<PAGE> 1
<TABLE>
<S> <C>
Table of Contents
OVERVIEW
LETTER TO SHAREHOLDERS 1
ECONOMIC SNAPSHOT 2
PERFORMANCE SUMMARY
RETURN HIGHLIGHTS 4
PORTFOLIO AT A GLANCE
CREDIT QUALITY 5
TWELVE-MONTH DIVIDEND HISTORY 5
TOP FIVE SECTORS 6
NET ASSET VALUE AND MARKET PRICE 6
Q&A WITH YOUR PORTFOLIO MANAGERS 7
GLOSSARY OF TERMS 11
BY THE NUMBERS
YOUR TRUST'S INVESTMENTS 12
FINANCIAL STATEMENTS 21
NOTES TO FINANCIAL STATEMENTS 26
REPORT OF INDEPENDENT AUDITORS 29
DIVIDEND REINVESTMENT PLAN 30
TRUST OFFICERS AND IMPORTANT ADDRESSES 32
RESULTS OF SHAREHOLDER VOTES 33
</TABLE>
Our generations
of money-
management
experience
may help you
pursue life's
true wealth.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 2
OVERVIEW
LETTER TO SHAREHOLDERS
November 20, 2000
Dear Shareholder,
The first three quarters of 2000 proved to be especially volatile, with all of
the major markets declining in the spring and spending the following months
trying to recover. To manage one's portfolio during such unpredictable times
requires investment-management experience, and the following pages should give
you some insight into how we have performed in this difficult environment.
In this report, the portfolio managers will explain how your investment
performed during the reporting period and describe the strategies they used to
manage your trust during that span. The report will also show you how your
investment has performed over time. Helpful charts summarize the trust's largest
investments, and you can examine the complete portfolio to see all of your
trust's holdings as of the end of your trust's reporting period.
At Van Kampen, we place a high priority on providing you and
your financial advisor with the information you need to help
you monitor your investments during all types of markets. With
nearly four generations of investment-management experience,
we've been around long enough to understand that by investing
with Van Kampen you're entrusting us with much more than your
money. Your investments may help make it possible to afford your next house,
keep up with rising college costs, or enjoy a comfortable retirement.
No matter what your reasons for investing, we're thankful that you've chosen to
place your investments with Van Kampen. We will continue to apply our
generations of money-management experience to helping you pursue life's true
wealth.
Sincerely,
[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Investments
1
<PAGE> 3
ECONOMIC SNAPSHOT
ECONOMIC GROWTH
ECONOMIC GROWTH REMAINED RELATIVELY STRONG DURING THE REPORTING PERIOD,
UNDERPINNED BY LOW UNEMPLOYMENT AND RISING PRODUCTIVITY, YET THERE WERE SIGNS
THAT A HEALTHY SLOWDOWN WAS UNDERWAY. GROSS DOMESTIC PRODUCT, THE PRIMARY
MEASURE OF ECONOMIC GROWTH, INCREASED AT A 2.4 PERCENT ANNUALIZED RATE FOR THE
THIRD QUARTER OF 2000. FOLLOWING RELATIVELY MILD FIRST- AND SECOND-QUARTER DATA,
THIS THIRD-QUARTER FIGURE OFFERS FURTHER EVIDENCE THAT GROWTH MIGHT BE SETTLING
BACK TO A MORE MODERATE AND SUSTAINABLE PACE THAN ITS RAPID RATE IN LATE 1999.
CONSUMER SPENDING AND EMPLOYMENT
CONCERNS ABOUT INFLATION REMAINED AT BAY DUE IN PART TO A GRADUAL SLOWDOWN IN
CONSUMER SPENDING. RISING INTEREST RATES, HIGHER ENERGY COSTS, AND A
DISAPPOINTING STOCK MARKET BEGAN TO TEMPER RETAIL SALES, WHICH LEVELED OFF FROM
THE BLISTERING PACE OF LATE 1999 AND EARLY 2000. AND WHILE CONSUMER SPENDING WAS
BRISK, THE OVERALL TREND HAS BEEN DOWNWARD THIS YEAR.
THE JOBLESS RATE CONTINUED TO BE EXTREMELY LOW BY HISTORICAL STANDARDS, BUT A
RECENT DECLINE IN NEW JOB CREATION SUPPORTS THE POPULAR BELIEF THAT THE ECONOMY
IS MODERATING. ALTHOUGH EMPLOYER COSTS SUCH AS WAGES AND BENEFITS WERE RISING AT
THE END OF 1999 AND THE BEGINNING OF 2000, OVER THE PAST SIX MONTHS THE
EMPLOYMENT COST INDEX HAS SHOWN MARKED DECELERATION, WHICH SHOULD HELP EASE
INFLATION CONCERNS.
INTEREST RATES AND INFLATION
THE FEDERAL RESERVE BOARD (THE FED) RAISED INTEREST RATES FOUR TIMES DURING THE
LAST 12 MONTHS IN AN EFFORT TO WARD OFF INFLATION BY CURBING ECONOMIC GROWTH.
OVER THE SAME PERIOD, THE CONSUMER PRICE INDEX ROSE 3.5 PERCENT, WHICH INDICATED
THAT INFLATION GENERALLY REMAINS UNDER CONTROL.
THE FED HAS ACKNOWLEDGED THE RISK OF RISING INFLATION AND WILL STAY ON GUARD, AS
RISING ENERGY COSTS AND LOW UNEMPLOYMENT THREATEN TO PROPEL THIS FIGURE UPWARD
IN THE COMING MONTHS. AS LONG AS INFLATION IS CONTAINED AND THE PACE OF ECONOMIC
GROWTH REMAINS FAVORABLE, THE FED IS LIKELY TO HOLD INTEREST RATES STEADY IN THE
SHORT TERM, WHICH COULD HELP STABILIZE THE STOCK AND BOND MARKETS.
2
<PAGE> 4
U.S. GROSS DOMESTIC PRODUCT
SEASONALLY ADJUSTED ANNUALIZED RATES
(September 30, 1998--September 30, 2000)
[BAR GRAPH]
<TABLE>
<CAPTION>
U.S. GROSS DOMESTIC PRODUCT
---------------------------
<S> <C>
Sep 98 3.80
Dec 98 5.90
Mar 99 3.50
Jun 99 2.50
Sep 99 5.70
Dec 99 8.30
Mar 00 4.80
Jun 00 5.60
Sep 00 2.40
</TABLE>
Source: Bureau of Economic Analysis
INTEREST RATES AND INFLATION
(October 31, 1998--October 31, 2000)
[LINE GRAPH]
<TABLE>
<CAPTION>
INTEREST RATES INFLATION
-------------- ---------
<S> <C> <C>
Oct 98 5.00 1.50
4.75 1.50
4.75 1.60
Jan 99 4.75 1.70
4.75 1.60
4.75 1.70
Apr 99 4.75 2.30
4.75 2.10
5.00 2.00
Jul 99 5.00 2.10
5.25 2.30
5.25 2.60
Oct 99 5.25 2.60
5.50 2.60
5.50 2.70
Jan 00 5.50 2.70
5.75 3.20
6.00 3.70
Apr 00 6.00 3.00
6.50 3.10
6.50 3.70
Jul 00 6.50 3.70
6.50 3.30
6.50 3.50
Oct 00 6.50 3.50
</TABLE>
Interest rates are represented by the closing midline federal funds target rate
on the last day of each month. Inflation is indicated by the annual percent
change of the Consumer Price Index for all urban consumers at the end of each
month.
