last NAV calculation in the first required financial statement period.
As a result, the Trust will incorporate FIN 48 in its semi annual report on
April 30, 2008. The impact to the Trust's financial statements, if any, is
currently being assessed.
In addition, in September 2006, Statement of Financial Accounting Standards
No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Trust's financial statement disclosures.
29
VAN KAMPEN PENNSYLVANIA VALUE 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
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
President and Principal Executive Officer
DENNIS SHEA
Vice President
J. DAVID GERMANY
Vice President
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
One Lincoln Street
Boston, Massachusetts 02111
TRANSFER AGENT
COMPUTERSHARE TRUST COMPANY, N.A.
c/o Computershare Investor Services
P.O. Box 43011
Providence, Rhode Island 02940-3011
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
DELOITTE & TOUCHE LLP
111 South Wacker Drive
Chicago, Illinois 60606-4301
* "Interested persons" of the Trust, as defined in the Investment Company Act
of 1940, as amended.
30
Van Kampen Pennsylvania Value
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 Pennsylvania Value
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.
(continued on back)
Van Kampen Pennsylvania Value
Municipal Income Trust
An Important Notice Concerning Our U.S. Privacy Policy continued
B. INFORMATION WE DISCLOSE TO THIRD PARTIES. We do not disclose personal
information that we collect about you to non-affiliated third parties except
to enable them to provide services on our behalf, to perform joint marketing
agreements with other financial institutions, or as otherwise required or
permitted by law. For example, some instances where we may disclose
information about you to non-affiliated third parties include: for servicing
and processing transactions, to offer our own products and services, to
protect against fraud, for institutional risk control, to respond to
judicial process or to perform services on our behalf. When we share
personal information with these companies, they are required to limit their
use of personal information to the particular purpose for which it was
shared and they are not allowed to share personal information with others
except to fulfill that limited purpose.
3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL
INFORMATION WE COLLECT ABOUT YOU?
We maintain physical, electronic and procedural security measures to help
safeguard the personal information we collect about you. We have internal
policies governing the proper handling of client information. Third parties
that provide support or marketing services on our behalf may also receive
personal information, and we require them to adhere to confidentiality
standards with respect to such information.
Van Kampen Funds Inc.
1 Parkview Plaza, Suite 100
P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com
Copyright (C)2007 Van Kampen Funds Inc.
All rights reserved. Member NASD/SIPC.
VPVSAR 6/07
(VAN KAMPEN INVESTMENTS LOGO) IU07-01472P-Y04/07
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Schedule of Investments.
Please refer to Item #1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
TOTAL NUMBER OF MAXIMUM NUMBER
SHARES PURCHASED AS OF SHARES THAT MAY
PART OF PUBLICLY YET BE PURCHASED
TOTAL NUMBER OF AVERAGE PRICE ANNOUNCED PLANS UNDER THE PLANS OR
PERIOD* SHARES PURCHASED PAID PER SHARE OR PROGRAMS PROGRAMS
------- ---------------- -------------- ------------------- ------------------
November -- -- -- --
December -- -- -- --
January -- -- -- --
February -- -- -- 2,460,810
March 46,050 14.69 46,050 2,414,760
April 51,500 14.63 51,500 2,363,260
* The Share Repurchase Program commenced on 2/28/2007.
The Trust expects to continue to repurchase its outstanding shares at such time
and in such amounts as it believes will further the accomplishment of the
foregoing objectives, subject to review by the Board of Trustees.
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-CSRS 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 second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(1) Code of Ethics - Not applicable for semi-annual reports.
(2)(a) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(2)(b) 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 Pennsylvania Value Municipal Income Trust
By: /s/ Ronald E. Robison
---------------------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: June 21, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Ronald E. Robison
---------------------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: June 21, 2007
By: /s/ Stuart N. Schuldt
---------------------------------
Name: Stuart N. Schuldt
Title: Principal Financial Officer
Date: June 21, 2007