3
<PAGE> 5
PERFORMANCE SUMMARY
RETURN HIGHLIGHTS
(as of October 31, 2000)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
<S> <C> <C>
NYSE Ticker Symbol VQC
-----------------------------------------------------------------------
One-year total return based on market price(1) 4.70%
-----------------------------------------------------------------------
One-year total return based on NAV(2) 11.44%
-----------------------------------------------------------------------
Distribution rate as a % of closing common stock price(3) 5.88%
-----------------------------------------------------------------------
Taxable-equivalent distribution rate as a % of closing
common stock price(4) 10.14%
-----------------------------------------------------------------------
Net asset value $16.58
-----------------------------------------------------------------------
Closing common stock price $15.000
-----------------------------------------------------------------------
One-year high common stock price (08/11/00) $16.375
-----------------------------------------------------------------------
One-year low common stock price (12/22/99) $13.250
-----------------------------------------------------------------------
Preferred share rate(5) 3.50%
-----------------------------------------------------------------------
</TABLE>
(1) Total return based on market price assumes an investment at the 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 stock price at the end of the period
indicated.
(2) Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.
(3) Distribution rate represents the monthly annualized distributions of the
Trust at the end of the period and not the earnings of the Trust.
(4) The taxable-equivalent distribution rate is calculated assuming a 42%
combined federal and state tax bracket, which takes into consideration the
deductibility of individual state taxes paid.
(5) See "Notes to Financial Statements" footnote #5, for more information
concerning Preferred Share reset periods.
A portion of the interest income may be taxable for those investors subject to
the federal alternative minimum tax (AMT).
Past performance is no guarantee of future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
4
<PAGE> 6
PORTFOLIO AT A GLANCE
CREDIT QUALITY
(as a percentage of long-term investments)
<TABLE>
<CAPTION>
As of October 31, 2000
<S> <C> <C>
- AAA/Aaa............ 49.6%
- AA/Aa.............. 13.2%
- A/A................ 8.1%
- BBB/Baa............ 12.4%
- Non-Rated.......... 16.7%
[PIE CHART]
<CAPTION>
As of October 31, 1999
<S> <C> <C>
- AAA/Aaa............ 50.7%
- AA/Aa.............. 14.0%
- A/A................ 7.9%
- BBB/Baa............ 13.7%
- Non-Rated.......... 13.7%
[PIE CHART]
</TABLE>
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's, respectively.
TWELVE-MONTH DIVIDEND HISTORY
(for the period ended October 31, 2000, for common shares)
[BAR GRAPH]
<TABLE>
<CAPTION>
DIVIDENDS
---------
<S> <C>
11/99 0.0825
12/99 0.0825
1/00 0.0825
2/00 0.0825
3/00 0.0775
4/00 0.0775
5/00 0.0775
6/00 0.0775
7/00 0.0775
8/00 0.0775
9/00 0.0735
10/00 0.0735
</TABLE>
The dividend history represents past performance of the trust and is no
guarantee of the trust's future dividends.
5
<PAGE> 7
TOP FIVE SECTORS
(as a percentage of long-term investments)
[INVESTMENT PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
OCTOBER 31, 2000 OCTOBER 31, 1999
---------------- ----------------
<S> <C> <C>
General Purpose 19.2 17
Tax District 12.9 12.4
Retail Electric/Gas/Telephone 10.9 10.6
Public Building 9.2 8.7
Multi-Family Housing 8.4 10.1
</TABLE>
NET ASSET VALUE AND MARKET PRICE
(based upon quarter-end values--September 1991 through October 2000)
[INVESTMENT PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
NET ASSET VALUE MARKET PRICE
--------------- ------------
<S> <C> <C>
9/91 14.81 15
15.07 14.375
14.9 15.625
15.45 14.75
9/92 15.72 15
15.64 14.75
16.78 16.25
17.07 16.375
9/93 17.7 17.375
17.42 16.75
15.67 15.125
15.43 15.25
9/94 15.21 14.875
14.35 12.75
15.69 14.75
15.94 15
9/95 16.17 15.25
16.87 15.375
16.16 15.875
16.1 15.25
9/96 16.51 15.875
16.67 16.625
16.42 15.125
16.86 16.75
9/97 17.26 16.8125
17.6 17.0625
17.56 17.5
17.6 17.3125
9/98 16.07 18.1875
17.62 18.4375
17.5 17.6875
16.73 16.625
9/99 16.25 16.5625
15.58 13.4375
15.99 15
16.05 15.25
9/00 16.49 15.5625
10/00 16.58 15
</TABLE>
The solid line above represents the trust's net asset value (NAV), which
indicates overall changes in value among the trust's underlying securities. The
trust's market price is represented by the dashed line, which indicates the
price the market is willing to pay for shares of the trust at a given time.
Market price is influenced by a range of factors, including supply and demand
and market conditions.
6
<PAGE> 8
[PHOTO]
Q&A WITH YOUR PORTFOLIO MANAGERS
WE RECENTLY SPOKE WITH THE PORTFOLIO MANAGER OF THE VAN KAMPEN CALIFORNIA
QUALITY MUNICIPAL TRUST ABOUT THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED THE
MARKETS AND INFLUENCED THE TRUST'S RETURN DURING THE 12 MONTHS ENDED OCTOBER 31,
2000. JOSEPH A. PIRARO, PORTFOLIO MANAGER, HAS MANAGED THE TRUST SINCE MAY 1992
AND HAS WORKED IN THE INVESTMENT INDUSTRY SINCE 1971. THE FOLLOWING DISCUSSION
REFLECTS HIS VIEWS ON THE TRUST'S PERFORMANCE.
Q WHAT WERE THE MOST IMPORTANT
DEVELOPMENTS IN THE FIXED-INCOME MARKETS AND HOW DID THE TRUST PERFORM
DURING THE REPORTING PERIOD?
A The key factor in the market's
behavior during the past fiscal year has been generally rising interest rates,
especially at the short end of the maturity spectrum. This rate environment
stemmed from the Federal Reserve Board's commitment to keeping inflation in
check by ratcheting up short-term interest rates whenever the economy threatened
to overheat and push the prices of goods and services higher. In fact, the Fed
increased short-term rates four times during the reporting period, with the last
hike occurring in May 2000.
The strength of the economy, and the accompanying Federal Reserve activity,
caused interest rates to rise across the board for the first half of the
reporting period. In the spring of 2000, the bond market rallied as investors
began to anticipate an end to the Fed's rate-tightening cycle. By the end of
October, short-term rates remained high, but rates in the intermediate to long
maturity segments of the market had actually declined from the levels we had
seen at the start of the reporting period.
Because the trust is leveraged, higher short-term rates placed pressure on
the trust's dividend, as the increased cost of borrowing cut into the fund's
earnings. However, the relatively high long-term rates that prevailed for part
of the reporting period allowed the trust to add new holdings at attractive
yields, partially offsetting the decline in income that occurred as short-term
rates climbed.
After the steady increase in short-term interest rates over the past year,
we have seen a more stable environment in recent months, as the Fed has reacted
to slower economic growth, more efficient workforce output, and moderate price
gains by keeping target lending rates unchanged. The inflation rate, as measured
by the consumer price index, peaked in March 2000 at 3.8 percent and has since
dropped back below the 3 percent level.
7
<PAGE> 9
At the state level, California's economic growth continues to outpace that
of the nation in terms of employment and income growth. Personal income growth
was a strong 7.4 percent in 1999 and is expected to grow 6.7 percent in 2000.
Non-farm employment grew 3.2 percent in the first half of the year, driven by
solid increases in the business service and construction sectors.
Supply in the California municipal market was sharply lower from the levels
of a year ago, as higher interest rates have made it unattractive for
municipalities to retire existing debt. At the same time, strong economic
activity has allowed many municipalities to generate a budget surplus, enabling
them to cover spending that would normally require municipal bond financing. In
the state budget, for example, revenues were running nearly $900 million over
projections. Still, California remained the leading issuer of municipal debt
through September 2000, even though issuance was down 18.5 percent from last
year, to $17.6 billion.
Because demand has remained strong, the lack of new issuance in the primary
market helped support bond prices, although the somewhat limited selection of
available securities required us to be very selective in choosing new bonds for
the trust's portfolio. In many cases, we found attractive values in the
secondary market, buying and selling bonds that have been in the market for a
while.
The trust continued to provide shareholders with an attractive level of
income. Its monthly dividend of $0.0735 per share translates to a distribution
rate of 5.88 percent based on the trust's closing market price on October 31,
2000. Because income from the trust is exempt from federal and state income
taxes, this distribution rate is equivalent to a yield of 10.14 percent for an
investor in the 42 percent combined federal and state income tax bracket.
For the 12 months through October 31, 2000, the trust produced a total
return of 4.70 percent based on market price. At the same time, the trust's
market price decreased from $15.2500 per share on October 31, 1999, to $15.0000
per share on October 31, 2000. Of course, past performance is no guarantee of
future results. As a result of recent market activity, current performance may
vary from the figures shown. By comparison, the Lehman Brothers California
Municipal Bond Index posted a total return of 9.20 percent for the same period.
This broad-based, unmanaged index, which reflects the general performance of
California municipal securities, does not reflect any commissions or fees that
would be paid by an investor purchasing the securities it represents. Such costs
would lower the performance of the index. It is not possible to invest directly
in an index. For additional performance results, please refer to the chart and
footnotes on page 4.
Q HOW DID YOU REACT TO THE
MARKET CONDITIONS YOU ENCOUNTERED IN MANAGING THE TRUST?
A Much of the activity in the trust's
portfolio during the reporting period was guided by a strategic direction we
8
<PAGE> 10
adopted early in 2000 and have gradually implemented since then. It was our goal
to lengthen the duration of the portfolio (a measure of its sensitivity to
changes in interest rates) so that it more closely mirrored the benchmark
indicators we use to gauge the trust's performance. At the time, we felt the
market had solid upside potential, and a longer duration would allow the trust
to more fully participate in the gains of the market if it rallied over time.
As we began implementing this strategy, we caught the market at a good time.
Early in the year, the market presented us with attractive yields on
long-duration securities, particularly those priced at deep discounts. We
purchased some of these bonds and sold prerefunded securities and bonds with
short calls--many of which were scheduled to be called or refunded within the
next year or two. In effect, this strategy helped capture additional par value
and the potential for capital appreciation, all while achieving the desired
effect of extending the portfolio's duration. This strategy was a positive in
terms of the trust's performance, especially during the market rally that
occurred in the second and third quarters of 2000.
Q HOW DID THIS STRATEGY AFFECT THE
COMPOSITION OF THE PORTFOLIO?
A A by-product of this market
activity--and the trust's positioning within the market--was an increase in the
overall credit quality of the portfolio. Typically, the rallies were strongest
at the high end of the quality spectrum, so these securities saw solid price
gains while the valuations of nonrated and lower-rated securities, such as those
rated BBB or lower, remained fairly flat or declined. On the whole, however, the
nonrated and lower-rated securities of California issuers tended to trade
stronger than the nonrated and lower-rated securities of other state issuers.
Over the course of the reporting period, the portfolio composition came to
reflect this trend, as the trust's allocation to securities rated AAA or AA
decreased to 62.8 percent of long-term investments (down from 64.7 percent at
the start of the period). In general, our bias toward high-quality securities
was a boost to portfolio performance, but we have enough confidence in our
research capabilities to carry a significant amount of assets in the nonrated
and lower-rated sectors. The trust's allocation to these rating categories
combined was approximately 20 percent of long-term investments.
The trust remained well diversified by industry sector and issuer, with the
portfolio retaining a similar overall composition throughout the reporting
period. We did initiate a few transactions for tax purposes, seeking to offset
taxable gains for shareholders, though we anticipate that later this year the
trust may pay out some of the capital gains it realized by selling prerefunded
securities earlier in 2000.
9
<PAGE> 11
Q WHAT DO YOU SEE AHEAD FOR
THE ECONOMY AND THE MUNICIPAL MARKET?
A The outlook for the municipal
bond market will be closely tied to the prospects of the U.S. economy and the
Fed's reaction to key economic indicators. While interest rates have been fairly
steady of late, the Fed's next move will be based on whether inflation shows
signs of heating up. We believe inflation appears to be under control at this
time, but the Fed will be watching economic growth statistics, the labor market,
and the prices of key commodities, such as crude oil, for signs of inflationary
pressures.
Clearly, the direction of interest rates will be determined by the Fed's
reaction to inflationary signals, so we feel it would be imprudent to make a bet
on the direction of interest rates in terms of how we position the trust.
Consequently, we will seek to maintain a neutral stance with respect to the
portfolio's duration in the near term.
We believe the demand for municipal securities should remain healthy. This
will hopefully bode well for the trust, although it will be competing with a
range of investment options, such as individual bonds, mutual funds, and managed
accounts, for investor assets. Also, the stock market may continue to attract
assets away from bonds, depending on its return prospects and price volatility.
Bond supply should remain tight, helping to support prices, as
municipalities continue to operate with budget surpluses that can be used for
construction projects, education funding, road improvements, and other
expenditures typically financed by new bond issuance. In September, the state's
general obligation ratings were upgraded to Aa2 by Moody's Investors Service and
to AA by Standard & Poor's Ratings Group. The credit outlook for state and local
government bonds remains positive due to improved fiscal positions, increases in
reserves, and a broad-based expansion in a state economy that is well
diversified, both by region and by sector.
We will continue to search for securities that have the potential to enhance
the trust's long-term performance. If our analysis indicates that it would be
advantageous to sell certain bonds--or as bonds are prerefunded, mature
according to schedule, or are called from the portfolio--we will strive to
replace them with bonds that offer the best relative value available at the
time.
10
<PAGE> 12
GLOSSARY OF TERMS
A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.
CALL FEATURE: Allows a bond issuer to buy back a bond on specific dates at set
prices before the bond's maturity date. These dates and prices are set when the
bond is issued. To compensate the bondholder for the potential loss of income
and ownership, a bond's call price is usually higher than the face value of the
bond. Bonds are usually called when interest rates drop so significantly that
the issuer can save money by issuing new bonds at lower rates.
DISCOUNT BOND: A bond whose market price is lower than its face value (or "par
value"). Because bonds usually mature at face value, a discount bond has more
potential to appreciate in price than a par bond does.
DURATION: A measure of the sensitivity of a bond's price to changes in interest
rates, expressed in years. Each year of duration represents an expected 1
percent change in the price of a bond for every 1 percent change in interest
rates. The longer a bond's duration, the greater the effect of interest-rate
movements on its price. Typically, funds with shorter durations perform better
in rising-rate environments, while funds with longer durations perform better
when rates decline.
MATURITY LENGTH: The time it takes for a bond to mature. A bond issued in 1999
and maturing in 2009 is a 10-year bond. Typically, short-term bonds mature in
five years or less, intermediate-term bonds mature in five to ten years, and
long-term bonds mature after ten years.
PREREFUNDING: The process of issuing new bonds to refinance an outstanding bond
issue prior to its maturity or call date. The proceeds from the new bonds are
generally invested in U.S. government securities. Prerefunding typically occurs
when interest rates decline and an issuer replaces its higher-yielding bonds
with current lower-yielding issues.
SECONDARY MARKET: A market where securities are traded after they are initially
offered.
YIELD SPREAD: The additional yield investors can earn by either investing in
bonds with longer maturities or by investing in bonds with lower credit ratings.
The spread is the difference in yield between bonds with short versus long
maturities or the difference in yield between high-quality bonds and lower-
quality bonds.
11
<PAGE> 13
BY THE NUMBERS
YOUR TRUST'S INVESTMENTS
October 31, 2000
THE FOLLOWING PAGES DETAIL YOUR TRUST'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS 96.0%
CALIFORNIA 93.1%
$1,390 Abag Fin Auth For Nonprofit Corp CA
Childrens Hosp Med Cent.................... 5.875% 12/01/19 $ 1,464,337
500 Abag Fin Auth For Nonprofit Corp CA
Childrens Hosp Med Cent.................... 6.000 12/01/29 527,870
1,000 Abag Fin Auth For Nonprofit Corp CA Multi-
Family Rev Hsg Utd Dominion Ser A Rfdg..... 6.400 08/15/30 1,029,310
1,000 Bakersfield, CA Ctfs Partn Convention Cent
Expansion Proj (MBIA Insd)................. 5.875 04/01/22 1,037,630
3,600 Benicia, CA Uni Sch Dis Cap Apprec Ser B
(MBIA Insd)................................ * 08/01/25 894,672
1,000 Benicia, CA Uni Sch Dist Ser B (MBIA
Insd)...................................... * 08/01/18 378,760
1,610 Blythe, CA Redev Agy Redev Proj No 1 Tax
Alloc Ser A Rfdg........................... 7.500 05/01/23 1,759,022
1,055 Borrego, CA Wtr Dist Ctfs Partn Wtr Sys
Acquisition................................ 7.000 04/01/27 1,107,866
2,435 California Edl Fac Auth Rev Cap Apprec
Loyola Marymount Univ (MBIA Insd).......... * 10/01/29 406,596
1,000 California Edl Facs Auth Rev Pooled College
& Univ Proj Ser B.......................... 6.125 04/01/13 1,059,910
1,000 California Edl Facs Auth Rev Pooled College
& Univ Ser B............................... 6.625 06/01/20 1,055,600
2,000 California Edl Fac Auth Rev Student Ln CA
Ln Pgm Ser A (MBIA Insd)................... 6.000 03/01/16 2,109,000
2,500 California Hlth Fac Fin Cedars Sinai Med
Cent Ser A................................. 6.125 12/01/19 2,566,025
1,000 California Hsg Fin Agy Rev Cap Apprec Home
Mtg Ser K (MBIA Insd)...................... * 08/01/24 235,620
1,000 California Hsg Fin Agy Rev Home Mtg Ser B
(MBIA Insd)................................ 6.100 02/01/28 1,027,920
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
YOUR TRUST'S INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 990 California Hsg Fin Agy Rev Home Mtg Ser E
(AMBAC Insd)............................... 6.100% 08/01/29 $ 1,021,700
1,090 California Hsg Fin Agy Rev Home Mtg Ser F
(FHA Gtd).................................. 6.750 08/01/11 1,119,463
2,120 California Hsg Fin Agy Rev Insd Hsg Ser E
(MBIA Insd)................................ 7.000 08/01/26 2,188,158
3,000 California Hsg Fin Agy Rev Multi-Unit
Rental Hsg Ser C II........................ 6.850 08/01/15 3,110,220
8,190 California Hsg Fin Agy Rev Multi-Unit
Rental Hsg Ser C II........................ 6.875 08/01/24 8,454,128
10,000 California Pollutn Ctl Fin Auth Pollutn Ctl
Rev Southn CA Edison Co (AMBAC Insd)....... 6.000 07/01/27 10,189,700
4,000 California Pollutn Ctl Fin Auth Pollutn Ctl
Rev Southn CA Edison Co Ser B (AMBAC
Insd)...................................... 6.400 12/01/24 4,161,480
1,000 California Pollutn Ctl Fin Auth Pollutn Ctl
Rev Southn CA Edison Co Ser B (MBIA
Insd)...................................... 5.450 09/01/29 1,001,140
3,000 California Pollutn Ctl Fin Auth Solid Waste
Disp Rev North Cnty Recycling Ser A
(Prerefunded @ 07/01/04)................... 6.750 07/01/17 3,166,200
1,500 California Rural Home Mtg Fin Auth Single
Family Mtg Rev Pgm Ser B (GNMA
Collateralized)............................ 6.250 12/01/31 1,578,915
620 California Rural Home Mtg Fin Auth Single
Family Mtg Rev Ser C (GNMA
Collateralized)............................ 7.800 02/01/28 691,499
1,060 California Spl Dists Assn Fin Corp Ctfs
Partn Spl Dists Fin Pgm Ser KK (FSA
Insd)...................................... 5.800 11/01/29 1,095,266
1,275 California St (FGIC Insd).................. 4.750 04/01/20 1,165,261
1,000 California St.............................. 4.750 12/01/28 883,560
3,655 California St Cpn Muni Rcpts............... * 03/01/08 2,608,135
13,255 California St Cpn Muni Rcpts............... * 09/01/09 8,782,100
1,000 California St Pub Wks Brd Lease Rev Dept
Hlth Svcs Ser A (MBIA Insd)................ 5.750 11/01/24 1,034,200
2,340 California St Rfdg (FGIC Insd)............. 5.000 02/01/23 2,226,697
1,000 California St Veterans (AMBAC Insd)........ 6.200 02/01/16 1,000,770
1,000 California St Veterans Ser BH (FSA Insd)... 5.400 12/01/15 1,012,480
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
YOUR TRUST'S INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$2,000 California St Veterans Ser BH (FSA Insd)... 5.400% 12/01/16 $ 2,013,460
2,000 California Statewide Cmntys Dev Auth Ctfs
Partn...................................... 7.250 11/01/29 2,052,580
2,000 Campbell, CA Redev Agy Tax Alloc Central
Campbell Redev Proj Ser A.................. 6.550 10/01/32 2,085,100
1,595 Cardiff, CA Sch Dist Cap Apprec (FGIC
Insd)...................................... * 08/01/24 420,299
1,675 Cardiff, CA Sch Dist Cap Apprec (FGIC
Insd)...................................... * 08/01/25 416,271
1,500 Carson, CA Impt Bond Act 1915 Assmt Dist No
92-1....................................... 7.375 09/02/22 1,586,535
1,085 Cathedral City, CA Pub Fing Auth Rev Cap
Apprec Ser A (MBIA Insd)................... * 08/01/27 239,329
1,085 Cathedral City, CA Pub Fing Auth Rev Cap
Apprec Ser A (MBIA Insd)................... * 08/01/28 225,940
2,545 Chula Vista, CA Redev Agy Tax Alloc Sr
Bayfront Ser D Rfdg........................ 8.625 09/01/24 2,994,345
1,000 Coachella, CA Redev Agy Tax Alloc Proj Area
No 3 Rfdg.................................. 5.875 12/01/28 967,920
1,000 Colton, CA Redev Agy Tax Alloc Mount Vernon
Corridor Redev............................. 6.300 09/01/36 1,021,630
370 Contra Costa Cnty, CA Pub Fing Auth Tax
Alloc Rev Ser A............................ 7.100 08/01/22 383,997
630 Davis, CA Pub Fac Fin Auth Loc Agy Rev Mace
Ranch Area Ser A........................... 6.500 09/01/15 660,750
1,000 Delano, CA Ctfs Partn Delano Regl Med
Cent....................................... 5.250 01/01/18 893,600
1,885 Delano, CA Ctfs Partn Ser A (Prerefunded @
01/01/03).................................. 9.250 01/01/22 2,107,298
1,000 Duarte, CA Redev Agy Tax Alloc Davis
Addition Proj Area Rfdg.................... 6.700 09/01/14 1,059,790
1,220 Emeryville, CA Pub Fing Auth Rev Assmt Dist
Refing..................................... 5.900 09/02/21 1,199,077
850 Fairfield, CA Hsg Auth Mtg Rev Creekside
Estates Proj Rfdg (Prerefunded @
08/01/02).................................. 7.875 02/01/15 919,785
1,000 Fairfield-Suisun, CA Uni Sch Dist Spl Tax
Cmnty Fac Dist No 5 New Sch (FSA Insd)..... 5.375 08/15/29 992,670
1,000 Folsom, CA Spl Tax Cmnty Fac Dist No 2 Rfdg
(Connie Lee Insd).......................... 5.250 12/01/19 996,970
</TABLE>
See Notes to Financial Statements
14
<PAGE> 16
YOUR TRUST'S INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$15,000 Foothill/Eastern Corridor Agy CA Toll Rd
Rev Cap Apprec Rfdg........................ * 01/15/26 $ 3,061,650
6,000 Foothill/Eastern Corridor Agy CA Toll Rd
Rev Cap Apprec Sr Lien Ser A............... * 01/01/27 1,380,420
2,500 Foothill/Eastern Corridor Agy CA Toll Rd
Rev Conv Cap Apprec Rfdg (a)............... 0/5.875% 01/15/27 1,399,550
2,000 Foothill/Eastern Corridor Agy CA Toll Rd
Rev Conv Cap Apprec Sr Lien Ser A (a)...... 0/7.050 01/01/10 1,793,080
1,000 Glendale, CA Uni Sch Dist Ser C (FSA
Insd)...................................... 5.500 09/01/19 1,021,630
2,000 Hawaii Desert, CA Mem Hlthcare Dist Rev
Rfdg....................................... 5.500 10/01/19 1,738,280
1,500 Huntington Beach, CA Pub Fin Auth Rev
Huntington Beach Redev Proj................ 7.000 08/01/24 1,548,750
1,000 Huntington Park, CA Pub Fin Auth Lease Rev
Wastewtr Sys Proj Ser A.................... 6.200 10/01/25 1,014,630
425 Inglewood, CA Redev Agy Tax Alloc Centy
Redev Ser B................................ 6.125 07/01/23 429,067
2,000 Los Angeles Cnty, CA Met Tran Auth Sales
Tax Rev (AMBAC Insd)....................... 5.000 07/01/23 1,902,260
1,000 Los Angeles Cnty, CA Met Tran Auth Sales
Tax Rev Prop A First Tier Sr Ser B (FSA
Insd)...................................... 4.750 07/01/24 897,060
12,000 Los Angeles Cnty, CA Pension Oblig Ctfs Ltd
Muni Oblig Ser A (MBIA Insd)............... 6.900 06/30/08 13,949,520
1,200 Los Angeles Cnty, CA Sch Regionalized
Business Serv Ctfs Part Cap Apprec Pooled
Fin Ser A (AMBAC Insd)..................... * 08/01/26 280,500
1,000 Los Angeles, CA Ctfs Partn Sr Sonnenblick
Del Rio West L.A. (AMBAC Insd)............. 6.000 11/01/19 1,074,620
1,900 Los Angeles, CA Ctfs Partn................. 5.700 02/01/18 1,877,428
1,493 Los Angeles, CA Multi-Family Rev Hsg
Earthquake Rehab Proj Ser A (FNMA
Collateralized)............................ 5.700 12/01/27 1,528,917
1,635 Los Angeles, CA Single Family Home Mtg Rev
Pgm Ser A (GNMA Collateralized)............ 6.875 06/01/25 1,666,343
1,000 Mendocino Cnty, CA Ctfs Partn Cnty Pub Facs
Corp (MBIA Insd)........................... 5.250 06/01/30 972,880
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
YOUR TRUST'S INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$2,000 Metropolitan Wtr Dist Southn CA Ser A
Rfdg....................................... 4.750% 07/01/22 $ 1,798,440
3,720 Midpeninsula Regl Open Space Dist CA Fin
Auth Rev (AMBAC Insd)...................... * 08/01/27 722,647
1,110 Mountain View Los Altos, CA Uni High Sch
Dist Cap Apprec Ser D...................... * 08/01/24 292,496
1,000 Murrieta Vly, CA Uni Sch Dist Ser A (FGIC
Insd)...................................... * 09/01/17 402,170
2,000 Needles, CA Pub Util Auth Util Sys
Acquisition................................ 6.500 02/01/22 1,999,740
1,500 Newport Beach, CA Spl Tax Spl Impt Dist No
95-1 Ser A................................. 6.750 09/01/20 1,576,275
1,000 Oakland, CA Uni Sch Dist Alameda Cnty Ctfs
Partn, 144-A Private Placement (c)......... 7.000 11/15/11 1,138,980
2,000 Oakland, CA Uni Sch Dist Alameda Cnty Ctfs
Partn Energy Retrofit Proj, 144-A Private
Placement (c).............................. 6.750 11/15/14 2,286,200
975 Oceanside, CA Mobile Home Pk Fin Auth
Rev........................................ 5.800 03/01/28 912,922
2,000 Orange Cnty, CA Recovery Ser A Rfdg (MBIA
Insd)...................................... 5.750 06/01/15 2,089,440
1,500 Pasadena, CA Spl Tax Cmnty Fac Dist No 1
Civic Cent West............................ * 12/01/07 1,089,525
2,000 Pittsburg, CA Redev Agy Tax Alloc Los
Medanos Cmnty Dev Proj (AMBAC Insd)........ * 08/01/25 493,460
1,375 Pittsburg, CA Redev Agy Tax Alloc Los
Medanos Cmnty Dev Proj (AMBAC Insd)........ * 08/01/26 319,811
1,100 Pomona, CA Redev Agy Tax Alloc Downtown No
2 Redev Proj Ser U Rfdg.................... 5.750 04/01/19 1,067,748
1,000 Port of Oakland, CA Spl Fac Rev Mitsui
O.S.K. Line Ltd Ser A (LOC: Industrial Bank
of Japan).................................. 6.800 01/01/19 1,008,880
1,165 Redding, CA Redev Agy Tax Alloc Market
Street Redev Proj Ser A.................... 6.700 09/01/23 1,211,297
2,000 Redlands, CA Redev Agy Tax Alloc Redev Proj
Ser A Rfdg (MBIA Insd)..................... 4.750 08/01/21 1,814,420
1,000 Redondo Beach, CA Pub Fin Auth Rev South
Bay Cent Redev Proj........................ 7.000 07/01/16 1,076,890
2,000 Richmond, CA Rev YMCA East Bay Proj Rfdg... 7.250 06/01/17 2,060,460
</TABLE>
See Notes to Financial Statements
16
<PAGE> 18
YOUR TRUST'S INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$2,000 Sacramento Cnty, CA Ctfs Partn Pub Fac Proj
Rfdg (AMBAC Insd).......................... 4.750% 10/01/27 $ 1,777,160
1,900 Sacramento Cnty, CA Santn Dist Fing Auth
Rev Ser A.................................. 5.875 12/01/27 1,957,665
1,500 Sacramento, CA City Fing Auth Lease Rev CA
EPA Bldg Ser A (AMBAC Insd)................ 4.750 05/01/23 1,349,535
500 San Bernardino Cnty, CA Ctfs Partn Med Cent
Fin Proj (MBIA Insd)....................... 5.000 08/01/28 465,595
2,500 San Bernardino, CA Redev Agy Tax Alloc San
Sevaine Redev Proj Ser A................... 7.000 09/01/24 2,628,725
2,575 San Bruno Pk, CA Sch Dist Cap Apprec Ser B
(FGIC Insd)................................ * 08/01/24 678,538
2,660 San Bruno Pk, CA Sch Dist Cap Apprec Ser B
(FGIC Insd)................................ * 08/01/25 661,063
6,000 San Diego Cnty, CA Wtr Auth Wtr Rev Ctfs
Partn Ser 91 B (Inverse Fltg) (Prerefunded
@ 04/27/06) (MBIA Insd) (b)................ 8.120 04/08/21 7,342,500
2,000 San Diego, CA Convention Cent Expansion
Fing Auth Lease Rev Ser A.................. 4.750 04/01/28 1,777,180
2,650 San Diego, CA Indl Dev Rev San Diego Gas &
Elec Ser A (MBIA Insd)..................... 6.400 09/01/18 2,793,763
5,000 San Diego, CA Indl Dev Rev San Diego Gas &
Elec Ser A (AMBAC Insd).................... 6.100 09/01/19 5,218,900
1,000 San Diego, CA Redev Agy Centre City Redev
Proj Ser A................................. 6.400 09/01/25 1,039,590
2,000 San Francisco, CA City & Cnty Arpt Comm
Intl Arpt Rev Second Ser Issue 23-B (FGIC
Insd)...................................... 5.000 05/01/24 1,895,480
1,000 San Francisco, CA City & Cnty Arpt Comm
Intl Arpt Rev Second Ser Issue 12-A (FGIC
Insd)...................................... 5.800 05/01/21 1,020,310
3,000 San Francisco, CA City & Cnty Redev Agy
Lease Rev George Moscone................... * 07/01/08 2,087,730
3,520 San Francisco, CA City & Cnty Redev Agy
Lease Rev George Moscone................... * 07/01/09 2,324,643
4,250 San Francisco, CA City & Cnty Redev Agy
Lease Rev George Moscone................... * 07/01/12 2,341,623
</TABLE>
See Notes to Financial Statements
17
<PAGE> 19
YOUR TRUST'S INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$2,130 San Francisco, CA City & Cnty Redev Agy
Lease Rev George Moscone................... * 07/01/14 $ 1,030,366
800 San Francisco, CA City & Cnty Redev Agy
Lease Rev George Moscone (FSA Insd)........ 6.750% 07/01/15 876,456
1,200 San Jose Evergreen, CA Cmnty Coll Dist Cap
Apprec Ser C (AMBAC Insd).................. * 09/01/10 748,728
1,000 San Jose, CA Single Family Mtg Rev Cap
Apprec Ser A............................... * 04/01/16 436,170
2,000 San Leandro, CA Ctfs Part Library & Fire
Stations Fing (AMBAC Insd)................. 5.750 11/01/29 2,061,680
1,000 San Marcos, CA Pub Fac Auth Sub Tax Incrmnt
Proj Area 3 Ser A.......................... 6.750 10/01/30 1,033,860
1,575 San Marcos, CA Redev Agy Tax Alloc......... 6.000 08/01/29 1,548,351
1,000 San Mateo Cnty, CA Jt Pwrs Auth Lease Rev
Cap Proj Ser A Rfdg (FSA Insd)............. 4.750 07/15/23 899,150
1,000 Santa Ana, CA Multi-Family Hsg Rev Villa
Del Sol Apts Ser B (FNMA Collateralized)... 5.650 11/01/21 1,020,330
2,000 Santa Clarita, CA Cmnty Fac Dist Spl Tax No
92-1 Ser A................................. 7.450 11/15/10 2,110,680
1,000 Santa Monica-Malibu, CA Uni Sch Dist Cap
Apprec (FGIC Insd)......................... * 08/01/23 279,350
1,325 Simi Valley, CA Cmnty Dev Agy Coml Sycamore
Plaza II Rfdg.............................. 6.000 09/01/12 1,389,342
1,160 Southern CA Home Fin Auth Single Family Mtg
Rev Pgm B (GNMA Collateralized)............ 6.900 10/01/24 1,193,536
5,000 Southern CA Pub Pwr Auth Pwr Proj Rev
Multi-Projs................................ 6.750 07/01/12 5,880,000
1,000 Stockton, CA Cmnty Fac Dist Spl Tax........ 5.800 09/01/14 1,010,880
1,000 Stockton, CA South Stockton Cmnty Facs Dist
Spl Tax No 90-1 Rfdg....................... 6.400 09/01/15 1,028,310
2,795 Ukiah, Ca Uni Sch Dist (FGIC Insd)......... * 08/01/17 1,129,152
1,000 Vista, CA Mobile Home Pk Rev Estrella De
Oro Mobile Home Ser A...................... 5.875 02/01/28 902,940
------------
219,226,223
------------
</TABLE>
See Notes to Financial Statements
18
<PAGE> 20
YOUR TRUST'S INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
GUAM 0.9%
$2,000 Guam Arpt Auth Rev Ser B................... 6.700% 10/01/23 $ 2,073,940
------------
PUERTO RICO 0.7%
487 Centro de Recaudaciones de Ingresos Muni
Ctfs Partn PR.............................. 6.850 10/17/03 497,276
1,215 Puerto Rico Hsg Fin Single Family Mtg Rev
Portfolio 1 C (GNMA Collateralized)........ 6.850 10/15/23 1,255,727
------------
1,753,003
------------
U. S. VIRGIN ISLANDS 1.3%
1,000 Virgin Islands Pub Fin Auth Rev Gross Rcpts
Taxes Ln Nt Ser A.......................... 6.375 10/01/19 1,028,040
1,000 Virgin Islands Pub Fin Auth Rev Gross Rcpts
Taxes Ln Nt Ser A.......................... 6.500 10/01/24 1,034,300
1,000 Virgin Islands Pub Fin Auth Rev Gross Rcpts
Taxes Ln Ser A (ACA Insd).................. 6.125 10/01/29 1,026,360
------------
3,088,700
------------
TOTAL LONG-TERM INVESTMENTS 96.0%
(Cost $210,918,378)................................................... 226,141,866
SHORT-TERM INVESTMENTS 2.6%
(Cost $6,200,000)..................................................... 6,200,000
------------
TOTAL INVESTMENTS 98.6%
(Cost $217,118,378)................................................... 232,341,866
OTHER ASSETS IN EXCESS OF LIABILITIES 1.4%............................. 3,187,390
------------
NET ASSETS 100.0%...................................................... $235,529,256
============
</TABLE>
See Notes to Financial Statements
19
<PAGE> 21
YOUR TRUST'S INVESTMENTS
October 31, 2000
* Zero coupon bond
(a) Security is currently a zero coupon bond which will convert to a coupon
paying bond at a predetermined date.
(b) An Inverse Floating security is one where the coupon is inversely indexed to
a short-term floating interest rate multiplied by a specific factor. As the
floating rate rises, the coupon is reduced. Conversely, as the floating rate
declines, the coupon is increased. These instruments are typically used by
the Trust to enhance the yield of the portfolio. The price of this security
may be more volatile than the price of a comparable fixed rate security. 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.
(c) 144A securities are those which are exempt from registration under Rule 144A
of the Securities Act of 1933, as amended. These securities may be resold
only in transactions exempt from registration which are normally those
transactions with qualified institutional buyers.
ACA--American Capital Access
AMBAC--AMBAC Indemnity Corporation
Connie Lee--Connie Lee Insurance Company
FGIC--Financial Guaranty Insurance Company
FHA--Federal Housing Administration
FNMA--Federal National Mortgage Association
FSA--Federal Security Assurance Inc.
GNMA--Government National Mortgage Association
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance Corp.
See Notes to Financial Statements
20
<PAGE> 22
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
October 31, 2000
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $217,118,378)....................... $232,341,866
Cash........................................................ 69,699
Receivables:
Interest.................................................. 3,189,957
Investments Sold.......................................... 525,180
Other....................................................... 6,208
------------
Total Assets............................................ 236,132,910
------------
LIABILITIES:
Payables:
Income Distributions--Preferred Shares.................... 201,357
Investment Advisory Fee................................... 139,138
Administrative Fee........................................ 39,754
Affiliates................................................ 4,176
Accrued Expenses............................................ 98,045
Trustees' Deferred Compensation and Retirement Plans........ 121,184
------------
Total Liabilities....................................... 603,654
------------
NET ASSETS.................................................. $235,529,256
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 3,000 issued with liquidation preference of
$25,000 per share)........................................ $ 75,000,000
------------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 9,682,997 shares issued and
outstanding).............................................. 96,830
Paid in Surplus............................................. 143,433,980
Net Unrealized Appreciation................................. 15,223,488
Accumulated Net Realized Gain............................... 1,339,662
Accumulated Undistributed Net Investment Income............. 435,296
------------
Net Assets Applicable to Common Shares.................. 160,529,256
------------
NET ASSETS.................................................. $235,529,256
============
NET ASSET VALUE PER COMMON SHARE ($160,529,256 divided by
9,682,997 shares outstanding)............................. $ 16.58
============
</TABLE>
See Notes to Financial Statements
21
<PAGE> 23
Statement of Operations
For the Year Ended October 31, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $14,065,284
-----------
EXPENSES:
Investment Advisory Fee..................................... 1,606,644
Administrative Fee.......................................... 459,042
Preferred Share Maintenance................................. 199,009
Trustees' Fees and Related Expenses......................... 24,236
Custody..................................................... 15,064
Legal....................................................... 11,085
Other....................................................... 145,688
-----------
Total Expenses.......................................... 2,460,768
Less Credits Earned on Cash Balances.................... 882
-----------
Net Expenses............................................ 2,459,886
-----------
NET INVESTMENT INCOME....................................... $11,605,398
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 1,538,717
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 8,725,029
End of the Period......................................... 15,223,488
-----------
Net Unrealized Appreciation During the Period............... 6,498,459
-----------
NET REALIZED AND UNREALIZED GAIN............................ $ 8,037,176
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $19,642,574
===========
</TABLE>
See Notes to Financial Statements
22
<PAGE> 24
Statement of Changes in Net Assets
For the Years Ended October 31, 2000 and 1999
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.............................. $ 11,605,398 $ 11,619,011
Net Realized Gain/Loss............................. 1,538,717 (199,058)
Net Unrealized Appreciation/Depreciation During the
Period........................................... 6,498,459 (18,202,739)
------------ ------------
Change in Net Assets from Operations............... 19,642,574 (6,782,786)
------------ ------------
Distributions from Net Investment Income:
Common Shares.................................... (9,120,944) (9,570,332)
Preferred Shares................................. (2,747,249) (2,058,702)
------------ ------------
(11,868,193) (11,629,034)
------------ ------------
Distributions from Net Realized Gain:
Common Shares.................................... -0- (1,921,647)
Preferred Shares................................. -0- (473,423)
------------ ------------
-0- (2,395,070)
------------ ------------
Total Distributions................................ (11,868,193) (14,024,104)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES....................................... 7,774,381 (20,806,890)
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued Through Dividend
Reinvestment..................................... -0- 637,809
------------ ------------
TOTAL INCREASE/DECREASE IN NET ASSETS.............. 7,774,381 (20,169,081)
NET ASSETS:
Beginning of the Period............................ 227,754,875 247,923,956
------------ ------------
End of the Period (Including accumulated
undistributed net investment income of $435,296
and $698,091, respectively)...................... $235,529,256 $227,754,875
============ ============
</TABLE>
See Notes to Financial Statements
23
<PAGE> 25
Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<TABLE>
<CAPTION>
YEAR ENDED TWO MONTHS
OCTOBER 31, ENDED
----------------- OCT 31,
2000 1999 1998
------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD (A)......... $ 15.78 $ 17.93 $ 17.85
------- ------- --------
Net Investment Income.............................. 1.20 1.20 .20
Net Realized and Unrealized Gain/Loss.............. .82 (1.90) .09
------- ------- --------
Total from Investment Operations..................... 2.02 (.70) .29
------- ------- --------
Less:
Distributions from Net Investment Income:
Paid to Common Shareholders...................... .94 .99 .17
Common Share Equivalent of Distributions Paid to
Preferred Shareholders......................... .28 .21 .04
Distributions from and in Excess of Net Realized
Gain:
Paid to Common Shareholders...................... -0- .20 -0-
Common Share Equivalent of Distributions Paid to
Preferred Shareholders......................... -0- .05 -0-
------- ------- --------
Total Distributions.................................. 1.22 1.45 .21
------- ------- --------
NET ASSET VALUE, END OF THE PERIOD................... $ 16.58 $ 15.78 $ 17.93
======= ======= ========
Market Price Per Share at End of the Period.......... $ 15.00 $ 15.25 $18.4375
Total Investment Return at Market Price (b).......... 4.70% -11.34% 4.09%*
Total Return at Net Asset Value (c).................. 11.44% -5.69% 1.37%*
Net Assets at End of the Period (In millions)........ $ 235.5 $ 227.8 $ 247.9
Ratio of Expenses to Average Net Assets Applicable to
Common Shares**.................................... 1.62% 1.56% 1.58%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (d).................... 5.85% 5.78% 5.40%
Portfolio Turnover................................... 20% 24% 2%*
* Non-Annualized
** Ratio of Expenses to Average Net Assets Including
Preferred Shares.................................. 1.09% 1.07% 1.10%
</TABLE>
(a) Net Asset Value at September 27, 1991, is adjusted for common and preferred
share offering costs of $.195 per common share.
(b) Total return based on market price assumes an investment at the 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 stock price at the end of the
period indicated.
(c) Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.
(d) Net investment income is adjusted for common share equivalent of
distributions paid to preferred shareholders.
24
<PAGE> 26
<TABLE>
<CAPTION>
SEPTEMBER 27, 1991
(COMMENCEMENT
YEAR ENDED AUGUST 31, OF INVESTMENT
--------------------------------------------------------------- OPERATIONS) TO
1998 1997 1996 1995 1994 1993 AUGUST 31, 1992
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 17.08 $ 16.28 $ 16.13 $ 15.70 $ 17.45 $ 15.82 $ 14.81
------- -------- ------- ------- ------- ------- -------
1.23 1.26 1.26 1.27 1.28 1.30 1.04
.85 .90 .23 .52 (1.69) 1.66 .87
------- -------- ------- ------- ------- ------- -------
2.08 2.16 1.49 1.79 (.41) 2.96 1.91
------- -------- ------- ------- ------- ------- -------
.99 1.02 1.05 1.05 1.05 .98 .70
.24 .25 .29 .31 .23 .21 .20
.06 .07 -0- -0- .05 .11 -0-
.02 .02 -0- -0- .01 .03 -0-
------- -------- ------- ------- ------- ------- -------
1.31 1.36 1.34 1.36 1.34 1.33 .90
------- -------- ------- ------- ------- ------- -------
$ 17.85 $ 17.08 $ 16.28 $ 16.13 $ 15.70 $ 17.45 $ 15.82
======= ======== ======= ======= ======= ======= =======
$17.875 $16.8125 $16.125 $ 15.00 $ 15.50 $ 16.75 $15.125
12.96% 11.45% 14.89% 3.95% -.90% 18.66% 5.69%*
10.99% 11.96% 7.60% 10.02% -3.81% 17.89% 11.80%*
$ 247.0 $ 239.4 $ 231.7 $ 230.2 $ 226.1 $ 243.0 $ 227.2
1.59% 1.61% 1.64% 1.66% 1.62% 1.58% 1.55%
5.63% 6.05% 5.95% 6.22% 6.34% 6.70% 6.09%
21% 17% 10% 16% 7% 26% 93%*
1.10% 1.10% 1.11% 1.10% 1.10% 1.07% 1.09%
</TABLE>
See Notes to Financial Statements
25
<PAGE> 27
NOTES TO
FINANCIAL STATEMENTS
October 31, 2000
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen California Quality Municipal Trust (the "Trust") is registered as a
diversified closed-end management investment company under the Investment
Company Act of 1940, as amended. The Trust's investment objective is to provide
a high level of current income exempt from federal and California income taxes
consistent with preservation of capital. The Trust will invest in a portfolio
consisting substantially of California municipal obligations rated investment
grade at the time of investment, 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 September 27,
1991.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
A. SECURITY VALUATION Municipal bonds are valued by independent pricing services
or dealers using the mean of the bid and asked prices or, in the absence of
market quotations, at fair value based upon yield data relating to municipal
bonds with similar characteristics and general market conditions. Securities
which are not valued by independent pricing services are valued at fair value
using procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of 60 days or less are valued at amortized
cost, which approximates market value.
B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when-issued" or "delayed delivery"
basis, with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when-issued or delayed delivery
purchase commitments until payment is made. At October 31, 2000, there were no
when-issued or delayed delivery purchase commitments.
C. INVESTMENT INCOME Interest income is recorded on an accrual basis. Bond
premium is amortized and original issue discount is accreted over the expected
life of each applicable security.
26
<PAGE> 28
NOTES TO
FINANCIAL STATEMENTS
October 31, 2000
D. FEDERAL INCOME TAXES It is the Trust's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.
At October 31, 2000, for federal income tax purposes cost of long- and
short-term investments is $217,118,378; the aggregate gross unrealized
appreciation is $16,099,740 and the aggregate gross unrealized depreciation is
$876,252, resulting in net unrealized appreciation on long- and short-term
investments of $15,223,488.
E. DISTRIBUTION OF INCOME AND GAINS The Trust declares and pays monthly
dividends from net investment income to common shareholders. Net realized gains,
if any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income for tax
purposes.
F. EXPENSE REDUCTIONS During the year ended October 31, 2000, the Trust's
custody fee was reduced by $882 as a result of credits earned on overnight cash
balances.
2. INVESTMENT ADVISORY AGREEMENT AND
OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, Van Kampen
Investment Advisory Corp. (the "Adviser") will provide investment advice and
facilities to the Trust for an annual fee payable monthly of .70% of the average
net assets of the Trust. In addition, the Trust will pay a monthly
administrative fee to Van Kampen Funds Inc. or its affiliates (collectively "Van
Kampen"), the Trust's Administrator, at an annual rate of .20% of the average
net assets of the Trust. The administrative services provided by the
Administrator include record keeping and reporting responsibilities with respect
to the Trust's portfolio and preferred shares and providing certain services to
shareholders.
For the year ended October 31, 2000 the Fund recognized expenses of
approximately $3,600 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Trust, of which a trustee of
the Trust is an affiliated person.
Under separate Accounting Services and Legal Services agreements, the
Adviser provides accounting and legal services to the Trust. The Adviser
allocates the cost of such services to each Trust. For the year ended October
31, 2000, the Trust recognized expenses of approximately $25,500 representing
Van Kampen's cost of providing accounting and legal services to the Trust, which
are reported as part of other and legal expenses, respectively, in the statement
of operations.
27
<PAGE> 29
NOTES TO
FINANCIAL STATEMENTS
October 31, 2000
Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
officers of Van Kampen.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable for a ten-year period
and are based upon each trustee's years of service to the Trust. The maximum
annual benefit per trustee under the plan is $2,500.
3. CAPITAL TRANSACTIONS
At October 31, 2000 and October 31, 1999, paid in surplus related to common
shares aggregated $143,433,980.
Transactions in common shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
<S> <C> <C>
Beginning Shares.................................. 9,682,997 9,646,008
Shares Issued Through Dividend Reinvestment....... -0- 36,989
--------- ---------
Ending Shares..................................... 9,682,997 9,682,997
========= =========
</TABLE>
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $46,211,956 and $54,276,517,
respectively.
5. PREFERRED SHARES
As of October 31, 2000, the Trust has outstanding 3,000 shares of Auction
Preferred Shares ("APS"). Dividends are cumulative and the rate is reset through
an auction process every 28 days. The rate in effect on October 31, 2000, was
3.500% and for the year then ended rates ranged from 2.875% to 4.399%.
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.
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 redemptions if the tests are not met.
28
<PAGE> 30
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees and Shareholders of Van Kampen California Quality
Municipal Trust
We have audited the accompanying statement of assets and liabilities of Van
Kampen California Quality Municipal Trust ("Trust"), including the portfolio of
investments, as of October 31, 2000, and the related statements of operations,
changes in net assets and the financial highlights for the year then ended.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The Trust's
financial statements and financial highlights for the periods ended prior to
October 31, 2000 were audited by other auditors whose report, dated December 9,
1999, expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2000, by correspondence with the Trust's
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of Van
Kampen California Quality Municipal Trust as of October 31, 2000, the results of
its operations, the changes in its net assets and the financial highlights for
the year then ended, in conformity with accounting principles generally accepted
in the United States of America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
December 6, 2000
29
<PAGE> 31
DIVIDEND REINVESTMENT PLAN
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, State Street Bank and Trust
Company, as your Plan Agent, will automatically invest your dividends and
capital gains distributions in Common Shares of the Trust for your account.
HOW TO PARTICIPATE
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be
re-registered in your own name which will enable your participation in the Plan.
HOW THE PLAN WORKS
Participants in the Plan will receive the equivalent in Common Shares valued
on the valuation date, generally at the lower of market price or net asset
value, except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Trust's Common Shares,
resulting in
30
<PAGE> 32
the acquisition of fewer Common Shares than if the dividend or distribution had
been paid in Common Shares issued by the Trust. All reinvestments are in full
and fractional Common Shares and are carried to three decimal places.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
changes sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.
COSTS OF THE PLAN
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
prorata share of brokerage commissions incurred with respect to the Plan Agent's
open market purchases in connection with the reinvestment of dividends and
distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.
TAX IMPLICATIONS
You will receive tax information annually for your personal records and to
help you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA
02266-8200. If you withdraw, you will receive, without charge, a share
certificate issued in your name for all full Common Shares credited to your
account under the Plan and a cash payment will be made for any fractional Common
Share credited to your account under the Plan. You may again elect to
participate in the Plan at any time by calling 1-800-341-2929 or writing to the
Trust at:
Van Kampen Funds Inc.
Attn: Closed-End Funds
2800 Post Oak Blvd.
Houston, TX 77056
31
<PAGE> 33
TRUST OFFICERS AND IMPORTANT ADDRESSES
VAN KAMPEN CALIFORNIA QUALITY
MUNICIPAL TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
THEODORE A. MYERS
RICHARD F. POWERS, III* - Chairman
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
RICHARD F. POWERS, III*
President
STEPHEN L. BOYD*
Executive Vice President and
Chief Investment Officer
A. THOMAS SMITH III*
Vice President and Secretary
JOHN L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer
RICHARD A. CICCARONE*
JOHN R. REYNOLDSON*
MICHAEL H. SANTO*
JOHN H. ZIMMERMANN, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
CUSTODIAN AND TRANSFER AGENT
STATE STREET BANK
AND TRUST COMPANY
c/o EquiServe
P.O. Box 43011
Providence, Rhode Island 02940-3011
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT AUDITORS(1)
DELOITTE & TOUCHE LLP
180 North Stetson Avenue
Chicago, Illinois 60601
For Federal Income tax purposes, the following information is furnished with
respect to the distributions paid by the Trust during its taxable year ended
October 31, 2000. The Trust designated 100% of the income distributions as a
tax-exempt income distribution. In January, 2001, the Trust will provide tax
information to shareholders for the 2000 calendar year.
(1) Independent auditors for the Trust perform an annual audit of the Trust's
financial statements. The Board of Trustees has engaged Deloitte & Touche LLP to
be the Trust's independent auditors.
KPMG LLP, located at 303 West Wacker Drive, Chicago, IL 60601 ("KPMG"), ceased
being the Trust's independent accountants effective April 14, 2000. The
cessation of the client- auditor relationship between the Trust and KPMG was
based solely on a possible future business relationship by KPMG with an
affiliate of the Trust's investment adviser.
* "Interested persons" of the Trust, as defined in the Investment Company Act
of 1940, as amended.
(C) Van Kampen Funds Inc., 2000. All rights reserved.
(SM) denotes a service mark of Van Kampen Funds Inc.
32
<PAGE> 34
RESULTS OF
SHAREHOLDER VOTES
The Annual Meeting of Shareholders of the Trust was held on June 21, 2000, where
shareholders voted on the election of trustees and the selection of independent
auditors.
1) With regard to the election of the following trustee by the common
shareholders of the Trust:
<TABLE>
<CAPTION>
# OF SHARES
-----------------------------
IN FAVOR WITHHELD
<S> <C> <C>
Wayne W. Whalen........................................ 9,040,733 131,186
</TABLE>
With regard to the election of the following trustee by the preferred
shareholders of the Trust:
<TABLE>
<CAPTION>
# OF SHARES
-----------------------------
IN FAVOR WITHHELD
<S> <C> <C>
Rod Dammeyer........................................... 2,986 -0-
</TABLE>
The other trustees of the Trust whose terms did not expire in 2000 were: David
C. Arch, Howard J Kerr, Theodore A. Myers, Richard F. Powers, III, and Hugo F.
Sonnenschein.
2) With regard to the selection of Deloitte & Touche LLP to act as the
independent auditors for the Trust, 9,000,406 common shares, 2,986 preferred
shares voted in favor of the proposal 11,483 shares voted against and 160,030
shares abstained.
33
